The passing of ownership

Question 1

What are the requirements for transfer of delivery?

Answer 1

1. Delivery
2. Intention to transfer
3. Intention to become owner.

Question 2

When does transfer of ownership of IP occur?

Answer 2

Registration.

Question 3

When does transfer of ownership of incorporeals occur?

Answer 3

Cession.

Question 4

When does transfer of ownership of MP occur?

Answer 4

1. Delivery
2. Payment of purchase price, the provision of security or the giving of credit.

Question 5

Which essentials are required for the passing of ownership on traditio?

Answer 5

1. Thing must be capable of ownership
2. Capacity to sell
3. Traditio made by the seller or agent
4. Intention to pass ownership
5. Delivery must be made to the buyer/agent
6. Capacity to become owner of the thing
7. Buyer must accept delivery intending to acquire ownership of the thing.

Question 6

What is the case for ownership passing on delivery only if cash is paid or credit has been allowed?

Answer 6

Laing v SA Milling Co Ltd.

Question 7

What did the court state in Laing v SA Milling Co Ltd?

Answer 7

On a sale of movables followed by delivery the property does not pass until the purchaser has paid the money or secured the seller for the same, or unless the sale is on credit.

Question 8

When does ownership pass in a cash sale?

Answer 8

Ownership passes once there has been (in addition to delivery) due payment of the purchase price.

Question 9

When does ownership pass in a credit sale?

Answer 9

The fact that credit has been given is an indication that ownership merely passed on delivery.

Question 10

What is a pactum reservati dominii?

Answer 10

A clause reserving ownership until the full price has been paid.

Question 11

What happens if there is no express or implied agreement indicating that credit has been granted?

Answer 11

It is presumed that every sale is a cash sale.

Question 12

Which cases deal with the presumption that every sale is a cash sale in the absence of agreement that credit has been granted?

Answer 12

1. Lendalease Finance v Corporacion de Mercaedo Agricola
2. Daniels v Cooper.

Question 13

Which legislation regulates credit agreements?

Answer 13

National Credit Act.

Question 14

What are the requirements for a credit agreement?

Answer 14

It must be specific and clear.

Question 15

What did the court hold in the Lendalease v Corporacion de Mercadeo Agricola?

Answer 15

1. In the absence of an express term as to the sale being for cash or on credit, there is a presumption that it is for cash.
2. Presumption may be rebutted in various ways but the giving of credit cannot be inferred from mere delivery by the seller without receiving the purchase price.
3. A sale which as expressly/presumptively for cash may by subsequent agreement, express/tacit, become one on credit.

Question 16

Which case explains the difference between cash sale and credit sale?

Answer 16

Lendalease.

Question 17

What is a cash sale?

Answer 17

A sale that requires payment of the purchase price to be made against delivery of the goods.

Question 18

What is a credit sale?

Answer 18

A sale in which the time for payment has been postponed for a substantial (non-negligible) period after delivery.

Question 19

What are the facts of Daniels v Cooper?

Answer 19

1. Daniels and Martin entered into a sale agreement for animals including ostriches
2. Daniels allowed Martin to take the ostriches without payment and after making it clear that it is a cash transaction and that he reserves ownership
3. Martin sold the ostriches to Cooper
4. Daniels sent a Letter of Demand the same day after finding out about the unlawful sale and after warning Cooper.

Question 20

What was the rule applied in Daniels v Cooper?

Answer 20

Mere sale and delivery of movables does not pass the property therein to the purchaser, unless the price be paid, security found, or credit be given.

Question 21

What is the holding in Cooper v Daniels?

Answer 21

Goods sold for cash and delivered can be followed by the unpaid vendor in the hands of third persons, if the vendor reclaims the goods within reasonable time.

Question 22

What is the case that deals with ‘where the parties have agreed to the contrary’?

Answer 22

Horne v Hutt.

Question 23

What are the facts of Horne v Hutt?

Answer 23

1. Hutt sold mealies to Horne which were at the time in the possession of a 3rd party for holding, the mealies were marked and kept separate until they were destroyed by fire.
2. Hutt claimed that Horne accepted delivery at the farm at the time of the agreement of sale and that from that time the risk passed to Horne
3. Horne denies that the mealies had ever been appropriated to him or that he had ever agreed to take delivery at the firm on the date of the agreement as alleged
4. Ito the agreement, payment was not to be made until delivery

Question 24

What are the rules applied in Horne v Hutt?

Answer 24

1.The common law rule that the risk of the thing sold passes to the buyer can be varied only by a clear and specific contract.
2. Common law rule of risk is not limited to the case where the vendor ha ownership of the merx nor is notice to the buyer of appropriation by the seller a condition precedent to the rule taking effect.