In the twenty first century, contracts have become a part of our everyday lives from cell phone contracts, service provider contracts, employment contracts, leasing, motor vehicle financing and bond.
We conclude these contracts frequently, but do you know what the fundamental requirements to conclude a valid legally- binding contract in South African are?
For a contract to be legally binding the following fundamental requirements must be met, namely:
Is an invitation to the creation of certain obligations, an “offer”, and another party affirming the obligations, an “acceptance”?
In simple terms, a contract is a meeting of the minds that creates an obligation on the parties contracting.
Commonly known as “meeting of the minds” or “accepted consensus”.
This is in principle accepted that a contract is created when an agreement is reached between the parties in the creation of obligations, essentially the object that is to be delivered, the price to be paid for the object, and any suspensive conditions for example obtaining a bank guarantee loan.
As the basis of a contract is either consensus, that is the contracting parties have a meeting of the minds, or that a reasonable belief is created for one of the parties in that consensus is created.
Juristic persons and natural persons all have passive legal capacity to act, however to complete a legally- binding contract, each party must have contractual capacity. In terms of natural persons minors have limited contractual capacity and require representation by their parent, guardian, Master of the High Court or by means of a Court Order.
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