Law Of Sale I

Front 1

What is the definition of a sale?

Back 1

A contract in which the seller agrees to deliver free and undisturbed possession of a thing to the buyer in return for payment of the price.

Front 2

What must the parties reach agreement on for a valid contract of sale to come into existence?

Back 2

i) price

ii) subject matter = essentialia

Front 3

When is there agreement on price and subject matter?

Back 3

Once the price and the subject matter is either ascertained or ascertainable.

Front 4

If the seller is not an owner, is the sale valid?

Back 4

Yes

Front 5

If the seller is the owner, must the seller intend to pass ownership?

Back 5

Yes

Front 6

What must seller do in law of sale regarding passing of ownership?

Back 6

Seller must transfer all rights to buyer, but can only transfer rights that he himself actually has.

Front 7

What are the requirements for ownership to pass from seller to buyer?

Back 7

1. Delivery (actual or constructive)

2. Intention to pass ownership

Front 8

How does court establish intention?

Back 8

1) Cash sale :

-proper payment is payable on delivery

-presumed intention is ownership will pass on delivery and full & proper payment.

2) Credit sale:

-whole or part payable after delivery date

-presumed intention is ownership will pass on delivery alone (unless express reservation of ownership clause)

Presumption can be rebutted if clear evidence to the contrary

Front 9

What is Rei Vindicatio?

Back 9

Roman Law:

-recovery of possession of a thing wrongfully taken or detained from the rightful owner. Owner can claim their property from a possessor who has no legal right to hold it.

Front 10

What does the duty to take care of res mean?

Back 10

Refers to the responsibility or obligation of the involved parties to ensure proper care and maintenance of the subject matter of the contract.

-seller holds duty to maintain and take care of goods until transfer of ownership or delivery to the buyer.

Front 11

What happens if damage and destruction to goods is due to seller’s failure of taking proper care of goods?

Back 11

If res is damaged and destroyed due to seller’s negligence or failure to fullfil their duty of care it constitutes a breach of the duty of care issue.

Front 12

What happens if the damage or destruction to goods is not due to seller’s failure to take proper care?

Back 12

If damage or destruction occurs despite the seller fulfilling their duty of care, then it becomes a matter of a risk issue.

The risk might have passed to the buyer at an earlier stage in the transaction, and in such cases, the buyer might bear the loss or risk associated with the damaged or destroyed goods.

Front 13

Define risk:

Back 13

Risk is the risk of accidental loss,

-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

Ex. Fire; theft; expropriation; taxes

Front 14

Define benefit?

Back 14

Benefit refers to the fruits and other advantages that attach to the goods.

Ex. Actual fruits (agricultural land harvest of wheat etc.)

& rental income

Front 15

When does risk pass from the seller to the buyer?

Back 15

In common law:

When the contract is perfecta

In CPA:

When goods are delivered to the buyer (S19 (2c))

Front 16

When is a contract perfecta?

Back 16

-when subject matter is ascertained

-and proper payment is definite

-and suspensive conditions is fullfilled

Front 17

What does it mean when goods are damaged or destroyed with regard to suspensive conditions being fullfilled?

Back 17

If goods are damaged then suspensive conditions are still fulfilled: passes

If goods are destroyed then suspensive conditions aren’t fullfilled anymore: does not pass

Front 18

What if the seller is in mora in making delivery (mora debitoris)?

Back 18

Mora means seller is in delay of making delivery within agreed upon time.

If seller is in mora, the risk does not pass to the buyer even when goods are damaged or destroyed during this period while in the seller’s possession.

Front 19

What if the buyer is in mora in taking delivery? (Mora creditoris)

Back 19

Mora creditoris refers to buyers delay in accepting delivery within agreed upon time.

If buyer is at fault for not taking delivery as per terms of contract, then the seller is generally only liable for damage or destruction caused by gross negligence (high degree of recklessness; beyond reasonable) , and not ordinary negligence.

Front 20

What does implied warranty against latent defects mean?

Back 20

Legal principle that concerns the sale of goods and addresses defects that might not be apparent uppn reasonable inspection but still affect the effectiveness of item being sold.

Front 21

What does defect mean?

Back 21

An abnormal quality or attribute which destroys or impairs the utility or effectiveness of the thing for the purpose for which it was sold or for which it is commonly used.

Front 22

What does latent mean?

Back 22

A defect which is not discoverable on a reasonable inspection by an ordinary purchaser

Front 23

What is the responsibility of a seller regarding defects?

Back 23

Seller must disclose all defects that are latent.

Front 24

What if seller doesnt know defect exists?

Back 24

Irrelevant!!! Strict liability!

Front 25

When is something considered a defect?

Back 25

Not a flaw which a reasonable person would expect to find in articles of that type, age and price.

Front 26

What is a voetstoots clause?

Back 26

It is a provision in a contract that aims to exclude the seller’s liability for any defects, explicitly mentioning that the buyer purchases the item “as is” or “with all faults” and that the buyer accepts the risk of any potential defects.

Front 27

What happens if a seller uses a voetstoots clause to exlude liability for latent defects?

Back 27

The voetstoot clause does not absolve them from liability if the defect was known to the seller or should have been reasonably known.

Despite the voetstoot clause, if the defect is one that the seller was aware of or should have reasonably been aware of, the seller might still be liable for the latent defect, and the clause might not fully protect the seller from their responsibility.

Front 28

What does implied warranty against latent defects principle do?

Back 28

The principle upholds the buyer’s protection from undisclosed defects and ensures that sellers cannot escape liability by simply pleading ignorance of a latent defect.

Front 29

What remedies does the buyer have if goods have latent defect?

Back 29

-Actio Redhibitoria

-Actio Quanti Minoris

-can’t claim Damages but there are exceptions!!!

Front 30

What does actio redhibitoria mean?

Back 30

-cancellation and restitution of material defects only

Front 31

What does actio quanti minoris mean?

Back 31

-reducing proper price for material and non material defects

Front 32

What are the exceptions to the rule that damages can’t be claimed for consequential losses in law of sale under common law?

Back 32

1. Manufacturer responsibility: if seller is manufacturer

-manufacturer can be held accountable for consequential losses caused by defective product

2. Merchant seller claiming expertise liable for consequential losses

3. Fraudulent seller

4. If there is an express warranty against latent defects, it might override general rule allowing claims for consequential losses arising from those defects.

Front 33

What are the exceptions to the rule that damages can’t be claimed for consequential losses in law of sale under the CPA?

Back 33

1. Liability of various parties: the CPA extends liability for damages for consequential loss to various parties involved in the supply chain, including the producer, importer, distributor and retailer.

2. Exception for distributor or retailer: this can exempt a distributor or retailer from liability for consequential loss if it was unreasonable for them to have discovered the defect considereing theor role in marketing the product to the consumer

Front 34

What is meant by eviction?

Back 34

When dispossessed by someone who has a better right to possess than you have

Front 35

What is meant by eviction?

Back 35

When dispossessed by someone who has a better right to possess than you have

Front 36

What should a buyer do when threatened with eviction?

Back 36

1. Inform seller & ask for assistance in contesting claim

2. If seller assists and lose case in court, then you can claim compensation from seller.

3. If seller does not assist, must still defend 3rd parties claim in court. If case is lost then you can claim compensation from seller.

But if it is clear that the 3rd party is incontestable, you do not need to defend claim in court. You can simply hand over the goods to 3rd party, and claim compensation from seller.

Front 37

What compensation can a buyer obtain?

Back 37

-purchase price

+ (improvements) lesser of amount spent or amount by which value increased

+ natural increase in value (only if foreseeable)