Commercial law 1 ( BM 135 )
Introduction to commercial law 1
 Law comprises a set of rules that regulate human behaviour
• Business law/ commercial law are rules that govern business
relationships eg contracts, tenders, joint ventures, mergers,
trade alliances.
• Madhuku(2010) “law are rules and regulations that govern human
conduct or societal relationships”
• Reynolds(1983) “the body of rules which a state or community
recognize as binding on its subjects or members”.
• Law stipulates what must be done, what may be done and what
must not be done.
 We live in a hive of laws knowingly and unknowingly.
Why talk about business law/ commercial law?
• Business managers should be aware of the legal environment in
which their business operates
• Provide rules to which people or business interact eg work, sell,
partnership.
• Every business decision has repercussions.
• Winning or losing in business in often depends on the ability to
make good choices from a legal perspective.
• Provide rules to which people or business interact eg: work, sell,
partnership.
• Identify legal problems that occur in the running of businesses.
 The following may be classified under commercial/business
law:
• Contracts of sale
• Lease and credit agreements
• Negotiable instruments
• Insolvency
• Companies, partnerships and close corporations
• Agency
• Security
• Labour law
• Intellectual property
PURPOSE AND FUNCTION OF LAW
• Preservation of peace and order
• Justice
• To enforce morality
• Fairness( no one is above the law)
• Uniformity.
• Equality.
• Authority
• Certainty
• Safeguard people’s rights and interests
• From a Marxist theory “ law protects the interest of the
ruling class”
DIVISIONS OF THE LAW
• Criminal law- wrong punishable by the state.
• Civil law- wrong against the other person and compensation
enforced as a remedy.
• Common law-system of law in most English speaking world
based on judicial precedent.
• Public law- relationship between govt and private individuals
• Private law- rules governing relations between private
individuals or groups of persons eg torts, contracts, property
rights.
• Substantive law- rights and duties that each person has in
society.
• Procedural law- protection and enforcement of the rights
and duties as obtained under substantive law.
• National law- body of rules peculiar to a particular state.
• International law- rules that regulate relations among states.
Eg IcJ.
• Constitution- foundation law from which all other laws
derive power from.
SOURCES OF LAW
• Customary law/custom law
 law of the indigenous people.
 These are habits or practices observed by individuals in a
given society
 It is generally unwritten, accepted norms through repetition.
 The following must be met before customary law will be
recognised:
 It must be reasonable
 It must have existed for a long time/ long standing
 It must be generally recognised and observed by the
community
 Uniformly observed
 It must be certain and clear
 Notorious/well known.
Case authority : Van Breda vs Jacobs 1921.
Legislation/ statute
 Statute is a law made by parliament, provincial legislatures
and municipality governments.
 It refers to the law validly enacted by the legislative
authority of Zimbabwe
 This authority vests in the president and parliament of
Zimbabwe
 Act of parliament becomes the legal document.
 Delegated authority/subsidiary legislation means parliament
delegates law making powers to the president, ministers,
local authorities and other state institutions
 Use
of
specialized
legal
document
called
statutory
instruments.
• Hence two forms of legislation in Zimbabwe; Act of parliament
and Statutory Instruments.
Case law/judicial precedent/common law/judge madelaw.
 It refers to past decision of superior courts
 Recorded reasons given by judges for their decisions and
later adopted by other judges in later cases.
 Supreme court decisions in Zimbabwe are binding on all
inferior courts
 Stare decisis et non quetamovere means the decision
stands/do not disturb settled points.
 Ratio decidendi means the reason for the decision
 Obiter dictum means statements made in passing/incidental
remarks.
• Advantages of judicial precedent
 Stare decisis makes the law stable and certain enough to be
consulted confidently.
 Consistency, law is not subject to whim
 Certainty
and
predictability,
if
the
law
becomes
unpredictable it is not serving its purpose
 Flexibility, law can be created without waiting for legislation
 Similarity of cases.
 Convenient
 Saves time.
• Reliable
Disadvantages of judicial precedent
 Uncertainty due to the large number of cases that can be
reported
 Fixity resulting in injustice being perpetrated
 Unconstitutionality, judges are then seen as making law
instead of merely applying it
 Bias arising from judges especially under conditions of rapid
change
• Reform may be stifled
Roman Dutch law
 Originated from Rome as the Roman law
 Grafted on to the Dutch law.
 As Holland communities developed and grew new laws were
necessary to govern and control the additional complexities.
 No Dutch law was available to meet this need hence two
systems of law merged.
 Roman Dutch law spread overseas via the great Dutch trading
companies
 Brought to the Cape of good hope in 1652 by Jan van
Riebeeck.
 Law applying at the Cape of Good Hope as on 10 June 1891
was largely based on Roman Dutch Law
 Was brought by the British in Zimbabwe 1890 fused as the
Anglo Roman Dutch law.
Constitution of Zimbabwe
 Supreme law of the land.
 Any law inconsistent with it is void
 Constitutional supremacy not parliamentary supremacy.
 Sets the state structure, bill of rights, judiciary, legislature,
administrative organs eg public service commission.
 All acts of parliament are intra vires the constitution.
 anything outside the constitution becomes ultra vires.
Persuasive sources
 Acknowledged law textbooks that are held in the greatest
esteem.
 Contain judiciary decisions held in greatest respect eg Roman
Dutch writers, south African and English legal authors.eg
King’s Reports on corporate governance.
The structure of the courts
 Courts are classified into 2 broad categories namely; criminal
courts and civil courts
 Primary Courts
 civil court.
 Village court headed by a headman
 Called the people’s domestic court.
 Customary law applied
 Arbitrate in disputes arising in the immediate village.
 Principle of reconciliation is upheld
community courts are used .
 Civil court headed by the chief
 Chief appointed by the minster of justice.
 Use customary law
Magistrates Courts
 Derives existence from act of parliament
 Its powers and duties determined by that enactment
 Presided over by resident magistrates in major centres and
minor centres.
 Apply both customary law and general law
 Try any crime except murder or cases requiring death
penalty.
 In civil matters, magistrate sits alone.
 Could use assessors to assist in an advisory capacity.
 Magistrate has no jurisdiction on;
 Interpretation of written will.
 Dissolution of marriage chp 5.11
 verification of a person’s mental capacity.
The high court
 Situated permanently in Bulawayo, Harare, Masvingo and
Mutare.
 Goes on circuit to Gweru
 Has original jurisdiction over all civil and criminal matters
throughout Zimbabwe.
 Has full original jurisdiction over all persons and over all
matters within Zimbabwe
 Judge sits alone.
 May appoint one or two assessors as advisors.
 Its original jurisdiction is unlimited
 Choice of court is dictated by costs
 Jurisdiction to supervise magistrate courts and other
subordinate courts
• Inherent review powers over the proceedings and decisions of all
inferior courts
The Supreme Court
 It is a court of first instance in constitutional matters(human
rights)
 Final court of appeal except in cases which the constitutional
court has jurisdiction.
 Constituted of not less than 3 judges at any given point.
 Presided over by a chief justice.
 In serious appeals the chief justice may recommend more
than 5 judges on the bench.
 Its role is to perform the enforcement of the declaration of
right contained in the constitution
 It has power to allow and quash a conviction
 Alter a conviction
 Substitute another conviction with a suitable sentence
 Confirm conviction or increase a sentence
Constitutional court
 Established by section 166 of the constitution of Zimbabwe.
 Composed of the chief justice and the deputy chief justice.
 Seven other judges part of the court.
 Chief justice the head of the judiciary system in Zimbabwe.
 Con court interprets the constitution.
 Consultative court on constitutional matters.
 Con court looks at special violation of fundamental rights eg
marriage of minors.
 Special courts
 Labour court
 Maintenance court
 Small claims court
 Juvenile court.
Law making process in Zimbabwe
 Society defines the power of government through the
constitution.
 Constitution defines the power and structure of government
organs
 Main government organs are; legislature; executive and
judiciary.
 Legislature makes the law.
 Executive implements the law.
 Judiciary interprets the law.
 Legislature consists of the parliament(house of assembly and
senate) and president.
• Executive consists of the president, cabinet, military, police,
correctional service and all law enforcement agencies.
Passage of a bill in Parliament
 First reading: minister gives notice of his intention to present
the bill
 No debate takes place and the bill is referred to the PLC
 Second reading: minister explains the principles of the bill.
Debate is confined to the principles of the bill
 Committee stage: the house becomes a committee to
consider the bill clause by clause. Amendments may be
introduced without upsetting underlying principles of the bill
 Third reading: the bill is read for the 3rd time. Once passed it
then goes to senate. The bill is then presented for
presidential assent.
 Publication of the act in the government gazette
• THE LAW OF CONTRACT
Definition
• A contract intends to formalise an agreement of two or more
parties in relation to a particular subject
• note that there is no legal requirement that a contract
should be written for it to be binding. Eg oral agreement
such as handshake is a contractual symbol/guarantee
• However by statute some contracts are void if their creation
has not been effected with the necessary formalities such as
writing, notarial execution, registration etc.
• The essential elements of a valid contract
 Agreement/ consensus- clear, certain and communicated
agreement
 Contracting parties are consensus ad idem( meeting of the
mind)
 Mutual understanding of what the contract covers.
 Without meeting of the mind the contract becomes
unenforceable( the mustang case) Contractual capacity
-parties must be legally capable of contracting
 Natural and artificial persons contract in terms of the
companies act.
 Serious intent-parties intend to make their agreement
binding (Balfour vs Balfour 1919)
 Necessary formalities-such as writing, deeds, registration,
notarial execution.( case :woods v walters 1921)
 Possibility/certainty of performance-performance must be
certain and possible. Initial impossibility exists where
performance was impossible at the conclusion of the
contract.
 Supervening impossibility refers to where performance was
possible
at
the
conclusion
but
subsequently
became
impossible
 Impossibility must be beyond the control of the parties (vis
major ‘an act of God”)or casus fortuitous “unavoidable
accident”
 Lawfulness-agreement must be lawful
 Agreement must not be illegal or contrary to public policy.
 Lawful when concluded in accordance with statute and
common law.
 Unlawful contract violates common law or contra bonos
mores( against good morals).
Contracts illegal at common law
 Contracts to commit crimes or civil wrong
 Contract to assassinate someone or to fraud
 Contract involving sexual immorality.
 Contract to promote corruption
 Contract to bribe
 Contract to trade with an enemy of the state
 Contract prejudicial to the administration of justice.
 Contract directed against the welfare of a friendly foreign
state,
Agreement
 Agreement = offer + acceptance
Requirements of a valid offer
 Offer must be definite( Kantor v Kantor 1962)
 Offer must be made with the intention of being accepted by
some other person. Eg displays on shop windows.
 General statement of lowest price is not an offer.
 Offer must not have been revoked
 Offer must be one on which an optimal time limit has not
expired
 Termination of offer
 By acceptance
 By rejection
 By revocation before acceptance
 Death
• Failure of condition attached to offer Requirement of a valid
acceptance
• Acceptance must be definite and unconditional
• Acceptance must be communicated. Eg silence is not
acceptance.
• Acceptance must be made by the person for whom the offer
was intended
• An advert is an invitation to do business.
• Acceptance must not be based on some justifiably mistaken
belief
Ticket cases
•
•
DISCLAIMER CLAUSES
if a person receiving a document knows that there is writing on
it and contains ‘
conditions relative to the contract, he is bound whether he reads them or
not
• If he knows there is writing but does not know that it
contains conditions relative to the contract he is not bound
• In cases of unsigned documents such as tickets or receipt
which waive liability, there is need for a public notice
displaying the terms, if not the terms should be pointed out.
• Signed documents
• If a person signs a contract without reading its contents, he is
bound by the written terms. The concept is termed caveat
suscriptor- let he who signs be aware
Types of contracts
 Valid contract-all elements of valid contract present
 Void contract- nonexistence of at least one or more of the
valid element(s)
 Voidable contract- all valid elements available but arise at
the prejudice of the other party’s hidden intentions.
•
Mistake
 It is a misunderstanding or misapprehension by one or both
parties regarding facts, events or circumstances in the
contract
 Mistake can be at law and at fact
 Mistake must be at fact not at law .
 Ignorance of law is no defense/privilege but a misfortune.
 Mistake of law does not invalidate a contract.
 A mistake must be reasonable and it must concern material
facts regarding the contract
 Mistake can be unilateral, common, and mutual mistake
Types of mistakes:
 Unilateral mistake- prior to the formation of a contract, one
party is mistaken with respect to the meaning of a contract
term and the other party is aware of that mistake, hence the
courts tend to treat it unenforceable.
 One party understands a specific aspect of the contract
while the other party is aware of the true facts.
 An instance where only one party is mistaken regarding a
word, term, definition, quality, measurement or price of a
product or service in a contract.eg A wants to sell a house at
a price of $60000 but quotes a price of $6000.
 One party holds this mistaken belief but the other party is
clear as to the meaning. Screw, hammer,
Common mistake
 Both parties misunderstand the same terms, facts, or aspect
of the contract.
 One mistake shared by both parties to the contract
 Share an error with respect to some important contextual
circumstances.
 Prevents an agreement reached either through the parties
failure to produce matching offer and acceptance on a
matter essential for the agreement.
• Mutual mistake
 Both parties misunderstand different aspects or terms of the
contract(dissensus)
 Mistake
as to the subject matter of the contract. Eg
mistaken as to the identity of the subject matter. Eg the
mustang sale contract. The parties are at cross purpose
hence the contract void.
• Remedies.
 Rescission (cancellable set aside)
 Rectification
 Specific performance
 Damages
 Restitution.
Voidable contracts
 Misrepresentation
 Duress
 Undue influence.
Misrepresentation
 It is a false statement made by one party to induce the other to
enter into a contract
 The misrepresentation must: be a false statement of facts
 Be material
 Be made by the contracting party
 Be made with the intention of persuading the other party to
conclude the contract
• Be made in such a way that the other party believes the facts to
be represented and concludes the contract on the faith thereof
Kinds of misrepresentation
 Fraudulent misrepresentation: if a person making the
statement knows that what he said is false, he will be liable
for fraud. See cases; Donners Motors vs Kufinya 1968, Lamb
vs Walters 1926, Dibley vs Furter 1951)
 Negligent misrepresentation: the person making the false
statement has reasonable grounds for believing it to be true
( Bisset vs Wilkinson 1927
 Innocent misrepresentation: is a false statement made by a
person who had reasonable grounds to believe that it was
true, up to when the contract was entered into.
Duress
 It is when a party to a contract or his family is subjected to
threats of violence
 The requirements are as follows: the fear must be reasonable
 The fear must be caused by a threat of considerable evil directed
at the contracting party or his family
 It must be a threat of immediate danger which cannot be averted
 The threat or intimidation must be contra bonos mores or against
good morals
• The moral pressure exerted must cause damage ( Broodryk vs
Smuts 1942) (Blackburn vs Mitchell 1897
Undue influence
• It is a situation where the relationship between the two
parties is such that one occupies a position of dominance or
influence over the other
• Such as doctor and patient, solicitor and client, parent and
child, employer and employee, lecturer and pupil, husband
and wife.
• Requirements are as follows: one party obtains the influence
over the other
• The influence weakens the other party’s resistance and
renders his resolve malleable
• The party exerting the influence uses his influence in an
unscrupulous manner
• The influence leads to the conclusion of a contract, which is to
the detriment of the other party (Preller vs. Jordaan 1956), (
Patel vs Grobbelaar 1974)
Contractual capacity
• It is the capacity the law grants a person to perform valid
acts
• Only the person with the required capacity may conclude
contracts
Categories of contractual capacity
 Full contractual capacity: these may contract freely such as
those over 18years.
 Limited contractual capacity: may conclude contracts only
when assisted by certain persons.eg Minors of 7years and
below 18, prodigals,
 No contractual capacity: may not conclude contracts at all,
such as insane, convicted criminal, alien enemy ,intoxicated
persons and minors below 7 years
 Minors can get into valid unassisted contracts in exceptional
cases where there is:

Unjust enrichment
 Fraudulent Misrepresentation of Majority
 Tacit Emancipation

Ratification
Minors:
 Unmarried person under the age of 18.
 -minority under the custody and lawful authority of a guardian
whose duty it is to maintain the minor until he/she can maintain
self, administer his/her property
 assist him/her in contracting.
Unassisted contracts
 -A minor may not, as a general rule sue or be sued or contract
without the assistance of his guardian should he/ she attempt to
do so the contract is void.
 -A minor may, however, in certain cases acquire a perfectly valid
obligation without his/her guardian’s assistance. These
obligations are only exceptionally contractual, even though they
often arise in the course of attempts to contract.
Assisted contracts
A minor is bound either by contracts on his/her behalf by guardian or
by contracts made by self with the assistance of the guardian.
Mentally ill persons
-A purported contract made by a mentally ill person is void if at the
time of agreement he/she could not understand and appreciate the
transaction into which he/she purported to enter or if his/her consent
was motivated or influenced by an insane decision cause by mental
disease.
NB: All persons are presumed to be sane, unless they have been
declared mentally disordered by an expert in the medical field.
(Prisloo’s Curators v Crafford&Prinsloo)
Drunk Persons
Where a person enters into a purported contract while so drunk that he
does not know he is entering into a contract or he has no idea of the
terms of the contract, the contract is void.
The fact of drunkenness will not prevent the person concerned from
incurring an obligation on the ground of enrichment.
Prodigals
A prodigal (that is a person declared by the court to be incapable of
managing his/her affairs as a result of a propensity to squander his
assets) cannot contract with regard to his/her property.
However outside the field of his/her property he/she is entitled to
contract freely, eg marry. The court in declaring a person to be
prodigal appoints a curator bonis whose duties are to administer the
affairs of the prodigal.
Insolvent Persons/
The sequestration of the estate of insolvent divests him of his estate
and vests it, after appointment in a trustee.
Property which he subsequently acquires before rehabilitation also
vests in the trustee with certain exceptions.
Persons who have been convicted of Crime
Imposed convicted persons are subject to various disqualification eg if
convicted of theft, fraud, forgery or perjury and sentenced to
imprisonment, they are disqualified from being appointed company
directors.
Alien Enemies
An alien enemy (namely a person residing or carrying on business
in enemy territory) may not sue on our courts and all commercial
relations with him is prohibited.

 Limited contractual capacity: may conclude contracts only
when assisted by certain persons.eg Minors of 7years and
below 18, prodigals,
 No contractual capacity: may not conclude contracts at all,
such as insane, convicted criminal, alien enemy ,intoxicated
persons and minors below 7 years
Enrichment
 A minor can get into a valid unassisted contract where there
is enrichment
 However unjust enrichment is where a minor unjustly
enriched in terms of the purported contract, the minor is
bound to the extent that she/he is enriched(value of the
advantage received)
 The contract is void. Tanne vs Foggit 1938.
• Fraudulent misrepresentation of majority.
 Misrepresentation of age is when a minor deceives another
person to contract with a minor believing to be full of age.
 The minor has a delictual obligation to make good for the
loss suffered as a result of fraud.
• Tacit emancipation
 A minor is allowed by a guardian/parent to carry on business
or other occupation n own behalf.
 Minor financially independent.
 The minor contract validly in regards to that business.eg
Dama v Bera 1910, Dickens v Daley 1956, Wood v Davies
1934.
• Ratification
 if a minor purports to contract without the guardian or
parent’s consent, the minor can ratify on attaining majority.
 Ratification can be express or implied. Eg using an article
which the minor purported to have bought during his/her
minority
• Ratification renders the contract valid and effective from the
time of the purported agreement.stuttaford& co vs Oberholzer
1921. Fouche vs Battenhausen& co, 1939.
Terms, conditions and clauses ( Dos and Donts)/ checks and
balances.that should attract the attention of the contracting
parties
Terms of contract
 A term in a contract is a provision which imposes on a
contracting party one or more obligations to act in a specific
manner or to refrain from performing a specific act
 Essential terms are those terms that constitute the essence
of the contract, they go to the root of the contract
 If that obligation is breached then cancellation occurs.
 Non essential terms carry less legal gravity, trivial to the
objectives of the contract.
 An express term is based on the intention of parties and is
stated verbally or set down in writing
• An implied term is not expressed in words and can be implied
from the conduct of the parties
Conditions ( act, event, thing, qualification, obligation that should
affect the parties contractual duty)could be before or after.
 A condition is a qualification/basis to the contract rendering
the operation of the contract dependent on the taking place
or non-taking place of an uncertain future event
 A suspensive condition is a contractual term which suspends
the operation of the contractual obligations in terms of the
contract until the condition has been fulfilled or
 Contract suspending or
on hold until an obligation is
fulfilled( condition precedent) (comes into effect when the
condition is fulfilled)
 It postpones the operation of the contract until the
occurrence of an uncertain future event
 Eg A undertakes to give his son a car, if he passes examination at
the end of the year. Getting a discount when a certain amount
has been used in purchasing a product)
 A resolutive condition renders the continued existence of the
contract dependent on the occurrence or non-occurrence of a
specified uncertain future event eg A gives his car to his
daughter, subject to the qualification that it is to be returned if
his daughter does not pass her examination.
 A binding contract is concluded as soon as the obligations are
met.
• Rights and duties are operative and enforceable
Clauses (specific provision that define the rights and obligations
each party has under the contract or agreement.)
 A time clause determines a specific time when the contract
will either become operative or dissolved
 A suspensive time clause postpones compliance with an
obligation until a certain point in time or if the duty to
perform is postponed until a determined moment has come
 A resolutive time clause is when obligations will have effect
up to a certain day or until the expiry of a certain period of
time
 Voetstoots clause means
“as is” or “as it is”
 Guarantee/ warranty clause entails a contracting party accepts
absolute responsibility for proper performance relating to the
absence of defects in the product of service
 A cancellation clause entitles a contracting party to cancel the
contract summarily if the other party is in breach of contract
 A penalty clause attaches certain consequences to the
breach of contract in order to penalise the party who is in
breach or to deter him from breaching the contract
 It consists of payment of a sum of money
• A forfeiture clause attaches certain consequences to the party
who is in breach to forefeit all the contributions made such as
instalments paid
Breach of contract/non fulfilment of a contract
 There a five forms of breach
 Default by the debtor or mora debitoris
 The debtor fails to pay on time
 Default of the creditor or mora creditoris
 The
creditor
fails
to
accept
performance
or
delays
performance
 Positive malperfomance occurs when the debtor commits an
act which is contrary to the terms of the contract. Eg tender
defective or improper performance.
 Repudiation is given by the debtor that he will not comply or
continue to comply with his obligations/ noncompliance with
the obligation.
• Prevention of performance/anticipatory breach when one of the
parties cause performance to be impossible by act or omission
Remedies for breach of contract
 Specific performance is aimed at fulfillment of the contract
 Cancellation has the effect that the obligations are
terminated and the parties no longer have to perform in
terms of the contract
 Damages are paid in the event of a breach of contract
 Interdict is a court order either preventing someone from
acting in a certain way or compelling him to act in a
prescribed way
 Rescission
 Restitution/giving back benefits received under the contract.
Termination of contracts
 Proper performance –when the reciprocal obligations of both
parties are performed
 Merger – it is the concurrence of the debtor and creditor in
the same person and in respect of the same obligation.
 Agreement- agree to end their contractual obligations
 Insolvency –rights and duties are vested in the master of the
supreme court until the appointment of a trustee
 Set off
 Waiver
 Prescription
 Cession
 Compromise
 novation
 Death –the rights and duties of the deceased pass to the
executor of the estate. It ends contract obligations but legal
obligations continue after death.
 Supervening impossibility of performance- it occurs as a
result of circumstances beyond the control of the parties.

SPECIFIC—CONTRACTS
 CONTRACT OF SALE
 A contract of sale is a mutual agreement that imposes reciprocal
obligations on the buyer/ purchaser/emptor and seller/vendor.
 The seller undertakes to deliver the thing sold(the merx) to
another party/buyer
•
the buyer/ purchaser for this, agrees to pay the seller a certain
sum of money/purchase price/premium
The essentials of contract of sale
 Agreement that is offer and acceptance.
 The merx-it must be definite or ascertainable
 The purchase price- the price must be agreed upon.
•
duties of the seller
 To make the merx available to the purchaser
 The duty to take care of the merx until is handed over
 The duty to warrant the purchaser against eviction
 The duty to warrant against latent defects
• NB: Voetstoots clause maybe applied.
Duties of buyer
 To pay for the purchase price
 Take delivery of the merx.
Latent defects
 Defects that are not detected with the naked eye.
 The seller has a duty to assume responsibility for all latent
defects that render the merx wholly or partially unfit for the
purpose which it was intended to be used.
• If the seller the breaches the duty to warrant against latent
defects, Aedilition remedies available namely; Actio redhibitoria
and Actio quanti minoris ‘’
Actio redhibitoria

An action for the cancellation of the contract and the
restoration of each party to his or her original position.
 The defect must be of such a serious nature that it entitles
the purchaser to rescind from the contract.
 The purchaser may claim a refund of the purchase price with
interest and also reimbursement of all the expenses incurred
as a result of the contract of sale
• The seller entitled to the return of the merx.
Actio quanti minoris
 an action calling for the reduction of the purchase price if
the merx suffers from a defect rendering it only partially
unfit for its ordinary purposes
 Damages. The purchaser may claim damages if the seller had
expressly warranted the merx to be free of defects
• The purchaser may also claim damages if the seller knew that a
defect
existed
and
fraudulently
kept
silent
or
made
misrepresentation that there was no defect
The transfer of ownership
 The transferor must deliver the thing to the transferee
 Both parties must have the intention that ownership should
pass from the transferor to the transferee
 The transferor must be in a position to transfer ownership
Passing of risk
 The general rule is that the risk of damage/destruction of
the merx plus any advantages are passed to the buyer after
conclusion of the contract of sale.
 The buyer bears liability or advantages; eg rent from the
property.
 However exceptions apply against the general rule;
 Negligent or willful acts of the seller such as the leaving the
garage unlocked and the sold car stolen.
 Express or implied agreement only then pass as and when the
time stipulated by the parties to the contract expire.
 Suspensive condition where ownership in a hire purchase,
risk passes when the last instalment is paid
 Fungibles where goods require counting, weighing, measuring
(maize, wood), and risk does not pass on until ascertained.
• Seller in mora (default in the delivery )
Forms delivery
• Actual delivery (manu de manu) -physical handing over of
the merx to the buyer.
• Symbolic delivery/ fictitious - something else is delivered
which enables person to obtain control of the merx. Eg keys
to a house, deeds, receipts).usually when goods are bulky or
heavy.
• Traditio longa manu(delivery be long hand)- it entails the
pointing out of the merx and its being placed at the disposal
of the purchaser.case:Nxapa vs Ntsoko 1919.
• Traditio brevi manu(delivery by short hand)-the purchaser
was already in possession, subsequently holds the merx as
owner
• Transfer of possession(constitutum possessorium)-the parties
agree that the seller retains detention of the merx, but then
holds it on behalf of purchaser
• Attornment /constructive delivery -3rd party holds merx on
behalf of purchaser
• A third party such as a warehouse in possession of the merx
acknowledges holding goods on behalf of the buyer.
• Registration of a merx.
Special contracts of sale
• Auctions
• Judicial sale
• Cost, Insurance, Freight sales (CFI)-seller pays the costs,
freight, and insurance to bring the goods to the port of
destination.
• Free On Board (FOB) & Free On Rail (FOR) contracts of saleseller agrees to absorb the costs of delivering goods to the
buyer’s transporter of choice or nearest port.
• Hire purchase
THE LAW OF LEASE (legal agreement to use someone else
building, land, equipment etc)
 contract for the letting and hiring of thing/ merx

Reciprocal agreement between lessor/ landlord and lessee/
tenant.
The essential elements of a lease contract
 The property/thing to be let, that is, must be identified.
 Rent to be paid.eg rent must be money not service or kind.
 Agreement to give the tenant the temporary use and enjoyment
of property.
Duties of the lessor/landlord
 The duty to deliver the thing let to the lessee
 The duty to maintain the thing let in proper condition at
start of the lease/ conditions reasonably fit for the purpose
for which it is let.
 The duty to ensure the lessee’s undisturbed use and
enjoyment of the property.
• Warranty against interference.
Rights of the lessor/landlord
 Cancellation of the lease and ejection of the tenant if misuse
of property is material
 Claim damages as has been suffered.
 Interdict for misuse of property
 Tacit hypothec for rent( security for the recovery of rent in
arrears
• Inspect leased property at reasonable periods.
Duties of the lessee/ tenant
 To pay rent
 Duty of proper use and care of the thing let
 Return undamaged property at conclusion of the lease.
 Duty to give notice on termination of the lease
Rights of the lessee/tenant
 If breach of delivery, tenant may claim specific performance
 Material breach constitute cancellation and vacating the
property
 Set off or deduct costs from rent due
 Claim for damages
 Demand reduction in the rent
 Warranty against interference
• Obtain an interdict.
The termination of a lease
 By expiry of time
 At the will of the landlord.
 At the will of the tenant
 By notice
 By death
 Setting off.
 interdict
THE CONTRACT OF EMPLOYMENT
 It is a form of lease which the employee lets his/her services to
the employer
 An agreement entered into between an employer and an
employee at the time the employee is hired that outlines the
exact nature of their business relationship.
The essential elements of employer
• The employee lets his/her services of a defined nature to the
employer in exchange for a fixed ascertainable remuneration
• The nature of the services in the sense of the capacity in which
the employee is to serve
Duties of the employer
 To provide work
 Provide safe working conditions
 Payment of wages
 To provide leave
 To join and be active in a trade union
 The duty of good faith and to respect the employees’ dignity
 Deal fairly with employees, eg pre dismissal hearing
 To refrain from forced labour or slavery
 To refrain from inhuman or degrading treatment of employee
 Grant employees an opportunity to be heard and adhere to
the principles of natural justice
 To refrain from unlawful discrimination, including on grounds of
religion or conscience
 Not to commit unfair labour practices
 Not to commit sexual harassment
 Duty of equal protection of the law
 To adhere to fundamental labour standards
 Not to violate the employees freedom of association,
assembly, movement and expression
 Duty to comply with statutory duties, eg observe prescribed
hours of work, grant leave and legal requirements.
 Duty of vicarious liability.
The concept of vicarious liability
 Means employer liable for the wrong/torts/acts/omissions
done by the employee during the course of employment.
 The employer is responsible for all those are employed by
him/her.
 Quifacitper alium facit perse- he who acts through another
acts herself.
 Respondeat- let the master answer.
 Third party usually sue the employer as he/she in a financial
position to meet claims for damages.
 Note that an independent contractor employee is not
covered under vicarious liability unless;
 Negligent selection of the contractor by the employer
 Employer negligently gives an instruction to the contractor
 Employer does perform statutory duties, eg tenders.
Conditions for vicarious liability
 Vicarious liability is not a given deal but the following may
validate it;
 Employee carries out an authorised risk but in a wrongful
manner,in LCC vs Cattermoles Garage 1953.
 Employee commits a wrongful act that was expressly
forbidden.
 an employer negligently employs an incompetent employee
 An employee acts negligently.eg Nott vs Zanu PF 1983. the
driver collided with a vehicle as he had diverted to do his
personal business. courts look at the extent of deviation,
time and distance.
 Employee wrongfully
permits another party to perform
his/her duties.
 Employee makes a mistake, in Barley vs Manchester Sheffield
&Lincolnshire railway company,1872
 NB Employer not vicariously liable for acts done by an employee
outside the course of employment, in Warren vs Henlys 1948.
Duties of employee
 Provide services
 Obedience
 Subordination
 Maintain confidentiality
 Good faith
 Loyalty
 Competence
Termination of contract of employment
 By notice
 Wilful disobedience of lawful orders leads to summary
termination
 Drunkenness so as to be unable to perform one’s duties
 Continued absence from work without a reasonable excuse
 Dismissal for incompetence
INTELLECTUAL PROPERTY LAW (IP LAWS)
 Intellectual property comprises of the creations of the human
intellect for which exclusive rights are recognized, eg innovators,
artists, inventors, authors, etc.
 Legal rights that people hold over creativity of the mind.
 It is concerned with immaterial or incorporeal objects which
come into existence through the mental activity of a person.
 It consists of different branches: law of copyright, patent law,
law of trademark, industrial design law , competition law, trade
secrets
The law of copyright
 This is the right given against the copying of defined types of
literary and artistic works
 Enables the owner to control the commercial exploitation of
the work.
 It protects literary and artistic works and prevents the
unauthorized use of the expression of the creators’ ideas
Works protected by copyright
 literary works include the following:
 Novels, stories and poetical works
 Dramatic works, film scenarios and broadcasting scripts
 Textbooks, histories, biographies, essays and articles
 Encyclopedias and dictionaries
 Letters, reports and memoranda
 Lectures, speeches and sermons
 Tables and computer
Artistic works
 Paintings, sculptures, drawings engravings and photographs
 Works of architecture
 Works of craftsmanship
 Sound recordings
 Broadcasts
 Published editions
 Computer programs
Musical works
 This consists of music of any words or action intended to be
sung.
Requirements
 The work must exist in some form, this means material
embodiment
 The work must be original
 The copyright is for a period of 50 years.
Law of Patents
 This protects new inventions
 Invention can be a product or process giving a technical
solution eg a new method of doing things, composition of a
new product, technology improvement.
 An invention is a solution to a technical problem
 The law concerns the right of an inventor to make use and
sell his/her invention for a limited period.
 Useful in trade, industry and agriculture.
 Requirements
 The invention must be new and involve an inventive step
 It must be capable of use or application
The law of trademarks
 A trade mark is a mark used by a person in relation to goods
or services for the purpose of distinguishing those goods or
service from the same kind of goods and services
 This mark can be a device, letter, label, ticket, symbols,
phrases, name, signature, word shape, number, pattern or
colour.
 Trade mark can be licensed or assigned to others( franchise)
Requirements
 It must be capable of distinguishing the goods or services in
respect of which it is registered, from the goods or services
of other persons.
Infringement of IP laws
 Piracy
 Counterfeiting
 Photocopying
 Downloading copyright work.
 Free booting
Remedies
 Interdict
 Damages
 Right to seize infringed material
 Delivery /destroy infringed products
 Forfeiture
 Licence withdrawal
•
