Sale: Part 1

Question 1

Define sale

Answer 1

A contract in which the seller agrees to deliver FREE and UNDISTURBED POSSESSION of a thing to the buyer in return for payment

Question 2

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.

Answer 2

business
juristic

Question 3

Define a ‘lease’, what is the main difference between sale and lease

Answer 3

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

Question 4

What are the contracts of sale governed by?

Answer 4

Contracts of sale are governed by the common law AND by the Consumer Protection Act
2008

Question 5

What are the essential requirements for sale? [3]

Answer 5

a) Intention to transfer free and undisturbed possession
b) Agreement on the SUBJECT MATTER of the sale
c) Agreement on PRICE

Question 6

What does ‘‘VACUA POSSESSIO’ mean?

Answer 6

Free and undisturbed possession = VACUA POSSESSIO

Question 7

When there is an agreement on price and subject-matter, what is the next step? [2]

Answer 7

• Ascertained
• Ascertainable

Question 8

Sale does not necessarily mean ownership, therefore can someone who is not the owner make the sale?

Answer 8

Sale does not necessarily mean ownership
Yes, therefore possible for someone who is not the owner to sell an thing
VALIDLY.

Question 9

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
________________

Answer 9

delivery
valid
real
ownership

Question 10

What is possession?

Answer 10

Possession is a very strong real right but it is a lesser real right than ownership.
Some buyers may become owners, but not always.

Question 11

What must happen to avoid a material mistake?

Answer 11

The parties must agree on the subject matter of the sale otherwise there’s a
material mistake.

Question 12

What are the types of subject matter? [2]

Answer 12

1. CORPOREAL = tangible
2. INCORPOREAL = intangible e.g . intellectual property, copyright, patent,
   shares, the right to sell your debts.

Question 13

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

Answer 13

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

Question 14

In terms of agreement on price, what must it include? [2]

Answer 14

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

Question 15

What is the legal effects of a contract of sale? [2]

Answer 15

a) The passing of ownership
b) The passing of risk & profits

Question 16

What is the key requirement for ownership to be transferred? [2]

Answer 16

1. Delivery
2. Intention to pass ownership

DELIVER + INTENTION TO PASS OWNERSHIP

Question 17

What are ‘movables’?

Answer 17

Movables = delivery can be actual (actually hand good over) OR it can
constructive

Question 18

What happens during constructive delivery?

Answer 18

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.

Question 19

What are ‘immovables’?

Answer 19

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.

Question 20

What happens if there is Intention to pass ownership under a CASH sale of a moveable?

Answer 20

then it is presumed that the intention of the parties is that ownership will pass ON DELIVERY and FULL purchase price must be paid

Question 21

What happens if there is intention to pass ownership under a CREDIT sale of a moveable

Answer 21

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.

Question 22

What happens if there is intention to pass ownership under immovable property?

Answer 22

ownership will pass on delivery alone (registration at Deeds Office) and the purchase price need not have been paid.

Question 23

Why does it matter wether ownership has passed?

Answer 23

Rei vindicatio = As the action through which an owner who is out of possession sues to recover possession of his property

Question 24

What is the risk common law rule?

Answer 24

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.

Question 25

What are the requirements for a sale to be PERFECTA? [3]

Answer 25

1. The price must be fixed
2. The subject matter must be ascertained
3. Any suspensive condition to which the sale is subject must have been fulfilled.

Question 26

Unascertained goods must be ‘______________’ to the contract

Answer 26

appropriated = removed

Question 27

What if goods are damaged or destroyed? [2]

Answer 27

Destroyed = does not pass
Damaged = passes

Question 28

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)

Answer 28

Mora debitoris = Risk does not passs
Mora creditoris = Seller only liable for damage/destruction due to gross negligence, not ordinary negligence