MIDLANDS STATE UNIVERSITY

FACULTY OF LAW

NAME: RUSSELL PAGIWA

REGISTRATION NUMBER: R1917606 J

MODULE: COMMERCIAL LAW (LB 204)

LEVEL: 2:1

ASSIGNMENT QUESTION: Consider the extent to which sellers can exempt

themselves from product liability under our
law of sale.
DUE DATE: 10 /02/2021
A sale is a contract in which one person called the seller promises to deliver a thing/
merx to another person called the purchaser with the purchaser agreeing to pay a
price/pretium.1 It is during a contract of sale that most often sellers introduces
exemption or limitation clauses which exempt themselves from assuming liability during
or after a sale. As already mentioned, sellers often use exemption clauses such as
caveat subscriptor rule, limitation clause, indemnity clause, exclusion clause and
voetstoots to mention just a few to avoid liability during a sale contract. However the
government of Zimbabwe has enacted laws which protect consumers/sellers from unfair
exemptions and limitation clauses implemented by sellers during contracts of sale. This
write up will clearly discuss the level or extent to which sellers uses exemption clauses
in order to exempt themselves from product liability and also look on how the
government have enacted laws to protect the consumers against such activities.

An exemption clause can be thought of as the “what-if” part of a contract, it is that

clause which explains the consequences of breaching the agreement for unsafe
behavior or any other variables that may occur during or after a contract of sale. 2 But
however it is important to note that before resorting to an exemption clause during a
contract of sale, the seller has some obligational duties at law which he or she has to
meet during the contract of sale. These duties are discussed below as follows:

1. Duty of a seller to take care of the merx. Here it is clear that, before delivery
the seller has to take proper care of the merx even if the lability of any risk is not on him.
The seller here is only liable for any loss or liability caused by his negligence.

2. Duty of a seller to deliver a merx. It is the duty of the seller to deliver the
merx on the stipulated contractual time. If the seller fails to deliver the merx to the
buyer, the buyer may choose to sign out of the contract with damages on specific
performances or not.

1
Maja. The Law of Contract in Zimbabwe. (2015)
2
Christie, RH Business Law in Zimbabwe (1998)
3. Duty of the seller to guarantee the buyer against eviction It has to be
noted that all contracts of sale come with an implied warrant against eviction, where by
the seller assures the buyer of the merx that, he would not be disturbed during the time
he possess the merx. Put differently the buyer is said to enjoy vacant possession of the
merx if

4. Duty of the seller to guarantee against defects. It is common cause in

every contract of sale that the buyer or the receiver must be allowed the opportunity to
thoroughly inspect the product and confirm whether the merx tallies with the
specifications agreed upon. The buyer is at liberty to reject the product if it does not
meet the agreed specifications upon delivery. It is also important to note that defects
come in two which are; patent defects those that can be easily observed at the time of
delivery by mere inspection and latent defects are those defects that are hidden and not
readily discernible at the time of delivery.

Despite the above mentioned obligational duties which sellers have to meet at law when
participating in contracts of sale it is important to note that, sellers however can add or
invoke exemption clauses during contracts of sale when conducting business. 3 They
can use exemption clauses such as the caveat subscriptor clause. The rule of caveat
subscriptor can be defined as a principle that the purchaser/ buyer of a merx who
endorses his or her signature to a document during a contract of sale is presumed to
have knowledge on what the document contains and is therefore bound by the contents
therein. 4The principle was further explained by Chief Justice Innes in a South African
case of Burger v Central South African Railways. 5 The learned judge in describing the
principle of caveat subscriptor argued that, it is a sound principle of law that a man
when he signs a contract is taken to be bound by the ordinary meaning and effect of the
words which appear over his signature. It therefore follows that, indeed the principle of

3
Manase, AJ a Madhuku, L (1996) A Handbook on Commercial Law in Zim University of Zimbabwe Publications:
Harare
4
Lilienthal JW ’Privity of Contract’ (1887) 1 (5) Harvard Law Review
5
Burger v Central South African Railwayss
caveat subscriptor if correctly applied at law it can exempt sellers from product liability
under the law of sale.

Under our common law, a seller is directly liable to a consumer or buyer for all latent
defects which are noticed after delivery of the merx. However it is important to note that,
if a voetstoots clause is to be included in a contract of sale agreement, subsequently the
seller cannot be held liable if the buyer identifies defects on the merx unless he or she
can prove that the seller was aware of the latent defects upon delivery of the merx. The
voetstoots clause was successfully relied upon in the case of Haviside v Heydricks and
Another 2014, were a buyer of a residential property discovered that there was no
building plans for a garage on the property and consequently the structure was illegal.
The court held that the absence of statutory approval such as building plans is a latent
defect.6 It therefore follows that indeed sellers can exempt themselves from product
liability hence applying a presumption under the voetstoots that, a defect that manifests
itself shortly after the sale of the merx existed at the time of the sale.

In furtherance there is also another exemption clause which is used by sellers in trying
to limit or exempt product liability in any given business transaction which is called the
limitation of liability clause. A limitation of liability clause is a legal provision in contracts
of sale that limits the amount of liability which a seller or company may face in the event
a lawsuit is filed by the purchaser or buyer. 7 Most scholars argue that it is debatable on
whether or not limitation of liability clause are applicable at law or rather they merely
attempt to bargain away liability in favour of sellers during a contract of sale. However
there are several benefits of having a limitation of liability clause included when
conducting business between the buyer and the seller. One of the benefits is that a
liability clause provides legal protection from potential liability and other claims the seller
might encounter during a contract of sale. However a limitation of liability clause is not
applicable where it is as a result of negligence on the part of the buyer. This was clearly
held in the case of, Cabri (Pvt) Ltd v Terrier Services (Pvt) Ltd, where the court
established that an exemption clause that limits or excludes liability based on
6
Haviside v Heydricks and Another 2014
7
Wessels, JW a Roberts, AA (1951) The Law of Contract in South Africc Butterworths: Durban
negligence in a consumer contract could not be enforced. 8 It therefore follows that
indeed a limitation of liability clause can exempt sellers from product liability if correctly
applied under the law of sale.

However in as much as sellers implement exemption clauses in trying to avoid or limit

liability during contract of sale, the Zimbabwean government have enacted laws and
policies which protect unfair practices by sellers during contract of sale. This saw the
emergence of the Consumer Protection Act [Chapter 14:14] act which came to protect
consumers from unfair practices which might occur during contracts of sale.

As an emphasis to the policies being implemented by the Government, part of the

preamble in the Consumer Protection Act reads as follows:
“to protect the consumer of goals and services by ensuring a fair, efficient,
sustainable and transparent market place for consumers and business;...”9
On the face of it, this part of preamble clearly show the main thrust and effort of the
enactments being implemented by government towards creating a fair and transparent
ground when parties are conducting contracts of sale. It therefore follows that
regardless of exemption clauses which might be implemented by sellers during
contracts of sale in evading liability, the government however has enacted laws which
protect buyers or consumers from unfair practices.

Under the Consumer Protection Act there are also provisions which grant relief mostly
to consumers who fell victims to unfair contractual practices when conducting business
on a daily basis. For instance Section 35 of the Consumer Protection Act provides for a
right to fair honest dealing and protection from unconscionable conduct. 10 The provision
further prohibits sellers or suppliers from using undue influence or unfair tactics against
consumers. In furtherance, section 41 of the Consumer Protection Act protects
consumers from unfair, reasonable and unjust contractual terms which are exemption

8
Cabri (Pvt) Ltd v Terrier Services (Pvt) Ltd
9
Consumer Protection Act [Chapter 14:14]
10
(n8 above)
clauses.11 The provision clearly puts it on record that, an unfair exemption clause is that
clause which is commonly prepared in favour of a person other than the consumer.
Such legal reasoning can be traced In the case of Cabri (Pvt) Ltd v Terrier Services
(Pvt) Ltd 2004.12 In this matter the defendant had negligently performed a contract to
move plaintiff’s heavy equipment. This contract was carried out negligently by defendant
leading to property damage to plaintiff. Using the Consumer Protection Act the court
cancelled a clause in the contract which purported to exempt defendant from liability for
loss caused by negligence.
Given the above law and judicial precedence it goes without any reasonable doubt that
indeed, government policies and laws are practically effective when dealing with unfair
contractual practices of sellers to consumers when conducting a sale.

In summation one can conclusively argue that, it is not in dispute that most often than
less, sellers found themselves including exemption clauses when contracting with
buyers under the law of sale in trying to limit or avert liability. Some of these limitations
are recognized at law and are applicable. However as a way of protecting innocent
consumers from unfair and fraudulent practices by sellers, the government of Zimbabwe
have enacted laws and policies which if followed by business parties they provide a fair
and favorable ground of doing business.

11
(n9 above)
12
Cabri (Pvt) Ltd v Terrier Services (Pvt) Ltd 2004 (1) ZLR 267 (H)
BIBLIOGRAPHY

1. Maja. The Law of Contract in Zimbabwe. (2015)

2. Christie, RH Business Law in Zimbabwe (1998)
3. Manase, AJ a Madhuku, L (1996) A Handbook on Commercial Law in Zim
University of Zimbabwe Publications: Harare
4. Wessels, JW a Roberts, AA (1951) The Law of Contract in South Africc
Butterworths: Durban
5. Consumer Protection Act [Chapter 14:14]
6. Cabri (Pvt) Ltd v Terrier Services (Pvt) Ltd 2004 (1) ZLR 267 (H)
7. Burger v Central South African Railways