Derrick Obama graduated from Richfields, a private college in , Durban with a Bcom degree.

Derrick obtained employment at Dilane properties Ltd, in Pretoria as an assistant Chief Financial

Officer. The existing Chief Financial officer has informed the company that he intends emigrating. On

the 6th of January 2020 he, Derrick commenced employment for the very first time. Since Derrick

Obama was a new recruit, it was compulsory that he attends the company's recruitment and training

conference held at Midrand.

On his way to the training centre Derrick noticed a "For Sale" sign in front of a residential property

with contact details of the Estate agent. He contacted the agent and after viewing the property

decided to purchase the property.

Derrick Obama approached Led Bank for a home loan to finance his property. The condition for his

bond approval was that Derrick Obama obtain a suitable surety since he was employed for only one

month. Derrick approached his father Mr Obama to stand as surety and co-principal debtor for his

indebtedness to Led Bank. Mr B. Obama is a wealthy businessman and has valuable assets as well as

an excellent income. The bank accepted the surety and finalized the loan facility for the immoveable

property.

Derrick Obama paid his first installment at the end of February 2020.In March 2020 Dilane properties

suffered serious financial impediments due to COVID 19. During the subsequent "LOCKDOWN" the

company terminated trading activities, for five months and no salaries were paid to the staff. Derrick

Obama had no income and was unable to service his bond with Led Bank. Derrick approached the legal

department of Led Bank to make arrangements to repay his debt. Led bank requires a written

response from Derrick mitigating his default.

Answer the questions that follow with an intention to build a viable defense for Derrick Obama. A few

legal principles applicable to the response by Derrick is indicated below. In the event you wish to raise

further legal issues you are entitled to discuss them supported by South African legislation and case

law.

Does COVID render the contract illegal? (10 marks)