contract of sale

Question 1

When do we apply the CPA to sales

Answer 1

When the transactions occur in the ordinary course of business, when the consumer is not a juristic person with a gross asset value larger than 2 million

Question 2

What are the requirements for sale

Answer 2

1) Intention to transfer a free and undisturbed possession
2) Agreement on the subject matter
3) Agreement on the price

Question 3

What does it mean to transfer a free and undisturbed possession

Answer 3

Vacua possessio
Once delivery has taken place the buyer has a real right of possession.

Question 4

What does it mean to agree on the subject matter

Answer 4

Parties must agree on the subject matter or else it is a material mistake. Subject matter can be tangible or intangible

Question 5

What does it mean to agree on price

Answer 5

The price must be in money or atleast have a monetary component and the price must be fixed or the parties must have agreed upon some external method

Question 6

What are the legal effects of a contract of sale

Answer 6

1) The passing of ownership
2) The passing of risk and profits

Question 7

What does the passing of ownership involve

Answer 7

The seller himself must be the owner and there must be delivery with the intention to pass ownership

Question 8

When does ownership pass in credit, cash and immovables sales

Answer 8

Cash: On delivery and when full purchase price has been paid
Credit: On delivery alone
Immovable: On delivery alone (registration)

Question 9

When does risk transfer under common law

Answer 9

The risk of accidental loss transfers to the buyer as soon as the sale is perfecta even if the thing has not been delivered yet

Question 10

What does accidental loss refer to

Answer 10

The damage or total destruction of a thing. So if item is damaged before delivery the buyer must still pay full purchase price

Question 11

Does the buyer bear the risk of all loses

Answer 11

No, only accidental. The buyer is not liable for loss caused by sellers negligence or otherwise. The seller will be responsible for these damages and won’t receive the purchase price

Question 12

When is a sale perfecta

Answer 12

When the price is fixed and not merely ascertainable, the subject matter is ascertained and all suspensive conditions have been met

Question 13

What are the duties of a seller

Answer 13

Duty to care for item
Duty to deliver
Duty to give vacua possessio and implied warranty against eviction
Duty to take liability for latent defects

Question 14

What does implied warranty against eviction mean

Answer 14

The seller guarantees that the buyer will not dispossessed/evicted by any third party with a better title.

Question 15

What happens if buyer is evicted

Answer 15

They can claim against the seller for implied warranty.

Question 16

How can they claim implied warranty

Answer 16

1) they could refuse to hand over goods until there is a court order. They must notify the seller
2) hand over the goods willingly and do not have to notify seller

Question 17

What compensation can the buyer claim under implied warranty against eviction

Answer 17

There will be a breach of contract by the seller and therefore the buyer can claim back purchase price, any costs incurred defending the matter in court or any additional fees

Question 18

What happens if the buyer has made any additions to the item

Answer 18

The buyer can then claim back what they used in modifying the item under unjustified enrichment against the owner

Question 19

What is a latent defect

Answer 19

A defect that is not obvious to the ordinary person upon a reasonable inspection

Question 20

Does a seller have to of known about the defect to be held liable ?

Answer 20

No

Question 21

What are the two remedies to latent defects

Answer 21

Actio Redhibitoria: Where it is a material defect. can claim back the full purchase price and any additional costs incurred

Quanti manoris: Not material and reasonable person would have bought it for less. Can claim it at purchase price less the cost of damages

Question 22

What is it called when these remedies can be excluded under an express clause

Answer 22

Voetstoots clause which means you purchase item as it stands

Question 23

When does a voetstoets clause not apply

Answer 23

When the seller knew of the defect and did not advise the buyer

Question 24

What does implied warranty of quality mean

Answer 24

The consumer has the right to good quality goods which are free of latent and patent defects