Question

Mbathera trades in his old car on a new car at Special Wheels Motors. The parties agree that the price for the new vehicle is N$ 150 000 and they place a trade-in value of N$ 50 000 on the old car. Mbathera pays N$ 100 000 and drives away in his new car. Special Wheels Motors finds out later that the gear box of the old vehicle has to be repaired for N$ 10 000 and that Mbathera concealed the noise the broken gear box makes by putting some bananas in the gear box. The value of the old car is in fact not N$ 50 000, but N$ 40 000. Special Wheels Motors wants to know:

1)            whether they concluded a valid contract of sale or an exchange and
2)            whether it would be able to claim N$ 10 000 from Mbathera as a price reduction. Discuss fully.     

Answer 1

This is a case of concealment which means it is an unlawful supression of fact and failure to reveal an important informaton which should have been communicated to the buyer (i.e. Special Wheel Motors).

1) Thus, putting bananas in the broken gear box to hide the defect, Mbathera has concealed an important information, hence Special Wheels Motors can make the contract invalid.

2) As an act of wilfull concealment, Special Wheel Motors can totally void the contract or it can also claim N$ 10000 from Mbathera as a price reduction which it has incurred on repairi g the broken gear box.

Thus, wilful concealment of an important information from a party to the contract can make the contract void and also the other party can file for claim to make the defect good.