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Engineering Contracts True/False Questions

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Engineering Contracts True/False Questions

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Chapter 6, Engineering Contracts and Law

Section 6 A – True/false questions

This section consists of true/false questions. State whether the following statements are true or false. In your
answer book, write down ‘true’ or ‘false’ and provide a brief explanation for your answer where appropriate.

Examples (questions and answers)

6A.1 The law of obligation is based on the principle that one must honour one’s promises.
True, METS-2: 106
6A.2 All agreements between persons are contracts.
False, Not all agreements create obligations. METS-2: 107.
6A.3 A contract is an agreement that creates rights and duties.
True, METS-2: 107
6A.4 Parties must reach agreement before a contract can be formed.
True. It is one of the requirements for a contract. METS-2: 107
6A.5 A contract can only come into existence when both parties have contractual capacity.
True. It is one of the requirements for a contract. METS-2: 107.
6A.6 The creditor has a duty to perform.
False, The debtor has a duty to perform. METS-2: 108
6A.7 In terms of a contract, a debtor is a person who has a duty to perform.
True. METS-2: 108
6A.8 One of the requirements of an offer is that it must be definite and complete.
True. It is one of the requirements of an offer. METS-2: 110.
6A.9 A tender that was called for constitutes an offer.
False, A tender that was called for was not addressed to a specific person which is one of the
requirements of an offer. METS-2: 110.
6A.10 An advertisement is an offer to do business.
False, It is only an invitation to do business – not an offer. METS-2: 110
6A.11 One of the requirements of an offer is that it must be directed at a definite person or persons.
True. METS-2: 110.
______

Other True/False questions (without answers)

6A.12 A contract has not yet been concluded when a counter-offer is made.
6A.13 An offer lapses or expires when a counter-offer is made.
6A.14 An offer lapses on the death of the offeror or offeree.
6A.15 The acceptance of an offer must be unconditional for a valid contract to be formed.

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 48


6A.16 If the consensus of one of the parties is legally invalid, there can be no contract.
6A.17 For a contract with the state (where government is one of the parties) to be valid, such a
contract must be authorised by the relevant minister.
6A.18 Minors, who are older than seven years, have limited contractual capacity.
6A.19 A minor under the age of seven has no contractual capacity.
6A.20 In South Africa contracts may, in principle, be concluded orally or even by conduct alone.
6A.21 In South Africa, a contract for the sale of land must be in writing for it to be valid.
6A.22 When the representatives of two companies agree that their verbal contract must be reduced to
writing, then a valid contract will only be concluded once it has been reduced to writing.
6A.23 A contract is unlawful when the performance to be rendered is forbidden by law.
6A.24 A contract to commit a crime, eg fraud, would be void (not valid).
6A.25 The registration of professional engineers, technologists and technicians are regulated by the ECSA
(Engineering Council of South Africa).
6A.26 A resident engineer must watch and supervise the design and execution of works.
6A.27 The purchase price of an item is an example of the naturalia of a contract of purchase and sale.
6A.28 The essentialia of a contract are the terms that the law deems essential for placing a contract
into a certain category.
6A.29 To sell something “voetstoots” (as is) would normally form part of the naturalia of a (purchase
and sale) contract.
6A.30 The incidentalia are the additional terms that are included in a contract in order to provide for
special requirements of the parties.
6A.31 Express terms are terms in a contract that are incorporated into contracts by operation of law.
6A.32 Implied terms are terms in a contract which the parties incorporate into a contract.
6A.33 Tacit terms are incorporated into contracts without having to be expressed in words. It is based
on the parties’ true intention.
6A.34 A warranty is a contractual term whereby a contracting party assumes absolute liability for
proper performance.
6A.35 A condition is a clause in a contract that entitles a contracting party to summarily cancel the
contract owing to the other’s breach.
6A.36 A supposition is a clause in a contract that states that the party who commits breach of contract
must render a specified performance to the aggrieved party.
6A.37 Primary, secondary and tertiary rules can be used to interpret contracts.
6A.38 The law of contract recognises five distinct ways in which breach of contract may occur.
6A.39 Mora debitoris means “delay of the debtor”.
6A.40 Mora creditoris means delay of the creditor.
6A.41 If a party to a contract indicates that he/she does not intend to perform in terms of the contract,
there is a breach of contract in the form of positive malperformance.
6A.42 An innocent party (to a contract) is always entitled to claim specific performance.
6A.43 Cancellation (recission) of a contract is possible only in exceptional circumstances.
6A.44 Delegation is when contractual duties are transferred to a third party.

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 49


6A.45 Release is when a contract is replaced by a new contract.
6A.46 Novation is when a contract is cancelled by agreement.
6A.47 If John owes Lucky R1000 whilst Lucky owes John R800 then John owes Lucky R200 after set-
off.
6A.48 No formalities are required for letting and hiring of work contracts.

______

Section 6 B – Multiple choice questions

This section consists of multiple-choice questions. In your answer book, write down the number of the
question, and next to it the number representing the correct option, for example ‘6.15 [1]’.

Examples (questions and answers)

6B.1 Read the following 3 statements:


a) The law of obligation is based on the principle that one must honour one’s promises.
b) All agreements between persons are contracts.
c) The creditor has a duty to perform.
Which of the above statements is/are correct? (1)
[1] b and c
[2] a and c
[3] a and b
[4] a
[5] None of the options (1, 2, 3, or 4) is correct.

Answer 6B.1: [4]


a) True, METS-2: 106
b) False, METS-2: 107.
c) False, see METS-2: 108

6B.2 Read the following 3 statements:


a) A tender that was called for constitutes an offer.
b) If the consensus of one of the parties is legally invalid, there can be no contract.
c) A minor under the age of seven has no contractual capacity.
Which of the above statements is/are correct? (1)
[1] b and c
[2] a and c
[3] a and b
[4] a, b and c

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 50


[5] none (not a, b or c)

Answer 6B.2: [1]


a) False, METS-2: 110.
b) True, METS-2: 112
c) True, METS-2: 117

6B.3 Read the following 3 statements:


a) In South Africa contracts may, in principle, be concluded orally or even by conduct alone.
b) A contract is unlawful when the performance to be rendered is forbidden by law.
c) A resident engineer must watch and supervise the works.
Which of the above statements is/are correct? (1)
[1] b and c
[2] a and c
[3] a and b
[4] a, b and c
[5] None of the options (1, 2, 3, or 4) is correct.

Answer 6B.3: [4]


a) True, METS-2: 118
b) True. METS-2: 121
c) True, METS-2: 124

6B.4 Read the following 3 statements:


a) The purchase price of an item is an example of the naturalia of a contract of purchase and
sale.
b) Tacit or implied terms are incorporated into contracts without having to be expressed in
words.
c) Primary, secondary and tertiary rules can be used to interpret contracts.
Which of the above statements is/are correct? (1)
[1] b and c
[2] a and c
[3] a and b
[4] a, b and c
[5] None of the options (1, 2, 3, or 4) is correct.

Answer 6B.4: [1]


a) False, METS-2: 125
b) True, METS-2: 126
c) True, METS-2: 128

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 51


______

Other MCQs (without answers)

6B.5 Read the following 3 statements:


a) The law of contract recognises five distinct ways in which breach of contract may occur.
b) An innocent party is always entitled to claim specific performance.
c) Cancellation of a contract is possible only in exceptional circumstances.
Which of the above statements is/are correct? (1)
[1] b and c
[2] a and c
[3] a and b
[4] a, b and c
[5] None of the options (1, 2, 3, or 4) is correct.

6B.6 John constructs carports. He recently placed an advertisement in the local newspaper to
advertise his business. Which one of the following statements is correct? (2)
[1] The advertisement is an offer to do business.
[2] An advertisement is merely an invitation to do business while a tender that is called for is a
firm offer to do business.
[3] An advertisement and a tender that is called for are merely invitations to do business.

6B.7 The carport at Peter’s new home was rusty and in a bad condition. He entered into a contract
with AAA Carports for the construction of a new carport on 5 January 2008. He paid AAA
Carports an amount of R3000 on 5 January 2008. The terms of the contract stated that Peter
was responsible for removing the old carport and that AAA Carports had to start constructing the
new carport on the same spot at any time on or after 12 January 2009. The company had to
complete the carport by 19 January 2009. On 12 January 2009 a supervisor and workers from
AAA Carports arrived at Peter’s home to start with the construction of the carport. By then Peter
had not yet removed the old carport – he did so only on 14 January 2009. Which one of the
following statements is correct? (2)
[1] Peter did not breach the contract because AAA Carports had until 19 January to construct
the car port.
[2] There was a breach of contract known as mora creditoris.
[3] AAA Carports are in the wrong, because they should have checked with Peter if he had
removed the old carport.
[4] There was a breach of contract, known as repudiation.
[5] There was a breach of contract, known as mora debitoris.

6B.8 Which one of the following statements is incorrect? (2)

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 52


[1] The essentialia of a contract are the terms that the law deems essential for placing a
contract into a certain category.
[2] To sell something “voetstoots” (‘as is’) would normally form part of the naturalia of a
(purchase-and-sale) contract.
[3] The incidentalia are the additional terms that are included in a contract in order to provide
for special requirements of the parties.

6B.9 Which one of the following statements is correct? (2)


[1] Implied terms are terms in a contract which the parties incorporate into a contract.
[2] Express terms are terms in a contract that are incorporated into contracts by operation of
law.
[3] Tacit terms are not expressed in words but are based on the parties’ true intention.

6B.10 Which one of the following is not a requirement for the conclusion of a valid contract? (2)
[1] Each party to the contract must have capacity to act.
[2] There must be consensus between the parties.
[3] It must be physically possible to perform in terms of the contract.
[4] The contract must be permitted by law.
[5] The contract must be in writing, signed and dated.

6B.11 Richard makes an offer to buy Tumelo’s motorcar for R10 000. He gives Tumelo 10 days to accept
his offer. On the ninth day, Tumelo informs Richard that he will sell his car to him, but that he wants
R12 000 for it.
Which one of the following statements is correct? (2)
[1] A contract came into existence between Richard and Tumelo with a purchase price of R12
000.
[2] A contract came into existence between Richard and Tumelo with a purchase price of R10
000.
[3] No contract came into existence between Richard and Tumelo as Tumelo made a counter-
offer, which Richard has not yet accepted.
[4] Richard’s offer still stands.

6B.12 Which one of the following statements is correct? (2)


If a party to a contract indicates that he/she does not intend to perform in terms of the
contract, there is a breach of contract in the form of
[1] mora debitoris
[2] repudiation
[3] positive malperformance
[4] prevention of performance

6B.13 Read the following 3 statements:

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 53


a) A contract is an agreement that creates rights and duties.
b) When the representatives of two companies agree that their verbal contract must be
reduced to writing, then a valid contract will only be concluded once it has been reduced to
writing.
c) Mora debitoris means “delay of the debtor”.

Which of the above statements is/are correct? (2)


[1] b and c
[2] a and c
[3] a and b
[4] a, b and c
[5] None of the options (1, 2, 3, or 4) is correct.

6B.14 Read the following 3 statements:


a) Mora creditoris means “delay of the creditor”.
b) An offer lapses or expires when a counter-offer is made.
c) In terms of a contract, a debtor is a person who has a duty to perform.
Which of the above statements is/are correct? (2)
[1] b and c
[2] a and c
[3] a and b
[4] a, b and c
[5] None of the options (1, 2, 3, or 4) is correct.

6B.15 Your company (X) wants to enter into a contract with another company (Y), which manufactures
components that form part of the product that your company assembles. X offers Y a price of
R10,50 per component but Y wants R11,50 per component. Read the following three
statements:
a) There is no agreement between the two parties and therefore no contract.
b) X’s offer expired because Y made a counter-offer.
c) A contract will come into existence if X informs Y that it is willing to pay R11,50 per
component.
Which of the above statements is/are correct? (2)
[1] a and b
[2] b and c
[3] a, b and c
[4] a and c
[5] none (neither a, b nor c)

6B.16 Read the three statements below regarding the contract for the letting and hiring of work.

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 54


a) This is a contract whereby a specialist is hired to perform a specific piece of work by an
owner of a mine, plant, etc.
b) The hired party (contractor) is not employed by the owner and therefore not under his/her
control.
c) The contractor is entitled to be remunerated for "extras" and variations not provided for in
the original contract if the owner consented to them.
Which of the above statements is/are correct? (2)
[1] a and b
[2] b and c
[3] a, b and c
[4] a and c
[5] none (neither a, b nor c)

6B.17 Read the three statements below:


a) Duress arises when a prospective contractant is forced/compelled by means by of an
unlawful threat/intimidation by the other party (or someone acting on his/her behalf), which
causes fear in the prospective contractant, to conclude the contract.
b) Duress usually results in a void contract because the consent of one party is obtained in an
improper manner.
c) Culpable misrepresentation (either fraudulent or negligent) is a wrongful statement of fact
made by one party (or his or her agent) to the other party (or his/her agent) prior to
finalising the contract, which misrepresentation persuades the latter party to conclude the
contract.
Which of the above statements is/are correct? (2)
[1] a and b
[2] b and c
[3] a, b and c
[4] a and c
[5] none (neither a, b nor c)

6B.18 Read the following three statements:


a) A warranty is a contractual term whereby a contracting party assumes absolute liability for
proper performance.
b) A condition is a clause in a contract that entitles a contracting party to summarily cancel the
contract owing to the other’s breach.
c) A supposition is a clause in a contract that states that the party who commits breach of
contract must render a specified performance to the aggrieved party.
Which of the above statements is/are correct? (2)
[1] a
[2] b

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 55


[3] a and c
[4] a and b
[5] none (neither a, b nor c)

6B.19 Read the following three statements:


a) Release is when a contract is replaced by a new contract.
b) Novation is when a contract is cancelled by agreement.
c) If John owes Lucky R1000 whilst Lucky owes John R800 then John owes Lucky R200 after
set-off.
Which of the above statements is/are correct? (2)
[1] c
[2] b and c
[3] a and c
[4] a, b and c
[5] none (neither a, b nor c)

______

Section 6 C – short and long questions

Examples (questions and answers)

Question 6c.1
Explain whether your mine, plant or factory must accept the lowest tender, eg for drilling blast holes. (3)

Answer
The employer has no obligation to accept a particular tender or lowest tender (unless the tender
documents state otherwise). A tender is not an offer. It is merely an invitation to do business. Not only
cost but also other factors such as safety, deliverability and quality have to be considered. The safety
record and track record of the contractor may be considered before a decision is made to accept a
tender or not.

For further information, in addition to chapter 6 of METS-2, see:


• Bracher PA, August 1992, Some legal aspects of the tender, Institute of Quarrying of SA (3)

Question 6c.2
List two factors that can render a contract voidable. (2)

Answer 6c.2
Definitions of “voidable” (background)

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 56


1) In contracts, voidable is a term typically used with respect to a contract that is valid and binding
unless avoided or declared void by a party to the contract who is legitimately exercising a power to
avoid the contractual obligations ([Link]

2) A contract that has legal effect and force when it is made, but is liable to be subsequently annulled
or set aside by the courts through the process of rescission
([Link]

{Any two of the following: }


• Misrepresentation (METS-2: 114)
• Duress (METS-2: 115)
• Undue influence (METS-2: 116) (2)

Question 6c.3
Explain the contractual capacity of the following parties: (4)
• A company
• A boy, 17 years of age
• A child of 6 years
• The state

Answer 6c.3
Company: A company is a juristic person and needs representatives (or organs) to act on its behalf.
The contractual capacity of the representative is determined by the powers given to him by the
company. (METS-2: 116)
Boy, 17 years old: The boy has limited contractual capacity (METS-2: 116-117). The boy may only
conclude a valid contract with the assistance of his guardian.
Child, 6 years of age: Has no contractual capacity. (METS-2: 116-117)
State: Contract must be authorised by the responsible minister. (METS-2: 116) (4)
Question 6c.4
a) List and discuss a number of reasons for making use of contractors. (6)

Answer 6c.4 (a)


Consult the references below when answering 6c.2 b to d.

a) Those operations/activities that are not considered to be the core business of an organisation
and which other organisations may provide with greater efficiency and at reduced cost to the
company should be outsourced.
Loading and hauling at a mine may be contracted out for the following reasons:
• The contractor must usually provide his/her own equipment. The mining company therefore
requires less capital to buy and maintain equipment.

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 57


• Production could be increased without increasing the capacity of the loading and hauling
fleet of the mine by contracting out some of the work.
• It may sometimes be more cost effective to contact out certain work. A small quarry may for
example not fully utilise expensive equipment.
• Some of the requirements of the Mining Charter could be met by contracting such work out
to a BEE company.

References:
• Bracher PA, August 1992, Some legal aspects of the tender, Institute of Quarrying of SA
• Ford M, 11 March 1993, Selective and effective use of contractors at Rietspruit opencast
th
services – 24 Annual General Meeting, Institute of Quarrying of SA

Other questions (without answers)

b) List various costs that have to be considered when deciding on whether an activity should be done
in-house or to invite contractors to tender for it. (6)
(Minerals Industry)
c) Discuss a number of managerial implications of using contractors at a mine or quarry. (8)
d) What is your mine’s policy towards the use of contractors? Discuss some examples of activities
that are already contracted out or which should be contracted out in future. Which types of
activities on a mine could be contracted out successfully? (8)

Question 6c.5
Your company (A) wants to enter into a contract with another company (B), which manufactures
components that form part of the product that your company assembles.

a) When does a contract come into force/existence? List the requirements for a contract to come
into existence. (4)
b) Your company offers company B a price of R10,50 per component. Company B wants at least
R11,50 per component. Briefly explain whether a valid contract has been concluded or not. (2)
[6]
Question 6c.6
Briefly distinguish between mora debitoris and mora creditoris. (2)

Question 6c.7
Briefly explain the principles relating to the contract for the letting and hiring of work. (4)

Question 6c.8
Differentiate between the following two types of contracts:
• Contracts for the letting and hiring of work

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 58


• Contracts for the letting and hiring of personal services in return for remuneration (8)

Question 6c.9
Briefly define a contract. (2)

Question 6c.10
a) Define obligation and contractual performance and explain the consequences of the coming into
existence of an obligation. Create an example of a contract to illustrate the specific duties of
each party to the contract. (6)

Or

b) A surface mining company enters into a contract with an earthmoving company. The purpose of
the contractual agreement is to outsource the loading and hauling functions at the mine to the
earthmoving contractor at a fee. The fee structure is described in detail in the contract. Describe
obligation and contractual performance in the context of this case. Explain the consequences of
an obligation coming into existence. You must use the following terminology in your explanation
and it should be clear what these terms mean: debtor, creditor, right and duty. (4)

Question 6c.11
Briefly differentiate between the requirements for a valid offer and a valid contract. (8)

Question 6c.12
Differentiate between express, implied and tacit terms. (3)

Question 6c.13
Define duress and state what the consequences of duress could be when drawing up a contract. (2)

Question 6c.14
You want to rent a workshop for your company and to enter into a contract with the owner of the
workshop. List and discuss some of the requirements and terms of this contract.
{Hint: This is a broad question. The following may be discussed: 1) Requirements for a contract to
come into existence (METS-2: 107) and 2) terms of a contract (METS-2, pp. 125-128)} (8)

Question 6c.15
Mary and Susan agree that their verbal contract must be reduced to writing, Explain whether a valid
contract will be concluded before it has been reduced to writing. (METS-2, p. 136, 6.6) (3)

Question 6c.16
Discuss the transfer and termination of obligations arising from a contract. (8)

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 59


Question 6c.17
List four ways in which an offer lapses or expires. / List the conditions that may cause the expiry of an
offer. (4)

Question 6c.18
Match each of the following terms of contract on the left of the table with its correct definition on the
right of the table below. In your answer book, write down the number of each term, and next to it the
letter representing the correct option, e.g. 1. j. (6)

1. Condition a. Determines a specific time or period within which the


contract will either become operative or be dissolved.
2. Time clause b. A contractual term whereby a contracting party assumes
absolute liability for proper performance.
3. Supposition c. A clause that entitle a contracting party to summarily cancel
the contract due to the other’s breach.
4. Warranty d. A clause that states that the party who commits breach of
contract must render a specified performance to the aggrieved
party.
5. Cancellation clause e. A contractual term that renders the operation of a contract
dependent on an event that has already taken place.
6. Penalty clause f. A contractual term that renders the operation and
consequences of the contract dependent on the occurrence or
non-occurrence of a specific uncertain future event.

Question 6c.19
Match each of the following terms of contract on the left of the table with the correct example on the
right of the table below. In your answer book, write down the number of each term, and next to it the
letter representing the correct option, for example “1. j”. (6)

1. Condition a. On 21 December 2007, John buys steel from XYZ Timber


and Steel. They agree that delivery will occur on 3 January
2008.
2. Time clause b. DEF Mining Company Ltd. enters into a contract with EFG
Smelter Construction Ltd for the design and construction of a
new smelter. One of the clauses in the contract states that the
smelter will have an output of 8 000 ounces of platinum per
day.
3. Supposition c. Peter and John incorporate into their lease contract a clause
stating that if Peter is late in paying rent, John is entitled to

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 60


cancel the contract.
4. Warranty d. STU Civil Engineers and Contractors and VWX Hotels and
Casinos entered into a contract for the design and building of a
new casino. VWX wishes the new casino to be completed by
10 December 200X, in time to open for the December holiday
season. One of the clauses in the contract states that VWX will
be able to claim R10 000 for each day that STU is late.
5. Cancellation clause e. ABC Exploration Ltd. agrees to buy Lucky’s farm, provided
that the soil contains gold ore that can be economically
exploited. ABC has not done any exploration on the farm yet,
and therefore does not know whether the soil is gold-bearing or
not.
6. Penalty clause f. BCD Gold Mining Company agree that it will buy the farm of
Mr Groenewald’s farm if BCD’s application for a mining licence
is successful. (Mr Groenewald is the owner of a farm, on which
gold ore has been discovered that can be exploited
economically.)

Question 6c.20
Match each of the following terms (related to the transfer and termination of obligations arising from a
contract) on the left of the table below with the correct description or example on the right of the table.
In your answer book, write down only the number of each term, and next to it the letter representing
the correct option, e.g. 1. j. (6)

1. Cession agreement a. The transfer of contractual duties from the original debtor to
a third party.
2. Delegation b. Peter was required to deliver golden earrings to Sharon.
They both agreed that he would deliver a golden ring in its
place.
3. Novation c. Rights arising from a contract can be transferred by the
holder thereof to another person.
4. Set-off d. Example 1: John owes his father R500. Before he could pay
his father this amount, he fixed his father’s car for the amount
of R1 500. The result is that his father now has to pay him R1
000.

Example 2: LG Electronics has entered into a cross licensing


agreement with GE Consumer & Industrial that will allow LG
and GE to use one another's patents for refrigerators and
cooking appliances without paying licensing fees (27 Feb 2008,

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 61


[Link] .

Question 6c.21
ABC Electricity Generation Ltd is and independent power producer (IPP). Eskom made ABC and offer
to purchase 600 000 MWh of electric energy over a period of one year at a price of 22c per kWh. ABC
informs Eskom that it would provide the 600 000 MWh but at a price of 29c/kWh. Explain whether a
contract came into existence. (2)

Question 6c.22
List five ways in which breach of contract can occur. (5)

Question 6c.23
List three (3) remedies for breach of contract. (3)

Question 6c.24
Differentiate between a debtor and creditor – the terminology as used in the context of contracts. (2)

Question 6c.25
Briefly explain what a mistake is with regards to a contract. (2)

Question 6c.26
Why would a call for tenders not constitute an offer? (1)

Question 6c.27
Match each of the concepts (on the left-hand side) with its definition or description (on the right-hand
side). In your answer book, just write down the number and next to it the letter representing the correct
option, eg 1. z.

Legal concept Definition or description of concept


1. Contract a) the terms that the law deems essential for placing a contract
into a certain category
2. Mistake b) terms that naturally form part of a contract
3. Duress c) additional terms that parties themselves make part of a
contract
4. Essentialia d) an agreement that creates obligations and legal ties
5. Naturalia e) one or both parties to a contract have the incorrect
impression. Such incorrect impression affects the validity of
the contract.
6. Incidentalia f) when a prospective contractant is forced or compelled by
means of an unlawful threat or intimidation by the other party

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 62


7. Tacit g) not expressed in words but based on the parties’ true
intention
8. Repudiation h) intention of one of the parties not to meet its duties
(8)
Question 6c.28
Pete, aged 17, buys a washing machine from Maria on credit for the amount of R1000. He received the
appliance from Maria but must still pay her the amount by 1 April. On the due date, Pete forgets to pay
her.

i) Define the obligation in this example. (1)


ii) Who is the creditor in this example? (1)
iii) Discuss in detail whether this transaction constitutes a contract. Provide reasons. (5)
iv) Explain whether and how your answer in question (iii) would change if Pete was married. (2)
[8]
Question 6c.29
Explain whether or not a valid offer was made in the following case: Arnold told Ben that he can buy his
car at a very low price of which the exact amount can be agreed upon later. (2)

Question 6c.30
List two factors that can render a contract voidable. (2)

- - - - End (Questions on Chapter 6) - - - -

METS-2&3 Workbook (Updated: 26 Feb 2012) Page 63

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