Commercial Law Past Paper PDF 2015, The Independent Institute of Education - COML6010

The Independent Institute of Education 2015 MODULE NAME: MODULE CODE: COMMERCIAL LAW COML6010 ASSESSMENT TYPE...

The Independent Institute of Education 2015 MODULE NAME: MODULE CODE: COMMERCIAL LAW COML6010 ASSESSMENT TYPE: EXAMINATION (PAPER ONLY) TOTAL MARK ALLOCATION: 120 MARKS TOTAL HOURS: 2 HOURS (+10 minutes reading time) STUDENT NAME: STUDENT NUMBER: INSTRUCTIONS: 1. Please adhere to all instructions in the assessment booklet. 2. Independent work is required. 3. Five minutes per hour of the assessment to a maximum of 15 minutes is dedicated to reading time before the start of the assessment. You may make notes on your question paper, but not in your answer sheet. Calculators may not be used during reading time. 4. You may not leave the assessment venue during reading time, or during the first hour or during the last 15 minutes of the assessment. 5. Ensure that your name is on all pieces of paper or books that you will be submitting. Submit all the pages of this assessment’s question paper as well as your answer script. 6. Answer all the questions on the answer sheets or in answer booklets provided. The phrase ‘END OF PAPER’ will appear after the final set question of this assessment. 7. Remember to work at a steady pace so that you are able to complete the assessment within the allocated time. Use the mark allocation as a guideline as to how much time to spend on each section. Additional instructions: 1. This is a CLOSED BOOK assessment. 2. Answer All Questions. 3. Please number all questions clearly. 4. NO dictionaries are allowed. © The Independent Institute of Education (Pty) Ltd 2015 Page 1 of 12 The Independent Institute of Education 2015 Question 1 (Marks: 20) Q.1.1 What values are enshrined in the Constitution of the Republic of South Africa, (3) 1996? Q.1.2 What does “unjustified enrichment” mean? (2) Q.1.3 At what age may a minor person give consent to medical treatment? (1) Q.1.4 List any five contracts where a written agreement is required in terms of (5) legislation. Q.1.5 Differentiate between ratification and rectification and provide an EXAMPLE of (6) each. Q.1.6 Name the three requirements required for contractual consensus. (3) © The Independent Institute of Education (Pty) Ltd 2015 Page 2 of 12 The Independent Institute of Education 2015 INSTRUCTIONS FOR ANSWERING MULTIPLE CHOICE QUESTIONS MCQs (a) Answer the following questions by choosing the most correct statement in each instance and by marking the corresponding number with an "X" in the back of your answer script. (b) There is ONLY ONE (1) correct answer. (c) NO marks will be allocated when more than ONE answer is given. (d) KINDLY NOTE: Where a question contains an assumption the assumption is applicable to that question only unless the context indicates otherwise. Question 2: (Marks: 40) Use the following citation to answer Q.2.1 & Q.2.2: KLVC v SDI and Another 1 All SA 532 (SCA) Q.2.1 Where is the court based that heard this matter? (2) (a) Bloemfontein (b) Braamfontein; Johannesburg (c) Pretoria (d) Randburg; Greater Johannesburg (e) Cape Town (2) Q.2.2 As a general rule, which court/s are bound the decision made by the presiding officers in this court? (a) Constitutional court (b) Supreme Court of Appeal (c) Kuilsrevier Magistrate’s Court (in the Western Cape) (d) Both (b) and (c) (e) All of the above [(a) – (c)] © The Independent Institute of Education (Pty) Ltd 2015 Page 3 of 12 The Independent Institute of Education 2015 Q.2.3 Error in motive renders an agreement valid. This statement is – (2) (a) false. (b) true. Use the following extract from the Companies Act 71 of 2008 to answer Q.2.4 – Q.2.5: Related and inter-related persons, and control 2. (1) For all purposes of this Act— (a) an individual is related to another individual if they— (i) are married, or live together in a relationship similar to a marriage; or (ii) are separated by no more than two degrees of natural or adopted consanguinity or affinity; (b) an individual is related to a juristic person if the individual directly or indirectly controls the juristic person, as determined in accordance with subsection (2); and (c) a juristic person is related to another juristic person if— (i) either of them directly or indirectly controls the other, or the business if the other, as determined in accordance with subsection (2); (ii) either is a subsidiary of the other; or (iii) a person directly or indirectly controls each of them, or the business of each of them, as determined in accordance with subsection (2). Q.2.4 To which source of law does the extract refer? (2) (a) Customary Law (b) Legislation (c) Case Law (d) Old Authorities (e) Foreign Law Q.2.5 The reference (1) refers to a/n – (2) (a) sub-paragraph. (b) item. (c) section. (d) sub-section. (e) paragraph. © The Independent Institute of Education (Pty) Ltd 2015 Page 4 of 12 The Independent Institute of Education 2015 Q.2.6 As a general rule it is possible to draft a will electronically and as such the Electronic (2) Communications and Transactions Act 25 of 2002 will apply. This statement is – (a) false. (b) true. Use the following set of facts to answer Q.2.7 – Q.2.11: Faaiza enters into an agreement with Sparkle Mountain Fresh Water (Pty) Ltd to purchase 1 000 bottles of 500 ml 100% fresh mountain water for her yoga café. Faaiza pays David, Sparkle Mountain Fresh Water (Pty) Ltd’s sales representative, R10 000. David tells Faaiza that the water is of the highest quality. After delivery of the water Faaiza is devastated when she opens a bottle to find it is contaminated with chlorine particles, which are usually used to purify normal tap water. She would never have purchased the bottles from Sparkle Mountain Fresh Water (Pty) Ltd if David had not told her that the quality of the water was of the highest quality. Q.2.7 The purchase price of the bottles of water is a/n ______________ of the contract (2) between the parties. (a) naturale (b) incidentale (c) essentiale Q.2.8 The terms regarding the delivery of the water is a/n _____________ of the contract. (2) (a) naturale (b) incidentale (c) essentiale Q.2.9 The contract between Faaiza and Sparkle Mountain Fresh Water (Pty) Ltd is a/n (2) _______ contract. (a) unilateral (b) reciprocal © The Independent Institute of Education (Pty) Ltd 2015 Page 5 of 12 The Independent Institute of Education 2015 Q.2.10 What is the effect of David’s misrepresentation on the contract between Faaiza (2) and Sparkle Mountain Fresh Water (Pty) Ltd? (a) It remains valid. (b) It is voidable at the option of Sparkle Mountain Fresh Water (Pty) Ltd. (c) It is unenforceable. (d) It is void. (e) It is voidable at the option of Faaiza. Q.2.11 Of which other legal concept is misrepresentation an example of? (2) (a) Unjustified enrichment (b) A warranty (c) A delict (d) A criminal offence (e) A lex commissoria Q.2.12 What is the period of prescription for contractual claims as determined by the (2) Prescription Act 68 of 1969? (a) 3 years (b) 6 years (c) 10 years (d) 15 years (e) 30 years Q.2.13 Sitembele and Kasamba are married in community of property. In which of the (2) following options is informal consent required from the other spouse? (a) Where Kasamba donates movable assets from the estate. (b) Where Sitembele enters into a credit agreement as contemplated in the National Credit Act 34 of 2005. (c) Where Kasamba cedes shares held by the joint estate to third party as security. (d) Both (a) and (b). (e) All of the above [(a); (b) and (c)]. © The Independent Institute of Education (Pty) Ltd 2015 Page 6 of 12 The Independent Institute of Education 2015 Q.2.14 As a general rule a restraint of trade that is reasonable is – (2) (a) valid. (b) void. (c) voidable at the option of the person who signed the restraint. (d) voidable at the option of the party who drafted (prepared/wrote) the restraint. (e) unenforceable. Q.2.15 Where there is initial impossibility of performance the contract – (2) (a) may be cancelled. (b) may be terminated. (c) remains valid. (d) is void. (e) becomes voidable. Q.2.16 Alfred owes Paribas Bank Ltd R500 000. In order to secure the debt Alfred (2) transfers his rights in respect of a claim he has against Pretty Little Blue Liars CC to Paribas bank. What is the legal name of Alfred’s action? (a) Assignment (b) Cession (c) Delegation (d) Stipulatio alteri (e) Agency Q.2.17 Contract without the assistance of the trustee of an unrehabilitated insolvent is - (2) (a) valid. (b) voidable at the option of the unrehabilitated insolvent. (c) unenforceable. (d) void. (e) voidable at the option of the trustee. © The Independent Institute of Education (Pty) Ltd 2015 Page 7 of 12 The Independent Institute of Education 2015 Q.2.18 Celia and Milos agrees that he will paint her patio for her for R2 000 before (2) 1 September 2015. Two days before Milos was due to start painting he calls Celia and informs her that he will no longer paint her patio. What type of breach of contract is this? (a) Rendering performance impossible/prevention of performance (b) Mora debitoris (c) Mora creditoris (d) Repudiation (e) Positive malperformance Q.2.19 Which of the following is/ are a valid offer/s? (2) (a) Siyanda advertises his 2007 BMW X5 in The Pink Pages for R280 000. (b) Andy makes an offer to Suzette to appoint her as a financial consultant at his firm. He makes no mention of a salary. (c) Betty makes a verbal offer to Ernst to purchase his flat in Killarney for R1 900 000. (d) More than one of the above constitutes a valid offer. (e) None of the above constitutes a valid offer. Q.2.20 The Parol Evidence rule – (2) (a) applies to written contracts. (b) means that only the written document and no other evidence is considered to ascertain the terms of the agreement. (c) means that no extrinsic evidence will be heard to establish the intention of the parties. (d) refers to none of the above. (e) refers to all of the above. © The Independent Institute of Education (Pty) Ltd 2015 Page 8 of 12 The Independent Institute of Education 2015 Question 3 (Marks: 10) Indicate whether the following contracts are valid, void, voidable or unenforceable AND give a reason/ motivation for the correct answer. Q.3.1 Kelly is 17 years old when she enters into an agreement with Money Bags Bank Ltd (2) to open a savings account. Q.3.2 Tabo, aged six (6) years, buys a DVD with his pocket money without the assistance (2) of his mother. Q.3.3 Chirstelle, aged 16, is married to Terence out of community of property with (2) accrual. When she is 17 and three (3) months she enters into a contract with Mohammad to buy a car for R 450 000. She is not assisted by Terence. Q.3.4 Imran makes an offer to Heila to buy her laptop for R7.50. Imran tells her if she (2) does not he will arrange for somebody to hurt her daughter. Heila believes Imran’s threat. She accepts the offer and Imran pays her. Q.3.5 Nic plays the horses at the Turffontein Racetrack in Johannesburg. This Racetrack (2) is a registered gambling facility in accordance with the National Gambling Act 7 of 2004. Nic wins R55 000 in Race 7 one Monday afternoon. He goes to the TAB (the gambling site) to collect his winnings. © The Independent Institute of Education (Pty) Ltd 2015 Page 9 of 12 The Independent Institute of Education 2015 Question 4 (Marks: 10) Identify types of clauses that are described below. Merely write the question number and next to it the name of the contractual clause. For example, 4.1: Penalty clause. Q.4.1 Dylan is hired by Get Ripped CC to assist them in their spinning classes until he (2) turns 60. Q.4.2 Kelly’s mother, Janice, agrees to pay Kelly’s tuition towards a B.Com (Finance), (2) amounting to R15 000 per year, if she passes every year. Q.4.3 Thandi takes absolute responsibility for the truth of the statement that the puppy (2) she is selling her is a tea-cup Yorkshire Terrier in her contract of sale with Susan. [A tea-cup Yorkshire Terrier is a specific breed of Yorkshire Terrier.] Q.4.4 Candice enters into an agreement of sale with Lucy in terms of which Candice only (2) has to pay Lucy the purchase price of the articles bought on 5 January 2016. Q.4.5 The contracting parties agree that either party may cancel the contract between them provided that reasonable written notice is given to the other party of the intention to cancel the agreement. Question 5 (Marks: 10) Answer the following questions by stating if it is TRUE or FALSE AND provide a correct motivation for the correct indication of true or false. Q.5.1 As a general rule a contract will be void if it is entered into it with an unassisted (2) minor. Q.5.2 A material mistake in a contract renders the contract void. (2) © The Independent Institute of Education (Pty) Ltd 2015 Page 10 of 12 The Independent Institute of Education 2015 Q.5.3 A mentally incapacitated person may enter into a contract in terms of which she (2) only acquires rights. Q.5.4 An agreement regulated by the Consumer Protection Act 68 of 2008 between an (2) unassisted minor and another is void. Q.5.5 An advertisement is an initial offer. (2) Question 6 (Marks: 10) Arnold wants to build and additional wing to his current house to make it bigger for his ever growing family. He purchases all the building materials necessary to build the house. Arnold contracts with Thomas and they agree on the following: (a) Thomas will work for 4 months to complete the extension to the house. (b) Arnold will pay Thomas R300 000. Arnold will make a first payment in the form of a deposit to the amount of R150 000 and the balance thereof will only be paid to Thomas once the building job is completed. Q.6.1 Assume that Thomas does not arrive to start working on the date agreed to (2) between him and Arnold. What type of breach of contract is this? Why? Q.6.2 Assume that on the agreed date and time of performance by Thomas Arnold is not at home, nor did he make any other arrangements, to grant access to Thomas. (2) What type of breach of contract is this? Why? Q.6.3 Name and explain the three Common Law remedies that are available to the (6) innocent party in the event of breach of contract. © The Independent Institute of Education (Pty) Ltd 2015 Page 11 of 12 The Independent Institute of Education 2015 Question 7 (Marks: 20) Mpho has an eye for investment opportunities. She sees an advertisement of a house situated near the University for sale at R1 200 000. She meets with the area agent of Real Houses CC, Fikile, and they agree on the following in writing: (a) The seller, Nomsa, will appoint an attorney of her choice to see to the transfer of the title deed and registration thereof in the Deed’s Office on or before 30 October 2015. (b) Mpho will pay the full purchase price into the trust account of Nomsa’s transferring attorney on or before 1 October 2015. (c) The Fikile will deliver the keys of the house to Mpho on 5 October 2015 at the offices where she work on behalf of Nomsa. Q.7.1 Is this a valid contract? Motivate with reference to the requirements for a valid (6) contract. Q.7.2 Identify the naturalia of this agreement. (4) Q.7.3 Assume that Mpho bought the house voetstoots. What does this mean? (2) Q.7.4 When will ownership of the house transfer to Mpho? (2) Assume that Mpho became the owner of the house. Mpho enters into a lease agreement with Kayla. Kayla is unsure of the legal implications of this lease agreement and approaches you to advise her on the following: Q.7.5 Advise Kayla on her duties as the lessee (3) Q.7.6 Explain to Kayla what the maxim Huur Gaat Voor Koop means. (3) END OF PAPER © The Independent Institute of Education (Pty) Ltd 2015 Page 12 of 12