TOPIC ONE:
INTRODUCTION TO BUSINESS LAW
NATURE AND CLASSIFICATION OF LAW
The term “law” has no assigned meaning. It is used in a variety of senses. Though different writers
have attempted to explain the term, no generally acceptable explanation has been given. Different
writers explain the term law from different points of view. The study of law is referred to as
jurisprudence or legal philosophy. According to Hart Law is a coercive instrument for regulating
social behaviour.
Law has also been defined as a command backed by sanctions.
These two
explanations of the term law presuppose the existence of a sovereign, which prescribes or
formulates the commands and enforces sanctions, which is not necessarily the cas
According to Salmond, law consists of a body of principles recognised and applied by the state in the
administration of justice. Law has also been defined as a collection of binding rules of human conduct
prescribed by human beings for obedience of human beings. Inevitably, therefore law implies rules
or principles enforced by courts of law. Rules of law are binding hence differ from other rules or
regulations. Rules of law are certain.
In summary therefore, law is an aggregate of conglomeration of rules enforced by courts of law at a
given time.
Rules of law originate from acts of parliament, customary and religious practises of the people, they
may also be borrowed from other countries.
Law and Morality
Morality consists of prescriptions of the society and is not enforceable, however, rules of law are
enforceable. Wrongs in society are contraventions of either law or morality or both.
However, law incorporates a significant proportion of morality and to that extent morality is
enforceable.
However, such rules/contraventions are contraventions of law for example murder, rape theft by
servant or agent.
Purposes or Functions of Law
(i)Rules of law facilitate administration of justice. It is an instrument used by human beings to
achieve justice.
(ii)Law assists in the maintenance of peace and order. Law promotes peaceful co-existence, that is,
prevents anarchy
(iii) Law promotes good governance.
(iv) Law is a standard setting and control mechanism.
(v) Provision of legal remedies, protection of rights and duties.
Types and Classification of Law
Rules of law may be classified as:
Written
National and International
Public and Private
Substantive and Procedural
Criminal and Civil
Written Law
These are rules of law that have been reduced into a written form. They are embodied in a formal
document for example The Constitution of Kenya, laws made by parliament (statutes). Such laws
prevail over unwritten Law.
Unwritten Law
These are rules of law that have not been reduced into written form. They are not embodied in any
single document for example African Customary Law, Islamic Law, Hindu Law, Common Law,
Equity. Their existence must be proved.
National or Municipal Law
These are rules of law operational within the boundaries of a country. It regulates the relation between
citizens and between citizens and the state. It is based on Acts of Parliament, customary and religious
practices of the people.
International Law
It is a body of rules that regulates relations between countries/states and other international persons
egg United Nations. It is based on international agreements of treaties and customary practices of
states and general principles.
Public Law
It consists of those fields or branches of law in which the state has an interest as the sovereign egg
criminal law, constitutional law, administrative law.
Public law is concerned with the constitution and functions of the various organs of government
including local authorities, their relations with each other and with the citizens. Public law asserts state
sovereignty/power.
Private law
It consists of those fields or branches of law in which the state has no direct interest as the sovereign
egg law of contracts, law of tout, law of property, law of succession.
Private law is concerned with day to day transactions of legal relationships between persons.
It
defines the rights and duties of parties.
Substantive Law
It is concerned with the rules themselves as opposed to the procedure on how to apply them. It
defines the rights and duties of parties and provides remedies when those rights are violated e.g. law
of contract, negligence, defamation. It defines offences and prescribes punishment e.g. Penal Code
Cap 63.
Procedural Law
It consists of the steps or guiding principles or rules of practice to be complied with or followed in the
administration of justice or in the application of substantive law.
It is also referred to as adjective law e.g. Criminal Procedure code Cap 75, civil procedure Act Cap
21.
Criminal Law
Criminal law has been defined as the law of crimes. A crime has been defined as an act or omission,
committed or omitted in violation of public law egg murder, manslaughter, robbery, burglary, rape,
stealing, theft by servant or agent.
All crimes or offences in Kenya are created by parliament through statutes. Suspects are arrested
by the state through the police. However, individuals have the liberty to arrest suspects. Offences
are generally prosecuted by the state through the office of the Attorney General.
When charged with a particular offence the suspect becomes an accused hence criminal cases are
styled as R V Accused. Under sec 77 of the constitution the person cannot generally be prosecuted
for an act or omission which was not defined by law as a crime when committed or omitted. Under
section 77 (2) (a) of the constitution an accused person is presumed innocent until proven or has
pleaded guilty. It is the duty of the prosecution to prove its case against the accused. The burden of
proof rests on the prosecution.
The standard of proof in criminal cases is beyond any reasonable doubt.
In the event of any
reasonable doubt the accused is set free (acquitted). The court must be satisfied that the accused
committed offence as charged. If the prosecution discharges the burden of proof the accused is
convicted and sentenced which could take any of the following forms.
(a)
Imprisonment term
(b)
Capital punishment
(c)
Corporal punishment
(d)
Community service
(e)
Fine
(f)
Conditional discharge
(g)
Unconditional discharge
The purpose of criminal is;

To ascertain whether or not the crime has been committed.

To punish the crime where one has been committed.
Civil Law
Civil law is concerned with violations of private rights in their individual or corporate capacity egg
breach of contract, negligence, and defamation, nuisance, passing off trespass to the person or
goods.
If a person‟s private rights are violated, the person has a cause of action. Causes of action are
recognized by statutes and by the common law.
The person whose rights have been allegedly
violated sues the alleged wrong doer. Hence civil cases are styled as Plaintiff v Defendant. It is
his duty of the plaintiff to adduce evidence to prove his case the burden of proof lies on the
plaintiff.
The standard of proof in civil cases is on a balance of probabilities or on a preponderance of
probabilities. It must be more probable than improbable that the plaintiff‟s allegations are true. If
the plaintiff discharges the burden of proof then he wins the case and is awarded judgement which
could take any of the following forms:
(a)
Damage, i.e. monetary compensation
(b)
Injunction
(c)
Specific performance
(d)
Tracing
(e)
Accounts
(f)
Rescission
(g)
Winding up/liquidation
Purpose of civil laws
(i)
Protection of rights and enforcement of duties.
(ii)
Provision of legal remedies as and when a persons rights have been violate