Waiver of legal exceptions

This is a continuation from last week’s article on sureties.

You may be aware of those dreaded Latin clauses in security agreements, which are regularly waived by the sureties or guarantors.

There are various clauses that are waived in surety agreements. In most cases, for suretyship and acknowledgements, clients are asked by bankers and financial institutions or, in the ordinary course of entering into an agreement, to renounce the legal exceptions non numeratae pecuniae, non-causa debiti, errore calculi, revision of accounts and no value received.

The tendency for most people is just to go to the dotted lines without applying their minds to the import of what they are renouncing in the first place. What you are doing is actually renouncing the legal protection accorded by those legal exceptions.

What do those exceptions mean?

This a complex area of law, but I will endeavour to simplify the meaning and legal effect of those exceptions and benefits. Once you renounce the benefits, a financial institution or a creditor is entitled, in terms of the law, to recover the full debt from the person who renounced these benefits. This also applies where there is a debtor and a surety and/or joint debtors.

Beneficium ordinis seu excussionis et divisionis

This means the creditor must first proceed against the principal debtor and once it has exhausted its remedies against the principal debtor, it can look to the surety for payment. The effect of waiving this benefit is that it entitles a creditor to claim payment from the surety without first exhausting the legal remedies against the principal debtor. The surety cannot insist that he or she is liable for more than his or her pro rata share of the debt.

Beneficium de duobus vel pluribus reis debendi:

This is a legal exception that is applicable in cases where there are two or more principal debtors who are liable jointly but not several times, meaning, each one is liable only for his/her share of the debt.

In the event of the creditor claiming the full amount of the debt from one of the debtors, the debtor from whom the full amount is claimed can provide himself of this benefit, thereby avoid having to pay more than his share of the debt.

The effect of waiving this benefit by a co-debtor or surety is that it entitles the creditor to recover the full debt from such a co-debtor’s surety, without first requiring payment from the other debtor or the principal debtor.

Exceptio non causa debiti

The “exceptio non causa debiti” is a legal exception at the instance of a debtor, where they can argue that there is no just cause for the debt as the principal obligation does not exist.

I once handled a case for a client who was tricked into signing an acknowledgment of debt yet there was no debt.

The purported beneficiary of the debt decided to sue my client for the alleged debt. We managed to take this point, and we were successful in the prosecution of the defence.

However, it must be noted that, in terms of the law, this exception does not prevent the debtor from denying the existence of the principal obligation, but serves to shift the burden of proof. The purpose of renouncing exception is to place the onus of proving the absence of a cause of debt on the debtor.

Exceptio errore calculi

“Errore calculi” is a Latin phrase that means error in calculation. The exceptio errore calculi is a defence that can be taken by a debtor relating to errors of calculation. The defence entitles the debtor to a revision of accounts. The exceptio errore calculi protects a debtor’s right to insist on the re-examination of accounts. A debtor can validly argue that the amount claimed has been incorrectly calculated.

Exceptio non numeratae pecuniae

The exceptio non numeratae pecuniae is a defence by a debtor that money has not been paid to him. The exception places the onus on the debtor to prove that money has not been paid to him and is not tantamount to an acknowledgement of debt. Consequently, the effect of the defence is that the obligation is not owing.

The position of the law, however, is that the renunciation of a legal exception will not preclude such exception from being raised as a defence to anyone in the event that a dispute arises or legal proceedings are instituted.

In the event, however, that an exception has been raised as a defence by any party after waiving such exception, then the onus of proving that such exception and the relevant facts relating thereto will lie with that party.

LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.

Arthur Marara is a practising attorney, author, human capital trainer, business speaker, thought leader, law lecturer, consultant, legal proctor (University of Zimbabwe), notary public and conveyancer. He is passionate about promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected]