Sale & Lease Notes 2016

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Sale & Lease Notes – Semester 1 2016

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SALE AND LEASE NOTES:
SALE:
Characteristics of a contract of sale
Definition: contract of sale is a reciprocal contract in terms of which

the seller undertakes to deliver the thing to the buyer and the buyer
undertakes to pay a sum of money in exchange for the thing.
2 essentialia:
1. The parties must agree that one of them will deliver the thing
2. The other party will pay a price
Difference between sale and lease:

in lease: one party undertakes to deliver the thing and the other
undertakes to pay a sum of money – there is a further essentialia: the
parties must agree expressly or tacitly that the lessee must restore the
thing leased to the lessor at some time. Sale does not have this clause.
BUT a contact of sale could be subject to a suspensive or resolutive
condition/ right of rescission, in that the thing may be returned to the
seller in certain circumstances – this doesn’t arise out of the
conclusion of the contract but out of cancellation of the contract.
Title: it’s not an essentialia of a contract of sale that the seller of the
thing undertake to stand in for his title – a clause in the contract that
the seller should guarantee his title – ie. That he is the owner of the
thing! THE SELLER DOES NOT NEED TO BE THE OWNER OF THE
THING FOR A VALID CONTRACT OF SALE TO TAKE PLACE, NOR
DOES DELIVERY NEED TO TAKE PLACE OR PAYMENT TO BE
MADE. ALL THAT IS NEEDED IS AN UNDERTAKING BY THE SELLER
TO DELIVER AND AN UNDERTAKING BY THE BUYER TO PAY THE
PURCHASE PRICE.
As long as the parties agree that the seller will, in exchange for
payment, give possession of the thing to the buyer = contract of sale,
even though both parties are well aware that the seller isn’t the owner
= BUT it is a naturalia that the seller stand in for the eviction of the
purchaser.
Sale: the seller has an obligation to perform = delivery

1. Locatio conduction operas (contract for the letting and hiring of work):
is an agreement where an independent contractor undertakes to
render the result of his labour to the other party.
Contract of sale is distinguished in that the seller’s obligation is one to
deliver, while that of a person accepting work is a duty to do
something.
Critical Law Studies CC ©

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So if a contract relates to manufacture and delivery of a thing not yet

in existence – will only be sale if the manufacturer also provides the
materials for the manufacture of the thing.
The emptio rei speratae (sale of a future thing) and the empti spei (sale
of pure chance:
Contract where one party undertakes to deliver a thing not yet in
existence to another in exchange for a sum of money – can be a sale
even if the thing doesn’t exist at the time of the conclusion of the
contract.
The seller then has a duty to deliver the thing and also see that the
thing materializes.
It must be possible to deliver the thing as from the conclusion of ht
contract – if not the contract will be of no force and effect =
impossibility of performance.
2. Emptio rei speratae:

this occurs in the sale of a thing not yet in existence, it’s the intention
of the parties that the price be paid only if the thing does come into
being – if the thing doesn’t come into existence = no sale.
Suspensive condition construction: the full operation of the sale is

suspended until an uncertain future event (coming into being of the
thing) occurs – if the thing doesn’t come into being the contract comes
to an end.
The function of the condition construction:
a) Explain why the buyer cant claim the thing immediately
b) Explain why the risk that the thing sold wont materialize is
borne by the seller
This is complicated incorrect and unnecessary – in accordance with
the intention of the parties an obligation resting on the seller to bring
the thing into being and then make delivery – if there is a duty on a
contracting party to see that a condition is fulfilled its not a genuine
condition.
SO this construction must be rejected.
Correct construction:
a) The buyer cant claim the thing immediately because a party to
the contract can claim performance only after a reasonable time
has elapsed - the buyer must aloe the seller a reasonable time
to prepare the thing
b) The seller carries the risk that the thing sold wont materialize,
because that is what the parties agreed.
3. Emptio spei
When a thing, which hasn’t yet come into existence, is sold and it’s
agreed that the buyer will be liable for the purchase price even if the
thing never materializes.

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Sale of expectation/hope – buyer will have to pay whether the thing

materializes or not. The seller is entitled to the purchase price.
4. The emptio ad mensuram (sale of a group of things at a price per unit)

Deliver a group of things – flock of sheep = the price isn’t fixed but
determinable = but the thing is fixed.
Land: is often sold at Rx per hectare
5. Sale in the alternative and generic sales

The sellers undertaking to deliver a thing need not be an undertaking
to deliver a specific thing.
Alternative sale: where the seller has to deliver one of several specific
things – i.e. X sells one of his 3 horses
Generic sale: where the seller has to deliver a thing described
according to its nature – sells one sheep for R300.
The undertaking to pay a price
The price as a sum of money:

there can be a contract of sale only if one party undertakes to pay a
price in exchange for the undertaking to deliver the thing.
If no price = no contract of sale (could then be a donation).
Contract of donation: agreement where one person undertakes to give

another something out of liberality without getting or stipulating any
counter performance.
In SA law price and a contract of sale can only exist if the buyers
performance is expressed in an accepted unit of currency = rands or a
currency which can be converted into rands.
If the price was originally expressed in money and the parties later
agree that the buyer may render performance in another form or the
seller is released from his obligation.
1. Another performance together with the price

Problem – when the counter performance of a sum of money – trade in
The intention of the parties is the decisive factor in determining the
category of the contract – if their intention can’t be determined, the
principal part of the counter performance will be conclusive – if there’s
still uncertainty, and the contract is regarded as a contract of sale.
2. A contract of sale for a reasonable price

Genac Properties: AD said that it’s difficult to determine according to
what principle a sale for a reasonable price should be regarded as
invalid. Many writers are also in favour of the validity of such a sale.
To aver that a contract of sale at a reasonable price is impossible is
unconvincing = as we look at the intention of the parties.

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The parties are agreed that a price is being stipulated the only
question is the extent of the price.
It’s a question of legal policy whether such a contract should be a
valid contract of sale.
3. A contract of sale in which no price is stipulated

For a contract to be a sale, it’s not necessary that the parties should
expressly agree to a specific price. A tacit undertaking to pay a certain
price is valid – also an express or tacit undertaking to pay an
ascertainable sum of money is fine.
• In commerce someone often buys something without asking the

price – it is uncertain whether a valid contract comes into being
– it’s also uncertain whether the common law authority seems
to point to the existence of a naturalia that a reasonable price
must be paid in such a case.
• Another possibility is that the parties agreed tacitly on an
ascertainable price – this relates to the requirement that, for a
contract to be binding, the party’s performances must be fixed
or ascertainable.
Two possibilities:
a) Where the seller is a merchant, it can be said that there’s a tacit
agreement that the sellers usual price has to be paid
b) Where the seller doesn’t have a usual price it can be said that
there’s a tacit agreement that the market price has to be paid
• The validity of a tacit agreement on a reasonable price will

depend on whether an express term would be valid.
4. Determination of the price by a 3rd party

A contract to deliver a thing at a price determined by a 3rd party is
recognized in our law as a contract of ascertainable content = valid,
provided that the 3rd party is ascertained.
The 3rd party is ascertained where the parties had a 3rd party in mind
– or have agreed to a method to nominate a 3rd party.
Contract to deliver a thing at a price determined by a 3rd party =

contract of sale subject to a suspensive condition.
Problems: where one of the parties intentionally prevents the
fulfillment of the condition – destroying the thing sold = 2 possible
solutions:
The intentional conduct can be regarded as:
a) Fictitious fulfillment: the price is regarded as fixed, although it

hasn’t been fixed – court tries to determine what the 3rd parties
price would have been – the parties are held to a price which
ahs been fixed in a way that wasn’t envisaged by them – BUT
there is a difference:

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1) The court must try to determine as closely as possible, in

accordance with all the available evidence what price the
3rd party would have fixed
2) The condition rests on fiction – the condition is deemed to
have been fulfilled
b) Prevention of performance: consider the party to the contract

who prevents the 3rd party from determining the price as having
committed a breach by preventing performance – the innocent
parties remedy is the usual remedy available to him namely
damages – BUT to calculate damages, the court will have to fix
a price
5. The 3rd party does fix a price, but it appears to be unreasonable – 4

solutions:
a) The sale is valid – in the absence of mala fides and

unlawfulness, the contact of sale holds. In English law the price
specified by the 3rd party is binding in the absence of fraud,
error, mala fides or collusion
b) The contract is invalid if the parties intended the price to be
reasonable
c) The sale is valid but the aggrieved party isn’t bound by the
unjust determination of the price as the court has a general
power to correct such a determination – Basson: both parties
are bound by the courts determination
d) The sale is valid but the aggrieved party isn’t bound by the
unjust determination of the price – the court has a general
power to correct such a determination, but the other party may
elect whether or not to abide by the courts determination = this
therefore doesn’t allow the court to create a new contract for the
parties.
Because the contract of sale is reciprocal in nature, the seller &

the buyer have various obligations / duties to one another:

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DISCUSSION OF THE DUTIES OF THE SELLER:
1. The duty to deliver:
The seller of a movable need not seek out the buyer (duty not
necessarily positive), but must place the thing at the disposal of the
buyer.
He must ensure that the thing is ready for delivery. There is also a
duty on him to give the buyer notice – see MCQ (Q about a moveable
sold, and must it be delivered to the buyer’s house BY LAW?).
The duty to deliver an immovable = seller must admit the buyer to

possession of the thing and the seller must give transfer to the buyer
= the seller must at his own expense arrange for the registration of the
property in the name of the buyer, and if there is any bond on the
property, he must cancel it. In practice parties often agree that the
buyer pays the costs of transfer.
The act of delivery must be of such a nature that the buyer will get
undisturbed possession of the thing by taking delivery of it – ie.
vacua possessio.
Seller of immovable property must remove from the property sold all
movables, which aren’t included in the sale agreement – and remove
all unlawful and lawful possessors.
York: when the duty to give possession is considered. With
trespassers, the mere fact of their physical presence, if it results in
deprivation of the buyer’s right to secure the enjoyment in possession
of his purchase is enough to justify the purchaser in claiming that the
seller has failed to carry out his obligation.
Does the mere fact that there’s a person other than the seller who has
a right to the thing sold (servitude) mean that the seller can’t give
undisturbed possession? – Means a bona fide seller of a thing, which
belongs to someone else, could never give undisturbed possession,
which isn’t in accordance with law.
Mostert: undisturbed possession: at the time when transfer of
possession takes place, there must be no interference with the
physical possession of the buyer and that the existence of a servitude
doesn’t mean that there’s interference with the buyers physical
possession.
Such interference only takes place if the holder of the right is
exercising his right at the time possession is transferred to the buyer
= correct. THUS, IF THE HOLDER OF THE SERVITUDE IS
EXCERCISING HIS RIGHT (THUS WALKING OVER THE LAND) WHEN
NEW OWNER MOVES IN, THE SELLER HAS NOT GIVEN THE NEW
OWNER (BUYER) VACUA POSSESSIO. ITS NOT THE EXISTENCE OF
THE SERVITUDE THAT PREVENTS VACUA POSSESSIO, BUT THE

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EXERCISE OF THE RIGHT BY THE RIGHT HOLDER AT THE TIME OF

DELIVERY.
Undisturbed possession is lacking when there’s a defect in the

physical possession obtained by the buyer at the time of delivery.
Subject matter of the obligation:

The thing, which is the object of delivery, is the thing being sold – no
other thing can serve as a substitute unless the buyer agrees. If the
thing sold is an undefined article, the seller must abide by the
arrangements made in the agreement.
Sometimes it’s difficult to determine whether a specific or undefined
thing has been sold – the courts have indicated there are 2
possibilities
1. When such a description is encountered and it’s clear from the
surrounding circumstances that it’s merely descriptive of a
specific object = specific thing. The actual amount is immaterial
– provided the seller acted in good faith. The buyer has a
remedy only if the seller was guilty of intentional
misrepresentation
2. Where no deduction can be made from the surrounding
circumstances, the description is merely descriptive of a specific
object, 2 further possibilities exist:
a) if no qualifying words are used in indicating the amount, the
determination of the amount must be regarded as a guarantee
and the seller must deliver the amount indicated
b) If qualifying words are used there can be a minor deviation
from the stipulated amount.
The thing must be delivered in the condition it was when the contract
was concluded.
The seller must deliver all accessories and attachments, except where
they are excluded by agreement.
With immovable, any objects, which have lost their movable character
by attachment, must be regarded as the thing sold. Even if the objects
haven’t been rendered immovable by attachment but which intended
for permanent use of the house, such as covering of a well, bolts,
hooks and keys must be delivered with the principal thing.
Attachments to movables remain movables – but could form one unit
= keys to the car.
The seller must transfer to the buyer all fruits and profits produced by
the thing after the sale has become perfecta.
This rule is based on the principal that, since risk attached to the
buyer after the sale is perfecta, the profit must follow the prejudice.

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To whom must delivery be given?

The thing doesn’t need to be delivered to the buyer, but can be
delivered to his representative.
Once the thing is in the hands of the buyer or his agent the seller’s
duty to deliver has been discharged.
If the seller wants to transport the thing elsewhere and employs a
carrier, the carrier is his mandatory.
The same applies where a provision has been made in the agreement
that the thing will be transported after it has been made available –
the carrier will be acting as mandatory or agent. The seller can be
expected to do no more than deliver the thing to the carrier.
BUT where the seller assumes responsibility for delivering the thing
elsewhere, any carrier he employs for that purpose, is his
mandatory/agent and the seller won’t be released because he has
made the thing available to the carrier – the seller’s duty of custody
continues until delivery is complete.
Onus: the seller who has transferred possession of the thing to the
buyer in accordance with the requirements has discharged his
obligation to provide undisturbed possession of the thing. The onus
rests on the seller to prove that he has complied with these
requirements.
Failure to deliver is a breach of contract and the buyer has the

ordinary remedies for breach – mora debitoris; mora creditoris;
repudiation; positive malperformance or prevention of performance as
forms of breach – remedies then: specific performance OR cancellation
AND damages for patrimonial loss.
2. The duty of custody
Seller’s obligation to take care of the thing until it’s handed over:
After the contract has been entered into but before delivery of the
thing – the seller is obliged to look after the thing. The purchaser
carries the risk of accidental damage or destruction of the thing sold
after the contract is perfecta.
The seller is liable if the damage or destruction of the thing is her
fault.
Degree of care:
That of a reasonable person – but it may be agreed that the seller use
less or more care – the onus of proving that he bestowed the required
care rests on the seller.
If there is a mora (delay) on the part of the buyer with accepting
delivery = mora creditoris – the seller will only be liable if the thing is
damaged or destroyed intentionally or by gross negligence.

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If the seller is in mora (mora debitoris) he is liable in all cases, except

where the thing would have been destroyed even if it had been
delivered in time.
Purchaser’s remedies:
he may cancel the contract because of the seller’s neglect of his duty
of custody. May also claim damages for full loss.
Where the damage or destruction can be imputed to a 3rd party, the
seller incurs no liability. If the risk is the buyers the seller must cede
any claim, which he has against a 3rd party.
3. The seller’s duties: the sellers guarantee against latent defects

in the thing sold
General principles of the law of contract: a seller who delivers a

thing with the same characteristics it had when the contract was
entered into, would have no further liability for defects in the article,
unless she was guilty of a misrepresentation, or unless she had
expressly or tacitly guaranteed the presence or absence of certain
characteristics. Such liability (ie for misrepresentation and breach of
contract) may be referred to as the general liability of the seller.
In the case of contracts of sale, however, sellers are in certain
circumstances held liable for defects in the thing sold, even if they
have given no express or tacit guarantee as regards such defects, and
even if they were entirely unaware of the defects. This form of liability
will be referred to as the seller's
a) Liability on the ground of breach of warranty: breach of

contract:
The seller may be sued in terms of the actio empti, which is the
general action afforded for breach of contract. South African courts
have held that the actio empti may also be used by a buyer to claim
damages from a seller who misrepresents the characteristics of the
thing sold. In this case, it is not breach of contract, but delict, which
is the ground for the actio empti.
The actio empti may also be used to claim damages from
manufacturers or dealers whose products are defective. However, it is
not certain whether the liability is based on the breach of an ex lege
warranty (warranty implied by law) or misrepresentation. The actio
empti is also employed here irrespective of whether the ground for its
employment is contractual or delictual express or tacit guarantee.
The seller may be sued in terms of the actio empti if his performance
is defective. The seller's performance will be defective if he delivers a
defective article after guaranteeing (expressly or tacitly) the absence of
such defects, or delivers a thing without the commendable

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characteristics which he has guaranteed (Minister van Landbou-

Tegniese Dienste v Scholtz).
This non-compliance with the terms of the agreement as regards the
characteristics of the thing is, of course, ordinary breach of contract
(positive malperformance). In such a case, the purchaser has the
normal remedies as regards damages, and, where appropriate,
rescission. Of course, it makes no difference whether the guarantee
has been given expressly or tacitly.
b) Liability for misrep’s at the time the contract was entered

into:
The seller is liable for misrepresentations on the ground of

delict.
The misrepresentation may take the form of a false statement about
the presence of commendable qualities in the article, or the absence of
bad ones.
The wrongful act is a commissio. But the misrepresentation may also
take
the form of an omissio (omission), in that there may have been a
failure to remove an existing misconception about the absence of bad
characteristics. The seller commits a wrongful omission only if he was
under a duty to act in accordance with generally accepted community
standards. According to positive law, such a duty to speak rests upon
the seller who is aware of any latent defects in the article sold (Glaston
House). The seller is also liable for misrepresentation if he deliberately
conceals poor qualities which, though admittedly not latent defects,
do nevertheless have this effect, means that the parties do not
contract on an equal footing (Dibley). Sometimes difficult to know
where to draw the line. For example, Von Mellenthin v MacDonald,
where the court found that there was no legal duty on the seller to
inform the buyer about defects which commonly occur in horses, even
though the seller knew about such defects. In other cases the seller's
silence was regarded as a misrepresentation that may lead to the
usual
delictual remedies (Glaston House & Dibley v Furter).
Unlike breach of warranty, misrepresentation does not deal with non-

compliance with the provisions of the contract itself, but with untrue
representations which precede the conclusion of the contract and
which cause a party to the contract (the purchaser in this case) either
to enter into the contract at all or to enter into it with the existing
content. A misrepresentation is thus a delict.
Remedies:
1. rescission
2. damages
3. dolus dans
4. dolus incidens

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A misrepresentation can be either intentional or negligent. The

decision in Bayer South Africa (Pty) Ltd v Frost, placed the remedies
for intentional and negligent misrepresentation on the same footing. It
is generally accepted that the misled party has the choice either of
rescinding the contract on the ground of such misrepresentation or of
maintaining it, and that she is also entitled to damages calculated
according to his negative interest, that is, the damages must restore
her to the position in which she would have been had the
misrepresentation not taken place. Where the contract is cancelled,
the innocent party's damages will usually be the wasted costs which
he may have incurred in connection with the conclusion and
cancellation of the contract. Where the contract is upheld, the
innocent party's damages will be assessed in one of two possible ways.
1. First, if it appears that the misled party would not have entered
into the contract at all were it not for the misrepresentation, the
innocent party has to be placed in the financial position she
would have been in had there been no contract at all. This is
traditionally called dolus dans. Her loss is usually determined
by deducting the value of the performance made by the
misrepresentor from that made by the innocent party, and by
adding any consequential loss to the difference.
2. Secondly, when it appears that, in the absence of the
misrepresentation, the innocent party would still have
contracted, but on other terms, the innocent party must be
placed in the financial position she would have been in had she
concluded a contract on those different terms. This is known as
dolus incidens. The innocent party's loss is determined by
deducting the value of the performance that she would have
been prepared to render had there been no misrepresentation
from the performance that the innocent party actually rendered,
and adding to that any consequential loss that the innocent
party may have suffered.
c) Liability for dicta et promissa:

In Phame, the Appellate Division held that the aedilitian actions (ie the
actio quanti minoris and the actio redhibitoria) are available to the
buyer if the seller made a false, material statement to the buyer
during the negotiations bearing on the quality of the thing sold and
going beyond mere praise and commendation. The facts of the Phame
case show that “quality” should not be given a restrictive meaning.
Thus, where a dictum et promissum is made, a purchaser can either
claim that the contract be set aside in terms of the actio redhibitoria,
or he can claim a reduction in price under the actio quanti minoris.
A culpable misrepresentation can also amount to a dictum et
promissum if the statement complies with the definition of a dictum et
promissum. The buyer will then also have other remedies available.

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Trade-ins:
The courts are divided on the question whether the aedilition actions
are also available to the seller for dicta et promissa made by the
purchaser in regard to the thing traded in as part of the purchase
price. The courts have held that the aedilition actions are not available
to the seller (Mountbatten Investments).
However, in Janse van Rensburg, the court held that the aedilition
remedies should be available to the seller for dicta et promissa made
by the purchaser regarding the trade-in, because this is an instance
where the common law should be extended and adapted. In a trade-in
agreement, it would be unjust, inequitable and unreasonable should
the seller be liable for latent defects in, and misrepresentations
relating to, the vehicle sold by him, while no such liability attaches to
the purchaser in regard to the vehicle traded-in by him. The
purchaser would in fact be at large, while proclaiming his innocence
and good faith, to deliver a defective trade-in vehicle in the knowledge
that the seller will have no recourse against him by means of the
aedilitian actions. If the aedilitian actions are available to the one, so
also should they be available to the other. It would also be in conflict
with public policy, which represents the balanced interests of all
members of a community, including those participating in commercial
interaction with one another.
The courts regarded the extension of the application of the aedilitian
actions to be in line with the spirit and values contained in the Bill of
Rights of the Constitution. The approach in the Janse van Rensburg
case is to be preferred.
d) Aedilitian liability for latent defects:
SA law holds a seller liable if she sells a thing with latent defects, even
if she did not give an express or tacit guarantee.
Requirements for liability

Before a seller can be held liable, the following requirements
must have been complied with:
1. There must be a defect in the article

A defect is an abnormal characteristic in a thing which makes it less
useful for its normal purpose. The defect must therefore be a defect in
the thing itself and does not depend on the particular needs of the
purchaser.
The purchaser of a motorcar, for example, will not be able to complain
that the vehicle is defective for the purposes of ploughing.
In Dibley: definition of a latent defect:
... they (redhibitory defects) are those defects which either destroy or
impair the usefulness of the thing sold for the purposes of which
things of that kind are ordinarily intended to be used.
The test is thus an objective one - whether the thing can be used for
the purpose for which it is normally intended. The requirement does

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not imply that there can be only one defect which renders the thing
less useful; it is possible for a number of minor defects to culminate in
an impairment of the
thing's usefulness for the purpose for which it is normally intended.
In Knight v Trollip – a similar definition, but, it is added, that, if the
thing does not comply with the special purpose for which it was
bought to the knowledge of the seller, this must be regarded as a
defect. Some modern writers hold the same view. Where the thing is
bought for a special purpose, of which the seller is aware, it would
appear, however, that it is assumed either that representations were
made (which, according to the circumstances of the case, constitute
an express guarantee or a misrepresentation), or that the parties
tacitly agreed that the thing was suitable for a special purpose.
Although this will give rise to the aedilitian actions as well, it is
actually a case which should fall within the scope of liability for
misrepresentation or faulty performance.
In a number of cases, the courts correctly held that the seller tacitly
guaranteed fitness of purpose.
It would appear that our courts regard the presence of a servitude
which was not communicated to the purchaser when the contract was
entered into, as a latent defect. In Southern Life Association v Segall,
a servitude was regarded as a defect, but, with reference to Voet, it
was stated that the purchaser may act only in terms of the actio
quanti minoris. A further requirement laid down is that the seller
must deliberately have concealed the servitude (ie made an intentional
misrepresentation), or have guaranteed that the thing was free of any
servitudes (ie breach of contract).
2. The defect must not be insignificant

This is a consequence of the rule de minimis non curat lex (the law
does not concern itself with trifles).
3. The purchaser must not have known of the defect

If the purchaser knew of the existence of the defect, she cannot claim
the aedilitian remedies. This question to be assessed subjectively, and
the answer depends on the facts of the case: either the purchaser
knew about it or she did not know about it. This knowledge could
have been acquired in ways:
• the seller herself may have told the purchaser,
• or a third party may have provided the information;
• the purchaser herself may have discovered the defect or the
purchaser's agent may have possessed the necessary
information
Thus it is purely a factual question.
4. The defect must be latent

The test which must be used in this connection is of an objective test,
whether a reasonable person in the purchaser's position would have
noticed the defect if he had inspected the thing. If the reasonable

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person would have discovered the defect, it is said that the purchaser
should have known about it.
The nature of the inspection which a reasonable person would have
conducted, will not always be the same. For example, if there are
indications that latent defects are reasonably to be expected, a
reasonable person will conduct a far more careful inspection, as in the
case of the sale of a very old car.
A reasonable person will always notice very obvious defects.
Where we are dealing with an expert purchaser (or an expert who
conducts an inspection for latent defects on behalf of the purchaser),
she should have known of the defect in the thing as a matter of
course.
The balance of authority seems to be against any rule that a
purchaser who has employed an expert is taken to have known of a
defect which should have been discoverable by that expert, but the
fact that there has been expert examination may in some cases go to
show that there has in fact been knowledge of the defect.
The modern writers support this. The position is thus that, if the
defect would have been reasonably discovered by a reasonable person
possessing the same knowledge as the expert, knowledge of the defect
is ascribed to her (or her principal).
5. The defect must have existed at the time the contract was
entered into.
This is a question of fact: did the defect exist when the agreement was
entered into, or did it develop later? If it developed after the conclusion
of the contract, the prejudice is naturally that of the purchaser.
However, it will sometimes be difficult to prove that the defect was
present at the time the contract was entered into. The onus of proving
this fact rests on the purchaser. If she proves that the defect existed
shortly after the agreement was entered into, this may contribute to
the discharge of the onus.
In Odendaal the court held that where an immovable property lacks

statutory approvals or other authorisations for building alterations,
the absence of such approvals does not render the property unfit for
the purpose for which it was purchased, namely habitation.
However, the lack of permission in respect of the alterations (in this
case a manhole over a sewer and a carport’s irregular structure) may
require demolition or alteration as a condition for approval and
therefore interfere with the ordinary use of the property. As such, the
unapproved alterations constitute a latent defect.

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The scope of liability for latent defects

The aedilitian remedies are the actio redhibitoria and the actio
quanti minoris.
i) Actio redhibitoria:
The actio redhibitoria is available if the purchaser can prove that a
reasonable person would not have bought the article had she been
aware of the defects. Where more than one article has been bought
and one is affected by a serious defect, there must be restitution of
not only the single article but of all the articles, provided that it is
apparent that it was the intention to sell the articles as a unit, and the
purchaser can prove that a reasonable person would not have bought
it had she been aware of the defect in the article. If this is not the
case, there can be restitution of no more than the single article.
The purchaser may set the contract aside and claim restitutio in
integrum under the actio redhibitoria. This means that the seller must
repay the purchase price with interest and compensate for all
reasonable expenses incurred in connection with the thing from the
time of its receipt. For her part, the purchaser must return the thing,
unless it has been destroyed through no fault of her own. If it is her
own fault that the thing has been destroyed or materially damaged,
the action is not available.
Where the purchaser has alienated the thing, there can be no
rescission if the intention to waive her right of rescission can be
deduced from her conduct.
ii) Actio quanti minoris:

The actio quanti minoris is intended for less serious cases, like where
a reasonable person would still have bought the thing, but would
merely have paid less for it had she been aware of the defect. It is also
available when the actio redhibitoria cannot be instituted because the
purchaser has neglected the article, or because she has waived her
right to resile.
In the case of the actio quanti minoris, reduction in price is claimed in

terms of the agreement. The amount which may be recovered is the
difference in value between the purchase price and the true value of
the defective article. There is no unanimity as regards the time at
which the value is to be determined. It would seem that the correct
date is the date of the sale.
Not only may the purchaser positively enforce her claim for restitution
or a reduction in price by way of the action redhibitoria or quanti
minoris, but she may also enforce it negatively by relying on the
guarantee as a defence when she is sued for the purchase price. If she
relies on restitution as a
defence, she will naturally have to return the article.

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Trade-ins:
In Wastie, it was held that not only the buyer but also the seller can
invoke the aedilitian actions where the thing traded in has a latent
defect.
The facts of this case were briefly as follows. SM sold W a motorcar for
R1 250. The purchase price consisted of R400 in cash, and W traded
in his old motorcar for the balance. When the contract of purchase
and sale had been concluded, SM discovered that the motorcar which
had been traded in had a
latent defect. It would cost R120 to repair the defect. SM claimed the
R120 under the actio quanti minoris on the ground that a latent
defect was present at the time of conclusion of the contract of sale.
The court held that, where a part of the purchase price consists in
something other than money, the same principle that applies to the
thing sold, applies to the non- monetary part of the price. The reason
is that, in contracts of exchange, both contracting parties are
protected by the aedilitian actions against latent defects in the things
which are the subject matter of these contracts, and that it would be
unfair and illogical not to afford similar protection to the seller in
respect of the thing traded in. Thus the judge held that the seller
could also invoke the actio quanti minoris if the non-monetary part of
the price contained a latent defect.
The purchaser who is entitled to use the actio empti because of the
presence of a misrepresentation or the absence of guaranteed
commendable characteristics, may, if she prefers, use the aedilitian
actions if a latent defect is present in the thing sold.
Cases where the aedilitian remedies are not available to the

purchaser:
The aedilitian remedies are not available to the purchaser in the
following instances:
1. sheriff, trustee or curator bonis. In the case of sales in
execution by the sheriff, trustee or curator bonis of an insolvent
estate.
2. Where the purchaser has waived his rights. This waiver may be
tacit or express, at the time the agreement was entered into or
thereafter.
1. Waiver at the time the contract was entered into:

The obligation to compensate for latent defects in a thing is one
of the naturalia of the sale agreement. The parties can thus stipulate,
when entering into the agreement, that the seller will not be liable for
latent defects in the thing. Such a stipulation is known as a
“voetstoots clause”. A voetstoots clause may be expressly included in
an agreement by mentioning the clause by name, or it may be tacitly
included, for example, by saying that the article is sold “as it stands”.

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A voetstoots clause cannot afford a seller any protection against

misrepresentation, since it has nothing to do with misrepresentation.
It should no difference whether the misrepresentation is intentional,
negligent or innocent, or whether it is a misrepresentation by
commission or omission. Where there was an omission, the Appellate
Division held in Van der Merwe v Meades that a seller will only be
deprived of the protection afforded by a voetstoots clause where the
purchaser can prove that the seller was actually aware of the
existence of a defect in the thing sold at the time of making the
contract and intentionally.
(Glaston House)
2. Waiver of rights after the contract has been entered into

Tacit waiver of rights once the contract has been entered into can
exist either as regards the payment of the purchase price or as
regards acceptance of the thing.
The purchaser may possibly forfeit her rights to both restitution and
reduction in price if she voluntarily pays the purchase price after
becoming aware of the defects in the thing.
Its a question of fact whether or not payment with knowledge of the
defects amounts to a waiver of rights.
Regarding waiver of rights by acceptance of the article, it is accepted
that the purchaser's remedies relating to rescission are affected
thereby, but not the remedies relating to reduction of the price. Mere
receipt of the thing is not equivalent to a waiver of rights, but it is
quite possible that the acceptance of the thing may have that result.
The acceptance of the thing may consist in its inspection by the
purchaser, followed by discovery of the defects, either by chance or by
expert inspection (since a latent defect cannot be revealed by a
normal, reasonable inspection), followed by the decision to retain the
article none the less by exercising powers of ownership over the thing.
Thus the right to claim restitution has been waived, but it does not
necessarily follow that the purchaser has also waived her remedy
relating to reduction of the price.
Liability of manufacturers and dealers for consequential damages

caused by latent defects:
Both the manufacturer and the dealer are liable for latent defects.
• Liability of the manufacturer:

Voet: manufacturer is liable for consequential damage on the ground
of the presence of a latent defect, even if they weren’t aware of the
defect and gave no express warranty.
Where liability is founded on a delict, damages are calculated
according to the buyer’s negative interest but where it’s founded on
beach of contract damages are calculated according to positive
interest.

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Courts have held that the actio empti is the action used against the
manufacturer.
Liability is founded on either breach of a warranty implied by law or
on misrep taking the form of failure to disclose the presence of a
defect because knowledge of the defect is imputed to the manufacturer
(Holmdene Brickworks: court said that there was a likelihood that the
basis of liability would lead to different results, the court therefore,
merely approached the question as on of breach of contract.
• Liability of the dealer

Pothier: a dealer who specializes in the sale of certain type of goods is
also liable for consequential loss caused by defects in the goods even if
he was unaware of the defect.
Kroenstad: the court held that a dealer who was unaware of the latent
defects in the thing sold is liable for consequential damage caused by
the defect BUT only where he publicly professes to have attributes of
skill and expert knowledge in relation to the kind of goods sold.
Langeberg: AD applied the Kroenstad case – the seller was a processor

and canner of fruit and veggies. The seller prescribed to producers the
cultivars of the fruit and the type of seed to be used and supplied the
seed to the producers. The seller’s workers visited the producers and
assisted them. All this was done on the understanding that the seller
would later buy the unprocessed produce. The seller sold sweet corn
seed to the purchaser but his crop failed due to a latent defect in the
seed.
The court found that the seller was a merchant dealer who professed to
have attributes of skill and expert knowledge in relation to the goods
sold and he was liable for consequential loss resulting from the latent
defect of which the seller was unaware – the court questioned the
viability of the rule regarding the merchants liability in modern
commercial practice.
Jaffe: the court said that the liability of the dealer is based on non-
fulfillment of a tacit warranty – but in such a case its better to work
with misrepresentation or a warranty implied by law against latent
defects.
4. The seller’s duties: the seller’s obligation to transfer

ownership or to warrant against eviction
The seller isn’t required to be the owner of the thing for the sale to be
valid. The aim of the contract is the buyer should become the owner of
the thing sold in place of the seller.
The seller has an obligation to transfer every right and benefit arising
from the thing sold to the buyer.

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If the seller isn’t the owner of the thing, the contract is valid but the
seller must guarantee that no one with a better title will evict the
buyer.
Transfer of ownership:
If the seller is the owner he is obliged to transfer ownership to the
buyer. The action for the transfer = actio empti.
Abstract system of transfer of ownership
A real agreement is required – ownership is transferred if there is a
valid, real agreement: mutual intention that ownership should pass
coupled with delivery or registration.
The abstract system is followed: the invalidity of the contract doesn’t
affect the validity of the transfer of ownership. Only a valid real
agreement is required
Delivery must be made to the buyer himself or his representative
(carrier).
Relationship between the payment of the price and the transfer of

ownership: NB
In the absence of an agreement ownership of movables passes to the
buyer despite the fact of delivery only if the purchase price has been
paid or credit has been given = if goods are sold for cash and have
been delivered and if the price isn’t paid, the seller may reclaim the
thing, even where its in the hands of a bona fide 3rd party.
Cheque: payment is subject to a resolutive condition – if the cheque

isn’t paid out, there is no payment. But parties could agree that
payment by means of cheque be unconditional = ownership passes on
delivery.
There’s a presumption that all transactions are cash transactions –

but can rebut this by proving there was an express or tacit agreement
that credit would be given, provided that the intention of he parties
was apparent.
The fact that credit was given can be deduced from the fact that
delivery took place before payment.
A tacit agreement that credit is given has been construed in the

following instances:
1. Where the buyer offers security for the payment of the price
2. Where the buyer agrees to pay interest on the price
3. Where a date is laid down for payment after delivery is due
4. Where the sale is in fact a cash sale and a substantial period
elapses before the seller asserts his rights, the inference can be
made that credit was given
5. If there has been a course of dealings on credit between the
parties or where a commercial usage applies
6. Although the parties may agree that the buyer may discharge
his obligation to pay the price by means of a promissory note,

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cheque, etc, this doesn’t imply an intention to give credit. It

would imply an intention to give credit where:
a) A negotiable instrument which isn’t payable on demand is
given as payment
b) The seller has undertaken to accept a bill as payment of
the price at the time of delivery but payable after.
A tacit agreement can be concluded at the time of the conclusion of

the contract (ownership will pass when the thing sold is delivered) or
as an amendment of the original agreement (ownership will pass when
the amendment has been reached to grant credit if the thing sold is
already delivered).

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Warranty against eviction – NBNB!!
Its not a requirements for the validity of the sale contract that the
seller be the owner of the thing sold – if he isn’t the owner, the law
implies a warranty into the contract that no-one with a better title will
deprive the buyer of his right to possession = naturalia of the contract.
The fact that the seller is liable for eviction doesn’t imply that he may
sell an article belonging to another, with full knowledge that he isn’t
the owner, since he would be guilty of misrepresentation.
Wessels Trustee: the claim would then be based on eviction and the
buyer would have to await eviction.
Requirements for liability for eviction

Before a seller is liable for eviction the following requirements must be
complied with:
1. The purchaser must have been evicted:

Actual confiscation of the thing by a 3rd party who has a better title.
E.g. where the true owner claims the thing form the buyer.
The meaning of eviction has been extended to include cases involving
more than actual judicial deprivation of the possession. Lammers:
include:
a) Cases where the buyer is compelled by a court order to pay a
sum of money if he wants to retain the thing
b) Where the buyer sells the thing to a 3rd party who is then
evicted by the true owner and now sues the seller (original
purchaser)
c) Where the police seize the thing sold as suspected of being
stolen, buyer is evicted as soon as it becomes apparent that the
police wont return the thing – permanent dispossession
d) The buyer’s action for eviction is available where there is neither
judicial deprivation of possession nor a lawsuit intended to
recover a sum of money. Once its been established that eviction
is inevitable – buyer has a claim for eviction if he can prove:
1) The 3rd party made a demand on him (mere notice isn’t
enough) and
2) The buyer has voluntarily surrendered the thing to the 3rd
party or admitted the demand and legally bound himself
to comply with it and
3) The seller had no title which could have made resistance
of the true owner possible = 3rd party has a legal claim.
Van Staden: buyer of immovable property had taken possession of the

property and had paid for it – before he could take transfer, the creditors
of the seller attached the property in execution of a debt owed by the
seller. The property wasn’t yet sold in execution. Rather than lose the
property he paid amounts owing himself. He eventually got transfer but

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tried to recover these amounts from the seller as damages resulting from
breach of warranty against eviction.
Decided: against him.
The eviction in regard to which the warranty exists must be one in
respect of a flaw in the title of the seller, which existed at the time of the
sale or is due to some act on the part of the seller – the threats, which
occurred to the buyer, didn’t arise out of a flaw in title.
The seller is in no way liable for unlawful interference with possession

(theft). He is only liable if someone lawfully interferes with the use and
enjoyment of the thing.
A defect in the title which is transferred to the buyer distinguishes the
sellers liability on the ground of eviction from his liability for failing to
give undisturbed possession where there is a defect in the physical
possession obtained by the buyer at the time of delivery and from the
sellers liability for latent defects where there is a defect in the thing
itself making it less useful for its ordinary purpose.
2. Notice:
The buyer must give the seller notice of the 3rd party’s claim of
possession of the thing – must be given in good time so that the seller
has an opportunity to fulfill his general obligation to protect the
purchaser in his possession. The seller may enter into negotiations
with the true owner or may participate in an action instituted against
the buyer.
If the buyer fails to give the seller notice he has no right of recourse
against the seller – unless he can prove that the 3rd parties claim is
unassailable or it’s the seller’s fault that the notice didn’t reach him in
time.
In ABSA Bank Ltd v Eksteen court held that where the seller receives
a notice of the threatened eviction from the buyer and does not
respond, the seller cannot later argue that the buyer should have
resisted the third party’s claim more energetically or skilfully.
3. Virilis defenso (proper and competent defence)

York: nothing more is expected of a buyer that that he should conduct
his case as a reasonable litigant - examples of what the judge
considered reasonable are:
a) The plaintiff company employ an attorney
b) The proceedings it brought were brought in the proper form
c) The fact were laid before the court
d) No error in law was made in the presentation of the case
e) No wrong concessions of fact or law were made
Where the seller decides not to get involved after getting notice and
the buyer is evicted after conducting a proper defence = the seller cant

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question the 3rd parties right to the thing sold as this is sufficient
proof.
Q: if a buyer today has to conduct a virilis defensio as a prerequisite
for his claim against the seller = 2 situations:
a) The 3rd parties claim is legally unassailable and notice has been
given to the seller – to conduct the defense here would be a
waste of time (Lammers)
b) The 3rd parties claim isn’t unassailable – notice must be given
before the buyer can sue the seller – don’t need to defend = after
the seller is given notice, he has only himself to blame if the
buyer is evicted
4. Defective title derived from the seller:

The defect in the purchaser’s title, which gave rise to the eviction must
have been derived from the seller.
Remedies on the ground of eviction:
Rescission on the ground of eviction:

Alpha Trust: AD held that in a case of total eviction, the buyer is
entitled to claim from the seller repayment of the purchase price and
compensation for his damage in terms of the actio empti. The effect of
the decision is that the buyer who has been totally evicted can claim
at least the purchase price from the seller – impression that a buyer
who has been totally evicted can rescind the contract. This isn’t the
case since it has been expressly decided that he buyer need not cancel
the contract between himself and the seller, but he may claim the
purchase price.
Rescission isn’t used when the price is claimed but the price is
claimable as a form of minimum damages
Damages for eviction:

According to general principles in breach of contract, damages are
calculated according to the buyer’s positive interest, irrespective of
whether the buyer upholds or resiles from the contract.
If h resiles he ought to be able to claim, apart from the purchase price,
damages he incurred.
If he upholds the contract he ought to be able to claim only the
damages he sustained as a result of the eviction = if the thing sold has
appreciated or depreciated in value after the conclusion of the
contract, only the value of the thing at the time of eviction can be
claimed where the buyer doesn’t rescind the contract = the loss which
the buyer suffers as a result of eviction.
Alpha Trust: has changes the position – rescission isn’t taken into
account and the buyer who is totally evicted is entitled to claim as a
minimum amount of damages, the purchase price with the actio
empti.

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This decision leaves open the possibility that where the thing is sold is
a depreciating asset; the buyer who has had an uninterrupted period
of use and possession may not be able to recover the full purchased
price on eviction.
The court can free the seller from repayment of part of the purchase
price.
Apart from the purchase price the buyer can then claim from the
seller any further damages he may have sustained because of the
eviction – i.e. reasonably foreseeable damages.
The court also refused in Katzeff to regard a car as a fast depreciating
asset.
As part of his damages for eviction the buyer can also claim that the
seller reimburse him for improvements which he effected to the thing
Lammers: the buyer to the knowledge of the seller made improvements
to a car, which increased in value from R50 to R250.
When threatened by the true owner he handed the car over after
notifying the seller. The seller did nothing about the matter, but when
sued by the buyer, alleged that he was only responsible for the amount
of R50. As far as the improvements were concerned the buyer had a
claim of enrichment as well as a lien against the true owner.
Consequently he should never have surrendered the car and the seller
wasn’t liable since the buyer hadn’t put up a virilis defensio.
On appeal majority of the court found that the buyer wasn’t obliged to
put up the defence after notice to the seller = seller liable on the ground
of breach of warranty for all foreseeable damage.
Partial eviction: buyer will be able to retain what he ahs left after
eviction and will be able to claim compensation, calculated according
to his positive interest for that part of the thing of which he’s been
dispossessed.
Cases where limited liability for eviction exists:

seller’s liability for eviction is one of naturalia but may be altered by
mutual agreement.
Vrystaat Motors: the court held that the parties may exclude the
seller’s liability for damages, but not for the return of the
purchase price.
Where both parties reasonably believe in good faith that a thing which
they know isn’t the sellers is available for sale and without the buyer
implying expressly or by means of his conduct that he is content to
buy in the hope that he wont be evicted = buyer is entitled to
reimbursement for the purchase price on eviction but not for his loss.
Reason for seller’s liability for eviction:

Seller warrants against eviction – fault on the part of the seller isn’t a
requirement because the seller is liable for eviction even if he acted in
good faith.

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Remedies of the buyer for eviction differ in 2 respects from ordinary

remedies for breach: cancellation is irrelevant and the measure of the
assessment of damages isn’t the value of the thing sold during
eviction, but the purchase price as a minimum.
___________________________________________________________
THE DUTIES OF THE PURCHASER:
The buyer has certain obligations implied by law:

a) take delivery of the thing and
b) compensate the seller
1. Buyer’s duty to pay the purchase price

Payment of the price is performance – it must be in accordance with
the terms of the contract.
He must pay the price with legal tender
Payment may be made by the purchaser himself, his representative or
someone acting at the will of the buyer, provided that the intention is
to discharge the debts of a particular debtor thereby.
Payment must be made to the seller or someone authorized to receive
payment on his behalf.
Payment to an unauthorized person is null and void.
Must pay interest on the price when he is in mora.

General rule: payment is effected on delivery. Should a seller demand
payment before delivery she may be confronted with the exceptio non
adimpleti contractus (defence available to a party to withhold
performance until the claimant has tendered proper performance).
Parties can also make other arrangements:
Wehr: there may be good reasons for the seller to make sure at an
early stage that he will be paid his price – in this case the contract
stipulated that the buyer of immovable’s would supply a bank
guarantee on registration for the balance of the purchase price.
Buyer who pays is entitled to a receipt from the seller.

If the buyer fails to pay the purchase price = seller may claim it as well
as damages in terms of the actio venditi.
2. Purchaser must take delivery:

The buyer must take delivery of the thing at the place where and the
time when delivery must take place. If no time is mentioned, he must
take delivery within a reasonable time.
Purchaser who doesn’t take delivery of the thing falls in mora
creditoris.
Purchaser must reimburse the seller for all necessary expenses

incurred in connection with the custody of the thing:

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Duty of custody means that the seller must take all necessary steps
which a reasonable person would have taken to guard against the
destruction of or damage to the thing.
But expenses incurred by the seller in terms of this obligation must be
defrayed by the buyer – seller even has a lien with which to enforce
the payment of such expenses.

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The risk in contracts of sale:
The consequences of the risk rule

Once the contract of sale is perfecta, the risk of any accident rests on
the buyer – buyer obliged to pay the price even though the seller can’t
deliver the thing or can only deliver it in a damaged condition.
A contract becomes perfecta before delivery.
The risk rule is in conflict with the general principle regarding

supervening impossibility – in the case of mutual agreements; the
supervening impossibility of one performance has the effect of
extinguishing the obligation to counter perform.
In the case of a sale – this doesn’t happen and it’s only the seller
who’s freed from his obligation to deliver by supervening impossibility,
while the buyer is still liable for payment.
Rules relating to impossibility apply to sale contracts before they are
perfecta.
The buyer carries this risk even though the thing hasn’t yet been
delivered and there is no possibility that he has already become the
owner. Ownership doesn’t pass when the contract is perfecta; it only
passes on delivery or registration.
The seller must undertake custody of the thing before delivery takes
place, like a reasonable person. If he doesn’t comply with this
obligation he is liable in full for loss.
Accidental misfortune and benefit

If misfortune befalls the thing for which the seller can’t be held liable –
buyer suffers the damage. The nature of the misfortune is irrelevant
(floods, earthquake, burring down house– BUT latent defects aren’t
included.
The may also be some benefit after the contract is perfecta = goes to
the buyer.
Van Deventer: the court held that the seller of a house isn’t obliged to
pay over to the buyer insurance money received after the house had
already been sold had burnt down.
Requirements for the contract to become perfecta:
1. The purchase price must be determined (capable of being

determined) by simple calculation:
While the price is uncertain the seller bears the risk of
destruction of the article and the buyer the risk of depreciation.
A sale as mensuram: sale of a group of things per unit (R500
per 100 bricks) mustn’t be confused with sale per aversionem,
where a thing is sold in a whole lump sum = in such a case the
price has already been ascertained and the risk passes.

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2. The thing sold must be ascertained:

the thing must be capable of being pointed out as the subject of
the sale.
In the case of sale in the alternative: the thing is indefinite until
he person who must point out the thing does so or until one
remains after the others have been destroyed:
Voet: where both alternatives are destroyed, the buyer bears the
risk for the one thing and must pay the price.
Generic sale – the thing is indefinite – object of sale is only
ascertainable when individualization has taken place =
seller sets aside 100 bags of mealies.
3. The agreement must be unconditional:

a condition in the contract, which renders the operation of the
obligations dependent on the occurrence of an uncertain future
event – suspensive and resolutive.
Suspensive condition: if the sale is subject to a suspensive

condition which isn’t fulfilled, the seller bears the risk of
accidental destruction and he can’t recover the price from the
buyer.
If the condition is fulfilled the seller braes the risk of accidental
destruction until fulfillment of the condition then risk passes.
Resolutive condition: if the condition isn’t fulfilled, the risk of

both accidental destruction of and damage to the thing passes
to the buyer immediately on conclusion of the contract = seller
is entitled to the full price.
If the condition is fulfilled the buyer bears the risk of
destruction of the thing until the moment of fulfillment then
risk reverts to the seller. If the condition is fulfilled, the risk of
accidental damage to the thing is borne by the seller from the
moment of conclusion of the contract, which means that the
buyer can return the thing in its damaged condition and is
entitled to repayment of the full purchase price.
Pactum displicentiae (cancellation agreement) –buyer gets the

right to return the thing to the seller within a certain or
reasonable time if he is no longer satisfied with it.
Effect of delay of the seller on the risk rule:

if the seller is in mora with regard to delivery of the thing (mora
debitoris) he must carry the risk from the moment he fell into mora
unless he can prove that the thing would have been damaged even if
he delivered it in time.
The buyer’s delay in taking delivery doesn’t affect the risk – the seller’s
duty of custody is just lessened.

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Formalities required for the conclusion of a

binding contract of sale - LAND:
Requirements for valid contract:
Capacity, consent, possibility, lawfulness, formalities
Types of contracts to which the provisions of the Alienation of

Land Act apply:
Every alienation of land must be contained in the deed of alienation –
which is a document under which land is alienated (sale, exchange or
donation).
Conditional contracts: Tuckers Land: a contract of sale which is

subject to a suspensive condition doesn’t in law become a contract of
sale until the condition has been fulfilled.
Any contract in terms of which one party undertakes to deliver land
while the other undertakes to deliver an asset in a persons estate as
counter performance = contract of exchange – once the counter
performance is money = contract of sale.
Land:
Any contract of sale, exchange or donation in terms of which a piece of
land, the right to claim transfer of land, an undivided share in land or
a real right to land is alienated must be contained in the deed of
alienation.
Deed of alienation
Contents of the deed of alienation:
S2 requires every alienation of land to be contained in the deed of
alienation, which must be signed by the parties or their agents – the
following must appear:
a) The identity of the parties
b) The essentialia of the contract in question (sale, donation or
exchange)
c) Other material terms on which the parties agreed
d) The signature of every party to the contract
The identity of the parties:

it must be clear from the document who the alienator of the land is
and who the alienee is.
It’s not sufficient that one person has signed the document as
alienator and the other as alienee – it must be evident from the
document that the parties intended top contract with each other.
Alienation will be void if it emerges from the deed of alienation that the
offer, which it embodies, was accepted by someone other than the
offeree.

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The document may make it clear that the offer is intended for
someone other than the person to whom it’s addressed and that the
latter’s only function is to transmit the offer to the person for who it’s
intended.
One may address a written offer to buy property to an estate agent but
indicate that its ones intention that she should submit the offer to the
owner of the land for acceptance = the owner can validly accept the
offer which was in fact intended for her.
Regarding signing the document, the Act is silent on when the

signatures of the parties or their authorised representatives should be
affixed to the document. In Just Names Properties the Supreme Court
of Appeal held that the function of the signatures is to indicate
agreement on the terms. As such, the signatures must be affixed after
the terms of the contract have been reduced to writing or at least
before the contract containing the terms is released to the other party.
One party cannot sign the document in blank and authorise the other
party to complete the contract.
The essentialia of the alienation

Essentialia of a contract of exchange of land are an undertaking by
one party to deliver land to the other party and an undertaking by the
other party to deliver to the alienator in return anything, which is
capable of being an asset in a person’s estate.
The essentialia of a contract of donation of land are an undertaking by
the alienator to transfer land to the donee and the party’s intention
that the donee will render no counter performance.
Problem that arises is whether the performance to which the parties

intended to bind themselves has been set out clearly enough in the
deed of alienation to comply with the formal requirements.
Land, which is being transferred, must also be described in the deed
in such a way that it’s capable of objective identification – without
recourse to extrinsic evidence to establish the real intention of the
parties.
Clements v Simpson: the test for compliance with the statute in

regard to a thing sold (res vendita) is whether the land sold can be
identified on the grounds by reference to the provisions of the contract
without recourse to evidence from the parties as to their negotiations
and consensus.
Objective identification can be achieved:

a) By a description which is in itself sufficiently definite to be
capable of being related to a particular entity of immovable
property
b) By indication of a person who has the right to select a portion of
property from a larger whole.

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It will always be safer to rely on the description of the land, which

appears in the title deed:
a) A reference to the physical location of the land (street address)
b) Reference to the popular name of the entity
c) Reference to the objective determinable relationship between the
land and a particular person (X’s farm)
d) Reference to a plan or diagram on which the boundaries of the
land are marked
e) Description which refers to existing beacons
f) Reference to a description of the land which is contained in the
deed of transfer
Identification of land can’t depend on an agreement, which isn’t

reflected in the deed of alienation or on an agreement still to b entered
into.
The nature and extent of the counter performance, which is to be
rendered, appear from the deed of alienation or capable of
determination by reference to objective criteria laid down by the deed
of alienation – extrinsic evidence is inadmissible to prove the intention
of the parties.
Other material terms

In S2 (1) of the Alienation of Land Act all the material terms of a sale,
donation or exchange must be contained in a deed of alienation, such
terms must be in writing – all material terms must be contained in the
document, when its signed – a deed of alienation isn’t valid if its
signed in blank and completed at a later stage.
Essentialia are material terms – a document which contains no more
than the essentialia of a contract of sale, exchange or donation and
which has been signed by the parties = valid deed of alienation, if all
the requirements for a valid contract have been complied with.
In most cases the parties don’t want to have their relationship

determined by the naturalia – preferring to spell out the incidentals of
their relationship.
They normally agree to a number of incidentalia = 2 approaches, to
see whether they should form part of the material terms:
Wide approach: regards all terms on which the parties have agreed to
as material terms of their contract and includes every term in the
following:
a) The content and properties of every performance which must be
rendered
b) When, where and how the performance is to be rendered
c) The cooperation which each party requires regarding the
performance by the other
d) The remedies which a party will have if the other party commits
a breach

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In Jones: the court formulated the following test to determine whether

a term is material:
a) Did the parties apply their minds to the term?
b) Did they agree either expressly or tacitly:
1) That the term should form part of their contract and
2) Be binding on them?
A non material term is one which contains information only and which
isn’t intended to bind the parties.
Restrictive approach:
Not all terms the parties agree to be material.
Court in Trustees v Mitchells Plain Trust: all the material terms of the
contract be reduced to writing only if the characteristics of materiality
is amenable to objective determination = examples are terms going to
date of transfer or possession, the contractual duty to renovate the
premises or render them in a certain condition before transfer and
terms fixing liability for certain costs, such as transfer or survey costs.
The court regarded a term determining which of the parties had the
power to appoint the conveyancer as not being material.
The signatures of the parties or their agents:

Van Niekerk v Smith: a signature doesn’t only mean the writing of a
persons name and surname but any mark that identifies it as an act
of the party.
The Alienation of Land Act says nothing on where the signatures

should appear on the document and they therefore may be annexed
anywhere as long as it’s clear they were intended to cover the whole
document. Normally they sign at the end. If the deed has more than
one page it’s not necessary that each page be signed. If the purchaser
signs in the space provided for signature, there is a prima facie valid
contract.
Someone who signs as an agent – must indicate they are acting in a
representative capacity.
Rectification
A deed of alienation can be rectified if it doesn’t correctly reflect the
intention of the parties. – Before it can be rectified it must be prima
facie valid – it must at least:
a) Contain the essentialia of the contract in question
b) Disclose the identity of the parties
c) Be signed by the parties/agents
Where it doesn’t contain these it’s invalid and can’t be rectified.

If an essential term has been incorrectly reproduced in the document
– the contract is prima facie valid and capable of rectification.
If a non-essential (but material) term has been omitted or incorrectly
reproduced contract is prima facie valid and capable of rectification.

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Alienation through an agent:

the deed of alienation needs to be signed.
Agent: a person who has been authorized by another, the principal, to
conclude the alienation on his behalf.
In terms of S2 (1) the agent may conclude the alienation only if the
principal has authorized him to do so in writing.
The following people aren’t agents in terms of S2 (1) and don’t need
the written authority of the person they represent:
a) A father as natural guardian of a child
b) Guardian of a minor
c) Husband/wife married in community of property
d) Partner who acts on behalf of his co-partners
e) Curator of a person whose unfit to manage his own affairs
f) The executor of a deceased estate
g) Trustee of an insolvent estate
h) Liquidator of a company
These people derive their authority to act on another behalf from

common law or statute.
An attorney/advocate has no ex lege authority (derived from law) to
enter into a deed of alienation on behalf of his client = needs written
authority.
Nature and extent of requited written authority NB MCQ!:
1) The agents authority must be in writing

2) The document in which the authority is granted need not
be signed
3) The agent need not be named – her identity can be
objectively determined
4) An agent can act on written authority only if she is aware
that the written authority exists – she need not have the
authority in her possession when she signs the deed of
alienation
5) The agent may derive her authority to act on behalf of the
principal from a general authorization or may be specially
authorized to conclude a specific alienation
6) In view of the fact that the agent must act on the
principals written authorization, the principal cant ratify
a deed of alienation which ahs been entered into on his
behalf by a person who didn’t have the necessary written
authority when he signed the deed, or who exceeds his
authority when he signed
7) The doctrine of undisclosed principal cant find application
with the alienation of land – if an agent enters into a deed
of alienation without disclosing that he’s acting as a
representative, the undisclosed principal cant derive any

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direct benefit from the contract = reason is that the

identity of every party must appear from the deed of
alienation itself and extrinsic evidence aimed at showing
that there was another [party to the contract is
inadmissible. If an agent doesn’t indicate that she’s an
agent she is personally bound to the deed of alienation.
Agent and representative of companies

When a company acts through its organs, the act is that of the
company – they aren’t agents and don’t require written authorization
when they enter into a deed of alienation on the companies behalf.
Company may also make use of agents – needs written authority.
No one can act as representative for a non-existent principal, BUT S35

of the Companies Act makes it possible for a person to conclude a
contract as agent for a company which is still to be incorporated and
S2 (2) of the Alienation of Land Act provides that S2 (1) shall not
derogate from the provisions of any law relating to the conclusion of
written contracts by a person professing to act as the agent for a
company not yet formed, incorporated or registered.
Sales of land by public auction

S3 (2) provides that S2 doesn’t apply to the sale of land by public
auction – it also prescribes formalities in the case where land is sold
on installments by public auction = where land is sold by public
auction but the purchase price or other charges payable in more than
2 installments over a period of more than one year.
One of these formalities is that he seller must provide the buyer with a
copy of the contract of sale immediately after the auction.
This doesn’t mean that the contract is ratified by its reduction into
writing.
A contract of sale comes into existence at an auction when the bid is
knocked down to the buyer and even if the seller should subsequently
fail to furnish the buyer with a copy of the contract, the oral contract
will still be valid – the buyer then has the right to cancel the contract.
Variation and revival of deeds of alienation

If the parties to a deed of alienation enter into a subsequent
agreement which has the effect of varying any of the material terms of
the deed, the subsequent agreement must be reduced to writing and
must be signed.
An informal (oral) variation of a deed ought to be regarded as without
effect and not affect the validity of the original deed.
A unilateral waiver by one party to the deed of alienation of a right,

which eh derives from the deed, isn’t a variation of the deed and
therefore need not be in writing.

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An agreement in terms of which a deed is cancelled and one releasing

a party to the deed from some of his duties don’t amount to variations
of the deed – don’t need to be reduced to writing.
Cancellation of the deed may be revived informally by the parties – e.g.

where the party who cancelled waives the rights derived from the
cancellation when the other party requests him to do so.
The cooling off right of the perspective purchaser or purchaser to

revoke the offer or terminate the contract of sale.
S2 (2A): requires that the deed must contain the right of a purchaser
or prospective purchaser to revoke the offer or terminate the deed in
terms of S29A.
S29A confers on certain purchasers of residential land the right to
terminate the deed or revoke an offer to purchase land within 5 days
after signing the alienation or offer.
Consequence of non-compliance with formalities

Failure to comply with S2 (1):
S2 (1): provides that no alienation of land shall be of any force or effect
unless its contained in the deed signed by the parties/their agents
with written authority. – Alienation, which doesn’t comply with the
formal requirements, is void and neither party is bound by it.
It may happen that one of the parties renders performance before they
become aware that the formal requirements haven’t been complied
with = this is regulated by S28:
1) If the person to who the land has been alienated has
rendered full performance and the land has been
transferred to her, the alienation is ab initio valid,
notwithstanding the fact that the formal requirements
haven’t been complied with. In such a case neither party
can reclaim performance
2) If the person to who the land has been alienated has
rendered only partial performance, or has rendered full
performance but the land hasn’t yet been transferred,
each party can reclaim from the other that which she has
performed. The alienee is entitled to interest on any
amount, which she has paid in terms of the deed,
calculated from the date of recovery at the rate prescribed
by the minister. She is also entitled to reasonable
compensation for necessary and useful expenses, which
she incurred in connection with the land. The alienator is
also entitled to reasonable compensation for the
occupation, use and enjoyment, which the alienee had in
the land, as well as compensation for any damage
intentionally or negligently caused to the land.
S28 was drafted with a contract of sale in mind – but the provisions
apply to all alienations and to exchange and donation.

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Failure to comply with S2 (2A)

Although the Act doesn’t expressly state what the consequences are of
failure to refer to the cooling off right in the contract of sale – Cape
High Court – said the contract is void (Sayers v Kahn).
One or both parties may render partial or full performance before they
become aware that there is no reference to the cooling off right in the
contract – the legislature failed to make S28 applicable to such
situations.
The normal position would be that any person who renders a
performance in terms of a void contract could reclaim her
performance.
The Transvaal courts have adopted the following position:

a) If the contracting party rendered performance in terms of a
contract which was void for non-compliance with the prescribed
formalities, she was entitled to reclaim her performance
b) Recovery was barred where both parties performed in full in
terms of the void contract – in such a case neither party can
recover their performance
c) Recover was barred if the defendant was willing and able to
perform in terms of the void contract – plaintiff had to allege in
his particulars of claim that the defendant was unwilling or
unable to render performance – if she failed to do so her claim
was excipiable.
The effect of these rules was that a contract, which was wholly void
and could in principle have no effect, could be enforced if one or both
parties rendered full or partial performance
This was so much in conflict with the general principle of the law of
contract that the decisions in question were severely criticized and
when the matter came before the Cape Provincial Division it refused to
follow the Transvaal approach.
The “cooling-off” rights of certain purchasers of land

The contract contains more than just terms to which the parties have
agreed – the law may incorporate terms into the contract by legal rules
= naturalia.
The naturalia may either be directory or peremptory. Most of the

naturalia in a contract of sale are directory in operation – the parties
are free to make alternative arrangements.
The seller is liable, for example if the buyer is evicted or if the thing
sold has hidden defects, but in the case of a credit transaction, the
seller can’t evade such liability by way of mutual agreement.

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Peremptory naturalia, which are created by the legislature – S29A

confers on certain purchasers or prospective purchasers of residential
land the right to terminate the deed of alienation or to revoke an offer
to purchase land within 5 days after signing the offer. They exercise
this right by written notice delivered to the seller.
They can’t waive the rights conferred on him in terms of S29A and any
such waiver is void.
Application of the “cooling-off” right

Purpose of S29A is to protect purchasers against the high-pressure
selling techniques, their own inexperience in property transactions
and their irrational decision-making.
A decision to buy land is a major decision involving a huge long-term
financial commitment and a wrong decision can cause economic,
financial and social hardship.
So cooling off is confined to people who are in need of protection.
S1 defines land for the purposes of S29A by confining its meaning to

residential land and extending its meaning to all forms of residence.
Agricultural land is specifically excluded and is defined as any land
used or intended to be used, mainly for commercial farming
operations.
Land includes, besides its common law meaning:
1. Land used mainly for residential purposes

2. Any housing interest (housing Development Schemes for
Retired Persons Act)
3. Share block
The cooling-off isn’t available where:
1. The purchase price of the land or the price offered exceeds

R250 000 or a higher amount as the minister may prescribe
2. The purchaser is a trust or someone other than a natural
person
3. He bought the land at a publicly advertised auction
4. The seller and buyer previously entered into a deed of
alienation of the same land on the same terms
5. The purchaser has reserved the right, in terms of the deed to
nominate or appoint another person to take over his rights and
obligations
6. The purchaser purchases the land by exercising an option
which was open for exercise for a period of at least 5 days
Exercise of the “cooling-off” right

The purchaser or prospective purchaser exercises his right by written
notice delivered to the seller – it’s only effective if the purchaser signs
it, identifies the offer or deed that’s being revoked and is unconditional

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Someone who signs an offer to buy land or a deed, within 5 days after
having signed the offer or deed and before he has exercised his
cooling-off right in respect of the transaction, will on signature of the
transaction be deemed to have exercised his cooling-off right to revoke
or terminate.
Such a purchaser must notify the seller in the earlier transaction of
the revocation or termination in writing- failure to do so is a criminal
offence.
This automatic exercise of the cooing-off right doesn’t apply to a

purchaser or prospective purchaser who bona fide intends to
purchase both the land to which the earlier transaction and the land
to which the later transaction relate.
Effect of the exercise of the cooling-off right

Where the offer is revoked or the deed is terminated everyone who got
any amount from the purchaser/prospective purchaser must refund
the full amount of such payment to the purchaser within 10 days of
the date on which the written notice was delivered to the seller.
No one will be entitled to any remuneration payable in respect of the
deed, which the purchaser has revoked or terminated, and no such
person or agent will be entitled to claim damages from any person.

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Lease:
Essentialia of a contract:
These classify a contract as one of a specific type – e.g. contract of sale
For a contract of sale you look at:
a) An undertaking by the seller to deliver the thing to the buyer
b) An undertaking by the buyer to pay a sum of money in
exchange for the thing
If the contract doesn’t have these terms it isn’t a contract of sale.

If it doesn’t have the essentialia of any type of contract but is a valid
contract it will be a contract sui generis.
Naturalia:
These are included in the contract by operation of law – they don’t
need to be expressly negotiated by the parties (they are based on
notions that are fair and reasonable). The operation of these natural
terms can be excluded by agreement between the parties – i.e. the
operation of the naturalia depends on the will of the parties.
When the parties intend to enter into a type of contract = they agree
on the essentialia of the contract concerned.
The essentialia and the naturalia which is part of the contract by
operation of law amount to the contract, which are enough particulars
to ensure there is no doubt what they intend.
Parties are also free to insert other terms in their contract which the
essentialia and naturalia don’t provide for, in order to meet specific
requirements = incidental terms.
Definition and essential elements
Contract of lease: is a reciprocal agreement between the lessor and the

lessee, whereby the lessor binds himself to give the lessee the
temporary use and enjoyment of the thing in return for the payment of
the rent.
Requirements for a valid contract:
There is no contract without actual agreement, but not every

agreement gives rise to a valid contract.
If the requirements aren’t complied with the contract will be rendered
null and void.
Essential elements of a contract:

for a contract of lease for which the lessor and lessee must reach an
agreement to conclude a valid enforceable contract are that:

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1. The lessor deliver and the lessee receive a thing or property for
the temporary use and enjoyment
2. It must be a thing or property which is being let
3. An amount of rent must be paid for the use and enjoyment
An agreement, which doesn’t comply with these 3 requirements, isn’t
a contract of lease.
1. The parties must agree to deliver and receive a specific thing:
Performance must be possible.

Performance becomes impossible through:
1. Supervening impossibility: through no fault of the lessor
2. Prevention of performance: 2 forms:
a) Absolute impossibility: performance is prevented permanently
b) Relative prevention: where its only performance by the debtor
which is impossible (breach of contract in terms of repudiation)
The letting and hiring of the leased thing must be temporary and not
perpetuity:
The lease can’t be forever – only a contract in which temporary use
and enjoyment of the thing is granted = lease.
This doesn’t mean that a contract in which the use and enjoyment of
a thing is granted to a party in perpetuity is for that reason invalid – it
means that such a contract isn’t one of letting an hiring.
The requirement that a contract of lease must be of a limited duration

is complied with in the following cases:
1. The lease is run for a definite period (Steyn)
2. If the lease is to run until the occurrence of an event which is
sure to occur although the date of its occurrence is uncertain
(Davy)
3. If the lease is at the will of the lessor or lessee (Hart)
4. If the lease is for an indefinite time but the rent is payable
periodically (means that the lease can be terminated by either
party by reasonable notice to the other).
The thing can either be corporeal, incorporeal or a thing still to come

into existence:
In Young and Graham: there was no doubt that an incorporeal thing
can form the subject of a lease.
The matter arose from granting the tenant the power to conduct a
business on a particular piece of land – the court said that what was let
was an incorporeal right to trade.
The view that incorporeal things can be let and hired is unconvincing
– in the abovementioned cases, corporeal things were being let even
though the lessee’s powers of use and enjoyment may be restricted by
the contract.

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In the case of a usufructry – the thing, which is the object of the

usufruct, is being let.
The fact that the lessor is the usufructry of a thing = the lessor is able,
because of his valid title, to protect the lessee in the possession of the
thing.
Where the lessor empowers the lessee to do business on certain

premises, the premises are let with the understanding that the tenant
will only have a certain proportion of the use and enjoyment thereof.
The fact that a lessee’s powers are limited = lease contract.
As long as the performances of the parties are ascertainable there is

no objection to the landlords agreeing to deliver only a portion of an
existing thing (A lets a flat to B).
A thing which hasn’t yet come into existence can be let – the fact that
the undertaking is to deliver such a thing doesn’t automatically mean
that there can’t be a lease – locatio conductio rei spertae: if the thing
doesn’t come into being the lessor's performance becomes impossible.
Making a fungible thing available at a price can’t be a lease.

Letting and hiring presumes that the use and enjoyment of the thing
will be made available and not that the lessee will use up the thing.
Lease: the parties limit the power, which the lessee may exercise over
a thing. Only the use and fruits of the thing are granted to the tenant
Lessee must pay rent for the leased thing:

The counter performance for the use and enjoyment of the leased
thing MUST sound in money otherwise there is no contract of lease.
One exception: rural leases where the rent is either a definite quantity
or an agreed proportion of the produce of the leased property.
Legality of the contract of lease:
The conclusion of the contract, its performance and its objective must
be lawful – it’s unlawful when its reason or conclusion is forbidden by
statute, common law or is contrary to public interest/ good morals.
Consequences of illegality:
the contract is void and unenforceable – the court won’t enforce the
illegal lease irrespective of whether the parties to the contract raise
the question of illegality.
If illegality is alleged, the party alleging it must prove it.

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Ex Turpi Causa:
the 1st consequence of nullity of an illegal contract is that neither
party may institute an action on the contract – ex turpi causa: from
an immoral cause no action arises.
This is an absolute rule of contract = no exceptions.
The fact that one of the parties has performed her undertaking makes
no difference because performance doesn’t render the contract lawful.
The courts will refuse to enforce such a contract.
The unlawfulness of a contract = that 1 party cant claim performance

from the other but the unlawfulness also means that a party who has
suffered damages as a result of the contract cant claim damages from
the other party by relying on the contract.
Par Delictum Rule:

It seems unfair to allow the lessor to keep the rent paid by the lessee
in terms of an illegal contract:
e.g. where X lets his house to Y, Y operates a brothel and X
contravenes the Rental Housing Act by not investing the deposit
in an interest bearing account. X knows that Y wants to operate
a brothel and knows its contrary to the law – X charges a high
rent of R30 000p/m and required a deposit of R60 000. Because
the contract is void restitution should in principle be granted –
BUT the par delictum rule prevents this = where both parties are
guilty, the one who is in possession is in the stronger position –
based on unjust enrichment.
This rule is founded on the public’s interest, as the court will do
everything in its power to discourage an unlawful contract.
Relaxation of the Par Delictum Rule:

the though behind the rule is that the party who has acted
disgracefully by executing the performance shouldn’t be able to
recover such performance – where a party to an unlawful contract has
performed but his performance isn’t disgraceful = he can recover what
he has performed from the other party.
The argument raised to relax the application of this rule is that the
par delictum rule is founded on public interest which demand that
justice be done = it cant be in the public interest to enforce the rule
where its unjust to the plaintiff.
The par delictum rule should be applied as a general rule to which an
exception must be made whenever simple justice between man and
man demands it.
The contract of lease is reciprocal, and thus, there are

numerous obligations / duties imposed on the parties to the
agreement. These are NB!

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Duties of the lessor:

The lessor must:
1. Make available or deliver the use and enjoyment of the property
2. Refrain from disturbing the lessee’s use and enjoyment of the
property
3. To place and maintain the property in the condition agreed
upon
4. Warrant against eviction
Failure to comply with these = breach:

- Failure to deliver: mora debitoris
- Delivery of defective performance: positive
malperformance
- Delivery to someone other than the contracting party:
repudiation
- Failure to prevent eviction: positive malperformance.
DISCUSSION ON THE DUTIES OF THE LESSOR:
1. Lessor must deliver the thing:
The lessor must deliver the thing at the agreed time and place – he
must make it available to the lessee.
Delivery must be such that the lessee gets vacuo possession.
The lessor must ensure that subject to an agreement to the contrary
no one will, lawfully or unlawfully, interfere with the lessee’s exercise
of the full and undisturbed use and enjoyment of the thing. The lessor
must deliver everything without which the thing can’t be used
properly.
Problem: where the lessor lets the same object to 2 different parties
but established neither in possession of the object:
A enters into a contract of lease with B, in terms of which B rents A’s
thing, before he takes possession A leases the same thing to C.
If C isn’t in possession and at the time of the contact was aware of the
contract between A and B, B’s right prevails. B can prevent A from
delivering the object to C by means of an interdict.
Where C contracted bona fide with A = problem:
Some jurists apply the prior in tempore rule – B can prevent A from
putting C in possession.
Other holds that C should be given possession.
Our courts follow the prior in tempore rule.
Lessee’s remedies:
if there is a major breach of contract – where the debtor fails to deliver
the thing = cancellation, this includes the case where the condition of

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the property is such that it’s unfit for the purposes for which it was let
= can cancel and possibly to get an action for specific performance.
If the property is delivered on the due date but isn’t up to the

standard of the contract (defective) this is a case of positive
malperformance and the lessee can recover his losses, provided it was
foreseeable, by means of an action for damages.
Damages claimed may include both actual and consequential loss –

the rule of mitigation applies.
2. Lessor mustn’t disturb the tenant in his possession:
Duty to give undisturbed use and enjoyment:

Once the property is delivered to the lessee – the lessor can’t disturb
his use and enjoyment thereof, except lawfully: where he reasonably
required such right to inspect the property or effect repairs.
Sishen Hotel: AD extended this rule by interpreting the lessee’s right

against the lessor to include a restraint on him to refrain from direct
or indirect conduct, which negatively affects the profitability of the
leased thing.
Facts: the parties concluded a 20 year lease on a hotel – the hotel was
next to a national road, which increased custom – 8years after
concluding the lease, the national road was diverted on application
and at the expanse of the lessor, to expand his mining operations in
the area = the result was that the hotels profits declined and
eventually turned to losses. 3 years later the hotel closed down and
the lessee instituted action against the respondent for the payment of
damages for breach of contract = the claim was dismissed by the court
a quo.
The appellant raised the argument that the contract had an implied
term that the respondent wouldn’t take any steps to interfere with the
access to the hotel and prevent the flow of custom to the hotel.
The judge: Commodus usus could include the idea of profit where the
lessee runs a business from the leased premises.
The judge found that because the lessee conducted business to make
a profit, closing or diverting the road indirectly infringed with his use.
(Sishen Hotel, the court found that in that case commodus usus
included the idea of profit where the lessee ran a business from
the leased premises. However, this seems to amount to a tacit
term implied within the circumstances of that case as opposed
to a term, which would apply in all cases of a similar nature.
This is thus an exception and not a general rule.)

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This extension of the meaning of Commodus usus was challenged in

Sweets from Heaven v Ster Kinekor:
Q: whether profitability was one of the naturalia of a commercial lease
or whether the lessee has to rely on a tacit term.
SK was the lessee of an entertainment center and sub-lets the

premises to 3rd parties.
A franchise of SFH occupied the premises through the 1st appellant
with the consent of SK.
They then sublet to another sweet shop situated next door to SFH –
they both sold similar products.
Court a quo: granted the interim interdict to prohibit SK from giving

the 2nd respondent occupation of the premises.
The applicants based their claim on the respondent’s failure to ensure
free and undisturbed use and enjoyment (commodus usus) of the
property in allowing the 2nd respondent to compete.
The judge found that the lessor hadn’t breached its obligations and of
the lessee to succeed the lease contract would have to tacitly or
otherwise prohibit the lessor from such conduct.
It was held that the lessor was entitled to let the business premises to
competitors.
I.e. the extension in Sishen wasn’t regarded as a naturalia of the lease

contract.
Also included in this obligation is:

- Lessor isn’t entitled to take the fruits of the leased property
- Lessor cant graze cattle on land let to another
- Lessor may not exclude the lessee from the leased property or
from a portion thereof or deprive him of the use thereof
- It’s a breach of this obligation if the lessor who has undertaken
to prevent plastic bags blowing onto land let for grazing fails to
do so.
Remedies
Since the lessor’s obligation is negative, the lessees’ normal remedies
are an interdict, cancellation and damages.
Remission of rent isn’t claimable.
3. Lessor must deliver the thing in a specific condition and

maintain it
The condition of the property at the time it’s made available:

Poynton v Cran: the condition in which the thing is delivered must be
in accordance with the provisions (express or tacit) of the agreement

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If there is no express agreement: the lessor must deliver the thing in

the condition in which it was when the contract was entered into in
accordance with any implied agreement.
So where the thing has been let for a specific purpose it must be
delivered in such a condition so it’s fit for that purpose.
Where there’s an express agreement about the condition of a thing –
lessor must comply.
A lease creates continuous obligations – the lessor must ensure that
the thing is in a fit and proper state.
At the moment of delivery there must be no defects in the article,

which are contrary to the contract.
Should the defects have occurred after the contract was entered into
but during the subsistence of the contract = the lessor is compelled to
effect repairs to eliminate the defects provided there are no
stipulations to the contrary.
The condition of the thing during the currency of the lease

Lessor need not carry out repairs due to wear and tear and
deterioration through use, which are laid to the charge of the lessee.
BUT as soon as wear and tear reach such a stage that the property is
no longer fit for the purpose of lease – lessor is compelled to carry out
repairs so to comply with the contractual obligation to keep the
property in a fit state.
The lessor is liable for breach only if he has fault – when he is
unaware of the fact that the defect has occurred after the contract has
been concluded, he cant be blamed if he fails to effect repairs – our
law: lessee should notify the lessor of a defect, unless the lessor was
aware or should have been aware of such a defect.
Repair: landlord is liable for repairs don’t necessarily mean that he

must make structural improvements (except if necessary in view of the
purpose served by the rented property) he must merely repair
structural defects.
Problem: where the lessee undertake to effect repairs – must he also

repair structural defects = Salmon: the judge held that the lessee is
only liable to make repairs that are ordinarily required if he
undertakes to keep the house in a good condition – he isn’t required to
make structural alterations to ensure freedom from leaking =
subsidiary parts of the property must be replaced but he need not
renew the whole thing so as to ensure its continued existence.
Q: Sarkin: the lessee had undertaken to repair the thatched roof on the
premises. In an action for forfeiture of the lease on the ground that the
lessee neglected repairs – plaintiff proved that at the commencement of
the lease that the roof was in a proper state of repair and in a condition,
which fulfilled the requirements of tenancy until its termination.

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I.e. if the lessee hadn’t neglected ordinary repairs the roof would have
lasted the whole course of the lease.
If the lease contains a clause putting an obligation to maintain on the

lessee, such obligation must be interpreted in light of the condition of
the premises at the date when the lease became operative.
The lessee isn’t obliged to improve the roof in the sense of returning it
to the lessor in a better condition than it was when he took
occupation – where the roof is no longer capable of repair the lessee
wont be obliged to put on a new roof, such renewal must be done by
the landlord.
Contractual duty/ ex lege warranty

If the duty to deliver the thing in a specific condition and maintain it
involved ordinary duties, the lessor isn’t liable for damages arising
from the fact that the thing wasn’t at any time in the required
condition, of which fact the lessor was either unaware, or ought not to
have been aware or if he had taken all reasonable precautions against
it.
The reason for the distinction is that fault is normally required for
liability by reason of breach. Fault isn’t required for liability by virtue
of breach of warranty.
With an ex lege warranty in a lease contract = the fact that he was
unaware of the reputed defect and that it wasn’t possible for him to
have been reasonable aware of it, or he had taken all precautions
won’t avail the lessor.
Remedies:
1. Cancellation
2. Specific performance:
Marais: obligation to repair is vague so the court can’t
supervise an order of specific performance. This view is said to
be a generalization.
The rule that a court can’t grant specific performance where the
order would be difficult to enforce is open to doubt. It’s the duty
of the party in whose favour the order is given to repair and the
court may then take necessary steps.
The extension of this rule is questionable.
3. Remission of rent:
If the lessor fails to comply with his requirement for repairs, the
lessee may continue to suffer the inconvenience and may then
claim remission of rent in accordance with the degree of
inconvenience suffered (damages).
4. Damages:
Claimed of loss suffered as a result of a defect
a) Tenant’s knowledge: where the lessee knows of the defect
at the time he enters into the contract, he loses his claim
for damages against the lessor for loss caused by the

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defect – the lessee must safeguard himself by asking the

lessor for a warranty.
If he doesn’t do so he is held to have assumed the risk for
such damage – but the lessee is under no duty to inspect
the property before the lease – where he doesn’t inspect it
he loses his right to claim damages for all patent defects,
which existed at the time of inspection.
b) Landlord actual knowledge of the defect: where he knows
of the defect he’s liable for any loss caused by the defect –
where he gives a warranty he warrants the property to be
free from defects, not caring whether that is absolutely so
or not = he is liable even if he wasn’t aware of the defect.
c) Where the lessor should have known of the defect: old
writers: not bound to compensate the lessee for loss
because of the lessor's failure to maintain unless he knew
or because of his trade should have known of their
defective condition.
Cooper: lessor should be responsible for loss suffered by
the lessee caused by a defect in the thing even if he had
no knowledge of the defect.
d) Where the lessor has no actual knowledge: he isn’t liable
unless he gave an express warranty – Cooper: says that
the tenant may also cancel the contract if the defect is
serious or claim a remission of rent.
These don’t apply in cases where the lessee is responsible or has

damaged the thing let.
4. Landlord must guarantee the tenant against eviction
Warranty against eviction: this binds the lessor to compensate the

lessee who has been evicted from the property by a 3rd party with a
better title – if the lessor has no title and the owner evicts the lessee –
the lessor is liable in damages unless the lessee was aware of the lack
of title.
Glatthaar: plaintiff owned a portion of the farm, he sold it to C who

took possession and before he got ownership, he let the property to
defendant; C didn’t at any time become the owner because he failed to
pay the purchase price and the plaintiff cancelled the sale. After the
sale was cancelled the plaintiff sued the defendant for ejectment,
where the defendant pleaded that he was lawfully in possession as
lessee, that he had paid 4 years rent in advance and that the plaintiff
was bound to recognize his possession. The plea failed and the order
of ejectment was granted.

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Huur Gaat Voor Koop: allowed the lessee too turns off of the land the
landowner himself. It was C who must make good any losses, which
were incurred.
Lessor may validly let something belonging to another, lessor doesn’t
guarantee his title – the only obligation resting on the lessor is to
place the lessee in undisturbed possession and to maintain him in
undisturbed possession.
As with a contract of sale = law presumed the existence of an ex lege
warranty against eviction in a contract of lease.
The eviction of a lessee is usually governed by the same rules as the
eviction of a purchaser.
E.g. the lessor doesn’t guarantee against unlawful hindrances and the
mere threat of eviction doesn’t yet constitute breach of contract by the
lessor. The lessee would have no claim against the lessor if she leaves
as soon as the 3rd party threatens to evict her. She must go on paying
the rent – if she fails to do so = breach. Warranty doesn’t apply if the
disturbance is because of an act of God (including expropriation).
Remedies:
1. Cancellation
2. Damages: lessee who entered into the lease knows or ought to
know that the lessor’s title is limited, has no right to damages if
he is required to leave as a result of the termination of the
lessor’s title.
The lessee will, irrespective of his knowledge have a right to
damages if the lessor terminates his right of his own volition (by
surrendering it).

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Tenant’s duties:
1. Tenant must pay the rent
2. Must use the property in the proper manner
3. Must restore the property to the lessor on the termination of the
lease
4. Must carry out any special obligation imposed on him by the
agreement of lease.
DISCUSSION ON THE DUTIES OF THE TENANT / LESSEE:
1. The tenant must pay the rent
Certainty: ascertain ability of the contents of the agreement – if the

performance is vague the contract is void.
Since enforcement of an obligation, the rights and duties of which
can’t be determined – contract where performance is negotiated at a
later stage or where one party has a discretion = invalid.
Certainty of performance can be attained in 2 ways:

1. By expressly defining the rights and obligations
2. By parties agreeing to identify an external standard by which
the performance can be determined.
Place of payment:
where does payment take place if the contract doesn’t provide a place
Q: Must the creditor seek out the debtor for payment?
Conflict among writers:

Some: creditor must seek out his debtor.
Others: payment must be made where the contract was concluded.
There is usually a trade usage: while the interests of the parties can
be deduced from the surrounding circumstances.
Where there is no stipulation and no trade usage = it’s thought in SA
that creditors must seek out the debtor.
De Wet and Van Wyk: where there is no other indication, the debtor
must pay at the place where the contract was concluded but they
don’t deal exhaustively with the matter: e.g. A and B (PTA) while in
JHB enter into a contract of lease of a house in PTA- no stipulation or
trade usage on where the rent must be paid = stupid to hold the rent
must be paid in JHB.
Venter: the lease between 2 parties had a forfeiture clause in the event
of non-payment of the rent (fixed date). The lessee sent the rent on the
due date to a certain bank and told the lessor. The bank credited the
account of another Venter – when the lessor called the bank he was
told that there was no money – he cancelled the lease.

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The mistake was discovered and the bank paid but the lessor refused
to accept.
NOW: if the creditor must seek out the debtor then the lessor would
have to apply to the lessee for payment and the mistake would have
immediately been discovered.
Q: was it the lessor’s duty to ask the lessee for payment, since there
was originally no money at the bank.
AD: unanimous – where the contract fixes a date for payment = the
debtor must seek out the creditor to pay (i.e. must tender payment to
avoid breach of contract.
OUR LAW: where a date for payment has been fixed the debtor must
seek out the creditor unless usage indicates otherwise.
Time of payment
If the parties agree that rent must be paid on a specific date and at a
specific place – no uncertainty.
If they stipulated a specific day – the lessee has until midnight to pay
– this doesn’t mean that he must keep trying to pay until midnight = if
he has tried unsuccessfully to pay during the afternoon he doesn’t
need to try present payment during the evening as well.
BUT if the lessor can’t be found during the morning, the lessee is
expected to try again later on in the day.
After that mora creditoris will arise.
If payment on a specific day is excused (Sunday), the lessee has until

the next business day to pay.
If the day of payment is a public holiday and rent doesn’t have to be
paid at the business address – decided according t the intention of the
parties.
If it’s the lessor's fault that payment couldn’t be made on the day
specified = he will be in mora.
If according to the agreement payment has been made in advance, the

rent is payable on the 1st day of the period of the lease without any
demand for payment having being made on the lessee.
Where the contract has no specific day for payment, the rent becomes
due only after the expiry of the lease. It’s not certain whether it’s
necessary for the lessor to place the lessee in mora after the lease has
expired.
Consequences of a failure to pay the rent on time

If the lessee doesn’t pay the rent on time – breach and normal
remedies are at the lessor’s disposal – the lessor may uphold the
contract, claim rent, which is owing and damages. Or he may rescind
the contract.

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If there’s a term in the contract that the landlord may resile if the
tenant fails to pay the rent – lessor automatically has a right of
rescission.
There’s uncertainty about the circumstances in which the landlord is
entitled to resile on the ground of the tenants failure to pay the rent if
there is no term in the contract covering this contingency.
At common law: the landlord couldn’t resile before the rent has been
in arrears for 2 years.
BUT: in Goldburg: AD decided that the 2 year rule had become
superfluous and that a lessor could get a right to rescind by giving the
lessee notice of rescission.
Even if the lessor is entitled to rescind the contract on the ground of
the lessee’s failure to pay the rent, he forfeits this right if he waives it
expressly or by implication.
Waiver takes place if the lessor claims the rent or takes receipt of the
rent for a certain period of the lease – after this he can no longer resile
on the ground of failure to pay the rent for that particular period – but
isn’t barred from resiling on the ground of subsequent failure.
Waiver can also take place if the lessor doesn’t resile within a
reasonable time after he becomes entitled to do so.
If despite prior acceptance of late payment of rent, the lessor gives the
lessee due notice insisting of future payment of rent being timeous
and thereafter the lessee fails to pay timeously, the lessor will be
entitled to cancel the lease on this ground.
Eviction procedure:
Before: SA courts held that in a claim for eviction it was sufficient to
allege that the plaintiff is the owner of the property and the defendant
was in possession thereof.
It was unnecessary for the owner to allege that the defendant was in
wrongful unlawful occupation = because ownership entitles
possession.
The plaintiff can establish ownership by bringing the title deed or get
admission of the plaintiff’s ownership by the defendant – onus then
moves to the defendant to prove his right of occupation.
S26 (3) Constitution: gives rise to the promulgation of the Prevention

of Illegal Eviction from Unlawful Occupation of Land Act (PIE) –
requires the eviction of unlawful occupiers.
Ndlovu and Becker: Q: whether PIE applied to people who once had
lawful possession but whose possession becomes unlawful
The tenant’s lease in Ndlovu appeal was terminated lawfully but he
refused to vacate.
In Bekker - appeal a mortgage bond had been called up and the
property was sold in execution and transferred to the applicant. The
owner refused to vacate the property.

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In neither case did the applicant for eviction comply with the
procedural requirements for PIE.
In cases where the defaulting tenant and mortgagors fail to vacate the
property they are said to be holding over.
PIE applies to an unlawful occupier which = someone who occupies
land without the express or tacit consent of the owner or the person in
charge or without any other right in law to occupy such land.
Q: whether an unlawful occupier includes holding over?
The court held that the significance of this question is that should PIE
not apply to cases of holding over, then a landlord or a bank may evict
the defaulting tenant or mortgagee from an urban residence by
satisfying the common law pleading requirements.
If PIE is applicable to cases of holding over then the procedure in the

Act must be followed.
The court concluded that PIE did apply to cases of holding over = for
an owner to get an eviction order the procedural and substantive
safeguards for the PIE have to be met.
Eviction procedure:
Occupation for less than 6 months: if an unlawful occupier has
occupied premises for less than 6 months at the time that proceedings
are instituted, a court may grant an order for eviction if its of the
opinion that its just and equitable to do so after considering all the
relevant circumstances: look at the needs and rights of the elderly,
children, disabled and households headed by woman.
Occupation of more than 6 months: court may grant an order for

eviction if its of the opinion that its just and equitable to do so after
considering all the relevant circumstances = look at the needs of the
elderly, children, disabled and households headed by woman and the
fact that land has been made available by a municipality, organ of
state or another landowner. The circumstance dealing with alternative
accommodation does not have to be considered where the property
has been sold in a sale of execution pursuant to a mortgage, even
where the occupier has occupied the premises for more than six
months (Ives v Rajah). The court must balance the interests of the
owner and the occupier. The court has held that an unlawful occupier
cannot expect to occupy the premises indefinitely at the expense of
the owner (Maphango, the court held that “it will, generally, not be
just and equitable for a court to grant an eviction order where the
effect of such an order would be to render the occupiers of the
property homeless”).

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Rent must consist in money:

if there is no price to be paid for the use of a thing there is no lease.
Lease must sound in money – BUT exception: lessee’s performance
may consist in portion of the proceeds of the thing leased.
Rubin v Botha: AD accepted that there was a lease despite the fact
that the lessee performance didn’t consist in the payment of money.
Otherwise than in Roman law where agreements had to be fitted into
specific categories to be enforceable, in our law distinctions are drawn
between contracts with a view of specific naturalia or to special
requirements which the law deems desirable in the light of the
characteristics of the modern contract.
Q: whether a contract, which doesn’t require the lessee to render a
performance in money, can and should be regarded in the same light
as a contract in terms of which the lessee’s performance sounds in
money.
Look at 2 situations:
1. Its possible to agree that each party will make available the
thing which he must deliver only for a limited time, as where 2
farmers, each of whom have one ox, agree to plough with both
oxen in turn – if this contract is a lease its impossible to
distinguish between the lessor and lessee.
2. Its possible that one party undertakes to make the thing he has
delivered available to the other on a permanent basis, just as
the lessee permanently surrenders the rent to the lessor – if
services are rendered in exchange for the use of a thing =
possession is the same- can distinguish between lessor and
lessee – PROBLEM: naturalia of a lease don’t make provision for
a case where the lessees performance = delivery of a thing =
need an adjustment of the naturalia of a lease before a contract
without rent can be regarded as a lease.
Q: legal policy – rent must consist in money – if the rent doesn’t sound
in money, the contact isn’t a lease with the result that if its valid
contract it will be governed by the general principles of the law of
contract.
The fundamental question is whether the lessee’s performance can

consist in something other than the payment of a sum of money.
In Rubin v Botha, the court accepted that there was a lease despite
that fact that, in casu, the lessee’s performance did not consist in the
payment of money. In De Jager v Sisana, the court ruled that no lease
exists. Therefore the squatter cannot rely on the ‘huur gaat voor koop’
rule. The squatter only had a right to occupation in return for his
services. This innominate contract ceases to exist by reason of the sale
of the land by the person entitled to the services. The squatter has not
shown any legal right to occupation.

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Y, however, has the right to decide whether he will allow the squatter
to continue with his services, in return for the right to occupy his
land. In spite of various attempts made by Y to prove to the squatter
that he (Y) is truly the new owner of the land, the squatter still refuses
to recognise Y as the owner. Y therefore had the right to have the
squatter removed from his land. It is therefore a question of legal
policy. Except in the case of the bywoner’s contract, the rent can
consist only in money.
2. Tenant must use the thing in the proper manner
The lessee must use the property for the purpose of which it was let
and he must exercise care of a bonus paterfamilias in looking after the
property (i.e. look to whether he is changing the nature of the
property).
Ordinary use: where in the agreement there is no indication of the

purpose for which the property must be used = lessee may use the
property for the purpose for which its ordinarily used – provided he
doesn’t do anything which may decrease the value of the property.
Trees: the lessee may plant trees unless the nature of the property
forbids it (mimosas on arable land) – he is then liable to maintain the
trees if he has undertaken to do so.
Cutting trees:
a) Silva caedua: the lessee may cut down trees that grow after
being cut down (Gum) and sell the wood for his own benefit =
the lessee doesn’t appropriate a portion of the property (such
trees reproduce themselves). But he may not cut them down if
they have been planted for ornamental purposes
b) Fruit trees: may not be cut down
c) Other trees: can only be cut down for domestic and agricultural
purposes, but cant be cut down if they have been planted for a
special purpose (shade).
Lessor’s remedies:
where the tenant misuses the property, the lessor may:
a) claim damages
b) get an interdict
c) cancel the contract where the misuse is serious
Abandonment of property:
Where the lessee abandons the property the lessor may abide by the
contract and sue for rent when due or he may accept the lessee’s
repudiation and sue for damages for breach.

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Presumption as to the cause of damage:

there’s a rebuttable presumption that damage was caused by the
lessee – the onus is on him to prove otherwise.
The tenant must vacate the property and return it on conclusion of

the lease – if he fails to do so = breach.
The property is to be returned in the same condition as it was when
he received it except for normal wear and tear.
E.g. B hires a room from D and G Co in a building in which a number

of other rooms have also been occupied by other tenants. There was a
common use bathroom which B obstructed by putting her personal
belongings there, using it as a laundry and washed dishes in there
and emptied all waste into the drain.
Burns: the court held that B was interfering materially with the
ordinary comfort and convenience of the other tenants in the building.
The court held that B’s conduct = breach of the lease and was serious
enough to entitle D and G to cancel the lease and eject B.
3. Tenant’s real right
SA law = Huur Gaat Voor Koop rule applies

Green: The lessee gets real rights and decided that the HGVK rule
applies.
The establishment of the tenants real rights

Between the parties the contract is enough protection – the lessee can
enforce his rights against the lessor even if he isn’t in possession of
the premises and even if his right hasn’t been registered.
Long leases: Roman Dutch law said that registration was a

requirement for the establishment of the lessee’s real right. An
unregistered long-term lease was also valid against the lessee’s
successors who had notice of it. Even if they didn’t know of the
existence of the lease, the lessee was protected, by the unregistered
long term lease for the 1st 10 years of the lease, provided he was in
possession of the leased property.
An unregistered long-term lease was valid for the full term against
successors universali.
SA made a distinction between successor lucrative: someone who

inherits the property – against whom a long term lease would apply
even if the lessor’s successors had no knowledge of the lease and the
lessee wasn’t in possession of the leased property.
Successor onerosi – someone who buys the property – against who a
long term leaser was only valid for the full term if it was registered or
if the successor had knowledge of the lease.

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Before the commencement of S2:

1) Successor lucrative was bound for the full period
2) Successor onerosi were bound for the full period in the following
circumstances:
a) Full period if the lease was registered against the title
deed of the property
b) If the lease wasn’t registered – bound for the full period if
he knew of the lease
c) If the lease wasn’t registered and successors didn’t know
of the existence of the lease – still bound for the 1st 10
years of the lease if the lessee was in possession of the
leased property – i.e. protected for the duration of a short
term lease.
S2 of the Act: provided that no long term lease would apply against
the successors of the lessor unless it was registered against the title
deed of the leased property – it was decided that in future this would
only be the case where the lease would apply against successors of the
lessor = imply an amendment to common law.
Essop: stated that the common law wasn’t amended by S2 (this case
also disagreed with the court in the Alternators case).
S1(2) of Act replaced S2: it apples to leases entered into for at least 10
years, the natural life of the lessee or another or a lease which is
renewable.
It determines that no such lease is valid against a creditor or
successor onerosi for longer than 10 years unless:
- it’s registered
- They knew of the lease
Short leases:
the lessee’s real rights vest on him getting possession.
Where the buyer had actual or constructive notice of the lease, the
lessees title is good even though he doesn’t have possession: A leases
a house from B for 5 years but cant take possession for at least 6
months = he is afraid that B may sell the property to a 3rd party in which
case the innocent party will get the property free from the lease = A may
register the lease and such registration is constructive notice to any
would be purchaser.
A short term lessee who isn’t in possession gets only personal rights –
he can enforce this right against the lessor but not against any
holders of real rights – he can’t maintain his lease against a purchaser
in good faith.

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Onerous and gratuitous successors:

Q: whether the short-term lessee who isn’t in possession under an
unregistered lease, may maintain his lease against gratuitous
successors of the landlord who didn’t have notice of the lease?
Lessor’s successors classified:
1) Where he has succeeded to a whole portion (universalia

successor) of the estate or an item of the lessor’s estate
(singular successor)
2) Whether he has given value for the property he got from the
lessor – onerous successor, where he hasn’t given value for the
property = lucrative successor.
The difference between universal and singular is that since an estate

consists of assets and liabilities, a universal successor takes over not
only the assets but also the liabilities, whereas a singular successor
takes over a particular asset but no liabilities.
Universal successor is bound to recognize a lease concluded by the
lessor even if the lessee isn’t in occupation or the lease hasn’t been
registered and even if he has no knowledge of the lease.
A lease, which isn’t registered, shouldn’t bind singular successor or if
the lessee isn’t in occupation or by a lease of which he has no
knowledge.
The courts have accepted that a universal successor is bound by a

lease concluded by the lessor and gratuitous successor is in the same
position as a universal one.
Collins NO v Hugo: the courts have disregarded the distinction
between a universal and singular successor.
De Wet: has criticized this view followed by our courts = maintains
that the reason for the universal successor being bound to
acknowledge a lease is that he, as successor in obligation becomes a
debtor as a result of the contract of lease. He says that this
consideration doesn’t necessarily apply to every successor in title.
Effect of the tenants real rights:
Lessee gets real rights over the leased thing = HGVK = applies to the
right of everyone who has established a right over a thing after the
lessees right has been established.
The tenants real right enjoys preference if it conflicts with any other
subsequent vested right – if the right of a holder of a mortgage or
servitude is vested after that of the lessee, his right must be given
pride of place to the lessees = the right of the lessee is proffered to
purely personal rights irrespective of the time they were vested.
Thus non-preferent creditors of the lessor are always bound by the
lessee’s real right.

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Effect of the real right of the lessee is that no one can disturb him in
the exercise of his right during the currency of the lease.
In respect of the alienation of the property let = Q: whether the new

owner will also take overt from the original lessor as debtor and
creditor in the contract of lease.
General principles say that this is impossible.
Claims are transferred by cession and obligations by delegation.
According to general principles of our law one would say that the new
owner need only tolerate the lessee’s exercise of his real right but that
doesn’t mean that the new owner simultaneously takes over the rights
and obligations of the lessor.
Our court take a different view: its said that as soon as the new owner
has taken transfer, he is as owner entitled to the rent and that the
seller by alienating the property, releases himself from his obligations
in terms of the contract of lease, so that his obligation will now rest on
the buyer.
Genna-Wae Properties: alienation of leased property consisting of land

and buildings in pursuance of a contract of sale doesn’t bring the
lease to an end.
The new owner is substituted ex lege for the original lessor and the
latter falls out of the picture.
The new owner gets by operation of law all the rights the original
lessor had under the lease.
At the same time the new owner is obliged to recognize the lessee and
to permit him to occupy the leased property in terms of the lease,
provided he continues to pay the rent and observe his obligations
under the lease.
The lessee is also bound by the lease and provided that the new owner
recognizes his right doesn’t have any option or right of election to
resile from the contract.
The buyer is bound by all the terms of the lease. If the actual terms of
the lease differ from the terms – the buyer is bound by the actual
terms.
However, this will not be the case with an option to purchase
contained in a lease agreement (Spearhead Property Holdings (Pty) Ltd
v E&D Motors)
Greenblatt: held that the HGVK doesn’t apply where the ownership of
the thing let passes by operation of law and not by virtue of the
contract. The lessee has no rights against the local authority in the
case where the leased property vests in the local body in terms of an
ordinance.

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Genna-Wae Properties: AD held that our law doesn’t recognize that a

lessee has a right, on change in the person of the lessor to elect
whether he wishes to continue with the lease or not.
Lessor’s tacit hypothec to secure rent:

Nature of the lessor’s hypothec
This isn’t a lien: which depends on possession of the goods by the
creditor – with the lessor’s hypothec the goods must be on the leased
premises: in the possession of the lessee.
As soon as rent is in arrears the lessor gets a personal right to attach

all movable property on the premises – this exists without the parties
having to agree to it = naturalia of the contract.
The right to attach such property: personal right, so the lessor can’t
pursue it in the hands of a 3rd party, even when it has been removed
from the premises.
The hypothec automatically gives preference in the event of
sequestration of the lessee’s estate.
The hypothec is transferred into a real right after the property has
been attached.
What goods are subject to a hypothec?

The goods must be on the premises and they distinguish between
goods, which belong to the lessee, and goods belonging to 3rd parties.
All movable (invecta et illata) brought onto the property may be held
as security by the lessor.
Goods exempt from ordinary attachment: goods, which can’t be

attached by statute cant, be subject to a hypothec (bedding, wearing
apparel).
Harris: such statutory protection merely defined the extent to which
execution on a judgment may proceed and that it didn’t affect the
common law right of the lessor = while a reasonable amount of
bedding and wearing apparel are exempt from attachment by writ,
they still form part of the lessor’s hypothec.
Money: money present on the property is subject to the hypothec. But

the proceeds from the sale of movable, which have been deposited in
the lessee’s bank account, aren’t subject to the hypothec.
Whose goods are subject to the hypothec:

Tenant: all goods of the tenant are subject to the hypothec unless they
are brought onto the property for temporary use. There must be some
degree of permanency.

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Subtenant: al his goods which are permanently on the property are

subject to the hypothec BUT only to the amount of rent still owed to
him by the lessee.
3rd parties: in Roman Dutch law: movables of a 3rd party are subject to
the hypothec provided the goods were brought onto the property with
the permission of the owner and with the intention that they remain
on the property for an unspecified time.
Bloemfontein Municipality: when goods belonging to a 3rd party are

brought onto the leased property with the knowledge and consent of
the owner and to remain there for an indefinite time for the use of the
tenant.
4 factors are taken into account when considering if the goods of a 3rd
party are subject to the hypothec:
1. Provided the lessor is aware the goods on the property belong to
a 3rd party, those goods aren’t subject to the hypothec
2. If the 3rd party is aware that the goods are being held on leased
property and he was given permission that they remain there =
subject to the hypothec = the 3rd party creates the impression
that the lessee is the owner of those goods – if the 3rd party
wants to prevent the lessor from being misled by the impression
created, he must ensure that the lessor gets notice that the
goods don’t belong to the lessee – if he fails to do so = must
accept the fact that the goods are subject to the hypothec
3. If the goods of the 3rd party are merely temporarily on the leased
property but are brought there for the indefinite use of the
lessee, they are subject to the hypothec
4. Goods of a 3rd party will only be subject to the hypothec if they
are brought on the property for the use of the lessee.
The hypothec only secures rent.
Legal effect of a hypothec:

in the absence of attachment of the goods, the hypothec is of little
value – it doesn’t give the lessor a real right to the goods – he can’t
pursue the goods if they are removed from the premises nor can he
remove the goods or realize them himself. This can be remedied by an
attachment order.
Preference in insolvency:
S85 (1) of the Insolvency Act: the lessor’s legal hypothec: preference
with regard to any article subject to that hypothec for any rent
calculated in respect of any period before and up to the date of
sequestration but not exceeding:
- 3 months, if rent is payable monthly or shorter than a month
- 6 months, rent payable at intervals exceeding 1 month but not
exceeding 3 months

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- 9 months if the rent is payable at intervals exceeding 3 months

but not exceeding 6 months
- 15 months
Interdict or attachment
The lessor may give effect to the hypothec by asking for an interdict
restraining the lessee from removing goods from the premises.
If the amount of rent in arrears doesn’t exceed the Magistrate court
jurisdiction – the Magistrate Court Act provides for an automatic rent
interdict: notice is inserted in the summons prohibiting anyone from
removing the goods from the premises pending the decision of the
action
In the Supreme Court: common law proceedings: can get either an

interdict or attachment = effect of this is that the landlord doesn’t lose
his hypothec if the goods are removed from the premises – if the lessee
is solvent the lessor can get judgment for the rent and sell the goods
in execution.
If the lessee is insolvent – the lessor is a privileged creditor in respect
of the goods.
The tacit hypothec doesn't give the lessor real rights to the goods =
should the lessee remove them and store them in another place, the
lessor can’t seize them.
Also the lessor can’t pursue the goods once they are in the possession
of a 3rd party.
The lessor’s real right only exists once he has confiscated the goods,
which are on the leased property, or if the goods have been removed,
before they reach their new destination.
The hypothec is applicable only if the lessee owes the lessor rent, if no
rent is owing no hypothec can exist over the goods of the lessee.
Quick pursuit
This doctrine applies when attachment will be granted.
Once the goods have been removed from the premises, the lessor loses
his hypothec and attachment may no longer be granted = problem:
lessor may not forcibly restrain the lessee from removing the goods to
defeat the hypothec before an attachment can be obtained.
So the lessor is in a position to lose his hypothec = the law allows the
lessor to carry out a quick pursuit = can apply to the court for an
attachment order while the goods are in the process of being removed
or are in transit, he can apply for an interdict to prohibit the lessee
from removing the goods from the leased property.
Webster v Ellison: AD while recognizing the doctrine of quick pursuit

refused an attachment order since removal of the goods had been
completed at the time the court was approached.

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BUT this case shows us that the courts will grant an attachment order
where approached before the goods have reached their destination – if
they haven’t yet reached their destination at the time the attachment
is requested, they may be taken back to the leased property where the
hypothec is revived.
Effect of termination of the lease

Termination of the lease doesn’t discharge the hypothec.
Q: what the position if the goods are removes before the termination of
the lease? Frank: the landlord’s hypothec was lost when the tenant
removed the movables to a new place = before receiving notice of a
rule nisi, the tenant had removed the movables to a new farm.
The court refused to order the tenant to return such movables to the
original farm.
Q: whether, if the lessee had removed the goods with the deliberate
objective of defeating the landlord’s lien, he would have been ordered
to return them was left open.

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Remission of rent:
Lessee is released from his obligation to pay the rent if he is prevented
(by vis major) from having the full use and enjoyment of the thing
Where circumstances beyond the control of the parties make it
impossible for the lessee to have the full use and enjoyment of the
thing = lessor’s performance has become impossible.
The lessee will be released wholly or in part from his own performance
= payment of rent.
Only if, where there is nothing wrong with the property (locusts
destroyed crops) it’s the lessor’s duty not only to deliver and maintain
the property in a specific condition but also to ensure the lessee can
use the property in a profitable way = supervening impossibility.
Rules for remission of rent

Distinguish between:
a) total destruction
b) Lessee doesn’t have the use and enjoyment of the property
Total destruction: the contract is extinguished because of supervening

impossibility.
Where the lessee loses use and enjoyment: lessee remains in
occupation of the property – reason why the lessee is entitled to
remission of rent is that the continuous full beneficial use and
enjoyment was a supposition on which the parties contracted and
therefore on failure of this the lessee is entitled to claim remission of
rent.
The lessee need not pay the full rent or pays no rent at all where
circumstances beyond the control of the parties lead to his being
unable to have full or partial use of the thing for the purposes
intended by the lease.
Vis major and Casus Fortuitus

Vis major: superior power or force which can’t be resisted or
controlled = lightning, floods, expropriation
Casus fortuitus: extraordinary event not reasonably foreseeable
Drought: depends on the region =- in some places it’s expected and is

therefore not a vis major.
Business leases: remission of rent is applicable to business leases =

the lessee can claim remission of rent where the government forbids
the sale of liquor on premises expressly let for such a purpose.
BUT: it’s a foreseeable occurrence – in the contemplation of the parties
and therefore not a ground for remission.

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Abandonment of property:
Where loss is caused by a vis major the lessee can claim remission or
abandon the property (becomes useless).
Abandonment is justifiable even though the loss is only imminent.
Where the tenant abandons the property he is only liable for the rent
for his period of occupation.
Whether release is granted depends on whether the thing has become
unfit for the purpose for which it was let.
Amount of remission
This is within the courts discretion – some think the profits of 1 year
should be set off against the meager crops of another year – if the
lessee has a good year, she can’t complain if he isn’t so fortunate the
next year.
Where the lessee has paid in advance, he may recover this from the
lessor.

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Compensation for improvements:

The lessor must on expiry of the lease compensate the lessee for
improvements to the property – problem if the parties don’t provide for
this in the contract (not provided for by law).
Law relating to the lessee’s right to compensation for improvements =
placaat.
To what types of leases do the placaat apply?

Leases of land:
Common law applies to all other leases – original placaat applied only
to leases on land.
Urban and rural land:

It was decided that although the placaat only applied to rural land –
there is no justification in modern law for drawing a distinction
between urban and rural tenements = in SA the lessee of immovable
property (rural or urban) has no lien or right of retention and may
claim compensation for necessary and useful improvements after
vacating the property (Palabora Mining).
Agricultural leases:
Differentiate between annexure, improvements that aren’t annexure,
trees and crops.
The lessee can’t claim any compensation for improvements, which
aren’t annexure – can’t claim compensation for soil erosion work.
Trees: in the absence of agreement for compensation the lessee

doesn’t get any compensation for the planting of trees and where the
lessor merely promises to pay without fixing an amount = the lessee
gets only the price of the trees at the time of planting.
Crops: the lessee is entitled to a reasonable amount of compensation

for the ploughing, sowing and seed corn – since the land is let for
agricultural purposes, the lessor’s consent isn’t necessary for an
agricultural lease, implies ploughing and sowing = lessee can claim
compensation for ploughing and sowing even though the lessor didn’t
expressly give his consent.
Annexures:
these include fences, dams, bridges and aqueducts.
Where the improvement doesn’t amount to an annexure no then
compensation is payable.
Annexures made without the lessor’s consent:

Article 12: if a structure is erected without the consent of the owner,
the lessee is bound before expiration of the lease to break down and
remove the materials from the ground under penalty that whatever

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shall be found thereon after the prescribed time shall come to and
remain for the benefit of the owner.
The lessor obtains such an annexure without payment of
compensation but he lessee may remove them.
Annexure made with the lessor’s consent:

Article 10: the lessor must compensate the lessee for such an
annexure = lessee can’t remain in occupation until such
improvements have been paid for. The tenant may only institute
action for compensation after vacating the land.
Article 11: lessee would get for the materials what a housebreaker
would get.
Necessary improvements:
these are necessary to preserve the property – the placaats are silent
on necessary improvements = raises a presumption that no distinction
should be made between necessary and useful improvements
De Beer: placaats shouldn’t be applied in the case of necessary
improvements and that in such a case the lessee is entitled to
compensation as if he were a negotiorum gestor – this was followed in
Bailey.
Other leases:
placaats don’t apply and common law does – here the lessee has
certain rights to remove her property.
If the lessee doesn’t remove his property, the lessor must pay
compensation for necessary and useful improvements but not for
luxurious improvements.
The scale of compensation is measured by the value of the property
enhanced unless the improvement actually cost less, in which case
the lessor must pay the lesser amount.
Consent of the lessor to effect improvements isn’t necessary for the

recovery of compensation and the lessee may remain in occupation
until he has been compensated.
Removal of the property by the lessee

The lessee may remove all his movable property from the premises
unless it’s attached for rent under a landlord’s hypothec BUT
annexures are sometimes immovable.
a) Agricultural leases: Article 12: gives the tenant the right to

remove the annexure, whether or not they have become
immovable. So the tenant may remove all crops and trees before
the expiry of the lease, even though he may claim compensation
if he leaves them = this right of removal expands to necessary
improvements
b) Other leases – common law applies

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In civil law: the accession has the same character as the thing
to which it’s acceded. Permanent annexures made by the lessee
become part of the property and fall under the ownership of the
lessor.
So the lessee can’t remove the annexure, either during or after
the expiration of the lease.
But in the case of annexures other than buildings – it becomes
difficult if a movable is annexed to an immovable with the
intention that it should remain there permanently = the
movable becomes immovable.
BUT this doesn’t happen where the movable wasn’t
intended to remain there for a permanent purpose and
since the lessee’s title is only temporary = presumption
that where a lessee fixes a movable to the property he has
no intention of fixing it permanently.
Look at the following elements to determine if it was meant to

remain permanently:
a) the nature of the thing
b) The manner and degree of attachment
c) The intention of the person annexing it.

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Subletting, Cession, Delegation and Assignment:

Subletting:
where the tenant lets the leased property to another – its an ordinary
contract f lease – the mere fact that in a sub lease, the lessor is also
the lessee in the property, doesn’t influence the contractual rights and
obligations of the parties involved = they are the same as an ordinary
contract of lease.
The sub lessee gets his title from the sub-lessor = he has no claim to
the leased property against the original lessor, when the original lease
is terminated.
May lessee sub-let?

Q: does the original lessee not commit breach of contract to his
landlord if he sub-lets the property?
If there is a clause in the contract that the lessee may not sublet, a
lessee who disregards this will commit breach if he sublets. It isn’t
breach if he just allows another to have use and enjoyment of the
thing.
Subletting of rural premises:

Q: in Roman Dutch law if a lessee on rural premises may sublet
without the lessor’s consent – this matter depends on 3 placaats:
1. 1st placaat: said that no tenant can transfer any lease after the
expiry of the lease unless this is done with consent – this
prohibited cession of a lease after it expired BUT not cession of
the original lease
2. Provincial ordinance: tenant may let the hired property again to
another unless otherwise agreed
3. 1658 Placaat: Article 9: during the lease or after its expired
tenant may give a sublease of land by sale, exchange, donation
or another contract without the previous written consent of the
owner.
Van Leeuwen: lessee may sublet without consent

Nolte: the Transvaal court held that the relevant placaats weren’t in
force in SA and that a rural lease could therefore be sublet
This was overruled in Rubin.
The correct view = the lessee of rural property is free to sublet.
Subletting of urban premises:

certain Dutch ordinances did forbid the subletting of urban property
but these weren’t in force in the Republic.
Rule of Roman law is still in force: urban lease can be sublet without
consent.
Voet: said that the lessee may not sublet where the sub-lessee is such
a person that his using it would be more prejudicial to the thing hired
that their use by the lessee.

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The lessee may even sublet to another where the landlord himself
desires to obtain tenancy.
Cession of the rights under the lease

When may cession take place?
General principle: the lessee may by means of cession transfer his
rights in terms of the lease to a 3rd party without the cooperation of
the lessor.
Cession of rights from the lease of rural premises may take place only
with the consent of the lessor in terms of S9 of Placaat 1658.
Consequences of cession:
the contract doesn’t affect the position of the lessee as debtor in terms
of the lease. The effect of cession by a lessee is that the cessionary
becomes the lessor’s creditor but the lessee remains the lessor’s
debtor.
Difference between cession and sublease

Cession: the lessee transfers his contractual claim to possession to
the cessionary through cession = he is entitled to possession, while
the original lessee remains liable for the rent.
Only his rights are transferred not his obligations.
There is a direct legal tie between the cessionary and the lessor.
Sublease: there is no legal tie between the sub lessee and the lessor –
the legal tie is only between the lessee and sub-lessee. The lessee lets
the thing to the sub-lessee so that the lessee becomes the lessor in
relation to the sub-lessee.
Van Rensburg concludes that cession of a contract of lease doesn’t

need to be in writing.
Delegation:
The lessee is replaced by another as debtor and it takes place by
means of a novation agreement entered into by all 3 parties
concerned.
Assignment:
the lessee in his capacity as creditor and debtor is replaced by another
– he affects the transfer of his rights by means of a cession thereof to
the other person and the transfer of his obligations is naturally a
delegation governed by the normal principles of delegation.
A sub-lessee may also cede his rights to another.
Prohibition on transfer
The lessee must comply with any contractual prohibitions on cession,
waiver or subletting by the lessee without the lessor’s permission.
If he does what has been prohibited, he commits a breach of contract.

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Mere waiver of possession by the lessee in favour of a 3rd party

without getting remuneration for doing so doesn’t contravene such a
prohibition.
A prohibition relation only to cession doesn’t prevent subletting,

although a prohibition on subletting is wide enough to cover cession
as well.
Termination of the lease
1. Mutual agreement
Such an agreement can be concluded orally even if the contract of
lease was required to be reduced to writing – unless otherwise agreed
on such an agreement has no effect on already existing obligations –
lessor will be entitled to payment of rent in arrears.
2. Effluxion of time
Terminates the lease automatically – if the lease was for a specified
period.
It often happens that the parties renew the contract expressly or
tacitly.
Express renewal:
The lease may give the lessee the option to renew – he may then
convert the lease into a long lease = requires registration.
Where no date is fixed for notice by the tenant of his exercise of the
option of renewal he may give notice within a reasonable time before
the expiry of the lease, but not after.
Tacit renewal:
This happens: If on the leases expiration the lessee continues to hire
the same property from the same lessor (the parties and subject
matter must be the same) – there can be variation in the agreement.
Renewal of the lease brings a new lease into existence.
The party claiming tacit renewal must prove this.
The conduct that constituted relocation depends on the circumstances

of the case – so the tenant may prove that he remained in occupation
while the landlord accepted rent. BUT where the landlord accepted
rent under the mistaken impression that the lease was still in force =
NO relocation.
Tacit renewal isn’t renewal of the old lease, but the creation of a new
lease. The creation of the new lease will depend on the intention of the
parties.
Until the contrary is proved, it’s presumed that the conditions of the
new lease are the same as those of the original lease.

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Q: of which terms of the lease are deemed to be incorporated on tacit

renewal was discussed in Doll House Refreshments: there was a
presumption that the property was re-let at the same rent and all
those provisions which were incidental to the landlord and the tenant
were incorporated in the tacit relocation.
Those provisions of the original lease which were collateral,
independent of and not incidental to the landlord and the tenant
weren’t presumed to be incorporated in the re-letting.
3. Notice:
A lease for an unspecified period may be terminated by either party
after reasonable notice has been given.
Notice is reasonable if the lease will expire at the end of the rental
period and if it offers the other party a reasonable opportunity to
make alternative arrangements = tenant must give a months notice on
or before the 1st day of the month if the rent is payable monthly.
4. Merger (confusion)
If the lessee buys the leased property = merger of titles.
5. Destruction of the property

A lease is terminated by the destruction of property where such
destruction isn’t the lessee’s fault.
Where the lessee is at fault he is liable for the rent for the remainder
of the lease and for the value of the property BUT where the property
isn’t totally destroyed the lease isn’t terminated.
6. Rescission following breach of contract

The contract may be terminated by one of the parties resiling from the
contract on the ground of non-performance of an obligation by the
other party.
Where the lessee cancels the contract unilaterally because of the
lessor’s breach – he remains liable for the rent until he has quitted the
premises (giving the lessor free and undisturbed possession thereof).
Where the lessor cancels because of the lessee’s breach he may

according to Eastern Investment Co v Edwards: claim rent pro rata for
the period during which the lessee was in possession until the
contract was finally cancelled.
Spence: lessor has a claim of rent pro rata up to the 16th of the month
but not for the period after that – in this case – the employee committed
a breach as a result of which the employer cancelled the contract –
employees claim for his pro rata salary was granted – this claim was
based on enrichment and its amount was determined with reference to
the contract price.
In the present case it’s the lessee who commits breach – this gives the
lessor a claim for damages which will correspond to the amount of
rent lost while a new lessee is being found = its wrong to call this a
claim for rent.

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A claim for rent is a claim for performance, which is dependent on

counter performance (which is making the right available).
The lessor by his withdrawal hasn’t rendered the indivisible counter
performance and it would thus be wrong to allow him to claim part of
his rent.
The lessees failure to pay rent on time = common law rule was that
the lessor could cancel the lease when the rent was 2 years in arrears.
Goldburg: AD decided that the 2-year rule wasn’t useful and the
lessor could get a right to rescind by giving the lessee notice of
rescission.
7. Extinction of the landlords title

If the landlord’s title is extinguished – this doesn’t necessarily mean
termination of the lease but the lessor will commit breach if the lessee
is evicted.
8. Insolvency
Landlord: this doesn’t terminate the lease BUT in some circumstances
the lessor’s insolvency does terminate the lease = where the trustee
may sell the property free from the lease – in terms of the Insolvency
Act, a stipulation in a lease that the lease shall terminate or be varied
on the insolvency of the lessor is null and void.
Lessee: at common law the insolvency of the lessee terminates the

lease. NOW S37 of the Insolvency Act:
- Lease wont be terminated on the sequestration of the lessees
estate but the trustee of the insolvent estate may terminate the
lease by notice in writing to the lessor – lessor claim compensation
for a loss due to non performance form the estate
- If the trustee doesn’t within 3 months of his appointment notify
the lessor that he wants to continue the lease on behalf of the
estate = termination of the lease at the end of 3 months
- Rent due under such a lease from the date of sequestration to the
termination by the trustee shall be included in the costs of
sequestration
- Termination of the lease by the trustee deprives the insolvent
estate of any right to compensation for improvements other than
improvements made in terms of an agreement with the lessor
- A stipulation in the lease that the lease will terminate or be varied
on the sequestration of the estate of either party is null and void.
9. Death
Definite period: general rule – death doesn’t terminate the lease where
the lease was for a definite period
Indefinite period: Z leases a house month to month and on the 15 May

he dies – Q: does the lease automatically terminate on the 31 may, if not

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to who must the lessor give notice = lease stays in force until the 31
May.
The lease terminates because there is no exercise of will – it’s also
argued, pending the appointment of an executor, the Master may
continue the lease – notice must be given to and by the master until
an executor is appointed, then he gives and receives notice = practice.
Leases at will: terminate on the death of either party.
Express provision: executor in the estate of the lessee is bound by a

provision in the contract for the termination of the lease by death of
the lessee or his successor.
Section 4(5)(c) provides for the termination of the lease on grounds

that do not constitute an unfair practice and which are specified in
the lease. It is possible that the lawful termination of the lease may
still constitute an unfair practice. In Maphango the Constitutional
Court held that where a landlord terminates a lease, as permitted
under the contract or the common law, such termination may
constitute an unfair practice when the purpose of the termination is to
increase the rental in excess of that agreed to in the escalation clause
or what is considered reasonable.”
10. Legislation:
S6 Immorality Act: the lease of a house or a place which becomes a
brothel after the conclusion of the contract is terminated and
becomes void as from the date of this event.
The case where the inhabitant of a hotel room lives an immoral life
doesn’t fall under this section – Lomax: proprietor of a hotel sued an
occupant of one of its rooms claiming cancellation of the agreement
and ejectment – the conduct complained about being that the
defendant used the room for an immoral purpose – an exception to
the declaration was upheld.
A landlord doesn’t have the right to eject his tenant of a house, flat or
room for privately living an immoral life, while disturbing no one and
creating no nuisance nor causing anyone patrimonial loss.
May the lessee sublet?
If there is a clause in the contract that the lessee may not sublet, a
lessee who disregards this will of course be committing breach of
contract if he or she sublets the property.
However, breach of contract will arise only if he or she sublets and not
if he or she merely allows another to have the use and enjoyment of
the thing.
Whether the original lessor can resile from the contract on the ground

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of such breach of contract will depend on the usual principles

governing rescission.
In Roman law, a lessee of urban as well as rural premises could sublet
without the consent of the landlord. But this right must have been
abused, for we find a substantial body of Dutch legislation forbidding
a sublease of rural as well as urban premises without the consent of
the landlord.
Subletting of rural premises

There is a conflict of authority in Roman-Dutch law concerning the
question whether or not a lessee of rural premises may sublet without
the lessor's consent.
This depends on three placaats: a placaat of Charles V of 1515, the
Political Ordinance of 1580, and a placaat of the States of Holland
dated 1658.
The first placaat stated that “no tenants shall be allowed to transfer
any lease after the expiration of the same, unless with consent ...”.
This placaat prohibited cession of a lease after the expiration thereof,
but nowhere did it prohibit the cession of an original lease.
The Political Ordinance of 1580 merely re-enacted the placaat of 1515.
Grotius, writing in 1620, said: “A tenant may let the hired property
again to another, unless otherwise agreed ... .”
Grotius was not of the opinion that the two above-mentioned placaats
forbade the lessee of rural property to sublet.
Groenewegen wrote in 1644 to the same effect.
In the same year, Neostadius wrote: “Although by the civil law a
tenant was allowed to cede to another the land leased, by the placaats
of our princes it is otherwise.”
And in 1698 Voet held: “It has been established by our customs that
leased lands cannot be sublet without consent ... .”
Voet then quoted the placaats and the opinion of Neostadius.
In 1658 the placaat of the States of Holland, Article 9 was enacted. It

read: “... nor shall any occupiers or tenants, either pending and
during the lease, or after the expiration thereof, make over directly or
indirectly zoodanige hyre of lands by sale, exchange, donation or other
contracts, without previous written consent of the owner ... .”
Van Leeuwen states that the lessee may sublet without consent, and
he makes no special mention of rural property. Also after the placaat
of 1658, Wassenaar wrote to the same effect and quoted Van
Leeuwen. The authors of the Regtsgeleerde Observatien held that the
sublease of land was forbidden by the placaat of 1658. Van der
Keessel noted that article 9 of the placaat of 1658 forbade the
subletting of rural premises without consent.
On the one hand, Grotius, Van Leeuwen, Groenewegen and
Wassenaar held that the lessee may sublet, while Voet, Neostadius,
Van der Keessel and the authors of the Regtsgeleerde Observatien did
not. However, it is most important to note that Grotius do not rely on
the placaats. (Grotius obviously had knowledge of the first two

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placaats and we agree with him that they do not forbid a sublease of
rural premises.)
The placaats of 1515, 1580 and 1658 remain undoubtedly in force in
the Republic except as regards the penal provisions of the ninth
article. In De Vries, it was held that in terms of the placaat of 1658, a
lessee of rural property cannot sublet without consent. This case was
followed by the Orange Free State court in Visser case.
However, in Eckhard, the Transvaal court held that the relevant
placaats were not in force in South Africa and that a rural lessee
could therefore sublet. But this view was overruled by the Appellate
Division in Rubin.
Neither of the above-mentioned two opinions is correct. The placaat of
1658 is doubtlessly part of our law, but section 9 does not apply to
subletting. The correct point of view seems to be that the lessee of
rural property is free to sublet.
Subletting of urban premises

Certain local Dutch ordinances did forbid the subletting of urban
property, but these ordinances were local and are not in force in the
Republic. Consequently, the rule of Roman law is still in force in the
Republic and an urban lessee may sublet without consent.
This has been established by a long line of cases in South Africa. The
lessee must exercise this power to sublet judiciously. Voet says that
the lessee may not sublet where the sublessee “is such a person that
his using it would be ... more prejudicial to the thing hired than their
use by the lessee”. The lessee may, however, even sublet to another
where the landlord himself or herself desires to obtain the tenancy.
RENTAL HOUSING ACT:
Brief summary:
o “lease” = limited to an agreement of lease concluded between a

tenant and a landlord in respect of a dwelling for housing
purposes.
o section 2(1) - The application of the act is limited to dwellings

used for housing purposes. Thus business premises are
excluded and the applicability of the act to situations where a
dwelling is used simultaneously for industrial or commercial
purposes or where a profession is carried out from home will
have to be determined.
o It is assumed that hotels and holiday accommodation are
excluded from the application of the act, but furnished
dwellings, licensed clubs and boarding houses appear to be
included.
o section 4(2), the right to privacy is actively protected in that the

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tenant's right to privacy limits the exercise of the landlord's

right of inspection to a reasonable manner after reasonable
notice and section 4(3) prohibits the landlord from searching
the person, home or property, seizing possessions without court
order and infringing of the communications of the tenant,
household and bona fide visitors of the tenant.
o The act includes a number of common-law duties of the lessee

and introduces these as rights of the landlord against the
tenant:
§ Section 4(5)(a) provides for prompt and regular payment of the
rent and other charges.
§ Section 4(5)(b) provides for the recovery of unpaid rental or
other moneys due and payable after obtaining a ruling by a
rental housing tribunal or a court order.
§ Section 4(5)(c) provides for termination of the lease on grounds
specified in the lease and not prescribed as a practice
unreasonably prejudicing the rights or interests of the tenant.
§ Section (5)(d)(i) provides that on termination of the lease, the
landlord has the right to receive his property in a good state of
repair, save for fair wear and tear.
§ Section 4(5)(e) provides for claiming compensation for damage to
the property caused by the tenant, household or visitors of the
tenant. The inclusion of visitors is an extension of the common
law in which the lessee's responsibility for damage caused by
guests was limited to the case where the lessee had been
negligent in admitting the visitor to the dwelling.
o To demand a deposit is permissible, but the deposit may not be
more than the amount specified in the contract (s 5(3)(c)). The
act does not limit the amount of the deposit.
o The deposit must be invested by the landlord in an interest-

bearing account with a financial institution and the lessor must
pay the tenant interest at the applicable rate, which may not be
less than the interest rate on savings accounts with a bank. The
landlord must provide written proof in respect of accrued
interest if requested ((s 5(3)(d)).
o When the lease is terminated, the lessor may use the deposit
and interest towards the payment of unpaid rental or any other
amounts due and payable by the tenant under the lease,
including the reasonable cost of repairing damage to the
dwelling during the lease period and the cost of replacing lost
keys.
o Before the lessee takes occupation of the premises, the parties

must together inspect the dwelling to ascertain any defects or
damage to determine the lessor's responsibility for rectifying

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such defects or damage as well as to register such defects or

damage in a list.
o If the lessee should vacate the premises before expiration of the

lease, without notice to the lessor, the lease is deemed to have
expired on the date that the lessor established that the tenant
had vacated the premises. If this should happen, the lessor
retains all his/ her rights arising from the lessee's breach of the
lease contract.
o Where the parties have not expressly agreed thereto, the

contract is deemed to have been renewed on the expiration of
the lease if the lessee remains in the premises with the express
or tacit consent of the landlord (s 5(5)). This lease qualifies as a
periodic lease, on the same terms and conditions as the
expired lease, except that at least one month's written notice
must be given of the intention by either party to terminate the
lease (s 5(5)). A periodic lease is a lease, which runs from time to
time until brought to an end by notice – common law lease, a
new lease is created when lessee stays and still pays rent and
landlord letshim stay – but both become month to month.
o Where the lessee does not promptly pay the rent or charges,
does not vacate the premises on proper termination of the lease
by the lessor, does not return the dwelling in a good state of
repair and does not pay compensation for damage caused by
himself or herself, the household or visitors, will be guilty of an
offence and liable to a fine or imprisonment not exceeding two
years or to both (s 4(5) together with s 16(a)).
It is important to understand the interplay between unfair practice

disputes and eviction procedures.
The [Rental Housing] Act expressly recognises the landlord’s right to
terminate (when permitted to do so under the common-law or
contract), the tenant’s duty to restore the property on termination,
and the landlord’s right to obtain an eviction order if the tenant fails
to do so. This is the position as it is under the common law. Having
first recognised the right, the Act then proceeds to qualify the right:
landlords may (only) terminate if the ground relied upon for the
termination is specified in the lease and if the termination does not
constitute an unfair practice. The landlord may, moreover, only
institute proceedings for the tenant’s eviction in the absence of a
dispute regarding an unfair practice.
Therefore, the Rental Housing Act prescribes further requirements
before a landlord may institute eviction proceedings. Again, the same
principles applicable to eviction (specifically, the requirements
prescribed by PIE)

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The Consumer Protection Act:

PURPOSE AND APPLICATION:
The Consumer Protection Act 68 of 2008 came into effect on 31 March
2011. It will have far-reaching consequences for sale and lease
agreements affected by it. The primary purpose of the Act is to afford
protection to consumers from exploitation and to promote their
economic and social welfare.
The Act recognises a number of fundamental consumer rights to give
effect to its aims and, amongst other things, either prohibits or limits
certain terms in consumer contracts. In consequence, the Act will play
an enormous role in policing consumer contracts in South Africa and
ensuring that consumers get a fairer deal than they have thus far.
The Act is thus intended to effect greater reasonableness and fairness
in specifically consumer contracting and aims to establish a legal
framework for the creation of a consumer market that is fair and for
the benefit of consumers in general. It also aims to promote fair
business practices and to protect consumers from unconscionable,
unjust or unreasonable business practices (section 3). The rights of
consumers are protected through the courts and national consumer
protection institutions, such as the National Consumer Commission
and the National Consumer Tribunal established under the National
Credit Act 34 of 2005 (section 4).
Failure to comply with the provisions of the Act may lead to the
issuing of compliance notices and eventually the imposition of fines
and criminal penalties. Contractual terms that are impermissible in
terms of the Act also may be declared void to the extent of non-
compliance. In a module such as this we cannot provide a complete
overview of the Consumer Protection Act; that is a module all on its
own. We aim only to alert you to some of the more important
provisions that potentially impact on sales and leases.
Scope
The Consumer Protection Act applies to most transactions between
suppliers and consumers and the promotion of goods and services
that could result in such agreements, as well as the goods and
services themselves upon conclusion of the relevant transaction
(section 5). The following are some important definitions in terms of
section 1 of the Act:
A supplier is any person (including a juristic person, trust or organ of
state) who markets (promotes or supplies) goods or services.
A consumer is any person to whom particular goods or services are
marketed in the ordinary course of the supplier’s business; a person
who has entered into a transaction with a supplier in the ordinary
course of the supplier’s business (unless the transaction is exempt
from the application of this Act); a user of those particular goods or a
recipient or beneficiary of those particular services, irrespective of
whether that user, recipient or beneficiary was a party to a

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transaction concerning the supply of those particular goods or

services; and a franchisee in terms of a franchise agreement (subject
to limitation).
Goods include anything marketed for human consumption, or any
other tangible object including any medium on which anything is or
may be written or encoded; any literature, music, photograph, motion
picture, game, information, data, software, code or other intangible
product written or encoded on any medium, or a licence to use any
such intangible product; a legal interest in land or any other
immovable property; and gas, water and electricity.
Service includes any work or undertaking performed by one person for

the direct or indirect benefit of another; the provision of any
education, information, advice or consultation (except advice that is
subject to regulation in terms of the Financial Advisory and
Intermediary Services Act 37 of 2002); any banking services, or related
or similar financial services, or the undertaking, underwriting or
assumption of any risk by one person on behalf of another (except to
the extent that any such service is subject to regulation in terms of
the Financial Advisory and Intermediary Services Act 37 of 2002, or is
regulated in terms of the Long-term Insurance Act 52 of 1998, or the
Short-term Insurance Act 53 of 1998); the transportation of an
individual or any goods; the provision of any accommodation or
sustenance; any entertainment or similar intangible product or access
to any such entertainment or intangible product; access to any
electronic communication infrastructure; access, or of a right of
access, to an event or to any premises, activity or facility; or access to
or use of any premises or other property in terms of a rental; a right of
occupancy of, or power or privilege over or in connection with, any
land or other immovable property, other than in terms of a rental; and
rights of a franchisee in terms of a franchise agreement (subject to
limitation), irrespective of whether the person promoting, offering or
providing the services participates in, supervises or engages directly or
indirectly in the service.
In terms of section 5(1) the Consumer Protection Act applies to:

1. (a) every transaction occurring within the Republic (unless
exempted);
2. (b) the promotion of any goods or services, or of the supplier of
any goods or services, within the Republic (unless those goods
or services could not reasonably be the subject of a transaction
to which the Act applies, or the promotion of those goods or
services has been exempted);
(c) goods or services that are supplied or performed in terms of a
transaction to which the Act applies, irrespective of whether any of
those goods or services are offered or supplied in conjunction with any
other goods or services, or separate from any other goods or services;
and

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(d) goods that are supplied in terms of a transaction that is exempt

from the application of this Act, but those goods, and the importer or
producer, distributor and retailer of those goods, respectively, are
nevertheless subject to sections 60 (dealing with safety monitoring
and recall of goods) and 61 (dealing with liability for damage caused
by goods) in terms of section 5(5).
In terms of section 5(2) the Act does not apply to a transaction:
1. in terms of which goods or services are promoted or supplied to
the State;
2. in terms of which the consumer is a juristic person (which
includes a body corporate, partnership, association, or trust as
defined in the Trust Property Act 57 of 1988 – section 1) whose
asset value or annual turnover, at the time of the transaction,
equals or exceeds the threshold value determined by the
Minister (determined at R2 Million);
3. if the transaction falls within an exemption granted by the
Minister;
4. that constitutes a credit agreement under the National Credit
Act 34 of 2005, but the goods or services that are the subject of
the credit agreement are not excluded from the ambit of the Act;
5. pertaining to services to be supplied under an employment
contract;
6. giving effect to a collective bargaining agreement within the
meaning of section 23 of the Constitution and the Labour
Relations Act 66 of 1995;
7. or giving effect to a collective agreement as defined in section
213 of the Labour Relations Act 66 of 1995.
It is apparent that the scope of the Consumer Protection Act is very

wide; it not only applies to natural persons, but also to a franchisee
and a juristic person with an asset value or annual turnover below the
prescribed threshold of R3 Million. The Act furthermore applies to sale
agreements, lease agreements and it seems even contracts for the sale
of immovable property concluded in the ordinary course of the
supplier’s business. Within the latter context the Act will probably not
affect once-off transactions for the sale of immovable property, but
more typically the sale of land, units or houses by a developer. The Act
will have a significant impact on sales and leases that are subject to
it.
Pre-contractual procedures and remedies

Right to disclosure and information
Part D of the Act contains several provisions relating to the
consumer’s right to disclosure and information regarding goods or
services. These include the rights to information in plain and
understandable language (section 22), disclosure of the price of goods
or services (section 23), product labelling and trade descriptions
(section 24), disclosure of reconditioned or gray market goods (section
25), and written

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Part E of the Act deals with the consumer’s right to fair and
responsible marketing by suppliers. Amongst other things it contains
provisions regarding general standards for the marketing of goods or
services (section 29); the regulation of bait marketing (section 30); the
prohibition of negative option marketing (section 31); the regulation of
direct marketing to consumers (section 32); and the regulation of
catalogue marketing (section 33).
Right to fair and honest dealing

We would like to draw your attention specifically to Part F of the Act
which governs the consumer’s right to fair and honest dealing. These
provisions overlap to a large extent with the common law relating to
improperly obtained consensus (refer to paragraph 3 on page 49 of
Study Guide 2 and paragraph 4 on page 51 of Study Guide 2; refer
also to your notes on the general principles of contract law).
Section 40: Unconscionable conduct
Section 40(1) provides that a supplier (or an agent of the supplier)
must not use physical force against a consumer, coercion, undue
influence, pressure, duress or harassment, unfair tactics or any other
similar conduct, in connection with any-
1. marketing of any goods or services;
2. supply of goods or services to a consumer;
3. negotiation, conclusion, execution or enforcement of an
agreement to supply any goods or services to a consumer;
4. demand for, or collection of, payment for goods or services by a
consumer; or
5. recovery of goods from a consumer.
Section 40(2) provides that in addition it is unconscionable for a
supplier knowingly to take advantage of the fact that a consumer was
substantially unable to protect the consumer’s own interests because
of physical or mental disability, illiteracy, ignorance, inability to
understand the language of an agreement, or any other similar factor.
Section 40 not only largely coincides with what under common law
would qualify as duress, undue influence and even material mistake,
but also goes further by prohibiting the supplier from taking
advantage of entirely subjective factors relating to the consumer.
Potentially then the supplier will have to take reasonable steps to
ascertain whether the consumer is fully aware of the implications of
the transaction. Therefore, the supplier must within reason look after
the interests of the consumer, whereas in terms of common law each
party is required to look after its own interests.
Section 41: False, misleading or deceptive representations

Section 41(1) provides that in relation to the marketing of any goods
or services, the supplier must not, by words or conduct-
1. (a) directly or indirectly express or imply a false, misleading or
deceptive representation concerning a material fact to a
consumer;

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2. (b) use exaggeration, innuendo or ambiguity as to a material

fact, or fail to disclose a material fact if that failure amounts to a
deception; or
(c) fail to correct an apparent misapprehension on the part of a
consumer, amounting to a false, misleading or deceptive
representation,
or permit or require any other person to do so on behalf of the
supplier.
Section 41(2) provides that a person acting on behalf of a supplier of
any goods or services must not-
(a) falsely represent that the person has any sponsorship, approval or
affiliation; or
(b) engage in any conduct that the supplier is prohibited from
engaging in under subsection (1).
In addition section 41(3) provides that it is a false, misleading or
deceptive representation to falsely state or imply, or fail to correct an
apparent misapprehension on the part of a consumer to the effect,
that-
1. the supplier of any goods or services has any particular status,
affiliation, connection, sponsorship or approval that they do not
have;
2. any goods or services-
(i) have ingredients, performance characteristics,
accessories, uses, benefits, qualities, sponsorship or
approval that they do not have;
(ii) are of a particular standard, quality, grade, style or
model;
(iii) are new or unused, if they are not or if they are
reconditioned or reclaimed, subject to subsection (4);
(iv) have been used for a period to an extent or in a manner
that is materially different from the facts;
(v) have been supplied in accordance with a previous
representation; or
(vi) are available or can be delivered or performed within a
specified time;
3. any land or other immovable property-
(i) has characteristics that it does not have;
(ii) may lawfully be used, or is capable of being used, for a
purpose that is in fact unlawful or impracticable; or
(iii) has or is proximate to any facilities, amenities or natural
features that it does not have, or that are not available or
proximate to it;
4. the necessary service, maintenance or repair facilities or parts
are readily available for or within a reasonable period;
5. (any service, part, replacement, maintenance or repair is needed
or advisable;
6. a specific price advantage exists;
7. a charge or proposed charge is for a specific purpose;

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8. an employee, salesperson, representative or agent has the

necessary authority to negotiate the terms of, or conclude, an
agreement;
9. the transaction affects, or does not affect, any rights, remedies
or obligations of a consumer;
10. a particular solicitation of, or communication with, the
consumer is for a particular purpose; or
11. the consumer will derive a particular benefit if they assist
the supplier in obtaining a new or potential customer.
Section 41(4) provides that a representation contemplated in

subsection (3)(b)(iii) to the effect that any goods are new is not false,
misleading or deceptive if those goods have been used only-
1. by or on behalf of the producer, importer, distributor or retailer;
and
2. for the purposes of reasonable testing, service, preparation or
delivery.
Section 41 generally relates to what under common law would qualify

as culpable misrepresentation (negligent or intentional), innocent
misrepresentation, and a dictum et promissum. It is important to note
that a misrepresentation can be either positive (eg a statement) or
negative (failure to remove an incorrect impression). In terms of
common law a negative misrepresentation or non-disclosure will only
give rise to remedy where there was a legal duty to speak in the
circumstances.
Section 41, however, is phrased so broadly that conceivably it may go
even further and encompass situations that would not normally
provide redress in terms of common law. For instance, the supplier
may not indulge in the use of “exaggeration, innuendo or ambiguity as
to a material fact” which might in terms of common law be permissible
as being mere puffery. Time will tell how broadly the courts are
prepared to interpret section 41.
Remedies
Section 52(3) provides the following remedies if a supplier
transgresses section 40 or 41:
If the court determines that a transaction or agreement was, in whole
or in part, unconscionable, unjust, unreasonable or unfair, the court
may-
(a) make a declaration to that effect; and
(b) make any further order the court considers just and reasonable
in the circumstances, including, but not limited to, an order-
(i) to restore money or property to the consumer;
(ii) to compensate the consumer for losses or expenses
relating to-
(aa) the transaction or agreement; or
(bb) the proceedings of the court; and

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(iii) requiring the supplier to cease any practice, or alter any

practice, form or document, as required to avoid a repetition
of the supplier’s conduct.
Section 52(3) gives the courts a very wide discretion regarding the
redress that they may afford a consumer where section 40 or 41 has
been transgressed by a supplier. In terms of common law the
remedies for specific forms of improperly obtained consensus are more
limited and may differ depending on the circumstances (consult your
law of contract notes and Study Unit 6 of Study Guide 2). For
instance, cancellation is generally a remedy if warranted in the
circumstances, but a claim for damages in the case of undue
influence has not yet been dealt with by the courts. Section 52(3)
seems to allow a claim for negative interest damages (losses or
expenses) and legal costs, but the courts will have to determine
whether a claim for consequential damages will be permissible as
being “just and reasonable in the circumstances.” It is not clear
whether a transgression of sections 40 or 41 renders an agreement
void or merely voidable.
Other remedies
There are various remedies available to consumers in terms of the Act.
We mention but a few here:
Section 16: Right to “cooling-off” period after direct marketing
One remedy is a consumer’s right to a “cooling-off” period after direct
marketing (meaning to approach a person, either in person or by mail
or electronic communication, for the direct or indirect purpose of
promoting or offering to supply, in the ordinary course of business,
any goods or services to the person; or requesting the person to make
a donation of any kind for any reason – section 1). Section 16 provides
that (subject to an exception where section 44 of the Electronic
Communications and Transactions Act 25 of 2002 applies) a
consumer may rescind a transaction resulting from any direct
marketing without reason or penalty, by notice to the supplier in
writing, or another recorded manner and form, within five business
days after the later of the date on which the transaction or agreement
was concluded; or the goods were delivered to the consumer. A
supplier must return any payment received from the consumer within
15 business days after receiving notice of the rescission (if no goods
had been delivered to the consumer in terms of the transaction), or
receiving from the consumer any goods supplied in terms of the
transaction; and not attempt to collect any payment in terms of a
rescinded transaction (except as permitted in terms of section 20(6).
Section 20: Consumer’s right to return goods

Aside from the right to return unsafe or defective goods (section 56) or
any other right between a supplier and consumer to return goods and
receive a refund, in terms of section 20 the consumer may return
goods to the supplier, and receive a full refund of any consideration
(means anything of value given and accepted in exchange for goods or

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services – section 1) paid for those goods, if the supplier has delivered
(a) goods to the consumer in terms of an agreement arising out of
direct marketing, and the consumer has rescinded that agreement
during the cooling-off period, in accordance with section 16; (b) goods
that the consumer did not have an opportunity to examine before
delivery, and the consumer has rejected delivery of those goods for
any of the reasons contemplated in section 19(5); (c) a mixture of
goods, and the consumer has refused delivery of any of those goods,
as contemplated in section 19(8); or (d) goods intended to satisfy a
particular purpose communicated to the supplier as contemplated in
section 55(3), and within 10 business days after delivery to the
consumer, the goods have been found to be unsuitable for that
particular purpose. There are, however, circumstances in which goods
cannot be returned (eg for reasons of public health).
Section 61: Liability for damage caused by goods

Section 61(1) creates a very wide no-fault liability for the producer or
importer, distributor or retailer for any harm caused wholly or partly
as a consequence of (a) supplying any unsafe goods; (b) a product
failure, defect or hazard in any goods; or (c) inadequate instructions or
warnings provided to the consumer pertaining to any hazard arising
from or associated with the use of any goods. Section 61(4) limits this
wide liability. ‘Harm’ includes (a) the death of, or injury to, any natural
person; (b) an illness of any natural person; (c) any loss of, or physical
damage to, any property, irrespective of whether it is movable or
immovable; and (d) any economic loss that results from harm
contemplated in (a), (b) or (c) (s 61(5)).
E Formalities
Section 50: Written consumer agreements
Certain prescribed categories of consumer agreements have to be in
writing may be (s 50(1)). Signature of the consumer is not required (s
50(2)(a)). Record must be kept of all other transactions (s 50(3)). It also
has to be in plain language (s 22).
F Terms of consumer agreements
Section 19: Consumer's rights with respect to delivery of goods or

supply of service
This section codifies the supplier’s duty to deliver the goods: the time
and place of delivery, the right of the consumer to examine the goods
when delivery takes place, the consumer’s rights when the supplier
delivers a larger quantity of goods than the consumer agreed to buy
and the consumer’s rights when the supplier delivers some of the
goods the supplier agreed to supply mixed with goods of a different
description.
It is important to note that this section changes the common-law rule
regarding the passing of risk. Section 19(2)(a) provides that, unless
otherwise expressly provided or anticipated in an agreement, it is an

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implied condition of every transaction for the supply of goods or

services that goods to be delivered remain at the supplier's risk until
the consumer has accepted delivery of them. Section 19(4) determines
when the consumer is regarded to have accepted delivery of any
goods. It will be on the earliest of the following circumstances:
(a) When the consumer expressly or implicitly communicates to
the supplier that the consumer has accepted delivery of such
goods; or
(b) when the goods have been delivered to the consumer, and-
(i) the consumer does anything in relation to the goods that
would be inconsistent with the supplier's ownership of them; or
(ii) after the lapse of a reasonable time, the consumer retains
the goods without intimating to the supplier that the consumer
has rejected delivery of them.
Section 54: Consumer's rights to demand quality service

This section can also find application to the services the lessor
renders.
Section 56: Implied warranty of quality
Section 56 read with section 55 creates two implied warranties.
Sections 56 (1) read with section 55(2) provides that in any
transaction or agreement pertaining to the supply of goods to a
consumer there is an implied provision that the producer or importer,
the distributor and the retailer each warrant that the goods -
(a) are reasonably suitable for the purposes for which they are
generally intended;
(b) are of good quality, in good working order and free of any defects;
(c) will be useable and durable for a reasonable period of time, having
regard to the use to which they would normally be put and to all the
surrounding circumstances of their supply; and
(d) comply with any applicable standards set under the Standards Act
29 of 1993, or any other public regulation.
Section 56(1) read with section 55(3) also provides that there is a
second implied warranty that the goods are reasonably suitable either
for the specific purpose for which the consumer wishes to acquire the
goods or for the use to which the consumer intends to apply those
goods and which the consumer has specifically informed the supplier
of, and the supplier either ordinarily offers to supply such goods or
acts in a manner consistent with being knowledgeable about the use
of those goods.
Section 55(4) provides that in determining whether any particular

goods satisfied the requirements of the two warranties all of the
circumstances of the supply of those goods must be considered,
including but not limited to –
(a) the manner in which, and the purposes for which, the goods were
marketed, packaged and displayed, the use of any trade description or

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mark, any instructions for, or warnings with respect to the use of the
goods;
(b) the range of things that might reasonably be anticipated to be done
with or in relation to the goods; and (c) the time when the goods were
produced and supplied.
Section 55(5) provides that for greater certainty in applying section

55(4) –
(a) it is irrelevant whether a product failure or defect was latent or
patent, or whether it could have been detected by a consumer before
taking delivery of the goods; and
(b) a product failure or defect may not be inferred in respect of
particular goods solely on the grounds that better goods have
subsequently become available from the same or any other producer
or supplier.
There are two exceptions:
(a) Goods sold at auctions are excluded from both warranties (s 55(1)).
(b) The first two aspects ((a) and (b)) of the first warranty do not apply
if the consumer has been expressly informed that particular goods
were offered in a specific condition and has expressly either agreed to
accept the goods in that condition, or knowingly acted in a manner
consistent with accepting the goods in that condition. (s 55(6)).
These implied warranties are in addition to any other implied
warranty or condition imposed by the common law, this act or any
other public regulation and any express warranty or condition
stipulated by the producer or importer, distributor or retailer, as the
case may be (s 56(4)).
Within six months after the delivery of any goods to a consumer, the
consumer may return the goods to the supplier, without penalty and
at the supplier's risk and expense, if the implied warranties are
breached and the supplier must, at the direction of the consumer,
either repair or replace the failed, unsafe or defective goods, or refund
to the consumer the price paid by the consumer, for the goods (s
56(2)). If a supplier repairs any particular goods or any component of
any such goods, and within three months after that repair, the failure,
defect or unsafe feature
has not been remedied, or a further failure, defect or unsafe feature is
discovered, the supplier must replace the goods or refund to the
consumer the price paid by the consumer for the goods (s 56(3)).
The two naturalia created by the act have a wider application than the
sellers liability for latent defects and the manufacturer’s liability for
consequential loss, but the remedies are far more limited. The no-fault
liability for damage caused by the goods in section 61 is, however,
very far- reaching.
Section 49: Notice required for certain terms and conditions
Section 49(1) provides that any notice to consumers or provision of a
consumer agreement that purports to (a) limit in any way the risk or
liability of the supplier or any other person; (b) constitute an

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assumption of risk or liability by the consumer; (c) impose an

obligation on the consumer to indemnify the supplier or any other
person for any cause; or (d) be an acknowledgement of any fact by the
consumer, must be drawn to the attention of the consumer.
The fact, nature and effect of the provision or notice must be drawn to
the attention of the consumer in a conspicuous manner and form that
is likely to attract the attention of an ordinarily alert consumer, having
regard to the circumstances (s 49(4)(a)). It also has to be in plain
language (s 49(3)). This has to be done before the consumer enters
into the transaction or agreement or is required or expected to offer
consideration for the transaction or agreement, whichever is the
earliest (s 49(4)(b)). The consumer must be given an adequate
opportunity in the circumstances to receive and comprehend the
provision or notice (s 49(5)).
If there has been no compliance with the above requirements a court
may sever the provision or notice from the agreement or declaring it to
have no force or effect with respect to the transaction and make any
further order that is just and reasonable in the circumstances with
respect to that agreement, provision or notice, as the case may be (s
52(4)).

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CONTRACT SUMMARY:
Recap of contract:
Elements of a valid contract:

1. consensus
2. capacity
3. possibility
4. legality
5. formalities
6. ascertained / able terms
MISREPRESENTATION:
Def: untrue stmt of fact, made by one contracting party to

another during negotiations, whereby one induced the other
to enter into a contract he would either NEVER HAVE
ENTERED INTO HAD HE KNOWN THE TRUTH (dolus dans) OR
WOULD HAVE BUT ON DIFFERENT TERMS (dolus incidens).
CONTRACT THUS VOIDABLE!
WITH DAMAGES CLAIM IF IT WAS A NEGLIGENT OR

INTENTIONAL MISREP.
THREE TYPES OF MISREP:

1. INTENTIONAL
2. NEGLIGENT
3. INNOCENT.
Thus, 1 and 2 are based on fault, and are delicts.
And 3 there is no fault, thus not a delict.
Intentional and negligent: are delicts = elements of a delict are

an act, wrongfulness, fault, causation and damage. Damages
are in the negative (place the innocent party in the position he
would have been in had there been no contract). Damages are
decided on according to dolus dans or dolus incidens.
Innocent: not a delict, as there is no fault, but contract is still

VOIDABLE but no claim for damages. Lets try help the innocent
party:
We can if:

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The statement he made which induced the other to enter into

the contract complied with the def of a dictum et promissum, ie
a statement that goes beyond puffing (sales talk) and is bearing
on the quality of the thing. Also if the statement made was a
guarantee.
If the contract was a contract of sale, and the thing sold
suffered from a latent defect, the BUYER can use the following
remedies:
AEDILITIAN REMEDIES:
1. ACTIO REDHIBITORIA: give the thing back to the seller and
claim from the seller the purchase price paid, any interest he
would have made on the purchase price, any improvements
made to the merx (thing) and all expenses incurred in
preserving the merx.
2. ACTIO QUANTI MINORIS: buyer keeps the thing but claims a
reduction in the purchase price, thus deduct what the thing
is worth from the purchase price paid.
THESE ACTIONS ARE NOT USED TO CLAIM DAMAGES BUT
TO RATHER CLAIM RESTITUTION.
CASE: Phame v Paisies.
The liability of the seller is not founded on the innocent misrep
per se, but on the dicyum et promissum as defined.
Legality:
Jajhbay:
An illegal contract cannot be enforced as its illegal and thus void. If a
party to an illegal contract wants to claim the OTHER PARTY’S
PEROFRMANCE i.t.o the contract, he may NEVER do so due to the ex
turpi causa rule – from an illegal act, no action arises. This rule is
never relaxed and is an absolute rule. Thus one may never claim the
performance of the other party to the illegal contract.
BUT one may try to claim one’s own performance BACK using undue
enrichment = the rule that applies to undue enrichment is par
delictum = where the parties are of equal guilt, the possessor is in the
stronger position. This rule may, however, be relaxed, for SIMPLE
JUSTICE BETWEEN MAN AND MAN – Jajhbay.
SEE MEMO OF THE JAJHBAY QUESTION IN THE QUESTION PACK!!!

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BREACH:
This is where there was a valid contract, and due to one party’s
fault, there is a breach.
5 types:
1. mora debitoris
2. mora creditoris
3. repudiation
4. positive malperformance
5. prevention of performance.
Mora debitoris: If the debtor neglects or fails to perform timeously in

other words, when performance is due, where performance remains
possible in spite of such failure he is guilty of a breach of contract
called specifically mora debitoris. He is then in mora.
Remedies of the creditor in the case of mora debitoris: There are 3

possible remedies open to a creditor whose debtor is in mora, namely:
- Performance by the debtor may be enforced.
- Creditor may cancel the contract in certain circumstances.
- Creditor may claim damages with regard to any loss suffered.
- Damages may be claimed together with specific performance or
with cancellation.
Mora Creditoris: Creditor is guilty of a breach of contract if he fails to

co-operate timeously. Mora creditoris can arise only in certain
circumstances:
(1) The debt is capable of fulfillment that is capable of being
discharged.
(2) The debtor is ready to perform and tenders proper performance.
On his part, the debtor must do everything he can do without
enlisting the co-operation of the creditor.
(3) The creditor culpably fails to perform an act necessary for the
debtor to perform on his part.
(4) The creditor culpably fails to co-operate.
The results of mora creditoris are as follows:
(1) A creditor and debtor cannot, in respect of the same obligation,

be in mora creditoris and mora debitoris respectively at the
same time.
(2) The debtor’s duty of care is diminished if the creditor is in mora;
he is responsible only for intentional loss and loss occasioned
by gross negligence.
(3) The risk of supervening impossibility of performance lies with
the creditor if he is in mora.

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Positive Malperformance: Malperformance is performance of

something which does not comply with the terms of the contract or it
is the doing of something which the contracting party undertook not
to do.
The remedies are as follows:
(1) The creditor may retain the defective performance and sue for
damages to compensate for the loss caused by the defect.
(2) He may reject the defective performance and claim proper
performance.
(3) He may reject the defective performance and claim damages
from the other party as compensation.
(4) He may resile from the contract if he has reserved to himself a
right to resile OR if the breach of contract is so serious that he
cannot reasonably be expected to abide by the contract and be
satisfied with damages.
Repudiation: This is when one contracting party conducts himself in

such a manner that the other can conclude with reasonable certainty
that the former will not render performance or will not render further
performance. Examples of behaviour which qualify as repudiation are:
A denial of liability; a refusal to perform; where a party disputes the
terms of a contract; where he tries to resile from the contract without
valid grounds, etc. The test to be applied: It is not, however, a
requirement for repudiation that the renouncing party must have the
subjective intention to put an end to the contract.
An objective test is applied. The question to be answered is whether
the party renouncing has acted in such a way as to lead a reasonable
person to the conclusion that he does not intend to fulfill his part of
the contract.
Remedies:
- upholding contract or cancellation of contract
- specific performance
- damages
Prevention of performance: takes place where performance is made

impossible by a contracting party after conclusion of the contract.
This is a form of anticipatory breach of contract since it takes place
either before, on or after the date set for performance. Can be
committed by a debtor as well as by a creditor.
A debtor commits it where the object which must be performed is
destroyed as a result of the debtor’s fault.
By a creditor where performance becomes impossible as a result of
the creditor’s fault.
Prevention of performance takes place where prior to delivery the
seller of a car negligently destroys it, so that it can never be delivered
to the buyer. A creditor will be guilty of prevention of performance
where he does not accept delivery of goods bought, and as a result of

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94
his delay the goods, for instance fresh fruit are spoilt so as to render
later performance impossible.
2 forms of prevention of performance
(1) Absolute or objective prevention of performance, where
performance is prevented permanently and as regards everyone.
(2) Relative or subjective prevention of performance, where it is
only performance by the debtor which is rendered impossible.
Remedies
The innocent party has the usual choice between rescinding/canceling
and upholding the contract. However, he cannot claim specific
performance as the performance is rendered impossible.
The difference between mora creditoris and prevention of

performance is that one has to do with mora creditoris where the
creditor fails to render co-
operation timeously, but performance still remains possible, while one
has to do with prevention of performance where performance is no
longer possible as a result of the creditor’s delay.
Prevention of performance, which is also a form of anticipatory

breach, differs from repudiation in that the eventual non-performance
is not reasonably certain but absolutely certain.
For example, if I slaughter the cow, which is owed, I will never be able
to return the cow.
And because non-performance is absolutely certain, there is no sense
in allowing the innocent party, as in the case of repudiation, to ignore
the prevention of performance and insist on specific performance.
DAMAGES
Whether the innocent party claims performance or cancellation of the
contract, he can still sue for damages.
The innocent party must suffer patrimonial loss: The plaintiff must
prove actual patrimonial loss. Such a loss is loss suffered by the
estate of the person concerned, THUS one compares the present
value of the innocent party’s estate with the value it would have had,
had the contract been carried out properly and on time. The debtor
must place the creditor in the same patrimonial position as he would
have been in had proper and timeous performance taken place. This is
the formula applied for damages and is referred to as positive
interest.

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Sale & Lease Notes – Semester 1 2016

SALE AND LEASE NOTES:

Characteristics of a contract of sale

Definition: contract of sale is a reciprocal contract in terms of which

Difference between sale and lease:

Sale: the seller has an obligation to perform = delivery

Critical Law Studies CC ©

So if a contract relates to manufacture and delivery of a thing not yet

2. Emptio rei speratae:

Suspensive condition construction: the full operation of the sale is

Critical Law Studies CC ©

Sale of expectation/hope – buyer will have to pay whether the thing

4. The emptio ad mensuram (sale of a group of things at a price per unit)

Land: is often sold at Rx per hectare

5. Sale in the alternative and generic sales

The undertaking to pay a price

The price as a sum of money:

Contract of donation: agreement where one person undertakes to give

1. Another performance together with the price

2. A contract of sale for a reasonable price

Critical Law Studies CC ©

3. A contract of sale in which no price is stipulated

• In commerce someone often buys something without asking the

• The validity of a tacit agreement on a reasonable price will

4. Determination of the price by a 3rd party

Contract to deliver a thing at a price determined by a 3rd party =

a) Fictitious fulfillment: the price is regarded as fixed, although it

Critical Law Studies CC ©

1) The court must try to determine as closely as possible, in

b) Prevention of performance: consider the party to the contract

5. The 3rd party does fix a price, but it appears to be unreasonable – 4

a) The sale is valid – in the absence of mala fides and

Because the contract of sale is reciprocal in nature, the seller &

Critical Law Studies CC ©

DISCUSSION OF THE DUTIES OF THE SELLER:

1. The duty to deliver:

The duty to deliver an immovable = seller must admit the buyer to

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EXERCISE OF THE RIGHT BY THE RIGHT HOLDER AT THE TIME OF

Undisturbed possession is lacking when there’s a defect in the

Subject matter of the obligation:

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To whom must delivery be given?

Failure to deliver is a breach of contract and the buyer has the

2. The duty of custody

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If the seller is in mora (mora debitoris) he is liable in all cases, except

3. The seller’s duties: the sellers guarantee against latent defects

General principles of the law of contract: a seller who delivers a

a) Liability on the ground of breach of warranty: breach of

Critical Law Studies CC ©

characteristics which he has guaranteed (Minister van Landbou-

b) Liability for misrep’s at the time the contract was entered

The seller is liable for misrepresentations on the ground of

Unlike breach of warranty, misrepresentation does not deal with non-

Critical Law Studies CC ©

A misrepresentation can be either intentional or negligent. The