Summary
Summary KRG 120, Part four notes. Purchase and Sale
- Course
- KRG 120
- Institution
- University Of Pretoria (UP)
The document contains a summary of the KRG 120 textbook on part 4, purchase and sale
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Part 4 page 195 - 240Disclaimer
The notes below are made using the following textbook:
Nagel et al. 2019. Commercial Law. 6th Edition. LexisNexis. South Africa.
, Purchase and Sale
General Introduction Into The Law Of Purchase And Sale
Introduction
Contract of sale defined:
The contract of sale is a specific, nominated, reciprocal agreement to buy and sell, in
terms of which the seller has the true intention to deliver a determined or
determinable object together with all his rights in the object undisturbed, to the
buyer, and the buyer has the true intention of paying a determined or
determinable price for the object
Requirements for valid contract of sale:
The prerequisites for the conclusion of contracts in general (consensus, contractual
capacity, legality, physical possibility, and formalities) as discussed under the
general principles of the law of contract are applicable to all contracts of sale
For a contract to qualify as a contract of sale, the seller and the buyer must reach
consensus on the essentialia of the contract of sale:
a. The intention of the seller to sell and the buyer to buy (consensus on the
nature of the contract)
b. The object sold (consensus on what is bought and sold)
c. The purchase price (consensus on the monetary performance owing by the
buyer to the seller)
The contract of sale is thus distinguished from a contact of lease in that ownership
does not pass to the lessee, whereas a contract of sale is concluded with the
intention of passing ownership. The contract of lease is of a temporary nature,
while a contract of sale is not term-bound
The seller does not have to be the owner of the object sold to conclude a valid and
binding contract of sale. The seller is only obliged to transfer all his rights in the
object to the buyer without interreference or disturbance. If one of these rights is
the right to ownership, the seller must transfer this right to the buyer. The
transfer of ownership is one of the characteristics of a contract of sale. Any
clause in a contract stating that the buyer will never receive ownership of the
object sold, will have the effect that the contract will not be a contract of sale.
The reason for this is that one of the essentialia of a contract of sale, the
intention to buy and sell, is absent
The mere conclusion of a contract of sale does not result in the transfer of
ownership. Other requirements exist for the transfer of ownership, for example
the delivery of the object sold and/or payment of the price
2
, Essentialia of the Contract of Sale
Nature of the contract:
The seller and the buyer must reveal their intention to buy and sell
The intention of the parties to a contract of sale is to deliver the rights of
undistributed use, enjoyment, and disposal of the object to the buyer, in other
words, to enable the buyer to obtain ownership of the object sold. Where both
the buyer and seller know that the object sold does not belong to the seller and
that the seller is not entitled to sell the object (such as a stolen object), the deed
of sale is null and void because of juridical impossibility of performance
(illegality)
The object sold
General:
For a valid contract of sale, the seller and the buyer must reach consensus on the
object sold. The object must be determined or determinable at the time of
conclusion of the contract. If the description of the object is too vague to
determine exactly what is sold, the contract will be null and void
The object sold can be movable or immovable, material or immaterial. It must also
be merchantable, in other words, be the property of a person and able to be sold
commercially
Sometimes the object sold appears to be merchantable, but the alienation thereof is
prohibited by law (for example no portion of agricultural land shall be sold or
advertised for sale unless the Minister of Agriculture has consented in writing to
such subdivision)
Where a restraint of trade is incidental to a business and forms part of its goodwill,
the contractual right to enforce the restraint is sold with the business as part of
the goodwill and the object sold
Different objects sold:
a. Future objects
These objects are only determined at the time of conclusion of the contract in terms
of certain specifications or the occurrence of a certain event. If these
specifications are met or if the event occurs, the object becomes determined.
Empito rei speratae –> the thing sold can be determined by weighing,
measuring, counting in the future. Empito spei is an aleatory sale and chance
determine the object sold; the object sold is fixed as soon as the contract is
concluded. Generic sale is where the object is indicated in general and only
individualized later, object sold is determinable and will be fixed only after
individualization
3
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