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Most Student friendly University - Strive to. Legal Method. Financial Management. Human Resource Management. Law of Contract-I. BBA: 4 th. Skip to content Post last modified: 9 July Reading time: 8 mins read. What is Business Law? Download PDF. Sharing is caring More. Leave a Reply Cancel reply Comment. Enter your name or username to comment.

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Share via. It is referred to as the reception date. It was the date on which the extent of application of English Law to Tanganyika was declared by the British Colonial Government by the Tanganyika Order in council of which met at the Court of Buckingham Palace.

The Colonial Government on behalf of his majesty King of England declared 1. The substance of Common Law that which used to be applied by the courts of law in England as shown above 2. Principles of Equity that which was applied by the courts in England as shown above 3. Statutes of General Application. As the laws that would apply to Tanganyika. Tanganyika any Act or law of the United Kingdom, or of any legislature of India, or of any Colony or Protectorate, subject to any exceptions and modifications which may be deemed fitting.

It implies that English laws would, by this declaration, apply to Tanganyika as they were standing by 22nd July and other laws adopted from other countries would apply subject to modification, so that they suit the local environment.

Therefore with minor modifications this Act has, since its application, been the relevant Act directly providing for the matters pertaining to contracts in Tanzania. The substance of this act is the same as that of its counter part, The Indian Contract Act of In law they are called statutes in parimateria. Therefore customary laws apply to Tanganyika subject to such limitations underscored above.

Due to the effects of the imposition and adoption of the English Law to Tanganyika, development of our Law is largely through judicial precedent and codification by the parliament just like in the English Legal System. Law made by the parliament is largely characterized by public opinion rather than customary practices. You will, thus, notice later that all the laws in Tanzania that relate in one way or another to business have a more or less direct relation to the English law and Practices.

Judicial Precedents from English courts will, by and large, be of that inevitable significance to this course. Indian cases might be of some use in the general understanding of some issues especially in contract cases for we share with them common matters in various aspects of contract law and due to the fact that some part of their law has at some point in time been imposed on our legal system.

Therefore this account, in short illustrates the development of the law in Tanzania. That is why you might have seen criminal cases being referred to as R v. Instances of this law are company law, contract law, banking Law, business law etc. Com v. Com, IAA v. You might be wondering why it is said that the law governs relationships between individual persons and a case has its parties as IAA v. You shall encounter a lot of these as you move forward in this course. A simple instance of a wrongful act is breaching a contract.

A person who suffers loss due to a wrongful act of another may open up a civil case before a court of law [after opening that case he will be called a plaintiff] and if he proves to have actually suffered that loss, the person who caused such loss [the defendant] is said to be liable and the court may order him to indemnify the victim.

Upon proving that he has suffered a particular loss, the remedies that may be awarded by the court into which he has filed the case are of two kinds: 1. Common law remedies e. Damages 2. Equitable remedies e. Specific performance or rescission of a contract, Courts injunction This is how the rules of law are being enforced.

In Criminal as well as in Civil Law there is one legal duty known as the burden of Proof [it refers to the duty to prove your claim before a court] is upon the Plaintiff in Civil Matters and in the Prosecution in Criminal matters.

In more precise terms other laws of the land must not contravene the provisions of the constitution, if they do the constitution will prevail and the other law will be declared null and void [treated as no law].

The process is that, the government must show an intention to have a particular law in place bringing a bill to the parliament for the proposed law on which the parliament will debate and decide if it is a suitable law. The response of the interested parties would be sought before passing the law. To become the law the president must assent to it and the same must be advertised in the gazette. Delegated Legislation Though the supreme law making body of the country is the parliament, it usually delegates [assigns], its power to make the law through the laws it has made to specific authorities in charge of that law.

This authority to which power to make law is delegated by the parliament will make a valid and enforceable law only when it does not exceed the powers granted to it. The laws made by delegated power are known as by-laws, regulations and circulars. Customary and Islamic Laws You already know what are customary laws, these together with the Islamic laws, apply subject to the limitation that they should not infringe the general law of the land.

Remember s. English Law subject to Reception Clauses, 22nd July vi. Case Laws and Precedents, decided by the higher Courts of the land i. However to consolidate your understanding, the courts in Tanzania use the principles established in the already decided cases to future cases whose facts are materially the same as of those cases. Think of when you go for shopping in a supermarket, or when you drive, sign an employment contract etc.

The world of business is full of such terms as Partnerships, companies, contracts, accounts, auditing and many other related terms to mention a few.

All of these need to be legally valid and therefore enforceable so that they be of value to the general goodwill of the particular business. The law is important to any business because it governs its various aspects such as: i. Its establishment ii. Mode of running it iii. The mode of winding up etc. Any person involved in operation of business needs to content himself with the range of rights, powers, privileges and responsibilities of the owners, managers and employees.

Without clear knowledge of the law the business establishments would repeatedly suffer loss, if any profitable business ventures its owners undertake was done without abiding to legal requirements set for it and at the end of the day the undertaking was nullified. B and Soulsby J. N Contracts do touch on every aspect of human life i. Just to refresh your mind and be specific to this topic the sources of contract law in Tanzania are: Customary laws: will apply to customary contracts, Legislation: the principle legislation that provides for the general principles of contract law in Tanzania is the Law of Contract Ordinance, Cap or as renamed in the revised laws as the Law of Contract Act, Cap of Case laws: cases that have been decided by the Supreme Courts of Tanzania; the High Court and the Court of Appeal and which have established various principles on contract law are also sources of contract law.

Nditti, an expert in contract law of East Africa has this to say about the application of English common laws to Tanzania. The word contract refers to an agreement which can be enforced by law between one person and another.

Pg See also Banana R. A contract needs to be binding to be legally useful and it can not be binding unless it is enforceable. Consider the following examples: Juma promised to take her girl friend to some zoo on every weekend, but he usually refuses at the on set of the weekend. Can she enforce this agreement? Or A wife confides to her husband that if he promises to love her whole heartedly he would buy him a car.

Can he enforce this agreement? Are these two agreements contracts? All of these are agreements but they are not contracts because they are lacking in one important feature which goes to the substance of the whole nature of all contracts which is: they are incapable of being enforced. Enforceability bindingness of an agreement, therefore, is the condition precedent before the same can be established as a valid contract.

In the formation of a contract the law provides for a minimum number of prerequisites or some times are referred to as essentials of a contract, before an agreement can be a contract. According to s. A person for instance may not be competent to contract if he falls under one of the following groups: is of under the age of the majority age. Since agreement is the beginning point in the making of a contract, the validity of the latter will depend largely on the preciseness of the former.

An agreement is therefore one of the fundamentals of a valid contract. The proposal usually contains of a number of terms, which would either take an oral or written form depending on the nature of a particular contract. Some contracts must be made in writing only e. Bills of exchange, insurance contracts, hire purchase contracts etc. Instances of a proposal 1.

We will use these examples later. On the basis of the terms of the proposal made a The terms must be certain It means the terms making the proposal must be self explanatory; they should not leave a question to the offeree , the person to whom the offer is made. This person must understand correctly the content of the offer and such things as: 1. Is the offer for selling or purchasing? What is the item, subject to that sale? What is the price?

The terms are clear and certain if the parties will be in a position to be able to say exactly upon what is their agreement founded. Do the examples of the proposals given above meet these tests? Answer Every proposal must contain terms which are certain e. In example number one the terms that are contained therein are: Selling a plot only and there is no any other term.

Is there certainty to this proposal? No it is not certain since B would not know how much is the plot sold. In example number two, the terms are: 1. The price is mentioned at Tshs. This is a certain offer since it defines in precise terms what C is willing to do; it also mentions the price for the same. Price in a contract of sale was held to be a fundamental term and non disclosure of which renders the agreement uncertain.

However, if a contract is in writing, its content can only be varied changed in writing and there must be a separate agreement whose function is to change that contract. This agreement must be supported by consideration. These words are the decision of Lugakingira J. By making and signifying the terms of the proposal A and C in our examples above have shown that they are willing to be bound by their own terms that they have made to which they expected B and D would assent to.

We will have a deeper discussion on terms of contract later in this work. This request for information does not amount to an offer. The following case illustrates this point. This means Harvey just sought to know whether or not Facey would be willing to sell the property. Reply by Facey: Telegram number 2. The court held that: There was no contract because of two reasons; i. Telegram number two was not an offer but rather a mere supply of information; it merely supplied the price at which if there was an offer, Facey would be willing to sell.

Telegram number three was a true offer but not an acceptance. This true offer is no where accepted in their telegram communication. Due to this you must know how to distinguish when a person makes an offer and when he merely seeks a supply of information as to the subject matter of the contract. In other words these are terms that the maker merely intends to invite an offer and set in motion negotiations with any one who would be interested.

Examples of invitation to treat are: i. Display of goods for sale When goods are displayed in a shop for sale together with its price ticket attached to it, this act does not amount to an offer.

By so displaying, the law presumes that this person only meant to invite offers from the interested persons. This was held in a famous English case of: Fisher v. Bell [] 3 All E. It was illegal to offer a flick knife for sale under the English law.

So he was sued for so offering such a knife. The issue before the court was: Does the display of goods for sale in a shop amount to an offer?

The law in England made it illegal to sell drugs without supervision of a registered pharmacist. That by displaying the drugs Boots Cash offered them for sale. That by placing the drugs in the basket, the customer accepted the offer. That a sale was effected between Boots Cash and the customer, by the obove two acts, and for this sale Boots Cash violated the law which prohibited selling of drugs without supervision.

The offer is instead made when the customer presents to the cashier the item together with payment for such an item and the acceptance will be presumed to done when the cashier accepts the payment. The person who tenders is the one who makes an offer. Acceptance of this offer is done by the person advertising tenders by considering and accepting one of them.

In Harris v Nickerson L. The auction was later cancelled. Harris sued Nickerson for damages because he had traveled from a distant place to come to the advertised auction.

He argued that the advertisement constituted an offer and by traveling that far he had accepted it. The court held that the advertisement was not an offer, thus it could not be accepted by making such a journey.

Who presided over this case established that an act of advertising that items will be placed up for auction does not constitute an offer to any person that the goods will actually be put up. The person who placed the advertisement may withdraw the items for the auction at any time before the auction. These are those which take the form of promises which a sensible person may take into account.

An illustration of promises which might be taken seriously is as it happened in the following case: Carlill v Carbolic Smoke Ball Co. They placed an advertisement in the newspapers that they would pay Pounds to any one who caught influenza after using their drug.

Carlill trusted the makers of the promises contained in the advertisement, bought and used their smoke balls after which she still contracted influenza. She sued the company. The court held that the advertisement was a valid offer. Show that these were rigid promises by which the maker of these words intended to be bound. Any reasonable man would take them seriously like Mrs. Carlill did.

These are called offers of unilateral contracts. They are so called because a promise is made by only one party; there is no reciprocity of promises. In this kind of offers if any one person from the public happens to respond to it, he will be said to have accepted the offer, by his conduct. If any person buys product X and he is not awarded the promised free Nokia cell phone on the spot he has the right to sue the company for breach of a contract.

What distinguishes it from other kinds of contracts is that there is no preceding negotiations between the two parties prior to acceptance of the offer like there is in other contracts. Instead the offer is made by the parties who respond to this advertisement by sending in their tenders in which are contained the specific terms relating to that particular tender by which he is ready to be bound.

This offer by the person responding to the advertised tender may or may not be accepted by the advertiser for the law does not compel him to accept it, it does not also blame him for not accepting that offer. It is upon him to decide whether or not to accept it. However if it was advertised that the highest tender would be the one accepted, the party inviting the tenders has no option but to accept the same.

Various persons sent in their offers and the offer made by the plaintiff Co. The terms which the advertisement specified for the tenderers to include in their offers was that payment and collection of the ivory must be done within 30 days. Rubama J. Each of the tenderers offered to buy at his quoted price and it was upon the government of the United Republic of Tanzania to accept an offer or reject it; ii Central Tender Board was not obliged to accept the highest bid or any of the tenders… 2.

An offer can only be accepted after it has come to the knowledge of the person to whom it is made. Any one who purports to accept the offer while he has been unaware of its existence, his acceptance is not legally accepted. This situation has happened in the following case: R v Clarke Simple facts of this case: It was advertised by the government of Australia that if any accomplice of a specified syndicate of murderers furnished evidence that would help to arrest the murderers, he would be offered a free Pardon by the government.

One Mr. Clarke gave the information while he was unaware that there was such a pardon by the government. He only realised later after he gave the information and claimed that he be given a pardon because he had accepted the offer.

The court held that: Mr. Clarke could not benefit from the reward because he was not aware of the offer. It appears therefore that if Mr. Clarke had a knowledge of the offer before he tendered the information to the government, his acceptance would have been valid and he would have been entitled to benefit from the free government pardon. Usually, before it is accepted, an offer is valid as long as nothing happens that brings it to an end.

There are a number of events, in daily life and as far as principles of contract are concerned, whose effect is to end the offer. Generally Such events are as follows: i.

If the offeror dies or becomes insane. If there is a failure to fulfill a condition; for offers which are contingent upon fulfillment of such a condition. If the offer is properly accepted. Intervening illegality Termination of an offer is referred to by s. More or less of the events mentioned above are enumerated under this section as acts which when done would occasion revocation.

Out of all the events that I have mentioned above only two events are not mentioned in this section; rejection and acceptance of the offer. You are now aware that one of the acts that cause an offer to terminate is its revocation. An offer must be revoked by the person who has made the offer or it may be revoked by the person who is authorized to act on his behalf. This section can be analyzed as follows: The communication of- i. This act or omission should not only be intended to communicate such revocation but also must have the effect of communicating it it must actually come to the knowledge of the offeree.

Case illustration: In Byrne v Tienhoven [] 5 CPD Simple facts of the case: The facts would be understood well if evaluated in terms of dates specific events happened as follows: On October 1st Vantienhoven, from England by post, sent an offer to sell tin plates to Byrne in New York On October 8th Vantienhoven posted a letter of revocation of offer.

When van Tienhoven refused to sell the tin plates relying on his revocation, the court held that there was a valid contract made between them because the revocation letter had not been effective until it was actually communicated which was after the acceptance had already arrived. If you look at the dates carefully you will realize that the revocation was sent earlier 8th October than the acceptance 11th October ; under normal circumstances you would expect the revocation to take priority over the acceptance but the law does not lay emphasis on time but rather on knowledge of the particular information required to be known.

This is the import of s. If he makes a counter offer A person will be said to have made a counter offer if his acceptance contains new terms which are different from those which are contained in the original offer.

In Hyde v Wrench [] Simple facts of this case: i. Wrench rejected iii. Wrench rejected. Hyde sued him. For offers which do not provide for a specific time frame, they will lapse after a certain period of time referred to as reasonable time. The question is: What constitutes reasonable time in law?

The reasonable time will be deduced from the circumstances of each particular case. It is the court that normally decides if there was reasonable time from the facts of a particular case that have been tendered before it. Montefiore [] illustrates the instance where the court construed reasonable time. The offer did not set the time limit for its acceptance. In November In this month Ramsgate accepted this offer being five months later. But by this time Mr. Montefiore did not need the shares any more.

Ramsgate sued him, claiming that he breached the contract since they accepted his offer while Montefiore maintained that his offer had expired and could no longer be accepted, so his was not an acceptance in the eyes of the law. Held: Where an offer is stated to be open for a specific length of time, then the offer automatically terminates when that time limit expires. Where there is no express time limit, an offer is normally open only for a reasonable time. According to this section, in either case, whether it is death or insanity, knowledge of it is an important element.

What if the offeree does not know of the death of the offeree? If the offeree does not know of the death of the offeror he is entitled to accept the offer, nonetheless, despite this death except when identity or personality of the deceased offeror is vital i.

This contention is illustrated by the following example. An offer that has been given by a professor of Law the University of Dar es salaam, who happens to die before it is accepted, can not be accepted by the offeree who does not know of this death, if his identity as the professor of Law the University of Dar es salaam is vital to the contract. Offers of this kind are valid only as long as these conditions are fulfilled.

The nature of these conditions: The conditions may be of two kinds: i. They are inferred from studying each particular situation In Financing Ltd v Stimson [] Stemson offered to buy a car on a hire purchase arrangement from Financing Ltd. General meaning of acceptance An acceptance is an unconditional assent to the terms of the proposal. The word unconditional means that the terms of the acceptance must not set new conditions apart from those stated in the offer. If the acceptance does so it is termed a counter offer.

Statutory meaning: S. An acceptance has to meet certain legal aspects before it becomes an effective acceptance. The general rule is that an acceptance is supposed to reflect the terms of the offer as it has been made. In other words the acceptance must match or reflect those of the offer. If the offer is for sale of a motor cycle at Tshs. It is under very limited circumstances to have a contract even without matching the offer and acceptance.

See the following cases: Brogden v Metropolitan Railway Co. Counter offer I hope you remember what a counter offer is; this happens when the offeree in his acceptance of the offer either introduces a new term or varies the existing terms of the offer. When this case happens the original offeror may or may not accept the counter offer. It amounts to rejection of an offer. See Hyde v Wrench Refer to pg. It cancels the original offer, in which case it is useless even if you accept it later on the original terms.

Conditional assent If the offeree places any condition in his acceptance, the acceptance will be shorn of its central feature which is it should be an unconditional assent to the terms of the proposal.

Refer back to s. Therefore in order to form an agreement the acceptance is supposed to change the proposal into the promise. If he fails do so he is deemed to have accepted that acceptance. If the offeror does not specify any special mode by which acceptance should be carried out, it may done by any normal method such as: by oral means, written means, by phone, by fax or even by conduct4.

Not only must it be communicated but also the communication must be complete. Communication of acceptance of the proposal how made: Remember s. Only when this has been done can we say that communication of acceptance is effective.

Without this no contract can be formed. The general rule in contract law is that an acceptance must be communicated. Silence does not amount to acceptance. Later the uncle claimed that there was a binding contract between the nephew and him.

The court held that there was no contract because acceptance did not amount to acceptance. The fact that an acceptance must be communicated to make it effective is only a general rule; there are exceptions to this general rule as in the following two circumstance: i.

When the offeror dispenses with acceptance. A may accept the offer by bringing the bus to IAA on that morning. Offers that are made in terms of advertisements are the ones which fall under this category.

While some agreements are legally binding others are not necessarily binding, depending on the intention of the parties to such agreement. For an agreement to be legally binding, some elements need to be present which may be hitherto unknown to the intending parties to contract. It therefore becomes imperative to deal with those important elements in order to distinguish agreements that are legally binding from those that are not.

Be that as it may, it is therefore necessary to introduce the students to specific principles guiding the formation of contractual agreements between the parties. At the end of the semester, students are expected to: 1.

Understand some aspects of business law in Nigeria. Appreciate that the law recognizes the freedom of individual to enter into contractual and commercial transactions. Contact: Email: onyekachiduru gmail. Appreciate the working of the guiding principles of business law derived from the case law. Understand the role of law of contract as the basis or foundation of business transaction in Nigeria.

Explain the meaning and nature of business law. Outline the Scope of Business Law. Analyze the functions and importance of Business Law. Identify the sources of Business Law in Nigeria. Business law is the body of enforceable principles, rules, regulations and practices governing the various interactions between parties to a commercial transaction. In other words, business law is the legal framework through which economic and business activities are conducted and regulated.

Scope of Business Law: Business law pervades different aspects of law, including the following: a. Law of Contract: This is the branch of business law which regulates the formation, terms, performance, discharge and remedies for breach of enforceable agreements contracts between parties.

Law of Agency: Law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual relationships that involves express or implied derivation of authority by one party, the agent, from the other party, the principal.