Q&A – 13 December 2010
Everything on demand
I have entered into a loan agreement with a bank whereby everything the bank wants is on demand. Money due shall be paid on demand, interest on demand and additional security, if required, on demand. This sounds like a life sentence to me. How should I go around this?
GJ, Dar
From the tone in your question, it seems you signed the loan documentation and then started reading the documents. In the many years that we have practiced, we have noted that this is what most of the borrowers do- get the money from the bank and then start reading the documentation when there is a default or any other problem!
Covenants to pay in bank security documents are usually to pay on demand. This has the advantage for the bank that time does not start running under the Limitations Act until demand is made. Quite obviously a valid demand can only be made in respect of moneys which are due. This does not mean that a term loan becomes a demand loan. The normal covenant that we have come across requires payment on demand of all moneys obligations and liabilities when the same shall become due. If that is the clause that is causing you this irritation then it is a very standard clause.
We must point out that the on demand clause to provide additional security is very strange. We would have to read the entire document to understand how it is to be construed. From reading it in isolation, it is a very strict condition and does indeed sound like a life sentence. Since we haven’t seen the entire document, we advise you to contact your attorneys to guide you further.
Will in safe overseas
I made a Will in Tanzania three years ago and deposited it in a bank vault in London for safekeeping. I am nearly 80 and don’t expect to live very long. I wish to change my Will and sent a letter to the bank in London that now wants me to be physically present to receive the envelope with the Will copy. I am very weak and cannot travel such distances any longer. The bank does not seem to be able to understand this. What should I do as I desperately need to change my Will? What happens if there are two Wills?
FF, Dar
Before we answer your question we wonder why the bank in the UK is not releasing the Will. Perhaps they are unaware that the envelope contains a Will. We wonder what would have happened to the envelope in case you had passed away. Should the bank have acted like that when you were gone, it would have been pointless for you to have made a Will, as no one would have been able to access it. We suggest that you deposit the Will in a Will Bank and inform the executor of the deposit being made there.
Your question is very simple- in order to make a new Will, you do not need to have the current Will. The new Will will automatically revoke any older Will. Hence unless there are other reasons that you have not disclosed to us, there is no point in requesting the bank to send you the current Will. Proceed and draft a new Will and make sure that it is kept in a place where the executor has access to it.
In the event there are two Wills, and both are genuine, the Will that was made at the latest date prevails as it revokes the older Will.
Tenancy in common vs Joint tenancy
My wife and I have lived all our lives in a National Housing Corporation flat. We have now finally bought a house and have been given the choice of either owning it as joint tenants or as tenants in common. What is the main difference and what do you recommend us to do?
MM, Tabora
The joint tenancy and tenancy in common are the two types of joint ownership. Under a joint tenancy agreement, the joint owners together own the whole property and do not have a particular share in it. If one of the owners dies the other automatically becomes the sole owner.
This would be the case even if a Will had been made leaving the deceased owner’s ‘share’ to someone other than the co-owner. On
the other hand tenancy in common is the opposite of joint tenancy in that the tenants in common each have a definite share in the property. For example you and your wife could own the property in equal shares. This would be the most appropriate agreement where people want to own a property in separate pre-determined shares. Under tenancy in common if one of the owners dies, his share of the property will pass on to whoever he specifies in a Will, or if a Will is not made, in accordance with the rules of intestacy.
We normally recommend couples that get along well to adopt a joint tenancy as there is perceived to be no advantage in defining separate shares in the property and where it would be the intention that on the first death the property would automatically pass to the surviving spouse.
Supplier changed sample
I am the procurement manager of a school and had come to Dar to buy various equipments for our science labs. One of the items to purchase was a dozen weighing scales whose sample I had seen and approved. The shopkeeper promised to get the items delivered to the school in Lushoto. Ten days later, when the goods came, the weighing scales were totally different from what he had shown me. Is this not an offence?
MN, Lushoto
The Fair Competition Act is very clear in that where in a contract for the supply of goods to a consumer there is a term in the contract, expressed or implied, to the effect that the goods are supplied by reference to a sample there is an implied condition that the bulk will correspond with the sample in quality; there is an implied condition that the consumer will have a reasonable opportunity of comparing the bulk with the sample; and there is an implied condition that the goods will be free from any defect, rendering them unmerchantable, that would not be apparent on reasonable examination of the sample.
You can hence pursue the supplier under this particular provision of the law.