BUSINESS LAW AND ETHICS

WEL COME T O TH E S TUDY O F

LAW
 LAW?

What images come to mind?

Why?
 WHAT IS LAW?

Law has been defined as rules [written and unwritten]

and regulations governing human conduct which are
recognized as binding by the whole community.
It is a social science which is also divided into two
divisions, namely, Public and Private law.
Public law is the branch, which deals or governs the
relationship between the state and its citizens,
whereas, Private law governs the relationship between
citizens.
Classifications & Categories of LAW helpful to
understanding law

H How many
 categories do you
think exists?
 Name them?
 Divisions of law

Law may be divided into public and private law. Private

law is the law that affects or deals with individuals as
against individual e.g. contract, family law.
Public law is the law that involves the state as a player
in some way for example constitutional law and
administrative law.
A further division is that between civil proceedings and
criminal proceedings. Criminal proceedings are public
in nature while civil proceedings fall under private law.
 Role of law in society

 Maintain law and order

 Regulate individual relationships

 Regulate business relationships

 Protection of interests

 Protection of rights

 Limiting the power of the state

 Providing scope for good government

 Delict /Tort

A delict is a wrongful and culpable conduct which causes

harm to a person, property or personality of another.
Everyone owes a duty of care to prevent harm falling on
another person.
A crime is a wrongful conduct for which the wrongdoer
is liable for punishment by the state.
This is conduct which the common law or statute has
prohibited e.g. murder, rape, assault etc. if the accused is
convicted for the offence he is send to jail, to perform
community service or to pay a fine..
 Parties to a criminal process

The person aggrieved or injured in his rights

is called the complainant and is the one
who approaches the police with a complaint.
The one alleged to be the perpetrator of the
offence is called the accused.
Police investigates
Public prosecution prosecutes
Court decides
 Civil proceedings

These are proceedings where an individual seeks or

claims a remedy from the courts.
The state is not a party in the process unless if it is one
of the litigants.
The person who institutes an action is called the
Plaintiff; he is the person aggrieved and approaches the
court by way of summons seeking a particular remedy
such as payment of damages.
The person being sued is called the defendant. If the
process is commenced by application procedure (i.e. on
affidavits) the person aggrieved is then called the
applicant while the one sued is called the respondent.
 SOURCES OF LAW

Legislature
These are laws which are promulgated through the
two houses of representatives that is the House of
Assembly & Senate.
These are invariably written laws.
Bills pass through the two houses before the president
signs them into law. It is commonly referred to as
statute law.
The Legislature is free to change the law as they deem
fit subject only to the constitution in a constitutional
democracy.
 CUSTOMARY LAW

It emanates from customs. A custom is a rule established by usage which

acquires the force of law because it is generally followed.
It must be certain, reasonable, long established and uniformly observed by
the community.
 See the case of Van Breda v Jacobs & ors 1921 AD 330.The plaintiffs
who were fishermen set their nets after identifying a shoal of fish coming
that direction. A second group of fishermen then cast their nets a few meters
away from the 1st group’s lines. The 2nd group caught all the fish and the first
group sued for damages on the basis that there was a custom followed by
fishermen to the effect that on a free beach once one set their lines to catch
fish seen traveling on the coast, no other fishermen could set their line in
front of it within a reasonable distance from it. It was held that such a
custom existed. It was reasonable and certain and 11 witnesses testified that
it had been strictly observed for at least 45 years. Plaintiffs claim succeeded.
In Zimbabwe the payment of bride price (lobola) is a good example of a
legally binding custom.
 LOCAL AUTHORITIES AND BOARDS

Local governing authorities are authorized

by the enabling acts of parliament to enact
their by-laws for administrative purposes.
the Urban Councils Act or
the RDC Act
These may regulate issues like
construction, municipal police, vending,
building bye laws and planning rules.
 ROMAN DUTCH LAW

In terms of the constitution of Zimbabwe the Roman-

Dutch law in force in the colony of the Cape of Good Hope
on the 10th June 1891 as modified shall apply in Zimbabwe.
See s192 of the constitution as read with s89 of the old
constitution.
It is worthy noting that the parliament can repeal the
operation of R&D in certain instances such in:
Criminal Law (Codification and Reform) act section 3
repeals its application in criminal law.
The Labour Act does the same in many respects.
Consumer Contracts Act in certain consumer contracts.
 PRESIDENT

The constitution gives the president

power to enact temporary laws.
The Presidential (Temporary Powers)
Measures Act mandates the president to
enact temporary laws to deal or avert any
situation of emergency.
Such law has a life span of 6 months.
Law lapses after 6 months.
 COMMON LAW

This is unwritten law evolved from Roman Dutch

precedents. It is found in text books, judicial
writings and other writings.
In the course of deciding disputes before them the
courts make pronouncements of the law.
 It is only the superior courts’ precedents that are
binding and taken as the position of the law. Such
exposition of the law stand until such position has
been changed by the legislature of by another
decision of the court
 INTERNATIONAL TREATIES AND CONVENTIONS

The country is a member of various international

organizations such as the UN which creates
treaties and conventions.
Once the same has been signed by the president
and ratified by parliament as required by the
constitution it becomes part of our law. Examples
include the Paris Convention, the African Charter
for People’s Rights and TRIPS Agreement .
Zim has a dualist system as opposed to a monist
one.
 TEXT BOOKS

Celebrated authors are taken as

another source of law in their writings.
In Zimbabwe Prof Feltoe is an example
in media law, criminal law and
administrative law.
 Constitution

The Constitution is the supreme law in Zimbabwe:

All statutes, conduct, customs, common law have to
comply with it.
See Chapter 1 Art 2- “supremacy of Constitution”
 The Zimbabwean courts

CONSTITUTIONAL COURT

SUPREME COURT OF APPEAL

 
HIGH COURT
 
ADMINISTRATIVE COURT LABOUR COURT

 
 
  MAGISTRATE COURT
 
 
 
COMMUNITY COURT
 
 
LOCAL COURT
  
CONSTITUTIONAL COURT

This is a court which has jurisdiction in

all constitutional matters.
It is presided over by the Chief Justice
with 8 other judges.
It has no jurisdiction in any other
matters.
It serves as a court of referral or first
instance.
 The Supreme Court of Appeal

The Supreme Court serves as the court

of final appeal for civil and criminal
matters from all the lower courts.
As an Appellate court it sits with three
judges of the court.
Its judgments are binding to all lower
courts.
 HIGH COURT

This is a court of inherent jurisdiction in all

matters save for constitutional matters.
It has no limitation both in civil and criminal
matters. It applies both civil and customary laws.
It is presided by a judge as a court of first
instance and two judges for appeals and reviews.
When it is dealing with criminal matters the
judge sits with two assessors. An appeal from the
High court goes to the Supreme Court.
 LABOUR COURT

It is a creature of the Labour Act. It is

presided over by a President.
It is created to deal with matters of
employment only.
It serves as a court of appeal or a court of
first instance.
An appeal against its decision which must be
on points of law lies with the Supreme Court.
  
ADMINISTRATIVE COURT

 It is a court of first instance in

administrative disputes and also serves
as appeal court against decisions of
boards and tribunals.
It is presided over by a president.
 MAGISTRATE COURT

It is a creature of the statute and has no inherent

jurisdiction.
It is presided over by the Magistrate and applies both
customary and civil law.
It has jurisdiction over criminal matters as well as civil
matters to the extent so allowed by the enabling act.
It also serves as appeal court against the decisions of the
community court.
Appeals against its decisions are filed with the High
Court.
 COMMUNITY COURT

It is headed by the chief and only applies customary

law.
It has no jurisdiction in criminal matters.
An appeal against its decision lies with the
Magistrate court.
 LOCAL COURT

The head man presides over it and only

applies customary law.
Appeals from the court lie with the
community court.
It has no jurisdiction in criminal
matters.
 Activity

a) Trace the hierarchy of Zimbabwean courts from

the lowest to the highest level court explaining the
jurisdiction of each court. [10]
Can a chief try a case involving a white man who
stays in town who was caught committing adultery
with a local woman. The adultery was committed
in the local village. Support your answer.
 LAW OF CONTRACT

Definition
A contract may be defined as an agreement which
creates and defines legal obligations between parties to
it.
A contract creates a legally enforceable duty to render
[and a corresponding enforceable right to receive] a
performance.
On a day to day basis the law of contract is encountered
the most by all people such as when you borrow money
from a friend, get into a bus or buy from a shop.
 Contract Cont’d

A legally binding contract requires certain essentials

for it to be valid and binding. The essentials are as
follows:
Agreement between the parties (called animus
contrahendi).
The parties must have the relevant capacity to
contract e.g. must not be an insane person.
The parties must have real consent to contract.
All the formalities required for that type of
transaction must be followed
 The offer

The offer may be made to a particular

person, a group of persons or to the whole
world.
The terms of the offer itself may however
restrict the offer to persons or person e.g.
newspaper competitions prohibiting the
employees of a particular company from
entering into a competition.
 Offer Cont’d

The offer must be communicated to the

offeree, otherwise it would not have any
legal force if the offeree does not know of it.
The offer must be a statement intended to
seriously create a legal relationship between
the parties.
Offers made in the social context or in jest
are not binding.
 Offer continued

The offer must be accepted in an unequivocal way. The

offeree’s reply must convey without doubt that to the
offeror, that it is intended to be an acceptance.
A counter offer is not acceptable. In such a situation the
offeree becomes the one making the offer which may or
may not be accepted by the offerror.
The offer and acceptance must be in clear and definite
terms and there should be no material gaps. The terms
must not be vague.
However some degree of ambiguity may be cured by
applying certain rules of interpretation
 Acceptance

Not every one can accept an offer. Only the person

to whom the offer is addressed may accept, and the
offeree can not cede the offer to someone else.
However, C can accept an offer from A to B if he can
show that the offer was intended to be open to C as
well.
The acceptance of the offer must be communicated
to the offeror.
The general rule is that there is no acceptance until
it is communicated to the offeror.  
 Offer cont’d

The exceptions are:

Where the requirement of notice of
acceptance is dispensed with by the offeror
either expressly or impliedly. Contracts
entered by post [letter and telegram].
Contracts entered by phone and telex are
treated as normal since the
communication is instant.
 CASE

See the case of Magret Munyavi v Zimbabwe

Reinsurance Company HH-34 -07
The defendant offered to its sitting tenants an offer to buy
some flats by a certain date. The Plaintiff who was a sitting
tenant accepted the offer in writing before the date of expiry
had passed. The defendant later sought to change the price
of the flats arguing that at the time of the expiry of the offer
no acceptance of the offer had been made. The Court agreed
with the Plaintiff that a contract of sale had been entered
into through the offer of the defendant and its acceptance
by the Plaintiff. An extract of the judgement is part of these
notes.
 Cont’d
Acceptance must be in the same manner and mode
prescribed by the offeror. If through no fault of the
offeree the acceptance fails to arrive there will be no
acceptance. Silence alone will not mean acceptance.
 Reward cases

In reward cases doing the prescribed or advertised

act constitutes acceptance of the offer.
The first person to provide the information may
claim the reward subject to them being aware of the
offer when they gave the information and then
accepting the offer. See the Blom case above. See also
the case of Carill v Carbolic Soap Ball Co [1893]
1 QB 256 (CA) - offer to the public to use a smokeball
in a certain way to prevent influenza. C did so but
still got the virus. He got the promised money.
 Letters & Telegrams

 Where an offeror authorises acceptance by

letter either expressly or impliedly [eg. By
sending the offer by post] then the contract
come into existence when and where the
letter of acceptance is posted- provided all
the other essentials are present.
To revoke the offer such revocation is
effective when received by the offerree.
 Telegrams

The same position applies as in

letters. An offer by letter is not
implied authority to use a
telegram.
 Counter offer

The acceptance must be unconditional and

correspond with the terms of the offer.
A conditional acceptance e.g. ‘I accept
but…….or if…….’ Constitutes a counter offer
and brings the original offer to an end.
The original offeror becomes offeree and has
the choice to accept or rejecting the new offer.
When counter offer is made original offer
disappears for good.
 Cont’

 No legal rights are created until

acceptance and until then the offer may
lapse or be revoked. An offer will be
revoked if withdrawn by the offeror.
 Lapsing of an offer
An offer will likewise lapse if :
it is rejected
by death or legal incapacity of any of
the parties
by supervening impossibility
in reward cases if the first person
accepts
 Revocation

An offer may be revoked at any time

before it is accepted. Once accepted it
can not b e revoked. The offeror must
inform the other party of the
revocation. A revocation is not valid
until it reaches the mind of the offeree.
 CONT’D

Generally it is usually possible to

separate an agreement into an offer and
acceptance. This may not be the case in
every situation e.g. in the case of press
competitions. The offer and acceptance
may be communicated by implication
e.g. boarding bus without speaking to
the driver or the conductor.
 
 Press offers?

In the case of Bloom v American Swiss Watch Co

1915 AD 100 a company that had lost jewellery from a
robbery placed a notice in the press offering a reward to
the first person to provide information leading to the
arrest of the thieves and recovery of the jewellery .B gave
the required information but when he did so he was
unaware of the that a reward had been offered. He later
learnt of that and claimed the reward. It was held that as
he did not know of the offer when he gave the
information, he had not accepted it. In the circumstances
the company could not be liable to him for the reward
 CAPACITY TO CONTRACT

While everyone is free to enter into contracts within

certain limits, some groups of people have limited
capacity to enter into legally binding transactions.
These are:
minors,
the mentally ill,
drunk persons,
insolvents and
prodigals.
  
MINORS

In Zimbabwe a minor is a person under the age

of 18 years of age. See art 81 of Constitution.
A minor is under the guardian of his or her
father or mother.
The law distinguishes between contracts
entered by the minor unassisted and those
assisted by his guardian.
The latter contracts are generally valid while
the former are not.
 Unassisted contracts

As a general rule contracts entered by a minor

unassisted are in valid as far as the minor is
concerned and invalid as far as the other party is
concerned.
This means the minor acting through the
guardian, can accept the contract if he wishes
while the other party has no such choice.
In certain circumstances, though the minor may
incur an obligation based on other legal branches
of law. 
 Minority -exceptions

a] if a minor misrepresents her age or

pretends that she is emancipated the
minor will incur an obligation.
This burden arises as a result of the
minor’s fraud and is based on the law of
delict.
The minor has to make up the loss
suffered by the other party.
 cont’

See the case of Dama v Bera 1910TPD

928 where a minor had been employed for 4
years as a domestic worker. She continued to
live with her parents paying for her
accommodation. She sued for her wages and
she was met by the defence that she was a
minor and could not sue on her own. It was
held that D could sue for her wages.
 Case:

In Grand Prix Motors WP [Pty] Ltd v Swart

1976[3] SA 221 [C] S, a student nurse of 18years
entered into a higher purchase agreement for a car
unassisted. [In SA The age of majority is 21 years of
age]She subsequently returned the car and sued for
the money she had paid. The car dealer argued that
she was bound to the contract as she was tacitly
emancipated. S’s father had left the family some time
before even though he retained his legal guardianship
over her. The court ruled that S had not been tacitly
emancipated and she succeeded in her claim.
 Unjust enrichment

where the minor is unjustly enriched in terms of the

unassisted contract , the contract is void, but the minor
is obliged to make restitution to the other party to the
extend of the enrichment.
A minor may ratify an earlier contract when he becomes
a major. Ratification can be in writing or by conduct.
E.g. operating an account opened while a minor.
Before the new Constitution a minor could attain
majority status on marriage irrespective of his age. A
subsequent divorce or death of the spouse does not
change the position.
 Assisted contracts
A minor is bound by contracts made on the minor’s behalf by
the guardian, or made by the minor alone with the consent of
the guardian given before hand, at the time or afterwards.
The guardian incurs no personal liability from the contract.
The father can not be sued on the contract.
See Marshall V National Wool Industries Ltd 1924
OPD 238. M a minor bought some shares from N Ltd. M
signed an application form for the shares in the presence and
knowledge of his father. N Ltd sued for the balance of the
purchase price of the shares and M raised the defence that he
was a minor at the time of the contract. N Ltd withdrew the
action against M and sued his father. The action failed the
court stating that a guardian is not liable on his minor child’s
contracts
 Cont’

However, if the contract is prejudicial

the minor may seek the protection of
the court to set it aside.
This can be done by the minor assisted
by the guardian or by a curator
appointed for that purpose or by the
minor himself after becoming of age.
 Mentally ill people

A contract entered into by a mentally ill

person is void if at the time of the agreement
she could not understand and appreciate the
transaction into which they entered or if
their consent was motivated by an insane
delusion.
Illness is not mere say so. Has to be proved.
The concept of unjust enrichment as stated
above may apply to an insane if he is
unjustly enriched.
 Drunks
If a person enters into a contract while so
drunk or drugged to the extend that they do
not know that they are entering into a contract
the contract is void.
The issue is a question of degree.
If the drink only made the person more easily
persuadable or reckless then the contract will
be valid.
Relevant evidence required to prove.
 Insolvent persons

 These are people whose liabilities exceed their assets.

In general, the term is used to describe those whose
estates have been sequestrated by the High court
under the Insolvency Act.
Such a person is deprived of power to perform certain
acts and to hold certain official positions such as
company directorship.
A trustee is appointed to manage their estate and
certain acts of the insolvent have to be done or
authorised by the trustee.
 Prodigals

A prodigal or a spendthrift is a person

who squanders his assets with such lack
of care that they threaten themselves or
their dependants with destitution.
At the instance of a concerned party
the High Court may declare a person
incapable of dealing with their property
without the consent of a curator
 Aliens

In terms of the Immigration Act aliens

do not have certain contractual
capacities particularly to enter into
contracts of employment without a
work permit.
 Exercise


b) Anna a 16 year old girl entered into an agreement
of lease with Mrs. Munyu, a Sakubva resident. Mrs
Munyu was not aware and did not inquire Anna’s age
at the time of entering the lease agreement. 7 months
after paying her rentals religiously Anna has for the
past three months been defaulting in paying rent.
When the landlady tries to sue Anna she is met by the
defence that she is a minor and cannot be sued. You
are a court hearing the case
write your judgement in the matter.
 GENUINE CONSENT

A person must enter a contract freely,

willingly and voluntarily without any other
undue pressure being brought to bear on him.
A person’s consent may be affected by the
following circumstances, mistake, fraud,
duress or undue influence.
Consent procured by any of these is not valid.
 Mistake

It is said the minds of the contracting

parties must meet for there to be a
contract.
A mistake may render a contract
invalid if it is one of fact, material,
reasonable and estoppel does not apply.
 Mistake of fact

The mistake must be reasonable and essential if the mistaken

party is to get out of the contract.
The question is did the contracting party rely on the mistake? In
other words if they had known of the mistake would they still
have entered into the contract?
The mistake may be as regards the terms of the agreement
(error in negotio e.g. donation and sale), error in corpore i.e. in
the subject matter –horse and donkey, error in substantia [error
in the quality of the matter]. This is close to error in corpore.
The error may be on the identity of the parties to the contract
i.e. error in persona.
In all instances if the effect of the mistake is sufficiently serious
so as to vitiate the contract, then, it will be regarded as an
essential mistake.
 Estoppel

Estoppel must not apply

Def: where someone by conduct or words
misleads a reasonable person into thinking
that certain facts exist.
that person is prevented [estopped] from
denying the existence of those facts.
This is known as the doctrine of estoppel and
it applies in many areas of the law such as
agency.
 Misrepresentation
A misrepresentation is a false representation/ a lie.
A representation is a statement by one party to
another, before or at the time of contracting,
concerning some aspect of the contract and which is
one of the causes inducing the contract.
A misrepresentation may be made fraudulently,
negligently or innocently.
 Cont’

In Trot man v Edwick 1951 [1] SA 443, T sold a

piece of land where 2 flats were built. The flats were
enclosed by a garden wall. However part of the land
enclosed did not belong to T but to the municipality
and he was merely renting it. The land was destined
to be used as a road in future. In the course of the
negotiations T had indicated that the whole land was
his. It was held that by his conduct he had
misrepresented that all land enclosed by the garden
wall was his.
 Fraudulent misrepresentation

There must be a false representation by Y, made by

with fraudulent intent and which X believes and
acts upon e.g. B who is selling a car says upon an
inquiry by G whether the car has been involved in
an accident says ‘no, never at all’ when he knows
that it was so involved twice and he had to repair
and panel beat it.
G may use the fraud as a shield to an action
brought by B to enforce the contract. G may
rescind the contract with or without a claim for
damages.
 continued
In Dibley v Furter 1951 [4] SA 73 F
sold a farmstead without disclosing that
there was a graveyard close to the house.
Prior to the sale F had ploughed over the
graveyard and obliterated all visible
traces of it. F was liable for the non
disclosure.
 
 Negligent misrepresentation

The elements of an action based on negligent [careless]

misrepresentation are:
A false representation by X made negligently, and which Y believes
and acts upon. 
Negligent misrepresentation may be raised as a defence by Y to an
action brought by X to enforce the contract.
Y may claim rescission of the contract.
Damages may also be claimed if X was under a duty to speak
carefully.
Y may abide by the contract and claim quanti minoris damages i.e.
claim a reduction of the purchase price of the thing sold. Quanti
minoris damages are only available if the contract is one of sale.
 
 Innocent Misrepresentation

The elements of an action based on innocent

misrepresentation are as follows:
a false representation by X;
which Y believes and acts upon
Rescission may be sought.
 Remedies

The misrepresentation may be used as

a defence by Y not to pay the balance
due for example.
Y may claim rescission of the contract;
but no damages are claimable.
Y may choose to abide by the contract
and claim quanti minoris damages.
 UNDUE INFLUENCE

 Where one person has an influence over another, and uses

such influence to persuade the other to enter into a contract,
such contract may be set aside.
 The influenced party may rescind the contract on the grounds
of undue influence [unfair and improper conduct]. He must
prove the following :
 X had acquired an influence over him. Examples include
teacher to pupil, doctor to patient, priest to church member,
lawyer to client
 x used the influence in an improper manner; and
 Y then entered into the contract which he would not have
entered into had his will not been subject to this influence
 Case

Undue influence is normally found where there

exists a relationship of trust between the parties
e.g. doctor and patient, lawyer and client, parent
and child. See the case of Preller v Jordaan 1956
[1] SA 483 [A]
P had acted as a doctor and advisor of J an old
man. J donated 4 farms to P in the course of their
relationship. J subsequently sought to set aside
the donations on the basis of undue influence. The
court held that undue influence had been proved.`
 DURESS

 In this instance force or threats are used to induce

the other person to enter into a contract.
X must have intended to subject Y to pressure and
thereby induce him to enter the contract.
What X did must have constituted a threat or an
exercise of pressure and the threat must have been
one of the factors that induced Y to enter into the
contract.
Y must have acted under reasonable fear.
X must have used the pressure unlawfully. If Y can
prove all the above elements, then he will be able to
rescind the contract.
 Task

You find your school mate in serious financial difficulties. You

advise him to sale one of his expensive cars to save pending
litigations. Your friend agrees. You then immediately offer to
buy the car at a discounted price. The friend agrees and after
paying the price the friend is refusing to deliver the car to you.
He is asserting:
Duress – that you applied improper pressure on him
Mental stress – He states he was so stressed that he could not
apply his mind to the issue at hand.
That in any case the price he charged was too low as to
invalidate the transaction.
What are the prospects of the success of any of these defences?
 LAWFULNESS AND POSSBILITY OF PERFOMANCE
An agreement intended to create obligations
will only do so only if it is –
a] Certain in its terms
b] Lawful; and
c] Capable of being carried out.
 Certainty

An agreement is void if the language of the contract is so imprecise or

vague that it is not possible to determine what a party must do in order to
perform his side of the agreement e.g. an agreement to pay a large sum
every year is vague to be enforced.
An agreement may also be void if it makes the debtor bound at his option
e.g. an agreement of sale specifying that the seller shall deliver ‘at such
times and in such quantities as may be expedient to him’.
Such an agreement is void because of uncertainty. In addition material
gaps may also render it void e.g. an agreement in a sale of a business
providing that the stock in trade will be taken at ‘valuation’.
In Patel V Adam 1977 [2] SA653 [a] an agreement of sale of land
provided that the price was payable in monthly instalments free of interest
“. It was held that the agreement was void because it left it to the purchaser
alone to decide what amount he wished to pay every month and,
consequently the court was unable to determine the monthly instalments.
 LAWFULNESS

A contract is void for illegality if it is contrary to a statute or the

common law.
In the case of statutory illegality the statute should prohibit as
criminal doing certain things e.g. the labour Act prohibits employers
at the pain of criminal penalties from paying a wage below the
stipulated minimum wage.
In Pottie V Kotze 1954 [3] SA 719 P sold a controlled product, a
tractor without a certificate of fitness being produced as required by
the law. Subsequently K learnt of the certificate requirement and
refused to pay the balance and asked for the money he had paid upon
tender of the tractor. The law provided for a fine if such item was sold
without being inspected first. He was unsuccessful in his claim
because the court reasoned that the fact that the law provided a fine
was enough and could not render the act void.
 Common law illegality

The basic principle is that a contract is illegal and void if it

is contrary to good morals (contra bonos mores) or if it is
against public policy.
The following are some of the more important categories
of contracts which our courts have found illegal at
common law:
 Agreements to commit a delict (civil wrong)
 Agreements interfering with the administration of justice
e.g. to be a false witness.
 Agreements which detract from marriage.
 Agreements to condone fraud.
 Wagering [betting] contracts.
 Restraint of trade

 This is an agreement which prevents a person from

practising their trade or profession freely.
It is generally included in scholarship agreements to the
effect that the student shall for a set number of years be
obliged to work for the one who offered the scholarship.
They are also be found when one sales his business and
undertakes not to open a similar business within the
same area or in contracts of employment.
The courts have held that such restraints can only be
enforced if it is reasonable at the time it was entered
and if it is in the interests of the parties and the public
generally.
 The effect of illegality

Illegality has the effect of making the

agreement unenforceable.
In addition recovery of performance may not
be permitted save in very limited
circumstances [not relevant for this study].
In certain circumstances the courts may
severe the illegal part of the contact from the
rest of the contract. The remainder of the
contract may be enforced.
 Possibility of performance

If the performance which either of the parties agrees to carry out is
impossible ab initio the agreement is void e.g. A sales his holiday
cottage to B unaware that the cottage has been swept away by floods.
It is void because the contract is absolutely impossible to perform at
the time it is entered.
Impossibility arises through a vis major, act of God or such other
circumstances and not due to one’s wilful or negligent acts.
The contract may also be rendered voidable if an impossibility of
performance arises later. This is an old roman Dutch principle that a
contract is a nullity if at the time of its inception it was impossible of
performance. The impossibility may arise in various ways such as
change of law, destruction of the subject matter or actions of the
state. See Peters, Flamman & co v Kokstad Municipality
1919 AD 427
 Impossibility Cont’d

P & Co had been contracted to provide street lighting in the

municipality. After the break out of the World War the
partners of the co/ were arrested as enemy aliens. The
partnership business was wound up. The municipality sued
for damages for breach of contract. The court ruled that it
was impossible for the partners of P & Co to perform in
terms of the contract hence they were discharged of liability.
Performance must be absolutely impossible and not just
difficult or expensive to carry out. Thus if B had agreed to
supply TM Mutare with green mealies hoping to get them
from AU farm, he will still be bound if AU farm can longer
supply him and he has to go elsewhere to get the goods.
 Own acts/negligence

 If the debtor is responsible for the impossibility he will still be

liable, see Benjamin V Myers 1946 CPD 655 where an attempt
to raise impossibility failed.
M let to B some premises to sell fuel among other things. In the
lease B undertook that he would always stock petrol and oils.
He committed an offence in the process by overcharging his fuel
and was subsequently barred by the authorities from selling fuel.
M Cancelled the lease on the basis of B’S breach and he sought to
raise the defence that it was now impossible for him to stock fuel
and oils because of the state’s prohibition. This failed the court
ruling that the prohibition was a result of his own wrongful
conduct in breaching the price control regulations.
 FORMALITIES

The last requirement of a valid transaction is that any

formalities prescribed by law as a requirement for the
transaction have been complied with.
Generally no formalities are required to make a valid
contract.
There is no legal requirement that contracts be in
writing in Zimbabwe.
An agreement may be oral and binding though the law
requires that certain transactions be in writing. For
example the Hire Purchase Act requires that such
agreements be put in writing for it to be valid.
 Formalities required by statute

The Hire Purchase act as stated above, apprenticeship

contracts, the Deeds registry Act and some other acts
require that particular contracts need to be in writing.
Marriage contracts need to be signed, witnessed and
registered for them to be effective.
Likewise a transfer of land or a change of name has to be
registered in the Deeds Registry (state offices) for it to be
valid.
If the parties have chosen that their contract be in writing
then it must be signed by them or their duly chosen
agents.
 CONTENTS OF A CONTRACT

Terms
The word term is used to describe all the obligations,
essential or non essential, which the parties assume in the
contract.
An essential term is one which “goes to the root of the
contract” and if breached allows the injured party to
cancel the contract.
The breach of a non essential term on the other hand only
allows the injured party to a claim of damages.
Express terms are those specifically included in the
contract, being either written or resulting from a
discussion between the parties.
 Implied terms

Terms may be implied by law, trade usage or from the

facts.
Implied by law
All the rules of the common law relating to that
particular type of contract are automatically implied in
the contract unless the parties agree to exclude them.
For example in the law of sale there is a rule that the risk
of damage of the thing sold passes to the purchaser
immediately upon the finalisation of the contract. This
rule is implied in every contract sale unless excluded by
the parties.
 Implied by trade usage

Mercantile or commercial agreements are sometimes

subject to all the trade usages and customs of a
particular trade or profession which are not
expressed in the contract itself. To apply the trade
usage or custom must be:
Be notorious
Certain
Reasonable and not contrary to statute.
 Tacit terms

Sometimes referred as terms ‘implied from the facts’.

These are implied from the facts of a particular case,
and the following question must be asked: “was the
term necessary to give effect to the contract and was
it one which the parties would have included if they
had thought about it?” e.g. if I buy a car from Harare
and ask the garage to deliver it to Mutare, it is
implied that they can act as my agents in negotiating
the delivery of the car.
 Imposed/Standard terms

These are terms found on tickets, notices, receipts and programmes. They are
referred to as imposed terms since the terms are from one party and are
given on a take and leave it basis.
The offeree will be bound if he was aware or ought to have been aware of the
terms on the ticket or receipt. This will not be the case if the offerree was
misled.
The approach of the courts has been initially to ask 2 questions:
 Did the person know that there was writing or printing on the ticket or receipt,
and
 Did the person know that this writing was referred in the contract?
If the answer to both questions is “yes” then the terms form part of the
contract. If the answer to either question is no then a third question has to
be asked:
 Did the person giving the ticket do what was reasonably sufficient in the
circumstances to give the person receiving it notification of the terms?
If the answer to the 3rd question is yes then the terms form part of the
contract. If the answer is no then the terms do not form part of the contract.
 Exemption Clauses

It is common in standard form contracts for a party to

insert clauses limiting or excluding his liability which
the law normally attaches to him.
An example being an “owner’s risk clause”.
The common law approaches such clauses as valid as
long as there is no fraud or duress.
These are also called disclaimers.
The justification being that people should honour the
obligations that they enter into willingly. The case of
George v Fairmead (Pty) Ltd 1946 TPD 30 is
illustrative.
 Facts of G’s case

G orally hired a room at a hotel. Subsequently on moving in he was

asked to sign the hotel register which had an exemption clause
which said that the hotel would not be liable for thefts or loss of
property of the guest.
There was a place for the guest‘s signature and G duly signed it.
Some belongings of G were subsequently stolen form the room. G
sued for damages but was unsuccessful.
The court ruled that the oral agreement had been varied by the
subsequent written agreement. The exclusion clause in the
contract covered the hotel for the type of loss. Whether he had
read the terms or not was immaterial as his signature bound him
to the contract. See also Patel v Clus (Pty) Ltd 1946 TPD
30,Wells v South African Alumenite Company 1927 AD 69
 Caveat subscriptor

In addition to this there is the principle of caveat subscriptor

which means that “let the signatory/signer beware”.
The principle states that when a person signs a document he
is bound by the terms appearing on that document.
It renders it difficult for a party who has signed a document
containing contractual terms to avoid liability on the basis of
the absence of consensus.
Signing creates the reasonable impression that one intends
to be bound. It is no answer to argue that I did not read or
correctly understood the terms. George v Fairmead supra,
Bhikagee v Southern Aviation
 Interventions – re exemption clauses
a) By the courts
 Judges have over the years created certain rules to ameliorate the
harshness of exemption clauses.
 The courts have ruled that one can not limit his liability from his own
wilful or grossly negligent acts.
 The moment a party is found to be grossly negligent a clause to that effect
will not save him as it will be contrary to public policy to uphold such a
clause. See Cotton Marketing Board v NRZ 1988 (1) ZLR 304(SC)
The clause in the NRZ contract of carriage provided for payment of a fixed
sum in the event of loss of the goods being carried. Some bales of cotton
belonging to CMB were burnt in transit and they claimed damages for the
loss. The carrier argued that they could only pay the damages at the rate
given. The court ruled that the cause of fire was the gross negligence of
the carrier, NRZ; hence NRZ could not be protected by the exemption
clause in the standard terms. The carrier was held liable for the full value
of the loss despite the limitation clause. See also Dube v NRZ HB
61/2010
 Principles used

Secondly the document must not be signed after the

contract has been entered into already.
If the document is not signed like tickets etc then it
is the duty of the one seeking to impose such terms
to put the exemption clause to the notice/attention
of the other party.
He must ensure that the contractual terms are put to
the notice of the garage client, shopper or buyer etc.
 By the Legislature
 The Consumer Contracts Act empowers the courts to do a
number of things such as setting aside the application of an
exemption clause, enforcing part of the contract and ignoring
part, vary the contract, reduce the amount or declare the clause
enforceable for a particular purpose only.
 Common exemption clauses such as “no guarantee and no
returns”, “no risk of loss accepted”, “owner’s risk” can be
challenged in appropriate cases. One can easily challenge them
in the courts.
 The act lists a number of clauses that are prima facie unfair
including exemptions clauses, voetstoots clauses, conclusive
proof statements etc.
 See Modzone Enterprises & Anor v Transtech Freight Zimbabwe
(Pvt) Ltd HH/65/2007
 Modzone case….

“In the instant case, the combined effect of the

relevant exclusionary provisions is this. Firstly, as per
the authorities referred to above, the “owner’s risk”
clause operates to exonerate the defendant only in
respect of negligence and not for its gross negligence.
Moreover, as was held in AMI Zimbabwe (Pvt) Ltd v
Casalee Holdings (Successors) (Pvt) Ltd 1997 (2)
ZLR 77 (S) at 85, it is not possible for the parties to
an agreement to contract out of liability for gross
negligence. In this context, the reference to “wilful
act” must be similarly construed……
 Penalty clauses

These are clauses which provide some form of a penalty in

the event of the other party failing to do something at all or
timeously. Examples include clauses stating that in the event
of premature termination of the contract the purchaser shall
not recover the instalments already paid, or clauses
specifying the level of damages in the event of a breach of
the contract by one party.
The purpose of such clauses is to persuade the other party at
the pain of the pre-determined damages to adhere to the
agreement. These clauses are regulated by the Contractual
Penalties Act.
See OK Zimbabwe Ltd v Msundire S-23-15
 Intervention by Statute

The legislature has also enacted the Contractual Penalties Act, which
empowers the courts to strike down penalty clauses or to reduce their effect
in a contract.
Penalty clauses are lawful but the courts are empowered to reduce the level
of pre-estimated damages if they are found to be too high.
Thus a clause in a sale agreement saying all payments made shall be
forfeited if the purchaser withdraws to cover administration charges may be
unreasonable if someone had paid an amount as high as $10 000 for
example.
See the case of Van Staden v Central South Lands and Mines 1969
(4) SA 349 where a clause stating that the purchaser will forfeit the sum of
R20 000 already paid if he defaulted in paying or submitting a bank
guarantee of R113 000 was held to be reasonable. This was because the
purchaser had sought and had been given numerous extensions of the time
to pay. Further when the seller cancelled the sale he had to renovate the
building to enable the new buyer to take occupation.
Contracts for the benefit of a 3rd party

Contracts for the benefit of a 3rd party are referred to

as stipulatio alteri.
This contract may be defined as an agreement
between A and B whereby A binds herself to B to
perform in favour of C, if C so desires and accepts A’s
undertaking a contract comes into existence between
A and C which A can enforce only if C has accepted ,
otherwise there is no contract.
R&D accepts such contracts while English law does
not.
 TERMINATION OF CONTRACT
A contract is terminated when both parties have fully performed their obligations under
the contract. A contract may be terminated by;
By the mutual release of the debtor
By a unilateral act of waiver by the creditor
Cancellation of the contract by one party which is accepted by the other.
Novation [substitution] of the old contract with a new one
Compromise- this a way of settling disputed obligations
Supervening impossibility – e.g. a change of the law, destruction of the subject matter
etc may make the performance of the contract impossible.
Merger this is where a person becomes both the debtor and creditor in respect of the
same obligation.
By set off
Prescription i.e. the period of limitation expires
A contract may also terminate by reason of breach by one of the parties. In this case the
innocent party has a right to claim damages or specific performance from the defaulting
party.
 LAW OF SALE
A sale is a contract whereby one party (the
seller) undertakes to transfer a thing (the
merx or res vendita) or the possession
thereof to the other party (the purchaser) in
return for the payment of a price by him.
 Merx Cont’

Merx is the Latin term for the thing which is sold. In

order to conclude a valid contract of sale it is
important to remember that the merx must be either
definite or at least ascertainable.
The parties must be in agreement on the subject
matter of the contract though it is not necessary for
the thing to be in existence at the time of sale.
 The purchase price

The purchase price must be either definite or

ascertainable.
The price must be an amount payable in money.
A sale at a “reasonable price” is not valid while an
agreement to have the price fixed by a third party is
acceptable.
 The agreement

There must be an agreement between the

parties that the contract is one of purchase
and sale and not some other type of contract
such as donation.
In other words there must an intention by
one party to buy and the other party to sell.
 Modes of delivery

Immovable properties are delivered by

registration of the name of the
purchaser on the property in the deeds
office.
 Movable property

 Movable property may be delivered in a number of

ways such as;
actual delivery [traditio]
This consists in the actual physical handing over of
the merx from one person to another, usually from
hand to hand.
 Constructive or fictitious delivery

If actual delivery is impossible, difficult or not

required at the time constructive delivery is used.
In this case the goods stay where they are at the time
of the sale and do not move even though they may do
so later.
 Symbolic delivery

This delivery of some symbol of the thing

and not the thing itself which allows the
purchaser to have full control of the thing
sold. E.g. the handing over of a key to a ware
house in which furniture is stored or a bill of
lading used in ships.
 Delivery with the long hand [traditio longa manu]

Delivery takes the form of pointing out of

the goods to the buyer and in giving the
buyer the right to remove them.
This is normally used when dealing with
bulky goods or when actual delivery is
impossible or not desired to remove the
goods there and then e.g. cattle when there
is a quarantine.
Delivery with the short hand [traditio brevi manu]

In this case the buyer is already in

possession of the goods bought but now
continues to hold them as owner.
Attornment is a form of delivery with the
short hand where an agent has control of the
goods and continues to hold the goods, not
for the seller but for the buyer.
 Constitutum possessorium

This is the opposite of delivery with the short hand

and here the seller continues to keep possession of
the goods, but now holds them on behalf of the buyer
e.g. one buys a car and leaves at the garage so that a
new radio is fitted in it.
The car has been delivered to me by the fiction of
constitutum possessorium.
 Passing of ownership

 Once the essentials of a contract of a sale have been agreed

upon, all the buyer is assured of is free and undisturbed
possession of the goods. He does not receive ownership.
Ownership is the most important thing that the buyer
wants.
For ownership to pass the seller must be the owner of the
goods, the parties must intend to sell and the
purchaser to buy, the contract must be valid, and the
price must be paid. In cash sales the price must be paid
before ownership pass while in credit sales delivery plus the
other requirements are sufficient to pass ownership. Lastly
delivery of the goods must be made.
 Passing of risk/ Profit

The general rule is that risk of damage to or

destruction of the merx, plus any advantages,
are passed to the buyer immediately after the
contract of sale is concluded.
In other words as soon as the three
essentials have been agreed upon, the
risk passes.
There are exceptions to the rule that risk
passes as soon as the contract is concluded.
 Exceptions

4.1 Negligent or wilful acts of the seller

Where the seller is negligent or by his own wilful act
damages or destroys the merx the buyer will not carry the
risk.
4.2 express or implied agreement
If the parties decide that the rule will be varied then risk
will not pass immediately. It will pass at an agreed time.
4.3 suspensive conditions
In cases where the contract is subject to a suspensive
condition the risk will not pass until the condition is
fulfilled.
 Fungibles

Where the goods require counting weighing or measuring the risk does
not pass until the goods are appropriately weighed measured or
counted.
In Poppe, Scunhoff & Guttery v Mosenthal & Co 1879 Buch 91, P
sold 200 hogsheads of brandy to M. before delivery and before P had
done any act to show that he had appropriated any particular brandy in
his possession for M, The legislature imposed an excise duty on all
stocks of brandy in hand. P paid the duty and there after sought to
recover it form M. The court held that as P had done nothing in any way
of setting the brandy aside for M prior to the imposition of duty, there
risk was still with P when the duty was imposed. P was liable for it.
The converse of this finding was made on similar facts on the basis that
the brandy had been measured off and set aside for the purchaser. See
Taylor& Co v Mackie, Dunn & CO 1879 Buch166
 Duties of the seller

  To care for the goods.

The seller must care for the goods until it is delivered to
the buyer.
If delivery is overdue through the fault of the buyer, the
seller is only responsible for wilful acts and gross
negligence.
If the seller is late in making delivery, the seller will be
liable if the loss or damage to the goods would not have
occurred had the goods been delivered on time. Where
the seller is negligent the buyer is entitled to damages or
cancellation of the contract if the thing is badly damaged.
 To deliver the merx

The goods must be delivered to the buyer at the agreed place and time or
if time is not fixed within a reasonable period. The goods must match
the contract description in terms of quantity and quality.
If goods are not delivered to the purchaser, the purchaser may cancel
the contract with or without a claim of damages. The buyer may seek
specific performance.
A merx which does not meet the contract description is not good
enough. See Tuckers land and Development Co (Pty) v Aleco
Investments 19812 (1) SA 852. A bought a piece of land from T In a
proposed township. After the agreement was signed T caused the plan’s
of the town ship to be amended. The amendment had the effect of
reducing the land bought by A by 10%. It was held that T had repudiated
its obligation to deliver and that A was entitled to cancel the contract
and claim repayment of the money it had paid T Company.
 Guarantee against eviction

This is also known as the implied warranty against eviction. This is

implied on all contracts of sale.
The seller promises that the buyer will not be disturbed in his free
possession the goods. If the buyer is disturbed in his possession the
seller must protect him. If the buyer is evicted then the seller must
compensate him.
The buyer must notify the seller of any threats he faces and must
act prudently and not let go of possession easily.
The warranty will not apply if the parties agree that the seller will
not be liable or if the buyer is aware that a third party is the owner.
The warranty will not apply if the eviction is not by legal right or if
the cause of eviction arises after the sale and the seller is not
fraudulent.
 Cont’

See Nunan v Meyer 1905 22 SC203, M purchased cattle

from N. Subsequently one X claimed the cattle, alleging they
had been stolen from him. M released the cattle to X and
sued for a refund of the purchase price form N. m succeeded
in proving that the cattle had been stolen from X and the
court upheld his claim for a return of the purchase price.
If he had failed to prove that the claim by X was not a valid
one he would not have succeeded in his claim. In short he
took a gamble.
He ought to have given notice to the seller so that he could
defend the 3rd party claim. CF with the case of Lammers
and lammers v Giovannoni 1955 (3) 385
 The guarantee against defects

The purchaser is entitled to a merx free from latent defects.

Our law presumes that every article sold is free from any hidden
defects which make it unfit for either the ordinary purpose or any
special purpose considered by the parties.
This will not apply in an agreement entered in to on a voetstoots
basis i.e. as they stand or as it is.
But If the purchaser acts fraudulently he will still be liable. This
does not apply to patent or obvious defects. The maxim caveat
emptor (let the buyer beware) applies in the case of open defects.
It does not cover those defects that were not in existence at the
time of the sale or where the value of the goods is not impaired by
the defect or where the buyer knows the defect when he bought
the merx.
 Remedies of the purchaser

If the merx is latently defective then the buyer has the choice of either
cancelling the contract or suing for the return of the purchase price [action
redhibitoria] or a claim for a reduced purchase price [actio quanti
minoris].
The damages are claimable if the seller;
 Acted fraudulently

 Is a merchant dealer with special knowledge of the goods sold; or

 Gave an express warranty that the goods were free from defects.

However, certain conduct of the purchaser may debar him from the remedy.
For example repairing the merx, evinces an intention to keep the product. In
Goldblatt v Sweeny 1918 CPD 320, S bought a car from G and he
subsequently discovered that it was latently defective as it had a welded
crankshaft. He sent the car to a garage, not only to have work done of the
crankshaft but on a number of other things. It was held that S was debarred
by his conduct from claiming redhibition. Se also Vorster v Louw 1910 TPD
1099.
 Duties of the Purchaser

The duties of the purchaser are imposed by common law and may be varied by
an agreement of the parties. If not varied by the agreement the following
principles will apply: 
6.1 To pay the price
The buyer must pay the price at the correct time. In cash sales, this is at the
same time as delivery while in credit sales at the agreed time.
VAN Jaarsveld v Coetzee 1973 (3) SA241, V bought a farm from C for R40
000, of which R20 000 was payable by way of a land Bank loan and R10 000
was payable by way of a bank guarantee or payment in the trust account of C’s
attorney, S. The sale was made subject to V being granted the loan from the
lands Bank. V failed to obtain the loan but furnished a bank guarantee for R30
000 to S. it was held that the condition regarding the land bank loan was for V’s
benefit only, and that C’s argument that the sale was void because the land bank
loan had not been obtained could not be sustained. 
 To reimburse the seller of necessary expenses

The buyer must pay the seller for any necessary expenses
incurred in looking after the goods before delivery.
To accept delivery of the merx
The buyer must accept delivery of the goods when
offered, unless they are not up to the contract standard.
When a proportion of the goods are not up to standard,
then the whole order may be rejected if the contract is
indivisible.
If the contract is divisible it is possible to reject only the
defective goods while accepting the rest.
 Remedies of the seller

Remedies of the seller

If the purchaser fails to pay the purchase price or the
seller’s necessary expenses, then the seller may either
sue for payment and claim interest from the date of
mora, or claim cancellation of the contract, with or
without a claim of damages.
Where the buyer does not take delivery at the time and
place agreed, then the seller may either seek an order of
specific performance to compel the buyer to take
delivery and claim the full purchase price plus interest,
or treat the contract as cancelled and sue for damages.
Law of Agency

DEFINITION
 definition

Agency is a contract in which one person (the agent) is

authorised and usually required by another (the principal) to
create contracts between the principal and a third party or
parties.
In other words the agent is authorised and required (mandated)
to bring the principal into a binding legal relationship with third
parties.
The agent is not personally liable. See Marais v Perks 1963
(4) SA 802. M a farmer sued P for loss sustained by him when
he used what was described as tick oil when it was instead sheep
dip. P was an auctioneer and estate agent. The court ruled that if
P had contracted as an gent then he was not personally liable.
 How agency arises

A contract of agency may arise or be formed in

different ways. The principal must have the normal
contractual capacity.
No formalities are required provided an agreement is
reached on the act to be performed and the
commission if any to be paid.
However certain acts require written proof of
authority to act such transferring immovable
property (a Power of Attorney is required).
 Express authority

In this context written or verbal

authority is given to act. The
authorisation to act may be general or
special.
 Implied authority

Here the contract may be implied from the behaviour or

actions of the principal. It is essential to ask the question
“was the authority reasonably necessary to, and readily
inferred from, the mandate the agent was given”.
For example if you buy a car in Bulawayo and ask the
garage to deliver it to Mutare, it is implied that they can
act as your agent in negotiating with the towing company
or the railways to deliver the car.
Similarly if I appoint a manager to run my business while
I am away, that person has authority to do everything
reasonably necessary to the running of the business.
 Implied by law

In our law certain persons may be represented by

agents where they are unable to run their own
affairs. Strictly speaking there is no agency, since
there is no agreement between the parties.
Examples;
a guardian representing a minor
a board of directors acts for a company
A curator an insolvent
 A trustee in a trust
 Implied by conduct

This is also referred to as “agency by estoppel”.

When someone by conduct or words, misleads a
reasonable person into thinking that certain facts
exists, they are prevented (or estopped) from
denying the existence of those facts, if that
reasonable person acts on them to his detriment.
The principal must by his conduct or words
represented that the agent had authority to contract
on his behalf. The agent’s mere representation is not
enough. Weedon v Bawa
 Ratification

In this case a person acts without authority from

the principal, but the act is later ratified by the
supposed principal.
The agent must have professed to have been acting
on behalf of the named or ascertainable principal.
The ratification dates back to the time of the
original contract. The principal must ratify the
whole contract and not part of it. See the case of
Dreyer v Sonop Bpk
 stipulatio alteri

Also known as contracts for the benefit of

third parties in our legal system.
It is possible to enter into these types of
contracts whether or not the third person is
in existence at the time.
Thus it is possible for a parent to enter into
a contract for an unborn or minor child for
example
 Negotiorum Gestio

A person who acts for another in a case of necessity

is referred to as negotiorum gestor e.g. a person send
cattle by rail and there is no one to receive them at
the station.
Then if the railway employees feed and water them
the railway administration is a negotiorum gestor or
agent of necessity.
The owner of cattle must reimburse the railways for
their expenses.
 Duties of the agent

It is the duty of the agent to perform the mandate

personally, with utmost good faith, and must keep
accurate accounts.
To perform the mandate
The agent must perform the mandate fully or substantially
to the best of their ability, within a reasonable time,
strictly observing any limits imposed by the principal.
The agent must also obey all lawful instructions from the
principal and take due care in carrying out his duties. If
the agent fails to do this he will be liable in damages to the
principal.
 To perform the mandate personally

The agent must perform the mandate personally and

may not delegate or appoint a sub agent without the
principal‘s consent unless the acts are purely
administrative [such as typing a document], justified
by trade usage or custom or if necessary due to
unforeseen circumstances e.g. the agent falling ill
 To act with care and skill

An agent must act with reasonable care and skill in the execution of his
or her mandate. Failure to act as above may result in compensation
having to be paid by the agent .e.g. a doctor carrying an operation.
The duty to act in good faith
The agent must act for the benefit of the principal not themselves. It is
said he must act with the utmost good faith.
The agent is only entitled to the agreed commission, and not more,
anything obtained should be handed over to the principal.
This means the agent must not make a secret profit, he can not enter
into contracts where his interests and those of the principal conflict,
the agent must not accept a secret profit or bribes or the agent may not
use confidential information acquired in the course of the agency to his
own ends or the mandate of a subsequent principal.
 Keeping accurate accounts

The agent must pay for and account for and pay over
to the principal any money or property acquired as a
result of carrying out the mandate.
A number of agents such lawyers, accountants,
Deputy Sheriffs and estate agents are compelled by
law to keep trust accounts where they keep money
for their clients. Such accounts have to be audited
annually.
 Duties of the principal

To reimburse and indemnify the agent

The principal must refund the agent for any
expenses or losses already suffered and
indemnify the agent against any expenses or
losses which may arise in future.
These expenses must arise in the course of
carrying out the mandate and not by
exceeding it.
 To pay the agreed remuneration

An agent is not entitled to pay unless there is an express

or implied agreement to pay. If there is an agreement to
pay but there is no agreement on the quantum, then a
reasonable payment in the circumstances has to be made.
Termination of agency
Agency may be terminated on completion of the mandate
e.g. sale of a house by an estate agent. It may also
terminate on the expiry of a given time, on the incapacity
of the principal or agent, by mutual consent, by
impossibility of performance, renunciation by the agent
 CONTRACT OF INSURANCE

Definition
Insurance is a contract in terms of which one party
[the insurer] undertakes, in return for payment of
a premium by the other [the insured], to pay to the
insured a sum of money or render him its
equivalent on the happening of a specified
uncertain event in which the insured has an
interest.
A contract of insurance is normally concluded by
having the insured completing and submitting to
the insurer a proposal form.
 The essentialia of the contract

a) The premium
There must be an agreement to pay a sum of
money as a premium by the insured. Actual
payment is not necessary, an undertaking to
pay being sufficient. However the insurer
may refuse to make payment to the insured
before a premium is paid.
 A sum of money or its equivalent

Insurance contracts are two kinds, indemnity

insurance and non indemnity insurance. In the former
the insurer is obliged to compensate the insured for
the actual loss which he has suffered as a result of the
happening of the event insured against. E.g. fire, theft
and car insurance. In non indemnity insurance the
insurer is bound to pay a specified sum of money to
the insured on the happening of an event regardless of
the extent of the actual loss which he has sustained
through the occurrence of the event. Life and personal
accident policies fall under this category.
 Uncertain event

An event may be uncertain in two respects: whether

it will occur at all, and should it occur, when in life
polices the uncertainty lies in when it will occur.
 Insurable interest

For the contract to be enforceable, the insured must

have an insurable interest. In indemnity insurance this
means that the insured must have a pecuniary interest
in preventing the occurrence of the event insured
against. The test is; whether the insured will incur
some pecuniary loss or fail to derive some anticipated
financial benefit on the risk insured against
materializing. This is satisfied if the insured owns, has
hired it. The purpose of requiring an insurable interest
in indemnity insurance is to distinguish a true
insurance contract form a gambling transaction.
 Duties of the insured

Duty to disclose all material facts

The insured has a duty to disclose all material facts
and circumstances of which the insured has actual
or constructive knowledge to the insurer. This duty
is imposed by operation of law in all contracts of
insurance. Breach of the duty amounts to mala-
fides entitling the insurer to avoid liability under
the contract. See Mutual and Federal
Insurance Co Ltd v Oudtshoorn
Municipality 1985 [1] SA 419.
 Disclosure…

All facts must be disclosed even those not directly asked

in the proposal form. See Fine v General Accident, Fire
& life Assurance Corporation Ltd 1915 AD 213 Where
an insured had answered no the question whether
insurance had been declined on the same property.
While none had been declined a policy had been issued
but subsequently cancelled. That was held to be a non
disclosure. The insurer may waive certain information
such as “have you been convicted of a driving offence in
the past 5 years”. There is no need to refer to a
conviction dating back to the last decade.
 Duties of the insured

To pay the premiums due under the

policy
The insured must pay the premium on the
date agreed upon. If no payment is made on
time the contract lapses.
To bring himself strictly within the terms of any warranties

The insured is bound to comply with all

promissory (that he will behave in a certain
way) or affirmative warranties where one
undertakes that he has answered correctly.
At common law if a warranty is not followed
the insurer is entitled to cancel it whether or
not it was substantially correct or that
inaccuracy did not affect the assessment of
risk.
 To assist the insurer in recovering amount of loss from third parties.

By virtue of the doctrine of subrogation, the

insurer , if he has indemnified the insured, is
entitled to step into the shoes of the insured
and proceed in law against third parties, if
any who are legally liable for the loss.
 Duties of the Insurer

The major duty is to meet all lawful claims made on

the policy.
To act in good faith towards the insured.
 Canvassing Agents

Under the law of insurance canvassing agents employed by the

insurer are not regarded as the agents of the insurer but those of
the insured.
If the agent completes a proposal on behalf of the insured in
doing so he is acting as the agent of the insured. If any
information included by the agent is untrue the untruth is held
against the insured.
In a common sense way, this can be justified on the ground that it
is the duty of the insured to fill the proposal form. If he chooses
someone to carry that task out, he has a responsibility to check
the contents of the form before signing and submitting it. If he
signs it without checking he would be deemed to have adopted
what his agent has done.
 LABOUR LAW

Definition
Employment is a contract whereby one
party (the employee), in return for payment
of a wage by the employer, puts his personal
services at the disposal of the employer in
such a way that the employer is entitled to
define his duties and (to some extent)
control the manner in which he discharges
them.
 The parties to the contract

These are obviously the employer and the

employee. By statute certain people may not
be employed such as those under the age of 16.
The wage
This must be expressed in monetary terms
and must be paid over certain fixed periods
such as monthly or weekly. Statute may
stipulate certain minimum wages while at
common law the parties are free to agree.
 Personal service

The contract may specify the exact duties to be carried

out or may simply refer to the type of work to be
carried. In general the services to be undertaken are
defined by the employer.
Formation of the contract
Under the common law no formalities are required for
the formation of a contract of employment; the
contract may be oral or even implied from the parties
conduct. The Labour Act makes it mandatory that the
contract be in writing and that it must state the pay
intervals and such other relevant details.
 The duration of the contract

The parties themselves agree on the nature and duration of

their relationship. Ordinarily the initial period after
engagement is usually on probation- where the employee is
in trial and may terminate the contract upon giving a
shorter notice as compared to when permanent. By statue
one who is on a contract without limit of time and is still on
probation may during the probation give two weeks notice
of termination. While the notice period after probation is 3
months. The courts have ruled that the probation period is
similar to a fixed duration contract. See the following
cases; Kazembe v Adult Literacy Organisation
 Duties of the employer

To pay the wage

The employer is obliged to pay to the employee the
agreed wage. The labour acts provide some restraints
on what an employer may deduct from an employee’s
wage. At common law an employer may deduct even
without the consent of the employee. However, certain
deductions are imposed by law such as PAYE tax
deductions and social security. An employer is obliged
to pay one who has worked or tendered his services to
him (even if there was no actual work for him during
the period).
 To receive the employee and retain him

Once he has engaged an employee an employer is

not obliged to provide him with work, except in the
following cases,
a] Where the pay is based on the volume of work
done as in a salesmanship agreement
b] Where the employee’s professional reputation
would be adversely affected by his not working for
example an actor (not acting takes away publicity).
See Muzondo v University of Zimbabwe
 To provide safe working conditions

An employer is bound to take reasonable steps to

ensure the safety of his employee in the workplace.
This duty is further defined by the act. There is need
to provide safety clothing and to ensure that any
machinery that may endanger the health of the work
force is properly guarded or protected and in
addition there is need for a safety and health
committee at the workplace. An employee may stop
or refuse to work in an unsafe environment.
 Duties of the employee.

To enter and remain in service i.e. to work

The employee must carry out the activities tasked or
given to him by the employer. Matters of hours of
work leave etc are subject to agreement. At common
law an employee is not entitled to paid vacation leave
but this has been changed by the labour act. In
general refusal to work is repudiation of the contract,
unless if there is a justifiable reason for the failure to
work such as threat to life or health or non payment
of wages
 To exercise reasonable skill and diligence

In agreeing to perform a particular type of work

such driver, lawyer etc the employee is impliedly
warranting that he is reasonably competent to
carry out the work. He further undertakes that he
will exercise due diligence in the performance of
the various facets of his work. He commits an
offence if he is inept or incompetent. See
Ndamase v Fife –King 1939 EDL 529 – a store
man who could not enter entries of stock in the
register.
 To serve in good faith

An employee owes his employer a duty of good faith,

- meaning he must serve the employer alone, must
not appropriate the employer’s property as his and
he must not use confidential information obtained in
the course of his work for his own benefit nor divulge
it. He must also not make a secret profit from his
work. See the case of Jones v East Rand
Extension Mining discussed under Agency above.
 To obey the lawful instructions of the employer

The employee must obey the reasonable and

lawful instructions of the employer that
relate to his work. He must also behave in a
respectful manner towards the employer or
superiors appointed by the employer. The
employer may dismiss an employee for
insubordination. See the case of Matereke
v CT Bowring & Associates 1987 (1) ZLR
206 (SC), PTC v Chihoro 1997 (1) ZLR 148
 To refrain from misconduct

The employee is under a general duty to refrain

from any conduct which is incompatible with the
employment relationship. The misconduct need not
directed to the employer it can be at customers or
clients so long as it is committed during working
hours. In some instances even conduct outside the
work hours may have a bearing to the employees
work. See Tanganda Tea Co v Mvududu SC
1/07 – assaulting a fellow patron in a club owned
be the employer outside work hours.
 Termination

The contract may be terminated by any of the methods that

apply to other contracts. In particular an employment
contract may be terminated by death of the employee,
resignation by the employee, mutual consent of the parties
or by retrenchment or redundancy. However the process
must be fair otherwise it may be set aside by the labour
Court. In the case that the termination is by way of
dismissal the employer is compelled to hold an oral
hearing into the case in terms of a code of conduct. There
are two codes of conduct in use in Zimbabwe, the national
code (SI -15 –of 2006) and an industrial code registered by
the employer or by a whole sector
 Dispute resolution

Labour disputes are dealt with by specialist tribunals in

Zimbabwe. At the lower levels there are labour Officers
who hear cases and try to reach consensus with the
parties. After that level matters go to arbitration where an
arbitrator hears matters and makes an award. There is
also a Labour Court which has exclusive jurisdiction to
hear labour cases. On the other hand every employer is
empowered to administer discipline at the work place.
However, a dissatisfied employee may then appeal to the
Labour Court or approach a labour officer depending on
whether there is a workplace code of conduct or not.
 LEASE AGREEMENT

A lease is a contract in which one party, the landlord

or lessor, agrees to give another the tenant or lessee
the use and enjoyment of a specified property for a
specified period and the tenant agrees to pay the
landlord rental in return. A contract whereby one
party is authorised to take certain materials from the
land is not a lease. This was said in the case of
Bozzone v Secretary for Inland Revenue 1975
(4) SA 579 (A). The contract allowed the appellants to
dig, work and obtain stone, gravel, sand and any
other like material from a certain piece of land.
 The essentials of the contract

The essentials of the contract

There are three essentials in a contract of
lease. These are that;
The object of the contract must be one of
lease.
The subject matter must be a property or
premises
The rent
 The use and enjoyment of a thing

The lease may pertain to a lease of object in

totality (e.g. A farm or a car), or it may
pertain to only part of the object of the lease
(e.g. two rooms in ten roomed house).
 Temporary use and enjoyment
In a contract of lease the lessor makes only
the temporary use and enjoyment of the
object of the lease available to the lessee.
 The rent

The amount of rent to be paid by the lessee

must be certain and must sound in money.
The only exception is where the leased
property is agricultural land where the rent
may be an agreed proportion of the produce.
 Formalities

No formalities are required for a lease of

both moveable and immovable property.
Long leases i.e. those for a period over ten
years may require certain formalities. Such a
lease may be registered on the deeds of the
property leased.
The duties of the

landlord
 to deliver use and occupation of the property

The lessor must allow the lessee to use and occupy

the property from an agreed date and for the full
period of the lease. The tenant must be able to use
the property for the purpose it was leased out to him
and the landlord must ensure that it is in an
acceptable condition for this purpose. In the case of
Mcneill v Eaton (1903)20 SC 507, a failure by the
landlord to ensure that gates that led to the property
(which was a boarding house) were kept open was
held to be a breach of the agreement entitling the
tenant to cancel the agreement.
 To guarantee quiet enjoyment

While the landlord does not guarantee that he is the

owner of the property, he does guarantee that
persons acting under a legal right will not disturb the
tenant in his use of the property. The landlord does
not agree to protect the tenants’ against illegal
disturbance .e.g. from neighbours because the tenant
can protect himself in that regard. This was the issue
in the case of Baum v Rode 1905 TS66, R let B a
room in a building for purposes of running a shop.
Other tenants were a problem.
 To maintain the premises

The landlord must maintain the premises in a state

of good repair, fit for the purpose for which it was
leased, unless it is agreed otherwise in the contract.
If repairs are necessary the tenant may be asked to
vacate, but no rent may be claimable during the
period of repairs. If the property is not being
maintained in a proper state the tenant can ask for a
reduction of rent or may quit the premises and
cancel the lease. See Shapiro v Yutar 1930 CPD
92.
 To pay for taxes on the property

The landlord is responsible for any rates/ taxes

or other charges on the property demanded by
the local authority or government.
[e]to compensate the tenant for damages
caused by defects.
If the lessor knows of any defects and fails to
disclose them he may be liable to the tenant or
he warrants that the property is in a good
condition.
 To compensate for any improvements made
The tenant must be paid for any necessary
improvements made to the property. These are
improvements that are necessary for the protection or
preservation of the premises. The tenant is entitled to
the full cost of such repairs. If the tenant made useful
improvements, i.e. those that increase the values of
the property then compensation is only claimable if
the landlord consented to the improvements. The
amount of compensation is limited to the cost of
materials and not for labour.
The duties of the
lessee
 Duty to pay rent

The payment of rent is an essential element of the

contract of lease. Therefore it may not be excluded by
agreement of the parties. If no payment date is
provided in the lease the rent is payable at end of the
period for which the property is leased. If a place of
payment is agreed then payment should be made
there. The tenant is prohibited by the landlord’s tacit
hypothec to remove any moveable property from the
leased building if any rentals are outstanding. The
lessor has security for unpaid rent by operation of
law.
 To use and maintain the property in a proper manner

The property must be used for the

purpose for which it was leased and any
damage or destruction caused to the
property is presumed to be caused by
the tenant. It is up to the tenant to
prove otherwise. In Burns v D & G
(Pty) Ltd 1949 (4) SA 135
 To restore the property

At the end of the lease the lessee must

return the property leased in the same good
condition in which it was when he received it
– except for fair wear and tear
 The rights of the leasee

The lessee has the right to sublet the

property to a third party unless if that is
specifically excluded by the lease agreement.
The lessee may also cede or assign his rights
in the agreement. This may not be done in
rural land and where it is specifically
prohibited by the agreement.
 Huur Gaat Voor Koop rule

If the property is sold by a lessor, and providing the

lessor is the owner, there is generally no termination
of the lease since the maxim huur gaat voor koop is
applied. The rule means “hire takes precedence over
purchase”, in other words the rights given by lease
take priority over rights given by sale. The maxim
applies if the purchaser had actual or constructive
notice of the lease. Constructive notice will arise
where the tenant is in occupation of the premises or
where the lease is registered over the deeds of the
property.
Statutory

protection
Of Tenants
 The rent Regulations

In Zimbabwe the state set up an instrument called

the rent regulations which govern both residential
and commercial premises. The regulations limit the
rights of the landlord over their leased property. It
prohibits ejectment of a tenant in a number of
situations and retains the right only in the case of
non payment of rent or where the owner wants the
property for own use. The law creates Rent Boards
that deals with such disputes and can award rent
orders.
 Termination

A contract of lease may be terminated

in various ways [just like any other
contract see above] such: as by efflux
ion of time, by cancellation by one
party for breach, by mutual agreement
etc. The termination of lease will result
in the termination of any existing
sublease.
 FINITO

THANK YOU

MAZVITA

SIYABONGA

ASANTE SANA