Tuesday 22 March 2016

Assessment 1 Q & A


Question 1:                                                                                            [15]

Differentiate between the following concepts:-

(1)      A legal subject and a legal object;                                                  (3)

(2)      A natural and a juristic person;                                                       (3)

(3)      A duty and an obligation;                                                                (3)

(4)      Common law and customary law;                                                   (3)

(5)      A co-operative and a company;                                                      (3)

 

Q 1

1.1 legal subject = rights and duties,

legal object = does not have rights and duties but monetary value

 1.2 natural person = all human beings that has legal personality,

juristic person = is an entity created by natural persons with intention to create rights and duties separate from the founders.

1.3 duty = a responsibility to perform according to the terms & conditions of the contract

Obligation = legal tie between legal subjects recognised by law created by source of obligation that creates rights and duties

1.4. Common law = Unlike most European continental legal systems, SA law is not codified:

    • It is drawn from various authoritative sources
    • Such as statutes (legislation) and decided cases
    • Occasionally also Roman and Roman-Dutch law.

Customary law= Does not consist of written rules but develops from the habits of the community and is carried down from generation to generation

A customary rule will be recognized as a legal rule when:

It must be reasonable

It must have existed for a long time

It must be generally recognized and observed by the community

It must be certain and clear

1.5 Co-opertaive = A co-operative is:

         * an independent association of persons who join forces to

         * meet their economic, social and cultural needs and aspirations

         * through a jointly owned and democratically controlled enterprise, organised and operated on co-operative principles.

         The co-operative provides services and products to its members.

         Profits, known as surpluses in a co-operative, are divided among members in relation to the amount of the business each member did with the co-operative.

Company = is a juristic entity created by natural persons to restrict the shareholders personal liability

 

Question 2:                                                                                            [15]

2.1     Define and differentiate between a primary, secondary and tertiary co-operative                                                                                                (5)

u A primary co-operative’’ means a co-operative formed by a minimum of five natural persons whose object is to provide employment or services to its members and to facilitate community development.

u A secondary co-operative’’ means a co-operative formed by two or more primary co-operatives to provide sectoral services to its members, and may include juristic persons.

u A tertiary co-operative’’ means a co-operative whose members are secondary co-operatives and whose object is to advocate and engage organs of state, the private sector and stakeholders on behalf of its members, and may also be referred to as a cooperative apex.

         

2.2     Discuss the liability of members of a co-operative.                         (5)

The liability of a member of a co-operative is limited to an amount equal to the nominal value of the shares, for which the member has not paid, that the member holds in the cooperative.

 

2.3     List the essential elements that are required in order for a contract to be valid.
(5)
a)    Contractual capacity

b)    Agreement

c)     Formalities-must comply with formalities required by law.

d)    Certainty – the contract must be clear & certain.

e)    Possibility of performance –performance expected from each party must be possible.

f)      Legality –you cannot hold one to contract that requires them to do something illegal.

 
 

Question 3:                                                                                           [20]

Mr. Smith sells his beautiful thoroughbred horse, THE STALLION, to Mr. Scott. They agree on a purchase price of R1000 000. Included in the price is THE STALLION’S grooming equipment and saddle. Read the cases narrated below and identify the form of breach in question and the most suitable remedy for the breach. Also explain why you think the remedy you have identified is the most appropriate.

(1)  Before delivery of the purchased items, Mr. Scott informs Mr. Smith that he has changed his mind and that he no longer wants to purchase THE STALLION;                                                                                                         (5)
 

Form of breach = repudiation

Any behaviour by a party to the contract indicating his intention not to honour the contract.

Entitled to normal remedies = cancel contract, sue for specific performance and damages and interest if incurred.

 

(2)  On delivering THE STALLION, Mr. Scott is not ready to receive the horse because he had not mended his farm fence. Mr. Smith has to take the horse back and wait for Mr. Scott to accept delivery of the horse well after the due date for delivery.                                                                                       (5)

 

Form of beach = Mora Creditoris

The creditor causes the debtor’s performance to be delayed.

Specific performance, damages and interest

 

(3)  On delivery of THE STALLION Mr. Smith informs Mr. Scott that the saddle and grooming equipment that formed part of the purchase price was stolen.                                                                                          (5)

Prevention of performance = debtor cannot render performance

Cancellation of contract and damages

  

(4)  THE STALLION is delivered and Mr. Scott pays Mr. Smith with counterfeit money.                                                                                                     (5)

Positive Malperformance = debtor tenders improper performance 

Specific performance / cancellation and damages

 

THE END

Monday 7 March 2016

Information relating to Assessment 1


CCDL 311

Information relating to Assessment 1.
Date: 15 March 2016
Venue: A1-10
Marks: 50
Duration : 60 minutes

Please note that Nagel et al, Commercial Law, 5th ed is the prescribed textbook for this module. Notes and power point presentations provided to students are additional and purely for purposes of assisting students in preparing for the assessment/s and examination.

 
Module 1:

Please refer to:-

- The power point presentation titled “Basic aspects of SA law”;

- Chapters 1& 2 of the prescribed text;

- Notes and slides during class.

 

Module 2:

Please refer to:-

- The Co-operative Act 14 of 2005;

- Power point slides “What is a Co-operative”

- Notes and slides during class.

 

Module 3:

Please refer to:-

-        Chapters 3-8 of the prescribed text

-        Power point slides “ Basic Principles – law of contract”

-        Notes and slides during class.

Module 4:

Please refer to:-

-        Chapters 9 of the prescribed text

-        Power point slides “ Breach of Contract”

-        Notes and slides during class.

 

 

 

 

Assessment 1 : 2015


Class Test for Commercial Law for Cooperatives 22 April 2015 (CCDL311)

Duration: 1 Hour and 30 Minutes

Instructions:

·       Answer all questions

Question One

Explain the differences between the following words/terms in your own words:

(a)       Law and morality;                                                                                                   (2)

(c)       A legal subject and a legal object;                                                                        (2)

(d)       A natural and a juristic person;                                                                            (2)

(e)       A duty and an obligation;                                                                                      (2)

Question Two

Explain how each of the following is a source of South African Law:

·       Constitution;                                                                                                            (2)

 
·       Legislation;                                                                                                               (2)

 
·       Roman-Dutch Law;                                                                                                 (2)
 

·       Judicial precedent;                                                                                                 (2)

 
·       Customary law;                                                                                                      (2)

 
·       Common law                                                                                                                                                                                        

 

Question three

Z , a cattle rancher and successful businessman sells his stud bull to Y, a neighbouring farmer  who runs small butcheries in the district for a purchase price of R7 000. Identify the breach, the party who commits the breach and the obligation to which the breach relates in the following situations:

- Before delivery of the bull, Z calls Y and tells him that he has changed his mind; his bull is not for sale after all.                                                                                 

When Z delivers the bull to Y, Y is not ready to receive it because he had not mended his farm fence. Z has to take the bull back and wait for Y to accept delivery of the bull well after the due date for delivery.                                                                   

- Z has visitors from Thailand who like bull meat and he slaughters the bull for them. He tells Y he will have to refund him.                                                              

The bull is delivered, but it is a young and emaciated one which is not the one Z pointed out to Y during the sale negotiations.                                                                   

Question Four

Read the cases narrated below and identify the form of breach in question and the most suitable remedy for the breach. Also explain why you think the remedy you have identified is the most appropriate.

(a)   Nkemenkeme sells 100 bags of maize to Nomfuneko. Upon delivery, about 40 of the bags have rotten and mouldy maize which cannot be used. Nomfuneko is very angry about this and approaches you for advice. Advise Nomfuneko.                                                                              (4)

 
(b)   You arrange a graduation party and you conclude a contract with your neighbour in terms of which she will bake and deliver a cake at least 20 minutes before the graduation party starts. It is now 2 hours after the graduation party has started and your neighbour has not delivered the cake. She cannot be reached on her cell phone which is now on voicemail. What form of breach of contract has your neighbour committed and what is the appropriate remedy for you? Why do you think this remedy is appropriate?                                                                                               (4)
  TOTAL MARKS FOR TEST 50

Friday 26 February 2016

Cooperatives

What is a Cooperative?

Globally co-operatives are broadly defines as autonomous  associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprises.



What is a member's liability?

The liability of a member of a co-operative is limited to an amount equal to the nominal value of the shares, for which the member has not paid, that the member holds in the cooperative.
 
Benefits of a Co-op?
 
uCo-operatives are community enterprises
uCo-operatives promote democracy
uCo-operatives build open markets
uCo-operatives raise human dignity
uCo-operatives are systems for development
Categories of co-ops?
uA primary co-operative’’ means a co-operative formed by a minimum of five natural persons whose object is to provide employment or services to its members and to facilitate community development.
uA secondary co-operative’’ means a co-operative formed by two or more primary co-operatives to provide sectoral services to its members, and may include juristic persons.
uA tertiary co-operative’’ means a co-operative whose members are secondary co-operatives and whose object is to advocate and engage organs of state, the private sector and stakeholders on behalf of its members, and may also be referred to as a cooperative apex.
Principles of Co-ops ? Section 3
uVoluntary and open membership: recognizes that co-operatives are
voluntary organizations, open to all persons able to use their services
and willing to accept the responsibilities of membership, without
gender, social, racial, political or religious discrimination;
uDemocratic member control: recognizes that co-
operatives are democratic organizations controlled by
their members, who actively participate in setting their
policies and making decisions;
uMember economic participation: recognizes that
members contribute equitably to, and democratically
control, the capital of their cooperative.
uAutonomy and independence: recognises that co-
operatives are autonomous self-help organizations
controlled by their members. If they enter into agreements
with other organizations, including governments, or raise
capital from external sources, they do so on terms that
ensure democratic control by their members and maintain
their co-operative autonomy;
uEducation, training and information: recognizes that co-
operatives provide education and training for their
members, elected representatives, managers and
employees so they can contribute effectively to the
development of their co-operatives
 
uCo-operation among co-operatives: recognizes
that co-operative serve their members most
effectively and strengthen the co-operative
movement by working together through local, national, regional and international structures;
Concern for community: Co-operatives work for the sustainable development of their communities through policies approved by their members.
 
Values of a Co-op?
uCo-operatives are based on the values of :
uself-help,
uself-reliance,
uSelf responsibility,
udemocracy,
uequality,
equity and solidarity. In the tradition of their founders,
co-operative members believe in ethical values of trust,
honesty, openness, social responsibility and caring for
others.
 
Types of Co-ops?
uCo-operatives are basically classified according to their type rather than their economic activity. Below is the clarification of the types of primary cooperatives found as outlined in the Schedule 1 of the Co-operatives Act No.14 of 2005.
 
Registration process
uBefore a co-operative can apply for registration, there
must at least be one preliminary meeting of interested
persons
uThe persons present at this meeting must adopt the
constitutions  (sec 13) of the co-operative and elect the
first directors of the co-operative
uAfter this meeting, the group must then submit an
application for registration to the Registrar of Co-
operatives
uThe minimum number of members who must support
the application is different for different levels of co-
operatives:
uPrimary co-operative – at least five people
uSecondary  co-operative – at least two primary co-
operatives
uTertiary co-operative – at least two secondary co-
operative
uA very simple definition of a co-operative would be
to say it is a business where a group of people get
together voluntary to address their common needs. 
uA co-operative is a distinct form of enterprise that
provides services and/or products to its members.
Profits, known as surpluses in a co-operative, are
divided among members in relation to the amount
of the business each member did with the co-
operative.
uBy registering a co-operative, you are creating a
legal entity with certain powers to act on its own and
certain responsibilities. Before registering a co-
operative, take note of the important record-
keeping that need to be done by a co-operative.
uBefore you decide to register a co-operative you
need to have a formation meeting to decide on
common purpose and agree to register a co-
operative.  At the formation meeting the members
have to decide on the form and type of co-
operative. There must be at least five founding
members (people) in order to form a primary co-
operative.  Co-operatives have certain principles,
and are expected to include certain values in all the
work that it undertakes.  Click on the links below for
further detail:
 
uBefore registering a co-operative, a formation meeting needs to be held with all persons
that are interested in establishing the co-operative.
uThe Chairperson outlines the aims and objectives of the proposed co-operative
uThe Chairperson answers all the arising questions
uThe Chairperson invites everyone to join
uThose interested should be given an application form for Membership to complete
uThe persons that have completed the above-mentioned application form decide how
many persons will be required to manage the co-operative
uThe members will then elect the board of directors (the board of directors will be the
management or steering committee of the co-operative)
u Also discuss and agree on the following:
uThe Objectives (exactly what the co-operative will do)
uThe equipment, premises and other materials needed by the enterprise
uWhere will the premises (co-operative office) be located
uHow will the co-operative be financed? How will the funds be obtained?
uDraw-up an initial business plan
uChoose a name for the co-operative (propose and choose alternative names).
uThe constitution of a Co-operative is the document which contains all the rules for how a
Co-operative should be structured and managed. The constitution should include:
uOfficial document - Procedures and Regulations in the Constitution
uMeetings
uMembership
uGeneral Matters
uThe Annual General Meeting (AGM)
uThe Board of Directors;
uDecision making
uManagement
uFinances
uAny other rules that agree with the Co-operative principles
uEvery member has to read the constitution of the Co-operative carefully and understand
all the regulations in it.  Alternatively, the Board of Directors must explain all the rules of the
constitution to the members and ensure that they understand them.
uCIPC can provide you with a model constitution especially designed for co-operatives. 
You may use this model for your own co-operative or amend it to suit the requirements of
your own co-operative.