Contract of Sale

Learning Outcomes
After completing this study unit, you should be able to:
 Discuss the contract of sale in the South African law in
terms of its essential elements, the rights and duties of the
buyer and seller and the passing of the risk.

Assessment Criteria

We will know that you are able to discuss the contract of sale in
the South African law in terms of its essential elements, the
rights and duties of the buyer and seller and the passing of the risk
when you are able to:
 Define the contract of sale;
 List the essential elements of a contract of sale;
 Give the requirements for the merx and the purchase
price;
 Discuss the rights and duties of the parties to the contract
of sale; and
 Determine when a contract of sale becomes perfecta and
when the risk in the merx passes.

INTRODUCTION

A contract of sale is a contract in which one party (the

seller) undertakes to deliver the merx to the other party (the
buyer/purchaser) and the purchaser in exchange for this, agrees
to pay the seller a certain sum of money (the purchase price).

The essentialia of a contract of sale is that the parties must agree

on the merx and the purchase price.

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The requirements for the merx and purchase price are the following:
 The merx must be definite or ascertainable, i.e. it must
be mentioned by name, e.g. “The pony, Blackie”, or “Erf
345, Rietfontein” or in the case of a generic sale the
number, weight or measure must be mentioned with the
thing, e.g. “20 tons of maize”, “1 000 head of cattle”; and
 The purchase price must be definite or ascertainable, i.e.
a specific price (R20,00) or a price per unit, e.g. “10 tons of
maize at R500,00 per ton”. The price may also be
determined by a third party, but not by the parties
themselves.

RIGHTS AND DUTIES OF BUYER AND SELLER

In chapter 1, it was said that the essentialia of a contract cannot

be excluded by the parties (the parties cannot conclude a contract
of sale and not deliver the merx or pay the purchase price).
However, the naturalia can be amended or excluded (e.g. you
can exclude the warranty against latent defects).

The common-law rights of the buyer and corresponding duties of

the seller are the following (Table 3.1):

The common-law rights of the buyer and

corresponding duties of the seller
Buyer’s Seller’s Notes Example/Remedie
Delivery
rights of To
dutymake the Forms of s
merx.
the merx delivery:
available to movables
the Actual Actual Ð groceries
purchaser. deliver handed to woman
y: at grocery store.
physicall
y
Symbolic
handing Symbolic: Keys
delivery:
over the of car handed to
Something
merx buyer so that
else he/she can drive
delivered to the car.
buyer to give
him/her
Delivery Long hand:
control over
with long Cattle not
merx.
hand: physically
Pointing out moved, but
of merx. pointed out to
buyer.

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Delivery Short hand:
with short Buyer rented
hand: Merx bicycle and then
already in buys it Ð already in
possession possession of
of buyer. buyer.
 Constitutum Constitutum
possessoriu possessoriu
m: Seller m:
remains in Seller remains in
possession of possession, eg
merx, but sells bicycle to X
ownership but then rents it
passes to from X.
buyer.
Delivery:
immovables
Preservation May not If
Ð buyer
by means
of merx destroy does not co-
of registration
pending merx due operate
in Deedsto
delivery. to receive
Office.
negligence delivery,
or intent. seller will
only be
liable if merx
is destroyed
Protection Seller must by gross X sells his watch
by seller assist buyer negligence to Y. Z
against if someone or intent. approaches Y
eviction. with a and tells him that
stronger the watch was
title (ie stolen
someone from him and that
who he is the real
alleges that owner of the
he/she is watch. X must
the real then help Y to
Merx free Must
owner) Requirements Remedies
prove that the
from latent deliver
tries to to prove that (aedilitian
watch was not
defects. merx free
claim the merx actions):
stolen from Z.
from
merx.latent contained  Actio
defects, latent defect: redhibitoria;
even if  Defect must  Action
he/she was be material; quanti
unaware of  Defect must minoris;
the defect. have been and
present at  Merx can also
time of sale; be sold “as
 Defect was is”/”voetstoots”
latentÐbuy Ð warranty is
er unable then
to excluded.
notice
defect
upon
inspection;
and
 Buyer 35
unaware of
defect at
Read more about remedies on pages 151-157 of the textbook.

TRANSFER OF OWNERSHIP

The aim of the contract of sale is ultimately that the ownership of

the merx is transferred from the seller to the buyer.

Four requirements have to be met before ownership will pass to

the buyer:
 The merx must be delivered to the buyer.
 The seller and the buyer must have the intention that
ownership be transferred.
 The seller must be the owner of the merx.
 The purchase price must be paid (or that the seller
has extended credit to the buyer or that the bu yer has
given security for payment).

3.4 PASSING OF RISK

Read the following case study:

Rosina buys Simon’s Toyota Tazz. Before the car is handed to

her, Simon’s garage roof collapses and the car is destroyed.
Who will suffer the damages, Rosina or Simon?

The person who suffers the damages will be the party who
carried the risk of accidental loss or damage to the merx. The risk
can pass to the buyer even before transfer of ownership, as long
as the contract has become perfecta.

The following must happen before the contract will be perfecta:

a) The merx must be definite or identified – not

merely ascertainable;
If Then
The buyer can still The contract is not yet perfecta.
choose the exact
It is a generic sale
item The contract becomes perfecta
once individualisation has taken
place.
b) Purchase price must be ascertained or ascertainable
through simple calculation. If the price is payable per unit,
the number of the merx must already be determined.
Eg if John buys horses from Joseph at R10 000 a horse
and the horses have not been counted, the contract is not
yet perfecta; and
c) Any suspensive conditions must have been fulfilled.

Read pages 159-166 in your textbooks to find out more about

how buyers in South Africa are protected by legislation.

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