Introduction to Law

Question: What are Defamation, Libel and Slander?
Answer:
  • Defamation is a false statement of fact made to someone other than the victim which harms the reputation of victim. 
    • It includes any means of communication, including graphic, pictorial, electronic representations or even verbal statements.
  • Slander is an oral form of defamation.
  • Libel is a written form of defamation.
  • Important note: Every person participating in the defamatory publication is liable including the editor, publisher, proprietor, broadcaster and seller.
Question: What is a Causal Event? (Proximate Cause)
Answer:

 

  • How far back in a chain of events must one look in order to find the event which caused the loss? 
  • This is important because the loss causing event must happen on or after the policy’s retroactive date
  • In terms of the following example, which event would be considered to be the loss causing event?
  1. During 2005 the farmer’s thermostat mechanism on his silo is stolen. 
  2. The farmer replaces the thermostat but makes mistake in calibrating it.
  3. During 2006 the farmer stores the cotton seed in a silo at the incorrect temperature 
  4. During 2007 the cotton was grown. 
  5. During 2008 the cotton was woven into a fabric.
  6. During June 2009 the Insured manufactured the tent material using the cotton.
  7. On 1 July 2010 the material was sold to the tent maker.
  8. During August 2010 the material was used by the tent maker to manufacture the tent.
  9. On 1 September 2010 the completed tent was sold to the retailer and was immediately displayed on the retailer’s shelf.
  10. On 1 October 2010 the tent was sold to a customer.
  11. On 31 October 2010 the customer erected the tent.
  12. On 1 November 2010, due a flaw in the fabric, the tent tore open causing rain damage to the electronic equipment inside the tent. 
  13. On 2 November 2010 the customer tried to repair the equipment using a hair dryer, but accidentally caused further damage.
  14. On 1 December 2010 the customer legal action against the retailer, naming the Insured and the farmer as co-defendants.
  • Events 1 to 11 are not considered to be loss causing events because, without additional loss causing events, no loss would have arisen. 
  • In other words, the loss causing event would have been event 12, since liability arose at that point even without any further events taking place.
  •  

     

    Question: At what point during a sale is ownership transferred?
    Answer:
    • Suppose the Insured is a petrol retailer and a motorist instructs the forecourt attendant to fill up her car. At what point does the motorist become the owner of the petrol? Is it when:
      • She first instructs the attendant to fill her car?
      • The petrol leaves the nozzle of the petrol pump?
      • She pays for the petrol?
      • She drives off?
    • If the sale is a cash transaction (she pays by cash, credit card or cheque) then ownership is transferred upon payment.
    • If the sale is a credit transaction (e.g. payment is made at the end of the month), then ownership is transferred upon delivery (i.e. when it leaves the nozzle of the petrol pump).
     
    Question: What are Damages?
    Answer:
    • Damages is an award, typically of money, to be paid compensation for loss or injury caused to a third party.
      • Grammatically, it is a singular noun, not plural.
    • General damages compensate the claimant for the non-monetary aspects of the specific harm suffered. 
      • This is usually termed 'pain, suffering and loss of amenity'. 
      • Examples of this include physical or emotional pain and suffering, loss of companionship, loss of consortium, disfigurement, loss of reputation, loss or impairment of mental or physical capacity, loss of enjoyment of life, etc.
      • This is not easily quantifiable, and depends on the individual circumstances of the claimant.
    • Special damages compensate the claimant for the quantifiable monetary losses suffered by the plaintiff.
      • For example, lost income and medical expenses following an injury. 
    • Speculative damages are damages that have not yet occurred, but the plaintiff expects them to. Typically, these damages cannot be recovered unless the plaintiff can prove that they are reasonably likely to occur.
     
    Question: What is a plaintiff?
    Answer:
    • In this document we sometimes use the word ‘plaintiff’ instead of ‘third party’. In the context of this document the ‘defendant’ is usually the Insured.
    • The plaintiff sues the defendant
    • A plaintiff is a person who brings (initiates) an action in a court of law. 
    Question: What is the doctrine of estoppel?
    Answer:
    • If your actions allow someone to believe that certain facts are true then you cannot subsequently rely on those facts not being true. Examples:
      • If the Insured’s behaviour shows the Insured’s admission of guilt, then it can’t subsequently deny its guilt.
      • The Insured’s employee had a 3 month fixed term contract. When the contract expired both parties behaved as if the contract had been renewed. Estoppel would mean that both parties are contractually bound as if they had agreed to renew the contract.
    Question: What is the difference between a Natural Person and a Juristic Person?
    Answer:
    • A Juristic Person is a company, a close corporation, a body corporate or a trust.
    • A Natural Person is a living, breathing human being.
    • More precisely, the term ‘Natural Person’ includes a single male or female, a couple married in community of property, a person married out of community of property, a sole proprietor and a partnership.
    • However, a partnership is considered to be a juristic person in terms of the Consumer Protection Act.
    Question: What is the difference between statute and common law?
    Answer:
    • A statute is a written law passed by a legislative body.
      • In the case of legal liability the legislative body is parliament.
      • Before being passed the document is called a Bill. It is called an Act once it is passed by parliament.
    • Common law is not necessarily written down. It is made up of:
      • Common sense laws handed down through history e.g. do not murder.
      • Customs – provided they are long established, certain, reasonable and uniformly observed.
      • Judicial precedent i.e. case law .
    Question: What is bailee’s liability?
    Answer:
    • When the Insured has any third party property in its care, custody or control then it is a bailee.
    • There is a strict liability obligation on bailees to return the goods to the owner in good order.
      • This strict liability means that the bailee will be legally liable for damage to these goods even if the damage was not the bailee’s fault. 
    Question: What is Vicarious Liability?
    Answer:
    • It is a basic principle of SA law that one person cannot be held liable for the actions of another, but there are exceptions. One exception is vicarious liability which says that under certain circumstances, one person may be held liable for the actions of another.
    • Vicarious liability is a form of strict liability that arises under the common law doctrine of agency.
    • When a Mr A hires Mr B to act on his behalf, Mr A becomes liable for the acts of Mr B.
    • For example, if company A hired company B to demolish a building, company A would be liable if company B demolished the wrong building by mistake.
    • The policy does not exclude vicarious liability.
    Question: What is Strict Liability?
    Answer:
    • Its is sometimes referred to as ‘no fault liability’ or ‘absolute liability’
    • Strict liability is a legal doctrine that makes a person or organisation responsible for damages their actions or products cause, regardless of any "fault" on their part.
    • Employer example: An employer is automatically liable for the actions of their staff while they are performing their duties
    • Retail example: In terms of the Consumer Protection Act a retailer can be held liable for a dangerous defect in a product caused by the manufacturer.
    • Hotel example: A hotelier is liable for loss or damage to the property of guests brought onto the hotel’s premises even where the loss or damage was not caused by the hotelier. The hotelier is allowed to contract out of this liability and would also not be liable if the loss was caused
      • by irresistible forces of nature (such as an earthquake)
      • by the goods themselves being flawed
      • through the guests’ negligence
    • Animal example: If a third party is, through no fault of their own, injured by the Insured’s animal, they need only prove that the Insured was the owner of the animal. Consider the following:
      • Mr A owns a dog which is properly secured behind a fence and gate
      • Mr B negligently leaves the gate open while making a delivery.
      • The dog bites Mr C while he is walking past. Mr C did not provoke the dog.
      • Mr C can sue Mr A simply because Mr A owns the dog. (Mr A can in turn sue Mr B – assuming he can be found)
    • Bailment example: A person or company who looks after the property of others in exchange for a fee is sometimes called a bailee. This type of agreement is called a ‘contract or depositum for reward’. If the bailee does not return the goods in good condition, then the bailee is legally liable even if a third party caused the damage.
      • Even though thieves damaged the customer’s watch while it was at the jeweller, the jeweller is nonetheless liable for that damage
    Question: Is a verbal contract binding?
    Answer:

    Yes. There are three ways in which a valid contract can arise

    • In writing
    • Verbally
    • By your actions – if a reasonable outsider would think that you intended to bind yourself. E.g. If the restaurant waiter asks you what you want to eat and you point to an item on the menu, then you have agreed to buy a meal.
    • Certain contracts are only valid if agreed in writing. They mostly pertain to the sale of fixed property, hire purchase agreements and surety agreements.
    Question: Requirements for a valid contract
    Answer:

    Before a contract is enforceable it needs to meet several requirements, including:

    • It must be lawful. A contract to commit murder is not enforceable
    • The parties to the contract must have the capacity to contract. Some people do not have the legal capacity to enter into contract, such as those who are too young, drunk, insane or insolvent
    • There must be a serious intent to bind. There is no binding contract if
      • one of the parties was just joking
      • the communication was merely and invitation to do business (such as an advert)
    • It was not concluded under duress or undue influence. A sale agreement might not be valid if the seller’s influential spiritual leader purchased the property below market value.
    • The terms must not be too vague
    • The offer must be accepted on exactly the same terms as it was offered
      • An offer can be withdrawn at any time before it is accepted
      • The offer can only be accepted by the person to whom the offer was made
      • A party is only bound by those terms which he/she could reasonably be aware of at the time of concluding the agreement. A hotel should not rely on a disclaimer which is only brought to the attention of the guest after ‘checking in’.
      • Silence is not consent. The customer is not bound by simply refusing to reply to a mail order offer.
    Question: What is meant by prescription?
    Answer:
    • If someone has suffered a loss they have a limited time (usually 3 years) in which to start legal action to recover that loss from the wrongdoer.
    • The plaintiff cannot wait indefinitely before starting legal action against the defendant.
    • Prescription is defined as the limitation of time beyond which an action, debt, or crime is no longer valid or enforceable
    • The prescription period only starts once the plaintiff is aware that he has been wronged. In other words, the Insured could, for example, be successfully sued 10 years after doing something wrong because the plaintiff only discovered the wrongdoing many years later.
    • The prescription time limit does not apply to the time taken during the legal proceedings. Example:
      • On 1 Feb 2000 the Insured damaged the plaintiff’s property, but the Insured’s guilty employee hid the damage
      • On 1 Feb 2007 the plaintiff discovered the damage
      • On 31 Jan 2010 the Insured found out about the loss when the plaintiff started legal proceedings. At this time the Insured notified the insurers of a possible claim.
      • On 1 Feb 2012 the matter was finalised when the court ruled in favour of the plaintiff. At this stage the insurers would pay the claim.
    • Mostly the prescription period is 36 months but there are situations where it is longer:
      • 30 years for taxes, mortgage bond or judgement debt
      • 15 years for loans owed to the State
      • 6 years for bill of exchange of negotiable instruments
      • 3 years on any other debt.
    Question: What is the difference between Delict and Tort?
    Answer:
    • The word ‘tort’ is used in Anglo-American law
    • In Roman-Dutch based law, the equivalent word is ‘delict’.
    Question: What are the legal requirements for a liability (delict)?
    Answer:

     

    In order to successfully sue the Insured, the plaintiff (the entity trying to sue the Insured) needs to prove four key points. 

    1. Wrongful act. The plaintiff would need to show that the Insured’s conduct was wrong.
      1. It is possible for a business to harm others without it being wrong. For example, an effective advertising campaign might put competitors out of business, but that would not normally be a wrongful act. 
      2. Amputating the plaintiff’s leg would not be wrong if it was a life-saving procedure, but it would be wrong if the doctor selected the wrong leg by mistake.
    2. Fault. Fault can arise either through intent (the Insured intended harm to occur) of through negligence. If the plaintiff argues that the Insured’s negligence caused the loss then there are three further points that the plaintiff must prove:
      1. Foreseeability. A reasonable person could have foreseen the possibility of harm arising out of these actions.
      2. Duty of Care. A reasonable person would have taken steps to prevent the harm.
      3. The Insured failed to take reasonable action to prevent the harm.
        1. E.g. When a passenger on a train was attached, he argued that if the train operator had posted sufficient guards on their trains the attack would have been prevented. The train operator could argue that it was not their duty, but rather the duty of the police to ensure a safe society.
        2. The company would be liable for negligence if a visitor slipped on a soapy, wet floor because the company did not give the visitor adequate warning of the soap.
    3. Causation: the connection between the actions and the damage caused must not be too remote. 
    4. Harm: the courts would make an award to reasonably compensate the third party for their loss and restore them to the same financial position they were in before the damage was done. (By contrast, the court would punish the wrongdoer for criminal behaviour.)