ESSENTIALS: THING TO BE SOLD

Question 1

What is a sale contract?

Answer 1

A contract in which the seller promises to deliver a thing to the buyer, the latter agreeing to pay a certain price.

Question 2

What is the case that defines a sale contract?

Answer 2

Treasurer-General v Lippert

Question 3

What are the two essentials of a contract of sale?

Answer 3

AGREEMENT on the:
1. Thing to be sold
2. Price to be paid

Question 4

What is the latin term for the thing sold?

Answer 4

Merx or res vendita

Question 5

What did the court hold in Hamburg v Pickard?

Answer 5

The parties to the sale must reach agreement over the subject matter of the sale.

Question 6

What is the general requirement regarding the subject matter of the sale?

Answer 6

It must be:
1. Defined and ascertainable
2. Existing at the time of the contract or having a potential existence.

Question 7

What are things that can be sold?

Answer 7

1. Sale of res sua
2. Unascertained goods
3. Future goods
4. Res aliena
5. Things which are the subject of litigation (res litigiosa)

Question 8

What are the two forms of sale for future goods?

Answer 8

1. Emptio rei speratae
2. Emptio spei

Question 9

What is emotion rei speratae?

Answer 9

1. A contract of sale of future things which must be determinate or specific
2. Depends upon the condition of its future existence

Question 10

What is emptio spei?

Answer 10

1. Sale/purchase of a hope/expectation that something might come into existence irrespective of whether it does or does not come into existence in future.
2. Effective even if the thing does not appear

Question 11

What are the things that cannot be sold?

Answer 11

1. Res extra commercium
2. Things which cannot exist
3. Things which have ceased to exist at the date of sale
4. Res litigiosa (champerty)
5. Sale of a right of inheritance (while the person is still alive)

Question 12

Which case deals with the things that don’t exist for unsellable things?

Answer 12

Theron Ltd v Gross

Question 13

What did the court hold in Theron Ltd v Gross?

Answer 13

A contract for the sale of a specific thing, which has ceased to exist at the time of the contract, is not binding on the parties.

Question 14

What are the facts of Hamburg v Pickard?

Answer 14

Pickard claimed that he had verbally sold to Hamburg a hotel situated in the Cape Colony together with the furniture therein for 20 000 pounds sterling. Pickard’s offer only included the hotel building whereas his agent’s offer included the hotel building concluding furniture, stock for 24 000 pounds, Hamburg thought he was accepting the second offer at a reduced price (20 000).

Question 15

What was the holding in Hamburg v Pickard?

Answer 15

Parties to the sale must reach agreement over the subject matter of the sale.

Question 16

Which cases deal with res sua?

Answer 16

1. Cawcutt v Teperson and Saacks.
2. Hilton Quarries Social and Athletic Club v CIR.

Question 17

Which case deals with goods which do not yet exist but may also be the subject of a valid sale?

Answer 17

Hamilton-Browning v Denis Barker Trust.

Question 18

What does Hamilton-Browning v Denis Barker Trust say?

Answer 18

1. Sale of spes is not subject to a suspensive condition
2. Result of entry into an emptio spei is that the purchaser must pay even if nothing comes into existence, and the purchaser gains if the result is greater than expected
3. Price is due immediately the contract is concluded
4. If seller fails to act as contemplated, he is liable to pay as damages “the speculative value of the catch”.
5. Contract takes effect whether or not the merx of which the spes was sold comes into existence.

Question 19

Which cases deal with emptio rei speratae?

Answer 19

1. Tulloch v Marsh.
2. Richtown Development v Dusterwald

Question 20

What are the facts of Tulloch v Marsh?

Answer 20

Tulloch sued Marsh for 10 pounds and 10 cents for a set of artificial teeth made by himself and supplied by him to Marsh’s wife.

Question 21

What legal issue did Tulloch v Marsh deal with?

Answer 21

The proper test to distinguish between a contract of sale and letting/hiring.

Question 22

What is the legal rule in Tulloch v Marsh?

Answer 22

1. When a customer supplies the material and the other party the work= letting/hiring
2. When the workman produces an article manufactured by himself out of his own material/which he supplies to the customer= sale.

Question 23

What are the facts of Richtown Development v Dusterwald?

Answer 23

DW claimed payment of certain arrears instalments due to it, ito a written contract of sale of certain undivided shares in units ito the Sectional Titles Act. A plan was attached to the contract but the plan was non-compliant with the requirements for a sectional plan laid down by the Act. RT claimed that as a unit within the meaning of the Act had no existence. DW claimed the contract was a emptio spei or emptio spei speratae.

Question 24

What did the court hold in Richtown Development v Dusterwald?

Answer 24

1. Emptio spei speratae only comes into existence when the object has been stipulated actually comes into existence
2. Emptio spei speratae is a sale subject to a suspension condition up to the stage that merx actually comes into existence.

Question 25

Which case illustrates the sale of things which have ceased to exist at the date of sale?

Answer 25

Scrutton and Scrutton v Erlich

Question 26

What are the facts of Scrutton and Scrutton v Erlich?

Answer 26

Scrutton bought mining rights in an area but war happened and after the war, he attempted to sell his rights to a 3rd party however at that time new mining legislation had illegalised the sale of mining rights.

Question 27

Which case deals with the requirememnt of consensus on price?

Answer 27

Westinghouse Brake v Bilger Engineering.

Question 28

What did the court hold in Westinghouse Brake v Bilger Engineering?

Answer 28

There can be no valid contract of sale unless the parties have agreed, expressly or by implication, upon a purchase price.