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a. Improper compensation of legal practitioners: 7. Contracts prejudicial to freedom of trade: CONSEQUENCES OF ILLEGALITY:
- Contingency fees: no win, no fee. - Restraint of trade clauses: agreement limiting a parties
Contingency fee act: required in writing and a ability to engage with economic actiwity for specific 1. VALID, but unenforceable:
may charge 100% success fee, but total fee period in specific geographical area. Need to balance - Unenforceable= no claim for performance- ex turpi causa
not more than 25% of amount awarded. Pacta servanda sunt v parties right to freely engage in non orbitur action (ex turpi rule):
- Maintenance champerty: maintenance= economic activity. - “out of illegal cause – no action for enforcement
where somebody provides improper - Onus: MAGNA ALLOYS v ELLIS; BASSON v CHILWAN: onus arises.
assistance to another in order to conduct on party seeking to escape retraint of trade clause. BOP - Statute: COOL IDEAS v HUBBARD: builder buld
litigation and the party providing assistance prove that clause is contrarty to PP. other party bring house, but not register, thus not paid for work
has no legitimate interest. Sub category of evidence as to why their version is equally as he had done.
this is champerty= where you provide proboble.basson confirdmed position. - CL:bv gambling, valid ctr, but unenforceable
financial assistance to another party so that - BASSON v CHILWAN: Basson build busses in employment thus can’t claim enrischment
they can litigate with the idea that party ctr. 5 years the retraint- 2 years B started to work for - Valid= right to retain, no enrichment
providing asiistance shares in the amount competitor. LQ: is retraint against PP? 2. VOID and unenfoceble:
awarded by courts. • Community interest v parties interest: socciety’s - No claim for performance if ctr illegal.
- PWC v NATIONAL PATATO CORP: not illegal interest of members being economically - Ex terpi rule = no action for illegal ctr
champerty, depends on the purpose productive, balance exercise. Parties interest= - No exceptions to the rule
3. Contracts promoting crimes: formulated 4 wuestions to answer - Partial enforcement:severance of bad bits of ctr. Ctr
- EVERET v WILLIAMS: robbers regarding their 1. Does enforcer have a protectable interest? partially illegal.
share in robbery – court was like wtf ➢ Trade secrets/ confidential: usefu/ - Indirect enforcement: can’t claim performance, but
- BOE VANK v VAN ZYL: treatend mrs VZ under secret/ have economic value. can claim enrichment
duress if she not stand surety for son in law they ➢ Trade connections: fear of taking 3. Enrischment claim (Restitution):
take criminal action. Purpose was: sought for companies customers. - CONDTICTO OB TUREPEM VEL IUSTAM CAUSAM= “
amount due them them 2. Is the interest threatened by society? claim for restitution for n immoral or illegal purpose.
4. Contracts excluding delictual liability: 3. If threaten does it way up against - Claim restitution for transfers tainted by illegal or
- AFROZ HEALTHCARE v STRYDOM: Strydom had retrained’s interest being affected? immoral transfers.( If ownership never transferred,
operation and nurse negligent thus had to ➢ Duration of rtraint of trade/ area you can use rei vindication.)
amputate harm. Exception clause in ctr. Court to which it is applicable/ interest - This rule however subject to: PAR DELICTUM RULE:
said illegal if exception clause is excempt from weighed up. “if parties are in par delicto, the position of the def is
liability for intentional harm. In this case court 4. Other external aspects of PP relevant? stronger. Plaintiff barred from instituting enrichment
however found that the specific exception ➢ Bv net 1 fetal surgeon in sa. claim to cober performance. If equally tainted by
clause was not contrary to PP. - Found retraint unreasonable and against illegal the plaintiff wil fail. Both parties must be
- CPA limitations: PP, no trade secret in business. Not whown exually tained.
S51(1)(C)(I): BLACKLIST: clauses escape L for there is confidentiality or def breached - BRANDT v BERGSTEDST: COW illegal to sell on
gross negligence such.no intention that def could steal Sunday. Buyer can’t claim due to 1st rule or the 2nd
Reg44(3)(a):greylist presumed to be unfair: clients. The retraint was a an attempt to rule. Thus relaxation needed as seller has cow and his
clause escape for death or personal injury. monopoly the field of business. money. CASSIM case confirmed PP should take into
Reg44(3)(b): greylist: presumed for escape - Partial enforcement: onus on person wanting to partially account simple justice between man and man.
liability for a breach enforce the retraint of trade? Unresolved.\ - Factors to consider:
5. Contracts prejudicial to marriage institution: - Consequences/ remedies: if retraint is against PP= NOT 1. Relative enrichment of parties
2. Criminal sanction: not needed for additional
6. contracts prejudicial to freedom of testation: pactum VOID, just unenforceable. If not against PP= interdict or
punishment
successorium: limits freedom of testation as you say damages.
3. Moral turpides of parties: parties state of mind
upon death you will despose of their asset. 20
,1. Relevance of constitution in determining PP: Fairness and consumer legislation:
- BARHUIZEN v NAPIER: “PP rooted in constitution and underlying values” PP takes into account CPA:
fundamental human rights and values of constitution like HD, freedom, equality. - S48(1): prohibits seller from selling goods and services at an unreasonable/
- BREDENKAMP v STANDARD BANK: “PP values can be found elsewhere and not only in unjust price or terms that are unreasonable or unjust.
constitution” - (2): A term/ condition or agreement is that is unfair/unreasonable
- BEADICA v OREOGON TRUST: not always clear where the lin is to be drawn, acknowledges ubuntu. (a): excessively one sided infavour of person other than consumer
2. PP and fairness (values): (b) terms or agreements that are inequitable to consumer
- BRISLEY and BREDENKAMP both state that the test whether a ctr term or it’s enforcement is valid (c) misrepresentation
is against PP and not fairness and reasonableness.= the SCA (d) attention of consumer not drawn to certain terms
- BOTHA v RICH: dealt with fairness when looking at a ctr term= the CC Remedies: S53: only court can give these remedies. Either return of money or goods to
- Confusion as 1 is SCA and other is CC consumer or compensation to consumer
- NOW: BEADICA v OREGEON TRUST:
• Tenants had to take steps to renew the lease, failed to take such steps and lease terminated. Thus Various protectable interests:
trust sought to evict them. 1. State administration: ctr with curropt purposes limits offivials to do their work
• The leases were part of an economic empowerment plan so that the franchisers were enabled to and limits sate revenue.
conclude these franchisers by means of state assistance. Potential threat= if lease terminated it 2. Civil justice system:
could lead to knock on effect of the fanchise agreement. b. Conclusive proof syrtificate: clause proving that creditor may issue a
• BARKHUIZEN v NAPIER: bank terminating the ctr. Court in this case used fairness and certificate of indebtness which will constitute proof of debtors indebtness.-
reasonableness to establish wether a term or it’s enforcement is invalid. ABSTEIN case said you can’t have a clause which allows creditor to be the
• Beadicia judge said woah the test is not fairness or reasonablensss, but PP. fairness and sole judge of a debtor’s indebtness- against PP(creditor would be it’s own
reasonableness are not free floating principles. Theu inform the test for PP. judge). Where independent 3rd person issues such a certificate it would be
• Fairness has 3 functions: valid.
1) When applying PP test it’s considered c. Pactum commissoruim pledge: forfeits ownership if you default= invalid, BUT
2) Creative, informative and controlling function, underlying law creditor may include a clause to sell the object and use proceeds to settle the
3) Developenmtal role as required by the constitution. (assist with CL) debt and left over give back to debtor.
• Court said that pacta servanda sunt not only valuje in our law and can be overridden by other d. Parate executie clause: immediate realisation of an asset without court order.
values. Also do not have to establish a term or it’s enforcement is against PP because it result in (cession as security/mortgage bond/ notarial bond)
substantial harm to the public. - SA BANK OF ATHENS v VAN Zyl: paarate executie clasues are valid aslong
• As Barkhuizen said good reasons must be given for a term to be against PP. explain why. as not contrary to PP. test is: “consider tendency of the term” in this
• Thus: (1)on the facts the tenants did not provide good reason for not complying with the term set case security by way of cession was used to resort to self-help and thus
out. (nb to remember they wanted the court to declare that they did infact renew the lease even remove peoples right to access to court.
though they did not follow steps given) e. Time limits on instituting action: 3 years before prescription. These clauses
• (2)There was no evidence of the landlord snatching at a bargain. Did not terminate as he got a aimed at making prescription earlier.
better deal. - BARKHUIZEN v NAPIER: Insurance claim for vehicle instituted after 2
• (3)court disagreed that the enforcement of the termination would be against their right to equiliy years. Insurance raise special plea saying prescription as summon
as it would have a detrimental franchise agreement. served after 60 days. 2 arguments: (1)against PP= no, term not to short
• Court also said by declaring termination invalid it might have a knowck on effect for future people (objective approach), relationship between parties (subjective A)= no
as they would not want to do business with economic empowerment plans inequality bargaining poer as B driver BMW. (2) enforcement of term
• Minority: said fairness and reasonableness is an independent standard. Where a constitutional right or fair?= onus on ctr denier, time-bar to institute clause would be unfair as
value is implicated a person can go directly to fairness and reasonableness. Minority said good faith is he was in a coma and against PP(goodfaith)
- S44(3)(x-z): greylist terms; insurance regulations 6 moth period)
on it’s own, not used synonamously to reasonabless as in majority. Found that landlord had an
element of exploitation and had more sympathy for the empowerment plan.
19
, LEGALITY: a ctr or it’s STATUTORY ILLEGALITY: COMMON LAW ILLEGALITY:
enforcement is against statute When is a ctr statutory illegal: Test:
or the CL. - It’s a matter of statutory interpretation to - Against PP, public’s interest, good moral (contra boni mores_
determine (1) which ctr are prohibited and - SASFIN v BEUKES: all the above factors mean the same thing just different way of saying it.
Distinguish legality from:
(2) whether the particular ctr falls within the - Pp is a test for whether a term is valid, and for whether a term should be enforced.
1. Conclusion of contract:
ambit of these prohibited transactions. - First look if terms is legal (if not then look to PP), but is come to conclusion term is legal and
- Content of ctr is illegal
Consequences: depends on intention of legislature. therefore valid, we ask whether the term being enforced is against PP. (2 step)
at conclusion of ctr. X
1. Statue makes the consequences clear - BARKHUIZEN v NAPIER + BEADICIA v ORGEON TRUST: both confirmed this 2-step approach.
tells B to kill C
2. Consequences depend on intention of - BRISLEY: non-variation clauses may be valid, but it’s enforcement may make it invalid.
- The content itself is
legislator. THUS look at factors to determine: Application of CL illegality test:
illegal
factors considerations Intention of 3. Whose perspective counts in determining what PP is:
2. Manner of performance: legislator - Judges know of the issues people are experiencing and they are good at balancing conflict
- SA BANK OF ATHENS v Wording “shall or must” Likely invalidity rather than to side with one group. Politically-laden idea: no single group or interest
VAN ZYL: when
Penalty Fine or Fine= legal determine PP.
determining legality a attached imprisonment Imprisonment=invalid - NB that judges should have experience in society.
ctr tendency to conflict Impact on Harsh/necessary 4. PP is dynamic:
with statute or the CL is validity of invalidty/ - PP is progressive and what was in past may be no more.
considered. consequences - PP changes over time
- Look at the ctr or term of validity 5. What aspects of operation is examined? Look at tendency of ctr:
and it’s tendency to be enacted Fee/ amount Likely valid
- What is the tendency of the ctr. Does it tend to conflict with CL? Probable result is the focus.
in conflict with a for state payable
6. Courts apply PP rules sparingly:
particular rule revenue Liquor lisence
- POD: courts apply PP sparingly- very cautious to declare ctr provision or enforcement
3. Purpose of object: motive Innocent and Likely valid
unaware Likely invalid contrary to PP. courts do not want to be the destroyer of ctr agreements. Number of
- KENNEDY v STEENKAMP:
Intentionally considerations:
both parties were
contravene a. Principle of legality: not keen for a judge to say ctr term is against PP due to judge’s
involved in a illegal
protection Individual Likely valid personal view on something. SOP- not a courts job to make a new rule and say it must be
diamond transaction.
public Likely invalid followed. judges not judge arbitrarily they follow rules and standards.
- Content of ctr is fine, but
Transaction in freudem legis: (transaction in freud of b. Certainty: if courts declare ctr/ enforcement against PP, people will not know if their ctr
the purpose or the
law) can be enforced or not. This uncertainty in itself is unfair if you do not know. More
object is illegal. Bv koop
- Designed to look like something else in order to interference= less certainty
n axe om X dood te
circumvent a statutory prohibition. c. Pacta servanda sunt, freedom to ctr: underlying value that ctr must be enforced. Free to
maak. The purpose is
- Parties deliberately make it a ctr of sale when choose with who to ctr.
illegal. Both parties must
actually a ctr of lease in which omething is d. PRIDWIN principles, BUT BEADICIA limitations:
be aware of the illegal
prohibited. • principles= PP demand that free to conclude ctr must be honoured. Ctr against
purpose or object. Die
- NA in our law. Simply ask: (1) what the act CC or PP is invalid. PP is standard to determine wether a ctr is invalid. Both
sale tannie moet ook
prohibits (2) does ctr fall into the scope of the enforcement and Ctr must be inline with PP. onus on person alleging invalidity.
weet
prohibition? Only when harm is substantially incontestable and not dependant on arbitrary
4. Burden of proof:
Examples: jusge’s views it it term invalid.
- Party who raises the
Protection against harmful substances like narchotics • Limitations= PP not mots NB principle + need for substantial and incontestable
illegality must prove, BUT
or alcohol for child under 18. harm to public (last limitation to strict)
cours can also investigate
Economic interest: gambling • Other values: good faith, fairness/ reasonableness/ dignity for ctr partner
illegality if no one raise –
CPA: S1: blacklist term (terms favouring supplier over
MERO MUTU 18
consumer)= VOID
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