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University of the Witwatersrand, Johannesburg
Law of Contract University of the Witwatersrand, Johannesburg
Cases Summary For Contract Law Test:
Under chapter 2:
Boots Co Ltd v Somerset West Municipality 1990:
F: An accident occurred between a truck and a car. Car was rented from Hertz (third party). Had to determine
liability. There was a first agreement (employment and the car: binding) and a second agreement (tax dodge. It
was not intended to bind either Hertz or Boots or Nel)
I: Which agreement was the binding agreement?
P: The truth of the matter rather than the writing must be looked at. ‘Plus Quod Agitur Quam Quod Simulate
Conciptur’
A: The court must be satisfied that there is a real intention, which differs from the simulated intention
C: The first agreement is therefore binding, it had the intention, it was found to be genuine. The second
agreement was just a tax dodge.
Under chapter 3:
Agreement as a requirement for validity:
Wessels v Swart 2002:
F: Plaintiff invested in a company on advice of her brother. Company went insolvent and plaintiff lost her
investment. Plaintiff alleged an oral contract was between her and her brother in which he would pay her back for
the money she invested. Her brother paid the first instalment but then died. Plaintiff claimed money from his
estate
I: Was a valid agreement formed?
P: Valid agreement would need animus, consensus and expressed agreement (in this case oral)
C: Court held on fact that there was a valid oral contract between the plaintiff and the deceased.
Church of the Province of SA, Diocese Cape Town v CCMA 2002:
F: Applicant is the Anglican church of the Cape and the third respondent is an ordained priest of the applicant
church. Third respondent’s licence to minister was revoked after being found guilty of misconduct. His license was
revoked for 5 years. He approached CCMA as he believed his dismissal was unfair according to his contract of
employment. Applicant alleges there is no contract of employment as it differs in religion: in Anglican religion the
relationship between priest and church cannot be regarded as employment
I: Whether the parties had, at the time they concluded the agreement, entered into a legally binding contract of
employment?
P: There must at the time of contracting have been consensus between the parties in the sense that they had
serious intention to create mutual rights and duties to which they would be legally bound and they must’ve been
aware of this intention. Each party must have the legal capacity to enter. The rights and duties assumed must be
possible to perform. The rights created and duties assumed must be permitted by law. If formalities are
prescribed, they must be observed.
A: Priest argued: offer and acceptance; salary (not an actual one- stipend); benefits; licensed therefore an
employee; therefore legally binding agreement between him and church. Church argued he is not an employee;
there was never an intention to contract; the relationship between the licensee and the church are governed by
ecclesial law therefore no intention in civil law. Ecclesial arrangement: no animus, couldn’t go to court, had to go
through church structures. Looked at common law definition of an employee (dominant impression test). Took
into account: paid a regular amount each month, subject to tax deductions, eligible for participation in car loan,
bound to minister, subject to authority of bishop, bound by church practices.
C: In these circumstances, court said it appeared to be an employment contract however not both parties had
intended for them to become a binding contract. The licensing oath ritual removes it from the realm of being a
civil contract. The relationship exists on that calling from God which cannot make it a contract of employment.
Therefore since no contract of employment, the priest is not an employee as defined in LRA and consequently
CCMA has no jurisdiction to entertain alleged dispute. Note second respondent said there was a contract.
Boots Co Ltd v Somerset West Municipality 1990
(above)
Requirements for agreement: rule of formation
Gebuild Contractors v Rare Woods SA 2002
F: Gebuild requested quote for the supply of certain materials from Rare Woods. R used different price of
different kind of wood and omitted some of the items on G’s list. Total price quoted was therefore less than the
actual price of the materials. When R realised this he refused to supply the goods at that price. G argued a quote
constituted a valid offer which became a contract on G’s acceptance thereof.
I: Does a quote constitute a valid offer?
P: Generally a quote or tender constitutes an offer but in each case it is a question of fact. For such a quote to
constitute a valid offer it should’ve been made animus contrahendi
A: Looked at nature of quote; words in which quote was expressed; circumstances surrounding issue of quote;
explanations/detailed account of events as provided by parties’ evidence. Court uses a blend of objective and
subjective factors to ascertain the intention of the parties
C: Court found that R didn’t have the necessary animus contrahendi, he did not intend to be legally bound to
deliver the goods at the price quoted if G accepted the quote. Therefore not a valid offer.
Pitout v North Cape Livestock Co-op Ltd 1977
F: Widow negotiated with NCLC on behalf of her son’s debt with them. During discussions, Mrs P raised the
possibility that she could guarantee to NCLC the price of 72 head of cattle which belonged to her but which were
being rented by John (because of the rental contract, John would’ve had to give his consent to the sale). NCLC
sued John for his debts owing but were unsuccessful. They thereafter claimed the price of 72 cattle claiming Mrs P
made a valid offer which had upon their acceptance turned into a legally binding contract
I: Did Mrs P have the necessary animus contrahendi when offering the guarantee or was this merely a tentative
declaration of intent by her?
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