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