Seller required to take care of res vendita until merx is made available
The discussion of risk above indicates that the risk of accidental loss normally passes to the buyer as soon as the contract of sale is perfecta. This, however, does not release the seller from all responsibility for the thing sold while it remains in his possession. The general rule is that the seller is under an obligation to take care of the thing until the time comes for performance, and that he is responsible for any damage caused by his fraud or negligence. In Frumer v Maitland, Schreiner JA said,
It will be convenient to consider first the obligations of a vendor who has not yet delivered the property sold. It is his duty to look after it as would a bonus paterfamilias and if he fails in that duty the purchaser would be entitled to claim damages, or, if, but only if, the result of the vendor’s neglect is that the thing sold is materially different from the thing tendered, to repudiate the contract and to refuse to take delivery.”
Where it is the seller who is in mora, the seller becomes liable for all loss, no matter how it comes about. Only if it can be shown that the damage would nonetheless have occurred, even if the thing had been delivered, will the loss be the buyer’s.
The extent of the duty to take care pending delivery is altered if the buyer is in mora in taking delivery. If the buyer has failed to take delivery, the seller is only liable for the consequences of his gross negligence (culpa lata) or fraud (dolus). He is not liable for ordinary negligence.
The measure of care may also be varied by agreement.
Where the res vendita has been damaged or lost while in possession of the seller prior to delivery, and the responsibility is not the seller’s, he must cede to the buyer any rights of action he might have in respect of the damage, so that the buyer might exercise these rights in covering his own loss. If, for example, the goods are stolen and found in possession of a third party (not the thief), the seller must cede his vindicatory rights to the buyer.
The buyer’s remedies
Where the seller has not taken due care, the remedies available depend on whether the goods are specific or unascertained.
Specific goods
In the case of specific goods, where the damage is material, the buyer is entitled to refuse to accept delivery of the goods and to repudiate the contract, claim damages, and a refund of the price if paid. In other words, he is entitled to treat the situation as he would non-delivery of the thing. Where the damage is not material, the buyer must accept the delivery of the goods, and then claim damages.
Unascertained goods
Where the sale is of unascertained goods, the buyer may reject the goods and once again treat the seller as if there had been no delivery at all (whether the breach is major or not), provided the damage is not trifling. Where, however, the purchaser accepts the res vendita, but claims damages, the damages are estimated on the basis of the difference between the value of the sound goods and the value of the damaged goods delivered. The buyer may also claim any wasted necessary expenditure.
Seller’s duty to make available the thing sold
This duty is the same as the duty to “deliver the res vendita,” as it is most often described—including in the new Consumer Protection Act. Some prefer Kerr’s description. One should understand the terms “making the thing sold available” and “delivery” as being synonymous.
Mackeurtan deals with this matter in great detail, enumerating the six elements of this duty (with semantic variations) as follows:
to make the thing available at the agreed time and place;
to make the thing available in the condition that it was at the time of sale;
to make the thing available in accordance with specifications regarding size, quantity, quality or any other aspect agreed upon in the contract of sale;
to make the thing available with all its accessories, appurtenances and fruits;
to place the buyer in a position whereby he acquires vacua possessio (undisturbed possession); and
to do, at the seller’s own expense, whatever is necessary to make the thing sold available to the buyer.
Agreed time and place
The seller must make the thing available at the time and place stipulated in the contract.
Time
If no time is stipulated, the res vendita must be made available immediately (if performance is possible at the time of sale), or within a reasonable time (if the process must necessarily take time). The circumstance of each contract determines what is a reasonable time. A seller who fails to make the thing sold available at the appropriate time is in mora.
The seller is not entitled to deliver by instalments if the contract was not to that effect. Where periods are stated for delivery by instalments, though, the seller is bound to deliver as agreed upon.
Place
The seller must make the thing sold available at the place agreed upon in the contract. If no place is agreed upon, he must make it available at the place where the article is, if it is specific. If the res is unascertained, the seller must make it available at his place of business; if he has no place of business, then at his residence. If the thing is ordered to be manufactured, the thing must be made available at the place of manufacture, in the absence of any agreement to the contrary.
Same condition as at time of sale
In Frumer v Maitland, Schreiner JA noted that, “The appellant was entitled to delivery of the house in a state not materially different from that in which it was at the date of the contract.”
In accordance with specifications
The rules regarding this element are protean. The following discussion considers only two facets.
First, it should be pointed out that, where sales are concluded by sample, such a contract contains an express warranty that the bulk of the goods conform to the sample. If the final consignment does not comply, the warranty is breached, and the buyer has an actio empti, and a full range of contractual remedies, including (where appropriate) a claim for damages.
Secondly, as Volpe puts it, “The seller may not make available more or less than the amount stated in the contract, nor the contract goods mixed with others of a different description.”
In Cedarmount Store v Webster & Co, Wessels JP held,
According to our law a contract to deliver at one and the same time a number of articles of a particular quality is prima facie an entire contract, and the seller has no right to alter the nature of the contract. ASi in emptione modus dictus est et non-praestatur ex emptio actus est. It is based upon the principle that a creditor cannot be compelled to accept a partial payment or a part performance of a contract. Although the subject matter of the contract is physically capable of division, yet from the legal point of view the obligation is a payment of the entire sum due or a number to be delivered. There is no duty cast upon a purchaser to separate the bad part of a consignment from that of the good. As soon as he satisfies himself that out of a large number of bags there is an unreasonable number defective, he is, prima facie, entitled to reject the lot.”
There is some dispute about the powers of a purchaser with regard to violations of this requirement.
With all accessories, appurtenances and fruits
Mackeurtan defines these words as follows:
Accessories “are those things which, though capable in the abstract of separate conception, in fact form an integral portion of the principal thing, and lose their individual existence.” He gives the following examples of accessories: anything that springs organically from an object (trees, etc.), and anything attached to the principal thing in a permanent manner (buildings on land, an arm on a statue, etc.). Accessories are identifiable by the nature of the thing, the way they are attached to the principal object, and the intention of the one who attached it.
Appurtenances “are its auxiliaries, which are not absolutely identified with it, but share its destiny, legal conditions and relations.” They are naturally adapted to serve and augment permanently the utility of the principal thing. Examples would be the keys to a chest, the sheath of a sword or the bottle containing liquor.
The seller must also make the thing sold available with any fruits accrued to it since the sale was perfecta. The important date is that on which the benefit passes. Natural fruits include all natural products of the thing, including anything extracted from it (crops from land sold, for example), while civil fruits refer to any pecuniary advantage that accrues to the thing (for example, interest and rents).
Vacua possessio
This obligation means, first, that the seller must make the thing available in such a manner that no-one is alleging any immediate right of possession over the res. In other words, at the time the thing is made available, the buyer must acquire free and undisturbed possession.
Secondly, it means that the seller must make available the thing sold in such a way that no-one in future can establish a superior legal right to the thing against the buyer. This particular part of the seller’s obligation involves the warranty against eviction.
Whatever is necessary to make the thing sold available
This obligation may be subdivided into a number of duties.
Where the res vendita comprises unascertained goods, the seller must appropriate them to the contract and ensure that the quantity and description and quality of the goods thus appropriated are in accordance with the terms of the contract.
If anything has to be done to the res vendita to put it in a deliverable state, the seller is responsible for doing so at his own expense.
The seller must, if the buyer requires this, give the latter reasonable opportunity to examine the thing prior to acceptance.
The seller must give notice to the buyer of the fact that the thing is available, if the buyer cannot reasonably be expected to appropriate the thing without such notice.
Buyer’s remedies
Mackeurtan writes,
The seller of goods may be in default as regards his duty to deliver, either by not delivering at all, or by delivering goods other than, or more or less than, those bought, or because he has tendered the goods at an improper time or place. He may have repudiated his obligations. He may have broken his warranty against eviction, or his obligation to take care of the goods until delivery [….] These are clearly breaches of contract for which the buyer’s remedies are contractual.”
The nature of remedies for breach of this residual duty are particularly detailed and complex. A brief summary is given here, based on Kerr’s discussion.
Specific performance
The buyer has a right to demand the thing sold to him (subject, of course, to the court’s discretion to refuse it). The remedy is available to a buyer who rejects the tender of goods as being inappropriate. As we have seen, a buyer, having received less than what he contracted to receive, may prefer to accept what was tendered, but sue for the balance to be produced.
Cancellation
Failure to make the goods available in a contract of sale is a major breach. It entitles the buyer to cancel the contract. In Landau v City Auction Mart, Watermeyer JA said,
I can find nothing in Roman-Dutch law which stands in the way of an order being made in favour of a purchaser for cancellation of a contract of sale and repayment of the price by reason of a refusal by the defendant to deliver the property sold.
Damages
If the seller fails to make the goods available, damages may be awarded (with or without cancellation, depending on the circumstances and type of breach), according to the general principles of contract.
Seller’s duty to transfer ownership
The seller has a duty to transfer ownership if he has it, or can obtain it, failing which, his duty is to warrant the buyer against eviction.
Transfer of ownership
The seller, as noted before, need not be the owner of the thing he is selling. In most circumstances, he is, though, and is therefore obliged to transfer ownership. This duty, although seeming to amount to common sense, has been a source of some debate in South African law. In particular, uncertainty has been caused by statements made by Wessels JA in the case of Kleynhans Brothers v Wessels Trustee. This debate is considered in due course.
Should a seller mala fide fail to transfer ownership, the buyer has an action ex empto for transfer of ownership, as soon as he discovers the true position.
Warranty against eviction
Again, the seller is normally the owner of the property. He is expected to transfer this ownership as part of the sale. What happens, however, in the situation where someone bona fide believes he is the owner of the thing he is selling, but in fact is not? Such sales are, of course, valid, but ever since Roman days the law has said that a person who buys and takes possession of property from such a seller has no action unless and until he is threatened with eviction by someone with better legal title to the property (usually the true owner). The action arises in such circumstances out of what is known as the warranty against eviction. The warranty requires of the seller that he do whatever is legally possible to protect the buyer in his possession of the res vendita. An inability to do so renders him liable under this warranty. The warranty is obliquely re-articulated in the Consumer Protection Act.
Three basic requirements must be met before the seller becomes liable on the buyer’s eviction:
– Eviction
– Notice
– Determined defence
Eviction
Voet states, “Eviction is the recovery by judicial process of our property, which the opponent has acquired by iustus titulus.” In present times the word has a much wider connotation than that given in Voet’s definition. It means any lawful interference with vacua possessio, by seller or third party. In Norman’s Purchase and Sale, it is said that eviction
thus includes a demand on the part of a third person to hand over the property sold to him if the purchaser is unable to resist such a claim; the refusal of the person in possession of the property to relinquish it to the purchaser; the demand for payment of a sum of money by the purchaser in order to retain the whole or portion of the res vendita; and conceivably the existence of a concealed servitude over the property which interferes with the use and possession of the property. In short anything which weakens the purchaser’s right to the whole or a portion of the thing sold, or which constitutes a menace to his right of having free and undisturbed possession.
The seller is not liable for any unlawful interference with the buyer’s possession. Liability only arises if the interference is the result of a flaw in the seller’s title. The flaw must have existed at the time of sale or, if it arose subsequently to the sale, be due to the seller’s own act. Eviction, therefore, does not include situations where the sale is set aside by the court, or if the property is attached by the seller’s creditors before ownership passed.
The warranty begins to operate as soon as the buyer’s vacua possessio is threatened.
“The idea of eviction,” writes Volpe, “has also been extended to cater for successive sales: the repayment of the purchase price to the purchaser who has been evicted is equated in that situation with the seller’s own eviction and serves as such when the seller looks next to the one from whom he himself bought.”
Thus Kerr writes, “The facts of Olivier v Van der Bergh and Louis Botha Motors v James Slabbert Motors show that it is not uncommon for A to sell to B and B to C (possession being transferred in both cases) before the true owner makes his claim. These decisions show that once a claim has been made against C and he has surrendered the thing sold, whether after judgment or because he can show that the claimant has an unassailable right he may claim compensation from B and B may claim from A. C may not, in the absence of cession, claim direct from A.”
In cases where there has been a string of successive sales, however, intermediate parties who have bought and then sold goods on to other parties do have the locus standi to bring proceedings to determine whether the person claiming a right to the property has a legitimate right to do so.
The action on the warranty also arises where the res vendita or part of it is in the possession of a third party, and the buyer is unable to obtain it.
Notice
As soon as eviction is threatened, the buyer is required to give the seller notice of the third party’s claim to possession of the thing. The seller has to be given adequate notice to fulfil his obligation to protect the buyer’s possession. The duties of the seller are somewhat unclear, but it seems that he is expected to intervene in the action, and take up the defence against the other party claiming title. It is the seller’s duty under the warranty to relieve the buyer of the risks and costs of court action. If the buyer fails to give the necessary notice, he has no recourse against the seller unless he can prove that the third party’s right is incontestable, or that it is the seller’s fault that the notice did not reach him in time.
The buyer is relieved of this duty when:
The title of the third party claiming the thing is legally unassailable;
The parties have expressly agreed that notice is not required
Notice is not given owing to the seller’s own fault
The seller has sold property mala fide, in which case the seller is liable for fraud in terms of the actio ex empto
Determined defence
The buyer, faced with eviction, is required in most circumstances to put up a determined defence (virilis defensio) of his possession, unless he can prove that the claimant’s title was legally unassailable. This must be done when the seller has failed to assist the buyer, either because he cannot be found, or because he refused to assist.
The buyer’s remedies
Kerr states that a buyer claiming under the warranty is entitled to repayment of the purchase price (or whatever portion has been paid) and, if loss over and above the amount can be shown, compensation for such loss. The action is a contractual one, which is sued for by means of the actio empti.
Being a bona fide possessor, the buyer could also claim for any improvements made to the property, this from the true owner.
Where eviction is partial only, and insufficient to entitle the buyer to claim rescission, he is entitled to claim the difference between the value of the property at eviction and the value of what is left to him.
It is important to remember that the warranty is residual. One may contract out of it, if this is possible.
Duty to make res vendita available free from defects
The seller is required to make the thing sold available without defects or diseases.
Where the seller makes the res available with a defect, a number of considerations determine the nature and extent of the remedy available to the buyer. In any defect case, one needs to consider two critical things:
the nature of the defect (whether it is a patent or a latent defect); and
the nature of the remedy.
In certain circumstances, the buyer’s remedy is clearly contractual (enforceable in terms of the actio empti). In other circumstances, the remedies are not contractual; they find their roots in the aedilitian actions of Roman law. The extent of relief available differs, depending upon which remedy applies. Historically, contractual actions entitle the buyer to consequential damages, while the aedilitian remedies do not. While some decisions do not specify which remedy is referred to, the differences in the nature of the remedies remain important.
Patent defects
Patent defects are defects obvious to the naked eye: easily discoverable by the buyer at the time the goods are received. An example would be a scab on a sheep. Where specific goods are identified, or unascertained goods are appropriated by the seller to the contract, and the goods suffer from a patent defect, the seller may be sued for breach of contract by defective performance. The remedies are therefore contractual; consequential damages may be claimed.
Where the buyer has inspected the res vendita at (or before) the time of sale, and the inspection ought to have disclosed a defect, and the buyer accepts the goods without objection, the seller is not liable provided he has not warranted (expressly or impliedly) the absence of the defect, nor fraudulently concealed it. The reasoning behind this rule is that the buyer has waived his remedies by his conduct. He is deemed to have bought the goods subject to the defect, which he ought to have discovered.
Latent defects
In Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd Corbett JA defined a latent defect as follows:
Broadly speaking in this context a latent defect may be described as an abnormal quality or attribute which destroys or substantially impairs the utility or effectiveness of the res vendita for the purpose for which it was sold or for which it is commonly used. Such a defect is latent when it is one which is not visible or discoverable upon an inspection of the res vendita.”
In other words, a latent defect would not be apparent to an ordinary person, even if an expert might have discovered it. Where the seller makes the thing sold available, and it is discovered that the thing has a latent defect, the seller is liable to the buyer in four circumstances. It is important to note that the first three categories allow an aggrieved party a contractual remedy: that is, an actio empti, which includes a claim for consequential loss or id quod interesse. The fourth category provides for aedilitian relief.
The four categories are:
where the seller has acted fraudulently, or mala fide;
where the seller has warranted the absence of a latent defect;
where the seller is an artifex, manufacturer or seller, or is a dealer professing attributes of skill and expert knowledge in relation to the thing; and
where the aedilitian actions are available.
Fraud
Regarding mala fides on the part of the seller, Glaston House (Pty) Ltd v Inag (Pty) Ltd.
Warranty
Where the seller has given an express or implied warranty against the existence of the defect, or has warranted the fitness of the res vendita for the purpose for which it is bought, the seller is liable. The action is contractual. The case provides a useful distinction between contractual and aedilitian remedies for latent defects.
Skill and expert knowledge
The leading cases are Kroonstad Westelike Boere Ko-operatiewe Vereeninging v Botha and Another, Holmdene Brickworks, Sentrachem Bpk v Weinhold, Langeberg Voedsel Bpk v Sarculum Boerdery Bpk, Sentrachem Ltd v Prinsloo Ciba-Geigy (Pty) Ltd v Lushof Farms (Pty) Ltd and D&H Piping Systems (Pty) Ltd v Trans Hex Group Ltd See also section 61 of the Consumer Protection Act.
Aedilitian actions
A seller is also liable for latent defects in the merx in terms of the aedilitian actions. The curule aediles were the Roman magistrates in charge of markets and public works. They had the power to issue edicts. Their most famous edict concerned a seller’s liability for latent defects. Ulpian said,
Labeo writes that the edict of the curule aediles applies as well to sales of land as to sales of chattels inanimate or animate. The aediles say: “Sellers of slaves are to inform buyers of any disease (morbus) or defect (vitium) in any slave and whether any slave is a runaway, a vagabond, or not free from noxal liability; all these matters they must declare with proper publicity when the slave shall be sold. But if a slave was sold in contravention of the foregoing or in contravention of what was stated or promised when he was being sold we grant to the buyer an action for redhibition of the slave. The motive for the proposition of this edict is to defeat the artifices of sellers and to assist buyers whenever they are cheated by sellers. It is however, to be understood that a seller, even though he was unaware of the existence of faults must nevertheless be held liable. Nor is this unfair, for the seller was in a position to inform himself on these matters, while to the buyer it makes no difference as to whether his deception is due to the seller’s ignorance or guile.
The seller’s obligations and the buyer’s rights in terms of the aedilitian actions arise ex lege by operation of law, not with reference to the contract itself. One must not refer to an implied warranty against defects being present.
The aedilitian actions are the actio redhibitoria and the actio quanti minoris, both of which are available in South African law. Each action provides the aggrieved buyer with certain specific remedies. Each has some similar elements:
The actions are available (in the case of defects)
if at the time of the sale the thing suffers from a disease or defect; and
if it was sold “in contravention of the edict” (adversus ea); in other words, if there has been non-disclosure of the defect or disease.
Defects and diseases
This matter is canvassed by Kerr. There is little need, then, to detail it here. As far as defects are concerned, Corbett JA’s words in Holmdene still apply. The remedies lie only if the disease or defect existed at the time of sale. Kerr says,
Aedilitian actions do not lie if the thing sold was sound at the time of the sale although it had suffered previously from a disease or defect. It is important that it should be wholly sound, not merely a defective part that should have been repaired or replaced. Just as the actions do not lie if the thing, having previously been diseased or defective is sound at the time of sale, so also they do not lie if the thing was sound at the time of sale but became diseased and defective thereafter.
The existence of the disease or defect at the time of the sale is a question of fact that the buyer must prove on the balance of probabilities. An inference that the disease or defect existed at the time of sale may be drawn from the fact that the disease or defect manifests itself shortly after the sale.
Obviously the buyer does not have to prove that the defect was apparent at the time of sale. Where the subject matter of the sale is a class of goods (bags of maize, for example, or pockets of oranges), the aedilitian remedies apply. Yet the extent to which the buyer is entitled to redhibition is determined by whether the contract was divisible or indivisible. Mackeurtan states: “The redhibition to which the purchaser is entitled extends only to the affected articles, unless the contract may properly be regarded as an indivisible one for the sale of the articles as a whole.”
Adversus ea
The seller must sell the property in contravention of the edict; in other words, must defy the requirements of the edict by failing to disclose the existence of the defect. The ordinary rules of non-disclosure apply here, but the facts of the case determine which of the two actions is appropriate.
The actio redhibitoria is an action for the cancellation of the contract and restitution. It involves the restoration of the parties (buyer and seller) to their original positions, as far as this is possible. One is not entitled to a claim for one’s consequential loss (id quod interesse) in terms of this remedy.
The test to determine whether the buyer is entitled to redhibition is objective. In Reid Brothers v Bosch, the test was expressed in two ways:
A buyer is entitled to rescission of the contract if the defect is of such a nature as to render the article completely unfit for the purpose for which it was bought (for everyone, not just the specific buyer).
A reasonable buyer would not have bought it at all had he known of the defect.
In other words, the defect must be material if it is to justify redhibition. Whether the buyer is entitled to redhibitory or quanti minoris relief depends, therefore, on the seriousness of the defect. The defect must not be merely trifling—it must hinder or prevent the usefulness or serviceability of the thing—if it is to justify complete redhibition.
If redhibition is applicable, the buyer is entitled to a refund of the purchase price, plus interest, and of course reimbursement for useful or necessary improvements made to the res. The buyer is obliged, however, to inform the seller of the defect, and to tender a return of the thing (plus accessories, appurtenances and fruits).
The buyer’s right to redhibitory relief is terminated in the following circumstances:
where he uses the article in such a way as to make it impossible to return it to the seller;
where it has been destroyed or damaged materially due to the buyer’s negligence;
where the buyer fails to discover the defect and to return the thing within a reasonable time after the discovery of the defect (or the time when the defect should reasonably have been discovered); and
where the buyer, knowing of the defect, exercises rights of ownership over the article (for example, where he arranges to have it repaired).
Where the article has been destroyed as a result of the defect itself, or in the course of its normal use, or accidentally, the buyer is still entitled to redhibitory relief.
The actio quanti minoris (also known as the actio aestimatoria) is the other action to be considered here: an action for the return of a portion of the purchase price. The actio quanti minoris may be sought as a remedy in two circumstances.
In the first instance, the basic requirements for an actio redhibitoria are the same as those that give rise to the actio quanti minoris. Wherever such circumstances are present as justify complete redhibition, the buyer has an election to choose which of the two actions he prefers. If he has this choice, he may
restore the thing and claim the price paid; or
retain the thing and reclaim part of the purchase price.
The actio quanti minoris may also be sought in a second set of circumstances. Where the defect is of such a character that it is not material enough to give rise to a redhibitory action, it may nevertheless give rise to an actio quanti minoris. A buyer may therefore claim a reduction in the purchase price if (despite the defect) he would still have entered into the contract, but at a lower price. A buyer may sue for a redhibitory action, claiming quanti minoris damages in the alternative.
When the actio quanti minoris is used, the buyer, if successful, is entitled to the return of a portion of the purchase price. The actual amount is calculated on the basis of the difference between the purchase price and the actual value of the thing sold.
The calculation of the award in current South African law is different from that of Roman law, where the amount awarded would be calculated on the basis of the difference between the price actually given and the price the purchaser would have paid if he had known of the defect. It is, in other words, a subjective test. In South African law, the measure of relief is usually the difference between the actual purchase price and the value of the article in its defective state. The value of the defective thing must be ascertained as it is in the case of failure to make available the thing sold: by reference to the market price, if there is one. If no market price can be established, the best evidence available must be used to establish the actual value of the thing sold. Another means of assessing the amount recoverable is by referring to the cost of repairing the defect that existed at the time of sale and/or remedying any deterioration that might have occurred as a result of the defect. Only reasonable costs of repair may be taken into account in this regard.
A measure of controversy exists as to the date to be used when determining the actual value of the thing sold. After considering the cases, Kerr comes to the conclusion that the relevant date is the date when the sale took place.
Where the sale involves a res vendita, consisting of a number of articles, and one or more of them is defective, the quanti minoris relief exists only in respect of the defective articles. If the sale is indivisible, however, the buyer is entitled to relief only if a valuation of all the articles, both defective and sound, clearly shows that he has received less than he has contracted for.
The right to claim quanti minoris damages is lost where the buyer, knowing of the defect, accepts the article as satisfactory in terms of the contract.
The aedilitian remedies as defences
Circumstances that entitle the buyer to redhibition, or to a reduction of the purchase price, entitles him to defend, on the basis of these facts, actions for payment of the purchase price, or any other action arising out of the contract. When the buyer is sued by the seller, therefore, he is entitled to deny liability and claim redhibitory relief as a defence if the defect is material. The same rules apply as above. This is known as the exceptio redhibitoria.
Circumstances that give cause for an actio quanti minoris may also be used as a defence to an action for the price by the seller. This is called the exceptio quanti minoris.
Exclusion of liability for defects
The following are circumstances in which the seller is not liable for latent defects in the res vendita:
where, in terms of the contract, the seller expressly excludes liability (where, that is, he sells voetstoots);
where the seller’s liability is impliedly excluded in terms of the contract;
where the defect arose after the date of sale;
where the buyer knew of the defect at the time of sale, or, having become aware of it later, expressly or impliedly accepts the position (thus waiving his remedies);
where the remedy has expired (for example, by prescription); and
where aedilitian remedies are not available to buyers in respect of goods sold at judicial sales in execution.
The only of these circumstances to be examined in detail here is the first.
It is competent for the parties to agree that the seller shall not be liable for the presence of diseases or defects. The most famous example is the voetstoots clause. Where the thing is sold voetstoots, it is sold “with all its faults” or “as it stands” or “as it is.” The term must expressly form part of the contract; it cannot be implied.
The effect of such a sale is that the seller is not liable for defects in the res vendita. Where there is an inspection of the thing by an expert, this does not necessarily make the sale voetstoots. It is important to note, however, that the voetstoots clause affects only the presence of latent diseases and defects; it does not cover the situation where a misrepresentation of any kind is made.
One big exception attaches to the voetstoots clause. A voetstoots clause does not relieve the seller of responsibility for a defective res vendita when the seller has acted fraudulently, since no-one can contract out of fraud.
There has been some polemic between the Natal courts, and those in the Transvaal and the Cape, as to what is meant by fraud in this context. Following a note by Milne, the Natal courts took the view that a seller who knew of the defect, and yet sold voetstoots, was not fraudulent unless he designedly concealed the defect from the purchaser. The Cape and Transvaal courts, however, held that knowledge of the defect coupled with a voetstoots clause was in itself sufficient to render the seller fraudulent.
These difficulties were finally cleared up by the Appellate Division in Van der Merwe v Meades. The latest case on the point is Odendaal v Ferraris.
There is also some debate about the effect of the Consumer Protection Act on the voetstoots clause.
Where there is an express term of the contract in apparent conflict with a voetstoots clause, a question arises as to whether the buyer has an action against the seller. The answer depends on the ambit of the term in the circumstances. If the term extends beyond the field of aedilitian liability, the voetstoots clause may not assist the seller. For example, a second-hand car is sold, the seller having guaranteed that the car has a new camshaft, and the car is sold voetstoots. If the seller delivers the car with a new camshaft, he is not liable for latent defects in that new camshaft. If the camshaft is not new, however, the buyer has the usual remedies for breach of contract, which have nothing to do with aedilitian remedies.
National Credit Act excludes the possibility of a valid voetstoots clause in a sale subject to that Act.
Dicta et promissa
The Romans recognised that, where a seller made a statement amounting to a dictum et promissum, and where the res vendita did not measure up to that statement, the buyer was entitled to aedilitian relief. In such cases, there is no latent defect; the problem comes in that the concept of the thing created in the buyer’s mind by the seller’s dictum et promissum is different from the true character of the thing. These remedies are relevant where a representation is made, but it falls short of a contractual warranty.
In South African law, despite any distinctions between dicta and promissa in the Roman law, the term refers to, “a statement or undertaking or promise by the seller which was intended to be acted upon by the parties.” The leading case on dictum promissumve is Phame (Pty) Ltd v Paizes, Holmes JA posed one of the questions raised by the case in the following way: “Can an innocent misrepresentation ever entitle a buyer to a reduction of the price under the actio quanti minoris? If so, under what circumstances? In other words, what factual foundation is required?”
The answer, as he saw it, was this:
What has to be considered is not innocent misrepresentation per se, but the dictum et promissum of the Roman-Dutch law and the consequential aedilitian relief. It is both unnecessary and confusing to try to fit a dictum et promissum into some modern juristic niche like a warranty or term; and then to draw conclusions therefrom as to the buyer’s rights. The Roman-Dutch authorities in particular do not require this.
Those authorities he described as “simple and clear” on the point:
If there is a latent defect, at the time of sale, ipso facto the aedilitian remedy is available (unless excluded by agreement). The seller’s obligation and the buyer’s right arise by operation of law, and not by reference to the intention of the parties. Similarly, if during the negotiations the seller made a dictum et promissum bearing on the quality of the res vendita and it falls short of it ipso facto the aedilitian remedy is available, by operation of law.
In summary, “on a conspectus of all the authorities, decisions and discussions,” he considered the law in South Africa on this question to be as follows:
“The aedilitian remedies are available if the res vendita suffered from a latent defect at the time of the sale.”
“The aedilitian remedies are also available if the seller made a dictum et promissum to the buyer on the faith of which the buyer entered into the contract or agreed to the price in question; and it turned out to be unfounded.”
A dictum et promissum is a material statement made by the seller to the buyer during the negotiations, bearing on the quality of the res vendita and going beyond mere praise and commendation.”
“Whether a statement by the seller goes beyond mere praise and commendation depends on the circumstances of each case. Relevant considerations could include the following: whether the statement was made in answer to a question from the buyer; its materiality to the known purpose for which the buyer was interested in purchasing; whether the statement was one of fact or of personal opinion; and whether it would be obvious even to the gullible that the seller was merely singing the praises of his wares, as sellers have ever been wont to do.”