This is Part 1 of a five-part series. Law firm STBB hosted a webinar on the topic of ‘caveat emptor’ and the following is the transcript:
In transactions concerning immovable property, the ‘voetstoots’ clause holds significant importance as it pertains to the exclusion of warranties against latent defects. Derived from the Dutch word meaning ‘pushed with the foot’, voetstoots effectively transfers ownership of an item or property to the buyer with all its inherent defects, whether patent or latent, without recourse to the seller for those defects post-sale.
The voetstoots clause places a major responsibility on the buyer to meticulously assess the condition of the property before finalising the transaction. This principle aligns with the Latin maxim of ‘caveat emptor’ or ‘buyer beware’, reinforcing the notion that the buyer assumes the risk associated with any hidden flaws or defects that may not be immediately apparent.
From a legal standpoint, the application of the voetstoots clause hinges on several critical considerations. Firstly, it does not shield the seller if they were aware of the defects at the time of sale, acted fraudulently, or negligently concealed pertinent information regarding the property’s condition. This exclusion is underscored by case law, which defines a defect as an abnormal characteristic that a reasonable buyer would not expect under normal circumstances of the transaction. Moreover, for a defect to be legally actionable, it must be substantial, material, and objectively unexpected by a reasonable purchaser.
The primary intent behind incorporating a voetstoots clause into a sale agreement is to absolve the seller from ongoing liability for defects that manifest after the sale concludes. However, the clause’s efficacy is contingent upon the seller’s awareness of the defects or their lack thereof. Case law illustrates instances where sellers cannot rely on the voetstoots clause if they were found to have prior knowledge of significant defects and failed to disclose them.
In practice, the voetstoots clause serves as a safeguard for sellers against indefinite liability but requires them to act in good faith by disclosing known defects or risk legal repercussions. It underscores the importance of transparency and due diligence in property transactions, ensuring that buyers are adequately informed and protected against unforeseen liabilities.
As property law continues to evolve, the application and interpretation of voetstoots clauses remain pivotal in shaping contractual obligations and safeguarding the interests of both buyers and sellers. Clear understanding and adherence to these legal principles are crucial for navigating property transactions effectively and mitigating potential disputes.
Continued in Part 2…
