ASML Slides Unit 1 PDF

ASPECTS OF MERCANTILE LAW UNIT ONE DEFINE MERCANTILE LAW Mercantile law is the law relating to companies and other areas in the business or commercial field such as labour law and the law of insolvency. Commercial law is a subject area that tries to summarise the main prov...

ASPECTS OF MERCANTILE LAW UNIT ONE DEFINE MERCANTILE LAW Mercantile law is the law relating to companies and other areas in the business or commercial field such as labour law and the law of insolvency. Commercial law is a subject area that tries to summarise the main provisions of mercantile law. Mercantile law is also known as commercial law. ‘The word “mercantile” means of or pertaining to the business of merchants, i.e., to the commerce, trade, or business of selling and buying merchandise, acting on or conducting business principles, trading, and other commercial principles.’ Mercantile law regulates the area of law that pertains to commercial transactions. A number of things can go wrong with a commercial transaction, ranging from the failure of a client to pay based on a contract or even the loss of a shipment as a result of an ‘act of God’ such a cyclone or hurricane. THE PURPOSE OF OF MERCANTILE LAW Mercantile law provides specific guidelines for a variety of situations that can arise while doing business, setting out the responsibilities and rights of people involved in commercial transactions, and establishing a regulatory framework that allows the government to supervise commercial transactions and step in when necessary. Mercantile / Commercial law is subdivided into several subfields. These include company law corporate law, corporate governance, competition law (antitrust), consumer protection, contract law, environmental law, intellectual property law, tax law , international trade law. Commercial law generally regulates all business activities, whilst Labour Law, as a sub-division of commercial law, aims to regulate the relationship between employer and employee as well as the collective relationship between employers/ employer organisations and employees/ trade unions. THE DIVISIONS OF LAW MERCANTILE LAW BELONGS TO Company law Companies Act, 2008 regulates the formation and governance of companies. Company Law Close Corporations Act, 1984 – regulates the formation and governance of close corporations Tax Law Income Tax Act, 1962 – determines which entities are taxable and the amount of tax obligation owed. Trust law Trust Property Control Act, 1988 – regulates business trusts Labour law Basic Conditions of Employment Act 1997 provides the basic conditions for employees and regulates inter alia, hours of work, leave Consumer protection law Consumer Protection Act of 2008 protects consumers from unfair, unreasonable and/or improper trade practices. To protect consumers from misleading, deceptive, unfair or fraudulent conduct and/or actions. COMMERCIAL LAW, RELATED LITIGATION & THE NEED FOR REGULATION Transactions between businesses and customers often involve a contract and this could frequently give rise to legal issues pertaining to the terms of the contract. For instance, a breach of contract can cause significant losses for either party. What is the role of the legal practitioner in company / corporate law? Consider the following examples: 1. Contracts: Reviewing, drafting, and negotiating legally binding agreements on behalf of the company or corporation, which could involve everything from lease agreements to multi- billion-dollar acquisitions. 2. Mergers and acquisitions (M&A): Conducting due diligence, negotiating, drafting, and generally overseeing "deals" that involve a corporation "merging" with another company or "acquiring" (purchasing) another company. 3. Corporate governance: Helping clients create a framework for how a firm is directed and controlled, such as by drafting articles of incorporation, creating bylaws, advising corporate directors and officers on their rights and responsibilities, and other policies used to manage the company and ensure compliance with legislation. 4. Venture capital: Helping start-up or existing corporations find capital to build or expand the business, which can involve either private or public financing. 5. Securities: Advising clients on securities law compliance, which involves the complex regulations aimed at preventing fraud, insider trading, and market manipulation, as well as promoting transparency, within publicly-traded companies. 6. The LP advises a client on how to set up a business by informing the client of the requirements set out in the Companies Act, etc. or how certain legislation regulates a particular commercial activity. 7. The commercial practitioner will draft an agreement for the sale or purchase of immovable property. The LP as conveyancer, will also perform work related to the transfer of ownership in the property from the seller to the buyer. Conveyancing is the legal process that takes place when lawful ownership is obtained of immovable property. Each time a property is sold, a new deed of transfer must be drawn up and registered. 8. A LP has the duty of ‘translating’ legal jargon for their client. This includes reading and explaining the contractual terms and conditions to the client in simple English as well as suggesting possible amendments to the contract if necessary to protect the client’s interests  INTELLECTUAL PROPERTY Intellectual property is the general term for intangible property which comes about as a result of intellectual effort. Therefore, intellectual property results from creations of the mind and denotes objects that are not physical or tangible things. The subject matter of intellectual property is very wide and the following fields of intellectual property are protected by our law: copyright trade marks designs performers' rights patents plant breeds.  COPYRIGHT LAW The primary right that an artist, writer, musician or playwright has regarding her creative works, is the right not to be copied by someone else. Copyright is the right that a legal subject, who is usually the copyright owner, has to the creative work that she has produced. Think, once again, of the video game that you like to play. If you copy it for a friend, you violate the copyright of the game developer, the musicians who created the music of the game, as well as the artists who created the game's graphics. Copyright law in South Africa is regulated by the Copyright Act 98 of 1978 together with the Copyright Regulations, 1978. The Act protects the rights of authors and owners of copyright to the objects of copyright. These objects are referred to as works, and include literary works, musical works, artistic works, computer programs, cinematograph films, sound recordings, broadcasts, programme-carrying signals, and published editions. An author is usually the person who first created the work and is also usually the first owner of the work.  It is important to note that someone other than the creator of the work can become the owner of the work when it is transferred as movable property. Other than most forms of intellectual property, copyright does not need to be registered with any authority in order to be protected. This means that, as soon as it is created and meets certain requirements, the owner thereof will be able to enforce her rights to it. Often, the owner of a copyright will indicate her ownership of the copyright by using the phrase 'copyright by or the symbol ©, followed by her name and the date at the end of the work. For example, we would indicate the copyright of this book as follows: Pearson SA, 2018. Note that it is not a legal requirement to indicate that copyright subsists in a work. Therefore, one cannot assume that if a work does not indicate that copyright subsists therein, that it is not protected by copyright.  As mentioned above, copyright protects various forms of works. For ease of reference, these works can be divided into the following categories: traditional works, which include literary works, musical works and artistic works communication media, which comprise big-screen movies, DVDs, videos and video games; this media includes: sound recordings, sounds or images carried by satellite (such as DStv) the design and layout of literary or musical works computer programs, which direct a computer to perform a particular task. SHIPPING AND LAW OF CARRIAGE A common law contract of carriage is South Africa is an agreement in which one person undertakes to another person to transport certain goods and/or persons from one place to another, by road, rail, sea or ait, either for payment or for free. The law of carriage deals with the legal relationship between a carrier of goods and the person or company for whom those goods are carried. The law of carriage also deals with the legal relationship between a carrier of passengers and the passengers themselves Many of the principles of carriage come from contract, delict, property and agency. Nonetheless, it is important to look at the specific legal principles and legislation that have developed under the heading of carriage, from the time of Roman law until the present day.  Principles and legislation on the law of carriage have been developed for a variety of reasons: Carriage is often international by its very nature, since goods and passengers are often transported between countries. Contracts for the carriage of goods by land, sea and air are usually directly dependent on other commercial activities. Special and often dangerous conditions apply when the carriage of goods and passengers takes place. Efficient carriage of goods and people and well regulated transport systems have been an important part of economic and societal progress. The World Bank has identified the efficient carriage of goods and people as vital to the socio-economic development of modern societies. This is especially important in developing countries such as South Africa. Good transport networks can ensure that people have access to jobs, clinics and schools. People can be connected to their families, communities and to the broader global world. More than ever before, the movement of people and goods from place to place is a characteristic of our modern, interconnected world and it requires fair, efficient and uniform regulation. The law of carriage is a complex area of commercial law. Various sources of law regulate the law of carriage in South Africa: the law of contract (contractual agreements between the different parties), the law of delict (liability between the parties), international law (international conventions, treaties or covenants  COMPETITION LAW Competition involves two or more traders who want to secure the business of customers. The regulation of competition can be traced back to the Roman Empire. The first example of competition legislation is the Lex Julia de Annona that prohibited the raising of prices of food and prevented other unfair practices that related to the transportation and sale of food. In some countries, such as the United States of America, public competition law is referred to as antitrust law.  SA COMPETITION LAW Competition law in South Africa has two parts: public competition, which is regulated by the Competition Act 89 of 1998, and deals with maintaining and promoting competition between businesses private competition, which is regulated by common law, and deals with unlawful competition The Competition Act established the Competition Commission, which is tasked with, amongst others, regulating business activities between firms, or companies, to ensure a competitive market. This is very much in the public's interest. But private competition is concerned with the legal relationship between the competitors themselves. This area of the law gives a wronged trader a remedy it the requirements of unlawful competition are met. So, if Trader A unlawfully infringes Trader B's goodwill by way of a competitive act, Trader B will have a legal remedy against Trader A. UNLAWFUL COMPETITION IN SA Unlawful competition refers to the legal position between traders, where one trader wrongfully infringes the competitor's right to goodwill. Liability is based on the lex Aquilia, which provided compensation to the owners of property damaged by someone else's fault. This action is delictual in nature, meaning that the elements of delict must be proven by the competitor, who is alleging unlawful competition. The elements of a delict are: conduct wrongfulness fault cause damages. INSOLVENCY LAW A person's estate is comprised of all his assets and liabilities. A person (or debtor) is insolvent when his liabilities exceed his assets. For the purposes of insolvency law, a person who only has liabilities may be regarded as having an estate. But, a debtor who is unable to pay his debts is not treated as an insolvent until his estate is sequestrated by an order of court. Sequestration is the process whereby the court formally declares that a debtor's estate is insolvent. Sequestration applies to a person's estate and not to the person themself. We do not say John is being sequestrated. We say John’s estate is being sequestrated. So, the debtor is insolvent and his estate will be sequestrated. It is also important to remember that only a natural person's estate can be sequestrated. A company that is unable to pay its debts will not be sequestrated - it will be liquidated. Once a debtor's estate is sequestrated, he is no longer called a debtor - his legal status changes to insolvent. In early Roman law, creditors were allowed to seize a debtor who was unable to pay his debts and sell him into slavery. They also had the option of cutting him into preces according to the size of their respective debts. Thankfully, that is no longer the case The Insolvency Act 24 of 1936 regulates and governs the sequestration of a debtors estate. Let us look at some of the main principles that apply to the sequestration of a debtors estate  LABOUR LAW The Constitution and Labour Law The Constitution of the Republic of South Africa, 1996, is the supreme law of the and. If any law disagrees with the Constitution, that law has to change. However, the Constitution does not provide a complete list of laws that must be followed. Statutory law made up of governmental regulations and Acts, or statutes. In this section, we will look at what the Constitution and the legislation say about the employment relationship. The SA Constitution Section 23 of the Constitution of the Republic of South Africa, 1996, gives everyone the right to fair labour practices and gives every worker the right to: form and join a trade union participate in the activities and programmes of a trade union strike to try to force their employer to take note of their demands regarding working conditions and/or low pay. Section 23 also gives every employer the right to: form and join an employers' organisation participate in the activities and programmes of an employers' organisation.  There are also other sections of the Constitution that influence employment law. For example, Section 9 of the Constitution states that everyone is equal before the law and has the right to equal protection from and benefit of the law. More importantly for labour law, no person may unfairly discriminate directly or indirectly against anyone on one or more reasons, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth. All rights contained in the Constitution's Bill of Rights may be limited. The limitation, however, must be reasonable and justifiable (in other words, be for a fair and good reason) in an open and democratic society, based on human dignity, equality and freedom. For example, a person's right to freedom of expression will be limited if that person is encouraging one group of people to kill another group of people.  Because of the serious issues facing the country regarding unemployment and working conditions, a number of Acts make up our employment law. These Acts include: the Labour Relations Act 66 of 1995 (LRA) the Basic Conditions of Employment Act 75 of 1997 (BCEA) the Employment Equity Act 55 of 1998 (EEA) the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA) the Unemployment Insurance Act 63 of 2001 the Occupational Health and Safety Act 85 of 1993 (OHSA) the Skills Development Act 97 of 1998 the Employment Services Act 4 of 2014. Acts such as the Broad-Based Black Economic Empowerment Act 53 of 2003 may, in addition, indirectly influence employment law in the future. The LA and the other relevant statutes have effectively codified our labour law. This means that a number of the common law duties of employers and employees, such as the duty of an employer to take reasonable care of the worker's safety and the employee's duty to maintain trust and confidence, have been specifically included in various statutes, or given effect to by decisions of the courts. BANKING & INSTRUMENTS OF PAYMENT LAW At first, people used a system of barter. A person would exchange what they had for the goods or services of another person. This was highly inefficient, as you had to find someone who had what you wanted and who wanted your goods or services in return. Merchants then developed cash, in the form of coins and notes, to pay their debts. This created a much more flexible payment system. But the risk of travelling with money led to the evolution of paper money, most notably the negotiable instrument - an instrument of payment. However, there are two disadvantages to negotiable paper money, namely: a risk of non-payment a volume of paper-flow involved in the collection process. This led to the development of other payment instruments. The latest development in the evolution of payment is electronic transfers. The debtor electronically instructs the bank to pay funds into another person's bank account.  A negotiable instrument is a legal document that entitles the person who is in possession of the document, and who satisfies certain requirements, to receive the specified amount of money. In South Africa, negotiable instruments are regulated by statute in the form of the Bills of Exchange Act 34 of 1964 (BEA). Negotiable instruments consist of: bills of exchange cheques promissory notes. SECURITIES REGULATION Why do you think the bank would be hesitant to provide you with a student loan without having some form of security? The answer is that the creditor, in this case the bank, is taking on a risk. You might not pay the bank back. This risk becomes greater when a debtor owes money to more than one creditor. What if the debtor does not have enough money to repay all the creditors? This is where security comes in. Security is used to ensure repayment. If you provide the bank with security for performance of an obligation, you guarantee that you will indeed perform the obligation (usually to pay your debt as agreed) and that if you do not, the bank may take over your property.  There are different kinds of security in our law. Where there are a number of creditors owed money by a debtor, the type of security that each creditor has (if any) will determine which creditors receive payment first. The bank usually has a preference over other creditors to get its money. The right of certain creditors to be paid before others is an important part of the law of security. Security serves a positive purpose for both the creditor and the debtor. For creditors, security makes it more likely that the debtor will repay them their money by the due date. Or, if the debtor does not, the creditor will have the right to sell the property that was promised by the debtor as security. The creditor can then recover the debt from the money received from the sale. From a debtor's perspective, the provision of security greatly increases the chances that someone will loan him money. Consider the following. You have the idea to start your own cosmetics business, so you conduct careful research to establish whether the business is likely to be a success. No matter how great your idea is, you will need start-up funds to get your business going, and it you cannot secure funding from a bank because the bank does not have security for the loan you seek, then your whole idea will in all likelihood never get off the ground.  Different types of security Security may take the form of real security or personal security. Real security is provided in the form of property owned by the debtor. A typical example of real security is a mortgage on a house. This is often also known as a mortgage bond. A mortgage is a right of security over property. Let us say you borrowed money from the bank to buy your house. You owe the bank money, so you are a debtor. If you miss too many repayments, the bank can take steps to have your house sold in order to get the money owed to it. This arrangement gives the bank confidence that it will not lose money on the deal. Personal security, also called suretyship, is given when someone agrees to meet the obligations of the debtor if he is unable to pay the creditor.  We have already been introduced to the concept of real security. This section now looks primarily at the three different types of real security that debtors can provide to secure a loan. 1. A mortgage, as you have already learned, is security in a property owned by the debtor and which provides a creditor with security that the debtor will repay his debt to the creditor. 2. A pledge is created when a debtor delivers her property to a creditor as security for a debt owed. A pledge is, in fact, a special type of mortgage, but it is dealt with separately in this chapter because of its importance and some special characteristics. 3. A lien allows someone, who provides a service to another's asset or property to retain that property in certain circumstances until he is paid for the work.  CONSUMER LAW However, in South Africa, consumer protection was not a government priority prior to 1994, and South African consumers had to rely on the common law (particularly the law of contract and delict) to protect themselves as consumers. Using the ordinary civil courts is, however, very expensive and it takes a long time betore a matter is heard, so it was often not worthwhile for consumers to pursue consumer complaints through the legal system. In certain areas specific legislation was passed to provide consumer protection. Examples include: Foodstuffs, Cosmetics and Disinfectants Act 54 of 1972 Estate Agency Affairs Act 112 of 1976 National Building Regulations and Building Standards Act 103 of 1977 Competition Act 89 of 1998 Rental Housing Act 50 of 1999.  Since 1994, the South African government has committed itself to consumer protection. This commitment is part of a wider commitment to the promotion and advancement of the social and economic welfare of all South Africans, which is reflected in the following legislation that has been passed since 1994: Electronic Communications and Transactions Act 25 of 2002 National Credit Act 34 of 2005 СРА Protection of Personal Information Act 4 of 2013 Financial Sector Regulation Act 9 of 2017. The need to introduce comprehensive and general consumer protection legislation was made necessary by factors such as unfair and discriminatory market practices, the proliferation of low quality and unsafe products, the complexity of goods, a lack of knowledge of the rights of consumers, limited redress and weak enforcement of consumer rights. The CPA provides comprehensive consumer protection legislation, but the Act is not a complete codification of all consumer legislation in one piece of legislation.  The primary purpose of the CPA is to promote and advance the social and economic welfare of consumers in South Africa (section 3). This aim is to be achieved through: establishing a legal framework for achieving and maintaining a consumer market that is fair, accessible, efficient, sustainable and responsible for the benefit of consumers generally reducing disadvantages experienced in accessing goods and services by vulnerable consumers promoting fair business practices protecting consumers from unfair trade practices improving consumer awareness and access to information, and encouraging informed consumer choices and behaviour. developing a culture of consumer responsibility providing an effective system of consensual dispute resolution providing an efficient system for redress. INTERNATIONAL TRADE LAW Trade takes place between various nations which includes the provisions of goods and services across borders. International trade law is a global system of laws that govern trade relations between countries.  TAX LAW Without the revenue from tax, the government cannot do its job. The state uses taxes paid to fund social and economic programmes, and to provide public goods and services, such as schools, universities, hospitals, clinics and roads, as well as defence and security. South Africa’s tax system is determined by the laws that the Commissioner must administer. The Income Tax Act 58 of 1962, the VAT Act 89 of 1991 and the Customs and Excise Act 91 of 1964 are the most important of these.  Every year, the Minister of Finance presents the Budget, which outlines the total government expenditure for the following financial year and the ways in which this expenditure will be financed. Tax legal practitioners deal with the following issues: 1. Consult with clients on the tax aspects of commercial dealings. 2. Interact on behalf of their clients with the tax authorities, whether in seeking rulings and other dispensations on their behalf of their clients. 3. Provide tax opinions on commercial transactions and Tax due diligence reviews. 4. Advice on international tax considerations for residents and non-residents, including the tax exemptions, tax treaties and withholding taxes.  INSURANCE LAW A contract of insurance is concluded to transfer the risk of possible loss to an insurance company. Insurance therefore is an attempt to protect ourselves and our possessions, such as our houses and our cars, against possible future loss or damage. In exchange for regular payments, insurance companies will pay us out a certain amount of money, it the event against which we are insured should happen. In addition to the usual home, household contents and car insurance, people also insure against potential liabilities, such as professional negligence insurance, their lives, their bodies and the lives of close family members. Insurance is defined as a contract of good faith between two parties, the insurer and the insured.  The insurer is the party that provides the insurance and agrees to give a sum of money or its equivalent to the insured if a specified uncertain event occurs. The insured is the person who pays money, a premium, to insure her interests against unforeseen events. The insurer will be a professional insurer. The company concludes contracts of insurance with many people. The insurer collects premiums from these people and then pays claims for losses from the pool of funds, which it also manages. The insurance industry is regulated both by the common law and three pieces of legislation, namely: The Long-Term Insurance Act 52 of 1998, which applies to the long-term insurance industry The Short-Term Insurance Act 53 of 1998, which applies to the short-term insurance industry The Financial Advisory and Intermediary Services Act 37 of 2002, which introduce minimum standards aimed at protecting consumers of financial products (which include insurance policies) and Policy Protection Rules to promote sound insurance practices. INFORMATION TECHNOLOGY LAW & E- COMMERCE LAW As the name suggests, electronic commerce involves business being conducted over the internet. E-commerce can be done only by making use of online contracts. Before we discuss online contracts, you need to know two important things: 1. The Electronic Communications and Transactions Act 25 of 2002 does not do away with any of the common law principles that you have already studied in the previous chapters (such as principles relating to contractual capacity, consensus, and legal validity). 2. All agreements can be concluded online except for: a. agreements for the sale of immovable property b. long-term lease of immovable property tor 20 years or more c. the execution, retention and presentation of a will or codicil d. the execution of a bill of exchange e. documents or agreements, which, by agreement between the parties, may not be generated electronically.  Three broad categories of online contracts may be identified, namely: contracts for the sale of goods contracts for the supply of digitised products contracts for the supply of services and facilities. These three categories may further be subdivided into the following three classes of online contracts: shrink-wrap agreements click-wrap agreements browse-wrap agreements. Shrink-wrap Agreements Shrink-wrap agreements are typically encountered when buying and selling software This type of contract was first used in the 1980s and 1990s, when more and more companies started to sell software. The reason that companies felt it was necessary to conclude this type of contract with the buyer of the software was because of the unexpected rise of piracy which is the illegal copying of software. (Think about how many times you may have illegally copied music, pictures and games from your friend To counteract this threat of piracy, companies started to include an 'agreements of use whenever they sold software to a user. The whole aim of a shrink-wrap agreement is to regulate the activities of the user and to prevent him from acting in a way that may damage the software producers and developers. Click-wrap Agreements A click-wrap agreement is basically the online version of shrink- wrap agreement. Click-wrap agreements are those agreements that are built into internet websites. This type of agreement has mainly two purposes, namely: to get you to accept (and therefore be legally bound by the terms and conditions of the website to exclude/limit and restrict the legal liability of the website owner, company or third party if something goes wrong. Browse-wrap Agreement A browse-wrap agreement is an agreement that regulates how the content of a specific website is used and/or accessed. The easiest way to identify a browse-wrap agreement is to look for the (hyper) link on the screen. This is because, in this type of agreement, just by clicking on that link and entering its website, you are agreeing to its terms and conditions of use. The main difference then between a click-wrap agreement and a browse-wrap agreement is that in a click-wrap agreement, you typically indicate that you accept the terms and conditions by clicking on the accept button whereas, in a browse wrap agreement, there is no such affirmative action. WHEN A LEGAL DISPUTE ARISING OUT OF MERCANTILE LAW WILL BECOME A CRIMINAL OR PRIVATE LAW MATTER CRIMINAL While the general rule is that only a natural person can perform a criminal act, a juristic person (including a corporation) can nevertheless be liable for a crime in certain circumstances. A company or corporate is a separate legal identity or person, which can be tried and convicted of a crime committed in its name. Corporate criminal liability refers to the holding of a corporation criminally liable for crimes it has committed or for crimes that have been committed in endeavouring to pursue the interests of the corporation. Businesses have been prosecuted for crimes such as Ponzi schemes, embezzlement, and crimes that intentionally violate environmental laws and regulations.  Corporate criminal liability in South Africa is mainly governed by Section 332(1) of the Criminal Procedure Act13. This provides that a corporate body such as a company may be held directly liable for a criminal offense. In terms of Section 332(2) of the Criminal Procedure Act, a director of a company will be cited14 as a representative of the corporate body in any prosecution and will be dealt with as if he (the director) were the person accused of committing the offense. However, if found guilty, the corporation will be convicted rather than the director DELICTUAL Vicarious / delictual liability is when a supervisory party such as a company becomes delictually liable for the negligent actions committed by an employee in the scope and performance of his duties. This means that if an employee is driving the company’s delivery vehicle and causes a collision whilst acting in scope of his employment as a driver, the company will be liable for the damage caused by the employee. Vicarious liability justifies holding a corporation/ company liable for crimes committed by its directors, members and employees as long as it can be shown that they committed these crimes in the process of furthering the interests of the corporation. Section 332(7) of the Criminal Procedure Act allows for the criminal liability of members of associations, such as partnerships, that lack juristic personality. SUBSTANTIVE LAW AND ADJECTIVAL LAW Substantive law is law which governs the rights and obligations of individuals. It is the written rules passed by the legislature that govern the behaviour of people. Adjectival or procedural law is the law that governs the mechanics of how legal cases flow. Procedural law dictates how the substantive law is to be administered. Mercantile law forms part of the substantive law and when individuals participating in related commercial activities want to enforce a right, the matter is brought before the court using civil procedure. STATUTES, THEIR INTERPRETATION AND IMPORTANCE WRT MERCANTILE LAW Statutes regulate a wide variety of both civil and criminal matters covering many areas of life, from road travel to income tax. For example, the National Road Traffic Act 93 of 1996 regulates the licensing and driving of motor vehicles. The Income Tax Act 58 of 1962 regulates the payment of income tax. A statute contains many provisions. A provision refers to a specific requirement, condition or rule about something which the statute aims to regulate. In most instances, the language of the statute is clear, however, difficulties can arise when reading the provisions of a statute. For example: Provisions may differ - one section of a statute may say one thing while another says something else. An example of this would be in labour law, where one section of a statute refers to redundancy while another section of the same statute refers to retrenchment. Whether the difference is significant would be a matter for interpretation. A provision in a statute may be unconstitutional, because it conflicts with the Bill of Rights in our South African Constitution. An example of this could be where the legislative requirements for a job state that only males may be employed, for example, fire-fighters. This is discrimination and it is unfair because there is no basis for reserving the job for males only. Technology is changing rapidly, and legislation cannot change quickly enough to adapt to new technological advances. In South Africa, legislation recognises only bank notes or coins as legal tender, which may be used to settle a monetary debt. Yet, technological changes allow us to make payments via our phones, the internet and debit and credit cards. These are not yet recognised as legal tender and the creditor can refuse to take payment in by these methods. The wording used in the Act may be ambiguous because the words could have more than one meaning. For example, after the administrator appoints an assistant, he or she shall supervise the dissolution of the estate. Does the 'he or she' refer to the administrator or to the assistant? THE IMPACT OF COMMON LAW ON MERCANTILE LAW South African common law is a set of laws that developed over time. It includes contributions from various European cultures, as well as South African court decisions. Let us look at three ways in which common law can develop. 1. As we have already mentioned, decisions made in superior courts of the land can help to shape and change common law by addressing new issues or interpreting the legislation in new ways. The Constitution of the Republic of South Africa, 1996, is particularly important to these decisions. 2. When these courts have to deal with a problem that is not covered by the common law or by legislation, they sometimes look to the legal systems of other countries for suggestions. In this way; the courts can bring in pieces of foreign law and make them part of our common law. 3. It the legislature wants to remove, adapt or develop a part of the common law, it can do so by passing legislation. Because we inherited our common law from other legal systems and developed it over a long time, It is not as easy to look up as other sources of law. Common law principles, are long-established practices that have gained the force of law. These principles are not written down and therefore they can be difficult to ascertain, find or even interpret unless the courts have given clarity on them, or set out these principles in academic textbooks. Academic textbooks are often the best place to start when you want to find out what the common law or customary law on a particular subject states. The second major place where you can find the common law is in the decisions of the courts. THE IMPACT OF THE CONSTITUTION & THE BOR ON MERCANTILE LAW The Constitution 1996 is the supreme law of the land. No other law or government action can supersede the provisions of the Constitution. The Constitution 1996 impacts all the various areas of Mercantile law. A few examples are included below: Section 23 of the Constitution provides that all individuals should not be exposed to unfair labour practises and protects labour rights The Basic Conditions of Employment Act was enacted to ensure that individuals are not exposed to unfair labour practices. Section 9 of the Constitution 1996 provides that everyone is equal before the law and has the right to equal protection and benefit of the law. The Consumer Protection Act ensures that framework for consumer protection and aims to develop, enhance and protect the rights of consumers and to eliminate unethical suppliers and improper business practices. THE ROLE OF THE LEGAL PRACTITIONER IN MERCANTILE LAW & PERFORMING BUSINESS TRANSACTIONS Transactions between businesses and customers often involve a contract and this could frequently give rise to legal issues pertaining to the terms of the contract. For instance, a breach of contract can cause significant losses for either party. ISSUES FOR WHICH LEGAL RECOURSE MIGHT BE NECESSARY What is the role of the legal practitioner in company / corporate law? Consider the following examples: 1. Contracts: Reviewing, drafting, and negotiating legally binding agreements on behalf of the company or corporation, which could involve everything from lease agreements to multi- billion-dollar acquisitions. 2. Mergers and acquisitions (M&A): Conducting due diligence, negotiating, drafting, and generally overseeing "deals" that involve a corporation "merging" with another company or "acquiring" (purchasing) another company. 3. Corporate governance: Helping clients create a framework for how a firm is directed and controlled, such as by drafting articles of incorporation, creating bylaws, advising corporate directors and officers on their rights and responsibilities, and other policies used to manage the company and ensure compliance with legislation. 4. Venture capital: Helping start-up or existing corporations find capital to build or expand the business, which can involve either private or public financing. 5. Securities: Advising clients on securities law compliance, which involves the complex regulations aimed at preventing fraud, insider training, and market manipulation, as well as promoting transparency, within publicly-traded companies. 6. The LP advises a client on how to set up a business by informing the client of the requirements set out in the Companies Act, etc. or how certain legislation regulates a particular commercial activity 7. The commercial practitioner will draft an agreement for the sale or purchase of immovable property. The LP as conveyancer, will also perform work related to the transfer of ownership in the property from the seller to the buyer. Conveyancing is the legal process that takes place when lawful ownership is obtained of immovable property. Each time a property is sold, a new deed of transfer must be drawn up and registered. 8. A LP has the duty of ‘translating’ legal jargon for their client. This includes reading and explaining the contractual terms and conditions to the client in simple English as well as suggesting possible amendments to the contract if necessary to protect the client’s interests. THE IMPORTANCE OF USING PRECEDENTS FOR DRAFTING The use of precedents is an important part of legal drafting in South Africa. Precedents are sample legal documents that have been used in previous cases. They can be used as a guide when drafting new documents, and they can help to ensure that the new documents are compliant with the law. There are several advantages to using precedents when drafting legal documents in South Africa. First, precedents can save time and effort. Lawyers do not have to start from scratch when drafting new documents, they can simply use a precedent as a template. This can save a significant amount of time, especially for complex documents. Second, precedents can help to ensure that the documents are compliant with the law. Precedents are based on previous cases, and they have been vetted by judges and lawyers. This means that they are likely to be compliant with the law. This is important, as a poorly drafted legal document can have serious consequences for a client. Third, precedents can help to improve the quality of legal drafting. Precedents are written by experienced lawyers, and they can provide a model for good drafting practice. This can help lawyers to improve their own drafting skills, and it can lead to the production of better quality legal documents. Of course, there are also some disadvantages to using precedents. First, precedents can be inflexible. They may not be suitable for all cases, and they may not be able to accommodate the specific needs of a client. This is why it is important to tailor precedents to the specific circumstances of each case. Second, precedents can be outdated. The law changes over time, and precedents that are a few years old may not be up-to-date. This is why it is important to check precedents against the latest legislation and case law. Overall, the use of precedents is an important part of legal drafting in South Africa. Precedents can save time, improve quality, and help to ensure compliance with the law. However, it is important to use precedents wisely and to tailor them to the specific needs of each case.