Class notes

Private Law 411 Specific Contracts Notes

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Course
Private Law 411 (PL411)

Institution
Stellenbosch University (SUN)

Lecture notes for the Private Law 411 module from the 2o22 academic year. The notes include detailed descriptions of contracts of sale, lease contracts, and suretyship agreements. The notes also include case summaries as discussed in class.

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Uploaded on April 26, 2023
Number of pages 55
Written in 2021/2022
Type Class notes
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private law 411
private law
contract law
stellenbosch law
stellenbosch contract law
law stellenbosch
llb
llb final year
fourth year contracts
contracts
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private law 411 specific contracts notes

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PRIVATE LAW 411: SPECIFIC CONTRACTS

Introduction ............................................................................................................................2
Why rules relating to specific contracts? .................................................................................2
Methodology of classification ...................................................................................................2
Sources of specific contracts ...................................................................................................3
Contract of sale ......................................................................................................................3
Definition: .................................................................................................................................3
Distinguish ...............................................................................................................................3
Merx/res vendita ......................................................................................................................6
The price ..................................................................................................................................8
Formalities .............................................................................................................................11
Consequences of a contract of sale ......................................................................................12
Duties of the parties: ..............................................................................................................16
Seller’s duties: warranty against eviction ...............................................................................16
Seller’s liability for attributes of the merx ...............................................................................22
Delictual liability .....................................................................................................................28
Remedies in terms of consumer protection Act .....................................................................28
Exclusion of liability for latent defects/misrepresentations:....................................................30
Lease .....................................................................................................................................31
Nature and conclusion ...........................................................................................................31
Temporary use and enjoyment ..............................................................................................31
Rent .......................................................................................................................................32
Formalities .............................................................................................................................32
Distinction from other types of contracts................................................................................33
Duties of the lessor ................................................................................................................33
Duties of the lessee ...............................................................................................................37
Subletting, cession, and delegation .......................................................................................39
Termination of the lease relationship .....................................................................................41
Rental housing Act 50 of 1999...............................................................................................42
Suretyship ............................................................................................................................46
Introduction ............................................................................................................................46
Definition and general concepts: ...........................................................................................46
Conclusion of suretyship agreement .....................................................................................47
Relationships involved in suretyship: .....................................................................................48
Termination of surety’s liability...............................................................................................52

,Introduction
Why rules relating to specific contracts?
• General contractual principles = underlying framework
o These rules are, however, quite generic
o Sometimes there is a reason to deviate from the general framework
o Overarching principles are not sufficient to deal with specific contracts
o Sometimes general rules are silent on specific problems which are unique to specific
contracts
o There is also specific legislation which is relevant to specific contracts
Methodology of classification
• When dealing with specific contract types, must have a way to classify contract
• 2 broad approaches to classification of contracts in SA law
o NB: not an either/or with these approaches, they are applied in conjunction with one
another
o (a) essentialia-naturalia model
§ Essentialia of contract = those characteristic rights and duties which distinguish one
contract type from another
• Example: contract of sale à parties agree on what will be sold (merx) + the
intention that there will be a permanent transfer of the seller’s rights in that merx.
• What distinguishes, for example, a contract of sale from the contract of lease?
o Sale à intention of permanent transfer of rights
o Lease à intention that transfer of rights is TEMPORARY
§ Benefit of this approach à once parties agree on these characteristic rights and
duties, the law steps in and reads in certain terms automatically. These ex lege terms
= naturalia
• I.e., all that is required of parties is an agreement on essentialia, as law reads in
terms based on policy considerations aimed at balancing interests of the parties
• Easy to apply
• Certainty à when parties know a particular conclusion is certain, this is fair
• Efficiency
§ BUT this is an all or nothing approach
• Example: if we cannot conclude on merx and purchase price, it cannot be a
contract of sale, regardless of parties’ intentions
• This can lead to a formalistic approach
§ Shortcomings
• Does not lend itself to a nuanced approach, hides the need to differentiate
between sub-types of contracts/mixed types of contracts
o Example: trade-in transaction à want new car, trade in old car + money. What
type of contract is this? Is it a contract of sale? Or is it a contract of exchange
as a contract of exchange = thing for a thing?
o Essentialia/naturalia model does not help us to classify a contract as above
because of the mixed element
• Sometimes applying this model is not enough as the essential terms of 2
contracts may be the same
o This can occur when dealing with distinction between employment contract
and a contract for an independent contractor as for both contracts the intention
is for provision of service and remuneration. But the distinction between
employment contracts and contract for independent contractor = NB
o How do we make the distinction? Consider external factors e.g., how are
people paid, how much supervision etc.
o (b) Typological approach

, § Inherited from German law
§ Recognises that concepts (like that of a contract of sale) are valuable, but are
insufficient
• Idea of ‘concept’ is a closed one i.e., it thinks of a contract of sale as a concept
à must be agreement on merx and price for compliance with requirements of the
CONCEPT of sale
§ By contrast, typological approach is more fluid, works with fluid ideas/ ’types’ à i.e.,
sees contract of sale as a type, not concept. Because this notion is more fluid, the
criteria ≠ all or nothing
• Many different factors, not all of which must be present for the existence of a
specific contract
§ Types are used to determine whether dominant impression is that parties concluded
a specific contract
§ Example: employment contract/independent contractor: essentialia look the same,
look beyond what the contract looks like and rather how the parties interact with one
another
Sources of specific contracts
• Common law rules
o Those rules from Roman Law, interpreted by Roman-Dutch authorities, and which have
remained unchanged since 1700s
• Legislation
o Certain acts prescribe formalities e.g., alienation of land Act, suretyships etc.
o CPA
o Formalities in respect of Leases of Land Act 18 of 1969
o Rental Housing Act 50 of 1999
• Constitution

Contract of sale

Definition:
• An agreement that the seller will deliver an object (i.e., merx) and transfer all his rights
therein in return for payment of the purchase price by the buyer
• Essentialia
o Agreement on the merx
o Agreement on the purchase price
o These essentialia must be present for a contract to qualify as one of sale
• Note:
o It is not an essentialia of a contract of sale that the seller transfer ownership to the buyer
§ The contract of sale will thus not be invalid if the seller does not make the buyer an
owner of the thing
§ See later when we do the sale of something belonging to somebody else
o In textbook, there is reference to 3rd ‘essentialia’ à parties must have intention to sell
and to buy
§ Myburgh: this is redundant as if you already agree on what you are going to buy and
at what price, this idea is implicit in the essentialia
Distinguish
• Contract of sale from lease contract
o Similar looking contracts
o Main distinction: in the case of a sale, the intention is to transfer rights in the merx
permanently. Whereas with a lease, the intention is that the lessor transfers rights in
the leased object temporarily
• Contract of sale v contract of exchange
o With contract of exchange à object given in exchange for another object

, o BUT do get a contract where an object is given for an object + sum of money
§ E.g., somebody trades in old car + money for a new car
§ This type of contract can either be a contract of sale or a contract of exchange
§ How do we determine which type we are dealing with?
§ Wastie v Security Motors 1972 (C) à not prescribed
• Because we are working with a contract, the intention of the parties = decisive à
if intention is for exchange, then it is an exchange, if the intention is for sale, then
it is sale
• If it is still unclear, the court will consider which aspect of the traded-in performance
has the largest value
§ In the example, if the vehicle has the greater value in the performance, then it is a
contract of exchange. However, if it is the money which has the greater value in the
performance, then it is a contract of sale
o Trade-in transactions, particularly when in exchange for vehicles, there is a
presumption in favour of it being a contract of sale
o Practical relevance of distinction?
§ Trigger event à right of pre-emption
• What constitutes a trigger event which would make this right enforceable depends
on the distinction
• Right of pre-emption is where somebody has a preference to acquire an object
o Generally formulated as: should the granter of the right ever wish to sell the
object; the holder of the right will have first choice to purchase such object
• Trigger event which will activate this right ^
o Making the decision to sell, or any other conduct from which an intention to sell
can be inferred
o To circumvent this, you would exchange the object and therefore you would not
be in breach as it would not be a sale
§ Transfer of ownership where the transfer of ownership is relevant
• Transfer of ownership ≠ validity requirement, but if the seller is owner of the merx
and sells it then the intention is that the right of ownership will be transferred
• With exchange, ownership is transferred at delivery
• With a contract of sale must distinguish between cash sale and credit sale
o Cash à ownership is transferred when there has been delivery of the merx +
payment of the purchase price
o Credit à ownership is transferred upon delivery only
§ Aedilitian actions
• Available when dealing with defective merx, or where seller has made certain
misrepresentations about the characteristics/attributes of the merx
• Available on 2 grounds à latent defect, misrepresentation
• Available remedy for defective/misrepresentation = termination and reclaim
purchase price or claim reduced purchase price
• Initially developed for contracts of sale, but later extended to include contracts of
exchange
• Then, question of whether these remedies are also available when dealing with
trade-in transactions
• Janse van Rensburg v Grieve Trust 2000
o Trade-in transaction of vehicles
o Buyer wanted new car, as payment for which he traded in old car and paid sum
of money
o Buyer misrepresented the year model of the car that he traded in
o Question was then whether the seller could institute aedilitian action against the
buyer
o Trade-in transactions = presumed contracts of sale

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