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Hiding Behind a Voetstoots Clause

Published

2016

Tue

01

Nov

 

 

 

 

 

Brian Martin, Executive Director Legal and Compliance
Renasa Insurance Company Limited

 

 

 

 

 

Sellers of goods are frequently faced with a subsequent claim from the purchaser that the goods sold suffered from a latent defect, which impairs upon the utility of the goods purchased. A purchaser may seek to cancel the sale or to claim a reduction of the purchase price on these grounds. In an attempt to avoid liability to a purchaser, sellers may allege that the goods were sold voetstoots and that the purchaser is not entitled to any recourse.

 A voetstoots clause has been defined as: - “a clause that stipulates that the seller is not to be held responsible for diseases or defects and goods are sold ’as it stands’ or ’with all its faults’”.

The effect of such a clause is that “the seller does not take the risk of the presence of any diseases or defects, but is liable for misrepresentations of any kind”.

Disputes may arise between the parties as to whether goods sold were subject to voetstoots clauses or not. The defence of goods being sold voetstoots is also not an absolute one, and is only available where the seller is not a merchant or manufacturer of the goods sold, or where the seller was not aware of the defects in the goods and as such did not conceal same from the purchaser, or when no warranty, express, implied or tacit was given to the purchaser by the seller. The seller of goods will be deprived of the protection afforded by a voetstoots clause where the purchaser can prove that the seller was aware of the defect at the time when the contract was entered into and concealed the existence thereof from the purchaser with the purpose of defrauding him.

The remedy available to a purchaser for a latent defect, is the cancellation of the contract in terms of the doctrine of breach of the contract and an award of damages. Consequently once it has been established that the seller was a dealer in the goods sold, an implied warranty that the goods were free of any defect kicks in and the purchaser is entitled to invoke the actio empti which allows a purchaser to either cancel the agreement and/or to claim damages.

In the context of such an action, a latent defect has been described as “an abnormal quality or attribute which destroys or substantially impairs the ability or effectiveness of the res vendita (goods sold), for the purpose of which it has been sold or for which it is commonly used. (see Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd 1977 (3) SA 670 (A) ).

Contracts of sale are the backbone of modern economies and both the purchaser and seller of goods need to be aware of their rights and responsibilities when entering into such agreements. The dangers of entering into contracts of sale where issues of liability for defects are not expressly addressed need to be recognised and professional advice should be sought if necessary, prior to the conclusion of any agreement. Where necessary agreements of sale should include specific voetstoots clauses to avoid any uncertainty as to the basis upon which the goods are being sold.

 
Source: Renasa Insurance Company Limited
 
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