CLA2601
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO. 770920
DUE DATE: 16 APRIL 2025
, CLA2601
Assignment 2 Semester 1 2025
Unique No. 770920
Due Date: 16 April 2025
Commercial Law IIA
Question 1
Lesego and Phumudzo, as trustees of the Build Your Own Home Trust, have a duty to
manage and protect the assets of the trust. One of the key responsibilities of trustees is
to act in the best interests of the trust and its beneficiaries while also preserving its
assets. In this case, they have purchased a back actor (a construction machine) even
though the trust deed does not explicitly state that they are allowed to do so.
To determine whether their actions are lawful, we need to consider the principle that
trustees must act within the powers given to them by the trust deed. If a trust deed does
not give express permission for a certain action, trustees cannot automatically assume
they have the authority to proceed. However, if the purchase of the back actor is
necessary for the efficient running of the trust’s business in construction, then it could
be argued that their decision was in the best interests of the trust.
South African trust law requires trustees to exercise their powers with care and
diligence. If the purchase benefits the trust by improving efficiency and profitability, and
there is no clause in the trust deed specifically prohibiting such purchases, they may be
justified in their decision. However, if the trust deed explicitly limits their powers or
requires them to seek permission before making such purchases, then they may have
acted unlawfully.
A court would likely consider whether their actions were reasonable and whether they
were genuinely acting in the best interests of the trust. If their decision exposes the trust
ASSIGNMENT 2 SEMESTER 1 2025
UNIQUE NO. 770920
DUE DATE: 16 APRIL 2025
, CLA2601
Assignment 2 Semester 1 2025
Unique No. 770920
Due Date: 16 April 2025
Commercial Law IIA
Question 1
Lesego and Phumudzo, as trustees of the Build Your Own Home Trust, have a duty to
manage and protect the assets of the trust. One of the key responsibilities of trustees is
to act in the best interests of the trust and its beneficiaries while also preserving its
assets. In this case, they have purchased a back actor (a construction machine) even
though the trust deed does not explicitly state that they are allowed to do so.
To determine whether their actions are lawful, we need to consider the principle that
trustees must act within the powers given to them by the trust deed. If a trust deed does
not give express permission for a certain action, trustees cannot automatically assume
they have the authority to proceed. However, if the purchase of the back actor is
necessary for the efficient running of the trust’s business in construction, then it could
be argued that their decision was in the best interests of the trust.
South African trust law requires trustees to exercise their powers with care and
diligence. If the purchase benefits the trust by improving efficiency and profitability, and
there is no clause in the trust deed specifically prohibiting such purchases, they may be
justified in their decision. However, if the trust deed explicitly limits their powers or
requires them to seek permission before making such purchases, then they may have
acted unlawfully.
A court would likely consider whether their actions were reasonable and whether they
were genuinely acting in the best interests of the trust. If their decision exposes the trust
