Complete and detailed Specific Contracts notes. Includes detailed class notes, relevant textbook summaries, in depth case summaries and lecturer's test/exam tips and examples. Notes are set out in an organised, structured manner making it easy to understand.
- General principles are insufficient
o Sometimes reason to deviate
Eg why we need to limit freedom of contract or why we protect consumers
more
o Sometimes silent
Eg risk rule in law of contract
o Specific legislation
Eg Rental Housing Act, Consumer Protection Act
- When we identify specific contract types, we typically look at
o The purpose of the contract
o Interests of the parties
o Policy considerations
- Sometimes it might be necessary to deviate within a specific contract type
o Eg contract of sale there is a rule that specific types of sellers, eg manufacturers,
have a higher liability for latent defects
o Policy consideration: a person whose business it is to sell goods and has the
expertise should be liable for latent defects as it is their duty to check
Methodology of Classification
- Two broad approaches
o Essentialia-naturalia model
When you look at the purpose of the contract it defines the essence of the
contract and there are certain obligations that flow naturally from that
essence
The purpose of the contract of sale is the exchange of a thing for a
monetary value with a few to affording the purchaser permanent
enjoyment of the subject matter of the sale
The essentalia are the terms of the contract that we use to identify the
contract type
In a contract of sale, the essentalia would be the intention to buy
and to sell, the purchase price and the merx
The naturalia are the terms that flow naturally from the type of contract by
operation of law
The parties do not have to say anything or include them in their
contract
But the parties can exclude the naturalia
For example, in the contract of sale the duties of the seller and
buyer are naturalia of the contract
2
, o Eg warrant against eviction
Shortcomings (Naude)
Hides need for differentiation / sub-types
o For example, a consumer contract
Can’t treat all sales the same, may be a need for
further differentiation
o If you only look at essentalia it may not be easy to
determine when differentiation is needed
Sometimes not sufficient
o For example, employment contract and independent
contractor
For employment contract the only essentalia you
need is a description of the job and the payment
But these essentalia do not help us decide whether
it is a normal employment contract or an
independent contractor contract
o Typological approach
Suggested by Naude to be used in addition to essentialia-naturalia model
Analysis in terms of concepts and valuable, but insufficient
We work with contracts where there is a close list of things
A contract has to have certain characteristics to be seen as a specific
contract
She says this is a little bit harsh as there should be situations where
we work with a more open type
o We have the characteristics and see whether a contract
meets most of those characteristics, not necessarily all
o But this is also criticised as it leads to uncertainty
Therefore types: not all or nothing criteria
Employment contract / independent contractor: essentialia the same, look
at other factors
Such as the measure of control, own tools or tools of employer, level
of supervision, working on own premises or that of employer
- We need specific contracts because we need to know what the consequences are of a
specific type of contract, especially if the parties are silent on it
o Eg what happens if the merx is damaged on delivery, etc
Sources
- Common law
- Legislation
o Prescribing certain formalities
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
3
, 2 CONTRACT OF SALE
Nature and Conclusion
- Definition
o Agreement that seller will deliver a thing (ie merx) and transfer all his rights therein
in return for payment of purchase price by buyer
It does not say you have to transfer ownership
Thus, you do not need to be the owner of the thing you sell
o Essentialia
Merx
Price
Often referred to by Latin term ‘pretium’
Intention
Intention is usually decisive factor
If the parties are concluding a sham agreement, eg it is actually a
donation and not a contract of sale, the courts do not look at the
form of the agreement
o Thus do not look at whether there is a merx and price
o They only look at the intention of the parties
o Contract of sale does not need to be in writing
Except for contracts where there are prescribed formalities, such as
alienation of land
- Distinguish sale from:
o Lease
Lease is only the temporary use and possession of the item delivered
Sale is permanent
Distinction is important for credit sale agreement, lease of mining rights and
lease of minerals
o Exchange
Exchange involves the exchange of one thing in return for another
Not money, but rather two objects
In roman law the distinction was more important because sale was
enforceable, and exchange was not
However, in modern law it is important if you buy a new vehicle
You trade in the vehicle you have at the moment and pay a sum of
money in exchange for the new vehicle
Is this sale or exchange?
If it is only an object for an object, then it is exchange
Object for object plus money?
o You look at the intention of the parties
Did they intend it to be contract of sale or of
exchange?
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