The Purpose Of Legislation Law Contract Essay

Published Date: 02 Nov 2017

Written by:

Llewellyn Holtshausen

CONTENTS

The purpose of legislation

Legislation (also known as "statutory law") is law which has been promulgated (or "enacted") by a legislature or other governing body [i] , for example parliament or congress. The purpose of legislation is to create rules, rights, and obligations to which legal subjects (human beings or entities) are subject to.

Legislation is also referred to as an act, accompanied with a year in which the piece of written rules and regulations and the procedure to be followed by legal subjects, with regards to a particular topic of law. For example section 7 of the divorce act 70, of 1979. This regulates certain aspects of family law.

Legislation is the most important source of law (where the law can be found).

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Question 2

Jurisdiction of a specific Court

2.1 The jurisdiction of a specific court refers to the power or the authority a court may have to hear a case. A court typically has specific jurisdiction on a matter where a claim founding in money, exceeds a R100 000. In this case a high court will have jurisdiction to hear the matter, but a magistrate’s court will not be able to hear the matter. Generally a party may institute legal proceedings in the court in which area the defendant ordinarily resides or works.

Jurisdiction of the Constitutional Court

2.2 The Constitutional Court is not only the highest court in the land, but is the court that has the final say over matters relating to the enforcement, interpretation and protection of the provisions of the Constitution. All other courts are subject to the decisions of the Constitutional Court. So its jurisdiction - the scope of its authority to hear cases are restricted to constitutional matters and issues connected with decisions on constitutional matters [ii] . The constitutional court has the final say in respect of constitutional issues, for example: The Constitutional Court will determine whether a fundamental right contained in Chapter 2 of the Bill of Rights has been infringed. The Constitutional Court’s purpose is to uphold and protect and enforce the provisions of the constitution of South Africa Act of 1996. The Constitutional Court is situated in Johannesburg, Braamfontein. Some of the constitutional issues which the Constitutional Court will have the power to hear are: the right to housing, the right to freedom of expression, the right to human dignity, the right to equality etc.

The main task of the Constitutional Court as per section 167(3) of the Constitution says the Constitutional Court: [iii] 

Is the highest court in all constitutional matters; examples are chapter 2 in the Bill of Rights, which contains the rights of all people in our country and affirms the democratic values of human dignity, equality and freedom;

May decide only constitutional matters and issues connected with decisions on constitutional matters; and

Makes the final decision whether a matter is a constitutional matter or whether an issue is connected with a decision on a constitutional matter.

Section 167(4) continues to give the Constitutional Court exclusive jurisdiction in deciding disputes about the powers and constitutional status of branches of government. Only the Constitutional Court may:

Decide disputes between organs of state in the national or provincial sphere concerning the constitutional status, powers or functions of any of those organs of state;

Decide on the constitutionality of any parliamentary or provincial Bill;

Decide on the constitutionality of any amendment to the Constitution; and

Decide that parliament or the president has failed to fulfil a constitutional obligation.

http://www.constitutionalcourt.org.za/site/images/contcourtlogo.gif

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Question 3

The two most important principles when interpreting legislation

It is important to note that when the meaning of law or legislation is being interpreted, it is interpreted firstly by means of statutory interpretation – to ensure that the interpretation (an active and practical interpretation) of the background and circumstantial factors surrounding the law, are researched accurately in order to determine the purpose of the legislation, and what it was initially intended for. It also needs to be verified in the light of the principles prescribed by the Constitution and the Constitutional Law.

While the ‘stare decisis’ rule will show that one of the sources of law, is law made by previous judges on similar cases, setting the precedent for how law is interpreted (whether the decision was correct or not). This precedent together with the interpretation of the meaning of a piece of legislation, means that other courts will be bound by that legislation unless a higher court (Supreme Court or Constitutional Court) places a different interpretation on it or the legislature (Parliament or Congress) amends the legislation.

The Constitution therefore set the guidelines and rules for interpreting legislation, and any law that conflicts with it can be declared invalid. Most importantly Section 39(1) of the Constitution states that, when interpreting the Bill of Rights, a court must promote the values and norms of the Constitution, and always take it into account. Section 39(2) of the Constitution states, that when courts interpret legislation they must always promote the spirit and purpose intended by the Bill of rights.

Furthermore, Section 233 states that, when a court interprets any legislation, it must prefer any reasonable interpretation that is consistent with international law over any alternative and inconsistent interpretation.

Two of the most important other principles when interpreting legislation are:

The meaning of a provision must be determined by its language (words should be given their ordinary meaning) and context in the legislation read as a whole (having regard to the overall purpose for which that law was created).

When there are two interpretations of words, the interpretation which renders the law valid, must be preferred over the interpretation which renders the law invalid.

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Question 4

The doctrine of ‘stare decisis’ (the decision stands) and the hierarchy of courts

Introduction: Definitions

‘Stare decisis’

The doctrine of ‘Stare decisis’ emanates from the common law principal that it is the function of a judge to state the law and not to create law as that is the function of the legislature. It is important that a judge remains objective and focusses on what the law has already held on a particular issue and precedence is already available to him.

‘Ratio decidendi’

‘Ratio decidendi’ meaning "the reasons for the decision", are the principles used by a judge when making his judgment, and is a binding decision. It also creates a precedent, which means that other courts lower in hierarchy will have to follow the same decisions for cases which are very similar.

‘Obiter dicta’

‘Obiter dicta’ meaning "other things said", is everything other than what was said and binding ‘ratio decidendi’. In other words, anything that was said by the judge in passing, or any incidental statements made by the judge which did not form part of the final decision and judgment, is obiter (by the way) and does not form a binding precedent for other courts. It does however become a persuasive precedent, and a future judge does not have to follow it. If and when such an ‘Obiter dicta’ was used and applied in a later court, it becomes ‘Ratio decidendi’, and therefore becomes a binding precedent.

Explanation and application

The doctrine of ‘stare decisis’ (The decision stands) refers to the hierarchy of the courts (lower, higher, supreme courts) and the lower courts must follow the ‘ratio decidendi’ of a judge’s decisions in higher courts in regard to similar issues or disputes. For example a Magistrate’s Court is bound by the decision of a High Court and both the Magistrate’s Court and the High Courts are bound by the decisions of a Supreme Court of appeal.

Where two high courts have conflicting decisions, a lower court .e.g. a Magistrates Court, must follow the decisions of the High Court in whose area of jurisdiction the decision was given. In other words the Benoni magistrate’s court must follow the decision of the Johannesburg High Court.

Every court is also bound by the decisions of a court (‘ratio decidendi’) on the same level, and with equal powers within its particular area of jurisdiction, unless of course such courts are convinced that the earlier decision was incorrect. For example; a judge of the North Gauteng High Court is bound by earlier ‘ratio decidendi’ or the decisions of judges, handed down in the North Gauteng High Court on similar matters, unless the judge believes that his learned colleague erred in his earlier decision.

However, one high court is not bound to follow the decision of another high court as it is not within the same area of jurisdiction as the other high court. The law of Gauteng High Court is not bound by decisions made by the High Court in Kimberly. The decision of the other high court will however have a great deal of persuasive value (‘Obiter dicta’).

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Question 5

Definition of a contract

Define a contract: A contract can be described as an agreement between two or more persons with the serious intention of creating legally enforceable rights and duties (Obligation).

Requirements for a valid contract

Discuss the requirements for a valid contract: The law prescribes certain requirements that must be met for a contract to be valid and legally enforceable. The requirements are as follows:

Consensus (meeting of the minds), both parties must agree on the objectives of the contract. Each party to the contract must have the serious intent to create rights and duties to which each of them will be legally bound. Offer and acceptance = Consensus.

Capacity to act. Both parties must be able to act. For example, a minor cannot enter into a contract, as he does not have the capacity to act and enter into an agreement.

The performance must be legally and physically possible. For example, the performance of contract must be possible. I cannot sell you a car if it has been stolen.

Leave – The purpose of the contract must be lawful. For example, the rights and duties of contract must have a lawful purpose. I cannot sell you uncut diamonds.

Formality: The contract must comply with all the legal formality. For example if a contract has legal formalities, they must be complied with. If you enter a contract of sale, and you haven’t agreed on a merx (a defined thing that you are selling), a purchase price, time, and a transfer of ownership, the contract will be invalid.

Ascertained or Ascertainable. The terms of the contract must be ascertained or readily ascertainable, they must be clear, For example you have to work out how much you are buying, and what it is that you are actually buying.

Explanation of contractual obligations and outcome

Following the above requirements for a valid contract, the following could be said in relation to the agreement between Mary and Steven: Even though there is a general consensus between Mary and Steven regarding the model of car, price (merx), and intention to buy or sell, the fact remains that this agreement is based on illegal activity and the agreement between Mary or Steven do not constitute legally enforceable obligations, they do not have the legal right and capacity to act, the agreement is not permitted by the law and therefore is not legally or physically possible (It is not possible for Mary to buy a car from Steven that has been stolen, which does not have the owner’s consent to sell it). Finally the formalities cannot be observed as they are not lawful. We can safely say that because Mary and Steven do not satisfy the requirements of a contract, they may still be in an agreement, but this agreement will not constitute a valid contract, or is not enforceable, as the law prohibits the sale of stolen (things) cars. Neither Mary nor Steven will be able to have a basis to take legal action against the other.

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Question 6

Answer to Cindy with regard to the advertisement

The mistake created in the advertised offer relates to a fact, which fact is material (Cindy thinks she can buy two phones for R300 each, whereas in reality the offer was for R3000 each). The mistake in the advert is reasonable under the circumstances, the test is objective, and it cannot be said that Bargain stores was negligent or careless; therefore Cindy cannot rely on the mistake to render the offer valid. This mistake leads to the absence of consensus, and therefore it goes to the root of any contract that would have been created, being the purchasing of two phones for R300.00. In general advertisements do not constitute an offer. It is in fact Cindy who by reacting to the advertisement actually makes an offer to Bargain stores. It is only if Bargain stores accepts Cindy’s offer, will a valid contract of sale come into being.

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Question 7

Type and breach of contract

The type of breach of contract referred to in Paul and Peter’s case is called repudiation.

Paul is the debtor, and Peter is the creditor. In order for Paul to commit breach of contract, his performance of building the swimming pool for Peter must already been claimable. In this example, there is no question of late performance as Paul has advised Peter prior to the 20th of February 2013 that he no longer intends to build the swimming pool.

Paul will only automatically fall into ‘mora ex re’ on 20 February 2013. There is no indication in the example that Paul’s refusal to perform is due to his own fault. Paul has also not warranted performance. Paul’s breach is repudiation of the agreement as he does not intend to honour his obligation to perform by 20 February 2013. It is clear that he is trying to withdraw from the contract without any reasonable justification being given by him. Under the circumstances Peter cannot be expected to wait to see whether Paul will ever build the swimming pool for him and Peter is entitled to use at his disposal the following remedies:

He must be placed in a position which he would have been in had he not entered into the agreement with Paul. In other words, restitution must take place and Paul must return to Peter the full amount received.

In addition to restitution Peter has a claim for damages against Paul. However proving damages suffered will be very difficult. As somebody else can build him a swimming pool, unless the date of 20 February 2013 was significant to some other obligations which Peter had to fulfil. For example: Occupational rental which Peter was to receive that was dependent on a swimming pool being built by the 20th of February 2013.

Peter has a duty in law to mitigate his damages. And it would seem from the fact of the question, later delivery of performance being his building of the swimming pool by another contractor will not involve extra costs necessarily.

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Question 8

Who suffered the loss?

8.1 The risk for damage or loss to the vehicle has not resulted from Simon’s intentional or negligent conduct; therefore Rosina will remain liable for the loss, even though Rosina was entitled to the preservation of the merx (the BMW vehicle). The risk has passed from Simon to Rosina, because the contract is ‘perfecta’.

Was the contract ‘perfecta’?

8.2 The contract was already ‘perfecta’ when the loss occurred, because the merx (being the BMW), and the purchase price were already determined and there was no suspensive condition to be fulfilled. For example, the car has to pass a roadworthy test before Rosina will pay the full purchase price. _________________________________________________________________________

Question 9

The difference between Indemnity and Non-Indemnity Insurance

There are two types of insurance contracts

Indemnity Insurance

Non-indemnity Insurance

To understand the difference, let’s compare the two in the form of a table:

Indemnity Insurance

Non-Indemnity Insurance

Insurer’s

undertaking

The insurer will pay-out the insured for the actual costs of the damage incurred (the value if the thing insured), if the event insured against takes place (the insured must suffer financial loss). Usually subject to a maximum amount.

The insurer will pay-out the insured or beneficiary a fixed sum of money (defined in the contract) if or when the event insured against takes place, irrespective of the damage and costs.

Types of

insurance

Property insurance.

Liability insurance.

Life insurance.

Personal accident insurance.

Examples

Santam Insurance undertakes to indemnify Sally if her vehicle has been in an accident, or if her car has been stolen. Santam Insurance will pay Sally the total amount in damages, or the value that the car was insured for (or the fair market price of the vehicle). There is no "profit" from this insurance, as the value paid constitutes a fix or replacement of an existing object.

Liberty Life undertakes to pay Mike R500, 000.00 should he lose a limb from an accident that will stop him from being able to perform his usual duties. There is no real replacement value for non-indemnity insurance, as it cannot be directly correlated with the loss. For example, you cannot place a value or cost of replacement on someone’s life.

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Question 10

The lease of a contract

10.1 Define the lease of a contract

A contract of lease is a reciprocal contract. In other words it creates rights and obligations (duties) for both parties in terms of the contract. The lessor has certain rights and duties towards the lessee who also has certain rights and duties towards to lessor. A contract of lease can involve the letting and hiring of a thing, for example an object (movable or immovable property) or it can involve the letting and hiring of services, (For example a contract of employment) or it could involve the letting and hiring of work to be done (For example: a construction contract).

The essential elements of a contract of lease

10.2 List the essential elements of a contract of lease

1. The lessor must give use and enjoyment of a thing to the lessee. The lessee may use and enjoy the whole thing (for example a farm or a car) or only part of the leased object (for example two rooms in a ten bedroom house).

2. The lessor makes only the temporary use and enjoyment of the object available to the lessee. In other words on the expiry of the lease agreement the lessee must return the leased object to the lessor.

3. The lessee must pay rent to the lessor. The amount of rent to be paid by the lessee must be certain and must sound in money. The only exception is an agricultural lease where the lessor might agree to receive a proportion of the produce or a share in fruits.

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Question 11

Rights of a partner in a partnership

List five (5) rights of a partner in a partnership.

Partners are entitled to claim delivery of the contribution promised by another partner.

Each partner is entitled to share in the profit of the partnership. It does not mean that partners have to share equally.

Each partner may be use or utilise the assets of the partnership as co-owner of the assets, provided that assets are used to advance the aims and profitable purpose of the partnership.

Each partner is entitled to access and proper insight into the accounting records of the partnership

Each partner has the right to participate and become involved in the management of the partnership and to perform management function on behalf of the partnership, unless otherwise agreed between the partners.