Month: May 2015

Contracting with minors in a digital context

A1BIn this article, we examine whether contracts entered online by minors, using their parents’ credit cards, are legally binding in the specific context of social media such as Facebook.

Both Common law and legislation deal with the capacity of minors who enter into different types of contracts. According to the Children’s Act, 38 of 2005 a minor is a person between the ages of seven and 18 years. In terms of common law a minor does not have sufficient capacity to incur binding obligations under a contract and must obtain the assistance or consent of their guardian to do so. This consent can be given before the contract is concluded or thereafter, in which case it is seen as ratification of the contract. There are exceptions to this rule, which may be found in various pieces of legislation as well as in common law, such as contracts where the minor obtains only rights and no duties (e.g. a donation).

A minor can escape liability even when they have been bound in terms of the contract (i.e. where the guardian has assisted the minor in the conclusion of the contract, consented to or ratified the contract). This can be done where the contract was prejudicial to him or her at the time that it was concluded. The court may then, on application, set the contract aside and order that each party be placed in the same position as what they were in before the contract had been concluded.

Facebook is currently involved in an ongoing class-action lawsuit. In this lawsuit, a class of parents in America are pressing their claim that Facebook should change how it handles online transactions by minors.

Attorneys for the parents in the above case note that it is important that Facebook has knowledge of a user’s actual age but still treats children the same as adult users when it comes to taking their money.

One of the biggest issues here is that reciprocal performance, being the payment of money via credit or debit card and the child obtaining credits, takes place almost immediately. Therefore, if the parent were to be refunded, the minor would be unjustifiably enriched using the credits.

The system, that Facebook currently employs, is therefore problematic since it takes advantage of children who may not fully understand the contracts that they are entering into when they purchase game credits. Furthermore, should the parents be immediately refunded in the current system, it may lead to situations where the parent consents to the purchases and then after the child obtains the enjoyment from the credits, request that their accounts be credited due to a ‘lack of consent’.

It is therefore clear that this system of payment should be changed. We should obtain clarity on how to deal with this in South Africa once the class-action suit in America has been concluded and a solution has been reached. At present, it seems that there will be no alternative for parents whose children overspend or use their credit or debit cards, without permission. If your child has, a Facebook gaming habit it is a good idea to keep a close eye on your wallet until we have clarity on the recourse available to parents who find themselves in this situation.

Bibliography

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice

Registering deaths and death certificate requirements in South Africa

A2BMany South African citizens do not know the correct procedures to follow in order to register a death, or how to obtain a death certificate and by whom, until it is too late. Coming to terms with a death is difficult enough without having to enquire about the legal processes that are necessary in the circumstances in order to proceed with funeral arrangements and other family affairs.

The Births and Deaths Registration Act 51 of 1992 outlines the simple requirements and procedures to be followed upon the death of a South African citizen.

The Births and Deaths Registration Act no. 51 of 1992 requires that a person’s death must be reported to any one of the following people authorised by The Department of Home Affairs. Specific officers at the Department of Home Affairs, South African Police Service members, South African Missions, Embassy’s or Consulates where the death occurred abroad or funeral undertakers that have been appointed and are recognised by law.

A Notification of Death or Still Birth Form (Form BI-1663) must be completed when reporting a death. This form, along with all other forms that may be necessary are available from all Home Affairs offices. The following people have to complete different sections of this form in order for it to be submitted: the person reporting the death, the medical practitioner or traditional healer involved in the declaration of the death, and a Home Affairs official or a member of the Police service if a Home Affairs official is not available.

A Death Report (Form BI-1680) will be issued after a death has been registered with one of the relevant department officials. Only someone whom the Department of Home Affairs has authorised to do so can issue this report and this includes traditional leaders, members of the SA Police Services and authorised undertakers.

These designated people may also issue burial orders. No burial may take place unless authorised by way of a burial order (Form BI-14).

Deaths of South African citizens and South African permanent residence permit holders that occur outside South Africa must be reported to the nearest South African embassy or mission abroad. The country in which the death occurs must issue a death certificate and a certified copy of the death certificate must be submitted to the South African embassy or mission when reporting a death. If the deceased is to be buried in South Africa, the embassy or mission will assist with the paperwork and arrangements with regards to transportation of the body to South Africa.

The Department of Home Affairs will issue a Death Certificate on receipt of the notification of death form BI-1663 and the Death Report form BI-1680. Applications for a Death Certificate must be lodged at any office of the Department of Home Affairs or at any South African embassy, mission or consulate if the death occurs abroad. An abridged death certificate will be issued free of charge on the same day of registration of death. An unabridged death certificate can be obtained by completing Form BI-132 and paying the required fee.

If a person has been recorded, mistakenly or fraudulently, as dead in the National Population Register, (i.e. they are still alive); this must be reported as soon as possible to the nearest Department of Home Affairs office for urgent investigation and corrective action.

Chapter 3 (Section 14 to 22) of the Births and Death’s Registration Act regulates all matters pertaining to the Registrations of Deaths in South Africa and regulations on how to obtain a Death Certificate. The Act provides for the different procedures to be followed when a death is due to natural causes, stillbirth or other methods. This process is simple to follow and the appointed officials at Home Affairs Departments are fully equipped to process registrations and to answer any questions you may have.

Reference List:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice

Differences between liquidation and sequestration process

A3BThe application for liquidation and sequestration processes are often confused. Many people think that the processes are the same. However, there is a big difference between these two processes.

A simple way to describe liquidation is that liquidation is the winding up of a firm by selling off its free (un-pledged) assets to convert them into cash to pay the firm’s unsecured creditors. Before a liquidation application can be issued in court, a founding affidavit needs to be drafted. This affidavit will include all the details of the Applicant and / or Respondent. The Applicant is the person who wants to liquidate the company and the Respondent is the company. In the case where the Applicant is the company, there will be no Respondent. The affidavit will also include any details of the company, employees and creditors. A bond of security also needs to be signed for the purpose of the Master of the High Court.

Once the application is issued, the only people who receive this notice is the South African Revenue Services (SARS), the Master of the High Court, employees of the company and any trade unions. As soon as this is done, a Master’s certificate is obtained verifying the application, and a provisional liquidation order is granted.  A return date is then set, and all creditors are notified of the provisional liquidation through registered post and by placing the provisional order in two local newspapers. Should the Applicant’s attorneys receive no notice of intention to defend the matter, a final liquidation order is granted. The order together with the application is sent to the Master of the High Court and a liquidator will be appointed.

Sequestration is the preferred option for the individual who has exhausted all other options of resolution, and is now in a position where even if all their assets are sold, they would be left with such a high shortfall that it would be unreasonable to expect them to recover from this loss. A sequestration involves a little more administration work before a court date can be obtained. Before the Notice of Motion and Founding Affidavit are drafted, a valuer needs to be appointed in order to value the Applicant or Respondent’s estate. This needs to be done in order to ascertain whether the debtor is indeed over-indebted, and whether he / she has enough assets to provide a benefit for all creditors involved.

In the matter of a voluntary sequestration, the Applicant will be the party whose estate is to be sequestrated. The valuer needs to value the property of the Applicant on a forced sale scale. This will be calculated by subtracting 20% of the actual value of the property.

As soon as the valuer has made an estimate for the Applicant / Respondent’s estate, a Statement of Debtor’s Affairs needs to be handed in to the Master of the High Court for inspection by all creditors. This needs to be done no less than 14 or more than 30 days before the court date. A Notice of Surrender needs to be sent through registered post to all creditors to inform them that the Statement of Debtor’s Affairs is available for inspection.

The Notice of Surrender needs to be posted in two local newspapers and the Government Gazette no less than 14, or more than 30 days before the court date. Once all of the above-mentioned requirement has been adhered to, the notice of surrender can be annexed to the Founding Affidavit and can be heard by the court, no Bond of Security is needed at this point. A sequestration can only be heard by the High Court, whereas a liquidation can be heard either by a Magistrate’s Court or by the High Court, depending on the merits of the case.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice

Disclaimer notices

A4BDisclaimer notices offer protection for owners and employees concerning shopping centres, stadiums, parking lots and other public areas. For these notices to be effective, certain requirements have to be adhered to.

False reliance on these disclaimers can be a very expensive mistake. Find out whether your disclaimer notice will be sufficient to protect you and your employees.

Disclaimer notices are commonly seen in shopping centres, stadiums, parking lots and other public areas. These notices are generally aimed at protecting the owner or employees with regards to the area in question, by exempting him/her from legal liability when a member of public using the area suffers damage.

It is well established that disclaimer notices are enforceable when properly implemented. This is clear from the extract below:

Durban’s Water Wonderland (Pty) Ltd v Botha and Another (1999) 1 All SA 411 (A) at 115:

“If the language of a disclaimer or exemption clause is such that it exempts the proferens from liability in express and unambiguous terms effect must be given to that meaning. If there is ambiguity, the language must be construed against the proferens. (See Government of the Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A) at 804 C.)”

According to prevailing case law, when considering whether a disclaimer notice is effective, two factors have to be considered:

Firstly, from the Durban Water Wonderland case, it is evident that for the disclaimer’s content to be effective, the wording thereof must not be ambiguous. It is therefore required that the disclaimer must indicate in express terms what the person relying on the disclaimer is exempted from when someone reads the disclaimer. However, any alternative meaning of the disclaimer notice cannot be too widely interpreted. It is simply required that the meaning of the disclaimer is clear to anyone reading it. This test is implemented so that a vague statement cannot be regarded as sufficient to bind someone according to the legal principle of so called “quasi-mutual assent”, which is the underlying basis binding a person that reads a disclaimer notice.

Consider the following examples: “the owner of the property is hereby exempted” and “the owner, managing agent and any other employee is hereby exempted”. In the first example only the owner of the property is exempted from liability, while in the second example, employees of the owner and the managing agent of the property are included under the exemption clause. The first example would not have been sufficient if damage was caused to a person by the negligence of an employee, as employees were clearly not within the ambit of the notice. It is therefore important to ensure that the wording of a disclaimer is clear, unambiguous and is sufficient to protect all parties that need protection.

A further issue to take into account when the effectiveness of a disclaimer notice is considered is the question whether such disclaimer has been properly displayed. A disclaimer can only be effective when it is found that the disclaimer was displayed in an appropriate position, which would allow the reasonable person to have seen the disclaimer, or to ought to have seen the disclaimer. Practical issues, such as the size of the disclaimer, the distance from the viewer, the visibility, font and positioning of the disclaimer should be taken into account. This test is implemented as the content of the disclaimer can only fall within the knowledge of a person, when the notice is of such a nature that it is easily spotted by someone. When a disclaimer is affixed to a premise, it is therefore important that the above factors be taken into account.

It is clear that a disclaimer is an effective method of protection, especially when used in areas where large amounts of people visit frequently. However, the use of a disclaimer notice is a potentially risky practise, as it must be ensured that the wording and placement thereof is sufficient for the reliance thereon. It is recommended that an attorney be consulted before putting up such a notice.

Bibliography

Cases

Durban’s Water Wonderland (Pty) Ltd v Botha and Another (1999) 1 All SA 411 (A)

Government of the Republic of South Africa v Fibre Spinners & Weavers (Pty) Ltd 1978 (2) SA 794 (A)

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice

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