by slamatattorneys | Jul 30, 2021 | Business Law, Contract Law
The exceptio non adimpleti contractus is a contractual defence which can be raised in regard to reciprocal contracts.
While it is classically stated that reciprocity is the cornerstone of any good relationship, it is evident that times have certainly changed.
The exceptio non adimpleti contractus means in simple layman’s terms the right to withhold performance (eg. payment) where reciprocity exists contractually in terms of the performances by each party.
Performance by the parties must be simultaneously due or one party due to perform before the other. It is typically used in commercial contracts disputes when a party (a land owner or homeowner) is sued for payment by a service provider, for example a building company, when the service provider has not performed at all in terms of the contract or, as most frequently occurs, where the building company has performed defectively in terms of the contract.
The requirement of reciprocity is thus a crucial element of the defence and it also finds particular application in contracts of lease and contracts of letting and hiring and other commercial contracts.
It is increasingly clear that the legal principle of exceptio non adimpleti contractus is taking on substantial significance in South Africa in recent times and since the onset of the Covid19 pandemic and indeed in respect of the seemingly clear trend of parties’ wilfully defaulting/breaching contractual terms with self-professed impunity. This appears to be increasing especially in the fields of commercial contracts for:
- construction contracts for homes, homeowners associations and sectional title units;
- other ‘building’ contracts such as services for electrical wiring, plumbing, ventilation systems, audio-visual services, security systems, swimming pools, spas, Jacuzzis;
- service contracts particularly in regard to independent contractors services; and
- also pure service contracts where a service provider bills the consumer in arrears for the service rendered.
It is thus imperative that when a party to a reciprocal contract does not perform as that party agreed to, the other party must seek expert legal advice without delay from an expert contracts attorney to safeguard its interests, or otherwise the delays caused by inaction or the exercise of incorrect legal remedies may result in serious financial consequences and lack of legal recourse to obtain reciprocity or equity in terms of the contractual relationship.
ASHLEY SLAMAT ATTORNEYS – Success is the Only option™
www.slamatlaw.co.za ASHLEY SLAMAT ATTORNEYS – Copyright.
by slamatattorneys | Jul 8, 2021 | Business Law
The legal means by which business can secure credit being offered to customers is by the various legal measures providing for credit security.
Typically, credit security falls into one of two legal categories, namely, real security or personal security. The former secures the obligation(s) owed in regard to the entire world while the latter secures the obligation(s) owed only in respect of the juristic person or the debtor him/herself.
The former also provides a greater measure of protection in the event of the debtor’s insolvency or liquidation.
The following credit legal instruments are available each having their own unique legal requirements and provisions for enforcement against defaulting debtors:
- General or specific credit agreements and bonds (such as incidental credit agreements or specific agreements, and bonds such as general notarial bonds or special notarial bonds);
- Mortgages which generally secure rights to immovable property or land;
- Pledge agreements which secure movable property (the Security by means of Movable Property Act 57 of 1993 is relevant);
- Liens, which typically secure goods in respect of services rendered;
- Cession, being either out- and- out cessions or together with cession in securitatem debiti;
- Hypothecs in regard to movable property and legal claims;
- Suretyships in regard to personal debts for individual or several debtors.
Depending on the type of business products or services offered and the accepted level of risk, one or more of these instruments can be utilised (sometimes together as opposed to in the alternative) to secure credit being offered by the business.
Doing business prudently with adequate credit security in place for debtors’ obligations together with a sound debtors’ book management system is vital for successful business especially in regard to consumer related sales.
Utilising expert credit security legal expertise places your business at the forefront of it’s potential to maximise credit sales opportunities.
ASHLEY SLAMAT ATTORNEYS – Success is the Only option™
www.slamatlaw.co.za – ASHLEY SLAMAT ATTORNEYS – Copyright
by slamatattorneys | Jul 8, 2021 | Business Law
Contracts and business – the tail wags the dog.
It is said that doing business without a contract is stupid business. Never have truer words been spoken.
Nonetheless, it is remarkable that in 2021 so many court cases are filed in regard to businesses not doing business with proper contracts in place. Contracts and business go hand in glove.
Invariably, this results in many lost opportunities, ill-will and frequently the liquidation of companies with the consequent loss of investments placed by investors, particularly in start- up companies.
Why is it then that so many businesses go under due to not making use of proper contracts or any contracts at all?
Evidently, factors such as the type of business entity involved, the size of the business, the kind of business operation and the nature of the business owner, sufficient equity, credit lines, focused efficient labour, effective costs management, to mention a few determines the inclination to do business properly with contracts, or foolishly without.
The understanding of risk aversion is another crucial factor as is the amount of investment by the business owner in the business itself. After all, it is quite easy to play around and take substantial risks with investors’ money as opposed to your own.
Whether it be for lease agreements in regard to office space, office equipment, motor vehicles, or other agreements (in regard to employees, procurement of supplies, licencing, intellectual property, franchising, merchandising, marketing, advertising) the value of a proper contract cannot be underestimated or under-utilised by any entrepreneur. Furthermore, dealing adequately in contracts in regard to legislation that affects all businesses in general terms is also imperative, such as the following legislation:
- Companies Act 71 of 2008;
- Close Corporations Act 69 of 1984;
- Labour Relations Act 66 of 1995 & Basic Conditions of Employment Act 75 of 1997;
- Financial Intelligence Centre Act 38 of 2001 & POPI Act 4 of 2013;
- National Credit Act 34 of 2005;
- Income Tax Act 58 of 1962;
- Value-added Tax Act 89 of 1991;
- Insolvency Act 24 of 1936;
- Business Rescue in terms of Companies Act 2008;
- Liquor Act 59 of 2003;
- Trust Property Control Act 57 of 1988;
- Skills Development Levies Act 9 of 1999;
- Unemployment Insurance Contributions Act 4 of 2002;
- Occupational Health & Safety Act 85 of 1993;
- Electronic Communications & Transactions Act 25 of 2002;
- Electronic Communications Act 36 of 2005;
- Films and Publications Act 65 of 1996;
- Copyright Act 98 of 1978;
- Trade Marks Act 194 of 1993;
- Consumer Protection Act 68 of 2009;
- Competition Act 89 of 1998;
- Customs and Excise Act 91 of 1964.
These Acts invariably impact upon any business by imposing obligations and duties in many respects which should be catered for in business contracts or agreements whenever applicable. In addition, there are a multitude of provincial, municipal by-laws which may also be applicable depending on the type of business being conducted.
After all, in the final analysis, is there anything worse for a business person’s reputation than going bankrupt or being prosecuted for contraventions of the law? Not only does this place the business in jeopardy but also the investors’ investment, employees’ jobs and the credibility of the business owner.
ASHLEY SLAMAT ATTORNEYS – Success is the Only option™
www.slamatlaw.co.za ASHLEY SLAMAT ATTORNEYS – Copyright.
by slamatattorneys | Mar 16, 2021 | Business Law
The purpose of the Banks Act 94 of 1990 is to, inter alia:
- Provide for the regulation and supervision of the business of public companies taking deposits from the public.
The Act, which has been amended on numerous occasions consists of nine chapters and various regulations thereto, and is the primary legislation governing the regulation and supervision of the activities of banks in South Africa.
Insofar as the Act imposes requirements with which any institution must comply before it may carry on the business of a bank or in the lawful carrying on of the business of a bank, the Act does not apply to the following institutions:
- the Reserve Bank;
- the Land Bank;
- the Development Bank of Southern Africa;
- the Corporation for Public Deposits, established by section 2 of the Corporation for Public Deposits Act, 1984 (Act No. 46 of 1984);
- the Public Investment Commissioners referred to in section 2 of the Public Investment Commissioners Act, 1984 (Act No. 45 of 1984);
- any mutual bank; or
- any other institution or body designated by the Minister by notice in the Gazette.
The administration of the Act is fulfilled by the Office for Banks (OFB) which is located at the Reserve Bank. The primary persons responsible for fulfilling the functions and exercising the powers of the OFB are the Registrar and Deputy Registrar of Banks.
The Act provides for the application for authorization to establish a bank (and granting, refusal and/or revocation thereof), the registration (granting, with or without conditions, or refusal thereof) and the cancellation of registration of banks and relevant matters thereto.
The Act furthermore provides for the shareholding in and registration of controlling companies in respect of banks, the functioning of banks and controlling companies with reference to the Companies Act.
The prudential requirements with which banks must comply are provided for and inaddition thereto the provisions relating to the conducting of the business of a bank and the control of certain activities of unregistered persons.
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