FACULTY OF LAW

MODULE LEARNING GUIDE

YEAR: 2024

Instruments of Payment
(Module Code: LIP 311E)

Lead Lecturer:
Dr Simphiwe S Bidie

Time-on-Task Lecturer
Mr S Madala

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FACULTY OF LAW

YEAR: 2024

Module Title: Instruments of Payment

Module Code: LIP 311E

Module Credit Value: 8 Credits

National Qualifications Framework (NQF) Level: 7

Name of Lecturer: Dr Simphiwe S Bidie

Mr S Madala

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Table of Contents:

Cover Page 1
Table of Contents 3

PART A: ORGANISATIONAL COMPONENT 4

1. Welcome statement 4
2. Contact Details 4-5
3 Consultation Times 5
4 Overview of the module 5
4.1 Rationale for the module 5
4.2 Purpose of the module 5

PART B: LEARNING COMPONENT

5. Learning Outcomes and Associated Assessment Criteria 5-8

6. Outline of module content 8-13
7. Teaching-Learning Methods 13
8. Assessment Methods 14
9. Time allocation 14-15
10. Roles and responsibilities of the Learner 15-18
11. Roles and responsibilities of the Lecturer 18
12. Assessment information
12.1 Assessment timetable 18
13 Learner Support 19
13.1 Review Questions 19-21
13.2 Reading Materials 21

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 Part A: ORGANISATIONAL COMPONENT
1. WELCOME STATEMENT
A warm and hearty welcome is hereby extended to all students of the Instruments of Payment
class of 2024. The module is concerned with the modern forms of payment and will cover
related areas such as debit card transactions, stop orders, credit card transaction,
documentary letter of credit, online banking and Electronic fund transfer, Banker-Customer
Relationship and Unjust enrichment.

Importantly, owing to the current digital revolution occasioned by the invention of new forms of
payment and the impetus of Coronavirus (COVID -19) experienced throughout the globe from
2020, new methods of payments such as cryptocurrencies are increasingly gaining traction.
Therefore, this module will also cover such contemporary digital instruments of payments
such as block chains technology, Central Bank Digital Currencies and cryptocurrencis.

Historically, such instruments were predominantly negotiable instruments (bills of exchange,

promissory notes and cheques) governed by the Bills of Exchange Act Act 34 of 1964. In
recent decades, particularly with the advent of electronic banking, they were supplanted and
yet not superseded, by diverse instruments, covered by new statutes, common law principles,
codes of banking conduct, such as credit, debit, internet banking, Electronic funds transfer
and mobile payments. The course dwell much on modern forms of payment because in terms
of the modern economies, the use of paper money or cash is decreasing in favour of other
forms of payment such as stop orders, debit orders, credit transfer and credit card. Many of
these forms are paperless in that they are done solely by debiting and crediting various
accounts.

The course introduces you to the exciting modern economy in which there are various ways in
which one may pay for something. A brief historical introduction will be given on forms of
payment that are still paper based such as Bills of exchange and promissory note. In this
module, you are introduced to commercial paper forms of payment and in detail to paperless
forms of modern payment dealing with cards and new technology. Additionally, you will be
introduced to the bank customer relationship that governs the relationship between the
holders of the instrument and the liabilities of the parties.

The objectives of the course in Mercantile Law are designed to improve not just your

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substantive and procedural knowledge of the law but your legal skills in certain specific areas:
• a general enhancement of your ability to apply basic logic to factual situations - the
analysis of the facts, inferential reasoning etc;
• an ability to identify evidential issues in factual situations;
• an ability to relate those evidential issues to broader, theoretical concerns - in
particular those involving human rights and the trial; and
• development of advocacy skills.

The course is heavily (though not exclusively) statutory. To a large extent, it is on the
interaction among statutes, common law, practices and policies. A central theme is the
adaptation of an old body of law to accommodate needs arising in modern commercial
settings culminating in electronic banking.

From a teaching and learning perspective, this module affords students the chance to develop
their potential through participation in class discussions, online discussions, class-based and
online formative and summative assessments. Active participation in the module (measured
through class-based and online engagement) may be rewarded in ways other than through
inclusion in the calculation of semester (DP) marks. In the majority of instances, deliberate
efforts will be made to ensure that the teaching methodology is as interactive and reflective as
possible.

2. CONTACT DETAILS

Designation Name Phone Email Office

Lecturer Dr SS Bidie 7523 sbidie@ufh.ac.za 6th Floor, Office 629
Gasson Centre Building
Faculty Ms K. Mkiva 7521 amkiva@ufh.ac.za 6th Floor, Office 613
Manager Gasson Centre Building

3. CONSULTATION TIMES:
Students can consult with the lecturer:

To be advised.

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4. OVERVIEW OF THE MODULE
4.1. Rationale for the module:

After successful completion of this module, a student will be able to identify and
understand and apply principles and terms, identify problems and formulate
solutions regarding:
• General principles of the law governing Instruments of Payment.
• Validity requirements which must be adhered to before a document will be
valid as a negotiable instrument.
• Different processes such as negotiation and acceptance.
• Different instruments of payment such as the bill of exchange, debit and
credit cards, emerging forms of payment such as cryptocurrencies; and
• Online banking and Electronic funds transfers (EFT’s).

4.2 Purpose of the module

This module is meant for learners studying towards the Bachelor of Laws (LLB)
degree. However, it may also be offered to other prospective participants in
commerce and industry, corporate, public and business functionaries as it will
equip learners with a sound knowledge of the principles and the validity
requirements to which instruments of payment must adhere, different processes
in which instruments of payment may create rights and duties.

The course augments the commercial and business law course offerings,
provides an introduction to the specialised field of banking law, and is particularly
relevant to those intending to work in these areas. It further develops skills in
doctrinal analysis and statutory interpretation.

PART B: LEARNING COMPONENT

5.1 Learning Outcomes

• Demonstrate knowledge of the principles of law that seek to regulate and

promote the use of payment instruments in South Africa.
• Critically be able to evaluate the principles relating to the bank and
customer relationship.
• Differentiate between various payment instruments and their essential
elements.
• Identify the rights, duties, obligations and liabilities of parties to various
payment instruments.
• Demonstrate a sound knowledge of the historic and economic foundations
of and justifications for banking law policy and practice.
• Assess and recognise the risk of fraud in financial transactions.
• Demonstrate a sound knowledge, as well as the ability to analyse and
interpret legislation relevant to the law of payment instruments.

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 • Demonstrate a sound knowledge of the structures and institutions relevant
to the law of payment instruments.
• Demonstrate an ability and willingness to contribute to the attainment of
group learning goals.
• Students demonstrate the ability to communicate effectively, using
language skills in both oral and written modes.
• Demonstrate the ability to find, analyse, organize and evaluate information
relating to the law of payment instruments.
• Demonstrate the ability to organize and manage themselves responsibly
and effectively.
• Demonstrate the ability to competently provide legal guidance in respect
of the liability of the parties in relation to each instrument of payment.

ASSESSMENT CRITERIA

The student will be competent if the student is able to:

• analyse the legal nature of bank and customer relationship in South Africa
and other jurisdictions.
• apply the principles relating to the bank and customer relationship to areas
of law such as banking confidentiality and the attachment of current
accounts.
• propose a theoretical basis for the classification of negotiable instruments.
• Apply the principles of the law of negotiable instruments in conformity with
the general principles of South African private law, in particular the law of
contract and delict.
• Apply the general principles of the law of unjust enrichment in banking
law.
• Apply the principles of estoppel in the bank and customer relationship.
• Apply the general principles regarding payment and the law of contract to
credit card transactions.
• Analyse the structure and legal nature of credit transfers.
• Discuss money as a legal concept and describe the nature of banking law.
• Explain basic concepts relating to negotiable instruments and be able to
propose a theoretical basis for the classification of negotiable instruments.
• Identify and discuss the formal requirements for a bill of exchange and can
determine whether a document is lacking in any of the formal
requirements.
• Analyse the concepts – delivery, signature, causa, negotiation, holder and
holder in due course.
• Apply the principles of banking law in conformity with the general
principles of South African private law.

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 • Analyse the legal nature of the bank and customer relationship and apply
the principles relating to the bank and customer relationship to areas of
law such as forgery of the drawer’s signature and bank secrecy.
• Discuss and apply the principles regarding the potential delictual liability of
banks in relation to payment instruments.

6. Outline of module content/syllabus

Origin and sources

• Introduction
• The origin of negotiable instruments
• Sources of South African law of negotiable instruments

Prescribed Reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa 2ed (2013) LexisNexis
• Malan on Bills of Exchange, Cheques and Promissory Notes Chapter 2

Outcomes:
• Identify the origin and sources of negotiable instruments.
Basic concepts, definitions and parties
• Characteristics of negotiable instruments
• Instruments payable to order or to bearer
• Parties to negotiable instruments
• Cambial agreement/obligations

Prescribed Reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa

Overview of the bank-customer relationship

Sources of banking law and introduction to the Banks Act 94 of 1990

Outcomes:

• Explain the legal basis of the bank-customer relationship in South African

law.
• List and discuss the sources of South African law and the relevant
provisions of the South African Banks Act 94 of 1990.

Prescribed reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa

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 • Transitional Local Council of Randfontein v ABSA Bank Ltd [2000] 2 All
SA 134 (W)
• Tournier v. National Provincial & Union Bank of England [1924] 1 K. B.
461

Debit Cards

Outcomes:
• Explain debit card transactions as a method of payment; and
• Identify the rights and duties of parties to debit card transactions.

Stop Orders

Prescribed reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa
• Cambanis Buildings (Pty) Ltd v Gal 1983 (2) SA 128 (NC)

Outcomes:
• Explain the operation of debit orders as a method of payment.
• Identify the rights and duties of parties to debit order transactions.
• Explain stop orders as a method of payment.
• Identify the rights and duties of parties to stop order transactions.

Credit Cards

Prescribed Reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa
• Re Charge Card Services 1988 3 All ER 702 [CA]
• Diners Club SA (Pty) Ltd v Singh 2004 3 SA 630 [D]
• Cornelius "The Legal Nature of Payment by Credit Card" 2003 15 SA
Merc LJ 153
• Schulze "Of Credit Cards, Unauthorized Withdrawals and Fraudulent
Credit-Card Users" 2005 17 SA Merc LJ 202
• Van der Bijl "The cloning of credit cards: The dolly of the electronic era"
Stell LR 2007(2) 331
• Trevor Budhram, “Lost, stolen or skimmed-overcoming credit card fraud in
SA” SA Crime Quarterly no 40 June 2012

Outcomes:
• Explain the operation of the tripartite relationship in respect of credit cards;
and
• Identify the various parties to tripartite credit card agreements and discuss
their relationship to one another.

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Online banking, virtual money, cryptocurrencis and Electronic Fund
Transfers

• Emerging instruments of payment: Cryptocurrencies, blockchain

technology and Central Back digital currencies

Prescribed reading:
• On cryptocurrencies journal articles will be supplied on blackboard.
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa
• Nedbank Ltd v Pestana 2009 (2) SA 189 (SCA)
• Take and Save Trading CC and Others v Standard Bank of SA Ltd 2004
(4) SA 1 (SCA)
• Nissan South Africa (Pty) Ltd v Marnitz NO and Others 2005 (1) SA 441
(SCA)
• Schulze "Countermanding an Electronic Funds Transfer: The SCA takes a
second bite at the cherry" 2004 16 SA Merc LJ 667
• Mthembu "Electronic Funds Transfer: Exploring the Difficulties of Security"
Journal of International Commercial Law and Technology Vol. 5, Issue 4
(2010) 201
• Lawack-Davids & Marx "Consumer Protection Measures for erroneous or
unauthorized internet payments: Some Lessons from the EU?" Obiter
(2010) 446
• Schulze "Electronic Fund Transfers and the Bank’s Right to Reverse a
Credit Transfer: One Small Step for Banking Law, One Huge Leap for
Banks" (2007) 19 SA Merc LJ 379–387
• Schulze "Electronic Fund Transfers and the Bank’s Right to Reverse a
Credit Transfer: One Big Step (Backwards) for Banking Law, One Huge
Leap (Forward) for Potential Fraud: Pestana v
Nedbank (Act One, Scene Two)" (2008) 20 SA Merc LJ 290–297

Outcomes:
• Explain fully electronic fund transfers as a method of payment.
• Identify and discuss the rights and duties of parties to electronic fund
transfer transactions.
• Demonstrate knowledge and understanding of the characteristics, use and
legal consequences of online banking.
• Comprehensively explain the liabilities of the different parties involved in
online banking.
• Discuss the suspension of the creditor’s remedies in case of electronic
payments.

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Documentary letters of credit

Prescribed reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa
• Ex Parte Sapan Trading (Pty) Ltd 1995 (1) SA 218 (W).
• Transcontinental Procurement Services CC v ZVL & ZKL International AS
2000 CLR 67 (W).
• Phillips & another v Standard Bank of South Africa Ltd & others 1985 (3)
SA 301 (W).
• Loomcraft Fabrics CC v Nedbank Ltd and another 1996 (1) SA 821 (A).

Outcomes:
• Explain fully the operation of documentary letters of credit.

Unjust enrichment

Prescribed reading:
• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa
• Wille’s Principles of South African law Chapter 39.
• First National Bank of Southern Africa Ltd v Perry NO and Others 2001 (3)
SA 960 (SCA).
• J du Plessis, Toward a rational structure of liability for unjustified
Enrichment: thoughts from two mixed jurisdictions, (2005) 122 SALJ.
• JC Sonnekus, Unjustified enrichment in South African Law, LexisNexis
2008

7. Teaching–Learning Methods

Expository lectures, class participation and take-home assignments.

The Blackboard LMS programme will be used as a critical part of the teaching
and assessment methodology for this course. The Teaching and Learning Centre
(TLC) provides students each year with an induction and training workshop into
Blackboard in the first contact sessions begin.

8. Assessment Methods:

• COMPULSORY – test 25%

• COMPULSORY – Assignment 25%
• EXAMINATION – Exam 50%

9. Time allocation

Work in progress.

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10. Roles and responsibilities of the learner – Assessment-related
prescriptions

10.1 Due Performance Requirements (Faculty Rule L.8)

The following requirements MUST be satisfied in order for a student to qualify to

write the examinations in this module.

10.1.1 Class attendance

Class attendance is compulsory for all law modules. Accordingly, attendance

registers shall be circulated in class and must be completed by learners. A
learner’s class attendance record shall be considered for the purposes of
considering condonations of final marks and any other discretionary student
matters.

10.1.2 Attendance at tutorials

75% attendance at tutorials is the minimum required. This is applicable to

modules where tutorials are part of the learning programme.

10.1.3 Participation in tests and assignments

100% participation in mandatory tests and assignments is required by the

University and the Faculty.

10.2 Requirement of an examination entrance (due performance) sub-

minimum (General Rule 5.9)

A student shall not be eligible to write the degree or supplementary examination

in any module for which s/he is properly registered unless s/he has obtained a
minimum semester (DP) mark of 40% in the module. For the avoidance of doubt,
this rule shall not apply to a student who is registered for a module under
General Rule 7 or under any other institutional rule that exempts her/him from the
requirement of a semester (DP) mark.

10.3 Requirement of an examination sub-minimum (General Rule 5.10)

Notwithstanding the provisions of General Rule 5.8, a student shall only be

credited with a pass in a module if s/he obtained a minimum of 40 percent in the
degree or supplementary examination.

A student who has been unsuccessful in obtaining the examination sub-minimum

mark of 40 in the degree examination shall be entitled to a second chance at
obtaining the said sub-minimum mark (through the supplementary examination)
provided s/he obtained a minimum final mark of 45.

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10.4 Plagiarism Alert

Learners must be aware that plagiarism is an academic offence prohibited in

terms of the UFH Plagiarism Policy 2009. With regard to what constitutes
plagiarism, etc, see the following extract from the said policy.

Definitions

Plagiarism, in an academic, university context, may be defined as taking and

using the ideas, writings, works or inventions of another, from any textual or
internet-based source, as if they were one’s own.

This definition covers the following aspects:

• Using the direct words of another without using quotation marks (even if
the passage is referenced).
• The unacknowledged copying of a sentence or two of text; copying more
extensive blocks of text.
• The syndication of a single piece of work by more than one student
(unless the assignment task is a legitimate group assignment).
• The borrowing and using of another person’s assignment (with or without
their knowledge and permission).
• Stealing an entire essay from another person or from the Internet; or
infringing copyright.

For the purposes of this policy, the intention, negligence or innocence of a

person is not relevant to the finding as to whether plagiarism, as a fact, has
occurred. However, the state of mind of the person will be highly significant in
determining how to deal with the case as far as taking remedial action or
imposing a penalty is concerned.

Students should note that their assignment may be submitted to an electronic

plagiarism detection software programme now available to the Faculty.

10.5 Faculty Referencing Style

When preparing and in submitting assignments which require students to

acknowledge their authorities and sources in footnotes, the Faculty requires that
ALL students use the house style of Speculum Juris (the law journal published
by the UFH Faculty of Law). For this purpose, students should, therefore,
familiarise themselves with the Speculum Juris Law Journal Style Guide
available online at www.speculumjuris.co.za. Hard copies of Speculum Juris are
also available in the Library.

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10.6 Consequences of cheating/fraud

Students should carefully note that the Dean of Law will not provide a testimonial
in respect of any law student who is convicted of cribbing, plagiarism or any other
form of cheating/dishonest conduct in a test/examination or on an assignment or
any assessment exercise. Without a testimonial from the Dean, a law graduate
will not (a) be admitted as an attorney; or (b) be allowed to register for articles of
clerkship – which is necessary in order to qualify for admission as an Attorney.
Also, a law graduate who is not in possession of a testimonial issued by the
Dean may not (a) be admitted as an advocate; or (b) be accepted for pupilage
training – which is necessary for admission to the bar (of advocates).

10.7 Roles and responsibilities of the Learner - General

1. Class participation and meaningful contribution to the attainment of group

learning goals.
2. Write take home assignments which are both well structured and well written.
3. Participate in student evaluation of the lecturers.
4. Meet deadlines for submitting work.
5. Adhere to given guidelines.

11. Roles and responsibilities of the Lecturer

It is the responsibility of the lecturers to:

• Design and specify the number and type of assessment tasks and their
weightings.
• Prepare and distribute the module learning guide in a timely fashion.
• Ensure the signing of the compulsory attendance register by learners.
• Maintain and collate records of class attendance; and
• Provide feedback on each of the given assignments.

12. Assessment Information

12.1 Assessment Timetable

Nature of assessment Description Value

Test Test: Covering the work done 25%

up to date.
Assignment Essay on an appropriate case 25%
law or topic to be prescribed
by the lecturer.
The percentage that each
assessment will contribute towards

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the final mark will be discussed in
class by the lecturer accordingly
Test 1 + Assignment 50%
Examination FINAL MARK 50%

13. MODULE MATERIAL

13. 1 INSTRUMENTS OF PAYMENT 311 E

Students can access module information, module material such as cases and
legislation as well as assessment information from Blackboard. Additional
material (cases, articles, lecture slides, etc.) may be posted by the lecturer as
well.

13.2 RECOMMENDED TEXTBOOK

The recommended textbook for this module are:

• HC Schoeman et al An Introduction to Banking and Credit Law in South
Africa 2ed (2013) LexisNexis
• Malan, FR & Pretorius, JT (2009) Malan on Bills of Exchange, Cheques
and Promissory Notes 5th ed. LexisNexis and;
• Buys R. (ed), Cyberlaw @ SA II – The Law of the Internet in South Africa,
2nd ed, Van Schaik Publishers, 2004,

Students should acquaint themselves with the prescribed textbooks from an early
outset. The prescribed textbook is an excellent text on the general field of the law
of Payment Instruments in South Africa and will greatly enhance students’
understanding of the subject.

83 PRESCRIBED LEGISLATION

The principal statutes that will be analysed in this module are the Bills of
Exchange Act 34 of 1964 (available in Malan) and Electronic
Communications and Transactions Act 25 of 2002. During the course of
lectures, mention may also be made of other relevant statutes such as the Banks
Act 94 of 1990, South African Reserve Bank Act 90 of 1989, the Prevention of
Organised Crime Act 121 of 1998, the Financial Intelligence Centre Act 38 of
2001, the Financial Advisory and Intermediary Services Act 37 of 2002, the
National Credit Act 34 of 2005, the Companies Act 71 of 2008 and the Consumer
Protection Act 68 of 2008.

84 PRESCRIBED CASE LAW

Details of cases may be found in the module outline below and will sometimes be
prescribed in lectures. Prescribed cases (both local and foreign) must be studied

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in detail. It is recommended that students acquire and bring the relevant case(s)
along to lectures.

85 RECOMMENDED ADDITIONAL READING / REFERENCE MATERIALS

The lecturer may from time to time, refer to additional reading or reference
materials. While such material is not prescribed, it is highly recommended that
any student who wishes to deepen his knowledge and understanding of the Law
of Payment Instruments consult these materials. It is also highly recommended to
make use of these materials when preparing for the tests and exam. These
additional materials include, but are not limited to, the following:

Textbooks:

• HC Schoeman et al An Introduction to Banking and Credit Law in South

Africa 2ed (2013) LexisNexis
• Nagel, CJ et al Commercial Law 4th ed (2011). LexisNexis; Chapter 30, 31
& 32
• Nagel, CJ et al Commercial Law 4th ed (2011). LexisNexis; Chapter 21 &
22
• Gibson, JTR South African Mercantile and Company Law 8th ed (2003).
Juta & Co.
• Collier-Reed, Lehmann, Basic Principles of Business Law 2nd edition
(2010) LexisNexis Chapter 15
• R Sharrock, Business Transaction law 8th Edition (2013) Juta, chapter 25

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