contract OF PURCHASE AND SALE

Specific, nominate, reciprocal agreement to

buy and sell, in terms of which the seller
has the true intention to deliver a
determined or determinable thing together
with all his rights in the thing undisturbed ,
to the buyer and the buyer has the true
intention of paying a determined or
determinable price for the thing.
GENERAL PRINCIPLES OF
PURCHASE&SALE
Ordinary 5 requirements are also
applicable to Contract of sale.
It is concluded with the intention of
passing ownership though seller does
not have to be the owner of the thing.
 Seller only obliged to transfer all his
rights in the thing to the buyer without
interference or disturbance.
If one of these rights is ownership, seller
to transfer ownership.
transfer of ownership is one of the
characteristics of Ctr of sale.
Any clause stating that buyer will never
receive ownership of the thing sold will
have an effect that Crt will not be a Ctr of
sale.
Mere conclusion of the Ctr of sale does
not result in the transfer of ownership.
Buyer obtains a personal right against
seller.
Other requirements have to be met eg
delivery
 Essentialias of
Contract of Sale
1. Thing Sold
seller and buyer must reach consensus on
thing sold. thing must be
determined/determinable at the
Conclusion of Contract.
 if the description is too vague to
determine what is sold, Ctr null and Void.
can be movable or immovable, material
or immaterial.
must be merchantable ie, be able to be
What can be sold?
1. Generic Sale-
where the thing sold is indicated in
general and only individualised later.
 eg 20 bags of cement from all bags
available in the seller’s store.
Object sold is determinable and will
be fixed only after individualisation.
2) Future Things

These things are only determinable @

conclusion of the Ctr ito certain
specifications or occurance of a certain
event.
If these specifications are met or if the
event occurs = Thing becomes determined
eg Emptio rei speratae - where S sells
next season’s crop to B for R20 per bag.
The object sold only determinable and will
be determined when the crop has been
fixed in units.
Emptio Spei – where S sells the next
season’s crop to B for a lump sum of R10
000 irrespective of whether the crop
materialises or not. This is a Ctr of Chance,
object sold is fixed as soon as the ctr is
concluded
3) Res aliena

This is the thing of which the seller is not the owner.

It does not affect conclusion of a valid Ctr of sale.
The seller does not have to be the owner of the thing
sold.
Owner only has to deliver the undisturbed use and
enjoyment of all his rights in the thing to the buyer.
If seller knows that he is not the
owner of the thing sold and
proceeds with sale, Buyer who acts
in good faith will be able to hold
seller liable for fraud or
misrepresentation and criminal
sanctions.
Where seller sales a res aliena,
This right stems from NEMO PLUS IURIS
RULE-which provides that a person can
only transfer the rights which he has to
another person.
Where buyer posses a Res aliena in good
faith the owner can claim his property from
buyer only if the Prop still exists.
If buyer sold property to someone else, one
can’t claim the value of the property from
the former buyer.
On the other hand, one will be able to
claim the value where the buyer
through his negligent or intentional
conduct made it is impossible for the
owner to reclaim Prop.
Where buyer buys a res aliena and
acts in bad faith the true owner can
claim the value
 Rei Vindication can Not be exercised where

(i) Real owner represented to the buyer that seller is the owner,
Doctrine of estoppel will prohibit the owner from invoking the
real state of affairs.
(ii) Object was sold in terms of an order of court and buyer
acted in good faith.
(iii) An object which without knowledge on the part of curator
does not belong to insolvent estate is sold by a curator who
acts in good faith.
(v) Buyer has by law a lien or tacit hypothec over the object
sold.
(v) Real owner has instructed another person to sell the
2.Purchase Price
S and B must reach consensus on
purchase price
- Requirements
(a) Agreement on the Price
(b) The price must be certain and
C) The price must consist of
acceptable currency
2.1 General
-must be determined or determinable
-law will not recognise an agreement on
the price where there is a serious
disproportion between the price and
the value of the thing sold.
-The price can be less than the value of
the thing but where it is completely out
of proportion no Ctr of sale exist.
-Valid methods of price fixing: $125
or price is determined per unit =
R120 / bag
-Ineffective methods – party to fix
price unilaterally,
-Unnamed 3rd party to determine
Price
-Described as reasonable and fair
3. AGREEMENT TO BUY AND
SELL
Duties of the Seller
1. Safe keeping / Duty to take care of
the thing sold
2. Delivery of the thing.
3. Warranty against eviction
4. Warranties against latent Defects
1. Safe keeping of thing sold
-Duty of seller is to take care of &
protect the thing sold from the time
of conclusion of the Ctr until thing is
delivered to the buyer
-Buyer can claim damages for
Negligent Conduct of Seller
-Not liable – if not Due to his fault –
vis major
 DAMAGE TO THING AFTER CONCLUSION OF CTR but Before DELIVERY

FAULT NO FAULT
(INTENT / NEG) (COINCIDENCE / ACTS OF GOD)

Duty of Safe Keeping Passing of Risk

Seller bears Damages Buyer bears Risk if Ctr is Perfecta.

Contract is perfecta if :
1.buyer and seller have an intention to buy and sell
2. purchase price is determined.
3. thing is determined
4. contract is not subject to suspensive condition
Factors that influence Duty of safe
keeping
1. Mora Creditoris & Mora Debitoris
-Where buyer is in mora Debitoris or
Creditoris (where he fails to pay the
price or fails to receive the thing sold)
-seller will only be held liable for
damages caused by His Intentional/
grossly negligent conduct
- Seller in Mora Debitoris (where he
fails to deliver thing sold ) =
Responsible for any damage even in
the absence of fault on his part.
Passing of Risk
-Doctrine determines whether seller
or buyer bears the risk where
accidental damage is caused by
COINCIDENCE or ACTS OF GOD
and not by culpable conduct of
either Party
-General Rule – owner suffers loss
when his property is destroyed
-A Ctr is perfecta when

(a) B & S have intention of

buying and selling

(b) purchase price is determined

(c) Ctr is not subject to a

suspensive condition.
-Result is that B bears the Risk
where the thing is damaged /
destroyed through coincidence or
Act of God.
- Buyer still has to pay the purchase
price even where the seller has not
delivered the thing to him.
NB- the principles as applied to
passing of risk also apply to the
allocation of benefits.
Exceptions
a] Where there has been an express or implied
agreement varying the general rule. in Jacobs v Petersen &
Another [1914] CPD 705 J sold and delivered a horse and
cart to P for a price of $8 which was to be paid in
instalments. The contract was subject to the condition that
ownership of the property was to pass only on payment of
the full purchase price. P paid the first instalment but the
horse died soon thereafter. J sued for the balance of the
purchase price. Held the sale was subject to the suspensive
condition that ownership was only going to pass on
payment of the full purchase price, hence the risk of
destruction of the goods remained with the seller until the
counting or weighing is done
 b) Where the goods bought have to be measured,
weighed or counted in order to fix the price or
appropriate them to the contract.

.in Poppe, Schunhoff & Guttery v Mosenthal &

Company in [1879] Buch 91 the plaintiff bought from
the defendant 200 cases of brandy on 6 July 1878. Of
these, 110 cases were delivered on 18 July 1878; 60
cases were delivered on 6 August 1878 and the
remaining 30 cases were delivered on 15 August 1878.
On 25 July an Act imposing excise duty on brandy
became law. This meant that the brandy that had not
been delivered by 25 July was liable to pay duty.
c. Where there is mora debitoris on the
part of the seller.
The principle of passing of risk is also
used for passing of benefits
-Eg where a cow has a calf after date
of sale but before delivery the calf
belongs to Buyer.
Passing of Ownership
-mere conclusion of the contract does
not transfer ownership to B.
-on conclusion, B obtains a personal
right against the seller for delivery of
the thing sold.
-No duty on the seller to transfer
ownership to the buyer as ownership
is not one of the Reqs for valid and
Binding Ctr.
1. Requirements of Passing of
Ownership
IMMOVABLE PROPERTY
B will obtain ownership of
Immovable Property where:
(a) Seller is the owner of thing sold
(b) S has intention of transferring
ownership & Buyer has intention of
obtaining Ownership.
(c) Property is registered in the name
of the buyer (payment) of the
purchase price Is not a requirement
for transfer of ownership.
MOVABLE PROPERTY
-B will obtain ownership where
(a) Seller is the owner of the thing.
(b) Both parties have the intention to
pass ownership from SELLER to
BUYER
(c) Where it is a cash sale
(i) S must deliver the thing
(ii) Buyer must pay purchase price
(d) Where it is a credit sale, the only
Requirement is delivery.
2.Delivery of thing sold

-Ownership will never be transferred to

B where delivery has not been effected
even though the buyer has paid
purchase price.
-Right to use, enjoy and dispose of the
thing is transferred to B on Delivery
FORMS OF DELIVERY(ALREADY
COVERED)
3.Warranty against Eviction
-Any action by a 3rd Party who has
better rights in the thing sold that
deprives the buyer of the total or
partial use, enjoyment and disposal of
the thing sold, constitutes eviction.
-It must be remembered that the Buyer
does not become owner of the thing by
mere conclusion of a valid Ctr of sale.
- S is not obliged to transfer.
Forms of Eviction
1. when True Owner of the thing sold
claims his property from the buyer.
2. A 3rd Party obtains possession of
the property and the buyer cannot
claim this prop from the 3rd Party
due to a defective title.
3. I.t.o the Rule that lease goes before
sale (Huur Gaat Voor Koop) – Buyer to
allow lessee to use and enjoy property
until lease expires.
4.Holder of a limited real right (eg
Right of way) may prevent the buyer
from having full use and enjoyment
of the thing sold.
What can the buyer do when
eviction is imminent
-General Rule – buyer must not
surrender the thing to someone
threatening him with eviction
-Buyer to notify seller of threatened
eviction In order to put up a defence
against 3rd party.
-Where seller cannot be found or
intentionally avoids notification,
buyer is relieved from any further
duty of Notification.
-As soon as seller receives
notification of the threatened
eviction, he can take cession of
Buyer’s rights and intervene.
-Assist the buyer and furnish the
necessary proof of title
-Be joined as a party to the lawsuit
-Do nothing
-If seller does not help, Buyer to put
up a strong defence
BUYER’S RIGHT OF RECOURSE
1.TOTAL EVICTION
-Cancel the Ctr of sale
-Claim repayment of total purchase
price
-Claim of damages which can include
the following:
-Fruits which had to be delivered to the
true Owner, legal costs of the law suit ,
costs for improvement and any increase
in value of the thing sold.
2. PARTIAL EVICTION
-Where the eviction has left the buyer
with so little a remainder of the thing
sold that it cannot be said that a
reasonable man would have bought
the same, the buyer may cancel the
Ctr, claim repayment of the purchase
price and repayment of damages
provided that he offers to return the
remains of the thing sold to the seller.
-Where party’s eviction is not of
such a substantial nature and the
remains of the thing sold can be
effectively used, the Buyer may
retain the remains and claim a pro
rata repayment of the purchase price

as well as damages from the seller.

Where Buyer has no OR Limited
Right of Recourse
1. Seller will not be held liable where
buyer knew that the seller was not
the owner of the thing at the time of
conclusion of the Ctr
2. Where the seller was unsure at the
time of conclusion of the Ctr whether
or not thing belonged to him and has
made this known to the buyer, the
seller cannot be held liable.
3.Seller will not be held liable where
buyer’s claim against seller has
prescribed.

4. Where the eviction was caused by

Vis major, buyer has no right of
recourse
4.Warranty Against latent defects
-SELLER HAS A DUTY TO
WARRANT AGAINST LATENT
DEFECTS
-LATENT DEFECTS ARE
DEFECTS THAT COULD NOT BE
DETECTED UPON REASONABLE
INSPECTION OF THE MERX
-
VOETSTOOTS DOES NOT APPLY
IN LATENT DEFECTS
-ONLY APPLIES TO PATENT
DEFECTS
Remedies for latent defects
OMEGA