What are some of the formalities required in respect of different categories of contract?
A contract will be lawful if made either viva voce (orally), in writing or tacitly (adopted from the conduct of the parties).
Formalities, as prescribed by legislation for certain categories of contracts, are deemed exceptions to the general rule that no formalities are required to validate contracts.
Contract for the Alienation of land – the contract must:
Be contained in a deed of alienation, .i.e. written and signed by the parties or authorised agents – and if used or intended to be used for residential purposes, it must in certain instances also: Contain various prescribed detail and information, incorporate certain mandatory terms as part of the contract, whether agreed upon or not, and make reference to various rights accruing to the purchaser and some other consequences arising from the act.
Failure to comply with these additional requirements makes the contract voidable.
A Contract for the acquisition of interest in a share block scheme or for a sale or lease of time sharing interest must be done in writing and be signed by the parties or by their authorised agents.
A Lease of land for a period of ten years or more or a Lease of mineral rights must be registered against the title deed of the land.
Prospecting Contracts and Ante Nuptial Contracts must be registeredin the deeds registry and attested by a Notary Public.
Credit and Lay-by agreements must also be done in writing and signed by the parties of the contract. It is a criminal offence not to comply with these requirements.
A Contract of Suretyship must be embodied in a written document and signed by, or on behalf of, the surety; else the contract will be invalid.
Donations must be in writing and signed by the donor or his or her authorised agent in the presence of two witnesses; else it will have no effect.
A Contract of Apprenticeship in certain trades must be in writing and signed by or on behalf of the employer and the apprentice, and by his or her guardian if a minor, and be registered by the Registrar of Manpower. Failure to comply renders the contract invalid.
When is a contract voidable?
When a contract is voidable it means that one of the parties may opt for the rescission (setting aside) of such a contract because his acceptance of the terms thereof was the result of improper conduct by the other party before or at the time of contract formation.
- The following conduct is regarded as improper and will justify rescission of the contract:
- Duress, and
- Undue influence.
- The contract will remain valid and must be performed on by both parties until time of rescission.
- Note that the aggrieved party has a choice – he may also decide to take the improper conduct in his stride and not to claim for rescission.
What are some of the miscellaneous provisions that appear in contracts?
Provisions may vary dependant on the nature of the transaction, the needs and intentions of the parties.
Provision Types commonly found in various contracts, are:
Suspensive Conditions that suspend the operation of an obligation to be performed until a future uncertain event, i.e. I will buy a ladder when dad lends me money but you agree that I use it in the meantime (sale is suspended until loan) and or Resolutive Conditions which is immediately binding but suspends the continuous operation of such obligation or contract until a future occurrence or non- occurrence, i.e. you will sell the ladder to me unless you get a better offer – until such better offer we must still perform according to the agreement, but when you get a better offer our contract becomes void ab initio (from the start)
Warranties (or Guarantees ) ; statement intended to bind yourself that it is correct, .i.e. that the dog I sell is a puppy of 6 months old,
- Exemption or Exclusion Clauses,
- No Variation Clauses,
- Cancelation Clauses,
- Penalty Clauses,
- Domiciluim Citandi Clauses,
- Clauses providing for Giving of Notice,
- Clauses Consenting to Jurisdiction of Magistrate Courts,
- Clauses providing for Attorney and Client Cost.
- Large enterprises make use of standard form contracts with prefixed provisions that form the basis on which that specific entity is prepared to do business with the public