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Estopple & Suspensive Conditions – Friend or Foe?

It is common practice within the commercial environment to conclude contracts which are subject to suspensive conditions or otherwise known as condition precedents (“CPs”). Whilst most CPs are relevant and necessary for a variety of reasons (dependent on the particular transaction), ensuring the accurate fulfillment of same is often not attributed the same level of [...]

The Business Judgement Test

Section 76 of the Companies Act No. 71 of 2008 (“Act”) sets out the partial codification of directors’ duties and liabilities. The partial codification of directors’ duties has effectively narrowed the scope of directors’ duties due to the statutory defence available to directors in the form of satisfying the test deemed the business judgment test. [...]

Distinguishing Between An Unincorporated Association And An “Universitas”

Introduction Before delving into an investigation as to the differences between an unincorporated association and an universitas, it is essential to have a basic understanding of the two concepts: An unincorporated association is a voluntary association existing under the common law.  It is not a juristic person and cannot own immovable property for its own [...]

Selected Cheques and Balances of the NCA

A significant aspect to consider under the auspices of the National Credit Act 34 of 2005 (“NCA”) is when a repayment of a loan agreement is made by way of cheque and upon such cheque being presented for payment, the payment fails and the cheque is subsequently dishonoured. The notable question which emerges is will [...]

Sequestrating or Liquidating a Body Corporate?

The estate of a debtor who has committed an act of insolvency or who is in fact insolvent may be sequestrated. “Debtor” is defined in section 2 of the Insolvency Act No. 24 of 1936 (“Act”), as “a person or a partnership or the estate of a person or partnership which is a debtor in [...]

The Removal of a Director in terms of a Sharholders’ meeting and the associated legal mine field

In practice one often finds one’s self dealing with the situation where the shareholders of a private company who are also the directors of said company have fallen into a dispute and have reached the situation where they can no longer work together. At this point in time, one of the shareholders may look to [...]

Unauthorised Distributions and the Dangers of turning a Blind Eye

It goes without saying that the primary goal of a profit company is to increase the wealth of its shareholders, by paying dividends and causing the price of the company’s shares to increase. The company’s board is entrusted with managing the business and affairs of the company in the interests of the company’s shareholders, as [...]

Insolvency and Partnerships

Introduction From the moment a partnership is sequestrated, its creditors are mostly confined to the partnership assets and inevitably deprived of any recourse against the partners individually.  According to Michalow v Premier Milling Company Limited 1960 (2) SA 59 (W) (“Michalow case”), a partnership is treated, for purposes of insolvency law, “as a separate entity [...]

Considering the ECTA when drafting Non-Variation clauses

Any astute attorney, when drafting a contract, will be very careful to ensure that the contract meets two essential standards: firstly, that the contract clearly represents the intentions of the contracting parties involved and, secondly, that the contract pronounces the fact that such intentions coincide and are unequivocally agreed between the parties. A dispute relating [...]

Trustees Acting Without Authorisation

It is often the case that contracts entered into by trustees on behalf of a trust are regarded as being void. Cameron JA in Land and Agricultural Bank of South Africa v Parker and Others 2005 (2) SA 77 (SCA) stated that, “It is a fundamental rule of law… that in the absence of contrary [...]

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