Topic 1: Introduction to Specific Contracts
T Naudé ‘The Preconditions for Recognition of a Specific Type or Sub-type of Contract – The Essentialia-Naturalia
Approach & the Typological Method’ 2003
T Naudé & Lubbe ‘Exemption Clauses – A Rethink Occassioned by Afrox Healthcare Bpk v Strydom 2002 SCA
Why are there rules relating to specific contracts:
General principles of contract law are insufficient when given a unique problem
o Sometimes there is a good reason to deviate from general contractual principles
o Sometimes general contractual problems are silent/ non-existent in the face of a unique problem
o Sometimes specific leg. applies to unique problems/ contract types.
E.g. Consumer Protection Act
Methodology of classification:
As soon as you’re concerned with specific types of contracts, you need a manner of classifying them.
2 broad approaches:
o (1) Essentialia-naturalia model
See contract law notes from last year for more detail
Essentialia: characteristic rights & duties which distinguish 1 contract type from another
(rights & duties which form the essence of the contract)
As soon as parties agree on the essentialia, the law automatically reads in specific ex lege
terms unless the parties explicitly vary or excl. such terms through incidentalia.
Efficient, easy to use contract model
Shortcomings:
All or nothing approach (e.g. parties must agree on the essentialia for a contract of
sale for such a contract to be classified as ‘sale’)
o No room for ‘sub-types’ of contracts or mixed types of contracts (elements
of more than 1 type of contract involved)
o Afrox Healthcare v Strydom: S had to go in for an op & when he got to
hospital he had to sign an admissions form. In fine print there was a clause
exempting hospital from liability for any damage suffered from negligence of
healthcare staff. Due to a nurse wrapping a bandage too tightly, S had to
eventually amputate his leg. S went to court for damages & argued that the
clause in fine print was contrary to public policy, which the court declined as
it’s a typical clause found in contracts for independent contractors. LQ: Are
we dealing with a normal independent contractor, or a sub-type of
independent contractor –it’s a subtype (provision of medical services) which
puts a different view on what a client is entitled to expect ito duty of care
exercised by the service provider. Case is a good example of where a non-
critical approach advocated by this model results in unfair, harsh results.
Sometimes this model isn’t sufficient (e.g. employment contract vs. independent
contractor. Essentialia of those contracts are identical, but there are real differences
between these types of contract which extends to leg. protection. The essentialia-
naturalia model in SA law doesn’t allow the distinction between these contracts)
o (2) Typological approach
Comes from German law
Recognises that an analysis ito ‘concepts’ is valuable but is insufficient
Concepts: e.g. contract of sale, contract of lease, contract of suretyship.
Approach advocates working with types of contracts (e.g. you have contract type A which
has a list of criteria pointing to the likelihood that parties concluded contract type A)
These are NOT all of nothing criteria, but criteria are rather assessed on a scale
Dominant impression when looking at attributes of parties’ contractual relationship
Factors/ criteria are indicative of the general purpose of s specific type of contract
o E.g. sale – purpose is for seller to transfer all their rights in the merx & for
the buyer to pay the seller in money for these rights.
More flexible, open-ended approach
Issue: this model provides less legal certainty than the essentialia-naturalia model.
, If the application of the essentialia-naturalia model is insufficient, at least there’s
another approach which could be used (this is the case for distinguishing an
employment contracts vs an independent contractor contract.)
Sources for law on specific contracts:
Common law
Roman law is very relevant for modern SA law on specific contracts (sometimes we use the same solutions &
formats & sometimes these are slightly altered to suit our current legal dispensation)
Legislation
o Formalities prescribed for specific contract (e.g. Alienation of land in a contract of sale; suretyship)
o Rental Housing Act 50/1999
o Formalities ito Leases of Land Act 18/1969 (long term leases enforceable against 3 rd parties)
o Consumer Protection Act 68/2008
Constitution
o General legality – provides an overarching framework.
o Some specific contracts involve basic human rights (e.g. lease contract encapsulates a right to
housing & if a lessor doesn’t repair the rented property, the lessee can claim the cost of repairs from
the lessor, but this presupposes that a lessee has money to repair the property)
Topic 2: Sale
Janse van Rensburg v Grieve Trust CC 2000
Adcorp Spares v Hydromulch 1972
LendaLease v Corporacion de Mercadeo Agricola 1976
Alpha Trust v Van der Watt 1975 (translation on Sunlearn)
Louis Botha Motors v James & Slabbert Motors 1983
Garden City Motors v Bank of OFS 1983
Lammers & Lammers v Giovannoni 1955
Plit v Imperial Bank Ltd 2007 SCA
Waller v Pienaar 2004
Ellis v Cilliers 2016
Gannet Manufacuturing v Postaflex 1981
Kroonstad Westelike Boere Koöp v Botha 1962
Langeberg v Sarculum Boerderye 1996
D & H Piping Systems (Pty) Ltd v Trans Hex Group Ltd 2006 SCA
Vousvoukis v Queen Ace CC t/a Ace Motors 2016
Freddy Hirsch Group (Pty) Ltd v Chickenland (Pty) Ltd 2011 (SCA)
Banda v Van der Spuy 2013
T Naudé ‘The Consumer’s Right to Safe, Good Quality Goods & the Implied Warranty of Quality under Sections 55 &
56 of the Consumer Protection Act 68 of 2008’ (2011)
Sources on the Law of Sale:
Until recently, most sources of the law of sale was found in common law
Legislation:
o Most significant leg.: Alienation of Land Act, Electronic Communications & Transactions Act (ECTA),
National Credit Act (NCA), & Consumer Protection Act (CPA)
o Most far-reaching leg. is the CPA.
Applies to a broad range of transactions for supply goods & services, incl. certain sales of
goods, & marketing practices ito these transactions & sales.
Sales fall within the definition of ‘transaction’ specifically for the supply of goods
Sellers & buyers are within the definitions of ‘supplier’ & ‘consumer’ respectively.
Applies to every sale of goods occurring in SA, unless the sale is specifically exempt.
o National Credit Act (NCA)
Applies to certain sale contracts as ‘credit agreements’.
Application is determined by various factors incl.: type of contract, its ‘size’, where it was
concluded or has an effect; when it was concluded, parties to it, & its purpose.
, Parties to a contract to which it applies as ‘credit provider’ & ‘consumer’
Nature & Conclusion of the Contract:
Definition of a contract of sale:
Definition: reciprocal agreement that the seller will deliver an object (merx / res / res vindita) & transfer a
their rights therein in return for payment of a purchase price by the buyer
o It’s not a validity requirement that the seller is the owner of the merx, seller simply sells their rights
ito the merx to the buyer.
o Difficult to formulate an entirely satisfactory definition of the contract of sale, & was earlier defined
as no more than ‘a legally enforceable agreement that imposes reciprocal obligations on the
contracting parties, the seller (vendor) & purchaser (buyer) respectively’.
o Difficulty in definition relates primarily to the description of seller’s primary obligation ito sale
contract (obligation to give the buyer possession of property sold)
Description of seller’s obligation appears inadequate as it seems seller is required to, at least
to intend to, transfer permanently to a buyer their rights in the res sold, incl. ownership.
Essentialia of a contract of sale:
o 1. Merx
o 2. Price
Distinguish these from sale:
o 1. Lease (transfer of rights in the merx is temporary & lasts until lease period ends)
o 2. Exchange (transfer of an object for an object – doesn’t involve money)
o 3. Contract of an independent contractor
Test: who provides the material?
Independent contractor only provides services, not material
Sale: one party provides both the material & service
Mixed contracts (elements of a sale & an exchange):
o Object exchanged for an object + money
o E.g. You want to buy a car from a dealership & in exchange you trade in your old car + some money.
o Wastie v Security Motors 1972: if parties’ intention is clear, this is decisive ito what contract it is.
When intention is unclear, one must determine which transaction has the larger value (object or the
money). If object has a higher value, it’s an exchange. If money has the larger value, it’s a sale.
o Presumption applies that it is a sale contract – implicates who bears the onus of proof.
Practical relevance of distinction between sale, lease & exchange:
o Trigger event – right of pre-emption (where a party indicates that if they wish to sell the property,
they will first approach whomever is the holder of the right).
If one formulated the trigger event as a sale in the right of pre-emption, one could conduct
an exchange rather than a sale to circumvent the trigger event or vice versa.
o Transfer of ownership
Sale: distinction between a credit & a cash sale
Credit sale: ownership transfers upon delivery of merx
Cash sale: price payment rule – ownership is transferred once the merx is delivered
& the purchase price is paid.
o Remedies available
Initially, Aedilitian remedies were only available ito a sale contract, but were made available
to exchange contracts later.
Remedies available to the buyer either when there’s a latent defect in the merx or
where there is a misrepresentation ito qualities of the merx.
Remedy allows cancellation of the contract or a reduced contract price.
o Janse van Rensburg v Grieve Trust CC 2000 : LQ: are Aedilition actions also available to a seller who
received payment consisting of both money & a non-monetary component (old car) where the non-
monetary component is defective? Buyer is therefore paying a price which consists partly of money
& partly of a thing. First view from Wastie case says that based on the price components, it’s
similar /analogous to an exchange contract where such remedies are available to both parties – so it
should be available to a seller in this type of trade-in transaction. Other view is that allowing these
remedies to a seller promotes an equitable balance of parties’ interests because if a seller didn’t
have these remedies there’s nothing preventing a buyer from acting improperly. Alternative view ito
, Mountbatten Investments where court felt the seller shouldn’t have such remedies as they could’ve
protected themselves with an express warranty, but lecturer doesn’t agree with this as a buyer could
also use a warranty but has access to this remedy. In this case, court said that in other contracts like
lease or mandate, the lessor/ mandator isn’t protected if the lessee/ mandatee doesn’t maintain the
property or makes misrepresentations about their abilities (lecturer feels this is an irrelevant
argument as Aedilition remedies were never available in a lease to a lessor or a lessee). Court in
Janse van Rensburg followed Waistee case, as it’s in line with a court’s duty to develop rules to cater
for modern day situations (trade-in transactions are part of today’s daily commerce) & in line with
good faith & reasonableness. Court says that allowing these remedies to seller promotes equality
between parties before the law, which is entrenched in the Const.
At the time this case was determined, this was in the peak of the development of the notion
that good faith as an independent ground could be introduced in our law (which has
received a lot of backlash by the SCA)
Practical relevance of distinction between a contract of sale & an independent contractor:
o Building contractors: they provide materials & the service, but are classified as independent
contractors, not as a contract of sale.
Reason: even though the contractor provides material, most of what they do is provide the
service (dominant purpose of the contract)
o Was thought in BK Tooling that the claim for a reduced contract price due to exceptio non adimpleti
contractus was only applicable to contracts of independent contractors (not sale). In BK Tooling the
court says that the exceptio & the claim for a reduced contract price all stem from the fact that
contracts are reciprocal (if A doesn’t perform B isn’t required to perform), which isn’t limited to
contracts of independent contractors.
o In contracts with independent contractors, parties can agree on ‘reasonable remuneration’ (non-
fixed amount)
This isn’t valid in a contract of sale or lease.
The merx (AKA res vendita):
Nature of the merx:
o Must be capable of being the object of a private transaction (res intra commercium)
Things that can’t be sold incl. the ocean, the mountains, the beach, the sky.
o One can’t sell a merx to someone who already owns the merx.
o Merx can be movable, immovable, corporeal & incorporeal.
Requirements of the merx:
o 1. The merx must be certain/ ascertainable:
Specific application of the certainty requirement that is generally applicable to all contracts
Merx is certain if it’s described in the contract
Ascertainable: can describe merx ito future characteristics, describing it ito the purpose it
will fulfil, referring to a sample of the future merx.
If the merx which is delivered isn’t of the same quality/ character as the sample: if
the purpose of the sample was for the merx to comply then the contract is
breached, but if the sample was a mere sales puff there’s no breach,
If the sample is a form of the seller giving a warranty that the merx will comply with
the sample, where the seller’s liability is extended.
o This would depend on the interpretation of the contract (fact-specific)
Where the merx is described as part of a kind/ class (genus)
This is known as a generic sale.
E.g. A buys a kilogram of tea
o 2. The merx must exist or be capable of existing in the future
If at the time the contract is concluded, parties are unaware that the merx no longer exists
(destroyed), this is impossibility of performance & the contract is void.
If the seller knows the merx doesn’t exist & doesn’t inform buyer, this is breach
(misrepresentation) which can be fraudulent or negligent.
Situations of impossibility when the merx doesn’t/ can’t exist
This may impact on the contract
Unlimited genus sale: irrelevant to the buyer where the merx comes from
