Theme 2.pdf - KTH Notes Theme 2 ESSENTIALIA OF THE CONTRACT...

KTH Notes
Theme 2
ESSENTIALIA OF THE CONTRACT OF SALE
Nature of the Contract:
❖ INTENTION OF THE PARTIES is: to deliver undisturbed use, enjoyment and
disposal of thing sold to buyer.
❖ When BOTH Buyer and Seller know Seller is not owner (Stolen)= juridical
impossibility ( illegality )= Deed of sale NULL AND VOID.
❖ Stipulation: no Transfer of Ownership= not Contract of Sale (Essentialia not met)
Case: [4] Vasco Dry Cleaners v Twycross 1971 1 SA 603 (A)
✓ Facts complicated with consecutive sales of dry-cleaning business incl.
equipment.
✓ Court had to determine whether agreement between P1 and P2 was indeed
sale.
✓ Court held that for there to be sale:
→ Parties must have consensus on all 3 essentialia
→ True intention was not sale but rather moneylending secured by pledge
→
Court will only give effect to TRUE INTENTION of the parties and not
pretence of sale
The Object Sold (Merx/ res vendita )
❖ For Valid Contract of Sale:
• Object must either be determined or determinable at time of conclusion!
• Requirement satisfied: Execution= Physically Possible
• If description is too vague= Contract is NULL AND VOID
❖ Thing can be Movable/Immovable, Material/Immaterial BUT:
• Must be able to SELL COMMERCIALLY (AKA: Merchantable Merx)

❖ Object Merchantable but ALIENATION (Sale) Prohibited:
• Portion of Agricultural Land unless consented by Minister of Agriculture.
• Portion of Land in a township UNLESS declared an approved township.
Case: [6] CWA Snyders NO v Louistef (Pty) Ltd 2017 JDR 1264 (CC)
✓ Louistef sold site license (to sell petroleum products) to Snyders Family Trust
→ Site license issued ito Petroleum Products Amendment Act 2003 (PPA)
✓ Snyders Trust attorneys said that the sale was invalid and unlawful
→ Approached high court for DECLARATORY ORDER
✓ HC
→ Common mistake – SITE LICENCE NOT MERCHANTABLE MERX –
therefore impossibility of performance – therefore sale was void ab initio
✓ SCA ( appeal brought by Louistef )
→ Snyders Trust: no legal rights from site licence – no res vendita – no sale
(void ab initio )
→ SCA per Fourie AJA:
• No merit in above argument
• Louistef derived personal right from site licence
• Delectus Personae (“choice of person” = free selection of person
for a position)
• License commercial value for both parties = merchantable merx
• Compared with stipulations of a liquor license
• Sale was valid, appeal was upheld.
✓ CC
→ Held: Entitlement to transfer site licence = asset with commercial value
BUT subject to 2 constraints (restrictions):
• Transferred only to new lessees/ new owners
• Cannot survive termination of lease period
→ Existed for only limited period & only against new lessees/owners
→ There was no deprivation of property & Snyders Trust constitutional
angle was without merit
→ Snyders Trust benefitted from transfer (cannot have its cake and eat it!)
→ Leave to appeal by Snyders Trust was dismissed