QUESTION ONE The legal issue : the consequences of illegality of a contract .

An unlawful or illegal contract (contrary to public policy and good morals) is void under the common law. Where an agreement is void due to illegality, none of the parties acquire any enforceable right and duties from the contract. No party may institute an action against the other to claim a promised performance on the grounds of the unlawful agreement. This rule is expressed in the maxim known as ex turpi causa non oritur action (no action arises from a shameful cause). This rule is never relaxed. Even if one of the parties has already rendered performance, the court will not recognise the contract. Because no valid contract came into being, the normal contractual remedies are not available to the parties. If any party has already delivered performance in terms of such a contract, he could reclaim his performance from the other party on the grounds of unjust enrichment, but the unlawfulness of the contract means the person who has suffered the loss as a result of the contract is not able to rely on the contract to claim damages. In this case, because the cameras are stolen property, it is an unlawful contract; contrary to public policy and neither Tom nor Tarryn, acquired any rights or duties from the contract as it is void. Tom has already rendered performance, having given Tarryn the box of cameras. Tarryn has refused to pay and rightly so, as no obligations flow from an illegal contact. If Toms claim that he did not know that the property was stolen is true, he might be able to reclaim the cameras back on the grounds of unjustified enrichment. Tom cannot legally compel Tarryn to pay the purchase price as illegal contracts are not enforceable by law.

QUESTION TWO The legal issue : special terms .( notices and tickets) Service providers are entitled by law to impose any such terms their customers are prepared to accept but the law also seeks to control these terms by insisting that they are incorporated into the contract before the conclusion of the contract between parties. Terms cannot be added after the contract has been concluded.

An exclusion clause is a term which purports to exclude liability for the happening of certain events. Notices of the existence of an exclusion clause should be given to the other party before or at the time of concluding the contract so that it can be incorporated in the contract. If notices are used , they must be sufficiently large and be placed in prominent positions where they are visible to customers prior to them entering into premises . When the supplier of the service has given adequate notice of the terms upon which he is prepared to do business, the customer does not need to have actually read the terms in order to be bound by them. He will be assumed to be in the same position as if he knew of the terms, read and accepted them. A service provider would be entitled to assume assent where there customer expresses that all terms are understood and are accepted. It is impossible to prove that the customer has read the notices but as long as the service provider takes reasonable steps to ensure that the customer is alerted to the existence of such terms before being bound by contract, then terms are included in the contract.. By paying the entry and proceeding to enter the premises, Summer expresses to abide by and be bound by all the facilities` rules and regulations . By conduct, he has agreed to all terms incorporated into the contract . Swimmer cannot sue for damages as there is the notice at the entrance that is clearly visible which he is deemed to have seen. If the notice was printed on the back of the ticket Swimmer received, the service provider still runs the risk for the ticket was only issued to Swimmer after the agreement had been made and it was too late to incorporate the term into the agreement . Swimmer can sue for damages.

QUESTION THREE The legal issue : public offer and acceptance. By law, a public offer is a declaration of intent by a prospective party to a contract to members of the public in general, in which he indicates an intention to be contractually bound by the mere acceptance of the offer and in which the person sets out the rights and duties he wishes to create. All stipulations and essential elements in terms of which the offeror is prepared to include must be contained in the offer. The

offer must be clear and certain. A suspensive condition is a contractual term which suspends the operation of the contractual obligations and consequences in terms of the offer until a specified uncertain future event. Acceptance to the public offer can only be by a person who has actual knowledge of the offer and must conform exactly to the offer. If the offer is one which is accepted by being acted upon, communication of the intention to accept is not necessary. One can accept such an offer by performing the required act (as set out in the offer). Acceptance should, however, be expressed and it will only be effected if the offeror is notified that the offer has been accepted. Once acceptance is complete, the offer is irrevocable and a legally binding contact has been entered into and the parties cannot withdraw from the contractual relationship. The operation of contractual right and duties are suspended until, and become enforceable only when the condition is fulfilled. An offer can only fall away : If the offer is valid for a specified period, If offeror withdraws the offer before the offere accepted it If the offered does not accept the offer exactly as it was made If either party die before the offer is accepted By law, Bob should have had knowledge of the offer and when he and went provided the information to the police, he should have done so with the intention of accepting the offer that Mr Diamond had made and should have expressed this acceptance. Bob was aware of the offer since he attempted to claim the reward. When he gave the information to the police, he was in fact accepting the offer. Consensus was reached and therefore a contract arose between the two parties. Upon the arrest of the robbers, Mr Diamonds contractual duty to pay the reward and Bobs right to the reward became enforceable and he is compelled to pay as non payment would put him in breach of contract.

QUESTION FOUR The legal issue : Misrepresentation Misrepresentation is a false statement of fact by one person to another, before or at the time of conclusion of the contract, concerning an existing fact or circumstance relating to the contract, with the aim or intention and result of inducing the latter to conclude the contract Effect: contract between the parties does not represent a true meeting of the minds and contract may be void or rendered voidable at the election of the aggrieved party. In this case, John was aware of the lease being cancelled and set out to mislead

QUESTION FIVE The legal issue : Passing of Risk. The principle of the passing of risk determines whether the seller or the buyer bears the risk when there is accidental damage to or loss of the merx. It is a consequence of the contract of sale that this risk is passed from the seller to the buyer as soon as the contract is perfecta. A contract is perfecta when the merx is definite and the price ascertainable and the contracted is concluded and not subjective to a suspensive condition. The buyer bears the risk and will therefore generally remain liable for the purchase price even if the merx is totally destroyed before delivery takes place , provided that the seller is not to blame for the destruction of the item(s). When goods have to be counted and separated from the remainder of a supply held by the seller, risk will not pass until that has taken place. The supply of wine was held in the cellar and the manager of the Simsonsberg Wineries admitted that he had not yet separated and identified the wine bought by Tipsy from the stock. Risk was not passed from the seller to Tipsy and Simsonberg Wineries as the owner of the cellar and wine , bears the burden of the destruction, without being able to claim the purchase price. Tipsy is not liable for the purchase price and would only have been liable had the purchases been separated from the rest of the wine in the cellar.

Had the wine been destroyed in a deliberate fire , Tipsy would not have been liable for the purchase price, but however, because of the culpable conduct the manager which would have resulted in the destruction of the wine, Tipsy would have been entitled to damages in addition to return of purchase price.