Formalities in Contracts of Sale: Chapter 8 Flashcards
(18 cards)
What are ‘formalities’ in the context of a contract of sale?
The external visible form required for the contract, e.g., a written, signed document.
What is the general rule of common law regarding formalities in sale contracts?
No formalities are required for a valid and enforceable contract of sale, especially for movable property.
Are there statutory exceptions to the general rule on formalities?
Yes, certain statutory formalities are required for valid sales of immovable property.
Can parties agree to impose their own formalities?
Yes, but their intention must be examined to determine if formalities are a validity requirement or merely evidentiary.
What are the two possible reasons for parties agreeing to formalities?
(1) Validity requirement – contract is only valid after compliance.
(2) Proof of existing contract – contract already exists, writing is evidence only.
Can a written contract be informal (e.g., in a letter or invoice)?
Yes, a formal document is not necessary for a written contract to be valid.
What is the key formal requirement under Section 2(1) of the Alienation of Land Act 68 of 1981?
The alienation of land must be in a deed of alienation signed by the parties or their authorized agents.
Since when has the Alienation of Land Act been in effect?
Since 19 October 1982.
Can parties waive the formalities required under the Alienation of Land Act?
No, statutory formalities cannot generally be changed or abandoned by agreement.
Who is exempt from the requirement that an agent must have written authority under Section 2(1)?
(a) Pre-incorporation agents
(b) Partners acting for partnerships
(c) Legal representatives (e.g., parents for minors)
(d) Functionaries of companies
Are formalities required for a sale of land by public auction?
No, a public auction sale is complete when the property is knocked down to the highest bidder.
Is it certain that the Act applies to pre-emptive rights and options?
No, courts have not definitively confirmed this (see Pick ’n Pay v Eayrs, Mokone v Tassos).
What does ‘alienate’ mean under Section 2(1) of the Act?
To sell, exchange, or donate land, even if subject to suspensive or resolutive conditions.
What does ‘land’ include for purposes of the Act?
(i) Any unit (sectional title)
(ii) A right to claim land transfer
(iii) An undivided share in land
(iv) Certain interests in land (e.g., habitatio, usus, usufructus), with some exclusions.
What is a ‘deed of alienation’?
Any document(s) that effect the alienation of land—broader than a ‘contract’.
Which Acts impose similar formalities to the Alienation of Land Act?
Shareblocks Control Act 59 of 1980
Timeshare Control Act 75 of 1983
Housing Development Schemes for Retired Persons Act 65 of 1988
What does the General Law Amendment Act say about donations after 22 June 1956?
A donation is valid if in writing, signed by the donor or agent (with written authority), and in the presence of two witnesses—even if not registered or notarially executed.
What are the aims of statutory formalities in contracts of sale?
(a) To prevent disputes over contract content
(b) To avoid uncertainty
(c) To prevent malpractices
