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BUSINESS LAW 1

CML 1001F, 2014


Melissa Deacon
3pm B115
Class number: 8026
Course outline
A. Introduction
B. Law of Contracts
C. Sale, Credit Agreements,
Lease & Agency
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PART A: INTRODUCTION
1. What is law?
2. Sources of South African law
2.1. Constitution
2.2. Legislation
2.3. Case law (judicial precedent)
2.4. Roman-Dutch common law
2.5. African customary law
2.6. Custom
2.7. Customary international law
3. Legal rights
3.1. Personal rights
3.2. Real rights
4. Legal personality
5. Branches of law
5.1. International/national law
5.2. Public/private law
5.3. Criminal/delict/contract/
unjustified enrichment
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PART A: INTRODUCTION
1. WHAT IS LAW?
the only body of rules and regulations
governing human conduct that is
recognised as binding by the state and
which the state, will if necessary,
enforce.
2. SOURCES OF LAW
Not codified
Binding sources of law
Persuasive sources of law
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2.1. THE CONSTITUTION
Supreme law
Constitutional democracy
Section 2: Inconsistent = invalid
Bill of Rights
Section 7(1) and Section S39(2)
Three Branches of Government
Legislature
Parliament
(national/
provincial/
local levels)
S43
Make Laws
Judiciary
Courts
S165
Apply
Laws
Executive
President;
Ministers;
Administration
(civil service);
police
S85
Enforce Laws
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2.2. LEGISLATION
Acts / Ordinances or by-laws
National / provincial / local
(a) Original
From the Constitution
Eg: Acts of Parliament
Set aside if unconstitutional
(b) Delegated
From original legislation
Eg: Regulations of Ministers
Set aside if unconstitutional OR
ultra vires
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Example: Unconstitutional
Du Toit v Min Welfare 2003 (CC)
CHILD CARE ACT 74 OF 1983
17 Qualifications for adoption of children
A child may be adopted-
(a) by a husband and his wife jointly;
(b) by a widower or widow or unmarried or
divorced person;
(c) by a married person whose spouse is the
parent of the child;
(d) by the natural father of a child born out
of wedlock.
The Constitution, 1996:
S9(3) The state may not unfairly discriminate
directly or indirectly against anyone on one or
more grounds, including race, gender, sex,
pregnancy, marital status, ethnic or social origin,
colour, sexual orientation, age, disability,
religion, conscience, belief, culture, language
and birth.
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Example: Unconstitutional
CHILDRENS ACT 38 OF 2005
231. Persons who may adopt child.(1) A
child may be adopted
(a) jointly by
(i) a husband and wife;
(ii) partners in a permanent domestic life-
partnership; or
(iii) other persons sharing a common
household and forming a permanent family
unit;
(b) by a widower, widow, divorced or
unmarried person;
(c) by a married person whose spouse is the
parent of the child or by a person whose
permanent domestic life-partner is the
parent of the child;
(d) by the biological father of a child born out
of wedlock; or
(e) by the foster parent of the child.
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Example: Ultra Vires
Bezuidenhout v Road Accident Fund 2003 (SCA)
The Act provides for the creation of a Fund.
S3: [T]he object of the fund is the payment of
compensation in accordance with the Act for loss
or damage wrongfully caused by the driving of
motor vehicles.
S17(1) distinguishes between the liability of the
Fund in the case of a claim for compensation
where the identity of the owner or the driver of
the vehicle involved has been established and
the case of a claim for compensation involving
an unidentified vehicle. Section 17 creates
liability in both cases, the only difference being
that in the case of an unidentified motor vehicle,
the Funds liability is made "subject to any
regulation made under Section 26.
i.e. No express provision in the Act limiting or
excluding liability in the case of an unidentified
vehicle.
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Example: Ultra Vires cont
S26(1): The Minister shall or may make
regulations in order to achieve or promote the
object of this Act.
Regulation 2(1)(d):
In the case of any claim for compensation
referred to in section 17(1)(b) of the Act, the Fund
shall not be liable to compensate any third party
unless
(d) the motor vehicle concerned (including
anything on, in or attached to it) came into
physical contact with the injured or deceased
person concerned or with any other person,
vehicle or object which caused or contributed to
the bodily injury or death concerned.
The question then is whether reg 2(1)(d) was a
valid exercise of the powers granted by s 26 to
the Minister to make regulations?
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2.4. ROMAN-DUTCH COMMON LAW
Roman law from 6
th
century as commented on
by the 15-17
th
century Dutch writers.
Law as applied in Holland when SA was a
Dutch colony and now developed by SA courts.
2.5. AFRICAN CUSTOMARY LAW
Section 211(3) of 1996 Constitution: The courts
must apply customary law when that law is
applicable, subject to the Constitution and any
legislation that specifically deals with
customary law.
2.6. CUSTOM
Oldest forms of law.
Custom must be (a) certain and (b) reasonable
and (c) long-established and (d) uniformally
observed within a community.
2.7. CUSTOMARY INTERNATIONAL LAW
Section 232 of 1996 Constitution: Customary
international law is law in the Republic of South
Africa unless it is inconsistent with the
Constitution or an Act of Parliament.
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2.3. CASE LAW
Courts apply & interpret law
JUDICIAL PRECEDENT
Earlier decisions create
binding precedent because of
doctrine stare decisis (let the
decision stand)
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SA COURT STRUCTURE
1. CONSTITUTIONAL COURT
Seat in Johannesburg
Jurisdiction: Constitutional & public importance (s167)
Court of first instance/appeal
2. SUPREME COURT OF APPEAL
Seat in Bloemfontein
Jurisdiction: Constitutional & civil & criminal (s168)
Except exclusive jurisdiction of CC
Court of appeal only
3. HIGH COURT
Nine divisions (eg Western Cape Division at CT)
Jurisdiction: Constitutional & civil & criminal (s169)
Except exclusive jurisdiction of CC
Limited to area of province
Court of first instance/appeal (1 judge/full bench)
5. SPECIAL COURTS&TRIBUNALS
Eg Labour Courts, Competition Tribunal etc
4. MAGISTRATES COURTS
Regional & District (lots)
Jurisdiction: Civil & criminal (limited) and own area
Limited constitutional jurisdiction section 170
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Example: COURT STRUCTURE
National Parliament has passed a new Act. I
believe a section in this Act infringes on my
rights in Chapter 2 of the Constitution. Am I
able to approach:
My business deal goes wrong and I want to
sue my business partner for R1 million for
breach of contract. Which court do I go to?
(a) The CC direct?
(b) The SCA direct?
(c) The CC on appeal?
(d) The SCA on appeal?
(e) The HC direct?
(f) If so, which HC Division?
(g) The HC on appeal?
(h) Regional court?
(i) District court?
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JUDICIAL PRECEDENT
Courts are bound by (a) the ratio
decidendi of (b) higher courts with
jurisdiction over lower courts.
Principle:
HC = Bound by CC and SCA and HC of equal
or higher standing (1/2/3 judges) in own
province only.
MC = Bound by CC and SCA and HC of own
province. If no decision on the issue, HC of
other province. Full bench HC trumps single
judge. If equal HC bench then later in time
trumps earlier in time.
RATIO DECIDENDI
The Reason for the Decision
OBITER DICTUM
Incidental Statements
Not necessary for the judge to reach a decision.
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Example: JUDICIAL PRECEDENT
High Court WC Division (one
judge) decides may kill in defence
of property.
True or False:
(a) HC WC Division (full bench) are
bound.
(b) HC EC Division (one judge) not
bound.
(c) Stellenbosch Magistrates Court is
not bound.
(d) Upington Magistrates Court is
not bound.
What if obiter?
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3.1. Real Rights
That a person has in a thing (object).
Are absolute rights that can be enforced
against the world at large.
Eg Ownership.
3.2. Personal Rights
Lie against a particular person or persons
only.
Enforce against the specific wrongdoer only.
Eg To deliver object / delict / contract (most
rights are personal rights).
3. LEGAL RIGHTS
WHAT IS A LEGAL RIGHT?
An interest conferred by and protected by
the law which entitles one person to
claim that another person give him/her
something, or do something, or refrain
from doing something.
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4. LEGAL PERSONALITY
Persons with Legal Personality:
Can bear legal rights & duties
Have the capacity to acquire rights and
duties by their own conduct; and
Have the capacity to sue/be sued.
4.1. Natural persons
ALL Human Beings
From birth to death
Automatic
4.2. Juristic (artificial) persons
All companies
Legislation / custom
Perpetual succession
Separate legal personality
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Legal persons do not all have the
same rights and duties:
4.1. Natural persons:
Depends on status
Eg nationality, age, marital status
(gender, race) etc.
Childrens criminal and delictual capacity:
0<7 years
7<14 years
14 + years
Childrens contractual capacity:
0<7 years
7-18 years
4.2. Juristic persons:
Limited by legislation and/or
articles of association.
EG: Company or University or Church
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4. LEGAL PERSONALITY

What about:
- Right to vote
- Right to inherit
- Children
- Animals
- Joint Ventures
- Partnerships
- Clubs
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PUBLIC INTERNATIONAL LAW
NATIONAL LAW
PUBLIC PRIVATE
CONSTITUTIONAL LAW FAMILY LAW COMMERCIAL
ADMINISTRATIVE LAW CONTRACT LAW BANKING LAW
CRIMINAL LAW LAW OF DELICT INSURANCE LAW

PROPERTY LAW COMPETITION

INHERITANCE LAW COMPANY LAW

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CRIME:
An act specifically prohibited by common
law or statute and which is punishable by the
state.
Eg The unlawful and intentional (vs
negligent) killing of a person = murder (vs
culpable homicide).
Criminal sanction.
DELICT:
A general duty not to (a) wrongfully and (b)
culpably (c) cause (d) harm to the person,
property or personality of another.
Intention and negligence (blameworthy).
Damages.
CONTRACT:
An agreement between parties giving rise to
a legally binding and enforceable rights and
duties between the parties.
Damages.
UNJUSTIFIED ENRICHMENT
One person is enriched at the expense of
another.
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Dolus directus (direct intent)
Dolus indirectus (indirect intent) Intent
Dolus eventualis
Negligence = Reasonable person test
(a) Would a reasonable person in the
circumstances in which X found himself have
foreseen the possibility that a particular
consequence might result from his act;
(b) Would the reasonable person have guarded
against that possibility; and
(c) Did Xs conduct deviate from that of a
reasonable person?
Patrimonial (financial) & non-patrimonial loss
Pure economic loss
Examples:
1. Cricket ball hit out of a cricket ground injures
a woman on a public road. Cricket balls have
been hit out of those grounds 6 times in the
past 28 years.
2. Oil negligently spilt from a ship in harbour
and spreads to a wharf where welding repairs
are being carried out, leading to a serious fire.
3. Horses escape from an unfenced field and
stray onto the road where they are hit by a
truck.
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