SPECFIC CONTRACT:

TOPIC 2: CONTRACT OF SALE

PART 3

3. DUTIES OF THE PARTIES

• COS creates rights and duties for the parties
o Ex lege (auto consq of COS)
o Naturalia: thus can always be varied by agreement

3.1 Duties of the BUYER:

1. Core duty: pay purchase price
2. Co-operate to take delivery of the merx
o Performance is seen as bilateral juristic act
o Thus, seller must tender / offer to perform & buyer must accept that offer
§ Acceptance is reflected in the buyer’s co-operation, in some form or another in
taking delivery
o In addition to the primary duty the buyer also has a duty to co-operate in order to take
delivery of the merx.
§ A breach of the duty to take delivery typically occurs when the buyer delays in
accepting delivery which means that the buyer is guilty of mora creditoris
§ If the buyer is in mora creditoris, the buyer has to compensate the seller for any
expenses that the seller needed to incur to look after the merx.

3.2 Duties of the SELLER

1. Duty of care prior to delivery:
• Must exercise reasonable care in relation to the merx = culpa, thus the seller must act like a
reasonable person and therefore not be negligent. If he does not we are dealing with breach
of contract.
2. Delivery of merx by seller
• In absence of parties agreeing to something else, ex lege duty of delivery simply means
to make the merx available
• Does NOT mean the S is obliged to deliver the merx to the buyers house
o Not part of the ex lege duty
3. Warranty against eviction
• S warrants that the buyer will have undisturbed possession of the merx
• Nobody with a better title to merx will disturb buyer in his possession
4. “Warranty” against defects (loose reference)
• Duty to provide merx of a certain quality / certain attributes
• Liability in the event merx doesn’t possess qualities / attributes
• But not all warranties are equal
o Can be have different consq
o Thus caution! not warranty in strict sense of contractual warranty

WARRANTY AGAINST EVICTION

• General
• What must buyer prove
• Duty / options of buyer at threatened eviction
• Buyers remedies
• Exemption of liability

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a) General
• Seller does NOT warrant that the B will become the owner of the merx, merely warrants buyer
will have undisturbed possession
o Warranty of undisturbed possession contains 2 duties in the alternative
a) Buyer will have undisturbed possession, failing which
b) Seller will COMPENSATE the buyer for failure to have undisturbed possession
o Only if S doesn’t compensate Buyer will there be BOC giving rise to BOC remedies
§ Alpha Trust v Van Der Watt 1975 (A) – prescribed
§ Depending on how see S duty, are we dealing with claim of specific performance
OR damages?

• Reason for rule: balancing parties interests in fair way (heart of ex lege consq)
o Seller’s position is made easier – doesn’t have to make the buyer owner
§ The merx could have passed through a number of different hands – a chain of
seller – it can be difficult to determine whether ownership was transferred through
previous sellers, this is why the seller does not warrant transfer of ownership.
o Buyer comprehensively protected
§ The buyer can institute remedies for breach of contract against the seller if they
are dispossessed due to a defect in the seller’s title. Remember, that there is still
a valid contract despite the defect in title
§ Offer’s buyer sufficient protection in the event there is a 3p with stronger title in
the merx, who disturbs buyer of his possession

ALPHA TRUST V VAN DER WATT 1975 (A) - PRESCRIBED

she never went over this in class but this is from old notes

Facts –
• Parties entered into an instalment sale agreement, in terms of which the buyer bought a
Ford Thunderbird motor car from the seller
• At the time of entering into the contract, both parties bona fide believed that the seller was
the owner of the car
• While the buyer was still paying off the car, KBA claimed the car and the buyer gave it to
them, because it appeared that they were the true owners of the car
o Therefore, the buyer was evicted
• As a result of the eviction of the car, the buyer terminated the contract and instituted action
in the HC against the seller for repayment of the full amount paid by him to the seller
• Seller argued that the buyer was not entitled to cancellation of the contract and repayment of
the purchase price, but only to damages as a result of the eviction i.e. the value of the car at
the time of eviction, set off against the balance still owed by the buyer in terms of the
contract
• Court a quo found in favour of the buyer: buyer was allowed to claim the full amount paid by
him to the seller
• Seller now appeals against this order

Judgement –
• It is clear in our law that seller need not be owner of the merx in order to conclude a valid
contract of sale
o Seller is not obliged to make the buyer the owner of the merx
o Must merely place the buyer in possession of the merx and protect him against
eviction

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 o This means that the seller warrants that nobody with a better right will lawfully
deprive the buyer of the merx, and that the seller will protect the buyer’s possession
• Question – what are the obligations of the seller where he does not or cannot fulfil his
warranty against eviction?
o Court quotes authority that states that the seller’s warranty obligation is an alternative
one – he must either see to it that the buyer retains possession, use and enjoyment
of the merx, failing which, he must compensate the buyer
§ If the first part is impossible to fulfil,
• i.e. the seller is unable to protect the buyer’s possession, use and
enjoyment, this is not breach of contract –
o In terms of the contract of sale itself, the seller is liable to fulfil
the second obligation
§ i.e. to compensate the buyer
o Pothier also stated that the seller’s obligation to repay the purchase price to the
buyer arises from the contract of sale itself
§ it did not arise because of breach of contract
o In Roman Dutch law, the buyer could claim repayment of the purchase price together
with compensation for any damage suffered by the buyer as a result of the eviction
o In Roman Dutch law, if the seller wanted to exclude his liability for eviction with a
pactum de evictione non praestanda, he could only be exempted from paying
damages that were over and above the purchase price
§ He remained liable for repayment of the purchase price
§ This shows that repayment of the purchase price in the event of eviction of
the buyer was the generally accepted rule in Roman Dutch law
§ The reason given by Voet for this rule is that a condition whereby the buyer
could lose the merx and the seller could nevertheless keep the purchase
price, was incompatible with the nature of a contract of sale
o Court held that even where the value of the merx at the time of eviction is less than
the purchase price, the buyer does not lose his right to claim repayment of the
purchase price
o Court held that the Roman Dutch writers are not clear whether a buyer who suffers
damages as a result of the eviction may claim full damages suffered as a result of
the eviction, together with repayment of the purchase price paid, from the seller
§ Seems as if the claim was essentially aimed at damages, with the purchase
price being the minimum
o Court held that compensating the buyer according to the value of the merx at the
time of eviction would be unfair to the innocent buyer in many cases and benefit the
seller without any reason
§ E.g. a collector who pays an extravagant amount for a stamp to complete his
collection
§ E.g. a buyer purchases a painting at a low price and afterwards discovers it is
a valuable masterpiece
§ The damages the buyer is entitled to claim at eviction are limited to such
damage as could reasonably have been foreseen by the parties at the time of
conclusion of the contract, plus the purchase price
• Limited by the contemplation principle
o Court rejected the notion that Lammers and Lammers v Giovannoni (prescribed) is
authority for the statement that an evicted buyer is only entitled to claim damages
and not restitution of the purchase price
• Court held that on the facts, it was unnecessary for the buyer to cancel the contract between
him and the seller

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 o As a result of the eviction, he was entitled to claim repayment of the purchase price
and damages from the seller with the actio empti
o Buyer was therefore entitled to repayment of that portion of the purchase price which
he had already paid and was absolved from paying the portion which he still owed
o Confirmed the decision of the court a quo

b) What must buyer prove if wants to succeed with eviction claim?

i. First requirement: must prove eviction: disturbance in possession, use, enjoyment of merx
by 3p (with a stronger title)
• Dev on law of sale: threatened eviction is sufficient to found claim against seller
o Thus not only actual eviction
• Total v partial eviction
o Total vs partial eviction: the merx taken away in its entirety vs where the buyer is
deprived only of a part of the thing sold or a third party is successful in claiming the
existence of a right which diminishes the buyer’s enjoyment of one or other of the
incidents of ownership although the buyer retains possession of the thing sold.
• Examples of eviction
o Someone with stronger title disturbs possession
§ EG: rei vindicatio against buyer successful = total eviction
o Permanent attachment by police because stolen goods
§ Vrystaat Motors v Henry Blignaut
§ Deprived entirely of merx by 3p
§ 3p does not necessarily have to be the true owner of the merx iof an act to
qualify as eviction
§ External authority deprives buyer of the merx
o Buyer voluntarily relinquishes merx to a 3p
o Buyer pays 3p money to retain possession of the merx
• but for it to amount to eviction & B to have a claim based on eviction against
their own seller, buyer must take certain steps
• Designed to show that the 3p has a stronger right to the merx
o Loss of surrogate of merx – also amounts to evictions
• Indirect reference to Chain sales

Chain sales à successive sale of same merx (NB)

• merx sold from A – B – C – D – E
• assume E is evicted by a 3p (merx taken away from him)
o He (E) institutes a claim against his seller (D) based on eviction, D pays E a sum of
money (this sum of money is seen as the surrogate of the merx). Which would
enable D in turn to institute a claim based on eviction against C, all the way up the
chain on assumption no-one has a valid defence against that claim
o Surrogate of merx: amount S has to pay buyer, that would enable him to institute a
claim against his OWN seller
• In chain transaction’s
o eviction is not only understood as the actual loss of the merx but ALSO the loss of
the surrogate of the merx (sum S has to pay B to compensate for their own eviction)
o Whether it can mean something more, OR if someone in the middle of the chain can
institute a claim based on eviction against their own seller is discussed in cases
below

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LOUIS BOTHA MOTORS V JAMES & SLABBERT MOTORS 1983 (A) - PRESCRIBED

FACTS
• Ryan Nigel owner of vehicle which he leased to Sigma
• Sigma is breach of the lease contract sells the vehicle toà James & Slabbert
• James & Slabbert sells to à Louis Botha Moters
• Louis Botha à Stannic à De Meyer (currently in possession of the care)

• Ryan Nigel, finds out that Sigma has breached lease contract and has sold car to successive
purchasers
o Nigel, instead of going to De Meyer who was in possession of the car, approached LB
Motors and threatened LB s that if they did not pay him the amount owed to it by Sigma
ito the lease agreement between it & Sigma, then he (Nigel) would evict De Meyer
• Because LB Motors, wanted to preserve its good business relationship with Stannic AND De
Meyer, voluntarily (not through court process) paid Ryan Nigel the amount outstanding for the
car
o Then institutes a claim based on eviction against J&S
o Claimed compensation from J&S, arguing that by paying Ryan Nigel, it had in fact
been evicted

• NOTE: Nigel was not in position to demand anything from LB motors, if wanted to enforce
stronger right should have started with de Meyer (in possession)
o Bona fide possessor (person innocently sells goods of another person, then 3p owner
cannot institute any action against the bona fide possessor)
o Ryan Nigel can only validity institute a claim against De Meyer because he is the one
actually in possession

LEGAL ISSUE: whether a party, like LB, can institute a claim for compensation against its own
seller when it is a party in the middle of a chain transaction (intermediate) and it has not either
faced a) with a claim based for eviction OR b) has been threatened with a claim based on eviction
from its own buyer

COURT
• General rule eviction / threatened eviction in a chain transaction:
o Rule up until this point was that before you could claim for eviction when you were in the
middle of the chain, the claim had to come up the chain
o Thus, true owner (Ryan Nigel) would have to evict the last purchaser (de Meyer), he in
turn would have to claim compensation from his seller (Stanic), who would have to claim
compensation from his seller (LB Motors)
o At this point, that LB (if not valid claim against Stanic) could institute a claim based on
eviction against J&S
o Claim based on eviction must come all the way up the chain
o This is NOT what happened on these facts

o Why is the general POD (good reasons)

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 § 1) Privity of contract (only bind parties to contract)
• a sellers warranty against eviction only applies to that seller in relation to
his own buyer, does not give a warranty against eviction to everyone in
the chain transaction. In order to succeed with this claim each and every
warranty must be relied on = think of set of dominoes
• Thus, Stanic’s warranty only protects De Meyer
o Iof for claim to go up the chain, each and every warranty must be
activated (domino reaction)
§ 2) Each party is in the best position to know whether she has a valid defence
against the claim based on eviction against the true owner
• If valid defence: would potentially stop the claim from coming up the chain
• EG: possible that contract btwn LB and Stannic excludes warranty against
eviction à then claim would stop with Stannic since can’t institute a claim
against LB

• Court faced with question:

o Given this is the POD, and privity of contract and best position, can someone in the
middle of the chain who is NOT possession of merx and not faced claim based on
eviction from own buyer institute an action against its own Seller where it has paid a sum
of money to 3p iot protect buyers later in the chain?
o OBITER statement, court prepared to assume for the sake of argument that LB motors
could claim despite not being faced or threatened with eviction, but LB must show that
the claim WOULD HAVE come up the chain
§ Must call the subsequent purchasers as witnesses (de Meyer and Stannic) to
• 1) subsequent purchasers must show they would NOT have been able to
ward off a claim based on eviction and
• 2) they WOULD as a result of this have instituted a claim against their
own seller
§ Court will entertain argument, but must call W to prove claim would of come up
the chain
• LMB should have contacted De Meyer or Stannic to show that they did
not have a defence and would have instituted a claim against the seller
and up the chain it goes.
• LBM failed to do this and therefore and it was not possible to show that
the claim would have come up the chain. The onus to show that it would
have come up the chain rests with the person trying to argue it – in casu
LBM.
• Held: the claim must come up the chain or you need to show that it would have come up the
chain

To summarise:
• The law of eviction has gradually developed, and it is no longer confined to situations where
the buyer has been physically disposed (for instance through a court action).
• The buyer can also be regarded as evicted if the buyer voluntarily gave up the merx, paid a
sum of money to keep the merx, or in chain sales where the buyer had to give up the surrogate
of the merx (the purchase price).
o In the case of a chain sale, the rule is the claim must come up the chain, this is
because the warranty against eviction only binds a seller and their immediate
purchaser.
o Requiring the claim to move up the chain, means that the warranty between each of
the parties needs to be activated.

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 o As a general rule, the party in the middle of the chain cannot institute a claim based
on eviction unless the party in the middle of the chain has faced a claim based on
eviction from its own purchaser.
• The court in the Louis Botha Motors case is prepared to assume that someone in the middle
of the chain does have a claim based on eviction even where it has not faced a similar claim
from its own purchaser provided that this party in the middle of the chain can show that they
would have faced a claim from their own purchaser.
o In other words, even though the claim has not come up the chain you need to prove
that it would have come up the chain. This means that you need to call the subsequent
parties in the chain to testify.

GARDEN CITY MOTORS V BANK OF THE ORANGE FREE STATE 1983 (N) [PRESCRIBED]

This case and the previous one complement each other in the sense that GCM is a good illustration
that the claim did not and would not have ever come up the chain

Practical illustration where there is a permanent interruption in the chain of claims

(CADMAN)

FACTS
• Chain sale: A à B à C à D à E
o General rule: a party in the middle of the chain cannot institute a claim based on eviction
unless this party in the middle has faced a claim based on eviction from its own
purchaser
• Stannic owns a car, leases it to Cadman, who in breach of the lease contract sells the car to
GCM, BOFS purchase’s the car from GCM and then Cadman manages to convince BOFS to
lease it again to Cadman
• Cadman in breach of his contract with the bank, in turn sells the car to McCarthy who sells it to
Hoogland Motors
• Stannic, when it becomes aware of this, threatens McCarthy that it is going to evict Hoogland if
McCarthy does not compensate it. McCarthy does pay Stanic
o McCarthy to prevent eviction à pays Stannic to protect Hoogland Motors
§ McCarthy has now paid twice for a car it does not even posses

• McCarthy does not do anything else (ie doesn’t do things listed below)
o Could have instituted a claim against Cadman based on fraud
§ Fraudulent misrepresentation

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 o OR based on a breach of a warranty against eviction
• Similarly, Bank of OFS could have instituted a claim against Cadman amongst other things for
breaching the terms of the lease agreement or fraud
o But they didn’t do this
• Not what happened – because claim has not come up the chain, and it would never have come
up the chain (facts slightly different to Louis Botha case)
o because
[1] Cadman committed suicide (died)
[2] Cadman’s estate was insolvent
explains why McCarthy did not bother to claim from him, which they could
have done based on fraud

• Instead Bank of OFS turned on innocent GCM (also victim of GCM dishonesty) and claimed
they had been evicted & thus claimed compensation
o Instituted a claim based on warranty of eviction against GCM
o Bank demanded repayment of the purchase price it had paid for the car
o Court a quo granted the Bank’s application on the basis that they could not institute a
vindicatory action against an unlawful possessor and that this constituted eviction
o Rule: claim must have come up the chain, or must prove that it would have come up the
chain
§ Even though we recognise eviction in the context of lease agreements, our
understanding of what constitutes eviction is far narrower than when it is
understood in terms of COS
§ In the context of lease agreements, nothing short of actual physical
disturbance of the lessee’s possession is sufficient for eviction
§ Did not happen in this case - Cadman constitutes the break in the chain cannot
get away from this)
§ This claim would not come up the chain

• Good illustration where claim of eviction would not have gone up the chain
o Cadmans own conduct (his fraudulent activity) would have prevented him from inst claim
against BOFS
o Court had to decide whether OFS has in fact been evicted
§ Held that in no ways had Bank of OFS been evicted and it would never have
been evicted because Cadman had never been evicted
• Chain would have been interrupted where Cadman was

• Under no interpretation of eviction would BOFS have been evicted and neither would they be
able to institute claim against GCM
o But argued on behalf of BOFS that warranty of eviction had been breached by GCM
because it did not make the bank the OWNER of the merx

ii. Second requirement for eviction: buyer must prove the eviction was a result of a
defect in seller’s title at time of contract conclusion

Options:
1) POD: Buyer must prove, on BOP that, 3p has a STRONGER title (than seller)
• 3p had an unassailable claim to the merx
Buyer need not prove stronger title notice/virile defence
2) Buyer can notify seller of threatened eviction so seller can assist him in defending the 3p’s
claim
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 3) Virile defence – proper defence
• Alternatively, if buyer cannot find seller OR seller doesn’t care then buyer must conduct a
proper & competent defence (ie like a RP)
• Buyer must prove defect in seller’s title
• Why would (2 & 3) be adequate alternatives?
• S has info - assist B in showing they have a stronger title
• If lose, by implication means 3p has a stronger right
• What is the difference between buyer conducting a defence and buyer getting sellers
assistance?
• If institute action must prove on a BOP that 3p has a stronger title
• Different to burden of rebuttal -simply raise doubt
• don’t have to prove more probable
• normally because seller is NOT owner
o but could be that S doesn’t have incidence of ownership
§ IP right irt the merx (partial eviction) OR S is the owner but doesn’t have capacity
to exercise right
§ Par Excellence Colour Printing v Ronnie Cox Graphic Supplies 1983 (A)
• S sold wall calendars, but hooks were patented by Ronni (IP right belong
to Ronnie)
• Thus, Ronnie approached buyer and said using patenting object that
belongs to him = partial eviction

• NB Loss of possession due to lawful conduct of 3p

• Eviction doesn’t cover something like theft or where 3p has a weaker right
• casus fortuitus (supervening impossibility)
• Outside the party’s control
• Governed by risk rule

c. Duty / options of buyer at threatened eviction

• Choice’s buyer can make when threatened with eviction, are designed at figuring out if 3p does
in fact have a stronger title to the merx
o If does have a stronger title, then means B can claim from his own S
o Why would seller assist buyer if buyer is inst. a claim against eviction against the seller?
§ Remember the buyer is trying to ward off the 3p’s claim

Lammers & Lammers v Giovannoni 1955 (A): PRESCRIBED

• General rule: 1) buyer must give notice to Seller that he is being threatened with evictions so
that seller can assist the buyer in some form or another
• If seller cannot be found, or deliberately avoids buyer OR washes his hands of the matter
(happened in this case) then
• 2) Buyer must conduct a virile defence
• Proper & competent defence / conducted like a reasonable litigant
• 3) if no notice or virile defence: buyer must prove that 3p has stronger title to the merx at
time of contract conclusion
• Options / choices = aimed at making it easier for the buyer to ward off 3p and avoid courts.
• Who bears onus of proving on a BoP that 3p has a stronger title ?
• 1 & 2: onus on the 3p to show he has a stronger title
• 3: onus rests on buyer
• Impacts - what buyer can claim from seller as a result of eviction

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d) Buyer’s remedies
• Where buyer show’s he was evicted due to defect in seller’s tittle
• à He can claim compensation from seller
o How much can he claim and for what

WHAT is this claim?

1. Specific performance? Aspect of it
2. Cancellation? NO
3. Damages? Aspect of it

• Duty to warrant against eviction is seen as an alternative duties for the sellter
• 1) the duty to give undisturbed possession of the merx, failing which, the alternative
obligation in terms of this warranty kicks in which is to,
• 2) compensate the buyer for the fact that they don’t have undisturbed possession at a
minimum this means to repay the purchase price.
• Related to this, is the question of how we categorize buyers claim for compensation in event
seller has breached duty to compensate?
• S is obliged at minimum - to return purchase price to B
• Repayment of purchase price = SPECIFIC PERFORMANCE
• Because it amounts to enforcement of S duty to compensate
• Further loss B suffers (over and above the repayment of the purchase
price) = claim for DAMAGES
• Follows that it is unnecessary for B to CANCEL the contract iot receive
compensation from the seller
• S is also liable for any loss or damages that the B may have suffered

Case law dealing with buyers claim for eviction

• After reading the case law you need to be able to answer the following questions: What (how
much) can a buyer claim from the seller in the event of a valid eviction? What are the
defences which the sellers raised to limit or exclude their liability even if it was accepted that
eviction took place?; what is the legal position in respect of each defence?

CASE 1: Lammers & Lammers v Giovannoni 1955 (A) - PRESCRIBED

FACTS
• LL bought a car which they demolished iot sell pieces for scrap metal
• G, bought the shell of the car from LL. His intention was to rebuild the car
• Wanted to make improvements to the shell.
• LL knew that G was going to rebuild the car
• Somewhere along the line, 3p (true owner of the car) threatened to evict G who then
approached LL and informs them he is being threatened with eviction. Asked LL to assist him.
• LL basically said G must wait until everything goes south and will see what happens then
• In effect he washed his hands of the matter
• Because G didn’t want to see where this would lead à he reached a settlement with the TRUE
OWNER of the car. But a result of this settlement G instituted a claim based on eviction against
LL

LEGAL ISSUE
• How much can G claim from seller, LL
o Was the claim limited to the purchase price or could claim the value of the merx at the
time of eviction (purchase price and improvements that contributed to its market value)?
OR

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 o Was the buyer entitled to full compensation for all expenses incurred in improving the car
i.e. the cost of improvements? (highest amount, as purchase price and all improvements
including luxury improvements)

COURT
• Quantum of claim:
• 3 possible values he can claim
i. Lowest value = purchase price (bought the shell of the car)
ii. 2nd highest value = value of car at the time of eviction
• Consists of: purchase price (shell) + value of the improvements (necessary
+ useful improvements) to car that contributed to its market value
iii. Highest value: G expenses?
• Purchase price + all improvements made by G (including luxury improvements)

RATIO:
• According to the court, the buyer can claim the value of the car at the time of eviction. Thus,
the purchase price and economic value (not the highest value), because the buyer (G)
should claim the improvements from the true owner.
• Why? G is a bona fide possessor and secondly because G had a duty to mitigate his loss.
• Also, due to foreseeability – luxury improvement are not foreseeable but in this case the
economical improvement were foreseeable and the seller actually knew that the buyer was
going to make these improvements.
• The principal of foreseeability is important in determining how much you can claim.
o Generally, a bona fide possessor, where that buyer has made improvements to the
merx, that possessor has an enrichment action against the true owner coupled with
this enrichment claim;
o Is the bona fide’s possessors right to retain the merx until the true owner
compensates him for the improvements by the true owner, this is a lien.
• The court disagreed with this defence:
o 1. It does not lay in the hands of the seller who having been approached by the buyer
on the basis of threatened eviction, then washes their hands of the matter to say to
the buyer who has been evicted – that the buyer should have warded off the TP
claim more “skilfully” – thus is it not for the seller to say that the buyer should have
resisted the true owners claim more vigorously so that the seller can be absolved
from liability.
o 2) These types of enrichment liens and whether you are going to be compensated is
inherently uncertain. It is uncertain whether the buyer will even succeed but it is also
usually results in expensive and time-consuming litigation. = court has discretion
whether to award this claim or not.
• For these reasons the court rejected the seller’s defence and for these reasons the seller
was liable for the value of the car at the at the time of eviction in other words purchase price
+ necessary and useful economical improvements.

CONCLUSION
Consq of court dismissing defences raised by LL
• G was entitled to claim the value of the merx at the time of eviction
o purchase price + cost of necessary (preservation of merx) and useful improvements
(contribute to market value)
o ie luxury improvements are not included since aesthetic

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LL establishes the RULE, that in the event of eviction the Buyer can claim the value of the merx at
the time of evictions
o In this case merx INCREASED in value

CASE 2: Hendler Bros v Lambons 1967 (O)

• Value of the merx DECREASED from the time of contract conclusion
• With the effect of the court, applying LL, ordering that the amount of compensation that B would
receive was the value at time of eviction but this was LESS than the purchase price
• This case confirmed that the buyer can claim the value of the merx at the time of eviction – the
buyer is limited to claiming the price of the merx at the time of eviction.
• Thus, the value of the merx at the time of eviction in this case was less than the purchase price.
Thus, the court only awarded the value of the merx at the time of eviction and not the full
purchase price.
• This seems odd if the buyer disposed of the merx, should the buyer not at least be entitled to
what the buyer paid for the merx.

CASE 3: Alpha Trust v Van der Watt 1975 (A)

• Important because
• sets out what exactly a buyer is claiming in eviction cases (SP, Damages?); also nb
because it decides that when you are instituting a cliam of eviction against the seller the
minimum you can claim from the seller is the purchase price. Regardless whether
value of merx has decreased or increased + his or her damages provided those
damages were foreseeable.
• “Damages” (not in true sense of the word) ---- with price as minimum
• Definite distinction btwn return of purchase price (specific performance) versus damages
• When reading cases dealing with eviction sometimes the judge refers to damages, but if
you read this case you will see the court draws a definite distinction between return of
the PP, versus damages. The court does not view the return of the PP as a claim for
damages, but rather as a claim for SP.
• Contemplation principle
• When claiming damages , these damages must be foreseeable
• Special damages
• Contemplation principle applies to COS à thus departure from
• Convention principle: general pod in LOC foresee loss and agreed def would be
liable for those damages
• Not in the case of COS

Defences raise by the SELLER

• 1) B should not have been able to claim full purchase price because value of merx
diminished over time (thus should have to pay back less than full purchase price)
o Because buyer had the value of use of merx (car)
• Should deduct value of use from full purchase price?
• The court rejected this argument
• While the buyer may have had the use of the merx the seller had use of
the money and in fact it is not the seller who is affecte by the fact that the
buyer has had use of the merx for a long period of time but rather the true
owner. This defence failed.

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• 2) merx was a rapidly depreciating asset?
• Thus S wasn’t required to repay full purchase price?
• Court entertained argument (possibility claim may be deduced in this case), BUT not
prepared to decide on basis of the facts before it that it would reduce the buyers claim
(obiter)
• Doesn’t make sense why court didn’t make a decision in this case
• Clear car rapidly depreciated in value
• But refused to decide if veh is a rapidly depreciating asset

Similar judgements (not prepared to decide whether a VEHICLE is a rapidly depreciating asset)
• Katzeff v City Car Sales (Pty) Ltd 1998 (C)
• merx itself – they do not buy the use of the merx.
• If the buyer bought the use of the merx, like a usufruct, this might be a situation where
you would need to take into account that the merx is a rapidly depreciating asset, but this
was not the case in this matter.
• Mdakane v Std Bank 1999 (W)
• Object of the sale was a taxi, and it was a assumed that a taxi is a rapidly depreciating
asses within the SA context, but again the court declined to consider the argument of a
rapidly depreciating asset and came to the conclusion that this was a question which
needed to be dealt with by the legislature.
• Should be left to the legislature

(v) Exclusion of liability for eviction: pactum de evictione non praestanda

• Warranty excluded by way of exemption
• Open to parties to agree that sellers liability will be excluded
• But this type of exemption clause doesn’t operate in the same way as exemption clauses
generally
• Confirmed in

• Alpha Trust v Van der Watt; Vrystaat Motors v Henry Blignaut

• Alpha Trust v Van der Watt: “… where the seller stipulates at the time of concluding the
contract that he does not accept liability towards the purchaser for possible eviction, the
socalled pactum de evictione non praestanda. In such a case the stipulation, only
protected, the seller against payment of damages or loss of profit, but he nevertheless
remained liable for repayment of the purchase price.” [745– 746]
• Parties have included exemption clause then excludes S liability for the payment of
damages
• It does NOT exclude the S liability for repayment of the purchase price
• S remains liable for the repayment of the purchase price
• Why?
• Argument: it is a core duty / fundamental to a COS that a S provides
undisturbed possession of the merx to the buyer
• In exchange for this (giving of undisturbed possession)
• The buyer pays the purchase price
• In the event of eviction, it means the S has not complied with this core
duty
• Thus no basis for the S to retain the purchase price
• As a general rule: can’t try disrupt relationship between parties, by
means of exemption clause excluding buyers protection from
eviction / sellers duty

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 • If you had a exemption clause doing this – that excluded
liability of damages and purchase price = unexpected term
• No reasonable reliance on buyers consent (iustus
error / Smith v Hughes)

• Even if you have traditional exemption clause in context of eviction – if S is fraudulent then
exemption clause = void
• Maxum: fraud unravels all
• Court will adopt a restrictive interpretation to an exemption clause – means as S must be
specific when drafting an exemption clause about what it is that you want to be
exempted from
• Catch all exemption clause? “seller does not give any warranty at all”
• Not enough to protect a seller in the event of eviction. The exemption clause needs to be
drafted more specifically in order to protect a seller.
• The reflects the general approach of South African courts when it comes to interpreting
exemption clauses = particularly broadly worded exemption clauses – restrictive
interpretation is applied.
• Thus, a catch all exemption clause will be interpreted in a such a way as to limit the
buyer’s right only as far as necessary.
• Thus, the general POD is that an exemption clause may exclude the seller liability for
damages but it will not exempt the seller from paying the purchase price.
• Can the parties also agree the seller’s repayment of the purchase price in the event of
eviction will also be excluded?
• How would we effect that if a typical exclusion clause in this context does not exempt a
seller’s liability of the purchase price?
• Question addressed in case below
• Addressed indirectly - The court doesn’t actually decide on the matter. Does
allude to the possibility that the seller can include an out and out exception,
meaning he is excluded from any liability.

Plit v Imperial Bank Ltd 2007 1 SA 315 (SCA) - PRESCRIBED

Facts:
• Buyer (Plit) wanted to buy a light aircraft and 2 engines à concluded an instalment sale
agreement with the bank
• IB paid the supplier and the supplier delivered to Plit.
• Imperial Bank gave a loan to Plit and concluded two instalment sale agreements Plit needs to
pay off the purchase price in instalments).
• Contract acknowledges amongst other things, that
• the Bank is not involved in the selection of the goods
• And further that the buyer acknowledges that the bank is not owner of the goods
• And that Buyer will do everything it can to make the bank owner of the goods
• 3p delivers aircraft and engines to the buyer
• True owner evicts the buyer on basis that engine and aircrafts belong to the other party.
• Issues arose when the aircraft and engines were attached by the sheriff on behalf of the true
owner as result of which P did not pay any further instalments
• Buyer institutes a claim based on eviction against the bank, bank argues you can’t do
this because there is an exemption clause in the contract (tacit clause thus must look at
surrounding circumstances and other terms in contract to det. If there is an unexpressed
exemption clause)

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Legal question:
• What is the effect of the exclusion clause? On a proper interpretation of the agreements was
the implied warranty against eviction excluded?

Ratio:
• Given the fact that the bank was not involved in selection in goods and that there was these
clauses
• Confirmed bank’s non-involvement in selection AND Buyer acknowledgement that the
bank was not the owner of the goods
• These factors led court to conclude that there was an EXEMPTION of the bank as Seller
liability in the event of eviction
• This was based on the court reading the clauses together
• Thus, when interpreting the agreements the two clauses (referred to below) made
it clear that the parties intended to exclude the warranties against eviction.

• But court does not ADRESS what effect of clause’s 2.1 and 2.2 on sellers duty to repay the
purchase price
• Explains general position: S liability has been excluded
• Generally, where the buyer knows the seller is not the owner but purchases the merx –
this is where a buyer would be taking the risk of eviction upon himself. (Dr Myburgh
thinks this is reflected in the clauses).

• Court quotes professor De Wets view on the potential ambit of this type of exclusion clause. Prof
De Wet sets out the general postion.
• Para 12 (De Wet and Van Wyk Die Suid-Afrikaanse Kontrakte- en Handelsreg 5 ed vol 1
at 331 – 2):
• “The seller’a liability for eviction is a natural consequence of a contract of sale,
which can be varied by the parties’ agreement ... The effect of such an
agreement (exemption clause) is that after eviction the buyer cannot claim any
damages from the seller, but he can at least claim the purchase price (general
position). The buyer cannot even claim the purchase price where he has taken
the risk of uncertainty in the seller’s title upon himself. If the buyer knows that
the seller has no title then he can (knows S isnt the owener but accepts the risk –
take eviction upon himself), in the event that he is evicted, claim absolutely
nothing from the seller, unless the seller has undertaken to be liable for eviction.
If the seller knows that he has a defective title, but nevertheless holds himself out
as having a legal title [to the merx], then he is of course guilty of
misrepresentation and he is then in any event liable for the misrepresentation,
whether the buyer is evicted or not.”
• The general rule is that the impact of an exclusion clause is to exempt the seller from
paying damages in the event of an eviction, but according to de Wet and van Wyk, if the
buyer knows that the seller is not the owner, the buyer takes the risk of this title on
themselves.
• Accordingly, in this instance the seller can be exempt from paying the purchase price.
• Looking at Clauses 2.1 and 2.2
• Clause 2.1
• Confirms that the buyer selected the merx and that the seller had no knowledge
of the purpose for which the merx was purchased
• “Purchaser has selected the goods and seller has no knowledge of the purpose
for which the goods are required by the purchaser and does not guarantee that
the goods are suitable for that purpose.”
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 • Clause 2.2
• amounts to placing an obligation on the buyer to ensure that the seller becomes
owner of the merx.
• “Purchaser shall at its own cost, procure and take delivery of the goods from
seller or supplier in such manner that seller becomes owner and shall hold the
goods on behalf of the seller, as owner, for the duration of the agreement.
Delivery or tender of delivery by seller or supplier to purchaser within 30 (thirty)
days from date hereof shall be deemed to be delivery of the goods by seller to
purchaser. Supplier shall not act as seller's agent except for the purposes of
delivery.”
• Read together the clauses points to the tacit exclusion of liability for eviction.
• Held that they are only ruling on whether there was an exemption clause, they refused to make
a decision on whether the exemption clause meant that the seller was only excluded from
liability for damages or whether this is a situation whether the seller is also excluded from liability
for the repayment of the purchase price.
• Point: EXEMPTION clause can go further than what is generally the case

QUALITY OF THE MERX

Liability for attributes of the merx

• Merx is defective or has an imperfection OR S has made certain representations about the
attribute of the merx which subsequently turn out to be incorrect
• These alternatives are relatively unproblematic
• Becomes tricky when look at possible remedies available to a Buyer where there is a
defect in the merx or Seller has made misrepresentation
• One set of facts can give rise to multiple remedies

• Possible remedies:
• Aedilitian actions: oldest
• Warranty: breach of contract (actio empti)
• Breach of contractual warranty
• Delictual liability
• Consumer Protection Act: provided transaction falls within CPA à statutory remedies
• NB When looking at scope of remedies available to Buyer
• Most narrow: Aedilitian remedies – because can’t claim consequential loss (damages)
• Or all other remedies, claim for damages is available
• If you can prove as a buyer that the seller actually warranted that the merx didn’t have latent
defects or warranted that the merx would have certain attributes, if this turns out to be incorrect
then dealing with BOC
• Warranty hasn’t been complied with.
• If you can prove this then remedies available are broader as you have all BOC remedies
available to you. Including damages
• Similarly, if you can prove the seller has made a fraudulent misrepresentation.
• Then its improperly obtained consensus and therefore can claim delictual damages

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Double basis of liability:
When can Buyer resort to these remedies
Two grounds for Seller to be liable

(i) latent defect in the merx

• i) “defect”?
• à abnormal characteristic in merx that renders it unfit / deficient for the purpose for which it
was bought.
(a)Defect must be an abnormal characteristic – reduces usefulness / utility of the merx
• To this usefulness is measured according to purpose for which the merx was
bought
• When determining if characteristics is abnormal must compare attribute of
specific merx to class of goods from which the merx comes from.
• EG: bought a second hand car and it’s gear box breaks, iot det if this
is abnormal char of a second hand car can‘t compare with a new veh.
But rather to second hand cars and ask if defect is one you can
reasonably expect?
• Unfit for purposes you bought it
• Excludes reasonable wear and tear
(b)purpose for which purchased merx :
• normal/ordinary purpose
• (Ellis v Cilliers; Sarembock v Medical Leasing Services 1991(A))
• Prescribed – see below

• OR special purpose
• Must inform the Seller of this special purpose BEFORE you can hold
the Seller liable for a defect in the merx that makes it incapable of
fulfilling its special purpose

• Sarembock v Medical Leasing Services 1991(A))

• Doctor, bought a Porche, took it to a mechanic to effect
improvements. Said are you aware that Porche consist of 2
stuck together
• Thus instituted a claim against the Seller
• Seller contended that fact car consists of 2 parts
doesn’t impact fact car can be driven / as fast as before
• Court held, ordinary purpose of a porche, is not only to drive
fast but also for investment purposes (resell it and make profit)
• Ordinary purpose, is negatively affected when dealing with 2
halves of 2 diff porches’
• How purpose of something can change over time and if
dealing with defect or not

• Glaston House v Inag 1977 (A)–

• Facts: Buyer bought a building in order to demolish it and
redevelop the property. This is not seen as an ordinary
purpose, seen as a special purpose – informed the seller.
• Buyer did not know, that in the corner of the building there was
a statue that had been declared a historical monument. The
effect of this is that the buyer had to preserve it and could not
demolish it. Also, had to reinstate it in new development.

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 • Ratio: This is an expensive process, therefore buyer instituted
claim against the seller (due to fraudulent misrepresentation).
• NB: Something that has value may also constitute a defect
specifically because of the special purpose of buyer. We
approach idea of a defect liberally.

Ellis and Another v Cilliers and Others 2016 1 SA 23 (WCC) - PRESCRIBED

• Illustrates that the notion of what constitutes defect in a merx can change overtime as the
needs of society change overtime.
• The court acknowledged that the approach to determine what constitutes a defect is quite
liberal.
• Facts:
o This case concerned the sale of a wooden house in Knysna. The house in question
was a wooden house on stilts, this houses timber (stilts) were not treated correctly,
and they started rotting. The foundation of the house as well. = the back of the house
was built into a slope and the front on stilts.
o The effect of which the house started sinking into the sand. The floors started buckling.
The seller then threw a cement layer and carpeted to give the appearance that the
floor was level and a false ceiling had been installed.
o When the buyer wanted to renovate the property the buyers discovered these
alterations and wanted to institute a claim for a latent defect.
o Defence was that the alterations were done for aesthetic reasons and therefore could
not constitute latent defects.

• Issue: Contract contained a voetstoots clause

o Buyer would have to prove the seller fraudulently concealed the fact that the foundation
was rotting by building the false floor and ceiling.

• Ratio:
o Court stated here in its liberal approach – that even though we are not dealing with a
clear physical imperfection it can still be a defect. As sometimes the purpose for which
a merx is bought determines whether it is in fact a defect.
o A house is bought to live in it, but over the course of time we know buyers purchase
houses to renovate them even more so when buying a wooden house. Because this
purpose can no longer be fulfilled, this means that the screened floor and artificial
ceiling constitute defects for the purpose of instituting a claim against the seller.
o Amounted to a latent defect because it hindered the ordinary or common use of
the merx.

ii)Defect must be “latent“?

• POD: the defect was not visible on reasonable inspection and buyer is unaware of the
defect

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Waller v Pienaar – PRESCRIBED

Facts:
• Unreasonable inspection of the merx
• W, purchased a house from Pienaar and unbeknown to him, it was built on uncompacted
sand with the effect that as the sand started to settle, the house started cracking
• W bought house iot build onto it (extenstions), thus inspected house to see if it was suitable
for this purpose but did so at night
• Thus he failed to notice a significant crack in the north side of the house
o There were also cracks in the house, that Seller repaired and painted over (this
would have been sufficient to give W a claim)
o Issue: assume only massive crack in north, fact W inspected the house at night =
unreasonable inspection
§ If this had been the only flaw, it would have been a PATENT and not latent
defect
Legal question: What is required in order to classify a defect as latent? What circumstances does
the law recognise a duty to disclose?

Ratio:
• Discussion around inspecting the merx – if the buyer is a expert in relation to the merx being
sold do we expect a higher standard of inspection? There is no clear answer other than this
is a circumstance that would be considered together with the other factors to determine if
there was a reasonable inspection.
• Factor that we take into account but not decisive.
• Implicit in the judgment that that one crack on its own is not sufficient in and off itself that the
buyer should have been more cautious. The actual issue was all the other crack that had
been painted over.

• If buyer is expert in relation to the type of merx sold. Is there a stricter test ito reasonable
inspection conducted?
• No clear answer in this regard
• Not decisive à Circumstance that will be considered together with other factors to
det if there was a reasonable inspection

• When must defect exist?

• General pod: at the time of contract conclusion
• Departure from general pod, if dealing with GENERIC goods then appears defect
must exist at the time of appropriation (where the goods are separated and
appropriated to the contract)

• Onus of proof?
• Onus of proof on buyer
• Hard to show defect occurred at contract conclusion – since merx still generally in
sellers possession
• Problems – when dealing with merx that doesn’t exist at conclusion of contract but
will likely exist in the future
• Assume merx materialises in the future and there is something wrong with it,
then strictly speaking, claim based on latent defect is not existence, since if
have to prove it existed at contract and conclusion and assume at this time no
merx exists, then possibility of claiming for latent defect is not there

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(ii) dictum et promissumve (misrepresentations about attributes of the merx)
• POD: Specific form of misrepresentation
• For the most part the general contractual remedies for misrepresentations run parallel to
the remedies one has for a dictum – can choose. (remember that you cannot claim
damages under AA).
• The fact that you can qualify the misrep as a dictum – is where you can classify it as an
innocent misrep that is not serious enough to allow you to rescind the contract.

• Phame v Paizes - definition

• material statement
• made by the seller to buyer
• iro quality/attributes of merx
• amount to more than mere puffing
• influences buyer either to conclude contract OR to pay higher price
• Statement about attributes of the merx, can be a number of different things ito legal concepts
(a) can be mere puff (praise)
• Would be no liability on the seller
• Test if statement is a puff: ask if even a gullible person would know seller was
puffing
• If NOT then at very least dealing with a dictum et promissum, which in and of
itself gives rise to remedies in the form of AEDILITIAN actions but this is where it
stops in the absence of further factors
(b) or dictum et promissum
• Gives rise to remedies in the form of AEDILITIAN actions
(c) or a warranty (S warranting merx has certain attributes)
• dictum et promissum becomes a contract warranty where parties intend for
statement of representation to form a term in the contract
• thus intention shared by parties that specific representation is
CONTRACTUALLY binding, in which case, should statement / representation
turn out to be untrue – would deal with a claim of BOC
• means as a general rule: have more remedies than just aedilitian actions

• Factors determine if puff or dictum promissum = draw a distinction between a puff or

puffing which cannot find liability vs dictum promissumve which can
• Depending on how the statement is characterised will also determine the buyers
remedies, if any.
• Gannet Manufacturing v Postaflex 1981 (C)
• Buyer Postaflex, new company that wanted to make advertising boards to
be placed in certain areas in the Witwatersrand
• Iot do this had to have special frames made for them to insert
advertisements
• Thus approached Gannet because had to develop new
• Vitally important to the buyer that boards could withstand strong winds
• When buyer expressed concerns about durability of advertising frame’s, S
assured the buyer that they were strong enough to withstand strong wind
(last for about 4 years)
• But not strong enough to withstand normal winds
• Court had to decide whether statement about withstanding strong
winds–
• Was simply an opinion (legally irrelevant) OR if a dictum et
promissum

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 • OR in fact a contractual warranty

Side note
• Misrepresentation remedies (delictual damages) and dictum et promissum (aediltiian remedies,
can’t claim general damages)
• Can choose but would be better to choose misrepresentation
• Fact you can qualify misrepresentation at dictum et promissum gives you a greater
remedy, where you dealing with a DEP in the form of an innocent misrepresentation that
is not serious enough to allow you to rescind the contract, because of the general
principles of contract law, in this situation you would stuck
• Can’t claim damages because misrep innocent,
• Can’t cancel & claim restitution – because misrep not serious enough
• BUT in law of sale specifically, the B would be able to claim a REDUCTION in
the purchase price
• Thus, additional remedy / option
• Relying on an Aedilitian remedy for a dictum et promissum would be a last resort

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