eBusiness Weekly
Arthur Marara
The position of the law is that a seller is obliged to deliver a merx (the thing sold) that is free from material patent and latent defects unless a contract of sale provides the contrary.
This week we want to look at something that affects most people including businesses when they make purchases of goods; defects. The defects can either be “patent” or “latent”.
What is a patent defect?
A patent defect in simple terms is one that can be seen with the naked eye. There is no need for expertise in order for you to see it.
You may have had this experience before acquiring a property, you usually inspect to look for anything abnormal. A number of times what you are looking for with the naked eye are patent defects.
In the case of immovable property, it’s possible to see walls that have cracks, shattered windows, broken doors etc.
These are patent defects as they are obvious to the naked eyes upon reasonable inspection. In other words casual inspection suffices in order for you to see the defect.
In the case of patent defects, the parties to the agreement usually address the question as to who shall be responsible for costs of repair.
The agreement of sale also addresses the issue. If the damages are captured in terms of the agreement, the seller has a strong evidentiary basis to argue that the purchaser was aware of the defects and hence no argument arising from allegations of concealment can be sustained.
Latent defects
On the other hand, a latent defect is the direct opposite of a patent defect.
A latent defect is one that only an expert can be able to identify. Even if you examine with your natural eyes as long as you are not an expert you will not be able to identify such.
The defect would not be apparent to a reasonable person upon inspection of the property. In the case of immovable property a latent defects may include rising damp, faulty pool pumps or geysers, rusted internal pipes and leaking roofs. Only an expert can be able to flag out these issues.
Some of the latent defects will manifest as the merx is used shortly after conclusion of the contract of sale.
Because latent defects are very difficult for a seller to discover, caveat emptor does not apply.
Caveat emptor is a common law doctrine that places the burden on buyers to reasonably examine property before making a purchase.
A buyer who fails to meet this burden is unable to recover for defects in the product that would have been discovered had this burden been met.
If the latent defect was not known to the seller, the seller cannot be held liable for the defect. However, if it can be proven that the seller knew of the defect and deliberately failed to disclose it, the seller may be held liable.
A number of sellers are aware of the challenges occasioned by latent defects in a property transaction hence inclusion of the “voetstoots clause“ in the purchase/sale agreement.
“Voetstoots“ speaks to a sale in which the seller is freed from all responsibility for the conditions of the goods being sold.” The term “ Voetstoots“ originated from Afrikaans, the word literally means “as it is.”
The voetstoots clause is meant to protect the seller against all defects in the property including all latent defects which are unknown to the seller.
We shall look at Voetstoots clauses in greater detail in the following articles. The seller has a legal duty to disclose to the purchaser any latent defects to the property at the time of concluding and signing the offer to purchase/sale agreement.
The voestoots clause is not meant to protect a Seller who fraudulently conceals latent defects in the property they are selling.
If the seller was aware of a latent defect and deliberately concealed this from the purchaser, the purchaser will then have a right of recourse against the seller.
A seller is deprived of the protection of a voetstoots clause in circumstances where the seller perpetrated a fraudulent non- disclosure.
However, should a defect be identified after the sale of the property is concluded, the onus is on the purchaser to prove that the seller was aware of the defect and that he or she fraudulently/deliberately concealed this from the purchaser while concluding the transaction.
To ascertain whether the seller deliberately concealed the defect the court will look at objective factors. If it is found that the seller was in fact fraudulent, he or she may be required to refund part of the purchase price or rectify the defect in question.
In reality, however, it is onerous on the purchaser to prove that the seller was aware and deliberately concealed this from the purchaser.
An implied warranty against latent defects is usually read into every contract of sale unless parties exclude it.
The law assumes that the merx is sold free from defects which makes it unfit for the purpose (ordinary or specific) sold or bought for. This warranty makes the seller liable for latent defects even if the seller was unaware of the latent defect and did not act in bad faith.
To be continued…
LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They do not constitute legal advice. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.
Arthur Marara
Arthur Marara is a corporate law attorney practicing law in Harare, Zimbabwe. He is also a notary public and conveyancer. He is also passionate about employment law, commercial law, family law and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email: [email protected]
