UNIVERSITY OF CAPE TOWN

DEPARTMENT OF COMMERCIAL LAW

Law for Engineers CML4607F Test

23 March 2022
Time: 1 hour 15 minutes

Instructions

• Write clearly and legibly. Write on both sides of the page. Do not write in the margins.

• There are 3 parts: Part, A, Part B and Part C. Answer Part A on the MCQ sheet provided.
Answer Parts B and C in the answer book provided. (You do not need to answer them in
separate books.)

• Be guided by the mark allocation for each question.

• No notes or materials may be used during the test; if you are found with such materials it
could lead to disciplinary action.

• No devices are allowed and this includes smart watches, calculators, headphones and cell
phones. Please remove smart watches, headphones and similar items before the test begins.
Please also make sure that your cellphones are turned off.

• During the first 15 minutes of the test, you may read the questions and make notes in pencil
on the test paper. Do not begin writing in the answer books or on your MCQ sheets until the
invigilator advises you that reading time is over and the test has begun.

• Good luck!

• Marks total: 25 marks

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 PART A

Multiple Choice Questions

• There are 10 multiple choice questions; each question is worth 1 mark.

• There is no negative marking.

• Unless otherwise indicated choose the MOST CORRECT answer.

• Use the MCQ answer sheet provided and please ensure that you answer in pencil.

1. Select the most correct statement:

a) Public law is the area of the law that regulates relations between commercial entities and
the state.
b) Private law is the area of the law that regulates relations between private persons and the
state.
c) Commercial law is the area of the law that regulates the economy.
d) There are overlaps between commercial law, private law and public law.
e) Only private law is relevant to individuals. [1]

2. Select the most correct statement:

a) The Labour Court’s decisions may constitute binding precedent.

b) Precedent is a source of law which requires the courts to follow previous decisions made
by all other courts. This is necessary to keep judges in check.
c) Arbitration awards handed down by the Commission for Conciliation, Mediation and
Arbitration (CCMA) have the same status as the common law.
d) The Constitutional Court must always uphold the common law.
e) Only the Bill of Rights in the Constitution is supreme; all other sections of the Constitution
constitute legislative provisions with the same status as legislation. [1]

3. Select the most correct statement:

Which of the following is a requirement to establish the existence of a legally binding custom?

a) The alleged law or principle must have been in place for at least 3 months.
b) The alleged law or principle must be recognised by everyone living within a specific radius
of the area in which the litigant seeks to rely on the law or principle.
c) The law or principle must be rational and clear.
d) The law or principle must be supported by legislation, the common law, indigenous law or
the Constitution.
e) The law or principle must be recorded in writing and signed by the parties to the dispute.
[1]

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 4. Lufefe owns an IT business in Cape Town. Recently, the business entered into a contract
with Lufefe’s cousin, who has a company based in Pretoria, to supply it with a substantial
quantity of software, worth approximately R1 million. Her cousin’s company delivers the
agreed products on time but about half of the products are either already opened or
damaged. When Lufefe calls to complain, her cousin says she did not guarantee that the
items would be in perfect condition and refuses to compensate Lufefe. Lufefe now wishes
to take legal action.

In which court or tribunal should Lufefe institute her claim?

a) District Magistrate’s Court, Cape Town.

b) Regional Magistrate’s Court, Pretoria.
c) The High Court, Pretoria.
d) The High Court, Cape Town.
e) The Constitutional Court.
[1]

5. Andile enters into an employment contract with an Engineering Company to work as a

general assistant while he completes his engineering degree (he anticipates completing his
degree in 2024). He is hired to work on a fixed term basis for 2 years, until December
2024. The company agrees to pay him R5000 a month (or R60 000 a year), working 15
hours a week.

Which of the following statements is most correct?

a) To comply with the law, the employer will need to provide a justifiable reason for fixing
the term of Andile’s contract.
b) In Andile’s final year of engineering, both of his parents are tragically killed in a car
accident, and he struggles to focus on his studies. As a result, he fails two subjects and is
required to return to UCT for a further 6 months. When Andile’s contract with the
company comes to an end on 31 December 2024, he may apply to the CCMA on the basis
that he has been unfairly dismissed because he had a reasonable expectation that his
contract would be renewed until his engineering degree was completed.
c) Andile’s contract is a fixed term contract because it is linked to a specific task.
d) Andile would not be entitled to overtime pay in terms of the Basic Conditions of
Employment Act.
e) None of these statements is correct.
[1]

6. Mpho works as the manager of the Four Seasons hotel in Cape Town. Mpho needs to
purchase new television sets for the hotel. Mpho sends an email to EZ Electronics (Pty)
Ltd situated in Pretoria on 3 August 2021, requesting the company to send her the pricing
and pictures of a certain television set. On 5 August 2021, Edward, the Sales manager of
EZ Electronics (Pty) Ltd sends Mpho an email with a picture of the television set,
indicating a price of R12 000 per set. Both agree that confirmation of the sale will be done
via email. On 6 August 2021, Mpho calls Edward and requests 100 TV sets at a discount
of 15% per set, on the initial quote provided. Edward responds to Mpho that EZ Electronics
(Pty) Ltd is only willing to give a 10% discount. On 7 August 2021, Mpho sends an email
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 to Edward confirming that she will purchase the TV sets at R10 800 (ie at the discounted
rate of less 10%). Edward then sends a confirmatory email to Mpho regarding the sale.

What is the correct theory that should be used to determine when consensus has
been reached between the parties?

a. Expedition Theory
b. Reception Theory
c. Information Theory
d. Declaration Theory
e. A combination of c and b [1]

7. Refer to the facts in question 6. When and where did the contract come into force?

a) 5 August 2021 at Cape Town

b) 6 August 2021 at Cape Town
c) 6 August 2021 at Pretoria
d) 7 August 2021 at Cape Town
e) 7 August 2021 at Pretoria [1]

8. Refer to the facts in question 6. The agreement between the parties that confirmation
of the sale must be done via email is an example of _ in a contract

a) custom

b) incidentalia
c) naturalia
d) natural obligation
e) both a and b [1]

9. Refer to the facts in question 6. Edward’s response to Mpho during the telephone call on
6 August 2021 is an example of:

a) revocation of an offer
b) offer
c) a counter offer

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 d) acceptance
e) conditional offer [1]

10. Refer to the facts in question 6. The consequences of determining when and where a
contract was concluded, include:
a. A determination of the court that will have jurisdiction.
b. A determination of the status of the parties involved in the agreement (age, marital
status, insolvency etc).
c. A determination of when contractual duties commence and contractual rights
accrue.
d. A determination of which statues and other legal principles apply to the contract
and contracting parties.
e. All of the above. [1]

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 PART B

True or False questions, with explanation

• There are 4 true/false questions, each worth 2 marks.

• There is no negative marking.

• First indicate whether you think the statement is true or false. Then write a brief explanation.
Your answer must simply address the particular issue(s) raised in the question.

11. Statement: In order for a restraint of trade clause to be enforceable against an employee
who has left a company’s employment, the company need only show that the clause is
necessary to eliminate competition.
[2]

12. Statement: If Tim honestly and in good faith discloses to the Department of Labour and
Employment that his employer is underpaying its blue collar workers, he may be protected
from dismissal in terms of legislation.
[2]

13. Jonathan buys a brand-new Porsche 911 Carrera S Coupe from Porsche Cape Town. He
buys the car with the hope that his long-term crush Naomi would notice the car and finally
also notice him. His plan fails, and Naomi falls for Jake who drives a VW Polo.

Statement: Jonathan can get out of the contract of sale he concluded with Porsche Cape
Town on the basis of mistake.

[2]

14. The sale of all rhino horn or rhino horn products has been prohibited by a regulation passed
by the Minister of Environmental Affairs acting under his or her authority to protect
endangered species in terms of the National Environmental Management Act 107 of 1998.
Nellie Jones is a 95 year old widow. She lives in an old age home. She has no children or
grandchildren. Her monthly expenses at the old age home are R5000, and Nellie is concerned
that her money is running out.

Nellie inherited two rhino horns from her grandfather when she was 21. She has kept the
horns as a sentimental reminder of her grandfather. Now, because of her financial situation,
she decides she must sell the horns to raise money. She approaches the owner of a curio shop
in Sea Point, who offers to pay her R100 000 for the two horns. Nellie is delighted and
accepts his offer. Nellie delivers the horns to the owner of the curio shop but she does not
receive payment.
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Statement: Nellie can claim restitution because of breach of contract. [2]

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 PART C

• There is one question, worth 7 marks.

• Your answer must simply address the particular issue(s) raised in the question.

• Write your answer in the answer book provided.

15. Nazreen, a race horse trainer, enters into a contract with Bob, in terms of which Nazreen
will purchase a race horse from Bob for R80 000. The contract is concluded on 2 May
2021, and Nazreen makes payment immediately. They further agree that Bob will deliver
the horse to Nazreen on 15 May 2021. Nazreen specifically tells Bob that it is imperative
that she receives the horse on time because it takes a minimum of one month for the horse
to settle before she can enter it into its first race on 14 June 2021. Bob does not deliver
the horse on 15 May and instead only tenders delivery on 15 June 2021. Nazreen is no
longer interested in the horse because she missed the race which she was certain she could
win with that particular horse. Knowing the industry very well she is also certain that if
she had entered that horse in the race (and it had won) she would have been able to resell
it for at least R120 000. Nazreen no longer wants to go ahead with the contract. Advise
her fully on her contractual law rights. [7]

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