When contracts are concluded using traditional and electronic methods then the parties should indicate time and place of formation to eliminate uncertainty CONSENSUS AND DEFECTS IN WILL If there is consensus but it was obtained in an improper manner an contract arises but it will be void and voidable contracts hinges on whether or not consensus existed between the contracting parties Absence of consensus – mistake Mistake exists when one or more of the parties to a proposed contract misunderstand a material fact or legal rule relating to the proposed contract. If such a misunderstanding exists there is no consensus and consequently no contract will arise. It may lead to inequitable results where the parties rely on their own material misunderstanding to escape liability. It is accepted that despite the lack of consensus the parties will be held to their declarations of intention unless the circumstances are such that the mistake is reasonable. If the mistake is unreasonable it is not excused by the law and the party who has made the mistake will be held to his declaration of intention rather than to his true intention. This rule is an exception to the principle that consensus is the basis for every contract. Only mistakes with regard to a material fact, legal rule or principle will lead to the absence of consensus Requirements to be met before mistake will render a contract void A contracting party who wishes to rely on a mistake to render a contact void would have to prove all of the requirements o The mistake relates to a fact, legal rule or principle o The fact or rule or principle is material o The mistake is reasonable The mistake must relate to a fact, legal rule or principle An example is where Tessa pays Elton R2000 in the mistaken belief that she owes him the money. The mistake must concern a material fact, legal rule or principle
P a g e | 15 A mistake is material in the following instances: o A misunderstanding in respect of the identity of the person with whom the agreement is reached. Eg Andrew dials the wrong number and offers a job to Bennie who answers. It will not be material if Ronit purchases a car from Douglas thinking that the sales person she is dealing with is Carol. o A mistake concerning the content of the intended contract. This relates to the performance that must be rendered, place or method of delivery or performance itself. Eg Shoni is under the impression that she is making an offer to buy the house in CT but Angie thinks she is offering to buy her house in Durban. It will not void the contract if there is a misunderstanding regarding the attributes of the house eg number of bathrooms. o A mistake in respect of an interpretation the law attaches to the offer and acceptance. In such an instance one or both parties have a particular perception of the contents of the contract. Mike offers to pay Tshepo a sum of money to live in a unit in an old age home, thinking he acquires ownership of
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