DEFINITION : LAW

 These are a body of rules and regulations written and or unwritten that
constitutes a community or society.
 A body of rules or regulations that govern human conduct within a given
community or society which are enforceable and binding on the subjects of that
community.

PURPOSE OF LAW
 To maintain peace and order.
 To settle disputes
 To do justice

PRINCIPLES/CHARACTERISTICS OF LAW

Just application- is reasonable or fair

Certainty –known-ignorantiajurisneminemexcusat,--ignorance of law excuses no one.
Equality –Law knows no status ,colouror religion. People are the same as in the eyes
of the law
Uniformity /Generality:-should apply to all parts of the country or
community.(geographically)
Authority:-It must originate from a relevant board e.g. Parliament; custom
;precedentetc

JUSTICIA/GODESS OF JUSTICE
(A)blind folded
(C)scaleCertainty
Fair Fair
Uniformity A Uniformity
fair
C Uniformity

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  The principles of law are derived from the justicia-the goddess of justice.
 She symbolizes the function of the law
 She is depicted or shown blind folded, holding a scale on her left hand and a
sword or bow and arrow on her right hand.
 The significance of these features are :-

JUSTICIA’S BLINDFOLD
Denotes equality and explains the fact that the law is blind to society’s difference,
disparities in wealth, class, power and race. All the people are the same in the eyes of
the law.

JUSTICIA’S SWORD

 Symbolizes the authority of power to enforce or use force if necessary

e.g.
 The use of police and courts
 It is with the sword that obedience is enforced.

JUSTICIA’S SCALE

 It symbolizes uniformity and or equality

 It represents the constant weighing of the rights and interests of one individual
against those of another, so that those belonging to one will not overshadow
another
 The aim is to achieve a balance, for if this fails the peace and order on which
society depends for its existence is endangered.

LAW DEFINITION AND ANALYSIS

Rules and regulations that govern human conduct.
There are many types of laws that relate to a number of things e.g.scientific laws that
relate to the universe and how nature is regulated etc.
However in this subject, we are concerned about how human behavioris regulated.
The law is an instrument that is used by a society/community to ensure that people
/subjects do the right thing.

ENFORCEABLE AND BINDING

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  The law should bind, oppose, direct, order or instruct the subjects what to do
and any action contrary/against what is stated at law is punishable.

SANCTIONS
Broadly speaking,sanctions can be described as an unpleasant event or act that is
given or prescribed to a member state who has failed to abide or uphold the defined
law.It is apunishment or punitive measure given to a member of a society who has
acted contrary to what the law says

LAW vs REGULATIONS
Law governs all members in the country or society but regulations like by laws may be
for specific areas eg. Each municipality can have by lawsfor its area and these are not
enforceable to another area.

THE NATURE/PURPOSE OF LAW /AIM

1.To do Justice
The word justice is difficult to define, it shall be assumed that justice is or means
anything that is right and fair in a given situation –what is right and fair to a fair
minded person,
The law should be seen by an ordinary man to achieve the right results that are fair to
everyone
Its objection should be logical and its results should be reasonable.

2. To reduce Conflicts
Where conflicts arise the law should take its course to settle the dispute.
Should someone have done something wrong, the person should be punishable by the
law thus serving to maintain peace.

3.To maintain Peace /Preserve Order

Without law everyone might do whatever he/she finds necessary to do without
considering other people’s position. To avoid a crisis the law should be applied
uniformly so as to maintain peace and order.

PRINCIPLES OF MORDERN LAWPOSTITULATES OF A JUST LAW

1. Just Application
Law must be reasonable-it should uphold what is right and forbid what is wrong
{murderer vs parking offender-fine]

2. Equality
The law should apply equally to all the people of a given community in the same

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 4. Authority
The law should be derived from a proper authority eg Parliament or Municipality
It should be derived from a competent body.

5. Certainity
In order to be just as far as possible the law should be certain/known.
It should be clear and not ambiguous .it should be declared and made known
before being applied. Any new law should be published in the government
gazette, and once gazetted, nobody can argue that he/she did not know it hence
legal maxim –IGNORATIA JURIS NEMI NEM EXCUSAT –ignorance of law
excuses no one.

Legislation which purports to apply to past action is called ACTS POST FACTO
LEGISLATION and is unfair as is applied retrospectively/ backwards
6. Positive
In the interest of the public

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 LAW

NATIONAL LAW

INTERNATIONAL LAW

PUBLIC INTERNATIONAL PUBLIC INTERNATIONAL

PUBLIC LAW
PRIVATE LAW

CONSTITUTIONAL LAW CRIMINAL LAW SUBSTANTIVE LAW ADJECTIVE

LAW CIVIL LAW

(individual vs individual) (procedure)

(compensation)

ADMINISTRATIVE LAW

Law of persons Law of Property Law of Succession

Law of (real rights)
obligation

Law
Is divided into international and national law

INTERNATIONAL LAW

Refers to rules and laws made and enforced by several states and regulates the
conduct
or relationship of one state to another. Public International law are laws enforced by
the state courts with the jurisdiction over private individualwhere the system of law for

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Refers to rules and laws made and enforced by a single state alone and is binding on
the inhabitants of that particular state.

PUBLIC LAWS

Refers to laws which regulate rights when one part of the dispute is the state.

CONSTITUTIONAL LAW
It’s a set of rules defining and regulating the structure and function of the organ of
central and local government.
It is mainly concerned with the structure of organs/depts of the state and the
divisions of power within the state.
A constitution is the collection of rules setting out the framework or machinery of the
state.It shows the distribution of authority among the various institutions which
together make up the state
These are the rules that controls the State, President ,Parliament, Law courtsand
government boards etc

ADMINISTRATIVE LAW
The branch of constitutional law which is concerned with details of administration. It
consists of rules and regulations which lay down functions of the state officials and
the rights and duties of private individuals in their dealings with the state and the
procedure In which these rights and duties are enforced.

CRIMINAL LAW
This is law relating to crime and mainly deals with the punishment by the stateof
persons for offences which they will have committed in the community.
A crime is an unlawful action accompanied by a blameworthy state of mind which is
punishable by the state.

PRIVATE LAW
Refers to the rules and regulations that govern the logical relations between individual.
It affects the interest and rights of individual citizen.

SUBSTANTIVE LAW
Refers to actions of logical rights which lay down that one person has a right against
another person

It is the law that is concerned with recognizationeg rights, duties, immunities,privilege

etc
In the law of purchase and sale, the buyer has the duty to pay the price and receive the
goods
and the seller has the right to receive the price and the duty to deliver the goods

LAW OF PERSONS

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LAW OF SUCCESSION
Deals with what happens to a deceased person ‘s property after his/her death.

LAW OF OBLIGATION

Deals with personal rights and obligation in favour of the person over another as a
result of a contract or delict

ADJECTIVAL /PROCEDURAL LAW

Refers to a class of legal rights which deals with means by which legal rights are
enforced or a law that is concerned with how the contractual rights and duties are
enforced.

CIVIL LAW
Refers to the laws that looks into the private affairs of individuals and regulates the
legal rights of people

DIFFERENCE BETWEEN CIVIL AND CRIMINAL LAW

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CRITERIA CIVIL LAW CRIMINAL LAW

Private law
1.Branch/division of law Public law

2.Aim/Objective/Intention To compensate the plaintiff for To punish the accused

the loss rather than punish the
defendant

3.Degree of proof required Based on balance of Proof beyond reasonable

probabilities doubt

4.Interest/Parties involved Private individuals eg Individual vs state usually

though private individuals
Peter vs John can initiate
5.Results /Actions Fine/specific performance Imprisonment /fine or
death sentence

6.Example Breach of contract Rape,murder,AssaultTreas

on etc.

ARMS OF STATE

A) EXECUTIVE
COMPOSITION
 Head of state
 Vice President
 Security Agents
 Cabinet
 Civil Service
 Attorney general

FUNCTIONS
1. Declare war and maintain peace
2. Turn bills into laws
3. Implement laws

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B) LEGISLATURE
COMPOSITION

The President
 Speakers (non voters)
 Presiding officer
 Governors
 Chiefs
 Members of parliament
 Attorney General (ex officio)

FUNCTIONS
 Debate on matters of public interest
 Make and amend laws
 Approve state budgets
 Monitor line ministerial expenditure
 Represent constituencies
 Debate the President’s speach
C)JUDICIARY
COMPOSITION
 Chief Justice
 Judges and magistrates
 Chiefs to headmen

FUNCTIONS
 To interpret and apply law
 Ensure that enacted laws are constitutional
 Administration of justice
 Pass judgments
 Promote good governance
 Head Commissions of enquiry

SOURCES OF ZIMBABWEAN LAW

The main source of law in Zimbabwe is the Roman Dutch Law , but has been
supplemented by legislation ,decision of our courts i.e judicial precedence and
custom
Furthermore many people in Zimbabwe are subject to traditional customary law
particularly in their family relationships.

THE ORIGIN AND DEVELOPMENT OF ROMAN DUTCH LAW

Roman Dutch Law is that system of the law which was applied in Holland during the
period of Dutch Republic and which the Dutch took with them to the various colonies
which they founded in the Cape, East and West Indies.
It is the common law today of Zimbabwe/South Africa,Botswana,Lesotho,Namibiaetc
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That law which is not a product of a parliament
This includesRoman Dutch Law, customary law and judicial precedence or judge
made law
Therefore common law includes all sources of law except legislation

SOURCE OF LAW
1.THE AUTHORITATIVE SOURCE OF LAW

These are the source of law which are binding upon all the citizen of the
nation/country and these include

A) . CUSTOM
These are habits, norms or usual practice of behavior observed by individuals in
society.
Unwritten codes of behavior developed and practiced by individuals in a society or
community
Customs can be divided into 2 categories
(a) Social Customs
Refers to practices of a given society which are not binding but of a persuasive
nature e.g. payment of lobola, greeting others etc.
(b) Legal Custom
These are practices which are binding .It entails duties which must be observed
and are enforced by the society. E.g. chisi
For a custom to be recognized as legally binding it must satisfy the following
condition:-
I. Must be seasonable
II. Long standing i.e. immemorial origin
III. Uniformity observed by the members of the society
IV. Certain
V. Consistent with existing statute law
.
CASE : VAN BREDA vs JACOBS 1921
In the above case a custom existed among those in the fishing industries in the Cape
that once a part of fisherman commences catching or nets a shore of fish between
Cape point and fish hock, other fishermen are required to desist from attaining a
position to catch fish from the same shore
Some fishermen sets their nets to a beach to a shore of approaching fish and another
part of fisherman then placed their nets a short distance in front of the first part,
thereby intercepting the shore and catching it.
The first party claimed in an action that the second party had violated a local custom
“first come first pull”,thus depriving them of their rights to catch the shore.

HELD
The court ruled in favor of the first part as it observed that the custom was reasonable
because it was designed to prevent disputes among fisherman and eminently fair to
all parties. The practice was Longley established as it has been in operation for more
than 45 years .It was uniformly observed and known by all fishermen in the Cape and

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This refers to laws made /enacted by parliament and the president working together.
Refers to the publication of binding rules and laws on precise and well defined form
by a competent authority or body, having the legislation power to do so.
In Zimbabwe the legislative power is vested in the legislature which consists of the
President and parliament working together.

A statute or a act of parliament is the most authoritative source of law in

Zimbabwe.its provision overrides all provisions of other laws that may be inconsistent
with the provision that statute or act.
Legislation should also be based on the following principles:-
 Authority -parliament
 Certainty –known /predictable not post facto
 Equality
 Uniformity
 Just application-reasonable

THE LEGISLATION PROCESS / LIFE CYCLE OF LEGISLATION

Legislation passes through the following stages:-
(a) Conception:
There must be at least the initial proposal.
In Zimbabwe anyone can initiate legislation/law.
Anyone can make a representation to his/her MP {Member of Parliament}
The MP will take the proposal to the relevant minister, who then can take it to the
Attorney General for the proposal to be put in legal form and jargon / language
This draft is called a bill.

(b) Birth:
The next adventure is the hatching of the bill into an act. This occurs when the bill
successfully sails through parliament and is assented to by the President before it is
finally promulgated or gazette into law.

The bills go through the following stages in parliament,

1. First reading
This is the introduction of the bill by the responsible minister-and no debating
2. Second reading
At this stage the minister explains the purpose of the billor the policy behind the bill.
Details of the bill can be analyzed and debated on
Members of the parliament are then given time to study the bill carefully before it can
be made law.
3. Committee Stage
The house goes into a committee to discuss the various clauses of the bill,making
amendments /corrections even to the wording
4. Report stage
The committee chairperson will report if there were any amendments made to the bill
by the committee
The committee and report stage are only necessary if there are amendments or to be
made to the bill.

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C)LIFE
If the President agrees with the provisions of the bill he/she signs and the bill
becomes law when it is published in the GVT gazette and hatches into an act.
From the date of publication the provision of the act become law and no one will be
allowed to argue ignorance of that law (ignoratiajurisnem nem excusat).ie ignorance
of law is no excuse.
The life of an act may be indefinite and will exist and be applied and enforced as long
as there’s need for it.
D) DEATH / TERMINATION
An act or enactment may come to an end in the following ways:-
a) Expressly Repealed
This is done by parliament by coming up with a new act which replace the old
one,
e.g. the Company’s act chapter 24/03 replaced company act chapter 190.

b) Impliedly Repealed
This occurs when the provisions of a new act are inconsistent with the
provision of an earlier act, the affected earlier section falls away.

c) Lapse of time
The time period set for the act may come to an end where an act has been
made for a specified period, when the period gets to an end the act cease to be
the law thereafter.

d) Abrogation / Death of Law

The rule of law is abrogated and becomes dead i.e. falls into disuse if it is no
longer in use / observed.

SUBSIDIARY LEGISLATION

This refers to the laws made / passed by authorized subordinates such as local
Authorities
and municipalities.
These laws are usually called by- laws and are published in statutory instruments,
GOVT notices, rules and orders etc. All subsidiary legislation must be within the power
of the enabling act.
Any subsidiary legislation which is in consistent with or which exceeds the limits of
legislation is declared ULTRA VIRES i.e. over and above and hence unenforceable.

JUDICIAL PRECEDENCE / JUDGE MADE LAW

Precedence is a previous judicial decision which serves as a rule/ guide to a similar

case in the future. Generally it is not the function of the judge to make law.
The function of the judge is to state, interpret and apply existing laws and not to
make laws.

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e.g.
1.In a novel case which has not previously been heard before the courts for legal
decisions, the judge’s decision becomes the law for the future.
2.Where the statute is not clearly worded, the wording as given by the judge becomes
the law until such time as it is altered by the parliament.
3. Where the law is vague and capable of double interpretation, this interpretation as
given by the judge becomes the law.
4. Where there’s a legal vacuum or a grey area, as to what law should be applied in a
given or prevailing situation.

PRINCIPLES OF JUDICIAL PRECEDENCE

1. STARE DECISIS (Stare decisis et non quitamovere)

Stare decisis means to stand by the decision and not to disturb settled points.
HABIB MOTAN vs TRANSVAAL GOVT 1904
Once the court has given a certain ruling that court and those courts that are
subordinate to it in future give the same decision on similar cases
This doctrine follows the hierarchy of courts or authority.e.g. the decision of superior
courts are binding on all inferior courts.
The decision of supreme courts binds all inferior courts including the high court but
not binding at the Supreme Court
Decisions of inferior courts do not bind any other courts even themselves.

ADVANTAGES OF STARE DECISIS

a) Maintains certainty , predictability ,equality ,uniformity and convenience of law
b) Decisions are not delayed
c) Keeps the weaker judge along right and rational path
d) Saves time and reduces court costs

DISADVANTAGES OF STARE DECISION

a) A legal rule formulated before sufficient experience may contain an errorwhich
may be perpetuated as bad law.
b) Fails to come up with changing times and sentiments
c) The first experiment become the last and wealth of subsequent experience and
constructive thought counting to nothing

2. RATIO DECI DENTI - Reason for decision

Ratio deci-denti is the reason for the decision, this refers to the basis or the material
facts on which a decision is reached.
It is the principle of the decision
Material facts are facts necessary to the decision of the case,the omission of which
would either lead to a different or no decision at all being made.

The sum of total material facts ued to reach a decision isthe ratio decidenti
COTTAT vs PRIEST 1937
3. OBITA DICTA

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was made.
PETERSON vs JAJBHAY 1940
JAJBHAY vs CAPPIN 1939

JURISTS
Is the collection of ancient practicing law in Netherlands or refer to those who own the
basis of a wide spread reference by the court and elsewhere are regarded as
authorities of law e.g. VOET

THE HIERARCHY OF COURTS IN ZIMBABWE

Top level
SUPREME COURT
Superior courts
Court appeal
HIGH COURT

Court of first instance MAGISTRATE COURT

COMMUNITY COURT
Local
Courts
Low level PRIMARY / VILLAGE COURT

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 b) Community courts
Courts of first instance and also courts of appeal on parties tried by the village courts
can appeal with the community court.

COMPOSITION OF THE COURT

A village court is presided over by a headman or any other presiding officer appointed
by the minister –in practice they are usually appointed by the public
A community court is presided over by a chief or any other presiding officer appointed
by the minister.

JURISDICTION /POWER OF PRIMARY COURT

Primary courts have and may exercise jurisdiction to hear and try and determine any
civil case in which customary law is applicable when:-
a) A defendant is the resident within that area of jurisdiction of the court or
b) The cause of the case arose within such area and or
c) The defendant consent to the jurisdiction of the court.

A village court shall have no jurisdiction in any civil case

a) Where the claim is not determined by the customary law
b) Where the claim or the value exceeds specified amounts
c) To dissolve a marriage
A community court has no jurisdiction in any case
a) Where the claim is not determined by customary law
b) To dissolve a marriage contracted under the marriage act i.e. a civil marriage.
In terms of amounts of claim, the community court has no limit

CRIMINAL JURUISDICTION OF PRIMARY COURTS

A village court has no jurisdiction to try criminal cases

OFFENCES WHICH MAY BE TRIED BY THE COMMUNITY COURT

1. Theft of property not exceeding specified amounts..
2. Malicious injury to property not exceeding specified amounts
3. Assault which does not involve the use of any weapon and which does not
cause grievousbodly harm (GBH)
4. Contravention of local by- laws.
From the community court one appeal with the magistrate courts

MAGISTRATE COURTS
These are established in terms of the magistrate court Act.
These are situated in all provinces
These are courts of records and all proceedings should be recorded in English
language

COMPOSITION
These are presided over by magistrates, who are appointed by the public service
commission in terms of the constitution.
The magistrates are usually appointed from the clerical section of departments of

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TYPES OF MAGISTRATES
1. Ordinary-junior magistrate
2. Senior magistrate
3. Provincial magistrate
4. Regional/ Chief magistrate

JURISDICTION
All magistrate have jurisdiction over civil cases,
They may hear any civil matter provided
a) The person /partnership/ company carries on or is employed within the
province in which the court has jurisdiction.
b) The parties consent to the jurisdiction of the court
c) The action arose solely or partially within the area of the court’s jurisdiction.
Magistrate do not have jurisdiction to hear matters relating :-
a) Dissolution of marriage not under customary law
b) Validity and interpretation of will
c) The mental status of a person –insanity
d) Order for specific performance where performance is sought without the option
of payment of damage
e) Where the claim is in respect of a liquid document e.g. cheque the amount
should not exceed specified amounts

CRIMINAL JURISDICTION
The magistrate should have jurisdiction over all crimes except :-
1. Treason
2. Murder
3. An offence where any law requires that the person convicted of such offence
shall be sentenced to death.
They can however preside over summary trials and preparatory examination

MAGISTRATE COURT
LEVEL IMPRISONMENT FINE
Ordinary 1 year
Senior 2 years
Provincial 3 years
Regional/ chief 7 years

Procedure
In both criminal and civil cases one can appeal in person or be represented by a
lawyer

Appeal
Appeals against sentence go to high court and appeal against conviction orcan go
straight to Supreme Court.

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  Courts are based in Harare and Bulawayo and presided over by a senior
magistrate.
 Procedure is semi-formal
 No legal representation

JURISDICTION
Commercial disputes that arise between traders and their consumers , e.g.
-dry cleaning firm and a client
-Lawyer and an accounting firm e.g. on over charging

There’s no appeal from a decision of the small claim court.

However the High Court has the power to review the decision where there’s an
allegation of gross irregularities in the proceedings e.g. That the magistrate has an
interest

HIGH COURT
It is set up in terms of the constitution
It is the superior court of records
Permanently set up in Bulawayo and Harare and has cessions in Gweru, Mutare and
Masvingo

COMPOSITION
 For the purpose of hearing or exercising its original jurisdiction in any matter it
shall consist of one or more judges of the high court
 For the purpose of hearing a criminal trial it consists of one judge of the high
court and two assessors.
 For the purpose of reviewing the proceedings or decision of inferior courts it
shall consist of one or more judges of the high court.
 For the purpose of exercising its appellant it shall consist of two judges of the
high court.

CIVIL JURISDICTION
The high court has jurisdiction over all matters and persons within Zimbabwe.
However they don’t have jurisdiction hear:-
a) Constitutional matters
b) Matters that require declaration of rights
The high court may reserve certain aspects to be decided upon by the Supreme Court.

CRIMINAL JURISDICTION
The high court may pass any sentence permitted by law and may impose a
deathpenalty. The powers are unrestricted as to period and amount.
The high court has full jurisdiction over matters arising within Zimbabweand has extra
territory jurisdiction (Authority outside country) in matters concerning Zimbabwe
citizens who commit offences outside Zimbabwe,the effects of which has some
harmful effects in Zimbabwe.
RODWELL MHARAPARA vs STATE (95/85)

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 that legal practitioners appear on their behalf.
- In criminal matters where the accused will not have the legal representation
because he/ she do not afford, counsel (non as prodea counsel) is appointed to
represent.

REVIEW AND APPEAL

- The high court has power to review all the proceedings from the inferior courts
.It can confirm, vary or set aside the judgment.
- It can also hear all the appeals from such courts but with regard to sentence
only
- Has power to review tribunals, Administrative laws etc.
- All appeals from high court go to the Supreme Court.

POWER TO OVERULE PARLIAMENTARY LEGISLATION

- Overrules parliamentary legislation where such legislation are In consistentwith
the constitution.
- Will determine the validity of subordinates legislation e.g. by-laws. Such
legislation will be invalid if:-
 Inconsistent with the constitution
 If it is ultra vires the structure under which it was made
 Uncertain or unreasonable
 Contain improper delegation of power

SUPREME COURT

- Set up in terms of the constitution of Zimbabwe

- Have sessions in Harare and Bulawayo –may sit in Gweru, Mutare and
Masvingo
- Is the highest court in Zimbabwe
- The judges are appointed from leading lawyers of the cream of the legal
professionals of Zimbabwe.
This is a court of appeal but can also be a court of first instance in relation to
constitutional matters and matters involving the violation of rights.

COMPOSITION
The Supreme court is duly constituted if it constitute not less than 3 judges of which
one shall be:-
a) The chief justice or
b) A judge of the Supreme Court.

JURISDICTION
The Supreme Court has the power to :-
a) Allow the appeal and squash the conviction / sentence
b) Alter the conviction / sentence
c) Substitute conviction with a suitable sentence
d) Confirm conviction or sentence or increase sentence

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REVIEW
Subject to review by non except pardon by the state President
ADMINISTRATIVE COURT
Constituted in terms of Administrative Court Act

COMPOSITION
- Is presided over by the President of the court or the acting President, who is
duly qualified to act as the judge of the Administrative Court
- Such a person must have to be a former judge of the High Court or a legal
practitioner
with at least 7 years experience.
- The President of the court and 2 assessors to assist him / her.

JURISDICTION
- It deals with administrative cases such as the determination of water rights,
shop licenses ,road and motor transportation permitsetc
- The jurisdiction of the court as determined by having reference to the act, itself
and any other enactment dealing with the function of the court.

PROCEDURE
The Administrative Court is a court of records and proceedings are conducted in
public unless otherwise stated .The parties may appear in person or may be
represented by the legal practitioners

APPEAL
Appeal to the Supreme Court but in some cases may be reviewed by the High Court.

LAW OF CONTRACT
CONTRACT: A contract is a lawful agreement made by two or more persons within the
limits of their contractual capacity,with the serious intention of creating legal
obligation, communicating such intentions without vagueness each to the other, being
of the same mind as to the subject matter, to perform positive or negative acts which
are possible of performance.

ESSENTIALS OF VALID CONTRACT

1. Lawful agreement-(Brandt vs Bergestedt 1917)-Sunday sales
2. The agreement must be within the parties contractual capacity –(Edelsten vs
Edelsten)

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 Moritz vs Pratley 1894.
6. Agreement must not be vague Levistein vs Levistein
7. Performance must be possible –Wilson vs Smith and Another 1961.

1.0)LAWFULL AGREEMENT
Any contract must be within the framework or limits of the law
The law defines what ought to be done and what must not be done i.e. legal or illegal

CAUSES OF ILLEGALLITY
a) An agreement contrary to statute
b) An agreement contrary to public policy
c) An agreement contrary to morals-iecontra bonos mores

An agreement contrary to statute

A contract which is specifically prohibited by law e.g. the sale of human beings, fire
arms or trading without a license-liquor
Any arrangement to do an illegal thing is void or is not allowed.
Lion Match Co. vs Wessels 1946

An agreement contrary to public policy

These refer to contracts such as Restraint of trade-Pest control(Central Africa) Ltd vs
Martin and Another 609
These include price fixing, monopoly, limits to individuals interest to work or trade.
(katz vs Efthimiou 1948)
However where the agreement is in the equal interest of the contracting parties and
does not adversely affect the public,the law may make exceptions e.g. ex- employee
and sell of goodwill.

Gambling Transactions
Wagers gambling are considered to be contrary to public policy and are therefore
illegal.(chimbadzo)

Immoral agreement –contra bonos mores e.g. (prostitution and polygamy)

Any agreements that seek to do anything that is immoral is void ab initio i.e. from the
start.
Agreements to further prostitution or paying a commission /bribing a marriage officer
is an immoral act and is thus un enforceable.(Hurwtz vs Taylor 1926)
All agreements which are illegal do not constitute contracts but mere arrangements
and the relationship between the parties is regarded by 2 doctrines.
1. Ex turpicausa non aurita action i.e
From an evil cause no action will arise.
- No court will come to the assistance of parties in a void contract.
- The above principle applies regardless of the fact that one part may have
performed his/her part to the arrangement
- No court can order specific performance at law and non can sue for the same
The court adopts the position that let the loss fall where it lies.
2. PariDelictum LestFactumDefendentis

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 (Jajbhay vs Cassim 1939)
The rule may be relaxed to do simple justice between man and man

2.0)CONTRACTUAL CAPACITY
- Refers to the ability of one person to either contract or his / her incapacity to
contract
- At law, not all persons can enter into contracts for some are deemed to lack it
and therefore needs assistance when contracting e.g. minors, insolvent,insane
persons etc
- On the other hand there are people who have totally no legal right to contract at
law.
- If they enter into any contract, the agreement or arrangement is void.
- There’s another group of people with full contractual capacity who can enter
into any contract which is legal.

`
PERSONS WITH FULL LEGAL CAPACITY
- All majors
- All married persons
- Women married out of community of property through antenuptual contract
- Tacitly emancipated minors

PERSONS WITH LIMITED LEGAL CAPACITY

- Insolvent
- Interdicted prodigal
- Women married in community of property
- Artificial persons

PERSONS WITHOUT LEGAL CAPACITY

- Drunkards/ intoxicated individuals
- Insane person
- Illegal association
- Minors
-
PERSONS WITH FULL LEGAL CAPACITY
All majors
- The legal age of majority act 1982 defines any one above the age of 18 as
having full contractual capacity, over all matters be it social or business.
- Every major can enter into any contract , e.g. hire purchase ,marriage etc.
(everything constant )

Married persons
- A minor automatically becomes a major at the instance of being married or
marrying
- Any married women can contract fully provided she is not married in
community of property.

21
 - She can sue or be sued without the husband’s role.
An antenuptual contract is executed by the judge and should be registered with the
registrar of deeds.
An antenuptual contract can be signed even if not registered but concluded.

TACIT EMMANCIPATION
Tacit Emancipated Minors
- These are minors who have been given some degree of freedom either
expressly or impliedly by their guardians, to contract either generally or can be
occupied or and can carry a trade (do a business) or can be occupied or
employed on own account.
- That emancipation give the minor full legal capacity in a particular trade and no
more
- Their capacity to contract is limited to the business or employment /occupation.
- In determining whether one was tacitly emancipated or not, the following
factors are relevant:-
a) The relationship between minor and guardian(s).
b) Whether the minor is staying with the guardian (DAMA vs BERA)
c) The nature. Duration or size of the occupation
d) The degree of the contract
- The minor is tacitly emancipated depending on the degree of freedom or
autonomyindicated by 4 functions indicated above.

PERSONS WITH LIMITED CAPACITY

1. Women married in community of property
Contracts entered by a woman married in community of property are void since such
persons have no legal standing for them to contract except with the consent/
husband’s expressed authority.
This excludes buying necessities such as clothing, food, medical necessities and their
domestic services consumed or used permanently or temporarily as part of joint
house hold ,
These include insurance, bank account, however they cannot apply for a bank
overdraft.
They may operate a business with the husband’s consent and hence bind the joint
estate.
The joint estate is liable only in-terms of the extent of any enrichment which has
happened to both but not to the extent of the total liability, unless it has been
authorized by the spouse to be public trade where:-
a) One need to be dealing with the public at large
b) It is clearly separated from home or joint business
c) Business is conducted on premises taken for that purpose
d) If this is conducted openly at a site of all.

2. Insolvent

22
 - These may enter into personal contracts such as marriage and can be
employed.the insolvent may not operate businesses or general dealers , be
manufacturers , be company directors or hold a liquor license for it require the
consent of the trustees.

3. Interdicted Prodigal
- The prodigals are persons on a spending spree.
- Persons squandering money
- These persons are managed by curator who has to approve their contracts ,
they can contract for basic necessity
4. Artificial Persons
- Companies are artificial persons for they can sue or and be sued
- They are separate from the shareholders
- Companies can only do what is permitted by the memorandum of association
or constitution.

PERSONS WITH NO LEGAL CAPACITY

1. Illegal Associations
An association that is not registered is illegal and any contract which it enters into is
illegal and hence void.
Such associations will only be liable in the event of any enrichment and not the actual
contract obligation

2. Alien Enemies

This refers to persons who are citizens of a country or countries which have been
declared to be at war with Zimbabwe and who are residing in the enemy’s territory
Any contract with these subjects is void.

3. Mentally Ill Person (Insane)

Any contract entered into by a pe

rson during the period of insanity is void but such person may be liable for
unjust enrichment.

4. Drunkards –intoxicated

- Drugs or alcohol affects the capacity to make competent judgments and hence
contracts are void.

- It should however be proved that the drunkard was not merely reckless but
totally blinded.

- The person will only be liable for unjust enrichment.

23
 contractual capacity at all except when they are assisted by their parents or
guardians.

- The assisted contract should be to the minors benefit and not the parent’s
benefit

- Should relate to –important life issues e.g. education, food etc

Exceptions

 Tacit emancipation (Dama vs Bera)

 Basic necessities (Unjust enrichment –Tanne vs fogit)
 Fraud –misrepresentation (where a minor lies or misrepresent his / her age the
contract will be binding in him.)
 statutory exceptions e.g. can open a POSB account
 Ratification ie if one later attains the legal age.
- Where the minor enters into a contract, the contract is void.
- Where the minor has already received something from the contract he/ she will
be required to pay for unjust enrichment and not for the contract itself.
- If the minor has received goods, can only return what he still has not what has
been consumed or lost.
- If a minor reaches the age of majority and chooses to pursue the contract
entered while he was a minor, the act will be regarded as ratification and hence
binds on him even though it was entered without the parent’s assistance.(where
a minor has performed his part, the other part should also perform - limping
contracts.)

3.0)SERIOUS INTENTION
- A contract can only result if the two parties are committed to be bound under
the contract.
- Serious intention can only be deduced from how the contract is defined.
- The parties must define their rights and obligation which they intend to
undertake in thecontract and should not leave any aspects open for a different
interpretation.
- No contract results if an offer is made jokingly and one accepts it.
- Informal family arrangement cannot be treated as contracts.
- Informal social arrangements do not result in contractual obligation,
- Both parties may expressly state that they do not want to be bound, no contract
result from that part.

(Balfour vs Balfour 1919)

Balfour agreed to pay wife monthly maintenance $30 while away in Caylon and then
failed and wife sued
held
24
  The agreement is formed when one party makes an offer and the other part
accepts that offer
OFFER + ACCEPTANCE = AGREEMENT-Agreement can be expressed or implied.
NB.All contracts are agreements but not all agreements are contracts.

OFFER
- An offer is an express or implied proposal to give or do something.
- It is a definite promise to be bound on certain terms.
- It is not a contract before acceptance
- An offer is made to a particular person or group of persons or to the world at
large e.g. reward cases. (Carlil vs Carbolic smoke Ball Co. 1893)
- Only the person or a member of that group to whom the offer was made may
accept.
- If the offer is accepted as it is an agreement is reached which may be a
contract.

ESSENTIALS OF A VALID OFFER

1. Offer must be definite.-
- It must not leave aspects of the agreement dependent upon the future will of
one of the parties Kantor Vs. Kantor
- It must not leave part of the agreement blank or open to subsequent
negotiation
(Ok bazaars vs Bloch 1929 and
King vs Portgieter).
- It must not contain wording which is vague (Dawidowitz vs Van Drimelin 1913
and Humphreys vs Carsell 1923 )
2. Offer must be made with the intention of being accepted by some other person
and not a mere invitation to do business.
NB.The following are not offers:-
a) Invitation to tender (Spenser Vs Harding)
b) Newspaper adverts in general
c) Display on self service counters(Pharmaceutical Society of Great Britain Vs
Boots Cash chemists 1953).
d) Displays on shop windows(Crawley Vs Rex)
e) Statements of lowest price in response to a specific enquiry (Harvey Vs
Facey 1893)
f) General statements of the lowest price (Erfoiken Vs Simon)
g) Adverts by transport company of their lowest price for conveying goods
frazer Vs Frank Johnson 1894
3. Offer must not have been revoked
- Offeror may revoke his offer at any time before acceptance has taken place.
The revocation is ineffective until brought to the attention of the offeree
- Revocation takes place in the following ways:-
a) Lapse of reasonable period.
b) Notification –expressly
c) Supervening impossibility or illegality
d) Rejection –counter offer Hyde Vs Wrench )

25
 4. Offer must be one on which an optional time limit has not expired.(Boyd Vs Nel
- The option is a separate contract which is totally binding on the offerer
regardless of whether his offer is eventually accepted or not or regardless of
even whether the offeree is capable of accepting or not.
- Thus the offerer may not break the option by selling to another person before
the date ,NOR may he destroy the options value by himself makingit impossible
before due time to fulfill his own offer, NOR is the option revoked by the
death.(Van de Pol Vs Symington)
NB,although it has been argued that an indefinite option should be regarded as valid
for at least reasonable period having regard to the circumstances (Annamma Vs
Moodley) Current thinking is that an option may not be granted for an indefinite period.
- However keeping an offer open until the offeree is in a position to accept is
permissible since the period although unknown is not indefinite.
5. Offer must be communicated to the person with whom it is intended that the
contract should be made
- An offer made to the specific person cannot be accepted by a third person.

ADVERTISEMENT
The general rule is that an advert is not an offer but a mere intention to do business.
Crawley Vs Rex 1929)
- For he who advertises may not have the serious intention to contract
- The purpose of the advert is merely to invite or attract the other part to come
and (negotiate or do business with the advertiser.
- Thus a customer is invited to offer the marked price for the article and the
tradesman can please himself whether to accept the offer or not.

In Crawley Vs Rex
- A shop keeper advertised a particular brand of tobacco at a shop by putting a
placard around his shop marking a cheap price.
- Crawley entered the shop and bought a pound of tobacco and left, he then re-
entered and asked for another pound and the shop keeper refused. Crawley
refused to leave the shop without the tobacco. The shop keeper sued Crawley
for trespassing.
Held
The advertisement was not the offer and the contract was therefore not concluded
Crawley tendered the price, Crawley was found guilty of trespassing.
Exceptions to the rule
An advert can however amount to an offer where a general offer is made to do
business with whoever shall perform certain acts as in Reward cases
Carlil Vs Carbolic Smoke Ball Company 1893
26
hence she was entitled to the $100

Where just one reward is offered only the 1st person to do what is required is entitled
to the reward.
(Lee Vs American Swiss Watch Co. 1914)
Mrs. Lee and several others gave the necessary information in response to the
company‘s advert.
Held
she was not entitled to receive as she was not the first to give information.
NB.No reward may be claimed by anyone who did not know of the requirements since
one cannot accept an offer he didn’t know about.

(Bloom Vs American Swiss Co.)

B didn’t know of the reward at the point of giving information and hence cannot claim
the reward later after giving the information willingly and ignorantly.
Similarly no reward of information is forcibly provided.

TERMINATION OF OFFER
An offer may be terminated through the following:-
1. Revocation/ Withdrawal
- Offeror may revoke his offer at any time before acceptance has taken place
- The revocation is ineffective until it is brought to the knowledge or attention of
the offeree.
- It is only effective when received by the offeree
- Revocation may also occur by implication.
(Greenberg Vs Wheatcroft 1950)
On 6 June W signed a written offer to buy certain land from G the owner. On 7
June W telephoned G’s agent revoking the offer,on 8 June G signed an
acceptance on the documents containing the written offer.
Held
The offer had been effectively revoked on 7 June and no longer opens for acceptance
NB.However an offer may be irrevocable if the offeror binds himself / herself by a
separate contract to keep the offer open for a specific i.e. where there’s an option
(option period)
In the event of breach of the option by the offeror the offeree is entitled to damages
(Boyd Vs Nel)

2. Lapse
A offer lapses in the following ways:-
- Death or insanity of either part.
- Reasonable time (Ramsgate Hotel Co. Vs Montefiore 1866)
- If not accepted within the prescribed time (Laws Vs Lutherfords 1924)
- If the intended program becomes illegal not possible for performance
(Wilson Vs Smith and other 1956)

3. Rejection
An offer comes to an end if rejected by the offeree either by communicating or
27
 (Hyde Vs Wrench 1840)
Defendant offered to sell land to the plaintiff for $1000.00, plaintiff offered to
pay $950.00.the Defendant rejected this
- Plaintiff then agreed to pay $1000.00 but now the defendant no longer wished
to sell Plaintiff then sues for breach of contract.
Held
- The plaintiff had made a counter offer which has the effect of cancelling the
original offer.
NB.
- A counter offer may however be accepted by the original offerorif he so wishes.
- It must also be noted that a mere requisition for more information is not a
counter offer(Stevenson Vs mclean 1880 and Amalgamated Society of
woodworkers of SA Vs Schoeman and another 1952)

DIFFERENCE BETWEEN AN OFFER, INVITATION TO TREATY,COUNTER OFFER AND

CROSS OFFER.
Invitation to Treaty
- This is an invitation to another person to make an offer as in the case of
advertisements e.g. where a customer is invited to offer the marked price for
the article and the tradesman can please herself whether or not to accept the
offer.
- Other example of invitation to treaty.
a) Invitation to tender (Spenser Vs Harding)
b) Company prospectus
c) An auctioneer’s request for bids.
d) Exhibition of goods for sale in shop (Fisher Vs Bell).
e) General adverts of goods.
Counter offer
is a rejection of the original terms of an offer by making alteration to the original
offer, it is a conditional acceptance that brings the original offer to an end, i.e. it
has the effect of cancelling the original offer.(Hyde Vs Wrench 1840)
- A counter offer may however be accepted by the original offeror if he so wishes.
Cross offer
- Occurs where there’s inconclusive discussion between X and Y regarding the
sale of X’s property e.g. where X by letter offers to sell his property to Y for
$500.00 and Y by means of a letter again which crosses X’s letter in the post
offer to buy X’s property for say $500.00 (Tiwn Vs Hoffman 1873)
Held
No contract arises from a cross offer
NB- it was a split decision as it was argued that a contract could come into
being where the parties have intended to create a legally binding agreement on
the same basis.

REQUIREMENTS OF A VALID ACCEPTANCE

28
 to whether acceptance has taken place (Boern Vs Harris 1949)
3. Acceptance must be made during the life of the offer i.e. before the offer lapses
or is revoked.(Ramsgate Victoria Hotel Co. Vs Montefoire 1866)
4. Acceptance must be in the manner prescribed by the offeror
- If the offeror prescribed the mode or manner of acceptance,these become one
of the terms of the offer.
- If Acceptance is not made in the manner prescribed by the offeror, no contract
arises.(Eliason Vs Henshaw 1819)
An offer by E to buy flowers from H was brought to H by wagon. In terms of the offer
it was required to send his acceptance to E by means of wagon H thinking he could
reach E more quickly by post accepted by letter which arrived after the wagon.
Held
Acceptance was invalid and hence there was no contract.
NB. Mode may not be prescribed as in adverts but performance of the act without
notification of the advertiser is valid –(Carlil Vs C.S.B Co.)
The mode used to make the offer is usually regarded as the mode for use on
acceptance
5. Acceptance must be made by the personto whom the offer was intended.
(Bird Vs Summerville and Other 1961)
Exception in the case of the option on a sale for cash where the right of the case may
be ceded to a second party.(Harsh Vs Neil 1948)
6. Acceptance must be communicated to the offeror
7. Acceptance must be consistence with the requirements of a valid contract

POSTAL RULE (expedition Theory)

Where the Post Office is used as a channel of communication and a written offer is
made by post, the contract becomes complete at the time when and the place where
the letter of acceptance is posted.(Cape Explosive Work Co. Vs SA Oil & fat
Industries 1921 and C.E.W Co. Vs Liver Brothers SA Limited )
Each of the defendants wrote and sends by post to C.E.W Co. at Summerset West
Cape,letters containing an offer to sell glycerin, SAO and fat industries from Belmotein
Transvaal and Lever Brothers in Durban.
The letter of acceptance was posted in Somerset West
The matter was heard before the court which had jurisdiction over the case –SAOFI
wanted Transvaal while LB wanted Durban where they respectively received
acceptance letters
Held
Somerset West where the letters of acceptance were posted, had the jurisdiction.
NB. The contract is concluded whether or not the letter was received by the offeror
(Household Fire Insurance Vs Grant )

29
 - The above also applies to offer and acceptance by telegram but not by
telephone or telex

AGREEMENTS BY TELELPHONE AND TELEX

In the case of instantaneous communication i.e. telephone and telex, a contract is
concluded at the time when and place where acceptance is received by the offeror.
Thus the postal rule does not apply, thus if bad weather –line prevents the offeror
from hearing the acceptance e.g. the line is cut before the offeror hears the
acceptance, there’s no legal or valid acceptance.

SPECIAL TERMS
- These are the contents of a contract which prescribe the performance to be
made by each part and the manner in which it should be made or
- These are the undertakings and or promises contained in the contract
- Terms may be expressly agreed or may be implied by law or the facts
- Where the offer is subject to special terms, the offeree will not be bound by the
terms but may expressly or impliedly accept them as follows:-
-
a) Signed Documents
Where these are concerned the CAVEAT SUBSCRIPTOR rule applies i.e. let the one
who signs be aware.
- The rule is to the effect that if a person signs a document he or she is bound by
the term and conditions of that document ,Whether he /she didn’t read it or
even where it is written in a language one doesn’t understand.
- It applies not only when one signs after studying the document but also when
one signs carelessly or recklessly (George Vs FairmaidPvt Ltd 1958)
G a hotel guest signed a hotel register which contained contractual terms some
of which he completed by filling in blank spaces but the rest of which he didn’t
read.
The clauses meant that goods will remain in rooms at owner’s risk, certain
goods belonging to G were stolen and he sued the hotel company.
Held
G was held by the terms because he knew he was signing a contractual document.
(Bhikagee Vs Southern Aviation 1949 )
B an experienced business man who was accompanied by a friend who could read
30
alternative arrangements, the company sued B when he refused to pay.

Held
B was bound by the condition, the that he didn’t understand English was immaterial.
By the signature he elects to take risks and is therefore bound.(Burger Vs Central
SouthAfrican Railways 1903)
Held
When a man signs a document he is bound by the words above his signature

EXCEPTIONS TO THE RULE

a) Where the signature was obtained through fraud ,duress, undue influence and
misrepresentation (Donnars Motors Vs Kufinya 1968-voestoots)
b) Where the contract is illegal or contains a mistake Justus error
(Foster Vs Mackinnon 1869)
c) Where the words contained in the contractarevague or ambiguous and the
parties are under an honest mutual mistake as to what each part intended.
NB, where a part signed a document where any of the above exceptions apply. The
party escapes liability by pleading a defense NON EST FACTUM(not my deed).

B)UNSIGNED DOCUMENTS e.g. Tickets and Receipts i.e. Ticket cases

Such tickets and receipts often contain certain exemption / exclusionary clauses. E.g.
- Goods left at owner’s risk
- Chengetainhumbidzikarasikahatiripe
An exemption clauses is a contractual provisional which seeks to protect one of the
parties from liability which he/she would be otherwise subject to:-
- These clauses may provide that the party concerned shall not be liable at all or
alternatively might place an upper limit.
- The clause must be communicated to the offeree or other part.
{Parker Vs South Eastern Railway Co. 1877CSAR Vs Maclaren and CSAR Vs
James 1903 }
Where an agreement has taken place in the normal manner and the offeree has been
given a ticket by the offeror which contains written matter purporting to contain terms
of the agreement,theofferee will be bound by all these terms if he is aware or ought to
have been aware of the terms at the time of acceptance that the offer was subject to
them
(Dyer Vs Melrose Steam Laundry 1912)
The approach of the court in ticket cases has been to adopt the so called Parker Test
established in Parker Vs Serc 1877
- Under the Parker Test the following questions are asked:-
a) Did the person who received the ticket know that there was printing or
writing on it
- If yes
b) Did he know that the printing /writing contained provisions of the contract in
question.
- If yes, then the plaintiff is bound
- If both or any of the above question are answered negatively (NO) then a third
question is asked.

31
 conditions to the notice of the offeree.(CSAR Vs Marlborough Court 1903 /
CSAR Vs James)
- The condition must be brought to the notice of the offeree either before or at
the time when the contract is made otherwise it will not apply.
(Oiley Vs Marlborough Court 1949)
O booked into a hotel having paid in advance she had a room allocated, and on one of
the walls was a notice”THE PROPRIETOR WILL NOT HOLD HIMSELF LIABLE FOR
ARTICLES LOST / STOLEN UNLESS HANDED OVER TO THE MANAGER FOR CUSTODY”
O closed the self locking door of the bedroom and handed the keys to the reception
clerk down stairs.
- A third person took the keys and stole certain of O’s goods from the room
- O sued the hotel for the loss
Held
The contract was completed at the reception desk and no subsequent notice in the
bedroom could affect O’s right as she had seen the notice when she was already a
guest. The notice must have been given to her before or at the time when contract
was being made hence the notice could not bind her.
Exceptions
NB. Had O previously visited and seen the notice she would have been bound by its
condition on the basis of constant number of dealings as in (Sparling Vs Bradshow
1956)
Where it was established that by having kept goods in a warehouse for 3 years, seeing
the notice on several occasions during that time was reasonable constant dealing for
one to have known the conditions and hence no compensation could be received for
loss or damage

5.0)AGREEMENT MUST NOT BE VAGUE

It must be certain in meaning
The requirement in certainty in a contract is the fact that rights and duties be
established and defined in such a way as not to render the contract impossible at the
instance of the court.
- The meaning of the contents should only have one interpretation
- E.g. there should be no room for argument as to whether the contracts was one
of purchase and sale or lease.
- Any contract that is vague is null and void –no contract and un enforcable

THE CONTRA PROFERENTUM RULE

- This rule is applied where there’s vagueness in the interpretation of a contract.
- It states that where the meaning of a contract is not clear and all the rules of
interpretation have been exhausted the ambiguity in the writing should be
interpreted against the party who is responsible to draft it.

6.0)THE PARTIES MUST HAVE BEEN OF THE SAME MIND

A true and valid agreement is an outcome of a valid offer and valid acceptance.
- Valid Offer + Valid Acceptance = Agreement = contract
- At law, the two parties should be in AD IDEM (Consensus ad Idem) –both
parties should be of the same view.

32
VOID AND VOIDABLE CONTRACT
VOID
- If a contract lacks one or more of the essential of a valid contract, it will be
described as a void contract i.e. it does not exist at law.-neither can rights nor
obligation arise out of it.
- It is unenforceable

VOIDABLE
- A voidable contract has all the essentials of a valid contract, but could contain
some floe of law
- There is a choice given to the aggrieved or injured party to choose to continue
to be bound or rescind it.
FORMS OF VOIDABLE CONTRACTS
MISREPRESENTATION
A misrepresentation is false statement of facts which is made by one person to
another before and at the time of contracting of some matter or circumstances
relating to it with the intention of inducing a contract that actually results in
contracting.

ESSENTIALS OFMISREPRESENTATION
1. The false statement should have been made to an existing fact not future fact.
a) A promise for the future not carried will only be misrepresentation if it had
been guaranteed \ has been made as a lie.(Kafiya Vs Domer Motors 1968)
b) An honestly held statement of opinion can never be a misrepresentation
(Lamp Vs Walter)
c) Puff Talk Vs Sales Talk
Puff talks are not misrepresentation
d) Conduct may replace compliment words as false representation.
(Trotman Vs Edwick)
e) Non disclosure (utmost of good –UberimaFidei) e.g. insurance or contract of
insurance
2. The false statement must be material in essence that an ordinary reasonable
person would have contracted in the circumstances.
3. The misrepresentation must have been made with the intention that it should
be acted upon.
NB. Duress force fear
Undue influence Weakening relationships
4. The misrepresentation should be acted upon resulting in the contract.

TYPES OF MISREPRESENTATION
Honest misrepresentation /Fraudulent / innocent / negligent

-
Duress Requirements
a) Actual violence or reasonable fear
b) The fear must be caused by the threat of some considerable evil to the party
or family or property.

33
 REQUIREMENTS FOR UNDUE INFLUENCE

- That the other party exercises influence over him

- that this influence weakened his powers of resistance and made his will pliable
- That the other part exercises his influence in an improper manner to induce him
to consent to the transaction which is to his detriment and which he ,with
normal free will would not have concluded.(Preller& Others Vs Jordan 1956 )

PERFORMANCE MUST BE POSSIBLE

- The intention of every contract is that something must be done.
- The objective or intention of the contract should be possible of performance.
- The moment performance becomes impossible the contract falls away or is
Void.
- Performance can either be physically possible or legally possible
- If a party seeks to avoid a contract on the ground of current impossibilities it is
important to prove.
a) The performance must have been impossible at the time of the contract.
b) The one seeking to avoid the contract should not have known or suspected
that the contract was impossible (Wilson Vs Smith)
c) The contract must be absolutely impossible to everyone.
(Adler Vs Bloomfontein Town Council)
d) Performance of the contract must not be guaranteed (Lord Clifford Vs
Waits).

SUPERVENING IMPOSSIBILITY
An act of God or state that prohibits performance, natural causes –storm, deaths and
imprisonment.
BREACH OF CONTRACT AND THE REMEDIES OF THE INJURED PARTY.

- Where there’s no real agreement or where the consent of one part is defective,
the relationship between the parties is governed by the rules applicable to void
and voidable contract.
- In the first place there is no contract so no question of enforcement.
- In the second, one of the party has an election , he may abide by the contract or
claim
(Restitutio in Integrum) damages eg
- Where there’s defective in performance i.e. failure to observe one or more
terms of the contract. (Broderick Properties Ltd Vs Rood 1962)
- Such breach may occur in advance i.e. anticipatory breach where there is
unlawful repudiation before the appointed time of performance
(Novick Vs Benjamin)
- in contracts where performance has to be made by each part at the same time
which is the general rule in bilateral contracts, breach by one part cannot arise
unless the other party has performed his part of the agreement or is ready to
perform his part to the agreement(Hauman Vs Norje)
- if one of the parties is required to perform first he cannot demand

34
 - Remedies differ according to the materiality of the breach.
If breach is material:-
a) He may treat the contract as cancelled and sue for damages.
b) Abide by the contract and sue for specific performance and claim such
damages as he has suffered-(Restitutio in Integrum)
c) Breach of non material fact does not lead to cancellation but to a claim for
damages as suffered as a direct breach of the term.

FORMS OF BREACH
1. Mora Creditoris- Creditor in default
2. Mora debitoris- Debtor in default
3. Rendering performance impossible
4. Anticipatory breach
5. Positive mal performance
REMEDIES
1. Damages
2. Specific performance

TERMINATION OF CONTRACTS
1. Performance
2. Merger
3. Novation
4. Set off
5. Release / Waiver
6. Prescription
7. Insolvency
8. Death
9. Supervening impossibility of performance
PERFOMANCE
- Performance is the fulfillment of the contract within the time and in accordance
with the manner stipulated.

- This is the most common way of terminating a contract

- The two usual methods of performance are payment and tender

(G Salt Works Vs Van Tender)

NB.SPECIFIC PERFORMANCE
An application for court order compelling the other party to perform their obligation in
terms of the contract
- Specific performance apply in certain circumstance and not in other
- Courts may not declare specific performance in the following situations

35
 or insolvency of either of the contracting parties
d) Where the result would be to be to impose hardship on the defaulters
party e.g. ordering the delivery of large quantities of water in drought years
from community to someone’s land.
e) Where the thing claimed can be readily bought elsewhere.

MERGER

- A contractual obligation is extinguished by the merger when the creditor and

debtor in respect of that obligation become the same person, e..g. marriage in
community of property by the parties.

- Or when there is a merger or coming together as one entity of two entities

which had

a debtor creditor relationship.

NOVATION
Is the extinction or coming to an end of one contract as it is replaced by another.
- The first or original obligation is extinguished and a new obligation is
substituted for it.
- The effect of novation is to discharge the old contract with its incidence such
as interest, real and personal securities

FORMS OF NOVATION
1. Novation Proper
This is when the original parties alone are parties to the new contract.E.g. when
a lease agreement is converted into a sale agreement between the same
parties.
2. Assignment
Exists when a new person replaces or substitutes one of the original parties
- The consent of all the 3 parties to the contract is required (i.e. the assigned
andthe original two parties )if the assignment is to be valid.
3. Delegation
Novation does not consist in substitution of one debt to another only but can
also be from one debtor to another through delegation.
- For the delegation to be valid consent of the 3 parties should be sought.
4. Cession
In the case of the old creditor being substituted for the new creditor.
5. Compromise
This occurs when a creditor agrees to accept less than the debt due to him or
accepts something else in lieu of the thing or act originally promised by the
debtor

SET OFF
Takes place when a debtor acquires a counter claim against his creditor.

36
 can be terminated by a verbal agreement or by any conduct on the creditors
part from which it can be inferred that he has waived his rights
-
PRESCRIPTION
For every sort of debt the law fixes a definite period after the lapse of which the debt
can no longer be legally enforced and if the period lapses the debt is said to be
prescribed.
- The debt becomes legally unenforceable although it has not been discharged
- The period of prescription is calculated from the day on which the debt became
due.

INSOLVENCY

When the debtor is declared insolvent

SUPERVENING IMPOSSIBILITY OF PERFORMANCE

i.e. act of God or State which makes performance impossible eg disasters, illness,
imprisonment
1. Death
- Partnership- death of a partner brings the partnership to an end
- Agency –death of principles / agent
- Employment- death of employee- contract terminated and death of employer
–contract terminated after one month.
- Surety ship – death of surety terminate the contract.

THE PAROLE EVIDENCE RULE

It states that ‘where a written contract is being interpreted no oral evidence may be
received by the court which tends to contradict or alter, add or vary the written terms
except where ambiguous words are used or where there’s fraud”

Mandanment Van Spoile

A court order directing the spoliator to return the thing immediately to a possessor
who has been deprived or despoiled of his possession without his consent

REQUIREMENTS FOR MISTAKE

The mistake must be of fact not law as ignorance of the law excuses no one.
(Barker Vs Bentley 1978)
- The mistake must concern a material fact(Maritz Vs Pratley 1894)
- The mistake must be reasonable (Justus error)
i.e. it must not be due to the negligence of the part
(George Vs Fairmaid 1958)

37
LAW OF DELICT
- A Delict is an act other than breach of contract for which the person wronged
may claim the damage or
- Is an unlawful act or the omission on the part of one person which infringes the
legal rights of another person’s life, person, property, liberty or reputation and
which entitles the later to claim damages /redress generally in the form of
pecuniary compensation from the offender .e.g. assault, defamation,
trespassing, false imprisonment, adultery etc
NB. Many delicts are crimes but not allCrimes are delicts e.g. adultery is a delict not a
crime but treason is a crime not a delict

Difference between a Crime and Delict

A delict is a wrong against a particular person entitling him to claim compensation
from the wrong doer, where as a crime is a wrong against the state which the state
punishes.
Who is liable for a delict
The general rule is that if a person commits a tort or delict he/ she is personally
liableto that delict.
i.e. the person who actually commits a delict is liable .However a person can be held
indirectly liable for someone’s delict and this concept is sometimes called vicarious
liability e.g. an employee can make his employer liable thus the employer is vicariously
liable or indirectly liable, for delicts committed by his employee during the course and

38
 the intentional or negligent killing or injury of another, damage caused by animals.
These types of delicts fall under Lex Aquilia
2. Those that involve an insult (contumelia)to another by infringing his rights in
respect of dignity, reputation or liberty e.g. defamation , assault or adultery –such
delicts are referred to as injuria
Damages for injuria are quite different from Aquilia damages in that a person can
claim Aquilian damages to compensate him for the loss he /she has suffered and the
claim is called Aquilian Action
Unlike the damages for the Injuria,Aquilia damages are not meant to punish the
offender but to compensate the injured part for the loss caused to him/her but must
prove what he /she has lost.
On the other handdamages for injuria, are meant to punish the offender and soothe
the injured person’s injured feelings
The person who has suffered an injuria therefore does not have to prove that it has
caused him any loss.
NB. The remedy whereby damages are recovered for pecuniary loss (i.e.loss which is
capable of being measured in terms of money)arising out of delicts involving injury to
property, person or life is the Lex Aquilia or Aquilian Action.
Generally this action is available only if the aggrieved partyhas suffered actual
percuniary loss,though it is possible to claim damages for pain and suffering arising
out of physical injury.
The remedy whereby damages are recovered in case of delicts involving injury to
another’s dignity, reputation or liberty is the Actioinjurium
- Here damages may be claimed whether or not the aggrieved party has suffered
actual
pecuniary loss. He is entitled to damages simply for the insult to his personal
reputation, dignity or physical integrity
Thus all delict come / fall under either injuria or Lex Aquiliathough some acts / delicts
may fall into both e.g. an assault may cause the victim pecuniary loss as well as injury
to his dignity
In which case damages will be recovered under both heads on a single action

Essentials of liability under the Lex Aquilia

1. There must have been Actual wrong doing by the defendant
2. The injury must have been either intentional or negligent
3. The plaintiff must have suffered pecuniary loss
4. The defendant’s wrong doing must have caused the plaintiff’s pecuniary loss.

Actual wrong doing by the defendant

Every person has the right that others should not injure his person or property and any
act which violates this right is therefore wrongful unless it is shown that the act was
legally justified e.g. if it was done in defense of the wrong doer, the person or property,
there is no liability even if the act caused pecuniary loss.
Thus the wrong doer must actually have done something; a mere failure to do
something (an omission) does not in general amount to delict. If a person sees a man
drowning in a river, there is no legal obligation on him to rescue the man and his
failure to do so is an omission for which he is not legally liable. However if he had

39
however cases in which a failure to do something can render the wrong doer delictual
liable
a) Where a person is required by statute to do something. If he fails to do it and
his omission causes loss to another he will be liable in damages to the later e.g.
owners of machinery are required to fence off all exposed dangerous parts of
the machinery which may cause injuries to others e.g. grinding mill.
b) Where a person assumed control of a potentially dangerous thing, he is under a
duty to prevent it from harming others e.g. tame a lion or snake or vicious dogs
etc.
c) Persons carrying on certain occupations are under a the common law obliged
to do certain things and if they fail to do so with the result that another person
suffered pecuniary loss, the later can recover compensation from them e.g. an
innkeeper is bound to give shelter to all bonfire applicants for accommodation
unless there is some reasonable ground for refusal.
d) When by some previous act, a person has created a potentially dangerous state
of affairs which would otherwise not have existed; he is under a legal duty to
take precaution to prevent it from becoming an actual danger. E.g. if a person
leaves his car in a public street it is his duty either to remove it before dark to
ensure it is protected by light to prevent danger from others
(Municipality of Bulawayo Vs Stewart 1916)

The municipality was found liable to a plaintiff who while walking one night
along a footpath In Bulawayo fell over pipe that was projecting above the
surface of the footpath. The municipality had laid the pipe properly but by the
wearing away of the path it became exposed.
Intention or Negligence
In order to succeed under the Aquilian Action, the plaintiff must prove that the
defendant acted either intentionally or negligently.
A) Intention (Dolus)
The plaintiff must prove two things if he seeks to establish that the
wrongdoer acted intentionally.
- That the wrongdoer foresaw and desired the consequences of his act.
- That the wrongdoer knew that the act was wrongful
NB. If either or both of these essentials are absent, there can be no dolus or
intention. Dolus may be implied In certain circumstances e.g. where a person
injures another by acting recklessly, it is assumed that he appreciated the wrongful
nature of his act.
The maxim, culpa latadolusacquiparatur applies which means gross negligence is
equivalent to wrongful intention
B) Negligence (Culpa)
Most actions under aquilian action results from carelessness / negligence
- Negligence means doing what a reasonable person would not do or
- It may be defined as a failure to exercise the degree of care which an ordinary
reasonable careful person (diligent paterfamilias) would have exercised in the
circumstances
For a person to succeed under a claim based on negligent, he must prove three
things a) that the other party acted dishonestly

40
inflicting harm upon the plaintiff or upon the class of persons of which the plaintiff
was a member i.e. he must show the defendant was negligent in relation to him (the
Plaintiff) or in relation to the class of persons of whom the plaintiff was a member.
- The courts have decided that a reasonable person would have foreseen the
possibility of harm and would have taken steps to prevent it and that if the
defendant failed to take steps he would be negligent.
- In Transvaal & Rhodesian Estates Ltd Vs Golding 1917
The plaintiff wondered off a road at night time and fell into an excavation on the
company’s property. The hole being about 20 yards from the road. The
company was held
Not liable as it would not reasonably have foreseen that users of the road would
be injured by the excavation, as it was far off the road.

NB. The position would have been different if the public were on the habit of
using the company’s ground or if the excavation was dangerously placed next
to the road

Standard of Care Required

The standard of care required is that which would have been observed in the
circumstances by an ordinary reasonably careful person (diligent paterfamilias) e.g.
the ordinary prudent person would certainly take more care in handling a gun than in
handling a walking stick.
Lack of skill
If a person voluntarily involved in some activities or occupation which requires greater
skill than the average person possesses, such person is under duty to have and
exercise that higher degree of skill, and failure to do constitutes negligence e.g.
surgeon & engineer
Proof of Negligence
The onus of proving negligence is on the plaintiff. Even if there is no direct evidence of
negligence, the mere fact that damage or injury has been caused may in certain
circumstances give rise to the inference that harm was due to the defendant’s
negligence, In such a case re iplaloquitur applies i.e. the occurrence speak for itself.
This principle applies where the injury was caused by a thing under the sole control of
the defendant or his employee and the injury is such that it would not have happened
had the necessary care been taken

Pecuniary Loss
To succeed in an action for damages under Aquilian Action, the plaintiff must prove
that he has suffered pecuniary loss (which is capable of being measured in monetary
terms.)
If he has not suffered pecuniary loss the plaintiff may / will not be able to recover the
damages unless the injury was accompanied by contumelia (insult) in which case he
has an action under the Actio injurium)
In Union gvt Vs Warneke 1911 AD plaintiff wife was killed due to the negligence of the
defendant’s servants
Plaintiff sued for damages on the ground that he had been deprived
a) His wife’s comfort and society

41
Exceptions
The rule that damages cannot be recovered under aquilian action unless loss is a
pecuniary one is subject to the following exceptions.
1. A person who is physically injured through another’s negligence may obtain
compensation for the physical pain suffered as a result
2. Where the real purpose of the action is not to obtain compensation for injury or
damage but to establish a right challenged by the defendant. In such a case
nominal damages may be awarded even though plaintiff proves no loss.
3. Apart from these exceptional cases, plaintiff must prove not only that he has
suffered pecuniary loss but also that the loss resulted immediately from the
defendant’s act. It should be noted that damages can be claimed under the
aquilian action for pure economic loss i.e. loss sustained without any physical
damage or injury to a person or to corporeal property
(Zimbabwe Banking Corp Ltd Vs Pyramid Meter Corp Ltd)
Such economic loss must be measured in monetary terms
4. Causation
- In order to succeed in an action for delict, the plaintiff must prove that his loss
or injury was caused by the defendant’s wrongful act or omission
- Where the defendant intended his wrongful act to cause harm, he will be liable
for that harm and no problem of causation arises, because a person is always
answerable for the foreseen and desired consequences of his act.
- Liability for unintended consequences is a matter on which there have been
conflicting opinions expressed in our courts and liability generally depends on
the answers to 2 questions:-

a) Did the defendant’s conduct in fact cause the harm?

- This is answered by determining whether or not the harm would have resulted if
the defendant’s wrongful act or omission had not occurred.
b) Did the defendant’s conduct legally cause the harm?
- This is answered by determining whether or not the harm was a reasonably
forcibleble result of the defendant’s wrongful conduct if it was within the range
of the ordinary human experience that the harm would result from the
defendant’s wrongful act or omission
It is not necessary that the special manner in which the harm occurs should be
forcible nor its presents extends all that is necessary is that the general nature or kind
of harm should have been foreseen.
In R Vs John 1969 the accused beat up his wife who was pregnant and chased her
into the bush at night where she fell into a pool and died.
Held
That he was liable for her death because even if he didn’t force the precise ways in
which she met her death, he would have foreseen that with her terror stricken flight
she might have met her death by tripling or colliding with some obstacle or in some
other manner.
NB. The forcible testis that applied in most cases, but in personal injury cases, courts
will impose legal liability on defendant’s wrongful act or omission even if the harm
was aggravated by an ailment or physical condition is suffered by the plaintiff and the
defendant was unaware of the ailment or condition.

42
ambulance in which the pedestrian is being taken to hospital is involved in an accident
/ collision and the pedestrian is killed.
John’s negligence in this case was a factual cause of the death because on the test
for factual causation the pedestrian would not have been in the ambulance in a
position to be killed, if John had not negligently knocked him down but the driver
(John) is not legally liable for his death because a new cause has intervened namely
the collision involving the ambulance.

Exceptions
Even where there is a new cause of harm the defendant may still be liable if the new
cause involves a risk inherently connected with the state of danger created by the
defendant or if the new cause was a forcible result of the defendant’s action e.g. if a
driver knocks down a pedestrian and is thrown in front of the bus by the impact and
run over, he is liable for the injuries caused by the bus.

In Sadomba Vs Unity Insurance Co. Ltd 1978

It was held that where a by stander stole a watch from a person who was lying
unconscious by the road side at night after a traffic accident, the theft was a
reasonably forcible result of the traffic accident and the driver who caused the
accident was liable for the loss of the watch.
The defendant will remain liable if the new cause is not independent action but a
necessary measure of protection against the danger caused by the defendant.

In Scot Vs Shepherd 1773 shepherd threw a lighted firework into a crowd, one of the
crowd beside where it fell threw it away to prevent injury to him and it exploded near
Scot and destroyed his sight in one eye.
Held
That shepherd was liable for the injury to Scot.

Injuria
An injuria refers to an insult so serious that damages may be claimed to soothe the
injured feeling.
The most common type of injuria is defamation
There are several ways in which one can insult people and all can amount to delict e.g.
a) Writing an insulting letter to a person
b) Using insulting words to a person in private
NB. Behavior can also be as insulting as words.

Liability under the Actio Injurium

Actio Injurium is an action to obtain compensation for an injury to a person’s dignity,
reputation or liberty
The following are the essentials of a successful action under Actio injurium
A Wrongful Act
The act complained of must be wrongful i.e. there must be no justification or excuse
for one act
- The act must also be a positive one since liability under Actio injurium can
never result from a mere omission.

43
NB. Same principles relating to causation under Aquilian Action apply under the Actio
injurium

DEFAMATION
- Is the publication of a false statement which damages a person’s good name or
- Is the publication without lawful justification of anything which tends to injure
the reputation of another
NB. The defamation matter nearly always consists of written (libel) or spoken words
(slander) but it may consist of a caricature (drawing /description that exaggerate) or
effigy (ugly and amusing) which holds up a person to ridicule
Thus there is a written (libel) defamation and oral defamation (slander).

GROUNDS FOR DEFAMATION

To succeed in an action for defamation plaintiff must prove inter alia
1. That it refers to the plaintiff (Complainant)
2. That it was published
3. That the defendant was responsible for the publication.
4. That the matter is defamatory (Injurious to reputation)
The matter must be defamatory
- a statement is defamatory if it tends to injure a person’s reputation i.e. to
diminish the esteem in which he is held by others
- It must be held defamatory to impute to a person the commission of a crime or
other dishonorable conduct, dishonest or immorality.
- A statement may however be defamatory even if it contains no imputation on
the plaintiff’s character. It may be defamatory to say that a person is insane or
physically deformed or suffering from an infectious disease or he holds
extreme or unpopular opinion e.g. that he is a racist

Defenses for Defamation

1. Justification
- Available if statement is true in substance –small inaccuracy do not defeat the
defense
- if he is a real murderer or thief prove it with references
2. Fair Comment
- A comment made in good faith on a matter of public interest
- It must be an opinion and not a fact
- The comment must be based on a fact which is stated with a comment, must
be fair.
3. Privilege
a) Absolute Privilege
- Members of the Parliament have absolute privilege and can make any
statement, false or malicious in parliament.
- Communication in judicial proceedings, state communication, parliament
papers provided they are fair and accurate.
-
b) Qualified Privilege
- The defense is available if it was not published widely than necessary and also

44
 1. The publisher was not negligent
2. The publisher didn’t intend to refer to the plaintiff
3. The words were not prima facie defamatory
4. The publisher didn’t know any possible invendo
5. Jest-The statement was made as joke not serious
Compensation
- Made in retaliation
- Statement made in equal terms after the plaintiff had made a similar or
same comment
6. Consent
The plaintiff may have accepted the statement when it was made and not
complained
Rixa
A statement made while angered or provoked

Defense for claims for injuries caused by a domesticated animal

1. Provocation
That the injured party provoked the animal e. throwing stones at a dog which is
lying

2. Trespassing
That the injured party had moved into someone’s property without prior notice

3. Third party provoked

That the third party provoked the animal resulting in the attack to the injured
party
4. Injured party was at the wrong place at wrong time
The injured party might have walked or wondered into someone’s property e.g. at
night when dogs have been set free

ARBITRATION
A procedure in which a dispute is referred to a person or to a tribunal, chosen by the
parties to the dispute for the final judgment adjudicating of the dispute, instead of
going to a law court (litigation).
- It is the determination of disputes by a tribunal set up for the purpose by the
parties themselves.
- It is the procedure in terms of which dispute is referred to a person or a tribunal
chosen by the parties to the dispute for the final adjudication of the dispute
instead of having recourse to a court of law or
- It is a dispute resolution process in which the disputing parties present their

45
Voluntary Arbitration

This is when the parties agree to submit their differences for arbitration by the third
party, who will also have final authority to determine the outcome after hearing from
the parties.

Compulsory/ Statutory Arbitration

This is arbitration regulated by law to avert a standoff in essential services, industrial

or sectors of the economy e.g. transport over fares etc.
The arbitration is free to award a decision as he deems fit / appropriate or chooses
either to separate or offer the disputing parties or choose the entire package of both
parties proposal.

Advantages of arbitration

1. Time saved as finality is reached more quickly

2. Costs are saved
3. Publicity is avoided as there is secrecy of proceedings
4. The decision of arbitrator is final
5. The neutrality of arbitrator creates an environment of fairness hence the
decision of the arbitrator is more acceptable to the parties.
6. The arbitrators are usually experienced personnel capable of resolving disputes
amicably

Disadvantages of arbitration
1. Arbitrator’s unlike judges need not give formal reasons for their decision
2. The approach is a win loose technique that affects the working relationship or
business relationship between parties to the dispute
3. An arbitrator is an outsider divorced from the internal forces causing the
dispute and hence can bring out or effect imposed terms that do not really help
the parties to the dispute.
4. Arbitration process invite 3rd parties to interfere as they fact find into internal
matters that might result in classified information being exposed to the outside
world.
5. Loss of sympathetic jurists –it is argued that jurists tend to sympathize more
with certain kinds of people such as fired employees, destitute wives and older
individuals.
6. The decision of an arbitrator is an outside solution that parties might choose
not to commit themselves to.

THE ARBITRATION PROCESS

1. An arbitrator notifies parties to the dispute of the date, time and place of
hearing of the dispute.
2. An arbitrator first conducts pre hearing briefs for the sake of clarification of
46
 6. An arbitrator considers the evidence brought before and renders an award or
makes a decision.
The arbitrator’s award is final and no appeal except only in the following
circumstances when the matter can be brought to the judge
- For An arbitrator dishonesty, partiality and bias
- When no valid agreement was entered into that authorizes the arbitration
process.
- When arbitrator rules in an issue that is not authorized or referred to him/her.
NB. Awards are only modifiable only if there was a miscalculation of figures or a
mistake in the description of the person, property or thing referred in the award.

Powers of an arbitrator
A. General Powers
- Power to allow or refuse amendment of pleading
- Power to order discovery and interrogation
- Power to order inspection of property which is the subject matter of the
reference
- Power to award pre award interest
- Power to depart from rules of evidence unless the departure is repugnant
(horrible and disgusting) to natural justice and fairness.
- Power to proceed with ex- parte hearing after a suitable preemptory order has
been issued.
B. Specific Powers
- Power to take and examine evidence of the parties and witnesses or oath
- Power to administer oaths or take affirmations of parties and witnesses
- Power to make award within 3 months
- Power to give/ award interim award i.e. use his discretion
- Power to order specific performance of any contract other than contracts
relating to land or interest in land.
- Power to correct clerical mistakes or errors arising from accidental / slip or
omission
- Power to award costs
- Power to award interest

47
COMMERCIAL LAW
LAW OF EMPLOYMENT
INTRODUCTION
The contract of service is traditionally considered as sub-specie of the common law
of the contract of lease / letting and hiring of property, hence the principles applicable
to the leasing of the things apply to the leasing of service.
The master/employer corresponds with the landlord and the servant / employee with
the tenant and salary/wages with rent.

Locatio Conductio-operum
This is a contract of letting /hiring of services whereby one person lets out his
services to another who hires them in return for remuneration.

LocatioConductio-operis
This is a contract of letting /hiring of work and applies to independent contractors

Servant/Employee
This is a person subject to command from the master as for the manner he/she
should do his work
This is a person employed by an employer to carry out his orders and is under the
supervision of the control and obeys the employer who determines the manner he is

48
the former has a contract for service whereas an employee has a contract of service.
Formation of the Contract of Employment
- The ordinary rules of contract apply, however no formalities are necessary at
common law, all that is required is that the two partners should agree on the
service to be rendered and remuneration to be paid.
- The agreement can in much fuller incorporate terms regarding his work, leave,
sickness, pension, fringe benefits and bonuses etc.
Duties of Employer
1. To pay the contractually agreed remuneration.
2. To accept the employee into his service
3. To provide the employee with work.
4. To treat employees with trust, confidence and respect.
5. To provide safe systems of work
6. To observe provisions relating to sick pay
7. To observe provisions relating to hours of work.
8. To observe provisions relating to holidays.
9. To permit employee’s time off work for public duties
10.To indemnify employees
11.To provide adequate plant, appliances and premises
12.To provide protective clothing
13.To observe provisions relating to maternity leave.

To Pay the Contractually Agreed Remuneration

-The employer has the obligation to pay wages, however the amount of
remuneration to which an employee is entitled is determined by the contract
often arising as a result of collective bargaining /may be fixed by law.
-The remuneration may be paid in money or in natura (kind) depending on the
agreement between the parties.
- There’s no agreement regarding the time of payment –common law prescribes
that payment will be made after term of service.

To accept the employee into his Service

- The rendering of service is a pre-requisite for the payment of remuneration, the
employer will be committing a substantial breach of contract should he fail to
take the employee into his service.
- The employee will then be entitled to claim damages amounting to his
actualloss i.e. the amount which he would have earned in respect of the
uncompleted part of the period of service.
Kinems Ltd Vs Berman 1932 and Meyer Vs Abrahamson 1952

To Provide Employee with Work

As a general rule the employer is not legally bound to provide work for the employee.
He does not commit a breach of contract if he fails to provide work provided that he

49
 someone doing peace work or a sales man.
b) Where the failure to provide work brings about a reduction in the status of the
employee
c) Where the employer has undertaken to train the employee in a certain progression
/task e.g. apprenticeship
d) Where the persons’’ earning capacity is linked to the publicity which he receives
from the work he does e.g. an actor
This person’s employer must provide him with work in order to ensure his
professional success.
To Provide the Safe Systems of Work
- It is the obligation of the employer to provide safe working conditions for the
employee
- This duty involves the organizing /supervision of the work force and safety
precautions which are laid down
- The employer must take reasonable steps to ensure the safety of the
employee,should failure to do so lead to the employee’s injury, the employer
may be held delictually liable.Paris Vs. Stepney Borough Council1951
In thiscase the employee was a garage mechanic with only one eye, whilst it
was not common practice to supply mechanics with safety goggles.

The court held that in this case the employerwas under a duty to do so because
if a drop of metal entered the employee’s good eye he would be totally blinded
and this is exactly what happened in this case

To Observe Provisions Relating to Sick Pay

An employer may have an obligationby virtue of a term in the contract of employment
to pay sick pay to employees when they are unable to work because of illness.
- In terms of the Labor Relations Act, the employer is entitled to pay an employee
90 days on full pay, and half pay thereafter.
- After 180 days the employer may terminate the contract of service.
-
To Indemnify the Employees
The doctrine of Volenti non fit injuria must be born in mind
- It implies that there’s no wrong to a person who agrees to it, i.e. a person
cannot claim compensation for an act which he had agreed either expressly or
impliedly
- If an employee has knowledge of the hazardousstate of affairs and realizes that
nature thereof, yet subjects himself voluntarily to this hazard and it leads to his
injury /death, the liability of employer would be excluded.
- Thus therefore an employee is able to claim compensation from the employer
but the following must be proved:
a) That the act or omission causing the injury was due to the fault of the
employer.
b) That the act or omission was unlawful.
c) That the employee sustained damages /personal injury
- At present the NSSA act provides for payment of compensation for the
employee should he be injured in the course of his service

50
 leave on full pay and the leave is only granted only once during any period of 24
months calculated from day when previous maternity leave was granted.
- Where there are complications in giving birth,an unpaid leave may be granted in
excess of the limit
- During the period when the employee is on maternity leave, her normal benefits
entitlement will continue uninterrupted in the manner in which they would have
continued had she not gone to such leave.
- For the maternity leave to be granted. The employee must furnish the employer
with a certificate signed by a certified registered nurse /doctor certifying that
delivery of baby is likely to take place within 45 days
- It will be unfair labor practice to deny any employee the right to go to any
maternity leave.
- In terms of the act any person who is aggrieved by an infringement of his
fundamental rights will be entitled to apply to the labor court for an order
directing employer to cease infringement/threatened infringement.
- He/she may also apply for an order for damages for any prospective or loss
caused either directly or indirectly as a result of infringement.
-
TheEmployerRemedies
1. Damages
- The employer is entitled to claim damages from employee if the behavior or
negligence of the employee causes him damage or loss if the employee
abandons his employment ina way which causes the employer damage.
2. Summary Dismissal
- Is the termination of an employee’s services without giving the prescribed
notice and amounts to cancellation.
Grounds for Summary Dismissal
Any employer can summarily dismiss an employee
a) If the employee is guilty of misconduct even outside the course of his duties.
b) If the employee willfully disobeys a lawful order i.e. insubordination
c) If he lacks a skill which he pretended to poses -incompetence to do particular
work.
d) Serious negligence when performing duties or if the employee habitually or
substantially neglects his duties.
e) If the employee is absent from work without permission or reasonable excuses
f) Unreasonable absence as a result of illness
g) Secret profits or commission made at the expense of the employerthereby
violating the relationship of trust
- S/he must not disclose information about the employer to third parties or
opposition or to use it for personal gain.
- Dishonest amounts to breach of good faith and justifies dismisal
- E.g. of dishonest behavior include receiving secret commission , theft of the
employers property to defrauding the employer
Federal cold storage Vs. Angelin&Piel 1910
Gerry Bouwer Motor Prop Ltd Vs. Preller 1940
PelesleyVs. Teran 1913

51
 1. TO SUBORDINATE TO THE EMPLOYER
- Because the employer is in a position of authority, the employee is obliged to be
subordinate to the employer
He commits breach of contract if he does not display the required respect.
E.g. of insubordination:
a) Writing an offensive letter to the employer
b) Using rude language to the employer
c) Passing insulting remarks to the employer’s customers
d) Cheeckness of a serious matter justifies dismissal

2. TO REFRAIN FROM MISCONDUCT

- The employee must at all times act in accordance with acceptable practice and
policy of his employee and therefore not be guilty of misconduct.
- Misconduct constitutes breach of contract and may justify dismissal
- E.g. of misconducts include drunkenness, gross negligence, incompetence,
rudeness, insult etc.
3. TO USE REASONABLE CARE AND SKILL
- This encompasses the duty not to be unduly negligent and the duty to be
reasonably competent
- The employee on entering employment impliedly warrants that he is qualified
for the post and also undertakes not to work against or harm his master’s
interest.
- He will also undertake that he will use or exercise reasonable care and skill in
the discharge of his duties.WallaceVs.Randy Daily Mail 1917. And Denchon Vs.
White 1925
- Negligent behavior by employee on the property of the employer constitute
breach of contract particularly where there has been a pattern of negligent
conduct by the employee
- A single act of negligence amounts to breach of contract if it is very serious.

4. TO TAKE CARE OF EMPLOYER’S PROPERTY

- The employee should always exercise reasonable care when using the property
of the employee.
- Unreasonable use of such property for personal use will be a breach of contract.
SuperfluxVs. Plaisted 1952
Thus the employee is under an obligation to indemnify the employee for the
loss sustained.

5. TO ACT IN GOOD FAITH OR MAINTAINING BONAFIDE.

- An employee is obliged to act in good faith and not to do anything which may
harm the relationship of trust.

- The employee has a duty to make his services available to the employer as
agreed and to work at the direction of the employer in return for the implied

52
 - this will constitute breach of contract.

6. TO OBEY THE EMPLOYER’’S LAWFUL ORDER

Because the employer is in a position of authority regarding the employee, he is

entitled to issue instruction regarding the activities of the employee.

- Consequently the employee will be obliged to obey his employer and to perform
all reasonable instructions punctually.

- Disobedience amounts to breach of contract and may justify summary

dismissal.

- However an employee is not obliged to do any act which is deemed to fall

outside the ambition of his individual contract of employment.

EXCEPTIONS

- An employee may be justified in refusing an order which is apparently within the

scope of the contract

a) Where such an order involves exceptional damage for which the employee is
not given extra payment.

b) Where the employer orders the employee to do something which would

constitute a criminal offense.

VICARIOUS LIABILITY
Refers to the liability of an employer for delictsand crimes committed by his
employees
- The general rule is that an employer is liable for the delictand crimes committed
by his employee between the course and scope of his employment.Lotter Vs.
Rhodes 1902

REASON OR JUSTIFICATION OF EMPLOYER’S LIABILITY

One of the main justifications for imposing liability of an employer is that:-
1. The employer has chosen to have his work done for him by the employee, he
owes a duty to the public to control his employee so as to protect members of
the public from injury or loss

53
 b) The delict must have been committed by the employee in the course and within
the scope of his employment i.e. in pursuance of his job within the limit of that
job.
c) He acted for his master’s benefit.
- Master/servant relationship exists where the master is In full control and may
direct the acts of his servant- e.g. If one engages the chauffeur
- It is evidenced by the contract of service. Bruce Vs. Lomartz 1922
Facts: A drove B’s car with full permission and while B sit in the car and collided
with a motor cycle and B was sued by the cyclist
Held
That B was liable as she was at all times in full control of the car.
Employee’s Scope of Employment
The test whether the employee is acting within the scope of his employment is not
whether he was engaged in the affairs of his employer at the time, but whether his act
or omission constituted a negligent performance of the work entrusted on him.
The scope of employment is not necessarily limited to the normal working hours but
may extend to cover carrying out the employer’s request in a social matter e.g. taking
the employer’s car home in case of a callout
- Theft by an employee will not normally render the employer liable, but he will be
liable in contract if the property has been entrusted to him for safe keeping, and
he has delegated responsibility to the employee who has committed the theft
- The same principles will apply to damaged property entrusted to the employer.
- Where an employee is hired out to a second employer or is in the services of 2
employers, the question is which of the employers has the control of
employee’s act at the time of commission of the delict would be liable.
KahlbergVs. Uitenhage Municipality 1926
K was contracted by the council to supply horse carts and drivers were under
the control of the council, while under the council’s instructions a driver was
responsible for damaging a car
Held
The council was liable.

Employee’s Course of Employment

The test of whether the employee is acting within the course of his employment is
whether it can be reasonably be said that he is exercising functions/duties for which
he was appointed.
- Lotter Vs. Rhodes 1902
Where a shepherd acting for the master’s benefit in the course of hisemployment set
fire to grass on his master’s farm, the fire destroyed trees and crops on a neighbour’s
property
Held
The master was liable.
- Thus where the employee is actually occupied with the execution of his duties,
i.e. he is obeying orders of his employer should he commit a delict causing a
damage to the 3rd party while he is occupied with his work, the employer is
liable.
HendrickVs. Cutting 1937
54
The employer was liable
Minister of Justice Vs. Khoza 1966
2 police constables were going about their work and they were inta alia (among other
things) guarding prisoners.One of the constables aimed the pistol at the other one in
jest. The pistol went off and the second constable was injured
Held
The employee was liable

Principle
Even if the employee acts in a foolish manner or negligently but within the scope of
his
employment. The employer is liable
That is, the employer will be liable where the employee behaves in extremely foolish
manner or where he acts negligently provided that it was done within the course and
scope of employment.
The employer is also liable if the employee is acting within the scope of his
employment whether during or after working hours.
Sauer No Vs. Deussema 1951
A postman was driving a vehicle which belong to the office, due to his negligence an
accident occurred and another vehicle was damaged
Held
The employer was liable because the trip undertaken was connected to the delivery of
post , the work for which the person had been employed.
General Tyre& Rubber Co. Vs. Khlenhans
A tractor driver was hay making when he received instructions to leave his tractor and
return to his homestead .he returned to his homestead on the tractor contrary to the
orders of employer.While crossing the main road caused collision

Held
The employer was liable because the servant was engaged in his work.

LCC Vs. Cutermoles Garage 1953

The garage hand was expressly forbidden to drive customer’s vehicles although it was
part of hisduties to push, contrary to his express instruction he drove a customer’s
vehicle and collided to a wall.

Held
Theemployer was liable
He is also liable where the employee oversteps the limits of his contractual duties
provided he is acting for the benefit of his employer, the employer will be liable.
Kay Vs. ITW 1968
The employer is also liable for any delicts committed by an employee acting in the
scope of his employment if this is necessary for compliance with orders.
MkizeVs. Martins 1914
The employer supplied his 2 employees with food, they made fire to cook food and
they negligently allowed the fire to spread causing damage in the 3rd party.
Held
55
following situations.
a) Where the employee is on a frolic of his own i.e. not on his master’s business
but his own. Storey Vs. Ashton 1869
A driver was driving back with returned empties to his employer, a wine dealer.
A fellow servant asks him to drive to his house about 2 miles away to pick up
something. The driver negligently ran over the plaintiff who sued the merchant.
Held
The master was not liable because the driver was on a frolic of his own
b) If the employee abandons his work totally In order to promote his own interest
RoussonVs. Central News Agency 1948
The employee gave a lift to a hitch hiker, as a result of the employee’s negligence the
hitch hiker was injured.
Held
Employer was not liable.
Nott Vs. ZANU PF
An employee driver had an accident whilst deviating from an assigned task inorder to
carry out his personal business.
Held
The employer was not liable.
Twine Vs. Beans Express (giving lifts)
c) An employer is not liable if the employee is acting outside his scope of
employment even if he is acting on behalf of the employer.

MASTER’S /EMPLOYER’S LIABILITY FOR EMPLOYEE DELICT OR CRIME

An employer is liable for his employee’s willful wrong doing, he is thus liable for
fraudulent misrepresentation, a defamatory statement and even for a criminal offence
Citizens Life Assurance Vs. Brown 1904
e.g. an assault made by an employee in course of his employment.
Master &Servant Jointly Liable
Both are jointly severally liable for the employer’s wrong doing, i.e. master liable on the
basis of vicarious liability and a servant is liable because he is the one who committed
the delict hence the wronged part may sue the either party.
Employer’s liability for Delicts of an independent Contractor
LocatioConditioOperis.
General rule : the employer is not liable for delicts of an independent contractor or his
servants. Colonial Mutual Life Assurance Co. Vs. McDonald 1931
Exceptions
The employer is liable in the following situations for delicts caused by his own actions
and those of the independent contractor.
1. Where the employer has given incomplete instructions.
2. Where the employer gives instructions to the independent contractor to do
something which he himself is not authorized to do.
3. Where the employer interferes in the manner in which work is done.
4. Where the employer gives an unlawful instruction to the independent contractor
or ratifies the unlawful act of the contractor.
5. Where the work is by its nature always or per se dangerous to require
reasonable prevention to be taken by both employer and independent

56
 An employer engaged an independent contractor to demolish a building adjoining
streets, neither part took any precautions to protect others from possible injuries
A wall collapsed and a passerbywas killed.
Held
The employer was liable for the death.
6. Where the law imposes an employee a continuing duty or liability e.g.
mechanical guarantee
7. Where the employer attempts to escape liability by employing an independent
contractor where special precaution are necessary
Andrews Vs. Patchel 1926
A defendant employed a contractor to erect a fence over land belonging to the
defendant which had for several years been used by public as a road. Owing to this
fact the contractor did not take proper precautions and the plaintiff rode into the
fence and was injured .The plaintiff sued the defendant for damages.
Held
That the act which the contractor was engaged to do was per se dangerous and
theliability of the defendant was not excluded by theemployment of an independent
contractor.

Fundamental Rights of an Employee

These are enshrined in the Labor Act Chapter 28.01
1. The right of membership of trade union or workers committee (Section 4)
- A worker cannot be prohibited by his employer from joining a trade union or
taking part in trade unionism
- It also means that an employee has complete freedom to join or not to join a
trade union and the employer cannot refuse to employ him if he chooses either
way.

2. Right to protection against discrimination (section 5), the act forbids employer
from discrimination against employee on grounds of race, tribe, place of origin,
political opinion, color, creed or sex, HIV status, pregnancy or disability, thus an
employer must not favor one sexor race above another in respect of wages,
choice of posts, promotion etc.
The Act however recognizes and provides accordingly that for practical or
reasonable or realistic reasons it cannot be discrimination where an employer
provides special provisions for females’ e.g. feeding times for nursing mothers,
and makes distinction which is necessary for the sake of decency e.g. different
toilets for male and female.
Likewise if it is not discrimination for bonafide reasons e.g. a political party
could hardly expected to employ on its staff members of an opposition party.

3. Rights to fair Labor Practices (section 6)

These fundamental rights embracethe rights to receive the lawful minimum
wage, the right to work beyond the maximum laiddownhours and the rights to
those conditions of employment laid down by the law for the job or which are
required by the law to be provided e.g. protective clothing, good working

57
 The act also sets out unfair labor practices in section 8 & 9 by the employer and
trade union respectively.
5. Prohibition of forced labor
No person shall be forced to perform forced labor
Forced labor does not include:
a) Labor required in consequence of sentence or court order
b) Labor by a detained person
c) Labor for any member of disciplined forces in pursuance of his duties
d) Any labor required by way of parental discipline
e) Labor for public emergencies reasonable unjustifiable in the circumstances
of any situation among during that period for the purpose of dealing with
that disaster or situation.
Unfair labor practices by the employer (section 8)
An employer commits unfair labor practice if
a) he hinders, prevents the worker from joining a trade union
b) fails to comply or implement a collective bargaining, agreement
c) Contravenes provisions relating to fundamental rights
d) Fails to comply or implement the decision of an employment board/ council.
e) Fails to comply with any determination by the minister of labor

Unfair labor practices by theworkerscommittee(trade unions) (section 9)

a) By an act or omission, prevents or hinders an employee to exercise his/her
fundamental rights e.g. association or disassociation
b) Fails to represent the employee’s interest with respect to violation of rights or
decisions of the employment board.
c) Fails to comply with or implement decisions of the employment board.
d) Not being registered purports to collectively enter into a collective bargaining
agreement (CBA)

General Rights of an Employee

1. Right to work
2. Right to fair remuneration and condition of employment
3. Right to associate and form unions
4. Right to collective bargaining
5. Right to training and retraining
6. Right to safe working conditions
7. Right to security in the event of unemployment
8. Right to compensation in the event of injuries on duty
9. Right to protection against unfair labor practices.

Termination of Contract of Service

1. Notice of termination
2. Efflux ion of time

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 8. Redundancy of the post

1. Notice of termination
At law (common) the duration of the contract is agreed between the parties and
may be a duration reasonable.
Reasonable notice is required e.g. for weekly contract – a weeks’ notice is
sufficient- for monthly contracts a months’ notice which should coincide with
the end of the month.
TiopaisiVs.Bulawayo Municipality 1923
For yearly contracts 3 months’ notice is reasonable, for daily paid servants a
day’s notice is sufficient
Notice is not required for casual laborers

2. Employers insolvency
The insolvency of the employer terminates the contract of service although the
employee is entitled to claim damages to the insolvent estate, the insolvency of
the employee doesn’t terminate (normally) the contract of employment except
where the employee is prevented from practicing a particular profession by the
insolvency act chapter 303.
3. Employer’s Death
Death of employee terminates the contract of service and the estate is entitled to
the salary and wages earned to the day of death.
The death of the employer does not terminate the contract of service and the
employee’s salary must be paid for period due.

4. By illness /accident
Illness of the employee does not normally terminate a contract of service but the
employer is entitled to dismiss the employee and terminate the contract if the
absence is due to illness for an unreasonable period or continuous
period.(reasonable period is at least 6 months)

59
 LAW OF PROPERTY
- Property refers to any valuable things or assets
- Something which is the subject of ownership or refers to any valuable assets
- It refers to a multitude of rights associated with property ownership.
-
The law of property
- Is concerned with the relationship of a person towards material objects
- The relationship of persons towards property is controlled by means of granting
of rights over property, the nature and extend of the legal power enjoyed by a
person over property depends on the real right held by that person.
- The function of the law of property is to regulate the acquisition and the use of
those things which members of the society require to satisfy their economic
wants and needs.

Relationship between law of property (LOP) and law of Contract (LOC)

LOP defines and protects the owners power to deal with his property.
- Is meant to maintain the status quo whereas LOC brings about a change in the
legal position of the owner and confers on others the right of ownership i.e it is
aimed at changing the status quo.
-
Rights: definition
Are interests protected by law
Any right a legal subject has regarding a specific legal object and which is protected
by law.

Division of Property
1. Real property (Realty)
Refers to the land and anything that is firmly attached to it e.g. building, growing trees,
crops andminerals .
2. Personal Property
Refers to all property which is not real property and include all movable goods.

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Classification of Things
The classification of things is a matter of convenience and it is the function of a thing
in a particular context which determines its class.

Methods of classification
1. Res Intra Commercium(RIC) and Res Extra Commercium(REC)
RIC are things capable of being privately owned
REC are things that cannot be privately owned
They (REC) can be divided into
a) Res Communes – things common to all inhabitants of the state e.g. air, sea etc
b) Res Publicare - property held by the state for for the benefit of all its inhabitants
generally e.g. rivers and roads
2. Owned and un Owned things– Res Nullius
This is the context of private ownership e.g. not owned things are wild animals (before
they are captivated) and things that have been abandoned by their owners.
3. Corporeal and Uncorporeal Things
- Un corporeal things are those which you can not touch or that can not be
perceived by senses e.g. goodwill,copy right or intellectual property.
- Corporeal are things that you can touch or things that are be perceived by
senses or are things that occupy space,
4. Movable and immovable Things
- Movable – these are things which can be really moved from one place to
another having regard to its size, nature and composition
- Immovable – those things that cannot be moved.
NB. A thing which is immovable today may be movable tomorrow e.g. soapstone
before and after it has been quarried
A movable maybe fixed to an immovable in such a way that it loses its identity and
becomes part of the immovable.

5. Divisible and Indivisible Things

- An item is divisible in the jural sense if the smaller parts can be divided.
- The nature of the smaller parts should correspond with that of the things as it
was before division at the total value of the undivided thing

NB. However not everything that can be physically divisible is also divisible in the
jural
sense e.g. it is physically possible to break up a car into various componentsbut as
the above requirements are not complied with it is classified as not being divisible

6. Consumables and non-Consumables

- This classification is more of academic interest
- The suggestion is that the reduction in value if any which is carried by the
ordinary use of such things should be the decisive factor.
- If the said reduction is substantial, the thing concerned should be classified as
consumables.
7. Fungible and non- Fungible Things

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 8. Single and Complex Things
Single things:
- Denote individual things which have not been the subject matter of value
addition e.g. bird; duck these may include things/ objects which have been
joined together in such a manner that they form an entity.
- Complex things
Refers to an entity which can be dealt with accordingly e.g. a herd of cattle and
a flock of sheep.

CONCEPT OF REAL RIGHT

- A real right is a right in a thing, it establishes a direct connection between a
person and a thing in the sense that the holder of the real right is entitled to
control the use of a thing.
- It is enforceable against the world at large e.g. ownership.

Categories of Limited Real Rights (Jus in re aliena)

A Ltd real right is Real right less than ownership in a thing ownedby a person other
than the holder of such rights eg.
1. Mortgage –immovable property.
- This confers the holder thereof (creditor) a right of security which entitles the
mortgagee the right to sell property mortgaged for his benefit if the ower fails
to settle the debt secured by the mortgager.
2. Servitude
Is a real right that gives its holder the right to use and enjoy the other person’s
property for his benefit in full or for a particular purpose e.g. A water right which
entitles its holder to draw water from land owned by someone else.
Servitude can be divided into 2
a) Praedial Servitude
b) Personal Servitude

Praedial Servitude
- Confers on the holder incapacity as owner of an adjacent property, limited right
to property of another e.g. servitude of grazing
Personal Servitude
- These confer on a person in his personal capacity the right of use and
enjoyment of property of which another is owner
3. Pledge (movable property)
This confers the holder thereof (creditor) a right of security in respect of
property pledged, the right to sell such property if the pledger fails to settle the
debt secured by the pledge.
4. Lease
Gives one person (leasee)the right to possess and use a thing owned by
another (leaser)

Difference between Real and Personal Rights

- Personal rights are enforceable only against particular individual or association
of particular individualson the basis of special legal relationship e.g. contract,
62
 thing within the limits of the rights enforceable against the world at large.

OWNERSHIP OR DOMINIUM
- Ownership is the right to which a person has in a thing- to possess it, use it,
enjoy its fruits, and destroy and to alienate or sell it.
- It is the most important comprehensive real right and has often been defined as
---‘” the sum total of all the possible real rights in and over a thing” i.e. it is the
corner stone of all real rights.
- This right confers the most complete power to property.

NB.However this doesn’t mean that ownership confers unlimited or absolute control:
an owner may not do what he/she likes with the property
- There could be restrictions by the dictates of public law and the rights of others.
Effects of legal ownership
- The absolute owner of the thing has the following rights in the thing.
a) Right to possess it
b) Right to use and enjoy the thing and its fruits
c) The right to destroy the thing
d) Right to alienate or sell the thing
Original ways of Acquiring Ownership
a) Occupation
The taking of possessions by a person of ares nullius which is not in the ownership of
any person with the intention of becoming the owner

b) Accession
Occurs when a person takes property that he does not own and add value to it. The
principle is that the old material if they are of less value accedes / attach to the more
value new materials. The test is which of the 2 things retains and which loses its
identity
the less value accedes to the more valuable
- Accession can be divided into
1 Natural Accession
- The most important is the ownership of the offspringof animals where their
mothers are in the persons other than the owner. The general rule is that
ownership of the young animals is vested in their mother
2 Industrial Accession
- This is the conversion of two or more separate things to one entity
- The factors to be looked at are:
a) The nature of the thing
b) The manner in which the thing has been annexed to the principal thing
c) The intention of the owner.
Aldine Timber Co. Vs. Hlatshwayo 1952
A father demolished an old building belonging to his son and reconstructed it with
2 materials he had bought, when the father failed to pay for the material, the
supplier obtained judgment against the father and attached the building in

63
 valuable new materials.
d) Plantatio
- Things planted and sown go with the soul/land provided the things so planted
have struck roots, thus if seeds of the young trees have been planted on
another land, ownership is vested in the owner of that land as soon as they have
taken roots.
e) Inaedificatio
- This means the permanent attachment/annexation of the buildings, pumps,
walls or other structures on land.
- Such buildings/structures become the property of the owner of the land on
which they have been built or erected
- A person who has made such improvements can only get compensation

f) Specificatio
- Is the working up of a thing into a new product If all or some of the materials
from which the new thing is made belong to another person who produces the
new thing, he becomes the owner of the thing provided that he had intention of
acquiring ownership in it.
- The new thing has a greater economic value than the materials from which it
has been made and the materials can be no longer be restored to their original
state.

g) Acquisitive Prescription
- According to the prescription Act, the possession / use by the person of
another’s movable or immovable property for an un interrupted period for 30
years, peacefully (NEC VI NEC CLAM), openly without violence(NEC Precano) or
as if he were, the owner thereof with the intention to acquire ownership or some
limited real right in the property in question may result in passing of ownership
- It does not matter whether the possession is bonafide or malafide
NB. A person who claims to have acquired ownership or someotherreal right by
prescriptionmust have possessed the thing or exercised the right in such a manner
that the owner could be expected to notice it if he looked after his property with
reasonable diligence e.g. an owner of land who only occasionally and not very
thoroughly patrols a long area and fails to notice that it is occupied by unauthorized
persons, does not exercise reasonable care, and the occupiers, will in due course
acquire ownership of it by prescription.
h) Commixio
Is the mixing up together or mingling of things in such a manner that they cannot be
separated from each other if the mixing has been done in good faith, the different
owners becomes co-owners of the mixture on proportion to the quantities of the
substances which have been mixed up.

Derivative Ways of Acquiring Ownership

- Delivery, Registration and Cession

A)Delivery
-This method is applicable to movable property

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There are two types namely:
1. Actual or physical delivery
2. Constructive or fictitious delivery

1. Actual or physical delivery(traditio)

Consist of the actual physical hand over of the merx (thing) or res vendita from one
person to another usually from hand to hand.
- Is the most common form of delivery
-
2. Constructive or fictitious Delivery
- Refers to the various methods of transferring a real right by which the
transferor places the transferee in legal control of the thing without physically
delivering it to him. This type of delivery is usually effected where actual
delivery is impossible, difficult or not required at that time.

Forms ofConstructive or fictitious Delivery

There are five forms of constructive criticism.
a) Symbolic Delivery
This is a delivery not of the thing itself but of some symbol of the thing which
allows the buyer to exercise full control over the merx e.g. the handing over of
the keys to the warehouse or a storeroom in which furniture or goods are stored
or the handing over ofthe bill of lading which indicates that the goods have been
on board a ship for the delivery to the buyer.

b) Delivery with a long hand (traditio longa manu)

- This method of delivery takes the form of pointing out the goods to the buyer
and in giving the buyer the right to remove them.
- This form of delivery is most suitable or used where actual delivery is
impossible or difficult either because of the weight or bulk of the article or load
or because of some special circumstances e.g. regulations preventing
movement of cattle at that time.
Xapa Vs. Ntsoko 1919
X was entitled by the virtue of the contract to get 5 herd of cattle from N and
went to N’s kraal to fetch them, when he got there N pointed out 5 herd of cattle
to him as agreed under the contract, but he was unable to take them away due
to certain east coast fever regulations in force at the time.
he then arranged with N to keep the animals for him and later visited twice N’s
kraal and saw his cattle.
Held
The cattle had become X’s.
.
c) Delivery with a short hand (traditio Brevimanu)
Takes place where the buyer is already in physical possession of the goodsbut

65
 goods and continues to hold the goods, not for the seller but for the buyer.

e) ConstitutumPossessorium – Constituted Possession

Denotes a form of delivery in which the seller or transferor continues to keep
possession of the goods (retains possessions of the thing) in which he has
agreed to transfer a real right, but now hold them on behalf of the buyer.
- It is only the mental attitude towards it that undergoes the change e.g. where a
person purchases a watch from a shop and leaves it for the jeweler to have a
new belt fitted. The watch in this case will have been delivered to the buyer by
the fictition of constitutumpossesorium..

NB. However this form of delivery is looked at with dislike or suspicion by the
courts because it is very easy for the debtor to defraud his creditors as it permits a
person to dispose of the assets while maintaining the outward appearance that
ownership in them is still vested in him.

B) Registration
This method of transferring ownership applies in the case of immovable property and
involves the registration of the transfer of ownership at the deeds office i.e. ownership
passes by registering the name of the buyer on the title deeds of the property.

C)Cession
Applies in the case of intangible property in which ownership is passed by a process
known as cession where the real rights are transferred from one person to another as
in the case with shares, patent rights etc.

Requirements for Passing Ownership

a) The thing must be legally capable of ownership
b) The seller must be the owner of the thing or his agent
c) The transferor must be legally competent to sell the thing or property.
d) The transferor must have the intention of passing ownership of the thing.
e) Delivery must be made to the transferee or his agent.
f) The transferee must accept delivery of the thing with the intention of acquiring
ownership of it.
g) Price must be paid or credit given
Loss of Real Right of Ownership
1. Abandonment
Ownership is lost when the owner abandon his property with the intention that it
should become a res –nullius i.e. the owner must give up his animus posidenti
presumably relinquish its physical control detention
NB. Mere loss of physical control does not however result in the loss of
ownership(ipso facto)lostin the thing which is abandoned in an emergence.

2. Expropriation
- Means that the owner is deprived of his right of property which then becomes
vested in the state or some other public authority or corporation authorized by
the state to acquire ownership in the property or there’s some form of

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 - Ownership in such properties is lost as a result of an order made by the court of
competent jurisdiction
- However such an order should only be made if the owner has himself
committed the offense in respect of which the property is liable for forfeiture
unless the owner knows of and consents to the legal use of his property.
4. Distruction of property in the public interest
An owner may be deprived of his property if its destruction has been authorized
by a statute.
5. Involuntary Transfer by Operation of Law
The owner of the real property can lose the right of ownership in such property
by operation of the law by action of the government or of another person e.g. if
the owner is in default on a mortgage or trust deed, the owner may lose the
property as a result of an action by the creditors.

OWNERSHIP AND POSSESSION

Possession
This is the physical control or detention by a person of a thing with the intention of
keeping control of it for his benefit.
NB. The absolute owner of the thing has a right to claim possession of the thing if it is
in the possession of another person illegally i.e. he has a right to vindicate the thing
and thus can recover possession by means of a vindicatory action.
For him to succeed he needs to allege or prove 2 facts:
a) That he is the owner of the thing
b) That the defendant is in possession of the thing .
Types of Possession
1. Jus possessionis and Jus Possedenti

Jus possessionis
Is a right of possession available to a person to demand that he is given the
possession of the thing, the person might not be the owner e.g. the thief.

Jus Possidenti
Is the right to possession which enables a person to demand that he be given the
possession of the thing, the person might be the owner. E.g. it might be an authorized
agent or a relative.

2. Possession Civilis (civil possession)

Possession Naturalis (Natural Possession)
- A person has a civil possession if he holds a thing with the intention of being an
owner irrespective of not he is the owner.
- Natural possession is where a person holds a thing with the intention of having
it for himself but without belief of an owner.
3. Just and Unjust Possession
- Just possession is open and peaceful possession
- Unjust possession is possession which has been acquiredand is being

67
 the thing either by himself or through an agent
- R Vs. Mafohla 1958
- it was held that a wounded animal which has sufficient strength to escape far
enough from the hunter to give hissearchfor the carcass, when it is getting dark
and to resume it the following morning remains a res nullius.

Subjective Element of Possession

- This is the subjective element of possession which relates to the purpose for
and the intention which a person seizes the control of a thing.
- The question then arises as to whether a person must know that the thing is
within the obit of his physical control before one can be said to be in a
possession of it. E.g. if somebody leaves mbanje in your house without your
knowledge, can you be said to be in possession
R Vs. Betelezie 1939
It was held that a person is not guilty of being illegally in possession of liquor when he
was able to satisfy the court that the liquor which has been discovered in his house
had been stored there without his knowledge or consent
NB. A possessor is protected in his possession whether or not he has jus possidenti,
therefore a person cannot be deprived of his possession merely because he has no
jus possidenti in respect of it.

Spoliation and Protection of Possessor

Possessor who has been deprived or despoiled of his possession without the consent
may apply to the court by mandament van spoile –(a spoliation order) which is a
court order directing the spoliator to return the thing immediately to him
The person who applies for such an order must prove
1. That he was in possession of the thing
2. That he was deprived of such possession
NB. In such proceedings, the court will not consider the spoliator claim that he has a
better title to the thing in question
Nino Bonino Vs. De Lange 1906

The Loss of Possession

Possession of a thing is lost if the possessor either gives up his animus possidenti or
loses his power to exercise physical control over it
NB. The possession of a thing which has been mislaid and cannot be found after a
thorough search has been made may be reported as lost even if it is lost within the
possessor’s orbit –area of control.

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LAW OF PARTNERSHIP
- Is a relation which subsists between persons carrying a business in common
with a view of profit.
- It is a contract between 2 – 20 people In which each agrees to contribute
something on a lawful common business with the object of making and sharing
a profit.
Joubert Vs Tarry &.Co.
Rhodesia Railways Co. & Others Vs Commissioner of Taxes 1925

Essentialsof Partnership
1. Contribution
Each partner must contribute something, be it money, food, labor or skill
2. Profit Motive
Objective must be to make and share profit
3. Common Business
It must be carried out for the benefit of all parties
4. Legal Contract
The contract between the parties should be legal including offer and
acceptance must be made between 2 – 20 people.
Formation
1. Express Authority
- A partnership may be formed orally or in writing and in the case of written
agreement a deed of partnership or articles of partnership is drawn up and may
include among other things
a) Nature of business
b) Contribution by each partner
c) Division of profits and losses
d) Salaries or bonuses of parties
e) Settlements between partners

69
 Fink Vs, Fink 1945
Fink and his wife purchased 3 cows and commenced to sell their surplus milk, from
this unlikely beginning to which each had contributed labor and money, a large thriving
business developed.

Held
A tacit universal partnership exists between a husband and wife who tacitly pools
their resources and effort to sell goods hence a partnership had been established.

3.Estoppel/ Holding out

This occurs where a person is not a partner in a particular form or who by words or
conduct represent himself to be a partner in it
-he is estopped from denying that he/she is a partner to anyone who has on faith of
such representation dealt with or given credit to the firm.
- It is sometimes called a doctrine of holding out
Jellyman Vs. SA Manufacturing Co.

Types of Partnership

A) Ordinary
- This is the most common form of partnership consisting of ordinary partners
only.
- Each partner’s name is disclosed to the public and take active part in running of
the business
- Each partner is also liable jointly and severally for those debts of the
partnership once the partnership is brought to an end and this may extend to
his own private assets.

B) Extra- Ordinary
Anonymous /Sleeping/Dormant Partner
a) Sleeping Partner
- Is one who contributes his share to the business in return for which he receives
his share of profit.
- The name of the partner is not disclosed and takes no active part in the running
of the business but leaves it to the disclosed partners, not to be liable for
partnership debts but is liable for the named ordinary partners for the full share
of the loss.
Commandite
- Under this type , business will be carried on by active or disclosed partners in
their names alone
- The undisclosed partner’s liability is limited and they also contribute a fixed
sum of money in return for a specific share of profit /loss
- Disclosed partners are liable (in solidium) in full to the creditors

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 Consequencies of Partnership
Two distinct definition of legal partnership arise from a partnership-
- Those arising between partners themselves
- Relationship between partners and 3rd parties.
-
- Relationship between partners interests once a partnership has been entered
into, a partner will have various duties and rights.

Duties of the Partners

1. Contribution
Partners should deliver whatever they agreed to contribute and failure to do so
will allow the other party /partner to bring an action to make the partner deliver.
2. Carry on Business
- It has been said that the partner sustains a double character of both the
principal and / agent and hence in the absence of an express agreement to the
other,
- Each partner contracts as an agent for the firm in the acts within the scope of
the partnership business.
Pat Sheffscomm Dairy& Industry Co.Ltd Vs. Standard Fresh Milk Supply Co.1973
Like an agent, a partner must act in accordance with his mandate whether express
or implied and must account to the other partners what he has received or paid out
in the course of the business, he must exercise reasonable care and skill in
carrying out the mandate.
3. Share of loses
General rule: loses should be shared in the same proportion as profits but
partners should act or come to some arrangement e.g. one partner will bear the
loss.
4. Utmost Good faith (Uberima Fidei)
The most important duty like agency and partnerships requires that each
partner should act with utmost –/total honest towards fellow partners.
Wegner Vs. Surgeson 1910

Wessel’s J said that “’the relationship between partners is very much the same
between brothers”.
Olifants Tin B Syndicate Vs.DeJager 1912
Where the court observed that it is a general principle of our law that the contract of
partnership is based on utmost good faith
On De Jagger’s appeal against the decision in that case Innes CJ added that “the
relationshipof members of partnership is one of mutual trust and confidence”.

- Quality of good faith may take any of the following

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 - A partnership was formed for the purpose of prospecting for acquiring tin
properties
- De –a partner prospected on behalf of the partnership and discovered Tin on
the farm which was not covered by the options.
- Without lettingco- partners know he acquired the rights for himselfto which he
claimed he was solely entitled.
Held
The discovery fell within the scope of the partnership business and the firm was
entitled to such profits.

b) No partner may dissolve a partnership to benefit himself alone

Parr Vs. Crosbie 1886
A partnership was formed to supply transport to the Government, one of the partners
gave notice of dissolution and contracted alone.

Held
The injured part was entitled to half of the profits

c) No partner may partnership may appropriate partnership property for himself

alone e.g. a partner may not buy immovable property with partnership funds
and have it registered in his own name.
Austrunther Vs. Trustees in the Estate of EJ Chiappini
- a partner who appropriates a partnership property of himself is guilty of theft
R Vs. Pretorius 1908
d) a partner cannot open a business in competition with the partnership business
and if it happensthis will be a breach of good faith.
Love Vs. Hobson 1913
e) a partner is liable to account to his co- partners for any benefits/ profits and
advantages, he acquired in any transaction that is rivalry with the partnership
business or injurious to it
Exceptions
However if the transactions doesn’t come within the scope of partnership business,
the partner will not be liable to account for it.
Trimble &Bennet Vs Goldenberg 1906

f) A partner may not buy partnership property without the consent of his co-
partners.
Hargreaves Vs. Anderson 1915
g) A partnership must disclose to his co- partners everything within his
knowledgeaffecting the partnership affairs.
Nash Vs. Murrhead 1909
NB. Breach of good faith normally entitle co- partner to claim dissolution of
partnership
Doucet Vs. Piaggio 1905
A contract entered into by a partner with a 3rdparty in breach of his duty of good faith
is un enforceable Hutton Vs. Stein Weiss 1905

72
 2. Right to inspect all books of accounts at any reasonable time and to obtain
extracts thereon.
3. Rights to share in the profits in the agreed proportion or proportion to the
partner’s contribution where no proportion has been agreed upon.
4. Partners are entitled to be reimbursed for necessary expenses and indemnified
for losses incurred or sustained in the courseof partnership business
5. Partners have no right to a salary or interest on their contributions unless
express agreement has been made to the effect.

Relationship Between Partners and 3rd Parties

- Contracts made between partnership firm &3rd parties are binding as long as
the partnership remains in existence
- If the 3rd parties wishes to hold the partnership liable to an agreement the
partner may have enteredinto , the following must be proved:
a) A partnership exists
b) Partner whom the 3rd party entered into the agreement with acted within the
scope of his authority or scope of business of the firm.
c) Partner actedin his capacity as a partner and not in his personal capacity.

General Rule
Partners are jointly and severally liable each for all the debts of the partnership firm
itself represented by all its partners.

Partners as Agents
General rule
All partners are agents of each other and of the partnership when acting in the course
of the partnership business
Standard Bank Vs. Good Child 1877
- where a partner in a trading firm made promising notes in a firm’s name
,discounted them with the bank and misappropriates the proceeds for his own
personal use
Held
Partnership was liable
 Thus for the firm to be liable, he must contract in the name of the firm or
partnership.
 Where he does so the business will be bound even though it may derive no
benefit from it.
 Such transactions must have been done within the scope of business.
NB. Where the partner disobeys the rule, the partnership will not be bound even
though he uses the business name.
Meyer Vs. Mosenthal Brothers 1925

- A partner ina milling business purchased soft goods from Mosenthal Bros.
falsely claimed the goods to be for use in the new store to be opened by them.
M. Bros sued Meyer (the partner) who knew nothing of the transactions for the
purchase price of the goods.
73
that he purpoted to act in the name of the partnership and the transaction is within the
scope of its objects.
Where a partner either exceeds his authority / contracts outside the scope of
business, his contract may be expressly or impliedly ratified.
Whiteside & Flanagan Vs. Shukinowsky& Kaplan 1924
Partners may be bound under the doctrine of estoppel where a party claiming of this
principle show that other partners have so acted as to reasonably mislead him into
believing that an authorized partner actually had the necessary authority to contract
and that he had contracted upon the faith of this representation and had suffered a
loss.

Termination of Partnership
1. Completion of the mandate
2. Expiry of time
3. Mutual agreement
4. Change in membership f the firm
5. Death of a partner
6. Notice of dissolution, provided its done in good faith.
7. Outbreak of war – if the partner is an alien subject
8. Order of court- a partner may apply to the court to dissolve the partnership if
he/she can show good cause i.e. just and sufficient ground.e.g.
 Mental disability
 Deadlock between partners
 Substantial incapacity of the partner due to illness
 Serious violation of duty
 Disappearance of a partner for 14 months
 No reasonable expectations of profits
 Complete loss of mutual cooperation and trust
 Failure to keep proper books of accounts
 Acts of carelessness on the part of a partner

Vicarious Liability in Relation to Partnership

A partnership will be vicariously liablefor the loss or delicts of partners committed in

the course of the partnership business
- Such liability in tort arises according to the ordinary principles of vicarious
liability
- Liability in tort is jointly or severally
Kendall Vs. Hamilton 1879
Hamilton Vs. Houston 1903

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Difference Between a Partnership and a Company

PARTNERSHIP COMPANY
Can be formed verbally/in writing by Companies may be
deed of partnership or its existence incorporated under the
FORMATION may be inferred from the conduct of the
company’s act chapter
parties. 24.03 or by a special act of
parliament
NUMBER 2-20 members except for professional Private company 1-50
OFMEMBERS partnership e.g. doctors and lawyers members & public -infinite
Each partner in solidium for all the Shareholders are liable only
LIABILITY partnership debts except those in the to the extent of amounts
extra –ordinary partnership. owing on shares held
Capital is provided by the partners. Capital is provided by the
CAPITAL shareholders
A partner may not transfer his share A shareholder may transfer
TRANSFER without the consent of all other his shares to anyone unless
partners his share is restricted by the
articles.

A partnership is not a legal persona A company is a separate

LEGAL – it cannot sue legal person distinct from
ENTITY the shareholders
MAKING OF Every partner is an agent of the firm and A company acts through its
CONTRACTS has implied authority to contract for his agents or officer (directors).
partners within the scope of the Shareholders have no
business authority or power to make
contracts which are binding
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SUCCESSION Affected by change in membership e.g. The company enjoys
death, admission, retirement etc. these perpetual succession.
terminates unless there’s a provision to
the contrary

LAW OF SECURITY
Security can be divided into2
A) Personal Security
- Is given by granting the creditor the right in case of non-payment of a principal
debt to secure payment by means of other personal rights given to the creditor
as security e.g. security / guarantee
NB. A personal right is usually enforceable only against a particular person or
association of individuals on the basis of a special legal relationship such as contract

B) Real Securities
- Is obtained by a creditor when either as a consequence of agreement with his
debtor or by operation of law acquired the right to reimburse himself from the
proceeds of a particular thing(movable or immovable)in the event of the
debtors default
- It affords a creditor a Limited real right to the thing which forms the subject
matter of the security.
- Therefore it is far better kind of security than personal security which affords a
creditor a mere personal right against the debtor.
- It does not provide entitlement of use and enjoyment.
E.g. mortgage, pledge, lien and hypothesis- all these securities are real rights
which a creditor has over the property of his debtor in order to secure
performance of the obligation,
NB. Mortgage and pledge follow upon an agreement and are therefore known as
conversational security.

Surety ship
-Is a contract between a creditor and one or more 3rd parties (surety) whereby the later
agree to make good to the creditor the whole or part of the debtor’s obligation if the
debtor fails to pay.
- Is a contract between a creditor and a third party, surety, in which surety
guarantees that he will pay the whole or part of the performance due by the
debtor or on default by the debtor.
-Is a contract between a creditor and a surety in which the surety or guarantor gives
an undertaking to the creditor and the principal debtor, to pay the whole or part of the
principal debt on behalf of the debtor
NB. a contract of surety creates only personal rights, the effect is that the creditor has
extended his right against his debtor to a right against 2 persons (debtor and surety)
who are jointly and severally liable.

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Nature and Formation of Surety
- The contract is between the creditor and the surety and the principaldebtor is
not part of it.
- Surety agreement is only ancillary. It must be reduced in writing and signed by
the surety or his duly authorized agent.
- There must be a valid principal debt which is legally enforceable, if it is void the
surety ship is also void
Types of Surety ship / Guarantee
Once the debt is due the creditor may have recourse against either the principal
debtor or surety for payment and there is no obligation upon him to proceed against
the principal debtor first.
Harley Vs, Marais 1882
If the creditor proceeds against the surety first, the surety has the following rights;

1. Benefit ofExcursion (BeneficiumExcussiousServodinis)

- This benefit entitles a surety to demand that the creditor should sue the
principal debtor first before coming to him
- However excursion is at the risk of the surety. If the creditor incurs costs in an
unsuccessful attempt to obtain satisfaction from the principle debtor, the
surety will be responsible for this cost.
Harley Vs. Marais 1882
- This benefit must be claimed before the order of the issue (jointer of action), if
not claimed by then it is lost.
- This defense also fails if the principaldebtor’s estate has been sequestrated i.e.
declared insolvent

Renunciation of the Benefit

The benefit may be renounced at the time the agreement is entered into in express
words or impliedly by signing the agreement as surety and co-principal debtor.
The defense fails however if
a) The surety fails to plead the benefit of excursion before the close of the pledge
in the action against him
b) If the principal debtors estate has been sequestrated
c) The surety expressly or impliedly renounces the benefit ifhe impliedly
renounces, the benefit by e.g. signing the surety ship contract as surety and
principal debtor or as surety and co- principal debtor.

2. Benefit of Division
The surety may request where there is more than one surety to have the debt divided
among the other sureties with him being sued for a prorata share of the debt.

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Termination
Surety gives notice of termination to the creditor in case of continuing
guarantee of surety ship.
Prescription – if the debt or obligation to which the surety ship relates is not
claimed within3 years, the debt on which the creditor had the right to look for
the debtor becomes prescribed and no claim can be made on the surety.
NB. Surety ship can also be terminated by agreement, novation and other
ordinary rules applicable to termination of contract.

Mortgage and Pledge

Mortgage is a security over immovable property which enables the creditor or the
mortgagee to obtain an order of court for the resale of the mortgaged property in
satisfaction.

Real Security

1. MORTGAGE
- Is the right over other’s property which serves as a security for obligation. It
enables a creditor as mortgagee to obtain an order of the court for the sale of
the mortgaged property in satisfaction of mortgager’s indebtedness to him
- A mortgage is a form of security which confers the holder thereof s right of
security in respect of the property mortgaged.
- A mortgage is thus generally accepted as the safest of all forms of security and
arises by agreement.
- The subject matter of the mortgage bond is immovable property
- The only way a mortgage can be created is by the execution of the registered
owner of the immovable property to be mortgaged or by the legal practitioner
authorized by him and by the power of attorney.
Registration
- Is an essential prerequisite for the existence of any mortgage bond.
- Once a mortgage has been registered in respect of a particular immovable
property.
- The registrar is precluded or barred from the execution of a transfer of that
property (has been realized from the operation of the bond by written consent)
on the mortgage.
- Delivery of tittle deeds of the property to the creditor does not create a
mortgage even if it is accompanied by the power of attorney signed in blank,
authorizing the passing of bond.
- A mortgage of land covers all buildings and other immovable on it at the time or
subsequently created or attached.
- A registered long lease is classified as immovable property for it may be
mortgaged but the security thereby achieved is limited as the mortgage falls away
if the lease is lawfully terminated.

Essentials of a Valid Mortgage

78
 bond must bind specific immovable property and must not contain the general
clause binding all the mortgagors property.
3. There must be a contract of mortgage between the parties which can only be
entered into by a person entitled to the administration of their own affairs
4. There must be an intention of mortgage.

The Nature of Security

- The nature of themortgagee’s security is three fold
a) He may protect the property
b) he may call up the bond and have the property sold and release money that is
due to him
c) He has a preference on insolvency

Protecting the Property

The deeds Registry Act section 48 provide for the protection of mortgaged property
and prohibit its focus for, except in execution, insolvency, assignment and liquidation
without mortgagee’sconsent.
- For closure or call up- this is the mortgagee’s right to call up the bond and have
the property sold so that he can realise the money that is due to him an order
(ParateExecutie)declaring the mortgaged property executable and then selling
it in execution
- Any agreement giving the mortgage the right to sell without order of the court is
void.

Difference Between a Mortgage and a Pledge

- A mortgage is effected by registration of the property without any change of
ownership taking place
- It is mainly used in the case of immovable property
- A pledge on the hand is used when the object matter of the contract is either
movable (corporeal) or is an incorporeal right e.g. shares and is actuallyhanded
over by the pledgerto the pledgee in order to constitute a security.

Legal Effect of a Mortgage

Rights and duties of the mortgagee (Creditor)
a) Right to retain security over the property until the debt has been extinguished.
b) Right to sell the property if the debt remain unpaid on due date and receive
payments out of the proceeds of the sale
c) The mortgagee may enforce his right against the mortgager’s successors or
sureties and if he cedeshis bonds the cessionary incurs his same rights
d) Duty to incur the expenses which are necessary for the proper preservation of
the property and recover these from the mortgage.
e) In case of a pledge, he is liable for any damage done to the property through his
negligence and must give an account of all fruitsand profits derived from the
property.

79
Rights and Duties of Mortgager
a) Right to redeem property on payment of the debt and all interest due.
b) Right to cancel bond or secure restoration of property on payment of debt
c) Right to receive from the mortgagee anaccount of all fruits derived from the
property
d) Right to grant lease of property unless expressly prevented by the terms of the
contract.

2. PLEDGE
- Security over movable property which entitles the pledgee to have such property
sold if the debtor or pledger fails to settle the debt secured by the pledge
- It therefore arises by the contract in terms of which a pledger places movable
property in the hands of anotherorpledgee as security
Smith Vs. Farvelly’s Trustee 1904
- In order to create a real right , delivery of the subject matter of the pledge by the
pledger to the pledgee is necessary i.e. possession by the pledgee is essential
for the existence of real security
- If the pledgee parts with the possession, his real right is lost
- If there is no delivery of the subject matter, the pledgee will only have a personal
right.

NB.A pledgee however does not lose his security if he returns the property to the
pledger to do some work on it, or when the pledger leases it to a 3rd party.

Forms of Pledge
a) Corporeal e.g. Furniture and Vehicles
b) Incorporeal e.g. shares

Corporeal Movables
- To create a pledge of a corporeal movable property, there must be an
agreement if it is to be held as security by the pledgee together with the delivery
of property to him.
- The delivery must be such as to put the pledge in effective control of the
property hence constitutumpossessoriumwill not suffice but trditiobravimanu
and attorneyment will
Incorporeal Movables
- Cession takes the place of delivery, cession aids the transfer of personal right
to a 3rd party.
- Cession of personal rights occurs in case of insurance policy, shares etc.

Formation or Validity of a Pledge

- A pledge is constituted by an agreement between the pledger and the pledgee
accompanied by the delivery of the item.
- No formalities are required for the obligation but in disputed cases lack of
writing may point to lack of intention to pledge.
- As with mortgage, a pledge will be unenforceable if there is no principal debt or
80
NB. Any necessary expenditure incurred in discharging of his dutyeg feeding pledged
animals are recoverable from the pledger.

2. He must give an account of all fruits and profits derived from the property

PactumCommissorium
- Is a term in a pledge entitled to the pledgee to retain the article pledged
- It allows the pledgee to sell such property and recover what is due to him

NB.
Although the clause in a pledge may allow the creditor to sell the property in the event
that the debtor fails to pay, the general rule does not however allow the creditor to
prejudice the debtor.
Sakala Vs. Wamambo 1990
S borrowed $50 000 and pledged his car worthy $130 000, he failed to pay back the
money and the car was sold for $ 7 500. S sued the creditor

Held
That the act of creditor was improper because he sold the car at a fraction of its
market price thereby prejudicing the debtor and the contract of sale was set aside.

Termination of Mortgage and Pledge

1. Discharge or payment of principal debt or liability
2. Renunciation by the mortgagee or pledgee of his right either expressly or
impliedly
3. Novation – substituting old contract with new one
4. Merger – when the mortgager and mortgagee become one
5. By prescription after 30 years if the mortgager doesn’t in any manner admit
liability
6. By order or decree of court setting aside the mortgage e.g. on the ground of
fraud or mistake
7. By release of mortgage
8. Sale of the mortgaged property e.g. in execution or insolvency
9. By destruction of mortgaged property.
10.By alienation of the mortgaged property by the debtor with the consent of
the creditor
11.By effluxion of time- limited by agreement for the duration of the mortgage.
12.Set off

LIEN
Right of Retention (Jus Retentionis)
- is a right enjoyed by a person who is in a possession of another’s property, to
retain possession of that property until some expenditure incurred in
connection with that property has been repaid. Or
- it is the right tacitly conferred on a person who is in possession of someone

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 through force, fraud or mistake

Types of Liens
Lien (Right of Retention)

Debtor & Creditor

Lien Enrichment Lien

Salvage Lien Improvement

Lien
(Necessary Expenses) (Useful Expenses)

Debtor and Creditor Lien

Occurs when a person is in possession of onother’s property on which he has incurred
expenditure with the owner’s express or implied consent
Unified Building Society Vs. Snooklers Trustee 1906
Tyre and Motor Supply Co. Vs. Lien Brand 1926
1. A builder of a new house or old house has a lien of it over the contract price
2. A repairer of an article has lien over it for the amount of payment agreed upon
for his work.
3. A carrier has lien on goods carried by him for his freight
4. A warehouse man has a lien on goods he has stored
5. An agent has lien on his principal goods for expenses incurred in respect of
such goods.

Enrichment Lien
- Is a lien which a person has on property in his possession on which he/she
incurred expenditure without the owner’s express or implied consent.
- He must have incurred the expenditurebonafideand it must have benefited /
enriched the owner.

Types of Enrichment
a) Salvage Alien
- One which a bonafidepossessor has incurred expenditurenecessary to protect
or preserve the property e.g. feeding and stabling animals, repairs to a building,
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 - Is one in which a bonafide possessor has for having incurred useful expenses
that have increased the property’s market
E.g.
- erecting a building
- sinking a well
- feeding sheep with the result that their numbers increases

Types of Expenses
1. Necessary Expenses – (impansaenecessarie)
- These are expenses incurred with the preservation or protection of the property
without which it would either perish or deteriorate
2. Useful Expenses –(impansae Utilities )
Are expenses incurred that have increased the property’s market value

3. Luxurious expenses - (impansaeVoluptuane )

- Expenses incurred merely to satisfy the personal whims, the person who incurs
such expenses will not have lien on it e.g. unnecessary decorations

Molafide Possessor
Is one who possess property knowing that it is owned by another but
nevertheless intending that he becomes the owner.
e.g.
a) one who incurs expenses under a contract with one he knows not to be the
owner such as a builder who has noticed that he is building on land which does
not belong to his employer.
b) A person who repairs a motor car under an agreement with a person he
knows its not his owner.

Possession and its Essentials

- Possession of the property is not only essential to constitute a lien but must be
continuous
- The lien terminates with the loss of possession unless it was lost through or by
improper means e.g. fraud
- The possession required to constitute lien is a legal possession which is
composed of corpus or detentio or physical control custody together with
animus possidentior the intention to hold and exercise possession for one’s
own benefit.

Effects of Lien
- A lien is merely a security for a claim and does not confer a right of action of
the claim
- It only serves as a defense to an action brought by the other to recover the
property in question
- It also covers the other expenses the creditor incurs through having to maintain
the lien-
e.g. cost of storing goods such to the lien

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LAW OF AGENCY

-Is acontractwherebyone person (principal)employs another (agent) to act for

him and enter into contractual relationship binding between him and 3rd parties.
Reasons for Agency
1. Lack of time
2. Lack of relevant skill
3. Incapacity to contract in person.
Principal
- It must be ascertained whether principal has capacity to contract with the agent
- It must also be established whether he had the capacity to enter into the
contract, his agent purports to make on his behalf e.g. a company will be
perfectly capable of appointing an agent but may not be empowered by its
memorandum to make the contract its agent had purported to make for it.
Agents
- An agent who lacks contractual capacitymayvalidly make a contract which
binds his principal and a 3rd party provided he has sufficient understanding of
the contract.
- He will not be liable in contract but may be liable for enrichment or in delict

Formation or Creation
- Express agreement or authority
- Ratification
- Estoppel
- Implied by law
Agency arises in the following
A. Express agreement
- General rule is that no formalities are required to form agency
- The principal and his agent conclude the contract of agency when they agree on
what the agent is to do and on the remuneration.
- The principal is to pay this unless the amount is fixed by law or custom
- Thus the contract of agency may be made either orally or in writing though in
few cases written formalities are necessary.
- Principal must have contractual capacity to contract otherwise the agent will
be unable to enter into contract on behalf.

Examples where written formalities are needed

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 execute transfers and mortgages of immovable property on behalf of clients in
the deeds office

Power of Attorney
- Is a written document from the principal to the agent specifying the agency
scope of authority
- It enables the agent to
 Buy or sell fixed property
 To have a mortgage bond registered in the deed register or office
 To institute /defend an action or prosecute an appeal in the Supreme Court.

Classification of Power of Attorney

The general power of attorney:
- This authorizes an agent to act on behalf of the principal on any task that is
needed by the principal.
- It involves performance of more than one task by the agent.

Special Power of Attorney

- Authorizes an agent to perform a single act only, once this act has been
performed the contract of agency is deemed to be completed.

B. Ratification
Occurs where a person without authority from the principal acts for the
principal and the act is later adopted or ratified by the supposed principal

Requirements for Ratification

1. The principal must be named or ascertainable
2. The principal must be in existence
KelnerVs. Baxter 1866
3. the contract or act to be ratified must be legal not ultra vires
4. it must be done or ratified within a reasonable time
5. the principal must ratified the whole contractand not part of it
6. the principal must have known all material facts before ratification
Maish Vs. Joseph
7. The agent must have acted as an agent and not in his own name
KeighleyMaxted Co. Vs. Durant & Co.

NB. Once ratification has taken place its effect is normally to place the parties in the
position they would have been in had the agent originally had the authority i.e. it dates
back to the time of the original transaction between the agent and the 3rd party, thus
the principal can sue or can be sued and the agent is relieved for liability.

C. Estoppel/Ostensible/implied by conduct/Doctrine of holding out

- Such types of agency arises where a person by words or conduct represents
permit it to be represented that another person who is professing to bind him,
has authority to do so and bound by the acts of the latter to any person (3rd

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 (X) 3rd to have because of principal’s conduct.
Kapuya Vs. Chakanyuka

Condition
- In order for the plaintiff to succeed, he/she has to show
a) The representation was made by the principal and not the agent
Kapuya Vs. Chakanyuka& Others
Faure Vs. Louw 1880
b) It was such a nature that it did reasonably have been expected to mislead 3rd
party or him.
c) He or she had in fact acted on it
d) He or she had in fact acted on it to his prejudice
Strachan Vs. Blackburn & Sons
Faure Vs. Louw 1880
- A merchant frequently allowed his son who managed his business to make
endorse promissory notes in his name. He had never given his son express
authority to do so, but never objected. Finally the son endorsed promissory note,
discounted it and misappropriated the proceeds. The father then repudiated the
liability on grounds of breach of warranty of authority by the son.
Held
By his conduct he had held his own son to be the agent and was therefore
estopped from denying the liability.

NB. There must be sufficient ground for the 3rd party to infer that A is in fact an
agent.
Sathe Vs. Kutubudien 1914
- A certain person once ordered goods from the plaintiff on behalf of the
defendant, purporting to be the defendant’s agent. On a latter occasion he then
ordered goods.
Held
The plaintiff should not have inferred from a single previous transaction that the
person was in fact the defendant’s agent and hence lost the case

D. Implication of Law
The law implies that for certain purposes one person becomes the agent of the
other by virtue of relationship exist between them, thus one person may in the
absence of an agreement have authority by law to represent another e.g.
guardian acting on behalf of minors, an executor for a deceased estate, a
partner for his co- partners and directors representing their companies
Stipulatio Alteri
- Contracts for the benefit of 3rd parties or nonexistent principal
Under English law it is impossible to enter into contract on behalf of nonexistent
principals, a statutory exception is however provided by the companies Act Chapter
24.03 sec 47 which enables a company to ratify pre incorporation contracts provided
that it was in writing and the person professed to be the agent or trustee and the
object clause of the association provided for its ratification e.g. a promoter of a

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 - A general agent is an agent who has the power to act for the principal in more
than one transaction
- A special agent is appointed for one specific transaction
- A universal agent is a general agent whose mandate is to act in all the
transactions which the principal may want
2. Merc/ Factor
- is an agent who sells goods on behalf of the principal and also have possession
and control of the goods
- he can sell under his name and can retain a commission known as factorage
3. Broker
- This is an intermediary who usually acts on behalf of the seller or
buyer,negotiating between the parties until the agreement is reached for the
purchase /sell of goods and services.
- They do not have possession of the goods to be sold and receive a commission
(brokerage) from both parties.
4. Delcredere
Is an agent who sells goods on behalf of the principal and guarantees payment,
if the 3rd party fails to pay for the goods, for taking the risk he receives a higher
commission known as Delcredere’s commission.

5. Auctioneer
An agent who sells goods on behalf of the principals by means of a public sell
or auction
He has authority to retain/ to receive purchase price and can sue for it in his
own name. He has a lien (right of retention ) on the goods for his charges
His commission is usually fixed as a percentage of the price.
6. Estate Agent
Is an agent authorized to negotiate the sale /purchase of the immovable
property
7. NegotiorumGestor (Agent of Necessity)
- Is a person who acts from necessity without either express or implied authority,
in the interest of another
- Is a person who on his own accord undertakes in case of necessity, in an
emergency to manage the affairs of another (property) without his knowledge/
consent with the view to preserve /salvage such property which would
otherwise perish or deteriorates
Great Northern Railway Co. Vs. Swaffield 1874
A company was held to pay an agent of necessity where the agent arranged an
emergency kit for the horse consigned to their care against which was uncollected.
The company was held entitled to recover deliverycosts as an agent of necessity e.g.
putting out a fire in a building

Duties of the NegotiorumGestor

1. To exercise the same care that a reasonable prudent man Bonus Patus
familius would exercise in the conduct of his own affairs otherwise he would be
liable to the owner for any damage or loss caused by his negligence
2. Must not leave the task undertaken incomplete to the owner’s detriment
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 incurred on his behalf
2. There must be a genuine emergency, a matter of convenience is not enough.
3. It must be impossible to obtain the principal’s instructions
4. Agent must act in good faith.

Duties on Agent (in general)

1. To perform the mandate substantially, to the best of his ability and within the
time agreed or within a reasonable time.
2. To perform the mandate personally –he must not delegate his authority to a
sub- agent(delegatus non protest delegare), however

Agent may delegate if:

 It is necessary to carry out the mandate

 It is customary to do so in the ordinary course of business

 The principal consent

3. To carry out the principal’s instruction precisely

4. To exercise the same care, skill and diligence that a reasonable prudent man
would employ in the conduct of his affairs.

5. To show interest, good faith in all dealings with his principal and not to make a
secret profit

- Must not allow his personal interest to clash with those of the principal e.g. he
must not bring his principal’s profits for himselfor sell his own profit.

Remedies of Principals
1. If an agent fails to perform his mandate substantially, the principal may
withhold his commission and claim any damages for any loss he suffers.
2. If an agent fails to carryout his mandate precisely he is liable for any loss the
principal sustains
3. If an agent fails to observe utmost good faith, the principal may terminate
the agency.
Cold Storage Commission Vs. Palma

Duties of the Principal

a) To pay the agreed remuneration
The principal must pay the agent the commission or remuneration that is
customary in the particular trade
b) Must indemnify the agent for loss or liability incurred by him in course of the
agency in the execution of his mandate/ directly caused by such executions.
Blumenthal Vs. Bond 1916
c) Re-imburse / refund the agent for any expenses /loses already suffered or
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 1. To remuneration
2. To receive re-imbursement for expenses / losses suffered
3. Lien –right of retention
Termination of Agency
1. Completion of mandate
2. Mutual consent/ agreement
3. Incapacity of either principal/ agent e.g. death, insolvency, insanity
4. Exfluxion of time / lapse of time
5. Revocation by principal-a principal may revoke agency before the agency has
executed unless it is irrevocable
Stable Ford Co.Vs. Brady
6. renunciation by the agent i.e. rejecting the mandate
NB. If the renunciation is unreasonable and unjust and the principal suffer any loss as
a result the agent will have to pay damages to the principal
7.Destruction of the subject matter

Breach of Warrant of Authority

A person who professes to act as an agent and who either has no authority from the
alleged principal or has exceeded his authority is liable in action for the breach of
warranty of authority at the suite of the party with whom he professed to make the
contract.

The agent is liable whether he acted fraudulently or innocently-

YONGE VS TONYBEE, 1910

The agent who was held to be personally liable for breach of warranty of authority
after the principal had become insane.

Relationship between Principal and Third Parties

(a) Where the principal is disclosed and named

-where both the existents of the principal and agent are named, the agent having
established a legal relationship between his principal and 3rd party, he completely
drops out of the transaction.

In such a case the agent acquires no rights and incurs no liability under the
contract he has brought about.

-The principal himself is entitled to sue and is liable to be sued as if he himself had
made the contract.

Exceptions

Although the principal is disclosed and named, the agent is however personally liable

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 3. Where the named principal was not in existence at the time of the contract.

4. Where the principal lacks contractual capacity.

5. Where there is a trade usage making the agent liable

(B). Where the principal is disclosed but not named

- there is a presumption that an agent who discloses that he is acting for that
principal but does not name him, is personally liable.

- to escape personal liability under certain circumstances, the agent must make it
clear that he was acting as agent in the particular transaction and if he does not make
that position clear, the 3rd party is entitled to sue the agent or principal if he
discoversthe latter’s identity.

NB. He cannot, however, sue both.

(C). Where the principal is undisclosed

-if an agent makes a contract with the 3rd party without disclosing that he is an agent,
the 3rd party may elect either to sue the principal or the agent e.g. a buyer of articles
sold by an agent for an undisclosed principal is entitled to regard the agent personally
as the seller.

Authority coupled with Interest

- Authority granted by the principal to the agent for a purpose of protecting or

securing some interest of the agent is known as authority coupled with interest.

VAN NIEKERK VS VAN NOORDEN 1900

- Authority coupled with interest often takes the form of procuratorship in

remsuam(agent in his own affairs).
- Procuratorship in remsuamis an agent in which the principal authorizes the
agent to carry out the transaction not for the principal’s benefit but to the
agent’s benefit and to sue in his own name.

Authority irrevocable

Authority coupled with interest is irrevocable and is not even terminated by the death
of the principal

NATAL BANK VS NATORP AND REGISTRY DEEDS 1908

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 revoke the power.

Held

The power cannot be revoked by a person by whom it was given.

NB. The power, however, lapses if

a) The principal becomes insolvent.

b) The agent validly renounces it

LAW OF PURCHASE AND SALE

- Is contract in which one person, a vendor/seller, promises to deliver a
thing(merx) to another ( buyer) who on his part promises to pay a certain
amount for it.

- A contract which the seller or vendor promises to deliver a thing to a buyer, the
latter agreeing to pay a certain price.

ESSENTIALS OF A SALE

1. Agreement

- There must be an agreement, an intention by the parties to buy and an

intention to sell (animus vandendi) thus there must be an agreement
between the parties that the contract is one of the purchase or sell and not
some other type of contract. e.g. donation.

- Like all contracts, there must also be a valid offer followed by a valid
acceptance and all the other essentials of a valid contract must be present.

2. The thing (merx) (res vendita)

- This is the subject matter of the contract, the parties must be in agreement on the
subject matter of the contract though it is not necessary that the merx be in existence
at the time the contractis entered into, provided there’s a possibility of it coming into
existence at a latter date.
3.Price (Pretium)
- The parties must be in agreement as regards to the prices. The price must be
seriously fixed
- It must be expressed in monetary terms, if it is expressed in some other form,
then it will not be a contract of sale but some other type of contract.

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The Sale of Another‘s Property
- Not only one’s property can be sold, but also the property of the 3rd person may
be validly sold provided the sale is being made in good faith
NB. it is not an essential of the contract that the seller guarantees to the purchaser
that he is the true owner of the thing sold. All that he guarantees is free and
undisturbed possession of the thing.
Buying One’s Property
When a person by mistake buy what is already own property there’s no contract
and if he has paid the purchase price, he is entitled to recover from the seller
The Sale of Non-Existent Thing(Res Extinct a)
- The general rule is that the merx should be present, however if the thing is
bought or sold as actually in existence there’s no valid contract.
- If it should turn out that at the time agreement the thing had never existed- no contract.
Therone Ltd Vs.Bross 1929

Exceptions
1) Sale of Spes (hope)
- There may be a valid sale of a thing which is not yet in existence and which may
never come into existence.
- If a purchaser agreed to pay a price whether or not the thing comes into
existence, the sale is presumed to be intended when the purchase or sale is a
matter of speculation e.g. where the purchaser buys mineral that may be found
on given claim(mine)
2) Sale of Res Sperata-(conditional sale) hoped for
- The sale of the thing not yet in existence, but whom the ordinary way of events
will come into existence but whose quality is not known at the time of
contracting.
- The sale is conditional upon the thing coming into existence. If it doesn’t, then
there’s no sale since the doctrine of frustration will apply.
Doctrine of Frustration
- Will apply to the contract of sale for future goods which do not materialize.
Howell Vs. Coupland 1879
In March 1872 the defendant agreed to sell to the plaintiff 200 tonnes of potatoes to
be grown on the defendant’s land, the potatoes were to be delivered in the following
September & October.
The defendant accordingly sewed enough seed potatoes on his land to meet
requirements of the contract, in the ordinary course of events before the time of
performance of the contract arise, a large portion of the crop destroyed by the disease
without any fault on the defendant’s part, the plaintiff sued for damages not delivery.
Held
- the contract was for sale of a specific crop, there was no warranty that the crop
would exist at the time of performance and the defendant was excused from
performance , the contract being frustrated at common law
NB. Refer to the concept of supervening impossibility
Hersman Vs. Shapiro

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The conclusion of the contract of sale has in itself no effect whatsoever upon the
ownership of the thing sold and ownership cannot be passed from one person to
another, without delivery of the thing or some equivalent in law of delivery. Once the
essential s of the contract of sale have been agreed upon all, the buyer is assured of
the vacua possetioor free and undisturbed possession of the goods, he does not
receive ownership.Ownership only passes from the seller to the buyer after the
following two essentials have been complied with namely
a) delivery has been made by the seller
b) Price has been paid by the buyer or credit given.

Conditions Necessary for Ownership to Pass

1) Intention
The seller must intend to pass ownership and the buyer must intend to receive
ownership, this ownership will not pass even if the seller is the owner, if there’s no
intention to pass ownership and no intention on the part of the purchaser of becoming
the owner.
Weeks Vs. Amalgamated Agencies 1920
A of A agencies in Port Elizabeth sold goods to B in Potchestroom and consigned
them by rail to Potchestroom the goods arrived but the purchaser, who had closed his
business refused to accept delivery stating that he had no intention of taking the
goods
Held
That ownership had not passed,for while the vendor intended to transfer ownership,
the intention to accept on the part of the purchaser was lacking with the result that
there was no concurrence between the parties and therefore no transfer of ownership.
2. The Seller must be the Owner
The seller must be the owner or his authorized agent or representative, the ownership
will not pass, since legally you cannot pass on rights which you yourself do not
possess. This is in accordance with the maxim –nemodat quod non habet which
means“ nobody can give what he doesn’t have”.
The true owner is entitled to recover the thing /to vindicate the goods from anyone in
whose possession they are found.
Exception
a) The rule doesn’t apply to the property sold in executionby order of the court of
competent jurisdiction
b) Not apply to money or negotiable instruments so these cannot be vindicated by
the true owner.
c) Not apply where the true owner has so acted as to negligently mislead innocent
purchaser e.g. by standing at a sale of his own goods by another and saying
nothing.

3. Valid Contract
- There must be a valid contract of sale if ownership is to pass.
4. Payment of the Price
- In cash sale the price must be paid before ownership can pass
- However in credit sales delivery plus other requirements would be sufficient to
pass ownership.

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 credit given, where the seller lacks contractual capacity.
7. The merx must be capable of being sold
Ownership will not pass if an article , the sale of which is prohibited by law is
sold and delivered.
Passing of Risk
Risk
- The loss from any damages /destruction of the thing sold or any other
disadvantage occurring to or affecting it, arising through an agency other than
the breach of contract or wrong full act or default of the seller.
- It comprises any form of deterioration or destruction of merx that could have
been prevented by the seller.
- It also include the liability to bear any loss or burden such as payment of rates
and taxes , so imposed on the goods sold between the date of sale and delivery.
NB. Risk include advantages and disadvantages, thus any loss or advantages
resulting from the thing sold to the benefit of the party which has to bear any loss that
might be sustained.
- Thus if a cow is sold and then gives birth before delivery, the purchaser is
entitled to the cow as well as the calf.
The basic rule in the passing of risk
(General rule)
Risk passes to the buyer as soon as the contract of sale is concluded, regardless
whether the delivery has been made or price paid.
Goldstein Vs. Harripeseisad 1942
G purchased at a judicial sale, certain property upon which there stood an iron
dwelling and before taking transfer he sold the property to H. In terms of the
agreement, possession was to be given H on the 3rd January 1931 and transfer to
pass as soon as reasonably possible.Subsequent to the date of sale and prior to the
date of possession to be given, the dwelling had been unlawfully removed from the
property by some person other than G and G promised to have it replaced.
By January 12 the whole building had been demolished by someone other than G. H
refused to take possession of the property.
Held
That risk passed to the purchaser when the contract was made and H had to pay the
purchase price.
Exceptions
1. Negligence / Willful Act
Where the seller is negligent or by his own willful act damages or destroys the
merx, the buyer will not carry the risk .
If the parties decide whether impliedly or expressly to vary the rule, the risk will
not pass as soon as the essential agree, but will pass at a time stipulated by
parties to the contract.
2. Suspensive&Resolusive Conditions
When the sale is subject to a suspensive condition risk will not pass until
condition is fulfilled.
Jacob Vs. Peterson & Others
NB. The effect of suspensive condition is to prevent the condition of the contract
itself until the condition is fulfilled and the contract comes into force only from the
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consequently sued to recover the purchase price, the defendant countered with the
argument that since the contract was for sellers station the railways were the agency
for the buyer.
Therefore risk had passed to the plaintiff by the time of inspection.
Held
That in favor of the plaintiff because there was no completed sale, it was not a
beneficiaperfector or a complete sale until such time as the grader had approved of
the mealies
Consequently the perticulumrei-venditaor the risk of the merx sold remained prior to
such approval with the vendor not with purchaser. E.g. Hire Purchase
Jacob Vs. Peterson & Others

3. Fungibles (unascertained Goods)

Res fungibles are things that have been measured,weighed or countedout by the seller
to determine the price – risk passes only when goods have been appropriated to the
purchaser’s benefit.
Taylor and Co. Vs. Makie Dan & Co. 1879.

Held
That risk had passed to the purchaser since the brand had been clearly appreciated to
them and the purchaser had to buy the duty however in PoppeShchnkoff and Cutting
vs. Mosenthal& Co.1879the buyers had bought 200 hay heads of brand, but the act
imposing the exercising duty came into force before the 200 hay heads had been
measured out.

Held
That since they had not been appropriated to the purchaser therefore the risk was on
the sellers who had to pay the duty e.g. fungibles include maize, groundnuts, oats etc.

4. Seller in Mora
Where the seller has been defaulted and is in mora or late in making delivery, then risk
return to the seller. If the loss or damage to the merxwould not have occurred had the
goods been delivered at the agreed time.

Duties of the seller

1. To care for the merx
- The seller must care for the merx until it is delivered to the buyer.
- This means that until the merx is delivered, the seller is liable for any loss
caused by his own willful act or negligence, however if delivery is overdue
through the fault of the buyer, then the seller is only responsible for willful acts
and gross negligence.
NB. the seller may however refuse to deliver e.g.
a) In the case of the credit sale – should the purchaser become insolvent or
otherwise unable to pay before delivery, the seller is entitled to refuse to give

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A sold 4 ostriches to B for R200 cash . B accepted delivery and sold them to C R200
without paying A, B disappeared. A sued C for the ostrich or their value and succeeded
as ownership had remained in him. C lost his money and the ostrich (right of
vindication)

2. To Guarantee Against Eviction/Warranty Against Eviction

This is also known as implied warranty against eviction and this warranty is implied in
all contracts of sale.
Under this warranty the seller promises that the buyer will not be disturbed in his free
possession.
Vacua possession of the merx, i.e. the seller guarantees not to disturb the buyerand to
protect the buyer against any legal attempt to evict him. If the buyer is evicted the
seller must compensate the buyer, however the buyer must notify the seller of any
attempt or threat to his position and must not just handover the goods to anyone
claiming them.
He must defend prudently i.e. he must put up a competent defense virilisdefension
Yorks and company Vs. Jones 1962

Exceptions
However the warranty does not apply where
a) The parties expressly agree that the seller will not liable should the buyer be
evicted.
b) The buyer is aware that the 3rd party is the owner.
c) The cause of eviction arises after the sale and the seller is not fraudulent.
d) In judicial sale on execution
NB.Where goods have been sold to a 3rd party without the true owner’s knowledge or
concern and if the true owner latter discovers his goods, he has a right to vindicate the
goods from anyone in possession of them.
The action that he takes is called a vindicatory action.

3. To Guarantee against Latent Defects.

(Implied warranty against defects)
Latent defects flows in the articles which are not readily apparent at the time. It was
sold or are defects which any reasonable inspection cannot be seen by a naked eye
but require the services of a specialist, the seller has a duty to guarantee against
latent or hidden defects to the buyer
However for the buyer to succeed under this warranty he must show three things:
a) The defendant was latent- the purchaser must show that he did not on a
reasonableinspection of the merx at the time of the sale have readily
noticed it.
Zievev.svester 1918
Measles from pigs may be held to be latent defect as it was held that a purchaser of
animals was not bound to apply a cruel test to satisfy himself that the animals were
free from diseases .
Donald v.s Stevenson 1932
Goldboattv.s Sweeny 1918
A welded crankshaft in a motor car was also held to be a latent defect which was so
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for human consumption.
The seller delivered the nuts that were unfit to be eaten although use could be made
from them for other purpose such as manufacture of oil.
It was held nevertheless that since the nuts were unfit for the purpose they bought for
they were latently defective .
Dibleyv.sFurteur 1951
F sold to D a 4 are farm without disclosing that one area who are recent grave yard
which had been ploughed over.
Held
D was not liable for adulation remedy (action quantiminoris& action redhibitoris)or the
relief under the sellers warranty against latent defect because the property could still
be used for the purpose for which it was soldbut he could however resign the contract
on the grounds of fraudulent misrepresentation by willful non- disclosure to latent
defect.

C) The defect was present at the time of the sale

Seboko Vs. Sol 1949

Aldilitionremedies for the buyer for goods which are latently defective.
When goods delivered are found to be latently defective the buyer has the following
acdilitionremedies.

1. ActioRedhibitoris
This entitles the purchaser to resign(set aside)the contract and repayment for the
purchaser price against the return of the thingwhere such goods are latently defective.
Marx Vs. Laughton
The buyer of eggs finding them unfit for consumption and allowing them to be
destroyed in accordance to the local by- laws was held to be entitled to a refund.
This ActioRedhibitorisis available where the breach goes to the root of the contract i.e.
the defect must be so serious as to render the thing useless for the purpose for which
it was bought.
The defect must be so serious that had the buyer known about it at the time of the
sale, he would not have bought it.
The test here is objective.

NB. Despite the basic prerequisitelatently defective must be returned

ActioRedhibitoris may nevertheless apply where goods cannot be returned if this is
because they have been destroyed due to the latent defectand without fault on the
part of the buyer.
Dodd Vs. Spitareli
D sold a horse to S which was subsequently found to be suffering from borne disease
of long standing. S called a veterinary surgeon who advised that the disease was
incurable and that the animal should be destroyed. the disease was existing at the
time of the sale but could only have been detected by a veterinary surgeon.S had the

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That S was entitled to succeed because the disease rendered the horse utterly
worthless and there was no obligation to return the merxwhen it is worth nothing at all.

NB. there are however 4 instances where the buyer cannot avail himself to action
Redhibitoris namely:
a) Where the merx has been destroyed or necessarily been damaged after delivery
through the purchaser’s negligence.
b) Where the purchaser has so used the merxthat he is unable to return it in the
same condition as when delivered, the he cannot claim under action
Redhibitoris.
c) Where the purchaser had sold the merx after he had discovered the defect, he
cannot claim recession as such as sale animals to a waiver of his rights
d) Where the purchaser who have discovered a defect, kept /retains the merx for
such a length of time that tacit acceptance of it is inferred, he cannot claim
recession.

2. ActioQuantiMinoris
This is a remedy which lies in favor of the purchaser for the reduction in the
purchase price proportionate to the defect discovered while keeping the thing.
In exceptional cases consequential damage may also be claimed underActio Ex
Emptofor latent defects.
- It is the action arising out of sale for one to claim consequential damage the
following should be proved or apply.
1. That the seller knew of the existing defect or acted fraudulently.
2. That the seller is a merchant ordealer who possesses special knowledge of
the article or goods he is selling.
3. That the seller gave an express warranty that goods were free from defects.
NB. The implied warranty against latent defects will not apply on the following
circumstances
a. Sales voetstoots
There are goods that are sold is they stand, as is or with all faults or free from
warranty
However if the seller acts fraudulently knowing that the goods are defective and
concealing the fact the buyer may cancel the contract and sue for damages or
stand by the contract and seek a reduction in the selling price.
b. Latent defect
In the care of obvious patent defect the maxim caviat emptor (let the buyer
beware)applies.
c. The warranty does not apply where the value of the merx is not impaired either
for its ordinary purpose or for some special purpose to the buyer and seller.
d. Warranty does not apply where the defects does not exist at the time of sale.
e. Warranty does not apply where the buyer know of the defect.

Conditions and Warrants

A condition is an important term which is the basis of the contract, it is an essential
term (a term which goes to the root contract) breach of which entitles the other party

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The plaintiff sued for breach of contract
Held
By missing the first week of the run, the plaintiff was in breach of the condition and
this entitled the defendant to treat the contract as discharged.

NB. A condition is a special type of term which makes the operation of the contract
depend upon the happening and non - happening of a future uncertain event.

Types of Conditions
1. Suspense Condition
Is the one which suspends the operation of a contract until certain conditions
are fulfilled or until the happening or non- happening of a future uncertain event
e.g. for a hire purchase contract ownership does not pass to the buyer until the
last installment is paid.
2. Resolutive Condition
These leavethe contract operating but as the condition is filled then the
contractends and the parties have to be restored to their original position.
NB. Fulfillment of the condition may be failure to pay by a certain date, this entitles
the seller to terminate the contract (in case of the lexcommissioria) and forfeit
whatever has been paid.
3. Positive Condition
A contract is created if something occurs or if someone does something.
4. Negative Condition
A contract is created if something does not occurs or if someone does not do
something.
5. Casual Condition
Depend on the chance or a 3rd party i.e. it depends upon a future event which is
uncertain to happen because of or because a decision of a 3rd person is sought
e.g. A will give $100 000 to B if C marries D
6. Potestative Condition
Depend on the contracting parties i.e. it depends upon future event, the
happening which is within the power of the party whose favor the obligation
was formed e.g. A will give $100 000 to B if B marries A.
7. Mixed Condition
Is the combination of the two or depends on combination of the above.

8. The Doctrine of Fictional Fulfillmentof a condition

This doctrine is applied where a condition is dependent on the future event
which may or which may not happen and where the party to an agreement
prevents the fulfillment of the condition will bind by the obligation unless the
nature of continuous and or circumstanced shoe the absence of a fault on his
part.
Mac Duff & Co. Vs. Johannesburg Consolidated Investments

Warranty
Is less important term which is ancillary to the main part of the contract. It is a
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 rehearsals for 6 days before that date, the plaintiff fell ill and did not arrive until
March 28, the defendant refused to accept the plaintiff’s services.
Held
The rehearsal clause was subsidiary to the main party of the contract which
was to sing on the tour, the plaintiff was available for actual tour and was only
in breach of warranty, and the defendant could not trust the contract as
repudiated but was himself in breach by refusing to accept the plaintiff’s service,
therefore he had to compensate the plaintiff.

Special Kinds of Sale

1. Sell by Sample
Occurs when specimen is exhibited and the parties agree that what the goods
to be sold are such goods supplied should correspond in quality with that
particular specimen
2. Sell by Description
Occurs when a thing sold is described as being of a particular kind of
possessing a particular quality on fitness for a particular purpose
3. Voestoots Sales
Is where a thing is sold as it stands or with all its faults.
4. Cost Insurance Freight (C.I.F)
Price quoted is already inclusive of the cost of goods, insurance and
transportation of goods to their destination
The seller should also submit relevant documents to the buyer e.g. bills of
lading
5. Free on Board (F.O.B)
Price quoted include charges up to the point where goods have been loaded
onto the ship .

-The obligation of the seller therefore is to deliver the goods on board a vessel.
-The buyer must pay the maintenance premium and the freight (transport cost) and
may other expenses which may be incurred by the goods in transit the carrier
(shipping co)becomes the buyer agent to receive delivery, the risk also passes from
the seller to the buyer on delivery of the goods on board doc.
6. (F.O.R) Free On Rail
Price includes the basic price plus the cost of packaging and getting the goods to the
railway station which the buyer………. title of the goods as well as the risk of loss and
damaged goods once delivery has been done to the station nearest to where the
goods are at the time of sale .The railway becomes the agent to the purchaser
therefor the expenses of carriage by the railway from the railway to the purchaser
destination are the buyers.

Hire Purchase

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to the agreement.
-Every agreement should contain a statement of the cash price.
-Duty of the seller to supply copies of the agreement the buyer.
-Duty of the buyer to notify the seller in writing of the change in addressprior to such
change of address.
Removal of goods in Zimbabwe shall only be done with the comment of the seller.
-Ownership shall pass to the purchaser upon payment of all sums payable by him in
terms of the agreement.
NB. The act adequately protects the seller because it imposes liability on the
purchaser if he breaches his duties, e g if the buyer fails to notify the seller of change
in address he will be guilty of an offence and liable to a fine.
-Where the seller has notified the landlord on which the goods are kept the landlord
shall not have hypothesis for rent on those goods.
-If the buyer removes from Zimbabwe without the consent of the seller he shall be
guilt of an offense and liable to a fine or imprisonment.

NEGOTIABLE INSTRUMENTS(N.I)

A NI may be defined as a document evidencing a contractor obligation to pay money

or deliver asecurity for money, the transfer of which by deliver or by endorsement and
delivery entitled a bona fide transferee for value to retain and enforce it,
notwithstanding defects in the transferor’s title.

Whether the transferor had obtained it by fraud or impersuance of an illegal

agreement or has stolen it, owner will be unable to vindicate it from the transferee and
the parties liable on it will be unable to resist the transferee’s claim by setting up the
defense of illegality or fraud.

Purpose /Necessity for Negotiable Instruments

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 Transfer can be by simple delivery where the instrument is payable to bearer
Transfer is passed by endorsement where the instrument is payable to order
2. Safety
Undisputable title is conferred on transferee /payee who is the holder in the due
course
The holder in due course is the only person with rights in the negotiable
instrument.
Loss of possession therefore renders the transferee unable to make any claim
whatsoever e.g. the holder’s title and rights are not disputable as long as he has
possession of the instrument.

NB. A Negotiable Instrument is a document entitlinga holder to the payment of a sum

of money which is transferable by delivery of the payable to bearer or transferable
endorsements of payable to order in such a manner that the transferee who takes the
instrument in circumstances which render him a holder in due course becomes
indisputable entitled to payment.

Bill of Exchange
An unconditional order in writing addressed by one person to another signed by the
person giving it requiring the whom to whom its addressed to pay on demand or at a
fixed determinable time, a sum certain in money to a specified person or his order or
the bearer

Cheque
A bill of exchange drawn on a banker payable on demand. It is an an unconditional
order in writing, addressed by a person to a banker, signed by the former requiring the
banker to pay on demand a sum certain money to a specified person or his order or
bearer.

Promissory Notes
An unconditional promise in writing made by one person to another, signed by the
maker or promisor and engaging t pay on demand at a fixed or determinable future
time a sum certain in money to a specified person or his order or bearer.

Functions of negotiable Instruments

1. Cheque
a) Instrument of Payment
The drawer draws a cheque on his bank and delivers it to the payee who
cashes it to the bank or deposit it to his own bank i.e. the collection bank
with instructions to the latter to collect payment.
The collection bank receives payment and credit payee account and the
drawers bank debit s the drawers account.
Such transfer can be achieved through other methods e.g. credit cards.

b) Bill of exchange

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 been received.
The seller draws a bill with specified amount to be paid and date of payment
and the buyer signs it.
The seller can then discounts the bill by endorsing it i.e. signing at the bank
and transferring his right s to a bank.
Endorsement by the seller is an engagement or affirmation that the buyer or
acceptor will pay as specified.
The endorsement can be blank i.e. no name is specified, the instrument
becomes a bearer instrument.
The seller delivers the instrument to bank i.e. the holder and the creditor then
assumes all rights in it.
The holder is not only the creditor but also endorse in possession of the
bearer instrument.
However, where the seller who is the holder, keeps the bill of maturity and the
bill is dishonored, the seller proceeds against the buyer where defenses are
available under punishable and sale contracts.
Where the bank discounted the bill in good faith and before maturity it becomes
a holder in due course.

A holder in due course takes a bill free from defects on title of prior parties.
Where seller becomes a holder in due course buyer cannot rely on purchase and
sale defenses.
An exporter can get paid for the goods while in trouble through a documentary
bill of exchange.
The importer or buyer opens an irrevocable document letter of credit in favor of
the exporter, the bank accept exporters documentary bill on presentation.
The bill is thus termed a bank acceptance which is discounted on a money
market or sold to financial institution.
Purchasing a bill before maturity constitute an instrument.

Budging Finance
The manufacturer is provided with this facility when he wants to buy raw materials
A merchant bank opens an acceptance credit for the manufacturer, i.e. to accept
manufacturer’s bill to a certain specified limits.
These bills are drawn or discounted, althoughthe manufacturer agree to pay for the
raw materials.
Promissory Notes
Can be used as:
a) An acknowledgement of debt
b) Instrument of profit
c) As a form of security
d) For confirming transactions implicit in the bill
e) An instrument of investment and credit.
Common Terms and Concepts
Promissory
Where a seller /trader receives money on a strength of a bill before it matures.
The value of the bill which is discounted is determined by

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Discounts e.g. notes. Bills, chequesetcthat confer personal rights of action that
accounts for simplified enforcement and transfer
Enforcement is possible I principle as long as possession is not lost.
NB. A share certificate is not a negotiable instrument per-se it in commercial paper
indeed and thus a negotiable instrument because of the role it plays in the transfer of
shares and contains the right embedded in a bill.
A traveler cheque is not a negotiable instrument but one by trade usage and as far as
it complies with the definition of the bill and other negotiable instruments

Attributes of a negotiable Instrument

1. Indisputable ownership by holder ever where transferor had defective or no title.
2. Holder takes possession free of defenses available to prior parties.
3. Payment in good faith discharges an instrument and the parties.
Possession
In all commercial paper the aspect of possession of the instrument and entitlement to
the rights embodied in it are inseparable.
The paper gives corporeal / tangible rights that are holder of instrument is deemed to
be creditor.
The holder can be seen as the payee/ endorses in the possession of the instrument.
The bearer is the person in possession of an instrument payable to bearer.
A thief or other unlawful possessor can thus be a bearer if in the possession of a
bearer’s instrument.
Such possession however merely makes the legislative person as a holder but not as
creditor or owner.
This position protects the debtor who pays a bill in good faith or purchaser who buys
in good faith.
NB. Payment in due course is one made at or after maturity of a bill to the holder in
good faith and of title is defective without notice thereof.
The primary and ancillary agreements in the N.I i.e. cambial relationship– one that
gives rise to negotiable instrument
Initially this relationshipwas as a result of contract called cambium traiectumvel
mercantile
The contract was where one party undertook to pay a sum of money i.e. value /
valutato the other party who will turn promise to repay this amount at another time
and place in foreign currency, and whereas this agreements was sufficient on its own
without a bill it later was accompanied by a bill and eventually cambium contract was
dropped and the bill was accepted as paper currency and the cambium agreement i.e.
literiumobligatiowas contained in the bill of exchange.
Consequently, the relationship in a bill of exchange is seen to be originating from
contracts but in practice as of now it is seen as relationship that arises from a
unilateral or abstract act of a debtor i.e. signing of instrument.
Protection of Good Faith
Once a debtor has signed, a holder of the instrument is protected by the doctrine of
good faith.
Thus where the other party other than the holder purchases a bill in good faith the
signatory or debtor is bound to make good on the bill without recourse to defense
available to immediate parties.

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agreed to be bound by its terms and is liable to a holder in due course.
A signature does not constitute an irrevocable binding commitment since lack of
capacity does not bind the signatory.
A cambium contract has an underlying obligation or the primary obligation.
Cambium obligation can be seen as relating to intention to settle a debt or make a
donation or extend a credit.
It is an issue between a drawer, payee or payer and acceptor or endorsee or endorser.
Primary agreement is just a cause but does not become part of the bill of exchange
The bill however does not set aside primary obligation,it merely reinforces / executes
it.
The ancillary agreement therefore, the bill obligation do not replace primary obligation
Both co-exist and are cumulative

Parties to a Bill
Drawer, drawee and payee
Drawer orders Drawee to pay Drawer and payer undertakes or assures payee that the
bill will be paid on presentment and if dishonored the Drawer undertake to
compensate the holder on endorse.
The Drawee is not liable to the bill except when he has agreed liability.
Payee is a first holder and the holder can also be the endorsee or the payee if a bill is
a bearer
Negotiation is possible only to a holder who negotiates by endorsement or delivery.
On negotiation, the payee become an endorser and the bill where the payee specifies
the endorsee or by order.
Where a bill does not specify the payee – it is payable to bearer and it is a bearer bill
and is negotiated by delivery and not endorsement
A person in possession of the bearer bill is the holder and when the negotiated by
delivery the bill and not endorsement.

Aval
Bill obligation can be secured by surety
The payee decides undertaking by Drawer to make good on the bill might require
security in the form of surety.
This surety is called an aval
An aval’s obligations are governed by the law of suretyship.

Accommodation Parties
The Drawer, Acceptor or Endorser can become an accommodation party. The party
lends his name to the other person to lend weight to that person and he becomes
liable to the capacity he signs.

Liability
The party’s liability is not based on their signature only but must be accompanied by
delivery.
Wherever the signature i.e.the endorsement or delivery is not present the bill is invalid.
Liability to the holder in due course i.e. the purchaser in good faith is based on the
doctrine of good faith and thus can be possible without possession.
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 - Te writing can be n any form of reproducing words e.g. typing, handwriting etc
- The medium which contains the writing can be anything e.g. stone , paper,
wood etc. but the medium must facilitate negotiation.
2. Addressed by one person to another
The person addressed /ordered is the drawee who should be named
ascertainable/identifiable
3. - A sum certain in money (dollars)- the order or note should specify an amount
or sum of money and not other merx and the amount should be legal tender in
local or foreign currency.
- The bill should not specify money payment and non- monetary payment.
- The sum certain includes interest not stated.
4. To a specified person- where bill is not payable to bearer /payee must be
named.

Order
Where a bill is payable to payee’s order and the bill is silent about that action, and
the bill has no restriction and no prohibition to that effect, the bill is payable to
order.
An order bill is negotiated by endorsement and delivery, where negotiation is
restricted that bill is not negotiable.

Signature
The signature can be in person or that of an authorized agent, a tagged signature
does not bind a debtor except where the debtor rectifies it.

The Form of the Bill

Chapter 14.02 of Zimbabwe Bill of Exchange rate specifies that a bill of exchange
should have the following form
1. Should have a title of Bill of Exchange therefore this entitles the parties to know
the risk of and implication they are entering to remove the need for pleading
ignorance
2. Value –should be stated in the bill.
3. Order- A bill should be an order from person to another and the order must be
unequivocal or i.e. not a request or an instruction or plea or authorization
- If the note, the promise should be an actual undertaking to pay and not
acknowledgement.
4. Signature
Should be signed by the person giving it, without the signature the bill is invalid
A maker of a note can also be synonymous with an acceptor of the bill.
5. Unconditional
- The order must be unconditional
- A bill must be clearly distinguishable from the primary obligation and must be
certain and the terms and general crossing do not remove negotiability of a bill.

Bearer
Where it stated that this is a bearer or the endorsement does not specify payee and is
ablank endorsement, the bill is a bearer instrument.

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 - Fictitious payee or excursus was brought about a clash between the primary
obligation or auxiliary obligation.
- Nevertheless speculators who mostly use these devices cannot escape liability
and the instrument remains the bearer’s instrument, however the forged or
unauthorized endorsement is in admissible and negotiation is not possible.
- Transfer however by a fictitious holder is valid and the purchaser becomes the
holder.
- Where the payee forged endorsement exist, the bill can be negotiated but the
holder cannot become holder.
- Fictitious payee is nonexistent payee.
On Demand
- A bill is payable on demandwhere stated and is payable on sight.
- A fixed future time.
- Payment should not be on or before certain date that is specified.
- Payment therefore must be within or after a specified period or date.

A Determinable Future Time

Time is determinable where a period is specified e.g. 6 days after Christmas and
where the 6th day, fails on weekend the correct date will be the working day.

Place of Payment/Drawing of Bill

Where both are not specified a bill is not invalid however bills in foreign currency can
be invalidated where place of payment is mentioned and not complied with.

Date
An in dated bill is not valid, but it might be invalidate the bill where the date is crucial
to determine
A) Period of circulation of a bill
B) Due date where payment periods are unspecified
C) Interest if any
Stamp Duty
Lack of stamp duty does not invalidate the bill, but the bill must not violate stamp duty
requirements.

Waiver and Exclusion of Liability

The endorser and the drawer can hint their liability by including the terms ‘’sans
recours’’ or without recourse or without obligation on any party.
Liability it thus limited and the same applies to waiver.
Delivery
A bill of exchange is based on a contractual understanding and so is the liability of a
drawer.
That agreement assumes
a) That the signature of the drawer, endorser or aval establishes or confirms their
liability.
b) That the bill will not be delivered by the endorser or holder
c) That there is a primary obligation or cause
- Without delivery, the bill agreement is incomplete.
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manner as to constitute the transfer or holder.
Delivery can be:
A) By post, where the transferee requested it should be passed
B) By post, where transferee had not requested it, the post office then becomes
the agent of the transferor.
Delivery is made animocontrahendiwith intention.
Delivery of an endorsed instrument however is not made as part of the contract on the
bill but is made with the intention to pass ownership.
Where the bill is used as a pledge, the delivery creates limited real rights in the
proceeds of an instrument.

Methods of Delivery
- Actual delivery
- TraditioBrevimanu
- Symbolical delivery
- Constitutum possession

Causaref to quid pro quo

Accommodation Parties
These are persons who have signed a bill or put their names to a bill as drawer,
acceptor or endorsee without consideration (benefit) for the purpose of
accommodating some other person who desires to raise money from the bill.

Specimen Bill

15 March 2010
Three months after date pay F. Moyo or order the sum of
$100.00 for value received
To B. Chabata
V. Mabuto

Parties
The drawer V Mabuto is ordering the drawee B Chabata to pay F Moyo 3 months after
the date appearing on the bill.
NB.
1. An imperative order is required not a mere request although the order may be
written in polite language.
2. The requirement that the order must be addressed by one person to another
does not prevent the drawer or for that matter the drawee being the payee e.g.
pay to me or pay to yourself are equally valid orders, but if the drawer and the
draweeare the same person or the drawer is a fictitious person, the holder may

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