BUSINESS LAW NOTESCHAPTER 1

1.0 Introduction
Law comprises a set of rules that regulate human behavior. These rules are
also called norms from latin ‘norma’ a yardstick or rule. In general norms
include moral codes, laws of ettiqutte fashion rules for games and sport.
Law refers to rules and regulations that govern human conduct or other
societal relations and are enforceable by the state. It is the quality of
enforceability by the state that distinguishes law from other rules.
What distinguishes a legal rule from any other rule is that a legal rule is one
that is recognized as law and is enforceable by the state.
The relationship between law and morality
Law is law, regardless of its moral content. However most legal rules are
derived from morality. This means that in such instances the law is used to
enforce morality. Law makers seeking to enact new laws to regulate human
conduct usually convert into law their deeply held moral convictions.
Morality is the bedrock of law but it is not law.
The relationship between law and justice
Law is law regardless of whether it is just or unjust. Most legal rules are
designed to achieve the ends of justice. As with morality, law makers
seeking to enact laws to regulate human conduct usually justify their
enactment on the basis of justice.
What is a legal system?
A legal system is the sum total of the law of a given society and includes the
way it is made, how it is enforced and the institutions involved in its making
and enforcement.
The Purpose and function of law
● Preservation of peace and order

One of the important functions of law is to maintain peace and order in the
community. Man must live in society if he is to achieve his full development.
Society however, cannot exist without law, for without rules of conduct there
cannot be order, and without order there cannot be peace and progress.
The preservation of peace and order must be sought with due regard to
justice and respect for fundamental human rights.
 ● Justice
Law must serve the ends of justice and this function is accepted by all legal
systems.
● To enforce morality

This purpose of the law is separate from that of promoting justice in

one respect: justice is merely one component of morality. There are
other components of morality that the concept of jusice does not
embrace.
DIVISIONS OF THE LAW
Criminal law
A crime is a wrong punishable by the state and the main objective of the
criminal law is punishment of the offenders.
Although a crime is a wrong against an individual, it is considered a wrong
against the state and it has a prerogative of prosecuting.
Every legal system decides which wrongs against individual are to be
regarded as wrongs against the state that is punishable by the state. It is
clear that wrong becomes a crime solely because of the decision by the legal
system that it be regarded as such that is why a crime in one society may
not be a crime in another.
A wrong may be both a crime and a civil wrong whereas virtually all crimes
are civil wrongs the reverse is not the case.
Civil law
A civil wrong is a wrong against another person and the main aspect of civil
law is to compensate the victim for the term suffered. Most civil wrongs are
not crimes. Example of civil wrongs includes breach of contract, depicts
defamation, assembles and trespasses. The prerogative of the state to
pursue a criminal prosecution does not affect the civil remedies available to
a person who has been wrongful where the wrong is both a crime and a civil
wrong; it is permissible to institute both proceedings t the same time or one
after another.
In a civil cases the liability of the other party need only be proved on a
balance of probabilities i.e. just above 50%. This means that people who
may not be proved guilty beyond a reasonable doubt may still b found
humble on a balance of probabilities. Accordingly, the fact that a person
may be found guilty in the criminal government cannot itself be a basis for
not pursuing civil action. However, it must be clear that a person found
guilty belong a reasonable doubt is clearly have on a balance of
probabilities.
The distinction between civil and criminal law is stated and by slapper
and Kelly as:
Civil law is a form of private law and matches the relationship between
individual citizens. It is the legal mechanism through which individuals can
assert claims against others and have those rights adjusted and enforced.
The purpose of civil law is to settle disputes between individuals and to
provide remedies; it is not concerned with punishments as such. The role of
the state in relation to civil law is to establish the general framework of legal
rules and to provide the legal institutions to operate those rights, but the
activation of the civil law is strictly a matter for the individual concerned.
Contract, tort and property law are generally aspects of civil law.
Criminal law, on the other hand is an aspect of public law and related to
conduct which the state considers with disapproval and which it seeks to
control and or involves the enforcement of particular forms of behavior and
the state as the representative of society acts positively to ensure
compliance in criminal law, a prosecutor prosecutes a defendant (the
accused). In civil law, a claimant sues (brings a claim against) a defendant.
Public law
That law in which the state is a party to a relationship or the dispute. The
state has direct matters over which it is involved in the day to day life of
citizens. Public law covers constitutional law, criminal law, law of taxation
and administrative law. Here the state is involved in its capacity as a
sovereign power.
Private law
Private law regulates the rights and duties of persons among themselves.
Private law covers the law of property, of obligations (contract and delict) of
persons. The state may be regulated by private law where it is involved not
as a sovereign power but as an ordinary person. Such as where it enters
into a contract to purchase goods and services.
Substantive law
Substantive law deals with specific legal rights and duties of person such as
the nature of the rights and duties, how these are constituted, how they are
extinguished and their legal effect.
Procedural law
Procedural law is composed of rules that govern the enforcement of rights
that is the steps which should be taken to impose those rights. It is
sometimes described as adjectival law and includes the law of criminal
procedure, civil procedure and the law of evidence.
National law
National law refers to the body of rules peculiar to a particular country or
state.
International law
It refers to rules that are binding on states in their relations with each other.
It is important to emphasize that the primary focus of international law is to
regulate relations among states, not create rights for individual citizens.
However, states may agree to create individual rights for citizens and when
this happens national law may be involved in the enforcement of those
rights. An individual citizen has no right of audience before the international
court of justice (ICJ).
In Zimbabwe, a rule of International law emanating from a treaty which has
been ratified by Zimbabwe does not create legal rights for citizens under
national law unless it has been incorporated into an Act of Parliament
Government gazettes
The government gazette of Zimbabwe is a newspaper publication describing
the laws and government decisions. It is the official medium within which
the government announces the passing of legislation and it is through
gazettes that amendments to legislation are made known to the public.
The government’s decisions are published in these gazettes decisions such
as the:
a) Issuance and invitations of state tenders
b) Notices of appointments of personnel to public offices
c) Changes of name or notarial deeds are also published through
government gazettes
d) Title deeds, deeds of transfer are also made public in this method
e) Licenses issued and licenses withdrawn and liquidation of companies
f) Advertisements of government publications on sale
g) Auction and public property
h) Notice to creditors and debtors
i) Statutory instruments are also published in or alongside government
gazettes proclamations, which in effect. Presidential decrees are made
known to the public through gazettes.
In Zimbabwe, government gazettes are published by government printers.
Gazettes are published in volumes with a volume number and year of
publication.
Codes
The only code in Zimbabwe is the criminal law codification and reform act.
This act consolidates all the criminal law and its aspects such as defenses
and requirements for criminal liability in Zimbabwe. This codes outs the
application of Roman Dutch Criminal Law in certain respects where it states
so. The constitutionality of this code is yet to be tested as a majority feel
that it defies the scope and import of section 82 of the constitution. This
section states that the Roman Dutch Criminal Law shall only apply in
Zimbabwe. But, section 3 of this code states that it shall not apply. Unless
there is an ammendment to section 82 of the constitution there will always
be disputes as to the constitutionality of the code. However, the code is
currently in Zimbabwe since June 22 2005

CHAPTER 2SOURCES OF LAW

Legislation
Legislation refers to the law validly enacted by the legislative authority of
Zimbabwe and assented by the president of Zimbabwe. In Zimbabwe the
legislative authority of Zimbabwe vests in the president and parliament of
Zimbabwe.
The legislature of Zimbabw

e can confer powers on any authority to create binding laws. Currently the
legislature of Zimbabwe of Zimbabwe is a bicameral system consisting of a
lower house (parliament) and an upper house (senate). Legislation brought
through parliament has to be scrutinized by senate before it goes for assent
to the executive president. The senate was recently ushered in through
constitutional amendment 17 of 2005
It is rules reported to as statutory law covers those rules of law made
directly by the legislature. Each state has an organ responsible for law
making and this is what is referred to as the legislature. The legislative
authorities of the state propagate law in various statutory forms such as
Acts of parliament, presidential decrees and ministerial; regulations. In
Zimbabwe the legislative authority is defined in the constitution as:
The legislative authority of Zimbabwe shall vest in the legislative which shall
consist of the president and parliament legislation by parliament is
embodied in a specialized legal document called an Act of Parliament.

It is only through these acts that parliament can make law. Parliament is
entitled to delegate its law making powers to the president, his/her
ministers , local authorities and other state institutions when these
authorities exercise this delegated power, they create what is called
delegated legislation (subsidiary legislation) that is embodies in specialised
legal documents called statutory instruments. Accordingly there are two
forms of legislation in Zimbabwe: Acts of Parliament and statutory
instruments.
The method of passing legislation is entrenched in section 511 of the
constitution. All legislation is styled acts of parliament or statutes. Other
authorities such as the president, acting unilaterally and ministers can pass
legislation known ghvbas statutory instruments or subsidiary legislation. It
consists of the following
● Regulations made a minister for purposes specified in the
Enabling Act of Parliament
● Bye laws created by specified local authorities such as urban or
rural councils acting under powers given to them by the relevant acts
of parliament.
● Proclamations issued by the president for purposes such as
dissolving parliament.
● Rules of the superior courts to facilitate procedure and their
operations
● Regulations made by the president under the Presidential
Powers Temporary Measures Act.
 A statutory instrument has the same legal status as an Act of
Parliament. Except that it must be consistent with the relevant Act of
Parliament delegating the authority to make that statutory
instrument. When it is consistent with the relevant Act, it is said to be
intra vires. The relevant Act is called the Parent Act or the enabling
Act. A statutory instrument that is inconsistent with the enabling Act
is said to be ultra vires for that reason void. For a statutory
instrument to be intra vires, it must meet two requirements 1st it must
be within the powers of the delegated authority. 2nd it must not be
grossly unreasonable.
Under Zimbabwean law, there is one piece of legislation that is
supreme and overrides all other laws the contrary. This is the
constitution of Zimbabwe. The constitution itself is an Act of
Parliament but it is superior to all other Acts of Parliament. Section 3
of the constitution says that this constitution shall be the supreme
law of Zimbabwe and any law which is inconsistent until it shall be
void to the extent of the inconsistency. Accordingly even an Act of
Parliament that has been duly passed and signed into law by the
president is void if it is contrary to the constitution.

Customary law
It is generally unwritten. This refers to the fixed customs and practices of
tribes of Zimbabwe which were in practice since time immemorial. The
customs must be certain, reasonable and must have attained recognition of
formal law. The constitution entrenches the recognition of African
customary law
These are habits or practices observed by individuals in a society i.e. an
unwritten code of behavior. Customary law does not consist of written code
of behavior. Customary does not consist of written rules but develops from
the habits of the community and is carried down from generation to
generation. In van Breda vs Jacobs 1921 AD, a local custom amongst
fisherman that once they have set their lines on a beach where no boats are
permanently stationed, for the purpose of catching a shoal of fish seen
moving along the coast, no other fisherman are entitled to set lines within a
reasonable distance in front of the lines already set, was held to be duly
established by the evidence as a valid custom. It appears from this
judgement that the following requirements must be met before a customary
rule will be recognized as a legal rule:
a) It must be reasonable
b) It must have existed for a long time
c) It must be generally recognized and observed by the community
d) The contents of the customary rule must be certain and clear.
Customary law also called trade usage also plays an important role in the
business and commercial world. It is often alleged that trade usage exists
within a certain trade or business and that the parties to a contract are
bound to it. The same requirements as for those proving a rule of customary
law apply.
Judicial Precedent/ Case Law
Precedent refers to past decisions of superior courts. Precedents establish
the legal position of cases tried in the courts to establish the reasoning for
decisions made by the judges in each particular case. Conversely,
precedents therefore guide the courts in making future decisions in similar
cases brought before them.
The maxim ‘stare decis et non quetamovere’ best sums up the use of case
law in Zimbabwe. This maxim means to stand by old decisions and do not
disturb settled points. Supreme court decisions in Zimbabwe are binding on
all inferior courts. High court ruling also binds the lower courts such as the
magistrates courts. The judgements of superior courts are one of the most
important sources of law. Theoretically the function of a judge is to state,
interpret and apply the existing law but not to make new law
nevertheless, the effect of judicial decision which gives a new interpretation
to a statutory provision is in m any cases to create law, and law so created
is termed judge made law. Because a later court does not depart highly from
the decisions of an earlier court, this judge made law becomes an
established legal rule.
The doctrine of stare decisis
The words store decisis mean the decision stands. A ruling concerning the
legal position applicable in a particular set of circumstances becomes the
law, when a court gives a decision, the parties to the dispute concerned will
be bound by the decision.
Ratio decidendi
The most important part of a judgment is what is called the reason for the
decision and it is the ratio decidendi of a case which is binding which is the
subject of the doctrine stare decisis. When it is said that a decision is
binding, this does not mean that every sentence uttered by the judge in
deciding the case must be considered as imposing a rule of law.
The 1st step is to determine the material facts on which the judge based the
decision. Once this is done the ratio decidendi is the conclusion reached by
the judge based on these material facts and by excluding the material ones.
The ratio decidendi is the principle of law upon which the decision is based.
Obiter dictum
In a judgement it is common for a judge to make statement of law in passing
which do not form part of the reason for the decision. A statement of such a
nature is called obiter dictum. The distinction between the ratio decidendi
and obiter dictum is central to the operation of the common low. If the other
requirements are satisfied, it is only the ratio decidendi, that is binding on a
future court, while an obiter dictum has no binding status but only what
may be defined specivalue.
Advantages of judicial precedent
a) Consistency, law is not suspect to whim.
 b) Certainly /predictability if the law becomes unpredictable it is not
serving its purpose (Christie).
c) Flexibility, law can be created without waiting for legislation.
Disadvantages
a) Uncertainly due to the large number of cases that can be reported or
referred to.
b) Fixity resulting in injustice being perpetrated.
c) Unconstitutionality. Judges are then seen as making law instead of
merely applying it.
d) Bias arising from judges especially under conditions of rapid change.
e) Reform may be stifled.

History of Roman Dutch Law

Law applying at the Cape of Good Hope on 10 June 1891 was largely based
on Roman Dutch Law. Roman Dutch Law is a fusion of Roman law and
medieval Dutch law. Holland whose inhabitants were mainly tribes of
Germanic origin, was conquered ad occupied by the Romans under the
Emperor, Julius Ceaser. The people in Holland were allowed to follow their
own customs and way of life, except in situations that the Romans regarded
as either criminal or unacceptable. However, it was inevitable that the
culture and laws of the Romans would cater to exert a great deal of
influence upon them.
With the collapse of Rom an rule in AD476 the reception of Roman law took
a new form which involved resorting to Roman law in situations where
customary law failed to provide an answer. Bit by bit, the local customary
law was reconstructed in the light of Roman law.
In 1652, Jan Van Rebeeckad his group of Dutch settlers took charge of the
Cape of Good Hope. They brought with them introduced, the law as it
applied at that time in Holland which was Roman Dutch law. Roman Dutch
Law was contained in judicial decisions and published treaties on low
written by Dutch jurists. From 1652 onwards and indeed up to this day, the
nucleus of the law of Zimbabwe and South Africa, as well as that of
Botswana, Lesotho, Namibia and Swaziland has renamed Roman Dutch.
The law introduced at the Cape in 1652 undermined some significant
charges after 1795. In that year, the British took over the Cape from the
Dutch. They did not replace the Roman Dutch law, but English law began to
influence some legal aspects.
By 1 June 1891, the law applicant at the Cape was Roman Dutch Law with
substantial English law gratings. This is why section 89 of the constitution
of Zimbabwe refers to the law in force in the colony of the Cape of Good
Hope and not the Roman Dutch law in force.

Authoritative (binding) sources

Legislation, Traditional customary law, General custom or trade usage,

Original Roman Dutch law, Roman law and commentators

Persuasive sources
South African judicial decisions are held in the greatest respect, English
judicial decisions
African, American, Continental/European, Acknowledged text books are
often referred to.
Textbooks on law have a persuasive authority upon which reliance can be
had in making judicial decisions. The few authoritative legal authors on
Zimbabwe rely on Roman Dutch writers. They mainly write commentaries
and guide to the law of Zimbabwe

Constitution of Zimbabwe
The constitution of Zimbabwe is the supreme law of the land and any other
law which is inconsistent with is deemed void to the extent of that
inconsistent. Therefore Zimbabwe has constitutional supremacy instead of
parliamentary supremacy.
The current constitution of Zimbabwe is the result of a settlement done at
Lancaster house in England in 1979. It sets off the state structure, the bill
of rights, the judiciary, the legislature and other administrative organs such
as the public service commission.
The constitution is the parent act of every other legislation. Therefore all
acts of parliament subordinate to it must be intra vires the constitution or
within the confines of constitutionality.
QUESTIONS
1) Trace the historical development of Zimbabwean law.
2) Discuss custom as a source of law.
3) Examine legislation as source of law using the following
headings;
i) Statutory instruments
ii) The doctrine of ultra vires
iii) The process of legislation
4) Describe and distinguish between authoritative and persuasive
sources of law.
5) Examine judicial precedent as a source of law with particular
reference to the following:
i) The doctrine of stare decisis including its advantages and
disadvantages.
ii) Ratio decidendi
iii) Obiter dicta
6) Discuss custom as a source of law using the Van Breda vs Jacobs
case
CHAPTER 3
The Zimbabwean courts
The justice system in Zimbabwe comprises the following elements: the
Supreme Court, the high court, the administrative court, magistrates’ court,
system for the administration of the courts, the office of the Attorney
General and associated public prosecutor’s and the legal profession. Acts of
Parliament define the operation of various courts as well as limits their
jurisdiction ie. Type of offense
High courts and supreme courts are superior courts. Magistrates courts,
community, primary and small claims are inferior courts. High courts have
jurisdiction to deal with trials and applications on any matter. Supreme
Court hears appeals on any matt
The structure of the courts
Courts are classified into two broad categories namely criminal courts and
civil courts. Civil courts in turn are divided into two groups ordinary civil
courts and specialized courts.
In Zimbabwe there is specific legislation that prescribes the composition and
jurisdiction of each court. The composition of a court refers to its judicial
officers i.e. whether a judge or magistrate presides , the number of presiding
judicial officers required to constitute the state, the qualifications the
presiding officers must have whether there is provision for assessors and if
so, the manner in which they are selected.
The jurisdiction of the government refers to its powers and the matters over
which it has competence and also determines its position in the structure of
the courts, particularly how it relates to other courts.
Ordinary civil courts
Primary Courts
Customary law disputes may be referred to specially set courts which
have been established to preserve the application of customary law in
civil disputes. There are two types of local courts namely:
● Primary court which is presided over by a headman or other
person appointed by the minister of justice.
● Community court which is presided over by chief or other
person appointed by minister of justice.

Magistrates’ courts
Jurisdiction
In civil matters, unlike criminal; cases there is no division of magistrates
into 4 classes of ordinary magistrate, senior magistrate, provincial
magistrate and regional magistrate. A magistrate’s court has jurisdiction to
apply both customary law and general law in its determination of civil cases.
There some civil cases over which the magistrate court is prohibited from
exercising jurisdiction. These are specified in section 14 of the magistrates
court Act and they include:
● Disputes in respect of the validity or interpretation of a
written will
● The statues of a person in respect to mental capacity
● The dissolution of a marriage other than a marriage
solemnized interims of the customary marriages Act (Chapter
5:07).
Composition
In a civil case, the magistrate sits alone. He or she may appoint one or more
persons to sit as assessors and assist in an advisory capacity. Any such
appointment requires the approval of the minster of Justice. The person
appointed must be willing to serve and have skill and experience in any
matter to be considered by the court. Assessors in a civil case merely are to
advice and have to voice in the findings of the court on both matters of fact
and law.
The high court
Functions
This is situated permanently in Bulawayo and Harare, but goes on circuit to
Mutare, Gweru and Masvingo. It has full original jurisdiction over all
persons and all matters within Zimbabwe.
Reviews and appeals- has power to review all proceedings from inferior
courts that is confirmation, alteration or setting aside of conviction.
Power to overrule legislation-applies where the legislation is inconsistent
with or ultra vires either the constitution or the enabling statute. Also, in
subsidiary legislation, where it is uncertain, unreasonable or contains
improper delegation.

Composition
The judge sits alone. He or she may also appoint one or more persons to sit
as an assessor or assessors and assist in an advisory capacity. As in the
magistrates’ court, an assessor appointed in a civil case must be willing to
serve and have skill and experience in any matter to be considered. Section
5(2) of the High Court Act makes it clear that such an assess shall act in an
advisory capacity only and shall not be entitled to vote in the decision of the
court.
Jurisdiction
Section 13 of the High Court Act states that the High Court shall have full
original civil jurisdiction over all persons and over all matters within
Zimbabwe. This means that its original jurisdiction is unlimited, there are
no monetary limits to claims that may be brought and it can hear any civil
dispute whatever nature of the claim it employs what is called inherent
jurisdiction which means that the high court is deemed to have jurisdiction
unless so prohibited by some law. This kind of jurisdiction is superior to
that of any other court because all jurisdiction specifically granted by the
enabling statute.
The fact that the High Court`s original jurisdiction is unlimited means that
all matters which may be heard by the Magistrates Courts can class at the
first instance, be heard by the High Court A hit grant is entitled to some in
the High Court, even in matters within the monetary limit of the magistrate
court. The choice of court may be dictated by costs, it is more expensive to
sue in the High Court than in the magistrate`s court. The High Court also
have appreciate jurisdiction in civil cases. An appeal only goes to the High
Court if there is a specific provision in a statute grant aright of appeal to the
High Court. Appeals from the magistrates Court go to the High Court. The
High Court also has inherent review powers over the proceedings of all
inferior courts and tributes. In exercising its review powers the High Court
may set aside proceedings of an inferior court or tribunal.
The Supreme Court
Function
It is the court of first instance in constitutional matters. Its vital role is to
perform the enforcement of the declaration of rights contained in the
constitution. It is also an appeal court with full jurisdiction over all types of
cases. It has power to: allow appeal and quash a conviction of sentence.
-alter a conviction, substitute another conviction with suitable sentence,
confirm conviction or increase a sentence.

Composition
The Supreme Court is considered duly constituted it consists of not less
than 3 judges. One of whom shall be entire the Chief Justice or a permanent
judge of the court. It may be composed of two judges when hearing an
appeal from any court other than the High Court, provided this happens on
the directors of the Chief justice, if an appeal involves a difficult or
important question of law, the presiding judge may direct that the appeal be
heard by a greater number of judges. In such cases the Chief Justice shall
determine the size of the reconstituted court. In a matter involving the
application or interpretation of the constitution, the Chief Justice or the
Minister may direct that the Court be composed of not less than 5 judges.
Jurisdiction
The Supreme Court has appellate jurisdiction only in civil matters, except
where the issue is brought under section 24 of the constitution. An appeal
only has with the Supreme Court where the provisions of the relevant
statute say so in respect of appeals from the High Court there is a right to
appeal to the Supreme Court from any judgment even if it arises from the
High Court `s exercise of this original or appellate jurisdiction.

QUESTIONS
1) Describe the structure and jurisdiction of the Zimbabwean
courts of first instance.
2) Discuss the hierarchy of the courts in Zimbabwe
3) Describe the functions of the primary, magistrate, high, and
supreme courts of Zimbabwe.
4) Describe the following Zimbabwean courtswith reference to
jurisdiction and composition:
i) Primary courts
ii) Magistrates courts
 iii) High courts
iv) Supreme courts

CHAPTER 4
The Law Making Process
Introduction
State organs and their powers
The power of governmental organs is limited and defined by the society that
creates the government. Every society has rules that define the structure of
the state and spell out their powers. These rules may be written or
unwritten or a combination of both. A totality of these rules make what is
called the constitution of a country. The law emanating from such rules is
called constitutional law.
Zimbabwe has rules defining the structure and powers of governmental
organs are embodied in its constitution. It is mainly to these documented
rules that reference should be made in order to understand the powers of
state organs.
Constitutional law utilizes the principle of separation of powers. This
principle requires that political power should not be concentrated on one
individual or organ of government. It requires that governmental organs be
separated into 3 different groups each performed by 3 different persons.
This is a way of creating checks and balances by one organ against another.
The 3 main governmental organs are the legislature, the executive and the
judiciary. Thus the organ that makes the law (the legislature) should be
different from the organ which implements it (the executive) and should
both be different from the organ that interprets it in the event of a dispute
(the judiciary).
The legislature (law makers)
A principal function of the state is that of making laws for the proper
ordering of society. This important function of the state is allocated to the
legislature, which in Zimbabwe consists of parliament and the president.
Parliament itself is composed of two chambers: the house of assembly (lower
house) and senate (upper senate).
For law to be said to be a law made by the legislature in Zimbabwe it must
pass through 2 stages 1st, it must be passed by the requisite majority in
both houses of parliament. 2nd , once it has been passed by parliament, it
should be assented to by the president before it becomes law.
The house of assembly is composed of 210 members all of whom are directly
elected. The senate is composed of 93 members, 60 of whom are elected in
60 senatorial constituencies. The other 33 comprise the president and
deputy president of the council of chiefs, 16 chiefs -2 from each of the 8
rural provinces, 10 provincial governors and 5 presidential appointees.
The house of assembly is presided over by the speaker, who is elected by
members at their 1st sitting. The senate is also presided by the president of
the senate, who is also elected members at their 1st sitting.
Apart from its law making functions, parliament also has power to supervise
the executive arm of government, by among other things, criticizing
government policies. Through this role, parliament has the power to
institute investigations into any activity of the state and to publicize its
findings. This power can be used to ensure accountability on the part of
government ministers. The most important manifestation of this power is
the question and answer session in parliament where parliamentarians are
entitled to ask question pertaining to the conduct of government and the
latter are obliged to answer those questions truthfully.
The Executive
This arm of government is composed of the president, the cabinet and all
Law enforcement agencies of the state namely the police, the military and
the prison service. The ultimate authority of the executive functions of the
state is vested in the president, who exercises a host of his function through
the cabinet.
The role of the executive arm of government is to implement laws made by
parliament and to run the affairs of the state. The executive also has the
responsibility to initiate policy, and in that regard it is empowered to
propose laws for consideration by parliament.
The Judiciary
The function of the judiciary is to interpret the law. One of the most
important functions of the judiciary in Zimbabwe is that of adjudicating on
the constitutionality of Acts of parliament or any other law which
contravenes the constitution, this can be declared unlawful by the supreme
court.
The Process of Law Making in Parliament
The constitution of Zimbabwe specifies the manner in which parliament
legislates. Section 51 provides that ‘the power of parliament to make laws
shall be exercised by bills passed by the house of assembly and the senate
and assented to by the president.’
Pre- Bill Stage
This is the stage leading to the finalization of the proposals that are
contained in the bill that is sent to parliament. This is exclusively a political
process dominated by the executive. Legislative proposals result from a
variety of sources such as political manifestos, government departments,
commissions of enquiry, parliament portfolio committees, pressure groups
and response to disasters.
Types of Bills
Public Bills are those that are intended to alter the general law or to deal
with revenue or the administration of justice. Private bills deal with matters
of a private or local nature such as legislation promoted by local authorities
or relating to the property of private individuals.
Gazetting of Bills
The government gazette is the official publication of the government of
Zimbabwe. It is the legal medium through which the government informs
the public about its legal instruments.
Passage of Bills in Parliament
● First reading. Before the first reading the minster gives notice to
the house of his intention to present the bill. At the 1st reading no
debate takes place and the bill is referred to the parliamentary legal
committee (PLC). The PLC checks whether any provisions might
violate the declaration of rights or other provisions of the Constitution.
PLC reports back to the house. Any adverse report is considered and
the House may accept or reject the opinion of the PLC. If the house
adopts the adverse report falls away.
● Second reading. The minister explains the principles of the bill.
Debate is confined to the principles. After the 2nd reading the bill goes
on to the committee stage
● Committee stage. A member from the presiding officer’s panel
chairs this. The whole house becomes one committee to consider the
bill clause by clause. Amendments may be introduced without
upsetting underlying principles of the bill.
● Third reading. Debate may take place on the principles. The bill
is then read a 3rd time. Once it is passed, it then goes to the next
house.
Once passed by both houses, the bill is presented for presidential. If
the president withholds his assent the bill is returned to parliament
for amendments.
The Act is then published in the Government Gazette.
Budget is brought before parliament in the form of :
● The Appropriation Bill (allocation of expenditure)
● The Finance Bill (methods of financing)
Delegated legislation
Parliament may delegate its law making powers to a variety of public
authorities, particularly the president, ministers and local authorities.
Legislation emanating from these authorities in exercise of the powers
granted to them by parliament is called ‘delegated legislation’. The extent of
the power to make laws in this way is regulated in each case by the relevant
Act of Parliament (enabling act or parent act section 32(2) of the constitution
of Zimbabwe allows Parliament to delegate its law making powers. It makes
it clear that the legislature is empowered to confer legislative functions on
any person or authority. The system of delegated legislation is subject to 2
controls namely:
Delegated legislation like any other legislation, must be consistent with the
constitution that is it must be intra vires the constitution
It must be consistent with the parent act that is not ultra vires the enabling
act.
QUESTIONS
1) Describe the passage of a bill in parliament.
2) Describe the role of the three state organs.
3) Describe the functions, the judiciary and the legislature.
CHAPTER 5 THE LAW OF CONTRACT
Introduction
A contract intends to formalize an agreement of two or more parties, in
relation to a particular subject. Contracts can cover an extremely broad
range of matters including the sale of goods or real property, the terms of
employment or of an independent contractor relationship, the settlement of
a dispute and ownership of intellectual property developed as part of work
for hire.
Essential Elements of a Contract
● Clear certain and communicated agreement. Meaning that the
parties are consensus ad idem or are of the same mind. The parties to
the contract have mutual understanding of what the contract covers,
eg. In a contract for the sale of a ‘mustang’ the buyer thinks that he
will obtain a car and the seller believes he is contracting to sell a
horse, there is no meeting of the minds and the contract will likely be
held unenforceable.
● Contractual Capacity, meaning that the parties are legally
capable of contracting. Only persons can contract, a person having
the capacity to acquire rights and duties. But not only natural
persons can do so. Our law recognizes the existence of artificial
persons who can likewise acquire rights and duties. The most
important of these are companies incorporated in terms of the
companies act. The general rule is that every person is able to
contract freely, within the limits of the law. But there are certain
persons of limited contractual capacity whose power to enter into
binding agreements is limited.
● Serious Intent, meaning the parties intend their agreement to be
binding and legally enforceable. When parties enter into an agreement
‘subject to contract’ they are expressly stating that they will not be
bound unless and until a formal contract is drawn up.
● Necessary Formalities. In some cases , certain formalities
(writing) must be observed.
● Contracts which must be in the form of a deed. Certain
transactions involving land require a deed that is conveyances, legal
 mortgages and leases for more than 3 years. A promise of a gift is not
binding unless in this form.
● Contracts which must be in writing a contract for the sale or
other disposition of land can only be made in writing and only by
incorporating all the terms which the parties have expressly agreed. In
one document or where the contracts are exchanged in each. The
document must be signed by or on behalf of each party to the
contract. Bills of exchange, cheques and promissory notes must be in
writing. Similarly the transfer of shares in a limited company must be
in writing. Employment contracts should be in writing with terms and
conditions of employment.
● Possibility of performance that is performance of the contract
must be possible.
● Legality that is the agreement must be lawful. The purpose of
the agreement must not be illegal or contrary to public policy where a
contract involves some wrong doing, It will be illegal. If however, the
conduct is either immoral or blameworthy but simply undesirable the
contract will be void. A court may object to an agreement either
because of a rule of common law or because it is contrary to statute.
QUESTIONS ON ESSENTIAL ELEMENTS OF A VALID CONTRACT
1) Discuss the essential elements of a valid contract
2) Briefly describe and distinguish the contractual capacity of ;
i) Minors under 7
ii) Insolvents
iii) Prodigals
iv) Artificial persons
v) Lunatics and mentally ill
vi) Alien enemies
vii) Illegal associations
3) Write fully on the following:
i) Tacit emancipation
ii) Contractual liability of an assisted minor
iii) The effect of fraud on the contractual liability of an
unassisted minor.
4) Read the following situation carefully and answer the questions
that follow;
Minor Joyce enrolls for a 6 months course with a business school
without the consent of her guardian, though she makes no effort
to conceal her minority. However after having attended and paid
 only for 2 months, she withdraws from the course and refuses
to make any further payments.
i) Advice the business on their legal position
ii) Would the situation be different if;
a) Joyce had fraudulently misrepresented that she was
over 18 because that was the minimum age permitted by
the school?
b) Joyce was living alone running a sole proprietorship
business?
c) Joyce’s guardian subsequently ratifies the contract?
5) State the effect of unlawfulness on a contract. Give examples of
lawful and unlawful contracts.
6) Name and define the formalities prescribed in a contract.
b) give examples for which certain formalities are prescribed
c) explain the effect of non compliance with prescribed
formalities on the validity of a contract.
7) a) define the concept of performance
b) distinguish between initial impossibility of performanceand
supervening impossibility of performance and give examples
8) describe the folwing concepts and identify them in practical
situations
a) terms of contract, express and implied
b) conditions- suspensive and resolutive
c)trade usage
d) time clauses
e) guarantees.

Agreement
Agreement = offer + acceptance
Requirements of a valid offer
1) Offer must be definite. It must not:
● Leave aspects of the agreement dependent upon the future will
of parties (Kantor v Kantor)
● Leave aspects of the agreement blank or open to subsequent
negotiation (Bundell v Blan& King v Potgieter&Finestone v Humburg)
● Contain wording which is vague
2) Offer must be made with the intention of being accepted by some
other person. Excludes the following which are not offers but
simply invitations to do business.
● General statements of lowest price (Efroiken v Simon)
● Statements of lowest price in response to a specific inquiry
(Harvey v Facey)
● Invitations to tender (Spencer v Harding)
● Newspaper advertisements in general (Shepherd v Farrel
Estate Agency)
● Advertisements by transport companies of their charges for
conveying goods (Frazer v Frank Johnson)
● Displays in shop windows (Crawly v Rex)
● Displays on self service counters (Pharmaceutical Society of
Great Britain v Boots Cash Chemists Ltd)
● Restaurant menus.

Reward Cases
Adverts constitutes offer (Carlill v Carbolic Smoke Co
One reward is only offered first person doing what is required is
entitled to that reward. (Lee v American Swiss Watch Co.)
No reward may be claimed by anyone who fulfilled the requirement
not knowing of that reward (Bloom v American Swiss Co.)
What is required must be done voluntarily.
3) Offer must not have been revoked. Offer may have been revoked or
lapse in one of the following ways:
● Offeree is notified that it has been revoked.
● Either the offeror or offeree dies.
● Lapse of a reasonable period of time.
● Supervening impossibility or illegality
● Rejection as where the offoree makes a counter offer which
contradicts the original offer by proposing specific alterations
to the terms of that offer.
4) Offer must be one on which an optimal time limit has not expired.
● Note: keeping an offer open until the offeree is in a position to
accept is permissible, since the period, although unknown, is
not indefinite (Hanekan v Mouton)
● In the case of an option which is offered gratuitously, silence is
not acceptance (Beinart v Zeffert)
 ● The right of acceptance of an option, provided that it is also a
cash sale, can be ceded. (Hersh v Nel)
● Written acceptance of an oral option is only valid upon receipt
regardless of the distance between the parties. (Smeiman v
Volkersz)
● A provisional option allows either party to withdraw before the
due date, whilist an option for a limited time at the descetion of
the offeror similarly allows that offeror to withdraw, as state at
his discretion. (Gerson v United Tobacco Co.s)
Termination of the Offer
● By acceptance- an offer which has been accepted constitutes a
contract. That offer is no longer available for acceptance.
● By rejection- an offer is rejected if: 1) Theofferee notifies the
offeror that he does not wish to accept the offer.
2) The offeree attempts to accept the offer but subject to certain
conditions. 3) The offeree makes a counter offer
(Hyde v Wrench)
● By revocation before acceptance- an offer may be revoked
(withdrawn) any time before acceptance, but will only be
effective when the offeree learns about it.
● If the offer lapses-the offeror may stipulate that the offer is only
open for a limited period of time. Once it has lapsed any
acceptance is invalid. Even if no time limit is mentioned, the
offer will not remain open indefinately. It must be accepted
within a reasonable period of time.
● Death- if the offeror dies after having made an offer and the
offeree is notified of the death any acceptance will be invalid.
● Failure of a condition attached to the offer. An offer may be
made subject to conditions. Such a condition may be stated
expressly by the offeror or implied by the courts from the
circumstances. If the condition is not satisfied, the offer is not
capable of being accepted.
Requirement of a valid acceptance
● Acceptance must be definite and unconditional. (Water Meyer v
Murray & Jones v Reynolds) acceptance must be unequivocal and
stated intention to accept is not adequate. (Boerne v Harris)
● Acceptance must be communicated.

● Mere stated intention to accept is insufficient. (Dietirchsen v

Dietrichsen)
 ● Acceptance may be either expressly stated or manifested by
conduct. (Reid Bros v Fisher Bearings Co)
● Silence cannot be acceptance. (East Asiatic Co.v Midland
Manufacturing Co.) Except where there is a duty expressly to
repudiate as with brokers notes. (Benoni Produce & Coal Co. v
Grendelfinger)
● An offeror is free to dispense with the normal modes of
communication to indicate alternative methods of acceptance
e.g. by dispatch of goods (Rex v Net &Mackenzie v Farmer’s
Co-op Ltd)
● Where specific form of communication is demanded by the
offeror acceptance by any other method is void. (Eliason v
Henshaw)
● Whilst an offeror may prescribe the manner of acceptance, he
may not prescribe the manner of refusal.eg by taking
acceptance for grantedif the offeree has not acted in a certain
way by a certain time. (Felthouse v Bindley)
Acceptance by post or telegram or telephone or telex
In acceptance by post, the basic rule is that the manner of offer implies the
manner of acceptance, consequently:
● Where written acceptance follows a written offer, acceptance
is valid at the timeof posting (Cape Explosive Works Ltd v
Lever Brothers Ltd)
● Where written acceptance follows an oral offer or option
(Smeiman v Volker) acceptance is only valid upon receipt
regardless of the distance between the parties. But
● Where offeror has demanded some other form of acceptance,
written acceptance is void (Eliason v Henshaw). Note:
● Acceptance to a wrong address due to the offeror’s fault, is valid
unless the offeree knew or suspected without checking, but where
the mistake is the offoree’s acceptance is void.
● Acceptance to the correct address, where the offeror has left that
address without notifying the offeree is valid. (Naude v Malcom)
● Correctly addressed and posted acceptance which does not arrive
is valid. (Household Fire Insurance Co. v Grant)
● An address incorrectly spelt by the offeree will only postpone
acceptance to the time of receipt if the error was so fundamental as
to cause delay. (Levben Products Ltd v Alexander Films Ltd)
 3) Acceptance must be made by person for whom the offer was
intended.
Right of acceptance can not be ceded by offeree to a third party.
(Blew v Snoxell& Bird v Summerville)
4) Acceptance must not be based on some justifiably mistaken. A
contracting party may only avoid a contract based on his
mistake if:
● Justus error was present and he was therefore blameless
plus
● Mistake was maternal and essential or important.

Ticket Cases
Unsigned document such as tickets or receipts, which contain
terms waiving liability on the part of contracting party a which are
unknown to the other party B. Thus B can only sue A if B is
blameless and this will only be the case if all of the following apply
● There was no public notice displaying the terms.
● The terms were not pointed out.
● The ticket was not of the type.

QUESTIONS ON OFFER AND ACCEPTANCE

1) Set out in detail the requirements for a valid offer in a law of
contract.
2) Set out in detail the requirements of a valid acceptance in a law
of contract.
3) Reward is the only contractual situation where an
advertisement is an offer. Discuss.
4) An advertisement is not an offer. Discuss.
5) Distinguish between valid offers and invitations to do business
in contract law.
6) Discuss the statement that in a contract acceptance must be
communicated.
7) Discuss the various requirements for and the timing of a valid
acceptance in a contract where acceptance is made in the form
of a letter.

Contractual Capacity
Minors: a minor is a unmarried person under the age of 18. During
the term of his minority he is under the custody and lawful authority
of a guardian whose duty it is to maintain the minor until he can
maintain himself, administer his property and assist him in
contracting.
Unassisted contracts
A minor may not, as a general rule sue or be sued or contract
without the assistance of his guardian should he attempt to do so
the contract is void. The Roman Dutch authorities speak of such
purported contracts as being void in one direct (that is as far as the
minor is concerned) and valid in another (that is as far as the other
is concerned.
A minor may, however, in certain cases acquire a perfectly valid
obligation without his guardian’s assistance. These obligations are
only exceptionally contractual, even though they often arise in the
course of attempts to contract.
●
● +Enrichment
Wherever a minor is unjustly enriched in terms of a purported
contract he is bound to the extent that he is enriched. He is bound
to restore to the other party to the purported contract so much of
what he has received as remains in his possession or to pay a sum
of money to the value of the advantage received. But the minor is
not bound by the contract, the contract remains void. His
obligation arises simply because he has been enriched at someone
else’s expense. (Tanne v Foggit)
● Fraudulent Misrepresentation of Majority

Where a minor fraudulently misrepresents his age or pretends that

he has been emancipated and by so doing deceives another person
who is induced to contract with the minor, believing him to be of
full age or emancipated, the minor incurs an obligation. But once
again the obligation is not contractual. The minor is not bound by
the contract, which is void. But the fraud being a delict, he is
bound delictually to make good to the other party any loss he
suffered as a result of the fraud.
It is essential that the other person be misled, otherwise there can
be no loss as a result of the fraud. It follows that a minor must be
 of such an age that it is possible for an innocent person to be
misled.
● Tacit Emancipation

Where a minor is tacitly emancipated he can incur a binding

contractual obligation within the field of his emancipation. Tacit
emancipation occurs where a minor is allowed by his guardian to
carry on business, or any other occupation, on his own behalf. In
such circumstances the minor may himself validly contract in
regards to that business. He may not, however, contract outside
that business without his guardian’s consent.
● Ratification

Where a minor purports to contract without his guardian’s consent

the contract may be subsequently ratified by either guardian, when
the effect is precisely the same as if the guardian had consented at
the time of the contract or the minor himself on attaining majority.
Such ratification may be express or implied. It is implied eg where
a person after attaining his majority, continues to use an article,
which he purpoted to buy during his minority as his own, or
indicates otherwise by his actions an intention to be bound.
(Stuttaford& Co v Oberholzer)
Once the ratification has taken place the contract is rendered valid
and effective from the time of the purpoted agreement. The
authority which was lacking is supplied by the subsequent
ratification.
Assisted contracts
A minor is bound either by contracts on his behalf by his guardian or by
contracts made by himself with the assistance of the guardian.
● Mentally ill persons

A purported contract made by a mentally ill person is void if at the

time of agreement he could not understand and appreciate the
transaction into which he purported to enter or if his consent was
motivated or influenced by an insane decision cause by mental
disease.
All persons are presumed to be sane, unless they have been declared
mentally disordered by an expert in the medical field. The contract is
presumed void unless it can be shown that it was entered into at a
time when the person concerned was in full possession of his
faculties. (Prisloo’s Curators v Crafford&Prinsloo) or that his state of
mind was such that he was able to understand the nature of the
contract into which he entered and to appreciate properly the duties
and responsibilities which were created by that contract.
● Drunk Persons

Where a person enters into a purpoted contract while so drunk that

he does not know he is entering into a contract or he has no idea of
the terms of the contract, the contract is void. The fact of drunken
ness will not prevent the person concerned from incurring an
obligation on the ground of enrichment.
● Prodigals

A prodigal (that is a person declared by the court to be incapable of

managing his affairs as a result of a propensity to squander his
assets) cannot contract with regard to his property. If he purports to
do so the contract is void. Ut outside the field of his property he is
entitled to contract freely. He may marry. The court in declaring a
person to be prodigal appoints a curator bonis whose duties are to
administer the affairs of the prodigal, subject to the overriding
approval of the courts.
● Insolvent Persons

The sequestration of the estate of insolvent divests him of his estate

and vests it, after appointment in a trustee. Property which he
subsequently acquires before rehabilitation also vests in the trustee
with certain exceptions.
Certain restrictions are place on his freedom to contract, but he is in
all other respects fully capable of contracting
The restrictions are:
-an insolvent may not contract in such a way as to purport to dispose
of any property of his insolvent estate.
-he may not without the written consent of his trustee enter into any
contract whereby his estate is likely to be adversely affected.
-he may not without the written consent of his trustee have any
interest in or be employed in the business of a trader who is a general
dealer.
 Should the insolvent, however purpot to contract in breach of these
provisions of the act the contract is not void. It remains valid until it is
set aside by the trustee.
● Persons who have been convicted of Crime

In certain cases, which do not require setting out in detail, ad which

vary dependency on the crime committed and the sentence, imposed
convicted persons are subject to various disqualification eg if
convicted of theft, fraud, forgery or perjury and sentenced to
imprisonment, they are disqualified from being appointed company
directed.
● Alien Enemies

An alien enemy (namely a person residing or carrying on business in

enemy territory) may not sue on our courts and all commercial
relations with him is prohibited.

QUESTIONS ON CONTRACTUAL CAPACITY

1) Describe the following in terms of contractual capacity:
a) Unjust enrichment
b) Fraudulent misrepresentation of majority
c) Tacit emancipation
d) Ratification
2) Name and briefly describe the categories of contractual
capacity.
3) State the general rule regarding the contractual capacity of
the following persons:
a) Minors
b) Married women
c) Insane persons
d) Intoxicated persons
e) Prodigals
f) Insolvent persons

Contracts illegal at common law

a) Contracts to commit crimes or civil wrongs eg a contract to
assassinate someone or to defraud Zimra
 b) Contracts involving sexual immorality
c) Contracts tending to promote corruption eg contract to bribe an
official.
d) Contracts trading with an enemy of the state
e) Contracts directed against the welfare of a friendly foreign state.
f) Contract prejudicial to the administration of justice eg contract
not to prosecute a person for an offence concerning the public.
Genuineness of Consent
The agreement must have been entered into freely and involves a meeting of
the minds. The agreement must not be invalidated by a number of factors,
mistake, misrepresentation, duress and undue influence.
● Mistake

The general rule is that mistake does not affect the validity of a
contract. The guiding principle is the caveat emptor which means ‘let
the buyer beware.’ So if a person agrees to pay $1000 for a car which
in reality is only worth $500, the contract is valid and he must sand
the loss. It should be noted that a mistake at law will not invalidate a
contract, since everyone is presumed to know the law.
There are , however some kinds of mistake which so undermine the
agreement that the contract is void. If this is the case, no rights of
ownership can pass and any goods which have changed hands can be
recovered. A mistake will invalidate the contract in the following
situations.
a) Mistakes as to the subject matter of the contract. The parties
may be mistaken as to the identity of the subject matter. If a
seller makes an offer in respect of one thing and the buyer
accepts, thinking of something else, the parties are clearly
talking at cross purposes and there is no contract.
b) - mistake as to the identity of one of the parties. This may
invalidate the contract where the identity of the party to the
contract is material to the contract, a mistake will result in the
contract being void. Where the identity of the party is not
material, the contract will be valid until the mistaken party
avoids the contract for misrepresentation.
 c) Mistaken signing of a written document. As a general rule, a
person who signs a document is assumed to have read,
understood and agreed to its contents. Exceptionally, a person
may not be able to plead ‘nonest factum’- ‘it is not my deed.’ 3
factors must be present if the contract is to be avoided, the
signature must have been induced by fraud, the document
signed must be fundamentally different from that thought to be
signed and the signer must not have acted negligently.

Rescission of terms
The court may be prepared to set aside an agreement provided the parties
accept the conditions imposed by the court for a fairer solution to the
problem
Rectification
If a mistake is made in reducing an oral agreement into writing, the court
may rectify the document so that it expresses the true intention of the
parties.
Specific performance
A court may refuse to grant an order for specific performance against a
party who made a mistake, if it would be unfair to enforce the contract
against him.

VOIDABLE CONTRACTS
a) Misrepresentation
The formation of a contract is often preceded by a series of
negotiations between the parties. Some of the statements made may
turn out to be false. The nature of the statement will determine
whether a remedy is available and if it is what type of remedy. A false
stamen which is not incorporated into the contract is known as
misrepresentation. A misrepresentation is a false statement made by
one party to induce the other to enter into a contract. It must be
shown that the statement has induced the person to whom it was
made to enter into a contract.

Kinds of misrepresentation and their effects

There are 3 kinds of misrepresentation; fraudulent, negligent or
innocent. In each case the contract is voidable.
i) Fraudulent Misrepresentation
If the person making the statement knows that what he said is false,
he will be liable for fraud. The injured party may rescind the contract
and also sue for damages for the deceit.
ii) Negligent Misrepresentation
This is where the person making the false statement has reasonable
grounds for believing it to be true. Damages may be awarded for a
negligent misstatement.

iii) Innocent Misrepresentation

Is a false statement made by a person who had reasonable grounds to
believe that it was true, not only when it was made, but also when the
contract was entered into. The basic remedy is rescission of the
contract.
Rescission
It aims to restore the parties to their pre contractual positions. Money
or goods which have changed hands must be returned.
b) Duress and Undue Influence
The general rule of law is that a contract will only be valid if the
parties entered into it freely and voluntarily. Where a party to a
contract or his family is subjected to threats of violence, the contract
may be avoided on the grounds of duress.
In undue influence, the relationship between the parties may be such
that one occupies a position of dominance and influence over the
other. There are several relationships such as doctor and patient,
solicitor and client, parent and child where it is automatically
assumed that undue influence has been at work. The contract will be
set aside unless the dominant person can prove that the complainant
had independent advice. Where there is no special relationship
between the parties the complainant must prove that pressure was
applied.
QUESTIONS ON VOIDABLE CONTRACTS.
1) Define the following concepts fully:
a) Valid contract
b) Void contract
c) Voidable contract
2) Explain the difference between a void and voidable contract.
Refer to decided cases.
3) Discuss the various forms of mistake and misrepresentation.
4) Give meaning of each of the following concepts and discuss
the requirements of each:
a) Mistake
b) Misrepresentation
c) Duress
d) Undue influence
5) Using decided cases, describe the main features of each of the
following clearly showing the difference between them:
a) Duress
b) Misrepresentation
c) Undue influence.

BREACH OF CONTRACT
This may occur in a number of ways. It may be an anticipatory or
actual breach.
a) Anticipatory Breach
This is where a party states in advance that he does not intend to
carry out his side of the contract or puts himself in a position whereby
he will be unable to perform. The injured party may sue immediately
for breach of contract or alternatively wait for the time for
performance to arrive to see whether the other party is prepared to
carry out the contract.
b) Actual Breach
One party may completely fail to perform his side of the bargain or he
may fail to carry out one or some of his obligations. Not every breach
of contract has the effect of discharging the parties from their
contractual obligations. The terms of the contract may be divided into
those terms which are important (conditions) and the less important
terms (warranties). A breach of a condition does not automatically
terminate the contract. The injured party has a choice: he may wish to
be discharged from the contract and claim damages for the breach. A
breach of warranty only entitles the injured party to sue for damages.
Remedies
Every breach of contract will give the injured party the right to recover
damages (financial compensation) other remedies such as specific
performance and injunction, may be granted at the discretion of the
court as part of its equitable jurisdiction.
Damages
In the business world it is quite common for the parties to agree in
advance the damages that will be payable in the event of a breach of
contract. These are known as liquidated damages. If there is no prior
agreement as to the sum to be paid, the amount of damages is said to
be unliquidated damages.

a) Liquidated Damages
The parties establish at the outset of their relationship the financial
consequences of failing to live up to their bargain. Provided the parties
have made a genuine attempt to estimate the likely loss, the courts
will accept the relevant figure as the damages payable knowing the
likely outcome of any legal action, the party at fault will simply pay up
without argument.

b) Unliquidated Damages
The aim is to put the injured party in the position he would have
been if the contract had been carried out properly. Damages are
designed to compensate for the loss. If no loss has been suffered, the
court will only award nominal damages: a small sum to mark the fact
that there had been a breach of contract.
c) Equitable Remedies
The normal remedy for breach of contract is an award of damages at
common law. There are some situations, however where damages
would neither be adequate nor appropriate. Equity developed other
forms of relief to ensure that justice is done. The more important of
these equitable remedies are specific performance and injunction.
d) Specific Performance
A decree of specific performance is an order of the court requiring the
party in breach to carry out his contractual obligations. Failure to
comply with the directions of the court, lays the defendant open to
imposition of penalties for contempt of court.
e) Injunction
This is an order of the court requiring the party at fault not to break
the contract. Its main use is to enforce the negative promises that can
that can occassionaly be found in employment contracts. The
employee may agree eg not to work in a similar capacity for a rival
employer during the period of his contract.
QUESTIONS ON BREACH OF CONTRACT
1) Name and define the different forms of breach of contract.
2) Discuss the remedies applicable to each form of breach of
contract.

CANCELLATION OF THE CONTRACT

The parties to a contract may expressly agree that breach of a certain
term will entitle one of them to cancel the contract. Such express
terms entitling cancellation may take any form, but the most common
are forefeiture clauses, fore closure clauses and the lexcommissoria.
A forefeiture clause in a contract of letting and hiring is a clause
which entitles the landlord to cancel the lease and have the tenant
ejected. If the tenant is in breach of certain specified terms one of
which is usually the payment of rent on the due date. In the absence
of such a forefeiturecluse, a term governing the payment of the rent
on a particular date is not material term and the land lord canot
therefore terminate the contract merely on the ground that the lesee is
in arrear with the rent.
A foreclosure clause in a mortgage is a clause entitling the mortgagee
to call up the bond where the mortgagor is in default usually by non
payment of interest on due date.
A lexcommissoria is a provision in a contract of sale that the seller is
entitled to cancel the contract on breach of one or other of the terms
of the contract usually non payment of an instalment in the case of a
sale where payment is made by instalments. Such a lexcommissoria
may, and usually does, contain valid penal provisions entitling the
seller to retain so much of the purchase price as had already been
paid to him, despite his cancellationof the contract and recovery of the
subject matter of the sale.

TERMINATION OF CONTRACTS
a) Performance
A contract is terminated by the performance of the reciprocal
obligations of the parties.
b) Set off
Where 2 parties are in debt to each other and the debts are due and
liquidated, both debts are automatically extinguished if they are of the
same amount. If one is larger than the other, the smaller is
extinguished and the larger automatically reduced by the amount of
the smaller debt.
c) Merger
It is the concurrence of the debtor and creditor in the same person
and in respect of the same obligation. It destroys the obligations in
respect of which it operates. Thus if x is the tenant of y and he
purchases the property from y, the lease comes to an end and for the
capacities of landlord and tenant are merged in x.
d) Agreement
The parties may by agreement put an end to contractual obligations
by waiver or novation. In both cases the express or implied agreement
of both parties is necessary.
e) Waiver
Is the abandonment of rights by one or both parties to a contract.
It is itself a contract which requires offer and acceptance in the
ordinary way. Agreement to waive may be implied, but the courts
will not lightly infer the abandonment of a right. It must appear
clearly from the words or conduct of the parties. The person who
waives a right can only effectively do so if he has full knowledge of
the right. If he purports to waive a right while ignorant of its extent
even as a result of ignorance of the law the waiver is ineffective,
despite the rule ignoratiaurishaudexcusat, provided the ignorance
is probable and justifiable. The abandonment may be of all rights
under the contract, which is in other words cancelled by mutual
 agreement, or of only certain of the rights eg waiver of one party
only.
f) Novation
It occurs where the parties agree to a new contract which replaces
the only one completely. The original contract is therefore
terminated a new contract comes into being. The new contract,
may indeed bring third parties to the original contract into the new
one as parties (eg assignment and delegation)
Cession on the other hand is really something different. There is
not a rule to the new contract and therefore no novation. The
original contract remains in existence but the right to receive
performance is ceded by the cedent to the cessionary.
Compromise is an agreement between persons for the settlement of
a matter in dispute, each party abating some of its previous
demands. If parties to a contract dispute each other’s rights in
terms of the contract and subsequently they compromise their
rights are regulated by the compromise and not by the original
contract which falls away. In such a case, as the parties enter into
a new contract which replaces the old one, it is clear that
compromise is a form of novation and the ordinary rules apply eg a
compromise requires strict proof, the presumption being against it.
f) Insolvency
The contractual rights and duties of an insolvent are affected in
various ways by the sequestration of his estate. The majority of the
rights and duties of the insolvent vest automatically in the master
of the supreme court until the appointment of a trustee when they
vest in the trustee.
It is the duty of the trustee to recover all debts due to the estate, to
liquidate the estate and to distribute the proceeds among the
creditors who have proved claims against the estate.
Insolvency is terminated by rehabilitation by court order.
Rehabilitation discharges all debts of the insolvent, which were
due, or the cause of which had arisen before sequestration.
g) Death
Death of a party does not terminate the contract. A form of
compulsory assignment takes place and the rights and duties of
 the deceased, other than in terms of contracts involving personal
skill which are terminated, pass to the executor.
h) Supervening Impossibility of Performance
Has the effect of extinguishing a contract.
QUESTIONS
1) Explain the following remedies:
a) Specific performance
b) Cancellation
c) Damages
d) Penalty clause
e) Interdict
2) Describe the following ways of terminating contracts
a) Proper performance
b) Prescription
c) Set off
d) Merger
e) Supervening impossibility of performance
f) Insolvency
g) Death.