Lecture notes from 2022 for Private Law 411 (Specific contracts). These notes, drawing on the textbook (Principles of the law of sale and lease), are detailed and comprehensive, and assisted the author with obtaining a distinction for the module.
Private Law 411
Contents
Topic 1: Introduction ........................................................................................................................ 3
1 Why rules relating to specific contracts? ................................................................................ 3
2 Methodology of classification ................................................................................................. 3
3 Sources of rules relating to specific contracts ........................................................................ 3
Topic 2: Contract of Sale ................................................................................................................. 4
1 Nature and conclusion ........................................................................................................... 4
11 Definition.......................................................................................................................... 4
12 Merx, res vendita ............................................................................................................. 6
13 The price.......................................................................................................................... 8
14 Formalities ..................................................................................................................... 14
2 Consequences of a contract of sale ..................................................................................... 14
21 Transfer of ownership .................................................................................................... 14
22 Risk rule......................................................................................................................... 15
3 Duties of the parties: naturalia.............................................................................................. 20
31 Buyer ............................................................................................................................. 20
32 Seller ............................................................................................................................. 20
4 Liability for attributes of the merx ......................................................................................... 28
41 Double basis of liability – when is the seller liable? ....................................................... 28
42 Remedies ...................................................................................................................... 31
Topic 3: Lease ............................................................................................................................... 40
1 Introduction .......................................................................................................................... 40
11 Nature and conclusion of the contract ........................................................................... 40
12 Formalities ..................................................................................................................... 42
13 Distinction from other types of contracts ........................................................................ 42
2 Duties of the parties ............................................................................................................. 42
21 Lessor ............................................................................................................................ 42
22 Duties of the lessee ....................................................................................................... 48
3 Subletting, cession, delegation............................................................................................. 51
4 Huur gaat voor koop............................................................................................................. 52
41 Short-term lease ............................................................................................................ 52
42 Long-term lease............................................................................................................. 53
43 Relationship between successor and lessee ................................................................. 53
5 Termination of the lease relationship ................................................................................... 54
51 Termination: B & L 185-192 ........................................................................................... 54
52 Renewal......................................................................................................................... 54
1
, 53 Compensation for improvements ................................................................................... 55
6 Rental Housing Act 50 of 1999............................................................................................. 56
61 Relationship between tenants – ‘landlords’.................................................................... 56
62 Rental Housing Tribunals .............................................................................................. 57
63 Position of the courts? ................................................................................................... 58
Topic 4: Suretyship ........................................................................................................................ 59
1 Introduction .......................................................................................................................... 59
2 Nature and conclusion ......................................................................................................... 60
21 Definition........................................................................................................................ 60
22 Conclusion of a suretyship agreement........................................................................... 61
3 Legal relationships involved in suretyship ............................................................................ 62
31 Surety & creditor (most NB) ........................................................................................... 62
32 Relationship between surety & principal debtor: right of recourse ................................. 64
33 Co-sureties inter se ....................................................................................................... 65
4 Termination of a surety’s liability .......................................................................................... 68
41 Extinction of principal debt ............................................................................................. 68
42 Extinction of surety’s obligation ..................................................................................... 69
2
,Topic 1: Introduction
1 Why rules relating to specific contracts?
• General underlying principles insufficient
• Sometimes reason to deviate
o Parties may have a particular reason or purpose for concluding a contract – where overarching
rules relating to the rules of contracts are not enough
• sometimes silent
o sometimes the law does not provide for a particular situation
• specific legislation
2 Methodology of classification
• 2 broad approaches to classifying specific contract types
(a) Essentialia-naturalia model
➢ Essentialia = characteristic rights and duties which distinguish one contract type from
another (e.g., merx coupled with intention that there will be a permanent transfer of seller’s
rights in that merx in a contract of sale)
➢ One the parties have agreed to the essentialia, the law steps in and reads in certain terms
automatically and these ex lege terms are referred to as the naturalia.
➢ Benefits
o Leads to certainty and efficiency, and thus fairness as parties know what is going
to happen
o Aimed at balancing the interests of the parties
➢ Shortcomings
o All or nothing approach – if cannot agree that parties agree on merx and purchase
price then cannot be a contract of sale, regardless of parties’ intention. Thus, it can
result in a formalistic approach.
o Does not lend itself to a nuanced approach – it hides the need to differentiate
between subtypes of contracts
▪ Trade-in transaction (car dealership) example –
o Essential terms of two contracts could be the exact same e.g. distinction between
employment contract and independent contractor (provision of a service for
remuneration, but very real difference in the way these contracts are treated).
▪ Look at supervision, whose tools they use, etc.
(b) Typological approach
➢ Inherited from German law
➢ Analysis in terms of set “concepts” are valuable, but insufficient
➢ Therefore sees contracts as “types“: not all or nothing criteria
➢ Looks at a number of different factors, not all of which have to be present, in order to
determine whether the dominant impression is that the parties concluded a contract of sale
or any other contract.
➢ Eg employment contract / independent contractor: essentialia the same, look at other
factors
• Approaches are applied in conjunction with one another – not either or
3 Sources of rules relating to specific contracts
• Common law rules
o Roman law as interpreted by Roman-Dutch authorities, which have remained largely
unchanged in our law since the 1700s
• Legislation:
o Formalities
3
, o Rental Housing Act 50 of 1999
o Formalities in respect of Leases of Land Act 18 of 1969
o Consumer Protection Act 68 of 2008
• Constitution
Topic 2: Contract of Sale
1 Nature and conclusion
11 Definition
• Agreement between the parties that seller will deliver an object (merx) and transfer all his rights therein
to the buyer in return for payment of purchase price by buyer
• Essentialia:
o Merx
o Purchase price
o NB: these essentialia must be present in order for a contract to qualify as a contract of sale
• What is NOT an essentialia of a contract of sale?
o It is not an essentialia that the seller transfer ownership of the merx to the buyer – a contract
of sale will not be void/invalid if the seller does not make the buyer owner (see: sale of
something belonging to someone else)
o Textbook refers to the intention to sell and to buy
▪ Intention to buy and sell is implicit from agreement on merx and purchase price
• Distinguish:
(a) Lease
• With a contract of sale, the intention of the parties is that the seller is going to transfer his
rights in the merx permanently; whereas with a contract of lease, the parties’ intention is
that the lessor is only going to transfer his rights to the leased object temporarily.
(b) Exchange
• With a contract of exchange, it is usually an object given in exchange for another object,
whereas with a contract of sale, a merx is usually given in exchange for payment of a sum
of money.
• However, there is also a mixed type of contract where an object is given in exchange for
an object plus a sum of money (e.g. trade in car plus sum of money for a new car). That
type of contract can either be a contract of sale or a contract of exchange.
o Object for object + money?
▪ Wastie v Security Motors 1972 (C)
• POD: parties’ intention is decisive – if the court can conclude that the parties
intended to conclude a contract of sale, then it will be a contract of sale.
• If, however, the intention is not clear, the court will look at which aspect of the
traded-in performance has the largest value (traded-in car + sum of money). If
it is the vehicle that has the greater value, then it is a contract of exchange. If
the money has the greater value, then it is a contract of sale.
▪ Trade-in transactions (particularly for vehicles) are presumed to be contracts of sale
o Practical relevance of distinction between sale and exchange?
▪ Trigger event – right of pre-emption (preference)
• “Should the grantor of the right ever decide to sell the object, the holder of the
right will have first choice to purchase it.”
• The trigger event = any indication that the grantor of the right wants to sell the
object. To circumvent the reference, the grantor could exchange the object,
because the trigger event is a sale, and it would not be breached by an
exchange.
▪ Transfer of ownership: price payment rule
4
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