Sale: Part 1 Flashcards
Define sale
A contract in which the seller agrees to deliver FREE and UNDISTURBED POSSESSION of a thing to the buyer in return for payment
The Act applies ONLY to transactions where the supplier sells/supplies “in the ordinary
course of ____________.” The Act applies ONLY where the consumer is NOT a _______ person with a gross asset value/gross annual turnover in excess of R2 million.
business
juristic
Define a ‘lease’, what is the main difference between sale and lease
A contract in which the lessor agrees to give the lessee the undisturbed use and possession of a thing, in whole or in part, for a temporary period of time in return for a price.
Main difference = for a temporary period of time in return for a price
What are the contracts of sale governed by?
Contracts of sale are governed by the common law AND by the Consumer Protection Act
2008
What are the essential requirements for sale? [3]
a) Intention to transfer free and undisturbed possession
b) Agreement on the SUBJECT MATTER of the sale
c) Agreement on PRICE
What does ‘‘VACUA POSSESSIO’ mean?
Free and undisturbed possession = VACUA POSSESSIO
When there is an agreement on price and subject-matter, what is the next step? [2]
- Ascertained
- Ascertainable
Sale does not necessarily mean ownership, therefore can someone who is not the owner make the sale?
Sale does not necessarily mean ownership
Yes, therefore possible for someone who is not the owner to sell an thing
VALIDLY.
Before ___________ takes places, there is a _____ contract of sale (all requirements
are met), and the buyer has a personal right against the seller for delivery.
Once delivery has taken place, the buyer has a _____ right of possession, NOT
________________
delivery
valid
real
ownership
What is possession?
Possession is a very strong real right but it is a lesser real right than ownership.
Some buyers may become owners, but not always.
What must happen to avoid a material mistake?
The parties must agree on the subject matter of the sale otherwise there’s a
material mistake.
What are the types of subject matter? [2]
- CORPOREAL = tangible
- INCORPOREAL = intangible e.g . intellectual property, copyright, patent,
shares, the right to sell your debts.
True or false, the CPA act, a list of services that fall broadly under sale, e.g. healthcare,
accounting services, legal services, hospitality & tourism, banking, airlines &
casinos, beauty
The Act provides a list of services that fall broadly under sale, e.g. healthcare,
accounting services, legal services, hospitality & tourism, banking, airlines &
casinos, beauty
In terms of agreement on price, what must it include? [2]
i. The Price must be in money or at least it must have a monetary component.
ii. The price must be fixed or the parties must have agreed upon some external
method or standard by reference to which the price can be ascertained
What is the legal effects of a contract of sale? [2]
a) The passing of ownership
b) The passing of risk & profits
What is the key requirement for ownership to be transferred? [2]
- Delivery
- Intention to pass ownership
DELIVER + INTENTION TO PASS OWNERSHIP
What are ‘movables’?
Movables = delivery can be actual (actually hand good over) OR it can
constructive
What happens during constructive delivery?
In constructive delivery, the item is not moved at all, instead the buyer is
placed in control of the item
E.g A buys all the stock in a warehouse from B. Instead of actually delivering the stock, B could give A the key to the warehouse.
What are ‘immovables’?
Immovables = delivery takes place when the sale is registered at the Deed’s
Office. This normally happens about 2 months after the contract of sale is signed
by the two parties.
What happens if there is Intention to pass ownership under a CASH sale of a moveable?
then it is presumed that the intention of the parties is that ownership will pass ON DELIVERY and FULL purchase price must be paid
What happens if there is intention to pass ownership under a CREDIT sale of a moveable
then it is presumed that the intention of the parties is that ownership will pass on DELIVERY ALONE i.e. before the full purchase price is paid.
What happens if there is intention to pass ownership under immovable property?
ownership will pass on delivery alone (registration at Deeds Office) and the purchase price need not have been paid.
Why does it matter wether ownership has passed?
Rei vindicatio = As the action through which an owner who is out of possession sues to recover possession of his property
What is the risk common law rule?
the risk of accidental loss passes to the buyer as soon as the sale is PERFECTA, even if the thing has not yet been delivered to him.
What are the requirements for a sale to be PERFECTA? [3]
- The price must be fixed
- The subject matter must be ascertained
- Any suspensive condition to which the sale is subject must have been fulfilled.
Unascertained goods must be ‘______________’ to the contract
appropriated = removed
What if goods are damaged or destroyed? [2]
Destroyed = does not pass
Damaged = passes
What if the seller is in mora in making delivery? (Mora debitoris)
What if the buyer is in mora in taking the delivery?
(Mora creditoris)
Mora debitoris = Risk does not passs
Mora creditoris = Seller only liable for damage/destruction due to gross negligence, not ordinary negligence
