COMMERCIAL LAW 1A

WEEK 2

Introduction to the Science of Law

LEARNING OBJECTIVES
• Understand the differences between public & private law

• Understand the term “rights”

• Differentiate between a natural person and a juristic person

• Name and explain the 4 different types of subjective rights

• Explain what is meant by the law of obligations

• Define a delict & identify the elements of a delict

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THE TERM ‘LAW’

 Law refers to a system of rules which apply in a

community.
 A right is any legal entitlement which a legal
subject has regarding a specific legal object
and which is protected by law. (Legally
protected)
LEGAL SUBJECTS VS LEGAL OBJECTS
•LEGAL SUBJECT = A HUMAN BEING OR ENTITY WHO/WHICH IS SUBJECT TO THE LAW
•LEGAL SUBJECTS HAVE RIGHTS & DUTIES = LEGAL PERSONS”
•LEGAL PERSONS = NATURAL PERSONS VS JURISTIC PERSONS
❖Natural Person = human beings. Every human being has rights & duties.
❖Juristic Person = entities that are recognised as holders of rights & powers & subject
to duties. Eg: University, company, municipality.
❖Both the juristic person and its members will have different rights & duties
(shareholder’s have a personal right against to claim a share of profits of the company
whereas the company is liable for company debts & the shareholders cannot be sued
for them)
•LEGAL OBJECT = ANYTHING WHICH CAN BE AN OBJECT OF A LEGAL SUBJECT’S CLAIM
TO A RIGHT.

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BRANCHES OF LAW

➢PUBLIC LAW- legal rules which control relationships between the state and citizens eg.
criminal law & constitutional law.
➢PRIVATE LAW- legal rules which control the relationships between citizens in their dealings
with each other eg. family law (divorce, custody etc) and contract law.
➢Both these divisions can be further subdivided into different areas of specific law
➢Commercial law – refers to those legal rules that have arisen from the common customs of
merchants or which relate to business activity.
➢Commercial law encompasses different branches of law, including BUT NOT limited to:
contracts of sale, lease, credit agreements, negotiable instruments, insolvency, company law
& other business structures, agency, security, intellectual property and consumer law

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SUBJECTIVE RIGHTS
Rights classified according to a particular legal object:
A.Personal rights – Rights to performance may be demanded (Do something or refrain from doing
something) e.g can come about through contracts or delicts
B.Real rights – Right to property: Ownership/servitude
1.OWNERSHIP --
2.SERVITUDES – Limited Real Right: Praedial vs Personal
3.MORTGAGE & PLEDGE –
C.Personality rights – Right to reputation/good name
D.Intellectual property rights – copyrights/trademarks/patents

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PRIVATE LAW
 Law of Persons
 Family Law
 Patrimonial Law
 Law of Succession
 Law of Intellectual Property
 Law of Obligations (contract,
delict, unjustified enrichment)

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LAW OF PERSONS

 The part of private law regulating the conception, the existence and
termination of all natural persons as legal subjects.
 Every human is the bearer of rights and duties = a legal subject.
 A human being is the bearer of rights as soon as he/she comes into
existence (birth) and terminates upon death.
 However, ones status differs eg. minors, majors, insolvents, prodigals etc.
 Status is conferred by law.
 Cannot be changed by his or her own account.

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FAMILY LAW

 Marriage – husband/wife + Parent & child

 Dissolution of Marriage
 Custody issues
 Domestic violence
 Maintenance

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LAW OF PERSONALITY AND PATRIMONIAL LAW
➢Law of Personality- rights in respect of ones physical being, their dignity and
reputation eg. everyone has the right not to be unlawfully assaulted. Protected in
both civil & criminal law. Defamation and the right to a good name

➢Patrimonial Law-law of property = Involves the relationship with people and their
patrimony (all their rights + duties which are valued in money – assets + liabilities.
ownership (methods of ownership)
Possession – physical control + intention to possess
Prescription – Passage of time (acquisitive prescription)
movable property - delivery
Immovable property - transfer

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LAW OF SUCCESSION
 Regulates the administration of deceased
estates;
 How assets and liabilities are calculated;
 After payment of all the debts, the method of
how remaining balance must be distributed
amongst heirs and beneficiaries
 Testate succession
 Intestate succession
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INTELLECTUAL PROPERTY
• Things external to a person which are of value to him or her but
are incorporeal eg. inventions and works of art.
• Copyrights –

• Patents –

• Trademarks –

• Goodwill (reputation of a business)

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LAW OF OBLIGATIONS
➢When a personal right comes into existence between legal subjects, the
bond or legal relationship between the legal subjects is referred to as an
obligation.
➢Personal rights may come about through contract, delict, or through various
other causes of which the most important example is unjustified enrichment.
➢Contract = legal subject must render performance as contractually agreed.
➢Delict = legal subject must pay compensation to injured party.
➢Enrichment = legal subject pays an amount equal to the amount by which
s/he has been enriched to the detriment of another

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 LAW OF DELICT
 Everyone is to some degree or another exposed to the possibility of suffering
damage or loss.
➢ Difference between contracts and delicts?? Contracts are based on an
agreement between parties with the intention of creating legally enforceable
obligations. Delict = claim compensation ito private law for loss or injury.

 A delict is any unlawful culpable act whereby a person (wrongdoer) causes the
other party (the person prejudiced) damage or an injury to personality, and
whereby the prejudiced person is granted a right to damages or compensation
depending on the circumstances.

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DELICT…..CONTINUED…
The following requirements must be satisfied before
delictual liability can be claimed.
 An act;
 Unlawfulness/wrongfulness;
 Fault;
 Causation;
 Damage or injury to personality.

REMEDIES
 actio legis Aquiliae (patrimonial loss)
 actio iniuriarum (injury to personality)
 Action for pain and suffering

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 AN ACT
• A person’s conduct determined by his will.
• THE ACT MUST BE VOLUNTARY
• HUMAN CONDUCT ONLY (Juristic persons are
capable of acting if they act through their organs)
• COMMISSION (positive act where a person actually does
something by their conduct ) VS OMISSION (refrain from

acting - where a person fails to do something and harm is caused to

another)

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UNLAWFULNESS/WRONGFULNESS
Unlawfulness arises where:
1.An act or omission INFRINGES UPON THE RIGHTS OF ANOTHER, or
2.A DUTY OF CARE IS BREACHED.
• Boni Mores or the legal convictions of the community determine whether
conduct is wrongful.

DEFENCES/GROUNDS OF JUSTIFICATION: (Makes an unlawful act lawful)

1. NECESSITY
2. SELF-DEFENCE
3. CONSENT
4. STATUTORY AUTHORITY
5. PROVOCATION

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 FAULT
•A WRONGDOER MUST POSSESS SOME FORM OF FAULT IN ORDER TO BE HELD LIABLE:
1.INTENTION (3 forms) – A person’s will is directed towards bringing out a particular result & is aware of the
unlawfulness of his/her actions
2.NEGLIGENCE (Culpa) – a wrongdoer is negligent if a reasonable person in the same position would have
foreseen harm to others and would have taken reasonable steps to prevent the act from occurring or took
precautions before acting.
➢There is also contributory negligence where both parties are at fault and damages are divided to the
respective degrees of negligence in terms of the Apportionment of Damages Act 34 of 1956
•WRONGDOER MUST POSSESS THE MENTAL CAPACITY TO COMPREHEND THE CONSEQUENCES OF
HIS/HER ACTIONS – CAPACITY TO HAVE A BLAMEWORTHY STATE OF MIND
•JUSTIFICATION AGAINST LEGAL BLAMEWORTHINESS: AGE & MENTAL CAPACITY PLAYS AN IMPORTANT
ROLE:
1.Insane persons and children under 7 years cannot be held liable
2.Boys under 14 & girls under 12 have a rebuttable presumption of incapacity

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 CAUSATION
FACTUAL & LEGAL CAUSATION
LINK BETWEEN THE ACT AND DAMAGE

SUFFICIENTLY CLOSE LINK BETWEEN WRONGDOER’S CONDUCT AND THE CONSEQUENCE.

1. FACTUAL CAUSATION: LINK BETWEEN THE ACT AND DAMAGE. CONDITIO SINE QUA NON
(“BUT FOR” TEST)– THE ACT OF THE WRONGDOER CAUSED THE DAMAGE OR BUT FOR
THE ACT THERE WOULD HAVE BEEN NO DAMAGE (CAUSAL LINK BETWEEN THE ACT &
THE DAMAGE)
2. LEGAL CAUSATION: EXISTS WHERE THERE IS A SUFFICIENTLY CLOSE LINK BETWEEN
WRONGDOER’S CONDUCT AND THE CONSEQUENCE

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DAMAGE OR IMPAIRMENT OF PERSONALITY
• TO INCUR LIABILITY A PERSON MUST HAVE CAUSED ANOTHER DAMAGE OR IMPAIRMENT OF
HIS/HER PERSONALITY
• PATRIMONIAL DAMAGE – DAMAGE TO HIS/HER ESTATE – CAR ACCIDENT – ESTATE BECOMES
SMALLER AS A RESULT OF THE DAMAGE
• ESTATE IS COMPARED TO WHAT WOULD HAVE NOT HAPPENED – PRESENT CONDITION OF ESTATE
VS WHAT IT OTHERWISE WOULD HAVE BEEN
• RESTORE THE ESTATE TO THE POSITION IT WAS IN BEFORE THE DELICT OCCURRED
• DAMAGES WHICH ARISE FROM HIS/HER OWN FAULT CANNOT BE RECOVERED
• PERSONALITY RIGHTS CAN BE INFRINGED – COURT CALCULATES COMPENSATION THAT IS JUST
AND FAIR

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REMEDIES
• A PERSON’S WHOSE RIGHTS ARE THREATENED MAY PROTECT THEM BY APPLYING TO COURT FOR
AN INTERDICT TO FORCE OR RESTRAIN ANOTHER PARTY FROM CERTAIN CONDUCT
• IF HARM HAS ALREADY BEEN CAUSED TO ANOTHER PERSON A CLAIM FOR COMPENSATION
ARISES
• THE REMEDY DEPENDS ON THE TYPE OF HARM SUFFERED
• PATRIMONIAL DAMAGE = DAMAGE TO ONE’S ESTATE = ACTIO LEGIS AQUILIAE (ECONOMIC LOSS).
E.G: CAR ACCIDENT – MONETARY DAMAGES
• PERSONALITY LOSS = INJURY TO PERSONALITY ACTIO INIURIARUM (SENTIMENTAL
DAMAGES/Reputational)
• ACTION FOR PAIN & SUFFERING. E.G. EMOTIONAL SHOCK. Protects the physical-mental integrity of
a person, as well as the psychological or mental injury equated to physical bodily injury in the area of
emotional shock.
• A PERSON CAN INSTITUTE BOTH THE ACTIO LEGIS AQUILIAE & THE ACTIO INIURIARUM

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UNJUSTIFIED ENRICHMENT
• What is unjustified enrichment?
✓ It is patently inequitable for one person to be enriched to the detriment/expense of another – i.e.: there is
no valid legal ground for the person who has obtained the benefit to have done so and that it was done at
the expense of the other.
• What if it involves a minor child?
✓ if the contract involves a minor child who is not competent to enter into such contract and does so
without the assistance of his/her parent/guardian and which minor child buys something and then refuses
to pay for it because s/he is not contractually liable, s/he will be enriched (for the amount of the good
purchased) at the expense of the other party.
• How will an aggrieved party seek relief from such a transaction?
✓ There is no contractual obligation between the parties as the minor has no contractual capacity & there is
no relief in terms of delict. However the aggrieved party has the right to claim back the goods which
enriched the minor.
✓ The aggrieved party can only claim the enriched amount – if the goods were damaged then s/he can only
claim the amount of the damaged goods

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UNJUSTIFIED ENRICHMENT

• Originated in Roman law which was then accepted in Roman-Dutch Law and then South African law.
• The obligation imposed upon the enriched person takes one of two forms:
1.Restitution (Payment or delivery in error – reasonable mistake OR payment or delivery under and illegal
contract – innocent party must not be guilty)
2.Compensation
• Restitution:
➢A person may recover money or property from another person which has been delivered or transferred to
that person and is not due to that other person.

➢Negotiorum gestio – A person voluntarily and without the permission/knowledge of another manages the
affairs of that person, the person whose affairs have been managed will liable to compensate that party
for all expenses s/he accrued whilst managing the affairs (only if the management of affairs is accepted).

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