contract of sale Flashcards
When do we apply the CPA to sales
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
What are the requirements for sale
1) Intention to transfer a free and undisturbed possession
2) Agreement on the subject matter
3) Agreement on the price
What does it mean to transfer a free and undisturbed possession
Vacua possessio
Once delivery has taken place the buyer has a real right of possession.
What does it mean to agree on the subject matter
Parties must agree on the subject matter or else it is a material mistake. Subject matter can be tangible or intangible
What does it mean to agree on price
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
What are the legal effects of a contract of sale
1) The passing of ownership
2) The passing of risk and profits
What does the passing of ownership involve
The seller himself must be the owner and there must be delivery with the intention to pass ownership
When does ownership pass in credit, cash and immovables sales
Cash: On delivery and when full purchase price has been paid
Credit: On delivery alone
Immovable: On delivery alone (registration)
When does risk transfer under common law
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
What does accidental loss refer to
The damage or total destruction of a thing. So if item is damaged before delivery the buyer must still pay full purchase price
Does the buyer bear the risk of all loses
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
When is a sale perfecta
When the price is fixed and not merely ascertainable, the subject matter is ascertained and all suspensive conditions have been met
What are the duties of a seller
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
What does implied warranty against eviction mean
The seller guarantees that the buyer will not dispossessed/evicted by any third party with a better title.
What happens if buyer is evicted
They can claim against the seller for implied warranty.
How can they claim implied warranty
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
What compensation can the buyer claim under implied warranty against eviction
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
What happens if the buyer has made any additions to the item
The buyer can then claim back what they used in modifying the item under unjustified enrichment against the owner
What is a latent defect
A defect that is not obvious to the ordinary person upon a reasonable inspection
Does a seller have to of known about the defect to be held liable ?
No
What are the two remedies to latent defects
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
What is it called when these remedies can be excluded under an express clause
Voetstoots clause which means you purchase item as it stands
When does a voetstoets clause not apply
When the seller knew of the defect and did not advise the buyer
What does implied warranty of quality mean
The consumer has the right to good quality goods which are free of latent and patent defects
