Requirements for a Valid Contract

South African Contract Law

The following will be considered in terms of South African Contract Law to ascertain the validity of a contract:

There must be a meeting of the minds of the parties to a contract. It is difficult to ascertain the subjective state of the parties to the contract and accordingly regard will be had to the external circumstances which serve as a manifestation of the mind and proof of the contract.

Serious Intention
The parties must have the serious intention to be legally bound by the contract i.e., they must be said to have animus contrahendi. The following offers are lacking an intention to be legally bound:
• an offer made in jest;
• vague and impersonal offers;
• an offer to explain and serve as an example as to how an offer s intended to be made

Parties to a contract must have the legal capacity to enter into the contract. On the face of it a party entering a contract will be assumed to have the capacity to do so. Insofar as it is alleged that a person lacks capacity to enter into a particular contract the party alleging the lack of capacity bears the onus of proving this in the case of a dispute.
When concluding contracts with the following persons/entities caution must be taken to ascertain their capacity to conclude the contract:
• The state: although it has ordinary contractual capacity, the contract must not be incompatible with the discretionary powers placed upon the state organ nor constitute an abdication of the state’s discretionary powers;
• Minors: subject to certain statutory exceptions a child under eighteen requires a guardian’s assistance in contracting;
• Persons married in community of property – in certain instances the contractual capacity of a person married in community of property is limited as he or she would require their spouse’s consent for example:
o to alienate, mortgage and burden immovable property forming part of the joint estate and to conclude a deed of surety
• person’s who are mentally unfit

Certain & Definite Terms
It has been stated in South African case law“… the element of uncertainty is fatal to the existence of the so-called contract…” Contracts can be held to be void due to vagueness. It is important that the contract has certain and definite terms.

There are also a number of formalities in South African contract law applied by virtue of legislation failing compliance with which a person wishing to institute legal proceedings based on a contract may find the matter defended on the basis of non-compliance with formalities.
For example:
• The Alienation of Land Act provides that alienation of land must be addressed in a written contract to be valid and which Act provides for formalities to be addressed in the contract.
• The General Law Amendment Act provides that a deed of suretyship must be in writing and signed by the parties.

Parties may also require that the conclusion of a contract is subject to their own formalities for example that the contract must be reduced to writing to be binding on the parties.

Capable of performance
A contract is null if at the time it was concluded it was incapable of performance.

Article by Lisa Boogaard

Boogaard Attorneys can assist in your Contract Law matters
Should you require assistance in matters addressing Contract Law Boogaard Attorneys can service Clients throughout South Africa remotely and can accommodate on site visits at our practice in Fourways. We are easily accessible to surrounding areas in Johannesburg North including Bryanston, Dainfern, Morningside, Midrand, Rivonia and Sandton to name a few.

Further we also assist in the drafting, reviewing and advice in a wide range of business related contracts, forms and documentation including those pertaining to Access to Information, Acknowledgments of Debt, Advertising, Agency and Representation, Carriers, Cessions, Companies, Information Technology Contracts, Consumer Protection, Employment, Employee Management, Franchising, Indemnities, Joint Ventures, Novation, Partnerships, Pledge, Sale of Movable and Immovable Property, Sale of Business Suretyship & Vehicle Management.