General Introduction to the law of Purchase and Sale

Question 1

Define the contract of sale

Answer 1

Is a specific, nominated, reciprocal agreement to buy and sell, in terms of which the seller has the true intention to deliver a determined or determinable object together with all his rights in the object undisturbed to the buyer, and the buyer has the true intention of paying a determined or determinable price for the object

Question 2

What are the requirements for the valid contract of sale?

Answer 2

• General prerequisites ( consensus, contractual capacity, legality, physical possibility and formalities)
• The seller and the buyer must reach consensus regarding the essentialia before a contract of sale can exist.

Question 3

Name the essentialia that distinguish a contract of sale from all other contracts

Answer 3

A) the intention of the seller to sell and the buyer to buy (consensus on the nature of the contract);
B) the thing/object sold (consensus on what is bought and sold);
C) purchase price (that is, consensus on the monetary performance owing by the buyer to the seller).

Question 4

Distinguish between contract of sale and contract of lease

Answer 4

• Contract of sale is concluded with the intention of passing ownership, and is not term bound
• Contract of lease is of temporary nature and does not pass ownership

Question 5

Distinguish between contract of sale and contract of exchange

Answer 5

• In contract of exchange, one object is rendered as consideration for another object. The right of ownership passes upon mere delivery of the various objects of exchange
• In contract of sale, a monetary amount usually constitutes the consideration in the case of a contract of sale. Delivery is usually not the only requirement for passing of ownership in terms of a deed of sale.

Question 6

Does the seller have to be the owner of the object sold to conclude a valid and binding contract of sale?

Answer 6

No

Question 7

What is the seller obliged to do?

Answer 7

To transfer all his rights in the object to the buyer without interference or disturbance

Question 8

What is one of the characteristics of a contract of sale?

Answer 8

The transfer of ownership

Question 9

Explain what occurs when there is clause that states that the buyer will not receive ownership of the object sold.

Answer 9

Wil have the effect that the contract will not be a contract of sale. Reason being is that one of the essentialia of a contract of sale, the intention to buy and sell, is absent

Question 10

Does a conclusion of a contract of sale result in the transfer of ownership?

Answer 10

No, the buyer only obtains a personal rights against the seller.

Question 11

Discuss the nature of the contract in terms of the essentialia of the contract of sale

Answer 11

The seller and the buyer must reach consensus regarding the essentialia before a contract of sale can exist.
They must reveal their intention to buy and sell.
If the parties only create a pretence of sale, but an reality conclude another types of a contract, the courts will not give effect to pretence but rather to the true of the parties.

Question 12

Discuss the process when parties have intention to a contract of sale

Answer 12

Is to deliver the rights of undisturbed use, enjoyment and disposal of the object to the buyer, to enable the buyer to obtain ownership of the object sold

Question 12

Discuss the process when parties have intention to a contract of sale

Answer 12

Is to deliver the rights of undisturbed use, enjoyment and disposal of the object to the buyer, to enable the buyer to obtain ownership of the object sold

Question 13

When is the deed of sale considered null and void in the result of juridical impossibility of performance?

Answer 13

Where both the buyer and seller know that the object sold does not belong to the seller and that the seller is not entitled to sell the object, such as stolen object.

Question 14

Explain future objects

Answer 14

These objects are only determinable at the time of conclusion of the contract in terms of certain specifications or the occurrence of a certain event. If the specifications are met or if the event occurs, the object becomes determined

Question 15

What is emptio rei speratae?

Answer 15

the thing sold can be determined by weighing, measuring or counting in future

Question 16

Define generic sale

Answer 16

The thing is indicated in general (part of a genus) and only individualised later.
determined after individualisation.

Question 17

Explain the Consumer Protection Act 68 of 2008

Answer 17

Future objects sold by description or sample must in all material aspects and characteristics, as envisaged by an ordinary alert consumer (purchaser), correspond with the delivered object.

Question 18

What should be done before accepting delivery of the merx?

Answer 18

A consumer is entitled to examine it to make sure it is of the type and quality agreed upon

Question 19

If consumer did not have the an opportunity to examine the merx?

Answer 19

The merx does not comply with the implied standard, a consumer may return the merx to a supplier (seller) and cancel the agreement within the 10 business days.

Question 20

Where the does risk and expense in respect of the return of the merx in the this instance?

Answer 20

The suppliers (sellers)

Question 21

Discuss res aliena

Answer 21

This is a object of which the seller’s is not the owner. This does not affect the conclusion of a valid contract of sale.

Question 22

What is seller duty in terms of res aliena?

Answer 22

The seller’s only duty in terms of a contract of sale is to deliver the undisturbed use and enjoyment of all his rights in the thing to the buyer.

Question 23

Define Nemo plus iuris rule

Answer 23

A person can only transfer rights which he has to another person. He cannot transfer more rights than he himself has

Question 24

Explain rei vindicatio

Answer 24

Where a sellers sells a res aliena to a buyer, a true owner is entitled to claim his property from the buyer with a vindicatory action

Question 25

Can the true owner claim his property from the buyer, where a buyer possesses a res aliena in good faith?

Answer 25

Yes, If the property still exists

Question 25

Can the true owner claim his property from the buyer, where a buyer possesses a res aliena in good faith?

Answer 25

Yes, If the property still exists

Question 26

If the buyer sold the property to someone else, can the true owner claim the value of property from the former buyer?

Answer 26

No, but the owner will be able to claim the value where the buyer, through his negligent or intentional conduct, made it impossible for owner to reclaim his property

Question 27

Discuss what happens when a buyer buys a res aliena and acts in bad faith

Answer 27

The owner can claim his property from such a buyer. Where buyer is no longer in possession of the property or where he has destroyed it The owner will be able to claim the value of the property from the buyer

Question 28

Discuss Consumer Protection Act 68 of 2008

Answer 28

every consumer (purchaser) has the right to assume and it is an implied term of every agreement, that the supplier (seller) of goods has the legal right and authority to sell those goods.

Question 29

Discuss res litigiosa

Answer 29

Is to the effect that where a 2nd sale occurs pending litigation, the rights of the firsts purchaser must prevail and are consequently enforceable against the 2nd purchaser, irrespective of whether the 2nd purchaser acted in good or bad faith

Question 30

When does merx become res litigiosa?

Answer 30

When summons is served. It is immaterial whether the 2nd purchaser took transfer of res litigiosa with/without knowledge of the pending litigation

Question 31

Name the requirements for a valid price determination

Answer 31

A) agreement on the price;
B) the price must be certain; and
C) the price must consist of an acceptable currency

Question 32

If payment is not of money, is it still considered as contract of sale?

Answer 32

No, essentialia is absent

Question 33

What happens if payment is a combination of both exchange and money?

Answer 33

A) the true intention of the parties must be determined;
B) if the parties intention cannot be determined, the value of money in relation to value of the goods must be determined;
C)if the money and goods are of equal value, it is a contract of sale (presumption in favor of contract of sale)

Question 34

Explain agreement on the price

Answer 34

No contract of sale exists where the price is not determined or determinable. The parties must have the intention that the agreed price will be the price for their contract and it will be payable a agreed.

Question 35

Will the law recognise an agreement on the price where there is a disproportion between the price and the value of the object sold

Answer 35

No, there is no contract of sale

Question 36

Will the law recognise an agreement on the price where there is a disproportion between the price and the value of the object sold

Answer 36

No, there is no contract of sale

Question 37

What method should be used to prevent the contract from being null and void?

Answer 37

The method of determination - valid method and ineffective method.

Question 38

Give example of valid methods

Answer 38

• Price is fixed as a lump sum (R125)
• Price is determined per unit (R120 per bag)
• An objective measure is used (purchase price plus 30%).
• Current or usual price (e.g. bread)

Question 39

Give example of ineffective method

Answer 39

• where one of the parties may fix the price unilaterally;
• where an unnamed third party is to determine the price;
• where the price is only described as reasonable and fair.

Question 40

What is the supplier prohibited from doing in terms of the Consumer Protection Act 68 of 2008?

Answer 40

From entering into an agreement to supply any goods at a price that is unfair, unreasonable or unjust.

Question 41

Is the retailer entitled to charge a higher price than the displayed price?

Answer 41

No, if more than 1 price is concurrently displayed, the supplier is bound by the lowest price. But not bound to displayed price if it contains an obvious error or has been tampered with.

Question 42

Is formalities required for a valid or enforceable contract of sale?

Answer 42

No, also applies to law of purchase and sale of movable property. But certain statutory formalities are required for the valid purchase and sale of immovable property

Question 43

State the Alienation of Land Act of section 2(1)

Answer 43

no alienation of land shall be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.

Question 44

Can the deed of alienation of land be concluded electronically?

Answer 44

no

Question 45

Discuss the influence of the consume protection act on formalities

Answer 45

Formality requirements of section 2(1) of ALA conflict with the CPA which does not require agreements in general to be in writing and, if in writing to be signed by a consumer (purchaser).
If agreement is required to be in writing, such agreement must be in plain and understandable language.
S2(9) of CPA if there is conflict between CPA and any other Act – the provisions of both Acts apply to the extent that it is possible to apply and comply with one of the inconsistent provisions without contravening any of the Acts.
If this is not possible, the provision that provides the most protection to the consumer prevails.