Chapter 13 - Contract of Sale Flashcards
Contract of sale
A sale agreement is a contract in terms of which one person agrees to deliver a thing to another person, who agrees to pay a price.
Essentialia of Contract Of Sale
The article (object)
The price
The agreement to buy and sel
Intention to enter into a sale
The parties must have intention to buy and sell.
The court will establish substance of agreement and the intention of the parties even if they call it a sale.
Object of sale
It is essential that there is a subject for the sale contract.
The subject matter of contract is in both existence and identified at the time of the contract then contract amounts to sale of ascertained goods.
When good agreed upon are not in existence and not identified then the contract is one of sale of unascertained goods.
Purchase price
There can be no valid contract of sale unless the parties have agreed expressly or by implication upon a purchase price.
Must either fix amount of good or agree upon a standard of determining a future amount.
Sale is complete when agreed to purchase and se respectively and thing is sold and price is paid.
Eg
Where the parties agreed that an “independent auditor” will set the price, the contract was held to be void for vagueness as an independent auditor was not at ascertainable person.
Price was therefore not fixed or sufficiently determinable.
The sellers obligations
Taking care of the thing sold.
Seller bears risk if thing sold is damages due to sellers negligence or fraud.
In contracts of sale, the risk of accidental loss to the object passes from seller to purchased is contract is perfect:
- When merx(object) is definite or identified
- when purchase price is ascertained or ascertainable through simple calculation
- if the contracts contains a suspensive condition
How can one protect oneself:
- by agreeing that risk passes at another time
- insurance
Transfer of ownership
Types of delivery
Long handed delivery - pointing out but not possible. Cattle in a Kraal.
Short handed delivery - buyer borrows decides to buy later stage.
Symbolic delivery - a symbol handed over such as keys of car.
Delivery
The seer is obligated to deliver the thing sold at time and place.
Delivery methods for movable property:
- actual delivery
Physically handing over the merx - CONSTRUCTIVE DELIVERY
- symbolic delivery - not physically handed over
- short hand delivery - buyer borrows something and decides to buy it at a later stage
- long hand delivery - Pointing out the merx when it’s not physically possible to hand it over.
Constitutum possesorium
This is the opposite of short hand delivery .
This is when a seller, by consent of a new owner, sells a merx but still retains possession of something they have sold.
Ferrari Enzo
Undisturbed possession
This is a guarantee against possession eviction by seller that the purchaser will remain undisturbed by the seller or a 3rd party.
If the third party is successful of repossession then the seller must make good to the purchaser of the loss they suffered.
Warranty against latent defects
Latent defects are defects in an object that only an expect could discover and not a normal person.
Eg a beetle infestation in a house
The purchaser is allowed to rescind the sale by means of actio redhibitoria only if latent defects are so serious that if the purchaser would have known he wouldn’t have bought it.
Purchaser can rescind the contract on the basis of a fraudulent or in event material misrepresentation, even if the sale is voetstoots.
The purchasers obligations
To take delivery of object
To pay the purchase price
To pay for any expense incurred
Actio quanti minoris
Opposite of actio rehibitoria
When the latent defects is not to material and purchaser would have not refused to buy it if he had known.
Voetstoots sale
It is possible for the seller to exclude this warranty by expressly including in the contract voetstoots or as is clause.
This clause means that the buyer takes the object as is and cannot hold the seller liable for any latent defects.
THE CPA Has altered the use of the “as is” clause and it only can be used in private sales with the sale is not in the ordinary course of the business of the retailer.
Actio Empti
This is a remedy which the purchaser can use, depending on the circumstances to enforce his or her rights against the seller.
If the merx is defective the purchaser May claim damages to the extent of the defect reducing the value of the merx.
Fraudulent misrepresentation by seller and claiming damages
The purchaser may claim damages plus consequential loss.
Eg if I buy a Mercedes and s Toyota of less value arrives then I can claim damages and profits that could have been made
