Types of defects in sold goods
South African common law states that a seller is liable (for a period of 3 years) for all latent defects in the property sold, after the discovery of the defects.
Latent defects refer to defects, which exist in hidden or dormant form but are usually capable of being brought to light. Patent defects refer to defects, which are readily seen, discovered, or understood to be defects.
How to sell goods with defects
The ‘voetstoots’ clause has been included in agreements of a sale of immovable property and offers the seller protection from the discovery of latent defects by the purchaser after the sale. This applies across the board, except where the seller has acted fraudulently by either being aware of the defect and not disclosing it, or concealing the defect from the purchaser or agent.The Consumer Protection Act (CPA) has changed this position. The operation of the voetstoots clause is excluded from transactions that are concluded in the ordinary course of the supplier’s business, by operation of Section 55 of the CPA which deals with the consumer’s right to safe, good quality goods (except goods bought on auction). This entitles the purchaser to receive the property or goods, reasonably suitable for the purpose that they are generally intended for, of good quality, in good working order and free of any defects.”
If the purchaser has been informed expressly or in writing that the property was offered in a specific condition detailing all defects, and if the purchaser has expressly agreed to accept the property in that condition or acted in a way that was consistent with accepting the property in that condition, it becomes irrelevant whether the failure or defect was latent or patent.
This means that the voetstoots clause can still be included in a contract, on the condition that the seller has clearly disclosed all defects to the purchaser and the purchaser has accepted this. The defects could be included in the contract by the means of an annexure to the contract or if the contract drafted by the agent allows for the addition of special information.
Where this is true of once-off sales, the situation is different where the seller is a developer, investor or speculator. Such individuals or companies cannot exclude liability for defects by way of a voetstoots clause. In these cases, if latent defects are not disclosed or if the property bought by the purchaser, differs materially from the specifications, the purchaser may have the right to refuse to take the transfer.
ABOUT THE AUTHOR
Esther Elverfeld is currently the SEESA Consumer Protection & POPI Provincial Manager at the Bloemfontein office. She has been with SEESA for 11 years.