A complete combination of all lecture notes on the Law of Sales as presented by Business Law (CML1004S) at UCT. It includes the requirements for a valid contract, passing of ownership, the passing of risk, the relevant section regarding common law, the relevant section regarding the consumer protec...
Part D
Law of Sale
A contract in which the seller agrees to deliver undisturbed possession of a thing to the buyer in return
for payment of a price.
Requirements for a valid contract of sale
Agreement on
- Price
- Subject matter
When is there an agreement on price and subject matter?
Once price and subject matter either:
Definite/Specific Ascertainable
Sell you my VW Polo 2005 for R50 00. Sell you a new VW Polo 2018 for current market
value
R100/bottle whole wine collection 100 bottle of 2009 Fairview merlot @ R100/bottle
Requirements for passing of ownership
- Seller must be the owner (or have authority to act for owner).
- Seller must intend to transfer ownership.
- Seller must deliver goods/property.
Intention to pass ownership
How does court establish intention?
- Cash sale
o PP payable on delivery
- Credit sale
o PP (whole or part) payable after delivery date
- If cash, presumed intention is ownership will pass on delivery AND full and proper payment PP.
- If credit, presumed intention is ownership will pass on delivery date alone.
- Presumption can be rebutted if clear evidence to the contrary (e.g. express reservation of
ownership clause).
What happens if property is damaged or destroyed after
contract concluded but before date of delivery?
- If damaged/destruction due to Seller’s intentional or negligence failure to take proper care of
goods, then seller in breach of contract.
, - If damage/destruction not due to seller’s failure to take proper care then seller not in breach of
contract; relevant rule = passing of ‘risk’.
Passing of risk
- “Risk” is the risk of accidental loss i.e. arising from damage to or destruction of the goods, or any
legal disadvantage that attaches to goods through no fault of the seller or buyer.
o Fire, theft, expropriation, taxes
- “Benefits” refers to the fruit and other advantages that attach to the goods.
o Actual fruits (agricultural land – harvest of wheat etc.); rental income
When does risk (and benefit) pass from the seller to the
buyer?
Common law
- When the contract is perfecta
o Subject-matter ascertained (definite)
Ascertainable goods must be ‘appropriated’ to the contract
o PP definite
o Suspensive conditions fulfilled
What if the goods damaged/destroyed before condition fulfilled?
Destroyed
Does not pass
Damaged
Passes
o Buy painting. Sale subject to expert authenticating it a genuine Picasso (based on photos
and x-rays). Damaged/destroyed before receive authentication.
Consumer Protection Act
- When goods delivered to the buyer
- S19(2)(c)
Section 19(2)(c)
(2) Unless otherwise determined expressly provided or anticipated in an agreement, it is an implied
condition of every transaction for the supply of goods and services that –
(c) goods to be delivered remain at the supplier’s risk until the consumer has accepted delivery of
them, in accordance with this section.
Implied Warranty against latent defects
Residual term
- Exclude using the voetstoots clause
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