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Principles of Commercial Law

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Multiple choice questions based on Havenga 7th addition law notes
Chi Nguyen
Quiz by Chi Nguyen, updated more than 1 year ago More Less
samantha00zw
Created by samantha00zw about 10 years ago
Chi Nguyen
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Resource summary

Question 1

Question
What is law?
Answer
  • Refers to a system of rules that apply in a community.
  • an agreement which is concluded between two or more persons.
  • any entity which can be the object of a legal subject’s claim to a right.
  • any right that which a legal subject has regarding a specific legal object.

Question 2

Question
What is a legal subject?
Answer
  • Rights which a person has to property, such as a book or a pen.
  • A human being or entity subject to the law.
  • The bearer of rights duties and capabilities.
  • Two of the above

Question 3

Question
What is a legal object?
Answer
  • A human being or entity subject to the law.
  • Rights relating to the aspect of personality.
  • The bearer of rights duties and capabilities.
  • Any entity who can be the object of a legal subject’s claim to a right.

Question 4

Question
4. What are subjective rights?
Answer
  • Any right that which a legal subject has regarding a legal object and which is protected by the law.
  • Rights to intellectual property
  • The relation between a legal subject and a legal object
  • An agreement between the creditor and the debtor

Question 5

Question
5. What are the types of subjective rights?
Answer
  • 1. Real Right. 2. Personal Right. 3. Personality Right. 4. Relationship rights
  • 1. Real Right. 2. Health Rights 3. Personality Right. 4. Intellectual Property Right
  • 1. Real Right. 2. Personal Right. 3. Personality Right. 4. Intellectual Property Right
  • 1. Fake Right. 2. Personal Right. 3. Personality Right. 4. Intellectual Property Right

Question 6

Question
6. What are Real Rights?
Answer
  • Rights which a person has to property, such as a book or a pen. Real rights can be classified as. Ownership, servitude and mortgage and pledge
  • Rights whereby some or other conduct referred to as a performance, may be demanded from a person. Performance may consist of giving something, doing something or refraining from doing something.
  • Rights relating to the aspect of personality. For example the physical integrity and reputation of a person
  • Rights to intellectual property. For example an artist’s right to a work of art.

Question 7

Question
What are personal rights?
Answer
  • Rights to intellectual property. For example an artist’s right to a work of art.
  • Rights relating to the aspect of personality. For example the physical integrity and reputation of a person
  • Rights which a person has to property, such as a book or a pen. Real rights can be classified as. Ownership, servitude and mortgage and pledge
  • Rights whereby some or other conduct referred to as a performance, may be demanded from a person. Performance may consist of giving something, doing something or refraining from doing something.

Question 8

Question
8. What are personality rights?
Answer
  • Rights whereby some or other conduct referred to as a performance, may be demanded from a person. Performance may consist of giving something, doing something or refraining from doing something.
  • Rights relating to the aspect of personality. For example the physical integrity and reputation of a person
  • Rights which a person has to property, such as a book or a pen. Real rights can be classified as. Ownership, servitude and mortgage and pledge
  • Rights to intellectual property. For example an artist’s right to a work of art.

Question 9

Question
9. What are intellectual property rights?
Answer
  • Rights whereby some or other conduct referred to as a performance, may be demanded from a person. Performance may consist of giving something, doing something or refraining from doing something.
  • Rights relating to the aspect of personality. For example the physical integrity and reputation of a person
  • Rights to intellectual property. For example an artist’s right to a work of art.
  • Rights which a person has to property, such as a book or a pen. Real rights can be classified as. Ownership, servitude and mortgage and pledge

Question 10

Question
10. What is a right?
Answer
  • A human being or entity subject to the law. The bearer of rights duties and capabilities.
  • The relation between a legal subject and a legal object as well as between a legal subject and another legal subject. All rights can in one way or the other be linked to a legal object.
  • Any right that which a legal subject has regarding a legal object and which is protected by the law.
  • An agreement between parties by which contractual parties settle a dispute between them about an actual of supposed obligation.

Question 11

Question
11. What is a delict?
Answer
  • An agreement between the creditor and the debtor in term of which the creditor releases the debtor from his or her contractual obligations.
  • an agreement which is concluded between two or more persons with the serious intention of creating legally enforceable obligations.
  • any right that which a legal subject has regarding a specific legal object and which is protected by law
  • An unlawful culpable act whereby a person, (the wrongdoer), cause another person, (the person prejudiced), damage or injury to personality, and whereby the person prejudiced is granted a right to damage or compensation, depending on the circumstances.

Question 12

Question
12. What are the sources of law in SA?
Answer
  • 1. Statue law & legislation. 2. Customary law. 3. Judgements of the courts. 4. Old authority. 5. Foreign Law. 6. Textbooks and law journals.
  • 1. Statue law & legislation. 2. Customary law. 3. Judgements of the courts. 4. Criminal Law 5. Foreign Law. 6. Textbooks and law journals.
  • 1. Statue law & legislation. 2. Corporate law 3. Judgements of the courts. 4. Old authority. 5. Foreign Law. 6. Textbooks and law journals.
  • 1. Statue law & legislation. 2. Customary law. 3. Judgements of the courts. 4. British law 5. Foreign Law. 6. Textbooks and law journals.

Question 13

Question
What is a contract?
Answer
  • is a specific form of novation where a change of debtors may take place.
  • an agreement which is concluded between two or more persons with the serious intention of creating legally enforceable obligations.
  • a declaration made by a person (the offeror) in which he or she indicates an intention to be contractually bound by the mere acceptance of the offer, and in which the
  • a declaration by the offeree (the person to whom the offer was addressed) through which it is indicated that he or she agrees to the terms of the offer exactly as expounded in the offer.

Question 14

Question
What is Legislation?
Answer
  • a human being or entity subject to the law OR bearer of rights, duties and capacities
  • A right to intellectual property.
  • Legislation is the making of law by a competent authority.
  • a new agreement between contracting parties to replace an old obligation with a new one.

Question 15

Question
Mention the four requirements which must be met before the courts will enforce customary law?
Answer
  • It must be reasonable It must have existed for a long time It must be recognised and observed by the community The contents of the customary rule must be certain and clear
  • It must be reasonable It must have existed for a long time It must be recognised and observed by the community The contents of the customary rule must be in french
  • It must be reliabe It must have existed for a short time It must be recognised and observed by the community The contents of the customary rule must be certain and clear
  • It must be reasonable It must have existed for a long time It must be recognised and observed by the community The contents of the customary rule must be uncertain

Question 16

Question
List five most important ethical issues that business must deal with.
Answer
  • The offer must be complete. The offer must be clear and certain. The offer may be made in any manner (i.e. expressly or tacitly). The offer must be addressed either to a particular person or persons or in general to an Unknown person or persons. The offer has to be communicated to the offeree.
  • It improves society It maintains a moral course in turbulent times It cultivates strong teamwork and productivity It supports employee growth and meaning It ensures that policies within the workplace are legal
  • • Conflicts of interest • Financial and accounting integrity • Corruption and bribery • Consumer and employee privacy • Ethical advertising • Bioethics
  • Financial, equipment, organisational, security, legal/compliance, operational,

Question 17

Question
Name two essential elements or essentialia of a contract of sale.
Answer
  • The object of the sale (merx) The purchase price
  • The Purchase price The buyer
  • The Purchase price The seller
  • The Purchase price The contract

Question 18

Question
What is Actio redhibitoria.
Answer
  • This remedy is available where the defect is less material and as such does not render the Merx completely useless. The purchaser keeps the merx and claims reduction in the purchase price of the merx.
  • The seller is the manufacturer and is liable for damages, including damages for consequential loss.
  • This remedy is available if the defect is so material that the thing cannot be used. The purchaser cancels the contract and claims repayment of the purchase price and interest.
  • The consequences of the contract take immediate effect, but it may be cancelled depending on the occurrence of a specified uncertain future event

Question 19

Question
What is Actio quanti minoris.
Answer
  • This remedy is available if the defect is so material that the thing cannot be used. The purchaser cancels the contract and claims repayment of the purchase price and interest.
  • This remedy is available where the defect is less material and as such does not render the Merx completely useless. The purchaser keeps the merx and claims reduction in the purchase price of the merx.
  • The consequences of the contract take immediate effect, but it may be cancelled depending on the occurrence of a specified uncertain future event
  • The seller is the manufacturer and is liable for damages, including damages for consequential loss.

Question 20

Question
What is Actio empti.
Answer
  • The seller is the manufacturer and is liable for damages, including damages for consequential loss.
  • The consequences of the contract take immediate effect, but it may be cancelled depending on the occurrence of a specified uncertain future event
  • This remedy is available where the defect is less material and as such does not render the Merx completely useless. The purchaser keeps the merx and claims reduction in the purchase price of the merx.
  • This remedy is available if the defect is so material that the thing cannot be used. The purchaser cancels the contract and claims repayment of the purchase price and interest.

Question 21

Question
What is a Resolutive condition.
Answer
  • This remedy is available where the defect is less material and as such does not render the Merx completely useless. The purchaser keeps the merx and claims reduction in the purchase price of the merx.
  • This remedy is available if the defect is so material that the thing cannot be used. The purchaser cancels the contract and claims repayment of the purchase price and interest.
  • The seller is the manufacturer and is liable for damages, including damages for consequential loss.
  • The consequences of the contract take immediate effect, but it may be cancelled depending on the occurrence of a specified uncertain future event

Question 22

Question
Who is responsible for compiling the risk management statement?
Answer
  • The risk manager compiles the risk statement in conjunction with senior accountants
  • The risk manager compiles the risk statement in conjunction with senior management and executive directors.
  • Executive directors and secretaries compile the risk management statement
  • The risk manager compiles the risk statement in conjunction with senior management and marketing department.

Question 23

Question
What is Indemnity Insurance
Answer
  • the insurer undertakes to pay the insured or the beneficiary a fixed sum of money if the event insured against takes place. An example is life insurance.
  • It is a specific form of novation where a change of debtors may take place. The old obligation of the debtor to perform is extinguished and a new obligation to perform by another party is created.
  • the insurer undertakes to make good the damages which the insured may suffer through the occurrence of the event insured against. An example is property insurance.
  • An agreement between the creditor and the debtor in term of which the creditor releases the debtor from his or her contractual obligations.

Question 24

Question
What is Non Indemnity Insurance
Answer
  • the insurer undertakes to pay the insured or the beneficiary a fixed sum of money if the event insured against takes place.
  • Those terms which are essential for the classification of a contract as belonging To a particular class or category of contract.
  • the insurer undertakes to make good the damages which the insured may suffer through the occurrence of the event insured against. An example is property insurance.
  • Terms which the law attaches to every contract of a particular class.

Question 25

Question
What is essentialia of a contract?
Answer
  • Terms which the law attaches to every contract of a particular class.
  • Those terms which are essential for the classification of a contract as belonging To a particular class or category of contract.
  • a term, which exists automatically as part of a contract, without either party having expressly referred to it.
  • a term based on the intention of the parties which is stated verbally or set down in writing.

Question 26

Question
What is naturalia of a contract
Answer
  • Those terms which are essential for the classification of a contract as belonging To a particular class or category of contract.
  • Terms which the law attaches to every contract of a particular class.
  • a term, which exists automatically as part of a contract, without either party having expressly referred to it.
  • a term based on the intention of the parties which is stated verbally or set down in writing.

Question 27

Question
What is an implied term
Answer
  • Those terms which are essential for the classification of a contract as belonging To a particular class or category of contract.
  • a term based on the intention of the parties which is stated verbally or set down in writing.
  • Terms which the law attaches to every contract of a particular class.
  • a term, which exists automatically as part of a contract, without either party having expressly referred to it.

Question 28

Question
What is an express term?
Answer
  • Terms which the law attaches to every contract of a particular class.
  • a term based on the intention of the parties which is stated verbally or set down in writing.
  • Those terms which are essential for the classification of a contract as belonging To a particular class or category of contract.
  • a term, which exists automatically as part of a contract, without either party having expressly referred to it.

Question 29

Question
Explain what risk elimination is.
Answer
  • entails taking alternative action to avoid a potential peril before exposure to the risk
  • a proactive technique of risk management. We react to an existing risk and proactively try to eliminate the risk by changing the circumstances of the risk.
  • about dealing with the risks identified and consists of various measures And techniques to ensure that we can survive the risk.
  • the process of reducing the frequency of risk.

Question 30

Question
Explain what risk avoidance is.
Answer
  • entails taking alternative action to avoid a potential peril before exposure To the risk
  • is a proactive technique of risk management.
  • entails taking alternative action to avoid a disaster before exposure to the risk.
  • the process of reducing the frequency of risk.

Question 31

Question
When does the parol evidence rule apply?
Answer
  • In terms of this rule the document is the only source of the terms of the contract
  • Where a written contract is being interpreted by the court, no evidence may be received by the court that tends to contradict, alter, add to or vary the written terms
  • Two of the above are correct
  • If a contract is in writing the parol evidence rule applies to the contract.

Question 32

Question
What is meant by the parol evidence rule?
Answer
  • In terms of this rule the document is the only source of the terms of the contract
  • Where a written contract is being interpreted by the court, no evidence may be received by the court that tends to contradict, alter, add to or vary the written terms
  • If a contract is in writing the parol evidence rule applies to the contract.
  • None of the above

Question 33

Question
Name the essential elements of an insurance contract.
Answer
  • i) An undertaking by the insured to pay a deposit ii) An undertaking by the insurer to pay a sum of money or its equivalent iii) A particular certain future event upon which the insurer's obligation to pay depends (the risk) iv) An insurable interest.
  • i) An undertaking by the insured to pay a premium ii) An undertaking by the insurer to pay a sum of money or its equivalent iii) A particular uncertain future event upon which the insurer's obligation to pay depends (the risk) iv) An insurable interest.
  • non of the above
  • two of the above

Question 34

Question
List the benefits of having a good corporate ethics programme in a business.
Answer
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Treat the risk Monitor and review
  • It improves society It maintains a moral course in turbulent times It cultivates strong teamwork and productivity It supports employee growth and meaning It ensures that policies within the workplace are legal It helps to avoid criminal acts and lower fines due to violations by organizations It promotes a strong public image of an organisation It is most importantly the right thing to do
  • There must be a misrepresentation. The misrepresentation must be made by one party to another The misrepresentation must be unlawful. The misrepresentation must have induced the contract as it stands. The misrepresentation can be made intentionally, negligently or innocently
  • none of the above

Question 35

Question
The risk management process consists of a series of steps that, when undertaken in sequence, enable continual improvement in decision-making. Name the 7 steps.
Answer
  • Discharge Cancellation Rescission Agreement Merger Set-off Supervening impossibility of performance
  • It improves society It maintains a moral course in turbulent times It cultivates strong teamwork and productivity It supports employee growth and meaning It ensures that policies within the workplace are legal It helps to avoid criminal acts and lower fines due to violations by organizations It promotes a strong public image of an organisation It is most importantly the right thing to do
  • • Conflicts of interest • Financial and accounting integrity • Corruption and bribery • Consumer and employee privacy • Ethical advertising • Bioethics
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Treat the risk Monitor and review

Question 36

Question
What are the 5 forms of breach of contract?
Answer
  • 1. Default by the insurer 2. Default by the partnership 3. Positive malperformance 4. Repudiation 5. Prevention of performance
  • 1. Default by the debtor 2. Default by the creditor 3. Positive malperformance 4. Repudiation 5. Prevention of performance
  • 1. There must be a misrepresentation. 2. The misrepresentation must be made by one party to another 3. The misrepresentation must be unlawful. 4. The misrepresentation must have induced the contract as it stands. 5. There must be a misunderstanding by the debtor and creditor The misrepresentation can be made intentionally, negligently or innocently
  • 1. Default by the debtor 2. Default by the creditor 3. Positive malperformance 4. Repudiation 5. Death of a partner

Question 37

Question
What is Default by the debtor.
Answer
  • A debtor commits breach of contract in the form of default of the debtor or mora debitoris if he/she fails to perform at the agreed time and the delay is due to the debtors fault. It is then said the debtor is in default or in mora
  • Default of the debtor occurs where the debtor causes the creditors performance to be delayed. Mora debitoris is a form of breach of contract which can occur only where discharge of the creditors obligation involves bilateral juristic act, that is, where the debtors co operation is required for the creditor to be able to render performance.
  • Default of the debtor is that form of breach of contract which occurs when the debtor commits an act which is contrary to the terms of the contract. Performance can be that a person must do something or refrain from doing something For this reason 2 situations can be distinguished with regard to default of the debtor: 1. The debtor tenders defective or improper performance 2. The debtor does something that he/she may not do in terms of the agreement/
  • Default by the debtor is any behaviour by a party to a contract indicating that he/she may not honour the obligations under the contract. A party can behave in this way with regard to all his/her obligations in terms of the contract. It is also possible for a party to default only some of his/her obligations or part of the contract. Default of the debtor constitutes breach of contract, entitling the innocent party to the usual remedies for breach of contract.

Question 38

Question
What is default by the Creditor?
Answer
  • A debtor commits breach of contract in the form of default of the creditor (mora crditoris) if he/she does not perform at the agreed time and the delay is due to the creditors fault. It is then said that the creditor is in default or in mora
  • Default of the creditor is that form of breach of contract which occurs when the creditor commits an act which is contrary to the terms of the contract. Performance can be to do something or refrain from doing something. For this reason there are 2 situations which can be distinguished with regard to default of the creditor: 1. The creditor tenders defective of improper performance 2. the creditor does something he/she may not do in terms of the agreement
  • default of the creditor or mora creditoris occurs where the creditor causes the debtors performance to be delayed. Mora creditoris is a form of breach of contract which can occur only where the discharge of the debtors obligations involves a bilaterial juritic act, that is where the creditors co operation is required for the debtor to be able to render performance.
  • Default by the creditor is any behaviour by a party to a contract indicating that he/she may not honour the obligations under the contract. A party can behave in this way with regard to all his/her obligations in terms of the contract. It is also possible for a party to default only some of his/her obligations or a part of the contract. Default of the creditor constitutes breach of contract, entitling the innocent party to the usual remedies for breach or contract.

Question 39

Question
What is positive malperformance?
Answer
  • Positive malperformance occurs where the creditor causes the debtors performance to be delayed. Positive malperformance is a form of breach of contract which can occur only where the discharge of the debtors obligation involves a bilateral jusritic act, that is, there the creditors co operation is required for the debtor to be able to render performance
  • Positive malperformance is that form of breach of contract which occurs when the debtor commits an act which is contrary to the terms of the contract. Performance can be that a person must do something or refrain from doing something For this reason 2 situations can be distinguished with regard to Positive malperformance: 1. The debtor tenders defective or improper performance 2. The debtor does something he/she may not do in terms of the agreement 2. The debtor does something that he/she may not do in terms of the agreement/
  • Positive malperformance is any behaviour by a party to a contract indicating that he/she may not honour the obligations under the contract. A party can behave in this way with regard to all his/her obligations in terms of the contract. It is also possible for a party to malperform only some of his/her obligations and part of the contract. Positive malperformance constitutes breach of contract entitling the innocent party to the usual remedies for breach of contract.
  • A person commits breach of contract in the form of positive malperformance if he/she does not perform at the agreed time and the delay is due to the debtors fault. It is then said that the debtor is in malperformance.

Question 40

Question
What is repudiation
Answer
  • Repudiation is the form of breach of contract which occurs when the debtor commits an act contrary to the terms of the contract. Performance can be that a person must do something or refrain from doing something. For this reason 2 situations may be distinguished with regard to repudiation: 1. The debtor tenders defective or improper performance 2. the debtor does something that he/she may not do in terms of the agreement
  • Repudiation occurs where the creditor caused the debtors performance to be delayed. Repudiation is a form of breach of contract which can occur only where discharge of the debtors obligation involves a bilateral juristic act, ie, the creditors cooperation is required for the debtor to be able to render performance
  • A debtor commits breach of contract in the form of repudiation when he/she fails to perform at the agreed time and the delay is due to the fault of the debtor. It is then said the debtor is in repudiation.
  • Repudiation is any behaviour by a party to a contract indicating that he/she may not honour the obligations under the contract. A party can behave in this way with regard to all his/her obligations in terms of the contract. It is also possible for a party to repudiate only some of his/her obligations and part of the contract. Repudiation constitutes breach of contract entitling the innocent party to the usual remedies for breach of contract.

Question 41

Question
What is prevention of performance by the debtor?
Answer
  • The debtor who culpably renders the creditors performance impossible commits breach of contract in the form of prevention of performance. In this case of prevention of performance by the debtor the creditor performance is made impossible and consequently can never be rendered. The creditor is still entitled to the debtor's performance, but the creditor must bring into account any expenses which have been saved by reason of the creditor no longer being obliged to perform
  • The debtor commits breach of contract in the form of prevention of performance when he/she culpably renders his/her performance impossible. In this case the debtor is not released from the obligation to perform. Because the debtor can no longer perform as agreed, he/she will have to pay damages instead of performing
  • all of the above
  • none of the above

Question 42

Question
What is prevention of performance by the creditor
Answer
  • none of the above
  • The creditor commits breach of contract in the form of prevention of performance where he/she culpably renders his/her own performance impossible. In this case the debtor is nor released from the obligation to perform. Because the debtor can no longer perform as agreed, he/she will have to pay damages instead of performing.
  • The creditor who culpably renders the debtors performance impossible commits breach of contract in the form of prevention of performance. In this case of prevention of performance by the creditor, the debtors performance is made impossible and consequently can never be rendered. The debtor is still entitled to the creditor's performance, but the debtor must bring into account any expenses which have been saved by reason of the debtor no longer being obliged to perform
  • all of the above

Question 43

Question
What are the remedies for breach of contract
Answer
  • 1. Cancellation of contract 2. Pause of contract 3. Agreement to cancel
  • 1. Agreement 2. Death 3. Legality
  • 1. Damages 2. Cancellation 3. Default
  • 1. Execution of the contract 2. Cancellation of the contract 3. Damages

Question 44

Question
What is execution of the contract?
Answer
  • The parties can expressly agree in their contract that one or both of them will be entitled to execute the contract if the other party commits breach of contract. If a contract does not contain an execution clause, the innocent party will be entitled to execute the contract only if the brech of contract is material, that is of a serious nature.
  • Execution of the contract can comprise one of three possible orders: 1. An order for specific performance 2. An order for reduced performance 3. A prohibitory interdict The remedy of execution of the contract is the obvious remedy for breach of contract, since it attempts to achieve the same result as was intended originally by the parties.
  • If a party is persuaded through undue influence to conclude a contract, his will is directed at the contents of the contract and a contract does indeed come into existence. However, the party’s assent to the contract has been obtained improperly so that his independent will was not exercised. Consequently the victim may elect to uphold or rescind the contract and/or claim damages based on his or her negative interest.  Therefore the contract is voidable
  • The contract is voidable where there is consensus, but the consensus has been obtained by improper means such as misrepresentation, duress or undue influence the contract is voidable.

Question 45

Question
What is cancellation of contract?
Answer
  • The parties can expressly agree in their contract that one or both of them will be entitled to cancel the contract if the other party commits breach of contract. If a contract does not contain a cancellation clause, the innocent party will be entitled to cancel the contract only if the breach of contract is material, that is of a serious nature.
  • Cancellation of the contract can comprise one of three possible orders: 1. An order for specific performance 2. An order for reduced performance 3. A cancellation of performance. The remedy of cancellation of the contract is the obvious remedy for breach of contract, since it attempts to achieve the same result as was intended originally by the parties.
  • The contract is voidable where there is consensus, but the consensus has been obtained by improper means such as misrepresentation, duress or undue influence the contract is voidable. 
  • If a party is persuaded through undue influence to conclude a contract, his will is directed at the contents of the contract and a contract does indeed come into existence. However, the party’s assent to the contract has been obtained improperly so that his independent will was not exercised. Consequently the victim may elect to uphold or rescind the contract and/or claim damages based on his or her negative interest.  Therefore the contract is voidable.

Question 46

Question
Describe the reduction of risk.
Answer
  • The aim of risk reduction is to reduce the effects of a risk. Risk reduction concentrates on reducing losses to the lowest possible level. However, risk reduction acknowledges that we cannot totally eliminate risk, but may be able to restrict the damage caused by the risk.
  • Risk reduction is the process of reducing the frequency of risk. Reduction of risk starts at Government level. For example, legislation regulates building standards and the workplace environment. In practice, we introduce physical protection and good housekeeping to reduce the occurrence of risk.
  • The reduction of risk takes place because all risks cannot be avoided or eliminated and the effect of minimisation cannot be guaranteed. For example, even if we install the best fire prevention measures we still cannot guarantee that a fire will not occur and then spread uncontrollably. Therefore, the risk can be transferred to third parties by either transferring the rights to the assets at risk, or by transferring the risk to an insurer by paying a premium. Note that when we refer to the reduction of risk, we are referring to the effect of the risk and not the risk itself.

Question 47

Question
Describe risk elimination
Answer
  • The aim of risk minimisation is to reduce the effects of a risk. Risk minimisation concentrates on reducing losses to the lowest possible level. However, risk minimisation acknowledges that we cannot totally eliminate risk, but may be able to restrict the damage caused by the risk.
  • The elimination of risk takes place because all risks cannot be avoided or eliminated and the effect of minimisation cannot be guaranteed. For example, even if we install the best fire prevention measures we still cannot guarantee that a fire will not occur and then spread uncontrollably. Therefore, the risk can be eliminated to third parties by transferring the risk
  • None of the above
  • Risk minimisation is the process of reducing the frequency of risk. Minimisation of risk starts at Government level. For example, legislation regulates building standards and the workplace environment. In practice, we introduce physical protection and good housekeeping to minimise the occurrence of risk.

Question 48

Question
Describe transfer of risk
Answer
  • The aim of transfer of risk is to reduce the effects of a risk. Transfer of risk concentrates on reducing losses to the lowest possible level. However, Transfer of risk acknowledges that we cannot totally eliminate risk, but may be able to restrict the damage caused by the risk.
  • The transfer of risk takes place because all risks cannot be avoided or eliminated and the effect of minimisation cannot be guaranteed. For example, even if we install the best fire prevention measures we still cannot guarantee that a fire will not occur and then spread uncontrollably. Therefore, the risk can be transferred to third parties by either transferring the rights to the assets at risk, or by transferring the risk to an insurer by paying a premium. Note that when we refer to the transfer of risk, we are referring to the effect of the risk and not the risk itself.
  • All of the above
  • Transfer of risk is the process of reducing the frequency of risk. Transfer of risk starts at Government level. For example, legislation regulates building standards and the workplace environment. In practice, we introduce physical protection and good housekeeping to reduce the occurrence of risk.

Question 49

Question
Describe business ethics.
Answer
  • Business ethics is an invitation to do business. It does not constitute an offer. When a person reacts to this invitation, he makes the dealer an offer to buy the advertised Item If the advertiser accepts the offer, consensus is reached and a contract of sale arises.
  • Business Ethics is a declaration by the offeree (the person to whom the offer was addressed) through which it is indicated that he or she agrees to the terms of the offer exactly as expounded in the offer.
  • Business ethics can be defined as written and unwritten codes of principles and values that govern decisions and actions within a company. In the business world, the organization’s culture sets standards for determining the difference between good and bad decision making and behaviour. In the most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right. The phrase 'business ethics' can be used to describe the actions of individuals within an organization, as well as the organization as a whole.
  • Business Ethics is a declaration made by a person (the offeror) in which he or she indicates an intention to be contractually bound by the mere acceptance of the offer, and in which the person sets out the rights and duties he or she wishes to create

Question 50

Question
What is an offer
Answer
  • An offer is a declaration by the offeree (the person to whom the offer was addressed) through which it is indicated that he or she agrees to the terms of the offer exactly as expounded in the offer.
  • An offer is a declaration made by a person (the offeror) in which he or she indicates an intention to be contractually bound by the mere acceptance of the offer, and in which the person sets out the rights and duties he or she wishes to create
  • An offer is an invitation to do business. It does not constitute an advertisement. When a person reacts to this invitation, he makes the dealer an offer to buy the offered Item If the advertiser accepts the offer, consensus is reached and a contract of sale arises.
  • all of the above

Question 51

Question
What is an acceptance
Answer
  • An acceptance is a declaration by the offeree (the person to whom the offer was addressed) through which it is indicated that he or she agrees to the terms of the offer exactly as expounded in the offer.
  • None of the above
  • An acceptance is an invitation to do business. It does not constitute an offer. When a person reacts to this invitation, he makes the dealer an offer to buy the advertised Item If the advertiser accepts the offer, consensus is reached and a contract of sale arises.
  • An acceptance is a declaration made by a person (the offeror) in which he or she indicates an intention to be contractually bound by the mere acceptance of the offer, and in which the person sets out the rights and duties he or she wishes to create

Question 52

Question
What is an advertisement
Answer
  • An advertisement is a declaration made by a person (the offeror) in which he or she indicates an intention to be contractually bound by the mere acceptance of the offer, and in which the person sets out the rights and duties he or she wishes to create
  • An advertisement is a declaration by the offeree (the person to whom the offer was addressed) through which it is indicated that he or she agrees to the terms of the offer exactly as expounded in the offer.
  • Advertisement is an invitation to do business. It does not constitute an offer. When a person reacts to this invitation, he makes the dealer an offer to buy the advertised Item If the advertiser accepts the offer, consensus is reached and a contract of sale arises.
  • All of the above

Question 53

Question
Name the requirements to be satisfied before a misrepresentation will render the contract voidable.
Answer
  • ● The misrepresentation must be similar in nature, ●The misrepresentation must be liquidated. ● The misrepresentation must be claimable. ● The misrepresentation must be between the same persons. The misrepresentation must in fact be reciprocal, that is, They must exist between the same parties in the same capacities
  • There must be a misrepresentation. The misrepresentation must be made by one party to another The misrepresentation must be unlawful. The misrepresentation must have induced the contract as it stands. The misrepresentation can be made intentionally, negligently or innocently
  • Where the seller is aware of defects in the merx but does not disclose this to the purchaser or if the seller induces the contract by making false representations about good qualities of the merx, the purchaser may rely on the actio empti to claimdamages.
  • Where the seller is the manufacturer of the merx P or a specialist dealer who publicly claims to have expertise regarding the merx, he can, if it is defective, be held liable for damages, including consequential damages.

Question 54

Question
There are eight guidelines for managing ethics in the workplace. Name 6 of these guidelines.
Answer
  • Recognize that managing ethics is a process. The bottom line of an ethics program is accomplishing preferred behaviours in the workplace The best way to handle ethical dilemmas is to avoid their occurrence in the first place. Make ethics decisions in groups, and make decisions public, as appropriate. Integrate ethics management with other management practices. Value forgiveness. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
  • • strong, visible support from top management, • ensuring that ethical values (e.g. honesty), and not only performance values (e.g. innovation), figure prominently in mission statement and codes of conduct • appointing ethics officers, creating innovative ethics training formats, and setting up ethics help lines; • carrying out ongoing evaluations/audits of ethical performance, with rewards and sanctions; and • creating board ethics and/or corporate responsibility committees. •Employee benifits
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Monitor and review
  • Establish organisational roles to manage ethics. Schedule ongoing assessments of ethics requirements Establish operating values and behaviours Align organisational behaviours with operating values Develop awareness and sensitivity to ethical issues Integrate ethical guidelines and decision-making

Question 55

Question
Identify benefits in managing ethics as a programme
Answer
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Treat the risk Monitor and review
  • • strong, visible support from top management, • ensuring that ethical values (e.g. honesty), and not only performance values (e.g. innovation), figure prominently in mission statement and codes of conduct • appointing ethics officers, creating innovative ethics training formats, and setting up ethics help lines; • carrying out ongoing evaluations/audits of ethical performance, with rewards and sanctions; and • creating board ethics and/or corporate responsibility committees.
  • Recognize that managing ethics is a process. The bottom line of an ethics program is accomplishing preferred behaviours in the workplace The best way to handle ethical dilemmas is to avoid their occurrence in the first place. Make ethics decisions in groups, and make decisions public, as appropriate. Integrate ethics management with other management practices. Use cross-functional teams when developing and implementing the ethics management program. Value forgiveness. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
  • Establish organisational roles to manage ethics. Schedule ongoing assessments of ethics requirements Establish operating values and behaviours Align organisational behaviours with operating values Develop awareness and sensitivity to ethical issues Integrate ethical guidelines and decision-making Structure mechanisms to resolving ethical dilemmas Ensure ongoing evaluation and updates to the programmes Help convince employees of the long-term benefits of attention to ethics

Question 56

Question
4. Give strategies that can be used to create an ethical culture in a business.
Answer
  • Recognize that managing ethics is a process. The bottom line of an ethics program is accomplishing preferred behaviours in the workplace The best way to handle ethical dilemmas is to avoid their occurrence in the first place. Make ethics decisions in groups, and make decisions public, as appropriate. Integrate ethics management with other management practices. Use cross-functional teams when developing and implementing the ethics management program. Value forgiveness. Note that trying to operate ethically and making a few mistakes is better than not trying at all.
  • • strong, visible support from top management, • ensuring that ethical values (e.g. honesty), and not only performance values (e.g. innovation), figure prominently in mission statement and codes of conduct • appointing ethics officers, creating innovative ethics training formats, and setting up ethics help lines; • carrying out ongoing evaluations/audits of ethical performance, with rewards and sanctions; and • creating board ethics and/or corporate responsibility committees.
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Treat the risk Monitor and review
  • Establish organisational roles to manage ethics. Schedule ongoing assessments of ethics requirements Establish operating values and behaviours Align organisational behaviours with operating values Develop awareness and sensitivity to ethical issues Integrate ethical guidelines and decision-making Structure mechanisms to resolving ethical dilemmas Ensure ongoing evaluation and updates to the programmes Help convince employees of the long-term benefits of attention to ethics

Question 57

Question
How can a good corporate ethics programme help a business to be more successful?
Answer
  • • strong, visible support from top management, • ensuring that ethical values (e.g. honesty), and not only performance values (e.g. innovation), figure prominently in mission statement and codes of conduct • appointing ethics officers, creating innovative ethics training formats, and setting up ethics help lines; • carrying out ongoing evaluations/audits of ethical performance, with rewards and sanctions; and • creating board ethics and/or corporate responsibility committees.
  • Communicate and consult Establish the context Identify the risk Analyse the risk Evaluate the risk Treat the risk Monitor and review
  • • Avoid insolvency, fines, lawsuits and criminal charges • Protect and strengthen sales, brand image, and reputation • Protect the company, especially during times of stress and change • Strengthen employee loyalty and commitment • Avoid prescriptive government regulation • Avoid loss of business • Limit vulnerability to activist pressure and boycotts: • Enjoy greater access to capital
  • It improves society It maintains a moral course in turbulent times It cultivates strong teamwork and productivity It supports employee growth and meaning It ensures that policies within the workplace are legal It helps to avoid criminal acts and lower fines due to violations by organizations It promotes a strong public image of an organisation It is most importantly the right thing to do

Question 58

Question
Explain Statue law & legislation.
Answer
  • The making of law by a competent authority. It can be found in statues enacted by PARLIAMENT AND PROVISIONAL LEGISLATIVE and proclamations, regulations and bylaws enacted by subsidiary legislative bodies, such as, the president, ministers and municipalities. The most important source of law.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation. For statue law to be recognised it must be: Reasonable. Existed for a long time. The contents must be certain and clear.
  • There are numerous textbooks and law journals on SA law. These works have no inherit authority on their own. If they are methodical and convincing expositions of law they may have a persuasive influence on the courts
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.

Question 59

Question
Explain Customary Law.
Answer
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation.
  • if nothing can be found in any of the sources, the judge may turn to the law of other modern countries for judgement Not regarded as an authorative source of sa law. Have persuasive authority only.
  • Old juristics of Holland. Authoritive in the courts. The body of the law provided by the old authority is also known as the common law.

Question 60

Question
Explain Textbook Journals.
Answer
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation.
  • Old juristics of Holland. Authoritive in the courts. The body of the law provided by the old authority is also known as the common law.
  • There are numerous textbooks and law journals on SA law. These works have no inherit authority on their own. If they are methodical and convincing expositions of law they may have a persuasive influence on the courts

Question 61

Question
Explain Judgements of the Courts.
Answer
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.
  • if nothing can be found in any of the sources, the judge may turn to the law of other modern countries for judgement Not regarded as an authorative source of sa law. Have persuasive authority only.
  • Old juristics of Holland. Authoritive in the courts. The body of the law provided by the old authority is also known as the common law.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation.

Question 62

Question
Explain foreign law
Answer
  • if nothing can be found in any of the sources, the judge may turn to the law of other modern countries for judgement Not regarded as an authorative source of sa law. Have persuasive authority only.
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.
  • Old juristics of Holland. Authoritive in the courts. The body of the law provided by the old authority is also known as the common law.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation.

Question 63

Question
Explain Old Authority
Answer
  • Can be divided into Superior and lower court. Superior courts are Constitutional, Supreme court of appeal and high court. The lower courts are lower in statue than the high court. The lower court are required to keep records of all their proceedings.
  • Old juristics of Holland. Authoritive in the courts. The body of the law provided by the old authority is also known as the common law.
  • Does not consist of written rules. Developed from the habits of the community. Passed down from generation to generation.
  • if nothing can be found in any of the sources, the judge may turn to the law of other modern countries for judgement Not regarded as an authorative source of sa law. Have persuasive authority only.
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