CLA1501 - Chapter 12 - Transfer & Termination of Personal ...
Transcript of CLA1501 - Chapter 12 - Transfer & Termination of Personal ...
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CHAPTER 12
CESSION
RIGHTS
FLOWING FROM
CONTRACT =
PERSONAL RIGHTS
PERSONAL
RIGHT = CAPABLE OF
BEING
TRANSFERRED
CESSION =
TRANSFER OF RIGHT BY
AGREEMENT
CESSIONARY
= PERSON TO WHOM
RIGHTS ARE
TRANSFERED
CEDENT =
PERSON WHO CEDES
RIGHTS
DOES NOT
TERMINATE OBLIGATION &
DOES NOT
CREATE NEW OBLIGATION
PENSION &
MAINTENANCE CANNOT BE
CEDED
RIGHT CANNOT
BE CEDED IF ENCUMBER
DEBTOR WITH
MATERIALLY DIFFERENT
OBLIGATION
RIGHT CAN
BE CEDED ONLY IN
ENTIRETY
DEBTOR CAN
HAVE COUNTER-
CLAIM
AGAINST CEDENT
CESSION
EFFECTED WITHOUT
FORMALITY
(NORMALLY)
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CONCEQUENCES OF CESSION
(A) RIGHT NOW
FORMA PART OF PATRIMONY OF CESSIONALY &
NOT OF CEDENT
(B) CESSIONARY
ALONE HAS RIGHT TO COLLECT DEBT
(C) ONCE CEDENT
HAS CEDED CLAIM - CAN NO LONGER
BE CEDED TO
ANOTHER. CESSIONARY CAN
CEDE FURTHER
(D) AFTER CESSION,
DEBTOR CAN NO LONGER PERFORM
VALIDLY TO CEDENT
(IF DEBTOR PAYS CEDENT IN GOOD
FAITH - RELEASED FROM LIABILITY)
(E) CLAIM =
TRANSMITTED TO CESSIONARY IN ITS
ENTIRETY
TOGETHER WITH ALL BENEFITS &
PRIVILEGES SUCH AS SECURITY /
INTEREST
(F) CESSIONARY ALSO
RECEIVES RIGHT WITH ALL
DISADVANTAGES
ATTACHED TO IT
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DISCHARGE
PRIMARY
PURPOSE OF CONTRACTUAL OBLIGATIONS -
SHOULD BE FULFILLED BY
DUE & PROPER PERFORMANCE
DISCHARGE
(FULFILMENT): PERFORMANCE
OF
OBLIGAITON UNDERTAKEN
CAN BE
BILATERAL / UNILATIRAL
JURISTIC ACT
BILATERAL -
DEBTOR NEEDS CREDITOR'S
CO-OPERATION
BILATERAL
DISCHARGED -BOTH PARTIES PERFORMED
FULLY
DISCHARGED
NOT ACCOMPLISHED BY DEFECTIVE
PERFORMANCE
LEGAL TENDER
= COINS & NOTES.
CHECQUE =
NOT LEGAL TENDER
DEBTOR MAY
WITHOLD PAYMENT IF CREDITOR
REFUSES TO GIVE RECEIPT
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PRINCIPLES FOR
APPLYING DEBT
INTEREST = PAID
BEFORE CAPITAL
DUE DEBTS ARE
PAID BEFORE DEBTS WHICH HAS
NOT YET FALLEN
DUE
ONEROUS DEBTS
(MORTGAGE BONDS) HAVE
PREFERENCE OVER
NON-ONEROUS DEBTS
OLD DEBTS HAVE
PREFERENCE OVER NEW DEBTS
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RESCISSION & CANCELLATION
RESCISSION = ACT
OF WITHDRAWING FROM CONTRACT DUE TO REASONS
OTHER THAN BREACH OF
CONTRACT
CANCELLATION =
WITHDRAWAL FROM CONTRACT
DUE TO BREACH OF
CONTRACT
VOIDABLE
CONTRACTS -INNOCENT PARTY HAS CHOICE OF
ENFORCING CONTRACT /
RESCINDING IT
IF INNOCENT PARTY
DECIDES TO RESCIND -CONTRACT
TERMINATED
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AGREEMENT
PARTIES CAN AGREE
TO END CONTRACTUAL RELATIONSHIP
AGREEMENTS FOR
TERMINATION OF CONTRACTUAL OBLIGATIONS:
(1) RELEASE(2) NOVATION
(3) SETTLEMENT
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RELEASE (WAIVER)
AGREEMENT
BETWEEN CREDITOR & DEBTOR ITO
WHICH CREDITOR
RELEASES DEBTOR FROM OBLIGATIONS
DONATION
DEBTOR ALSO
RELEASES CREDITOR FROM OBLIGATION
OFFER OF RELEASE -
NOT RELEASE -CONSENSUS =
LACKING
EXPRESSLY / TACITLY
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NOVATION
AGREEMENT
BETWEEN DEBTOR & CREDITR ITO
WHICH OLD
OBLIGATION = EXTINGUISHED &
NEW OBLIGATION CREATED
EXISTENCE OF
VALID INITIAL OBLIGATION =
PREREQUISITE FOR
EXISTENCE OF VALID NOVATION
IF NOVATION =
VOID - OLD OBLIGATION
REMAINS IN FORCE
UNLESS PARTIES AGREED TO
ABANDON IT
NOVATION CAN BE
MADE SUBJECT TO CONTDITION
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DELEGATION
SPECIFIC FORM OF
NOVATION
NEW PARTY =
INTRODUCED
CHANGE OF
CREDITORS / CHANGE OF
DEBTORS
OLD OBLIGATION =
EXTINGUISED, NEW OBLIGATION
CREATED
CO-OPERATION
FROM ALL 3 PARTIES ARE REQUIRED
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SETTLEMENT (COMPROMISE) (TRANSACTIO)
AGREEMENT BY
WHICH PARTIES SETTLE DISPUTE
ABOUT ACTUAL /
SUPPOSED OBLIGATION
VALIDITY DOES NOT
REQUIRE VALID DEBT
IF VALID DEBT -
EXTINGUISED BY SETTLEMENT
IF DEBTOR DOES NOT
PERFORM ACCORDING TO TERMS OF SETTLEMENT,
CREDITOR MAY FALL BACK ON ORIGINAL
DEBT ONLY WHERE TERM OF SETTLMENT THAT CREDITOR HAVE
THIS RIGHT
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MERGER (CONFUSIO)
TAKES PLACE
WHEN PERSON BECOMES BOTH
CREDITOR &
DEBTOR IN RESPECT OF SAME
OBLIGATION
CANNOT OWE
SOMETHING TO SELF - DEBT = EXTINGUISED
MERGER
AUTOMATICALLY TERMINATES OBLIGATION
EXAMPLE: MARRIED
IN COMMUNITY OF PROPERTY
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SET-OFF
EXTINGUISING
DEBTS OWNED RECIPROCALLY BY
2 PARTIES
(A) DEBTS MUST BE
SIMILAR IN NATURE
(B) DEBTS MUST BE
LIQUIDATED (VALUE CERTAIN / ASCERTAINABLE)
(C) DEBTS MUST BE
CLAIMABLE
(D) DEBTS MUST BE
BETWEEN SAME PERSONS
SET-OFF
AUTOMATICALLY TERMINATES
RESPONSIBILITIES
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IMPOSSIBILITY OF PERFORMANCE SUPERVENING
AFTER CONCLUSION OF
CONTRACT
MUST NOT BE DUE
TO FAULT BY EITHER PARTY
EXTERNAL FACTOR
BEYOND CONTROL (EXCEPTIONAL
FORCES OF NATURE/
WAR / DEATH)
CONTRACT =
TERMINATED
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CONSEQUENCES OF
SUPERVENING IMPOSSIBILITY
OF PERFORMANCE
AS RULE -
EXTINGUISHES OBLIGATIONS OF
CONTRACT
N/A WHERE 1 PARTY
AGREED TO ASSUME RESPONSIBILITY FOR
SUPERVENEING
IMPOSSIBILITY
WHERE PARTY
ACCEPTS RISK OF SUPERVENING
IMPOSSIBILITY -
OBLIGATION NOT TERMINATED
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OBJECTIVE & SUBJECTIVE
IMPOSSIBILITY OF
PERFORMANCE
SUBJECTIVE
IMPOSSIBILITY: SPECIFIC DEBTOR'S
INABILITY TO
PERFORM DOES NOT RELIEVE
FROM LIABILITY
OBJECTIVE
IMPOSSIBILITY -RELIEVED OF
LIABILITY
COMMERCIAL
CIRCUMSTANCES -NOT OBJECTIVELY
IMPOSSIBLE
OBJECTIVE
IMPOSSIBILITY -NOT FAULT -TERMINATES
OBLIGATION (RECIPROCAL -
EXTINGUISHES COUNTER-
OBLIGATION)
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TEMPORARY & PARTIAL
IMPOSSIBILTIY OF
PERFORMANCE
DIVISIBLE
PERFORMANCE -PARTIALLY IMPOSSIBLE - WHOLE OBLIGATION
NOT TERMINATED (RELEASED
PROPORTIONATELY -PERFORMANCE &
COUNTER-
PERFORMANCE)
INDIVISIBLE
PERFORMANCE -PARTIALLY IMPOSSIBLE -SAME CONSEQUENCES
AS TOTALLY IMPOSSIBLE (UNLESS CREDITOR
ACCEPTS PARTIAL PERFORMANCE) -
COUNTER-
PERFORMANCE REDUCED
SAME PRINCIPLES IF
CONTINUING OBLIGATION
BECOMES
TEMPORARILY IMPOSSIBLE
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PRESCRIPTION
NATURE OF
PRESCRIPTION
PRESCRIPTION
PERIODS
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NATURE OF PRESCRIPTION
AQUIRE RIGHTS -
ACQUISITIVE PRESCRIPTION
BE RELEASED
FROM OBLIGATIONS -
EXTINCTIVE
PRESCRIPTION
EXTINTIVE
PRESCRIPTION = WAY IN WHICH CONTRACTUAL
OBLIGATIONS MAY BE TERMINATED
PRESCRIPTION = TO
BRING ABOUT LEGAL CERTAINTY
WHERE DEBTOR
WILFULLY PREVENTS CREDITOR FROM KNOWLEDGE OF
EXISTENCE OF DEBT -PRESCRIPTION WILL
NOT BEGIN TO RUN UNTIL CREDITOR
KNOWS
IF CREDITOR
NEGLIGENT - DEEMED TO KNOW IF DEBT
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PRESCRIPTION ACT 68 OF 1969
PROVIDES FOR CIRCUMSTANCES
WHERE IMPOSSIBLE FOR CREDITOR TO ENFORCE RIGHTS:
CREDITOR =
OUTSIDE OF REPUBLIC
DEBTOR & CREDITOR
= MARRIED
CREDITOR = MINOR /
INSANE / UNDER CURATORSHIP / PREVENTED BY
SUPERIOR FORCE FROM INTERRUPTING
RUNNING OF PRESCRIPTION
CREDITOR & DEBTOR
ARE PARNTNERS & DEBT = DEBT WHICH
AROSE OUT OF
PARTNERSHIP RELATIONSHIP
CREDITOR = JURISTIC
PERSON & DEBTOR = MEMBER OF
GOVERNING BODY OF
JURISTIC PERSON
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PRESCRIPTION PERIODS
30 YEARS: DEBT SEURED BY
MORTGAGE; JUDGMENT DEBT(CLAIM AGAINST
SURETY); ANY TAXATION
IMPOSED / LEVIED BY / UNDER ANY LAW; DEBT
OWED TO STATE - SHARE OF PROFITS, ROYALTIES /
SIMILAR CONSIDERATION
PAYABLE - RIGHT TO MINE MINERALS / OTHER
SUBSTANCES
15 YEARS: ANY DEBT
OWNED TO STAE & ARISING FROM
ADVANCE / LOAN OF
MONEY / SALE / LEASE OF LAND BY STATE
UNLESS LONGER PERIOD APPLYS IN RESPECT OF
DEBT IN QUESTION
6 YEARS: DEBT ARISING
FROM BILL OF EXCHANGE / OTHER
NEGOTIABLE
INSTRUMENT / FROM NOTARIAL CONTRACT,
UNLESS LONGER PERIOD APPLIES IN RESPECT OF
DEBT IN QUESTION
3 YEARS: IN
RESPECT OF ANY OTHER DEBT (SAVE
HERE ACT OF
PARLIAMENT PROVIDES
OTHERWISE)
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SEQUESTRATION & SUBSEQUENT REHABILITATION
WHEN DEBTOR
UNABLE TO PAY -1 / MORE OF
CREDITORS MAY
APPLY TO HIGH COURT FOR
SEQUESTRATION
AFTER
SEQUESTRATION, DEBTOR'S PROPERTY
TRANSFERRED TO TRUSTEE
TRUSTEE SELLS
PROPERTY & DIVIDES PROCEEDS
AMONG
CREDITORS
SEQUESTRATION
ORDERS DOES NOT TERMINATE CONTRACTS
CONCLUDED PRIOR TO INSOLVENCY
SOME CONTRACTS
TERMINATED (CONTRACT FOR
MANDATE -
MANDATOR = SEQUESTRATED)
IF CONTRACT NOT
TERMINATED - ANY REMAINING
OBLIGATIONS -
EXTINGUISHED WHEN SEQUESTRATION
LATER TERMINATED BY REHABILITATION
UNLESS AROSE FROM
FRAUD
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