Answer to Question #310597 in Management for Kholoe

Question

At the end of the meeting with Vladimir Butin, Raymond concluded a sale of one million bottles of Russian Vodka to be stored on his premises. Raymond cannot recall reading the terms and conditions or signing the contract. Discuss whether the contract is enforceable in South African law, use case law to support your view. 50 marks

Answer 1

A contract is an agreement between two or more parties entered into, with the serious intention of creating a legal obligation. Contract law provides a legal framework within which persons can transact business and exchange resources, secure in the knowledge that the law will uphold their agreements and, if necessary, enforce them. The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealing. South African contract law is essentially a modernized version of the Roman-Dutch law, it is rooted in canon and Roman. In Raymond’s case the contract is not enforceable.

A contract in South Africa is classified as an obligationary agreement, it creates enforceable obligations and ought therefore to be distinguished from liberatory agreements whereby obligations are discharged or extinguished, for example; release, novation, real agreements whereby rights are transferred, for example; cession, conveyance, and family law agreements. For a contract to be considered valid and binding in South Africa, certain conditions must be met;

• There must be consensus ad idem between the contracting parties.
• The parties must have seriously intended the agreement to result in terms which can be enforced.
• The parties must have the capacity to contract.
• The agreement must have certain and definite terms.
• The necessary formalities must be observed.
• The agreement must be lawful.
• The contractual obligations must be possible of performance.
• The content of the agreement must be certain.