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Law, First Year Business

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Submitted By ksb101
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Law Week: 4 Notes
Law Week: 4 Notes

Intention to Contract: Parties must seriously intend the agreement concluded between them to result in the terms that can be enforced. Must have reasonable and serious intention to be binding. South Africa subscribes to the justa causa doctrine. According to that principle, an agreement is enforceable in SA if the parties who made the agreement intended to be bound by the agreement and the agreement is made for a good reason.

SERIOUS INTENTION TO CONTRACT

The courts do not regard the following proposals to indicate a serious intention to contract:

Proposals made in jest
Social arrangements
Gentleman’s agreements
Pamphlets/Brochures
Pricelists/Catalogues
Most Adverts

A contract can only give rise to a legal obligation once the following requirements are met:

a) Consensus: Parties must have corresponding intentions to create a legal obligation with certain legal consequences between them b) Contractual Capacity: Parties must have the ability to form an intention and understand the consequences c) Legality: Contract must be lawful/legal. Contract may not be in conflict with either the Common Law or legislation d) Physical Possibility: performance, in terms of contract, must be possible and determined/determinable e) Formalities: Contract must be reduced to some visible form, must comply with specific procedures in its conclusion such as notarial execution as required by law

Agreement: The core essence of contract is agreement/consensus.

Defined as: consensus ad idem, a meeting of the minds.

This breaks down to:
The parties must know that they are agreeing to enter into a contract and agree to the content of the contract.

If there is no consensus ad idem, there can be no agreement thus no liability on the contract.

In order to establish the presence of agreement, the courts

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