1. The contract of Sale
Commercial Law

2. Definition:
The seller (vendor) promises to deliver a thing (merx) to another person known as the buyer(emptor) for payment of a certain price (pretium)

3. The parties to the contract
Seller (who sells)
Purchaser (who buys)

4. Formalities Generally no formalities – but:
Parties may agree that no sale unless certain formalities complied with
Some Statutes require formalities

5. (Some) Statutory Formalities
Sale of land – signed & in writing
Credit agreements – in writing & signed by both buyer & seller
Sale of business – sale to be advertised
Labelling of goods

6. The essential elements of sale
Agreement to deliver
Agreement on the thing sold
Agreement on the sale price
Price must be ascertainable & in money

7. Agreement to deliver
The seller must give control of the merx to the buyer
Generally, deliver immediately, otherwise within a reasonable time

8. Delivery
Actual delivery
Constructive delivery

9. Types of constructive delivery
Symbolic delivery – keys
Long hand (longa manu) – pointing out
Short hand (brevi manu) – buyer already has
Constitutum possessorium – seller keeps
Attornment – gallery keeps

10. The merx Buyer and seller must agree
Can sell anything unless law forbids
Thing may not yet exist
Hope or spes

11. Thing sold (object of the sale)
Movables
Immovables
Specific things
Generic things
Corporeals and Incorporeals
Things in existence now or in the future

12. Price Price must be agreed upon Must be in money
Price must be fixed or ascertainable

13. Sale of 3rd party goods
You can sell something that is not yours!

14. Sale of 3rd party goods
Seller does not have to own goods Sale creates a personal right to delivery

15. Examples Sale of generic goods you expect to acquire
Sale of specific item you expect to acquire
Fraudulent sale of another's property
Sale of goods bought under credit agreement where ownership reserved

16. Rei vindicatio Action available to true owner of goods for recovery
Only needs to prove
Is true owner
Defendant in possession

17. Conditional contracts
Suspensive condition
Resolutive condition

18. Suspensive Condition
The operation of the obligation (performance of rights & duties) is suspended or delayed until the uncertain future event (condition) takes place
Eg: A agrees to buy B’s car if she can get a loan

19. Resolutive Condition
The obligation comes into operation immediately (performance takes place) but if the uncertain future event (condition) is fulfilled the obligation will immediately terminate
◦ Eg: A agrees that B may use his car until he finds employment. Once B is employed he must hand back the car to A

20. Rights of the Purchaser
To receive delivery of the merx
Does not mean seller must deliver, but must make available
Preservation of the merx pending delivery
Seller must look after goods until delivery. Risk passes on sale being perfecta but seller liable for negligent loss or damage
Purchaser to be protected against eviction
Sellers warranty against eviction
Purchaser entitled to merx free from latent defects

21. Duties of the Buyer To pay the purchase price
General rule – pay in legal tender upon delivery
To pay the seller’s necessary expenses
Costs of caring between sale & delivery, transfer costs
To accept delivery of the merx

22. The Passing of Risk General Rule
The risk passes from the seller to the purchaser as soon as the sale is perfecta.
The parties may agree to change this, for example, for risk to pass on delivery

23. When is the sale perfecta?
Agreement on price
Merx identified
Any suspensive conditions fulfilled

24. Did you get that?
Examples

25. Ownership Passing of ownership Seller must be owner at delivery
Seller intends to pass ownership
Buyer intends to acquire ownership
Seller must deliver to purchaser
Purchase price paid or credit granted

26. Transfer of ownership Immovable property – on registration of transfer
Incorporeal property – on cession
Movable property – on delivery
If cash sale – price paid & delivery
If credit sale – on delivery

27. Cession Transfer of a personal right
Cedent transfers to the Cessionary

28. Requirements for cession
Cedent must hold the right being transferred
Must be a personal right
Parties must intend to transfer
Object of cession must be identified
Must be lawful
See consequences of cession on page 71

29. Warranties May be express or implied
A contract of sale always implies the following warranties:
Warranty against eviction
Warranty against latent defects

30. Latent defects
Defect existing at time of sale but unknown to ordinary buyer even if apparent to an expert
There is an implied warranty that goods are fit for the purpose for which sold
If latent defect - entitled to remedy unless:
Voetstoots or “as is” sale (parties agree to exclude)
No defect at time of sale
Buyer aware of defect and accepted
Prescription

31. Requirements for claim of latent defect
There is or was a material defect in the goods
The defect was present when the sale was concluded
The defect was latent (not easily noticable on inspection)
Purchaser was unaware of the defect at the time of purchase

32. The Aedilitian Remedies
Actio redhibitoria
Available if latent defect renders goods useless or if purchaser would not have purchased the goods if aware of defect
Purchaser tenders return of merx & claims purchase price plus interest & costs of maintaining merx and cost of any improvement to merx
No compensation

33. The Aedilitian Remedies
Actio quanti minoris
If defect not so material as to render goods useless or if purchaser would still have purchased goods (but maybe at lesser price)
Buyer sues for reduction in purchase price
No compensation

34. The Aedilitian Remedies
Actio ex empti
Allows buyer to claim compensation in certain cases:
If seller fraudulent
Seller a manufacturer, expert or professes skill
Seller has given an express warranty

35. NB
The Consumer Protection Act prohibits the use of a voetstoots clause
This only applies to contracts covered by the Act
Other specific legislation relating to certain types of sale
Share Blocks
Sectional Title etc