CML1004S
BUSINESS LAW 1
Part A: Overview of the South African legal system
• Law is the body of rules to regulate human conduct.
• Compliance with laws is not voluntary.
• Laws are enforced by the state.
• The law prescribe what people can and cannot do
• The law's primary purpose is to ensure order and justice in all spheres of the community
• Failure to comply with the law results in sanctions (penalties or other means of enforcement used
to provide incentives for obedience with the law)
• Morals are subjective and in uenced by di erent factors such as culture, religion, individuality
and community
• Compliance with morals is voluntary
• Law and morality can overlap.
• Laws may be considered as morally repugnant (o ensive to the mind i.e. abortion)
S. A is a constitutional democracy
Everyone gets a say, the people elect what they want. For the people by the people.
In order for the government to run smoothly, it must have those who make the law, who interpret and
apply the law and those who enforce the law. This is called the separation of powers between the
organs of state (any department of administration in the national, provincial or local sphere of
government)
Legislature makes the laws
examples: parliament
Executive enforces the law made by parliament.
examples: The President
Judiciary applies and interprets the law.
examples: a Judge in a court of law
LEGAL PERSONALITYS
Two types of persons
= natural persons (human beings)
= juristic persons (arti cial persons/entities/ companies).
• Persons are capable of holding rights and duties.
• Human beings acquire rights and duties upon birth till death
—> they are announced alive once the umbilical cord is cut and are able to live outside the womb
• Juristic persons are non-living persons that acquire rights and duties upon registration
—> when a business registers as a “company” it becomes a separate entity to the founder of the
business.
The business is now is own entity, it is able to be sued and sign contracts etc.
• If the owner dies the business continues to exist. (have perpetual succession)
—-> Central to juristic personality is the concept of separate legal personality
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, RIGHTS - legally protected interests
REAL RIGHT PERSONAL RIGHT
WHAT IS IT? Right you hold in a thing. Hold against a speci c person/ an
Enforced against anyone. enforceable against a speci c person.
e.g. a laptop e.g. maintenance
HOW ARE THEY CREATED? Ownership/ possession usually created Contract, delict, unjusti ed enrichment
by a contract or slip
METHOD OF TRANSFER Delivery, registration Transferred from one person to another
by cession
“You have ceded your personal rights to
a person”
Legal subjects have legal rights to:
‣ Corporeal things —> TANGIBLE AKA U CAN TOUCH (latin for physical/ body)
‣ Incorporeal things —> INTANGIBLE AKA U CANNOT TOUCH
‣ Intellectual property —> property of the mind (thoughts and inventions)– trademarks, patents,
copyrights.
‣ Constitutional rights —> The Constitution applies to all persons in the Republic irrespective of
nationality except for rights like the right to vote and citizenship
the application depends on the nature of the right as well as the nature of the juristic person. For
example, one cannot argue that a company has a right to healthcare.
DA CONSTITUTION
S.A is a constitutional democracy founded on the principles of equality, dignity, human rights, non
racialism and non-sexism.
The cornerstone of the Constitution is the bill of rights (b.o.r)
• It may be amended in accordance with the Constitution.
• Persons in the Republic are bearers of the Constitutional rights.
• If there is a violation – claim from the State or legal persons
You as an ordinary person are able to sue the state or any legal personal.
3 CATEGORIES IN THE BILL OF RIGHTS / FUNDAMENTAL RIGHTS
1 ST generation rights – civil and political
‣ protects liberties of people, allow one to participate in civic/political activities, protect people from
abuse by the State.
e.g. the right to participate in political activities ( unless you are a foreign national/ non citizen ). The
right to freedom, security, privacy, belief, religion etc
2ND generation rights – socio-economic rights
‣ compel the government to provide basic needs that enhance human dignity (within its available
resources)
e.g. housing, education and water
3RD generation rights – collective rights
‣ environment, collective , cultural, community rights.
e.g. you have the right to have a language, a religion and be apart of a culture. You have the right to
a belief and an opinion.
Section 36 of the constitution
- provides the fundamental rights
**cute info to know —-> during lock down the government infringed on our right to movement but it
was legal because the limitation of the right to freedom was justi able (in an open & democratic
society) and served a purpose that most people would regard as important (Disaster Management
Act)
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, FORMS OF LEGAL LIABILITY
Legal liability is the condition of being bound to a legal duty and bearing consequences for failure
to do so. The two main categories of legal liability are civil and criminal liability
Criminal liability (state v plaintiff)
• A form of public liability which includes the duty to abide by provisions of criminal law as de ned
by the state and bear the punishment that comes with failure to abide by criminal law provisions
The burden of proof in a criminal case is on the state, which a prosecutor represents; hence the
case citation (law report) is, for example, S v Mzezewa.
The state must prove the crime beyond a reasonable doubt. If the courts nd that the accused has
committed a crime in a criminal case, we say that the accused is "guilty". The accused can go to
prison and or pay a ne. The victim does not get anything.
Civil liability (plaintiff v defendant)
• Arises from private relationships
• One can sue another person or the State.
• Party who institutes proceedings is a Plainti , the one defending is a defendant.
• If it is an appeal, the appealing party is the Appellant and the other party is a respondent.
• Must prove a case on a balance of probabilities – Plainti bears the burden of proof.
• If the plainti succeeds, the other party may be ordered to pay compensation, costs of legal
proceedings, or ordered to do something or stop doing something
In a civil case, the case citation is usually the parties' surnames, for example, Mzezewa v Khumalo.
Persons can also sue the state, so for example, for unlawful arrest, the case will be against the
Ministry of Police represented by the Minister of Police. For example, Mzezewa v Minister of Police
If the party making the case wins we say “the judge has found in favour of the plainti ” or “he found
against the defendent” and visa versa
Delict liability
A delict is wrongful and culpable conduct (act/omission) that causes harm/injury to another
person's property or personality (for instance reputation, dignity).
The elements of delict are:
- act/ conduct
- Wrongfulness – each person owes a duty to another to not cause harm
- Culpability (fault) - Negligence is a failure to act according to the standards of a reasonable
person. A person is negligent if a reasonable person in his position would have foreseen the
possibility of his conduct injuring another/property and taken reasonable steps to guard against
such occurrence
—-> A minor below the age of seven does not have the delictual capacity (irrebuttable presumption).
A minor between 7 and 14 years is presumed not to have delictual capacity unless proved otherwise
(rebuttable presumption).
Contract liability
Contractual liability arises when one is in breach of a contract. In that case, one can sue for actual
nancial loss caused by the breach of contract
• Agreement between two or more persons
• Legally enforceable
• Cannot sue for non-patrimonial loss
—-> A minor below the age of 7 does not have contractual capacity. A minor between the age of 7
and 18 years has limited contractual capacity.
Unjusti ed enrichment
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, • Enriched at the expense of another.
• No legal justi cation exists for the transfer of bene t.
• Must return the accrued bene ts
e.g. For example, X owes B two thousand rands and mistakenly EFTs twenty thousand rands to B
instead of two thousand
Overlapping of legal liability
I. Crime and delict
While these forms of liability arising from the same set of facts they are remedied in di erent ways,
delictual liability will lead to a civil case, and criminal liability will lead to a criminal case.
i.e. In terms of the National Road Tra c Act, it is unlawful to drive on a public road recklessly or
negligently (criminal case). So, X can be arrested and charged with reckless driving. The state will
prosecute X. If the state proves the case beyond a reasonable doubt, X is found guilty. Y will not
receive any compensation. Also, Y can sue for delict in a civil court. If Y succeeds with the claim, he
may receive compensation for his losses.
II. Contract and delict
The same set of facts can give rise to a delict and contract. In this situation, the a ected party may
claim damages in contract or delict and rely on both actions. However, the plainti cannot receive
compensation twice for the same loss
For example, a plastic surgeon (agrees to/ enters into a contract) to perform liposuction. After the
surgery, the area where the liposuction was performed is bumpy.
The plastic surgeon is liable in delict and contract. Y wants to claim R 500 000. Y can choose to either
claim in delict or contract.
Y can also rely on both actions in the same case, but Y will not receive R 1million because one cannot
receive double compensation for the same loss
THE SOUTH AFRICAN JUDICIAL SYSTEM:
1. Constitutional court
2. Supreme Court of appeal
3. High courts
4. Magistrate court
5. Any other court established or recognised in terms of an Act of Parliament
- In order for a court to hear a matter the court must have jurisdiction (the o cial power to make
legal decisions and judgements)
**court of quo- the court from which an appeal has been taken
- The jurisdiction to hear an appeal or review = geographical area + type of case.
- The jurisdiction to act as a court of quo = geographical area + type of case.
- Type of case = criminal (type of o ence + possible sentence) /civil ( amount sought + nature of the
claim) or constitutional matter (interpretation + enforcement of the Constitution).
- In addition - a factor connecting the parties to the jurisdiction ( cause of action/resident in the
area)
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