Law of Contracts Notes
Law of Contracts Notes
The constitution says any law, including customary law, that is in conflict with the constitution is null and void and will not be
followed; the law cannot contravene the supreme law of the land.
2. Islamic law
Subset of law which is highly specialized and is based on the holy Quran.
It does not apply to non-Muslims; only presides over Muslims.
It is only used as a source of law when determining issues of marriage and inheritance among Muslims.
Because it is a highly specialized law, they have the Kadhi's court to solve issues.
3. Hindu Customs
Only apply in Hindu marriages and divorces.
The environmental land court (ELC, Article 162 (2) (b))and employment and labour relations court(ELRC, Article 162 (2) (a)) do not
5 Kadhi's court
• Deals with Islamic cases on marriage, divorce and inheritance
6. Tribunals
• Established by acts of parliament, all others are established by the constitution
• Quasi-judicial function: They can hear and determine specific disputes; specific to the tribunal's function
○ Tax tribunal - a forum for those who are aggrieved by the decision of the Commissioner for Tax
○ HIV Tribunal - discrimination w.r.t someone's status
○ Sports Tribunal- sporting issues e.g doping
• The decisions which come out of the tribunal can only be appealed from the high court upwards.
Note: Common law is A system of law developed through court decisions and judicial precedents rather than through written statutes
or legislation. It should not be confused with Case law, The body of law made up of individual judicial decisions from courts; Case law
is a subset of common law
• Over time, legislative law has overpassed common law, and is regarded as true law. This is because legislative law is made by
representatives of the people, and is regarded as the will of the people. Common law however is still important when it comes to
covering matters not dealt with by statutory laws
• Both levels of the legislature make laws, but their roles are distinct
○ Senators make laws concerning county government
○ National Assembly make laws concerning national government
• Bills can be brought forward by individual or private members, or a government initiated process.
Stage 7: Assent
• National government bill taken to the president, County government bill taken to the Governor(point of contention in exam)
• Bill not signed or acted upon in 14 days are passed into law
• President/Governor can refer the bill back to the Reporting/Sectoral stage
Stage 8: Commencement
• Happens in two ways:
○ Bill may have a release clause
○ Bill becomes law 14 days after assent
3. Lawful consideration
4. Capacity of parties
○ This is the legal capability of people to enter into a contract.
○ You can enter into a contract with special considerations among:
a) Minors
b) Companies/legal persons
c) Immigrants
d) Mentally unsound people
5. Free consent
○ Parties must consent to entering into the contract: no coercion should be involved.
○ Should it be the case that you entered into a contract via coercion, the contract immediately becomes invalid
6. Lawful object
○ The reason for entering the contract must not be illegal
7. Possibility of performance
○ For a contract to be valid, it must be possible to perform e.g. you cannot get into a contract with a 21 year old to become 12 years old
Important exam note: DO NOT confuse benefits of a contract with its essentials
Capacity
• This is the legal capability of parties to enter into a contract.
• Specific rules are applied when entering into a contract with:
a. Minors
Legal minor age varies from country to country. In Kenya, it is someone below the age of 18
Group discussion: What kind of contracts can minors get into?
b. Corporations
Always make sure contact person has the capacity to bind the contract by asking for the company's memorandum and article of association
c. Immigrants/non-citizens/aliens
Ensure aliens have legal documentation to get into a contract in your country.
This includes
a) Proper registration
b) Permits from immigration
Those who are employed have a different permit from businessmen
These records can be confirmed by the immigration office
d. Mentally unsound people/Drunkards
Medically insane people can enter contract, but they must be lucid during the time they get into a contract.
Drunk people cannot enter a contract
There is a legal limit to how drunk one can be; you cannot observe drunkenness
e. Married Women
Under common law and some jurisdictions, married women could not enter into contract
Advances in the law however allowed women to get into contracts under the law reform act
TERMS OF CONTRACTS
• These are statements made in the process of contract negotiation that will eventually be included in said contract
○ However, not everything said during the negotiation will be included in the contract
○ These items which are left out are known as representations
○ Implied terms: In the absence of an expressed term, anything else which is guided by the law is known as an implied term
For example, you have to be above 18 years to enter most contracts
This term is implied as it is governed by the law; it is implied by other laws that you have the capability to enter into that contract
Consequences of subcontracting
• Research. This is very important
Discharge of contracts
○ This is the termination of a contract
○ Obligations and rights cease immediately when a contract is terminated
Parties are no longer legally bound to each other
○ Contracts can be discharged by
i. Performance
□ Occurs when each party has fulfilled their responsibilities
□ This is the most common way of bringing a contract to an end
□ Terms of contract are met when the contract is discharged
□ Discharge by performance can be looked at through
a) Complete performance: Carried out everything according to the terms of the contract
b) Substantive performance: Main objective of the contract is done.
◊ Minor objectives may have not been met, i.e. they may be defects, omissions, minor deviations etc.
◊ These defects should not affect the other party's rights
ii. Agreement
□ Both parties agree to terminate freely and willingly
□ Contracts without a termination clause by consent are dangerous
□ Obligations end when you both accept to end the contract
iv. Breach
□ When a party fails to meet their legal expectations
□ Going against what you are contractually obliged to do
□ There are two types of breaches
a) Material breach
◊ Failure to perform a substantial part of your obligations
b) Minor breach
◊ Breach of an insignificant part of the contract