Question

a) Explain what you understand by a credit agreement and why credit agreements remain so vital in commercial transactions. 

b) Giving examples draw distinctions between stop orders and debit orders as negotiable instruments. 

c) Discuss the relevance of insurance law in Namibia. 

d) Refereeing to case law, discuss the doctrine of subrogation. 

e) List any 5 (five) obligations of the lessee in a contract of lease over heavy duty construction machinery. 

Answer 1

a)

Credit Agreements: Credit Agreements are formed when there is parties of the agreement which taken credit from other party and the party is legally bound to pay the money.

it is made between the borrower and Lender.

when any person taken loan from one party then that will be bound to make payments to other party from the first party take loan.

thus credit agreement is formed to keep record, parties involved, payment detials, if payments are not made then what assets t o be ceased and penalty be imposed.

Now the question is that wheather it is important and vital in commercial transactions.

the answer is yes. because commercial transactions means involvement of two parties for goods or services. thus when business do credit sales and credit purchases then there will agreement is formed for future referenece.

b)

examples that distiction between stop orders and debit orders as negotiable instruments are as follows:

negotiable instruments are those instruments which are easily transferable. for example; Cheques, bills of exchange.

c) Relevance of Insurance law in Namibia:

d)

Subrogation means insurer when not paid any payment of insurance then third party will be liable for payment which person will be assigned by Insurer.

in Petrofina(UK) ltd. VS Magnaload ltd. the examples of this situation is contractor and sub contractor.

claiments were main contractors building in oil refinery. They Insured property. the policy defined the policy as contractors and sub contractors.the works of negligence of a sub contractor, the insurersa settled the claim and then sought to exercise their subrogation right against right of subrogation against subrogation.

e)

Leasing is an contractual agreement where lessor is the owner of the equipment, give right to use the equipment to lessee.  

Obligation by Lessee:

1. discloure of equipment in the books of lessee.

2. A lessee is bound to pay Rent on the lease asset. payments should be timely basis and on due date basis.

3. A lessee is legally bound to maintain the asset as it was leased from lessor. means should in same position.

4. the lessee is bound to put the lessor in the possession of the property on the determination of the lease.

5. even if lessee is doing any sub lease then also lessee will be liable for all the liabilities of the lease.

6. in any case property is damaged then lease will be void at the option of the lessee.