Page 1 of 7 DURATION: 3 HOURS TOTAL MARKS: 60 INTERNAL EXAMINERS : INTERNAL MODERATOR: PROFESSOR S LUIZ MR A LOUW MS M MARITZ MR J KOTZE (PART-TIME) PROFESSOR L STEYN EXTERNAL EXAMINER : PROFESSOR D BHANA INSTRUCTIONS TO STUDENTS This paper comprises SEVEN (7) pages. This paper comprises THREE (3) sections. Please read the instructions for each section carefully: 1. Use at least three examination books one for Section A and one for Section B and one for Section C. 2. SECTION A: Answer all the questions in the examination book provided and write Section A clearly on the front cover. 3. SECTION B: Answer all the questions in the examination book provided and write Section B clearly on the front cover. 4. SECTION C: Answer all the questions in the examination book provided and write Section C clearly on the front cover.
Page 2 of 7 SECTION A ANSWER ALL OF THE QUESTIONS IN THIS SECTION WRITE SECTION A CLEARLY ON THE FRONT COVER OF THE EXAMINATION BOOK QUESTION 1 Farmer Brown wants to sell 7 tons of wheat to Goodbread (Pty) Ltd, a company, for R8000 per ton. Farmer Brown hands a contract document to the managing director of Goodbread. The document contains the following provision: Once this contract has been signed by the seller, it must be signed by the purchaser within 7 days, failing which neither party will be bound by the agreement. Explain (with reference to a decided case) the legal effect of this provision prior to the signature of the document by the purchaser. [5 marks] QUESTION 2 The following appears in the KZN Times newspaper on 5 April 2010: Great new development! Mount Vesuvius with stunning views of the Indian Ocean Situated between Durban and the new King Shaka Airport 30 square metre Unit for R850 000 45 square metre Unit for R1 050 000 Contact Joe at Roundabout Properties now at 083 1234567 Eric sees this notice in the newspaper and is very excited. He immediately contacts Roundabout Properties and arranges a meeting with Joe for the following day. When Eric sees Joe he says: Joe, I agree to buy a 45 square metre Unit in your new Mount Vesuvius development to which Joe replies: Great then we have a deal. Joe explains to Eric that he will only be able to move into his new unit on 1 August 2010, but that he will be sure to contact him once the unit is ready. (a) Explain, with reference to a decided case, whether notices such as this in the newspaper constitute a valid offer in terms of the common law. [5 marks]
Page 3 of 7 (b) Consider the effect of Eric saying: I agree to buy a 45 square metre Unit in your new Mount Vesuvius development and explain whether the agreement between Eric and Joe for the purchase of the property constitutes a valid contract of sale of the unit. [5 marks] [Total: 10 marks] [TOTAL SECTION A: 15 MARKS] SECTION B ANSWER ALL OF THE QUESTIONS IN THIS SECTION WRITE SECTION B CLEARLY ON THE FRONT COVER OF THE EXAMINATION BOOK QUESTION 3 In the case of Breedenkamp v Standard Bank 2009 (5) SA 304 (GSJ), Jajbhay J granted an urgent interim order declaring the enforcement of a termination clause in a contract between a bank and its customer as being against public policy. The learned judge relied on the majority judgment of Ngcobo J in Barkhuizen v Napier 2007 (5) SA 323 (CC) in this regard. Critically evaluate the correctness of Jajbhay J s approach to the clause in question in light of the established notions in our law regarding the striking down of unfair contract terms which offend against public policy, and also with reference to the judgment of Moseneke J in the Barkhuizen Constitutional Court judgment. [7 marks] QUESTION 4 James enters into a contract to rent Barbara s cottage in the Midlands for 6 weeks. James is a wealthy best-selling writer who wishes to use the peace and quiet to finish his latest novel, and he pays R30 000 for the full rental in advance. Barbara has assured James that the cottage, which is situated on a large farm that Barbara owns, is perfect for his purpose, as it is 3 kilometers from the nearest town and far
Page 4 of 7 from the nearest highway, so that there is no traffic noise. There are other cottages on the property surrounding the one that James is renting, but when James asks whether anyone will be renting the other cottages, Barbara just smiles and says You ll love the peace and quiet out here, I plan to retire here in a few years. James moves into the cottage a week later after having all his writing equipment and everything he needs for the creative process brought in by professional movers at a cost of close to R15 000. (James apparently needs a big-screen TV, a pool table and a fully-fitted bar to get the creative juices flowing.) A week after James moves into the cottage, he is awoken at 8 one morning by the noise of motorcycles revving outside. He stumbles out of bed to find a group of about 40 bikers moving into the other cottages on the property, and performing doughnuts with their bikes to the loud cheering of their girlfriends and boyfriends. Some music systems are set up and hip hop and heavy metal starts blasting. James is very angry, and he confronts a hairy specimen who informs him that the biker gang (the Highway Hooligans ) rented the cottages from Barbara 3 months ago, and that they will be staying a month for the Midlands Motorcycle Mayhem rally and a bit of a holiday. They invite a very angry James over for a beer and some suspicious-looking cigarettes but he stomps off to phone Barbara. Barbara tells James that she is sorry to hear that he is so upset, but that she also has to make a living and needs to rent out the cottages for an income. She refuses to discuss the matter further and tells James that he can do what he wants, but that she is keeping the money he has paid her. James comes to you for legal advice. Advise James on his legal position and whether he has any remedies against Barbara. [7 marks] QUESTION 5 Thabo and his girlfriend Monica visit an indoor go-kart track and enter a race where they can win R10 000 if they manage to beat a well-known local racing driver, who is doing a promotion for charity. Thabo and Monica are each given a ticket and a competition entry form by the track manager after payment of the entrance fee of R50 each, and an assistant hands them each safety helmets and gloves. Thabo, Monica and the other 4 competitors all sign the entry form and return it to the track manager prior to getting into their go-karts. On the back of the ticket there is a typed provision that reads as follows:
Page 5 of 7 The owners and managers of F1 Thrills Go-Karting Track do not accept liability for any loss or damage to the person or property of any customer, howsoever caused and including loss or damage due to the gross negligence of the owners, managers and/or employees of F1 Thrills Go-Karting Track. There are prominent signs on the walls all around the track, over the entrance to the building as well as on the steering wheel in each go-kart which state the following: No person may drive a go-kart without a valid ticket terms and conditions apply. Halfway through the race, Monica s go-kart suddenly spins off the track and slams into the tyre barrier. Officials rush to the scene to find a gruesome sight. It appears that one the track s employees (who is immediately arrested on the scene for being high on drugs by an off-duty policeman who was one of the competitors in the race), had provided Monica with a clearly cracked and broken helmet. The back of the helmet had fallen off from the vibration of the go-kart and Monica s long hair had come loose and became entangled in the left back wheel of the go-kart. Large parts of her scalp have been ripped off and she is bleeding profusely. The paramedics who arrive at the scene tell Thabo that Monica will be safe (she is rushed to hospital), but that she will probably require extensive skin grafts in an operation that will probably cost in the region of R250 000. Thabo now wants to help Monica sue the owners of the F1 Thrills Go-Karting Track for her medical costs and for damages for pain and suffering, but they deny liability in light of the ticket. Advise Thabo as to Monica s legal position, with reference to relevant case law and any applicable as well as proposed legislation. [6 marks] [TOTAL SECTION B: 20 MARKS]
Page 6 of 7 SECTION C ANSWER ALL OF THE QUESTIONS IN THIS SECTION WRITE SECTION C CLEARLY ON THE FRONT COVER OF THE EXAMINATION BOOK QUESTION 6 In August, Peter and Anton conclude a written contract in terms of which Anton undertakes to construct a swimming pool for Peter in the garden of Peter s home. The contract price is R50 000. Although the contract provides that construction will start on 1 September, no date for completion is set. However, the contract does provide that should either party breach the contract and fail to remedy the breach within 7 days after dispatch of a written notice by registered post requiring the defaulter to remedy the breach, the other party may cancel the contract by giving written notice to that effect to the defaulting party. Anton commences construction on the agreed date. However, after two weeks Anton and his workers disappear from the construction site. At the end of September Peter discovers that Anton has gone on an overland trip through Africa and is not expected back soon. Peter is anxious that the pool be completed in time for the December holidays and so he immediately visits Anton s wife and tells her to inform Anton that he must finish the construction by 15 November otherwise he will get someone else to finish the job. On 16 November Peter comes to you for advice. Anton has not returned to complete the swimming pool and Peter wants to cancel the contract. Taking into account the facts above and with reference to decided cases, explain to Peter how he should proceed in order to cancel the contract. You are not required to consider the issue of damages. [15 marks] QUESTION 7 Seth enters into a contract with Nolufefe to purchase goods from Nolufefe. The agreement requires Seth to pay a deposit after which the goods will be delivered. The balance of the purchase price is required to be paid within a month of the
Page 7 of 7 delivery of the goods. Seth pays the deposit and the goods are delivered immediately. When Seth is about to pay the balance of the purchase price, he is notified by Nolufefe that he must pay the balance of the purchase price to Anastacia, Nolufefe s sister. This is apparently because Nolufefe owes Anastacia money and she has transferred her right to receive the money to Anastacia. Seth comes to you for advice. He wishes to know whether it is permissible for Nolufefe to do this. Seth tells you that the contract for the purchase of the goods was in writing and he did not agree to change the terms of it. He wants to know what would happen if he simply paid the balance of the purchase price to Nolufefe. Advise Seth fully with reference to decided cases. Explain whether your advice would be any different if the contract included a clause stating that no rights arising from the contract may be transferred to any other party. [10 marks] [TOTAL SECTION C: 25 MARKS] ~~~~~~~~~~~~~~~ END OF EXAMINATION PAPER ~~~~~~~~~~~~~~