TOPIC 4

TUTORIAL 1
Fred strolled through the mall after the Covid-19 lockdown, and was delighted to see many shops
advertising “specials”. He spotted a beautiful leather briefcase advertised with a price tag of R200
when he enters the Leathers4U shop, and excitedly decided to buy it. At the pay point, the cashier
scanned the briefcase and the price reflected as R2 000. While the cashier was scanning the
briefcase, Fred was busy texting on his cellphone. The cashier told him that the price is R2 000
and Fred, still distracted by his phone, nodded his head and handed the cashier his credit card.
Fred momentarily looked up from his phone to enter the pin number for his credit card, continued
texting, took his purchase and left the shop.
When Fred was outside the shop he received a SMS notification from his bank that he just made
a purchase in the amount of R2 000 at Leathers4U. A very upset Fred went back into Leathers4U,
insisting that he never agreed to buy the briefcase for R2 000. The manager advised Fred that
the transaction was valid and legal.
Fred meets with his friend Frisco, who is an attorney, insisting that the transaction was void as
there was no agreement on the price and that he wants his money back.

Discuss how attorney Frisco will advise Fred on this issue. Refer to the relevant sources of the law, (10
marks)

(I)IDENTIFY THE LEGAL ISSUE

How attorney Frisco will advise Fred on the issue of the transaction that he felt was void as there was no
agreement on the price and that and he wants his money back.

(II)LEGAL PRINCIPLE

The law my uphold a contract where there was lack of consensus if it is necessary to protect a party’s
reasonable reliance on the appearance of assent.

National and Overseas Distributors Corporation (Pty)Ltd v Potato Board

Facts:National and Overseas Distributors Corporation submitted a tender to the Potato Board(in
response to a call for tenders)and NODC successively received a letter of acceptance from Potato
Board.NODC relying on the appearance of assent stated making arrangements to render
performances in terms of the contact but shortly a communication with Potato Board came with that
the acceptance letter was sent in administrative error and they intended to accept a tender with
another company.
Court Decision:The court was in favor of NODC as the actions of Potato Board let to the NODC
reasonably there was a valid contact in place.
Court’s Reasoning:The court held that based on fairness and practicality there was a binding contract
as actions of Potato Board to NODC led to them reasonably believing that there was a valid contract in
place.
(III)APPLICATION OF THE LEGAL PRINCIPLE TO THE FACTS
The cashier reasonably believed that Fred was making the transaction on the given price based on his
actions.Fred angaged necessary actions of the transaction without any hesitation therefore the cashier
acted as a reasonable person.

(IV)CONCLUSION

The attorney will therefore advise Fred that the transaction was valid and legal as the cashier reasonably
believed there was a transaction in place.

REFLECTIONS

a.What did you do well in your approach to answering the tutorial questions?
-I correctly applied the case laws in each question as I critically studied and understood each one of
them before attempting the above questions.

b.What from the tutorial discussion,have you learnt and implemented in this tutorial
answers?
-I have learnt to critically apply the correct method to answer the question and implemented to fully
understand when answering the questions.

c.What can you still improve on future tutorials?

-Prepare while there is still time so that I can answer the tutorial with more reliable facts and application
of relevant sources of law without having to go back to my notes to reference it.

TUTORIAL 2
Zanele, who just turned 18 years old, landed her first job as an intern at Deloitte & Touche. Since
her high school days she always wanted a leather jacket, and she promised herself that she would
buy one with her first salary payment. In the week before pay day, she started scouting for jackets.
She went into a shop called Hides-R-Us where they sell leather goods such as handbags, shoes
and jackets. The store advertised in the window that they specialise in leather goods. Zanele
relished in the smell of leather in the shop. During her lunch break on pay day, she went back to
Hides-R-Us, excitedly telling the sales lady, Maude, that she wanted to buy her first leather jacket.
Maude smiled and said: “Go and have a look on that rail – our best leather jackets are hanging
there.” Zanele chose a beautiful brown jacket which was surprisingly not as expensive as she
thought it would be and handed it to Maude together with her credit card, saying: “I will never
forget this day! I have realised my dream of owning a real genuine leather jacket.” Maude
accepted payment and handed Zanele the jacket in a shopping bag. That evening Zanele,
dressed in her new leather jacket, went out clubbing with friends. She gushed about her leather
jacket, but disappointment soon took over when one of her friends noticed that the jacket was
actually made from synthetic leather. Zanele is livid especially as she noticed a sign in the shop
indicating “No returns”.
2.1 Advise Zanele fully on her legal position in canceling the contract of sale with Hides-R-Us.Refer to
relevant sources of law. (10 marks)

(I)IDENTIFY THE LEGAL ISSUE

Zanele’s legal position in canceling the contract sale with Hides-R-Us.

(II)LEGAL PRINCIPLES

Where one party has exclusive knowledge of the true facts and honest people would disclose them to
the other party,there is a duty on that party to disclose this to the other party

Dibley v Furter
Facts:Dibley purchased a farm from Furter.Twenty five percent of the farm was previously a graveyard
and had been ploughed, as a result this was not visible with the naked eye.

Court Decision: The court was in favor of the buyer (Dibley) as Furter has done an act of
misrepresentation by not disclosing exclusive knowledge.

Court’s Reasoning:The only way Dibley could have found out about the matter of the graveyard was
by Furter telling him before sale.The seller had an exclusive knowledge about the existence of the
graveyard and reasonable person would have disclosed this therefore this was misrepresentation
because of the seller’s silence as the was a duty to disclose this fact.

(III)APPLICATION OF THE LEGAL PRINCIPLE TO THE FACTS

The sales lady had exclusive knowledge that they were selling synthetic leather instead of genuine
leather and chose to be silent about this fact while Zanele stated that that she was looking for genuine
leather.A reasonable person would have disclose this fact therefore this constitutes misrepresentation as
there was a duty to disclose this fact.

(IV)CONCLUSION

In terms of the law of contract and the case law above,the contract in the case like this(Zanele’s) is not
void-it is voidable.Zanele can make a choice wether to rescind the contract or abide by it.

2.2 For purposes of this question, assume that Zanele was able to cancel the contract. Briefly
outline what steps must be taken by Zanele and Hides-R-Us as a consequence of being
able to cancel the contract. (2 marks)

Practically Zanele will have to give back the leather jacket to Hides-R-Us and they should give Zanele
back her money,however,Zanele will not be able to get the full amount but a portion of it as she had
worn the jacket after returning it for being able to cancel the contract.
(Total marks: 12 marks)
a.What did you do well in your approach to answering the tutorial questions?
-I correctly applied the case laws in each question as I critically studied and understood each one of
them before attempting the above questions.

b.What from the tutorial discussion,have you learnt and implemented in this tutorial
answers?
-I have learnt the correct application of IPAC method and have implemented to apply it correctly in this
tutorial answers.

c.What can you still improve on future tutorials?

-Time management when going through each tutorial so I will not engage in one tutorial more than the
other.

TUTORIAL 6
Funani is the wealthy owner of a security company. The operations of his company also involve
the protection of high-profile individuals. An A-list Hollywood actor, Bro-Bro, is visiting South Africa
and Funani’s company is tasked with his personal protection. Funani deploys five of his security
guards for this purpose. Shaka, the manager of Funani’s security team, approaches Funani with
a document which states that all the security personnel will, with immediate effect, be granted a
monthly salary increase of ten percent. Funani is furious, and angrily chases Shaka out of his
office. Shaka, however, does not leave, but instead informs Funani that he has instruction to,
should Funani refuse to sign the contract, the five security guards will immediately stop the
protection of Bro-Bro. Furthermore, the security guards deployed to protect Funani’s children at
their private school, where there was a kidnapping threat in the recent past, will also leave. Funani
signs the contract. At the end of the month, Funani, however, does not pay the increases as
agreed. Shaka, on behalf of the security personnel, sues Funani in terms of the contract.
Funani approaches you for legal advice.

Advise Funani fully on whether he is obliged to pay in terms of the contract. Include in your answer, a
discussion of his legal remedies. Refer to all relevant sources of law, including case law. (15 marks)

(I)IDENTIFY THE LEGAL ISSUE

Whether Funani is obligated to pay in terms of the contract.

(II)LEGAL PRINCIPLE

The innocent party must prove that the threat induced the contract.

Hendricks v Barnett
Facts:Hendricks an expert of house breeding managed a farm for Barnett.Barnett put the farm up for
sale but had an agreement with Hendricks that he will stay on until certain animals were prepared for
auction and that Barnett would pay him a termination of employment bonus.Soon prior the
auction,Hendricks threatens to leave his employment unless Barnett pays him a bonus of R10 000.This
means that the sale of the farm would have been imperiled as Hendricks was the single person who
would identify horses to their prospective buyers.This would result to Barnett sustaining financial loss
therefore he made an immediate payment cheque to Hendricks of five thousands and another
 postdated of five thousands.Soon after the auction the postdated cheque was stopped.When Barnett
was sued on the payment of the second cheque, contended that he was induced into issuing the
cheque under duress.
Court Decision:The court was in favor of Hendricks because Bernett did not provide sufficient
evidence to the court.
Court’s Reasoning:Hendricks action of threatening to leave employment was unlawful conduct and
was to harm Banett’s property but Bernett did not show any protest or unwillingness to make
payment before entering the contract therefore there was no sufficient evidence.

(III)APPLICATION OF THE LEGAL PRINCIPLE TO THE FACTS

The threat of the manager to Funani was unlawful and it was a threat to harm Funani’s property and
Funani’s fear was reasonable, but Funani did not provide enough evidence on the unwillingness to make
the salary increase payments so there was no sufficient evidence that he was induced into the contract.

(IV)CONCLUSION

Funani is therefore obliged to pay in terms of the contract and the contract will remain valid as there is
no sufficient evidence of being induced into entering into the contract.

REMEDIES

If Funani was able to come up with sufficient evidence according to law of contract will be avoidable and
he would have been able to choose whether to rescind it or abide by it.

Funani would also been able to sue the Manager,Shaka using the law of delict and claim damages
according to the financial loss he has incurred.

REFLECTIONS

a.What did you do well in your approach to answering the tutorial questions?
-I correctly applied the case laws in each question as I critically studied and understood each one of
them before attempting the above questions.

b.What from the tutorial discussion,have you learnt and implemented in this tutorial
answers?
-To understand the discussion fully so that I can be able to answer the questions properly.

c.What can you still improve on future tutorials?

-Prepare while there is still time so that I can answer the tutorial with more reliable facts and application
of relevant sources of law without having to go back to my notes to reference it.