BUSL6222 LU9
BUSL6222 LU9 – Transfer of
termination and personal rights
Chapter 12 - The passing, varying, and ending of rights and duties by
agreement
12.1 Co-debtors and co-creditors
Sometimes a contract involves more than two people, which means there can be
multiple co-debtors (people who owe) or co-creditors (people who are owed).
Who owes what depends on:
what the parties intended,
the type of contract,
and the type of performance required.
A key issue is whether the performance can be divided:
Divisible performance = can be split (example: 200 sheep sold to two
buyers).
Indivisible performance = cannot be split (example: one car sold to two
buyers -they receive it jointly).
12.2 Simple joint liability and joint and several liability
Simple joint liability:
Used when the performance can be divided.
Each co-debtor pays only their share of the debt.
Example: Rent is R6 000. Deepak and Sarvesh each owe R3 000.
Same idea for co-creditors: if Deepak pays R3 000 rent to Sibu and Zoli,
they each get R1 500 unless agreed otherwise.
If one co-debtor is released, the others are not automatically released.
Joint and several liability (in solidum):
The opposite of simple joint liability.
Each co-debtor can be held liable for the full debt.
The creditor can choose any one of the co-debtors to claim the whole
amount from.
The debtor who pays everything can then claim back the other debtors’
shares from them.
If the creditor releases one co-debtor, the remaining co-debtors’ liability is
reduced proportionately.
1
, BUSL6222 LU9
12.3 Stipulatio Alteri
A stipulatio alteri is a contract where two parties agree that a third party (not
part of the contract) will receive a benefit.
Example:
Andrew contracts with Bantam Insurance.
Bantam Insurance must pay Cathy (Andrew’s spouse) R200 000 when
Andrew dies.
Andrew = stipulans
Bantam Insurance = promittens
Cathy = third-party beneficiary
Even though Cathy wasn’t part of the contract, she can accept the benefit and
then has the legal right to enforce it.
Until Cathy accepts:
Andrew and Bantam Insurance can change the agreement anytime.
Andrew could replace Cathy with someone else, like his brother Deon.
Usually, Andrew gives something in return (like paying monthly premiums), and
Bantam Insurance promises to give the benefit to Cathy.
12.4 The transfer of personal rights
Most contracts create rights and duties.
Example: Nozuko buys a car from Rubens for R100 000 —
Nozuko has the right to get the car
Nozuko also has the duty to pay
Rubens has the right to receive payment
Rubens has the duty to deliver the car
These are obligationary agreements.
A personal right can’t be physically delivered, so the law uses cession -the legal
method of transferring a personal right from one person to another.
The person who has the right = creditor
The person who owes the duty = debtor
Cession is a separate agreement where the creditor transfers their personal right
to a new person.
This agreement is called the transfer agreement.
2
BUSL6222 LU9 – Transfer of
termination and personal rights
Chapter 12 - The passing, varying, and ending of rights and duties by
agreement
12.1 Co-debtors and co-creditors
Sometimes a contract involves more than two people, which means there can be
multiple co-debtors (people who owe) or co-creditors (people who are owed).
Who owes what depends on:
what the parties intended,
the type of contract,
and the type of performance required.
A key issue is whether the performance can be divided:
Divisible performance = can be split (example: 200 sheep sold to two
buyers).
Indivisible performance = cannot be split (example: one car sold to two
buyers -they receive it jointly).
12.2 Simple joint liability and joint and several liability
Simple joint liability:
Used when the performance can be divided.
Each co-debtor pays only their share of the debt.
Example: Rent is R6 000. Deepak and Sarvesh each owe R3 000.
Same idea for co-creditors: if Deepak pays R3 000 rent to Sibu and Zoli,
they each get R1 500 unless agreed otherwise.
If one co-debtor is released, the others are not automatically released.
Joint and several liability (in solidum):
The opposite of simple joint liability.
Each co-debtor can be held liable for the full debt.
The creditor can choose any one of the co-debtors to claim the whole
amount from.
The debtor who pays everything can then claim back the other debtors’
shares from them.
If the creditor releases one co-debtor, the remaining co-debtors’ liability is
reduced proportionately.
1
, BUSL6222 LU9
12.3 Stipulatio Alteri
A stipulatio alteri is a contract where two parties agree that a third party (not
part of the contract) will receive a benefit.
Example:
Andrew contracts with Bantam Insurance.
Bantam Insurance must pay Cathy (Andrew’s spouse) R200 000 when
Andrew dies.
Andrew = stipulans
Bantam Insurance = promittens
Cathy = third-party beneficiary
Even though Cathy wasn’t part of the contract, she can accept the benefit and
then has the legal right to enforce it.
Until Cathy accepts:
Andrew and Bantam Insurance can change the agreement anytime.
Andrew could replace Cathy with someone else, like his brother Deon.
Usually, Andrew gives something in return (like paying monthly premiums), and
Bantam Insurance promises to give the benefit to Cathy.
12.4 The transfer of personal rights
Most contracts create rights and duties.
Example: Nozuko buys a car from Rubens for R100 000 —
Nozuko has the right to get the car
Nozuko also has the duty to pay
Rubens has the right to receive payment
Rubens has the duty to deliver the car
These are obligationary agreements.
A personal right can’t be physically delivered, so the law uses cession -the legal
method of transferring a personal right from one person to another.
The person who has the right = creditor
The person who owes the duty = debtor
Cession is a separate agreement where the creditor transfers their personal right
to a new person.
This agreement is called the transfer agreement.
2
