2. 2
Course Outline and Assessments
Course Outline
The course is intended to introduce students to the general legal principles regulating
business transactions in South Africa. It starts by placing the regulatory framework for
business transactions in context and highlighting the importance of a knowledge of the
legal system to business transactions. The regulatory instruments of significance to
investments and business transactions will also be discussed. In this course, we will
consider important legal concepts and principles, including legal personality, the
sources of South African law, and the hierarchy of the court system, with an emphasis
on the impact of the Constitution of the Republic of South Africa, 1996 on law. After this
introductory session on legal concepts, students will be taught the legal requirements
for binding contracts, including the enforcement of contracts and the remedies that are
available in case of a breach of contractual provisions. We will also examine specific
types of contracts under the law of sale, the law of lease, the law of agency and
employment law. Students will also be introduced to the legal principles affecting the
formation, governance, maintenance and dissolution of common types of business
entities in South Africa, with particular emphasis on companies. The course will
conclude with an overview of the legal principles under the law of delict, and how they
apply to the regulatory framework of business transactions and that of business
entities.
Course Intended Learning Outcomes
At the end of this course, the student should be able to:
Critically evaluate the commercial legal system in South Africa.
Appraise the impact of the Constitution on the ‘rules for doing business’ in South
Africa.
Understand the requirements for a valid and binding contract.
Explain the process for the formation of companies and partnerships.
Assess the culpability of individuals and companies in relation to the law of
delict.
3. 3
The Session Intended Learning Outcomes below will elaborate on the Course Intended
Learning Outcomes set out above.
Integration with other PDBA Courses
Business law provides a fundamental context for, and a vital input into, business
strategy. Company law is integral to the application and understanding of finance and
accounting. Technology and operations involve many aspects of business law, such as
technology licensing and supply chain contracts. Entrepreneurship requires an
understanding of types of business entities, business skills, governance and the legal
structures of companies. Knowledge of the registration, formation and operational
processes of business entities underpin this understanding and promote good business
practice. Business law also impacts on people-management and labour relations in all
spheres of commerce.
Prescribed Reading
The prescribed textbook is:
Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law: Fresh perspectives (3rd
ed.). Cape Town: Pearson South Africa.
The chapters students are required to read are listed under the relevant session.
Recommended Readings
Sharrock. R. (2017). Business transactions law (9th ed.). Cape Town: Juta &
Co.
Davis D., Geach, W., Mongalo, T., Butler, D., Loubser, A., Coetzee, L., &
Burdette, D. (2013). Companies and other business structures in South Africa
(3rd ed.). Cape Town: Oxford University Press
Neethling, J., & Potgieter, J. M. (2010). Neethling-Potgieter-Visser Law of Delict
(6th ed.). Durban: Lexis Nexis.
4. 4
These books are recommended for additional reading. It is not necessary that you
purchase a copy. There are copies available in the libraries. It is sufficient for you gain
access to them from there (bearing in mind that there are a limited number of copies).
Note to students on the importance of preparation for lectures
It is imperative that students do the stipulated prescribed readings for each session to
ensure full participation in the class discussions and thereby enhance their
understanding of the lecture topic.
Teaching Methods
Since law is new to many students who are undertaking business law studies at Wits
Business School (WBS), our approach is to begin with fundamental concepts and to
use recent practical events reported in the financial and popular media to contextualise
the study of law and make it relevant to students. Therefore, students are expected to
keep abreast of recent local and international developments that have an impact on
business.
The course will be taught by way of formal lectures. The method of teaching will be
interactive and class participation is essential. Students are required to read the
prescribed reading for each section so that meaningful discussion and debate can be
facilitated in the lecture, and to enhance understanding of the legal issues covered.
Because of the practical aspects of this course, we will critically engage with various
exercises during lecturers. There will also be an emphasis on analysing relevant case
law to enable engagement with current business law principles.
The purpose of the lectures is to give students a chance to interact, and to stimulate
thinking on specific topics. It promotes students’ critical thinking and legal reasoning
skills.
5. 5
Learning Contract
Please note, as a student, you should review the Learning Contract and ensure you
are fully aware of the implication of the assessment approach, as the methods of
assessment and mark allocations cannot be changed retrospectively. If you have any
concerns about the assessment, please raise this with your lecturer at the beginning of
the course.
Course Assessments
The course assessments and weightings are as follows:
Assessment Weighting
(%)
Date Marks Return
Date
Individual
assignment
50 14 August 2019 by 16:00 22 August 2019
Examination 50 27 August 2019 -----------------
Plagiarism and Related Submission Requirements
Students are required to sign and attach the WBS Plagiarism Declaration to each
assignment submitted. Students are also required to run their assignment through
Turnitin prior to submitting their assignment both on Sakai and in hard copy. A copy of
the Turnitin report must be included with both submissions. Students are referred to the
University’s policy on plagiarism. In particular, their attention is drawn to the detail in
the Plagiarism Declaration which they sign.
Pass Mark Requirements
In terms of the Standing Orders, to pass a course a student is required to achieve a
final accumulative average of 50% for a pass mark, and a subminimum of 35% in the
examination.
6. 6
Individual Assignment
Purpose:
The purpose of the assignment is for students to demonstrate their understanding of
relevant contractual principles applicable to the formation of an imposed contract and
the application of the Constitution to commercial issues. Further, students are required
to demonstrate the ability to apply legal principles to a scenario-based question, using
current South African law.
Requirements: Students are required to read the scenario below and address
questions 1 to 3.
During the December holidays, Salim took his two children to Sun City’s Valley of the
Waves for the day. As they entered the premises, there was a large white sign up at
the boom gate stating the following in bold black writing:
‘The owners, management and employees of the Valley of the Waves do not accept
liability or responsibility for any loss or damage of any nature whatsoever caused
negligently or otherwise to any person’s property whilst on the premises.’
In his hurry to make the most of the good weather and keep an eye on the excited
children, Salim did not see the sign.
Salim and his children ran to the water and jumped into the waves. Unfortunately, parts
of the machinery used to create the waves had not been properly secured, and Salim
hit his head on a protruding piece of metal. He was seriously injured and was taken to
hospital. He was unable to work for three months after this accident.
To add to Salim’s misfortune, whilst he was being carried out of the water, his cell
phone was stolen. CCTV footage shows that the thief was an employee of the Valley of
the Waves.
7. 7
Salim submitted a claim to the valley of the waves for payment of his medical expenses
and his loss of income as a result of the accident. He also submitted a claim for the
value of his cell phone. The management of the Valley of the Waves rejected the claim.
Question 1 (30 marks)
Advise the management of the Valley of the Waves on their chances of success in an
action that Salim has brought for:
1.1 The cost of his medical expenses arising from the physical injuries that he
sustained, and the resulting loss of income; and
1.2 The cost of replacing his phone.
Refer to relevant sources of law, including case law, in your answer.
Question 2 (30 marks)
Before Salim left on his holiday to Sun City, he had entered into a contract with Paul for
the purchase of a car. The purchase price was R100 000, and Paul and Salim had
agreed that on Salim’s return from holiday, the car would be delivered to Salim who
would then pay for the car. Whilst in hospital, Salim is concerned about his future
income, and he decides he can no longer afford the car.
He writes to Paul, advising him that he will not purchase the car, and that he will not
pay the purchase price.
You are required to advise Paul of his legal position. In your answer, you are required
to identify the type of breach that has occurred, and set out the relevant remedies for
breach.
For Questions 1 and 2, students are required to write a well-structured legal opinion to
the client, based on the legal principles of South African law. The answer should
include the following:
(i) A brief background;
(ii) The correct identification of the legal issues;
8. 8
(iii) Setting out of the relevant legal principles;
(iv) An application of the relevant legal principles to the facts in the scenario; and
(v) A well-considered legal opinion and conclusion.
Question 3 (40 marks)
In Barkhuizen v Napier 2007 (5) SA 323 (CC), the Constitutional Court held that :
“Public policy had to be determined with reference to the Constitution, so that a
contractual term that violated the Constitution was by definition contrary to
public policy and therefore unenforceable (paragraph 29 at 333E - F).”
Consider this extract from the Barkhuizen case in relation to the sign outside the Valley
of the Waves, set out above.
In law, there are arguments that support the enforceability of the type of term relied
upon by the ‘Valley of the Waves’ and hold that it is necessary for these terms and
contracts generally, to be binding. There are also arguments that hold that such terms
should not be enforceable if the result will be that important Constitutional rights of a
party may be infringed.
Advise whether, in your opinion, such a term, as well as other types of terms that are
commonly inserted in contracts by means of notices, ‘tickets’ or standard exclusion
clauses, should be enforceable in South African law.
Students are required to engage with the role of the Constitution and public policy in
South African contract law and provide a logical and well-argued discussion of both
sides of the argument.
[TOTAL: 100 Marks]
9. 9
The assignment must be properly referenced, following the APA reference style.
There must be a bibliography attached to the assignment.
Penalty for late submission:
For every calendar day, or part thereof, that the assignment is late, 10% will be
deducted from your mark.
Mark allocation
The suggested length of questions 1 and 2 of the assignment is approximately1500
words, including footnotes and excluding the title page and the bibliography.
Criterion – Questions 1 & 2
CRITERION FOR QUESTIONS 1 AND 2
Mark Allocation (%)
MARK ALLOCATION (%)Correct identification of the legal issue and area of law 5
Identification of relevant legal principles (including proper referencing) 10
Application of relevant legal principles to the facts 10
Conclusion 5
TOTAL Q1: 30 AND Q2: 30
Total60
The suggested length for question 3 of the assignment is approximately 500 words,
including footnotes.
Criterion – Question 3
CRITERION FOR QUESTIONS 1 AND 2
Mark Allocation (%)
MARK ALLOCATION (%)Correct identification of the legal issues 5
Logical structure of the argument 5
Critical thinking and analysis 20
Well-motivated conclusion 10
TOTAL Q3: 40
Total60
10. 10
Examination
Format:
The examination will be in the format of a semi-closed book exam. Students are
allowed to bring in 2 x A4 pages double sided of written/typed notes.
Duration:
The duration of the examination is 3 hours.
Special instructions:
No electronic resources - including laptops, tablets or smart watches - are allowed in
the examination venue.
Please note:
The date and place of the examination may change after the publication of this course
pack. In terms of the University rules, it is the sole responsibility of the student to
ensure that he/she determines the time and place for an examination which he/she is
due to write.
11. 11
Course Timetable
Venue: Investec Auditorium
Session Date Time Session Heading
1 22 June
2019
12:00 –
15:30
Introduction to the SA legal system:
(i) Important legal concepts and terms
(ii) The sources of law
(iii) The hierarchy of the courts
(iv) Branches of law
2 29 June
2019
08:00 –
11:30
Introduction to the SA legal system (cont.)
3 6 July 2019 12:00 –
15:30
Principles of contract:
(i) Requirements for a valid contract
(ii) Contracts without agreement
(iii) Certainty, lawfulness and possibility of
performance
4 13 July
2019
08:00 –
11:30
Principles of contract:
(iv) Void and voidable contracts
(v) Breach of contract
(vi) Remedies for breach of contract
(vii) Excuses for non-performance
5 20 July
2019
12:00 –
15:30
Specific contracts:
(i) Sale
(ii) Lease
6 27 July
2019
08:00 –
11:30
Specific contracts:
(iii) Agency
(iv) Credit agreements
(v) The impact of the Consumer Protection
Act 68 of 2008
7 3 August
2019
12:00 –
15:30
Specific contracts:
(vi) e-Commerce
(vi) Employment law
12. 12
Session Date Time Session Heading
8 10 August
2019
08:00 –
11:30
Formation of companies
Directors, shareholders and shares
9 17 August
2019
12:00 –
15:30
The law of delict
Causation and damages
Venue, dates and times correct at time of publication. Students must consult
Sakai for the up-to-date schedule.
13. 13
Course Lecturer
JUDITH KATZEW is an attorney, admitted to the High Court, South Africa. She
practised as an attorney for 15 years, specialising in corporate law and insurance law.
She thereafter held lecturing and managerial posts at Damelin Management School.
Judith is now a lecturer of Law at the University of the Witwatersrand where she
lectures commercial, insurance and corporate law to undergraduate and post graduate
students. She has lectured in the Wits MBA program and facilitates the Post Graduate
Diploma in Advanced Company Law. She has published in the commercial law and
insurance field. Judith has a BA (Hons) (with distinction) and an LLB and LLM degree
from the University of the Witwatersrand.
Contact information
Email: Judith.Katzew@wits.ac.za
14. 14
Sessions 1 and 2
Introduction to the South African Legal System
Session Overview
This session will introduce students to the legal system in South Africa. The nature of
law, important legal concepts and terms, the sources of law, the hierarchy of our
courts, and branches of law will be considered. The impact of the Constitution on the
way in which business is and should be conducted will also be examined.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Understand the hierarchy of the sources of South African law and significance
thereof.
Understand the hierarchy of the court system.
Critically evaluate the legal system in South Africa.
Consider the various branches of the South African legal systems.
Prescribed Readings
Chapters 1 and 2 in: Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law: Fresh
perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Reading
Chapter 1 in: Sharrock. R. (2017). Business transactions law (9th ed.). Cape Town:
Juta & Co.
15. 15
Session 3
Principles of Contract:
(i) Requirements for a Valid Contract
(ii) Contracts without Agreement
(iii) Certainty, Lawfulness and Possibility of
Performance
Session Overview
This session deals with the nature of contract by placing contract law within the context
of relevant sources of South African law, and by discussing relevant basic legal
concepts. The session will also provide a background to the essential elements of a
valid contract. The session will consider the conclusion of a contract by looking at the
concept of ‘offer’ and ‘acceptance’ as a requirement for a legally binding contract under
South African law.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Understand the legal requirements for a valid and binding contract.
Consider the issue of contracting without agreement
Identify the role of the Constitution in commercial transactions.
Prescribed Readings
Chapters 4, 5, 7 and 8 in: Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law:
Fresh perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Readings
Chapters 2 to 6 in: Sharrock. R. (2017). Business transactions law (9th ed.). Cape
Town: Juta & Co.
16. 16
Session 4
Principles of Contract:
iv) Void and Voidable Contracts
(v) Breach of Contract
(vi) Remedies for Breach of Contract
vii) Excuses for Non-Performance
Session Overview
This session deals with the differences between void and voidable contracts, including
the three grounds for a voidable contract (misrepresentation, duress and undue
influence). We will then consider the ways in which parties can breach a contract, and
the remedies for such breach. We will also examine the basis on which a party can be
excused from performance on a contract.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Analyse a contract to determine its validity.
Distinguish between a void and a voidable contract.
Understand the respective requirements that the innocent party must prove in
order to succeed in a claim for a voidable contract on the basis of
misrepresentation, duress or undue influence.
Distinguish between the forms of breach.
Understand how to choose the appropriate remedy for a breach of contract.
Understand the instances in which a party will be excused from performance.
Prescribed Readings
Chapters 6, 10 and 11 in: Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law:
Fresh perspectives (3rd ed.). Cape Town: Pearson South Africa.
18. 18
Session 5
Specific Contracts:
(i) Sale
(ii) Lease
Session Overview
This session deals with sale and lease as specific types of contracts. We will consider
the requirements of each contract, and the duties of the respective parties.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Understand the respective requirements for a contract of sale and lease.
Understand the duties of the buyer and the seller, and the lessor and the lessee.
Prescribed Readings
Chapters 14 and 15 in Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law:
Fresh perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Readings
Chapters 16 and 17 in: Sharrock, R. (2017). Business transactions law (9th ed.). Cape
Town: Juta & Co.
19. 19
Session 6
Specific Contracts:
(iii) Agency
(iv) Credit Agreements
(v) The Impact of The Consumer Protection Act
68 of 2008
Session Overview
This session deals with agency as a specific type of contract. We will consider the
requirements for agency to apply as well the instances in which estoppel and
ratification apply. We will then consider credit agreements and the impact of the
Consumer Protection Act (CPA) on the common law of contract.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Understand the requirements for agency to apply.
Understand the principles of estoppel and ratification in the law of agency.
Understand the nature of a credit agreement.
Understand the impact of the CPA on the law of contract and apply it to practical
scenarios.
Prescribed Readings
Chapters 16, 17 and 18 in: Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law:
Fresh perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Readings
Chapters 8, 25 and 26 in: Sharrock, R. (2017). Business transactions law (9th ed.).
Cape Town: Juta & Co.
20. 20
Session 7
Specific Contracts:
(vi) e-Commerce
(vii) Employment Law
Session Overview
In this session, we briefly consider the validity of online contract before moving on to
examine the requirements for a valid employment contract and the relevant labour
legislation. We will also consider the law of unfair dismissal, the basic conditions of
employment, and unfair discrimination in the workplace.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Understand relevant labour legislation.
Explain the formation of an employment contract.
Apply recognition agreements and collective agreements.
Understand the principles of unfair labour practice in the workplace.
Prescribed Readings
Chapters 19 and 24 in Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law:
Fresh perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Readings
Chapter 22 and Appendix A in: Sharrock, R. (2017). Business transactions law (9th
ed.). Cape Town: Juta & Co.
21. 21
Session 8
Formation of Companies
Directors, Shareholders and Shares
Session Overview
This session deals with the formation of a company, the significance of a company
having a separate legal personality, and the different types of companies that may be
incorporated. This session also deals with the two organs that manage the company.
These are the shareholders and the directors. The meaning of ‘shares’ and
‘shareholders’, and the duties and liabilities of the directors will be discussed.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Explain the process for the formation of a company.
Understand the concept of a separate legal personality.
Understand the requirements and limitations of different types of companies.
Explain the role of the shareholder and of the director in a company
Understand the meaning of ‘securities’, specifically shares and debentures.
Critically evaluate the role and liability of directors in a company.
Prescribed Readings
Chapter 26 in Govindjee, A., & Pillay, K. (Eds.). (2019). Commercial Law: Fresh
perspectives (3rd ed.). Cape Town: Pearson South Africa.
Recommended Readings
Chapters 2 and 3 in: Sharrock, R. (2017). Business transactions law (9th ed.). Cape
Town: Juta & Co.
22. 22
Session 9
Law of Delict
Causation and Damages
Session Overview
This session deals with conduct, wrongfulness and fault as requirements for a delict.
We also consider the requirement of causation under the law of delict as well as the
concept of damages.
Session Intended Learning Outcomes
At the end of this session students will be able to:
Assess the culpability of natural and juristic persons under the law of delict.
Understand the requirement of causation in a delict.
Understand how damages and compensation are awarded.
Prescribed Readings
See class notes.
Recommended Readings
Chapters 2, 5 and 6 in: Neethling, J., & Potgieter, J. M. (2010). Neethling-Potgieter-
Visser Law of Delict (6th ed.). Durban: Lexis Nexis. (For chapter 2 particular
attention should be given to pages 25-31).
