Voetstoots: the common law principle

When someone buys goods, South Africa’s common law provides an implied warranty that the goods are sold free from defects. But if goods are sold “voetstoots” it means that the goods are sold “as is” and without any warranty. If it later transpires that there were defects in the goods the purchaser wouldn’t have any recourse against the seller. Except where the defect existed at the time of sale and the seller knew about it, yet failed to disclose the defect to the buyer. A sale contract containing a voetstoots clause wouldn’t protect a seller who knew about a defect but failed to disclose it, knowing that the sale may have fallen through, or the purchaser would have negotiated a reduced price. When the purchaser eventually finds out about the defect, the purchaser would have recourse against the seller to cancel the sale and reclaim the purchase price, alternatively to keep the goods but claim a reduction in the price. Read More.....

A Shareholders’ Agreement and the Company’s MOI (Memorandum of Incorporation) go together like the proverbial horse-and-carriage. Before the new Companies Act, a private company’s Shareholder’s Agreement was king of this carriage, overriding any conflicting provision in the articles of association. But not anymore. In terms of the South African Companies Act, the terms of the company’s Memorandum of Incorporation override any conflicting provisions in the Shareholders’ Agreement. Does this mean that a Shareholder’s Agreement is no longer relevant? Not at all. A Shareholders’ Agreement neither replaces nor alters the MOI. A company’s Shareholders’ Agreement should complement its MOI. What this does mean, however, is that shareholders should pay careful attention to the MOI under which it is incorporated. Read More.....