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MRL3701 - Study Unit 11 Uncompleted Contracts And Legal Proceedings Not Yet Finalised | Questions And Answers Latest {} A+ Graded | 100% Verified$13.48
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MRL3701 - Study Unit 11 Uncompleted Contracts And Legal Proceedings Not Yet
Finalised | Questions And Answers Latest {2024- 2025} A+ Graded | 100% Verified
PURCHASE OF GOODS IN TERMS OF INSTALLMENT AGREEMENT - Section 84 (1) provides, on
sequestration of the buyer's estate, the seller automatically acquires a hypothec over the res vendita
whereby the balance outstanding under the agreement is secured. As no one may have a hypothec over
his own property, ownership in the res vindita passes from seller to insolvent estate.
EFFECT OF SEQUESTRATION OF THE BUYER'S ESTATE - the seller loses his right of ownership in the
property and simultaneously becomes a creditor with a hypothec over the property.
THE TRUSTEE OF THE BUYERS ESTATE MUST - 1 deliver the res vendita to him
2. thereafter seller is deemed to hold it as security for his claim
3. and has the rights of secured creditor to realise his security as prescribed by the Act.
INSTALLMENT AGREEMENT ENVISAGED BY PARAS a, b and c(i) OF DEFINITION OF INSTALLMENT
AGREEMENT IN S1 OF THE NCA IS ONE IN TERMS OF WHICH - 1. all or part of the price is deferred and is
so to be paid by period payments
2. possession and use of the property is transferred to the buyer
3. ownership of the property passes to the buyer only when the agreement is fully complied with.
SECTION 84(1) OF THE INSOLVENCY ACT PRESUPPOSES AN AGREEMENT STILL IN FORCE - this section
DOES NOT apply if the seller has, prior to sequestration, cancelled the agreement on account of the
buyer's default and the buyer has not obtained reinstatement in terms of the NCA.
SECTION 84(1) PRESUPPOSES - That the seller is the owner of the res vendita - no hypothec arises in
favour of a seller who is not the owner
IN TERMS OF ACTION 84(2) OF THE INSOLVENCY ACT - if debtor returns the property to the seller within
one month before sequestration the trustee may demand that the seller deliver the property to him or
its value at the date of return subject to payment to the creditor by the trustee or to deduction by the
creditor from the value of the property of the difference between the total amount payable under the
transaction and the total amount actually paid under it.
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