lOMoARcPSD|14836282
Ethics notes compiled - Prep for from previous years Paper 3
admission exams.
Law of Contract (Rhodes University)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Ethics
When your bookkeeper steals…





attorney is liable to replace the money to the client’s trust account
o must do so as soon as establish the exact amount
report the trust shortfall to the law society
o law society will exercise supervision that attorney acts correctly in this matter
if unable to repay the amount:
o client entitled to recover shortfall from fidelity fund – also reasonable costs and
interest
 requirements
 must have given timeous notice of the possibility of a claim
 satisfied client was unable to recover from attorneys or any other
source
o it is a Fund of last resort – may require you to have issued
summons against attorneys
o should not suffer any loss
tell client to obtain independent representation in prosecuting claim against you and the FF
if the FF refuses to pay unreasonably– client can sue
Can loss be recovered by the attorney’s trust creditors?


Yes
claim against FF
o balance loss after deducting any money or benefits recovered from any source other
than the fund
 eg the attorney’s personal estate
Fees
Consequences of not discussing fees



if don’t make arrangements re fees – regarded as acting at a reasonable fee
o assumed to be the applicable court tariff
 except where non litigious work – no tariff there – law society
cannot charge interim fees
o common law – only entitled to fee when mandate has been executed
in event of dispute you may well have to tax your bill before issuing summons
o makes it difficult for you to recover
How to decide a fee dispute with client


fees for drawing up agreements – not litigious, so no tariff or officials empowered to tax bills
need to use the rules of the law society
o provide for council or assessment panel to be appointed
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282


 determine a reasonable fee
they will consider
o complexity matter
o importance of matter to client
o time spent (possible over caution)
o knowledge/expertise required
o time and place work done
o urgency
o amount of money involved
o seniority of practitioner
o extent of perusal and consideration of docs
o extent of work done by professional and non professional staff
all work must have been reasonably necessary
Fee disputes with counsel



duty to discuss fees at earliest possible time
if not – assume reasonable fees will be charged
if this doesn’t happen:
o arrange to discuss fees; try to resolve dispute
o refer to ombudsman at the bar (mediate)
o lodge complaint with Secretary of the bar council
 will arrange a proper hearing and debate the matter
Contingency fees




governed by the Contingency Fees Act
contingency fees=
o fees that constitute a percentage of a client’s successful claim if the claim sounds in
money; or
o fees chargeable at higher rate than normal if the work is successful
must enter into agreement in the prescribed form
o state on what contingency you become entitled to a fee
o how it is calculated
o state client was informed of all options
limits:
o can’t recover more than double your normal fee or 25% of the amount recovered
(lower figure)
Touting




can negotiate fees as long as not = overreaching or touting
o may reduce charges owing to volume of work
can’t act pro amico for people you don’t know
don’t’ lend them a holiday home
estate agent commission prior to transfer?
o might be regarded as touting
o if a genuine transaction – made at attorney’s risk
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282




o can’t use deposit money – use own funds
reducing rates
o needs to be based on financial structure – not just to attract more work
can’t share fees with non-professionials
o paying for mandates is an extreme form of touting
golf day
o supporting a client is in order if done in good taste
o prizes and publicity should not be excessive
bank offers you 20% of executor’s fee for each estate you refer to them to be administered
by them
o this is secret commission
o touting and sharing of fees
o declare commission
If someone can’t afford fees



like all professionals – you are expected to charge reasonable fee for services unless pro
amico or pro bono
o may not overreach BUT fee enough to enable you to practise profitably
explain: if successful, court likely to award costs against defendant on party and party scale
o this doesn’t purport to cover your costs
 calculated on attorney and client basis – likely to be more
 client is liable for your fee – can’t look to Def
can assist client by taking deposit, or extended payment or paying on instalments
Debt collection


law societies have prescribed fees for attorney and client fees for debt collection
you can enter into a contingency arrangement however
What can you recover from debtor if you get default judgment


recover the tariff stipulated in rules for undefended actions
or attorney and client fees if debtor has agreed in writing
Striking an attorney off the roll


Test: fit and proper (consider actions in that light)
o honesty, integrity and reliability
in an application to strike name off – even if you aren’t struck off, costs likely awarded to
LSSA as they are performing fiduciary duty
Next steps if you negligently allow a client’s claim to prescribe

the effect of letting it prescribe:
o claim is extinguished; becomes unenforceable
o payments may validly be received
o BUT summons is open to a special plea
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282


advise client:
o seek independent advice
o the attorney cannot continue to act in the matter
o BUT do not admit liability
 to do so may vitiate your rights under your professional indemnity policy and
the master policy issued by the Attorneys Indemnity Insurance Fund
other steps
o inform the AIIF (Attorneys Indemnity Fund) and your own insurers of any claims
 (ie) if client’s new attorneys send letter of demand, pass it on to AIF
 usually covered for amounts >R20 000 <1 000 000
o hand over any summons received
o pay the excess/deductible
o AIIF usually instructs their own attorneys to handle the matter and either settle or
defend (which they will decide in consulation with you)
o need not inform Law Society BUT you must respond to any complaints
Attorneys’ Act: What work may only be done by an attorney in
expectation of fee, gain or reward?


Drawing of
o agreement relating to imm prop or rights therein
o will/testamentary writing
o memo/articles assoc,/prospectus of a company
o agreement creating, amending or dissolving partnership
o pleadings – docs for use in civil proceedings
certain exceptions in s83(12) eg trust companies and trustees and advocates
Things you can employ an unqualified person to do






collections:
o appointment of collections clerk is common practice
o BUT practitioner must supervise the work; ultimately responsible
interview clients and take instructions:
o clients may be seen and instructions in new matters accepted only in the field of
expertise of the non-professional
o take formal instructions –client entitled to professional advice and service
negotiate with debtors
o supervise; guidance
legal advice
o this is a professional activity and cannot be given by support staff
handle HC matters and brief counsel
o no – professional activity
sign trust cheques
o no – entails abandoning control of trust funds
o at most he can be a co-signatory
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
A new computer system for accounts

your responsibilities:
o make sure it complies with requirements of Act and Rules
o check system is being adhered to
Sources to consult to determine if conduct is ethical







Attorneys’ Act and regs
Rules of Law Society
Rulings of Councils
Court decisions
Common Law
Textbooks
Foreign influences
Commissioning

Commissioning things for own firm:
o may not administer an oath in a matter in which you have an interest
 (eg) court case in which your firm is involved
o BUT permissible in conveyancing matters
 act and regulations specifically exclude conveyancing matters from those in
which you are regarded as having an interest
How to commission


satisfy self as to ID of deponent
deponent must either
o swear to an affidavit or
o attest to or affirm he contents

When administering the oath or affirmation:
o ask deponent if he knows and understands contents of affidavit
o ask if any objection to oath/affirmation
o whether he considers oath/affirmation binding on his conscience

Ask him to say
o “I swear that the contents of this affidavit are true so help me God” or
o “I truly affirm the contents of this declaration”

Deponent must sign in presence of commissioner
o commissioner must certify below deponent’s signature that he has acknowledged
and understands contents of affidavit
o date and place of signature
o print full names, designation, address, area for which he holds his appointment,
below c’s signature
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Fidelity Fund

Purpose:
o reimburse members of public who have suffered financial loss through theft by
attorney, employee or CA of funds/goods entrusted to that attorney

First Fidelity Fund Certificate – requirements
o complete the prescribed application; send to law society’s secretary
o disclosing:
 name of firm
 contact details
 names of partners
 commencement date
 trust banking account details
o course in practice management training
o in due course – opening certificate by accountant that a proper bookkeeping system
is in use

FF certificate
o attorney may not practise without one
 no fees; can’t appear in any tribunal
o if act in contravention – can’t take fees
 criminal offence
 may be struck off roll
 BUT clients retain rights against the F
o valid until 31 dec each year

payments of FF
o for benefit of individual practices
 contributes to bank charges on trust bank accounts
 contributes to cost of annual examination by accountant
 pays premiums to AIIF
o for benefit of profession
 contributes to administration of LSSA
 finances De Rebus
 subsidises schools for legal practice and practical courses and seminars
Confidentiality and privilege

legal professional privilege:
o rule of evidence
o info given to attorney for purposes of legal advice or representation
 attorney may not disclose to court without consent of client
o applies to communications
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
where the communication elates to your professional or intended
professional relationship
 made for purpose of seeking or giving legal advice/use in anticipated legal
proceedings
 oral or written
 where client confesses crime or fraud
duty of confidentiality
o contractual obligation
o keep affairs of client confidential
o legislation compels to disclose certain info in certain circs


Information not subject to privilege






not given for purposes of legal advice or representation
info given in documents not otherwise privileged
given for pruposes of committing a crime
name of client – can be compelled to disclose it
facts learned by practitioner’s own senses
excluded by statute.
When can you divulge confidential information



to client’s executor after his death
curator if client placed under curatorship
if client waives confidentiality
MANDATE
Legal relationship between attorney and client


relationship of mandate
consequences:
o reward
 agent not entitled to reward until mandate has been executed
o termination:
 agent may not terminate without good cause
 eg illness, failure to give instructions, failure to pay deposit, conflict
 must first place client on terms
 withdraw at an opportune time
 attorney has lien on docs on which he has bestowed skill and labour
o commissions:
 agent may not make a secret commission
o accounting
 agent must give financial accounting to the principal on completion
Circumstances requiring attorney to refuse a mandate


lack of expertise/qualification/experience
insufficient time to do the work
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282



danger of conflict of interest
mandate to do something illegal or improper
cannot come to satisfactory arrangement re fees
Circumstances where you are required to accept a mandate


from an existing client, particularly in an emergency situation
limited number of attorneys in particular area if effect is that there is no other attorney to
assist client
Client wants you to take over matters given to other attorneys



in law: client/principal may at any time terminate mandate given to attorney/agent
BUT attorneys concerned are subject to further rules of conduct:
o OLD ATTORNEY
 in law – right of retention/lien for his costs over documents drawn by him on
which he bestowed skill/labour
o NEW ATTORNEY
 get written termination of mandate form client
 send to old attorney
 not act until costs of old attorney paid or secured
 not use any documents unless costs are paid/secured (lien)
o neither attorney should insist on or be held to rules if it would be unconscionable to
the client
wise first to speak to old attorney in case there are factors the client did not disclose
Taking on instructions on something you haven’t done before





consult an experience colleague; look at precedents; own research essential
o inform client you wish to study the legal position and procedure
look at
o text books
o judgments and authority
o further assistance in a good library such as a noter up
as guide to drafting docs
o practice guides – forms and precedents
Most NB – docs are thoroughly and correctly drafted
o attorney properly prepares and qualifies self
be careful of negligence
What if you get a better instruction?

approached to do work; before you accept, get a better offer from another client – can you
choose more profitable instruction?
o general rule: entitled to accept or refuse work offered
 unless special reasons – some obligation to accept or refuse work
o enjoys a delictus personae wrt the clients
o (ie) free to choose between the mandates
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Client fails to provide with instructions and funds – trial impending

place client on terms
o so they can have no doubt of your intention to withdraw
o withdraw at opportune time (ie leave client time to find another attorney)
Can you proceed if your client has no case?




attorney is not a judge in client’s case
BUT duty to advise client properly; give considered view
if still insists – can carry on provided that
o it would not be an abuse of court process
o attorney doesn’t think he won’t be able to do justice to client’s case
write a letter to client setting out opinion and confirming that client has instructed to
proceed notwithstanding this advice.
Investing clients’ money


s78(2) investment
o NO instruction
o interest bearing account with a financial institution
o interest -> FF
s78(2)(A) investment
o instructed to invest
o interest – client must specify what is to happen
Random ethical scenarios




Borrowing money from client
o improper UNLESS
 client is in business of money lending or
 has been advised to take independent legal advice
o otherwise there is a conflict of interest
o fact that you’ve borrowed money won’t preclude you from acting for client in future
can you remunerate unqualified person purely on commission basis?
o yes
may attorney interview a witness subpoenaed for a civil trial by the other side when believe
possess evidence relevant to client’s case?
o yes
 if believe in possession of relevant info to assist your client
 notify practitioner representing other side BUT don’t need consent
you give a client a trust cheque. He asks you to cancel the crossing as he has no bank account
and cannot cash the cheque
o crossing may be cancelled
o BUT cannot make the cheque payable to bearer
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Drafting
Account to client

basically list all the things you did (eg perusing, preparing draft, faxing copies, discussions re
amendments, telephone calls, other correspondence, postage and sundry expenses
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
General
Terminology








conflict of interest
o anything which is likely to affect your judgment adversely in advising or representing
your client
overreaching
o taking advantage of client’s ignorance – recovering excessive amounts from clients or
debtors
o containing element of impropriety
costs de bonis propriis
o awarded against attorney or someone else in fiduciary position
 as a mark of displeasure at abusing the process of court
Party and party costs
o costs according to tarif
 which successful litigant may recover from losing party if court makes costs
award
o if can’t get the money from the other party – attorney can only charge his client the
party and party costs (unless agreement to charge more)
o if attorney fails to discuss fees with client, may only charge party and party
Attorney and own client fees
o fees attorney is entitled to recover from own client
o agreement – how fees to be determined
o fee must be reasonable
acting pro amico
o acting for friend or relative without charging fees
 genuine friendship or family relationship -> avoid touting suspicion
 colleagues in law firms generally considered friends for this purpose
o can charge disbursements
an order that costs are costs in the cause
o interim order re costs incurred in a matter that is not finalised
 these costs will follow the final costs in the matter
“days”
o Rules of Court:
 weekends and public holidays not reckoned unless the contrary appears
o Interpretation Act
 exclude first day include last in calculating a period fo days
 unless last day is weekend/holiday in which case that day is excluded
and next one included
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Magistrate’s recusal

if you find out magistrate is conflicted:
o inform her in chambers that you will apply for recusal
o if she declines – you apply in open court
o if still declines – can carry on and appeal later if decides against your client
Without prejudice







a letter without prejudice is a genuine attempt at settlement
o statement made in course of bone fide negotiations for settlement of dispute
irrelevant whether or not marked wop
letter is privileged
o cannot be used in the specific litigation without consent of both parties
 BUT can be used in other litigation
o need not be discovered
public policy to let people settle disputes without fear of what they’ve said being used
against them if negotiations break down
reply to such letter likewise not admissible
statement irrelevant to the dispute may be actionable
o eg defamatory
o acknowledgment of inability to pay debts is an act of insolvency even if made
without prejudice
once the offer is in fact accepted, letters become admissible
Prescription
Client wants you to serve summons even though claim prescribed – what advice do you give?


First find out if it really has prescribed. Ask if
o debtor has acknowledged liability
o debtor has been overseas
o creditor has been in a position that interrupts or stays prescription
explain that:
o payments may be received
o BUT summons may be subject to a special plea (ie legal action can be resisted)
 ensure you warn them of the implications
 eg likelihood of an order for costs if claim unsuccessful
o HOWEVER if debtor doesn’t raise the special plea, the court cannot raise it mero
motu
o so often worth proceeding with letter of demand and summons
o if the plea is raised creditor can withdraw while costs still limited.
If you issue summons and then delay

summons will lapse if
o not served within a year of issue
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
no steps taken within year of service
BUT can apply for extension before lapses (rule 10) or revival once it has lapsed (rule
60)
a judgment remains valid for 30 years (ie you can do nothing for a year and no effect)
o
o

Duties of an instructed correspondent



may not settle without instructions
may not communicate directly with client
must keep instructor informed
Contempt in facie curiae
1.
2.
3.
4.
5.
6.
7.
insulting the bench
wilfully interrupting/disturbing court proceedings
defying rulings/directives of the bench
failure to appear in court
destroying documents
breach of court orders
breaching sub judice rule
VAT
When is VAT payable (s7 VAT Act 1991)


when a registered vendor supplies goods or services in the course or furtherance of any
enterprise carried out by him
Import:
o Import of any goods into RSA by any person
o Supply of imported services by any person
Courts to approach







Small Claims court
CCMA
Pension Fund Adjudicaor
Master of the HC
Maintenance Court
Law Society (Assessments Panel)
Attorney’s Fidelity Fund
(see Aug 2012)
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
National credit act
Paragraph to include in letter of demand

s129(1)(a) NCA:
o you may refer the credit agreement to
 a debt counsellor
 ADR agent
 consumer court
 ombud with jurisdiction
o with the intent that the parties resolve any dispute under the agreement
 or develop and agree on a plan to bring the payments under the agreement
up to date
Stamp duty
[last asked in 2003 – not sure if this is still law]
Effect of not stamping agreement as required under Stamp Duties Act




legality of agreement not affected
BUT can’t be enforced by court of law until stamped
Act provides for penalty stamps to be affixed to the document in addition to basic stamp
duty
o if not stamped within 21d of signature of agreement
Penalty stamps must be cancelled by the Receiver of Revenue
Cancelling revenue stamps on a document


stamps must always be cancelled by the receiver of revenue
o by way of his official rubber stamp
can also be cancelled by any of the parties
o by initialling and writing the date on each individual stamp
Tracing a defendant


employ tracing agent on no trace no fee basis
add claim for tracing costs to summons
Rent and property issues
Holding property as security for rent


s31 MC Act permits inclusion of automatic rent interdict in summons
o prohibits removal from premises of movables pending a final court order
s32:
o attachment of property in security for rent (on application)
 must allege a demand and belief that the movables will be removed
 security for costs must be given
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282


both cases: effect is to prohibit removal movables subject to the LL’s hypothec
under s31 sheriff makes an inventory; under s32 he attaches
Actions for ejectment


actions for ejectment are subject to PIE Act
o owner must give written and effective notice of the proceedings to the occupier and
municipality 14d before hearing
how to calculate the value of a claim of ejectment for the purposes of taxation:
o value of eviction is equal to 2 months’ rent
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Forms of Business
Trusts




who to register a trust with:
o register a trust with the Master of the High Court in area where client resides
Documents to be submitted:
a. 2 copies Deed of Trust
b. Letter from Auditor to act
c. Acceptance of Trust by trustees
i. copies of all trustee ID docs
d. Statement regarding
i. bank account (name of bank)
ii. bookkeeper (name and address of person who will keep and maintain
records of trust)
iii. occupation of trustees
iv. motivation for dispensing with security
no stamp duty payable for registering a trust
discretionary trust: trustees have discretion regarding the benefits beneficiaries will receive,
if at all
Companies
Types of companies under the Companies Act


Profit
o State owned company
o Private company
o Public company
o Personal Liability Company
Non-profit
o incorporated for public benefit or other object
Pre-incorporation contracts under the companies act



pre-incorporation contract = a written contract by a person who is acting obo a company that
does not yet exist
o with the intention that once the company comes into existence, the company will
be bound by the contract
once company is incorporated:
o board of directors may, within 3 months of incorporation, completely, partially or
conditionally ratify or reject any pre incorporation contract
o when 3 months expires – deemed to have ratified
Joint and several liability
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
o
persons who enter pre-incorporation contract jointly and severally liable for liabilities
created if
 company doesn’t come into existence
 company rejects any part of the agreement
 UNLESS the company enters into an agreement on the same terms
as or in substitution of, the agreement entered before incorporation
 if rejected, person who signed contract entitled to recover any
benefit from the company that it has received ito the agreement.
Drafting – Powers of attorney
Power of attorney enabling you to register a private company with limited liability
Feb 2011 (15)
I the undersigned
x [ID no]
(un)married in/out of COP
hereby appoint
y [ID no]

on my behalf as my attorney and agent
o to subscribe for one share in a company o be registered with name XYZ (Pty) Ltd
o to sign the following documents required for registration of a company and to obtain
a certificate to commence business for it:
 Memo Articles of Assoc (Surely now this is MOI?)
 Application for Certificate to Commence Business (CM46)
 Notice stating the registered office (CM 22)
 consent to act as director (CM 27)
 return of director and auditor (CM 29)
 statement re the adequacy of capital (CM 47)
o to lodge the docs with Registrat of Companies for registration
o to make any amendments required by Reg
o to uplif the Certificate of Incorp and MOI once reg effected
o generally do everything as may be necessary on my belhalf to effect registration and
obtain certificate to commence business
SIGNED
WITNESS
WITNESS
Power of attorney enabling you to enter deed of sale
 empowered to
o sell immovable property on my behalf
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
negotiate terms
sign deed
 sign all docs necessary to give effect to sale (including to register in name of
purchaser)
o generally do whatever required as I might do if I could be personally present
2 WITNESSES
o
o

Partnerships
Essential characteristics
1. CONTRIBUTION
a. each partner brings something into the partnership or bind themselves to bring
something into it
i. labour, skill, money
2. JOINT BENEFIT
a. business carried out for joint benefit of partners
3. OBJECT
a. to make a profit
4. VALID CONTRACT
a. contract btw partners must be legitimate
Partnership v company

benefits of a legal entity:
o continuity (in p/ship, if a partner dies the pship is dissolved)
o sometimes protection against personal liability (whereas parteners are jointly and
severally liable)
o may be beneficial to avoid sequestration
o better organised regulatory structure
o may have tax flexibility
Recovering debts

A is a partner; debt arises; then A sells interest to B
o can still proceed against A for recovery of debt because A was a partner and liable at
the time when the debt arose
Drafting – clauses in partnership agreement
TERMINATION


Death/insolvency
o the partnership will terminate automatically on the death of a partner or the
surrender or sequestration of his estate
Retirement
o how retiring can happen:
 may retire; 3 months prior written notice to all other partners
 automatically retire at end of financial year at which he attains age of 65
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
illness injury; unable to perform duties 3 months; other partners may give
notice to retire at end of 2 months after notice
o on expiration of these periods, p/ship will terminate
Breach/misconduct
o partner may terminate on written notice to the others on event of:
 breach of material term of this contract by one of the partners
 misconduct on part of other partner which offends duty of good faith
between partners
 conviction of one of the other partners for theft, fraud, forgery or uttering.
other
o each partner shall be entitled to dissolve the partnership by giving 3 months’ notice
of termination to the other party without stating any reasons



DRAWINGS AND DIVISION OF PROFIT AND LOSS



partners shall share equally in all profit and loss
remuneration:
o entitled to draw an agreed monthly amount as remuneration for their services
o which amount shall be determined from time to time
profits:
o profits remaining after payment of monthly drawings
 as determined by the auditors of the partnership
 shall accrue to partners every 6 months
CONTRIBUTIONS BY PARTNERS

the first and second partner shall each contribute R25000 in cash to the capital of the
partnership
o payable within 7 days of signing the agreement
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Insolvency
Marriage out of COP – effects on partner A is partner B is sequestrated


s24 Insolvency Act: where spouse of insolvent person in possession of any property, such
property may be claimed by trustee
o property deemed to be that of insolvent
 could form an asset in insolvent estate
o (ie) these assets vest in the Master and then in the Trustee
o Spouse may obtain release
 lodge a claim with trustee for release
 need to prove ownership
 usually by affidavit
 if necessary (ie trustee refuses to release) - high court application;
court order to compel release
o so keep good records of your assets and transactions
marriage in COP –
o the whole of the joint estate would be subject to sequestration
Risks of claiming against an insolvent estate

creditors who claim against the insolvent estate run risk that of being held liable for a
contribution to costs pro rata to other concurrent creditors
o if there are not sufficient costs in the estate to pay the costs of liquidation and
liquidator’s costs, shortfall is recovered pro rata from the concurrent creditors who
have proved claims
o advisable to establish probable financial position of the estate before you decide
whether to prove
How to claim against an insolvent estate


claim must be prosecuted against the trustee in the insolvent estate
submit
o resolution (if client is a company)
o affidavit in proof of his claim
 in form set out in Act
o invoice (statement of account)
 showing how the claim is made up
 must reflect all credits and debits with applicable dates
o power of attorney
 authorising creditor’s agent (liquidator usually) to appear before Master at a
meeting of creditors to prove the claim
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Procedure from completing claims form to receiving dividend





Claim forms submitted to liquidator
o L will make sure the claim will be proved at next meeting of creditors
Second meeting of creditors (provided no special meetings are held)
o L has to draw his account
 submit to Master HC
Master:
o inspect account
o prepare list queries or approve account
if approves: allow L to advertise fact that account will be confirmed
L will make distribution ito the account
o pay dividends to the proved creditors insofar as they have not been paid earlier
s34 notice on sale of business
[20 marks Aug 2011]

Advertise sale of business in terms of s34 Insolvency Act:
o GG
o AND 2 issues each of an Afrikaans and English newspaper
 circulating in district where business conducted
 30-60 days before date disposition

if trader disposes of any business or part thereof belonging to him and
o DOES NOT advertise ito s34
 disposition shall be void as against his creditors
 6m after disposition
 void against trustee of his estate if sequestrated within the 6m period
o intention: prevent traders in financial difficulties disposing of business,
 trader can spend the purchase price and
 purchaser can liquidate the assets to detriment of creditors

ie the worry is that if proper notice not advertised
o sale may be voided
o should seller be sequestrated, he will have paid purchase price and receive nothing

HOWEVER
o as soon as sale advertised, all liquidated liabilities in connection with the business
become due forthwith
 creditors entitled to demand immediate payment
 subject only to deduction of interest on amounts not yet otherwise
due
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Protecting yourself in a sale of business

Abe sells business to Ben; 3 months later Abe is sequestrated. Can the assets of the business
be looked to for recovery of claim against Abe’s insolvent estate?
o may sue Abe’s insolvent estate and require trustee to set aside SoB ito Insolvency
Act [voidable disposition?]
o Ben should have required the sale to be advertised ito s34
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Matrimonial regimes
How can marriages be contracted


before a marriage officer OR
under customary law
Marital regimes and proprietary effects



main division – in and out of COP
IN COP:
o marriages are ipso iure in COP if no ANC concluded
o
only one joint estate
 all property brought into the marriage and all property acquired during it fall
into joint estate unless specifically excluded
 eg gifts and inheritances
 debts incurred before and after marriage can be recovered from joint estate
o
either spouse can in principle act obo joint estate
 equal powers re joint estate: can manage, dispose of assets, incur debts
against joint estate
 but lots of exceptions: Marital Property Control Act
 written consent:
o dealings with imm prop
o certain investments
o suretyships
 verbal consent in other cases
o
end of marriage:
 each party gets one half of joint estate
 unless – divorce – order spouse should forfeit benefits of marriage
 remain liable for debts incurred by other party during the marriage [BP
Southern Africa v Viljoen]
 as long as debts were incurred with the requisite lawful consent of
both parties
 no claim can be made against joint estate if consent was lacking
OUT OF COP:
o Must enter into ANC before a notary public
o
parties retain their separate estates through the marriage
 ie retain assets and liable for own debts
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282

o
accrual:
 marriage will be subject to accrual unless it is excluded
 at end marriage the growth/accrual of the 2 estates is shared equally
 excluded from accrual:
o inheritances, legacies
o donations
o assets which are acquired form inheritances, legacies or
donations
o
end of marriage:
 no accrual: each party retains his assets
 accrual: accrual shared – equalisation so both parties have equal accruals
summary of the legal position:
o If no ANC: it is in COP
o ANC can exclude community of property
o Accrual applies unless specifically excluded
o Certain changes can be authorised by court order
Marriage in COP: capacity to contract
[Aug 2013 – 9 marks]

s15: spouse married in COP may perform any juristic act wrt the joint estate
o BUT the consent of the other spouse is required
 in writing:
 alienation of imm prop
 investments
o can’t alienate or pledge assets of joint estates held mainly as
investments – paintings, jewellery etc
o can’t alienate or pledge investments held by other spouse in
a financial institution
 credit agreements
o can’t enter into credit agreement as credit receiver
 suretyships
o can’t bind self as surety
 can’t withdraw money held in name of other spouse at bank
 verbally
 sale of household effects
 receipt of income
 damages
 inheritances of that other spouse
 donations
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Maintenance
Enforcing arrear maintenance




lay a charge with maintenance officer attached to the maintenance court in the district
where you reside
o give him a copy of divorce order
o he will help you draft affidavit setting out payments dies and not made and the
surrounding circumstances
C will be charged with offences under Maintenance Act
If your allegations proved, he will be ordered to pay arrear maintenance
can also go back to the HC that made the original order but that’s slow and expensive
Increase in maintenance





both parents remain responsible for maintenance of children
amounts depends on circs at time – needs of children and abilities of parents to contribute
MAINTENANCE COURT
o if you can show circs changed – maintenance court enquiry into parties’
circumstances; whether change justified
o lower court may partially change order of HC and increase the amount of
maintenance
o ask Maintenance Officer to request such enquiry
HIGH COURT
o can apply for order amending the divorce order by increasing amount of
maintenance payable
o application on affidavits; argument – then court will decide if increase justified
Maintenance court = cheaper option
Frustration of access?


duty to maintain children is not dependent on access
o you can’t withhold access because he doesn’t pay and he can’t refuse to pay because
you’ve withheld access
variations and enforcement must be obtained through due process.
Factors to consider in determining maintenance to be paid


general
o both parents are liable for maintenance
o court has to act in BO of child
specific:
o previous standard of living of child
o financial needs of child
o income of parents
o parents financial ability to pay
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Contract
Describing parties







private company
o XCo Pty Ltd herein represented by AB in his capacity as Director and duly authorised
thereto by the Board of Directors on [date]
trust
o The trustees of the X Trust, herein represented by CD in his capacity as Trustee and
duly authorised by a resolution of the Trustees dated [date]
minor
o X, a minor assisted herein by his mother and natural guardian
spouse in customary marriage
o x, a major acting herein with the consent of Y his spouse
person acting obo another
o X duly authorised under a written power of attorney granted on [date] at [place] by Y
person acting for a company to be incorporated
o X acting as agent for a private profit company to be incorporated
partnership
o A and B trading in partnership as C Pty Ltd herein represented by A and B
Contracts that must be in writing to be valid
1. Alienation of land
2. Long Lease of land
3. Deed of Suretyship
4. ANC
5. Consumer agreements prescribed by minister
6. Credit Transaction under NCA
7. Franchise agreement
8. Donation
9. Apprenticeship
10. Sale of time share interest
Conditions


Suspensive
o suspends operation of obligations until occurrence uncertain future event
Resolutive:
o terminates obligations upon occurrence of a specified future uncertain event
Option v pre-emption

OPTION
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
unilateral document
granted by owner of property to a person
right to purchase the property within a specified time and at a fixed price
seller is bound by the option document
 holder of option becomes legally bound only when he exercises the option
and gives notice in writing that he exercises the option
PRE EMPTION
o granted by the owner of property to a person
o BUT that person can only exercise the right of pre-emption when the owner decides
to sell
 when owner decides to sell he has to first offer it to the person who holds
the right of pre-emption
 grantee must within a specified period decide whether he wishes to exercise
right
o
o
o
o

Letter to exercise option:

Tell client that:
o must sign attached letter in presence of 2 witnesses
o depending on wording of option, option may be regarded as having been exercised
on day of posting
 but if option says it has to reach grantor by expiry date the date of posting
won’t suffice
o ensure it reached grantor by expiry date – fax/courier
EXERCISE OF OPTION – LETTER TO GRANTOR
Date: 31 August 1988



hereby exercise the option [dated] granted to me by [x]
I, the undersigned
in terms of which I was granted the option to purchase [property]
o together with all improvements thereon
subject to the terms and conditions contained in the option
AS WITNESSES
{A}
{B}
SIGNED
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Contractual Drafting: Common clauses
Conditions – sale immovable property
a. SUSPENSIVE: Operation of agreement dependant on bond being obtained
 This agreement is conditional upon borrower obtaining bond for 80% of purchase price from
a financial institution, within 30 days hereof
o if not obtained, agreement shall not come into operation and will be null and void
o neither party have claim against other arising herefrom

OTHER EXAMPLES OF SCs
o This agreement shall be of no force and effect unless, within 30 days from effective
date
 the seller’s rights and obligations in terms of the existing lease…
 ceded and assigned from seller to purchaser
 with effect from effective date
 with consent of landlord; or
 existing lease agreement…cancelled and a new lease agreement entered
between purchaser and landlord on terms mutually acceptable
b. RESOLUTIVE: Terminate agreement on bond being refused
 Should purchaser be advised in writing that his application for bond unsuccessful, or not
successful in obtaining within 21 days of signature hereof,
o agreement shall terminate
o insofar as terms of agreement implemented, each party obliged to restore other to
position he would have been in had agreement never been concluded.
ADR/ Arbitration clause
(Feb 2013)


Should dispute arise re this agreement
o including validity; non compliance; termination
o parties bound to consider whether dispute can be solved by negotiation /discussion,
using techniques of negotiation/mediation/other form of dispute resolution
if fail to resolve in manner set out above, refer to arbitration
o [see template arbitration clause]
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Extensive arbitration clause
[Aug 2013 – 20 marks]
ARBITRATION
1. DISPUTES TO BE REFERRED TO ARBITRATION
o Should any dispute arise between the parties in regard to [inset various things that
might be disputed]
o the dispute shall be submitted to and finally settled by arbitration
o types of disputes to list:
 interpretation
 carrying into effect
 rights and obligations
 rectification
 termination
 question as to whether valid and binding agreement entered
 any other matter whatsoever emanating from this agreement
2. DEMAND ARBITRATION
o Any party may demand that dispute be settled ito this clause
o give written notice to other party
3. URGENT RELIEF
o clause shall not prevent party obtaining relief ON URGENT BASIS from court, pending
arbitrator’s decision
4. PLACE, RULES ETC
o The arbitration shall be held
 place
 present: parties and representatives only
 in accordance with Rules promulgated ito Supreme Court Act 1959 and
uniform rules of HC of SA
 provided no time period stipulated shall be longer than 10 court
days for purposes of arbitration
 otherwise in acc with Arbitration Act 1965, it being the intention that the
arbitration be concluded asap
5. ARBITRATOR



if matter in dispute is principally a legal matter
 Practising counsel or attorney (10 years)
if accounting matter
 Practising chartered accountant (10 years)
any other matter
 independent person qualified to hear and adjudicate:
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
o
and shall be agreed to by parties to dispute
 if they can’t agree what type of dispute it is within 7d of demand for
arbitration, deemed a legal dispute
 fail to agree on arbitrator within 14d arbitration demanded – appointed at
request of party by President of Law Society of Northern Provinces.
6. AWARD
o parties irrevocably agree that award
 final and binding
 will be carried into effect
 may be made order of court
7. IRREVOCABLE CONSENT TO ARBITRATION
o provisions of this clause = irrevocable consent of parties to arb proceedings in terms
hereof
o not entitled to withdraw or to claim at arb proceedings that it’s not subject to this
clause.
Leases: Common clauses
OPTION TO RENEW
o
the tenant shall be entitled to renew this lease for a period of a further 5 years
provided that:
 the tenant has faithfully complied with the terms and conditions of this
lease;
 [the rental as prescribed in the lease agreement is increased by 10% irt
every year of such extended lease period starting on date at which extended
lease period comes into operation;
 the landlord has been given 3 months’ written notice of the tenant’s
intention to renew the lease; and
 the terms of this lease shall apply mutatis mutandis during the renewal
period, save the right to extend.
OPTION TO PURCHASE

The Lessor grants to the Lessee
o for the duration of the lease period
o an option to purchase the premises on the following terms and conditions
 purchase price = Rx
 payable against registration of transfer
 security: lessee shall secure payment by delivering bank guarantee
within 14d of exercising option
 lessee may exercise option by delivering written notice at lessor’s domicilium
 sale further subject to terms and conditions set out in annexure A attached
 including obligation of lessee/purchaser to pay all costs of transfer
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
CESSION AND SUBLETTING
Lessee shall not, without prior written consent:
 cede rts under lease
 sublet premises or portion
 give up possession to third party
provided that if lessee is juristic person – transfer of controlling interest in lessee shall be
deemed to be a cession
lessor shall not without consent unreasonably
o
o
o
SURETIES UNDER LEASE

by signing this lease, x and y hereby bind themselves jointly and severally to the lessor as
sureties and co principal in solidum with the lessee
o for the latter’s timeous performance of all its obligations in terms of this lease
IMPROVEMENTS




no structural alterations or additions without prior written consent
o consent not unreasonably withheld
any alterations/additions made with consent must be carried out by tenant:
o at own cost
o if required, under supervision of landlord approved architect (tenant pay fees)
o in accordance with other reasonable conditions and requirements stipulated by LL
not entitled to remove nay alterations/additions made
o at end of lease -> property of LL without compensation
may instal any fixtures and fittings necessary for conduct of its business
o any not removed on termination -> property of LL without compensation
RETURN OF THE PREMISES

on termination of lease, tenant shall immediately
o remove all fixtures and fittings he has installed
 repair damage/blemishes caused by removal
o return premises to LL in same good order and condition as they wre at
commencement date
 fair wear and tear excepted
LANDLORD’S REMEDIES FOR BREACH


LL entitled to cancel by written notice if tenant:
o fails to make payment on due date
 remains in default 7d after notice
o any other breach of this agreement
 fails to remedy in 14d after notice to do so
If T fail to make payment to a third person as required under lease or fail to perform any
other obligation ito lease (after 7d notice):
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282


o LL may make payment/carry out obligation
o recover amount paid or cost from tenant on demand
o without prejudice to LL’s rights under 1
Remedies under 1 and 2 are in addition to any other remedies he may have
Disputes
o If LL cancels; T disputes and remains in occupation:
 tenant continue to make all payments due ito lease on due dates
 LL’s acceptance of payments not affect right to cancel or any other remedy
o if dispute determined in favour of LL, payments made under 4.1 regarded as
amounts [aid by tenant on account of loss sustained by LL as result of holding over of
premises by T
MAINTENANCE



T maintain whole of premise in good order and condition
o carry out any painting/repairs/replacement necessary at own cost
can notify of defects within 7d of commencement of lease
o save for defects indicate din writing, premises will be deemed to have been in good
order and condition at commencement of agreement
LL and agent entitled at all reasonable times to enter upon and inspect premises
RATES AND OTHER CHARGES



LL pay any rates levied by local authority on the premises (subject to 1.1)
Whenever rates increased during lease period
o L may increase rent by amount of rates increase
 by written notice to T
 calculated on monthly basis
o every such increase shall take effect on
 1st day of month following that in which notice of increase received by T
 OR date increase in rates takes effect (later)
tenant liable for all other charges iro premises
o electricity, refuse removal, sanitation, sewerage and water
o pay amounts to local authority directly
Whole Agreement clause


This document constitutes the entire agreement between the parties
neither party will have any right or remedy arising from any undertaking, warranty or
representation not included in this document
Variation clause

This contract cannot be varied, added to or cancelled other than by means of further written
agreement between the parties.
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Jurisdiction for district courts clause

Each party consents in terms of s45 of the Magistrates’ Courts Act to the jurisdiction of the
district magistrates court in respect of any proceedings pursuant to this agreement
Severability of provisions clause


each clause and part of a clause in this agreement is separate and severable from the rest of
the agreement
o unless severing would render the agreement unlawful/not reasonable to do so
having regard to the clause/agreement as a whole
should any clause or part thereof be unenforceable, it will not affect the enforceability of the
rest of the agreement
Domicilium
Aug 2012

For the purpose of the giving of notices and the serving of legal process in terms of this
agreement the Parties choose as their domicilium citandi et executandi the following:
o set out addresses – physical, post, fax, email

Either party may, at any time, by notice in writing to the other party, change its domicilium
to any other address in RSA that is not a post box or poste restante

Any notice given ito agreement shall, save where particular form of notice stipulated, be:
o delivered by hand; or
o sent by prepaid registered post; or
o sent by telefax;
o sent by email;
to the domicilium address as selected by the parties

when things will be deemed to be received:
o prepaid registered post
 correctly addressed envelope
 to the postal address set out above
 deemed to have been received within 10 days of date posted
 unless contrary proved by addressee
o delivered by hand
 to a responsible person
 during business hours
 at the physical address above
 deemed received on day delivery
 unless contrary proved
o telefax
 sent to fax number above
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282

o
email


deemed received first business day after transmission
 unless contrary proved
sent to email address
deemed received first business day after transmission
 unless contrary proved
Sale of immovable property – indemnity re agent’s commission



purchaser confirms agreement entered into without purchaser having been introduced to
seller directly or indirectly by an estate agent
o or that any agent was the effective cause for the conclusion of this contract of slae
as a result of sale on these grounds – purchase price reduced by amount equal to suspected
agent’s commission
purchaser indemnifies seller against any legitimate claim which may be brought for agent’s
commission arising from this sale
o seller shall call on purchaser to assist in any litigation arising from claim to
commission
o seller free to decide on best method settlement claim
o any costs incl legal fees on all scales and any capital sum payable shall be recoverable
from purchaser
Sale – clauses to protect seller on default
Aug 2004 15 marks


ownership will remain vested in seller UNTIL purchase price paid in full
 notwithstanding delivery of vehicle to purchaser
o in event of default in making payment:
 seller entitled to cancel; take possession vehicle
obligation to insure:
o until price settled in full purchaser shall keep the vehicle insured at his cost
 with insurance company approved by seller
o also ensure that the seller’s interest in the vehicle is endorsed against the insurance
policy
o furnish seller with proof of insurance and endorsement
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Letter of demand
date
REGISTERED POST
Addressee’s address
Dear Sir
We act for x; facts; action
“We hereby call on you to effect payment…”
“We have instructions to issue summons against you for the recovery thereof…”
Confidentiality clause in an employment agreement



accepts that as e/ee of the company and consultant to customers and clients, will have
access to and become possessed of proprietary info of the company, its customers and its
clients
o accepts reasonable for company to protect its rights and those of customers and
clients in this proprietary information
agrees to keep confidential
o both during and after term of employment
o all such proprietary info that may come to his knowledge
 directly or indirectly
 during course of or by virtue of his engagement ito this agreement
while agreement in force, agrees not to engage directly or indirectly in any capacity in any
business venture competitive or in conflict with the business of the company
o or that customers/clients may come into contact with during term employment
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Contractual drafting: Agreements
Sale of business agreement
(Feb 2013)
1. Definitions
a. business
b. effective date
c. fixed assets
d. premises
e. stock
2. Subject matter
a. seller sells to the buyer the business as a going concern comprising the following
assets:
i. goodwill
ii. fixed assets
iii. stock
b. excluded from sale
i. cash on hand; book debts; cheques in seller’s possession
3. Purchase price
a. sum of following amounts:
i. R50000
ii. book value of fixed assets (amount reflected in books of account less
deduction for income tax purposes)
iii. cost price of stock
b. must be paid in cash without deduction or set off on effective date
4. Payment of purchase price
5. Determination of cost price of stock
a. jointly take stock day before effective date
b. invoices/books account = prima facie proof cost price
i. if can’t prove – ask supplier; determination binding
c. record price in writing and sign record
d. cooperate
6. Delivery
a. Seller shall give ownership and control on effective date
b. Seller’s warranties
c. Seller shall do certain things in period before effective date
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
i. eg maintain the fixed assets; carry on business in proper manner; refrain
from conduct prejudice goodwill of business
7. Defects
a. sold voetstoots
b. no warranty as to profitability or turnover beyond the effective date
8. Risk and Benefit
a. pass to buyer on effective date (liable from then, and gets income from then)
9. Liabilities
a. incurred BEFORE effective date – Seller responsible; indemnifies buyer against claims
and proceedings
b. goods bought before effective date but delivered after – buyer deemed to have
accepted those supplies for his own account (unless notifies seller to contrary within
7 days of delivery)
10. VAT
a. both parties are registered as vendors under the Value Added Tax Act
b. The business is sold as a going concern and is, therefore, zero rated for the purposes
of VAT
c. All the assets required for the conducting of the business are included in the sale
d. the business is capable of earning income separately from all other businesses
e. should this transaction not be zero rated for any reason, then the buyer will pay the
VAT and reclaim the input VAT from SARS
11. Legal Advertisement
a. seller shall publish notices of intended transfer of business as required by s34
Insolvency Act
b. buyer pay costs incidental to application
12. Protection of Goodwill and Assistance to Buyer
a. for 3 years from effective date – seller shall not be interested in the business of a
restaurant in the Magisterial district of x
i. acknowledges reasonable restraint
b. period preceding effective date:
i. instruct buyer on business methods and running the business generally
ii. give complete access to every facet of business
1. in particular records re customers and recipes
iii. not entitled to remuneration for assistance
13. Employees and pension fund
14. Cancellation for breach
a. breach; fail to remedy 7d of notice, other party entitled to cancel (without prejudice
to any other remedy the party may have) by giving written notice.
15. Suspensive conditions
16. Boilerplates
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Indemnity
Aug 2013 (17)
1. INDEMNITY
The undersigned B (debtor) agrees to indemnify A and X (the sureties)
a. against
i. any payments which the sureties may be required to make
ii. any losses they may incur
b. arising out of giving suretyship undertaking (annexure A – the suretyship) iro
indebtedness of B to C (the creditor)
2. PRIOR PAYMENT OF CLAIM UNNECESSARY
a. if claim made against sureties under s/ship, debtor shall pay them the amount
claimed from them
i. not necessary for sureties first to pay the claim
3. PROCEDURE IRO DISPUTED CLAIM
a. on receipt of claim, surety notify debtor in writing
b. 3d – debtor give full details in writing of any defence to claim
c. if details given
1. sureties may defend claim at debtors expense; or
2. must give him opportunity to defend
d. if sureties wish to withdraw defence/compromise claim/pay in full or part
i. first give written notice to debtor
ii. debtor may take over defence as far as possible (3d)
iii. no action by the debtor or failure to act will prejudice rights of sureties to
settle the claim as they see fit
e. on request, debtor furnish bank guarantee for amount of claim and costs sureties
may incur
f. defence of a matter for purposes of this clause includes appeal/review
g. if debtor doesn’t give details of defence or defences fail/sureties or debtor choose
not to raise them:
i. debtor may not contest sureties’ claim for indemnification on grounds that
creditors’ claim against them was not enforceable
4. AMENDMENT OR NOVATION OF SURETYSHIP
a. if s/ship amended or novated – debtor remain bound by indemnity
i. except to extent has not consented to/may be prejudiced by the amendment
or novation
5. INTEREST
a. if sureties discharge a claim before debtor pays them – interest on amount at prime
pls 2%
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
i. compounded monthly in arrear
ii. accrue from date of payment by S to date of payment by D to them
Acknowledgement of Debt
[Feb 2012 – 24]
(this one excludes interest, early repayment and domicile)
1.
2.
3.
4.
5.
6.
Acknowledgment
Instalments
Additional Charges
Default
Proof of amount of indebtedness
legal costs
Feb 2009 – 14
Aug 2005 - 18
1. Acknowledgement
 I the undersigned [x] (debtor)
 do hereby admit that I am liable, and hold myself bound to [y] (creditor)
 for the due and proper payment of the amount of Rx
i. by reason of money actually lent and advanced to me by the creditor
(Principal debt)
AND I FURTHER DECLARE I AM BOUND BY THE FOLLOWING CONDITIONS VIZ:
2. Interest
o PD shall bear interest at rate 12% pa
 calculated monthly in arrear
 on the outstanding balance due on the last day of each calendar
month
3. Instalments
 PD and interest shall be paid in 12 monthly instalments
 1st: last day of month this doc signed
i. thereafter – last day of every succeeding month
4. Acceleration
 if payment not made on due date
 creditor may regard balance of PD and interest owing as due and payable
immediately
i. may issue summons without further notice or demand
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
5. Renunciation of legal exceptions
 debtor expressly renounces benefits of the legal exceptions
i. non causa debitii
ii. errore calculi
iii. revision of accounts
iv. no value received
6. Consent to juris of MC
 debtor agrees to juris of MC ito s45
7. Insolvency
 PD immediately due and payable on debtor’s insolvency/commits act insolvency
8. Costs


Debtor pays costs of AOD and stamp duty
if creditor incurs costs in collection PD, debtor pay on attorney and own client scale
9. Creditor entitled to cede or pledge interests
 without d’s permission
10. Allocations
 creditor may allocate any payment to capital, interest, costs or any other item as he
deems fit
11. Certificate of proof
 certificate issued by creditor or agent = prima facie proof of indebtedness;
i. def accepts onus of disproving amount so stated as no t being the amount
owing
12. Domicile
SIGNED
WITNESSES
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Out and out cession of book debts
Aug 2012 – 21 marks; Aug 2010 20 marks
1. Parties
a. Cedent and cessionary
2. Background
a. Cedent wishes to cede the book debts of his business [explain business, address]
(“the business”) to the Cessionary for the sum of [x]
3. Cession
a. Cedent cedes to cessionary all existing book debts of the business
i. of whatsoever nature and from whatsoever cause arising (“the book debts”)
b. Cessionary accepts the cession
c. Upon delivery of docs set out in 4, cessionary shall pay the amount specified in 2 in
cash.
4. Delivery of documents evidencing book debts
a. cedent shall, on demand, deliver, cede, negotiate or transfer to the cessionary any
docs of title, agreements, negotiable instruments or other securities held by the
cendent iro the book debts
5. Warranties by the cedent
a. the cedent warrants and undertakes that
i. not entered a/mt restricting/excluding transferability of BDs
ii. no knowledge of counterclaims that may extinguish any book debt
iii. not prior to this cession ceded any book debts to another person or concern
6. Notice to debtors
a. cedent authorises cessionary to give notice of cession to any of the debtors of the
business
7. Information regarding book debts
a. within 7 days of signature, cedent deliver list of all debtors of the business, reflecting
i. names, occupations, addresses
ii. nature and amount of indebtedness of each
iii. particulars of any agreements, documents of title, negotiable instruments or
other securities of any nature held by cedent iro BDs
iv. whether the indebtedness sis on open account or on credit; if on credit,
terms of such credit
b. cedent shall make available docs for inspection at place of business:
i. books of account, receipts and other books, papers and correspondence
relating to the book debts
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
c. cedent shall give cessionary all such info concerning the debtors of the business as
cessionary may reasonably require in order to enable him to recover the amount
owing by each of them.
Cession of book debts as security for overdraft
Feb 2005 20 marks
1. Parties
2. Background
a. cedent has agreed to grant security for its indebtedness to the cessionary, arising out
of the overdraft facility
b. and cedent has agreed to cede as security to the cessionary all its book debts
present and future
3. Cession
a. cedes all its right, title and interest in and to
i. all the book debts of the cedent,
1. present and future
2. from whatsovever cause arising
ii. as security for the above indebtedness, arising from overdraft
4. Duration
a. Cession of force and effect until the whole indebtedness extinguished
5. Information on BDs
a. deliver list of BDs on demand by cessionary while cession in force – names and
addresses; amounts indebtedness of each
6. Undertakings by Cessionary
a. won’t cede rights further
b. won’t notify debtors until debt due and cedent fails to pay
c. repay any surplus of claims against debtors back to cedent after satisfied its claim
d. cede back any remaining rights after claims settled
7. Notice to debtors
a. subject to what is said above, cedent authorises cessionary to give notice of the
cession to both present and future debtors of cedent
SIGNED
ACCEPTED
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Deed of suretyship
Feb 2010 20 marks
1. SURETYSHIP
o we the undersigned x [ID number] and Y [ID number] (“the sureties”)
o do hereby interpose and bind ourselves
 as SURETIES for and CO PRINCIPAL DEBTORS in solidum with and on behalf of
 [ABC Investments] (“principal debtor”)
 unto and in favour of
 [XYZ Property Holdings] (“the creditor”)
o for what:
 for the due and punctual payment by the principal debtor to the creditor
 of all sums of money which now owes or may from time to time owe to
creditor
 including damages for breach of contract or otherwise arising from a
Deed of Lease entered into on [date] between the creditor and the
principal debtor iro the premises [explain premises]
o and any extensions or renewals thereof
 and the due and proper performance by the principal debtor of its
obligations – now or in future owe to creditor thereunder
2. RENUNCIATION OF BENEFITS
o renounce the benefits of excussion, division, cession of action, no value received,
non causa debitii and revision of accounts
o declare selves fully acquainted with meaning thereof
3. ADDITIONAL SURETYSHIP
o agree /acknowledge this surety shall be in addition to any other
suretyships/guarantees/purported sureties and guarantees concluded by sureties tot
eh creditor obo PD
4. INDULGENCE IS NOT WAIVER
o extension of time/lenience/other indulgence granted to PD for fulfilment obligations:
 not release sureties form liability
 not regarded as waiver or tacit renunciation of creditor’s rights
 whether or not sureties had notice of indulgence
5. s45 CONSENT TO JURIS OF MC
o consent to creditor taking any legal proceedings for enforcement of its rights in MC
having jurisdiction
o also consent to proceedings in HC if creditor elects
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
6. DOMICILIUM
o choose domicilium citandi et executandi for all purposes hereunder at: [address]
7. ENTIRE AGREEMENT
o this is entire agreement; no alteration without writing and signed
8. COSTS
o if dispute arises from breach by sureties – pay creditor’s costs on attorney and own
client scale
o costs drawing up suretyship and incidental costs – sureties
SIGNED by the sureties at jhb this 1st day of August 2014
AS WITNESSES
1.
2.
NB if the intention was for 2 people to bind selves jointly and severally as co sureties and only one
signs, the agreement will be invalid under the Act (50 of 1956) [unless suretyship provides otherwise]
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
Right of pre-emption
without standard clauses
Feb 2014 – 14 marks
1. PARTIES
a. grantor and grantee
2. THE PROPERTY
a. in this agreement the property means
i. describe property – lot number, district, size in s quare metres
ii. held by the grantor under transfer number [x/2010]
3. PROHIBITION ON ALIENATION
a. grantor may not alienate the property for a period of 30 d after informing grantee of
an offer which the grantor is prepared to accept unless
1. he has first ofered it to grantee as provided in 3
2. the grantee has either
a. refused the offer or
b. failed to accept it timeously or in the manner prescribed in
4, and
3. the price payable to the grantor by any other buyer is not less than
the market value as set out in 3.2
4. OFFER BY GRANTOR
a. The offer referred to in 3(a)(1) must
i. be open for acceptance by the grantee for a period of 30d following the date
receipt offer
ii. stipulate the price
1. must be the reasonable market value of the property
2. “reasonable market value”: average of written valuations of 2 estate
agents selected by grantor carrying on business in mag district of x
a. copies of valuations must be attached to the offer or the
price which the grantor is prepared to accept from third
party
5. ACCEPTANCE BY GRANTEE
a. acceptance of the offer by grantee must be
i. in writing
ii. unconditional
1. save that may stipulate that the payment of the price subject to
obtaining a loan against the security of the mortgage bond of the
property
Downloaded by Bryson Govender (bryson.govender@gmail.com)
lOMoARcPSD|14836282
SIGNED
Downloaded by Bryson Govender (bryson.govender@gmail.com)