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Summary of 16 pages for the course Mercantile Law 193 at SUN (Merc Law summaries)
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IntroductionWhat is the law
Rules of Law & Other Laws
- Four Basic Types of Conduct Rules:
1. Rules of Religion
2. Rules of Individual Morality
3. Rules of Collective Morality
4. Rules of Law
- Only rules of law are legally enforceable through mechanisms of the power of
the state, courts & judicial process
- Boni mores: good morals of society; public policy which changes overtime
- Public policy is viewed as being constituted by our Constitution & foundational
values underlying it
- Areas of overlap between binding law & other rules
- Both morality & law regulate human conduct
- Law uses sanctions for deviation
- Morality uses sanctions & incentive for compliance
- Law and justice aren’t same – justice = fair play, fairness & equity
Role of Law within Business
- Rules of law take priority over rules of morality/religion
- Rules of law aimed at regulating human conduct (social or economic) so as to
create a peaceful & ordered society &to regulate civil society
- The law prescribes what people are not allowed to do, what they are allowed
to do and what they must do.
- Law guarantees certain freedoms
- Law determines how disputes can be solved through procedures applied by
independent institutions & mediation
- Companies must be registered in accordance to the Companies Act.
- Need local authority for a licence to trade
- Banks require some form of security to perform obligations & repay w/interest
- Methods of payment are regulated by law with serious consequences
- To provide for the risks of loss a contract of insurance is needed which must
meet certain validity requirements
- Employees appointed on service contract containing both the employer and
the employee’s rights and obligations
- Consumer protection laws as products have to meet certain standards
, - Insolvency Act regarding own business and debtors
- Management needs to identify need for legal advice & legal advisor can
determine legal risk & costs thereof.
- When agreement is to be concluded it’s essential an effective legal system
regulates transaction to see performance is secured/contract is cancelled in
breach of contract
- Effective legal system based on rule of law encourages business confidence.
- Non-compliance has legal consequences, affect business reputation,
professional negligence
Sources of Law
The Constitution of the Republic of South Africa
- Guarantees laws will be subject to test of freedom, equality & human dignity
- Constitutional sovereignty: Courts can strike down an act of parliament if they
feel it is not within the spirit of the constitution
- Preceded by the Interim Constitution, 1933
- Bill of Rights
Guarantees number of fundamental human rights
Applicable vertically (vs State) & horizontally (between individuals &
juristic persons) whereas many countries only apply vertically
All may be limited - Section 36 Limitation Clause
Rights comes w/responsibilities, so freedom of expression limited and
does not extend to hate speech/speech that causes harm
Right to: equality; assemble & to strike peacefully; freely choose a
trade, occupation and profession; fair labour practices; not be deprived
of property except in terms of law of general application; fair
administrative conduct; life; privacy; human dignity; religion; freedom of
speech; equality before the law; cultural rights; etc
Parliamentary Legislation (National Level)
- Parliament constituted by representatives of political parties elected
- Law is slow to react to change & statute is quickest to amend the status quo
- Parliament: most supreme legislator on national level but is subject to
scrutiny of the Constitution as the highest law of the land
- Parliamentary acts are most powerful source of law on national level & is
preferred over common law, court decisions & customary law.).
- Legislation is published in Government Gazettes available electronically
, Provincial Constitution & Legislation (Regional Level)
- Provincial legislature which may enact constitution for specific province and it
may legislate on “own affairs”
Subordinate Legislation (Local Level & Other)
- Legal rules can also be formulated by other bodies
- Delegated legislation is made by local councils, municipal councils, university
boards, health boards & ministers
- Subordinate: person/legislative body derives authority to legislate from an act
of Parliament & limited in sense that body can only act within the boundaries
of the authority provided by the authorising act.
- Ultra vires: legal rules which are outside the boundaries set by authorising
act may be declared invalid by court of law.
Court Decisions
- Constitutional Court: jurisdiction over constitutional matters & granted an
appeal in the public interest for matter to be heard
- High Court consists of divisions with one/more courts per province
- High Court: jurisdiction civil, criminal & constitutional matters (where a
fundamental human right is infringed) in their areas
- Magistrates courts (lower courts): limited jurisdiction over civil & criminal
- District courts: for smaller misdemeanours
- Regional Courts: for more serious matters
- Special courts: in matters of a specialised nature.
- Tribunals: presiding officer not a judge/magistrate but a specialist, plaintiff &
defendant act in personal capacities & not represented by legal counsel
- Statutory interpretation: reference to principles & rules provided by
legislator/ the courts.
- Stare decisis (stand by your decisions): extent to which court decisions are
binding determined by precedent system
- Ratio decidendi (reason for decision of a prior decision): court is bound to
this by same court/higher within jurisdiction until upturned by higher court
- Bound by decisions of Supreme Court of Appeal & Constitutional Court.
- Higher courts are bound by previous decisions of their own division
- Lower courts are bound by decisions of all higher courts
- Precedent system: ensures greater legal consistency,
certainty&predictability.
- When matter goes on appeal:
Appellant: party who lodges the appeal & will be referred to first
Respondent: party who opposes the appeal
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