Ethics Precedents 2 PDF

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PRECEDENTS1. COMMON TERMS Interpreation Whole Agreement and non-reliance on prior representation Non-Variation Relaxation of terms Consent to jurisdiction Addresses for service - domicilum et executandi Costs Beach Governing Law 1. DEEDS OF SALEMOVABLECONTRACT OF SALE CLAUSE TO PROVIDE FOR DEFAULT I...

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PRECEDENTS 1. COMMON TERMS 1. 2. 3. 4. 5. 6. 7. 8. 9.

Interpreation Whole Agreement and non-reliance on prior representation Non-Variation Relaxation of terms Consent to jurisdiction Addresses for service - domicilum et executandi Costs Beach Governing Law

1. DEEDS OF SALE MOVABLE CONTRACT OF SALE CLAUSE TO PROVIDE FOR DEFAULT IN PAYMENT OF INSTALMENTS AND SHOULD IT BE DAMAGED OR STOLEN BEFORE THE PURCHASE PRICE IS PAID IN FULL 6.1 It is agreed that ownership in the vehicle shall remain vested in the seller until such time as the purchase price is paid in full notwithstanding delivery thereof to the purchaser. In the event of the Purchaser's default in making any payment in respect of the purchase price the seller shall be entitled to cancel this agreement forthwith and to take possession of the vehicle. (5) 6.2 Until such time as the purchase price is settled in full the purchaser shall keep the vehicle insured at his cost with an insurance company approved by the seller. The purchaser shall also ensure that the seller's interest in the vehicle is endorsed against the insurance policy and shall furnish the seller with proof of such insurance and endorsement. (5)

IMMOVABLE ESSENTIALIA 1. PARTIES – 1. for a companyput registration number and represented by …. Duly authorised thereto 2. PROPERTY a. the fact that the seller agrees to sell to the buyer, b. the property – describe as per the title deed 3. PURCHASE PRICE – amount, mode of payment, time of payment, interest rate.

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4. SECURITY FOR PAYMENT – a. Deliver guarantee, Details of by whom it must be issued, When payable, Other conditions 5. LOAN 6. TRANSFER OF THE PROPERTY – a. Conveyancer, time, liability for the costs of transfer incl transfer duty 7. OCCUPATION OF THE PROPERTY TO THE BUYER – a. time and date, occupational interest 8. THE PASSING OF THE RISK AND BENEFIT IN THE PROPERTY – a.

Date, rates and taxes, insurance pending transfer.

9. WHETHER THERE IS A BOND OVER THE PROPERTY OR WHETHER ONE WILL BE REGISTERED. 10. LATENT DEFECTS, UNDISCLOSED SERVITUDES, AND DEFICIENCIES (OR EXCESSES) IN EXTENT. 11. WHETHER VAT/ ESTATE DUTY IS PAYABLE. 12. LIABILITY FOR AGENTS COMMISSION Boiler plate clauses 13. EXCLUSION OF RELIANCE ON PREVIOUS STATEMENTS AND REPRESENTATIONS 14. INFORMAL VARIATIONS OF THE CONTRACT. 15. CANCELLATION IN THE CASE OF BREACH, 16. SERVICE OF NOTICES, AND COURT PROCESSES, 17. CONSENT TO JURISDICTION, 18. RECOVERY OF COSTS IN THE EVENT OF PROCEEDINGS BEING INSTITUTED 19. COSTS OF PREPARING THE AGREEMENT. 20. INTERPRETATION Specific Scenarios 1. Pre-incorporation contract parties - in capacity as trustee for a company about to be formed, suretyship undertaking by trustee together with buyer, failure to ratify contract – trustee becomes the buyer. 2. Residential property – included certificate from entomologist and electrician 3. Agent’s commission – ensure that effective cause is acknowledged and that the agent accepts them. SALE OF CLUSTER HOUSE FROM CC TO INDIVIDUAL POINTS IN THE CONTRACT WHICH YOU MUST DISCUSS WITH THE PARTIES

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The full names of the member representing the seller The full names of the purchaser.

(1)

(1)

The status of the purchaser (1) The registration number of the purchaser

(1)

The ID number(s) of the purchaser and, if married in community of property, Also that of the spouse

(1)

The description of the property

(1)

The purchase price and method of payment thereof (1) Whether a loan is involved

(1)

Any conditions precedent

(1)

Agent’s commission (1) Date of occupation

(1)

Addresses of the parties

(1)

The transfer of the property (1) The costs of the contract

(1

STATUTORY COOLING OFF PERIOD IN FAVOUR OF THE PUCHASER PURCHASER'S RIGHT TO CANCEL: Subject to the provisions of Section 29A of the Alienation of Land Act no 68 of 1981 (1), the purchaser is entitled to cancel this agreement (1) by way of written notice (1) delivered to the seller (1) within 5 (five) days of the signing of this agreement by the Purchaser (1), provided hat the said notice is signed by the Purchaser (or his/her agent by virtue of a written power attorney) (1), that it clearly identifies this agreement (1) and that it is unconditional (1). INDEMNITY CLAUSE IN DEED OF SALE DEALING WITH COMMISSION WHERE BUYER SAYS NOT INTRODUCED BY ESTATE AGENT INDEMNITY (Agent's commission) The Purchaser indemnifies the Seller and holds her harmless against any claim by an Estate Agent for agent's commission arising out of this transaction. Should any such claim be made against the Seller, the Purchaser shall be obliged to settle or defend such claim forthwith and shall be liable for payment of all costs in connection therewith. CLAUSE IN DEED OF SALE OF IP TO PROVIDE FOR AGENT’S COMMISSION Example 1 Act for the seller and you are advised that the purchaser approached the seller directly after seeing that the house was vacant. If the seller has employed agents and is likely to be responsible towards them for commission he must be sure that the purchaser who approaches him directly has not in fact been introduced by an

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agent. In addition it is likely that if the seller sells directly he will have discussed a reduction in the purchase price because he will be relieved of paying commission. These factors must be taken into consideration. I suggest therefore an answer along these lines: 4.1 The purchaser confirms that this contact was entered into without the purchaser having been introduced to the seller directly or indirectly by any estate agent or that any agent was the effective cause for the conclusion of this contract of sale. 4.2 As a result of the sale by the seller to the purchaser on these grounds the purchase price has been reduced by an amount equal to the expected agent’s commission. 4.3 The purchaser consequently indemnifies the seller against any legitimate claim which may be brought against the seller for agent’s commission arising from this sale. The seller shall call upon the purchaser to assist the seller in any actual or threatened litigation arising from any claim for commission and shall put the seller in funds to do so. The seller shall however be free to decide on the best manner of settlement of any such action. Any costs or charges including legal fees on all scales and any capital sum payable shall be recoverable from the purchaser as liquidated damages.

Example 2 The purchaser confirms that he has not been introduced to the property by an estate agent and that he buys it from the seller direct. The purchaser herewith indemnifies the seller against any claim for agent’s commission including claim for legal costs, if any. (5)

CLAUSE PROVIDING FOR THE FACT THAT WILL TAKE LONG FOR PURCHASER TO OBTAIN FINANCE

Condition precedent This agreement is subject to: 1.3.1 The purchaser succeeding within 60 days of the signing of this agreement to sell his erf known as Erf 123 Uvongo successfully for an amount of at least Rl00 000,00 and that the property is transferred to the prospective purchaser within 90 days; and 1.3.2 The purchaser is granted a loan for at least R80 000,00 by a financial institution where he must apply within 7 days after the signing of this contract, which loan must be for a period of 20 years at an initial interest rate of not more than 22,5% per annum. Said loan must be approved within 90 days from the signing of this contract. 1.3.3 If the provisions contained herein are not met within the period stipulated, the contract will lapse and be null and void, except if the parties agree otherwise in writing and the deposit and any interest earned thereon be repaid to the purchaser. SUSPENSIVE CONDITION FOR A BOND This agreement is subject to the fulfilment of the condition that the Purchaser shall obtain and register a mortgage bond over his immovable property situate at .. . . . . . . .., within one month from the date of signature hereof as security for payment of for the full amount of the purchase price. If this suspensive condition is not fulfilled within the said period the provisions of this agreement will be of no force and effect and neither party shall have any claim against the other.

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CLAUSE PROVIDING CONSEQUENCES WHICH WILL FOLLOW CANCELLATION OF THE CONTRACT IF THE PURCHASER FAILS TO PROVIDE A GUARANTEE FOR THE BALANCE OF THE PURCHASE PRICE The main issue here is a provision that the damages which may be suffered by the seller may be deducted from the cash deposit 5.1 The purchaser shall pay to the seller’s attorney a deposit of R10 000 on or before to be kept in trust by the attorney pending transfer of the property at which date it shall be paid to the seller as part of the purchase price. 5.2 The purchaser shall furnish the seller with a guarantee for the balance of the purchase price before ….. This guarantee shall be from a bank acceptable to the seller and payable at ….. against registration of transfer into the name of the purchaser. 5.3 Should the purchaser pay the deposit but fail to furnish the aforesaid guarantee, the seller shall not be required to demand delivery of this guarantee but shall be entitled to cancel the contract without notice to the purchaser. In this instance the seller may retain the deposit as rouwkoop or as a genuine pre-estimate of damages to be sustained by the seller AGREEMENT GIVING ESTATE AGENT SOLE MANDATE TO SELL PROPERTY

1. PARTIES 2. APPOINT AGENT 3. PERIOD 4. PURCHASE PRICE AND OTHER TERMS OF SALE 5. COMMISSION 6. SOLE AGENCY 7. MARKETING AGREEMENT GIVING AGENT MADATE TO SELL INTEREST IN CC Example 1 APPOINTMENT

The undersigned NAIDOO (‘THE OWNER”) hereby appoints MOLEFE (THE AGENT”)as his sole agent for the purpose of finding a purchaser for his members’ interest and loan account in CHURCH STREET INVESTMENTS CC. 2 PERIOD

The agreement/appointment shall continue in force for a period of 3(three) months from the date of signature hereof.

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3 AGENT’S DUTIES

The AGENT shall use his best endeavours to find a purchaser who is willing and able to purchase the said interest and loan account.

4 ADVERTISEMENTS The AGENT shall at his own expense cause such advertisements to be placed in the press or elsewhere as necessary or customary to effect such sale. The AGENT shall have the right to place notices on the property belonging to the CC as he thinks fit. 5 MINIMUM PRICE

The AGENT shall not offer the interest and loan account for sale for less than R400 000 unless the OWNER agrees so in writing.

6 OWNER NOT OBLIGED TO ACCEPT OFFER The OWNER shall not be obliged to sell the interest and loan account to any person introduced by AGENT. 7 OWNER RESERVING RIGHT TO SELL Notwithstanding the sole agency hereby granted The OWNER shall be entitled to sell the interest and loan account himself to any person not introduced .by the AGENT and in that event the AGENT shall not be entitled to any commission. 8 COMMISSION In the event of the interest and loan account being sold, the OWNER shall pay the AGENT a commission of 5 % of the purchase price inclusive of VAT on receipt of the purchase price by the OWNER.

2. PARTNERSHIP AGREEMENT PARTNERSHIP AGREEMENT (ANSWER IN AFRIKAANS) 1. PARTIES - identities must be clearly stated 2. PRACTICE – conduct business together as partners, name, date of commencement 3. CONTRIBUTIONS

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4. SHARING OF PROFITS AND LOSSES 5. CAPITAL ACCOUNT - how the capital of the partnership will be arranged and regulated 6. CURRENT ACCOUNT (PROFITS AND LOSSES) 7. FINANCIAL RECORDS - The manner in which financial records will be kept – partner’s rights to inspect, financial statements 8. BANK ACCOUNT 9. DRAWINGS OF PROFITS 10. MANAGEMENT – Arrangement as to how partnership decisions will get made 11. LIMITATIONS ON PARTNER’S AUTHORITY – require written consent 12. INCOME AND EXPENSES – Income for professional services constitutes income of the partnership. 13. GENERAL OBLIGATIONS OF THE PARTNERS 14. LEAVE 15. INCAPACITY 16. PROFESSIONAL INDEMNITY INSURANCE 17. VALUATION OF GOODWILL 18. LIFE INSURANCE 19. TERMINATION 20. PURCHASE OF DECEASED’S PARTNERS SHARE 21. PURCHASE OF RETIRING / INSOLVENT PARTNER’S SHARE 22. PURCHASE OF EXPELLED PARTNERS SHARE 23. ARBITRATION Example(Translation)

2.1 Withdrawals and distribution of profits and losses 2.1.1 The partners share equally in all profits and losses; 2.1.2 The partners are entitled to a monthly set amount/salary as remuneration for their services, which amount may be determined according to the performance of the business; 2.1.3 Profits remaining after deductions of the monthly salary and as determined by the auditors, are allocated to the partners every six months. 2.2 Contributions by partners. The first and second partner each contributes R25 000 cash to the capital of the partnership, payable within 7 days after signature of the agreement. 2.3 Breaking-up of the partnership 2.3.1 occurs automatically 2.3.1.1 the death ofa partner; 2.3. 1.2 liquidation or sequestration of a partner’s estate

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2.3.2 Every partner is entitled to end the partnership by giving the other partner 3 months written notice of his intention to do so. No reason necessary. 2.3.3 Every partner may end the partnership immediately in the case of 2.3.3.1 the gross violation by the other partner of any material term of the agreement; 2.3.3.2 misconduct of the other partner which violates the trust relationship between them. 2.3.3.3 the conviction of the other partner in any theft, fraud, falsifying or “uitgifte’ (don’t know “uitgifte” — I think its to do with money) 2.3.3.4 physical or mental disability of the other partner affecting his ability to fulfil his duties. 3. SURETYSHIP The document is normally only executed by the surety(ies) and not by the creditor or the debtor. The surety’s signature should be witnessed. Essentialia

1. SURETYSHIP UNDERTAKING – a. (The undertaking by the surety to be liable to the creditor for due performance by the debtor of his obligations in terms of the principal debt) - Description of the surety, principal debtor and the creditor, nature of principal debt; and amount of principal debt. 2. Deed of Suretyship in addition to other suretyships or guarantees concluded by the sureties to the creditor on behalf of the principal debtor. 3. Renounce excussion, division, cession of action, no value received, non causa debiti and revision of accounts. 4. The effect (if any) which any future variation of the principal debt or indulgences given by the creditor to the principal debtor will have on the liability of the surety etc. 5. Creditor’s right of recovery against debtor - enforcement of the suretyship: in particular, the need (if any) for prior notice to the surety and proof of the amount of the principal debtors liability, 6. Proof of debtors liability - provision for a certificate by the creditor proving the amount of the indebtedness. 7. Usually a surety is not at liberty to terminate his liability in terms of the deed of suretyship. 8. Limitation of the liability of the surety to a certain amount where applicable. 9. Clause that deed of suretyship was duly completed at the time of signature thereof by the surety. Boiler plate clauses 10. Consent to the jurisdiction 11. Domicilium citandi et executandi 12. Exclusion of reliance on previous statements and representations and subsequent informal variations/termination of the contract. 13. Recovery of attorney and client costs including collection commission in the event of proceedings being instituted. 14. Liability for the cost of preparing the deed of Suretyship (including VAT).

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1. Suretyship by two members of a close corporation for the present and future liability We the undersigned, (hereinafter referred to as the Sureties) do hereby bind ourselves as sureties jointly and severally for and on behalf of and as co-principal debtors in solidum with ABC CC (hereinafter referred to as the Debtor) to and in favour of XYZ Ltd (hereinafter referred to as the Creditor) for the due and punctual payment by the Debtor to The Creditor of all monies whether now due owing and payable or becoming due owing and payable in the future. DATED AT THIS DAY OF 2000. OR We the undersigned ACE SPADES and JACK HEARTS bind ourselves as sureties to FIRST NATIONAL BANK LIMITED (‘the creditor’) On the terms and conditions set out below 1. SURETYSHIP UNDERTAKING 1.1 We bind ourselves to the creditor, jointly and severally, as sureties for and co-principal debtors with, T (Proprietary) Limited (‘the debtor’) for the due repayment of all amounts which are presently due and payable, or which may in the future become due and payable, by the debtor to the creditor in respect of moneys lent and advanced by the creditor to the debtor. DEED OF SURETYSHIP We, the undersigned, JOHN BROOME and DIRK ERASMUS (hereinafter referred to as “the SURETIES’) do hereby interpose and bind ourselves as SURETIES for and CO-PRINCIPAL DEBTORS with and on behalf of ELEMENTARY INVESTMENTS (PROPRIETARY) LIMITED (hereinafter referred to as “the PRINCIPAL DEBTOR”) unto and in favour of ACME PROPERTY HOLDINGS (PROPRIETARY) LIMITED (hereinafter referred to as “the CREDITOR”) for the due and punctual payment by the PRINCIPAL DEBTOR to the CREDITOR of all sums of money which the PRINCIPAL DEBTOR now owes or may from time to time hereafter owe to the CREDITOR, including damages for breach of contract, or otherwise arising from a Deed of Lease 9

entered into or to be entered into between the CREDITOR and the PRINCIPAL DEBTOR in respect of premises, being Erf 59 Mayfair,Johannesburg, Transvaal and any extensions or renewals thereof and the due and proper performance by the PRINCIPAL DEBTOR of the PRINCIPAL DEBTOR’S obligations which the PRINCIPAL DEBTOR may now or in the future owe ‘to. the CREDITOR thereunder. 1. The SURETIES renounce the benefits of excussion, division, cession of action, no value received, non causa debiti and revision of account, the meaning and effect whereof the SURETIES declare themselves to be fully acquainted. 2. The SURETIES agree and acknowledge that this suretyship shall be in addition to any other suretyship, guarantees or purported suretyships or guarantees concluded by the SURETIES to the CREDITOR on behalf of the PRINCIPAL DEBTOR. 3. Should any extension of time, lenience ‘or other indulgence be granted to the PRINCIPAL DEBTOR for the fulfilment of any of its obligations, irrespective of whether or not the SURETIES have had notice of such extension of time or variation, the ST.JRETIES declare that such extension of time or variation shall not release the SURETIES from their liability in terms of these presents and shall not be regarded as awaiver or tacit renunciationof the CREDITOR’S rights hereunder. 4. The SURETIES consent in terms of Section 45 of Act 32 of 1944 or any amendment thereof to the CREDITOR taking any legal proceedings for enforcement of any of its rights under this Suretyship for recovery of monies claimed under this Suretyship, if the CREDITOR so elects, in the Magistrate’s Court in any district having jurisdiction in respect ot the CREDITOR by virtue of Section 28 of the aforesaidAct. ShouId CREDITOR not elect to take legal proceedings in the Magistrate’s Court, but in a Supreme Court, the SURETIES consent to the jurisdiction of the Supreme Court of South Africa (Witwatersrand Local Division) in respect of any action arising under this Suretyship. 5. The SURETIES choose domicilium citandi et executandi for all purposes hereunder at: JOBN BROOME I.D. No DIRK ERASMUS I.D. No 6. The SURETIES acknowledge that this is the entire agreement between the SURETIES and the CREDITOR and no alteration or amendment shall be valid• unless reduced to writing and signed by the CREDITOR and the SURETIES. 7. In the event of any dispute arising out of any breach by the SURETIES of it obligations u...