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by Charl Theron
In Roman times, now more than 2,000 years ago, the superintendents of the markets, called the aediles curules, laid down specific Laws of buying and selling, which still apply today. It stated that if a Seller sells something, he by implication gives a warranty against latent defects in the thing so sold. Very basically, a latent defect is a defect that could not be reasonably detected by the Purchaser at the date of sale and also the Seller would not be aware of. The Seller was under obligation to disclose any defect known to him to the Purchaser.
If such latent defect manifested itself after the sale was concluded, the Purchaser had two options.
Firstly, if the defect was of such nature that, had the Purchaser known thereof at the date of purchase, the Purchaser would not have bought it, then the Purchaser could return the purchased object and claim back all money paid.
Secondly, if the defect was such that the Purchaser would notwithstanding the defect have purchased the object, than the Purchaser on discovering the defect after the sale, will be entitled to a reduction of the purchase price and therefore a partial refund by the Seller.
In the times of the Dutch influence on our Law, the Dutch being the astute businessmen they were, introduced the concept of “Voetstoots” also known as “as is”. By introducing the Voetstoots clause, the Seller’s liability under the Roman Law principles referred to above is limited. In a nutshell, “Voetstoots” means that an object is sold with all its latent or inherent faults and the Purchaser cannot avail himself of the above two options and has to retain the purchased object “warts and all”, unless the Seller knew of the defect and with a fraudulent intent did not disclose this to the Purchaser.
This puts the Purchaser in a very difficult position of proof as it allows the Seller not to be liable for a latent defect even if he had knowledge of a defect, but merely forgot to disclose this to the Purchaser, or had no fraud in mind when not disclosing the defect.
The legislature has now ostensibly come to the “rescue” of Purchasers by means of the Consumer Protection Act No. 68 of 2008 (“CPA”). This Act will come into operation on 24th October 2010. In terms of Section 55(2) of CPA:
“…every consumer has a right to receive goods that are reasonably suitable for the purpose for which they are generally intended, are of good quality, in good working order and free of any defects, will be usable for a reasonable period of time having regard to the use to which they would normally be put and to all surrounding circumstances of their supply and to comply with any applicable standards set under the Standards Act 1993 or any other public regulation.”
In a sense, Section 55(2) of CPA restates the Law as applicable from Roman times before the Dutch introduced the Voetstoots principle in that a Seller gives “an implied warranty of quality” of the product being sold.
Section 55(5)(a) goes further and states that in determining whether Section 55(2) applies to goods “it is irrelevant whether a product failure was latent or patent, or whether it could have been detected by a consumer before taking delivery of the goods.”
At first glance, it seems as though CPA will knock the principle of “Voetstoots” for a six. If however this was the intention of the Legislature, why did it not clearly spell it out to say that “Voetstoots” clauses in contracts would no longer be valid? This would have been easy enough to do as the principle is well known and defined in our Law.
Then however, Section 55(6) seemingly allows a Seller a watered down “Voetstoots” principle. Section 55(6) states that Section 55(2) will “not apply to a transaction if the consumer has been expressly informed that the particular goods were offered in a specific condition and has expressly agreed to accept the goods in that condition or knowingly acted in a manner consistent with accepting the goods in that condition.”
The “Voetstoots” clause has particularly been used in respect of sales of immovable property. It has become such a standard clause that I am of the opinion that if a Lawyer drafts a Deed of Sale for a Seller and he leaves out the “Voetstoots” clause, he might be held liable on grounds of negligence if the Seller suffered damages because of this omission.
Let’s face it, very few houses/buildings are perfect in all respects, but very seldomly would such defects be of such serious nature that a house/building cannot be occupied at all. Therefore the “Voetstoots” clause did oil the wheels of property transfers, brought some certainty and also avoided much and costly litigation.
If it is so that the “Voetstoots” clause is nullified by Section 55(5)(a) of CPA, it is my submission that litigation in property related matters will increase significantly.
It may also lead to a situation which applies in Britain for instance, where no home loan will be provided by a financial institution without an inspection by an independent qualified expert, which could become quite expensive.
To avoid the above situation and the uncertainty whether the “Voetstoots” principle is still alive, I suggest that each Deed of Sale for a “second hand” house or building contains a carefully drafted clause to introduce the safeguard for the Seller as referred to in Section 55(6) of CPA. Such a clause will differ from transaction to transaction and will depend on the state, age and condition of the house or building. Reference to the principle of “Voetstoots” should be avoided. It will however cause each Seller to exercise his mind clearly on these matters and will assist the Purchaser in making up his mind to purchase or not.
If such a provision is not made, I fear that there will be a proliferation of litigation and the Lawyers who will specialize in this direction will be handsomely rewarded at the cost of the parties involved.
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