Mr Chikuni

Topics: Contract, Negotiable instrument, Promissory note Pages: 59 (13737 words) Published: October 10, 2013
 Law Of Purchase And Sale
Definition-:
 A sale is a contract in which one party delivers a thing to another who on his part promises to pay a certain price i.e. exchange of property for a price which is exchange of a merx for a pretium.

 A contract by which one party delivers, transfers or promises/ agrees to deliver or transfer a thing to another who in turn promises to pay a certain price in money consideration.

Essentials


Agreement-Animus-Intention
 Animus venendi – agreement or intention to sell. One party must agree to sell.  Animus emendi – agreement or intention to buy. The other party should agree to buy.
Goods held on behalf of seller for le to third parties do not amount to amount to a contract of purchase and sale. Holder is an agent and has not agreed to buy therefore there is no agreement of sale.

Where there are disguised contracts, the law will take them for what they really are. Disguised agreements are those in which the parties pretend the contract is something other than it really is eg where sale of land is disguised as a lease.  Formalities must be met. The agreement may be oral but the following requires writing formalities.

 Sale of land plus any interest in land except where it is an auction or a lease or a mining claim. Such contracts must be reduced to writing and signed by parties or agents with written consent, failing of which the contract is void. The property must be defined or described with precision for identification.

 Where execution in writing has, by express agreement, been made a condition precedent for contract validity.



Merx – thing-subject matter

Prepared by Mbira Leonard, Masvingo Poly. [Msc. Finance & Investments, NUST]

Page 1

 The subject matter must be defined with sufficient certainty- it must be clear to both contracting parties on what is being bought and sold.
 All appurtenances essential for the effective use and enjoyment of the property sold are, as implied by law, included in the sale except where the agreement is to the contrary.
 Future goods which are goods yet to exist may be validly sold – hence there may be a valid sale of what may be expected to come into existence e.g. next year’ crop or a property yet to be built.

 As a general rule the sale would be void for initial impossibility if, unknown to the parties, the property was not in existence or had ceased to exist at time of the contract except


Where the non existence of the property is due to the fault of either party or



If the seller had represented or promised it exists.

 A sale of another person’s property is valid and the seller is obliged to deliver to the buyer or pay damages upon failure.
 The thing must be intra commercium or merchantable
 Extra commercium goods are goods which may not be bought or sold 

Things outside the realm of commerce e.g. air, sunlight etc



Public property, where this cannot be alienated even by the controlling authorities.



Fixed property inherited under a will specifically prohibiting sale of such property except where a court overrules such a provision.



Right of inheritance to a person still living



Things administered in a fudiciary capacity by such an agent or trustee cannot be sold by that agent or trustee



Registered goods requiring some license cannot be bought and sold without such a license.




One’s own property cannot be bought by oneself.

Price

 Should be expressed in money


If price is in the form of property or services then it’s not a sale.

Prepared by Mbira Leonard, Masvingo Poly. [Msc. Finance & Investments, NUST]

Page 2



Where price/consideration is in the form of both goods and/or services and money, money should be the major consideration. This also applies to a trade in.

 Must be fixed or fixable either expressly or impliedly i.e. ascertainable from the contract e.g.


Agreement for price to be fixed by...
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