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January 22, 2016

When is someone disqualified from benefiting under a will?

The following persons are disqualified from benefiting under a will:

1.      A person who has unduly influenced the person who wrote the will to give him a benefit under the will.

2.      A person who is unworthy, e.g.

·        A person who unlawfully has caused the death of the testator. This is in accordance with the maxim de bloedige hand er neemt geen erffenis, and clearly the person who murders another cannot take a benefit from the will of his victim.

·        a person who has led another into an immoral life and indirectly caused the latter’s death;

·        a person who has concealed the will of the testator;

·         A person who has attempted to defraud persons of their rightful inheritance by forging a will.

In Makhanya v Minister of Finance the court used the de bloedige hand maxim to extend the rule to cover any proceeds from the deceased’s pension fund from benefiting the person who caused the deceased’s death.

The facts in Danielz NO v De Wet and Another were that De Wet was the sole nominated beneficiary under four life insurance policies on the life of her late husband. In 2000, she hired and paid two men to assault her husband. Unfortunately, they killed him.

In 2006, after the she had been convicted on the criminal charges against her, she claimed under the life insurance policies from the insurer. The applicant, who was the nominee of the insurer (Old Mutual), applied for a declaratory order that De Wet was not entitled to the proceeds of the life insurance policies.

The court agreed and the application for a declaratory order to bar De Wet from claiming the proceeds of the policy was therefore successful.

January 19, 2016

How binding is a suretyship agreement contained in the terms and conditions of an application for credit?

Typically the credit application contains a clause like this:
By his/her signature hereto, the signatory hereby interposes and binds himself as surety and co-principal debtor in solidum for the due faithful and punctual performance of all obligations undertaken by the abovenamed Applicant in favour of the Creditor, under renunciation of the legal exceptions of excussion and division, the full meaning and import of which he is fully conversant with.
·        Provide consumers with prior written notice of clauses in agreements that may constitute a potential risk or liability to consumers.

·        Specifically draw the fact, nature and potential effects of risks to the attention of consumers, in a conspicuous manner and form, to which the consumers accordingly accept responsibility.
On that basis, the terms and conditions should have a preamble in bold, something like this:
IMPORTANT NOTICE. The CLIENT’s attention is drawn to the penalty for early cancelation in paragraph 5, the authority to increase the debit order amount in 6.4, the indemnity in paragraph 7.4 and the surety provisions contemplated in paragraph 7.6.

The CPA came into effect in 2010. Before that, in the matter of Brink v Humphries & Jewell (Pty) Ltd 2005 (2) SA 419 the Supreme Court of Appeal held that the suretyship was invalid as the signatory had not known, or been informed that the document embodied a personal suretyship.
The Court was of the view that:
(1)  The suretyship agreement must have a prominent heading which proclaims that it is such.
(2)  The clause containing the suretyship must be conspicuous.
(3)  The form must identify that the signatory is signing in their capacity as surety.
(4)  The signatory must sign as surety.

The CPA reinforces that decision.