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Business law notes chapter 1 to 15
- Course
- BUSL6221 (BUSL6221)
- Institution
- IIE Varsity College (VC)
a summary of chapters 1 to 15 that cover the selected learning units for the module.
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Learning unit 1:Theme 1: An introduction to the South African legal system
Definition of Law: Law is defined as a set of rules established and enforced by the state to
regulate human behaviour, ensure justice, and maintain order within society.
Legal rules:
• The rules that everybody in society has to follow.
• The state is responsible for setting legal rules and anybody who breaches these rules
will be known for going against the state.
• Disobeying legal rules can result in in them being held up in a court of law.
• Punishment may either be a fine or prison sentence.
Moral rules:
• Are subjective.
• They are personal standards of how a person is meant to behave or how a person
expects a person to behave.
• Based on people’s belief system, usually from religion.
Role of the State in the Legal System:
The state is responsible for creating, enforcing, and interpreting laws. It governs through various
arms of government to maintain the legal framework.
★ Parliament is the highest law-making body (legislature)
★ Legislation is a set of rules made by the legislature.
★ The constitution of the Republic of South Africa 1996 is the highest law of the land, and
it reflects public policy.
The Three Arms of Government:
1. Legislature: Responsible for making laws. The constitution of the Republic of South
Africa 1996 is the highest law of the land, and it reflects public policy.
2. Executive (cabinet): Enforces and implements laws. Consists of the president and all
the ministers of the various state departments.
3. Judiciary (courts): Interprets laws and resolves disputes. Responsible for deciding
whether laws have been followed or not and then make findings from that
determination.
Historical Development of South African Common Law:
South African common law developed from Roman-Dutch law and has been influenced by
English law.
Parliamentary Sovereignty vs. Constitutional Supremacy:
• Parliamentary Sovereignty: The legislature can make or change laws.
• Constitutional Supremacy: The Constitution is the highest law, and all other laws must
comply with it.
Sources of South African Law:
, • Primary Sources (Authoritative): The Constitution, legislation, common law, and
customary law.
• Secondary Sources (Persuasive): Legal textbooks, journals, and case law from other
jurisdictions.
Description of Each Source of Law:
• The Constitution: Supreme law of the country.
• Legislation: Laws passed by Parliament.
• Common Law: Based on Roman-Dutch law and judicial precedent.
• Customary Law: Traditional laws followed by certain communities.
Theme 2: The South African Court System
Civil vs. Criminal Cases:
• Civil Cases: Involves disputes between private parties. The standard of proof is "balance
of probabilities" and outcomes typically include damages or specific performance.
• Criminal Cases: Involves offenses against the state. The standard of proof is "beyond
reasonable doubt," and sanctions include fines, imprisonment, or community service.
Superior vs. Inferior Courts:
• Superior Courts: Includes the Constitutional Court, Supreme Court of Appeal, and High
Courts. They handle serious matters and have appellate jurisdiction. Only superior
courts create judicial precedent. They are bound by their decisions unless and until it is
overruled by a higher court.
• Inferior Courts: Includes Magistrates' Courts and Small Claims Courts. They deal with
less serious cases and lower monetary claims. Their geographical area of jurisdiction is
smaller than superior courts. They cannot create judicial precedent. They follow the
decisions of the supreme court.
Hierarchy of South African Courts:
The courts are organized in a hierarchical structure, with the Constitutional Court at the top,
followed by the Supreme Court of Appeal, High Courts, and Magistrates' Courts at the lower
levels.
Doctrine of Stare Decisis:
This doctrine means that courts are bound by their previous decisions or the decisions of higher
courts in similar cases, ensuring consistency in the law.
Ratio Decidendi:
The part of a court's judgment that provides the legal reasoning or principle behind the decision,
which binds future cases under judicial precedent.
Theme 3: Branches of Law and Interpretation of Statutes
Branches of Law:
, • International Law: It is made up of treaties or international conventions that are agreed
upon by a number of countries. All these laws are the same in the countries that have
signed agreements.
• Foreign Law: Law from other countries that may be persuasive but not binding in South
Africa. South African courts are not required to follow foreign law but the courts
sometimes tend to look at foreign decisions when it is appropriate.
• South African National Law: Law that applies within the borders of South Africa.
Divisions of South African National Law:
• Public Law: Governs relationships between individuals and the government(e.g.,
constitutional, administrative law, criminal law).
o Constitutional law deals with the constitution which provides for peoples rights,
the distribution of legal power, and the functions of the various parts of the
government.
o Administrative law regulates the power of the state over individuals and tries to
make sure that state officials and departments do not use their influence in
unfair ways.
o Criminal law determines what actions are unlawful and what punishment the
state should impose on each crime.
• Private Law: Deals with legal relationships between private individuals. There are 6
branches of private law:
o Mercantile law: law relating to companies.
o The law of obligations: It deals with peoples’ personal rights when these rights
have a monetary value.
o The law of property: contains rules about the ownership of objects or lands.
o The law of persons: the rules about being a legal subject of the country.
o Family law: the requirements for marriage and the relationships between
parents and children.
o The law of successions: the way a person’s estate is divided up after they die.
Their estate includes everything they own, and everything owed to other people.
• Procedural law: the way in which legal rules are enforced. There are three aspects:
o The law of evidence: guides a court in deciding what the parties before it have to
prove to succeed in a legal case.
o The law of criminal procedure: the steps the state has to take when it prosecutes
someone who has committed a crime.
o The law of civil procedure: the process for enforcing non-criminal law, usually
when person sues another person.
Civil Trial vs. Application Procedures:
• Civil Trial Procedure: The method used to resolve factual disputes through a formal
court hearing. There are two types:
o Trial procedure is used when the parties are in dispute about a wrongdoing. In a
court there are 4 phases:
▪ The pleadings – one person taking legal action against another. The
individual who makes the first claim is the plaintiff. The plaintiff’s
attorney issues a summons (document pertaining the claim).
, ▪ The trial – the court will decide whether or not the allegations made are
correct. A witness will testify making an oath to tell the truth.
▪ Appeals and reviews – the losing party has the right to appeal against the
decision of the court.
▪ The enforcement of court judgments – the judgements of the court are
put in to effect.
• Application Procedure: A process used when facts are not in dispute, typically for legal
arguments. The application procedure is quicker and cheaper than having a trial but can
only be brought when there is no real dispute on any important questions of fact
between the parties.
Appeals vs. Reviews:
• Appeals: A higher court reviews the correctness of a lower court's decision.
• Reviews: A higher court reviews whether the lower court followed the correct procedure.
Natural vs. Juristic Persons:
• Natural Persons: Human beings with legal rights and responsibilities.
• Juristic Persons: Entities like companies and organizations that have legal standing, can
enter contracts, sue, and be sued.
Legal rights:
Personal rights are rights one person can exercise only against specific other people. Real rights
are valid against the whole world.
Example personal right: If I buy a horse from Sam, I have the right to receive the horse from her.
Example legal right: If I own a tractor, the law will recognise my right of ownership and protect it
against anybody who may steal it.
Statutory Interpretation:
A statue contains many provisions. A provision is a specific requirement, condition, or rule
about something which the statute aims to regulate.
If a provision in a statute is unclear, then the court cannot give effect to the provision. The court
must then interpret the provision to determine the intention of the legislature in promulgating
such a provision.
Interpreting statute involved finding the purpose and aims of a piece of legislation to determine
whether a statute applies in a particular factual situation, and how it applied to that situation.
Theories of Statutory Interpretation:
• Literal Approach: the words of a statue are the primary source upon which the court
relies and if the words are clear an unambiguous, effect is given to them. The words in
the statute are given their ordinary, grammatical meaning in order to determine the
intention of the legislature.
• Purposive Approach: Aims to make sense of the statute in the light of the contextual
environment, including social and policy directions. The courts may consider intra-
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