LPL4801 Exam Pack | Latest Questions & Answers for Effective Exam Preparation

LPL4801 Exam Pack |
Latest Questions &
Answers for Effective
Exam Preparation

, 1

LPL4801
Questions and Answers
SALE LONG QUESTIONS:

1. Does the purchaser in a contract of sale have the same j j j j j j j j j j j




obligations arising ex lege with regard to the thing used as a j j j j j j j j j j j j




trade in as the seller with regard to the thing sold? j j j j j j j j j j j




Discuss.

It is one of the naturalia of a contract of sale that the seller is liable for
j j j j j j j j j j j j j j j j j




latent defects in the thing sold. But the question is whether the same rule
j j j j j j j j j j j j j j




applied in the case of a latent defect in a thing used as a trade-inj j j j j j j j j j j j j j j




regarding a contract of sale. In Wastie, the buyer used his old car to buy a j j j j j j j j j j j j j j j j




new one from the seller, along with a cash price. The old traded in car had
j j j j j j j j j j j j j j j j




a latent defect, which cost R120 to fix. The seller successfully claimed the
j j j j j j j j j j j j j




repair cost from the buyer with the actio quanti minoris. The court held
j j j j j j j j j j j j j




that, where part of the purchase price consists in something other than
j j j j j j j j j j j j




money, the same principle that applies to the thing sold (liability for
j j j j j j j j j j j j




latent defects) applies to the non- monetary part of the purchase price.
j j j j j j j j j j j j




The reason being that in the contract of exchange both parties are
j j j j j j j j j j j j




protected by the aedilitian remedies against latent defects in the thing j j j j j j j j j j j




forming the subject matter of the contract. It would thus be unfair, and j j j j j j j j j j j j j




illogical not to afford the same protection to the seller in respect of the j j j j j j j j j j j j j j




thing traded in. j j




This approach was rejected in Mountbatten, as the court could not find
j j j j j j j j j j j j




any authority for this approach, and distinguished the facts of Wastie
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from the facts of this case as this case dealt with a dictum et promissum.
j j j j j j j j j j j j j j




But in Janse van Rensburg, the court approved and followed the
j j j j j j j j j j j




approach in Wastie on the basis that good faith and public j j j j j j j j j j j




policy require a balance between the rights and duties of parties
j j j j j j j j j j j




to such contracts. It would be unjust and unequitable to have the
j j j j j j j j j j j j




seller liable for latent defects and misrepresentations relating to the thing
j j j j j j j j j j j




sold, while no such liability attaches to the buyer regarding the
j j j j j j j j j j




jthing traded in. this extension of the common law was also in
j j j j j j j j j j j j




line with the Constitution.
j j j




2. X enters into a contract of sale with Y in regard to a j j j j j j j j j j j j




TV. The terms of the contract state that the buyer, Y,
j j j j j j j j j j j j




may return the TV to X within one month after the j j j j j j j j j j j




contract if he no longer wants it. 3 weeks after the j j j j j j j j j j j




contract, Y tells X that he now wants to exercise this j j j j j j j j j j j




right. But, before Y is able to return the TV to X, its j j j j j j j j j j j j j




destroyed by a fire in his house, caused by lightning. j j j j j j j j j j




What is Y’s position now? And would it make a difference j j j j j j j j j j j




if the TV was only damaged in the fire? j j j j j j j j




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In order to establish Y’s legal position, one has to determine
j j j j j j j j j j j




which party bears the risk at the time of the destruction of the
j j j j j j j j j j j j j




television set. In other words, was the contract of sale already j j j j j j j j j j j




perfecta? The risk falls on the purchaser as soon as the contract j j j j j j j j j j j j




of sale is perfecta. This means that the purchaser remains obliged
j j j j j j j j j j j




to pay the purchase price even though the seller cannot deliver the
j j j j j j j j j j j




jthing sold at all, or is able to deliver it only in a damaged j j j j j j j j j j j j j j




condition. The term perfecta has a specific juristic meaning which is j j j j j j j j j j




jimportant for the purposes of transfer of risk. For the purposes j j j j j j j j j j j




of transfer of risk the sale is perfects if the following requirements
j j j j j j j j j j j j




have been complied with: j j j




1) The purchase price must be determined j j j j j




2) The thing sold must be ascertained j j j j j




3) The agreement must be unconditional j j j j




This problem deals with requirement (3), as it is clear that a
j j j j j j j j j j j j




pactum displicentiae is present. According to the pactum j j j j j j j j




displicentiae, the buyer acquires the right to return the thing to j j j j j j j j j j j




the seller within a certain time, if he is no longer pleased with it. A
j j j j j j j j j j j j j j




jpactum displicentiae can either be interpreted suspensively or j j j j j j j j




resolutively.

The question however remains: who bears the risk if the thing is
j j j j j j j j j j j j




destroyed in the meantime? In Fitwell, the appellant delivered goods to the j j j j j j j j j j j




jrespondent in terms of a contract of sale. The respondent j j j j j j j j j j




refused to face delivery on the ground that the invoiced price was higher j j j j j j j j j j j j j




than the agreed price. Hereafter the goods were destroyed by a fire. In his
j j j j j j j j j j j j j




j decision the judge concludes that it is beyond question that j j j j j j j j j j




when the goods were destroyed, the appellant was not prepared to reduce
j j j j j j j j j j j j




the price and it follows that the appellant must have known that
j j j j j j j j j j j




jthe respondent’s attitude in the circumstances was that the goods
j j j j j j j j j




jhad to be taken back. Thus, the contract of sale was not perfecta
j j j j j j j j j j j j




jand because of this the risk remained with the appellant. It is
j j j j j j j j j j j j




unclear whether the pactum displicentiae has a resolutive or suspensive j j j j j j j j j j




effect because insufficient facts are given. It has both a j j j j j j j j j j




suspensive and resolutive effect. Y has already notified X that he j j j j j j j j j j j




wants to return the goods in terms of the pactum displicentiae. j j j j j j j j j j j




Thus, just as in the Fitwell case, it is clear that it is Y’s intention
j j j j j j j j j j j j j j j




that the television set must be taken back.
j j j j j j j




X thus bears the risk for the destruction of the television set. Y
j j j j j j j j j j j j




jcan rely on the pactum displicentiae in terms of which he may withdraw
j j j j j j j j j j j j j




from the contract. When the thing is merely damaged, the seller (X)
j j j j j j j j j j j j




bears the risk for such damage. The buyer (Y) may return the
j j j j j j j j j j j j




thing.




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3. A squatter comes to an agreement with the owner of a farm
j j j j j j j j j j j j




according to which the farmer allows the squatter to live on j j j j j j j j j j j




the farm in return for certain services. Later, the farm j j j j j j j j j j




is sold and transferred to Y, who is aware of the agreement. Y
j j j j j j j j j j j j j




tells the squatter that he is prepared to allow him to j j j j j j j j j j j




stay on the farm on condition that he renders the same j j j j j j j j j j j




services he rendered to the previous owner. But the squatter j j j j j j j j j j




refuses to acknowledge Y as the new owner and indicates that j j j j j j j j j j j




he is only prepared to render services to the previous owner.
j j j j j j j j j j j




And the squatter claims the right to continue living on j j j j j j j j j j




the farm. Discuss Y’s legal position and give reasons for your j j j j j j j j j j j




answer and refer to case law. j j j j j




To be able to ascertain the relevant principles of law, one firstly has
j j j j j j j j j j j j j




to establish whether a contract of lease has been concluded. Thus
j j j j j j j j j j




jthe essentialia of a contract of lease are the following:
j j j j j j j j j




1) The lessor has to deliver a thing j j j j j j




2) The tenant has to be granted the use and fruits of the thing j j j j j j j j j j j j




3) The use of the thing should be placed at the disposal of j j j j j j j j j j j j




the lessee only temporarily. j j j




4) The lessee has to give the lessor either a fixed or ascertainable j j j j j j j j j j j j




sum of money or a portion of the proceeds from the thing leased. j j j j j j j j j j j j




However, there seems to be no sign of monetary compensation in the j j j j j j j j j j j j




given facts. Thus the fundamental question is whether the lessee’s
j j j j j j j j j j




performance can consist in something other than the payment of j j j j j j j j j j




a sum of money.
j j j




In Rubin v Botha, the court accepted that there was a lease
j j j j j j j j j j j j




despite that fact that, in casu, the lessee’s performance did not
j j j j j j j j j j j




consist in the payment of money. In De Jager v Sisana, the court
j j j j j j j j j j j j j




ruled that no lease exists. Therefore the squatter cannot rely on the
j j j j j j j j j j j j




‘huur gaat voor koop’ rule. The squatter only had a right to
j j j j j j j j j j j j




occupation in return for his services. This innominate contract j j j j j j j j j




ceases to exist by reason of the sale of the land by the person
j j j j j j j j j j j j j j




entitled to the services. The squatter has not shown any legal j j j j j j j j j j j




right to occupation. j j




Y, however, has the right to decide whether he will allow the
j j j j j j j j j j j j




squatter to continue with his services, in return for the right to j j j j j j j j j j j j




occupy his land. In spite of various attempts made by Y to prove
j j j j j j j j j j j j j




to the squatter that he (Y) is truly the new owner of the land, the
j j j j j j j j j j j j j j j




squatter still refuses to recognise Y as the owner. Y therefore had the right
j j j j j j j j j j j j j j




to have the squatter removed from his land. It is therefore a
j j j j j j j j j j j j




question of legal policy. Except in the case of the bywoner’s j j j j j j j j j j j




contract, the rent can consist only in money. j j j j j j j




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