Summary Private Law 411 (Specific Contracts) Semester Notes 2020

Contents
1 Introduction........................................................................................................................................2

Why Rules relating to Specific Contracts?..........................................................................................2

Methodology of Classification...........................................................................................................2

Sources..............................................................................................................................................3

2 Contract of Sale..................................................................................................................................4

Nature and Conclusion......................................................................................................................4

Consequences of a Contract of Sale.................................................................................................27

Duties of the Parties: Naturalia.......................................................................................................43

3 Contract of Lease..............................................................................................................................97

Nature and Conclusion....................................................................................................................97

Formalities.....................................................................................................................................103

Distinction from Other Types of Contracts....................................................................................103

Duties of Parties.............................................................................................................................104

Subletting, Cession, Delegation......................................................................................................122

Termination of the Relationship between Lessor and Lessee........................................................130

Rental Housing Act.........................................................................................................................134




1

,1 INTRODUCTION

Why Rules relating to Specific Contracts?


- General principles are insufficient
o Sometimes reason to deviate
 Eg why we need to limit freedom of contract or why we protect consumers
more
o Sometimes silent
 Eg risk rule in law of contract
o Specific legislation
 Eg Rental Housing Act, Consumer Protection Act
- When we identify specific contract types, we typically look at
o The purpose of the contract
o Interests of the parties
o Policy considerations
- Sometimes it might be necessary to deviate within a specific contract type
o Eg contract of sale there is a rule that specific types of sellers, eg manufacturers,
have a higher liability for latent defects
o Policy consideration: a person whose business it is to sell goods and has the
expertise should be liable for latent defects as it is their duty to check

Methodology of Classification


- Two broad approaches
o Essentialia-naturalia model
 When you look at the purpose of the contract it defines the essence of the
contract and there are certain obligations that flow naturally from that
essence
 The purpose of the contract of sale is the exchange of a thing for a
monetary value with a few to affording the purchaser permanent
enjoyment of the subject matter of the sale
 The essentalia are the terms of the contract that we use to identify the
contract type
 In a contract of sale, the essentalia would be the intention to buy
and to sell, the purchase price and the merx
 The naturalia are the terms that flow naturally from the type of contract by
operation of law
 The parties do not have to say anything or include them in their
contract
 But the parties can exclude the naturalia
 For example, in the contract of sale the duties of the seller and
buyer are naturalia of the contract

2

, o Eg warrant against eviction
 Shortcomings (Naude)
 Hides need for differentiation / sub-types
o For example, a consumer contract
 Can’t treat all sales the same, may be a need for
further differentiation
o If you only look at essentalia it may not be easy to
determine when differentiation is needed
 Sometimes not sufficient
o For example, employment contract and independent
contractor
 For employment contract the only essentalia you
need is a description of the job and the payment
 But these essentalia do not help us decide whether
it is a normal employment contract or an
independent contractor contract
o Typological approach
 Suggested by Naude to be used in addition to essentialia-naturalia model
 Analysis in terms of concepts and valuable, but insufficient
 We work with contracts where there is a close list of things
 A contract has to have certain characteristics to be seen as a specific
contract
 She says this is a little bit harsh as there should be situations where
we work with a more open type
o We have the characteristics and see whether a contract
meets most of those characteristics, not necessarily all
o But this is also criticised as it leads to uncertainty
 Therefore types: not all or nothing criteria
 Employment contract / independent contractor: essentialia the same, look
at other factors
 Such as the measure of control, own tools or tools of employer, level
of supervision, working on own premises or that of employer
- We need specific contracts because we need to know what the consequences are of a
specific type of contract, especially if the parties are silent on it
o Eg what happens if the merx is damaged on delivery, etc


Sources
- Common law
- Legislation
o Prescribing certain formalities
o Rental Housing Act 50 of 1999
o Formalities in respect of Leases of Land Act 18 of 1969
o Consumer Protection Act 68 of 2008
- Constitution

3

, 2 CONTRACT OF SALE

Nature and Conclusion
- Definition
o Agreement that seller will deliver a thing (ie merx) and transfer all his rights therein
in return for payment of purchase price by buyer
 It does not say you have to transfer ownership
 Thus, you do not need to be the owner of the thing you sell
o Essentialia
 Merx
 Price
 Often referred to by Latin term ‘pretium’
 Intention
 Intention is usually decisive factor
 If the parties are concluding a sham agreement, eg it is actually a
donation and not a contract of sale, the courts do not look at the
form of the agreement
o Thus do not look at whether there is a merx and price
o They only look at the intention of the parties
o Contract of sale does not need to be in writing
 Except for contracts where there are prescribed formalities, such as
alienation of land
- Distinguish sale from:
o Lease
 Lease is only the temporary use and possession of the item delivered
 Sale is permanent
 Distinction is important for credit sale agreement, lease of mining rights and
lease of minerals
o Exchange
 Exchange involves the exchange of one thing in return for another
 Not money, but rather two objects
 In roman law the distinction was more important because sale was
enforceable, and exchange was not
 However, in modern law it is important if you buy a new vehicle
 You trade in the vehicle you have at the moment and pay a sum of
money in exchange for the new vehicle
 Is this sale or exchange?
 If it is only an object for an object, then it is exchange
 Object for object plus money?
o You look at the intention of the parties
 Did they intend it to be contract of sale or of
exchange?


4