We buy and sell things every day, and no doubt most of us assume that it is only when we become the owner that we take the risk of our purchase being damaged or destroyed. Not always – in our law, passing of ownership and passing of risk are two different concepts, and although in our day-to-day lives they are normally simultaneous, sometimes they aren’t.
What happens then? The general rule in our law – unless the parties have agreed otherwise – is this –
- A buyer becomes the owner of a movable only when it is “delivered” to him/her (be careful here – “delivery” is a much more complicated concept in law than you might think).
- Risk however passes to the buyer on conclusion of the contract of sale; in other words, you could buy something, and if it is stolen or destroyed before you take ownership, you could end up losing both it and the purchase price. There are many provisos and exceptions to this rule (such as when the seller causes the loss) but the legal principles are complex and all in all it’s a minefield for the unwary.”
For more information, contact us on 041 501 9800.