Weeks 1-2 - Introduction & Fiduciary Law

Question 1

what is legal status?

Answer 1

ability to complete legal acts which have legal consequences

Question 2

what is a common law juristic person?

Answer 2

a group of people who act though they are a company despite not being registered in terms of generally enabling statute

Question 3

how does a comm law JP work?

Answer 3

• cannot make a profit unless registered (social club, comm hall)
• treated as one if they consistently behave as one

Question 4

what is a statutory juristic person?

Answer 4

created by statute through specific legislation or generally enabling structures

Question 5

when will a company be recognised a separate legal person?

Answer 5

ito the Companies Act s19, from the date & time that it is registered

Question 6

until when will a JP exist?

Answer 6

continuously until its name is removed from the companies register

Question 7

which legal capacity/powers does a JP have?

Answer 7

all those of an individual, except to the extent that:

• it is incapable of having that power / capacity (marriage, adoption)
• the MOI provides otherwise

Question 8

key features of a JP?

Answer 8

• ltd liability
• assets/profits belong to the company
• can contract with members and acquire rights/duties sep from members

Question 9

describe a fiduciary relationship?

Answer 9

the fiduciary has the duty to hold a legal/ethical rel of trust with one or more parties and take care of money/assets for them

Question 10

what is the standard of conduct of a fiduciary?

Answer 10

• above that of a casual business person

- act in best int of beneficiary (avoid self-dealing and conflict of int)

Question 11

characteristics of a fid relationship?

Answer 11

1) scope for exercise of a power
2) power can be used to affect beneficiary’s legal interests
3) vulnerability to the exercise of the power

Question 12

nature of fiduciary duty?

Answer 12

• delictual duty of care

- committing delict creates obl to compensate

Question 13

what is a delict?

Answer 13

wrongful or blameworthy conduct which causes harm to a person

Question 14

elements of a delict?

Answer 14

• fault
• loss
• wrongfulness
• causation

Question 15

what causes fault in delict?

Answer 15

failure to exercise due care

Question 16

what is an agency contract?

Answer 16

a contract in terms of which one person (A) is authorized and usually required by another (P) to contract/negotiate a contract on P’s behalf with a third person

Question 17

duties of the agent?

Answer 17

• perform the mandate
• be honest, show good faith
• due care
• act in accordance with P’s instructions
• allow inspection of books to render account to P

Question 18

duties of the principal?

Answer 18

• pay A the agreed remuneration if mandate is substantially performed
• reimburse A for exp incurred
• indemnify A for all losses suffered as a result of mandate execution

Question 19

what requirements must the principal meet before an agent can act on its behalf?

Answer 19

• principal must exist and must have contractual capacity

Question 20

agent requirements to act as an agent?

Answer 20

• have at least ltd con cap
• have authority to perform from P
• make it clear to third party that they act for a P but need not disclose Ps name

Question 21

what if A fails to disclose the existence of P?

Answer 21

A may incur liability ito contract

Question 22

commercial adv of empowered agents?

Answer 22

• do not need to enter a contract personally
• may authorize a representative
• they are necessary for comm JPs to function properly

Question 23

if A acts with authority?

Answer 23

• contract will not be with 3P and A, only 3P and P. A will incur not rights/obl ito of contract with 3P

Question 24

five ways for A to be authorized?

Answer 24

• express
• implied
• ratification
• ostensible/apparent
• auth by operation of law

Question 25

when will A’s authority be terminated?

Answer 25

• mutual consent of P and A
• revocation by P / renunciation by A
• insanity/insolvency of P
• death of either
• due performance by respective obligations