PRICE

Question 1

What is the leading authority on the essential of ‘price to be paid’?

Answer 1

Westinghouse Brake v Bilger Engineering.

Question 2

What did the court hold in Westinghouse Brake v Bilger Engineering?

Answer 2

There can be no valid contract of sale unless the parties have agreed , expressly or by implication, upon a purchase price.

Question 3

What are the requirements for price?

Answer 3

1. Serious
2. Fixed/capable of ascertainment
3. Sound in current money

Question 4

What is a serious price?

Answer 4

1. Real
2. Bears some sort of relationship to the actual value of the thing
3. Seller must intend actually exacting the price.
4. Buyer must intend to pay.

Question 5

When is the requirement of seriousness in price lacking?

Answer 5

When donation is the sole consideration moving the sale.

Question 6

What happens if donation is the sole consideration moving the sale?

Answer 6

The sale is void.

Question 7

Is it necessary for the parties to fix the price to be paid for the merx?

Answer 7

No, because of the id certum est quod certum reddi potest rule which holds that that which can readily be made certain, is certain.

Question 8

What is the effect of the reddi potest rule?

Answer 8

It is sufficient if the parties have agreed upon a method by which the price can be fixed.

Question 9

What case deals with fixing the purchase price?

Answer 9

Burroughs Machines v Chenille Corporation.

Question 10

What did the court hod in Burroughs Machines v Chenille Corporation?

Answer 10

1. No valid contract of sale unless the parties have fixed the purchase price expressly or by implication.
2. Purchase price must be fixed in the contract or;
3. The parties must agree on seeking external sources to help them determine the price without further reference to them.

Question 11

What are the severals ways to determine the purchase price externally?

Answer 11

1. By reference to independent circumstances
2. By reference to a third party
3. By reference to the usual or current market price

Question 12

What is the requirement of ‘price must sound in current money’?

Answer 12

1. It must consist in valid currency
2. If it’s goods, then the contract will be one of exchange and not a sale.

Question 13

Which case deals with the requirement of serious

Answer 13

CIR v Saner

Question 14

What are the facts of CIR v Saner?

Answer 14

Company A sold its undertakings to Company B for a consideration of shares in Company B, Company A then attempted to sell its holding of B’s shares at a nominal price (10% of their realisable value) with the object of dividend tax evasion.

Question 15

What did the court hold in CIR v Saner?

Answer 15

1. There can be no contract of sale and purchase without the animus emendi on the part of the purchaser and animus vendendi on the part of the seller.
2. Price must be real and serious i.e. bear relation/proportion to the thing sold
3. Animus be genuine

Question 16

Which case deals with the requirement that ‘price must be certain, fixed, or readily ascertainable in amount’?

Answer 16

Burroughs Machine v Chenille Corporation of SA.

Question 17

What did the court hold in Burroughs Machine v Chenille Corporation of SA?

Answer 17

1. There can be no valid contract of sale unless the parties have agreed, expressly or by implication, upon a purchase price.
2. They must either fix the amount of that price in their contract or agree upon some external standard by the application whereby it will be possible to determine the price without further reference to them.

Question 18

Which cases deal with determining price by reference to a 3rd party?

Answer 18

1. Odendaalsrus Municipality v New Nigel Estate Gold Mining
2. Mufamadi v Dorbyl Finance
3. Gillig v Sonnenberg

Question 19

What did the court hold in Odendaalsrus v New Nigel?

Answer 19

1. It is permissible that parties to a sale leave the determination of the price to a 3rd ascertained person
2. The contract in itself must place the subject-matter of the transaction, the price and fact of consensus, out of range of the clash of will of the parties.
3. Where the absolute discretion of the 3rd determinate party is crystallised and controlled to the agreement, then there is no reason the contract should not be upheld.

Question 20

What are the facts of Mufamadi v Dorbyl Finance?

Answer 20

MF and DF entered into a credit agreement wherein MF purchased 33 buses, MF breached the agreement and had to pay damages.

Question 21

Which aspect of Mufamadi v Dorbyl Finance is relevant?

Answer 21

In calculating the damages, Dorbyl Finance nominated an appraiser to determine the value of the repossessed buses ito a clause of the agreement.

Question 22

What are the facts of Gillig v Sonnenberg?

Answer 22

Parties had been the sole shareholders in a company, shares were fixed at a manifestly unfair price by a 3rd party and Sonnenberg was prepared to sell shares at the price fixed by the 3rd party.

Question 23

What did the court hold in Gillig v Sonnenberg?

Answer 23

General principles of laesio enormis apply.

Question 24

What is the doctrine of laesio enormis?

Answer 24

A legal doctrine based in Roman law that gives a contracting party the ability to rescind an agreement if the price of exchange is more than double or less than half the market value of the thing.

Question 25

Which cases deal with determining price by reference to the usual or current market price?

Answer 25

1. Machanick v Simon
2. R v Pierson
3. R v Kramer

Question 26

What did the court hold in Machanick v Simon?

Answer 26

1. Discretion given to the seller must be exercised with the judgement of a fairminded person
2. An implied agreement to pay at least a reasonable sum.

Question 27

What did the court hold in R v Pierson?

Answer 27

1. Unless no price is determinable in respect of the goods so delivered, the transaction must be regarded as a sale.
2. A transaction in which goods pass on sale without a price being stated is not the less of a sale if the court can determine from the conduct of the parties and the surrounding circumstances how the price was to be determined.

Question 28

What is a contract paid partly in money and partly in goods?

Answer 28

A sale.