Legal and Commercial Practices 201
BACHELOR OF BUSINESS
ADMINISTRATION
LEGAL AND COMMERCIAL
PRACTICES 201
Wraparound guide
Copyright © 2022
REGENT BUSINESS SCHOOL
All rights reserved; no part of this book may be reproduced in any form or by any means, including
photocopying machines, without the written permission of the publisher.
BACHELOR OF BUSINESS ADMINISTRATION
LEGAL AND COMMERCIAL PRACTICES 201
Table of Contents
INTRODUCTION TO LEGAL AND COMMERCIAL PRACTICES 201 .............3
CHAPTER ONE ...............................................................................................7
SELF-ASSESSMENT QUESTIONS...............................................................10
CHAPTER TWO .............................................................................................11
GENERAL PRINCPLES OF THE LAW OF CONTRACT ...............................11
CHAPTER THREE .........................................................................................21
SPECIFIC CONTRACTS ...............................................................................21
SECTION A - THE CONTRACT OF SALE.....................................................22
1. Discuss the essentials of an insurance contract. ........................................39
4. What is the difference between indemnity and non-indemnity insurance?
Give
some examples. .......................................................39
5. What are the financial obligations of the insured and the insurer? .............39
6. What is meant by ‘a future uncertain event’? .............................................39
7. What is the duty of disclosure? Why is it so important? .............................39
SECTION D – CREDIT AGREEMENTS ........................................................40
3.4. INTRODUCTION ....................................................................................41
CHAPTER FOUR ...........................................................................................45
NEGOTIABLE INSTRUMENTS .....................................................................45
1. Determine the essential elements of a cheque. ........................................48
3. What are the nonessential elements of a cheque? ...................................48
CHAPTER FIVE .............................................................................................49
INTELLECTUAL PROPERTY ........................................................................49
CHAPTER SIX ...............................................................................................53
COMPETITION LAW......................................................................................53
BIBLIOGRAPHY ............................................................................................55
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List of Figures
Figure 3.1.: The Common Law Rights of The Purchaser
22
Figure 3.2.: Types of Credit Agreements
46
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INTRODUCTION TO LEGAL AND COMMERCIAL
PRACTICES 201
1. Introduction
Welcome to the Bachelor of Business Administration programme. As part of your
studies, you are required to study and successfully complete a course on Legal and
Commercial Practices 201. The purpose of this guide is to introduce you to the Legal
and Commercial Practices in South African law. The structure of this guide is simple
and user-friendly.
2. Guide Overview
The wraparound guide provides a brief introduction and overview to Legal and
Commercial Practices 201. This guide must be read together with the prescribed text
listed below as it serves as a mere introduction to the contents of the prescribed
textbook. Throughout the wraparound guide, you are referred to read the various
chapters and to specific pages of the prescribed text for full information and reading.
3. Aim of the Guide
This guide aims to provide an introductory perspective to the relevant chapters of the
prescribed textbook. |The Self-Assessment Questions at the end of each chapter will
test your understanding of the study material against the Specific Learning Outcomes
listed at the start of the chapter.
4. Essential (Prescribed) Reading
Your essential (prescribed) reading comprises the following:
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Heinrich Schulze, Tukishi Manamela, Philip Stoop, Ernst Manamela, Eddie Hurter,
Boaz Masuku, Chrizell Stoop, General Principles of Commercial Law. (2019) Ninth
edition. Juta
Read the relevant legislation that is referred to in each chapter.
5. How to use the Guide
The module should be studied using the prescribed textbook/s and the relevant
sections of this guide. You must read about the topic that you intend to study in the
appropriate section before you start reading the textbook/s in detail. Ensure that you
make your own Please notes as you work through both the textbook/s and this guide.
You will find a list of objectives and outcomes at the beginning of each section. These
outline the main points that you need to understand when you have completed the
section/s. The purpose of this guide is to help you study. It is important for you to work
through all the Self-Assessment exercises as they provide guidelines for examination
purposes.
Additionally, you are referred to relevant case law. Some case laws are summarised
for you. In the instance where you are given the case name and citation, you are
expected to conduct research into the case, read and learn of its decision and the
issue facing the court, and how it applies to the necessary area of discussion.
6. Navigational Icons
Think Point
When you see this icon, you should think about and reflect on the
issues/challenges/themes presented.
Case Law Summary
This icon indicates a summary of a particular case law which explains
the principle of law being discussed.
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Definitions
This icon will alert you to a specific definition related to the topic under
discussion
7. Specific Outcomes and Chapter Alignment
SPECIFIC PROGRAMME OUTCOMES
CHAPTER
ALIGNMENT
SO 1:
Outline how legislation affects business relationships
1
and transactions within the scope of the administration of
a business
SO 2:
Demonstrate an understanding of creating and reviewing
2
a contract
SO 3:
Analyse the relationship between parties to a business
3
agreement
SO 4:
Outline the various forms of credit agreements and
3
comment on the applicability of the clauses
SO 5:
Demonstrate an understanding of the practical utilisation
4
of negotiable instruments
SO 6:
Display knowledge of competition law, trademark law,
5,6
copyright law and patent law.
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8. Specific Outcomes and Assessment Criteria
SPECIFIC PROGRAMME OUTCOMES
ASSESSMENT CRITERIA
The student should demonstrate the ability to:
SO 1:
Outline how legislation affects
Successfully apply legislation showing an
business relationships and
appreciation for how this affects business
transactions within the scope
relationships and transactions
of the administration of a
business.
SO 2:
Demonstrate an
Correctly review a contract and its
understanding of creating and
requirements.
reviewing a contract.
SO 3:
Analyse the relationship
Adequately determine the relationship
between parties to a business
between parties to a business agreement
agreement.
SO 4:
Outline the various forms of
Correctly explain the types of credit
credit agreements and
agreements available
comment on the applicability
of the clauses.
SO 5:
Demonstrate an
Sufficiently show an understanding of the
understanding of the practical
practical use of negotiable instruments.
utilisation of negotiable
instruments.
SO 6:
Demonstrate knowledge of
Appropriately discuss the concepts
competition law, trademark
contained within intellectual property and
law, copyright law, and patent
described how they are protected.
law.
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CHAPTER ONE
FORMS OF BUSINESS ENTERPRISE
Learning Outcomes
On completing of this chapter, you should be able to:
•
Understand the laws pertaining to the Businesses
•
Describe the different types of partnership.
•
Explain the rights and duties of partners.
•
Explain the termination of partnership.
•
Briefly explain how a close corporation is formed.
•
Discuss the duties of members.
•
Explain the requirements for the formation of a private company.
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INTRODUCTION
A business can take one of four legal forms:
•
Sole Proprietorship
•
Partnership
•
Close Corporation
•
Private Company
Definition
Sole proprietor means sole owner.
Sole Proprietor
The sole proprietor owns everything in the business and there is no legal distinction
between the owner and the business itself. The business does not have to be
registered but may have a trading name. The owner is solely liable for all duties and
obligations, assets and liabilities of the company.
If the business is liquidated, all the personal assets of the owner are also liquidated.
Investors and outside partners may not be brought into the business. The purpose and
existence of the company will cease on the death of the owner.
Partnership
Partnership is defined as a contract between persons (not more than 20) in which
the persons contribute or agree to contribute money, labour or skill to a common
stock and to carry on a lawful business with the purpose of making a profit for the
benefit of all the partners.
Company law
The Company as a form of a business enterprise provides the advantage of legal
personality and allows entrepreneurs to obtain more capital for their business
venture. The business also has perpetual succession.
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The Close Corporation
The close corporation (abbreviated to CC) is a relatively simple form of business
specifically tailored to the needs of the small entrepreneur. The business is a legal
entity separate from the people who own the business. Its members enjoy limited
liability, which means that the close corporation can be sued as a separate entity, and
not necessarily the owners. This reduces the personal risk of the owners. The
Companies Act, 2008 provides for the indefinite continued existence of the Close
Corporations Act in respect of Close Corporations that were already in existence when
the Companies Act, 2008 commenced. However, no new close corporations may be
registered.
Refer to Chapter 21 of the prescribed textbook for further information on the Forms
of Business Enterprise.
Think Point
Law is crucial to the functioning of the commercial world because it
recognises different types of property, facilitates, and upholds
business agreements, sets out the rules for businesses to function,
provides the foundation for the state regulation of a business activity,
and provides an authoritative mode of dispute resolution. For all
these reasons it is crucial for entrepreneurs, managers, accountants,
and auditors to have a basic understanding of the function played by
the law in regulating commercial activity.
Source: Scot et al, (2014) Law of Commerce in South Africa.
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SELF-ASSESSMENT QUESTIONS
1. Explain the position of a sole proprietor in Business
2. What is a close corporation?
3. What is a public company?
4. What is the difference between a public company and a private company?
5. Discuss the formation of a partnership.
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CHAPTER TWO
GENERAL PRINCPLES OF THE LAW OF CONTRACT
Learning Outcomes
On completing this chapter, you should be able to:
•
Discuss how obligations are created in contracts
•
Explain the requirements for a valid contract
•
Determine the essentialia of a contract
•
Describe how contracts are breached
•
Explain the remedies available for a breach of contract
Please note that all sections of chapters 3 to 12 of the prescribed textbook are
examinable.
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2.1. Introduction
This chapter explains, the formation of a valid contract. A distinction is drawn between
a contract and other agreements that do not give rise to legal obligations.
We will determine the legal definition of a contract and discuss the essential elements
contained in that definition. We will establish how contracts are created and
terminated, and the rights and remedies available to parties who have reached
agreements which have been breached.
A contract can be described as an agreement concluded by two or more persons with
the serious intention of creating legally enforceable obligations. The agreement must
be recognised by the law as binding between the parties to give rise to legal
obligations.
2.1.1 Obligation
Definition
An obligation is a legal relationship that exists between parties to an agreement, on
the acquisition of personal rights against each other which entitles them to
performance and or obliges them to perform in terms of that agreement. Baqwa. et al.
(2017)
Refer to chapter 3 of the prescribed textbook on obligation, special type of agreement
and two or more parties.
2.2. Requirements for the formation of a valid contract
Contracts are central to our daily lives. They are always being entered into between
people, between businesses with other businesses or when people sell or transfer
property or services to one another.
The purchase of goods such as food, electricity and water is based on a contract of
sale: - the hiring of employees is based on a contract of employment. Buying a loaf of
bread from the corner café is a contract of sale. Endless contracts are concluded every
day, without the parties to the contracts giving it much thought.
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The requirements for the formation of a valid contract are as follows:
2.2.1. Consensus
Refer to chapter 4 of the prescribed textbook for further information.
Acceptance theories.
•
Declaration theory: Acceptance occurs when the offeree has expressly stated
acceptance, for example where the offeree writes the letter of acceptance.
•
Expedition theory: When the offeree posts the letter of acceptance.
•
Reception theory: When the letter of acceptance reaches the offeror’s address.
•
Information theory: When the letter of acceptance reaches the mind of the
offeror, that is, when the letter is read.
In S v Henckert 1981 (3) SA 445 (A), a contract to purchase semi-precious
stones was entered into by telephone between a buyer in Namibia and a seller in
South Africa. The contract was illegal in terms of South African law and not
Namibian law. The court found that the buyer had heard the acceptance in
Namibia, and therefore the contract was entered into in Namibia and was not
illegal.
The reception theory applies to contracts accepted by telefax, facsimile transaction
(fax) or electronic mail (email). In this scenario, contracts come into existence at the
place where the acceptance is received by the offeree and at the time he or she
becomes capable of reading it.
Electronic Communications and transactions Act 25 of 200
In Bush and others v BJ Kruger Incorporated and another [2013] 2 All SA
148 (GSI) a dispute arose around a payment that was made when the
plaintiff instructed his bank in Pretoria to transfer funds to the defendant’s bank in
Johannesburg. Another area of contention arose as to whether the court in Pretoria or
in Johannesburg had Jurisdiction to hear the matter.
The Court held that payment by means of an electronic funds transfer occurs when
the party entitled to the payment and actually receives the money in his or her bank
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account. The mere instruction by the transferor to his or her bank to transfer the money
does not constitute payment. Further, the place where the money is received by the
bank is the place where the transaction occurs.
Offers with special terms
Davidson v Johannesburg Turf Club 1904 TH 260
Central South African Railways v James 10908 TS 221
Olley v Marlborough Court Ltd [1949] 1 KB 532 (CA), A hotel defended
an action by a guest that the hotel had been negligent in allowing the theft of her
luggage. A notice has been displayed in each bedroom disclaiming any liability. The
court held the hotel liable, as the notice was seen only after the guests had been
accepted to stay at the hotel.
Absence of consensus – Mistake
Refer to chapter 4 of the prescribed textbook for further information.
George v Fairmead (Pty) Ltd 1958 (2) SA 465 (AD)
Misrepresentation is defined as a false statement of fact made by one person to
another, before or at the time of the contract, or some matter or circumstance relating
to the contract, with the intention of inducing the latter to contract, and which induces
him or her to do so.
Refer to page 65 of the prescribed textbook.
Trotman v Edwick 1951 (1) SA 443 (A)
Feinstein v Niggli & another 1981 (2) SA 684 (A)
Duress:
Refer page 68 of the prescribed textbook
Broodryk v Smuts NO 1942 TD 47, a road worker employed by the
government claimed that he had entered into a contract to enlist in the armed forces
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under the threat that he would otherwise be imprisoned or interned. The threat had
been made by two government officials authorised to enlist people for military service.
The court found the contract to be voidable by reason of duress.
Undue influence:
Refer to page 70 of the prescribed textbook
Definition
Undue influence may be defined as the weakening of a person’s resistance in order
to make his /her will pliable. The contract will become voidable if the aggrieved person
acts reasonably soon after the influence is removed. Scot. et. al. (2014)
Preller v Jordaan 1956 (1) SA 483 (A), The doctor of an ill patient took
transfer of various properties. The Patient recovered and claimed that he had been
mentally and physically exhausted from illness, and that if he had not been for the
undue influence, he would never have agreed to the transfers. The court found that
such a reason would be sufficient for cancellation of the contract.
2.2.2. Capacity
Refer to chapter 5 of the prescribed textbook.
Definition
Capacity may be defined as the competence in the eyes of the law to have rights
and duties, perform juristic acts, incur civil or criminal liability for wrongdoing, and be
a party to litigation, that is, to sue or be sued in one’s own name.
As a general principle, any juristic or natural person has complete and unrestricted
control over his or her affairs and has full contractual capacity.
However, there are exceptions.
Consider the following:
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Age – Minority, Majority, Emancipation
Wood v Davies 1934 COD 250, the court set aside a contract for the
purchase of a house which had been entered into by the guardian on behalf of the
minor, where it was shown that the price was excessive, the purchase unnecessary,
and there were harsh clauses which imposed obligations on the minor which would
last after he became a major.
Ahmed v Coovadia 1944 TPD 364
Think Point
Natural persons under the age of 18 years, who are unmarried, are
called minors. It is possible under certain circumstances for minors
aged between 7 and 18 years to enter into valid contracts, with the
assistance of guardian, marriage, emancipation, and ratification.
Marriage
Edelstein v Edelstein NO 1952 (2) SA 1 (A), the court set aside an
antenuptial contract which had been entered into by a minor prior to her marriage.
Even though the guardian had agreed to the contract of marriage, he had not given
permission to the minor to enter into the antenuptial contract.
Influence of alcohol or drugs
Insolvency
2.2.3. Possibility of Performance
Performance of the rights and duties that flow from an agreement must be objectively
possible at the time of the conclusion of the contract. Additionally, it is required that
the performance should be certain or ascertainable.
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Peters Flamman & Company v Kokstad Municipality 1919 AD 427, a
partnership contracted with the municipality to supply gas light to the town. The
partners were then interned as enemy subjects and the gas supply was cut off. The
court held that the contract had become impossible to perform after being entered into.
Where an individual was prevented from performing by an act of state, he is
discharged from all liability.
World Leisure Holidays (Pty) Ltd v Georges 2002 SA 531 (W)
2.2.4. Formalities
The general rule is that no formalities are required. Valid contracts can be made
orally, in written form or even by conduct, established in Goldblatt v Freemantle 1920
AD 123.
As long as the intention of the parties is communicated clearly, then an oral contract
is generally as valid as a written one. The terms in a written document, however are
easier to prove in court than what may have been agreed in an oral contract. Some
formalities are imposed by law and some are imposed by the parties themselves.
Formalities imposed by statute
Read the related case Wilken v Kohler 1913 AD 135
2.3. Interpretation of contracts & terms of contracts
Our law tries to give effect to the true intention of the parties at the time the contract
was entered into. However, it can sometimes be very difficult for a court to work out
what this was when dealing with the parties who are in dispute over the meaning of
the words in the agreement. The courts will rely on presumptions and rules to help
them decide on the meaning of the terms and whether the parties to the contract
intended them to apply to their contract at all.
Read chapter 8 of the prescribed textbook.
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Consol Ltd t/a Consol; Glass v Twee Jonge Gezellen (Pty) Ltd and another 2005 (6)
SA 1 (SCA), where the court determined that the test for establishing the imputation
of a tacit term into a contract is the “officious bystander test”. Read this case to
further understand the establishing of the test and its application.
Think Point
The contract must not be so vague that the court is unable to
determine what it means or what the intention is of the parties. As a
general principle, the courts will try to ascertain on the evidence
before them what the intention of the party was at the time that the
contract was entered into.
2.4. Breach of Contract
When a party refuses or fails to perform as he or she has agreed to, the contract has
not been complied with. This can in certain circumstances constitute a breach of
contract, which may allow the aggrieved party to cancel the contract, or to claim
damages for the breach. In some instances, the aggrieved party can claim cancellation
and damages.
Scoin Trading (Pty) Ltd v Bernstein 2011 (2) SA 118 (SCA) a coin collector
paid a deposit of R200 000 to buy a valuable coin. The full price of the coin was R1.95
million. The collector died before the balance of the price was paid. The executor of
the deceased’s estate acknowledged liability to the seller for payment of the balance
of R1.75 million but denied liability for interest for the period that payment of the
balance had been owing. The executor said that because the collector had died, meant
that there was no fault on the part of anyone for the late payment. Accordingly, the
estate should not be liable for mora interest. The court had to decide whether the
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collector’s delay in performance could be attributed to wilful disregard of the contract
or negligent failure to perform on time.
Read chapter 10 of the prescribed textbook on the types of default.
2.5. Remedies for Breach of Contract
The courts will not allow a party to escape his or her obligations under a contract by
simply breaking it. If one party breaches the terms of the agreement, the aggrieved
party may be entitled to cancel the contract, but only under certain conditions.
Read chapter 11 of the prescribed textbook.
Remedies can be catergorised into three group:
1. Execution
➢ Specific performance
➢ Reduced Performance
➢ Interdicts
2. Cancellation
3. Damages – contract law only recognises patrimonial loss
1. Execution
Specific Performance
Haynes v King Williamstown Municipality 1951 (2) SA 371 (AD), the
municipality entered into a contract with the owner of land regarding the provision to
him of water from a river. If the municipality continued to supply him with the same
amount of water after a severe drought, residents of the town would have been harshly
affected. The municipality refused to honour the agreement. The court found that an
order of specific performance would have caused hardship to the inhabitants and
refused to order the municipality to comply with the agreement.
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Barkhuizen v Napier 2007 (5) SA 323 (CC)
2. Cancellation
Aucamp v Morton 1949 (3) SA 611 (A)
3. Damages
Administrateur, Natal v Edouard 1990 (3) SA 581 (A)
Think Point
What about penalty clauses which have been included in a valid
contract?
Self-Assessment Questions
1. Explain the rules of offer and acceptance.
2. Discuss how a contract may be entered into through the post, by telephone, fax
and by email.
3. Discuss the difference between failure to comply with the terms of a contract and
breach of a contract and discuss in full the possible remedies.
4. Indicate the numerous ways in which a contract may be terminated.
5. Distinguish between mistake and misrepresentation and discuss the effect each
has on the validity of a contract.
6. Name the five types of breach of contract and provide an example of each.
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CHAPTER THREE
SPECIFIC CONTRACTS
This chapter has four sections:
Section A: - The Contract of Sale
Section B: - The Contract of Lease
Section C: - The Contract of Insurance
Section D: - Credit Agreements
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SECTION A - THE CONTRACT OF SALE
Learning Outcomes
On completing this chapter, you should be able to:
Understand the nature of a contract of sale
•
Explain the essential elements of contract of sale
•
Explain the obligations of the parties to a sale contract
•
Discuss the duties of the parties to a sale contract
•
Discuss the passing of ownership and risk in a sale transaction
•
Explain the delivery of movables and immovables
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Please note that all of chapter 13 of the prescribed text forms examinable work
3.1. THE CONTRACT OF SALE
The contract of sale is a specialised part of the law of contract, applying in addition to
the principles of contract that apply to contracts generally and must therefore meet the
requirements for a valid contract (as discussed in Chapter two)
3.1.1. Introduction
The Law of Sale examines the requirements for there to be a valid contract of sale
between the parties, and the consequences of a contract characterised as a sale.
The sales contract is the most commonly- encountered type of contract in practice. All
enterprises, whether they sell goods, lease property, or are engaged in the provision
of work or services, will conclude sale contracts on a regular basis. The Law of Sale
has become more complex since the introduction of the National Credit Act 34 of 2005
(NCA) and the Consumer Protection Act 68 of 2008 (CPA). For our purposes, this
section will focus on the Law of the Contract of Sale for commercial transactions.
To get started read chapter 13 of the prescribed textbook.
The essentials of an agreement of sale can be understood to be ‘an agreement to
deliver a particular thing (merx) at a particular price’
A sales contract must be distinguished from other types of contracts, because of
different consequences, namely: •
•
There must be agreement on the object of the Sale
There must be agreement on a certain or ascertainable purchase price
3. 2
The Rights and Duties of the Purchaser and the Seller
3.2.1.
The common-law rights of the Purchaser
1. Purchaser is entitled
delivery of the merx
2. Purchaser is entitled
to preservation of the
merx pending delivery
3. Purchaser is entitled
to be protected by the
Seller against eviction
4. The purchaser is
entitled to the merx free
from latent defects.
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The remedies for the breach of the implied warranty against latent defects are the
so-called aedilitian actions -
3.2.1.1. The actio redhibotoria
Can be used to rescind the contract if the buyer can prove that a reasonable person
would not have bought the goods if he or she had been aware of the latent defect in
the goods. The seriousness and the extent to which the defect impairs the ordinary
use of the goods will be the determining factors as t whether the action will be
available.
Refer to page 161of the prescribed textbook for more details.
3.2.1.2. The actio quanti minoris
The actio quanti minoris can be used as an alternative to the actio redhibotoria where
the defect is not serious enough to warrant rescission, or where the buyer elects to
keep the contract intact, or where the restitution of the goods is not possible.
Refer to pages 161 - 162 of prescribed textbook for further details.
3.3. THE TRANSFER OF OWNERSHIP
3.3.1. Mode of Delivery
•
Actual delivery
The thing (merx) is physically available to the buyer immediately or at the time
agreed at the place of business of the seller.
•
Symbolic Delivery
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In this case, delivery of the thing(merx) takes place by providing the buyer with a
symbol representing the ownership or possession of the thing such as the keys to the
house in after a property transfer.
•
Delivery with the long hand
Here, the seller points out the goods to the buyer without actually giving physical
possession to the buyer. For example: - where a buyer A buys a horse from a farmer
who merely points out the horse to the buyer.
•
Delivery with the short hand
Here the merx is already in the possession of the buyer, but the intention o the parties
changes. For example, a lease agreement. The lessor now decides to sell the leased
property to the lessee who already resides in the leased property.
•
Constitutum Possessorium
With this method of delivery, the seller remains in possession of the goods after the
sale, and delivery takes place through a change of intention with which it is holding the
goods. For example, where the seller sells his car to the buyer but simultaneously
concludes an agreement for the lease of the car, Delivery takes place in this manner.
3.3.2. The passing of risk
Refer to page 165 of the prescribed textbook for further details.
3.4. The Voetstoots clause
The seller can exclude its liability for latent defects by the inclusion of a voetstoots
clause to that effect, meaning that the buyer takes the thing as it stands, and the risk
of latent defects rests with the Seller. It is then up to the seller to inspect the thing to
the extent necessary or possible.
The seller can, however, not exclude its liability in circumstances where it is aware of
the defect and remains silent about the defect to defraud the buyer. The question is
whether there was a duty on the seller to disclose the defect. If the seller remains quiet
because it is afraid that the buyer will not finalise the purchase or would ask for a
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reduced price, it would generally be regarded as fraudulent. In these circumstances
the voetstoots clause is ineffective and will not protect the seller.
A voetstoots clause can validly be used in conjunction with guarantees or warranties
against specific defects. The seller will be liable for the qualities specifically
guaranteed, but not for latent defects in general.
OBLIGATIONS OF THE PARTIES
Seller
•
The seller must take care of the merx until delivery
•
Delivery of the merx is the duty of the seller
•
The seller must transfer ownership or undisturbed possession of the merx to
the buyer.
•
The seller must deliver a merx which is reasonably sellable.
•
The Seller is liable for latent defects in the sales object.
•
The risk and benefit of the goods are transferred to the buyer when the contract
becomes perfecta- this means that there must be no outstanding requirements
on the agreement.
•
Where the merx is damaged or destroyed after transfer of the risk, the buyer
remains liable for the payment of the purchase price.
Buyer
•
The buyer must pay the price agreed upon
•
The buyer must receive the merx when it is presented to him/her.
3.5.
Statutory Protection of Purchasers
3.5.1 The Alienation of Land Act 68 of 1981
3.5.2
The Sectional Titles Act 95 of 1986
3.5.3
The Share Blocks control Act 59 of 1980
3.5.4.
The Property Time- Sharing Control Act 75 of 1983
3.5.5
The National Credit Act 34 of 2005
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Self-Assessment Questions
1. What are the essential elements that qualify an agreement as a sales contract?
2. What is the significance of an agreement being called a ‘sales agreement’?
3. Describe the remedies that are available to a buyer whose new goods are found to
be defective.
4. Explain risk in a contract of sale.
5. Name the implied warranties that arise from a contract of sale.
6. Tom buys a car from Jerry and pays Jerry R50, 000 in cash but will only fetch the
car the next week.
What would happen to the risk in each of these two separate cases:
(a) Lightning strikes the car the on the night before Tom fetches it and destroys the
car completely.
(b) Jerry takes the car for a drive the day before Tom fetches it and negligently
crashes the car into a tree.
7. Explain what a latent defect is.
8. If goods have a latent defect, what should the buyer do?
9. Distinguish between a serious defect and a less serious defect.
10. Describe the aedilition actions.
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SECTION B - THE CONTRACT OF LEASE
Learning Outcomes
On completing this chapter, you should be able to:
•
Explain what a lease agreement is
•
Explain the essential elements of a lease agreement
•
Identify the parties to a lease agreement
•
Explain how a lease agreement is formed
•
Explain the respective duties of the parties to the lease agreement.
•
Describe the remedies for a breach of the lease
Please note that all sections of chapter 14 of the prescribed textbook are examinable
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3.2. THE CONTRACT OF LEASE and THE PARTIES
Definition
A lease is a contract through which one party, the landlord (lessor), gives temporary
use and enjoyment of the property to the tenant(lessee) in return for payment of rent.
Baqwa. et al. (2017)
This section deals with the letting and hiring of immoveable property.
3.2.1. The Essential Elements
The essential elements of a lease are:
➢ Use and enjoyment of the property (use)
➢ Temporary use and enjoyment (duration)
➢ An undertaking to pay rent (rent)
3.2.1.1 The use and enjoyment of the thing (property)
SA Pulp and paper Industries Ltd v Commissioner for Inland Revenue 1995
(1) SA (T) the contract allowed SAPPI to cut and remove trees. The evidence was
that the trees regrew after cutting and therefore the contract was held to be a lease.
South African Railways and Harbours v Springs Town Council 1949 (2) SA
34 (T) The contract allowed for the erection and maintenance of billboards but did not
give exclusive control over the property to the tenant. The court held that it was
nevertheless, a lease.
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The identity of the leased property
Poynton v Cran 1910 AD 205, Cran leased a hotel from Poynton. The lease
required Poynton to put the premises in proper repair at commencement. The question
was whether an outdoor moveable water heater was included in the term ‘premises’.
The court held that a trade fitting such as a water heater would be included in the
lease.
3.2.1.2 Temporary use and enjoyment (duration)
The duration of the lease is for such period as the parties have agreed upon, either
expressly or impliedly. Leases fall into three main categories in this regard:
•
those entered into for a fixed period, short or long, or until the occurrence of a
certain event.
•
those whose duration is at the will of either party and
•
those which have no fixed terminal point.
This last category includes periodical leases, which continue from week to week,
month to month, or year to year, until they are terminated by reasonable notice from
either party; and leases in which the duration has to be determined by the residual
rules. If the parties have not made any agreement about the duration of the lease, it is
a periodic lease, the period being that in terms of which the rent is payable.
In appropriate circumstances, a lease may be ended before the date originally set or
extended beyond the original date. This is usually done by mutual consent.
3.2.1.3.
The rent
Rent must be fixed and definite
Jordan v Verwey 2002 (1) SA 643 (E) one of the parties had installed an
irrigation system in an orchard and in return could utilise certain orchards. The court
held that this did not constitute rent and therefore no lease existed.
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3.2.2 THE RIGHTS AND DUTIES OF THE PARTIES
For Duties of the Landlord refer to page 178 of the prescribed textbook.
➢ Duty to deliver the leased property
The landlord must deliver use and occupation of the leased property to the tenant
on the due date. This is often known as the duty to give vacant possession. If
someone else is in unlawful occupation of the property, the landlord must evict that
person.
In Tshandu v City Council Johannesburg 1947 (1) SA 494 (T), as a result of
a court order, the city gave Mr Tshandu a permit to occupy a house but refused to
evict his ex-wife from the premises. The court held that they were obliged to give
vacant possession.
➢ To place and keep the property in a proper condition
In Pete’s Warehousing CC v Boswink Investments CC 2000 (3) SA 833 (E),
a clause in the lease stated that the landlord did not warrant that the property was fit
for the purpose of the lease or any other purpose! The court held that the residual duty
to put the property initially in a condition reasonably fit for the purpose of the lease
remained.
➢ To give quiet (undisturbed) use and enjoyment of the property let
In Baum v Rode 1905 TS 66 the tenant refused to pay rent on the basis that
a café on the same premises was operating as a brothel. The court held that it was a
third party and not the landlord who was causing the disturbance, and the tenant was
therefore liable to pay the rent.
Duties of the Lessee:
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Read page 181-182 of the prescribed textbook
➢ To pay the rent
➢ To use the let property in a proper manner
➢ To restore the property in the same condition, reasonable wear and tear
accepted
RIGHTS OF THE LANDLORD
1. The landlord’s tacit hypothec for unpaid rent.
Read pages 183 of the prescribed textbook for further information.
To secure arrear rent, the landlord has a right of security known as a tacit hypothec
over all the moveable’s which are brought onto the leased premises by the tenant.
This is a very special extraordinary remedy that only a landlord can use. It is an action
that gives the landlord security for rent money that has not been paid. When goods
are attached, it means an officer of the court will come and take the goods away as a
form of security for outstanding rent. While goods are on the leased property the
landlord may interdict the tenant from removing them.
The landlord's tacit hypothec can only be used if the following is the case:
(i) The tenant must be in arrears (behind) with the rent money.-:
(ii) The goods belonging to the tenant must still be on the rented property. If the tenant
has moved his goods to another place the landlord cannot attach them there.-;
(iii) If the tenant thinks that the landlord is going to attach his goods and takes them
away, the landlord can follow the goods and attach them before they are moved onto
other property. This is called "hot pursuit".-:
(iv) Another extraordinary remedy that the landlord can use is the interdict. He may
use this remedy to stop the tenant from misusing the property.-:
2. Misuse of the property
Ordinary contractual remedies are available to the landlord.
3. Failure to return the property
Ordinary contractual remedies are available to the landlord.
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RIGHTS OF THE TENANT
These are determined by the duties of the landlord.
Read up from pages 187 – 189 of the prescribed textbook.
1.
Failure to deliver
2.
Failure to maintain the property
3.
Breach of warranty against interference
4.
Subletting
In Loubser v Vorster & Vorster 1944 CPD 380, the curt held that where the
subtenants rights were prematurely terminated through the fault of the landlord to the
sublease, then the subtenant is entitled to claim damages for breach of the warranty
against eviction.
5.
Cession
6.
Assignment
HUUR GAAT VOOR KOOP – ‘Hire takes precedence over sale’
When a property is sold when it has a tenant in occupation, the questions often raised
are: “What happens to the tenant if the landlord sells the property?”, and what rights
the tenant will have with regards to cancelling the lease or enforcing it, In typical
situations the lease has precedence over the sale and the clause “huur gaat voor koop”
is in force, which means that the lease takes precedence over the sale of the property
and the tenant has a right to remain for the full duration of that lease.
For further information read page 187- 189 of the prescribed textbook
TERMINATION OF THE LEASE
Performance is the most usual way of terminating a lease, however there are other
ways in which this contract may terminate.
•
Termination when the lease period ends
•
Termination by notice given by the landlord to the tenant
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•
Termination if the landlord is no longer able to give undisturbed use and
enjoyment of the property to the tenant.
•
Termination if either party dies.
•
Termination by insolvency
STATUTORY PROTECTION OF TENANTS
•
Rental Housing Act 50 of 1999
•
Prevention of illegal eviction from an unlawful occupation of Land Act 19 of
1998.
•
The Extension of Security of Tenure Act 62 of 1997
Think Point
In the case of an eviction of a tenant, a complex process has to be
followed with residential leases, arising as a result of section26 of the
Constitution of the Republic of South Africa, 1996. This section
provides that no one may be evicted from their home, or have their
home demolished, without an order of the court made after
considering all the relevant circumstances.
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Self-Assessment Questions
1. Pam leases a flat from Rajesh. The lease commences on the 1st of September
2022. Today is the 3rd of September and she has still not received the keys to the
flat. Is Rajesh conducting himself lawfully? Explain.
2. Dumisani’s best friend Toni, influences him to paint the walls in his rented house
red. Dumisani mistakenly uses red marine paint on the walls. The effect is great, but
it is impossible to remove the red paint off the walls. Dumisani is now really stressed
as his lease is about to terminate and he has to vacate the house soon. He consults
with you to advise on his position. How would you advise him?
3. Tom wants to lease a warehouse as a business premises for a period of 10 years
with an option to purchase if things go well. He has found a landlord who is willing to
lease, but Tom is concerned about what his position will be if the property is sold to a
new owner. Advise Tom accordingly.
4. Discuss the essential elements of a lease contract.
5. What ordinary and extra ordinary remedies are available to a lessee if the lessor
does not carry out his duties in terms of the lease?
6. Explain the operation of the landlord’s tacit hypothec.
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SECTION C - THE CONTRACT OF INSURANCE
Learning Outcomes
On completing this chapter, you should be able to:
•
Understand the concept of insurance
•
Differentiate between the types of insurance
•
Discuss the essentials of a contract of insurance
•
Discuss duty of disclosure
•
Identify and explain performance under a contract of insurance
•
Understand how an insurance contract may be terminated
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3.3. THE CONTRACT OF INSURANCE
Please note all sections of chapter 15 of the prescribed textbook are examinable.
Introduction
Insurance Law deals with claims against persons and entities who are insured.
Insurance Law focuses, to a large extent, on claims relating to the liability of insured
persons for harm or damage caused to others. This can include the loss of or damage
to property, and even injury to or the death of, a person or persons.
Insurance is a contract in terms of which the insurer undertakes, in return for the
payment of a price or a premium by the insured, to render the insured a sum of money,
or the equivalent to a sum of money, on the happening of a specified and uncertain
event in which the insured has some interest. The insurance contract is also referred
to as an - “insurance policy”. The rationale behind insurance is to protect oneself
against the occurrence of undesirable risk.
3.3.1 Types of Insurance.
Read from page197 of the prescribed textbook
•
•
Indemnity Insurance
Non-indemnity Insurance
3.2.2 Essentialia of the insurance contract are that:
•
The insurer must undertake to pay a sum of money or perform some other
benefit.
•
In exchange for an undertaking by the insured to pay a premium or the payment
of a premium…
•
on the happening of an uncertain or unplanned event…
•
which performance will indemnify the insured in the case of indemnity insurance
or make up for the materialisation of the risk where non-indemnity insurance is
concluded.
Refer to page 200 of the prescribed textbook
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3.2.3. Insurance contracts distinguished from other type of contracts
•
Insurable Interest
•
The Duty of Good Faith
•
Misrepresentations
•
Non-disclosures
•
Warranties
•
The parties to the contract
THE DUTY OF DISCLOSURE
Insurance companies deal with insureds who fail to tell the company all it needs to
know about the risk. Insurers are forced to work on information supplied by proposers.
To protect the insurer, the law creates a duty of disclosure on the insured.
Concealment of a material fact, or its misrepresentation, amounts to a breach of the
insured's general duty to make disclosure and entitles the insurer, upon such
discovery, to void the policy.
The court applies the "reasonable man" test in assessing materiality. When
considering the facts in each case, the court asks whether an undisclosed fact is
reasonably relative to the risk or the assessment of the premiums. The court decides
this objectively from the point of view of the reasonable man.
STATUTORY PROTECTION OF THE INSURED
•
Long- and Short-Term Insurance Act
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Self-Assessment Questions
1. Discuss the essentials of an insurance contract.
2. Provide an example of a fraudulent claim.
3. Distinguish the different consequences that a fraud committed by an insured in
bringing an insurance can have on the claim and the insurance contract.
4. What is the difference between indemnity and non-indemnity insurance? Give
some examples.
5. What are the financial obligations of the insured and the insurer?
6. What is meant by ‘a future uncertain event’?
7. What is the duty of disclosure? Why is it so important?
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SECTION D – CREDIT AGREEMENTS
Learning Outcomes
On completing this chapter, you should be able to:
•
Explain what credit agreements are
•
Discuss the relevance of credit agreements
•
Explain who the parties to a credit agreement are
•
Explain what a credit transaction is
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CREDIT AGREEMENTS
Please note that all sections in chapter 6 of the prescribed textbook are examinable
3.4
. INTRODUCTION
The South African consumer- credit industry is enormous. The National credit
Regulator’s consumer credit market report (third quarter – September 2021) indicated
that the total value of new credit granted increased from R146.87 billion to R159.12
billion for the quarter ended September 2021, an increase of 8.34% when compared
to the previous quarter and an increase of 22.93% year-on-year. The number of
applications for credit increased from 11.30 million to 11.76 million in September 2021,
representing an increase of 4.01% for the quarter. The rejection rate for applications
was 66.64%.
The following were some of the most significant trends observed for the quarter ended
September 2021:
•
The value of mortgages granted increased by 16.91% quarter-on-quarter from
R56.59 billion to R66.15 billion.
•
Secured credit granted increased from R43.18 billion for June 2021 to R45.44
billion for September 2021 (a quarter-on-quarter increase of 5.24%).
•
Unsecured credit agreements increased from R22.45 billion to R22.64 billion
for September 2021 (a quarter-on-quarter increase of 0.83%).
•
Credit facilities which consist mainly of credit cards, store cards and bank
overdrafts increased from R20.84 billion to R21.27 billion for September 2021
(a quarter-on-quarter increase of 2.08%).
•
Short-term credit showed a quarter-on-quarter decrease of 4.40% from R2.21
billion to R2.12 billion.
•
Developmental credit showed a quarter-on-quarter decrease of 6.65% from
R1.61 billion to R1.50 billion.
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Credit clearly plays an important role in daily life. Most South African do not have the
large amounts of cash required to purchase cars, clothes etc. People need to use
credit and have to apply for credit in making these purchases.
All credit facilities are regulated by the National Credit Act 34 of 2005 (NCA)
Industries that are affected by the NCA include micro-lender, banks, financial
institutions, retailers, vehicle financiers and the credit bureaux. Credit agreements are
very important to businesses and consumers.
▪
Credit Legislation --- The National Credit Act 3 of 2005
▪
Credit Agreements
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Figure 3.2.: Types of Credit Agreements
Source: The Law of Commerce. 2017. Second edition. Baqwa.et. al.
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The parties in credit sales are called the credit grantor (the seller) and the credit
receiver (the buyer).
Credit transactions
Definition
A credit transaction is any contract where goods are sold on credit and the buyer must
pay the purchase price off in instalments, or any service which the credit grantor gives
to the credit receiver and the credit receiver pays for the service in instalments.
For further information on the National Credit Act and its application read chapter 16
of the prescribed textbook.
Self-Assessment Questions
1.
What is a credit sale?
2.
What Act lays down the rules of credit agreements?
3.
Who are the parties to a credit agreement?
4.
Name the types of credit agreements stated in the Act.
5.
When does ownership pass in a credit sale which falls under the Act?
6.
Discuss three requirements for a credit agreement in terms of the Act.
7.
What is the "cooling-off" period?
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CHAPTER FOUR
NEGOTIABLE INSTRUMENTS
Learning Outcomes
On completing this chapter, you should be able to:
•
Explain what a negotiable instrument is
•
Identify a negotiable instrument
•
Apply the rules in relation to negotiable instruments
•
Discuss the requirements of a negotiable instrument
4.1. INRODUCTION
Please note that all sections of chapter 25 of the prescribed textbook are examinable
A negotiable instrument is a document that replaces cash money. Negotiable
instrument originated from business practices that arose during the Middle Ages and
were created by merchants who were faced with the problem of carrying large sums
of cash to pay for goods. The solution was to use a simple written contract that had
unique legal features that allowed it to operate in a similar manner as cash.
In South African law, the Bills of Exchange Act 34 of 1964 is the statute that sets out
the law in respect of cheques, bills of exchange and promissory Please notes.
Examples of negotiable instruments
A commercial paper is an instrument that embodies contractual rights, and the
possession of the instrument is required to enforce the rights contained in it. Although
negotiable instruments (bills, cheques, promissory Please notes, certain bearer
debentures, bonds and share warrants) are categorised as commercial paper, not all
commercial papers are negotiable instruments. Examples of commercial papers that
are not negotiable instruments include bills of lading and share certificates.
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Some negotiable instruments can be characterised as instruments of payment (bills,
cheques and promissory Please notes) whereas others can be seen as instruments
of investment (debentures, bonds and share warrants).
Characteristics of Negotiable Instruments
Basic characteristics:
•
Simplicity of transfer
•
The possibility of transfer free from equities
Reasons for the development of this type of instrument:
•
Beginning and subsequent increase of commercial trade in Europe.
•
It became economically practical to use a bill to effect payment because it was
safer than money, and
•
It made the process of effecting payment less time-consuming
Simplicity of Transfer
•
A common characteristic of bills, cheques and promissory Please notes is :that they and the rights embodied in them can be transferred from one person
to another without the need to comply with difficult and cumbersome formalities.
They can generally be transferred from one to another either by delivering them
to the recipient, or by signing them first before delivery. Whether or not it needs
to be signed before it is delivered depends on whether it is an order or a bearer
instrument.
Example:A buys a fridge from B for R2 000 and pays the amount by cheque. A hands the cheque
to B. B can do one of two things
(1) B can take the cheque to the bank and receive R2 000; or
(2) B can use the cheque to pay a third party for goods or services received.
Assume that B decides to use the cheque to pay for food that he has purchased at C's
shop. If the cheque is payable to bearer, it means that B can simply hand over the
cheque to C and C will become its holder. However, if the cheque is payable to order,
B first has to sign the cheque and then deliver it to C. C then has the same two choices
that B has.
Transfer free from equities
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It is a basic principle in our law that one cannot transfer a better title to another person
than the title one has oneself. Law of negotiable instruments creates exception to this
rule, which is based on commercial reality. Negotiable instruments will only be used
as a method of payment if the person who takes the instrument as payment for a debt
obtains ownership and full title to the instrument in the same way he would have if
payment was made with cash.
In applying this to negotiable instruments, it means that the person who takes the
negotiable instrument in good faith acquires ownership of the instrument, even though
the person from whom he received the instrument has no title or a defective title to the
instrument. In other words, such a person derives his title from the instrument itself
and is not subject to defences that could be raised against his predecessor's title.
However, negotiable instruments display characteristics that are different to cash. It
would defeat the very purpose of using negotiable instruments if negotiable
instruments had similar consequences to cash in all circumstances. From the historical
overview of negotiable instruments highlighted in our discussion, you can see that
these instruments were introduced partly as a response to the hazards and
inconvenience of physically transporting money across vast distances. Thus,
negotiable instruments had to display characteristics that made them “safer” than
cash.
For further information read Chapter 25 of the prescribed textbook.
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Self - Assessment Questions
1. Determine the essential elements of a cheque.
2. Outline the parties to a bill of exchange, a promissory Please note, and a cheque.
3. What are the nonessential elements of a cheque?
4. A client approaches you and asks you to advise him on the alternative ways in
which a cheque may be crossed and /or marked so as to provide the drawer, the
drawee and the holder with security. How would you advise them?
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CHAPTER FIVE
INTELLECTUAL PROPERTY
Learning Outcomes
On completing this chapter, you should be able to:
•
Understand the concept of Intellectual Property
•
Discuss the laws that govern Intellectual Property in South Africa
•
Explain the concept of a copyright,
•
Discuss the requirements for registering of a copyright
•
Explain the concept of a Trademark
•
Discuss the requirements for registering a trademark
•
Understand the concept of Patents and the requirements for its registration
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Intellectual Property
Please note that all sections of chapter 18 of the prescribed textbook are examinable
5.1
Introduction
Intellectual property is an intangible asset that consists of human ideas and
knowledge. As such the protection of these “creations of the mind” such as trade
secrets, inventions, broadcasts and literature occurs where the holder of this right has
protection against unauthorised use of his creation. Intellectual property refers to all
legislation concerning patents, designs, trademarks and copyright protection. It is
meant to protect the intellectual property of legal entities, as intellectual property can
also carry significant value and is thus vulnerable for exploitation by outside parties.
With the exception of copyright, intellectual property law in South Africa requires for
this property to be registered in order to qualify for protection.
5.2.
National and International Laws
Intellectual property is regulated nationally by the following acts:
•
The Copyright Act 98 of 1978
•
The Patents Act 57 of 1978
•
The Trade Marks Act 194 of 1993
Patents
In terms of the South African Patents Act No. 57 of 1978, a patent may be granted for
any new invention that involves an inventive step and that is capable of being used or
applied in trade or industry or agriculture. A patent grants exclusive rights for an
invention, providing the patent owner with the right to decide on how the invention can
be used by others. In exchange for this right, the patent owner discloses technical
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information about the invention to the public. A South African patent may be granted
for an invention that is new, inventive, and useful. If your invention meets these three
requirements, subject to certain exclusions, a patent may be granted.
Trademarks
The Trade Marks Act 194 of 1993 (“the Trade Marks Act”) and the pursuant
Regulations defines the mark used or proposed to be used by a person in relation to
goods or services for the purpose of distinguishing those goods or services from the
same kind of goods or services connected in the course of trade with any other person.
According to the South African trademark law you can register your unique mark to
protect your business interest from being exploited and potentially harmed through
misuse by unauthorised entities.
Once you have registered your trademark, the South African trademark law requires
you to renew this every ten years for it to remain in force. However, provided you
continue renewing your trademark registration in South Africa, your rights to the
trademark may last indefinitely.
Copyright
The Copyright Act No 98 of 1978 provides that the following works, if they are original,
are eligible for copyright: literary works, musical works, artistic works, cinematograph
films, sound recordings, broadcasts, programme-carrying signals, published editions
and computer programs. The rights that creators have over their literary and artistic
works. Works covered by copyright range from books, online content, music, paintings,
sculpture and films to computer programs, databases, advertisements, maps and
technical drawings. In South Africa, copyright does not have to be registered.
Copyright vests in the author of a work once the work is created in a material form.
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SELF-ASSESSMENT QUESTIONS
1.
What is Intellectual Property?
2.
Explain the laws related to Intellectual Property.
3.
Explain the concept of Copyright
4.
What are the requirements for registration of a Copyright?
5.
What is the duration of a copyright acquisition?
6.
Explain the concept of a Trademark
7.
What is the process for registration of a Trademark?
8.
Explain the concept of a Patents
9.
What are the formalities for registering a Patent?
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CHAPTER SIX
COMPETITION LAW
Learning Outcomes
On completing this chapter, you should be able to:
•
Understand the purpose of The Competition Act
•
Discuss the practices that will directly or indirectly restrict competition.
•
Describe the composition of the Competition Board
•
Understand how restrictive practices, acquisitions, and monopolies are dealt
with.
COMPETITION LAW
Please note that all sections of chapter 22 of the prescribed textbook are examinable
6.1. The Competition Act no. 89 of 1998
The Competition Act of 1998 came into effect on 1 September 1999 and prohibited
several practices, such as, restrictive horizontal practices, restrictive vertical practices,
and abuses of a dominant position. In terms of the Act, these prohibited practices were
to be investigated by the newly formed Competition Commission, an independent and
impartial body responsible for, amongst other things, to investigate and evaluate
alleged prohibited practices and refer matters to and appear before the Competition
Tribunal, a tribunal of record with jurisdiction throughout the Republic of South Africa.
In terms of procedure, the Act provides that the Competition Tribunal must conduct its
hearings in public in a speedy manner and in accordance with the principles of natural
justice and may conduct its hearings informally or in an inquisitorial manner. The
Tribunal may, subject to its own rules of procedure, determine any matter of procedure
at a hearing with due regard to the circumstances of that case and the principles of
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LEGAL AND COMMERCIAL PRACTICES 201
natural justice, and may condone any technical irregularities arising in any of its
proceedings. The standard of proof for proceedings under the Act, other than
proceedings in terms of section 49C or criminal proceedings, is on a balance of
probabilities, and written reasons for its decisions must be publicly issued. To ensure
further procedural fairness, the Act provides for judicial review of the Tribunal’s
decisions by the Competition Appeal Court which has the power to review any decision
of the Tribunal or consider appeals arising from the Tribunal.
Self- Assessment Questions
1. What is a restrictive practice?
2. Explain six ways in which competition may be restricted.
3. What is an acquisition and how can it restrict competition?
4. What are the functions of the Competition Board?
5. What does the Board have power to investigate?
6. What actions can be taken by the Minister to deal with a restrictive practice?
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LEGAL AND COMMERCIAL PRACTICES 201
BIBLIOGRAPHY
TEXTBOOKS
Heinrich Schulze, Tukishi Manamela, Philip Stoop, Ernst Manamela, Eddie Hurter, ,
Boaz Masuku, Chrizell Stoop, General Principles of Commercial Law. (2019) Ninth
edition. Juta
Johan Scott, Steve Cornelius, Dumile Baqwa, Elizabeth De Stadler, Sieg Eiselen,
Roger evans, Tracy Humby, Michelle Kelly-louw, Isobel Konyn, Shawn Kopel,Tjakie
Naudé,Heidi Schoeman, Susan Scott, Nicola Smit, Philip Sutherland, Charnelle Van
De Bjl, Tanya Woker , The Law of Commerce in South Africa, second edition. 2014
Oxford University Press
Kerr AJ, 2004 The law of Sale and lease, Third edition, Durban LexisNexis
Kopel, S 2012 Guide to Business Law , Fith edition, Cape Town, Oxford University
Press
ARTICLES / PUBLICATIONS
Assessing the nature of competition law enforcement in South Africa DEON PRINS
LLM, Candidate, University of Cape Town Pieter Koornhof Lecturer, Faculty of Law,
University of the Western Cape.
INTERNET WEBSITES
https://www.svw.co.za/intellectual-property/
https://www.gov.za/sites/default/files/gcis_document/201505/act-34-1964.pdf
https://www.ncr.org.za/documents/CCMR/CCMR%202021Q3.pdf
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