Law of Sale and Contract

Definition of Sale

• A sale is a contract where the seller transfers a thing (goods) to the buyer in exchange for payment of a price.
• There must be agreement on two essential elements: the goods to be sold and the price to be paid.

Essentials of Sale

• Agreement on the goods means identification of the goods and their essential characteristics.
• Agreement on the price means payment in money or readily ascertainable in terms of money.

Formalities of Sale

• The contract does not have to be in writing, but statutory law requires formalities in certain cases.
• Examples of formalities:
  • Sales of immovable property (land, houses, flats, farms, etc.) must be in writing under the Alienation of Land Act 61 of 1981.
  • Small credit agreements (loans for less than R15 000) must be in writing and contain certain specified information under the National Credit Act 34 of 2005.

Transfer of the Thing

• Parties must agree that the goods will be transferred to the buyer.
• This means the buyer will receive free and undisturbed possession of the goods.
• The seller can sell something they do not own, but must agree to transfer ownership to the buyer.

Consumer Protection Act (CPA)

• Applies to all consumer transactions in South Africa.
• Introduces fundamental consumer rights.
• Substantially alters the common law in certain respects, especially in contract and sale and lease.
• Important to establish when the common law applies and when the CPA applies.

National Credit Act (NCA)

• Applies to credit transactions.
• Introduces substantial protection for consumers, especially in claiming payment for goods bought on credit.
• Regulates lending money to consumers who cannot afford the goods (reckless credit and over-indebtedness).
• Regulates charging interest.