EXAMINATION PAPER:

Semester 1 2024
Module name Law of Contract
Module code LOC262
NQF level 6
Date & Time 11 June 2024 – 14:00-17:00
Duration 3 hours
Exam type Closed book
Marks 100

General instructions
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Booklet.
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numbers in the examination paper.
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LOC262
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 Equipment (Closed book)
1. No documents, notes, files, study guides, textbooks, or other materials will be allowed into
the examination.
2. No mobile devices or electronic equipment including smart watches, laptops, iPads,
Kindles, etc. will be allowed on your person or at your desk during the examination.
3. No borrowing or lending of any examination material and/or stationery will be permitted.

DO NOT TURN THIS PAGE UNTIL INSTRUCTED TO DO SO.

©STADIO [LAW OF CONTRACT - LOC262] [Semester 1 2024]

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Question 1 (15 marks)

1.1 Provide three examples of contracts that the law requires to be in writing and to be
signed by the parties for the contracts to be valid. (3)

1.2 Briefly explain what the parol evidence rule entails. (3)

1.3 Provide an overview of the nature (characteristics) of a contract. (5)

1.4 Explain what the right to information in plain and understandable language in terms
of the Consumer Protection Act 68 of 2008 entails. (4)

Question 2 (15 marks)

On 1 May 2023, Becky who lives and works in Pretoria, made an offer by email to Josh who
lives in Cape Town to buy Josh’s scooter. Josh accepted Becky’s offer by SMS on 2 May 2023 in
Benoni. The complete SMS reached Becky’s cell phone on 3 May 2023 in Boksburg. Becky was
travelling at the time and only read the SMS on 4 May 2023 in Witbank.

2.1 List the requirements for a valid acceptance. (4)

2.2 Identify the offeror and offeree, respectively. (2)

2.3 Establish when and where the acceptance of the offer took effect under the
circumstances mentioned in the facts of the question and explain your answer.
(9)

Question 3 (20 marks)

Derrick and Company A (the Company) concluded an insurance contract to cover Derrick’s car
against damage. The following term is contained in the contract:

“if we reject liability for any claim made under this Policy we will be released from
liability unless legal action is taken within 90 days of rejection of a claim.”

Derrick approached the court for assistance two years after being notified that his claim under
the contract has been rejected. The company argues that they are not liable, because Derrick
had failed to institute legal action within 90 days and therefore failed to honour their
agreement.

Derrick is of the opinion that the contract term is unconstitutional and unenforceable as it
violates his constitutional right to seek assistance from a court.

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3.1 List any two types of legally binding agreements. (2)

3.2 Briefly explain what each of the following three cornerstones of the law of contract
entails:

3.2.1 Freedom of contract. (2)

3.2.2 Sanctity of contract. (2)

3.2.3 Good faith. (2)

3.3 With reference to the facts of the case study in Question 3, discuss the tension
between the competing cornerstones of the law of contract listed in 3.2 above. In
your answer refer to relevant case law. (12)

Question 4 (20 marks)

Berenice is excited about her upcoming 50th birthday party on 30 August. She entered into a
contract with Stuffed Catering Services for the delivery of 10 meat platters at her house on 30
August. The parties agreed to the payment of R7 000.00 on delivery.

4.1 Distinguish between the essentialia and naturalia of a contract. (6)

4.2 Assume that Stuffed Catering Services only delivered six meat platters to Berenice’s
house on the agreed upon date. Explain the type of breach of contract that occurred
under these circumstances. (4)

4.3 Assume that Berenice decided to use the six meat platters for her party. However,
she refuses to make payment to Stuffed Catering Services until the full delivery of 10
platters had been made, based on the exceptio non-adempleti contractus.

Evaluate whether Berenice will be entitled to rely on the exceptio non-adempleti

contractus to withhold payment. In your answer refer to the requirements for this
defence. (10)

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Question 5 (10 marks)

Bonga, Percy and Liesl agree to watch a soccer game at Bonga’s house. Percy and Liesl agree to
bring pizza and cooldrink to serve as refreshments whilst Bonga agrees to make available his
house and TV set.

5.1 List the requirements for a valid contract. (6)

5.2 Explain whether the different agreements referred to above constitute legally
binding contracts. (4)

Question 6 (20 marks)

Alyssa agreed to buy 10 chickens from Dambisa for R500.00. They concluded the agreement
on 15 April 2023. Unbeknownst to the parties, all the chickens died on the night of 14 April
2023 due to bird flu.

6.1 Identify and describe the type of impossibility that occurred under these
circumstances. (5)

6.2 Discuss the consequences of the impossibility identified in 6.1 above. (5)

6.3 Assume that the parties included a warranty in their agreement stating that Dambisa
will deliver the chickens.

6.3.1 Define the concept “warranty”. (4)

6.3.2 Explain how Dambisa could be liable in terms of the warranty under these
circumstances. (6)

Examination Total: 100 Marks

©STADIO [LAW OF CONTRACT - LOC262] [Semester 1 2024]

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