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KTH Eng Memo Test Aug 2015_1.pdf - Department of Mercantile...

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Department of Mercantile LawKTH 220 Specific Contracts 220Semester Test August 2015Time: 90 minutes Marks: 50Examiners: Prof. DJ Lötz; Dr. J Barnard; Ms J Van WykPage 1 of 6MEMORANDUMQUESTION 1The facts are similar toMcWilliams v First Consolidated Holdings (Pty) Ltd. (1) Thecourta quodecided that “a positive agreement was reached on what may convenientlybe referred to as the basic terms of the sale”, (1) as consensus was reached on the:nature of the contract; (1) merx/thing; (1) and the purchase price. (1) The AppellateDivisoin agreed with the decision of the courta quo, especially in view of the fact thata letter confirming the agreement was written by F’s attorney shortly after thenegotiations and to which M did not respond at all. (1) M’s quiescence did notnecessarily amount to acceptance of the contents of the letter, especially wherecommercial practive and human expectation would indeed call for a response. (1)The circumstancesin casuindicated that M had to respond to the letter if it did notreflect the true position. (1) Consequently, the court held that the agreed terms wereindeed proved by the contents of the letter and the memorandum of agreement andthe appeal was dismissed. (1)[MAX 5]QUESTION 2(a)The facts are similar toVasco Dry Cleaners v Twycross. (1) No valid contract ofsale came into being between K2 and K1. (1) The contract of sale between K1 and K2was not a true contract of sale, but a money-lending agreement secured by a pledgeagreement. (1) The true intention of the parties, and not the wording of the contract, isthe key to determining the nature of the contract. (1) The latter is a question of fact tobe determined and investigated in view of the circumstances of each individual case.(1) The following factors were taken into account in establishing the nature of thecontract between K1 and K2: K2 made no profit from the transaction; (½); in case of asale in execution, any surplus would be paid by K2 to K1; (½) K1 did not intend to
Page 2 of 6relinquish his ownership to K2; (½) K2 did not have the intention of acquiringownership of the merx/thing; (½) K1 wished to obtain financial assistance from K2, andthis was achieved by way of a money-lending agreement coupled with a pledgeagreement all cast in the mould of a contract of sale; (½) the purchase price betweenK1 and K2 was not a serious one; (½) the requirement of delivery for the transfer ofownership was not met; (½) and K1 warranted to K3 that he, K1, was the true owner ofthe merx/thing. (½)[MAX 5](b)The mere conclusion of a contract gives rise to a personal right only. (1) Inorder to obtain a real right, other requirements must be met such as: Delivery of themerx/thing; (1) the intention to transfer and obtain ownership; (1) the seller must bethe owner of the merx/thing (1) and payment of the purchase price. (1) As K1 nevergave actual delivery of the merx/thing to K2, the requirement of delivery had not beenmet. (1)[MAX 3](c)Yes. (1) In order to conclude a valid contract of sale, the seller does not have

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Term
Fall
Professor
S van wyk
Tags
rei vindicatio

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