Question 2 [10]

A debtor, Mr A owes R100 000 to creditor Mr B, who is also his uncle. Three months prior to the sequestration of his estate, at a time when he is aware that he is hopelessly insolvent, Mr A agrees with Mr B that Mr B will buy from him goods to the value of R100 000. The goods are delivered to Mr B, however the purchase price is never paid, because the two debts cancel each other out. Mr B therefore benefited at the expense of other creditors in Mr As estate.

You are a lecturer at STADIO and you need to explain the process set out in the example to your students.