CLA2601
Assignment 2
Semester 1 |
Due 16 April
2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
CLA2601 Assignment 2 Semester 1 | Due 16
April 2025 Course
Commercial Law IIA (CLA2601)
Institution
University Of South Africa (Unisa)
Book
General Principles of Commercial Law
CLA2601 Assignment 2 Semester 1 | Due 16 April 2025. All questions
answered.
Question 1 Lesego and Phumudzo are the trustees of the Build Your Own
Home Trust, which carries on its business in the construction industry. Even
though the trust deed of Build Your Own Home Trust does not explicitly
authorise the trustee/s to purchase a back actor to excavate and prepare
building sites for construction, Lesego and Phumudzo purchase a back actor
for the Trust. Considering the requirement that trustees must preserve trust
assets, discuss whether Lesego and Phumudzo have acted lawfully. 5 marks
1. Duty to Act Within Powers Granted by the Trust Deed
Trustees must strictly adhere to the powers and authority conferred on them by the trust
deed.
If the trust deed is silent on a particular action (like purchasing equipment), the trustees
may not exceed their powers, unless the action is necessary for the administration or
benefit of the trust.
2. Fiduciary Duty and Duty to Preserve Trust Assets
Trustees have a fiduciary duty to act in the best interests of the beneficiaries and to
preserve and grow trust assets.
If the purchase of the back actor is necessary for the trust’s construction business, and
it contributes to generating income or reduces operational costs, it may be seen as acting
prudently and in line with their fiduciary duty.
3. The Common Law and Trustee Discretion
Assignment 2
Semester 1 |
Due 16 April
2025
NO PLAGIARISM
[Pick the date]
[Type the company name]
, Exam (elaborations)
CLA2601 Assignment 2 Semester 1 | Due 16
April 2025 Course
Commercial Law IIA (CLA2601)
Institution
University Of South Africa (Unisa)
Book
General Principles of Commercial Law
CLA2601 Assignment 2 Semester 1 | Due 16 April 2025. All questions
answered.
Question 1 Lesego and Phumudzo are the trustees of the Build Your Own
Home Trust, which carries on its business in the construction industry. Even
though the trust deed of Build Your Own Home Trust does not explicitly
authorise the trustee/s to purchase a back actor to excavate and prepare
building sites for construction, Lesego and Phumudzo purchase a back actor
for the Trust. Considering the requirement that trustees must preserve trust
assets, discuss whether Lesego and Phumudzo have acted lawfully. 5 marks
1. Duty to Act Within Powers Granted by the Trust Deed
Trustees must strictly adhere to the powers and authority conferred on them by the trust
deed.
If the trust deed is silent on a particular action (like purchasing equipment), the trustees
may not exceed their powers, unless the action is necessary for the administration or
benefit of the trust.
2. Fiduciary Duty and Duty to Preserve Trust Assets
Trustees have a fiduciary duty to act in the best interests of the beneficiaries and to
preserve and grow trust assets.
If the purchase of the back actor is necessary for the trust’s construction business, and
it contributes to generating income or reduces operational costs, it may be seen as acting
prudently and in line with their fiduciary duty.
3. The Common Law and Trustee Discretion
