SECOND EDITION

The Law of

Commerce

IN SOUTH AFRICA

COMMERCIAL LAW

JOHAN SCOTT (EDITOR) I STEVE CORNELIUS (EDITOR) DUMILE BAQWA l ELIZABETH DE STADLER

SIEG EISELEN I ROGER EVANS I TRACY HUMBY MICHELLE KELLY-LOUW I ISOBEL KONYN

SHAWN KOPEL I TJAKIE NAUDÉ HEIDI SCHOEMAN I SUSAN SCOTT

NICOLA SMIT I PHILIP SUTHERLAND CHARNELLE VAN DER BIJL I TANYA WOKER

OXFORD UNIVERSITY PRESS

SOUTHERN AFRICA

itSiUüsätiiä

Preface xxiii About the authors xxv About the book xxix Acknowledgements xxxi

CHAPTER 1 INTRODUCTION TO THE SOUTH AFRICAN LEGAL SYSTEM - TRACY HUMBY 1 1 The relevance of law 2

1.1 The purpose and function of law in a society 3 1.2 Law and commercial activity 3

1.2.1 Law articulates minimum standards 3 1.2.2 Law recognises different kinds of property 3 1.2.3 Law facilitates and upholds business agreements 4 1.2.4 Law is the foundation of corporate activity 4 1.2.5 Law legitimates state regulation of commercial activity 5 1.2.6 Law provides an authoritative mode of dispute resolution 5

2 Fundamental concepts 5 2.1 Law 5

2.1.1 Law is distinguished from religion and morality 6 2.2 Jurisprudence 6 2.3 The state and the rule of law 7

2.3.1 The legislature 7 2.3.2 The executive 8 2.3.3 The judiciary 8 2.3.4 The rule of law 8

2.4 Legal relationships 10 2.4.1 Public legal relationships 10 2.4.2 Private legal relationships 11

2.5 Legal liability: criminal and civil (contractual, delictual and unjustified enrichment) 12 2.6 Legal personality 14

3 Sources of law 14 3.1 The Constitution 15 3.2 Legislation 18

3.2.1 Relationship between primary and secondary legislation 18 3.2.2 The law-making process 19 3.2.3 Primary legislation relating to commercial activity 20 3.2.4 Judicial interpretation of legislation 21

3.3 Judicial precedent 23 3.4 Other sources of legal authority 25

3.4.1 Common law 25 3.4.2 Custom 26 3.4.3 Customary law 26 3.4.4 Foreign law 26

4 Categories of law 26 4.1 The traditional categorisation of legal subjects 27 4.2 Bringing different categories of law together in practical problem solving 28

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5 Litigation, the court system and legal professionals 28 5.1 Litigation 28

5.1.1 Distinction between a civil and a criminal trial 29 5.1.2 The criminal trial 29 5.1.3 Different types of civil trial 29 5.1.4 Appeal and review 30

5.2 The court system 31 5.2.1 The court hierarchy 31 5.2.2 Jurisdiction 33

5.3 Legal professionals 34 5.3.1 Attorneys and advocates 34

CHAPTER 2 THE LAW OF CONTRACT - SHAWN KOPEL, HEIDI SCHOEMANN 39 The relevance of law of contract 41 1 The many dimensions of contract law 41

1.1 Promissory and will theories 41 1.2 Reliance theory 42

2 Definition of a contract 42 3 Essential elements of contract 43

3.1 Consensus 45 3.1.1 Contracts accepted through the post 46 3.1.2 Contracts accepted by telephone, facsimile transmission, telegram

and email 47 3.1.3 Offers which introduce special terms 48 3.1.4 Rules of offer and acceptance 52 3.1.5 The doctrine of estoppel, and the doctrine of quasi-mutual assent 57

3.2 Serious intention 58 3.3 Reality of consent 59

3.3.1 Mistake 59 3.3.2 Misrepresentation 60 3.3.3 Duress 64 3.3.4 Undue influence 65

3.4 Capacity to contract 65 3.4.1 Factors affecting capacity 66 3.4.2 Aspects of contractual capacity relating to natural persons 69 3.4.3 Marriage and the contractual capacity of married women 75

3.5 Certain and definite terms 78 3.6 Lawfulness 79

3.6.1 Statute 80 3.6.2 Common law 81

3.7 Possibility of performance 82 3.7.1 Physical impossibility 83 3.7.2 Legal impossibility 84

3.8 Formalities 90 3.8.1 Formalities imposed by statute 90 3.8.2 Self-imposed formalities 92

4 Interpretation of contracts 94 4.1 Express, tacit and implied terms 94

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4.2 The parol evidence rule 95 4.3 Rules of interpretation 96

4.3.1 Presumptions of substantive law 96 4.3.2 Presumptions of interpretation 97 4.3.3 The use of extrinsic evidence 98

4.4 Conditional contracts 99 4.5 Special clauses in contracts 100 4.6 Rectification 100

5 Third parties to contract 100 5.1 Contracts for the benefit of third parties (stipulatio alteri) 101 5.2 Assignment 102 5.3 Cession 102 5.4 Delegation 104

6 Breach of contract 105 6.1 Repudiation 105 6.2 Mora debitoris 106 6.3 Mora creditoris 107 6.4 Positive malperformance 107 6.5 Prevention of performance 107

7 Termination of contract 109 7.1 Performance or payment 109 7.2 Notice 109 7.3 Release 109 7.4 Novation 110 7.5 Merger (confusio) 110 7.6 Impossibility of performance 110 7.7 Set-off (compensatio) Ill 7.8 Prescription 112

7.8.1 Types of prescription 112 7.9 Insolvency and rehabilitation 114 7.10 Death 115 7.11 Rouwgeld clause 115 7.12 Cooling-off provisions 115

8 Remedies 116 8.1 Specific performance 116 8.2 Cancellation 119 8.3 Damages 120 8.4 Interdict 123 8.5 Declaratory order 123 8.6 Penalty clauses 123 8.7 Interest 124

9 The effect of the Constitution 125

CHAPTER 3 THE LAW OF SALE - SIEG EISEUEN 131 1 The relevance of the law of sale 132 2 Definition of sale 134 3 Nature of sale 134

3.1 Agreement on the object of the sale 134

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3.1.1 Object determined or determinable 134 3.1.2 Different types of things 135 3.1.3 Third party goods 136 3.1.4 Consecutive sales of the same thing 137

3.2 Transfer of ownership or delivery of possession 137 3.2.1 Ownership 137 3.2.2 Cash and credit sales 139 3.2.3 Delivery of undisturbed possession of the goods 139 3.2.4 Place of delivery 140 3.2.5 Mode of delivery 140 3.2.6 Time of delivery 141

3.3 Agreement on the price 141 3.3.1 Certain or ascertainable price 141 3.3.2 Price based on estimates 142 3.3.3 Disproportionate values: sale or donation? 142

4 Distinguishing sale from other types of contract 142 4.1 Sale distinguished from barter 142 4.2 Sale distinguished from lease 142 4.3 Sale distinguished from contract for work or services 143 4.4 Sale distinguished from software licensing 143

5 Sales contract 143 5.1 Freedom of contract 143 5.2 Consumer protection legislation 144 5.3 Standard terms 144 5.4 Terms implied by law (naturalia) 145 5.5 Commonly included terms 146

6 Pre-contractual misrepresentations about the qualities of the goods 147 6.1 Introduction 147 6.2 Dicta et promissa 147

7 Options and rights of pre-emption 148 7.1 Introduction 148 7.2 Options 148 7.3 Rights of pre-emption 148

8 Formalities 149 8.1 Formalities required by law 149

8.1.1 Sale of immovable goods 149 8.1.2 Agents 150 8.1.3 Written contract 150 8.1.4 Parol evidence and rectification 151 8.1.5 Sufficient description of the thing sold 151 8.1.6 Credit transactions 151

8.2 Formalities prescribed by the parties 152 8.3 Formalities and electronic documents 153

9 Obligations of the seller 153 9.1 Duty to take care of the goods 154

9.1.1 Transfer of risk 155 9.1.2 Transfer of benefits 155

9.2 Seller's duty to take care of the goods 155

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9.2.1 Consequences of damage to or destruction of the goods 156 10 Obligations of the buyer 156

10.1 Payment of the price 156 10.1.1 Method of payment 156 10.1.2 Time and place of payment 157

10.2 Receipt of the goods 158 11 Warranties 158

11.1 Warranty against eviction 158 11.1.1 Requirements to rely on the warranty against eviction 159 11.1.2 Nature of the claim 159

11.2 Delivery of conforming or merchantable goods 159 11.2.1 Quality of the goods determined by the parties 160

11.3 Residual warranty of reasonable merchantable quality 161 11.4 Residual warranty of fitness for purpose 161 11.5 Residual liability for latent defects 161

11.5.1 Requirements for the liability for latent defects 162 12 Remedies 163

12.1 The actio redhibitoria 163 12.2 The actio quanti minoris 163 12.3 Sales action (actio empti) 163 12.4 Extended liability of manufacturers and dealers 164 12.5 Exclusion of the aedilitian remedies 165 12.6 The voetstoots clause 165

CHAPTER 4 THE LAW OF CONSUMER CREDIT AGREEMENTS - MICHELLE KELLY-LOUW 169 1 The relevance of credit agreements 170 2 Why was a new National Credit Act needed? 172 3 Objectives of the Act 173 4 Application of the Act 173

4.1 General application 174 4.2 Circumstances where the Act does not apply 174 4.3 Limited application where the consumer is a company, close corporation,

partnership or trust 174 4.4 Credit agreements to which the Act applies 175

4.4.1 Defining a credit agreement and the type of credit agreements 175 4.4.2 Not deemed to be credit agreements 180 4.4.3 Different categories of credit agreements 182

5 Consumer credit institutions and credit industry regulation 183 6 Registration of industry participants 184 7 National Register of Credit Agreements 186 8 Consumer credit policy and consumer rights 186

8.1 Basic consumer rights 186 8.2 Pre-agreement disclosure 188 8.3 Consumer must disclose location of goods 189 8.4 Obligations of pawnbrokers 189 8.5 Limits imposed on the costs of credit 189 8.6 Statements of account 189 8.7 Rescission from an instalment agreement or a lease 189

8.8 Surrender of goods 190 8.9 Prohibition of certain credit marketing and advertising practices 191

9 Credit agreements i92

9.1 Pre-contractual aspects: quotes and disclosure 192 9.2 Form and format of credit agreements 193 9.3 Waiving common law rights 193 9.4 Unlawful credit agreements 194 9.5 Unlawful provisions of credit agreements 195 9.6 Capping of interest rates and other costs of credit 195 9.7 Statements of the credit agreement 197 9.8 Alteration of credit agreements 197 9.9 Rescission and termination of agreements and surrender of movable goods 198 9.10 Early payments and consumer's right to settle the agreement before its

completion time 199 10 Reckless lending, over-indebtedness, debt counsellors and debt review or restructuring 199

10.1 Reckless lending and over-indebtedness 200 10.1.1 When is credit granted recklessly? 201 10.1.2 When is it deemed that a consumer is over-indebted? 203 10.1.3 Consequences of reckless lending 203 10.1.4 Prevention against abuse by consumers 204

10.2 Debt counsellors and debt review or restructuring 205 11 Legal debt enforcement and alternative dispute resolution 208 12 Search warrants and enforcement of the Act 210 13 Miscellaneous matters 211 14 Other legislation governing consumer credit agreements 211

14.1 Alienation of Land Act 68 of 1981 211 14.2 Consumer Protection Act 68 of 2008 212

CHAPTER 5 THE LAW OF LEASE - ISOBEL KONTO 217 1 The relevance of lease 218 2 Capacity 218

2.1 Co-owners 218 2.2 Ownership is not a requirement 219 2.3 Property subject to a bond or mortgage 219 2.4 Lease of property already owned 219

3 Essential elements of the contract of lease 220 3.1 The object of the contract 220 3.2 The identity of the leased property 220 3.3 The rent 221

3.3.1 The rent must be fixed and definite 221 3.3.2 The rent must consist in money or 'fruits' 222 3.3.3 The rent must be genuine 223 3.3.4 Receipts 223 3.3.5 Determination of rental by the Tribunal 223 3.3.6 Legislative provisions pertaining to residential leases 223

4 Duration of lease 224 4.1 Fixed-period lease 224 4.2 A lease until a certain event occurs 224

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4.3 A periodic lease 224 4.4 A lease at the will of landlord, tenant or either party 225

5 Renewal of lease 225 5.1 Implied renewal 225 5.2 Options to renew 226 5.3 Terms of the renewed lease 227

6 Huur gaat voor koop 227 6.1 Leases 227

6.1.1 Short leases 228 6.1.2 Long leases 228

6.2 The legal consequences of the operation of the huur gaat voorkoop doctrine 229 7 Subletting, cession and assignment 230

7.1 Subletting 230 7.1.1 Subletting by implication 231 7.1.2 Subletting by express provision 231

7.2 Cession 231 7.3 Assignment 231

8 The duties of the parties 233 8.1 Duties of the landlord 233

8.1.1 The obligation to deliver the leased property 233 8.1.2 To give quiet enjoyment of the property let 234 8.1.3 To place and Keep the property in a proper condition 235 8.1.4 To guarantee the tenant against eviction 237 8.1.5 To pay rates and charges in respect of the property 238 8.1.6 To compensate the tenant for improvements 238 8.1.7 Additional duties in respect of residential leases 239

8.2 Duties of the tenant 239 8.2.1 To pay the rent 239 8.2.2 To use the property let in the proper manner 242 8.2.3 To restore the property in the same condition, reasonable wear and tear

accepted 243 8.2.4 Additional duties in respect of residential leases 244 8.2.5 Role of the Rental Housing Tribunals 244

9 Termination 244 9.1 Insolvency 244 9.2 Death 244 9.3 Impossibility of performance 245 9.4 Expropriation 245

10 Eviction 245

CHAPTER 6 THE LAW OF AGENCY - ISOBEL KONYN, DUMIU BAQWA 249 1 The relevance of agency 250 2 The nature of agency 250 3 Formalities 252 4 Capacity 252

4.1 Principal 252 4.2 Agent 252

5 Formation of the contract of agency 254

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5.1 Express authority 254 5.2 Implied authority 254 5.3 Authority by estoppel 255 5.4 Ratification of authority 257

6 Delegation of authority 258 7 Rights and duties between the parties 259

7.1 Duties of the agent 259 7.1.1 Performance of the authority 259 7.1.2 To keep proper accounts 259 7.1.3 To show the utmost good faith (uberrima fides) 260

7.2 Duties of the principal 262 7.2.1 Reimbursement and indemnification of the agent for expenses and

losses properly incurred in performing the authority 262 7.2.2 Payment of the agreed remuneration 262

8 Rights and liabilities of third parties 262 8.1 Named principal 262 8.2 Unnamed principal 263 8.3 Undisclosed principal 263

9 Agent's rights and liabilities to third parties 264 10 Termination of agency 265

CHAPTER 7 THE LAW OF REAL AND PERSONAL SECURITY - SUSAN Scon 267 1 Relevance of security law 268 2 Forms of credit agreements 268 3 Basic forms of credit security 269 4 Personal security 269

4.1 Definition of suretyship 270 4.2 Accessory nature of suretyship 271 4.3 Suretyship distinguished from other forms of intercession 273 4.4 Characteristics of principal debt 274 4.5 Creation of suretyship contract 274 4.6 Types of sureties 275 4.7 Consequences of suretyship 276

4.7.1 Duties of surety 276 4.7.2 Rights of surety 276

4.8 Termination of suretyship 278 5 Real security 278

5.1 Background 278 5.2 General principles 280

5.2.1 Accessory nature 280 5.2.2 Security object 281

5.3 Pledge 281 5.3.1 Constitution 281

5.4 Clauses in mortgage or pledge agreements 282 5.4.1 Clause for summary execution (execution without court order) 282 5.4.2 Clause that pledgee may keep thing if pledgor fails to pay (pactum

commissorium) 283 5.4.3 Clause that pledgee may buy thing at specific price 283

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5.4.4 Clause that debt may not be redeemed 283 5.4.5 Pactum antichresis 283

5.5 Rights and duties of parties 284 5.5.1 Pledgee 284 5.5.2 Pledgor 284

5.6 Extinction of pledge 284 5.7 Security by means of claims 285

5.7.1 Pledge 285 5.7.2 Fiduciary security cessions 287 5.7.3 Notarial bonds of claims (incorporeal movable things) 288

5.8 Mortgage 288 5.8.1 Kinds of mortgages 288 5.8.2 Types of express mortgages 289

5.9 Operation of special mortgage over immovable things 291 5.10 Tacit mortgages 293

5.10.1 Tacit hypothecs 293 5.10.2 Liens (rights of retention) 294 5.10.3 Statutory security rights 297 5.10.4 Judicial pledge 297

CHAPTER 8 THE LAW OF INSURANCE - PHILIP SUTHERLAND, CHARNELLE VAN DER BIJL 301 1 The relevance of insurance 302 2 The economic function of insurance 303 3 Insurance defined 303 4 Insurance law and insurance business 304 5 Sources of South African insurance law 304

5.1 The common law 304 5.2 Statutes 304 5.3 'Hard' and 'soft' insurance law and alternative dispute resolution 305

6 The three branches of insurance law 305 6.1 Insurance contract law 305 6.2 The regulation of insurers 306 6.3 Intermediaries 306

7 Different types of insurance 307 7.1 The interest being protected 307 7.2 The duration 308 7.3 The peril or event insured against 308

8 Essentials of an insurance contract 309 8.1 The insurer undertakes to pay or perform something 309 8.2 In exchange for the undertaking to pay a premium or the payment of a premium 309 8.3 On the happening of an uncertain event 310 8.4 To indemnify the insured (indemnity insurance) or otherwise make up for the

materialisation of the risk (non-indemnity insurance) 310 9 Insurance contracts distinguished from other types of contracts 311

9.1 Wagering or gambling contracts 311 9.2 Manufacturers', sellers' and extended warranties 311 9.3 Suretyship 312

10 Formation of an insurance contract 313

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10.1 Agreement or its equivalent 313

10.2 Proposal forms 3*3

10.3 Conclusion of insurance policies by direct marketing 313 10.4 Cooling-off period 3^4 10.5 Insurance policies and policy documents 314 10.6 Legality 314

10.7 Disclosures by the insured 315 10.7.1 Materiality 316 10.7.2 Within the knowledge of the insured 316

10.8 Disclosures by the insurer or its intermediaries 317 11 Insurance claims 317

11.1 Description of the risk insured against 317 11.2 Interpretation of the terms which describe the risk covered 317 11.3 Limitations and exceptions 318

11.3.1 Special insurance risks 318 11.4 Dimensions of the described risk 318 11.5 Causal link between the peril and the harm 319

12 Insurable interest 319 12.1 Insurable interest in indemnity insurance 319 12.2 Insurable interest in non-indemnity insurance 321

12.2.1 Key-man insurance 322 13 Manner in which claims have to be brought 322

13.1 Notice and time-bar clauses 322 13.2 Fraudulent claims 323

14 Subrogation, cession and contribution 324

CHAPTER 9 LABOUR LAW - Nicou Sm 329 1 The relevance of labour law 330 2 Sources of labour law 330

2.1 The Constitution of the Republic of South Africa, 1996 330 2.2 Legislation 331 2.3 Collective agreements 332 2.4 The contract of employment 332 2.5 The common law 333

3 The employment relationship: who is an employee? 333 3.1 Test to determine who is an employee 334 3.2 Statutory definitions and presumptions 334

4 The contract of employment 336 4.1 Relationship of trust 336 4.2 Special terms 337 4.3 Vicarious liability 337 4.4 Duration of contract 338 4.5 Variation 339

5 Basic Conditions of Employment Act 75 of 1997 (BCEA) 339 5.1 Working time 340

5.1.1 Working hours and overtime 341 5.1.2 Compressed working week 341 5.1.3 Averaging of working hours 341

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5.1.4 Meal interval 341 5.1.5 Rest periods and other time off 341 5.1.6 Sundays, night work and public holidays 341

5.2 Leave 342 5.2.1 Annual leave 342 5.2.2 Sick leave 342 5.2.3 Maternity leave 342 5.2.4 Family responsibility leave 343

5.3 General obligations on employers 343 5.4 Notice of termination 343 5.5 Monitoring and enforcement 343

6 Labour Relations Act 66 of 1995 (LRA) 344 6.1 Unfair labour practices 344 6.2 Unfair dismissal 344

6.2.1 Dismissal for misconduct 346 6.2.2 Dismissal for incapacity 347 6.2.3 Dismissal for operational requirements 348

6.3 Remedies 350 6.4 Transfer of an undertaking 350 6.5 Freedom of association 351 6.6 Organisational rights 351 6.7 Industrial action 352

6.7.1 Strike 352 6.7.2 Secondary strike 353 6.7.3 Protest action 353 6.7.4 Picketing 354 6.7.5 Protection of industrial action 354

7 Employment Equity Act 55 of 1998 (EEA) 354 7.1 Prohibition of unfair discrimination 355 7.2 Affirmative action 356

7.2.1 Duties of a designated employer 356 7.2.2 Employment equity plan 357

7.3 Monitoring and enforcement 357 8 Social protection 358

8.1 Health and safety 359 8.2 Unemployment 361 8.3 Skills development 363

CHAPTER 10 THE LAW OF NEGOTIABLE INSTRUMENTS - ISOBEL KONYN 365 1 The relevance of negotiable instruments 366 2 Introduction 367 3 Characteristics of negotiability 367

3.1 A simple means of transferring rights 367 3.2 Transfer free from equities 368

4 Types of negotiable instruments 368 4.1 Bills of exchange and cheques 368

4.1.1 The drawer 369 4.1.2 The drawee 369

4.1.3 The bearer or payee 369 4.2 Promissory notes 369

4.2.1 The maker 370 4.2.2 Bearer or payee 370

5 Requirements for a valid negotiable instrument 370 5.1 An order or promise 370 5.2 Unconditional 370

5.2.1 Traveller's cheques 371 5.3 In writing 371 5.4 Addressed by one person to another or made by one person to another 372 5.5 Signed by the person giving it or making it 372 5.6 A sum certain in money 372 5.7 On demand or at a fixed or determinable future time 373

5.7.1 On demand 373 5.7.2 A fixed date 373 5.7.3 A determinable future date 373

5.8 To a specified person or his order or to bearer 374 5.8.1 A specified person 374 5.8.2 Or his order 374 5.8.3 Or to bearer 374

5.9 Non-essentials 374 5.10 A simple contract 374

6 Signature 375 6.1 Signature by an agent 376

6.1.1 Where the agent signs the principal's name 376 6.1.2 Where the agent signs his own name 376

6.2 Corporate signatures 377 6.2.1 Liability of the company or close corporation 377 6.2.2 Liability of the person signing 377

6.3 Forged or unauthorised signatures 377 6.4 Incorrect spelling of a person's name 378

7 The holder, and the holder in due course 378 7.1 The holder in due course 379

7.1.1 The holder 379 7.1.2 The instrument 379 7.1.3 Qualities of the instrument 379 7.1.4 Before the instrument is overdue 380 7.1.5 Without notice of previous dishonour 380 7.1.6 In good faith 380 7.1.7 Take for value 381

7.2 Deriving title through a holder in due course 381 7.3 Presumptions in favour of the holder 381 7.4 Defences available as against a holder in due course 382 7.5 Some advantages of being holder in due course 382

8 Delivery 382 9 Negotiation 383

9.1 Prohibition on negotiation 383 9.1.1 Cheques 384

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9.1.2 Bills of exchange and promissory notes 384 9.2 Indorsement 385

10 Liability of parties to an instrument 385 11 Col lecting payment 386 12 Provisions relating specifically to cheques 387

12.1 Crossed cheques 387 12.1.1 General crossings 387 12.1.2 Special crossings 388

12.2 Forged indorsements 389 12.3 Protection afforded to the true owner 390

13 An outline of the banker-customer relationship 391 14 Credit cards 392 15 Electronic funds transfer 393

CHAPTER 11 THE CONSUMER PROTECTION ACT 68 OF 2008 - TJAKIE NAUDÉ, ELIZABETH DE STADLER . .. 397 1 Introduction 398 2 The purposes of the Consumer Protection Act 399 3 Interpretation 400 4 When does the Consumer Protection Act apply? 401 5 The relationship between the Consumer Protection Act and other consumer law 406 6 The protection of consumer rights 407

6.1 The right to equal access to the consumer market 407 6.2 The right to privacy: 'direct marketing' 408 6.3 The right to choose 410

6.3.1 Bundling 410 6.3.2 Fixed-term agreements 411 6.3.3 Right to cancel advance reservations, bookings or orders 412 6.3.4 Right to choose or examine goods 412 6.3.5 Delivery and risk 413 6.3.6 Unsolicited goods 414

6.4 The right to disclosure and information 414 6.5 The right to fair and responsible marketing 416

6.5.1 Bait marketing 418 6.5.2 Negative option marketing 420 6.5.3 Catalogue marketing 420 6.5.4 Trade coupons and similar promotions 420 6.5.5 Customer loyalty programmes 421 6.5.6 Promotional competitions 421 6.5.7 Alternative work schemes 422 6.5.8 Referral selling 422

6.6 The right to fair and honest dealing 423 6.6.1 Unconscionable conduct 423 6.6.2 False, misleading or deceptive misrepresentations 424

6.7 The right to fair, just and reasonable terms and conditions 424 6.7.1 Overview of the provisions 424 6.7.2 General prohibition on unfair terms 425 6.7.3 List of prohibited terms 425 6.7.4 List of terms that are presumed to be unfair 425

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6.7.5 Prominence requirements for certain types of terms 426 6.7.6 Agreements must be in plain language 427 6.7.7 Interpretation of contracts 428

6.8 The right to fair value, good quality and safety 428 6.8.1 Quality goods 428 6.8.2 Good quality services 432

6.9 Supplier's accountability to consumers 433 7 The enforcement of the Consumer Protection Act 434

CHAPTER 12 THE LAW OF INTELLECTUAL PROPERTY - TANYA WOKER 439 1 General introduction 440

1.1 A short overview of international law 441 1.2 An overview of South African intellectual property law 443 1.3 Future developments for South Africa 443

2 Copyright 444 2.1 The subject matter of copyright 445 2.2 Requirements 446

2.2.1 Originality 446 2.2.2 Material form 447

2.3 Ownership of copyright 447 2.4 Use of a work, subject to copyright 448 2.5 The fair use/fair dealing doctrine 449 2.6 Remedies 451

2.6.1 Normal remedies 451 2.6.2 Special remedies 452 2.6.3 Criminal penalties 452

3 Trademarks 452 3.1 What are trademarks? 452 3.2 Unregistered trademarks 452 3.3 Registered trademarks 453 3.4 Unregistrable trademarks 454

3.4.1 Words needed in trade 454 3.4.2 Geographical origin 454 3.4.3 Trademarks likely to deceive 455 3.4.4 Generics 455

3.5 Foreign trademarks 455 3.6 Trademark infringement 457 3.7 Remedies 458

4 Patents 458 4.1 Requirements 459

4.1.1 Novel 459 4.1.2 Useful 459 4.1.3 Inventive 459

4.2 The application 460 4.3 Specifications 460 4.4 The actual procedure 461 4.5 Revoking a patent 461 4.6 Infringement 461

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4.7 Defences 462 5 Designs 462 6 Concluding remarks 463

CHAPTER 13 THE LAW OF INSOLVENCY - ROGER EVANS 467 1 Introduction 468

1.1 Insolvency law relates to debt collection by means of the sequestration of a debtor's estate 469 1.1.1 Debt collection prior to sequestration of a debtor's estate:

individual procedure 470 1.1.2 Debt collection by sequestration of a debtor's estate: collective

procedure 470 1.2 How is a debtor's estate sequestrated? 470

1.2.1 Voluntary surrender 470 1.2.2 Compulsory sequestration 470

1.3 How does sequestration affect the debtor? 470 2 How is the estate of a debtor sequestrated? 471

2.1 Application for voluntary surrender 472 2.1.1 Introduction 472 2.1.2 What is the purpose of the notice? 472 2.1.3 How does the application come before the court? 472

2.2 Compulsory sequestration 473 2.2.1 Introduction 473 2.2.2 Provisional order and final order 473 2.2.3 Discretion of the court 474 2.2.4 Final sequestration order 475

3 Consequences of sequestration 475 3.1 What consequences result from a sequestration order? 475 3.2 Effect of sequestration for the insolvent 475

3.2.1 Property 475 3.2.2 Other consequences 476 3.2.3 The effect of sequestration on the insolvent's spouse 476 3.2.4 Litigation 477

3.3 Consequences regarding contracts 477 3.3.1 General 477 3.3.2 Contracts regulated by statute 478

3.4 Dispositions that can be set aside 480 3.4.1 Introduction 480

4 The trustee 482 4.1 Introduction 482 4.2 Provisional trustee 482 4.3 Election and appointment 482

5 Meetings of creditors and proof of claims 483 5.1 General 483 5.2 First meeting 483 5.3 Second meeting 483 5.4 General meeting 484 5.5 Special meeting 484

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6 Liquidation of assets 484 6.1 General 484 6.2 Preferent claims 485

6.2.1 Funeral and deathbed expenses 485 6.2.2 Costs of sequestration 485 6.2.3 Costs of execution 485 6.2.4 Salaries and wages of employees 485 6.2.5 Statutory obligations 485 6.2.6 Income tax 485

6.3 Property subject to secured rights (encumbered property) 485 6.4 Assets conferring preference 486

6.4.1 Special mortgage bonds 486 6.4.2 Landlord's legal hypothec 486 6.4.3 Pledge 486 6.4.4 Right of retention 486

6.5 Encumbered assets not stated in the Insolvency Act 486 6.5.1 Instalment agreement hypothec 486 6.5.2 Immovable property on instalment 486

7 The trustee's account 487 7.1 Introduction 487 7.2 Description of the accounts 487

7.2.1 General 487 8 Composition 487

8.1 General 487 9 Rehabilitation 487

9.1 Introduction 487 9.2 Rehabilitation by passage of time 488

Bibliography 491 Table of cases 497 Table of legislation 507 Index 517