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Business Law > BER 210 Exam > Flashcards

BER 210 Exam Flashcards

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1
Q

What is a law?

A

-Rules to obey
-Enforced by the state
-Peremptory or regulatory

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2
Q

What is a right?

A

Legally protected interests enforceable against everyone

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3
Q

What are the different types of rights?

A

-Real rights
-Personal rights
-Intellectual Property Rights
-Personality Rights

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4
Q

What is a contract?

A

An agreement that creates an obligation/obligations between the parties involved in the agreement

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5
Q

What is an obligation?

A

It consists of a right and corresponding duty

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6
Q

What are the foundations of a contract?

A
  1. Freedom of contract
  2. Sanctity of contacts (pacta sunt servanda)
  3. Good faith (bona fides)
  4. Privity of contract
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7
Q

What are the requirements for a valid contract?

A
  1. Consensus
  2. Contractual capacity
  3. Legality/Lawfulness
  4. Possibility of performance
  5. Certainty
  6. Formalities
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8
Q

What is contractual capacity?

A

Refers to the competences to create rights and duties by concluding a contract w/ another person

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9
Q

Ppl w/o contractual capacity

A

-Mentally ill ppl
-Infants (under 7yrs)
-Ppl under the influence of ‘cohol/drugs

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10
Q

Ppl w/ limited contractual capacity

A

-Minors (7-18yrs)
-Married ppl
-Prodigals
-Insolvent ppl

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11
Q

Ppl w/ full contractual capacity

A

Everyone outside the above listed except criminals

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12
Q

What is breach of contract?

A

-When 1 (or both) parties fail to honour their contractual obligations
-When a party refuses/fails to perform as they agreed to

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13
Q

What are the forms of breaches of contracts?

A
  1. Delay by debtor (mora debitoris)
  2. Delay by creditor (mora creditoris)
  3. Positive malperformance
  4. Repudiation
  5. Performance rendered impossible/Prevention of performance
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14
Q

What is positive malperformance?

A

-When a debtor performs but poorly/incompletely/defectively

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15
Q

What’s repudiation?

A

-When (w/o lawful cause) a party claims they are no longer bound by the contract

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16
Q

What are remedies for breaches in contract?

A
  1. Special performance
  2. Cancellation
  3. Contractual damages
  4. Interdict
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17
Q

What is an interdict?

A

A court order preventing the wrongdoing party from breaching

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18
Q

What are contractual damages?

A

Innocent party can sue if financial loss is suffered

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19
Q

What is special performance?

A

When a court orders person in breach to do what they promised to do

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20
Q

Formalities for a contract

A

-The general rule of common law = no
formalities are required.
-Parties can however can have agreed upon formalities
-There are certain statutory requirements
>eg: contracts must be in writing, signed, or registered on the Deeds Registries system
-No formalities are necessary for the cancellation of a contract, or for the re-instatement of a cancelled contract, unless agreed upon by members

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21
Q

What is a contract of sale?

A

A contract which the seller undertakes to deliver the Merx to the buyer and the buyer in exchange agrees to pay the seller the purchase price.

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22
Q

Requirements (essentialia) for a valid COS

A

Essentialia of COS include
-Intention of seller is to sell and buyer to buy
-Reach consensus on the thing sold (merx)
-Reach consensus on purchase price

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23
Q

Describe the Merx (thing sold)

A

For valid Cos, Merx must be agreed on
-Merx must be definite and ascertainable
-Merx is definite if its mentioned by name in agreement
-No contract will come into being if Merx is illegal

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24
Q

Formalities for valid CoS

A

-General rule = No formalities required
-However, certain statutory formalities are required for valid contract of purchase and sale of immovable property
-Partners may also agree on certain formalities (signatures, witnesses etc)
-Formalities required by law, partners may not exclude, change or abandon

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25
Q

Important concepts for contract of sale of land

A

-Alienate
-Land
-Deed of alienation

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26
Q

Aim of formalities for CoS of land

A

-to prevent disputes regarding the contents of the contract
-to prevent ant uncertainties regarding contents of contract
-to prevent malpractices

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27
Q

What does the Alienation of Land Act 68 of 1981 state?

A

That the sale of immovable property be reduced to writing and signed by both parties or their agents

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28
Q

Formalities of CoS of land

A

-Contract must be written
-Contract must be signed

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29
Q

In the written part (of COS of land) what should be present

A

-Object to be sold must be clearly identified
-Purchase price must be clearly defined
-Parties must be clearly described
-Alteration of written contracts (must comply w/ formalities)
-Termination and re-instatement of written contract

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30
Q

What is the essentialia of a contract of lease?

A

Contract of lease exists when parties reach consensus on
-Property leased
-Temporary use and enjoyment of the property
-Lessee pays lessor determinable amount of rent

31
Q

Formalities of contract of lease… according to common law

A

-In terms of Common law
»No formalities required for contract of lease to be valid

32
Q

Duties of the parties are determined by…

A

-Contents and extent of these rights and obligations are determined by the contracts itself
-Also determined by CPA, Rental Housing Act and common law

33
Q

Duties of the parties in terms of Section 14 of CPA… regarding lease

A

-Expiry and renewal of fixed-term agreements
-Lease shouldn’t be more than 24 months
-Should be able to cancel within 20 business days

34
Q

Duties of the parties in terms of the Rental Housing Act (lease)

A

-Tenant has right to privacy … if there is to be an inspection, reasonable notice must be given
-Landlord has duty to provide tenant w/ dwelling in habitable condition and maintaining existing structures
-Landlord may not discriminate against tenants in advertising, in negotiating lease or during term of lease
-Landlord has right to recover unpaid debt after obtaining a ruling by the Rental Housing Tribunal or an order of a court of law

35
Q

Duties of Lessor

A

-Deliver the property
-Maintain the property
-Pay taxes
-Provide undisturbed use and enjoyment of the property

36
Q

Remedies for Lessee

A

-Specific performance
-Cancellation of lease
-Claim for damages
-Claim for reduction in rent

37
Q

Duties of lessee

A

-Pay rent
-Protect and use property in proper manner
-Return property in proper condition on expiry of lease

38
Q

How can a lease be terminated?

A

-Effluxion of time
-Notice/Agreement
-Death
-Insolvency
-Cancellation
-Dissolution of partnership

39
Q

Formalities of contract of lease… according to CPA

A

-In terms of CPA
»Minister may require certain contract to be in writing
»Written agreements are valid even if lessee did not sign
»Lessor must provide lessee w/ a free copy
»Agreement must be in plain language

40
Q

Formalities of contract of lease… according to Rental Housing Act

A

-In terms of the Rental Housing Act
»Tenant can insist on written contract
»Must include certain minimum info (if not) landlord commits offence
»Amendment Act - Contract must be in writing even if tenant has not requested it to be
»Minister - pro forma lease in 11 languages
»Long term leases must be registered in the Deeds Office

41
Q

If use and enjoyment is disturbed, lessee can…

A

…obtain interdict to have lessor refrain from interfering
…obtain spoliation order to have possession returned

42
Q

Define agency

A

A legal situation where 1 person is lawfully authorized to act on behalf of another person and the latter acquire all rights and duties in terms of the performed act

43
Q

An agent is…

A

…the person who has authority to represent the other person

44
Q

The principal is…

A

…the person who authorizes the agent to act on their behalf and who then will acquire all rights and duties under the act performed on their behalf by the agent

45
Q

Define act of agency

A

Refers to the juristic act that the agent performs on behalf of the principal
EG: real-estate transactions, legal representation

46
Q

List sources of authority

A

-Contractual authority
-Ratification
-Implied authority
-Ostensible authority (estoppel)

47
Q

Define ratification

A

-Involved the tacit/express approval by principal after agent has already acted w/o having necessary authority/ acted outside confines of granted authority

48
Q

Requirements for ratification

A

-PPL must have existed when agent performed act
-PPL must have intention to ratify unauthorized act
-PPL must declare that they ratify unauthorized act
-PPL to ratify act w/in reasonable time after act is performed
-Act of agency must still be valid
-Agent must have completed act for PPL and not for themselves

49
Q

Define Ostensible authority

A

Based on theory that PPL created impression that agent had authority even tho they didn’t

50
Q

Requirements of Ostensible authority (estoppel)

A

-Intentional/negligent creation of impression by PPL
-Representation must be 1 that can reasonably be expected to mislead 3rd party
-3rd party must have been led to act due to impression

51
Q

Define scope of authority

A

-Refers to the extent of power the agent has
-defines range of actions and decisions agent is authorized to make

52
Q

Types of scopes of authority

A

-Express authority
>(granted in terms of writing or verbally)
-Tacit authority
>(authority given in unspoken way)

53
Q

Formalities for when granting authority

A

-General rule = does not have to comply w/ formal reqs
-When written authority is required its called “Power of attorney”
-Power of attorney must be written, signed and clearly state agents authority
-Power of attorney is legally required
>Purchase of land
>Transfer ownership of land/register mortgage
>For legal practitioner to lodge appeal in high court for PPL

54
Q

Termination of authority

A

-When agent completes given task
-When authority expires
-When PPL and agent terminate through mutual agreement
-When there is change in party status
-When PPL revokes authority

55
Q

Special types of PPL

A

-Non-existing PPL
-Undisclosed PPL

56
Q

Define non-existing PPL

A

-Pre-incorporation contract where a contract is concluded on the behalf of a company that does not exist yet
-Agent will be liable if company
>is not incorporated as planned
>after incorporation company rejects contract

57
Q

Special types of agents

A

-Brokers and intermediaries providing financial serv/advice
-Estate agents
-Auctioneers
-Company representatives

58
Q

Define credit agreement

A

-An agreement constitutes a credit agreement to which NCA applies if it qualifies as
>credit facility
>credit transaction
>credit guarantee
>or combo

59
Q

Define credit facility

A

An agreement constitutes a credit facility if the provider undertakes to supply goods/serv or to pay an amount to consumer to either
>defer payment of the cost of such good/serv or defer payment of any part of such amount
>bill the consumer periodically for any part of such costs/amount and any fee or interest is payable to the provider

60
Q

Difference btwn credit facility and installment agreement lies…

A

… in the transfer of ownership

61
Q

Define pawn transactions

A

Agreements in terms of which a party advances money or grants credit to another and takes possession of goods as security

62
Q

Define credit guarantee

A

An agreement constitutes a credit guarantee if a person promises to satisfy on demand any obligation of another consumer in terms of a credit facility or transaction

63
Q

Credit guarantees provide for

A

-Small credit agreements
>Eg: Pawn transactions
>Credit facility w/ credit limit of R15k or less
-Intermediate credit agreements
>Credit facility w/ credit limit above 15k but less than 250k
-Large credit agreements
>Eg: A mortgage agreement
>A credit agreement (bar pawn trans) w/ credit limit of more than 250k

64
Q

Transaction excluded from NCA

A
  1. Shareholder loan agreement btwn consumer and credit provider
  2. When parties are in a familial relationship
  3. Agreements where parties are not independent of each other
  4. Lease of immovable property
  5. Stokvels
  6. Policy of insurance
  7. Agreement where consumer is a juristic person w/ as asset value less than 1mil
65
Q

A credit agreement is unlawful if its inter alia…

A

-was concluded w/ an unemployed minor who was not assisted by a guardian
-is an agreement w/ a consumer subject to a court order holding them to be mentally ill
-results from negative option marketing
-was concluded by unregistered credit provider

66
Q

Formalities of credit agreement

A

-NCA obligigates provider to provide consumer w/ a free copy of a doc that records their credit agreement
-Copy must be in paper form or printable electronic form

67
Q

Rights and duties of parties in Pre-arrangement stage

A

-Adults, natural persons, juristic persons and associations of persons can apply to a credit provider
-Provider has right to refuse to enter into agreement w/ consumer on reasonable commercial grounds
On request of consumer, provider must advise consumer on reason for
>refusing to enter in credit agreement
>offering consumer a lower credit limit than applied for
>reducing existing credit limit
>refusing to renew expiring credit card/ similar credit facility

68
Q

Pre-agreement disclosure

A

-Provider must provide pre-agreement statement and quotation to consumer before entering contract
-Quotation should set out rights, duties and financial info
-Purpose = to enable consumer to make informed decision

69
Q

Rights and duties of parties during progress of credit agreement stage

A

-Consumer must disclose location of goods
-Statements of accounts
>Provider must deliver periodic statements to consumer

70
Q

Changes to the OG credit agreement

A

-Must comply w/ following otherwise void
>Change must reduce consumer’s liability;
>Consumer to sign/initial in margin opposite change;
>Change is recorded in writing and; or
-Oral change is recorded electromagnetically and reduced to writing

71
Q

How can a credit agreement be terminated?

A

-Credit agreement may be terminated in the following;
>Consumer terminated agreement exercising cooling off period
>Termination by consumer: right to settle in agreement
>Termination of agreement by consumer: surrender of goods
>Termination of agreement by credit provider

72
Q

Describe consumer right to the cooling off period

A

-Consumer can cancel w/in certain period of time as long as its done so w/o breach of contract
-May do so w/o a reason provided
-Must be w/in 5 bus. days after conclusion of credit agreement by way of written notice to provider and consumer to return goods/money (if they received any)
-Provider to refund consumer, but is allowed to make certain deductions

73
Q

Describe consumer right to settle a credit agreement

A

-No advance notice to provider is required
-W/ large agreement, early termination fee may be charged
-Termination charge = the interest that would have been payable for period = to the difference btwn 3month and the period of notice of settlement given by consumer (f any)

74
Q
A

Business Law (6 decks)

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