CLA2602 Exam Pack

CLA2602
EXAMPACK
COMMERCIAL LAW: CLA2602
Jameszon31@gmail.com
081 438 7509/ 061 429 0222
1
Page |2
Contents
MAY/JUNE 2011............................................................................................................................................................ 3
NOV 2011...................................................................................................................................................................... 7
MAY/JUNE 2013.......................................................................................................................................................... 11
NOV 2013.................................................................................................................................................................... 15
MAY/JUNE 2014.......................................................................................................................................................... 19
Question papers are attached on separate sheets, and some are

also accessible on myunisa.
Page |3
MAY/JUNE 2011
SECTION A
QUESTION 1
a) (i) Transferable. No longer negotiable but remains transferable

(ii) Transferable. The true owner of a lost or stolen cheque acquires rights under s 81 only if the cheque is
crossed and marked ``not negotiable''.
(iii)Transferable. `à/c payee only'' do not affect the transferability of the cheque but are simply an
instruction to the collecting bank that a certain payee must receive payment of the cheque.
b) (i) B Bank – No, section 79 will protect B Bank if B Bank, as the drawee bank, paid to the wrong person a
non-transferable cheque with ``not negotiable'' written on it. Section 79 is applicable to both transferable
and non-transferable cheques. The protection offered by section 79 will also cover both the traditional
non-transferable cheque in terms of section 6(5) and the section 75A(1) non-transferable cheque on
which the words ``not transferable'' appear.
(ii) D – Yes, the true owner will have a right of recourse against the thief who was mala fide. His right of
recourse is based on delict (or enrichment), and not on the cheque itself.
(iii) E – Yes, in terms of section 81,C, the true owner, acquires a right of recourse against E, since the
following requirements of s 81(1) have been met:
- The cheque was crossed and marked ``not negotiable.''
- The cheque was stolen while it was crossed and marked as above.
- The drawee bank paid under circumstances which, in terms of the BEA, do not make the bank liable
against the true owner.
- The plaintiff is the true owner.
- C(true owner)must be able to show that he suffered damage as a result of theft.
- E had the cheque in his possession after the theft or loss.
- E gave a counter performance for the cheque (he took the cheque for value).
(iv) G Bank - According to s 81(5), a bank which receives a cheque which is crossed and marked ``not
negotiable'' is not to be regarded as having given consideration therefore merely because it has in its own
books credited its customer's account with the amount of the cheque before receiving payment thereof
or because any such payment is applied towards the reduction or settlement of any debt owed by the
customer to the bank. However, the collecting bank will lose its protection if it paid out cash over the
counter for such a cheque, or agreed that its customer could immediately draw against that cheque.
c) ATM
EFTPOS
Home banking
Mobile banking
Page |4
QUESTION 2
a) Minors
Prodigals
Mentally disturbed persons
Insolvent persons
Persons prohibited by legislation
b) any FIVE of these rights, powers and duties.

(i) taking custody of the estate;
(ii) the opening of a banking account ;
(iii) to submit executor’s inventory to the Master ;
(iv) advertisement of notice to creditors to lodge their claims against the estate;
(v) examination of claims against the estate;
(vi) determination of solvency of the estate;
(vii) determining who the legatees and heirs are;
(viii) lodging and advertising of the liquidation and distribution account ; and
(ix) liquidation of the estate.
c) Bewind Trust (aka bewindvoerder)
d) Garry’s failure to comply with his duties as trustee constitutes a breach of trust. A trustee may be
removed if his actions were mala fide. If elements of delictual liability are present, the trustee is
personally liable to make a good any loss.
QUESTION 3
a) Applicant entitled to apply in terms of section 9(1)

Debtor committed act of insolvency
Sequestration will to the advantage of creditors
b) (i)
1. Property owned before marriage to the insolvent.
2. Property acquired under a marriage settlement.
3. Property acquired by marriage settlement during the marriage.
4. Property protected under certain other provisions (eg, insurance legislation).
5. Property acquired with proceeds of the above.
(ii) • It is applied for the benefit of the creditors of the insolvent spouse.
• The solvent spouse will have to provide security to the insolvent estate.
• It will vest in the master or the trustee once the period for which the order was granted has expired.
SECTION B
1. T
Page |5
2. F
3. T
4. F
5. F
6. T
7. F
8. T
9. T
10. T
SECTION C
1. Holder
2. Issue
3. Blank
4. General
5. Order
6. Executor
7. Partial sell-out
8. Legatees
9. Undue Preferences
10. Assumption
SECTION D
1. 2
2. 1
3. 1
4. 4
Page |6
5. 3
6. 3
7. 1
8. 2
9. 1
10. 1
Page |7
NOV 2011
SECTION A
QUESTION 1
a) A holder in due course must have been a holder to whom a cheque has been negotiated that is
• complete and regular on the face of it
• before its due date
• without notice that it has been dishonoured in the past
• without knowing of any defect in title of the person who transfers the cheque to him
• in good faith
• for value
• Therefore I would say that “E” is a holder in due course since the check has met these requirements.
b) (s 30(4)) but it does not provide for the conversion of a bill originally payable to bearer into one payable
to order. If an instrument is originally payable to bearer, it cannot be converted to one payable to order
by a special endorsement. If the holder specially endorses a bearer document, the instrument remains
payable to bearer despite such endorsement.
c) (i) A - will not be liable because the forged signature is wholly inoperative. No right to enforce payment
against any party can be acquired through the forged signature.
(ii) X - Since the thief was mala fide, she is delictually liable. Alternatively F could also hold him liable on
the basis of unjustified enrichment.
(iii) E - endorsed the cheque after the forged endorsement. S53(2)(b) applies and requirements are met. E
can be known as endorser by estoppel. S53(2)(b) provides that the endorser of the cheque is precluded
from denying the genuineness and regularity in all respects of the drawer’s signature and all previous
endorsements. E will therefore be held liable to F. E will not be able to rely on the principle that the
forged signature of the thief renders the cheque wholly inoperative as S53(2)(b) applies. NB: will be able
to claim payment for the amount of the cheque from E, BUT, not from any earlier parties before the
forgery.
d) • The commercial banks have recently decided that a crossed cheque marked “Not Transferable” will only
be accepted for collection if the name of the account holder on whose behalf it is collected. Section 6(5)
still forms part of the Act.
• According to section 79, they have agreed that only crossed non-transferable cheques will be accepted
for collection.
• “S Bank” received payment on behalf of someone who was not entitled to it.
• Therefore “C” does have a right of recourse against “S Bank”.
e) (i) They’re both used by account holder (debtor) to effect regular payments to a third party (creditor) via
the account holders’ bank.
Page |8
(ii) Customers’ account gets debited in both Stop Orders and Debit Orders.
f) (i)when the contract is contrary to law

(ii) when the contract is contrary to good morals or public policy
(iii) where there is fraud involved
QUESTION 2
a) Minors
Prodigals
Mentally disturbed persons
Insolvent persons
Persons prohibited by legislation
b) (i) Executor is not obliged if he/she is:
• A parent, child or surviving spouse of the deceased.
• Exempted from it in the will.
• Exempted from it by the court.
• Since Janet is the sister, then she still has to furnish security.
(ii) - Usually by means of a bond of suretyship.
The master usually requires an amount equal to the value of the estate.
The master will issue letters of executorship only once a bond of security has been received.
c) Bewind Trust (aka bewindvoerder)
d) • Dishonesty/other offence is reason of imprisonment without option of a fine.

• If the trustee fails to give security within 2 months after being requested to.
• If the trustee’s estate is sequestrated/liquidated/placed under judicial management.
• If the trustee is declared mentally ill or incapable of managing his/her own affairs.
• If the trustee fails to perform satisfactorily any duty imposed by the Act, or to comply with any lawful
request of the Master.
QUESTION 3
a) (i) debtors estate insolvent

Free residue sufficient to pay costs of sequestration
Sequestration to be to the advantage of creditors
Comply with prescribed formalities
(ii) Even if the requirements and formalities have been met and observed, the court has discretion to
reject the surrender.
Page |9
b)(i) 1. Property owned before marriage to the insolvent.
2. Property acquired under a marriage settlement.

3. Property acquired by marriage settlement during the marriage.
4. Property protected under certain other provisions (eg, insurance legislation).
5. Property acquired with proceeds of the above.
b) (ii) • It is applied for the benefit of the creditors of the insolvent spouse.
• The solvent spouse will have to provide security to the insolvent estate.
• It will vest in the master or the trustee once the period for which the order was granted has expired.
SECTION B
1. T
2. T
3. F
4. T
5. T
6. F
7. F
8. T
9. F
10. T
SECTION C
1. Bearer
2. Issue
3. Holder
4. Special
5. S 75 non-transferable
6. Income beneficiary
7. Ownership
8. Heir
9. Dative
10. Making over in specie
SECTION D
1. 3
2. 4
3. 5
4. 1
5. 5
6. 3
P a g e | 10
7. 3
8. 4
9. 1
10. 4
P a g e | 11
MAY/JUNE 2013
SECTION A
1. 2
2. 5
3. 3
4. 3
5. 3
6. 3
7. 3
8. 4
9. 2
10. 1
Section B
1. T
2. T
3. F
4. T
5. F
6. T
7. F
8. F
9. T
10. T
SECTION C
1. Section 22
2. Section 53 (2) b
3. Section 81
4. Two party credit card
5. Letter of credit
6. Power of assumption
7. Collusive disposition
8. Perfect creditor
9. Liquidation and distribution account
10. Death notice
P a g e | 12
SECTION D
QUESTION 1
a) (i) No obligation because Mr Plumber did not fix the geyser
(ii) Yes, a cheque endorsed to a fictitious person or someone who does not have capacity to contract is
regarded as payable to bearer.
(iii) No, section 20(2) of the BEA provides that a minor who signs as drawer or as endorser without
consent is not liable on the instrument. His signature, however, still serves as a channel through which
rights are transferred to his successors
b) The section 75A(1) non-transferable cheque on which the words ``not transferable'' are printed with or
without a crossing. The words ``not transferable'' or ``non-transferable'' may not be cancelled and any
purported cancellation shall be of no effect. Non-transferable cheques in terms of s 75A(1) are only valid
between the parties to the cheque.
The traditional non-transferable cheque which, in terms of s 6(5), bears words or conveys an intention to
prohibit transfer. This type of a cheque is valid between parties and contains words which intend to
prohibit its transfer and does not entitle the named payee to negotiate or transfer it further.
c) (i) Alice will not be liable because in terms of section 22 the forged signature is wholly inoperative. If the
cheque has come into the hands of the payee, drawer Alice shall be protected, under section 79, `às if
payment of the cheque had been made to the true owner thereof''. In this case, the cheque did in fact
come into Anthea's hands (it was stolen from her), and therefore Anthea has no rights against drawer
Alice.
(ii) Since B Bank paid to a bank in accordance with the crossing, and since it paid in good faith andwithout
negligence, B Bank is protected under section 79 `às if payment of the cheque had been made to the true
owner thereof''.
(iii) Since the thief was mala fide, Michelle is delictually liable to Anthea. Alternatively Anthea could also
hold him liable on the basis of unjustified enrichment.
(iv) Maphuti is liable and Anthea, the true owner acquires a right of recourse against Maphuti since all
requirements of section 81 (1) have been met:
P a g e | 13
- Anthea (true owner)must be able to show that he suffered damage as a result of theft.
- Maphuti had the cheque in his possession after the theft or loss.
- Maphuti gave a counter performance for the cheque (he took the cheque for value).
(v) Fanie was a bona fide possessor who received the cheque in good faith and for value. Therefore he is
no liable.
(vi) I Bank was in good faith, and therefore, although the stolen cheque went through their hands, they
are not delictually liable to the true owner.
d) In the case of the travellers’ cheque does not conform to the essential element of unconditionality as
required by the Act. It is one of the essentials of a valid cheque is that the order to the drawee bank to
pay must be unconditional. If payment of the travellers' cheque by its issuer is subject to the condition
that it must be countersigned by the traveller, it is not unconditional as envisaged in the Act.
QUESTION 2
a) Order the formation of a bewind trust

b) The revocation need to be in writing
The founder’s signature must be witnessed or notarized
The trustee consent to the revocation
c) (i) The contracts are valid as long as Michelle exercises legal powers that are expressly conferred to her by
the trust instrument, the common law and the Trust Property Control Act
(ii) Michelle may not appoint an additional trustee since the trust deed does not include the power of
assumption. If the will does not provide for the filling of the vacancy of the trustee, the Master shall after
consultation with any interested persons appoint any person as trustee.
d) Awarding and handing over specific assets

Partial sale
Total sale
Taking over by surviving spouse
Redistribution agreement
QUESTION 3
a) Applicant entitled to apply in terms of section 9(1)

Debtor committed act of insolvency
P a g e | 14
Sequestration will to the advantage of creditors
b) Absence from the Republic/dwelling S8(a)

Failure to satisfy judgment S8(b)
Disposition prejudicing creditors or preferring one creditor S8(c)
Removal of property with intent to prejudice or prefer S8(d)
Offer of arrangement S8(e)
Failure to apply for surrender S8(f)
Notice of inability to pay S8(g)
Inability to pay debts after notice of transfer of business S8(h)
c) (i)The sequestration of the employer’s estate automatically causes the termination of the contract. The
employee will have a claim for arrear wages and for damages. The claim in respect of arrear wages, for a
period not exceeding three months and to the maximum amount fixed from time to time, will rank as a
preferent claim.
(ii) Sequestration of the purchaser’s estate nevertheless causes ownership in the moveable property to
pass to the insolvent estate immediately. The seller who loses his or her ownership is, however, protected
because he or she becomes a secured creditor of the estate.
P a g e | 15
NOV 2013
SECTION A
1.1
2.3
3.3
4.4
5.4
6.3
7.3
8.1
9.4
10.2
SECTION B
1. True
2. False
3. True
4. True
5. True
6. False
7. False
8. True
9. True
10. False
SECTION C
1. Bearer cheque
2. Transfer function
3. General crossing
4. Unauthorised signature
5. Three-party credit card
6. Bewind trust
7. Income beneficiary
8. Community estate
9. Composition
10. Undue preferences
P a g e | 16
QUESTION 1
a) Section 58 applies to cheques made payable to order only, and which are thus transferable and on the
other hand section 79 applies to non-transferable cheques only.
Section 79 protects both the drawer and the drawee bank whereas section 58 protects only the bank
when it paid someone that is not a holder.
In section 58, the drawee bank must pay in good faith and in the ordinary course of business and section
79 the bank must have the paid according to the crossing, in good faith and without negligence
The forged indorsement must not be that of a customer of the bank at the branch on which the said
cheque is drawn and section 79 does not contain this limitation.
b) Crossed cheque and marked “not negotiable” with “a/c payee only”
c) (i) A: If the cheque came into the hands of the payee, in terms of s 79 the drawer is protected `às if
payment of the cheque had been made to the true owner thereof''. In this case, the cheque did come into
the hands of the payee,C, since the cheque was stolen from him.C therefore has no rights against A, the
drawer, since A's liability on the cheque as well as on any underlying obligations are discharged.
(ii) B Bank: paid to a bank in accordance with the general crossing, and since the payment was made in
good faith and without negligence, in terms of section 79, B Bank is protected `às if payment of the
cheque had been made to the true owner thereof''. Therefore, B Bank may debit A's account.
(iii) E: In terms of section 81, C, the true owner, acquires a right of recourse against E, since the following
requirements of s 81(1) have been met:
- C (true owner) must be able to showthat he suffered damage as a result of theft.
- E gave a counter performance for the cheque (he took the cheque for value).
(iv) G Bank: According to s 81(5), a bank which receives a cheque which is crossed and marked ``not
negotiable'' is not to be regarded as having given consideration therefore merely because it has in its own
books credited its customer's account with the amount of the cheque before receiving payment thereof
P a g e | 17
or because any such payment is applied towards the reduction or settlement of any debt owed by the
customer to the bank. However, the collecting bank will lose its protection if it paid out cash over the
counter for such a cheque, or agreed that its customer could immediately draw against that cheque.
(v) D: The true owner will have a right of recourse against the thief who was mala fide. His right of
recourse is based on delict (or enrichment), and not on the cheque itself.
d) (i) `À holder [means] the payee or endorsee of a bill or note, who is in possession of it, or the bearer
thereof''. Lesego meets these elements and is therefore a holder.
(ii) It is an issue which is defined as ``the first delivery of a bill or note, complete in form, to a person who
takes it as holder''. The elements of issue are therefore:
- first delivery
- completeness in form
- to a holder
QUESTION 2
a) (i) Ownership trust,
(ii) Natural persons and corporate bodies may be appointed as trustees. Persons without contractual
capacity and persons disqualifies in terms of s 4 of the Wills Act are not qualified. A trustee may be
appointed in accordance with the provisions of the will. A testator cannot delegate the power to appoint
a trustee to another person.
b) (i) When the letter of executorship has been issued.

(ii) Advertise for creditors and debtors to submit claims within 30 days after the last date of publication.
(iii) Whether or not the estate is solvent
(iv) and in two issues of an Afrikaans newspaper and two issues of an English newspaper circulating in the
area of Y’s business.
QUESTION 3
a) Property owned before marriage to the insolvent.
Property acquired under a marriage settlement.
Property acquired by marriage settlement during the marriage.
Property protected under certain other provisions (eg, insurance legislation).
Property acquired with proceeds of the above.
b) (a) a creditor having a claim of at least R100 which is already due leaves a demand at the company’s
registered office and the company for three weeks after that has failed to pay the claim, to give security for it,
or to compromise it to the satisfaction of the creditor, or
P a g e | 18
(b) a warrant of execution or other process issued on a judgment against the company has been returned by
the sheriff with an endorsement that he did not find disposable property sufficient to satisfy the judgment, or
that the disposable property which he found did not, upon sale, satisfy the process, or
(c) it is proved to the satisfaction of the court that the company is unable to pay its debts
c) (i) A liquidation claim is a creditor’s claim for a fixed amount of money.
(ii) Rehabilitation is a legal process which happens automatically or by an order of the Court whereby the
insolvent is relieved of legal implications of being insolvent and put back into a legal position of someone
who was not declared insolvent.
P a g e | 19
MAY/JUNE 2014
SECTION A
1. 3
2. 4
3. 1
4. 3
5. 2
6. 1
7. 2
8. 3
9. 4
10.2
SECTION B
1. F
2. T
3. F
4. T
5. T
6. F
7. T
8. T
9. T
10. F
SECTION C
1. General crossing
2.
3.
4.
5.
6.
7.
8.
9. Free residue
10. Rehabilitation
P a g e | 20
SECTION D
a) (i)X is a holder because he is a payee in possession of the cheque.
(ii) X is a holder in due course because the cheque is a not negotiable and X takes it in good faith and for
value.
(iii) X is not neither a holder nor a holder in due course because no person may become a holder in due
course of a bill after its due date (ss 34(2 and 27(1)(a)).
b) (i) A is not liable because C authorizes payment by posting a cheque, he bears the damage of any
interception and misuse requested the cheque to be delivered to him by post from A. therefore C may not
institute any legal action.
(ii) B Bank No, section 79 will protect B Bank if B Bank, as the drawee bank, paid to the wrong person a
non-transferable cheque with ``not negotiable'' written on it. Section 79 is applicable to both transferable
and non-transferable cheques. The protection offered by section 79 will also cover both the traditional
non-transferable cheque in terms of section 6(5) and the section 75A(1) non-transferable cheque on
which the words ``not transferable'' appear.
(iii) D as a thief was mala fide, she is delictually liable. Alternatively C could also hold him liable on the
basis of unjustified enrichment.
(iv) E No, in terms of section 81,C, the true owner, acquires a right of recourse against E, since the
following requirements of s 81(1) have been met:
- C(true owner)must be able to show that he suffered damage as a result of theft.
(v) S Bank Applying the principles explained above, it is clear that at common law the true owner has no
claim against D or S Bank. D was in good faith, and that rules out a claim against him. S Bank acted in good
faith and without negligence, and therefore it cannot be held liable.
(vi) Y is the messenger not a subsequent possessor who gave value for the cheque. He simply acted on
behalf of E, and will not be liable in terms of s 81. Y could of course be liable if C were to ask him for
information about the cheque and he refused to provide it.
c) (i) An off-line system records each transaction on a magnetic tape or a disk. At the end of each day a
courier takes the tape or disk to the particular financial institution for processing. On the other hand on-
line system is directly linked to the bank's central computing system.
P a g e | 21
(ii) The banks exclude liability for any damage that the customer may sustain using the home banking
service.
The bank is not liable for damages sustained because of the malfunction of either the customer’s
computer system.
The bank will not be liable for erroneous or non –timeous performance of the customer’s instruction as a
result of any of the above-mentioned circumstances.
QUESTION 2
a) (i) A Preliminary Inventory indicating very roughly what assets the deceased held at the time of his or her
death. The information on this document is required by the Master of the High Court to enable the
Master to ascertain whether the deceased held assets in excess of R125 000,00 or not.
(ii) Certain persons are automatically exempted from giving security, for example a parent, spouse or child
of the deceased in terms of section 23 of the Administration of Estates Act. Other wills contain a typical
clause nominating an executor with the power of assumption and exempting him or her from giving
security. In this case in question, Thandi may qualify for the automatic exemption since she is a spouse of
the deceased.
b) Power of assumption means an executor nominated in a will can appoint another person to assist or
represent him.
Power of subrogation is a process by which one person (creditor) is put in place of another (trustee) so
that the trustee’s right of indemnity from the trust assets is used to satisfy the creditor’s debt.
Power of substitution is the act of a testator naming a second devisee or legatee who is to take the
bequest either on failure of the original devisee or legatee or after him.
c) In terms of s 51 of the Administration of Estates Act and its regulations, the executor’s fee may be
stipulated in a will. If not the executor is entitled to 3,5% on the gross value of the estate plus 6% on any
income obtained after the death of the deceased.
QUESTION 3
a) In voluntary surrender the debtor himself applies for sequestration whereas on compulsory sequestration
the debtor’s creditors apply.
The debtor must own realizable property of sufficient value to defray all costs of the sequestration unlike
the act of insolvency that must be proved in compulsory sequestration.
In voluntary surrender the debtor must be in fact be insolvent unlike in compulsory sequestration the
creditor must have a liquidated claim against the debtor for not less than R100
b) The following property may be released by the trustee:

Property owned before marriage to the insolvent.
Property acquired under a marriage settlement.
Property acquired by marriage settlement during the marriage.
Property protected under certain other provisions (eg, insurance legislation)
P a g e | 22
Property acquired with proceeds of the above.

Provided it not released it is applied for the benefit of the creditors of the insolvent spouse. The solvent
spouse will have to provide security to the insolvent estate. It will vest in the master or the trustee once
the period for which the order was granted has expired.

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CLA2602

COMMERCIAL LAW: CLA2602

081 438 7509/ 061 429 0222

Question papers are attached on separate sheets, and some are

a) (i) Transferable. No longer negotiable but remains transferable

b) any FIVE of these rights, powers and duties.

a) Applicant entitled to apply in terms of section 9(1)

f) (i)when the contract is contrary to law

c) Bewind Trust (aka bewindvoerder)

d) • Dishonesty/other offence is reason of imprisonment without option of a fine.

a) (i) debtors estate insolvent

b)(i) 1. Property owned before marriage to the insolvent.

2. Property acquired under a marriage settlement.

a) (i) No obligation because Mr Plumber did not fix the geyser

a) Order the formation of a bewind trust

d) Awarding and handing over specific assets

a) Applicant entitled to apply in terms of section 9(1)

Sequestration will to the advantage of creditors

b) Absence from the Republic/dwelling S8(a)

b) (i) When the letter of executorship has been issued.

a) Property owned before marriage to the insolvent.

Property acquired under a marriage settlement.

Property acquired by marriage settlement during the marriage.

Property protected under certain other provisions (eg, insurance legislation).

Property acquired with proceeds of the above.

c) (i) A liquidation claim is a creditor’s claim for a fixed amount of money.

b) The following property may be released by the trustee:

Property acquired with proceeds of the above.

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