Chapter 4 - Consensus Flashcards Preview

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Flashcards in Chapter 4 - Consensus Deck (28)
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1
Q

Consensus

A

A contract will only come into existence if the parties are in agreement on the rights and duties created by their agreement

  • it is the most important requirement for a contract

3 Requirements

  • every party must intend to be contractually bound
  • parties must have common intention
  • every party must make his/her intention known
2
Q

How is consensus reached?

A

1- serious intention to be contractually bound

2- have common intention

3- declare each other’s intention

3
Q

Intention to be contractually bound (duties)

A

A moral duty with no legal basis e.g social arrangement

A legal duty with a legal basis for breach of contract. Eg employment contract

4
Q

Common intention

A

The parties must have common intention to contract with each other and

Must intend to create the same legal relationship

5
Q

Make intention known

A

There must be a mutual awareness of other parties intention either (orally, writing or conduct)

Most common method to determine consensus is to look for offer and acceptance

6
Q

Define Offer

A

An offer is an declaration made by an offeror

They indicate intention to be contractually bound by mere acceptance of the offer

Offeror sets out the rights and duties he/she wants to create

7
Q

6 Requirements for an offer

A

Complete

Clear and certain

Communicated

Expressly or tacit

Offer must be binding

Addressed to the general public or a definitive

8
Q

When does an offer fall away?

A
  • after expiry of a certain time period
  • after offeror informs offeree the offer is withdrawn/revoked
  • if offeree rejects the offer
  • if the offeree makes a counter offer
  • the death of either offeree or offeror before acceptance
9
Q

Acceptance

A

An expression of intent by the offeree

10
Q

What makes an acceptance valid

A
  • Unconditional
  • Unequivocal
  • Consciously accepted by the person to whom it was addressed
  • It must comply with legislation if applicable
  • when parties contract a at a distance questions marise of when and where acceptance takes place on
11
Q

Acceptance theories

A

They conclude when arms where an offer takes place:

Information theory
- telephone/fax same as if in person

Expedition theory
- when sent through services like postal service

Reception theory
- electronic agreements, at the time when and at the place where.

12
Q

Factors that influence consensus

Mistake
Misrepresentation
Undue influence
Duress

A
  • misunderstanding with the effect that it does not correspond with the will of the other party- error
  • one party induces the other party to enter into a contract through duress
  • one party mislead the other into entering into the contract

In some cases these contracts will be rendered r voidable

13
Q

Effect on contract

A

Mistake - void
Misrepresentation - voidable
Undue influence - voidable
Duress- voidable

14
Q

Mistake

A

Renders a contract void as there is an absence of consensus.

15
Q

Categories of mistake

A

Unilateral mistake - only one of the parties was mistaken, while the other was aware

Mutual mistake - a situation where both parties are mistaken about each other’s intention and are thus at cross-purposes

Common mistake- does not lead to disagreement but leads to a contract being void due to underlying supposition

16
Q

What makes a mistake plausible?

A

A mistake must have influenced a parties decision to conclude a contract to be relevant.

17
Q

Material mistake

A

An error that negates actual agreement between parties because it relates to an element of concensus.

18
Q

Non material mistake

A

An error that does not exclude actual agreement between parties because it does not relate to an element of concensus.

19
Q

Historical categorisation of mistake

A

Error in corpore - this is a material mistake that concerns the contracts subject matter

Error in negotio - this is also a material mistake and concerns the nature of the contract

Error in persona - this is a mistake regarding the identity if the other party to the contract. The courts only regard this a material mistake if it is of vital importance to the mistaken party.

Error in substantia - mistake regarding an attitude of the contacts subject matter, generally not regarded as material.

20
Q

Mistake Types

Motive
Law
Name

A

Mistake as to the motive of entering into a contract is not regarded as material

Mistake of law not material if it relates to motive

Error in name is not regarded as material
-still contracting with the correct parties

21
Q

Misrepresentation

A

A false statement of past or present fact, not law or opinion, made by one party to another, before or at the time of the contract, concerning a matter of circumstance relating to it.

22
Q

Misrepresentation classification :

Fraudulent
Negligent
Innocent

A

Irrespective of classification( fraudulent, negligent or innocent) a party is entitled to restitution if the misrepresentation:

Was made by the other party
Made with the intention of inducing a contract
Was material

23
Q

How can misrepresentation be made?

A

Words , conduct or even silence.

Silent misrepresentation occurs when a party fails to disclose a material fact in circumstances where there is a legal duty to do so.

24
Q

Intentional misrepresentation

  • fraudulent misrepresentation
A

Made by a person who knew the statement was untrue or who did not honestly believe in the truth of the statement, no matter if it’s right or wrong.

The deceived party claim damages, whether they decide to proceed with the contract or not.

Claim for damages is not a contractual claim but one of delict (violation of the law)

Aim of claiming for damages: to put the party in a position as if the intentional deception had not occurred.

25
Q

Negligent misrepresentation

A

When a statement is made negligently with the aim of inducing the contract

Does not aim to make a false statement

The party genuinely believes the statement is true but fails to take the necessary steps a reasonable person would in those circumstances to satisfy themselves that the statement is true.

No actual duty is done to check accuracy of statement

Deceived party can claim damages under delict to place ever them in a position as if the deception did not occur.

26
Q

Innocent misrepresentation

A

Statement was made without intent or negligence

But made with intention of inducing a contact

No claim for damages only allowed to abide of cancel the contract.

27
Q

Duress

A

Improper pressure that may amount to intimidation. The coercion of will.

Contract if voidable when

  • physical violence, reasonable fear and or damage
  • threat must be imminent/inevitable
  • threaten must be unlawful
  • duress must be by one party on the other
  • MUST cause conclusion of a contract
28
Q

Undue influence

A

Also a form of Improper pressure on a party to force him/her to enter into a contract but is more subtle than duress

The undermining of the will of the other party. A relationship where one party abuses a superior position to influence the other.

Persuasion to conclude a contract

Contract is voidable when :
Party has influence
Used to weaken victims ability to resist
Party uses influence to persuade the victim to consent to a contract he would have done out of free will.