Essentials of Law IS 2220

Reference: Learning the Law by Glanville Williams (15th edition)

Introduction to Law Set of rules and regulations enforced by legislature (parliament)which governs the society or the state

What is law?

Law is defined as the Set of rules and regulations enforced by legislature (parliament)which

governs the society or the state.

Law varies from country to country.

Ex: In England, they practice English Law. Meanwhile in Saudi Arabia, they practice Sharia Law.

Nature of the law:

No one is above the law.

Ignorance of the law is not a defense.

Factors that affect the law other than the country:

Culture

Religion

Socio-economy

Technology

Importance of the law:

No civilized society can function without law.

Law is an integral part of any society.

Purposes and functions of law:

Establish standards

Maintaining order

Resolve disputes

Protecting liberties (නිදහස) and rights

Classification of law:

Figure 1: Classification of law

Constitutional law: ආණ්ඩුක්රම ව්යවස්ථා නීතිය

Law

Human RightsCriminal Law (Public Law)

Civil Law

Public Law

Tax LawAdministrative

Law

Constitutional Law

Private Law

Person/ Family Law

Property/ Land Law

Law of Obligations

Law of ContractLaw of delict/

tort

Business Law (Both Public and

Private Law)

Mercantile Law Law of Agency

Banking Law Partnership Law

International Law

Public Law Private Law

Comparison of Civil and Criminal Law:

Criminal Law Civil Law

Definition The word “criminal” derived from the word “crime” are known as criminal law. The word crime can be defined as an act which has been prohibited by law in a specific land, which affects the society at large or affects the whole state. Ex: 1) prostitution 2) theft 3) murder 4) fraud 5) domestic violence

The word “civil” derived from the “civilian”. Any dispute which arises between persons is known as “civil disputes”. All civil disputes are handled by civil law. Therefore civil law can be defined for civilian disputes which does not affect the society at large or the state. Types of Civil Law: 1) Law of property (land disputes etc) 2) Law of persons (divorce cases etc) 3) Law of contracts 4) Law of delicts(torts)

Aim Aim is to punish or to penalize the wrong doer. Therefore Criminal law is also called “Penal Law”.

Aim is to compensate or to give better relief to the innocent party. Compensations are of 2 types. 1) Financial compensations (non-

equitable remedy) Ex: maintenance in divorce, damege

2) Non-financial compensations (equitable remedy) Ex: specific performance, injuctions

Case bought by Minor crimes: PHI, Local government Bodies, Police Grave crimes: Attorney General Department

The victim

Terminology Figure 1 Figure 2

Standard of proof In Criminal Law standard of proof refers to that the Accused do not have any rights to bring counter claim. i.e. Prosecution has been given sword only, and Accused has been given shield only.

In Civil Law standard of proof refers to that the Defendant has all rights to bring any number of counter claims. i.e. Defendant has been given both the sword and the shield.

Burden of proof In Criminal Law burden of proof states that the Accused will be given punishment only after proven guilty. In legal terms it takes Prosecutor needs to proven beyond reasonable doubt(Even one doubt is enough).

In Civil Law burden of proof refers to the quantum of evidence which has been caught by the parties concerned. In Civil law, burden of proof depends on the balance of probabilities. i.e. Who brings more weightage will be considered to be the innocent party.

Courts Minor crimes: Magistrate Court Grave crimes: High Court

District Court

Figure 2: Structure of a Criminal Court

The authority brings the case is known as Prosecution. The person who is considered to be the wrong

doer is called Accused. A criminal action is Prosecute.

Figure 3: Structure of a Civil Court

The person who brings the original claim is known as Claimant or Plaintiff, and the person who defends

himself against the case is known as Defendant. The civil action is called Sue.

Law of torts/ Law of Delicts

For any damage of compensation events, aggrieved party (claimant/plaintiff) can get actions under the

Law of torts.

Relevant courts for delictual matters are the District Courts.

Following delictual matters are governed by District Courts

1. Breach of duty of care and all negligible matters in the society

2. Professional negligence

Any professional (charted accountant, architect, engineer, IT professional) infringed ()

his or her duty of care, that professional is liable to pay compensation.

Ex: Cassidy Vs. Ministry of Health- South Africa

Caparo Industries plc Vs. Dickman (UK)

Arsekularatne Vs. Prof. Priyani Soysa

3. Deformation statements (අපහාස ප්රකාශ)

4. Manufacture’s negligence

Ex: Grant Vs. Australian Knitting co.

Donoughue Vs. Stevenson

Law of Property

Terminology:

Ownership - අයිතිය

Possession - භුක්තිය

Mortgage -උකස

This category of Civil Law consist ownership, possession, mortgage, etc of movable and immovable

properties. In Sri Lanka, Law of property is governed by Roman Dutch Law (our common law). However

some concepts are developed by English Law. Therefore professionals must adhere to legal provision of

Law of properties.

Ex 01:

At present, private properties (real properties- නිශච්ල දේපල : land and building) ownership are limited

by different legislation.

Under the Mines and Minerals act of 1992, all mines and minerals in Sri Lanka are considered as

government properties. i.e. Government is the absolute owner of mines and minerals in Sri lanka.

Therefore if you have a granite (කළුගල්) in your garden, you cannot get utilization of it unless you get

the permission from the government.

Ex 02:

Under the prescription ordinance 3rd party can get prescriptive title (හිමිකම) if he possesses 10 years of

an independent period.

Intellectual Property Law

This category of law is a subcategory of Civil Law. However some areas of intellectual property law are

governed by Criminal Law

The relevant Jurisdiction (අධිකරණබලය) court for intellectual property is a Commercial high Court.

Intellectual properties intended to cover all the creations of the mind of any person which law

recognizes such as patent, trade mark, brand name, IT software.

Ex01:

Munchee vs Maliban case for Maliban imitating the Package of Munchee hawaiian Cookies

Ex02:

An author of a book has copyright to protect his interest and to see that the book is not published and

said without his knowledge and consent (අනුමතිය).

“all rights reserved” “සියලු හිමිකම් ඇවිරිණි”

Some more terminologies related to law:

Offence: illegal action

Crime: an act/offence that can be punished by law

Civil wrong/ matter: legal matters of people or person

Delict / tort: civil wrong consisting of an intentional or negligent breach of duty of care

Custody: taken to prison

Deed: a legal document

Arrest: taken to custody

Plaintiff: the person who bringing the case

Defendant: accused in the court of law

Eye witness: person who have seen a particular activity

Fraud: a kind of crime of deceiving someone to get money or goods

Rigorous imprisonment: strict keep in prison

Suspect: believed to be guilty without a certain proof

Trial a case: an examination of evidence in a court to decide if a person is guilty of a crime

Homicide: the killing of one person by another, whether intended (murder) or not

(manslaughter). Not all homicide is unlawful; killing in self defense, for example, is not a crime.

Theft: stealing of something

Constitution: a set of fundamental principles or established precedents according to which a

state or other organization is governed. Constitution will deal with 3 main functions of a state.

o Legislature

o Executive

o Judiciary

Evidence: information presented to law court to support the case

Sources of Law Anything which accounts for the existence of a legal rule or any place in which the law is stated

Sources of law:

Legislation (නීති සම්පාදනය)

o A legislature is the law-making body of a political unit, usually a national government,

that has power to amend and repeal public policy. Laws enacted by legislatures are

known as legislation.

Judicial precedents (Judges-made Law or Case Law )

o A judicial precedent is a decision of the court used as a source for future decision

making. This is known as stare decisis (to stand upon decisions) and by

which precedents are authoritative and binding and must be followed.

Equity (සාධාරණතාව)

Religion

Customs (සිරිත්)

Public international law

Opinions of Jurists (නීතිදව්දියා)/ writers

Legislation Also called Enacted Law, Statute Law

Three branches of government:

They are the legislative branch (make law), the executive branch (put law into action) and

the judicial branch (investigate the correct application of law in country).

Each branch is independent from the others, but each holds a similar amount of authority.

Legislature (නීතිකාරකය /ව්යවස්ථාදායකය):

A deliberative body of persons, usually elective, who are empowered tomake, change, or repeal

the laws of a country or state

Ex: Parliament

Legislation (නීති):

Legislation (or statutory law) is law which has been promulgated (or enacted) by a legislature or

other Governing Body or the process of making it. Before an item of legislation becomes law it

may be known as a bill, and may be broadly referred to as "legislation", while it remains under

consideration to distinguish it from other business.

Purposes of legislation:

to regulate, to authorize, to proscribe, to provide (funds), to sanction, to grant, to declare or to

restrict

Five types of local legislation:

1. Regulations and proclamations (දරගුලාසි හා නිදව්දන) issued by the governor between 1801 and

1833

o Regulations for can confirming the tax on roads and bridges (No 3 of 18031)

o Proclamation regulating the duty on the exportation of Tobacco from the Island (23rd

July, 1804)

2. Ordinances (ආඥා පණත) passed by colonical legislatures of Ceylon between 1833 and 1947

o Land Settlement Ordinance – No 20 of 1831

o Forests Ordinance – No 16 of 1907

3. Acts (පනත) passed by the parliament after 1948 to 1972

o Fertilizer Act – No 21 of 1961

o Motor Traffic Act – No 14 of 1951

o Land Acquisition Act – No 09 of 1950

4. Laws passed by National States Assembly under the 1972 Republican Constitution (ආණ්ඩුක්රම

ව්යවස්ථාව)

o Agricultural Insurance Law – No 27 of 1973

o Janawasa Law – No 25 of 1976

5. Acts passed by the parliament under the 1972 Republican Constitution

o Fisheries & Aquatic Resources Act - No 02 of 1996

o Town and Country Planning (Amendment) Act – No 49 of 2000

o Civil Aviation Authority of Sri Lanka Act – No 34 of 2002.

o Electricity Reform Act – No 28 of 2002.

o Intellectual Property Act – No 36 of 2003

o Etc…

o IT Related Acts

Computer & Information Technology Council of Sri Lanka Act No 10 of 1984

Computer Crime Act No.24 of 2007

Payment Devices Frauds Act No 30 of 2006

Electronic Transaction Act No.19 of 2006

Payments and settlements Act No.28 of 2005

Information communication Technology Act No.27 of 2003

Intellectual Property Act 36 0f 2003

Telecommunications Act No .25of 1991

Subordinate Legislation (යටත් නීති සම්පාදන):

o National environment (Protection and quality) regulations

o Vehicle emission control regulations

o National environnent ( noise control) régulations 1996

Judicial precedents (Stare Decisis) Judges-made Law or Case Law, the law as established by the outcome of former cases, introduced to Sri

Lanka during British period

What are Judicial Precedents:

A judicial precedent is a decision of the court used as a source for future decision making. This is

by which precedents are authoritative and binding and must be followed.

Some of the Famous Case Laws:

Cassidy Vs. Ministry of Health- South Africa

Caparo Industries plc Vs. Dickman (UK)

Arsekularatne Vs. Prof. Priyani Soysa

Grant Vs. Australian Knitting co.

Donoughue Vs. Stevenson

Rylands Vs. Fleture.

Refer this link to study few cases:

http://www.lawteacher.net/free-law-essays/judicial-law/previous-decisions-made-by-judges-in-similar-

cases-judicial-law-essay.php

Brief explanation of the court system in UK:

Figure 4 : Court System

Superior courts are Supreme Court (House of Lords) and the Court of Appeal. The supreme court of Sri

Lanka is the final court of justice in Sri Lanka. On any new matter which is not covered by any existing

law, a judgment of a superior court for such any new matter will become law for future court of justice

in Sri Lanka.

Equity Natural Justice

A historical law that was developed by the court of chancery to fill the gaps in the common law

Non monetary compensations such as injunction orders, specific performances were considered

Responsible for the development of the law of trust

Does not provide rules, but an abstract concept of principle behind the law

The two manifestations (versions) of equity:

1. Equity is viewed as the just and reasonable interpretation of the law

2. Equity used to fill gaps in a legal system

Maxims of law of Equity:

Equity follows the law

Those who come to courts must come with clean hands. i.e. they must not be wrong doers or

must not violate the law

Religion Today religion is a source of law through legislations or custom. In ancient societies, customary rules

were derived from the tenets of religion or morality. Hindu law and Muslim law have shaped the laws of

many Asian countries. Thus sphere of application of religious law through diminished still continues in

these countries.

In Sri Lanka the in own religious are Buddhism, Christianity, Hinduism and Islam. While there religions

have had their effect on the law of Sri Lanka a special emphasis may be placed on Islam, Hinduism and

Buddhism. Our courts administer legal rules derived from there religions.

Custom A traditional and widely accepted way of behaving or doing something that is specific to a particular

society, place, or time

Custom is also regarded as a source of law. However, for courts to recognize a custom it must be:

Ancient and well-established

Reasonable

Certain

It must have been uniformly used

In all societies the custom is in operation. The courts have the authority to recognize and enforce certain

custom as legal customs. Legal customs are binding and their sanctions are comparatively complete and

uniform.

A good illustration of a customs that has been recognized by our courts, is the right of any member of

the public to fish in the open sea. Hence every citizen can catch fish in the sea. It is held Fernando Vs.

Fernando (19 CLW31- CLW means Ceylon Law Weekly Law Reports) case in Sri Lanka. Our courts have

also recognized customary marriages in Sri Lanka as valid marriages. In recent years, there have been

few claims to enforce customs in our courts.

Jurists define custom as an unwritten right brought in gradually by the usage these who practice it and

having the force of Law.

Public international law

Conventions

Covenants

Protocols

Agreements

Opinions of Jurists/ writers Opinions of writers or the tradition of textual precedent as a source of law have a limited application

compared to the Doctrine of Judicial precedent. In fact is a very important source of Roman Dutch law

and the systems of law derived from it. Accordingly, the opinions of writers on the Roman Dutch-Law

are considered to be authoritative. The Roman Dutch Law developed not so much through

interpretation by courts but through the opinions of learned jurists.

Among the jurists who are most frequently, cited in the Sri Lankan courts are “Voet” “Grotius” “Van der

Linden” and Van- Leeuwen.

The opinions of eminent authors or writers of Sri Lanka are also cited as authorities such as C.G.

Weeamanthri for contract law , E.B. Wickramanayake for Law of Delict , Prof. G.L. Peiris for Law of

Property.

Constitution (ආණ්ඩුක්රම ව්යවස්ථාව)

In Sri Lanka, Constitution was passed by the parliament in1978. Up to now there are 19 amendments.

Main content of the constitution are:

Establishment of legislature

Executive president, prime minister and cabinet of ministers (establishment of an executive)

Independent judiciary (establishment of a court of law)

Introduction to human rights by law (fundamental rights law)

Establishment of independent commissions

o National Police Commissions

o Human Rights Commission

Constitutional law: Law that related to state is called constitutional law.

This category of law is also called supreme (basic) law in the country.

Administrative Law Law that governs the government officials

Under this law, if a government officer exceeds his powers (ultra vires), the affected citizens can get

actions under the administrative law.

Local Government Law Law that governs the Municipal councils, Urban councils, pradeshiya sabha

Generally, constitution activities, sewerage (the provision of drainage by sewers) on sanitary matters are

regulated under this law.

Legal System of Sri Lanka

What are the legal systems of Sri Lanka?

Roman Dutch Law (Common law in Sri Lanka)

English Law

Kandyan Law (Special Personal Law)

Thesawalamei Law (Special Personal Law)

Muslim Law (Special Personal Law)

What are the legal systems of UK?

English Law / English common Law

European Union Law

Court System in Sri Lanka

Courts of first instance:

A court in which legal proceedings are begun or first heard

Examples:

o The High court (in SL for both Civil and Criminal cases)

o The District court (Civil cases)

o The Magistrate court (Criminal cases)

o The Primary court (Civil cases)

Courts of second instance (appellate court/appeal court):

A court exercising jurisdiction to rehear a case de novo, or its appellate jurisdiction to hear an

appeal, from the court of first instance in which the matter originated.

Examples

o The High court

o Court of Appeal

o Supreme Court

Court of last resort:

The Supreme Court is the highest court in its jurisdiction. It decides the most important issues of

constitutional and statutory law and is intended to provide legal clarity and consistency for the

lower appellate and trial courts.

A Supreme Court’s decisions also produce finality, therefore it is the court of last resort.

Alternative dispute resolutions

Some disputes can be resolved outside the court process, but such bodies exercise important

judicial functions.

Examples:

o Arbitration

o Adjudication

o Mediation

o Conciliation

Statutory Interpretation The process by which courts interpret and apply legislation

Some amount of interpretation is often necessary when a case involves a statute.

Sometimes the words of a statute have a plain and straightforward meaning. But in many cases, there is

some ambiguity or vagueness in the words of the statute that must be resolved by the judge.

Three rules of statutory interpretation:

1. Literal Rule

2. Golden Rule

3. Mischief Rule

Literal Rule

Words must be given their plain, ordinary, everyday, dictionary meaning

Example case: Fisher v Bell (1961) 1 QB 394

Fisher v Bell [1961] 1 QB 394 is an English contract law case concerning the requirements

of offer and acceptance in the formation of a contract. The case established that, where goods

are displayed in a shop together with a price label, such display is treated as an invitation to

treat by the seller, and not an offer. The offer is instead made when the customer presents the

item to the cashier together with payment. Acceptance occurs at the point the cashier takes

payment.

Fact:

The Defendant displayed a flick knife in the window of his shop next to a ticket bearing the

words "Ejector knife – 4s." Under the Restriction of Offensive Weapons Act 1959, section 1(1), it

was illegal to manufacture, sell, hire, or offer for sale or hire, or lend to any other person,

amongst other things, any knife "which has a blade which opens automatically by hand pressure

applied to a button, spring or other device in or attached to the handle of the knife". On 14

December 1959, the Claimant, a chief inspector of police force, brought forward information

against the Defendant alleging the Defendant has contravened section 1(1) by offering the flick

knife for sale. This loophole was closed by Restriction of Offensive Weapons Act 1961 [1] Ban on

Flick Knives: which inserted after the words “offers for sale or hire” the words “ or exposes or

has in his possession for the purpose of sale or hire”."

The court held that the shopkeeper was not guilty.

Golden Rule

Where literal rule gives more than one meaning/ ambiguity, golden rule allows a judge to depart from a

word’s normal meaning in order to avoid an absurd (inappropriate) result.

Example case: Adler v George [1964] 2 QB 7

Under the Official Secrets Act 1920 it was an offence to obstruct a member of the armed forces

'in the vicinity' of a prohibited palace. The defendant was actually in the prohibited place, rather

than 'in the vicinity' of it, at the time of obstruction.

Held:

The court applied the golden rule. It would be absurd for a person to be liable if they were near

to a prohibited place and not if they were actually in it. In the vicinity of" should be interpreted

to mean on or near the prohibited place. The defendant was guilty of the offence.

Mischief Rule

The literal and golden rules are concerned with finding out what parliament said. The mischief rule is

applied to find out what parliament meant.

It looks for the wrong: the mischief which the statute is trying to correct. The statute is then interpreted

in the light of this.

The rule is based on the Heydon’s Case [1584] – Very OLD!...in which certain steps were identified as a

way of interpretation.

Heydon’s Case [1584]

In this case it was stated that judges should:

Consider what the law was before the Act was passed

Identify what was wrong with the law

Decide how parliament intended to improve the law through the statute in question

Apply that finding to the case before the court

The main aim of the rule is to determine the mischief and detect that the statute in question has set out

to remedy, and what ruling would effectively implement this remedy. In applying the mischief rule the

court is essentially asking what part of the law did the law not cover, but was meant to be rectified by

the parliament in passing the bill.

Example case: Smith v Hughes [1960] 1 WLR 830

According to Section 1(1) of the Street Offences Act 1959 it is an offence for a prostitute to loiter

or solicit potential customers in a street or public place.

The defendant in that case was a prostitute. The defendant, had been sat at the window on a

house tapping on a window in order to attract the attention of male passers-by.

It was argued that no offence had been committed as soliciting from a first floor window was

not ‘soliciting in a street’.

Lord Chief Justice Parker stated;

“I approach the matter [of interpretation] by asking what is the mischief aimed at by this Act?

Everybody knows that this was an Act intended to clean up the streets, to enable people to walk

along the streets without being molested or solicited by common prostitutes.

Viewed in this way it can matter little whether the prostitute is soliciting while in the street or

standing in a doorway, or on a balcony, or at a window, or whether the window is shut or open

or half open; in each case her solicitation is projected to and addressed to somebody walking in

the street.’

The court held that defendant had committed an offence under Section 1(1) of the Street

Offences Act 1959.

Refer:

http://sixthformlaw.info/02_cases/mod2/cases_stat_interp.htm#Adler v George [1964] QBD

Ejusdem or Eiusdem Generis:

Of the same kind or nature. A rule of interpretation that where a class of things is followed by

general wording that is not itself expansive, the general wording is usually restricted things of

the same type as the listed items.

Example case: Powell V. Kempton Park Racecourse (1899)

According to Betting Act 1853 “betting in a house, office or other place” is prohibited.

The Court held phrase “other place “meant indoor places. A ring on a racecourse was not fall

within the category of “other place”.

Noscitur a sociis:

The meaning of a word is or may be known from the accompanying words. Under the doctrine

of noscitur a sociis, the meaning of questionable words or phrases in a statute may be

ascertained by reference to the meaning of words or phrases associated with it.

Presumption:

A statute does not have any retrospective effect

presumptions are rebuttable

Law of Contract Law of contract is a civil and a private area under legal system of SL. The Law of Contract will apply to

anyone who breaches an agreement or contract.

As per the syllabus we must learn 4 sub categories of Law of Contract.

1. Definition of contract and elements of a valid contract

2. Contents of contract (conditions, warranties, exemption liability clauses)

3. Termination (discharge) of a valid contract

4. Remedies for breach (an act of breaking) of contract

Definition of contract Generally a contract forms when one person makes an offer, and another person accepts it by

communicating their assent or performing the offer's terms.

This includes Rights, obligations, liabilities, breach of duty of care in terms of contracts. Therefore this

falls under Civil Law. The police cannot intermediate.

Figure 5: Definition of Law of Contract

Areas of Law of Contract:

Conditions

Termination of contract

Remedies of breach/ violence/ infringe

Sources of Law of contract:

Case law

Legislation (10% of all sources of contract Law)

Opinions of jurists

Figure 6: Sources of Law of Contract

*note

Roman Dutch Law does not try to legalize effectively.

Ex:

Marriages are not compulsory to register

Land ownership depend on user, not the legal document

Therefore Law of Contract governed by English law.

Contract is an agreement which is enforceable by courts of law. Under the law of contract, all

agreements are not considered as valid contracts.

For an example social and domestic contracts/ agreements are not considered as valid contracts becoz

there is no intention to create legal relationship by parties to contract.

It was held (trialed/ decided) by famous case Law Balfour v Balfour.

Balfour v Balfour (1919) 2 KB 571

In this case House of Lords (Supreme Court of UK) held that there was no enforceable valid contracy

becoz that the parties did not intent to create legal relations.

Fact:

Mr Balfour was a civil engineer, and worked for the Government as the Director

of Irrigation in Ceylon (now Sri Lanka). Mrs Balfour was living with him. In 1915, they both came back to

England during Mr Balfour's leave. But Mrs Balfour had developed rheumaticarthritis. Her doctor

advised her to stay in England, because a jungle climate would be detrimental to her health. As Mr

Balfour's boat was about to set sail, he promised her £30 a month until she came back to Ceylon. They

drifted apart, and Mr Balfour wrote saying it was better that they remain apart. In March 1918, Mrs

Balfour sued him to keep up with the monthly £30 payments. In July she got adecree nisi and in

December she obtained an order for alimony.

Case Law

Legislation

Opinionsof jurists

Held:

At first instance, Sargant J held that Mr Balfour was under an obligation to support his wife. But Lord

Justice Atkin[2] took a different approach, emphasising that there was no "intention to effect legal

relations". That was so because it was a domestic agreement between husband and wife, and it meant

the onus of proof was on the plaintiff, Mrs Balfour. She did not rebut the presumption.

Merrit v Merrit [1970] 1 WLR 1211

However some domestic contracts were considered as legal contracts. If there is any intention to create

legal relationship by the parties to contract social or domestic contract can be considered as valid

contract. It was held by Merrit v Merrit.

Fact:

Mr. Merritt and his wife jointly owned a house. Mr. Merritt left to live with another woman. They made

an agreement (signed) that Mr. Merritt would pay Mrs. Merritt a £40 monthly sum, and eventually

transfer the house to her, if Mrs. Merritt kept up the monthly mortgage payments. When the mortgage

was paid Mr. Merritt refused to transfer the house.

Held:

The agreement was binding. The Court of Appeal distinguished the case of Balfour v Balfour on the

grounds that the parties were separated. Where spouses have separated it is generally considered that

they do intend to be bound by their agreements. The written agreement signed was further evidence of

an intention to be bound. Therefore Mr Merrit had to transfer the ownership of the house to Mrs

Merrit.

Different contracts in the business world There are different legal contracts in the business environment.

Those are;

Contract Parties Insurance Contract insure, insuree Lease lessor, lessee Rent Land Lord, tenant Mortgage mortgagor, mortgagee Sale of good contract (movable goods) vendor, vendee Higher Purchase bailor, bailee Leasing bailor, bailee or lessor, lessee Construction Contract client, contractor Consultancy client, consulter Employment employer, employee Partnership agreement partner, partner

Formation of a contract Formation of a contract can be categorized as follows.

1. By word of mouth

2. By writing

3. By conduct of parties (implied contract)

By word of mouth

Verbal contracts/ simple contracts

Examples:

Get a bus ticket

Purchase a cup of tea from the canteen

By writing

Written contracts

Under the law of contract some agreements should be in writing. These contracts are agreements

regarding immovable property.

Examples:

Lease, rent, mortgage, sale agreements for lands and buildings

This provision is legalized by prevention of frauds ordinance.

Those agreements affecting to lands and building should be attested (certified) by a Notary Public and

two witnesses.

*note

Under Law of Contract, lessee must pay stamp duty. Otherwise (if no stamp) the document of contract is

considered as null and void document.

Elements of a valid contract Under the law of contract, the following elements must be included in a valid contract.

1. There should be an offer.

2. There should be an acceptance.

3. There should be a consideration (Justa causa and valuable consideration).

4. Parties must have contractual capacity.

5. Not contrary to the public policy.

6. Reality of consent (consensus ad idem->mind+same, I.e., same mindset)

7. There should be an intention to create legal relationship.

Jurisdiction Courts for Contracts

Courts of first instance:

District court

Commercial high courts

Appellate courts:

Civil appeal high court

Court of appeal

Supreme Court