BER 210 Ch 8 : Intro to Law of Purchase and Sale

• Contract of sale is specific, nominated, reciprocal (both parties owe), agreement to sell
and buy .
– Where the seller has the full intention to deliver a determinable thing which contains all
the rights to the buyer
– The buyer has full intention of paying a determined price for the thing
o Requirements for a valid contract of sale:
– Is the 5 prerequisites of a normal contact ( c, cc, l , pp ,f)
– And the general principals of a contract of sale
– The essentialla of the contract distinguishes it from others:
• Intention for the seller to sell and the buyer to buy (consensus)
• The thing sold (consensus)
• The purchase price ( consensus of $$$ performance )
 Essentiallia of a contract of Sale
o Nature of the contract
• Intention of parties to deliver the rights of undisturbed use, enjoyment and disposal of the thing
to the buyer= ownership of the thing sold
• Seller and buyer must have consensus regarding the thing sold
• Their intentions must be revealed to buy and sell
• Must be specified in the contract . Who?
• A stolen goods= deed of sale in null and void = impossible to perform= illegal
o The thing sold
• There must be consensus on the thing sold
• It must be determined and determinable, if description is to vague = null and void
• It will mean that the contract is physically possible
• Thing sold can be movable (car) , immoveable (house) , material (dress), immaterial (debts) , must
be commonly sold and not need approval from another authority
• Commercially sold/ merchantable
o Purchase price
o Requirements for a valid price determination
• Agreement on price
• Price must be certain
• Price must be of acceptable currency - where it doesn’t not exist one of the essentiallia is missing thus not a contract of sale
• Letters of credit are most frequent method of payment in international trade
• Seller and buys must reach consensus of the price, amount and if it is paid as a sum of money
o Agreement on the price
• Not contract will exist where the price is not determined or determinable
• There must be serious intention that the agreed price will be for their contract and is payable as agreed

o Influence of the CPA on the price

– Price – unfair, unreasonable or unjust;
– Court – just and reasonable order
• A supplier (seller) is limited from going into a contract to supply (market ) any goods at a price that is :
• Unfair , unreasonable, unjust
• If so the court may order a return of $, property or compensation
• A retailer (seller) must display the price of goods on sale and cant charge higher than it
• If more than one price is on display the lower of the two is charged
• Seller is NOT bound by display if there is an obvious error /tampering
• Seller isn’t forced to display price of goods that are used for advertising or goods that aren’t ordinarily accessible to consumers
 Contract for the sale of land
o Formalities in terms of the Alienation of Land Act Section 2(1) of the Alienation of Land Act 68 of 1981
– Contract for alienation of land - Must be in writing and singed by both parties
– Agent must have written authority except:
• Agent acts on behalf of pre-incorporated company or CC not yet floated
• Partner acts on behalf of partnership
• No formalities are need where the sale is of a public auction
o Important concepts
– “Alienate” – Sell, exchange or donate
– “Land”
• Any unit
• Right to claim transfer of land
• Undivided shares in land
• Interest in land
– “Deed of alienation” – document/s through which land is alienated , more than a contract
– Same requirements apply to sharebook schemes , timeshare schemes and Housing Dev schemes for retired persons
older than 50
o Aim of statutory requirements
• Prevent disputes of contents
• Prevent uncertainties re to contents
 Written contract required
• Can be one or many documents – one contract – parol evidence rule applies: no verbal
testimony is allowed in legal proceedings to supplement change or contradict the terms of
written contract
• Verbal testimony only given to prove the intention of the parties (not written in the contract)
• Deed must contact all the essentialia
• Deed must contain all agreed or implied material terms – if lacking, could be void
• Material term a terms parties sees as important enough to insert in the contract
• Is term material?
• Parties apply mind to the term?
• Agree , Expressly or impliedly that
– terms part of contact
– and binding on them?
• Also contract the right of the buyer to terminate the deed of alienation and the deed CANT be
REQUIREMENTS:
o Things sold must be clearly defined
• Identify the thing sold
• Not identifiable? – null and void
• Determined or determinable without the parol evidence rule

o Purchase prince must be clearly defined

• Purchase prices as well as method and time of payment must be stated
• Instalments , periods btw ? Id not stated contract is null and void
o Parties must be clearly described
• Both seller and buyer describe capacities
o Alterations of written contracts
• As per statutory formalities applicable to contract (eg. in writing)
• If altered it must comply with legislation
o Termination of written contracts
• Can be affected verbally
• Doesn’t have to comply with the statutory formalities
 Signature of parties
• Both parties must sign the deed of alienation
• Either personally of through a representative
• Signature doesn’t have to be a full name – initial or mark that identifies the party as sufficient
• Offer of acceptance is in 2 documents both must be signed by both parties
• CPA
• Signed and initialled
• Can be done via electronic means – is so it must be carefully considered and fully valid
o Agents
• Act on behalf of seller or buyer
• Written authority which must exist at the conclusion of the contract and must have knowledge thereof - if not it will be
null and void
• CPA – agent is like an intermediary , must disclose info prescribed by minister of trade and industry to anyone who
regarding sale and any property, goods or services .
• Info is inter alia (full identification ) of rendered , fees, commission, cost payable , disclose any code of conduct
• Influence of CPA Act
• Written must be signed and in understandable language for consumers
• If there are any conflicting acts with in the alienation act and CPA both acts apply concurrently
 Consequences of non-compliance with formalities
• Contract is null and void
• If one party delivered whole/ partial performance, he cannot claim counter – performance
from other party can only reclaim performance
• Buyer who made performance to an invalid contract can claim following from seller:
– Interest at the rate
– Reasonable compensation
• for expenses incurred without the consent of the owner , and improvements made
• Improvements made with express and tacit consent to increase market value
• The seller who allowed buyer to possess land can claim:
– Compensation for occupation
– Compensation for intentional or negligent damage
• If both parties preform on a contract that was null and void based on invalid formalities – it will be deemed as
binding
 Right to revoke offer or terminate deed of alienation
• Section 29A of the Alienation of Land Act 68 of 1981
• Buyer my terminate deed of alienation within five days provided that:
– Written notice provided
– Purchase price not exceed R250 000
– Buyer is a natural person
– Property used for residential purposes
• If deed is terminated – every person who received money from buyer must return money
within 10 days of notice.
• CPA :
– Goods can be returned within days of delivery
– Supplier must return payment within n days
– Contract must contain a cooling off provision
– Direct marketing – email, person,