TIlE ZIMBABNE LAW JOURNAL

COMMERCl.~L LAW OF ZIrBAB'4E PURCH~SE .~ND SALL PART 1:

FORt'1.ATION OF THE CONTPACT
. BY

. PETER L VOLPE BA (lond) M4 LLB(Cantab)

of Gray's Inn, Barrister .
. Advocate of the High Court of Zimbab\'e .
Senior Lecturer in Law, University .of Zimbabwe

In the 1978 and 1979 issues oj this journat the authop

ppesented the tca,) of contract as it appUes in ZirtiJcwwe, in·a
mannep easity ass imitable by students studYing by· coppespondence
o.-r at technical corteges, who do not have :ready access to the
tca.J l'epopts.

·Continuing the series, the authop hem stapts a treatmiiln't

of the taw of purchase and sate that witt be continued in
subsequent issues of the joul'l'ltll.
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i
 FORl\lATlON OF TIlE CD~CI' 3S

TABLE OF .,cot·!TEtHS

PART 1 .' FORMATION OF 1HE CONrAACI'

SECTION 1 I m'RODUCT ION

1. 2 Sale is a special contract

1.2 Li tt1e differeru;e between sale of goods .
(IIDvab1es) and sale of land (ilTIFTDvab1es)
1. 3 Definition of Sale
1.4 Essentials 'of Sale

SECTION 2 CONSENT
2.1 Intention to buy 'and sell
·2.2 Requirements of consent

SECTION 3 THE. THING SOLD

3.1 Subject-matter of the sale
3.2 Things that can be sold
3.3 Things that cannot be sold
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SECTION 4 THE PRICE

4.1 .Requirements regarding price
4.2 Price must be serious
4.3 Price ImlSt be fixed, or capable of
. ascertaiiment
4.3.1 References by which price nay be
ascertaine4 .
a. . Reference, express or implied, to
previous coUrse. of dealing between.
parties. .
b. Reference to independent
circumstances '
c. Reference to named third party
d. Reference, express or'implied, to
uslial or current market price
. e. - Reference, express or implied. to
reasonable price
4.3.2 Impossibility, failure or defectiveness of
reference by which price is to be
ascertained
_a. Irrq:;ossibili ty of reference
b. Failure of reference
c. Defectiveness of reference
. 4 .4 Price ~t be in current IIDney

l
 36 lliE ZHlBABlI'E LAII' JOURNAL

PART 1. FORWITION OF TI-IE CONTRACf.

SE.CTION 1. Im'RDDUCTION

1.1 Sale is a special contract

Commercial law has a number of special contracts. OQe of the most

cOnm:Jn is the contract of sale. In dealing with these special con-
tracts it is tmnecessary to repeat the general principles which a~
applicable to them all. These general principles can be found in
Commercial Law of Zimbab.ue - Contract (Volpe 1980). Each special
contract, however, has particular rules of its own. Those dealing
wi th the contract of sale are covered in this handbook.

1.2 Little difference beilJeen sale of goods (rmvables) and sale of

land (i·rrrnovables). .

Christie (1961) states that the rules for the sale Of goods and the
sale of la.ri.d are almost identical. \\hat little difference there is
will be fOlmd in the passing of ownership (section 3.1 in Part 3
below) and in sales on instalments (section·S in Part 5 and section
1.2 in Part 6). It shohld be noted that in ZimbabNe, unlike South
Africa, a contract for the sale of land does not have to be in
NTiting t9 be valid.
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1.3 Definition of sale

A sale is a contract whereby the selZer (verukJr) promises to

deliver a thing (movable or irrrnovahle) to the buyer (eT'Iptor) , the
buyer agreeing to pay a certain price.

In Hutton v Lippert (see 2.1 below) the Privy Council approved the
definition by de VillierS CJ of a sale. Sir Robert P Collier,
delivering their Lorships I ju:lgment, said: "The law of the Cape
with respect to the contract 6f sale is thus stated by the Chief
Justice [de Villiers]:. 'Under our law, as under the Roman law, a
sale may be defined as a contract in l.mich one person promises to
deli ver a thing to another, who on his part promises to pay a
certain price' ".

The agreement alone constitutes the sale, legal rights and duties·
flowing invnediately· upon agreement. Neither the deli very nor the ~
payment is necessary before the sale is concluded. Sir Robert P
Collier in Hutton v Lippert continued: "In Van Leeuwen, cap 17,
section 1, is this passage: 'The purchase is understood to be
accomplished as soon as the price and the ITUltual condition has .been
. fixed, although the money had not been paid, nor the delivery of
the article made ... ' II.. So too Wessels J in Nimmo V Klinker>Derr:
Estates Co Ltd 1904 TH 310 said: '~o lawyers discussin~ it [sale]
from an academic point of view it means thetimel.men the parties
have arrived at a valid and binding agreement, apart from any
 FORMATION OF TIlE comRAer 37

question whether the purchase price has been paid or whether there
has been delivery ?f the article sold." '

1.4 Essentials of sale

'According to ~bckeurtan (1949 p 1) sale has 'three essentials:

1. consent (consensus ad idem);
2. a thing sold (merx); and
3. a price (pretium).

Innes CJ said the same thing in Union Government (Minister of

Finance) v Van Soelen (in 2.1 below): "N:Jw the requisites of a
sale are well known, men, pretium,' consensus. There must be a
merchantable article, an agreed price, and the consensus of both
, parties, the one to buy and the other to sell; or the one to
acquire and the other to alienate."
In the absence of these essentials there is no contract of sale.
Voet (18.1.1) states: '1here are three essential requirements for
it - consent, me,rchandise and price,. If one of them is wanting,
!here is no purchase."

SECTION 2. CONSENT
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2.1 Intention to buy and sell

There can be no- sal~ without a genuine intention on'the one hand
to buy (animus emendi) and on the other to sell {animus vendendiJ.

It often happens th'at parties enter into a contract of sale and, to

evade taxation or the provisions of certain statutes, describe it
as another type of contract; it is also poSSIble that an agreement
will be disguised as one of sale when in actual fact it may be one
of loan or pledge. The courts will, always look to the nature o'f the
transaction. This is illustrated by the cases below.

Regina v Tak~ra 1958 R &N'187. T~as convicted in a magistrate's

court of theft, by conversion. The charge alleged that Thad
recei ved from one Khan clothing of the value of E250 (the clothing
beingK's property), with' the purpose that T should sell the cloth-
ing on behalf of K. It appeared that the contract between K and T'
was that the clothing thus supplied to T by K was to be sold by T
at any price T chose, T being furnished by K with a list showing
the prices K expected to receive, for the various articles handed
over to T, and that T was at liberty to retain for himself all
m:meys he received over and above the aIlDunt at which the goods were
valued in the list. It appeared further that T received no wages
from K, nor was T registered as a servant of K's, and that 1- had
sold certain of >the clothing and had received Elll 18s for it, but
,had paid to K only EZO, leaving a deficiency of £91 18s for the
 38 TIiE ZIMBABWE LAW JOURNAL

theft of which he was charged and convicted. HELD, by' the High
Court -of Southern Rhodesia, the contract between T and K did not
give rise to the relationship of master and servant nor to that of
principal and agent, but seemed more closely to resemble a contract
under which K sold goods to T, leaving it to T to obtain for them
whatever' price he could; and, if this was so, the moneys realised
by T for the sale of the clothing were not the property of K nor '
were they trust moneys. The fact that T purported to sell under a --
general dealer's licence POssessed by K did not make the contract
one of agency, for it was obvious that this was merely an illegal
subterfuge for evading the licensing laws, and it could not change
the real nature of the contract. Conviction was accordingly set
aside.
Lawson and Kirk t! South African Discount and Acceptance Corpomtion
(Proprietary) Ltd 1938 CPD 273. Land' K in an action claimed a SlUll
of ironey under s 4 of the Usury Act of 1926 which they alleged
represented an amount paid 5, in. respect of loans of money, as
interest in excess of the rate allowed by that Act. The declaration
set out that 5 had agreed to lend L and K money on the .security of
hire-purchase contracts, L and K being required to sign on each
occasion an agreement purporting to be a contract of sale. 5
pleaded that there was a general agreement to buy hire-purchase'
agreements from L and K and that the written contracts of sale in
respect of the several purchaSes were in each case the true contract
between the parties. HELD, by the Cape Provincial Division, the
Court had to determine the true reaning and intent of the general
covering contract between the parties, which took the fonn of an
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arrangerent for purchases and sales, by what was said at the time
and subsequently, by whJlt was done under such contracts and by what
sorts of contracts were entered into in pursuance of the general
covering contract. On the facts the true nature of the contract
between the parties was oile of loan and judgment should be entered
for L and K. ' ,

McAdams t! FianaBr's T1'ustee & Bell NO 19Hi AD 207. The.,Appellate

Division, hearing an' appeal from the ,High Court of 50uthe'rn Rhodesia
was satisfied on the evidence that certain two transactions relating
respectively to cattle and machinery entered into be:tw~n H and an
insolvent F, which M alleged constituted a sale to him of the cattle
and machinery, were in reality pledges dis guised as sales. HELD,
the machinery and cattle which had been left in F's possession veste
on insolvency in his trustee. ,De Vini'ers AJA said: ''To go back
to first principles. There can be no contract of purchase and sale
without the animus emendi (intention of buying) on the part of the,
purchaser, ,and the animus vendendi (intention of selling) on the
part of the seller. And it must be a genuine animus of the one to
sell and of the other to buy. It is not enough for the parties- to
think that they have ,the intention, the int~ntion must be proved as
, a fact apart from what they thought. Now, here it is quite clear
that neither of the parties had a genuine intention, the one to sell
and the other to buy the machinery."

Union Government (Minister of Finance) t! Van Sqel.en 1916 AD 92. A

 FOro.lATICN OF THE CXJNTRACf. 39

commi ttee formed for the p1.U']lose of establishing a township under

the Orange River Colony Act of 1909 upon the farm of one de Bruin
agreed with him that he should receive out of the sale of erven the
sum of £6 000. A delay having occurred owing to the necessity of
obtaining further Parliamentary sanction for the scheme, de B entered
into a written agreement with the committee to the effect that the
committee should advance to him the StUll of E5 600 and he would
execute in their favour a power of attorney authorising them in his
name to carry out the requirements of the Act, to sell and transfer
the erven and to recoup themselves from the proceeds. In pursuance
of this agreerrent the committee advanced the E5 600, obtained the
further sanction of Parliament and acting tmder the pOwer of attorney
which de B had executed, sold and transferred a number of erven.
Thereafter on the death of de B the Fegistrar of I2eds refused to
register any further transfers on the grotmd that transfer duty
ought to have been paid as on a sale by de B to the committee.
HELD, by the Appellate Division confinning the decision of the
Orange Free State Provincial Division, the agreement between de B
and the committee did not anDtmt to a sale· and trans fer duty was
therefore rot payable.
Shapiro v Hitt and Paddon 1915 SR 110. S was heavily indebted to
a finn,--H and P. S owned a mine which was of value to his neighbour
. Meade. H and P attempted on S's suggestion to effect a sale of the
mine from S to M in order to liquidate S's indebtedness to the firm.
M refused to have any dealings wd. th S and said he would only deal
with H and P. H and P inforned S of this, and the arrangeinent was
then devised by H and P and S, in order to put the sale through,
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that S should fonmlly and apparently sell the mine to H and P and
H' and P should then sell to M. . M accordingly agreed to purchase
the mine from H and P, and H and Pshortly: after wrote to S referring
to "the claims which we have bought from you". S Wrote to H and P,
suggesting that H and P should await transfer of the mine tmtil at
least two bills of M in respect of instalments of the purchase price
had been paid to H and P in order.to save transfer fees, because,
as he said, if M failed to rreetthe bills, the claims would have to
be re-transferred to him. M failed to pay !lOre than a small portion
of the purchase price. S therefore sued H and P for the purchase
price. HELD, by the High Court of Southern Rhodesia, the re·al trans-
action showed that H and.P was merely agent for the sale of the
claims to M and that S was not entitled to rely on the feigned trans-
action of a sale to H and P.

Hoftneyer v Gous (1843) 10 SC 115. JG, an insolvent, executed a so-

called "deed of sale" whereby he purported to sell certain goods to
his father, PG, for the 3IfOtmt of a debt. due to PG, and PG agreed
that the sale should be considered as cancelled upon payment of the
debt. Upon the execution of the deed of sale the goods Were deli-
vered·to PG, but were afterwards allowed to remain in possession of
the son, JG, as his own property. HELD, by the Cape Suprerre Court
in an interpleader suit between PG and an execution credito-r of JG,
H, at whose suit the goods in possession of JG had been attached,
the attachment gave the creditor priority over PG. I2 Villiers CJ
said: "If the transaction between father and son was really a sale,
 40 THE ZIMBABl'iELAI'i JOURNAL

then the deli very t,o the father would have been sufficient to vest
the property in him. But it does not follow that because they
called it a sale, and produced a doctD11ent headed 'deed of sale' ,
the Court is bound to treat it ,as such. There is not a IIDre comm:m
device than that by which 'a pledge of goods is effected under the
guise of a sale. The pledgor purports to sell the goods for the
arrount of a debt owing by him, and actually delivers them to-the
pledgee, but at the same tire it is understood that the goods are
,to be re-delivered to the pledgor, until the creditors or any of
them assert their right to attach them, when the pledgee is to core
in as the owner by virtue of the alleged contract of sale. Rightly
or wrongly our law refuses to recognise such an arrangerent as a
sale, but treatsit as what it really is, a pledge."

Hutton v Lippert (1883) 8 App Cas 309. A contract between L and

one Ekstein in terms purported to be one of ~rantee or agency:
L guaranteed the sale of E's property in whole or by'lots at a fixec
price, E giving L a power of attorney to deal with the property as
he thought fit and agreeing that L should receive any surplus over C

and above the fixed price as his commission on and recompense for
the said guarantee. But the real effect of the transaction was to '
gi ve E every right which a vendor could legally claim, and to confel
on L every right which a purchaser could legallydemmd. H, iii. his
capacity as Treasurer-General of the Cape, brought a suit in ilie
Cape Suprere Court to recover from L transfer duty as on a sale of
land, but judgrent was given against H and he appealed to the Privy
Council. HELD, allowing the appeal, L was liable to pay 4uty on
his purchase IIDney. Si r Robert P Collier said: ". .. it appears
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to their lordships that the Chief Justice [he dissented from the
judgrent of the Suprere 'Court] was justified in saying that the,
effect of the transaction was to give Ekstein every right which a
vendor could legally Claim, and to confer on the defendant every
right which the purchaser could legally demand. IkJes it make any
difference that ,the parties have called this transaction by the
name of a guarantee? .•. The object of the parties seems to have
been to obtain all the benefits of a sale, without subjecting them-
selves to the dutY on it by giving a contract of ' sale the colour of
a contract of guaranty or agency. II

2.2 Requirements of consent

The ,requi'rerents of conSent in the contract of sale are basically

the, same as those for other contracts and have been stated by
Mackeurtan'(1972 p 28-9) as follows:

"1. There nrust be an agreenent of the minds of the contracting

parties, mutually comrm.micated with the intention of contrac-
ting a sale ...

2. It 1IlUSt exist with certainty as to:

(a) the subject'matter of the sale and its essential
characteristics; ,
 RlRMATION OF THE CONTMCf 41

(b) the price to be paid;

(c) any other tenn raised in the negotiations and expressly
or impliedly regarded by the parties as material.

3. '!he consent must be free in the sense that it must not be

induced by fraud, misrepresentation, duress or undue
influence. '

4. It must be rational. It cannot therefore exist in cases of

extreme youth, irrational intoxication, or insanity.
If these essentials are complied with there will be aonsenaus ad
idEm (consent) tI.

In Ma:t'gate Estates Limited v Moore (see 4.3 belOW) Grindley-Ferris

J approved 2(a) , (b) and (c) above when he said: "I can find no
fault with the staterent in Mlckeurtan (Law of Sale .of Goods in
South Africa, 2nd ed, p 5) that one of the rules for deterrning the
existence of consent in a c'ontract of sale is that there must be
certainty as to the subj ect matter, the price to be paid, and 'any
other tenn raised in the negotiations and expre!jsly or i~lied1y
regarded by the parties as· materiaL'" .

Hi Uia:t'd and Wenborne v Tabor Frost 1938 SR 89. H and W sought

. an order co~lling TF to transfer to them a certain farm and to
deliver to them lIDvables described in various ways in their SUll1JlDns,
declaration, an amendment to the· declaration and by their counsel's
reply to a questio)1. from the Court. '!he agent employed by TF to
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effect the sale· of the 'farm and lIDvables also gave varying descrip-
tions of what he was authorised to sell. H and W were unable to
state with precision in evidence what rrOvables they had bought, but
could only refer to,a description in the agent's advertiseTrent.
.The agent had made no proper inventory, The contract of sale relied
upon by H and W was a ve¢al one, formed by the agent's question,
after showing H and W over the fann, 'Well; what's' the verdict?"
and a reply from one of them, "We'll take it." TF's plea denied
the agent's authority to sell any lIDvables and put H and W to proof
of the contract. '!he agent had referred in letters to his authority'
to sell tithe place" and "the farm", without adding a reference to
lIDvables, and had claired commission on the scale usually applicable
to sales of illlllDvables. HELD, by the High Court of Southern Rhodesia,
granting absolution from the instance (judgnent given where it
appears to the Court that the evidence does not justify the giving
of judgment for either party) at the close of H and W's .case , it
was incumbent on H and W to establish what was the subject matter
of the contract of.sale and what the agent was authorised·to sell;'
the fact that the agent could give s!rll various versions of what he
was selling and the fact that H-and'W intl)eir correspondence and·
evidence and every pleading chopped and changed their version of
what they had bought gave the clearest indication that there was no
certainty as to the sl,lbject matter of the sale.
"<-
OK Bazaa:t's V Bloah 1929 WLD '37. OK negotiated through an estate
 42 1HE ZIMBABWE lAW JOURNAL
. - . .

agent for the ptn"Chase of BI s shares iTt a property-owning company.

Marcus, an employee of the estate agent, said to B: '~ok here, we
- have_been arguing this matter quite long enough, close at forty-
three (£.43 000) and we will take £500 commission." . B said, "All
right". \'chen B suggested a possible increase in the price .. M said:
"Leave the matter as arranged." Again B said, "Alr right." M
then told B that a deed of sale should be drawn up by his attorney,
adding "Let the· two attorneys wrangle between .themselves." M
admitted that a number of rratters would have to be discUssed by the
lawyers and conceded. that agreerrent would have to be reached on
these before a deed of sale could be drawn up.' HELD, by the Wit-
watersrand Local Division, the bargain between M and B was not a
final. and complete bargain.
Munro v Johnson & FletcheY' 1916 SR 57. J sued M in the magistrate's
court for the price o.f certain lamp pillars sold and delivered. J
and M had each tendered to supply the stedwork necessary for a
certain bridge to a municipality in accordance with certain specifi-
cationS under contract No 1, which. comprised c~rtain steelwork and .
lamp pillars. M's tender was accepted by the municipality. J then
. tendered, 'under letter headed "Contract" No 1 SA Bridge", to supply
M with "the folloWing steelwork" in accordance with the conditions,
specifications and drawings of. the municipality for the sum of
£1 095 lOs and stated that this price incluled certain steelwork set
out in great detail varying slightly from the municipal requirements.
No reference was made to lamp· pillars. M accepted this tender "for
the steelwork. for the SA bridge, all according to the plans and
specifications of the municipality, and as 'you have specified in
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your tender-." When the material was imported, M discovered that

J was not supplying the lamp pillars, and mterviewed J pointing out
that J was liable to suPPly these. J then wrote to M and stated
that the pillars were not included and asked M's inst-ructions as to
whether he was to ill1!Xlrt them or not. It did not appear that these
instructions were ever given, but despite this J proceeded to import
and'deliver them to M. HELD, by the High Court of Southern 'Rhodesia,
the contract as contained ~n JI S tender and M's acceptance did not
inc1ule lamp pillars, but as J had .failed to prove any contract in
respect of the sale of the pillars, the magistrate's judgment for J
should be altered to absolution from the instance;

SECTION 3. THE TH ING SOLD

3.1 SubJeat-matteY' of·the sale

TheY'e must 'in generoal be a defined and asaeY'tainild subjeat-nt:J.tteY'

e:r:isting at the time of the aontroat,oY' having a potential existence,
whiah need not be-aoY'poY'eal foY' everoything aan be sold that aan be
held, possessed OY' sUBd foY'. (Mackeurtan 1972 p 42)

HarrIDz.aog v Piaka.Y'd 1906 TS 1010. P alleged that he had verbally sold

to H an ho!el, situated in the Cape Colony, together with the
furniture for £20 000 . . In an"action for the purChase price the
 FORM4.TION OF 1HE CCM'RACT 43_

Transvaal Suprere Court found the contract proved and gaw judgJOOnt
for P. HELD, on appeal to the Judicial Committee of the Privy
Council, revers ing the Supreme Court's j udgJrent. the evidence did
not prove Wlatthe real subject-matter of the alleged sale was and
therefore P nrust fail. Sir Alfred Wills said: "Now it appears to
their lordships that it is ,not possible to gather from this evidence
Wlat the real subj ect-matter of the alleged agreerent was. There
was, nO doubt, an agreement that £20 000 should be the basis of the
bargain - but Wlat was- the stbject-nntter of the bargain, Wlether
actual or contemplated, their lcrdships have in vain endeavoured to
ascertain ... at the end Of nearly two days' discu<;sion their lord-
ships reiraine,d unable to elicit from the learned coUnsel for the
plaintiff (P) any definite statement of what the subject matter of
the alleged contract really was."

3.2 Things that can beso~d

Nornully anything can be sold, whethep coppopeal (a book, land,

mepchandise) op incorpopeat (copypight, patent, poyatties). Other
e:xaJ!illes will be found in the cases given in this book.
Mlckeurtan (1972 pp 43-4) states that the following can also be
sold:
(a) .r
An expeotation op hope emptio spei),' eg the sale of the pearls
in a catch of oysters for a lump sun. '
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(b) A thing not in existence -provided ip be capable of e:r:istence

and has a potential e:r:istence (emptio pei speitatae), eg the
sale of th,e next season's crop of fruit from a particular
farm at a price ad quantitatem (according to quantity).
(c) Unasceptained good~ (generic sales), as where the seller sells
simply '100 bags of maire'. Glads of the class described need
not actually exist at the tire ,of the contract, provided the
class be capable of existence.
(d) Futuro goods, as where the seller is to make and supply to the
buyer goods out, of the seller's,materials.
(e) The propeptyof a thi:rod pany (pes at'iel1LZ). As long as the
seller delivers it to the buyer and protects his possession
the lacJ of ownership of the property at the date of sale is
not a ground for invalidity. The buyer is in these circum-
stances protected by the illlpliedwarranty against eviction
(section 3 in Part 3). '
(f) , Propepty the s~jeat of litigation in 't'etn (where the action
, is brought against the property itself) (pes titigiosa). The
buyer is ,bound by the judgnent in the action and the success-
ful plaintiff can recover ,it from the new possessor by execu-
tion and without fresh proceedings. -

-.., - .
 44 . TIiE ZIMBABWE LAW JOURNAL

3.3 Things that cannot be sold

The fOllowing cannot be sold ((a) (b) (c) and (d) are mentioned by
~ckeurtan 1972.pp 43 c 3, (e) and (f) by Wille and t-jillin1975 p 148):

'(a) Things oumed by the ,buyer (res suaJ., but the owner of a thing
subject to a burden or charge may buy that charge in order to
secure the unencl.D11bered ownership of his property.

(b) Certain things the disposal of which is prohibited by the

conmon law on grounds of public pel icy orllPrali ty or by
statute (res extra commercium).

(c) Property the subject of an action, at any stage of the pro-

c~edings, to the seller's advocate or attorney (such agreements
are known as pacta dE quo ta Zi tis) .

(d) A specific thing which, unknown to both parties, has ceased

to exist at the date of sale.
Scrutton and Scrutton v Ehrlich & Co and others and The Transvaal
GOvernment 1908 TS 300. In 1894, a Bantu chief granted SandS a
concession of mineral rights in the tribal-location and asked the
G:lvernm"mt to grant S and S prospecting rights under the G:lld Law.
In 1904 the G:lveinment purported to do so, but some years earlier
the location had ceased to exist and the grant by the G:lvernment
was' invalid. Sand S sold to E f, Co a share in the rights. They
now sued E & Co for the purchase price. HELD, by the Transvaal
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Supreme Court, the grant. of prospecting rights by the G:lverrurent was

invalid and E & Co were entitled to rescind the contract. SolollPn
J said: '~th parties contracted- on the assumption that these
prospecting rights were actually in existence at the date of the
contracts. It is nOoll fOund that both were under a misapprehension
of fact, and that in reality there Were no prospecting rights to be
sold ... It seems to me that.it is impossible in these circumstances
to hold the defendants to their contracts, which in my opinion they
were entitled to repudiate as soon as they learned the true state of
facts .....

(e) Public property that may not be alienated by the authorities

"dontrolZing it.

(f) Right of inheritance to a person still living. Once the person

has died the inheritance maybe sold.
I,.
Schauer NO v Schauer 1967 (3) SA 615 (W). It was agreed between S
and one ~rais that the entire milk rounds of a dailY fann, M's
property, would be run by S fOr three years. S was granted options
of buying the milk rounds at RZ5 per gallon during or at the end of
the three years upon condi"tion the total price should not be less
than RS 000 and of buying the equipment for R600 during or at the
end of three years. Clause 4 then stated that M ''hereby states
irrevocably that in the eVent of his death, during the three years
of the agreement, [Schauer] shall inherit the said milk rounds-and
 FORMATIOO" OF -mE COmMeT 45

no compensation shall be paid or payable to his estate. In the ,~

event of him getting married and having dependants during the stipu-
lated three years, the milk rounds !hall be inherited by his depen-
dants in the event of his death." H had died within the three
.years without rrarrying or leaving dependants. In an action by S NO,
the executrix dative in Wi; estate for R5 6000, S having disposed
of the rights and goods without having said anything to H or S NO',
5 denied that he was liable to pay her as he had acquired ownership
of the milk rounds and equiprent in tel1l5 of clause 4. HELD, by
the Witwatersrand local Division, clause '4 was revocable and con-
tained a pactwn successoriwn (an agre~nt regarding the succession
to the estate of one of the contracting parties or of a third
person) with the result that it was invalid.

- SECTION 4. '!HE PRICE

/
4.1 Requil"ements l"ega:rding price

M3.ckeurtan (1972 P 44) states that the price IIU.lSt be:

(1) serious;

(2) fixed, or capable of ascertainment; and

(3) in current money.

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These requirerrents, and the problems attaching to them are discussed

below.

4.2 Pl'ice must be serious

The price must not be nominal 01" illusory but must be real and
serious and beal" some appl"eciable l"elation to the value of the thing
sold, and the seUel" must int,end to e:rnCt it. The price does not
have to be the exact value of the thing sold: the seller my sell
at a low price to oblige a friend and legitimte circumvention of
each other by the parties (buying for less than the value' and selling
for more) is tolerated by the law.

The. parties my generally fix the price as high or low as they wish
provided it is real and serious, which it will not be if it bears
no relation to the true value of the thing sold.

Commissionel" fOl" Inz'and Revenue v Sanel" 1927 TPD 162. Arnianthus

Mines Ltd (the old company) sold its undertakings to New Amianthus
Mines Ltd (the . new company) for a consideration of shares in the
.new company. The old cOl11'any by resolution of a neeting of direc-
tors and with the object of evading dividend tax, purported to
sell to its four principal shareholders, amongst whom was S, its
holding of shares in the new company at one-tenth of their realisable
value, such shareholders undertaking to sell the shares and
 46 mE ZIMBABWE LAW JOURNAL

distribute portion of the proceeds amongst all the shareholders of

the old company. The shares were duly resold at their believed
- value, and the proceeds dis,tributed as agreed. The matter carne before
the Transvaal Provincial Division on a case stated by th.e Special
Income Tax Court under the Income Tax Act of 1917. HELP, the -pur-
ported sale of shares to the fuw- principal shareholders was not a
sale in that the price was not real and substantial, and there was
no real animus vendendi (intention of se11ing) ori the-part of the
old company nor animus emendi (intention of buying) on the part of
the four shareholders. Tmda11 ,J said: "It is not enough for the
parties to think that they have the intention; the intention mus:t:
be proved as a fact apart from what they thought, and the price must, '
be real andserious. Btn'ge (1st ed vol 2 p 473), in commenting on
the rule that in a contract of sale the pri<;e must be real and
serious, states that it cannot be said to be real or serious when it
bears no proportion whatever 1;0 the value of the property sold".

See also McAdams v'Fiander's T~tee (2.1 above), where De Villiers

AJA said: _"!'br is there a genuine pw-chase pr~ce. A verum pretiwn,
'which the law derrands. The 800 was the arrount required for the loan.
The value of the machinery_ at the tiTre was at least double that
arrount. It YoOuld be idle to atte!]1pt to convince the Court under the
<:ircums'taI!-ces that that was the genuine price for the machinery."

4.3 Price must be, fixed, or capable 'of ascertainment /' ,

The parties must either fix the price or ,agree on a method by which
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it can be fixed.

Globe Electrical Transvaal (ptyJ Ltd V Brunhuber and others 1970 (3)
SA 99 (E). The applicant, G, held an option to purchase the shares
in FK Engineering Supply'Co 'Ltd, one of the respondents, as a going -
concern. In ,an application to restrain'F from selling its assets,
on the ground that it would' frustrate' the very purpose and object for
which the option agreement had been concluded, it appeared that, in
terms of the agreement, the purchase price was dependent upon the
value of F's stock-in-hand at a date of stocktaking which had not
been fixed but was alleged by G to be "upon a date to be agreed
between the parties or upon' a' reasonable date". G further applfed to
have the option agreement rectified to incorporate such wording.
HELD, by the Port Elizabeth Circuit Local Division, dismissing the
application, as ,the date of stocktaking had yet to be agreed upon, it
could not be said that the purchase price was certain or readily
ascertainable.

Margate Estates Limited V Moore 1~43 TPD 54. MEL and M signed a
printed agreement of purChase and sale, portion of which, relating to
the price and payment thereof, read as fo11ows: "For the sum of £250,
of which sum the arrount of no has been paid to the s~11er on the
signing of this agre~nt. The balance of the purchase price sha11
carry interest at the rate of 5 per cent per annum on the, [blank]
balances due from time to time, and ,shall be paid by the 'purchaser to
the se11er in manner fo11owing [blank]." The blanks after the words
 FORMATION OF 1HE mNTRAcr 47

"on the" and "foliowing;' were not fIlled in, the lTDde of payrent
having been discussed between the parties who a'greed that this ques-
tion, should be settled at a later date. HELD, by the Transvaal
Provincial Division, on the facts the lTDde of payment was a tenn
regarded by the parties as TTl3.terial, and in the absence of agreement
upon this question there was no concluded contract between the
parti~s ~ Grindley-Ferris J said: ", .. when the question of w-ten or
how paynent is to be ,made is part ohthe discussion bet\~een the
parties and is left over for determination at a, futLn"e date, can it
be said that all the TTl3.terial terms have been agreed upon? 'I think
not."

,'4.3.1 References by which price may be ,ascertained

The price may be ascertained by -

a. Reference. express or'impZied. to the previous course of

deaZing between the parties. _

'Singh v Sir JL HuZett &Sons Ltd 1924 NPD 117; For some years, S,
a sugar planter, sent his cane to the' company, , sugar millers, for'
the purpOse of,being TTl3.nufactLn"ed into sugar, S being paid for his
cane, upon a system Which had regard to the'price which the resulting
sugar was sold at. As 'a result of this course of dealing, which
extended from 1917, to 1921, a debit arose against S on the taking of
accOlDT~S, the figures of which were based upon the seasonal, as
distinguished from the lTDnthly average prices of sugar. The company
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was given judgJrent for this debit in a TTl3.gistrate's court and S

appealed. HELD, by the Natal Provincial Division, the appeal should
be dismissed: Tatham J said: " ... the question in issue here is
whether the plaintiffs are right in claiming that thyy.are entitled
_ to base their figures upon seasonal averages as distinguished from
lTDnthly averages. In the absence of any specific contract between
the parties, that question must of-.necessi ty depend upon the, course
of dealing which prevailed between them. The evidence leaves no
room, for doubt that from 1917 right up tottie close of the' 1921
season (after which 'the defendant sent no cane to the plaintiffs),
s'easonal averages were taken and not lTDnthly averages."

b.Reference to independent circumstances

This could be to "as much as the thing was bought for", "as 'much as
is in the chest".- cost plus a .fixed percentage, "at the price at
which my ne~ghbours 'sell", or subject to TTl3.rket flUctuations:

Dickinson,& Fisher v Arndt &Cohn -(1909) 30 NLR 172. D entered into

a contract with A, who undertook to supply 24 000 casks of cement in
parcels of 2 000 casks every two iOOnths, by sailing vessel from
Harrburg to Durban; "at 7/10 per cask, cif and c, Durban", i t being
stated in the body of th~ contract that "this price is based on the
rate of freight by sailing vessel at 14/- per ton." In the TTI3.~gin
of the contract fonn appeared the words in print "All prices subj ect
to TTl3.rket fluctuations". After supplying about 6 000 casks under
 48 1HE ZIMSABWE LAW JOURNAL

the contract, A then notified D that in consequence of market fluc-

tuations the price of cement wouH be increased. D thereupon denied
A's right to increase the price beyond the 7/10 per cask, except in
so far as it might be increased through the freight. A offered to
continue to supply in tenris of the contract, but leaving the question
of price. to future settlement, but this D refused and sued for
E1 407 5s 2d as damages being the difference between the contract
price and the selling price in Natal. HELD, by the Natal Suprerre
. Court, the words "All prices subject to market fluctuations" appearing
in pririt in the margin of the "order" forrred part of the contract
between the part;ies and were binding on thein. The words rreant that
the price might ,be increased at the option of the sellers upon the
. fluctuating upwards' in the market price of cement, and conversely in
the event.. of a fluctuation downwards. A were therefore absolved
from the instance: ..

c. Reference to a name{1 third party

The price rn:zy validly be determined by reference to a named third

party, but not if the partie~ agree that a third party who is not
name'd shall fix the price, because they may never agree upon his
nomination (it is all right i f the contract provides for his being
ascer~ined in the event of their disagreeing), 01' if the third
party is named but declines 01'. is unable to fix the price.
In Odendaalsrus·t Municipality v New Nigel. Estate Gold Mining Co Ltd
1948 (2) SA 656 (0) (the facts of the case are not important) van
den Heever J of the Orange Free State Provincial Division·states:
"It is permissible that parties to a sale leave the determination of
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the price·to a third ascertained person (Voet 18.1.23) ... There is

nothing to prevent rre from buying 'at a price to be fixed by a thi rd
deteTI)linate person".
Faatz v Estate MaiLlald 1933 SWA 73; F leased M an hotel. In the
agreement F tmdertook to see to it that upon termination 9f the lease
M's successor, whetherF himself, or a new lessee, would take over
all the hotel furniture on .the premises arUi emunerated in an .inven-
tory signed by both parties at a price to be arrived at by appraise-
ment. The relevant passage in the agreerrent read: ''!he' appraisement
is to be effected. by a commission of three persons set up in the .
following manner. Each party appoints his . own appraiser. Both of
these appoint a comnrm obmann (umpire or chairman). If the appraiser
appointed by the parties calU1Dt agree upon a cOllDlDn umpire, the
magistrate of Windhoek or his nominee shall act as such". The lease
was cancelled by IID.ltual consent. F and M each appointed an appraiser.
The two appraisers Without appointing an t.UIlli re agree~ upon the price
of £670 l4s 9d for the furniture. After the sequestration of M's
estage, F repudiated the assessment of £670 l4s 9d on the grotmd that
the· commission was not prOperly constituted. Upon the trustee's
agreeing to a reval.wtion, a properly constituted commission assessed
the price at £228 7s· 6d. After crediting F with an 3.nDl.U\t paid by
him as surety for M, the trus tee brought action for the balance
against F, who pleaded set-off. The magistrate gave judgrent for the
trustee and F appealed. HELD, by the High COurt of South West Africa
 ,/
FORMATION OF mE CONTRACf 49

dismissing the appeal, lD'ltil the appoinurent of the third rrember of

the commission which assessed the price of E670 l4s 9d, there was
not even an inchoate contract of sale, it was not yet concluded, and
this even though the two menDers appointed had agreed upon the price;
consequently, prior to M's insol veney there existed no contract of
sale; where F sought to set off against. the trustee's claim a liquid
c-laim' which he had acquired against M before insolvency, set-off
could not operate because before inS 01 vency there was nO claim in
eXistence by reason of any purchase price for the furniture against
which F .could set off his liquid claim. Van den Heever J said:
"It is trite law thaJ: lD'ltil the price is agreed there is no contract
of sale. Here the parties left the price to be determined by a
coJTl1\issionof three. Where the determination of the price is left
by the parties to a third person he should be an ascertained person
(Voet 18.1. 23). Here the personnel of the commission had still to
be agreed up:m, and it seems to me before such appointment the con-
tract was not even inchoate; it was not yet conchtied ... If the
thi rd person determines the price the contract is c~lete. I f he
refuses or fails to do so the contract is wid (Inst 3.23.1). Each
party appointed a menDer of the colllllission but these proceeded to
assess the price of the furniture without a third menDer, as the
contract provided. Such third member might 'have persuaded the two
to corne to a different valuation than that at which they arrived. -
It seems to me, therefore, that the valuation arrived at by them is
invalid. , , ' .

Heym::mn's Estate v Feathel'stone 1930EDL lOS. By a deed of partner-

ship between F and H, the surviving partner was entitled to buy out
the share of the first-dying at a value to be fixed by two valuers,
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one to be appointed by the surviving partrler and the other by the

executor of the deceased, and the two valuers were to appoint an
lJIIllire whose decision in caSe of conflict was to be final. The
valuers appointed by_ the parties appointed an umpire, who could not
act, and they· could not agree upon the value nor upon another umpire.
The executor of the deceased partner'hlVed to have an umpire appoin-
ted. HEW, by the Eastern Districts Local Division, as the deed .
merely provided a rreans whereby the property bought might be valued,
and not for settling existing or contemplated differences, it did not
aJ'OOlD'lt to a submission to arbitration and the Court had no power to
appoint an umpire lD1cler the Arbitration Act of 1898. Pittman J
concluded: ''The terms of the agreement provide for the purpqse of
arrlving at the price of the share to be bought a rrethod, whiCh ha$
-proved ineffective, and-the COurt ca,nnot supply another. Where by
the terms.of this contract buyer and. seller agree that the determin~
ing of the pl'etium is to be left to a third party, who proves unable
or unwilling to fix it, the sale must be considered as of no effect
(inutitis) - see Voet (18.1.23), and the Court cannot attempt
specifically to enforce it."
There is no sale whel'e the p1'iee is left to one of the pal'ties 01'
-even his no'fline8 to fix.

lJal.Jidowitz v Van Drimmelen 1913 TPD 672. D sued V for E99 l5s 4d fur
goods sold and delivered. V pleaded that a special contTact had been
 50 TIlE ZI~1BABWE LAW JOURNAL

entered into that the alTDlmt claimed should be paid in monthly

instalrrents according to his capacity of paying, and that if he were
to obtain money from other sources he was to pay "according to
ci rctDl1Stances". The magistrate believed V. and gave j odgirent for
absolution from the instance. D appealed. HEeD, by the Transvaal
Proyincial Division allowing the appeal, there must be j'udgment for'
the aJlJ)~ clairred. Wessels J said: "If I say, for instance: 'r
'will buy your horse for what I think it is worth', or: 'for what I
.choose to pay for it' ,there is no sale. ·This principle' appl ies to
every form of contract. If a per-son who claims that he has made a
contract proves that it depends wholly on his, own will what rart of
it he should perform, then according to my view there is· no contract
it, is void for vagueness. A contract to pay a debt by instalrrents,
the debtor to detefiiline the amount of each instalment, is such a
contract, as regards the paying by instalrrents, as a' court of law
cannot enforce." '

d: Reference, express or irrrplied, to usual 02' current market

price.

There may'oe express 'agreement to pay the usual 01' current rnarket ,
price. There is implied agreement where a 'thing which is ,in free
supply is, bought without a 1uord being said about price~

Lombard v Pongola Sugar Milling c;.o ud 1963 (4) SA 860 (AD), con-
finning the Durban, and Coast local Division 1963 (4) 'SA 119 (D). P,
~a miller, had in the course of dealings with L, a sugar grOl'ler" _
accounted to him for the amounts due to him. P had made deductions
for transport and shown the amounts' thereof. L had sued P for the
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anDunt of deductions made. ,p had pleaded .(1) that 'a portion of the
claim was prescribed and (2) that the deductions rode by it represen
ted transportation charges for the .......conveyance of L's cane on. the
f09ting of a tacit agreement to pay P's usual and knOlvn rate thereof
Both pleas were upheld by thefurban and Coast lpcal Division. On
appeal the plea of prescription waS not attacked.' HELD, by the
Appellate Division dismissing the appeal, as to (2), the evidence
estabhshed this plea,' Henning J in the lo\,'er court said: "It
,appears to rre that just as in the case of a sale by a -trader ",here
. no price is mentioned it is implied the sale is at his usual price,
'so also where a person makes' use of the transportation business of
another wi thout expressly agreeing on ,the annunt 'of the remunerat ion
for the service, he-'undertakes to pay the operator. at the-usual
rates' charged by him." .

Courts have had' to decide hON the price \Vas to be detennined, becaus(
none was stated by the parties, in a munber of prosecut ions for con-
travening price-control regulations. Extracts from the judgrrents in
DvO of these cases· are given below.

Rex v Kramer 1948 (3) SA 48 (N), This was an' appear by the Attonl~v
General to the Natal Provincial Division against tJ1C Durban magistra1
- decision that a sale had not taken.place at a price ahove, the contro'
price. Hathorn JP, in allowing the appeal, said: "CoY'.senS-U8 ad ic'('1
(rreeting of the minds) is essential to evel)" contract and price is
 FORMATION OF 1HE CDNTRACf 51

essential to every contract of sale. II'hen a housewife, who is a

regular custoIrer, telephones an order to the butcher, which he
accepts, and nothing is said about price - and this happens thousands
of times every day with butchers, grocers, and other trade SIren - the·
normal result is that a contract immediately comes into existence
and ,the common law settles the price. r do not think that it has
yet been authoritatively decided exactly how the price is detennined.
The method has been stated in several different ways. ~own view
is that the price is the tradesman's usual price because that is what
both parties intend, and it does not matter whether the tradesman's
competitors in the SaIre street charge a little more or a little less
for the same COJ1IDI)di ty. It is the tradesman's usual price whiCh.
carries the day." '
I
Rex v Pear>son 1942 EDL 117. ' This was an appeal to the Eas tern
Districts Local Division against conviction in the Port Elizabeth
magistrate's court for contravening price-control regulations.
Lansdown 'JP, in allowing the appeal, said: "There are many trans-
actions in which goods pass on'sale without a price being stated,
and the transaction is not the ,less a sale if the Court can detenrtine·
,from ,the conduct of the parties and the surrounding circrnstances
hOly the priCe was to be determined ... a person often sends to a
grocer's shop a list of provisions to'be supplied to his house and
nothing is said about price until at the end of the -month the grocer
reqders his account. It would be futile to say that such a trans -,
action was not a sale. I t appears to Ire that in such a case there
is a tacit agreeIrent that the price is that at which the goods so
supplied are usually sold by the grocer."
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e. Refer>ence, expr>ess or> "implied, to a. r>easonabl~ price.

There is much controversy whether a contract to pay a reasonable'

price, either expressly or by implication, is enforceable, and if so
whether it is a contract of sale or sOIrething else. Bresler J in
Er>asmus v Ar>caoo Electric held there could not be a contract to buy·
at a reasonable price., This decision was' quoted with approval in
Lombar>d,v Pongola Sugar> ~lling Co Ltd and applied in Adcor>p Spar>es
PE (Pty) ~td v Hydromulch (Pty) Ltd. But Macdonald JP in the
Zimbabwean case of Elite Electrical Contractor>s v The Covered Wagon
Restaurant, (this and, the other cases cited are set out below) made
the point that ,this rule might or might not be good law when applied'
exclusively to ,contracts-of sale, but in so far as the cases suggested
that this was a general, rule of contract they.were wrongly decided.
Th§ legal position, therefore, appears to be that, although on the
authorities as they stand at present there cannot be a 'sale' at a
reasonable price; this does not mean that a contract ,to pay a reason-
able,sum in return for performance of some kind (delivery of goods,
render,ing of services, 01' a .mixture of the two or something else) is
void; it is sirrrply not a sale, 'but a valid and enforceable
innominate contract. ...

Elite Electrical Contractors v The CoveredjWagon Restaurant· 1973 (1)

SA 195, (.RAD). om, a restauranteur, hired EEC, proprietor of a small
electrical business, to do the electrical work involved in moving a
 52 mE' ZIMBABWE UW JOURNAL

stove and other electrical appliances from one part of his kitchen
to another. Because of tJ:1e ~ fficulty. in makins... an adWI17e esti!IBte
of the' cost of work of thlS kmd, no fum quotatl.on was glven and th
parties agreed that EEC would proceed to- do the work on this basis.
Having duly completed the I<lork EEC, contending there had been an '
implied agreellEnt that CWR would pay a fair and reasonable price for
the materials supplied and services rendered, claillEd $233, '~2 in,a
magistrate's court. CWR, resisting this 'claim on the grounds that
such an implied agreeJ!Ent would be invalid '(on the 'basis of cases
given below) and the charges were not reasonable ,tendered to pay
$150. HELP, by the Rhodesian Appellate Division, the implied term
to pay a fair and reasonable charge was valid and enforceable; but,
,as EEC had not proved that O\'R's tender of ~150 was insufficient,
EEC's appeal against the magistrate's judgment for $150 should be
,dismissed. M:lcdonald JP said: "In these circtunStances ,it is the
contention -tor the appellant, that he was entitled to charge a fair
and reasonanle price for both the materials supplied and the work
done. However, counsel for the appellant referred the Court to the
case of Lombard v Pongola SUfJar Milling Co Ltd 1963 (4) SA 119 (D)
at 1"27, where the learned Judge, in dealing with the question of
the basis on'which a price is to be estimated where there has been n
ewress agreellEnt, said:
'The're appears to be a surprising dearth' of autho"rity on the
question whether a carrier, under a contract which does not
etpressly mention'the charge which he may make, is entitled
to be paid a reasonable remuneration or, a remuneration at
the rates charged ,by him. There are, however, several cases
dealing with the position where in a contract of sale the
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_ price is not expressly agreed upon. In Maahaniak v Simon,.

1920 CPO, 333 at p 338, it was stated that if a person bought
an article in a shop without the price being fixed, then in
our law
"it would be held that there was an implied agreement
to pay at least a reasonable sum, if not the selling
price of su::h articles in that shop." ,

In my view it is not surprising that there is a, dea~h of authority

on this particular qrestion, because the term to be implied in any
particular contract will depend upon the circumstances surrounding
that contract and is not a matter to be decided by reference to othe
cases. ,It seldom happenS that the circumstances surrounding one
contract are precisely si~lar to those surrounding another contract
In 'Lombard's case there is 'reference to the earlier decision of
Erasmus v Araade Eleatria 1962· (3) SA 418 (T-). In that case it was"-
held that a contract to pay a 'reasonable price' for gpods sold and
delivered was invalid. Reference to that case and to the later case
in which it was applied, narre ly Adaorp Spares PE (PtlJ J Ltd v Hydro-
mulah (PtyJ Ltd 1972 (3) SA 663 (T), does appear to establish that
these decisions were arrived at not by the application of special
rules relating to contracts of sale, but by the application of gener,
principles of the law of contract. .with respect, it seems to Ire th,
an implied term that a person I<lill pay' a fai r and reasonable charge
for goods supplied and work done imports suff;cient certainty into t:
 FORMATION OF 1lIE CONTRACf S3

contract to avoid the need for a court to rule that the contract is
void for vagueness. It is unnecessary in these proceedings to con-
siderl~hether the 'rule suggested in the two cases I ,have just refer-
red to may be good law so far as contracts of sale are concerned;
that is a point which 'can be decided when the occasion arises. In
so far as these cases suggest - and they certainly seem to - that
this is a general rule of contract, they are in my j udgrrent wrongly
decided. The implied term relied upon by the appellant in this case,
notwithstanding the cas~s to which I have referred, was in my view,
therefore, a valid and enforceable term."
Adcorp Spares PE (PtyJ Ltd v Hydromulch IPtyJ Ltd 1972 (3) SA 663
(T)'. In an action for the price 'of a planter; the seller's allega-
tion in the alternative alleged a sale for a "fair and reasonable
price". The buyer excepted to this alternative cause of action on
the grounds that it disclosed no cause of action "there being in law
no valid or enforceable agreement where the purchase, price, in tenns
of an alleged agreement of sale, is expressed in tenns of being fair
and reasonable." HELD, by the Transvaal Provincial Division, the
exception succeeded. Myburgh J said: '~e exception raises the
crisp issue whether the alleged sale of the planter in question with
the price'agreed as 'a fair and reasonable price' is a valid or
enforceable contract of sale. [Cotmse1 for the buyer] has in the
main relied on the judgment of the Full Bench of this Court in, the
case of Erasmus v Areade Electric 1962 (3) SA 418 (T), in support of
his' submission that the price haS not been agreed upon'with suffi-
cient certainty to constitute a valid contract of sale... It may
be that an undertaking to pay a fai r and reasonable aJIlJunt of IlDney
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for the deli very of a specified article is binding as an innominate

contract but I am not dealing with such a cause of action. The
plaintiff has elected to frame its cause of action as a contract of
sale. I The judwnent in Erasmus' case, supra, was quoted with
approval in Lombard v' Pongo la Sugar Mi lling Co Ltd 1963 (4-) SA 119
(D)at p 128 B, as follows: '
'In the recerit case, of 'Erasmus v A1'Cade Electric 1962 (3) SA
418 (T) at p 420, it was held that in our law a contract of
sale at a reasonable price is invalid, but that in certain
cases a term may be presumed to be implied, as where a person
buys an article from a trader without ~ price being fixed; in
such a case the price is the one normally charged by the
trader for that type of article, or the price he himself paid
for it, or, failing that, the ruling market price. From this
1. understand that where a trader has a usual price for the
article purchased, that is the price which the purchaser
undertakes to pay if the parties do not nention a price. That,
with respect, ~eems to me a correct statement of the law of
sale.' "
Myburgh J then refers to a 'nunber of writers and concludes: ''From
the authorities J t appears that the, price if not specifically agreed
nrus t be determinable by reference to something which in itself is
certain. Such would be the market price of the merx' if in fact it
has a market price which is rel¥iily ascertainable. The same would
 54 1HE ZIMBABWE lAW JOURNAL
'\

apply to the usual,price. An,agreenent to pay a fair'and reasonable

price ", in my view" is tootmcertain' to give rise to a valid cont tact
of sale. What is the true neaning ofa fair and reasonable price?
Who must determine it? How is it to 'be calculated? ._These are all
questions which in the ultimate result will depend on the opinion
of some tmde'termined person or persons. What is· to happen if they
differ? The usual price refers to:a factual position. 'That fact
CaQ be proved, and is not like a fair and reasonable price dependent
on opinion. Such, an agreement to deliver against paynent of a fair
and reasonable allDtmt of IJDney WOuld, in my view, be actionable as
an iIUloniinate contract. Such a contract will have its own elenents
of risk and obligations as to delivery which would not necessarily
coincide with such elements in a contract of sale."

Lomba~d v Pongola Sugar Milling Co Ltd i963 (4) SA 119 (D). The
facts of this case will be found in d. above. ' Extracts from Henning
J's judgment are given in. the cases above.

Erasmus v Arcade Electric 1962 (3) SA 4lB (T). A lent E a two-horse-

power engine. After- some tine had passedA suggested that E should
• buy it. E's son replied that he and his father would bUy it, but no
agreenent was reached as to 'the price, A being 'satisfied with the
fact that, the engine wowd be bought. Two years later, A for the
first time debited E with .tJ.B. in respect of the engine. When a
magistrate gave judgment for A for £1B, E appealed. HELD, by the
Transvaal Provincial Di visiqn allowing the appeal, no contract of
sale had existed. (Although' the headnote "A contract to sell for a
reasonable price is invalid" is taken from .the judgnent, it does not
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describe the position accurately. There was no contract to sell

"for a reasonable. price", but nerely a loose understanding that the
article would be bought, without any nention being made of the price.
Mackeurtan (1972 p 47) says:, '1he decision is thus ·of doubtful
authori ty on the point Ii.ere discussed, ")

4.3.2 Impossibility, failure or defectiveness of reference by which price

is to be ascertained.

Whe~e in terms of the contmct the price has to be ascertained by

reference to other facts or circumstances or a third party, there
.can be no' sale if the reference is impossible or fails or is
defective.

a.-,Impossibility of reference'

Cassimjee v Cassimjee 1947 (3) SA 701 (N). 'Plaintiff claimed speci·

fic performance of a contract whereby he had.purchased from defendant
"as a going concern, t,he business of a general dealer for the sum of
... £2 000 in respect of goodwill, together with the stock-in·trade,
which was to be taken over at valuation." HELD" by the Natal Prov·
incial'Division, the defendant's exception that the claim was tmen-
forceable as the contract ,was void for uncertainty should be upheld.
Broone .3' said: "It is clear that the contract, as -alleged, is
unenforceable'. If the parties intended the valuation to be mride by,
 R)RM'\TION OF 1HE CONTRACf 55
/

an unamed'third person, or by tDemselves jointly, or by one of them,

there is no contract. ~,breover, the declaration does not allege
"hen the valuatign was to be made, nor the basis of it (eg, the
market value or cost), nor the subject matter (eg, stock at the date
,of sale or at the date of valuation or at the date of delivery).
[Counsel for the plaintiff)" concedes that the 'vords 'at a valuation'
are not very, exp1ic:i t but submits tl).at they'are consistent with an
averment that the valuation was to be made in a valid manner. This
submiss ion clearly does not take him far enough. He also points out;
'I'ith rrore force, that no dispute is alleged as to the portion of the
contract relating to stock. If this is the true position, the
declaration should,nave so alleged. As it is, it is quite impossible
for the Court to enforce the contract as alleged."

b.' Failure of reference

This is illustrated by Heymann's Estate v Featherstone in 4.3.1 c.

above.

c. Defectiveness of reference

fYh.erri the price is to be fixed by a third party and that party has
fixed a manifestly unfair price, the determination of the price is
considered defective. The' agg-l;~eved party will be legally justified
in refusing to pay the price so fixed, and the other party will then
be entitled to elect either to resile entirely from the contract or
,to carry, it out at a price found by the court to be the true and fair
:- ya1ue of the res vendi ta. , .. .-
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DubZin v Diner 1964 (1) SA 799 (D). Diner agreed to purchase Dublin's
shares in Ben~Oz (Pty) Ltd at a price to b~ fixed by the company's
auditors. After the price had been fixed Diner refused to pay it on
tne ground that it was grossly excessive. ~lin's application to
compel. Diner to pay the said price against delivery of the shares was
postponed sine 'die (without a day being fixed for resumption) by the
Durban and Coast Local Division,' on condition that Diner within a
fixed time instituted action agaiTLst Dublin to establish that the
,price fixed by the auditors was "excessive in such a degree that he
is not obliged to pay it." Miller J said: ''The questions raised by
respondent's objection to the auditors' valuation are, firstly,
whether a purchaser of goods, at a price to be determined by a narred
third party, may be granted 'relief against the excessive determina-
tion, in the absence of fraud, and, secondly, if he is entitled to'
relief, ",hat must be shown to jus'tify the Court in relieving him from
the rigours of the bargain which he concluded? Both these questions
were fully considered and dealt with by Murray AJP (as he then was)
v
in Gillig Sonnenberg 1953, (4) SA 675 (T)', In regard to the first
of these questions, the learned Judge concluded that ... the majority
[of writers in Roman-Dutch law] and better opinion was that either
party', se1ler or purchaser, was entitled to relief against a mani-
festly unfair or improper valuation by the third party '" In
consi<;iering the reasoning of the Court.in .GiZlig v Sonnenberg, ·it is
important to bear in mind that the, ultimate point for decision in
that case was whether the seller, upon ,proof. that the third party's
 56 WE ZIMBABWE LAW JOURNAL

valuation was' manifestly I.Dljust, was entitled to compel the purchaser

to buy at a price other than that detennined by the third party; a
question which was answered in the negative, the Court holding that
the purchaser cotild elect whether to resile from the contract or to
carry it out on the basis of the price fol.Dld to be the true or fair
value of the res vendita .•. But in regard to what the aggrieved '
party had to prove in order to obtain relief at all, the learned
Judge clearly accepted that he need not prove what was required for
Zaesio enormis [this is discussed below] in the strict sense and
appears to have endorsed the view of Pothier, in the passage qooted
by him (Sale para 24), that whether the price was 'manifestly I.Dljust'
in any particular case was a matter ,to be decided in the discretion
of the Judge, provided the degree of difference between the price
detennined and the actual value, was, 'not merely trifling, but very
considerable' ... I come to the conclusion, therefore:, that if in '
the present case the respondents were able to show that the price,
detennined by the auditors is so grossly excessive that it bears no
reasonable relationship at all to the value of the shares at the
relevant time, ,and is a manifestly I.Dljust and I.Dlfair price, he would
be legally justified in refusing to pay the price now, demanded by
the applicant." '
Gillig v Sonnenberg 1953 (4) SA 675 (T). In terms of 'the articles
of Oro Industries (Pty) Ltd a shareholder was bol.Dld, if he wished to
dispose of his shares, to sell them to another me~er at a price
fixed by the company's auditor as being in his opinion the "fair
value" of the shares. Alleging that the auditor had acted "capri~
cioUsly and/or arbitrarily" in valuing the shares at £5 2s 8d each
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in that "sucll 3IOOI.Dlt was a manifestly I.Dljust and I.Dlfair price, as

the true value was at least £11 per share", the seller' noW sued for
an order setting aside the auditor's valuation, and compelling the
buyer to purchase the shares at a price fixed by a person appointed
by the Court or by the Court itself. Exception was taken by the
buyer to the declaration filed by the 'seller on the grol.Dld that such
declaration was vague, enbarrassing, bad in law and disclosed no
cause of action. HELD, by the Transvaal Provincial Division in up-
holding the exception, e'ven if the, seller was entitled on equitable
grol.Dlds to eScape the aUditor's valuation, he could not compel the
buyer to buy at any other price. ¥.urray AJP said: ''!here is much
to be said for the view that no relief at all should be granted to
a purchaser (or seller) who having deliberately decided to buy (or
sell) at the valuer's price eventually finds that the valuer's ,
opinion differs very seriously from the market value, or the value
in the opinion of some other person. If however relief should be
granted, it is purely equitable, and in giving it, it is only proper
to see that equity nrus t also be done to the other party. . . There
is no apparent reason therefore why in cases of the present type;
the other party should be in any worse position than in Zaesio
enonnis cases strictly so called. Where laesio enormis has been
proved and the conditions, for grant of relief exist, the-position,
as I l.Dlderstand it, is that the other party has the option either to
resile entirely from the contract of sale or to carry it out on the
IIDdified price found to be' the true or fair value of the res vendita
There is every reason for giVing that right of election to a
 IURMA.TION OF mE CONTRACT 57

..;
person in the position of the defendant (buyer) in the present ~e.
He was prepared to purchase, but only at a price fixed by a na.ned
third party. If the last na.ned's detennination is, so defective as
to justify the plaintiff as seller in refusing to accept it, the
defendant is equally entitled to decline to'go any further with the
transaction, and to resist a new contract being forced upon him ... tt.
By the General Law AmendJrentAct of 1879 section 8 (the South African
General Law Amendrent Act of,1952 section 25) it is prescribed that
no contracts, shall be void or voidable by reason nere1y of. laesio '
enormis (a Roman Dutch doctrine which allowed rescission if the
price was less than half or rrore thandouble the value) sustained by
either of the parties to such contract . AI though there '.is a strong
similarity between laesio enormis and the relief given, in tile cases
above, it would appear that the abolition of laesio enormis does
not involve the extinction of this relief.
In Dublin v Diner Miller J said: ''The kinship between laesio enornris
properly so called and the relief afforded in cases of this nature,
is self-evident. The authCJrities referred to in the judgnent in
Gillig. v Sonnenberg make it clear that relief in this' type of case
is granted for the sake of giving equitable relief to a party
'damnified by a rrwrifestly unfair decision on the valuer's part' (at
p 681). It does not seem to ne, however, that, because the reason
for giving relief in this type of case stems from considerations of
, equity which are similar to those which underlie the doctrine of
laesio e1Wrmis. the alloli tion of laesio enormis properly so called
involves the extinction of the remedy or defence available, according
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to the authorities, to an aggrieved seller or purchqser in a case

where the agreed third party has made a grotesqueiy inaccurate
valuation.".' .
Tredgold SJ had this to say in the Southern Rhodesian case of Walters
v ILunh (below): " ... the point seems to be fully dealt within
Voet (18.5.3 and 4). and as far as I can find the view he states
there is one that has been generally adopted. He says·a contract of
sale may be rescinded on the ground of grossly disproportionate price'
paid, and he says the renedy always existed before the grossly dis-
proportionate price (I use the translator's words in translating .
.- laesio enormis) was-fixed at something exceeding by half the filir
price, but he adds sone over-reaching is allowed in law and a con-
tract made in good faith ought not to be annulled nerely on the
ground of slight disproportion. . By the· General Law Amendrent ACt of
1879, section 8, it is prescribed that no contract shall be void or
voidable by reason merely of laesio eno:mti.s sustained by either
party to the contract. The term laesio eno:mti.s is here correctly
used in the sense of very great darrage. At that time the doctrine
of laesio eno:mti.s was only applied i f on the one hand the buyer had
paid or agreed to pay rrore .than double the value, or the seller had
sold at less than half the value. Having regard to the enactnent
quoted and the conception of laesio enormis I hold the view that
while no specific disproportion in price can now be used as a deciding
factor, . the disproportion IlU.ISt be extreme to set a contract aside •
. In fact, according to Voet, the basis of avoidance on the ground of
excessive price is il11'lied fraud."

. '. \
 58 TIlE ZIMBABWE. LAW JOURNAL

Walters v· Lamb 1925 SF. 81, the decision of the High Coyrt of Southern
Rhodesia being confirmed by the Appellate Division in Lamb v Watters
1926 AD 35. JW, acting .as agent for his wife MW, to whom he was
married out of commlIDity, sold certain land, house and furniture to
L for .£3 250, first instalment of £1 000 to be payable in Salisbury.
Thereafter, MW tendered transfer to L-of the land and buildings, and
delivery of the furniture, against payment of the first instalment
of £1 000. Thereupon L refuseCl pa)'lT\ent and denied compl~tion of an
agreement for the sale of the said property and goods, and affirmed
inter alia that such material misrepresentation had been made by JW --
as to the value of the property as to entitle him to avoid the con-~
'tract. HELD, as there was no such disproportion between the price
fixed upon the property by _indep~ndent valuation as to entitle L to
avoid the contract, MW was entitled to judgment for £1 000.

4.4 FTice must be in current money

- The price must be in current money or in foreign money reducibte in,

terms of·current money (Mackeurtan 1972 p 49).
Where the contract is: to hand .over an artide for a money price an4
another articte or the doing of some other act, the nature of'the
contract must depend upon what the parties intended; -If this is not
dear it _win be deemed to be a contract of sate if the price is the
main consideration;· if it is not, the contract wiLL be deemed to be
exchange, or some other contract. But this is onty a prima facie
. (on the first view) rute; a contract· of sate does not cease to be a
sate where'the parties mereLy fix a method of payment of.the purchase
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price, eg by the detivery of shares ~r other property at a fixed

vatue in part p~yment (Mackeurtan 1972 p 49). /
This tast statement is quaUfied by the obiter dictum of cotman J
CWitwatersrand Local Division) in Vizirgianakis v Karp 1965 (2) SA
145 CW) (the facts are not important): ','It seems to me that
(although the English CDurts -apparently take a different view) -there
is a good deal to be·said for the proposition that a 'trade-in'
transaction, e~en if the .parties choose to call it a·sale, is really
a contract_of exchange if ·the major consideration on each side is
property and not money. The fact that a value is assigned to each
item of property which is to pass does no.t, in my view, detract from
, the _validi ty of the view."
The buyer obtains the right to pay part of an aggregate money price
by the detivery of goods.

BOUhJer v Adetford Motors (Pty) Ltd 1970 (4) SA 286 (E). B had pur-
chased a Mercedes. Benz motor car from A and traded in a _Zephyr motor
car. - B had wanted Rl 500 for the Zephyr but A was only prepared to
allow Rl 400. In the end the parties .had settled at Rl 400 but A
had promised B that; if it realised more than Rl 400 for his car, it
would pay him the amolIDt realised more than Rl 400 up to Rl 500. . A.
had ·sold the Zephyr getting therefor R900 in cash .and a motor vehiCle
valued at R600, and the purchaser had been credited in A's books with
Rl 500. A had nevertheless refused to credit B with more than the
 FORMATION OF'lliE CDNTRACJ' 59
-
Rl 400. When A sued B for R86,54 for goods sold and services
rendered, B pleaded that A was not entitled to payment of the amount
claimed in that A had failed to credit him with RlOO. A magistrate
upheld A's claim and' B' appealed. HELD, by the Eastern Cape Division,
if goods were to be paid for by money and other goods on which a
fixed value was put, then the cOntract had to be treated as one of
sale for the aggregate sum as the price, viz Rl 500, and ther~fore
the magistrate' s"-court should have dismissed A's claim. .
Antonie v The, Price Controller and another 1946 TPD 190. A had sold
a certain Dr van Rooyen a Packard; car, the written agreement of sale
showing the price as £900, to be paid, as to the sum of £4S0 in cash,
/ and, by the trade- in of a Hudson car upon which a value of £450 ",as
placed. In terms of the price' control regulations, the Price Con-
troller had fixed the sum of £650 at which the Packard might be sold.
Under a regulation, which provided that 'whenever a person has
- received in respect of any goods ~ price in excess of the maximum"
a refund' of a sum not exceedirig _twice the amount of the excess could
be. ordered, the Price Controller 'ordered A to refund £250 to R. A
applied for a setting aside of the order.- HELD, by the Transvaal
Provincial Division dismissing A's application, the price received '
,by him for the Packard was in excess of the maximum price, inasmuch,
as when the Hudson was delivered A had, in terms of the agreement,
received the equivalent of £450 in addition to the cash payment of
£450. '
There is no sale of the article traded in; it is delivered as part,
payment.
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Massyn's Motors v Van Rooyen 1965 (3) SA 717 (0). The facts are not
important. The Orange' Free State Provincial Division held that,
where on the trade-in of an asset nothing else occurs'but that the
seller has expressed his willingness to take as part-paym,ent of the
purchase price an asset offered by the purchaser and the parties
subsequently place a value on such asset for the purposes of a hire-
purchase agreement, then no contract of sale comes 'into existence
with regard to the asset traded in.
Lee v'Solomon 1949 (2) SA 255' (C)." The parties agreed to the sale
Of undivided land for £1 500. The price had· to be paid as follows:
"(a), The purchaser shall immediately on the signing hereof transfer
to the seller 700 Greaterman's shares which shall be reckoned at
25/ - per share ..• (b) The balance of £625 shall be paid to the
seller against registration of transfer." It was a further condition
of the sale that should the approval of the subdivision not be
obtained so as to enable transfer to be passed the sale would be of
no force and effect and the seller would be obliged to refund to the
purchaser all money paid on account of the.price. After the shares,
representing an amount of £875, had been transferred, both authori-
ties concerned in the sub-division of the land refused to grant their
approval. In an action claiming (a) the cancellation of the sale
and (b) the payment of the sum of £875, or alternatively the transfer
to the bUyer of the 700 shares at 25/- a share, it appeared that the
seller'had prior to the filirig of the declaration tendered to return
 60 TIiE ZIMBABWE LAW JOURNAL

the 700 shares but not at 25/- a share. no!' the alternative IIlOOlDlt ,
of £875. The seller excepted to claim (b) on the grolDld that it
disClosed no cause of action. HELD. by the Cape Provincial DiviSion,
in tenns of the contract, which was one of sale, the seller was '
obliged in tenns of, a res~ission to refund the IIlOOlDlt of £875; it
was not competent for the seller to retl.ml the shares at all, much
less 'at any fixed price; accordingly. the exception should be
dismissed. .

(To be acmtinued)
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Town planning officer, g~v~ng evidence:

"Open space in towns is like virginity -:- when
its gone, it's gone . n