SELF-ASSESSMENT ACTIVITIES P91. Distinguish between authoritative sources and persuasive sources of South African law.Courts are bound to authorotive lawLegislationJudgementsCustomary lawOld AuthorityPersuasive sources may lead the court to apply or interpret a legal rule in a particular wayForeign lawTextbooks & Law Journals2. A group of fishermen normally set their lines on a beach where no boats were permanently stationed. The fishermen did so with a view to catching a shoal of fish seen moving along the coast. No other fishermen were entitled to set lines within any reasonable distance in front of the lines already set. Identify the case to which the above applies and outline the requirements that must be met before a customary rule will be recognised as a legal rule.3. Mention the requirements that must be met before this customary rule (practice) can be recognised as a legal rule.It must be reasonableMust have existed for a long timeMust be generally recognised and observed by the communityContents of the rule must be certain and clear4. Name the divisions of the courts in the Republic and draw a distinction between different courts in the country.Constitutional CourtSupreme Court of appealHigh courtMagistrate’s courtSmall claims court5. Explain the operation and effect of the doctrine of stare decisis.Literally means “the decision stands”Strict adherence mean that the latter court would be bound by the earlier decision regardless of the earlier decision being correctCourt is bound by its own decisions unless and until they are overruled by a superior courtStare decisis applies in SA Law but in appropriate cases it is possible to depart from the decision of an earlier and even a superior court6. Distinguish between ratio decidendi and obiter dictum.Most important part of judgmentRatio decidendi: means “reason for decision”Different parties but same facts courts will generally follow previous decision and its ratio decidendi

Material facts are determined, and immaterial facts are excludedAny statements that falls outside the ratio decidendi is known as obiter dictumAny remark which is irrelevant to the settling of a dispute obiter (by the way)Although not binding has strong persuasive authorityOnce it is applied by a later court in becomes ratio decrdendi and becomes binding7. Name different aspects of a court judgment.

SELF-ASSESSMENT ACTIVITIES P181. What does the term “law” mean?System of rules which apply in a communityBinding on peopleLegal rules are characterised by the fact that they can be enforced by the state2. Describe a legal object.Any entity that can be the object of a legal subjects claim to a right3. Describe a subjective right.Relationship between a legal subject and a legal object, as well as that between a legal subject and other legal subjects4. Draw a distinction between a legal subject and a juristic person.Legal subject is a human being or entity subject to lawAll legal subjects are called personsNatural person refers all human beingsJuristic persons refer to entities that are recognised as holders of rights and powersThese include companies, municipalities, universities and the state5. Name different classes of subjective rights.Real right is the right to property et. BookIntellectual property rights – right to intellectual right ex. Artists, writers and InventorsPersonality right – physical integrity or reputation of a personPersonal right – performance is demanded6. Draw a distinction between different ways in which ownership can be acquired.Original methods of acquiring ownership

1. Occupation – new owner does not obtain the right of ownership from another, but establishes an original right of ownership ex. Catching a fish or picking up a pen

2. Prescription – If he / she has possessed it openly as if he / she were its owners for an uninterrupted period of thirty yearsObtains ownership after owner has lost ownership

Derivative methods of acquiring ownership1. Movable property - Physically moving from one place to another

Must be intention of both parties to transfer rightsCalled delivery of property

2. Immovable property – No Delivery – Registration of the transfer at a deeds office is required

7. Draw a distinction between praedial servitudes and personal servitudes.Praedial – Limited right to the adjacent property example for grazing. Both parties must agree and will come into play after registration took placePersonal – The right to use and enjoy property of which another is owner. Example a wife using her deceased husband’s property until his son becomes owner8. Draw a distinction between ownership and possession.Ownership is when a person has the right over a property but is not necessarily the possessor of the propertyA person is in possession of property when he has physical control9. Define a “delict”.Any unlawful culpable act whereby a person causes the other party damage or can injury to personality and whereby the prejudiced person is granted a right to damages or compensation, depending on the circumstances10. Name and describe the grounds of justification.Necessity – Eternal forces, a person is placed in a position that the person’s legitimate interest can only be protected through a reasonable infringement of the right of another. Ex. breaking someone’s door down to assist a person escaping a burning houseSelf Defence – In a reasonable way defends himself against an actual, or imminent, unlawful attack by another to defend his own or another’s rightConsent – legally expressing his will gives consent to injury or harem EX. Consenting to an operationStatutory authority – Performing an act while exercising a statutory authorityProvocation – When a person is provoked or incited by another’s word or action to cause harem to others11. What remedies does the law grant to a person who has suffered damage or non-patrimonial prejudice?Actio Legis Aquiliae is aimed at recovering patrimonial damages, such as monetary lossActio iniuriarum is recovery sentimental damages such as damage to a person’s good name12. Name and describe the two forms that an obligation imposed upon the enriched person can take.Restitution – The act of restoring something that has been taken away, lost or surrendered to the right full ownerCompensation – Obligation to compensate the person at the expense of whom one has been unjustly enriched.

SELF-ASSESSMENT ACTIVITIES P261. Describe a contract.An agreement concluded by two or more persons with the serious intention of creating legally enforceable obligations2. What is the difference between an agreement and a contract?

Agreements are not always contracts as they don’t create legally enforceable obligations only moral dutiesDifference lies in the intention of the parties and the different consequences that are attached3. What are the requirements for the conclusion of a valid contract?1. Consensus – agreement to the same thing2. Capacity to act – the ability in law to perform the act of entering into contract3. Juridical possibility – legally possible4. Physical executability – Rights and duties must be physical possible5. Formalities – Must be observed if prescribed

Self-assessment activities P501. Briefly describe the requirements that must be fulfilled for consensus to be reached between the parties to a contract.All parties has a serious intention to be contractually boundAll parties have a common intentionAll parties makes his intentions known to every other party by means of declaration on intention2. Lido wants to sell his BMW 320i to Lara for R150 000. But Lido does not, in any way, express his intention to Lara. At the same time, Lara wants to buy the BMW 320i from Lido for R150 000. Similarly, Lara fails to express her intention to Lido. Has a valid contract come into existence between the parties?3. Describe the requirements for the offer and acceptance.Offer must be made with the intention that the offeror will be legally bound by the mere acceptance there ofOffer must be completed – must contain all the terms of which he wants to bind the offeree to and to which the offeror is willing to abideOffer and acceptance must be clear and certainOffer and acceptance may be made either expressly or tacitly by means of conductOffer must be addressed either to a particular person or persons or in general to unknown person or the public can only be accepted by the addressedOffer and acceptance must be communicated4. Draw a distinction between an offer and an invitation to make an offer.A request or invitation to make an offer or to do business is not a true offerGeneral rule is that advertisements or displays in itself does not constitute an offer but rather indentation to make a offerOnce the member reacts and makes the dealer a offer to buy the advertised product and he accepts a contract will arise5. Name circumstances under which an offer will lapse or fall away.1. If the offer stipulates that it is only valid for a certain period of time. Offer will fall away if not accepted in that period

2. If before the offer has been accepted, the offeror informs the offeree that he revokes the offer3. If offeree rejects the offer, offer falls way and cannot be revived4. When a counter offer is made the original offer falls away5. If either the offeror or offeree dies before the offer is accepted6. Describe an option in the context of offer and acceptance.Option can be given in respect of different kinds of contractsOption giver makes an offer to conclude a particular contract (substantive offer) and in addition makes a further offer to keep the first offer open for a specific period7. Various types of statements should be distinguished from true offers. Think of examples of statements that are not offers.Invitation to make an offerStatement of intentCalling for tendersAuctions8. Draw a distinction between the information (ascertainment) theory and the dispatch (expedition/posting rule) theory.If offeror and offeree are in each other’s presence when offer is accepted. The contract comes into being at the time when the acceptance is communicated and at the place where the parties happen to be at that moment. This is referred to as the information or ascertainment theoryIf offeror and offeree are not in each other’s presence and contract is concluded by post the contract comes in to being when the acceptance letter is posted this is seen as dispatch theory9. Explain electronic signatures.An agreement concluded electronically is concluded at the time when and the place where the acceptance of the offer is received by the offeror. The acceptance are usually by means of electronic signatures.Electronic signature can be anything from the typing of the name at the end of a document, a scanned handwritten signature or use of complex identification technology as long as it is intended to be a signature10. Discuss the requirements for mistake, misrepresentation, duress and undue influence.Mistake relates to a fact or a legal rule or principle

Example Tessa pays Elton R2000 in the mistaken believe that she owes him the money

Mistake in laws and fact will only invalidate a contract if it is considered to be excusable in the circumstances

Mistake must concern a material fact, legal rule or principleA mistake is material and excludes consensus in the following instances

A misunderstanding in respect of the identity of the person with whom the agreement is reached

A mistake concerning the content of the intended contractA mistake in respect of an interpretation the law attaches to the offer and acceptance

Mistake in fact or laws must be reasonableMistake will be reasonable if the reasonable person in the same situation would make the same mistake if he or she were to judge the particular circumstances

MisrepresentationMust be misrepresentation – a untrue statement concerning an existing fact or conditionMust be made by one contracting party to another contracting party, by someone actin gin the service of contracting party, or on his authority or in collusion with himMust be unlawful. Not considered unlawful merely because it is false. Must be material. Usually if it concerns facts which would probably induce somebody to conclude a contractMust have induce the contract as if it stands. There has to be a link between the misrepresentation and the contract.Can be made intentionally, negligently on innocentlyDuressThere must be actual physical violence or a reasonable fear of violence or damage. A threat of economic damage or ruin may constitute duress and allow the avoidanceThe threat must be of an imminent for inevitable evil question would be where the person could not have averted the threat other Thant by agreeing to the contractThe threat of harm of violence must be unlawfulThe duress must be exercised by one contracting party against the either contracting partyThreat must cause the threatened person to conclude the contractUnder InfluenceParty who has allegedly exercised the under influence must have acquired an influence offer the victimParty must have used his or her influence to weaken the victim’s ability to resist, so that the victims will become susceptibleInfluence must have used an scrupulously to persuade the victim to consent to a transaction the victim would not have entered into of his normal free will and which was to be the victims disadvantage

Self-assessment activities P621. Aaron is a mentally deficient, married man. Does his mental deficiency have an influence on his legal capacity?No it has no influence on his legal capacity to act unless it is proven in court that he did not sign the contract during a movement of normality2. Mention the factors that can influence a natural person’s capacity to act.AgeMarriageMental deficiency

Influence of alcohol and drugsProdigalsInsolvency3. Describe the different age bands according to which a person’s capacity to act is determined.a) 0 to 7Has no capacity to act and can therefore not conclude any contract whatsoever not even accept an offer of a donationb) 7 to 18 yearsSuch a minor needs assistance from someone who has full capacity to actLimited capacity to act can perform juristic acts within assistance of a guardianIf contract is concluded on behalf of minor that is detrimental he can within one year after reaching majority apply to the high court for cancellation of contractTermination of pregnancy no age limitsWills 16 and olderBanking 16 and olderValid marriage girls 15 boys 18 (not even religion)Religion marriage is above 15/18 Must give consentUnder 15/ 18 a Minister of Home Affairs must give consentMedical treatment: 12 yearsHIV test: 12 yearsContraceptive: 12 years4. Does a minor lose his or her capacity to act once a marriage to which he or she is a party is dissolved by divorce? Explain.No the court will provide for the guardianship (best interest of the child)5. Advise Mr Tau whether he can consent, as part of his cultural practices, to Mr Bundu marrying his 17-year-old daughter, Buhle, without her consent.No all those she is of legal age she must consent to the marriage6. Explain whether Mary, a 13-year-old girl, can undergo an HIV test without her guardian’s consent.Yes she can as the children act stipulates that over the age of 12 a minor can get tested without a guardians consent7. Can Matu, a 40-year-old businessman who is virtually unconscious after having consumed 12 glasses of whisky, conclude a contract for the sale of his farm?No the contract can be valid dateable or unenforceable if he can prove that he was in such a Intoxicated state that he is unable to control his actions8. Does Mabel, who has been declared a prodigal by the court, have capacity to act?No a project will has limited capacity to act. Can only agree to contracts that are solely to the advantage of the prodigal when the arrangement that when is him liable for a the discharge of obligation is concluded he can only do so with assistance of a curator9. Briefly describe the contracts for which a guardian’s assistance is insufficient.

With the alienation of immovable propertyBelow 100000 guardian and Master of High CourtAbove 100000 guardian and judge or judges (Court) acquired property is not affected by this rule10. Tapiwa, a minor of 17 years, has just completed a printing course and decides to launch a business that prints business cards as well as birthday and wedding invitations. His father, an estate agent, finds business premises for him in the local shopping centre. His mother buys a computer, a printer, photocopier and furniture for the business. As a minor, Tapiwa requests you to advise him on the concept of tacit emancipation.Emancipated minor has capacity to conclude certain contracts without the assistance of his GuardianOccurs when Guardian allows the minor to lead an economically independent existenceGuardian can consent tacitly example assistance in setting up his businessNote emancipation can provide capacity to act it does not terminate minorityMine would still need assistance in certain matters like marriage and alienation of property

Self-assessment activities P681. Molefe and Lebogang are engaged. They include a clause in their antenuptial contract to the effect that Molefe makes Lebogang his heir.2. Discuss whether this contact is legally possible or not in terms of common law.Yes although agreements restraining a person's freedom to participate in legal transactions is illegal an exception to the rule is made by means of Ante nuptial contracts where parties agree to the point mint of the other spouse has heir3. What do we mean when we say that the contract is contrary to statutory law?These contracts are forbidden by an act of parliament provincial or Buy municipal regulations usually because they are considered harmful to society example is sale of weapons and ammunition4. Tom pays Gwelo R50 000 to burn down the Pretoria city hall. However, Gwelo has second thoughts and refuses to perform as agreed. Is Tom legally entitled to enforce Gwelo’s performance or, alternatively, to demand the return of the R50 000?Know where an agreement is void owing to illegality no party May Institute and action against the other to claim a promise performance on the grounds of the unlawful agreementRule is expressed in the Maxim known as ex turpi causa non oritur actro (no action arises from a shameful Cause)This rule is never relaxed even if one of the parties has already rendered performance (example payment)The court will not recognise the contract5. Sifi so undertakes to deliver his Rally mountain bike to Motha. The contract further provides that Sifi so may, at his sole discretion, deliver another mountain bike of similar quality.

The alternative obligationWhere a party may select the performance which is due from two or more different alternativesThe object and quantity from which the selection may be made must be established at time of concluding the contract example one of two specific horsesThe generic obligationPerformance is determined by describing a kind (genus) of commodity in terms of number or measure for a valid determination of the performance that contract must contain the following

1. kind of commodity (what)2. method of selection (number, mass, measure)3. the party must make the selection (if there is no agreement right of selection resides

with the debtor)6. What kind of obligation is applicable in this scenario?

7. Draw a distinction between an alternative and a generic obligation.8. Explain what objective possibility of performance means.Requirements for the creation of a contract is that the performance of right and duties following from the agreement must be objectively possible at the time the contract is concluded example is one cannot agree to sell someone a deceased animal9. When is a contract or performance determined and ascertainable?Contract will be determined if the parties expressly mentioned the performance in their agreement. Both parties agree that Carl will buy Blackie from Vanja for 15000Both the identity of the horse and the price are specifiedPerformance will be ascertainable if at the time of concluding the contract the parties agree on a criteria or formula to identify the performance

Self-assessment activities P721. Peter is very excited. He has just heard that he has won a new car. He phones Mpho and tells him the good news. Peter offers to give his old car to Mpho, who gladly accepts the offer. They agree that Peter will deliver the old car to Mpho once he has received his new car.2. Discuss the legal status of the agreement between Peter and Mpho.The agreement can be seen as the social agreement and not as a valid contract. a contract of donation in terms of which performance is due in the future is only valid if two terms are contained in a written document that is signed by the donor (or someone acting on his behalf) as well as must be witnessed by two other parties3. Describe the formalities for contracts of donation in terms of which performance is due in the future.

The terms of the contract are contained in a written document that is signed by the donor (or someone acting on his behalf)* such a thorough t must be granted in the presence of two Witnesses* Authority to this must be written4. Can land be sold orally? Give reasons for your answer.No according to the alienation of land act no contract for the alienation of land is valid unless it is contained in a contract of alienation signed by the parties to the contract or by their agents acting on their written instructions5. A contract of suretyship is valid even if it is concluded orally. Is this statement true or false?FalseThe general law Amendment Act provides that a contract of surety is only valid if it is in written and signed by or on or behalf of the surety6. More agreements are concluded electronically than previously. The Electronic Communications and Transactions Act 25 of 2002 provides that data messages (electronic messages) are recognised as writing if the document is accessible for future use, except in respect of specific transactions concluded under specific Acts. Discuss whether electronic messages can be recognised as writing under the National Credit Act 34 of 2005.The electronic communications and transaction Act ( ECTAct) provide that data messages (electronic messages) are recognised as writing if to document or information is accessible for future use, and the National Credit Act is not part of the exclusions, like the alienation of land act, Wills Act, Bills of exchange act and stamped and duties Act

Self-assessment activities P741. Describe cession.The transfer of a right by agreement is known as Ascension2. Distinguish between cessionary and cedent.Person transferring the right is a cedentPerson to whom it is transferred is a cessionary3. List the consequences of cession.

1. Write forms part of the patrimony of the cessionary and not that of the cedent2. the cessionary alone has the right to collect the debt3. once the cedent has ceded his or her claim to one person it can no longer be ceded

to another - the cessionary can cede the right further4. after a cession, the debtor can no longer perform validly to the cedent, if the debtor

pays the cedent in good faith he is released from his liability5. Claim is transmitted to the cessionary in its entirety, together with all benefits and

privileges such as security and interest6. the cessionary also receive the right with all the disadvantages attached to it

SELF-ASSESSMENT ACTIVITIES P86

1. Name three ways in which a term can be made part of a contract.Express termsTacit termsImplied terms2. Can the incidentalia of a contract be used to exclude the naturalia of the contract?Yes the operation of naturalia May generally be excluded by agreement between parties,this agreement will be a additional term referred to as incidentalia3. Indicate whether the following terms are conditions or not:3.1 I will give you my bicycle if you pass Commercial Law at the end of the year.Yes, it's a condition because the contract is dependent on the occurrence of a specified uncertain future event3.2 Transfer of ownership of the house will take place if the bank approves your loan in the next three days.Yes, it's a condition because the contract is dependent on the occurrence of a specified uncertain future event3.3 I will wash your car for a week if it is true that the Lions beat Western Province in the rugby match last Saturday.No this is an event that happened in the past4. What is a time clause?The time clause determines a specific time when, or the period within which, the contract Will either become operative or be dissolved5. Describe a modus as a term of a contract.A term which burdens a contracting party right to the performance made to him in terms of the contact the burden can be to perform towards a third party to do something or refrain from doing something. Will always relate to something that has to happen in future.6. Draw a distinction between a penalty clause and a forfeiture clauseThe obligation imposed by a penalty clause usually consist of the payment of a sum of money. The forfeiture clause makes provision for a party who is in breach of contract to lose the right to Restitution. the party who is in breach thereof Forfeits all performances already rendered in terms of the contract.

SELF-ASSESSMENT ACTIVITIES p981. Name different forms of breach of contract.Default by debtorDefault by creditorpositive malperformanceRepudiationPrevention of performance2. Draw a distinction between mora debitoris and mora creditoris.Mora debitoris is a breach of contract in the form of default of debtor when he does not perform at the agreed time and the delay is without legal justification

Mora creditoris occurs where the creditor causes the debtors performance to be delayed. Where the creditors cooperation is required for the debtor to be able to render performance.3. Describe repudiation as a form of breach of contract.Any behaviour by party to a contract indicating that he or she may not under the obligation Under the contractWhere the existence of the contract is deniedWithdrawal without justificationNotice is given that he cannot or will not perform4. Draw a distinction between positive malperformance and prevention of performance.Positive malperformance occurs when the debtor commits an act which is contrary to the terms of the contract example a house is built but finished in inferior quality to those specified in the contractPrevention of performance is when the culpable renders his own performance impossible could be a creditor or debtor. note prevention of performance by creditor made performance for the debtor impossible Mora creditoris made performance for the debtor delayed5. What are the requirements that should be met before the debtor can be placed in

mora?performance must be delayedperformance must be claimable6. What are the requirements that should be met before a creditor can be placed in mora?performers must be the discharge abledebtor must render performancecreditor must fail to give his or her cooperation and thereby delay performance

SELF-ASSESSMENT ACTIVITIES P1101. Name the contractual remedies that are available to an innocent party in the case of

breach of contract.Execution of the contractCancellation of the contractDamages2. Name three possible orders the court can give with regard to the remedy of execution

of the contract.Orders for specific performanceOrders for reduced performanceProhibitory interdicts3. Under which circumstances will the court refuse an order for specifi c performance?Where the order affects the defendant too harshlyWhere the order would comprise an Injustice Or would be inequitable under all circumstances

4. What is the defence called the exceptio non adimpleti contractus all about?Is when a plaintiff who seeks to rely on specific performance by the defendant has not rendered his own performance or is not willing to perform or has rendered defective performance.5. What factors must the plaintiff prove for the court to grant him or her an order for

reduced performance?Defendant is using the defective performanceCircumstances are such that it will be equitable for the court to exercise its discretion in favour of the granting of such orderWhat reduces contract price should be,contract price less the amount required to bring performance up to the required standard.6. Describe a prohibitory interdict.Should a party do something he or she may not do in terms of the contract, or threatened to act in this manner, the other party may apply for interdict to end or prevent such conduct7. Why is cancellation of a contract an abnormal remedy for breach of contract?Abnormal remedy because the consequence is that the parties do not accomplish that which they originally agreed upon8. Under which circumstances will the creditor have the remedy of cancellation of the

contract in the event of mora debitoris?Specific date for performance (Mora ex re) and tacit term that timely performance is essentialNotice of intention to cancelCancellation clause9. Under which circumstances will the innocent party have the remedy of cancellation of

the contract in the event of mora creditoris?Specific date for performance (Mora ex re) and tacit term that timely performance is essentialNotice of intention to cancelCancellation clause10. Describe the consequences of cancellation of a contract.Termination of obligationsIf neither party has performed both are relieved of obligationsIf both or one party has performed Whatever Has Been performed must be returned to the relevant party11. Explain damages as a remedy for breach of contract.The idea damages are that the Innocent part`s patrimony should not be allowed to be diminished by the defendant's breach of contract and that the Innocent party should by means of payment of damages be placed in a position he would have been in had the contract been carried out.

SELF-ASSESSMENT ACTIVITIES P120

1. Name the essential elements (essentialia) of the contract of sale.Object of the sale MerxThe purchase price2. For a valid contract of sale, both the object of sale and the purchase price must be

definite or ascertainable. Explain what “definite” or “ascertainable” entails and provide practical examples to substantiate your answer.

Definite means the Merx is mentioned by name in the agreement example the horse Morning Star and the purchase price must be stipulatedAscertainable Merx is a generic item example the selling of a horseAscertainable purchase prices when the price will be determined by specific method3. List and discuss the common-law rights of the purchaser.1. The purchaser is entitled to delivery of the Merx: the Merx must be made available

to the Purchaser and that he is entitled to its free and undisturbed possession.2. Purchaser is entitled to preservation of the Merx pending delivery: if the Merx is

damaged or destroyed owing to the negligence or intentional conduct of the seller he or she will be liable.

3. Purchaser is entitled to be protected by the seller against eviction: the seller merely undertakes that the purchaser will not be disturbed in his enjoyment and possession of the Merx by another person with a better title to the Merx

4. Purchaser is entitled to a Merx free from latent defects: the seller is liable for latent defects even when he is unaware of the defect and did not act in bad faith

Purchaser that claim latent defects must proveThere is always a material defectThe defect was present when the contract was concludedThe defect was latent (noticeable during inspection)The purchaser was unaware of the defect

5. actio empty - a remedy the purchaser can use to enforce his or her Rights against the seller

Defective performanceMisrepresentationManufacturers liabilityBreach of the warranty against eviction

4. Explain the actio redhibitoria and indicate what the purchaser can claim with this action.If the defect renders the article useless the purchaser May claim the following

Return of the purchase price Interest Repayment of all expenses incurred regarding the receipt and preservation of the

Merx Reimbursement for improvements affected by him to the Merx

5. Explain the actio quanti minoris and indicate what the purchaser can claim with this action.

If the effect does not render the article useless but he's never the less defected the purchaser will have to be satisfied with keeping the MerxHe can claim a reduction of the purchase priceReduction is calculated by deducting the value of the defective Merx from the purchase price6. Discuss the differences between the actio redhibitoria and the actio quanti minoris.See Previous Question7. Explain the actio empti as a remedy which the purchaser can use to enforce his or her

rights against the seller.See Question 38. List and discuss the common-law rights of the seller.The seller is entitled to payment of the purchase price by the purchaser9. List the different forms of delivery and give a description and example of each of these

forms.Actual delivery - physically handing over of Merx by seller to the purchaser example like in a tuck shopSymbolic delivery - something else is handed to the purchaser which enables him or her to obtain control of the Merx example keys to a carDelivery with the long hand - pointing out to Merx which is too large to hand over physically example cattleDelivery with the short hand - Merx is already in the purchases possession when the seller Lends the purchaser an item and sells it to them while it is in their possession.Constitutum possessorium - this is the opposite of short and seller retains position of the Merx on behalf of the purchaser she might be renting the item for a period of time10. Explain the importance of the passing of the risk.It is important because it is one of the consequences of a contract of sale that the risk and accidental damage to all the loss of the Merx as well as the right to any potential benefit or profit occurring to it passes from the seller to the purchaser as soon as the contract is perfecta .11. What does it mean to say a contract is perfecta?a contract is perfecta when the following requirements are met

Merx must be definite or identified - not ascertainable The purchase price must be ascertainable (readily or easily calculated) if contract contains a suspensive condition it must have been fulfilled

12. Give a brief description of the legislation aimed at the protection of purchasers with emphasis on its purpose.

Contract drawn up by the more sophisticated with the two parties therefore legislation has Incorporated various protection mechanisms into them to prevent the exploitation of consumers

SELF-ASSESSMENT ACTIVITIES P1331. Name the essential elements (essentialia) of the contract of lease. Undertaking by the lessor to give the lessee the Use and enjoyment of something Agreement between the lessor and the lessee that the lessee is right to use

enjoyment is temporary An undertaking to pay rent to pay a sum of money or a share in the fruits of the

property2. List and explain the duties of the lessee and the lessor.

Duties of the lessor Duty to deliver the leased object to the lessee

o Lessor must put the use and occupation of the object that has been leased at the disposal of the lessee in such a manner that the latter is able to enter undisturbed occupation of it.

o All accessories which are needed for proper use of property needs to also be delivered example keys to a house

Duty to maintain the object of the lease in a proper conditiono Delivered property must also be maintained in a condition which is

reasonable fit for the purpose for which it has been leasedo This gives rise to obligations of a continued nature

Duty to ensure the lessee has undisturbed use and enjoymento Since the lessor undertakes to give the lessee the use and enjoyment of the

object of the lease for a certain time he must ensure that the lessee`s use and enjoyment is not disturbed by someone with the legal right to the property during that time

Duties of the lessee The lessee's duty to pay rent

o This element may not be excluded not even by agreement between the parties

Lessee`s duty of proper use and care of the object of leaseo Lessee may not use the object in properly or unreasonablyo The object of lease must be maintained in a good condition

Lessee`s duty to return the property undamaged on termination of the leaseo Leased property must be returned in the condition in which it was received

3. Explain the rights of the lessee and the lessor.Lessor

non-payment of rento Lessee has the right to receive rent agreed upon

Misuse of the object of the leaseo If the lessee Missuses the least property, the lessor has ordinary contractual

remedies and may claim damages

Failure to return the propertyo If the lessee fails to comply to return the object of the lease in a proper

condition the normal contractual remedies lieLessee

Failure to delivero Lessee May regard the contract is cancelled and Sue for damages or may

claim specific performance and damageso Where object is delivered but not in a proper state lessee may cancel the

contract and claim damageso Lessee can claim damages in form of Deduction in rent

Failure to maintain the propertyo If the lessor fails to maintain the property, the lessee after prior notice to the

lessor have repairs affected and deduct the repair cost from the rent Breach of warranty against interference

o When the lessor or third-party interfere with the lessee`s is enjoyment of the property the lessee relies on ordinary rights of breach of contract

o If leased property is interfered by Vis major (act of god) or casus fortuitus (accidental occurrence) lessee has a common law right to remission of rent

Sublettingo Unless the contract prohibited a lessee is entitled to Sublet anything that has

been let without the lessor's Consent except for rural tenement Cession

o Lessee may cede his/her right to a third party unless the contract prohibits or restrict this right

Assignmento A creditor transfers his right by cessiono Duties of a debtor are transferred by delegationo If there is to be a complete substitution of one lessee for another a cession

and delegation must take placeo This is called assignment

Lessee`s relationship with successors of the lessor the Maxim ~Huur gaat voor koopo Lease remains in force on the death of the lessoro If a lessor of immovable property sells the property the purchaser is bound by

the leaseo Applies to sold, exchange or donatedo Bound by the Maxim Huur gaat voor koop (Hire takes precedence over sale)

4. Explain the operation of the lessor’s tacit hypothec for unpaid rent.o Whether or not the contract of lease contains a cancellation clause the lessor or

landlord acquires a Hypothec over all movables situated on the property as soon as the lease of immovable property fall into areas with the rent

o This serves as a security in respect of such rent.o The hypothec operative only when and for as long as the rent is in arrears.

5. Explain the application of the maxim “huur gaat voor koop” in both “long-term leases” and “short-term leases”.o Certain leases of immovable property shall not be binding on a creditor or

successor under onerous title of the lessor for longer than ten years, unless lease is registered against title deed of the property, or unless the creditor or successor had knowledge of such a contract of lease

o The position of the lessees for less than ten years is not governed by legislation. These lessees are protected by the maxim only if they are in occupation of the property let, or if the successor or creditor of the lessor had notice of the existence of the lease at the time when he entered into the contract or acquired the real right in the property, or if the successor or creditor acquired the real right in the property gratuitously. Knowledge will be ascribed to the purchaser where the lessee occupied the premises or property at the time of such passing of ownership. These principles also apply in respect of the first 10 years of the term of long lease which has not been registered against the title deed

6. List the various ways in which a contract of lease may be terminated Termination by effluxion of time

o When period ends, or event occurs Termination by notice

o Reasonable notice giveno Indefinite time leaseo Notice of termination to be issued

Termination by extinction of the lessor’s titleo If unable to provide undisturbed use any longero If they intended the termination in such a case

Termination by deatho If contract provides this as a reasono If will provides this as a reason

Termination by insolvency The lessee’s right to compensation for improvements

o A lessee of rural land may remove annexures constituting luxurious or useful improvements before the lease terminates provided the property will not be left in a worse condition than it was received

o A lessee in terms of urban land is entitled to remove useful or luxurious improvements before termination of the lease, provided they can be removed without leaving the property in a worse position than it was received. The lessor can elect to keep the improvements and pay the lessee the value that they would have on separation. The lessee is not entitled to remove the improvements but has a claim for expenses. The lessee is entitled to compensation for useful

improvements that are not removable, but usually not in respect of luxurious improvements

SELF-ASSESSMENT ACTIVITIES P1411. List the essential elements (essentialia) of the contract of insurance.

An undertaking by the insured to pay a premium An undertaking by the insurer to compensate the insured for either a patrimonial or

non-patrimonial loss A term that makes the insurer’s obligation dependent on the occurrence of a particular

uncertain future event (risk) An insurable interest

2. What is a “premium”?premium is a consideration given or to be given in return for an undertaking to provide policy (insurance) benefits.It is used in the form of the sum of money but may also consist of something else.

3. Is the payment of a premium a prerequisite for the creation of a valid contract of insurance?

Although the actual payment of the premium is not a requirement for the creation of a contract payment is usually a suspensive condition for the policy to take effect however in the absence of such a condition in the contract the general rule applies and the contract if the other requirements have been met comes into being when a when and undertaking to pay the premium has been given

4. Explain how the amount payable on occurrence of the insured event by the insurer is determined in both indemnity and non-indemnity insurance.

In the case of non-indemnity insurance, the sum payable will be predetermined amount example a person insures his or her life for R100000 the insurer will have to pay that amount to the estate of the insured or the beneficiaryIn the case of indemnity insurance their insurance obligation is to pay a determinable sum of money, the exact amount of the payment is it determined after the occurrence of the event insured against, by determining the extent of the damage. The value of the claim or the measure of indemnity in respect of the loss of the risk of risk object is determined not by its cost but by its value at the date and place of the loss

5. What is a valued policy?To eliminate difficulties regarding proof of the value of the risk of risk-objects the parties may agree at the time of concluding the contract on the value of the risk objectives. These are known as value policies

6. Explain the insurer’s right to repair. Insurer reserves the right to repair the object instead of compensation Must be repaired within reasonable time

7. Explain the insured’s right of subrogation. A right of recourse for an insurer who has indemnified its insured

The insurer takes the place of the insured and can institute an action in the name of the insured

The parties to the lawsuit have the same rights and defences as they would have had, had the claim not been subrogated

Subrogation does not affect the rights and duties of either the plaintiff or the defendant Where the insured has a claim against a third party who has caused the damage to the

risk-object, the insured may not recover compensation from both his own insurer and the third party

Once the insurer has compensated the insured, the insurer has the right of subrogation – the insurer may enforce the insured’s claim against the third party in the name of the insured

The insurer does not have the right of subrogation unless the insurer has been fully compensated for his loss8. What is the difference between over- and under-insurance and what are the

consequences thereof? In case of indemnity insurance can’t claim more than total value of loss Average clause: insured is covered for average and suffers the loss of the difference If you are eg covered for 6/10 of the value of object you can claim 6/10 of the loss

suffered9. Explain what is meant by excess clauses.

Common in motor vehicle and liability insurance Must bear specific portion of loss by insured

10. What must be included in the description of the risk for the purpose of the insurance contract?

Description of risk must include:o The object insuredo The hazard insured againsto Circumstances affecting the risk

11. What is an insurable interest? When particular event causes someone damage or loss Those who have insurable interest can recover on the policy to the extent of the loss or

damage Insured must have an interest in non-occurrence of uncertain future event and such an

interest distinguishes an insurance contract from a wager12. What qualifies as an insurable interest for the purpose of both indemnity and non-

indemnity insurance?In indemnity insurance the insured must at least have a financial interest in a non-occurrence of the risk. Also, Authority for the point of view that the financial interest must have some legal Foundation

Non-indemnity insurance a distinction must be drawn between the insurance on one's own life or the life of a spouse on the one hand and the life of any other person on the other in the first case and unlimited interest is presumed where the life of another is insured

13. Explain fully the duty of good faith. The right of the insurer to receive correct and complete info about material facts

relating to the risk Duty on insured to provide the info known as ex lege

14. Discuss fully the consequences of misrepresentation and non-disclosure made by the insured in the insurance contract.

Misrepresentations A positive act consisting of a pre-contractual statement of fact made by the prospective

insured to the insurer. Statement is incorrect, and contract still concluded. Statement can be made orally or in writing Opinion not included Voidable at the instance of the insurer, insurer may uphold or rescind contractNon-disclosures Insured to disclose all material facts before conclusion of contract This is an omission Contract will be voidable at instance of insurer If contract requires fact to be disclosed it must be, irrespective if it is material or not

15. What is a warranty? A strict contractual term by which the insured undertakes that certain representations

are accurate or true In case of breach the insurer may rescind the contract and avoid all liability for losses

suffered for breach The insurer can only rely on a misrepresentation or non-disclosure, whether warranted

or note, if it was of such a nature as to be likely to have materially affected the assessment of the risk, if the representation is immaterial the insurer can no longer rely on it to avoid liability under the contract

SELF-ASSESSMENT ACTIVITIES P1501. Explain the concept of agency.

Person can have someone represent him for concluding transaction Juristic person needs a natural person to conclude a contract Anyone with capacity to act juristically can appoint an agent Agent can be distinguished as ”for”, on behalf of”, “pp” or “qq”

2. Explain how an agent can acquire authority to act on behalf of the principal. Authority to perform can be express or implied If no authority existed can be rectified by ratification or stopped

3. Discuss the termination of authority. Can be given for only the specific act thus ends when concluded or unable to conclude

Can be given for specific time period Can be given for specific relationship so ends when relationship ends When principle or agent dies When the status of the principle changes and restricts his capacity to perform juristic

acts eg insane, sequestration Principle may revoke authority – may be liable for claim for damages for breach of

contract Agent renounces authority – in absence of good cause agent can be liable for damages

for breach of contract4. Explain the application of the principle of estoppel in agency.

If principle culpably created false impression that another person has authority and the agent acts on that authority it will be taken as authority was given

Requirements:o Principle must have represented to third party that the agent had authority to

contract on his behalfo Representation of authority must be attributed to principle or someone for

whose conduct he is responsibleo Although representation did not intend to mislead, it must have been of such a

nature that it could reasonably have been expected to mislead the third partyo Third party must have acted on the strength of the representation to his

detriment – failure to confirm authority Court will consider circumstances of third party and principle in terms of a reasonable

person’s beliefs A company may be estopped from denying the authority of an individual who purported

to act on its behalf5. Discuss the duties of the agent and principal.

Duties of the agent The duty to follow instructions

o Follow parameters of agreement The duty to exercise care and diligence The duty of good faith

o Secret profits All profits are acquired for principal

o Conflicts of interest Agent to disclose any conflicts

o Disclosure of confidential information Agent to not disclose any confidential information even after termination

o Delegation of authority Delegation allowed if principal allowed it

The duty to account properlyThe duties of the principal

Payment of remuneration Reimbursement

o Must be reimbursed for expenseso Not reimbursed for negligence, default or breach of duty

Indemnityo Agent indemnified for loss or liability incurred in execution of mandate

6. Distinguish between the concept of unnamed principal and the doctrine of the undisclosed principal.

Personal liability of the agent or purported agent No legal relationship between third party or agent unless they agree on one Identity of principle need not be disclosed by agent In certain cases, agent can incur personal liability If agent doesn’t disclose to third party that he is representing someone else, he can

incur personal liability to third party An agent who contracts of behalf of principal without authority, or who exceeds his

authority, can be liable on basis of implied warranty of authority. If principal doesn’t ratify the unauthorized conduct, the agent is liable, not on the contract, but on the basis of the guarantee that he had required authority. If the agent acted fraudulently or negligently, the third party may claim damages for delictual action

The doctrine of undisclosed principal The situation may arise that, by a contract of mandate, an agent is authorized and

intends to contract on behalf of his principal but fails to disclose his representative capacity to the third party. No contract is then formed between the principal and third party. However, in terms of the doctrine of the undisclosed principal, the principal is entitled, once the representative has reached agreement with the third party, to step into the agent’s shoes as the real party to the contract. The third party may hold the principal liable.

This is contrary to the principles of contract and agency In instances where the doctrine applies, the undisclosed principal may elect to claim the

performance promised to the agent. If the principal doesn’t make this claim, the third party is liable to agent. If the third party performs to agent before the principal intervenes, the third party is discharged and performance to principal cannot be enforced

On discovery of the facts the third party can hold either the principal or agent liable Does not apply where the third party is obliged to perform to more than one creditor Does not apply where contract precludes it (agent not representative), or where the

third party wanted the contract to be concluded with agent specifically7. Explain whether or not an agent can incur personal liability.

See previous question

SELF-ASSESSMENT ACTIVITIES P163

1. Define the sole proprietor.• Single owner• Acquire all profits and risks• No favourable tax implications

2. Define a partnership. Two or more persons Not a separate legal entity Partnership can sue and be sued

3. Explain the basic requirements (essentialia) of a partnership. Must comply with requirements for valid contract No limitation of number of partners Legal entities may be parties to partnership agreement No formal requirements Each partner must contribute, object of making profit to be divided

4. Explain the natural consequences (naturalia) of a partnership1. Mutual mandate Each partner can perform individually Unless third party aware of partner’s lack of authority, partnership will be bound by

contract concluded, even if partner has a restricted capacity2. The proportion in which net profit is shared If no provisions in contract, the net profit is divided in same ratio as the respective

contributions If impossible to value contributions properly then divided equally among partners3. The obligation to share in the net loss General rule all partners share the loss Can be excluded by agreement but at least one partner to carry the loss4. The proportion which the net loss is shared In absence of provision, losses are shared in same proportion as net profits Partnership agreement should contain arrangement5. The proportion in which the assets are divided upon dissolution If not determined by contract, then in same ratio as profits If no agreement on profits, then in terms of contributions If not able to do that, then equally

6. The proportion in which partners are co-owners of the assets of the partnership Partners are co-owners of assets

5. Discuss the rights and duties of partners. Fiduciary duties:

o A partner must comply with his duties in terms of partnership agreemento Partner must advance the partnership interests unselfishlyo All info relating to partnership to be disclosed to all co-partners

Partners entitled to claim delivery of contribution by partner Partners to keep proper accounts and entitled to accounting records Unless otherwise agreed upon, each partner entitled to participate in management of

the partnership and to perform management functions6. Explain the dissolution of a partnership.

The termination or dissolution of a partnership Partnership estate is liquidated, creditors paid out and surplus divided No formalities required Wide publicity is encouraged to inform public of terminationGrounds for dissolution Termination agreement may be express or tacit Duration of partnership may be determined in partnership agreement A partnership may terminate on the occurrence of an event specified in the partnership

agreement Any change in membership terminates a partnership Retirement or death of a partner Due to events beyond its control making it unable to continue Sequestration of a private estate of a partner Personal circumstances eg illness, mentally incapable, enemy of war Court order Enemy of war residing in enemy territory Court order from breach of fiduciary relationship between partners Unilateral act of partner, notice is given, renounced by law eg misconductConsequences of dissolution Partners still owe fiduciary duties to one another Partnership agreement and mutual mandate is terminated Rights and duties to third parties remain valid Partners jointly and severally liable for ligations

7. Discuss the formation of a close corporation. Registration of founding statement by Registar of Close Corporations, separate from

Memorandum of Incorporation Ends with CC Only natural persons as members No more than 10 members Consent of member or members holding at least 75% of interest required for certain

matters Members owe fiduciary duties to corporation Members not liable for debts of corporation except where specified in Act Member’s to be held personally liable for carrying on business of corporation recklessly,

fraudulently, or with gross negligence8. Discuss the representative capacity of members of a close corporation.

Act allows for conclusion of pre-incorporation contracts CC has capacity and powers of natural person of full capacity in so far as juristic person

can have Every member is an agent

9. Define a business trust.A business trust is a trust where the trustees do not merely protect and manage the trust assets but use the assets for carrying on a business for profit in order to benefit the trust beneficiary or beneficiaries, or to further the aims of the trust. The private business trust is a trust with a specific aim, to run a business with the object of making a profit in order to benefit the trust beneficiary or beneficiaries

10. Discuss the requirements of a business trust. Not created by statute but from ordinary trust Must comply with normal requirements for trust Requirements:

o The founder of the trust must have the serious intention of creating a trusto The founder must express his intention in such a manner that a binding

obligation is createdo The trust assets and trust beneficiaries must be readily ascertainableo The trust object must be defined with reasonable certaintyo The object of the trust must be lawful

11. Define a co-operative. Autonomous association of persons united voluntarily to meet their common economic

and social needs and aspirations through a jointly owned and democratically controlled enterprise

Each member has only one vote Members provide capital At least five percent of surplus set aside in reserve fund Provide education and training to members and employees Restriction must not constitute unfair discrimination

12. Explain the registration process of the co-operative. Meeting of interested persons held Adopt a constitution and elect directors Application made to Registar of at least five people No restriction on maximum number of members Must have words co-operative or co-op in name Must have ltd as last word of name, unless unlimited liability Certificate of registration is issued Legal person Consists of black persons, youth, disabled persons, persons in rural area then support

from Dep of Trade and Industry Must maintain an office in the republic and keep its records there

Hold annual general meeting and appoint auditor

SELF-ASSESSMENT ACTIVITIES P1761. How is security obtained?

Security is obtained in 2 ways:o Creditor can obtain the right to have proceeds of property belonging to debtor

applied to ensure proper compliance with debtor’s obligations to the exclusion of rights of other creditors = real security

o Creditor can require 3rd party to bind him/herself in respect of proper compliance with debtor’s obligations = personal security

2. Define a contract of suretyship. Agreement by means of which one person (surety) renders him/herself liable towards a

creditor or another person (debtor) for proper compliance of obligations of the debtor 2 debtors: debtor in first agreement (principal debtor and debtor in contract of surety

(the surety) Liability of surety is additional to liability of principal debtor Essential characteristic: it is accessory (additional) to the principal obligation between

the original debtor and creditor3. What are the essential characteristics of a contract of suretyship?

The normal requirements for conclusion of a valid contract have to be met there must be a proper offer and acceptance and the parties must have the intention that the surety will be bound as such the principal debtor does not have to be a party to the contract of surety and in fact doesn't have to know of its existence

4. Explain what is meant by the obligation of surety being accessory to the obligation of the principal debtor.

Because the surety`s obligation is accessory to the principal then it becomes enforceable only if the principal debtor default in the performance of the principal obligation. If the principal debt is granted an extension of time the surety may not be held liable in the meantime if the debt is for an unliquidated or a certain amount the surety is not liable until the amount of debt has been established

5. Discuss the benefit of excussion.This benefit permits the surety to compel the creditor to recover as much as possible of the due date from the principal debtor before proceeding against the surety the surety must raise this defence at the beginning of the proceedings against him or her otherwise it is forfeited

6. Discuss the benefit of division.The benefit of division is available where there are several sureties in respect of one and the same obligation and the credit Attempts to recover the entire debt which is due from a single surety. Such surety is then at Liberty to the demand that the creditor divides his or her claim between the available sureties so that his or her liability may be restricted to his or her proportionate share of the principal debt

7. Discuss the benefit of cession of actions.allows surety who has rendered performance of principal obligation to demand the creditor transfer all rights which the creditor may enjoy against the principal debtor and co-sureties, to the surety who has settled the debt- surety that settled obligation, always enjoy right of recourse against principal debtor and co-sureties- surety may refuse to pay creditor, where creditor is unable to effect cession

8. Discuss the surety’s right of recourse against the principal debtor.surety that settled obligation to creditor has right against principal debtor for amount paid as well as any costs reasonably incurred- no cession by creditor required.- excluded if surety carelessly neglect to raise defence which was available to debtor, or if paying debt, he failed to inform debtor of payment (double payment to creditor)- if surety has not yet discharged obligation, may compel principal debtor to pay to release him of contract of suretyship in following circumstances: - where debtor and creditor allowed principal debt to remain undischarged for unreasonable time

- debtor is recklessly squandering assets- where creditor has obtained judgement against surety

9. Discuss the surety’s right to a contribution from co-sureties.surety that discharged debt fully, may recover proportionate contribution from each solvent co-surety-not available if surety has negligently failed to raise defence that was available

10. Discuss the surety’s right to reciprocal counter-performance.- creditor is contractually bound to render counter-performance to principal debtor against performance of principal obligation by debtor.- surety becomes entitled to claim reciprocal counter-performance, and set it off against his/her claim against the principal debtor11. Explain what is meant by the discharge of the surety. Termination of suretyship obligation: discharge obligations same way as obligations

generally (payment of principal debt, merger or expiry of agreed time limit). In a continuing suretyship, surety may terminate future liability by giving reasonable notice

Termination of principal obligation: automatically terminated when principal obligation is terminated. Liability of principal debtor is terminated by novation or absolution, surety is absolved from liability

Conduct prejudicial to the surety: surety is released if prejudiced by creditor (eg creditor makes surety liability more onerous by being too lenient to principal debtor. Also released if creditor, without surety’s consent, agrees to material variation of principal obligation, or departs from its terms in material aspects11. What is a pledge?

movable goods may be delivered or pledged as security for debt

Agreement between pledgor, who undertakes to deliver the article, and the pledgee, and the subsequent delivery of (movable) property in question

Without delivery of the article, the pledge may still be valid, but the pledgee has no real security in absence of delivery of the thing and its retention

Constitutum possessorium = seller retains possession of merx on behalf of purchaser,not a valid means of deliver. Reason = parties can easily disguise pledge as contract of sale

Pledgee acquires limited real right to merx This right enables pledgee to keep the merx in his control until pledgor has paid the

principal debt. If debt is not paid, thing pledged can be sold in execution. Creditor obtains judgement

against debtor and has a warrant of execution issued. Thing is sold to highest bidder by sheriff of court and proceeds of sale are used to satisfy debt.

Surplus is paid to debtor or debtor’s estate Parties may agree that merx is sold without intervention of law = parate eksekusie

12. What is a notarial bond? Registration of notarial bond over movable property of debtor to gain preference. Defined as a bond attested by a notary public, hypothecating movable property

generally or specifically General notarial bond = no real security unless property subject to bond has been

delivered to bondholder. No delivery = only preference over property when debtor becomes insolvent

Specific notarial bond = registered over specified corporeal movable property, property has been deemed pledged to bondholder even if it has not been delivered to him. Bondholder obtains real security.13. What is a mortgage bond?

Definition: bond attested by Registrar of Deeds specially hypothecating immovable property

Arises by agreement followed by registration Agreement gives rise to mortgage bond Registration is essential for existence of mortgage bond Mortgagor = whose property is mortgaged Mortgagee = in whose favour the mortgage bond is registered If mortgager defaults in principal debt, the mortgagee (financial institution) is entitled to

sell the property in execution to recover outstanding debt More than one real right may exist over same immovable property eg. More than one

mortgage bond or servitude may be registered. Second mortgage obtains weaker real right on property. Eg. First bond registered, will

have preference to proceeds of sale Kustingsbrief = special mortage bond which is registered simultaneously with the

transfer of ownership of land, in favour of the seller or 3rd party, and as security for the outstanding balance of the purchase price

14. What is a salvage lien? Is a right to retain the possession of property (right of retention) Possessor of someone else’s property who has expended money or labour on that

property, acquires the right to retain it until he has been compensated according to agreement or until compensation was made for actual expenses/increase in value of property if there was no agreement

Real security form arising from operation of law 3 types:

o Liens for the storage or salvage of property (salvage liens): enrichment liens, enforceable against any person

o Liens for the improvement of property (improvement liens): enrichment lienso Liens for contractual debt (debtor and creditor liens): creditor has done work on

property of debtor, which property is still in possession of creditor. Only effective against debtor – no real security. Eg Arthur leaves his car to be repaired at Bob’s garage. Bob has lien until debt is paid.

In respect of expense which is either necessary or useful = enrichment lien against any person and debtor-and-creditor lien against debtor for full amount of contract price

In respect of luxurious expenses, a party to a contract can only obtain debtor-and-creditor lien15. What is an improvement lien?

See Q1416. What is a debtor and creditor lien?

See Q1417. What is a hypothec?

real security arise by operation of law and not as consequence of agreement between parties possession not a prerequisite as in liens 2 kinds:

o Landlord’s tacit hypotheco Statutory hypothec

18. Discuss cession in securitatem debiti. Cession of a personal right (right o shares/right to payment of insurance policy) is

affected as security for a debt Creditor (vusi) has a personal right against debtor (molapho) who applies his personal

right against molapho as security for his own debt against his creditor, Nonzizwe, by ceding his personal right against Molopho in security of his (Vusi’s) debt to Nonzizwe.

Cession is reversed when cedent (Molapho) paid debt or when proceeds of personal right ceded have exceeded amount necessary for discharge of debt secured, the cendent is entitled to the balance

SELF-ASSESSMENT ACTIVITIES P184

1. Briefly discuss the purpose of the Consumer Protection Act.To promote and advance the social and economic welfare of South African consumers

2. The Consumer Protection Act has a wide field of application but also stipulates when the Act will not apply. Mention the transactions in respect of which the Act does not apply.

Transactions for the supply or promotion of goods or services to the state Transactions in terms of which at the time of transaction the consumer is a juristic

person whose asset value or annual turnover equals or exceeds the threshold value determined by the minister

Transactions exempted by the Minister after regulatory authority has applied for an industry-wide exemption

Transactions constitute in credit agreements under the National Credit Act but the goods and services subject to such credit agreement are not excluded from the application of the act

Transactions pertaining to services to be supplied under an employment contract Transactions giving effect to a collective bargaining agreement in terms of the

Labour Relations Act A collective agreement in terms of the Labour Relations Act3. List the eight fundamental consumer rights. The right to equality in the consumer market The right to confidentiality and privacy The right to choose The right to Disclosure and information The right to fair and responsible marketing The right to honest dealing and fair agreement The right to fair just and reasonable terms and conditions The right to fair value good quality and safety4. The Consumer Protection Act allows for differentiation on reasonable grounds. What

will be included under differentiation?

5. Gary has just turned 17 years old. He approaches you for advice on the following matter: The owner of the local market refused to sell him a packet of cigarettes. Gary feels that the owner of the store is unfairly discriminating against him and that the Act will protect him. Give Gary the correct advice.6. When will a transaction, an agreement, term, condition or a notice be unfair, unreasonable or unjust in terms of the Consumer Protection Act?