Unit 13 - Handout

STUDY UNIT 13
OBLIGATIONS & TERMS
13.1 PURPOSE
In study unit 13 the different components of a contract are considered, e.g. the different types
of obligations, conditions and terms that impact a contracting party’s rights and duties.
13.2 LEARNING OUTCOMES
After having studied this unit, you should be able to:
General Learning Outcomes Specific Learning Outcomes
• identify, discuss and distinguish between terms,

conditions, time clauses and assumptions and the
relevance of each to the operation of a contract.
• distinguish and explain the difference between
essentialia, naturalia and incidentialia.
• discuss and apply the rules that apply in the event of
“ticket cases”.
• discuss the caveat subscriptor rule and explain how it
is determined whether a person is bound to the
content of a document that s/he signed without
understand and give content to reading it.
the principles relating to the
• distinguish between express terms, tacit terms (i.e.
content and operation of a
terms implied ex consensu) and implied terms (i.e.
contract
terms implied ex lege);
• identify and explain the “officious bystander test” in a
set of fact and be able to explain what is necessary to
import a tacit term into a contract.
• identify discuss the concept of a “condition”.
• identify, distinguish and explain what the
consequences are of suspensive and resolutive
conditions in a set of facts.
• identify and explain time clauses, exemption clauses,
non-variation clauses and governing law clauses.
Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 1
13.3 PRESCRIBED STUDY MATERIAL
The following prescribed study material must be studied in detail for this study unit:
Textbook • Chapter 10 of Hutchison & Pretorius (4th ed.)
Legislation • Sections 48, 49, 50 and 51 of the Consumer Protection Act 68 of 2008
• Bhikhagee v Southern Aviation (Pty) Ltd 1949 (4) SA 105 (E).

• George v Fairmead (Pty) Ltd 1958 (2) SA 465 (A).
Case Law
• South African Forestry Co Ltd v York Timbers Ltd 2005 (3) SA 323
(SCA).
• Relevant sections in the learning guide, handouts and lecture slides /

Other
notes on Blackboard.
13.4 TYPES OF OBLIGATIONS
Students should be able to identify and discuss the different types of obligations that can be
found in a contract. These include:
• Civil obligations.
• Natural obligations.
• Moral obligations.
• Reciprocal obligations.
• Simply, alternative, generic and facultative obligations.
In addition to the types of obligations, students must be able to identify and explain how
divisible and indivisible performance operates within a contract.
13.5 TERMS
A contract may contain different terms. Students must firstly be able to explain what is meant
by essentialia, naturalia and incidentalia. In addition, there are express, tacit and implied
terms. When dealing with express terms, students should also take special notice of the
following:
• Caveat subscriptor rule.

• Standard-form contracts.
• How unsigned documents could become part of the express terms of a contract by
means of an attachment.
• Ticket cases (including disclaimers / exemption clauses). Take special note of the rules
of ticket cases as well as how the common law position and the position of the
Consumer Protect Act 68 of 2008 may differ.
George v Fairmead (Pty) Ltd [1958] 3 All SA 1 (A)

Bhikhagee v Southern Aviation (Pty) Ltd [1949] 4 All SA
164 (E)

• Study these cases in relation to ticket cases, disclaimers and exemption clauses. You
should study the legal principles established by the case, and be able to apply the case
as authority to a set of facts.
With regards to implied terms also take note of those terms implied ex lege, implied by statute
as well as terms implied ex consensus (and its similarity to tacit terms).
SA Forestry Co Ltd v York Timbers Ltd [2004] 4 ALL SA

168 (SCA).
• In this case the Appellant argued that Respondent had breached an implied term placing
on the Respondent the duty to act in accordance with reasonableness, fairness and
good faith. The court disagreed. Study the legal principles established by the case
related to implied terms, and be able to apply the case as authority to a set of facts.
13.6 CONDITIONS
Students should be able to identify and discuss the different types of conditions in a contract,
as well as the effect each type of conditions has on the contract and the contractual
obligations. These include:
• Positive conditions.
• Negative conditions.
• Suspensive conditions.
• Resolutive conditions.
• Potestative, causal and mixed conditions.
Students should also be able to briefly discuss how the doctrine of fictional fulfilment of a
condition operates.
13.7 OTHER CLAUSES / TERMS
Students should be able to identify and discuss the following other types of typical clauses /
terms found in a contract:
• Time clauses.
• Suppositions.
• Model clauses.
• Exception clauses.
• Non-variation clauses.
• Governing law clauses.

13.8 SELF-ASSESSESSMENT: CONCEPTS AND DEFINITIONS
By the end of this study unit, you should be familiar with and be able to define and explain the
below concepts. Take this opportunity to define these concepts after having worked through
the study material:
• Moral Obligation ………………………………………………………………………………….

……………………………………………………………………………………………………...
• Civil Obligation ……………………………………………………………………………………
……………………………………………………………………………………………………...
• Natural Obligation ………………………………………………………………………………..
……………………………………………………………………………………………………...
• Reciprocal Obligation ……………………………………………………………………………
……………………………………………………………………………………………………...
• Simple Obligation ………………………………………………………………………………...
……………………………………………………………………………………………………...
• Alternative Obligation ……………………………………………………………………………
……………………………………………………………………………………………………...
• Generic Obligation ……………………………………………………………………………….
……………………………………………………………………………………………………...
• Facultative Obligation ……………………………………………………………………………
……………………………………………………………………………………………………...
• Indivisible Performance / Contract ……………………………………………………………..
……………………………………………………………………………………………………...
• Divisible Performance / Contract ……………………………………………………………….
……………………………………………………………………………………………………...
• Naturalia …………………………………………………………………………………………..
……………………………………………………………………………………………………...
• Essentialia ………………………………………………………………………………………...
……………………………………………………………………………………………………...
• Incidentalia ………………………………………………………………………………………..
……………………………………………………………………………………………………...
• Caveat Subscriptor ………………………………………………………………………………
……………………………………………………………………………………………………...
• Express Terms …………………………………………………………………………………...
……………………………………………………………………………………………………...
• Tacit Terms ……………………………………………………………………………………….
……………………………………………………………………………………………………...

• Implied Terms …………………………………………………………………………………….
……………………………………………………………………………………………………...
• Condition ………………………………………………………………………………………….
……………………………………………………………………………………………………...
• Negative Condition ………………………………………………………………………………
……………………………………………………………………………………………………...
• Positive Condition ………………………………………………………………………………..
……………………………………………………………………………………………………...
• Suspensive Condition ……………………………………………………………………………
……………………………………………………………………………………………………...
• Resolutive Condition …………….………………………………………………………………
……………………………………………………………………………………………………...
• Potestative Condition ……………………………………………………………………………
……………………………………………………………………………………………………...
• Causal Condition …………………………………………………………………………………
……………………………………………………………………………………………………...
• Mixed Condition ………………………………………………………………………………….
……………………………………………………………………………………………………...
• Suppositions ……………………………………………………………………………………...
……………………………………………………………………………………………………...
• Modal Clauses ……………………………………………………………………………………
……………………………………………………………………………………………………...
• Exemption Clauses ………………………………………………………………………………
……………………………………………………………………………………………………...
• Non-Variation Clauses …………………………………………………………………………..
……………………………………………………………………………………………………...
• Governing Law Clauses …………………………………………………………………………
……………………………………………………………………………………………………...
13.9 SELF-ASSESSMENT: QUESTIONS
By the end of this study unit, you should be able to answer the below questions.
Take the time to work out the answers for the below questions (the answers are found within
the prescribed study material).
1 Define and explain what a moral obligation is.
2 Define and explain what a civil obligation is.
3 Define and explain what a natural obligation is.
4 Define and explain what a reciprocal obligation is.

5 Define and explain what a simple obligation is.
6 Define and explain what an alternative obligation is.
7 Define and explain what a generic obligation is.
8 Define and explain what a faculative obligation is.
9 Define and explain what divisible performance / contract is.
10 Define and explain what indivisible performance / contract is.
11 Define and explain what an essentialia is.
12 Define and explain what a naturalia is.
13 Define and explain what an incidentalia is.
14 What is the difference between an essentialia, naturalia and incidentalia?
15 What is an express term?
16 Explain what caveat subscriptor means and how can be used in signed contracts.
17 Define and explain what a ticket case is.
18 List and explain the series of questions that are applicable when determining when a
customer is bound to a ticket case.
19 What terms would be prohibited by law?
20 What is a tacit term?
21 What is an implied term?
22 Explain what is meant by terms implied ex lege.
23 Explain what is meant by terms implied ex consensu.
24 Explain what is meant by the officious bystander test and explain when it would be used.
25 What is a condition?
26 What is the difference between a condition and a term?
27 What is the difference between a positive condition and a negative condition?
28 What is the difference between a suspensive condition and a resolutive condition?
29 What is the difference between potestative, causal and mixed conditions?
30 Define and explain what a time clause is.
31 Define and explain what a supposition is.
32 Define and explain what a model clause is.
33 Define and explain what an exemption clause is.
34 Define and explain what a non-variation clause is.
35 Define and explain what a governing law clause is.
<<END OF STUDY UNIT HANDOUT>>

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STUDY UNIT 13

OBLIGATIONS & TERMS

13.2 LEARNING OUTCOMES

After having studied this unit, you should be able to:

General Learning Outcomes Specific Learning Outcomes

• identify, discuss and distinguish between terms,

Textbook • Chapter 10 of Hutchison & Pretorius (4th ed.)

• Bhikhagee v Southern Aviation (Pty) Ltd 1949 (4) SA 105 (E).

• Relevant sections in the learning guide, handouts and lecture slides /

13.4 TYPES OF OBLIGATIONS

• Caveat subscriptor rule.

George v Fairmead (Pty) Ltd [1958] 3 All SA 1 (A)

Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 2

SA Forestry Co Ltd v York Timbers Ltd [2004] 4 ALL SA

13.7 OTHER CLAUSES / TERMS

Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 3

• Moral Obligation ………………………………………………………………………………….

Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 4

13.9 SELF-ASSESSMENT: QUESTIONS

Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 5

<<END OF STUDY UNIT HANDOUT>>

Law of Contract (LCT41Y0) –Study Unit 13 (2024) - Handout 6

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