Credit Agreement Resolutive Condition

Topics: Contract, Real estate, Transaction processing Pages: 5 (1687 words) Published: April 21, 2013
Pactum reservati dominii
2.Facts of the case and the issues to be decided4
3.Validity and effects of pactum reservati dominii in the present case5 Conclusion7

Table of Cases
Quirk’s Trustees v Assignees of Liddle & Co. (1884 – 1885) 3 SC 322 Courtney-Clarke v Bassingthwaighte 1990 NR 89 (HC)
Smith & Venter v Fourie 1946 WLD 9
R v Ellinas 1949 (2) SA 45
Gosvenar Motors v Samson 1956 (3) SA 169
National Motors v Fall 1958 (2) SA 570

The law governing credit transactions is the Credit Agreement Act 75 of 1980 (hereinafter referred to as the Act) which replaced the Hire-Purchase Act 36 of 1942 as a result of Proclamation AG 17/1981 which states that “Subject to the provisions of this Proclamation, the Credit Agreements Act, 1980 shall apply to the territory of South West Africa.” The act regulates transactions where movable goods are purchased or leased on credit. It also applies to services rendered on credit. According to the Act, a credit agreement is a credit transaction or a leasing transaction or any transaction with the same import regardless of its form or regardless of the fact that the transaction(s) is subject to resolutive or suspensive conditions. For the purpose of this assignment, I will only discuss issues pertaining to credit transaction because the case of Quirk’s Trustees which is central to the question whether there is sale before the last assignment is paid falls with the ambit of this paper. A credit transaction according to the Act includes ‘goods sold and services rendered against payment of a stated of determinable future date or in whole or in part in instalments over a period in future’. Section 1 (b) states that the “goods” shall mean movable goods or in other words movable property. This point is significant given the nature of the problem we are faced with of whether a contract of sale by credit exists. 1.Pactum reservati dominii

Before looking at the facts in the case of Quirk’s Trustees v Assignees of Liddle & Co ., It is important to briefly discuss the concept of pactum reservati dominii. Credit agreements are in a form of pactum reservati dominii which entails that the seller allows the purchaser to take possession of the goods but ownership is retained by the sell until the buyer or purchaser has paid all the instalments. The pactum reservati dominii is meant to protect the seller who sells goods on credit. It also provides the seller with security in case the buyer defaults on the payment of instalments. The pactum clause is the same as a suspensive condition. It suspends not only ownership but also the whole contract of sale until the fulfilment of the suspensive condition – the payment of the purchase price in full. It means that unless there is an agreement to the contrary, the risk will only pass to the buyer when the last instalment has been paid. Consequently, the Aedilitian remedies for defects of the goods are not available to the buyer until the payment of the last instalment. 2.Facts of the case and the issues to be decided

The case of Quirk’s Trustees v Assignees of Liddle & Co is concerned with the transfer of ownership. The Briefly the facts from the headnotes are as follows: Q sold the furniture, fitting and stock of a certain hotel premises to L., who subsequently assigned his estate for the benefit of his creditors, and Q and L.’s assignees the entered into the following written agreement: “ Sold by L.’s assignees to Q. all the furniture, fitting etc. – in fact, everything stored in the town for £650, Q. to give bills at three, six, nine and twelve months. Property in goods bought to pass to Q. only upon payment of the last bill”. The greater portion of the goods so sold was delivered to Q., who, however, neither gave the bills nor paid any portion of the price. Q. the surrendered his estate. Q.’s trustees and L.’s assignees both claimed the goods...
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