MEANING OF LAW

Law is a set of rules set by a man, politically superior made to be followed by everyone regardless of
their stature. It is developed to govern people over a certain territory or certain group.

Several theories have emerged in an attempt to answer the question ‘what is law?’ Major theories
are natural law, legal positivism, pure theory, legal realism, sociological theory, historical theory and
economic theory

NATURE OF LAW

The different schools of thought that have arisen are all endeavours of jurisprudence: These schools
of thoughts…

(a) Natural law

This theory asserts that there are laws that are immanent in nature, to which enacted laws should
correspond as closely as possible. This view is frequently summarized by the maxim: an unjust law is
not a true law, in which ‘unjust’ is defined as contrary to natural law. Natural law theory defines "law
as the dictate of reason". The theorists are called the Naturalists.

The natural law theory seeks to explain what the law is by reference to certain first principles of
nature. The theory believes that God endowed man at creation with sufficient rationality which man
is capable of discovering for himself if he applies his reason. The theory believes that these principles
or reason can guide a man’s actions and his relations with fellow men.

Law consists of principles of Justice and morality which are deduced from the objective moral
principles of nature. These are rules of conduct for human beings, and, may be discovered by natural
reason and common sense. These are true law and are not obligatory but are followed naturally by
the people. This is the essence of this theory of law.

Naturalists oppose the positive law founded in Codes, Statutes, Constitutions etc., These are
obligatory and are enforced by force All these, which are opposed to natural law, are riot really true
law, but are only a violation or abuse of law.

Examples of Natural law theorists are; St. Thomas Aquinas

(b) Legal Positivism

The positive law school emerged in direct opposition to the views expressed by the natural law
school. Some of the influential defenders of legal positivism are the 19th Century philosophers, John
Austin and Jeremy Bentham; and the 20th century legal philosopher H.L.A Hart.

This theory holds the view that whether a certain rule is a law, creating legal obligations to comply
with it all depends on its source of enactment. The adherents argue that the only valid laws are rules
that issue from persons or authorities which are in the habit of securing unquestionable obedience
from their subjects.

Laws are rules made by the sovereign authority in accordance with certain procedures which are
obeyed and enforced by the society. The positive law theory rejects the notion that human conduct
can be governed by natural law. They also reject the notion that human conscience or reason can lay
down laws for the regulation of human conduct. Positivists argue that only man-made law can be
used to guide or order the lives, transactions and aspirations of man.

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Positivists see law as a command or a species of command. It is a command since it attracts
punishment or sanctions due to non-observance.

(c) Pure Theory of Law

This school of thought is essentially an offshoot of the positivist school of thought. The only major
deviation of the pure theory of law from the positive theory is one the positive theorists’ conception
of law as a command.

The chief proponent of the pure theory of law is Hans Kelsen. This theory must deal with law as it is
and not as it ought to be. Hans Kelsen sought a formula for explaining the concept of law that will be
free law from the contaminating effects of other disciplines and concepts like morality, religion,
sociology, ethics and politics and so forth.

The major postulation of the pure law theory is that every legal system consists of a hierarchy of
norms in which inferior norms derive their validity from a higher norm. The validity of a norm must
be based on a higher norm, which itself must be validated by yet another higher norm until we get to
the ultimate or basic norm. The source from which the basic law derives its validity is referred to by
the pure theorist as the ‘grundnorm’.

Kelsen saw law generally as a means of ordering human behaviour, as a specific technique of social
organization. He admitted, however, that other systems of norms (such as morality and religion) also
seek to regulate human behaviour. But he identified a specific characteristic of the legal method of
ordering human behaviour that both religion and morality lack. He calls that element the element of
physical force.

(d) Legal Realism:

Oliver Wendell Holmes who was a judge of the US Supreme Court is the father American Realism.
According to realists, the decisions that judges hand down do not simply arise or flow from a
mechanical application of the law to the facts of individual cases. Legal realism postulates that it is
not possible to know what the law at any given point in time until the court has had the opportunity
of pronouncing on such statutory provisions. Oliver Wendell Holmes argued that “the prophecies of
what the courts will do in fact and nothing more pretentious, are what I mean by the law.”

It holds that the law should be understood as being determined by the actual practices of courts, law
offices and police stations, rather than as the rules and doctrines set forth in statutes or learned
treaties. It had some affinities with the sociology of law. Salmond’s Theory

Other legal realists are Karl Llewellyn

(e) Sociological Theory

Sociology means, broadly the study of society of which law is but a part. Sociological jurisprudence,
according to its chief proponent, Dean Roscoe Pound, should ensure that the making, interpretation
and application of laws take account of social facts.

Law as a method of achieving peace and harmony should be formulated in such a way that peaceful
coexistence will continue notwithstanding the impossibility of satisfying all wants.

(f) Historical Theory of Law

The major proponent of this theory is the German philosopher and thinker Von Savigny. While the
positivists preach that law is made by a human legislator, the historical school direct attention to the

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evolutionary nature of law. The historical school believes that however far back one goes into the
past of a people, one will always find some law governing them.

The historical law theorists argue that law reflects the spirit and common consciousness of a people.
The greatest contribution of the historical school lies in its recognition of the fact that law is not just
an abstract set of rules imposed on society but it is an integral part of that society deeply rooted in
the social and economic order in which it functions and embodying traditional value systems which
confer meaning and purpose upon the given society.

(g) Economic Theory of Law

The most influential representative of the theory was Karl Marx. The Marxist theory of law is
generally identified with the following three underlying assumptions:

 that law is a product of evolving economic forces;

 that law is a tool used by a ruling class to maintain its power or stranglehold over the
lower classes;

 that in the communist society of the future, law as an instrument of social control
will wither away and finally disappear.

Marx wrote that a capitalist society will eventually be made up of two classes — the bourgeoisie
(‘the haves’) and the proletariat (‘have-nots’). Their common economic interests and roles in the
processes of production and exchange define these classes and the opposed interests of the two
classes produce conflict.

Law is perceived by Karl Marx as one of the means whereby the capitalist minority seeks to preserve
and increase its power, while those who have property sought to protect it against those who have
not. One of the main functions of law is to obscure power relationships. Thus, it is usually said that
there is freedom of contract, but in the absence of equality of bargaining power this freedom is
illusory

Functions/ Purposes of Law

1. It promotes peaceful co-existence by ensuring law and order is maintained.

2. Law sets standards of behaviour and conduct in various institutions or industry such as
construction, trade etc. The law also acts as a control mechanism of the same behaviour.

3. It protects rights and enforces duties by providing remedies whenever these rights and
duties are not honoured.

4. It resolves social conflicts. The rule of law facilitates their resolution by recognizing the
conflicts and providing necessary resolution mechanism.

5. It enables persons to make choices and give them legal effect. E.g law of contracts.

6. Promotes good governance, accountability and transparency. It facilitates justice in the

society.

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Differences between Civil Wrong and Crime

CIVIL WRONG CRIME

Definition offence against another individual Offence against the state

Purpose to deal with the disputes between To maintain the stability of the state
individuals, organizations or and society by punishing offenders and
between the two, in which deterring them and others from
compensation is awarded to the offending
victim.

Standard of Is on the balance of probabilities Beyond reasonable doubt

proof

Parties The plaintiff is the party that is Prosecution which represents the state
involved suing. The defendant is the one and the accused
being sued

Burden of Claimant must give proof however; “Innocent until proven guilty”. The
proof the burden may shift to the prosecution must prove defendant
defendant in situations of Res Ipsa guilty
Loquitur (The fact speaks for itself)

Type of Compensation (usually financial) for A guilty defendant is subject to

punishment injuries or damages, injunctions imprisonment, fines

Law and Morality

Morality is the sense of judgment between right and wrong by reference to certain standards
developed by society over time.

It defines standards of behaviour widely accepted by a society. An action that is considered to be

opposed to morality will generally be frowned upon by that society. However, morality is not
enforceable by courts of law.

The law incorporates a significant proportion of morality. Such morality becomes part of the law.
Example, killing a person is immoral as well as a crime. So is theft. However, certain wrongs in society
contravene morality but not the law. For example, adultery, failing to rescue a drowning person.
(However, it may be legally wrong if the person owned duty of care to the victim- We will look at it
in the law of torts).

What then is the relation of morality to law?

1. The existence of unjust laws (such as those enforcing slavery) proves that morality and law are not
identical and do not coincide.

2. The existence of laws that serve to defend basic values such as laws against murder, rape,
malicious defamation of character, fraud, bribery, etc. proves that the two can work together.

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3. Laws govern conduct at least partly through fear of punishment. When morality, is internalized,
when it has become habit-like or second nature, governs conduct without compulsion. The virtuous
person does the appropriate thing because it is the fine or noble thing to do, not because not doing
it will result in punishment.

4. As such, when enough people think that something is immoral they will work to have a law that
will forbid it and punish those that do it. However, if there is a law that says doing X is wrong and
illegal and enough people no longer agree with that then those people will work to change that law.

The Rule of Law

The concept of the Rule of Law is a framework developed by Dicey on the basis of the English Legal
system. It is also described as the due process.

According to Dicey, rule of law comprises three distinct conceptions namely:

1. Absolute supremacy or predominance of regular law: this means that all acts of The State are
governed by law. It means that a person can only be punished for disobedience of the law and
nothing else.

2. Equality before the law: this means equal subjection of all persons before the law. It means that
no person is exempted from obeying the law. All classes of persons are subjected to the same judicial
process regardless of their age, sex, creed, gender or race.

3. The law (Constitution) is a consequence and not the source of rights: means that the law is a
manifestation of the will of the people.

Sources of Kenyan Law

The primary sources are enumerated in section 3 of the Judicature Act (Chapter 8 Laws of Kenya),
and they include:

(i) The Constitution

Constitution of Kenya, 2010 came into force on 27th August 2010.

It is the Supreme law of Kenya, taking precedence over all other forms of law, written or unwritten.
This means that if any law is inconsistent with it, the Constitution prevails, and the other law, to the
extent of its inconsistency, is void.

Many Acts of Parliament are made pursuant to particular provisions in the Constitution.

The Constitution of Kenya derives its supremacy under article 2.

Amendment of the Constitution is found under chapter sixteen; articles 255, 256 and 257.

(ii) Acts of Parliament / Statutes/Legislations

These are passed by Parliament and also include subsidiary legislation, that is, laws made under the
Authority of an Act of Parliament.

Examples of statutes include; Engineers Act No. 23 of 2011.

(iii) Judicial Precedents/Case law

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Case law may be described as the method of learning law “through cases”. By studying a particular
case and the decision therein, we get to know the legal rules relating to the factual situation of the
case.

For case law to be effectively applied as a source of law, the following doctrines are worth of
mention;

a) The Doctrine of Stare Decisis

b) Ratio Decidendi

c) Obiter Dictum

(a) The Doctrine of Stare Decisis

Stare decisis means let the decision stand. Judicial precedent is based upon the doctrine of stare
decisis which refers to the legal doctrine that requires a judge hearing a case to refer to an earlier
case decided over by his predecessor in order to find out if material facts in those cases are similar
and to decide the case in the same way as the previous case.

This means that in trying and deciding cases a judge, must look back to see how the previous judges
have dealt with the case involving similar facts. In this way, the earlier decision “stays” or “stands” as
it was made.

The general rule provided by the doctrine of Stare Decisis is that a decision made by a court of higher
level binds all lower courts. A lower court cannot therefore over rule a higher court on any decision.

A judicial precedent contains two parts:

(i) Ratio Decidendi: this literally means reasons for the decision. The ratio decidendi is the rule
acted on by the court in coming to the decision in a particular case. That is, the vital reason,
which leads the judge to decide a particular issue or the reason for his decision.

Therefore, it is not the entire judgement in the previous case which becomes a binding precedent
but only that part which constitutes the ratio decidendi (reasons for his decision) and the rest of the
judgement is not binding.

(ii) Obiter Dictum: this means ‘by the way’ statements. Sometimes a judge may say things
(statements) which are not strictly relevant to the final judgment but which are intended to
create some persuasive authority where there is no binding principle available. Such remarks
are called obiter dicta (remarks by the way.

Obiter dictum is not binding but maybe important in suggesting solutions especially where it arises
from the highest court; it is persuasive in nature.

Obiter dicta are things stated in the course of a judgment which are not necessary for the decision.
For example in R v Howe & Bannister [1987] 2 WLR 568 Case summary the House of Lords held that
the defence of duress was not available to murder. This was the ratio decidendi of the case. The
House of Lords went on to consider whether the defence should be available to those who attempt
murder and stated obiter dicta that the defence of duress should not be available to attempted
murder.

(iii) English Statutes of General Application in Force in England on 12th August 1897

It is provided under section 3 of the Judicature Act (Chapter 8 Laws of Kenya).

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The English Statutes of general application passed before 12th August 1897 (the reception date), are
law in Kenya, unless a Kenyan Statute, or a latter English statute made applicable in Kenya, as
repealed any such statute.

A statute of general application, if repealed by a later English statute would still be law in Kenya.
Statutes of general application include public Acts of Parliament, that is, those which apply to the
inhabitants at large and which are not limited in their application to prescribed persons or areas.

The statutes are also applicable in Kenya in the form that they had at the reception date. Any
subsequent amendments of such statutes in England have no effect in Kenya. The only way to alter
such statutes is for the Kenya Parliament to amend these by independent legislation.

(iv) The substances of Common law and Doctrines of Equity

These are only applicable to the Kenyan inhabitants in so far as the circumstances of Kenya permit,
subject to such qualifications as those circumstances may render necessary.

These got incorporated into the Kenyan law under section 3 (1) (c) of the Judicature Act (Chapter 8
Laws of Kenya).

Common law is a branch of England which was developed by the ancient common law courts from
customs usages and practice of the English People. These courts applied the people’s customs to
resolve legal problems thereby giving the customs the effect of law.

It is not the entire common law that is a source of law in Kenya but only the portion which the courts
find compatible with the needs of the people of Kenya.

Equity means “fairness and justice”. The complainants who were dissatisfied with the decisions of
common law turned to the King and petitioned him to do justice to His Subjects and provide them
with an appropriate remedy. At first the king himself attended to the petitions. With increasing
pressure of work, he later handed over these petitions to Lord Chancellor. The Lord Chancellor set up
his own court to chancery where he or his representatives sat and decided the cases. The decisions
of the chancellor were guided with equity or fairness. Consequently, the decisions made by the
chancery came to be known as equity.

Equity developed the so called “maxims of equity”. These Maxims of equity are statements which
embody rules of equity. They are only guidelines. They are not applied strictly in every case.

The maxims of equity include:

1. He who seeks equity must do equity.

2. He who comes to equity must come with clean hands.

3. Equity is equality (Equality is equity).

4. Equity looks to the intent or substance rather than the form.

5. Equity regards as done that which ought to be done.

6. Equity imputes an intent to fulfil an obligation.

7. Equity acts in personam.

8. Equity will not assist a volunteer (Equity favours a purchaser for value without notice).

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9. Equity will not suffer a wrong to be without a remedy (Where there is a wrong there is a
remedy for it).

10. Equity does not act in vain.

11. Delay defeats equity.

12. Equity aids the vigilant and not the indolent.

(v) African Customary Law

This is applicable only on civil cases where one or more of the parties is subject to or affected by it, in
so far as it is applicable and is not repugnant to justice and morality or inconsistent with any other
law. African Customary Law differs from tribe to tribe.

Article 2 (2) states that any law including customary law that is inconsistent with the Constitution is
void...

(vi) Islamic Law

This is a very limited source of law in Kenya. It is applied in Kadhi’s Court when all the parties profess
the Muslim religion, but only as to questions of Muslim law relating to personal status, marriage,
divorce and inheritance issues.

(vii)International Instruments

The constitution under article 2 sub article (5) provides that the general rules of international law
shall form part of the law of Kenya, sub article (6) states that any treaty or convention ratified by
Kenya shall form part of the law of Kenya.

The government is party to a number of international legal instruments and Kenyans can use these
as an additional tool for the advancement of their rights. However, it only becomes enforceable in
Kenya after they have been incorporated into our domestic legal system by implementing legislation.

Examples include Vienna Convention for the protection of Ozone layer, 1985, United Nations
framework Convention for the protection of Ozone Layer, 1985.

COURT SYSTEM IN KENYA

The court system is divided into;

(i) Superior Courts; and

(ii) Subordinate Courts

Superior Courts

The Constitution of Kenya, 2010 under article 162 states that superior courts are;

a) Supreme Court

b) The Court of Appeal

c) The High Court

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(a) Supreme Court (Art 163)

The Supreme Court consists of The Chief Justice, the Deputy Chief Justice and Five other judges.

For the purpose of its proceedings, the Supreme Court is properly constituted if it is composed of five
judges.

Functions

1. Supreme Court has the exclusive original jurisdiction to hear and determine disputes relating
to the elections to the office of President

2. To hear and determine appeals from the Court of Appeal on matters involving the
interpretation or application of the Constitution and matter of general public importance is
involved.

3. Supreme Court may give an advisory opinion at the request of the national government, any
state organ, county government.

4. All courts, other than the Supreme court, are bound by the decisions of the Supreme Court.

5. Supreme Court shall make rules for the exercise of its jurisdiction.

NB: Look at The Supreme Court Act, 2011

(b) The Court of Appeal (Art 164)

The Court of Appeal shall consist of number of judges not fewer than twelve, as prescribed by an Act
of Parliament.

The Court of Appeal has jurisdiction to hear appeals from the High Court and any other court or
tribunal as prescribed by an act of parliament.

NB: Look at The Court of Appeal (Organization and Administration ) Act, 2015

(c) High Court (Art 165)

The High Court consists of a number of judges prescribed by an act of parliament

Functions

1. Unlimited original jurisdiction in criminal and civil matters;

2. Jurisdiction to determine a question whether a right or fundamental freedom in the Bill of

Rights has been denied, violated, infringed or threatened;

3. Jurisdiction to hear appeal from a decision of a tribunal appointed under this Constitution to
consider the removal of a person from office, other than a tribunal appointed for the
removal of President on grounds of incapacity.

4. Jurisdiction to hear any question respecting the interpretation of this constitution including
the determination of-

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(i) The question whether any law is inconsistent with or in contravention of this
Constitution;

(ii) The question whether anything said to be done under the authority of this
Constitution or of any law is inconsistent with or in contravention of this
Constitution;

(iii) A question relating to conflict of laws under article 191of the Constitution

Any matter certified by the court as raising a substantial question of law under function 2 and 4 shall
be heard by an uneven number of judges, being not less than 3 and are assigned by the Chief Justice.

High Court has supervisory jurisdiction over the subordinate courts and the over any person, body or
authority exercising a judicial or quasi-judicial function, but not over a superior court.

The appointment, tenure and removal of the judges are found under article 166, 167 and 168.

NB: Look at The High Court (Organization and Administration), 2015

Subordinate Courts

Subordinate courts include;

(a) The Magistrates courts; Look at The Magistrates’ Courts Act, 2015

(b) The Kadhis’ courts;

(c) The Courts Martial; The Kenya Defence Forces Act, 2012

(d) Any other court or local tribunal as may be established by an Act of parliament.

Kadhis’ Courts (Article 170)

A person is qualified for appointment to the office of Kadhi if the person;

(i) Profess the Muslim religion; and

(ii) Possesses such knowledge of the Muslim law applicable to any sects of Muslims

The jurisdiction of a Kadhis’ court shall be limited to the determination of questions of Muslim law
relating to personal status, marriage, divorce or inheritance in which all the parties profess the
Muslim religion and submit to the jurisdiction of the Kadhi’s Courts.

Look at The Kadhis’ Courts Act Chapter 11.

Courts Martial

The Court Martial hears cases involving people serving in the Military. They are established under the
Armed Forces Act

Tribunals

Tribunals are bodies established by Acts of Parliament to exercise judicial or quasi-judicial functions.
They supplement ordinary courts in the administration of justice. Tribunals, however, do not have
penal jurisdiction.

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Tribunals, like the courts, have to respect the Bill of Rights in their decisions and not be repugnant to
justice and morality or be inconsistent with the Constitution or other laws of the land. Most tribunals
are subject to the supervision of the High Court. All tribunals fall under the Judiciary

DEFINITION AND MEANING OF TORTS

“Tort” is derived from the French word “tortus” which means “twisted”, “wrong” or “crooked”. Torts
are wrongs of a civil nature.

A tort is a civil wrong that can be remedied by awarding damages (other remedies may also be
available). These civil wrongs result in harm to a person or property that forms the basis of a claim by
the injured party. The harm can be physical, emotional.

Examples of torts include; trespass, negligence, nuisance, defamation, occupiers’ liability, vicarious
liability, strict liability.

A tort arises from the breach of a duty that is imposed or fixed by law and it imposes an obligation
upon a person that arises from a legal requirement. The law of tort requires an observation of the
obligation.

1.NEGLIGENCE

Negligence is the omission to do something which a reasonable man guided upon those regulations
which ordinarily regulate the conduct of human affairs would do or do something which a reasonable
and prudent man would not have done.

Elements of Negligence

The tort of negligence consists of three elements which a plaintiff must prove in any action based on
negligence.

1. Legal duty of care

2. Breach of duty

3. Loss or damage

1. Legal Duty of Care

The plaintiff must prove that the defendant owed him a duty of care in the circumstances. The
circumstances must have been such that the defendant knew or ought to have known that acting
negligently would injure the plaintiff.

For example, a road user owes other users a legal duty of care; a manufacturer of products owes
legal duty of care to consumers.

Who owes another a legal duty of care?

As a general rule every person owes his neighbour a legal duty of care.

The neighbour principle was pronounced by Lord Atkin in his ruling in the case of Donoghue v
Stevenson … “the law that you are to love your neighbour becomes in law that you must not injure
your neighbour” Lord Atkin delivered a judgement that would have a lasting impact on society, as
his decision would forever establish that a manufacturer of a product owed a customer a duty of
care.

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LORD ATKIN: ‘...a manufacturer of products, which he sells in such a form as to show that he
intends them to reach the ultimate consumer in the form in which they left him with no
reasonable possibility of intermediate examination, and with the knowledge that the absence of
reasonable care in the preparation or putting up of the products will result in an injury to the
consumer's life or property, owes a duty to the consumer to take that reasonable care.’

the House of Lords held that a manufacturer owed a duty of care to the ultimate consumer of the
product.

A person owes a duty of care to his neighbours. This is the so-called neighbour principal. You must
take reasonable care to avoid acts or omissions which you can reasonably foresee would likely to
injure your neighbour.

Who then in law is my neighbour?

Persons who are so closely and directly affected by my acts that I ought to reasonably have them in
contention as being so affected when am directing my mind to the Acts or omissions which are called
into question.

Whether a person owes another a duty of care will depend on whether such a person could
reasonably have foreseen injuring the other.

Standard of care

As a general rule the standard of care expected of the defendant is that of a reasonable man. This a
man of reasonable prudence (carefulness). This is a person who has minimum information and
knowledge necessary to act reasonably in any situation. Where professionals and experts are
involved the standard of care is that of a reasonably competent professional.

2. Breach of Duty

The plaintiff must prove that the defendant acted negligently thereby breaching his legal duty of
care. The plaintiff must prove specific acts or omissions on the part of the defendant.

However, in certain circumstances negligence is proved without evidence. The cases are referred to
as Res ipsa Loquitor which means that thing or facts speak for themselves. As a general rule, the
burden of proving negligence lies with the plaintiff. He must prove that the defendant owed him a
duty of care, the defendant has breached that duty and that he has suffered damage.

Res ipsa is a rule of evidence and not of law. It merely assists the plaintiff in proving negligence
against the defendant.

Conditions/Requirements of Res Ipsa Loquitor

Before it can be relied upon, three conditions must be satisfied, namely;

(i) The instrument or object inflicting the injury must have been under the control of the
defendant or his servants or his agents.

(ii) The event must be such that it could not have happened without negligence.

(iii) There must be no evidence or explanation as to why or how the event occurred, as the
accident is such as in the ordinary course of things does not happen if those who have the
duty use proper care.

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In Bryne v Boadle

In Scott v London and St. Catherine’s Dock

Effects of Res Ipsa

a) It provides prima facie evidence of negligence on the part of the defendant.

b) It shifts the burden of proof from the plaintiff to the defendant.

3. Loss/ Damage

For the plaintiff to succeed in claim of Negligence, he must prove that he suffered harm, loss or
prejudice, unless this is presumed as in the case of injuria sine damnum (injury without legal
damage). This means an infringement of an absolute private right without any actual loss or damage.
Whenever there is an invasion of legal right, the person in whom the right is vested is entitled to
bring an action and may recover damages, although he has suffered no actual harm.in such a case,
the person need not prove the actual damage caused to him. Read the case of Ashby v White 1703

The defendant is reasonably liable for any loss which is reasonably foreseeable from his acts or
omissions. This was held in the case of The Wagon Mound II

Questions have arisen as to what losses the defendant must have foreseen and courts have taken the
view that as long as some loss is foreseeable the defendant is liable for any loss. See the case of
Bradford v Robinsons Rental Co. Ltd

Defences to Negligence

1. Contributory Negligence

This defence is available in circumstances in which the plaintiff is also to blame for the loss or injury.
The defendant must prove that;

 The plaintiff exposed himself to danger.

 The plaintiff was at fault or negligent.

 The plaintiff’s fault or negligence contributed to his suffering.

The effect of this contribution is that it reduces the amount of damages recoverable by the plaintiff
by the extent of his contribution. Liability is apportioned between the parties.

Contributory negligence does not apply in case of children and they can recover full damages even in
the case of their contributory negligence.

2. Voluntary Assumption of risk (volenti non fit injuria)

This defence is available in circumstances where the plaintiff with full knowledge of the risk
voluntarily agrees to undertake the same. The defendant must prove;

 That the plaintiff had actual knowledge of nature and extent of the risk.

 That the plaintiff agreed to incur the risk voluntarily.

Dann v Hamilton

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Tugwell v Bunnet

3. Statutory Authority

The defendant must prove in this defence that he acted in accordance within the provisions of the
statutes.

If the conduct complained of by the plaintiff is authorized by statute and the defendant has acted in
accordance with the provision of the statute the defendant has a complete defence to the plaintiff’s
action.

However, whether or not the defence is a complete defence, depends on the interpretation of the
statute.

2. VICARIOUS LIABILITY

Vicarious liability signifies liabilities which A (employer) may incur to C (client) for damage caused to
C (client) by the negligence or other tort of B (employee).

It is not necessary that A should not have participated in any way in the commission of the tort nor
that a day owed in Law by A to C shall have been broken. What is required is that A should stand in
particular relationship to B and that B’s tort should be referable in a certain manner to that relation.
The commonest instance in Law is the liability of a master for the torts of his servants.

Contract of Service

Vicarious liability generally arises from a contract of service (“servant”). Under contract of service,
servants act under the supervision of the master. This means a master is liable for the wrongful act
committed by his servants. Employer and employee relationship exists between master and servant.

It is important to determine the indications of a contract of service.

In an often-cited statement in Short v. J & W Henderson Ltd Lord Thankkerton said that there are four
indications of a contract of service;

a) The master’s power of selection of his servant.

b) The payment of wages or other remuneration.

c) The master’s right to control the method of doing the work, and

d) The master’s right of suspension.

This list has been found helpful in determining whether a master-servant relationship exists but it is
not conclusive. It is not possible to compile an exhaustive list of all the relevant considerations.

Independent Contractor

An independent contractor is one who contracts to perform a certain task or duty independently
according to their own means and methods without being subject to the control of the hiring party.
This means that unlike an employee, an independent contractor is not subject to the employer’s
supervision, direction or control.

An example is visiting consultants and surgeons are not employees of the hospital and thus the
hospital is not liable. This means that the employer is generally not liable for torts committed by an
independent contractor.

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Guidelines in Determining whether an Act was committed during the Course of Employment
(Assignment)

1. Look at the mode the servant is employed to do

In Century Insurance C v. Northern Ireland Road Transport Board, one of the respondent’s employees
was delivering petrol to garage. While the petrol was flowing from the lorry to the tank, he lit a
cigarette and negligence threw away the lighted match which caused an explosion damages the
appellant’s property. The action of the employee was treated as being within the course of
employment. On appeal it was held that the respondents were liable for the damage caused for such
an action, whilst for the comfort and convenience of the employee could not be treated as isolated
act as it was a negligent method of conducting his work.

In Bayley v. Manchester Sheffield and Lincolnshire Railway the plaintiff was in a train traveling to
Macclesfield and he explained this to the mistakenly believed that the plaintiff was the wrong train
(that train was not traveling to Macclesfield) and violently ejected the plaintiff who suffered injuries.
Held: The defendants were liable because the porter was acting within the cause of employment.

2. Whether the act was authorized within the limits of time and space e.g if one is employed
to work between 8.00 am and 5.00pm, the master is only liable for the torts committed
within that time frame.

Ruddiman & Company v. Smith, the plaintiff was using the lower room of the defendant’s house
while the defendant used the upper room for carrying on business. In the upper room there was a
lavatory. The clerk, after duty, went to the lavatory to wash his hands but on turning on the tap and
finding no water, went away without turning the tap off. When water turned on the morning, it
overflew into the lower room and damaged the plaintiff goods. Held: The employer was liable for
whether or not the use of the lavatory. Within the scope of the clerk’s employment, it was an event
incidental to his employment.

In Storey v. Aston, the defendant, a wine merchant, sent his car man and clerk to deliver wine and
pick up empty bottles. On their way back, they diverted to visit the clerks house in the course of
which they negligently knocked down the plaintiff and injure him. Held: The defendant was not liable
for the injury caused by the negligent driving of the car man for he was, that time, engaged in a new
and completely unauthorized journey

3. Whether the act was the initiative of the servant or the master had a certain control

In Warren v. Henlys Ltd, erroneously believing that the plaintiff had to drive away from the garage
without paying or surrendering coupons for petrol which had been put in the tank of his car, a petrol
pump attendant used violent language to him. The plaintiff paid his bill and gave the necessary
coupons and after calling the police, told the attendant that he would report him to his employers.
The pump attendant then assaulted and injured him. In an action for personal injuries against his
employers. It was held that the defendants were not liable for the wrongful act of their employee.
Since the act was one of the personal vengeances and was not done in the course of employment; it
not is an act of a class which the employee was authorized to do or a mode of doing an act within
that class.

In Poland v. John Parr and Sons, Arthur Hall, a carter was employed by John Parr. Parr and his son
were conveying a wagon with bags of sugar. Arthur, on his way home for dinner was walking else to
the wagon. The plaintiff, a schoolboy, was walking home in the same direction with his hand upon
one of the bags of sugar. Honestly and reasonably thinking that the boy was stealing, Arthur gave him

15
a blow on the back of his neck as a result whereof he fell and the wheel of the wagon injured his foot
which was amputated. Held: In the circumstances, the carter had implied authority to make
reasonable efforts to protect and preserve the defendants property; that the violence exerted was
not so excessive as to take his act outside the scope of authority and that the defendant were liable.

4. Where there is an express prohibition.

An express prohibition does not negate liability i.e a master does not escape liability simply because
he had an express prohibition. For liability to be determined, two factors are considered;

(i) Whether the prohibition limits the sphere of employment. If it does, the master is not liable
for an act done outside the sphere. (Sphere).

(ii) Where the prohibition deals with the contract within the sphere of employment. If it does,
the employer will be liable. (Mode).

In Canadian Pacific Railway Co v. Lockhart a servant of the appellant Company in disregard of written
notices prohibiting employers from using private cars for the purpose of the company’s business
unless adequately insured, used his uninsured motorcar as a means of execution of work which he
was ordinarily employed to do in the course of which he injured the respondent. Held: The means of
transport was incidental to the execution of work, which the servant was employed to do and that
the prohibitions of the use of an uninsured motorcar merely limited the mode of executing the work,
breach of the prohibition did not exclude the liability of the company to the respondent.

In Rand v. Craig, Carters were employed by a contractor to take rubbish from certain works to his
dump and were strictly forbidden not to hip it anywhere else. Some of the carters, without
knowledge of the contractors, and in contravention of their orders took the rubbish to a piece of
unfenced land belonging to the plaintiff as it was nearer the works that the dump of contractor. Held:
The illegal acts complained of where not within the sphere of the carter’s employment and
consequently the contractor was not liable for them.

5. Whether the act was a deliberate criminal act.

In Lloyd-v-Grace Smith & Co., the plaintiff had sought advice from the defendants, a firm of solicitors,
whose managing clerk conducted conveyance work without supervision. He advised the plaintiff to
sell some property, fraudulently persuading her to sign certain documents that transferred the
property to him. He disposed of it and kept the proceeds. Held: Even though the fraud had not been
committed for the benefit of the employers, nevertheless they were liable, for the clerk had been
placed in position to carry over such work and had acted throughout in the course of his
employment.

3.DEFAMATION

Defamation is the publication of a statement which reflects on a person’s reputation and tends to
lower him in the estimation of right-thinking members of the society generally or tends to make
them shun or avoid him.

Defamation is something defined simply as the publication of a statement which tends to bring a
person “into hatred, contempt or ridicule”; but this is not quite exact for a statement may possibly be
defamatory even if it does not excite in reasonable people feelings quite so strong as hatred,
contempt or ridicule and the definition is defective in omitting any reference to the alternative of
tending to shun or avoid him.

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Essentials of Defamation

The following essentials of defamation must be proved by the plaintiff;

i. The words must be defamatory

ii. They must refer to the plaintiff

iii. They must be maliciously published

(i) The Words must be Defamatory

A defamatory statement is one which has a tendency to injure the reputation of the person to which
it refers. The statement is judged by the standards of the ordinary right-thinking members of the
society and the test is an objective one.

It is no defence to say that the statement was not intended to be defamatory, a tendency to injure or
lower the reputation of the plaintiff is enough and a statement may be defamatory although no one
to whom it is published believes it to be true.

Abuse

Mere insult or vulgar abuse does not amount to defamation. The manner in which the words were
spoken and the meaning attributed to them by the hearers is however important in determining
whether the words are defamatory. In Penfold v West Cote (1806)

The speaker of words must thus take the risk of his hearers construing them as defamatory and not
simply abusive and the burden is upon him to show that a reasonable man would not have
understood them as defamatory.

Interpretation

In interpreting a defamatory statement, the meaning attached to it is not necessarily the meaning
with which the defendant published it but that which is or may be reasonably given by the person to
whom it is published.

The fact that the defendant did not intend to lower the reputation of the plaintiff is immaterial. So
long as the statement has a defamatory meaning to those whom he makes it. On the other hand, a
defamatory purpose will not render the defendant liable if the statement has no defamatory
significance to those it is published.

A statement is prima facie defamatory when its natural, obvious and primary meaning is defamatory.
Such a statement is actionable unless its defamatory significance is explained away successfully. The
burden of such an explanation rest upon the defendant.

Innuendo

The words which the plaintiff complains may be defamatory in the light of facts and circumstances
known to persons to whom they were published. An innuendo may thus make words, which are not
otherwise defamatory in the natural and ordinary meaning, to be defamatory. The burden is on the
plaintiff to prove the meaning, which he understood by persons having knowledge of particular facts.

In Tolley v Fry and Sons Ltd (1931)

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Knowledge of the innuendo by the defendant is immaterial and the defendant is nevertheless liable
for a statement he believes to be innocent but it is in fact defamatory by reason of facts unknown to
him but known to the persons to whom he makes it.

In Cassidy v Daily Mirror Newspaper Ltd (1929)

(ii) The Words must Refer to Plaintiff

The defamatory statement must be shown to refer to the plaintiff. A court has power to dismiss an
action on the ground that no reasonable person could conclude that the plaintiff should be identified
with the person mentioned in the statement complained as a defamatory.

If the plaintiff is mentioned by name, there is usually no difficulty. It is however sufficient in such a
case the statement was understood, even by one person, to refer to the plaintiff, even though it
remained hidden to all others.

The question is not whether the defendant intended to refer to the plaintiff but is whether any
person to whom the statement was published might reasonably think that the plaintiff was referred
to. In Hulton v Jones (1910)

In Newstead v. London Express Newspapers Ltd

Defamation of a Class

A problem arises where a defamatory statement referred to a class to which the plaintiff belongs.
The test is the same i.e would a sensible ordinary person identify the plaintiff as the person
defamed? In Eastwood v Homes

The question of whether an individual can sue in respect of words, which are directed against a
group or body or class of persons generally, was considered by the House of Lords in Knuppfer v
London Express Newspaper Ltd (1944) and the law may also be summarized as follows:

1. The question is whether the words are published ‘of the plaintiff’ in the sense that he can be
said to be personally pointed at

2. Normally where the defamatory statements are directed to a class of people no individual
belonging to the class is entitled to say that words were spoken of him. As per Lord Porter,
‘no doubt it is true to say that a class cannot be defamed as a class, nor can an individual be
defamed by a general reference to the class to which he belongs’.

3. Words which appear to apply to a class may be actionable if there is something in the words
or the circumstances under which they were published which indicates a particular plaintiff
or plaintiffs.

4. If the reference is to a limited class or group e.g trustees, members of a firm, tenants of a
particular building etc so that the words can be said to refer to each member, all will be able
to sue.

5. Whether there is any evidence on which the words can be regarded as capable of referring
to the plaintiff is a question of law for the judge. If there is such evidence then it is a question
of fact whether the words lead reasonable people who know the plaintiff to the conclusion
that they do refer to him.

Anson v Stuart

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(iii) The Words must be Maliciously Published

Publication is communication of words to at least one person other than the person defamed.

Communication to the plaintiff himself is not enough for defamation constitutes injury to one’s
reputation and reputation is what other people think of a man, not his own opinion of himself.

Communication between spouses about a third party is not publication. This is explained by the
fiction of unity between husband and wife. A communication by a third party to one spouse about
the other is however publication.

By dictating a defamatory letter to his secretary, an employer commits slander. If the secretary reads
it back to him or hands over the typed copy, she is not making fresh publication.

A statement not heard by the recipient because he is deaf or he does not understand the language is
not threatened as having been published nor is a person liable if a 3rd party on his own initiative
hears or sees the defamatory matter.

However, he will be liable for the statement which he intended a 3rd party to know or should have
foreseen might come to his attention.

Huth v Huth

The burden of proof of publication is on the plaintiff but in many circumstances this burden is
easened by certain rebuttable presumption of fact e.g open postcard or a telegram message is
deemed to have been published to those who would, in the ordinary course of transmission,
normally see it. Spoken words are deemed to have been published to people within earshot.

Repetition of a Statement

One who repeats a defamatory statement made by another person is liable for the repetition and
this constitutes a fresh publication even though the person does not know that the statement is
defamatory.

However, the original maker of the statement is liable for such re-publication if he has authorized it
or if it seems reasonably foreseeable.

Eglantine Inn v Smith

Vizentally v Mudle’s Select library Ltd

The tort of defamation is of 2 kinds:

1. Libel

2. Slander

Differences between Slander and Libel

Libel the defamatory statement is made in some permanent form such as writing , printing and
pictures.

Slander the statement is made in spoken words or in some other transient form whether visible or
audible such as gestures or inarticulate but significant sounds.

It has been stated that slander is addressed to the ear while libel is addressed to the eye. This
distinction is however not accurate because slander can be addressed to the eye as in the case of

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defamatory gestures whereas libel can addressed to the ear as in the case of Youssoupoff v M.G.M
Picture Ltd where Slesser L.J stated that: “There can be no doubt that so far as the photographic part
of the exhibition is concerned, that is a permanent matter to be seen by the eye, and is proper
subject of an action eye, and is the proper subject of an action for libel”.

Thus the ‘talking’ film, though generally addressed to the ear, was in permanent form thus making it
a libel.

DEFENCES OF DEFAMATION (Assignment)

1. Unintentional Defamation

Under common law, the fact that the maker of a statement was unaware of the circumstances
making it defamatory did not absolve him from liability. The Defamation Act seeks to redress this
situation by enabling the defendant to make an “offer of amends” for the innocent defamation.
(section 13)

Read Section 13 of Defamation Act.

Under the Act, words shall be treated as innocently published in relation to another person if and
only if:

1) The publisher did not intend to publish them of and concerning that other person, and did
not know of circumstances by virtue of which they might be understood to refer to him; or

2) The words were not defamatory on the face of them, and the publisher did not know of
circumstances by virtue of which they might be understood to be defamatory of that person,
in either case, the publisher has exercised all necessary care in relation to the publication.

The Defamation Act provides further that an offer;

a) In any case to publish or join in the publication a suitable correction and apology;

b) Where copies of a document or record containing the words have been distributed by or
with the knowledge of the person making the offer, to take such steps as are reasonably
practicable on his part to notifying persons to whom copies have been so distributed that the
words are alleged to be defamatory of the party aggrieved.

If the offer of amends is acceptable by the party aggrieved, and duly performed, no proceedings for
Libel or Slander may be taken or continued by that party making the offer in respect of the
publication in question.

If the offer of amends is not accepted by the party aggrieved, then it is a defence in any proceedings
by him for the Libel or Slander to prove that:

a) The words were published innocently in relation to the plaintiff

b) The offer was made as soon as it practicable after the defendant received notice that they were or
might be defamatory to the plaintiff; and

c) The words were published without malice.

2. Consent and assumption of risk

If the plaintiff expressly or impliedly assents to the publication of the matter which is true on the face
of it, the defendant is not liable; and this is so even if it appears that some persons may interpret the

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statement in a sense much more prejudicial to the plaintiff that is warranted by the plain meaning of
the words.

In Cookson v. Harewood, Scrutton L.J said

“If you get a true statement and an authority to publish the true statement, it does not matter in the
least what people will understand it to mean.”

The defence of consent has been regarded as an instance of voluntary assumption of risk (volenti
non fit injuria). This defence was upheld in Chapman v. Elsemele where the plaintiff by being a
member of the Jockey Club was deemed to have consented to publication of a report in the Jockeys
Journal.

3. Justification or truth

The plaintiff does not have to prove that the statement complained of was false. On the contrary the
burden is on the defendant to prove that the statement was true.

Truth is a defence because the law will not permit a person to recover damages in respect of any
injury to a character, which he either does not have or ought not to possess. The defendant must
establish the truth of the precise charge that has been made which is ultimately a matter of
interpretation of the facts.

In Wakley v. Cooke, the defendant called the plaintiff a ‘Libelous Journalist.’ He proved that the
plaintiff had been found liable for Libel once. The court took the view that these words did not mean
that the plaintiff was held liable on one occasion but mean that the Journalist habitually libelled
people. The defence of truth accordingly failed.

The defendant must justify the statement by showing that it was substantially accurate. The standard
of proof for jurisdiction is the normal civil one of balance of probabilities, but as is other civil cases,
the seriousness of the defendant’s allegation may be taken into account in determining whether he
has discharged that burden.

The defence will not fail if the truth of several charges is not established provided that having regard
of the truth of the remaining charges, the charge not proved does not materially injure the plaintiff’s
reputation.

In Alexander v. North Eastern Railway, the defendant published a statement that the plaintiff had
been sentenced to a fine of 1 to 3 weeks imprisonment. They justified this by proving that he had
actually been sentenced to a fine of 1 or 2 weeks imprisonment. The statement was held to be
substantially true.

One difference between the defence of justification and the defences of fair comment and qualified
privilege is that even malice on the part of the defendants does not deprive him of the defence of
justification.

The defence of justification is a dangerous defence if the defendant fails to prove the truth of the
statement, he has made he may end up paying aggravated damages as insisting that a statement is
true without proving amounts of fresh publication hence fresh defamation.

In Broadway Approvals Ltd v. Odhams press Ltd, per Davis L.J; “A plea of justifications should not, of
course be made unless the defendant has evidence of the truth of the statement.”

Read Section 14 of Defamation Act.

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4. Fair Comment

This defence stems from the belief that honest and fair criticism is indispensable in every freedom
loving society. The law weighs the interest of the plaintiff against the freedom of speech and it is for
the judge to rule whether any comment was called for in particular situation and to say whether the
statements are of facts or opinions, and if they are opinions, whether they are honest and fair.

The Requirements of this Defence are as follows;

a) Public Interest

The matter commented on must be of public interest. In London Artist Ltd v. Litler per Lord Denning
M.R

“Whenever a matter is such as to affect people at large so that they may be legitimately interested in
or concerned at what is going on or what may happen to them or to others than it is a matter of
public interest on which everyone is entitled to make fair comments. The reference to people at large
should not be taken to suggest that if the statement complained of refers to one person or a few
persons, it can never be of public interest.”

Matters of government, National and Local Management of public and religious institutions, the
conduct of foreign policy and even the behaviour of holders of public office are matters of public
interest.

b) The Comment must be an opinion on true matters

Fair comment is available only in respect of expression of opinion. In fair comment it is not necessary
to prove the truth of the comment, but that the opinion was honestly held. The defence of fair
comment only lies on facts which are proved to be true, and on statements of facts not proved to be
true but which were made on the privileged occasion. The comment itself need not be true, though.
It must be honestly made, but the facts upon which the comment itself need not be true unless they
are privileged. If the facts are untrue, the defendant will not succeed in fair comment merely by
proving that his comment is honestly made.

In Merivale v. Carson, it was held that a defendant who implied that a play was adulterous could not
rely on this as a fair comment where the court found as a fact that adultery was not dealt with in the
play.

Sometimes it is difficult to differentiate a statement of facts and a comment e.g. a statement that x
was drunk last night and his behaviour was disgraceful – such a statement is of opinion. If X’s
behaviour after drinking was in fact disgraceful, then it is a statement of fact. If, however, the second
statement is a statement of opinion, then it is the subject of a fair comment. Every statement must
be taken on its merits. The same words may be a statement of facts or an opinion depending on the
context. To say that “A is a disgrace of human nature” is an allegation of fact. But to say “Y murdered
his father and is therefore a disgrace to human nature,” the latter words are plainly a comment on
the former.

c) The Comment must be fair

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The comment must be honest and not actuated by malice. For comment to be fair it must first be
based upon true facts in existence when the comment was made. One cannot invent untrue facts
about another then comment on them. The fair comment may however be based on an untrue
statement which is made by some people upon a privileged occasion e.g., a statement of a witness in
the course of judicial proceedings, and properly attributed to him. The comment held should
however be based on the untrue statement of another person, not the person making the comment.

In assessing fairness, it is important that the defendant honestly holds is opinion. It is not for the
court to substitute its own judgment as to what is fair.

The test given by Lord Esher M.R. in Merivale v. Carson was:

“Would any fair man, however prejudiced he may be, however exaggerated or obstinate his views,
have said that which this criticism said of the work which is criticized.”

d) Absence of malice

The defence will be defeated by proof of malice, which here means, “evil motive or spite.” In Thomas
v. Bradbury, Agnew & co Ltd, the court of appeal held that a book reviewer for punch magazine was
hostilely motivated against the plaintiff’s books facts which are evident not only by the review he
wrote but also by his behaviour in the witness box. His behaviour displayed malice which negated
the plea of fair comment.

Read section 15

5. Privilege

There are two categories of privilege:

1. Absolute privilege

2. Qualified privilege

1. Absolute privilege

A privileged statement may be defined as one which is made in such circumstances as to exempt one
from the rule that a person attacks the reputation of another at his own risk.

A statement is said to be absolutely privileged when it is of such a nature that no action will lie for it,
however false or defamatory it may be and even though it is made maliciously. The defence is
available in the following cases:

a) Any statement made in the course of and with reference of judicial proceedings by any
judge, jury, party, witness or advocate.

b) Fair and accurate report in any newspaper of proceedings heard before any court.

c) Any statement made in parliament by a member of parliament.

d) Reports, papers, votes and proceedings published by the order and / or under the authority
of the National Assembly.

e) Communication made by one officer of state to another in the course of his official duty.

f) Communication between an advocate and his client in connection with litigation.

g) Communication between husband and wife.

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2. Qualified privilege

It is limited in scope. When an occasion of qualified privilege exists, a person, provided he is not
actuated by malice is entitled to make defamatory statements about another. Like absolute privilege,
here the right of freedom of speech prevails over the right of reputation but only to a limited extent.
The statement must be made honestly and without any indirect or improper motives.

Qualified privilege is thus an intermediate case between absolute privileges but only to a limited
extent. The statement must be made honestly and without any indirect or improper motives.
Qualified privilege is thus an intermediate case between absolute privilege and absence of privilege.

The general principle is that the statement is protected if it is fairly made by a person in the discharge
of some public or private duty whether legal or moral or in the conduct of his own affairs in maters
where his interest is concerned.

No complete list of such occasion is possible but it is generally agreed that the main instances are:

a) Statements made in the performance of a duty;

A statement is conditionally privileged if this is made in the performance of any legal, social or moral
duty, imposed upon the person making it.

The privilege is that of the publisher, the person to whom the statement is published needs no
privilege because he commits no tort. Never the less it is essential that the person to whom the
statement is made has a corresponding interest or duty to receive it. This is not to say that both
parties must have a duty or both an interest; one may have an interest and the other a duty.

The duty need not be the one enforceable by law, it is sufficient that by the moral standards of right
conduct prevalent in the community, the defendant lay under an obligation to say what he did. It is
not enough that he believed himself to be under such duty / obligation; it is for the judge to decide
whether on facts such a duty existed.

A father or a near relative may warn a lady as to the character of the man whom she proposes to
marry (Todd v. Hawkins). In Watt v. Longsdon, the defendant, a company director, informed the
chairman of the board of directors of his suspicion that the plaintiff, an employee of the company,
was misbehaving with women. He also informed the plaintiff’s wife. Held: That the communication
to the Chairman was privileged but not to the wife for although she had an interest in hearing about
the allegation, the defendant had no moral or social duty to inform her.

b) Statements made in protection of an interest

Even when there is no duty to make the statement, it is nevertheless privileged if it is made in the
protection of some lawful interest of the person making it, e.g. if it is made in the defence of his own
property or reputation but here also there must be a reciprocity i.e. there must be an interest to be
protected on one side and a duty to protect that interest on the other.

In Adam v. Ward, the plaintiff made a complaint in the House of Commons against the General
Scobell containing charges of a wounding character. The General Scobell, as he was compelled to do
by regulations referred the matter to the Army council which after investigations found that the
attack was unjustifiable. The army council ordered the defendant to publish in the newspaper a letter
to the General Scobell vindicating him and also containing statements defamatory of the plaintiff.
The plaintiff sued. Held: The occasion of publication was privileged and that the privilege was not
destroyed either by the number of people whom the publication might reach or by reason of the fact

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that the publication contained matter defamatory of the plaintiff had publicity attacked the character
of the defendant.

In Osborn v. Boutler, where some brewers answered a complaint by a publican of the poor quality of
their beer by voicing a suspicion that the publican had watered the beer, it was held that the latter
publication was covered by privilege.

The same principle is applicable even when the interest of the defendant is merely the general
interest which he possesses in common with all others in the honest and efficient exercise of public
officials of duties entrusted to them. Thus, any member of public may make charges of misconduct
against any public servant and the communication may be privileged, but the charge must be made
to the proper person, i.e., those who have a corresponding interest. A communication to the wrong
person e.g., a publication to the world at large in a newspaper or otherwise is an excess of privilege
and the privilege will thereby be lost.

c) Fair and accurate reports of parliamentary proceedings

This qualified privilege protects the advantage of publicity against any private injury resulting from
the publication. It is not limited to newspaper reports and covers other reports e.g. Broadcast
reports. In order to qualify as fair and accurate the report does not have to be a full précis of the
debate; a ‘parliamentary sketch’ may properly select those portions of the debate, which will be of
public interest. What matters is whether the report is fair and accurate in so far as the debate
concerned the plaintiff’s reputation.

d) Communication between advocate and client

This is covered by both qualified and absolute privilege. Professional communication between an
advocate and client in connection with litigation is absolutely privileged as was held in More v.
Weaver. Other communications which have nothing to do with litigation e.g. the drawing of a client’s
will are covered by qualified privilege. The general restriction is that the communication has to be a
professional one for it to be privileged and also that the relationship of advocate – client must be
proved. What passes between and advocate and a client if the relationship has been established is
privileged if, within a very wide and generous ambit of interpretation, it is fairly referable to the
relationship, or, put in another way, per Lord Atkin in Minter v. Priest.; “If it consists of personal
communications passing for the purpose of getting or giving professional advice.” This would exclude
a piece of gossip intersected by the client in a conversation on, say, land registration e.g. “have you
heard that Jones has run off with Mrs. Brown?”

STRICT LIABILITY

Anyone who in the course of non-natural use of his land, accumulates thereon for his own purposes
anything likely to do mischief if it escapes is answerable for all direct damage thereby caused.

This is the rule in Rylands v Fletcher (1866) where the defendant employed independent contractors
to construct a water reservoir on the land, which was separated from the plaintiff’s land by adjoining
land. In the course the works the contractors came upon some old shafts and passages filled with
earth. The contractors did not block them up. Unknown to them, the shafts connected their land
with the plaintiff’s mines. When the water filled the reservoir, it seeped through the old shafts and
into the plaintiff’s mines thence flooding them. It was found as a fact that the defendant was not
negligent, although the contractors had been. However, although the defendant was neither
negligent nor vicariously liable in tort of his independent contractors, he was held liable by the Court

25
of Exchequer chamber as delivered by Blackburn J at p. 279-280 and it has become a classical
exposition of doctrine.

“We think that the true law is, that the person who for his own purpose brings on his land and
collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if
he does not do so, is prima facie answerable for all the damage which is the natural consequences of
its escape.”

This may be regarded as the rule in Rylands v Fletcher

The court further said “He can excuse himself by showing that the escape was owing to the plaintiff’s
default; or the act of God: It is unnecessary to inquire what excuse would be sufficient”

The general rule, as above stated, seems to be just in principle. “The person whose grass or corn is
eaten down by the escaping cattle of his neighbour, or whose mine is flooded by the water from the
neighbour’s reservoir, whose cellar is invaded by filth of his neighbours or whose habitation is made
unhealthy by the fumes and noise and vapours of his neighbours alkali works, is damnified without
any fault of his own; and it seems reasonable and just that the neighbour, who has brought
something on his own property which was naturally there harmless to others so long as it is
confirmed to his own property, but which he knows to be mischievous if it gets on his neighbours
should be obliged to make good the damage which ensues if he does not succeed in confining it to
his property. But for his act in bringing, it there no mischief could have accrued, and it seems but just
that he should at his peril keep it there so that no mischief may accrue, or answer for the natural and
anticipated consequences and upon authority, this we think is established to be the law whether the
things so brought be beasts, or water, or filth, or stenches.” Lord Cairns in the House of Lords upheld
this judgment but restricted the scope of the rule to where the defendant made a “non-natural use”
of the Land.

This decision makes it clear that liability was strict in the sense that the defendant’s liability was
neither personal nor based on a mere vicarious liability for the negligence of his independent
contractors.

Requirements Of the Rule in Strict Liability (Rylands V Fletcher)

(i) The Thing

The rule does not require that the thing should both likely to escape and likely to do mischief on
escaping. If this were the case, there would be little difference between the rule in Rule in Rylands v
Fletcher and negligence. Furthermore, in Rylands v Fletcher, the thing need not be dangerous in
itself. The most harmless objects may cause damage on escape from a person land.

The rule has been applied to a large number of objects including water, gas, electricity, explosives,
oil, vibrations, poisonous leaves of trees, a flag post, a revolving chair at a fair ground, acid smuts
from a factory, a car, fire and even at one time gypsies.

In Musgrove v. Pandelis, the court applied Blackburn J’s test literally where the collected thing did
not itself escape but caused the escape of something else. In this case, the defendant was held liable
under Rylands v. Fletcher for the escape of a fire which started in the engine of his car was found to
be an object likely to do mischief if it escaped.

The artificiality of this approach was however rejected in Mason v. Levy Auto parts in relation to a fire
which began in wooden packing cases stored in the defendant’s land. The test applied was whether

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the objects were likely to catch fire and the fire spread outside the defendant’s premises. The liability
was a strict one if this occurred.

In A.G. v. Corke a landowner was held liable under Rylands v. Fletcher for permitting the camping on
his land of gypsies (caravan-dwellers) who trespassed and committed damage on the neighbouring
land. This case was however received general disapproval in applying the rule in Rylands v. Fletcher
to human beings. The objection has been that ‘things’ does not include human beings and that
liability in the above case should have been based on nuisance or negligence.

(ii) Accumulation

The thing must be brought into the land for the defendant’s purposes. The defendant need not own
the land into which the thing is brought. A temporary occupier of land such as a lessee or a person
physically present on the land but not in legal occupation of it such as a licensee is equally within the
scope of the rule and is liable for damage caused upon escape of a thing he has brought onto the
land.

In Charing Cross Electricity Supply Co-v- Hydraulic Power Company, the rule applied to one who had
the statutory power to lay electricity cables under the highway. In Rigby v. Chief Constable of North
Amptonshire, the court stated that the rule applied to cases where the defendant was in no sense in
occupation of the land; in this case by firing a canister of gas into the plaintiffs.

The requirement that the thing should be on the land for the purpose of the defendant does not
mean that it must benefit the defendant.

In Smeaton v. Ilford Corporation, it was stated that a local authority which was under a statutory duty
to collect sewage collected it for its own purposes within the rule in Rylands v. Fletcher. Where the
thing is naturally present on the defendant cannot be liable for its escape under Rylands-v-Fletcher.
The escape of weeds, rocks and floodwater is thus outside the scope of the rule but recent decisions
have established possibility of can action in nuisance for such escape.

The accumulation must thus be voluntary.

(iii) Non-natural user of land

This is the most flexible and elusive ingredient of liability. Blackburn J. understood ‘natural’ to mean
things naturally on the land and not artificially created. However, uncertainty crept as a result of Lord
Cairns qualification that must be ‘a non-natural user’ of the land.

Through a series of cases, courts have come to look upon ‘natural’ as signifying something which is
ordinary and usual even though it might be artificially instead of non-artificial.

Non-natural use of land was explained by the Privy Council in Richard v. Lothian as per Lord Moulton.
‘It must be some special use bringing with it increased danger to others and must not merely be the
ordinary use of the land or such a use as is proper for the general benefit of the community.’

What is natural is now viewed differently in different cases.

Non-natural use of land is generally constituted by certain activities as the storage on the land in bulk
of water, electricity, gas and the collection of sewage by local authorities.

It is however, arguable that many of the above examples should be held to be natural use according
to the Privy Council’s definitions as being for the general benefit of the community. In British
Celenese Ltd v. A.H. Hunt Ltd, it was held that the benefit derived by the community from the

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manufacturing of electrical and electronic components made the use of land for such purpose and
the storing of strips of metal foil thereon a natural use of the land. It is thus to be noted that the
scope of ‘non-natural user’ of land has narrowed over the years. The decision will now depend on
the facts of each case. It has been held that generating steam or electricity is not ‘non-natural’ but
that storing of industrial water under pressure, or gas and electricity in bulk is a non-natural use.

(iv) Escape

There is no liability under the rule unless there is an escape of the substance from the land where it
is kept. In Read-v-Lynns & co Ltd. the defendants operated on ammunition factory as agents of the
Ministry of Supply. The plaintiff was an appointed inspector for the ministry. In the course of carrying
out her duties in the factory, an explosion occurred causing her injuries. She based her claim against
the defendants on Rylands-v-Fletcher making no assertion that the defendants had been negligent. It
was held that Rylands-v- Fletcher was inapplicable because there had been no escape of the thing
that inflicted the injury. The House of Lords defined escape as:

“Escape from a place where the defendant had occupation and control over land to a place which is
outside his occupation or control.”

It was stated further in this case that Rylands-v-Fletcher is conditioned by 2 elements;

a) The condition of escape from the land of something likely to do mischief if it escaped.

b) The condition of non-natural user of the land.

The House of Lords emphasized that the absence of an escape was the basis of their decision in this
case

(v) Damage

Rylands –v-Fletcher is not actionable per se and therefore there must be proof of actual damage. This
appears to mean actual damage to person or property and it excludes a mere interference with the
plaintiff’s enjoyment of this land, such as would be a ground in an action in nuisance. Damages
recoverable under the rule is limited to damage to person or property.

In Hale-v-Jennings Bros, the court held that an occupier of land was entitled to damages for personal
injury under the Rule in Rylands-v-Fletcher. In Cattle-v-Stocker Waterworks co, it was held that purely
economic loss was not recoverable.

Defences To the Rule in Rylands V Fletcher

(i) Consent of Plaintiff

If the plaintiff has permitted the defendant to accumulate the thing the escape of is complained of,
then he cannot sue if it escapes.

Implied consent will also be a defence; thus, a person becoming a tenant of business or domestic
premises that the time when the condition of the adjoining premises occupied by the landlord is
such that the happening of the Ryland v. Fletcher type is likely to ensue, is deemed to have
consented to take the risk of such an event occurring.

In Kiddle-v-City Business Properties Ltd, the plaintiff became a tenant of the defendant in a house
below the house occupied by the defendant (Landlord). The gutter of the Landlord’s house was
blocked and when it rained, an overflow of rainwater from the blocked gutter at the bottom of the

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sloping roof in possession of the Landlord and above the tenant’s premises damaged the stock in the
tenant’s premises. It was held that the Landlord had a defence as the tenant impliedly consented to
the risk of rainwater overflowing into his premises.

If the accumulation benefits both the plaintiff and the defendant, the plaintiff may be deemed to
have consented to its accumulation e.g. where for the benefit of several occupants’ rainwater is
accumulated on the roof or a water closet installed or water pipes fitted, the several occupants are
deemed to have consented. On the other hand, the defence is not available as between a
commercial supplier of gas in respect of gas mains under the highway. In any event an occupier will
not be presumed to have consented to installations being left in a dangerously unsafe state.

(ii) Contributory Negligence

If the damage is caused solely by the act or default of the plaintiff himself or where the plaintiff is
contributorily negligent, he has no remedy.

If for instance a person knows that there is danger of his mine being flooded by his neighbours
operations on adjacent lands and courts the danger of doing some act which renders the flooding
probable, he cannot complain, as stated in Miles-v-Forest Rock Granite Co.Ltd.

In Dunn v. Birmingham Canal & Co, where the plaintiff worked a mine under the canal of the
defendant and had good reason to know that they would thereby cause the water from the canal to
escape into this mine, it was held that they could not sue in Rylands v. Fletcher when the water
actually escaped and damaged their mine. Cockburn C. J. said; “The plaintiff saw the danger, and may
be said to have courted it.”

(iii) Acts of third Parties (Acts of a stranger)

Where the occupier of land accumulates things on his land, the rule will not apply if the escape of
the thing is caused by the unforeseeable act of a stranger.

In Rickards v. Lothian the plaintiff failed in his claim against the defendant where a third party had
deliberately blocked up the waste pipe of a lavatory basin in the defendant premises, thereby,
flooding the plaintiff’s premises.

The basis of the defence is the absence of any nature of control by the defendant over the acts of a
stranger on his land and thus the burden is on him to show that the escape was due to the
unforeseen act of a stranger without any negligence on his own part.

If on the other hand, the act of the stranger could reasonably have been anticipated or its
consequences prevented, the defendant will still be liable. While it is clear that a trespasser is a
‘stranger’ for this purpose, other person included in this term depend on circumstances. The
occupier is of course liable for the defaults of these servants in the course of an independent
contractor unless it is entirely collateral. He is liable for the folly of a lawful visitor as well as the
misconduct of any member of his family he has control over.

It has also been argued that he ought to be responsible for guests and licensees on his land but a
distinction ought to be taken here or it would be harsh to hold an occupier liable for the act of every
casual visitor who has bare permission to enter his land and of whose propensities to evil he may
know nothing of e.g. an afternoon caller who leaves the garden gate open or a tramp who asks for a
can of water and leaves the tap on. Possibly the test is, “can it be inferred from the facts of the
particular case that the occupier and such control over the licensee or over circumstances which
made his act possible that he ought to have prevented it? If so, the occupier is liable, otherwise not.”

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As regards the issue of dangerous elements brought on the owner’s land by another person, the
owner is not liable under the rule as in Whitemorses v. Standford.

(iv) Act of God

Where escape is caused directly by natural causes without human intervention in “circumstances
which not human foresight can provide against and of which human prudence is not bound to
recognize possibility” the defence of act of God applies and the occupier is thus not liable.

(v) Statutory Authority

Sometimes, public bodies storing water, gas, electricity and the like are by statute exempted from
liability so long as they have taken reasonable care. It is a question of statutory interpretation
whether, and, if so, to what extent liability under Rylands-Fletcher has been excluded.

In Green v. Chelsea Waterworks Co. a main pipe belonging to a waterworks company which was
authorized by parliament to lay the main, burst without any negligence on the part of the company
and the plaintiff premises were flooded; the company was held not liable.

On the other hand, In Charing Cross Electricity Co v. Hydraulic Power Co. where the facts were
similar, the defendants were held liable. The defendant had no exemption upon the interpretation of
their statute.

The distinction between the cases is that the Hydraulic Power Company were empowered by statute
to supply water for industrial purposes, that is, they had permissive power but not a mandatory
authority, and they were under no obligation to keep their mains charged with water at high
pressure, or at all. On the other hand, the Chelsea water works Company were authorized by statute
to lay mains and were under a statutory duty to maintain a continuous supply of water it was an
inevitable consequence and damage would be caused by occasional bursts and so by necessary
implication the statute exempted them from liability where there was no “negligence’.

5.OCCUPIERS LIABILITY

A company or an individual who occupies a property has a duty of care to the people who visit it.

Occupier’s Liability at Common Law

At common law the duties of an occupier were cast in a descending scale to four different kinds of
persons. For example:

a) The highest duty of care was owed by the occupier to one who entered in pursuance of a
contract with him e.g. a guest in a hotel. In that case there was an implied warranty that the
premises were as safe as reasonable care and skill could make them.

b) A lower duty was owed to the invitee i.e. a person who without any contract entered on
business of interest both to himself and the occupier e.g. a customer coming into a shop to
view the wares he was entitled to expect that the occupier should prevent damage from
unusual danger of which knew or ought to have known.

c) Lower still was the duty of the licensee i.e. a person who entered with the occupiers express
or implied permission but without any community of interest with the occupier; the

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occupiers duty towards him was to warn him of any concealed danger or trap of which he
actually knew.

d) Finally, there was the trespasser to whom there was owed only a duty to abstain from
deliberate or reckless injury.

Occupiers liability deals with the liability of an occupier of premises and extends to immovable
property as open land house, railway stations and bridges as well as movable structures like ships, or
even vehicles although lawyers prefer to treat injury in the latter as falling with common law
negligence.

Under common law lawful visitors who did not fall under the above classifications of contractual
entrants, invitees or licensees were not clearly covered and accidents arising from the premises and
affecting such person were commonly governed by the general law of negligence.

The position of the common law was thought to be unsatisfactory. As lord Denning put it in Slatter v.
Clay Cross Co. Ltd

“If a landowner is driving his car down his private drive and meets someone lawfully walking upon it
then he is under a duty to take reasonable care so as not to injure the walker; and his duty is the
same no matter whether it is his gardener coming up with his plants, a tradesman delivering his
goods, a friend coming to tea, or a flag seller seeking a charitable gift”

Modern Law on Occupier’s Liability

 Occupier

Under Occupiers’ Liability Act, the word ‘occupier’ denotes a person who has a sufficient degree of
control over premises to put him under a duty of care toward those who come lawfully upon the
premises.

An owner in possession is no doubt an occupier, but an owner who has demised the premises to
another and parted with possession is not. An absentee owner may ‘occupy’ his premises through
his servant and thus remain subject to the duty and he may also be subject to it though he was
contracted to allow a third party to have the use of the premises.

There may be more than one “occupier’ of the same structure or part of the structure.

 Visitors

A visitor is generally a person to whom the occupier has given express or implied permission to enter
the premises.

The Act extends the concept of a visitor to include persons who enter the premises for any purpose
in the exercise of a right conferred by law for they are to be treated as permitted by the occupier to
be there for that purpose, whether they in fact have his permission or not. This would include a
fireman attending a fire or a policeman executing a search warrant.

Implied permission – this is a question to be decided on the facts of each case and the burden of
proving an implied permission rests upon the person who claims that it existed.

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Any person who enters the occupier’s premises for the purpose of communicating with him will be
treated as having the occupier’s tacit permission unless he knows or ought to have known that he
has been forbidden to enter e.g. by notice ‘no hawkers’ The occupier may of course withdraw this
implied license by refusing to speak or deal with the entrant but if he does so the entrant has a
reasonable time in which to leave the premises before he becomes a trespasser.

The duty owed to a visitor does not extend to anyone who is injured by going where he is expressly
or impliedly warned by the occupier not to go as where a tradesman’s boy deliberately chooses to go
into a pitch-dark part of the premises not included in the invitation and falls downstairs there (Lewis
v Ronald). Further the duty does not protect a visitor who goes to a part of the premises where no
one would reasonably expect him to go.

A person may equally exceed his license by staying on premises after the occupier’ permission has
expired but the limitation time must be clearly brought to his attention.

Common duty of Care

 Read Section 3 Occupiers’ Liability

The Common duty of care is duty owed to all visitors as well as an entrant on contract with implied
terms. Such care as in all the circumstances of the case is reasonable to see that the visitor will be
reasonably safe in using the premises for the purpose for permitted to be there.

The Act gives some guidance in applying the common duty of care:

i. An occupier must be prepared for children to be less careful than adults; and

ii. An occupier may expect that a person in the exercise of his calling will appreciate and guard
against any special risks ordinarily incident to it, so far as the occupier leaves him free to do
so.

As to (i) above, in Phipps v. Rochesther Corporation, Delvin J stated that some of the circumstances
which are to be taken into account in measuring the occupiers obligation is the degree of care for
their children’s safety which the occupier may assume will be exercised by the parents. In this case,
the plaintiff a boy aged five was with his sister aged seven and they walked across a large opening,
which formed part of a housing estate being developed by the defendants. The defendants had dug a
long deep trench the middle of the open space a danger, which was quite obvious to an adult. The
plaintiff fell in and broke his leg. Held: A prudent parent would not have allowed two small children
to go alone on the open space in question or at least he would have satisfied himself that the place
held no danger for the children. The defendants were thus not liable.

The judgment of Delvin J squarely placed the primary responsibility for the safety of small children
upon their parents, he stated: “It is their duty to see that such children are not allowed to wander
about by themselves or at least to satisfy themselves that the places to which they do allow their
children to go unaccompanied are safe for them to go. It would not be socially desirable if parents
were as a matter of course able to shelf the burden of walking after their children from their own
shoulders to those who happen to have accessible bits of land.”

The occupier will have discharged his duty if the place is reasonably safe for a child who is
accompanied by the sort of guardian whom the occupier is in all the circumstances entitled to expect
him to have with him.

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As to (ii) above the general rule is that where an occupier employs an independent contractor to do
work, be it of cleaning or repairing on his premises the contractor must satisfy himself as to the
safety or condition of that part of the premises on which he is to work In Roles v. Nathan (1963) two
chimney sweeps were killed by carbon monoxide gas while attempting to seal up a sweep hole in the
chimney of a coke-fired boiler, the boiler being alight at the time. Held: The occupier was not liable
for their deaths. As per Lord Denning M. R. “when a house holder calls a specialist to deal defective
installation on his premises he can reasonably expect the specialist to appreciate and guard against
the danger arising from the defect.”

Specific Aspect Affecting Occupier’s Liability

a) Warning

In most cases a warning of the danger will be sufficient to enable the visitor to be reasonably safe
and so amount to a discharge by the occupier by duty of care but, if for some reason the warning is
not sufficient then the occupier remains liable.

b) Independent character

Where damage is caused to a visitor by a danger due to the faulty execution of any work of
construction, maintenance or repair by an independent contractor employed by the occupier, the
occupier is not liable if in all the circumstances if he had acted reasonably in entrusting the work to
an independent contractor and had taken such steps as he reasonably ought to in order to satisfy
himself that the contractor was competent and that the work had been properly done.

In Haseldine v Daw (1941) the plaintiff was going to visit a tenant in a block of flats belonging to the
defendant and was injured when the lift fell to the bottom of its shaft as a result of negligence of the
firm of engineers employed by the defendant to repair the lift. Held: That the defendant having
employed a competent firm of engineers to make periodical inspections of the lift to adjust it and to
report on it had discharged the duty owed to the plaintiff whether the plaintiff was an invitee or a
licensee.

LIMITATION OF ACTIONS

Causes of actions are not enforceable in perpetuity, they must be enforced within the duration
prescribed by law failing which they become statute barred.

The Limitation of Actions Act prescribes the duration within which causes of action must be enforced
in Kenya.

The purpose of the Act in fixing the duration is to facilitate the administration of justice by ensuring
that cases are heard as and when they occur. The duration also ensures that cases are decided on the
best available evidence. It also ensures that the hearing of cases is spread out.

When does time start running?

As a general rule it starts running from the date a cause of action arises e.g the date of a breach of
contract or the date when the accident occurred. However, the running of time may be postponed in
certain circumstances:

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a) When the prospective defendant is the president or is exercising the functions of the office
of the president, time starts running when he ceases to hold office or stops exercising the
functions or dies, whichever comes first.

b) If the prospective defendant or plaintiff is an infant/ minor, time starts running when he
attains the age of majority (18 years) or dies, whichever comes first.

c) If the prospective plaintiff is a person of unsound mind, time starts running when he
becomes of sound mind or dies, whichever comes first.

d) If the prospective plaintiff is labouring under mistake, fraud or ignorance of material facts,
time starts running when he ascertains the true position or when a reasonable person would
have so ascertained.

A statute barred action may be proceeded “with leave of the court” if the court is satisfied that the
delay was justifiable after considering the circumstances of the case.

THE LAW OF CONTRACT

A contract may be defined as a legally binding agreement made by 2 or more parties. It has also been
defined as a promise or set of promises a breach of which the law provides a remedy and the
performance of which the law recognizes as an obligation.

The most important characteristic of a contract is that it is enforceable. The genesis of a contract is
an agreement between the parties hence a contract is an enforceable agreement. However, whereas
all contracts are agreements, all agreements are not contracts.

Elements of a Contract

These are the constituents or ingredients of a contract. They make an agreement legally enforceable.
These elements are:

a. Offer

b. Acceptance

c. Capacity

d. Intention

e. Consideration

f. Legality

g. Formalities

Creation/Formation of Contracts

A contract comes into existence when an offer by one party is unequivocally accepted by another
and both parties have the requisite capacity. Some consideration must pass and the parties must
have intended their dealings to give rise to a legally binding agreement. The purpose of the
agreement must be legal and any necessary formalities must have been complied with.

1. THE OFFER

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An offer has been defined as: an unequivocal manifestation by one party of its intention to contract
with another. The party manifesting the intention is the offeror and the party to whom it is
manifested is the offeree.

Rules/ Characteristics of an Offer

a) An offer may be oral, written or implied from the conduct of the offeror.

b) An offer must be communicated to the intended offeree or offerees. An offer remains

ineffective until it is received by the offeree.

c) An offer must be clear and definite i.e. it must be certain and free from vagueness and
ambiguity. In Sands v. Mutual Benefits as well as in Scammell and Nephew Ltd v. Ouston, it
was held that words used were too vague and uncertain to amount to an offer.

d) An offer may be conditional or absolute. The offeror may prescribe conditions to be fulfilled
by the offeree for an agreement to arise between them.

e) The offeror may prescribe the duration the offer is to remain open for acceptance. However,
the offeror is free to revoke or withdraw his offer at any time before such duration lapses e.g.
in Dickinson v. Dodds, the defendant offered to sell a house to the plaintiff on Wednesday
10/06/1874 and the offer was to remain open up to Friday 12th at 9.00 am. However, on the
11th of June, the defendant sold the house to a 3rd party. The plaintiff purported to accept
the offer of Friday morning before 9.00 am. It was held that there was no agreement
between the parties as the defendant had revoked his offer by selling the house to a 3rd
party on June 11th. A similar holding was made in Routledge v. Grant, where the defendant’s
offer was to remain open for 6 weeks but he revoked or withdrew it after 4 weeks. It was
held that there was no agreement between the parties.

f) The offeror may prescribe the method of communication of acceptance by the offeree. If he
insists on a particular method, it becomes a condition.

g) An offer may be general or specific i.e. it may be directed to a particular person, a class of
persons or the public at large. In Carlill v. Carbolic Smoke Ball Co, the defendant company
manufactured and owned a drug name the “Carbolic Smoke Ball” which the company
thought was the best cure for influenza, cold and other diseases associated with taking cold
water. The company put an advertisement in a newspaper to the effect that a £100 reward
would be given to any person who contracted influenza or related diseases after taking the
smoke ball as prescribed i.e. 2 tablets, 3 times a day for 2 weeks. The advertisement further
stated that the company had deposited £1000 with the Alliance Bank on Reagent Street as a
sign of their sincerity in the matter. Mrs. Carlill who had read the advertisement bought and
took the Smoke balls as prescribed but contracted influenza. The company rejected her claim
and she sued. The company argued that the advertisement; a. Was nothing but mere
salestalk b. Was not an offer to the whole world c. Was not intended to create legal relations.

The Court of Appeal held that though the wording of the advertisement was unclear, it amounted to
an offer to the whole world and the person who fulfilled its conditions, contracted with the company
hence Mrs. Carlill was entitled to the £100 reward.

Examples of offers: Public transport, application for employment.

An offer must be distinguished from an Invitation to treat.

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Invitation to Treat

This is a mere invitation by a party to another or others to make offer or bargain. The invitee
becomes the offeror and the invitor becomes the offeree. A positive response to an invitation to
treat is an offer.

Examples of invitation to treat;

i. Advertisement of sale by auction: At common law, an advertisement to sell goods or other

property by public auction is an invitation to treat. The prospective buyer makes the offer by
bidding at the auction and the auctioneer may accept or reject the offer. It was so held in
Harris v. Nickerson where a commission agent had sued as auctioneer for failure to display
furniture he had advertised for sale by auction. It was held that there was no contractual
relationship between the parties as the advertisement was merely an invitation to treat and
as such, the auctioneer was not liable.

ii. Sale by display: At common law, the display of goods with cash price tags is an invitation to
treat. The prospective buyer makes the offer to buy the items at the stated or other price
which the shop owner may accept or reject. In Fisher-v-Bell, the defendant was sued for
‘offering for sale’ a flick knife contrary to the provision of the Offensive Weapons Act. The
defendant had displayed the knife in a shop with a cash price tag. Question was whether he
had offered the knife for sale. It was held that he had not violated the Act as the display of
the knife was an invitation to prospective buyers to make offers.

iii. Sale by self-service: At common law, a sale by self-service is an invitation to treat. Prospective
buyers make offers by conduct by picking the goods from the shelves and the offer may be
accepted or rejected at the cashier’s desk. The offeror is free to revoke his offer to buy the
goods at any time before reaching the cashiers desk. In Pharmaceutical Society of Great
Britain v. Boots Cash Chemists (Southern) Ltd (1952). The defendant owned and operated a
self-service store which stocked among other things, drugs which under the provisions of the
Pharmacy and Poisons Act (1933) could only be sold with the supervision of the registered
pharmacist. The defendant’s pharmacist was stationed next to the cashier’s desk. The
plaintiff society argued that the defendant had violated the Act as the pharmacist was not
stationed next to the shelves where the drugs were displayed. Question was at what point a
sale took place. It was held that the defendant had not violated the provisions of the Act as
its pharmacist was stationed next to the cashier’s desk where the actual sale took place.

Counter Offer

This is a change, variation or modification of the terms of the offer by the offeree. It is a conditional
acceptance. A counter offer is an offer in its own right and if accepted an agreement arises between
the parties. Its legal effect is to terminate the original offer as in Hyde v. Wrench (1840), the
defendant made an offer on June 6th to sell a farm to the plaintiff for £1,000. On 8th June, the
plaintiff wrote to the defendant accepting to pay £950 for the farm. On 27th June, the defendant
wrote rejecting the £950. On 29th June the plaintiff wrote to the defendant accepting to pay £1,000
for the farm. The defendant declined and the plaintiff sued for specific performance of the contract.
It was held that the defendant was not liable as the plaintiff’s counter offer of £950 terminated the
original offer which was therefore not available for acceptance by the plaintiff on 29th June as the
defendant had not revived it.

A counter offer must however be distinguished from a request for information or inquiry.

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Request for information: An inquiry which does not change terms of the offer. The offeree may
accept the offer before or after inquiry is responded to as was the case in Stevenson-v-Mc Lean,
where the defendant had offered to sell 3,800 tonnes of iron to the plaintiff at £ 40 per tonne and
the offer was to remain open from Saturday to Monday. On Monday morning, the plaintiff
telegraphed the defendant inquiring on the duration of delivery. The defendant treated the inquiry
as a counter offer and sold the iron to a third party. The plaintiff subsequently accepted the offer but
thereafter received the defendant’s notice of the sale to the 3rd party. The plaintiff sued in damages
for breach of contract. It was held that the defendant was liable.

Termination of Offers

1) Counter Offer: This is a change or variation of the terms of the offer by the offeree. It
is a form of rejection. The legal effect of a counter offer is to terminate the original
offer as was the case in Hyde v. Wrench.

2) Revocation: This is the withdrawal of the offer by the offeror. At common law, an
offer is revocable at any time before acceptance.

Rules of revocation of offers

i. An offer is revocable at any time before it becomes effectively accepted. It was so

held in Paybe v. Cave. In Dickinson v. Dodds, the sale of the house by the defendant
to a 3rd party revoked his offer to the plaintiff.

ii. Notice of revocation must be communicated to the offeree. However, such

communications need not to be effected by the offeror. It suffices, if communicated
by a 3rd party as was the case in Dickinson v. Dodds.

iii. An offer is revocable even in circumstances in which the offeror has promised to
keep it open to a specified duration, unless an option exists, as was the case in
Dickinson v. Dodds.

iv. Revocation becomes legally effective when notice is received by the offeree.

v. An offer is irrevocable after acceptance. It was so held in Byrne v. Van Tienhoven.

vi. In unilateral contracts, an offer is irrevocable if the offeree has commenced and
continues to perform the act which constitutes acceptance.

vii. A bid at an auction is revocable until the hammer falls.

3) Rejection: An offer terminates if the offeree refuses to accept the same, the refusal
may be express or implied from the conduct of the offeree e.g. silence by the offeree
amounts to a rejection as was the case in Felthouse v Bindley.

4) Lapse of time: If an offer is not accepted within the stipulated time and not revoked
earlier, it lapses on expiration of such duration. Where no duration is specified, the
offer lapses on expiration of reasonable time. What is reasonable time is a question
of fact and varies from case to case.

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In Ramagate Victoria Hotel Ltd v. Montefiore in early 6/1864, the defendant made an offer to
purchase 40 shares of the plaintiff company, the offer was not accepted until November by which
time the defendant had given up. The company sued for the value of the shares, the defendant
pleaded that the offer had not been accepted within a reasonable time. It was held that the
defendant was not liable as the offer had lapsed for non-acceptance within a reasonable time.

A similar holding was made in Virji Khimji v Chatterbuck The defendant ordered timber from the
plaintiff and indicated that it be supplied as soon as possible. The plaintiff did not respond but
delivered the timber. 4 ½ months later, the defendant refused to take delivery and was sued. It was
held that he was not bound to take delivery as his offer had lapsed for non- acceptance within a
reasonable time.

5) Death: The death of the offeror or offeree before acceptance terminates an offer.
However, the offer only lapses when notice of death of the one is communicated to
the other.

6) Insanity: The unsoundness of mind of either party terminates an offer. However, the
offer only lapses when notice of the insanity of the one is communicated to the
other.

7) Failure of a condition subject to which the offer was made: These are conditional
offers. If a condition or state of affairs upon which an offer is made fails, the offer
lapses. In Financings Ltd v. Stimson, the defendant opted to take up a vehicle on hire
purchase terms. He completed the hire purchase application form and paid a
deposit. This form constituted his offer. He took delivery of the vehicle but returned
it to the showroom after 2 days for some minor rectification. The vehicle was stolen
from the showroom and when recovered it was badly damaged by reason of an
accident. The defendant refused to take delivery or pay installments and was sued.
He pleaded the state of the vehicle. It was held that he was not liable as his offer had
lapsed. This offer was conditional upon the motor vehicle remaining in substantially
the same condition as it was before and since its condition had changed, his offer
had lapsed.

2. ACCEPTANCE

This is the external manifestation of assent by the offeree. It gives rise to an agreement between
parties. In legal theory, an agreement comes into existence at the subjective moment when the
minds of the parties meet. This moment is referred to as Consensus ad idem (meeting of minds).

However, this subjectivity must be externally manifested by the offeree for the agreement to arise.
Acceptance may be oral, written or implied from the conduct of the offeree.

Rules of Acceptance

1.Acceptance may be oral, written or implied from the conduct of the offeree. In Carlill v. Carbolic
Smoke Ball Co, acceptance by Mrs. Carlill took the form of her conduct by purchasing and consuming
the smoke balls. In Brogden v. Metropolitan Railway Co, where it was held that the 1st load of coal
supplied by Brogden constituted acceptance of the defendants offer to supply the coal and hence
there was an agreement between the parties.

2. The offeree must have been aware of and intended to accept the offer. A person cannot accept
an offer whose existence he is unaware of. In Crown-v-Clarke, the Australian government offered

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£1,000 to any person who volunteered information leading to the arrest and conviction of the killers
of 2 police officers. Any accomplice who gave information would be pardoned. Clarke, who was
aware of the murder gave the information and the killers were arrested and convicted. However, he
made it clear that he had given the information to clear his name. It was held that he was not
entitled to the reward as he had given the information for a different purpose and therefore had not
accepted the offer.

3. Acceptance must be unconditional and unqualified the offeree must accept the offer in its terms.
Any variation or modification of the offer amounts to a conditional acceptance which is not an
acceptance as was the case in Hyde v. Wrench where the plaintiff modified the defendant’s offer of
£1,000 to £ 950.

4. An offer must be accepted within the stipulated time if any or within a reasonable time failing
which it lapses. As was the case in Ramsgate Victoria Hotel v. Montefoire, where the defendant’s
offer made in June was not accepted until November by which time had elapsed. A similar holding
was made in E.A Industries Ltd v. Powyslands.

5. Acceptance must be communicated to the offeror in the prescribed method if any or an equally
expeditious method. Where no method of communication is prescribed, the method to apply
depends on the type of offer and the circumstances in which the offer is made.

6. As a general rule, silence by the offeree does not amount to acceptance, it was so held in
Felthouse v. Bindley. The plaintiff intended to buy a house owned by a nephew named John who had
no objection. The plaintiff intended to buy it or £30 15p. He wrote to Jon stating ‘if I hear no more
about him, I consider the horse mine at that price.’ John did not respond but 6 weeks later he gave
the horse to the defendant for sale but instructed him not to sell the particular horse. It was sold by
mistake. The plaintiff sued the auctioneer in damages for conversion. Question was whether there
was a contract of sale between the plaintiff and John. It was held that there was no contract as John
had not communicated his acceptance of the offer.

7. An offer to a particular/specific person can only be accepted by that person for an agreement to
arise. It was so held in Boulton v. James.

8.An offer to a class of persons can only be accepted by a member of that class for an agreement to
arise. It was so held in Wood v. Lecktrick.

9.An offer to the general public may be accepted by any person who fulfils its conditions. As was the
case in Carlill v. Carbolic Smoke Ball Co.

10. The postal rule of acceptance: Where the offeror expressly or impliedly authorizes the offeree to
communicate acceptance by post, acceptance is deemed complete when the letter is posted
whether it reaches its destination or not. It was so held in Byrne v. Van Tienhoven and Co Ltd.

a) Express authorization: These are circumstances in which the offeror expressly permits the
offeree to communicate acceptance by post. As was the case in Adams v. Lindsell, on
2/9/1817, the defendant offered to sell to eth plaintiff a quantity of wood on certain terms
and required a response ‘in the course of post.’ The plaintiff received the letter on 5/9/1817
and posted an acceptance. On 8/9/1817 the defendant posted a letter revoking the offer. The
plaintiff’s letter of acceptance was received on 9/9/1817. It was held that there was a
contract between the parties as the plaintiff had posted the letter of acceptance by the time
the defendant purported to revoke the offer. Hence, the revocation was ineffective.

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b) Implied authorization: There are circumstances in which the offeror by implication
authorized the offeree to communicate acceptance by post. In Household Fire Insurance Co.-
v-Grant, the defendant offered to buy 100 shares to the plaintiff company. The offer was
communicated by post. The Company allotted the shares to him and the company secretary
made out the letter of allotment which was posted but never reached the defendant who
was subsequently sued for the amount due on the shares. He denied liability on the ground
that the company had not communicated its acceptance. However, it was held that since the
company had posted the letter of acceptance, there was a contract and the defendant was
liable. In Henthorn v. Fraser, X made an offer to Y to take up a lease. On the following day
between noon and1 pm, X posted a letter withdrawing the offer which was received by Y at
5pm. At 3.50pm on the same day, Y had posted a letter accepting the offer. The letter was
read by X on the following day. It was held that there was a contract between parties which
came into existence at 3.50pm when Y posted the letter of acceptance. The purported
revocation at 5pm had no effect. In Byrne v. Van Tienhoven and Co Ltd on 1/10 the
defendant made an offer to sell to eth plaintiff 1000 boxes of tin plates but on 8/10 the
defendant posted letter revoking the offer. The same was received on 15/10. On 11/10 the
plaintiff telegraphed the defendant an acceptance which he confirmed by a letter posted on
15/10. It was held that there was a contract between the parties which come into existence
on 15/10 when the letter of acceptance was posted.

c) No authorization: If the offeror does not expressly or implied authorizes the offeree to use
the post but the offeror uses the post, acceptance is deemed complete when the letter of
acceptance is received by the offeror.

11. if the offeror instructs his messenger to deliver to him the letter of acceptance in any from the
offeree, acceptance is deemed complete when the letter is handed over to the messenger.

Once an offer is accepted, an agreement arises between the parties as there is consensus between
them. Offer and acceptance constitutes the foundation of a contractual relationship. They do not
constitute a contract as a contract must be characterized by other elements.

3. CAPACITY

In addition to consensus and intention, a contract must be characterized by capacity. This is the legal
ability of a party to enter into a contractual relationship. For an agreement to be enforceable as a
contract the parties must have had the requisite capacity. As a general rule, every person has a
capacity to enter into any contractual relationship. However, in practice, the law of contract restricts
or limits the contractual capacity of certain classes of persons namely;

i. Infants or minors.

ii. Drunken persons.

iii. Persons of unsound mind.

iv. Undischarged bankrupts.

1. Contractual Capacity Infants Or Minors.

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Section 2 of the Age of Majority Act states that an infant or minor is any person who has not attained
the age of 18. Contracts entered into by an infant are binding, voidable or void depending on their
nature and purpose.

A. Binding Contracts

These are legally enforceable contracts; the infant can sue or be sued on them. Both parties are
bound to honour their obligations.

These contracts fall into 4 categories;

(a) Contracts for the Supply of “Necessaries”

Under section 4 (2) of the Sale of Goods Act necessaries mean goods suitable to the condition in life
of such an infant or minor and to his actual requirement at the time of sale and delivery.

In Nash v. Inman, the defendant was an infant college student. Before proceeding to college, his
father bought him all the necessary clothing material. However, while in college, he bought
additional clothing material from the plaintiff but did not pay for them and was sued. His father gave
evidence that he had bought him all the necessary clothing material. It was held that he was not
liable as the goods were not necessaries when supplied.

(b) Contracts for Supply of “Other Necessaries”

These are necessaries other than those covered by Section 4 (2) of the Sale of Goods Act. E.g. Legal
services, transport to and from work, lodging facilities etc. An infant is bound by any contract for the
supply of such necessaries. Under the Sale of Goods Act, whenever an infant is supplied with
necessaries, he is liable to pay not the agreed price but what the court considers as reasonable.

Education Contracts: An infant is bound by a contract whose purpose is to promote his education or
instruction.

(c) Contracts for Beneficial Service

These are beneficial contracts of service. Case law demonstrates that an infant can sue or be sued
and is bound by contracts whose object is to benefit him as a person.

In Doyle v. White City Stadium, the plaintiff was a qualified infant boxer. He applied to join the British
Boxing Board and was granted a license. One of the rules of the body empowered it to withhold
payment of any price money won if a boxer was disqualified in a competition. The plaintiff was
disqualified on one occasion and the Board withheld payment. The plaintiff sued. Question was
whether the plaintiff was bound by the contract between him and the Board. It was held that he was
as in substance it was intended to benefit him hence the money was irrecoverable.

A similar holding was made in Chaplin V. Leslie Fremin (Publishers) Ltd. Where the plaintiff, an infant
had engaged the defendant to write a book for him. He subsequently discontinued the transaction. It
was held that the contract was binding as it was intended to benefit him. A similar holding was made
in Clements v. London and North Western Railway Co.

B. Voidable Contracts

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Certain contracts entered into by an infant are voidable i.e. the infant is entitled to repudiate the
contract during infancy or within a reasonable time after attaining the age of majority.

By avoiding the contract, the infant escapes liability on it. The infant cannot be sued on the contract
during infancy. These contracts confer upon the infant a long term benefit. Examples include:
Partnership agreements, lease or tenancy agreement and contract for the purchase of shares.

Under Section 12 of the Partnership Act, an infant partner is not liable for debts and other liabilities
of the partnership during infancy since the contract is voidable at his option.

However under Section 13 of the Act, if the infant does not avoid the contract during infancy, or
within a reasonable time after attaining the age of majority, he is liable for debts and other
obligations of the firm from the debt he became partner.

In Davis v. Beynon-Harris where an infant had taken up a lease but failed to repudiate the contract
during infancy or within a reasonable time thereafter, it was held that he was liable under the
contract.

C. Void Contracts

Under the provisions of the Infants Relief Act (1874) which applies in Kenya as a statute of general
application, certain contracts entered into by infants are void. These are contracts which the law
treats as non-existent. They confer no rights and impose no obligations on the parties.

Theses contracts are;

1. All accounts stated with infants: These are debts admitted by an infant. The infant cannot be
sued on such admission.

2. Contracts for the supply of goods other than necessaries.

3. Money lending contracts: An infant is not bound to repay any monies borrowed from a 3rd
party as the contract is void. However, if the infant repays, the amount is irrecoverable.

In Leslie Ltd. V. Sheil, the defendant, an infant borrowed £400 from the plaintiff, a money lending firm
in 2 lots of £200 each and was liable to pay £475 inclusive of the interest but failed to do so and was
sued. The plaintiff argued that it was entitled to damages for misrepresentation as the defendant had
fraudulently misrepresented his age. It further argued that the defendant had received the money on
its behalf. It was held that the amount was irrecoverable as the contract was void by reason of the
Infants Relief Act 1874.

Since a money lending contract was void, any security given by the infant is also void and therefore
unenforceable by the lending party. It was so held in Valentini v. Canali. If an infant uses monies
borrowed under a void contract to purchase necessaries, the lending party is in Equity put into the
shoes of the party supplying the necessaries and can sue the infant for the recovery of the amount
borrowed as was used to purchase the necessaries.

This is the principle of subrogation as was explained in In re: National Permanent Benefits Building
Society Ltd.

Question has arisen as to whether an infant can ratify contracts made during infancy after he has
attained the age of majority. Any such purported ratification or adoption has no legal effect.

4. Contractual Capacity of Drunken Persons

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A contract entered by a drunken person is voidable at his option by establishing that:

1. He was too drunk to understand his acts.

2. The other party was aware of his condition.

By avoiding the contract, the person escapes liability on it. In Gore v. Gibson, the defendant was sued
on a bill of exchange he had signed and endorsed. He pleaded that when he did so he was too drunk
to understand what he was doing and that the plaintiff was aware of his condition. It was held that
he was not liable as the contract was voidable at his option by reason of the drunkenness.

If a contract entered into by a person when drunk is ratified by him when sober it is no longer
voidable as was the case in Mathews v Baxter where the defendant had contracted to sell a house to
the plaintiff. When sued he pleaded drunkenness. However it was held that he was liable as the
plaintiff proved that he had subsequently ratified the transaction while sober.

Under Section 4 (2) of the Sale of Goods Act, if a drunken person is supplied with necessaries, he is
liable to pay a reasonable price.

5. Contractual Capacity of Persons of Unsound mind

A contract entered into by a person of unsound mind is voidable at his option by establishing that:

1. He was too insane to understand his acts.

2. The other party was aware of his mental condition.

By avoiding the contract the party escapes liability on it. In Imperial Loan Co. Ltd v Stone, the
defendant was sued on a promissory note he had signed. He argued that at the time, he was insane
and therefore incapable of comprehending the nature or effects of his acts and that he was not liable
on the promissory note as the contract was voidable by reason of insanity.

In the words of Lopes L.J. “In order to avoid a fair contract on the ground of insanity, the mental
capacity of the one contracting must be known to the other contracting party. The defendant must
plead and prove not merely his insanity but the plaintiff’s knowledge of that fact and unless he
proves these 2 things he cannot succeed.” If a contract entered into by a person of unsound mind is
ratified by him when he is of sound mind it ceases to be voidable.

Under Section 4 (2) of the Sale of Goods Act, if a person of unsound mind is supplied with
necessaries, he is liable to pay a reasonable amount.

6. Undischarged bankrupts

These are persons who have been declared bankrupt by a court of competent jurisdiction. There
capacity to contract is restricted by the provisions of the Bankruptcy Act2.

4. INTENTION TO CREATE LEGAL RELATIONS

In addition to offer and acceptance, an agreement must be characterized by intention. The parties
must have intended to create legal relations. Intention is one of the basic elements of a contract as
common law. An agreement is unenforceable unless the parties thereto intended such a
consequence.

Ascertainment of intention: To determine whether parties intended to create legal relations, courts
consider;

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1. Nature or type of agreement i.e. whether commercial or business and domestic or social.

2. The circumstances in which the agreement was entered into.

These two factors demonstrate whether the parties intended to contract.

(a) Business or Commercial agreements;

In considering such agreements, courts proceed from the presumption that the parties intended to
create legal relations.

1. Advertisements

These are intended to promote sales of the advertiser. They have a commercial objective. In

Carlill v. Carbolic Smoke Ball Co. Ltd, the company had manifested an intention to create legal;
relations by stating that it had deposited £1,000 with Alliance Bank Regent Street. Hence Mrs Carlill
was entitled to the £100 as she had contracted with the company.

2. Employment Agreements

These are commercial agreements intended to impose legal obligations on the parties thereto. In
Edwards v. Skyways Ltd, the plaintiff was a former employee of the defendant company as a pilot and
was declared redundant but promised on ex-gratia sum. He provided consideration for the promise.
By reason of many other redundancies, the company was unable to make good the promise to
Edwards who sued. It was held that he was entitled to the sum as this was a business agreement
intended to create legal relations. The court was emphatic that this was not a domestic agreement.

However, the circumstances in which a commercial or business agreement is entered into may show
that the parties did not intend to create legal relations and this would be the case where honour
clauses or honourable pledge clauses are used. This is a clause in agreement to the effect that the
parties do not intend to create legal relations. It denies the agreement legal intention thereby
converting it to a gentleman’s agreement binding in honour only.

Such an agreement is unenforceable in law as was the case in Rose & Frank v. Crompton

Brothers where the agreement between the two companies contained an honour clause, but one of
them purported to enforce the agreement. The court of Appeal held that it was unenforceable as the
honour clause had denied it legal intention.

(b) Domestic or social agreements

Courts proceed on the presumption that the parties did not intend to create legal relations.

1. Agreement between husband and wife

Such agreements are generally not intended to impose upon the parties any rigid obligations.

In Balfour v Balfour, the defendant was a civil servant in Sri Lanka. At the time, he and his wife were
in Britain on holiday. His wife fell ill and it became clear that she was not in a position to accompany
him back to Sri Lanka. He promised to send her 30 pounds per month for the duration they would

44
remain apart. He did not and the wife sued. It was held that her action was not sustainable as the
parties had not intended to create a legal relationship.

2. Agreement between parent and child

Such an agreement is ordinarily not intended to be a contract but a working relationship.

In Jones v. Pandervatton, the plaintiff persuaded her daughter to leave a well paying job to study Law
in Britain, she was promised a maintenance allowance as she studied. She reluctantly agreed. In the
meantime, the plaintiff bought a house where the defendant lived as part of the maintenance.
Before the daughter completed her studies, the 2 quarrelled and the mother sought to evict her
from the house. She argued that there was a contract between them. However, it was held that the
parties had not intended to create legal relations and the mother was entitled to evict her.

However the circumstances in which a domestic or social agreement is entered into may show that
the parties intended to create legal relations. Such intentions may be collected from the words used
by the parties, their conduct and the circumstances of the agreement

Other Social Agreements

Such agreements may be enforced if the parties if the parties have manifested an intention to
contract. In Simpkins v. Pays, the defendant owned a house where she lived with a granddaughter;
the plaintiff was a paying boarder (a lodger). The three took part in a Sunday newspaper
competition. All entries were made in the defendant’s name. However, there were no rules on
payment of postage.One week’s entry won £750. The plaintiff claimed 1/3 of the sum. The defendant
argued that this was a pastime activity not intended to create legal relations. However the court held
that the plaintiff was entitled to 1/3 of the sum as the parties had manifested an intention to
contract.

5. CONSIDERATION

An agreement must be characterized by consideration to be enforceable as a contract. At Common

Law, a simple contract is unenforceable unless supported by some consideration. Consideration is the
bargain element of a contract.

It is nothing but mutuality. It has been defined as “an act or promise offered by the one party and
accepted by the other party as price for that others promise.”

Judicial Definitions

In the words of Lush J. in Currie v. Misa, “a variable consideration may consist of some right, interest,
profit or benefit accruing to the one party or some loss, forbearance, detriment or responsibility
given, suffered or borne by the other.”

In the words of Patterson J in Thomas v. Thomas “consideration means something which is of some
value in the eye of the law moving from the plaintiff. It may be some benefit to the defendant or
detriment to the plaintiff but at all events it must be moving from the plaintiff.” Consideration is
whatever the promisee gives or provides to buy the promisors promises. By so doing the promisee
becomes party to the contract. Consideration takes various forms. In Carllil v. Carbolic Smoke Ball Co,
it took the form of detriment i.e. swallowing of the smoke balls by Mrs. Carllil. In Patel v. Hasmani, it
took the form of forebearance to sue.

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Rules of Consideration

1. Mutual love and affection are not sufficient consideration

It was so held in Thomas v. Thomas. Mr. Thomas had expressly stated that if he died before his wife,
she was free to use his house as long as she remains unmarried. His brothers who later became
executors of his estate knew of this wish. After his death, Mrs. Thomas remained in his house and
unmarried. After the death of one of the executors, the other sought to evict Mrs. Thomas from the
house. She sued the late husband’s estate. It was held that the husbands promise was enforceable as
she had provided consideration by way of the £1 she paid for every year she lived in the house. The
love she had for the late husband was not sufficient consideration but the £1 she paid every year
was...

2. Consideration must be legal

The act or promise offered by the must be lawful as illegal consideration invalidates the contract.

3. Consideration must not be past

As a general rule, past consideration is not good to support a contractual claim as exemplified by the
decisions in Re McArdles case and Roscorla v. Thomas. However, in certain circumstances, past
consideration is sufficient to support a contractual claim, as indicated above.

4. Consideration must be real

This rule means that consideration must be something of value in the eyes of the law. It means that
consideration must be sufficient though it need not be adequate. This rule means that as long as
something valuable in law passes, the promise is enforceable. It means that the law does not
concern itself with the economics of a transaction. It means that the courts of law do not exist to
correct bad bargains. In Thomas v. Thomas, the £1 Mrs. Thomas paid per year was sufficient
consideration. However, if the consideration is too low in comparison and there is evidence of a
mistake, misrepresentation, duress or undue influence, the courts may intervene.

5. Consideration must flow from the plaintiff/promise

This rule means that the person to whom the promise is made provides consideration and by so
doing there is a bargain between the parties or mutuality. By providing consideration, the promise
becomes party to the transaction. In Thomas v. Thomas, Patterson J was emphatic that
“consideration must at all times flow from the plaintiff.” The rule that consideration must flow from
the plaintiff is referred to as The Doctrine of Privity of Contracts.

Doctrine of Privity of Contracts

This doctrine is to the effect that only a person who is party to a contract can sue or be sued on it. It
means that only a person who has provided consideration to a promise can sue or be sued on it.
However, there are exceptions to the doctrine, such as agency.

6. Consideration must be something in excess of a public duty owed by the plaintiff

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This rule means that performance by the plaintiff of a public duty owed by him is not sufficient
consideration for a promise to pay. In Collins v. Godefroy, the defendant was involved in a civil case
and the plaintiff had given evidence in the matter but was reluctant to do so in future. The defendant
promised him 6 pounds if he continued giving evidence which he did. The defendant did not honour
his promise and was sued. Question was whether the plaintiff had provided consideration for the
defendants promise to pay. It was held that the promise was unenforceable as the plaintiff had not
provided consideration but had merely performed a public duty.

However anything in excess of a public duty amounts to consideration. In Glassbrook Brothers v.

Glamorgan County Council, the defendant owned a mine and at the material time the workers were
on strike. The defendant requested the plaintiff to provide a stationary guard to protect the mine and
promised to pay for the services. The plaintiffs who are not bound to provide a stationary guard
provided the service but were not paid. In an action to enforce the promise, it was held that the
plaintiffs were entitled to payment as they had done more than the duty required and had therefore
provided consideration

7. Consideration must be something in excess of an existing contractual obligation

This rule means that performance by the plaintiff of an existing contractual obligation is not sufficient
consideration for a promise. In Stilk v. Myrik, the defendant who was a ship captain entered into a
contract with his crew members to assist him on a journey from Britain to the Baltic Sea and back. In
the course of the journey, 2 sailors deserted. The captain promised to share their wages between the
remaining crew members a promise he did not honour and was sued. It was held that the crew
members were not entitled to the extra pay as they had not provided consideration. They had merely
performed an existing contractual obligation. However, doing something in excess of a contractual
obligation constitutes consideration.

In Hartley v. Ponsonby where in the course of a journey, a substantial number of crew members
deserted and a promise for extra pay was made, it was held that they were entitled to the pay as
they had done more than a contractual obligation. The willingness to expose themselves to danger
for longer hours constituted consideration for the promise.

6. FORMALITIES

In addition to the basic elements of a contract certain contracts are subject to certain formalities,
which must be complied with for the agreement to be legally enforceable. The formalities includes:

1. Requirement of writing; some contracts must be embodied in a formal document. For

example, hire purchase Agreement, land agreement in The Law of Contract section 3 (3)

2. Requirement of Signature; A contract entered into with the government must be signed by
the Revenue Officer of the ministry or some other duty authorized person failing which the
contract is enforceable.

These statutory formalities may be justified on various policy grounds;

(a) They promote certainly in transactions.

(b) Others enhance genuiness and acceptability of contracts.

(c) Some formalities perform educative functions E.g. Contents of a Hire Purchase
Agreement.

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(d) Other formalities facilities state intervention private transactions e.g. requirement
of consent of the Land Control Board.

The formalities of writing and requirement of written evidence are intended to prevent found,
however, it is possible for a party to perpetrate fraud by insisting that the requisite formalities have
not been complied with.

3. Requirement of Consent:

Under sec. 6 of the Land Control Act7, a contract for the sale of agricultural land must be consented
to by the Land Control Board of the district in which the land is located failing which the contract is
unenforceable.

The consent must be applied for within 6 months of the agreement failing which the contract is void.
However, the president is empowered to exempt a transaction from the requirement of consent on
application by the parties.

7. LEGALITY

A contract’s legality refers to whether or not the terms and conditions are consistent with the law. A
contract cannot be created to govern the trade of illegal products or services. If the subject matter of
the agreement isn’t legal, the contract isn’t valid. Contracts can only be formed for legal purposes.

VITIATING ELEMENTS (FACTORS AFFECTING CONTRACTS)

These are circumstances which interfere with the enforceability of a contract. They have a negative
effect on contracts. They may render a contract void or avoidable. A void contract is unenforceable
while avoidable contract is enforceable unless avoided.

These factors are;

 Misrepresentation

 Mistake

 Duress

 Undue Influence

1. Misrepresentation

This is a false representation. It is a false statement made by a party to induce another to enter into a
contractual relationship.

It renders the contract avoidable at the option of the innocent party. However, for the innocent party
to avoid the contract, it must be proved that: -

(i) The statement in question was false in a natural particular i.e. it was untrue in whatever
it referred to.

(ii) The statement was more than a mere puff or sales talk. Whether a statement is a puff
or a misrepresentation depends on what a reasonable person could deem it to be.

(iii) The statement was one of fact not opinion. As a general rule opinion does not amount
to misrepresentation. It was so held in Edington v. Fitzmaurice. However, an opinion
may amount to misrepresentation if: -

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(a) The maker does not honestly hold that opinion.

(b) The opinion purports to be based on certain facts within the maker’s
knowledge but whose truthfulness he does not verify.

(iv) The false statement was intended to be relied upon by the representer (recipient).

(v) The false statement was in fact made by the other party to the contract. As a general
rule, omission, silence or non-disclosure does not amount to misrepresentation.
However, it may: -

(a) In contracts of utmost good faith e.g. insurance

(b) In confidential relationships.

(c) Where disclosure is a statutory requirement.

(d) Where the statement made is half true

(e) If the statement was true when made but turns false due to changes in
circumstances before the contract is concluded but the maker does not disclose
its falsity as was the case in With v. O’flanagan.

(vi) The false statement influenced the party’s decision to enter into the contract. The party
must show that the false statement was made before or when the contract was
concluded. However, the false statement need not have been the only factor the party
has considered. In Andrews v. Mockford; where the plaintiff had relied on untrue
statement in a company’s prospectus, issued by the defendants it was held that the
defendants were liable in damages for the statements as the plaintiff had relied on
them.

(vii) The false statement was innocently, fraudulently or negligently made.

a) Innocent Misrepresentation

A statement is deemed to be innocently misrepresented if the maker honestly believed in its truth
though it was false and had no means of ascertaining that it was false as was the case in Oscar Chess
v. Williams where the defendant had no means of ascertaining that the year of registration of the
vehicle was incorrect. In Alkerhielm v. De Mare where the defendants who were directors of a
company issued a prospectus stating that 1/3 of the company shares had been taken up in Denmark
which was not true at the time. It was held that the shares would be taken up in Denmark. A similar
holding was made in Derry v. Peek.

If innocent misrepresentation is proved, the innocent party may either:-

1. Apply for rescission of the contract

2. Sue for indemnity for any direct financial loss occasioned by the representation as was the case in
Whittington v. Seale-Hayne where the defendant had innocently misrepresented the sanitary
condition and habitation of his premises to the plaintiff who as a consequence took a lease to carry
on the business of poultry breeding. The premises were not in a sanitary condition and mere unfit for
human habitation. Some of the defendant’s poultry died while others lost value this farm manager
was taken ill and the premises were declared unfit for habitation. The defendant spent money

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putting it in a habitable condition, and paid outstanding rates. It was held that we could only recover
the direct financial loss suffered.

b) Fraudulent Misrepresentation

A statement is deemed to be fraudulently misrepresented if the maker:

a) Has knowledge that it is false

b) Makes it carelessly and recklessly

c) Does not believe in its truth

This test of fraud was formulated in Derry v. Peek. In Andrew v. Mockford where the defendants had
issued a prospectus containing untrue statements and the plaintiff applied for 50 shares and was
allowed the same but subsequently sued the defendants in damages for fraudulent
misrepresentation. It was held that the defendants were liable as they were aware of the falsity of
the statements.

A similar holding was made in Bartholomew v. Petronilla.

Remedies for fraudulent misrepresentation are either: -

i. Action for rescission of contract.

ii. Damages for the fort of deceit.

c) Negligent Misrepresentation

A statement is deemed to be negligently misrepresented if the maker has both means and capacity
of ascertaining its falsity but fails to do so. The maker is deemed negligent as a reasonable person in
such circumstances would have so ascertained.

However, for negligent misrepresentation to be relied upon, it must be proved that: -

1) There was a special relationship between the maker and recipient of the statements
hence the maker owed the recipient a legal duty of care. It was so held in Hedley Byrene
and Co. ltd. V. Heller and Partners Ltd. A customer of the defendant bank approached the
plaintiff bank for some guarantees. The plaintiff bank wrote to the defendant seeking to
show the credit worthiness of the defendant customers. The defendant bank in 2 letters
written on a ‘without responsibility basis’ confirmed that their customer was credit worthy.
The plaintiff extended the guarantee but due to the customer’s uncreditworthiness, the
plaintiff suffered loss of £19,000. The plaintiff sued. It was held that though the defendant
bank was negligent it was not liable as the information had been given on a ‘without
prejudice / responsibility basis”.

2) That the Party suffered loss of a financial nature

In Kirimu Estate (UG) Ltd. v. K.G. Korde the plaintiff company instructed the defendant (a lawyer) to
value a piece of land for it. The defendant gave a figure without the assistance of a proper valuation

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of the estate. The figure was far above the market value and the company sued in damages for
negligent misrepresentation. It was held that the defendant was liable to pay the difference in value
by reason of negligence.

2. Mistake (Assignment)

There are two types of mistakes:

 Mistakes of law

 Mistakes of fact

As a general rule a mistake of law does not affect a contract however, a mistake of foreign law may
affect a contract. Mistakes of facts affected contractual relationships. A mistake is said to be
misapprehension of a fact or factual situation. It is an erroneous assumption. Mistake of fact that
effect contracts are generally referred to as operative mistakes and the law recognizes various types
of operative mistakes:

a) Common

b) Mutual

c) Unilateral

d) Mistakenly signed documents

e) Mistake as to quality of subject matter

1. Common Mistake

This is a mistake as to the existence or ownership of the subject matter. Both parties make the same
mistakes. Each party understands the others intention but both are mistaken about some underlying
fundamental fact. Common mistake rendered void in two circumstances:

Cases of Res Exinta: These are circumstances in which parties about the subject matter. This
circumstance is contained in sec 8 of the sale of goods Act which provides where there is a contract
for the sale of specific goods which without the seller’s knowledge have perished the contract is void.

In Couturier V. Hastle the parties entered into a contract for the sale of a large quantity of corn which
at the time was supposed to be on transit to Britain from Greece but unknown to the parties the ship
captain had sold the corn in Tunisia due to overheating and fermentation. It was held that the buyer
was not liable to pay the price as the contract was void for common mistake as the subject matter
did not exist.

Case of Res Sua: These are circumstances in which parties are mistaken about the ownership of the
subject matter. The party purporting to buy is the legal owner but both are unaware of the fact. The
purported seller has no title to pass hence the purported contract is void. It was so held in Bingham
V. Bingham.

3. Unilateral Mistake

This is a mistake as to the identity of one of the parties to the contract. Only one party is mistaken
and the mistake is induced by the other party. Unilateral mistake arises where a fraudulent person
misrepresent his identity to another so as to obtain goods on credit or other favourable terms which
he then sells to a bona fide 3rd party who takes without notice of the fraud. The dispute is usually

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between the original owner of the goods and the bonafide purchaser. The original owner is entitled
to the goods or their value by establishing that the contract between him and the fraudulent person
was void for unilateral mistake.

The party must prove that: -

i. It dealt with a person other than the one it intended to deal with.

ii. The person it dealt with was aware of that fact.

iii. The identity of the person, the party intended to deal with was fundamental to the

contract.

By proving these facts the party establishes that the contract was void.

In Cundy v. Lindsay and Co. Ltd. A fraudulent person known as Blenkarn ordered goods from Lindsay
and Co. Ltd his signature resembled that of a company named Blenkiron and Co. Lindsay and Co. had
heard of Blenkinron and Co but had not dealt with them. Blenkarn had quoted an address on the
same street as Blenkiron and Co. Thinking that they were dealing with Blenkiron and Co. Lindsay and
Co. dispatched the goods to the address. Blenkarn took delivery and sold them to Cundy. Lindsay and
Co. sued Cundy in damagers of conversion. It was held that they were entitled to damages as Cundy
had no title to the goods like Blenkarn before him as the contract was void.

4. Documents Mistakenly Signed

This is a mistake as to the nature of the contract; it arises when a party to a contract signs the wrong
document. Such a mistake does not render the contract void but avoidable at the option of the party.

To avoid the contract, the party must prove that: -

(a) The document signed was fundamentally different from the one the party thought it
was signing.

(b) The party was neither careless nor negligent when it signed the document.

By proving these facts, the party establishes the plea of non-est factum which literally means this is
not my deed. Unless these facts are proved, the contract cannot be avoided as was the case in Gallie
v. Lee and Anor.

5. Mistakes as to Quality of Subject Matter

This mistake arises when one of the parties to the contract is mistaken about the quality of the
subject matter of the contract. Such a mistake renders the contract voidable at the option of the
innocent party.

6. Duress

At common law duress means actual violence or threats thereof. It exists where a contractual
relationship is procured by actual violence on the person or threats thereof. The party is compelled
or coerced to contract. For the most part, duress consists of threats. Duress was developed by the
common law with a very narrow scope. It renders a contract voidable at the option of the innocent
party.

For the contract to be avoided, the innocent party must prove that:-

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 The threat was intended to cause fear, injury or loss of life.

 The threat was directed to his person or body as opposed to his property. It was so held in
Altee v. Backhouse. A threat directed at the body of a member of the party’s household
amounts to duress.

 The threat was illegal e.g. a threat to sue, prosecute or cause imprisonment for no
reasonable cause. A threat to enforce once legal rights does not amount to duress. It was
so held in Hassan Ali Issa v. Jeraj Produce Shop where the defendant had alleged that the
cheque had been written under duress in that the plaintiff had threatened to sue if repair
and storage charges were not paid. It was held that the threat did not amount to duress. In
Friedberg Seelay v. Klass the defendants gained access to the plaintiff’s house and
threatened not to leave unless she sold her jewels to them.

7. Undue Influence

It is said to exist where a party dominates the other persons will thereby inhibiting its exercise of an
independent judgement on the contract. One party thus exercises overwhelming influence over the
other. Undue influence was developed by equity with a fairly wide scope. It renders a contract
voidable at the option of the innocent party. Undue influence renders a contract voidable in the
following circumstances;

1. Where parties have a special relationship

E.g. parent-child, advocate-client, doctor-patient, trustee-beneficiary, religious leader-disciple; undue

influence is presumed in favour of the weaker party. It is the duty of the stronger party to show that
the weaker party made an independent decision on the contract. e.g. he had an advocate of his own.

In Ottoman Bank Co. Ltd. v. Mawani, the plaintiff bank extended a loan to a business owned by the
defendant’s father and the defendant guaranteed the amount. The fathers business was unable to
pay the loan and the bank sued so to enforce the guarantee. Evidence that the defendant was still
under the control of the father. He worked in the fathers firm and had no independent source of
income. It was held that he wasn’t liable on the guarantee as it was voidable at his option for the
father’s undue influence.

2. Where parties have no special relationship

The party pleading undue influence must prove it by evidence. The circumstances must be such that
the party did not make an independent judgement on the transaction, as was the case in Williams v.
Bayley, where the defendant entered into a contract promising to pay monies withdrawn from a
bank by the son. The banker had made it clear that if no arrangement was arrived at, the defendant’s
son would be prosecuted for the offence. When sued the defendant pleaded the banker’s undue
influence. It was held that he was not liable as the contract was voidable at his option.

3. Unconscionable bargains

These are unfair bargains. They are transactions entered into in circumstances in which one party
takes advantage of its position to procure the deal. Such transactions are voidable at the option of
the innocent party. The concept of unconscionable bargains was developed by equity courts as an
extension of the doctrine of undue influence and was explained by Lord Dening in David C. Builder
ltd. v. Rees.

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DISCHARGE OF CONTRACT

A contract is said to be discharged, when the obligation created by it ceases to bind the parties who
are now freed from performance.

However, whether a party is liable or not after discharge, depends on the method of discharge. A
contract may be discharged in the following ways: -

1. Express agreement

2. Performance

3. Breach

4. Impossibility or Doctrine of Frustration

5. Operation of Law.

1) Discharge by Express Agreement

A contract may be discharged by agreement if the parties thereto expressly agree to discharge the
contract. Discharge by agreement is justified on the premise that whatever is created by agreement
may be extinguished by agreement.

Discharge by agreement may be bilateral or unilateral

a) Bilateral Discharge

If neither performs its part of the contract, the obligation are said to be executory and the discharge
is bilateral as both parties agree not to perform. The mutual promises constitute consideration.

b) Unilateral Discharge

If either of the parties has wholly or partially performed its part of the contract, the obligations are
said to be executed and the discharge is unilateral.

The party that has performed discharges the other from performance.

Unilateral discharge may take any of the following 3 forms: -

(i) Contract under Seal; Such a contract binds the parties and does not require consideration.

(ii) Novation: This is the substitution of the old contract with a new one. The old contract is
thereby discharged.

(iii) Accord and satisfaction: This is the purchase of a release from an obligation whether
contractual or otherwise not by performance but the provision of new or extra consideration
which is consideration which is accepted by the other party to discharge the contract. The
party that has not performed provides the new consideration which is accepted by the other
party. The new consideration is the satisfaction and its acceptance by the other party is
accord.

2) Discharge by Performance

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A contract is discharged by performance if both parties perform their mutual obligations as agreed.
Each party must have performed its part.

Medieval common law insisted that discharge by performance was only possible if parties had
performed their obligations precisely and exactly.

This is the common law Doctrine of Precise and Exact which is to the effect that parties must honour
their contractual obligations to the letter. Every aspect of the contract must be performed. It has
been observed that it is a fundamental principle of law that contractual obligations be performed
precisely and exactly.

The Doctrine of precisely and exact is exemplified by the decision in Cutter V. Powell. Mr. Cutter
agreed to assist Powell, a ship captain as a second matter on a journey from Jamaica to Liverpool, the
ship sailed on August 2nd, and Cutter died on September 20th, 19 days before the ship was due at
Liverpool. Mrs. Cutter sued for compensation for the work done by Mr. Cutter, it was held that
nothing was payable by the defendant as Mr. Cutter had not performed the contract precisely and
exactly.

This case demonstrates that strict application of the doctrine of precise and exact occasion’s unjust
enrichment. Common Law admitted exceptions to the doctrine of precise and exact to mitigate its
harshness. These are circumstances in which parties will be compensated for work done (quantum
meruit) or discharged even though they have not performed precisely and exactly.

3) Discharge by Impossibility or Doctrine of frustration

Frustration Of Contract

A contract is said to be frustrated if performance of the obligation is rendered impossible, illegal or

commercially useless by unforeseen or extraneous circumstances for which neither party is to blame.
When a contract is frustrated, it terminates and the parties are discharged.

Circumstances in which a Contract may be frustrated

I. Destruction of subject matter In Taylor v. Caldwell, the defendant had hired the
plaintiff’s hall to conduct a musical concert at specified charges, before the day of
the first concert, the hall was destroyed by fire and neither of the parties was to
blame.

II. Non-occurrence of an event; If a contract is based on a particular event or state of

affairs to obtain at a particular time, its non-occurrence frustrating the contract and
discharges the parties. However, for the contract to be frustrated, it must be evident
that the event or state of affairs was the only foundation of the contract.

III. Illegality; If performance of contractual obligations becomes illegal by reason of

change of law or otherwise the parties are discharged as there is no obligation to
perform that which has become illegal.

IV. Death or Permanent Incapacitation; e.g in contract of personal service such as

employment.

V. Government intervention; If a policy act or regulation make it impossible for a party

to complete its contractual undertaking the contract is frustrated and the parties
discharged.

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VI. Supervening Events; These are events that delay performance and thereby change
the commercial characteristics of the contract. The change must be fundamental. As
a general rule, additional expenses do not frustrate a contract; however, they may if
they render the transaction commercially useless.

4) Discharge by Breach of Contract; Breach of a contract does not discharge it; it gives
the innocent party an opportunity to treat the contract as repudiated or as existing.
If it treats the contract as existing, it is bound to honour its part however, if treats it
as repudiated it is not bound to do so.

Breach of contract may be:-

 Anticipatory

 Actual

(a) Anticipatory Breach of Contract

This is a situation where a party to a contract expressly or by implication intimates to the other in
advance its intention not to perform on the date of performance. Evidence must clearly suggest
breach of contract.

The innocent parties take any of the following steps:-

a) Sue in Damages

The party must prove the anticipatory breach of the contracts well as its willingness to perform its
part of the contract.

In Frost V. Knight where the defendant had contracted to marry the plaintiff after his father’s death
but married another person during the lifetime of the plaintiff ‘s father, it was held that the
defendant was liable in damages for anticipatory breach of the contract.

b) Wait for the party to perform by the due date.

The innocent party may opt to afford the other party a chance to perform its part of the contract,
however, if the contract is in the meantime frustrated, the innocent party loses all remedies as was
the case in Avery V. Bowden.

c) Sue for the Decree of Specific Performance.

The innocent party may apply for the equitable remedy of specific performance to compel the other
party to for the equitable remedy of specific performance to compel the other party to perform its
part of the contract and the same may be granted if circumstances justify as was the case in Hasham
Jiwa V. Zenab where parties entered into a contract for the sale of a piece of land but the defendant
repudiated the same before the date of completion and the plaintiff applied for specific
performance. The court granted the order and the defendant were compelled to perform. Where a
contract is breach in anticipation, the innocent person is not bound to mitigate its loss.

(b) Actual Breach of Contract

This entails the non-performance of a party’s obligation on the due date or tendering defective
performance. The innocent party may treat the contract as repudiated if the breach is fundamental

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to the contract as was the case in Poussard V. Spiers and Pond where the plaintiff’s non-appearance
from the beginning of the season entitled the defendant to treat the contact as having come to an
end.

5) Discharge by Operation of Law; Discharge of the operation of law entails the

discharge of parties from their contractual obligations at the instance of the law. The
parties are freed by law.

Such a discharge may take place in the event of:-

1. Merger

This is the incorporation of the items of a simple contract into a subsequent written

agreement between the parties. The simple contract is discharged by the operation o

the law.

2. Death

In contract of personal service or performance, the death of a party discharges the

contract.

3. Lapse of Time

If time is of the essence of the contract and a party fails to perform within the prescribed

time, the contract is terminated, as was the case in Panesar V. Popat

REMEDIES FOR BREACH OF CONTRACT

When a contract is breached, the innocent party’s contractual rights are violated and the party has a
cause of action known as breach of contract which entitles it to a remedy.

1. Damages (Monetary Compensation)

This is the basic Common Law remedy; it is a monetary award by the court to compensate the
plaintiff for the loss occasioned by the breach. Its objective is to place the plaintiff to the position he
would have been had the contract been performed. Damages for breach of contract may nominal or
substantial.

2. Specific Performance

The decree of specific performance is a court order which compels a party to perform its contractual
obligations as previously agreed. It orders performance without an option to pay damages. Specific
performance may be granted in circumstance in which monetary compensation inadequate; The
subject matter is unique or has rare characteristics e.g. land

3. Injunction

This is a court order which either restrains a party from doing or continuing to do a particular thing
or compels it to undo what it has wrongfully done. It is an equitable remedy whose award is

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discretional and may be granted in circumstance in which: - 1. Monetary compensation is inadequate
2. It is necessary to maintain the status quo.

However, for the order to be granted, the plaintiff must prove that: -

a) It has a Prima Facie case with a high probability of success

b) If the order is not granted the plaintiff is likely to suffer irreparable injury.

c) If the court is in doubt, it must decide the case on “a balance of convenience.”

It was so held in Giella V. Casman Brown Co. Ltd. (1973) The court said;

“The conditions for the grant of an interlocutory injunction are now, I think, well settled in East
Africa. First, an applicant must show a prima facie case with a probability of success. Secondly, an
interlocutory injunction will not normally be granted unless the applicant might otherwise suffer
irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if
the court is in doubt, it will decide the application on a balance of convenience.”

4. Rescission

The essence of this remedy is to restore the parties to the position they were before the contract. It
is an equitable remedy whose award is discretional. The remedy may be availed whenever a contract
is vitiated by misrepresentation

CONTRACT OF AGENCY

The law of agency deals with the principles that govern the relationship between a Principal and his
Agent. The term agency refers to a delegation of duties to another party by a principal. The agent
also has rights that arise from this relationship.

Agency may be defined as a legal relationship that exists between a person called the agent who is
considered by law to represent another known as the principal in such a way as to affect the
principal’s legal position in relation to 3rd parties. It has also been defined as a relationship where a
party expressly or implied consents that the other should represent him and the other consents to
do so.

Although consent is essential in ascertaining whether agency subsists or not, the relationship may
and does exist without consent of the parties. The basis of agency is authority which is the power of
the agent to affect the principal’s legal position in relation to 3rd parties.

Characteristics of Agency

1. The agent performs a service for the principal

2. The agent represents the principal

3. Acts of the agent affects the legal position of the principal

Creation of Agency

Once an agency relationship is created, an agent comes into existence. An agency relationship may
come into existence in the following ways;

1. By agreement, contract or appointment.

2. By ratification.

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3. By estoppel.

4. By necessity.

1. Agency by Agreement

This agency arises when parties mutually agree to create it. Their minds must be at ad idem and both
parties must have the requisite capacity. The purpose of the relationship must be legal.

As a general rule, no formalities must be complied with however, an agent appointed for the purpose
of signing documents in the principal’s absence must be appointed by a deed known as the Power of
Attorney.

2. Agency by Ratification

Ratification is the adoption or confirmation by a party of a contract previously entered intoby

another purporting to do so on his behalf.

Agency by ratification arises after the “agent” has acted. It comes into existence when the

person on whose behalf the agent purported to act and without whose authority he acted adopts
the transaction as if there had been prior authorization. By ratifying the transaction the agents
authority is backdated to the date of the transaction.

3. Agency by Estoppel

This agency is created by the equitable doctrine of estoppel. It arises where a party by word or
conduct, represents another 3rd parties as his agent and the 3rd parties deal with the agent. The
other party is estoppel from denying the apparent agency.

4. Agency of Necessity

This is a category of agency created by law in circumstances of necessity where one party is

deemed to have acted as an agent of another.

Agency of necessity arises in 2 circumstances namely;

(a) Commercial

(b) Domestic

(a) Commercial Agency of Necessity

According to Lord Simon in China Pacific case, commercial agency arises where a party is in

possession of another’s goods whether perishable or not and an emergency arises requiring

immediate action in relation to the goods and it is impossible for the party in possession to seek
instruction from the other.

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(b) Domestic Agency of Necessity

At Common Law a deserted wife is regarded as an agent of necessity with authority to pledge her
husband’s credit for necessaries.

For the agency to arise, the following conditions are necessary:

1. The wife must have been deserted by the husband.

2. She must be free from blame.

3. Her authority is restricted to pledging her husband’s credit for necessaries.

Types or Classification of Agents

1. General Agent: He is an agent engaged to perform a particular task or transaction on behalf

of the principal in the ordinary course of his business, trade or profession as an agent.

2. Special Agent: This is an agent whose authority is restricted to the performance of a

particular act not being in the ordinary course of his business, trade or profession. Both
types derive their authority from the terms of appointment.

Scope of the Agency Relationship (The Concept of Authority)

The principal is only liable if the agent was acting within the scope of his authority. Authority implies
permission to do or engage in a particular act. It differs from power which is a legal concept.

Whereas authority creates power, power may exist without authority. Though the two concepts are
at times used interchangeably, they are not the same.

In certain circumstances, the agent has power but no authority e.g. an agent of necessity. Authority
is the ability of the agent to effect the principal’s legal position in relation to 3rd parties.

Types of Authority

There are 3 types of authority an agent may have namely;

1. Real or actual.

2. Ostensible or Apparent.

3. Presumed.

Liability For Breach of Contract

If an agent with no authority to act warrants the same to a 3rd party who relied on the
representation

and suffers loss or damage, the 3rd party may have an action in damages against the agent for

breach of authority.

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Obligations of the Agency

Duties of the Agent

1. The agent must perform his obligation if the agency is contractual. He is not bound to
perform if the agency is not created by agreement or where the undertaking is illegal or void.

2. The agent is bound to obey the principal’s instructions. This means that he must act within
the scope of his authority.

3. The agent must exhibit a degree of care and skill appropriate to the circumstances. In
ordinary transactions, the degree of care and skill is that of a reasonable man, if engaged as a
professional the degree is that of a reasonably competent professional.

4. The agent must respect the principal’s title to any property he holds on the principal’s behalf.
He cannot deny that the principal has title thereto. However, if a 3rd party has a better title
and the agent issued, he is entitled to plead jus tertii (the other person has a better title).

5. The agent is bound to explain to the principal the application of money or goods that come
into his hands during the relationship. The account must be complete and honest.

6. As a fiduciary, an agent is bound to act in good faith for the benefit of the principal. His
actions must be guided by the principle of utmost fairness.

7. The agent must ensure that the principal is well aware of the transactions entered into.

8. The agent must not disclose his dealings with the principal to 3rd parties without the
principal’s consent.

9. The agent must maintain separate accounts of his money or assets and those of his principal.
This is necessary for accountancy purposes.

10. The agent is bound to disclose any personal interest in contracts made on behalf of the
principal. He must disclose any secret profit made, failing which he is bound to account the
same to the principal.

Duties of the Principal

1. It is the duty of the principal to remunerate the agent for the services rendered. This duty
may be express or implied. The agent must earn his remuneration by performing the
undertaking. However the principal is not bound to remunerate the agent if:

a. He has acted negligently.

b. He has acted in breach of the terms of the contract.

c. He has made a secret profit without disclosure.

2. It is the duty of the principal to compensate the agent for loss or liability arising. However,
the principal is only liable for loss or liability arising while the agent was acting within the
scope of his authority.

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Rights and Remedies of the Parties

Remedies of the Principal

1. The principal is entitled to dismiss the agent for misconduct. If the agent has acted
fraudulently, the principal has a complete defence against remuneration or indemnity of the
agent for any loss or liability arising.

2. The principal may institute certain actions against the agent where appropriate:

a) If an agent has acted in breach of contract, the principal has an action in damages.

b) If an agent has acted negligently, the principal has an action in damages for
negligence.

c) If an agent fails to hand over money or assets to the principal the principal has an
action in damages for conversion for money had and received.

d) To ascertain what the agent has in possession the principal has an action for an
account

e) If the agent is declared bankrupt or his assets are mixed with those of the principal,
the principal has an action in tracing to facilitate recovery of the same.

Remedies of the Agent

1. If the principal fails to remunerate or indemnify the agent, the agent has an action in
damages for breach of contract.

2. An agent in possession of the principal’s goods is entitled to retain them as security for any
obligation owed by the principal. However, for the agent to exercise a lien, the following
conditions are necessary:

a) He must have lawful possession of the goods.

b) He must have obtained possession in his capacity as agent.

c) The goods must have been delivered to the agent for a purpose connected with the lien
i.e. the agent can only retain the goods in respect of which the principal’s obligation
arose.

3. An agent who has parted with possession of goods is entitled to resume the same if the
goods are still in the course of transit to the principal, thereby enabling him to exercise a lien
on them.

4. Where property in the goods has not passed to the principal, the agent is entitled to
withhold the passage to compel the principal to honour any obligation owing.

Termination of Agency

An agency relationship may terminate in any of the following ways;

1. Agreement

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Where the relationship is consensual, the parties therefore may enter into a new agreement to
discharge the agency. Their mind must be ad idem.

2. Withdrawal of Consent

This is termination of agency at the option of other party. The agent may renounce the relationship
while the principal may revoke the same. However, agency is irrevocable if: -

a) The agent has exercised his authority in full.

b) The agent has incurred personal liability

c) The agent authority is coupled with interest

3. Death of Either party

The death of principal or agent ends the agency relationship. This is because the obligations of
agency are confidential and not transferable.

4. Performance

Execution of the agent’s authority in full terminates the relationship as the obligation has been
discharged. The contract if any is discharged by performance.

5. Lapse of Time

An agency relationship terminates on expiration of the duration stipulated or implied by trade usage
or custom.

6. Insanity

The unsoundness of mind of either party terminates the agency relationship since the party loses its
contractual capacity.

7. Bankruptcy of the Principal

The declaration of bankruptcy of the principal by a court of competent jurisdiction terminates the
agency relationship.

8. Frustration of Contract

Agency related by agreement or contract comes to an end when the contract is frustrated.

9. Destruction of Subject Matter

If the foundation of agency whether contractual or not is destroyed, the relationship terminates.

10. Cessation of Emergency

Agency of necessity comes to an end when the circumstances creating the emergency cease and the
party in possession is in a position to seek instructions from the owner.

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