Mercantile Law SG May-June 2009 ENG MEMO

8/22/2019 Mercantile Law SG May-June 2009 ENG MEMO

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SENIOR CERTIFICATE EXAMINATION 2009

MERCANTILE LAW

STANDARD GRADE

MAY/JUNE 2009

MEMORANDUM

MARKS: 300

This memorandum consists of 12 pages.

Copyright reserved Please turn over


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Mercantile Law/SG 2 DoE/May-June/2009Senior Certificate Examination Memorandum

QUESTION 1

1.1 1.1.11.1.2

1.1.31.1.41.1.5

DrawerPayee

DraweeCrossedDishonouringRefer to drawer (R/D) (5 x 2) (10)

1.2 1.2.1 Material alteration- Alteration on a cheque that changes the essential instruction on

the cheque- E.g. Amount/name of payee that is changed- Banks do not allow any changes on cheques any more

(Any 2 x 2)

Immaterial alteration- Alteration that has no influence on the validity of the cheque- E.g. Crossing of cheque (2 x 2)

(4)

(4)

1.3 1.3.11.3.21.3.31.3.41.3.5

PledgeMortgagesMortgageMortgagePledge

(2)(2)(2)(2)(2)(10)

1.4 1.4.11.4.21.4.31.4.41.4.5

FalseTrueFalse

TrueFalse

(2)(2)(2)(2)(2)(10)

1.5 Rights of mortgagee- Obtains real right over bonded property

- Insolvency of mortgagor has preferential right over other creditors- Mortgagor fails to pay debt; can sell property for outstanding debt- Right extends over appendages- Expenses incurred for maintenance may be compensated

(Any 3 x 2)

(6)



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1.6 Mortgage terminated by- Order of the court- Agreement between parties- Alienation of the property

-Discharge principal debt

- Merger of mortgagor and mortgagee- Prescription / Effluxion of time- Extinction of mortgagors title- By renunciation of rights- Destruction of mortgaged property

(Any 3 x 2)

(6)[50]

QUESTION 2

2.1 2.1.12.1.22.1.32.1.4

ADBC (4 x 2)

(8)

2.2 Aspects in written partnership agreement- Period for which entered into- Nature of business- Contribution of each partner- Authorised withdrawals- Interest on capital and interest charged on drawings

-Division of profits and losses

- Salaries and/or bonuses to partners- Control and authority of partners- Rights and duties of partners- Procedure when partner dies or retires- Settlement of disputes between partners

(Any 4 x 2)

(8)

2.3 Circumstances when member of CC loses protection limited liability- Where transactions are entered into on behalf of the CC without

using the letters CC- If the number of members exceeds the number of 10 for a period of

longer than six months- If a member is allowed to participate in management while he is

incapable of doing so- If the business is managed in a negligent and reckless manner- If the CC is deregistered whilst it still has outstanding obligations

(Any 4 x 2)

(8)



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2.4 2.4.12.4.22.4.32.4.4

2.4.52.4.62.4.72.4.82.4.92.4.10

TrueFalseFalse

True

TrueTrueFalseFalseFalse

True

(2)(2)(2)(2)

(2)(2)(2)(2)(2)(2)(20)

2.5 Requirements to accept contract entered into before incorporation- Contract must be in writing- Entered into by a person declaring that he is an agent of the

company- Memorandum of company must state its objective to accept and

ratify this contract- Two certified copies must be sent to the registrar together with the

articles and memorandum(Any 3 x 2)

(6)[50]

QUESTION 3

3.1

3.2

3.3

3.1.13.1.23.1.33.1.4

3.2.13.2.23.2.3

3.3.13.3.2

3.3.33.3.4

DBAC (4 x 2)BAD (3 x 2)

TrueFalse

FalseTrue (4 x 2)

(8)

(6)

(8)

3.4 3.4.1

3.4.2

3.4.3

3.4.4

3.4.5

Sequestration order

Master

Satement of affairs

Curator

Liquidation and distribution account

(2)

(2)

(2)

(2)

(2)(10)



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3.5 General rules for meetings of creditors- All meetings of creditors must be held at a time and place which are

regarded as the most convenient for all the parties concerned.- The Master (or an official in the public service who has been

appointed by him in general or specially for this purpose) presidesas chairman at all meetings in districts with a Masters office.

- The chairman must keep minutes of the proceedings and, if he isnot the Master, must send to the master, at the end of theproceedings, a certified copy of the minutes.

- The chairman in outlying districts, who is not the magistrate, mustindicate in his minutes the reasons for the absence of themagistrate.

- The chairman at such a meeting has the right to adjourn themeeting from time to time.

- The place at which a meeting is held must be accessible to the

public, and the announcement of a statement is protected to thesame extent as the announcement of a declaration made in a courtof law.

- The chairman has the right to summon any person who can provideinformation of importance to appear at such a meeting and/orsubmit books or documents which bear on the insolvent estate andcontain information thereon.

(Any 5 x 2)

(10)

3.6 When a trustee can be dismissed- If he accepts any benefit in connection with the estate

-If he wrongfully omits a creditors name or adds it to the records

- If any person is given any consideration- If he offers not to investigate previous transactions of the insolvent- If claims are divided in order to increase the number of votes

(Any 4 x 2)

(8)[50]

QUESTION 4

4.1 4.1.1

4.1.2

4.1.3

4.1.4

4.1.5

share capital

promote culture, welfare, religion, art

same task, promotion of business

bonuses and dividends

transferred to another article 21 company with similar aims (5 x 2)

(10)

4.2 4.2.1

4.2.2

A C F H (4 x 2)

B D E G (4 x 2)

(8)

(8)(16)



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4.3 Matters in Articles- Shares and share certificates- Divisible profits and dividends- Meetings- Directors (4 x 2)

(8)

4.4 Documents needed to register memorandum and articles- Original memorandum of association- Original articles of association in the prescribed form- Notice of physical and postal address of the office- Written consent in prescribed form to act as director- Written consent to act as auditor- Proof of payment of registration fee- Proof of payment of annual subscription- If one of the signatories of the memorandum does not present the

documents to the registrar himself, power of attorney must be

issued to a lawyer(Any 4 x 2)

(8)

4.5 Restrictions to choice of name of company - Name may not be the same or nearly the same as

that of company already registered- Name may not mislead the public- Must consist of at least three letters of the alphabet- If name does not form pronounceable word, name must be followed

by word describing the main business of the enterprise- Words like Government, State may not be used without the

permission of the State President- Words like Bank may not be used without the permission of the

Minister of Finance- Hotel, Motel or Botel may not be used unless the property is

used for that purpose.- Private company ends in (Pty.) Ltd- Public company ends in Ltd- Company limited by guarantee ends in Limited (limited by

guarantee) OR association incorporated under Section 21(Any 4 x 2)

(8)

[50]

QUESTION 5

5.1 5.1.15.1.25.1.35.1.45.1.5

Money / labourDebtor and creditorEnrichment lienImprovementSalvage

(2)(2)(2)(2)(2)(10)



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5.2 5.2.15.2.25.2.35.2.4

5.2.5

Debtor and creditor lienSalvage lienImprovement lienSalvage lien

Salvage lien

(2)(2)(2)(2)

(2)(10)

5.3 Reasons for dissolution of partnership- Mutual agreement- Lapse of time for which the partnership was formed- If purpose of partnership has been fulfilled- Death of one of the partners- Change in membership of the partnership- Sequestration of one of the members estate or that of the

partnership

-One of the partners gives notice that he wants to retire (dissolution)

- Order of the court- Exceeding the maximum number of members- If war breaks out and one of the partners is in enemy territory

(Any 5 x 2)

(10)

5.4 Mutual obligation to contribute something to partnership- Each partner must contribute something- Contributions form the basis of the partnership property- Contributions can consist of money, property, labour, etc.- Contributions form common stock and is jointly owned by partners

-That which partner contributes, is to be separated from his privateestate

- Partner cannot deal with joint property on his own, unless it hasbeen authorised

- No partner may be excluded from control of the joint property- Contributions made unconditionally; subjected to risks of the

partnership- Money contributed to the partnership on condition that it is paid

back, is a loan; partner is not a partner, but a creditor- Property transferred to partnership as follows:

movable (joint ownership by operation of law)immovable (registration in deeds office)incorporeal (cession of rights)

- On dissolution the joint property is returned to the partners in theproportion in which it was contributed

- If value of contribution cannot easily be determined, the share ofthe partner is determined according to his share in the profits

(Any 5 x 2)

(10)



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5.5 5.5.1 (a) Tenant(b) Landlord

(2)(2)

5.5.2

5.5.35.5.4

Contract of lease

WorseRemuneration

(2)

(2)(2)(10)[50]

QUESTION 6

6.1 6.1.16.1.26.1.36.1.4

6.1.56.1.66.1.76.1.86.1.96.1.10

DABC

EFFADE

(2)(2)(2)(2)

(2)(2)(2)(2)(2)(2)(20)

6.2 6.2.16.2.26.2.36.2.46.2.5

BADEC

(2)(2)(2)(2)(2)(10)

6.3 6.3.1 Definition voluntary surrender- The debtor himself/herself applies to have his/her estate

sequestrated- In order to relieve the pressure- Placed upon him/her by the creditors.

(Any 2 x 2)

(4)

6.3.2 Requirements: voluntary surrender- The statutory formalities must have been carried out- The debtor must have enough assets to cover the costs- The debtor is insolvent- Sequestration must be to the advantage of the creditors

(3 x 2)

(6)



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6.4 Persons disqualified to be a trustee- An insolvent- Relative of the insolvent within the third degree- Minors or other persons under disability

-Persons not resident in SA

- Persons with interests which conflict with the interests of thecreditors

- Rehabilitated insolvent who, when his estate was sequestrated,owed money which he misappropriated as trustee of another estate

- Person declared incapable by the court because he has received orgiven an unlawful remuneration in respect of a matter connectedwith an insolvent estate

- Corporate bodies- Person sentenced to imprisonment without the option of a fine- Person who tried to induce a creditor to vote for him as trustee

-Person who at any time acted as bookkeeper, accountant or auditorfor the insolvent for the period of twelve months before thesequestration

- Agents who act or vote for and on behalf of a creditor at a meetingof the estate concerned

(Any 5 x 2)

(10)[50]

QUESTION 7

7.1 Negotiorum gestor

-Acts on behalf of person who is not present

- Without his authority- To protect the property of the absent person- Actions of the NG must be reasonable and in good faith- NG may claim all his expenses from the owner- NG may not claim for his services- If NG spent more money than the amount by which the owner has

been enriched, he may not recover the extra costs- NG cannot create any legal obligation between the principle and the

third party

(Any 5 x 2)

(10)

7.2

7.3

7.2.17.2.27.2.37.2.47.2.5

7.3.17.3.27.3.3

7.3.47.3.5

AuctioneerLicenceCommissionReserve priceHighest (5 x 2)FactorBrokerFactor

BrokerDel credere (5 x 2)

(10)

(10)



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7.4 7.4.17.4.27.4.37.4.4

7.4.5

TrueTrueFalse

True

True

(2)(2)(2)(2)

(2)(10)

7.5 Duty to pay agents remuneration- Principal must pay agent promised commission as agreed or as is

the custom- If there is no agreement, then the agent is entitled to reasonable

commission- Agent may only receive commission if he performed his task- If the agent performed, the principal must pay the commission,

even if he did not benefit from it or if he withdrew his instruction

-Estate agents are only entitled to commission if a certain eventoccurred, for example the principal and the third party are bound bythe negotiations

(5 x 2)

(10)[50]

QUESTION 8

8.1 8.1.18.1.28.1.38.1.48.1.5

TrueTrueFalse

TrueFalse

(2)(2)(2)(2)(2)(10)

8.2 Huur gaat voor koop- If the landlord of a property sells that property, the tenant may not

be prejudiced- The buyer cannot evict the tenant as long as he pays rent- The new buyer can also not be bound by responsibilities the seller

still has toward the tenant-

The buyer becomes the new landlord as from the date he becomesthe new owner of the property- The buyer had to be aware of the contract of lease or the contract

had to be registered in the case of a long-term contract- The buyer had to be aware of the contract of lease in the case of a

short-term contract (especially if the tenant occupied the propertyduring the sale transaction)

(Any 5 x 2)

(10)



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8.3 8.3.18.3.28.3.38.3.4

8.3.58.3.68.3.78.3.88.3.9

TenantDamagesDamagesEvents that cannot be controlled by the tenant

UsefulLuxuriousLandlordNecessaryNecessary

(2)(2)(2)(2)

(2)(2)(2)(2)(2)(18)

8.4

8.5

Aspects to be agreed before contract of lease- The specific property- The duration of lease- The rent (amount) (3 x 2)

Termination of lease

- By the expiry of time- By notice- By mutual agreement- By merger of the tenant and the landlord- By the insolvency of the tenant- By the destruction of the property not due to the fault of the tenant

or landlord- By cancellation by either one of the two parties- By the death of any one of the two parties

(Any 3 x 2)

(6)

(6)[50]

QUESTION 9

9.1 Formalities to make a will- Must be in writing- Must be signed at the end thereof- Testator must personally sign or nominee must sign in his presence-

Testator or nominee must sign in presence of two competentwitnesses and they must be present at the same time- Witnesses sign in each other's presence and in front of the testator- Each page of will must be signed separately- If testator signs with a mark, a magistrate or notary must certify it at

the end thereof that he has satisfied himself regarding the identityof the testator and that it is his will

(Any 5 x 2)

(10)



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9.2 9.2.1 (a) Unilateral(b) Declaration of will(c) Legal(d) Estate / Assets

(2)(2)(2)(2)

9.2.29.2.39.2.49.2.59.2.69.2.7

Nominee1614MasterCodisilIntestate succession

(2)(2)(2)(2)(2)(2)(20)

9.3 Importance of office of executor- Must account to master for carrying out prescribed duties

-If adhered to directives, considered an offence; is punishable

- Always act in best interest of heirs- Must carry out instructions as stipulated, not own free will- If attorney is appointed, still fully responsible for actions of attorney- Estate distributed incorrectly, personally held liable to heirs- Position of good faith, may not misuse position- Negligent in execution of duties, liable to be punished

(Any 5 x 2)

(10)

9.4 9.4.19.4.29.4.39.4.49.4.5

FalseFalse

TrueTrueFalse

(2)(2)(2)(2)(2)(10)[50]

TOTAL: 300

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