COMMERCIAL LAW 1
LAWS1000
CHAPTERS 1, 2 & 4 SUMMARIES
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original textbook for the material on which these summaries are based. All information taken directly from:
Pillay, K. and Du Plessis, R. (2023) Commercial law: Fresh perspectives. 4th edn. Cape Town, South Africa, Western Cape: Maskew Miller Learning. .
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, PART 1: Introduction to Commercial Law
CHAPTER 1: Background to Law in South Africa
What is Law and why do we need Law
• Law is a concept that is difficult to define because it appears in diverse forms, emerges from a variety of sources, and
embraces a variety of functions
• Has to do with the ordering of society through prescriptive rules
• Is an attribute of human beings that appears when groups of people associate themselves into a society
• Human beings ordered themselves into socio-political clusters since a lawless state of being invokes “survival of the
fittest” where people are instinctively led by their personal interests
• Law promotes peace, order and harmony thus giving rise to a ‘social contract’
• In a social contract: members of society implicitly agree to surrender a portion of their individual freedom to a body of
authority in exchange for protection by the State and social benefits
• Considering this social contract, law is a set of rules made by a body of authority (the State) aka the government, to
control and regulate behaviour in society
• The State reinforces the law by ensuring people obey these rules
• Law indicates what your legal rights, duties and obligations are
• Overall purpose of law is to maintain order
Role of the State
• The Constitution of the Republic of South Africa, 1996, sets out and regulates the powers and functions of the State
• Section 7(2) of the Constitution states that the State must respect, protect, promote and fulfil the human rights in the
Bill of Rights (Chapter 2)
• Some of the rights that are protected in the BOR:
- right to equality (section 9)
- right to human dignity (section 10)
- right to life (section 11)
- right to freedom and security of the person (section 12)
- right not to be subjected to slavery, servitude, or forced labour (section 13)
- right to privacy (section 14)
- right to freedom of religion, belief, and opinion (section 15)
- right to freedom of expression (section 16)
• Section 8(1) states that the ‘Bill of Rights applies to all law, and binds the legislature, the executive, the judiciary, and all
organs of state’
• State’s power is divided up between three organs:
- the legislature
- the executive
- the judiciary
• Fear of absolute power lies behind the doctrine of the separation of powers thus based on the idea that dividing power
between three organs will prevent one from wielding too much power and becoming oppressive
• State makes several laws and aims to enforce these
• In SA, each organ of government has unique functions:
- Parliament (legislature) is highest elected law-making body and makes legislation
- The executive, consisting of president and ministers of various departments, makes policies that put legislation
into practice or result in new laws
, - The judiciary, consisting of the courts, is an independent organ of government which interprets and applies law to
cases served before it
Legal Subjects, Objects and Nature of Rights in Commerce
• Legal Subjects: refers to legal persons of which there are two types
- Natural persons = human beings
- Juristic persons = entities to which the law gives legal rights, duties and obligations
Have separate legal existence from their directors, shareholders and members
- Section 8(2) of the Constitution states that the BOR binds natural persons and juristic persons if, and to extent
that is applicable, considering nature of any duty imposed by a right
- Section 8(4) states a juristic person is ‘entitled to rights in BOR to extent required by nature of rights and nature of
juristic person’
- Every legal person has legal personality which is the ability to acquire legal rights, duties and obligations
- For natural persons, legal personality begins at birth and ends with death
- For juristic person, legal personality begins when juristic entity is incorporated and ends when deregistered
- Legal capacity arises from one’s legal personality and refers to person’s ability in law to exercise legal rights
- Legal capacity varies based on factors such as age, mental health, marriage and insolvency
• Legal Objects: refers to an object that has economic value and in which a legal subject can have legal rights, duties
and obligations
- Personality property which refers to elements of person’s personality
- Immaterial property (incorporeal property) which refers to rights attached to immaterial property eg. Intellectual
property rights
- Corporeal things which refers to tangible things with physical presence thus rights of ownership in corporeal things
are real rights
- Performances which refers to an act by natural person in terms of which something is done, given or not done thus
rights to performance are personal rights
• Legal Rights: in context of commercial law there are two types of rights being personal and real
- Personal rights are rights that one person can exercise only against specific people
- Real rights can be enforced against the whole world and can be transferred in various ways depending on type/
nature of right eg. Ownership
- Therefore personal rights are rights against persons and real rights are rights in things that can be enforced
against everyone
Origin of SA Law
• Before European settlers arrived, indigenous people developed African customary law
• When Dutch settlers arrived at Cape from 1652 onwards, they brought their law from Netherlands (Holland)
• Law settlers brought was called Roman-Dutch law and it became official law of Cape until British took over in early
1800s and introduced parts of their English law
• Law that has been inherited from other legal systems and has developed over time is known as common law
• SA common law therefore a combination of Roman-Dutch law and English law
• Common law has developed to include important court decisions and reflect changes in political control of country
• In addition to common law and customary law there is statutory law which is made up of Acts of national and provincial
legislatures and government regulations
• There are two sources of law in SA being primary and secondary
• Primary sources refer to original sources of law and secondary sources are subsidiary/subordinate to primary sources
