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Legal Terms

“He who puts up security for another will surely suffer” (a)

Those words spoken by King Solomon over 2000 years ago hold true today, particularly where
complex documents and legalese preclude a clear understanding of what you are signing.

Suretyships are generally furnished by people in an unequal bargaining position and are usually
automatically part of the pack of documents requiring signature in order to obtain credit or
banking facilities.

Our common law in this regard has developed to a sophisticated degree. As part of this
development, the law recognises certain safeguards or defences for sureties. Suretyship
documents these days inevitably record that the surety waives various of these defences (often
described by their Latin names) and, equally inevitably, also solemnly records that the surety
"knows and understands the meaning and full force and effect of..." the defences he is waiving.
Although the law relating to suretyships is fairly complex, the following is intended to serve as a
quick guide to the defences (sometimes also called exceptions or benefits) that sureties are
required to waive:
beneficium ordinis seu excussionis (the benefit of excussion) is an exception open to a
surety by which he can compel the creditor to proceed against the principal debtor first and to
obtain all he can from such debtor's estate before proceeding against the surety. The
renunciation of the 'benefit' has the effect of permitting the creditor to proceed directly against
the surety, before excussing the principal debtor, should he so wish. It should be noted that in
law a surety who binds himself as co-principal debtor is taken to have tacitly renounced this
benefit. Notwithstanding this, and possibly as evidence of the ignorance of the draftsman, it will
be found in almost all suretyships, irrespective of the way in which the surely binds himself.
beneficium divisionis (the benefit of division) allows a co-surety to demand that the debt be
divided between all sureties (excluding insolvent sureties or sureties who are outside the
jurisdiction of the Court) and that he or she be held liable only for his or her pro rata share of the
total liability. The surety loses this right upon renunciation of the benefit. It is also important to
note that a surety who binds himself as co-principal debtor is deemed to have renounced this
benefit.
beneficium cedendarum actionum (The benefit of cession of actions) allows a surety who
has paid the principal debt in full to demand that the creditor cedes its rights and securities,
which it has against the principal debtor and other sureties, to the surety who has paid. If it
transpires that the creditor is unable, by reason of its own conduct, to give effect to such a
cession, the surety is released from any liability. A surety is in any event entitled to such a
cession, even where this benefit has been denounced, and the effect of the benefit (where it
has not been waived) is simply to enable the surety to delay payment to the creditor.
de duobus vel phuribus reis debendi - When this benefit is renounced, it has the effect of
making two or more sureties jointly and severally liable (that is, either of them can be sued for
the whole debt).
The exceptio non numeratae pecuniae is an exception which may be taken by a debtor on
the grounds that, although he has signed an acknowledgement of debt, the amount was never
paid over to him. The renunciation of this exception shifts the burden of proof to the defendant
(i.e. the debtor) who will have to prove that he did not receive the money.
The exceptio non causa debiti is usually renounced in suretyships securing debts arising
otherwise than from loans of money. The purpose of getting a debtor to renounce this benefit is
likewise to shift the burden of proof onto the debtor. In the context of a suretyship, it would
mean that the surety would have to prove that the principal debt for which he undertook liability
does not exist. (b)
While it is unlikely that a creditor will agree to the deletion of clauses where the surety waives
his benefits and various exceptions and benefits, it would be wise to understand what you
agree to in signing a surety, and even better not to sign at all.

(a) Proverbs 11:15 New International Version Bible


(b) Extracted from ‘To sign or not to sign’ by Francis Newham published in Accountancy SA
September 2002
ab initio: From the beginning

beneficium divisionis: The benefit of division. Defence raised by two or more sureties of the same
debt that they each be liable only for their proportionate share.

beneficium ordinis seu excussionis: The benefit of order or of excussion. Defence raised by a
surety when sued by the creditor that the principal debtor be claimed from first.

curriculum vitae: Personal history.

domicilium citandi et executandi: Domicile for the purpose of serving summons and levying
execution.

errore calculi: Defence which can be taken by a debtor relating to errors of calculation.

exceptio non causa debiti: Defence used by a debtor that there is no reason for the obligation.

exceptio non numeratae pecuniae: Defence used by a debtor that the money has not been paid to
him.

in rem suam: In his own interest. It has been held that in some instances an agent acting with
authority plus an interest in the matter, acts with irrevocable authority.

revision of accounts: A defence which can be taken by a debtor relating to an amendment of an


account. This is relevant where the obligation relates to the settlement of account.

voetstoots: As it stands, with all its faults.

The Borrower renounces all benefits arising from the legal exceptions/ defences:
• non causa debiti (no cause or reason for the debt);
• non numeratae pecuniae (no money was paid to the Borrower);
• errore calculi (error in calculation of the amount paid or in respect of the account);
• de duobus vel pluribus reis debendi (the Borrower cannot demand to be sued jointly
with a co-debtor for the debt or for the debt to be divided between them);
• revision of accounts; and
• no value received.
The Borrower acknowledges that he or she full understands all these defences and their
consequences. The Borrower cannot use any of these defences as a reason for non-
payment.

The Borrower hereby renounces the right to raise prescription of debt as a defence against
RCS and more specifically renounces any benefits accruing to him or her in terms of the
Prescription Act, No. 68 of 1969. (Prescription occurs when 3 years have passed without a
repayment having been made or without a claim for repayment having been made. The
claim is then no longer legally enforceable.)
mutatis mutandis

A direct translation from Latin of mutatis mutandis would read, 'with those things having
been changed which need to be changed'. More colloquially, it can be interpreted as 'the
necessary changes having been made,' where "the necessary changes" are usually
implied by a prior statement assumed to be understood by the reader. It carries the
connotation that the reader should pay attention to the corresponding differences between
the current statement and a previous one, although they are analogous. This term is used
frequently in economics and in law, to parameterize a statement with a new term, or note the
application of an implied, mutually understood set of changes. The phrase is also used in the
study of counter-factuals, wherein the requisite change in the factual basis of the past is
made and the resulting causalities are followed.

Examples:

• "His cat" and "His dog" should be changed to "Her cat" and "Her dog", mutatis
mutandis for pony, sheep and cow. [i.e. "His pony" becomes "Her pony," and so on.]

• What we said about oil goes mutatis mutandis for natural gas.

• The two parties finally signed the contract mutatis mutandis.

• 1982 Convention, ARTICLE 111: Section 2. The right of hot pursuit shall apply
'mutatis mutandis' to violations in the exclusive economic zone or on the continental
shelf, including safety zones around continental shelf installations, of the laws and
regulations of the coastal State applicable in accordance with this Convention to the
exclusive economic zone or the continental shelf, including such safety zones.

Etymology:

Both "mutatis" and "mutandis" come from the Latin verb "muto" (principle parts muto,
mutare, mutatus), meaning "to change." "Mutatis" is the ablative plural neuter perfect
participle used as a substantive (this supplies the "things" in the translation--"with those
things having been changed which need to be changed."), and "mutandis" is the ablative
plural neuter gerundive. The phrase is an ablative absolute construction.