KTH220: Law of Specific Contracts
Study Unit 1: Purchase & Sale
Theme 1: Introduction
1. Introduction
Difference between contract & specific contract
Must comply with general reqs Parties must have consensus
for validity on essentialia of that specific
type of contract + comply with
general reqs for validity
What is essentialia?
= minimum essentials parties have consensus on
What is naturalia?
= rights & duties that naturally flow from specific contract
What is incidentalia?
= parties agree on particular terms & conditions OR exclude certain naturalia in
agreement
Law of purchase & sale has bearing on all legal rules applies to contracts of
sale
Contract of sale = most common contract found in practice
Brief historical overview:
- Roman law contract of exchange developed into independent nominated
contract of sale
- Roman law of sale expanded in Roman-Dutch law
- SA law of sale based on common law
- Essentialia came from Roman & Roman-Dutch law
1
,Definition of contract of sale = specific, nominated, reciprocal agreement to buy &
sell, in terms of which seller has true intention to deliver determined or determinable
object together with rights in objects undisturbed to buyer + buyer has true intention
of paying determined or determinable price for object
Contract of sale v contract of lease:
Intention of transferring No intention of transferring ownership
ownership
Contract of sale v contract of exchange (barter)
Money = consideration 1 object rendered consideration for another
object
Delivery not only req for passing Right of ownership passes upon delivery of object
Ownership (ito deed of sale)
2. Requirements for valid contract of sale
General reqs for valid contract:
1. Consensus
2. Contractual capacity
3. Legality
4. Physical possibility
5. Formalities
For contract to qualify as contract of sale seller + buyer must reach
consensus on essentialia of contract of sale
2
,3 Essentialia for sale: what buyer + seller must have reached consensus on to
conclude valid sale
1. Nature of agreement: to buy & sell
2. Thing sold = merx/res vendita
3. Price = pretium
McWilliams v First Consolidated Holdings = IMPORTANT CASE FOR PROOF OF
ESSENTIALIA
[facts]
- Letter of confirmation of verbal sale contract drafted by seller’s lawyer & sent
via post to buyer
- Buyer did not respond nor disputed letter
- Cout had to decide whether or not valid sale concluded
[court decision]
- Confirmed essentialia that parties must have consensus on for valid sale to be
concluded: 1. Nature 2. Price 3. Thing sold (merx)
- Mere quiescence not necessarily acceptance of contents by buyer –
especially where commercial practice & human experience would call for
response by buyer
- Thus: in casu, circumstances indicated that buyer had to respond to letter if
did not reflect true position
Basically where acceptance by buyer is necessary: doing nothing does
not amount to acceptance
o Conclusion of contract of sale does not result in transfer of ownership
= conclusion of sale establishes personal right against seller
= other requirements establish real right eg. Delivery of object sold &/or payment of
price
= transfer of ownership establishes real right
Note: real right much stronger than personal right!
4 categories of subjective rights:
i. Personality rights
ii. Intellectual property rights
iii. Personal rights
3
, iv. Real rights – right to ownership
Theme 2: Essentialia of contract of sale
1. Essentialia of contract of sale
A. Nature of contract Seller doesn’t have to be owner of merx to conclude valid
= intention of parties to contract of sale
contract of sale: deliver the - Seller only obliged to transfer all rights in object to
rights of undisturbed use, buyer without interference
enjoyment & disposal of - Transfer of ownership = characteristic of contract of
object to buyer sale
= court will give effect to - So cannot include clause stating that ownership will
true intention to conclude never pass to buyer = not valid contract of sale – void
sale – so if pretence of sale for illegality
is donation but true intention Why? Intention to buy + sell is absent (1st essentialia)
is contract of sale, court
gives effect to contract of - If seller is owner must have intention to transfer
sale ownership to conclude valid contract of sale
- Where both buyer + seller know object sold does not
belong to seller & seller not entitled to sell object,
such as stolen object, deed of sale = null & void as
result of juridical impossibility of performance
(illegality)
Vasco Dry Cleaners v Twycross - COURTS GIVE EFFECT TO TRUE INTENTION
OF PARTIES
[court decision]
- Parties must have consensus on all 3 essentialia
- True intention not sale but moneylending secured by pledge
- Court will give effect to true intention of parties not pretence of sale
4
Study Unit 1: Purchase & Sale
Theme 1: Introduction
1. Introduction
Difference between contract & specific contract
Must comply with general reqs Parties must have consensus
for validity on essentialia of that specific
type of contract + comply with
general reqs for validity
What is essentialia?
= minimum essentials parties have consensus on
What is naturalia?
= rights & duties that naturally flow from specific contract
What is incidentalia?
= parties agree on particular terms & conditions OR exclude certain naturalia in
agreement
Law of purchase & sale has bearing on all legal rules applies to contracts of
sale
Contract of sale = most common contract found in practice
Brief historical overview:
- Roman law contract of exchange developed into independent nominated
contract of sale
- Roman law of sale expanded in Roman-Dutch law
- SA law of sale based on common law
- Essentialia came from Roman & Roman-Dutch law
1
,Definition of contract of sale = specific, nominated, reciprocal agreement to buy &
sell, in terms of which seller has true intention to deliver determined or determinable
object together with rights in objects undisturbed to buyer + buyer has true intention
of paying determined or determinable price for object
Contract of sale v contract of lease:
Intention of transferring No intention of transferring ownership
ownership
Contract of sale v contract of exchange (barter)
Money = consideration 1 object rendered consideration for another
object
Delivery not only req for passing Right of ownership passes upon delivery of object
Ownership (ito deed of sale)
2. Requirements for valid contract of sale
General reqs for valid contract:
1. Consensus
2. Contractual capacity
3. Legality
4. Physical possibility
5. Formalities
For contract to qualify as contract of sale seller + buyer must reach
consensus on essentialia of contract of sale
2
,3 Essentialia for sale: what buyer + seller must have reached consensus on to
conclude valid sale
1. Nature of agreement: to buy & sell
2. Thing sold = merx/res vendita
3. Price = pretium
McWilliams v First Consolidated Holdings = IMPORTANT CASE FOR PROOF OF
ESSENTIALIA
[facts]
- Letter of confirmation of verbal sale contract drafted by seller’s lawyer & sent
via post to buyer
- Buyer did not respond nor disputed letter
- Cout had to decide whether or not valid sale concluded
[court decision]
- Confirmed essentialia that parties must have consensus on for valid sale to be
concluded: 1. Nature 2. Price 3. Thing sold (merx)
- Mere quiescence not necessarily acceptance of contents by buyer –
especially where commercial practice & human experience would call for
response by buyer
- Thus: in casu, circumstances indicated that buyer had to respond to letter if
did not reflect true position
Basically where acceptance by buyer is necessary: doing nothing does
not amount to acceptance
o Conclusion of contract of sale does not result in transfer of ownership
= conclusion of sale establishes personal right against seller
= other requirements establish real right eg. Delivery of object sold &/or payment of
price
= transfer of ownership establishes real right
Note: real right much stronger than personal right!
4 categories of subjective rights:
i. Personality rights
ii. Intellectual property rights
iii. Personal rights
3
, iv. Real rights – right to ownership
Theme 2: Essentialia of contract of sale
1. Essentialia of contract of sale
A. Nature of contract Seller doesn’t have to be owner of merx to conclude valid
= intention of parties to contract of sale
contract of sale: deliver the - Seller only obliged to transfer all rights in object to
rights of undisturbed use, buyer without interference
enjoyment & disposal of - Transfer of ownership = characteristic of contract of
object to buyer sale
= court will give effect to - So cannot include clause stating that ownership will
true intention to conclude never pass to buyer = not valid contract of sale – void
sale – so if pretence of sale for illegality
is donation but true intention Why? Intention to buy + sell is absent (1st essentialia)
is contract of sale, court
gives effect to contract of - If seller is owner must have intention to transfer
sale ownership to conclude valid contract of sale
- Where both buyer + seller know object sold does not
belong to seller & seller not entitled to sell object,
such as stolen object, deed of sale = null & void as
result of juridical impossibility of performance
(illegality)
Vasco Dry Cleaners v Twycross - COURTS GIVE EFFECT TO TRUE INTENTION
OF PARTIES
[court decision]
- Parties must have consensus on all 3 essentialia
- True intention not sale but moneylending secured by pledge
- Court will give effect to true intention of parties not pretence of sale
4
