SPECIFIC CONTRACTS

THE LAW OF SALE

Introduction and history of law
of sale
• What began and law of exchange and barter under Roman law later
developed into an independent nominated contract of sale.
• Roman law of sale was closely observed and expanded in the Roman-
Dutch Law.
• South African law of sale is based on common law.
• Numerous rules applied in Roman and Roman-Dutch Law regarding
the nature, essentalia and naturalia of contract of sale enjoy exactly
same applicaton under SA law
The Contract of Sale – defnition
• A contract of sale is a specifc, nominated, reciprocal agreement to
buy and sell, in terms of which the seller has a true intenton to
deliver a determined or determinable thing together with all his rights
in the thing, undisturbed, to the buyer, and the buyer has the true
intenton of paying a determined or determinable price for the thing
• Simply put, it is contract in which one party (seller) undertakes to
deliver the merx to another party (buyer), the purchaser in exchange
of this agrees to pay the seller a certain sum of money.
Essentialia - Salient features
• Contractual requirements must be met.
• However, there are those characteristcs that makes a contract of sale
what it is and not any other contract.
• The essentalia of a contract of sale are:
• 1. the intenton of the seller to sell and the buyer to buy (consensus on the
nature of the contract)
• 2. The merx (consensus on what is bought and sold
• 3. The purchase price (consensus on the monetary performance owing by the
buyer to the seller)
Essentialia – nature of contract
• Partes must reach consensus regarding the nature of the contract.
• If partes conclude a pretence sale, courts will give efect to their true
intenton.
• Intenton in contract of sale is to deliver the rights of undisturbed use,
enjoyment and disposal in the thing sold – ie, for buyer to take
ownership.
• Consequently no sale if partes’ contract say ownership will not pass to
buyer.
• Where both partes know thing being sold doesn’t belong to seller, the
contract is null and void.
Essentalia - The Merx/ res vendita –
the thing sold
• The thing must be determined or determinable at the conclusion of the contract.
• That makes the executon of the contract physically possible – if descripton of
thing is too vague to determine exactly what is sold contract will be null and void.
• Defnite & ascertainable eg porton 12 of the farm.
• Movable or immovable, or even incorporeal thing such as a claim, or servitude or
patent.
• Specifc things –
• Sectonal ttles in terms of Sectonal Titles Act
• Timeshare property in terms of Timeshare Control Act
• Future things
• Res aliena – this is a thing which seller is not owner – contract stll valid – but true owner can use rei
vindicato – though not always
Essentialia - The Purchase Price
• Seller and buyer must reach consensus on the purchase price in order to conclude
a valid contract of sale.
• Requirements for a valid determinaton are
• Agreement on the price
• The price must be certain
• The price must consist of acceptable currency – if payment is not money then its not contract of sale
• If payments consists both money and goods
• True intenton must be determined
• If not, what has more value between money and goods determine contract nature
• If goods and money value is equal then presumpton in favour of contract of sale
• Law will not recognise an agreement where the price and value of goods are
seriously disproportonate
• Dutes of the Seller
Duties of the seller
• Dutes of partes are naturalia ie partes can alter these dutes
• We will look at –
• Duty to take care of the thing sold
• Delivery of ownership
• Warrantes against evicton
• Warrantes against latent defects
Duties of the seller – 1. safe-
keeping of the thing sold
• First duty of seller is to take care of the thing sold from the conclusion
of the contract untl delivery
• Buyer can claim damages if goods were damaged through negligence
or intenton of seller.
• But not where there is no fault – doctrine of passing of risk applies
• Also – mora afects liability of seller
Duty of safe-keeping – Passing
of risk
• Doctrine of passing of risk determines whether seller or buyer bears
the risk in the goods sold where accidental damage occurs either by
coincidence or by acts of God and not by the culpable conduct of
either party.
• The general rule is that the owner sufers the loss when his property
is destroyed. If seller retains ownership he bears risk of total or partal
destructon of the thing without being able to claim purchase price
from buyer
• The doctrine of passing of risk causes the risk to pass to the buyer
when the sale is perfecta.
Passing of risk – perfecta
• A contract is perfecta when –
• (a) A buyer and seller have the intenton of selling
• (b) The thing to be sold is determined. In the case of
• (i) an empto rei speratae, the object sold is fxed afer being measured and weighed
• (ii) an empto spei, the object sold is fxed as soon as the contract is concluded
• (iii) a generic sale, the object sold is fxed afer individualisaton
• (c) the purchase price is determined
• (d) the contract is not subject to a suspensive conditon
• The result is that when the sale is perfecta, the buyer bears the risk
• Any advantage also accrues using the same rules
• CPA infuence is without agreement to the contrary, goods to be delivered remain seller’s risk untl
consumer has accepted delivery, that is communicatng that he has accepted delivery, or does anything
with the goods contrary to supplier’s ownership or keeps goods for unreasonable tme without informing
supplier that he doesn’t like the goods
Duty of the Seller -2. Delivery of
ownership
• Mere conclusion of contract does not transfer ownership to the buyer.
• There is no duty on the seller to transfer ownership to the buyer, as ownership is not
one of the requirements for a valid and binding contract. But duty is there where seller
is owner.
• Requirements for passing of ownership are:
a) If it is movable, transferor must deliver the thing to the transferee. Immovable by
registraton in the deeds ofce.
b) Partes must have intenton that ownership pass.
c) Transferor must be in possession to transfer ownership.
d) Purchase price must be paid.
Delivery of thing sold – forms of
delivery
• The minimum requirement for the transfer of ownership from the seller to the buyer is the delivery of the thing sold.
• Forms of delivery depend of the thing being sold
1. Actual delivery: physical handing over of the merx.
2. Symbolical delivery: something else is delivered which enables him to obtain control of the merx.eg bills of lading
for the goods on ship
3. Delivery with long hand (traditio longa manu): pointng out of the merx and its being placed at the disposal of the
buyer.
4. Delivery with the short hand (traditio brevi manu): where the buyer who already has physical denteton of the
merx, but doesn’t hold it as owner, subsequently holds it as owner
5. Constitutum possessorium (transfer of possession): partes agreed that the seller retains detenton of the merx, but
holds it on behalf of the purchaser.
6. Delivery through marking: delivery by marking the thing sold or bought
7. Atornment: merx is in the actual detenton of a third party. Seller, purchaser and third party agree that the third
party will hold the merx on behalf of the purchaser and not the seller
Delivery of the thing sold –
object, date and place
• Object
• Seller must deliver the thing agreed upon
• All accessories for the proper use and enjoyment must be delivered to the buyer (such
as the keys of a car)
• Seller is also obliged to deliver to the buyer all benefts which accrued afer the
contract became perfecta. (such as calves of cows sold)
• Date
• Partes must agree date, if not, then reasonable tme
• Place
• Place must be agreed, if not, where contract was concluded or home or business
premises of buyer
Duties of the seller – 3. Warranty
against eviction
• Any acton by a third party who has beter rights in the thing sold than
the buyer, and who deprives the buyer of the total or partal use,
enjoyment and disposal of the thing sold consttutes evicton
• Forms of evicton
• True owner of the thing sold claims his property from the buyer
• A third party obtains possession of property and the buyer cannot claim the
property from the third party due to a defectve ttle
• In terms of the rule that lease goes before sale
• The holder of a limited real right (servitude of right of way) may prevent full
use and enjoyment
Warranty against eviction –
duties of buyer on eviction
• Buyer must follow certain rules is he is being evicted, or else he will have no
recourse against seller.
• As a general rule buyer must not surrender the thing to someone threatening him
with evicton.
• Buyer must notfy seller of the threat in reasonable tme to enable seller to help
buyer or put up a defence. If seller cant be found, last known address is sufcient.
• Upon receiving notfcaton, seller can`
• Take cession of the buyer’s rights and intervene
• Assist the buyer and furnish the necessary proof of ttle
• Be joined as a party to the lawsuit
• Do nothing
Duties of buyer on eviction –
Recourse
• Sometme buyer has NO or limited recourse –
• Seller is only liable in terms of a warranty where the reason or cause of
evicton already existed at the tme of the conclusion of contract or where it
was caused by seller’s fault afer conclusion of contract
• Even where the seller has excluded his liability for damages, the buyer may
stll cancel the sale and reclaim the purchase price
• The seller will not be held liable where the buyer knew that the seller was not
the owner of the thing at the tme of the conclusion of the contract
• Where seller wasn’t sure of his ownership and informed buyer, seller is not
liable
• Where evicton was caused by vis maior the buyer has no recourse
Duties of the Seller – 4.
warranty against latent defects
• A latent defect is defect in the thing sold which is of such a nature that it
renders it unft for the purpose for which it was bought or for which it is
normally used, and which defect was not known by the buyer at the tme
of the conclusion of the contract and could not be discovered by him upon
reasonable examinaton of the thing sold.
• Warrantes against latent defects can be by operaton of law for which the
aedilitan actons can be used (acto redhibitoria for resttuton and the for
reducton in price) – but no damages with these actons
• Warrantes can be contractual for which the acto empt can be used to
cancel the contract and claim damages – the aedilitan remedies won’t be
very helpful since you buyer cannot claim damages .
Warranties – Actio Empti
• Acto empt is a remedy with which the buyer can claim cancellaton
of sale as well as damages
• Grounds of insttuton-
• Warranty against latent defects
• Warranty for presence of special qualites
• Seller conceals latent defects
• Dealer and manufacturer
Warranties - Aedilitian actions
• The aedilitan remedies are available to the buyer where a latent
defect is present in the thing sold and no express or tacit contractual
warranty was given by the seller.
• Acto redhibitoria and acton quant minoris
• Grounds of insttuton
• The thing sold has a latent defect
• The seller was aware of the latent defect and fraudulently concealed such fact
• The seller expressly or tacitly guaranteed the presence of good characteristcs
or the absence of bad characteristcs ; and
• The seller made a false dictum et promissum to the buyer
Aedilitian actions – when they
may not be instituted
• Aedilitan actons may not be insttuted where –
• (a) defect arose afer conclusion of contract
• (b) defect not latent
• (c) voestoots sale
• (d) latent defect repaired
• (e) waiver
• (f) prescripton
Four elements to be proved by
purchaser
1. Material defect in the merx.
2. Defects was present when the contract was concluded.
3. Defect was latent.
4. At tme of conclusion of contract purchaser was unaware of the defect.
• Warranty must be distnguished from misrepresentaton to defraud. An
inference of fraud is drawn where buyer can prove that the seller:
• Was aware of a defect in the merx at the tme of concluding the contract and
• Dolo malo concealed its existence from the purchaser with the purpose of
defrauding him.
Janse van Rensburg v Grieve
Trust CC 2000 (1) SA 315 (C)
• Buyer made innocent misrepresentaton that trade-in vehicle was
1993 model rather than 1989.
• Seller claimed reducton in the purchaser price in terms of acto
quant mmnorms.
Consumer Protection Act 68 of
2008
• S 55(2) provides that good must be:
a) Reasonably suitable for the purposes for which they are generally intended.
b) Of good quality, in good working order & free of any defects.
c) Usable & durable for a reasonable period of tme.
d) Compliance with applicable standards
• Product failure or defects in goods
• It is irrelevant whether a product failure or defect was latent or patent or whether it could have been
detected.
• Available defense for product failure or defect
• If consumer was informed of specifc conditon & she expressly accepted the goods on that basis
• Remedies
• She may return goods within six months afer delivery to the supplier.
• DUTIES OF THE BUYER
Duties of the buyer
• The buyer generally has two main dutes
• Payment of the purchase price
• Receipt of the thing sold
Duties – Payment of the
purchase price
• Payment must be in legal tender
• Date:
• if cash sale, pay same tme or at least same day
• if credit sale, pay on future date afer delivery
• Payment in instalments only where partes have agreed and number of
instalments, tme of instalments and amount of each instalment must
be determined or determinable otherwise contract is null and void
• Place of payment must be as agreed otherwise place where contract
was concluded or where thing was delivered.
Duties – Receipt of thing sold
• Buyer must receive the thing sold on the date and the place agreed
for delivery
• Where date has not been set buyer must receive thing sold in
reasonable tme otherwise he will be liable for breach in the form of
mora creditoris
• If thing delivered does not comply with specifcatons, buyer can
reject goods and seller will be liable for breach in the form of positve
malperformance
• If buyer delays taking delivery and seller incurs expenses for upkeep
and protecton of the thing – he can claim expenses from buyer
 The END
• Please follow up on the case law prescribed in your Module Learning
Guide on this topic.
• The slides are not sufcient for your understanding. They are meant
for teaching purposes only.