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CHAPTER 1

THE NATURE OF LAW

Many people have attempted to define law and explain its nature and scope. The question of what the law
really is in fact a jurisprudential one. The definitions of are many and varied, but a working definition of
law is: The set of rules that govern and regulate the behaviour of the society.

The law encompasses what is written down in the form of legislation or statutes. The written law also
comes in form of authoritative decisions of the High Court, Supreme Court and Constitutional Court. Part
of the law is unwritten and this is the common law of the land. The common law of the country is the
Roman-Dutch law.
PURPOSES OF THE LAW
1. Maintaining Order
Some semblance of order is necessary in a civil society and is therefore reflected in law. The law—when
enforced—provides order consistent with society’s guidelines. Wildlife management laws, for example,
were first passed in an effort to conserve game that had nearly been hunted into extinction during the
nineteenth century. Such laws reflect the value society places on protecting wildlife for future generations
to enjoy.
2. Resolving Disputes
Disputes are unavoidable in a society comprised of persons with different needs, wants, values, and views.
The law provides a formal means for resolving disputes—the court system.

SOURCES OF LAW
The law of this country does not come from a single source but from a variety of sources. These
sources will be considered in turn. Zimbabwean Roman-Dutch law is derived from four sources,
namely, Common law, Custom, Legislation and Judicial Precedent.

a. Common law
Roman Dutch Law is the common law of Zimbabwe. Rome was founded in approximately 753 B.C. The
earliest Roman law was developed during the monarchy and the law was a mixture of religious, moral and
customary rules.
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The Romans spent quite a long period in the Netherlands which formed part of the then Roman Empire.
During this period Roman law was absorbed into the native Dutch law.

Roman Dutch as a system of laws was introduced in the Cape when Jan Van Reibeck of the Dutch East
India Company settled there in 1652. The early Dutch settlers brought with them the Roman Dutch system
of law from their native country Holland (Netherlands). This system of law was initially practiced in the
Cape and subsequently it spread to Natal, the Transvaal, and Orange Free State and eventually into the
then Southern Rhodesia (Zimbabwe).

History has it that in 1806 the British annexed the Cape Province. One of the conditions that were agreed
on for the transfer of the Cape to the British was that the colonists retained their own legal system. This
condition effectively meant that despite the fact that the Cape was going to be under British
administration, Roman Dutch law was retained as the law of the colony.

When the Pioneer Column arrived in present day Harare in 1890, they brought with them the Roman
Dutch System of law which they had been practicing in South Africa. Later on 10 June 1891 the then
British High Commissioner issued a proclamation to the effect that Southern Rhodesia (Zimbabwe) was to
be governed for the time being by laws applicable in the Cape colony. This heralded the official
importation of Roman Dutch law into Zimbabwe where it formed the basis of our common law.

The Lancaster House Constitution of 1979 contained further provisions which effectively put the final seal
on the Roman Dutch law as the legal system of the country.

However an important consideration worth noting is that by the time Roman Dutch law came to
Zimbabwe it already contained significant English infiltrations.

b. Custom

A custom is a practice which, by long-established usage, has come to have the force of Law. Custom is a
recognized source of law and in this country customary law includes practices that have been accepted as
binding by society and have thus become legally enforceable. For a custom to be recognized as binding
and therefore legally enforceable, it had to be:

1. Reasonable
2. Long-standing
3. Certain
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4. Uniformly observed
The above requirements were enunciated in the case of Van Breda v. Jacobs. This case concerned a
fishing dispute between fishermen of the Cape Coast. There was a custom amongst the fishermen to the
effect that once fishermen had put their lines in a particular place for the purpose of catching fish, no other
fishermen were entitled to set their lines close to those of the first group as this would have the effect of
intercepting the fish which could have been caught by fishermen who had put in their lines first. The
courts decided in this case that since this custom was long standing, reasonable, certain and uniformly
observed in that area, it was therefore legal and enforceable.

Upon the attainment of independence, customary law was given similar recognition to Roman-Dutch law.
This was done through the creation of primary courts i.e. village community courts, which did away with
the racial discrimination that was inherent in the application of customary law prior to independence.
Presiding officers who heard matters in these courts were appointed on the basis of their knowledge and
appreciation of customary law.

The extent to which custom is still an important source of law in present day Zimbabwe society is now a
highly debatable issue. Some argue that the pace of societal development is now so fast that custom
cannot keep pace with it. To this extent custom is fast losing its place as a source of law.

c. Legislation
Legislation is the promulgation of binding law in a precise and well defined form by a person or body
having the legal power to do so. Legislation is the most important source of law-making today.

In Zimbabwe context the Legislature consists of the President and Parliament.

Currently the Parliament consists of the House of Assembly and the Senate. Most of these members are
elected by the various constituencies they represent and some are appointed by the President in terms of
the constitution of the country.

The legislature can make whatever laws it considers necessary or desirable in the interests of peace, order
and good government. By the same token the legislature can subsequently amend or repeal any such laws.
Law made by the legislature is known as Statute law and each separate law is known as an Act which
means an Act of Parliament.
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Currently there at least five hundred Acts in existence and these are constantly being updated, amended
and sometimes repealed. In 1963, 1974 and again in 1996 all Acts in force in the country were revised,
consolidated and were published in separate consecutive volumes. Every Act is referred to by its short title
and the chapter number allocated to it e.g. the Act regulating the use of motor vehicles on public roads is
referred to as the Road Traffic Act (Chapter 24:03).

Sometimes an Act will generally set out the broad principles pertaining to a particular subject only and
will authorize some other person or body to issue other enactments providing for the detailed
administration of the Act and the implementation of the principles involved. Most of the issues covered by
legislation today are so complex and technical that the legislature often delegates its power to make
enactments to responsible bodies that are better qualified to understand and control the activities of such
concerns. Such legislation is called delegated of subsidiary legislation. E.g. Statutory instruments which
is a generic term used to describe laws passed under an enabling Act Statute law therefore comprises Acts
of Parliament and statutory instruments passed under the relevant Acts.

d. Judicial precedent
Courts have developed a habit of following previous decisions within more or less well defined limits.
This called the doctrine of precedent. A precedent is a previous judicial decision which serves as a rule or
guide for similar cases heard in future. This is a very important source in modern societies.

Such a decision must be made by a competent court and in Zimbabwe it means only the High Court or the
Supreme Court can set precedents. The fundamental principle involved in the doctrine of precedent is
embodied in the Latin maxim “stare decisis non quita movere” which basically means to stand by
previous decisions and not to disturb settled points.

The decisions of the High Court, Supreme Court and Constitutional Court are binding on the inferior
courts (magistrates, community and village courts). The decisions of the Supreme Court are binding on all
other courts including the High Court.

The decisions of the inferior court do not bind any other court, even themselves. Decisions of courts of
other countries are not binding on any court in Zimbabwe. However, our courts regard them as
“persuasive authority”. These include decisions of the Supreme Court of Appeal of South Africa, the
House of Lords, etc. The term “persuasive authority” means that the local courts will have regard to these
foreign decisions and attach due weight to them but will not regard them as binding as such.
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Advantages of the doctrine

1. It makes a law credible.

2. It makes the law in general more predictable.
3. It enhances reliability in the law.
4. It promotes equality and uniformity in the way the law operates.
Disadvantages of the doctrine

1. It allows the law to degenerate into a forest of erroneous notions as some wrong decisions
made will be maintained under the cloak that “what hath been done before may legally be done
again”
2. A strict application fails to allow legal rules to move with the times. Law must be both stable
and dynamic.
3. Doctrine can lead to manipulation of the law by lawyers who may want to advantage from its
lack of flexibility.
(a) Ratio- decidendi
This term means “the reason for the decision” or “the principle for the decision”. The ratio-decidendi
refers to that part of a previous decision which possesses the rule of law upon which the decision was
founded. It can also be defined as the legally material facts of a case and the decision thereon.

(b) Obiter – dictum

These are statements contained in a judgment which are not necessary or relevant to the decision of the
case (i.e. said by the way or incidentally).

More often than not judges express their opinion as to what the law is on some aspect not really relevant
to the case under consideration. A typical example is where a judge postulates and answers a hypothetical
set of facts or cites an analogy. Such an obiter dictum is not binding on future courts but may be accorded
some respect by subsequent courts dealing with a similar matter depending on the eminence of the judge
who said it and the circumstances in which the remark was made.

The reason why obiter dicta is not binding on future courts is that the point in question (i.e. the subject of
the dicta) may not have been properly argued and evaluated with the result that its full implications may
not have been fully appreciated.
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(c) Distinguishing
A court may avoid be bound by a previous decision if it distinguishes the previous decision from the one it
is being faced with. To do this the court must make a finding that the facts of the present case are so
different from those in the previous case that the two decisions are distinguishable. In other words the case
before the court will not fall within the ratio – decidendi of the earlier decision hence the need to
distinguish it although there may be similarities.

Laws and their classification

The law can be classified as follows:
1.1 Public and private law
Public law comprises those laws that regulate rights, relationships and obligations between the state and
its administrative arms on the one hand and its subjects on the other.
Public law is concerned with the interests of the public at large and the welfare of the state.
Public law is formed from the following branches of law:
(a) Public international law
This law governs inter-state relationships e.g. immigration laws between Zimbabwe and other countries.
(b) Constitutional law
This law is concerned with the functions of the organs of the state, namely, the legislature, the executive
and the judiciary, as well as power within the state.
(c) Law of procedure
The law of procedure deals with procedural aspects applicable to both civil and criminal courts in a given
jurisdiction.
Private law
This branch of law governs the rights and obligations where both parties involved are private persons. The
word person includes companies and other organisations of a like nature. Examples include law of
persons, family law, law of property, intellectual property law, and law of succession, law of contract and
insurance law. The fundamentals of all insurance transactions lie in contract and consequently the law
governing contracts is very important to insurance students.
National and international law
National laws are laws pertaining to a particular state. Internal law is a body of rules that regulates the
conduct of states towards one another.
Civil and criminal law
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(a) Civil law

A delict is a breach of a general duty imposed by law leading to a civil action at the instance of the injured
person. Civil law governs relationships between private individuals and is not concerned with the
community at large.
In civil proceedings it is up to the injured party to seek redress or waive his rights. In civil cases the two
parties are always cited e.g. Joe Chani versus Peter Ghost.
The dominant role is to compensate the party injured by breach of legally imposed duties. Civil law can
also be used to prevent a threatened wrong from being committed e.g. an injunction can be used to prevent
a threatened breach of contract.
(b) Criminal law
A crime is simply a public wrong. Criminal conduct is that conduct which is viewed as harmful or
prejudicial to the society at large despite the fact that the particular act complained of would have been
committed against one person or a small number of people. For example, where A steals from B the view
taken by the law is that such conduct is not only harmful to B alone but to the whole community
represented by the State. Consequently, all criminal proceedings are usually conducted and sanctioned by
the state.
The state through the Prosecutor General plays a key role in all criminal proceedings in contrast with civil
proceedings where it is up to the injured party to seek redress or waive his rights. All criminal cases cite
the state as the main complainant e.g. The State versus Peter Muti even though in reality the actual
complainant would be a private individual.
Because criminal law deals with public wrongs all those found should be punished. Punishment takes the
form of imprisonment, payment of fines, canning or any other form of punishment which the court can
legally hand out.
(c) Technical distinction between civil and criminal law
The distinction is centred on the degree of proof legally required for a claim to succeed under the two
branches of law. In our law a civil case will succeed if there is enough evidence on a balance of
probabilities to support it.
On the other hand a criminal prosecution will only succeed if the available evidence proves that the
accused person is guilt beyond a reasonable doubt.
A lower standard of proof is used in deciding civil cases while a much high standard is used for criminal
cases. This difference is understandable in view of the fact that a criminal conviction leads to punishment
and one form of punishment often handed out by courts is deprivation of liberty (i.e. imprisonment). By
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imposing a higher burden of proof on criminal cases seeks to eliminate the danger of punishing innocent
citizens.
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CHAPTER 2

THE LAW OF CONTRACT

Introduction
The law of contract is the cornerstone of modern commercial law. It is a legal enforceable agreement
entered into by two or more different persons with legal capacity. The parties should have serious
intention to create legally binding obligations. Their agreement needs to be within parities’ contractual
capacity. Furthermore, parties should communicate such intention without vagueness each to the other
and being of the same mind to the subject matter.

Definition of contract

 An agreement which creates and defines or intends to create and define legal obligations within the
parties themselves.

 An agreement between parties which is recognised and enforced by law.

It is a lawful agreement made by 2 or more parties within the limits of their contractual capacity, with the
serious intention of creating a legal obligation, communicating such intention, without vagueness each to
the other and being of the same mind as to the subject matter to perform negative or positive acts which
are possible of performance.

An agreement which recognised and enforceable at law between 2 or more persons to do or abstain from
doing some acts or to get their intention being to creation of legal relations and not merely exchange
mutual promises. Balfour v. Balfour

NB: a contract has the effect of creating rights and duties that can be legally enforced. Contracts can be
made orally however certain types of contract need to be in writing e.g. sale of immovable’s, suretyship
e.t.c

While all contracts result from agreement it must be noted that not all agreements are contracts. Social
agreements do not qualify as contracts for example if Solo asks Mutsai out for lunch at Mutape restaurant
and Mutsai does not turn up Solo cannot sue Mutsai for breach as this was a mere social agreement not
intended to create legal rights. Similarly domestic agreements do not pass as contracts. This was made
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clear in Balfour v. Balfour where a husband promised to pay his wife a stated weekly sum during his
absence abroad. Mr Balfour faltered in his promise and the sued. The court held that there was no contract
since the agreement amounted to a domestic arrangement between spouses and did not evidence intention
to create legal relations.

Essentials of a Valid Contract

For an agreement to pass as a valid contract it must meet the following essentials.

1. There must be agreement

2. Parties must of the same mind to the subject matter (consensus ad idem). Raffles v. Wichelhouse
Facts: parties agreed to a sale of cotton to be delivered by ship from Bombay. However there were
2 ships named Peerless and in agreeing each party referred to a different ship. Because the sailing
time of the 2 ships was materially different neither party was willing to agree shipment by the
other peerless. Held: no binding contract because each party had a different ship in mind when
contract entered into.
3. Parties must communicate their intentions
4. Agreement must not be vague. Humphrey v. Cassell, Finestone v. Hamburg, Kantor v. Kantor
Facts: under a ante nuptial agreement, the prospective husband agreed to settle on his future wife
‘all furniture, linen, plate and domestic effects, together with any and all renewals of and additions
to the same, as he may then or thereafter acquire at such times and in such quantities as he may be
expedient to him to the value of R3000...’ Mrs Kantor sought performance of his promise but her
husband claimed that the contract was void for uncertainty. Held: in favour of the husband, that the
contract was indeed unenforceable since the terms of offer were unclear and left the donor “free to
act or not to act at all” as wished. Thus – in effect- the so called agreement depended upon a
condition which reserved to Mr Kantor an ‘unlimited option’. The principle is that indefinite or
uncertain offers can void a contract.
5. Agreement must be lawful Lion Match Company v Wessel. Wessel sued the company for the price
of wood sold and delivered by him to the company the sale was however illegal and unenforceable
because Wessel did not possess the required government licence and permit. He lost his claim. The
agreement must not contrary to public morals/good (contra bonos mores) contract to run a brothel
is against public morals in Zimbabwe.
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6. Parties must seriously intend to contract ( animus contrahendi)

7. Agreement must be within the limits of their contractual capacity
8. Agreement must be possible of performance lex cogit ad impossiblia.

Formation of a contract

An offer has to be made by one party (offeror) to another to another (offeree) and accepted.

Offer + acceptance =agreement

Rules of Offer

An offer is a proposal put forward by one party with the intention that its acceptance by another results in
a contract. It expresses one’s willingness to become party to a contract and acceptance by another binds
both of them contractually.

All contracts begin with an offer. It must be noted that no legal rights are created until offer is accepted.
Until then the offer can lapse or be revoked.

Requirements of a valid offer

1. The offer must clear, definite and unambiguous.

2. The offer must be consistent with the requirements/essentials of a valid contract:
I.e. it must be lawful, within limits of offeror’s contractual limits, made with serious intention of
being accepted, possible of performance.

3. The offer must be one on which an optional time has not expired
An option specifies the time within which the offeree can accept the offer. Boyd v. Nel FACTS:
Nel gave Boyd an option of 4 months to purchase a farm. Immediately afterwards Nel permitted
other persons to prospect the farm as a result of which the government issued notice of intention to
proclaim the farm as an alluvial digging. Meanwhile Boyd in ignorance of that prospecting is
permissible made arrangements for cutting the farm into plots and selling them. Because of Nel’s
action Boyd had to abandon his plans and suffered damages. HELD: Boyd had the full period of
action for considering whether he would buy and as Nel had broken his agreement an action for
damages was a suitable one. NB: An option or time limit given to consider an offer is a separate
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contract binding on the offeror. See also Hersch v. Nel, Laws v Rutherford where if there is no
acceptance within the stipulated time no contract is formed and it is too late for offeree to accept
after expiration of option unless offeror agrees.

4. Offer must be communicated to the offeree or made known to the offeree:

An offer has no force until it is communicated or made known to the offeree. The principle is that
a person who does not know of an offer cannot accept it. Bloom v American Swiss Watch
Company FACTS: A company from whom diamonds and jewellery had been stolen, by means of
an advert in the press offered £500 for information to be given to the C.I.D which could lead to the
arrest of the thieves and recovery of stolen items. Bloom in ignorance of the offer supplied the
information and afterwards having heard of it claimed the reward and was unsuccessful. HELD:
the court ruled out though an advert which offers a reward amounts to an offer, bloom was
unaware of its existence and therefore can be no acceptance by a person who is ignorant of the
offer and he did not succeed.
5. Offer must not have been revoked
Hyde v Wrench FACTS: defendant offered to sell land to the plaintiff for £1000. Plaintiff agreed
to pay £950. The defendant rejected this. Plaintiff then agreed to the initial £1000 after all, but by
now the defendant no longer wished to sell. Plaintiff sued for breach of contract. HELD: the
plaintiff made a counter-offer which rejected the offer previously made by defendant. Thus he
could no longer revive the original offer of the defendant by tendering an acceptance of it. A
counter-offer rejects revokes the original offer to which the counter-offeror may therefore not
return unless original offeror agrees.
6. Offer must be made with the intention of being accepted by some other party.
7. Offer must more than a mere invitation to treaty.

Crawley v Rex FACTS: a shopkeeper in Johannesburg advertised a particular brand of tobacco at a

cheap price. The advert was in form of a placard placed outside the shop on which the price was
indicated. Crawley entered the shop bought the tobacco and left. He came back and asked for
another cigarette. This time the shopkeeper refused to sell him and Crawley refused to leave the
shop. HELD: the display of goods by the shop keeper was a mere invitation to do business. The
advertisement was not an offer and contract was not therefore concluded when Crawley tendered
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the price. Instead Crawley was convicted under a Transvaal ordinance for not leaving premises
when required to do so.

Gibson v Manchester City Council FACTS: MCC tenant Gibson received a letter from the M.C.C.
saying it may be prepared to sell the stand to him at £2180. Gibson formally applied but M.C.C
refused to sell the property. Gibson sued M.C.C but lost because the court ruled that the letter was
an invitation to treaty not an offer. Hence there was no contract between the two parties

Pharmaceutical Society of Great Britain v Boots Cash Chemist, the plaintiff argued that boots
had offered to sell to the public drugs without there being a qualified pharmacist present contrary
to the requirements of some section of the Pharmacy and Poisons Act. In its defence boots argued
that goods on display on a shelf were merely an invitation to treaty and its customers who made
offered on the point of sale where a qualified pharmacist was stationed. Boots was acquitted.

NB If an offer is made to a specific person it cannot be accepted by a third person. NB. The
following are not offers.

i. Invitation to tender.
ii. Newspaper adverts in general.
iii. Displays on self-service counters/shelf, Pharmaceutical Society of Great Britain v Boots
Cash Chemist
iv. Displays on windows, Crawley v Rex
v. Adverts by transport companies of their charges.
vi. Statements of lowest price in response to a specific enquiry, Harvey & Anor v Facey &
Ors FACTS: plaintiff sent a telegram regarding the price of a certain land, ‘will you sell us
Bumper Hall Pen? Telegram lowest price-answer paid.’ To which the defendants
responded ‘lowest price for Bumper Hall Pen £900, Harvey responded ; ‘we agree to buy
Bumper Hall Pen for the sum of £900 asked by you’ but the defendants refused to sell, the
plaintiffs sued claiming that defendant’s response to his enquiry of lowest price implied an
offer to sell which they had accepted. HELD: there was no offer only a response to a
specific enquiry.
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Rules Relating to Adverts

As a general rule an advert is not an offer, it is a mere invitation to treaty or to do business. The customer
is thus to offer the marked price for the article and the tradesman can accept or reject the offer. This is
authority from Crawley v Rex.

Exception to the general rule

An advert can amount to an offer where a general offer has been made ‘to do business with whoever shall
perform certain acts’. Reward advertisements are offers and therefore binding on the offeror if accepted by
anyone acting as required, in which case notification of acceptance is unnecessary.

Carlill v Carbolic Smoke Ball Company FACTS: the company manufactured smoke balls which were
meant to prevent influenza. It placed an advert in the local press stating that anyone who used their
product in a prescribed manner would not catch/contract influenza and if that happens the company would
pay £100, the company even deposited £1000 with their bankers to meet any claims. Mrs Carlill bought
the smoke balls and used it as prescribed but nonetheless caught influenza. She claimed the £100 but the
company claimed the advert was not an offer but simply an invitation to treat- a ‘mere puff’ directed at no-
one in particular and regarding which acceptance had been notified. HELD: Mrs. Carlill’s claim
succeeded. The court noted that the advert was no mere puff as indicated by the deposit of £1000 with the
bank , the advert was specific ‘ offers to anyone who performs the conditions made in the advertisement,
anybody who performs the conditions of the advert accepts the offer and that no notice of acceptance is
required because the person making the offer shows by his language and from nature of transaction that he
does not expect and does not require notice of the acceptance apart from notice of performance.

Reward cases therefore represent the only contractual situation where an advert does amount to an offer or
constitutes an offer. However no reward can be claimed by anyone who fulfils the requirements of but is
unaware of the reward, Bloom v American Swiss Watch Company.

In cases of reward situation, it must noted that only the first person to act as required can only claim the
reward provided he is aware of the offer of reward. A second person acting as required cannot is not
entitled to the reward, Lee v American Swiss Watch Company, Lee gave the information after Bloom.
However, since the Cape Provincial Division in the Bloom case had ruled him ineligible to claim the
reward the question was whether Lee could claim the reward instead. Lee’s claim failed as only the first
person acting as required by the advert provided he knew of the reward can claim it. Consequently any
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person who is not first will not receive the reward even if the party who was first did not receive the
reward.

Termination of an offer

1. Death of offeror or offeree- if either of these parties dies before acceptance, then the offer
will as a general rule terminate. In De Kook v Executor of Van Der Wall it was held that
an offer of donation could not be accepted after death of offeror. However there are cases
where the offeror persists beyond the grave. This is where the offeror had intention that his
executor should continue with the offer after his death and so enter into contract on his
behalf.
2. Rejection/refusal of offer- an offer comes to an end if rejected by the offeree either by
communicating expressly or making a counter-offer. In Watermeyer v Murray W offered
to sell his farm to M on certain conditions. M did not accept unconditionally but made a
counter-offer, stipulating a different date for the payment of a down payment. W was not
prepared to deviate from the original terms. M then purported to accept the original offer. It
was held that the original offer had come to an end on the counter-offer being made and
therefore no longer open for acceptance and there was no contract.
3. Revocation/withdrawal-the offeror may withdraw/revoke his offer any time before
acceptance. It is important that the offeror communicates his withdrawal to the offeree so
that offeree will not act in his prejudice. An offer cannot be withdrawn after acceptance.
Greenberg v Wheatcroft. On June 6 W signed a written offer to buy a certain land from G
the owner, on June 7 W telephoned G’s agent revoking the offer. On June 8 G signed an
acceptance on the document containing the written offer. It was held that the offer had been
effectively revoked on June 7and was no longer open for acceptance. NB Revocation is
only effective when communicated or brought to the knowledge of the offeree. This was
enunciated in Byrne & Co v Leon Van Tiehoven & Co where the defendants in Cardiff
offered to sell goods in a later posted on the 1 st of October. The plaintiffs in New York
telegrammed their acceptance on 11 October, The defendants meanwhile posted a letter
revoking the offer on 8 October but the revocation letter arrived on October 20. The
defendant refused to deliver the goods. The revocation was held to be inoperative until the
20th and the contract was upheld since acceptance was made on the 11th.
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4. Lapse of time- if an offer is for a fixed period of time and the offeree does not accept the
offer within the prescribed time then the offer will terminate or lapse. Even where there is
no time limit specified the offer must be accepted within reasonable time otherwise it
lapses. It is an implied term in every offer that it must be accepted with reasonable time
failure of which the offeree will be held to have rejected the offer.

Generally an offer lapses in the following ways

a) After reasonable time- Ramsgate Victoria Hotel & Co v Montefiore: M applied

for shares in the hotel company on 8 June but no allotment was made until
November 23. On November 8 he withdrew his application. It was held that the
allotment must be made in reasonable time, it was not made and so the offer lapsed
b) If not accepted within prescribed time- Laws v Rutherford: R gave a 3 months
option to enter into contract to cut timber on her farm which expired on July 26.
Having had nothing R asked L to remove certain plant he had erected on the farm.
On July 28 by letter and 29 by telegram L purported to exercise the option. HELD:
as L had not notified his acceptance within the fixed time a rule nissi (provisional
court order) interdicting him from cutting timer had been properly been made final.
c) If the intended performance becomes illegal or impossible.

Rules of Acceptance

In order for a contract to come into existence, the offer ought to be accepted. It follows therefore that if
offer is not accepted, no contract can come into being, and neither party (offeror and offeree) acquires
rights until valid acceptance is made.

Requirements of a valid acceptance

1. Must be definite and unequivocal

It must also exactly correspond with the terms of the offer. Thus offer must be accepted as it is
stands and any alterations or conditional acceptance may make the purported acceptance a counter-
offer instead which cancels the original offer
NB The offeror may accept the counter-offer but if he does not the counter-offeror cannot insist
on reverting back to the original offer unless the original offeror agrees. However a request for
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consideration of the offer for some variation in the manner of performance e.g. asking for credit
where offeror has not specified cash does not constitute a counter-offer.
2. Acceptance must be made before offer is revoked or lapses
See Laws v Rutherford and Ramsgate Victoria Hotel Co v Montefiore.
3. Acceptance must be made by the person for whom offer was intended

The right to accept an offer cannot be ceded by offeree to a third party. Thus if A offers to B a
third party C cannot accept nor may B & C accept. Please note that in Hersch v Nel it was held
that ‘an option to purchase for cash is ordinarily capable of being ceded.’ Blew v. Snoxwell B
offered to buy a piece of land from a company Richard Currie Ltd. However unknown to B the
land did in fact belong to S, who upon knowing it wrote to Richard Currie accepting it whereupon
B was notified. In a lawsuit later B argued that there was no contract between him and S. The court
agreed holding that “it is a trite of law that an offer made by one person to another cannot be
accepted by a third party. In this case offer was made to Richard Currie Ltd not S.”

4. Acceptance must be made in the manner prescribed by offeror

The manner in which acceptance is to be made may be expressly prescribed by the offeror. If
acceptance is not made in the manner prescribed there is no contract. This is highlighted in the
case of Eliason v Henshaw where an offer by E to buy flour from H was made and brought to H
by wagon. In terms of the offer H was supposed to send his acceptance by wagon. H thinking he
would reach E faster quickly by post accepted by letter which arrived after the wagon. It held the
acceptance was invalid and therefore no contract. This ruling though controversial is authority for
the proposition that where mode of acceptance is stipulated acceptance by any other mode is void.
5. Acceptance must not be based on some justifiably mistaken belief
A contracting party may only avoid a contract based on mistake if it can be proven that 1. The
mistake is a Justus error i.e. a reasonable one and that the mistake was material and essential.
Acceptance like the offer itself must be consistent with the requirements of a valid contract
6. Acceptance must be communicated.
 Either expressly or by conduct. Carlill v Carbolic Smoke Ball Co
 Silence cannot be acceptance, except where there is a duty expressly to repudiate as with
brokers’ notes.
 Where a specific form of acceptance is demanded by offeror, acceptance by any manner is
void.
 18

Acceptance by post

Postal rule – expedition theory

The basic rule is that manner of offer implies manner of acceptance. Consequently a written offer should
unless stated otherwise be followed by a written acceptance. Acceptance is effected at the time of posting
i.e. it becomes a contract on posting. This applies eve where the address of the offeror has changed. A
letter through the post is subject to many misfortunes like

i. It may get lost

ii. It may be delayed and
iii. A dishonest offeror may say he never received the letter of acceptance

NB Notwithstanding all this the law still says the contract is created because offeror elected acceptance be
by post, he assumed all the risks associated or attached to the post. In Household Fire & Carriage
Accident Insurance Co v Grant: Grant wrote offering to buy 10 shares in the company and enclosing a
deposit to the company with a letter of allotment-thus accepting his offer. But this letter never arrived.
Nevertheless- when the company went into liquidation later the liquidator sued for money still owing on
the shares. Court held that there was a contract indeed and grant as offeror was liable e chose method to
communicate by post thus making it his messenger and agent- and consequently assumed by implication
the risk of delay and accident. Therefore since Post Office was impliedly authorised for acceptance, such
acceptance was valid at time of posting-regardless of whether it was lost or not.

In Levben Products Pvt v Alexander Films an acceptance by post failed to t arrive. It was claimed that
this was because it was addressed the Levben Products Sinola street instead of Sinoia street. The court
said acceptance was valid, the mistake was immaterial.

NB The rule also applies to offer and acceptance by telegram but not by telephone and telex. In the case of
instantaneous communications telephone and telex which are distinct from mailed communication, the
contract is only completed when acceptance is received by the offeror.

Acceptance by telephone

In the case of Tel Peda Investigation Bureau v Van Zyl , Van Zyl a resident of East London sued the Tel
Peda Company of Johannesburg for money owed to him in respect of an investigation which he had
carried out for the company. The company’s offer of employ him was made by phone from Johannesburg
 19

during which Van Zyl speaking in East London accepted. The company challenged Van Zyl’s contention
that this brought the case within the jurisdiction of the East London courts. The company was correct. The
contract was only concluded when acceptance was conveyed to the company in Johannesburg and
therefore the Johannesburg court had jurisdiction. The principle is that acceptance by telex or telephone is
only effective at the time and place of receipt. JP Jennet in Entores Ltd v Miles Far East Corporation “it
was said that communications by means of telephone or telex are virtually instantaneous and that no good
reason exists for a departure from the general rule that acceptance of an offer must reach the offeror... the
reasons given for that are conclusion are clear and convincing. Parties in telephonic communication with
each other are virtually in the same position as if they are inter praesentes. In order to speak to each other
they make use of an instrument that enables them to do so. The very object of their using such instrument
is to gain the direct communication that it affords. It follows that when the telephone is used to make an
offer, the offeror is not authorising a method of acceptance which will be binding on him whether or not
he is made aware f the acceptance”

Quasi mutual assent/The Blackburn Doctrine

If one party’s words or actions give one reasonable understanding that their minds had met then a contract
was concluded even in truth their minds had not. A person’s state mind is evidenced by actions and words.
However, words and action maybe ambiguous or be misunderstood. In such cases the rule to apply is that
in Smith v Hughes 1871:

“if whatever a man’ real intention may be, he so conducts himself that a reasonable man would believe
that he was assenting to the terms proposed by the other party and that other party upon belief enters into a
contract with him, the man conducting himself would be equally bound as if he had intended to the other
party’s offer. There is an expectation of good faith by a reasonable man relying on the actions or another.”

Tacit contracts
Tacit means silent. It often happens that a contract comes into being without the offer and the acceptance
being expressly made. The offer is implied so is the acceptance. Examples are where a person buys a
newspaper from a vendor or gets into a bus and without saying anything receives the ticket and takes a
seat in the bus.
The learned Judge succinctly expressed it as follows in Ellison Electrical Engineers v Barclays 1969 (2)
RLR 461 (A)
Page 160:
 20

“A customer takes a machine which requires repairs to a firm skilled in such repairs in order that the firm
may repair it, and nothing is said about the price or what repairs might or might not be necessary. In such
a case, a tacit contract comes into being between the customer and the firm under which the customer
agrees to pay the reasonable charges for such repairs as may be reasonably necessary”
The distinction between tacit contracts and written contracts does not affect their validity. It is not a
requirement in Roman-Dutch law that the contract is in writing.
Terms of the contract
A contract has terms which spells out the obligations of the parties to the contract.Terms of the contract
are the set of promises which are agreed upon by the parties. These terms of the contract may be written or
they may be oral, or they may be implied.
1. Terms implied by law
Even though the contract between the parties does not expressly state these terms, they are nevertheless
implied in the contract. The parties cannot agree to exclude the terms implied by law. In a contract of sale,
for instance, there is an implied warranty against latent defects. The Hire-Purchase Act also implies
certain terms in hire purchase contracts. See the case of Electra Rubber Products v Socrat 1981 ZLR
356 (A). A purchaser is impliedly entitled to quite enjoyment of the goods. (Section 12 of the Hire-
Purchase Act)
In a contract of sale, the law says that the Seller Warrants against latent defects. That is a term implied by
law which cannot be excluded by the seller.
2. Terms implied by trade usage
The case of Courts v Jacobs 1927 EDL 120 at p.132-3 held that , “the requirements of a trade usage are
that it must be notorious, certain and reasonable and not contrary to positive law” Every usage must have
acquired such notoriety within the branch of trade or commerce or in the departments of business or
amongst the class of persons who are affected by it, that any person in that branch or department or class
who enters into a contract of a nature affected by usage, must be taken to have done so with the intention
that the usage should form part of the contract.
Put in simplest terms, every type of trade has its own peculiar terms and where both parties are aware of
these terms, or where it would be a reasonable inference that the other party had to know of the usage,
even though he says he didn’t, it will be held that there was trade usage.
It has been said the usage must be “notorious”. This means it must be such that people in that type of trade
are quite familiar with the usage. An unreasonable usage or one which contravenes the law will not be
held to be such by the court.
 21

3. Tacit terms or terms implied from the facts

As pointed out earlier on, not all terms are written or oral. We have seen terms implied by law and terms
implied by trade usage. It is also important to consider other implied terms.
The old English case of Shirlaw v Southern foundries [1939] 2 KB 206 is to the point. Mackinnon J had
this to say at page 227:-
‘Prima facie that which in any contract is left to be implied and need not be expressed is something so
obvious that it goes without saying so that, if, while the parties where making their bargain, an officious
bystander were to suggest some express provision for it in their agreement, they would hastily repress him
with a common “Oh, of course!”

Expressed in other words, there are certain terms which the parties need not even bother writing or talk
about because they are obvious and follow naturally in such dealings. To the minds of the parties, it will
be a mere waste of time to include such terms because they know it already.
4. Written terms
Written terms are governed by the caveat subscripto rule and the parole evidence rule.

a. Caveat subscripto
See also Donners Motors v Kufinya 1968 (1) RLR 12 (A) Written terms usually have an advantage over
oral terms in that written terms are in black and white and are certain. This however does not mean that
with written terms, there will be no problems.
Caveat subscriptor means that a signer is bound by whatever appears above his signature (signer beware),
whether he has read the document or not. It was expressed in Burger v Central South African Railways
1903 TS 57 as follows:-
“It is a sound principle of law that a man, when he signs a contract, is taken to be bound by the ordinary
meaning of the words as they appear over his signature”
Exceptions to the caveat subscripto rule
The caveat subscription rule is designed to prevent a signer who knows fully well what he is agreeing to
from repudiating at later stage. It is also designed to penalize a signer who lacks diligence and just rushes
to sign what he has not read or understood. In the case Du Toit v Atkinson Motors Bpk, the parties
signed a written contract for the sale of a car. The seller said that everything was as per agreement and the
buyer signed. However the buyer realized he had been misled regarding the year of manufacture of the
car. The court said there was fraud and the caveat subscriptor rule did not apply.
 22

However, there are circumstances where a signer has a good reason to repudiate his assent. Where the
signature was obtained under duress, fraud, mistake or undue influence, the contract cannot stand because
there was no consent. In George v Fairmead 1958 (2) SA 465 it was stated as follows:-

“When can an error be said to be Justus for the purpose of entitling a man to repudiate his apparent assent
to a contractual term……….Has the first party the one who is trying to resile been to blame in the sense
that by his conduct he has led the other party, as a reasonable man, to believe that he was binding
himself?........................If his mistake is due to a misrepresentation, whether innocent or fraudulent, by the
other party , then of course, it is the second party who is to blame and the first party is not bound”
The facts of that case were that a guest at a hotel signed the register without acquainting himself, with a
clause which indemnified the hotel from claims arising from theft. His luggage was stolen but he said he
never saw the claim. The court said he could not be compensated because he signed and made an
unreasonable mistake.

The caveat subscriptor rule will not apply where the other party was blind and illiterate.

b. The parole evidence rule or the integration rule

It is to the advantage of the parties that their contract be reduced to writing. Such advantage will no longer
exist if the parties were allowed to lead evidence to vary their contract. However, this rule is not absolute
in its application. A party may show that the contract was vitiated by duress mistake, fraud or undue
influence. The rule therefore means that the parties should not vary what they agreed upon.

Conditions

A condition is something which must happen or be done before something can happen. There are two
kinds of conditions in the law of contract i.e. suspensive and resolutive.

1. Suspensive condition

A contract is suspended or held up if a certain condition is not done e.g. a hire purchase contract has a
suspensive condition that ownership only passes to the buyer when the last instalment is paid. Passing of
 23

ownership is suspended until that happens. A suspensive condition means that something will not happen
until another thing happens first.

2. Resolutive condition

A contract continues until this condition is met then the contract ends. For example, a contract of sale may
have a resolutive condition that ownership returns to the seller if buyer misses an instalment. When this
happens the contract is terminated and parties return to their original position i.e. seller owns the thing and
buyer does not.

Unsigned documents- “the ticket cases”

In most business transactions documents are handed over to the customer. These documents are usually
not signed. Obvious examples will be bus or train tickets. A customer will be held to be bound by what is
contained in the documents if it can be shown that the supplier or the other party did what was reasonably
necessary to bring to the attention of the customer the contents of the document. Sometimes the print on
the document is so small, especially with exemption clauses on dry cleaning tickets.
In Central South African Railways v Mclaren 1903 TS 727, this was illustrated very well. The facts
briefly were as follows:-
Mclaren bought a railway ticket. The conditions were printed on the ticket. When trouble started, Mclaren
claimed that he never saw the conditions on the ticket. The Court gave judgement in favour because the
railway clerk had partially obscured the terms by writing on the ticket. The reasoning of the Court was that
the terms were not brought to the attention of Mclaren. In Bhikagee v Southern Aviation the court
however, held that a passenger on an aeroplane was bound by the terms printed on his ticket because he
had read the terms but failed to ascertain their meaning. He should have reasonably been aware that the
terms formed part of the contract.

Parties to the contract

There is no contract without the parties to it. These parties may be private individuals or they can be other
juristic persons which, as have been seen earlier on, are accorded legal personality at law.
The state
The State can be party to a contract. It is empowered to enter into contracts by Section 2 of the State
Liabilities Act, Chapter 8:4. The State can contract like a private person but cannot contract itself out of its
 24

executive duties and powers.

Companies and other juristic persons

A company is a juristic or legal personality. It has the capacity to enter into contracts in its own name and
can sue and be sued. It therefore has locus standi.

A company enjoys the same privileges and rights as those enjoyed by a natural person. It can therefore
enter into valid contracts.

Married women

Women were once considered to be perpetual minors who could not enter into unassisted contracts.
Women now have full contractual capacity, whether they are married or not. See
Behr v Minister of Health 1960 R & N 715. Women married out of community of property can enter into
any contracts. If there is an ANTENUPTIAL contract, then the man has control, over the women’s
contractual capacity i.e. her capacity is limited. If the marriage is in community of property, the husband
has marital power. The parties own their property jointly in equal and undivided shares. The wife can
however enter freely into contracts for household goods and can operate bank accounts etc.

Minors
Minors who are below the age of seven have no locus standi to enter into contracts although they can enter
into minor contracts like buying sweets or toys!
A minor lacks the full contractual capacity. If it becomes necessary for the minor to contract, he or she can
only do so when duly assisted by the guardian.
The post Office Savings Bank Act allows minors who are over the age of seven to have accounts with
POSB. The Building Societies Act also allows minors over the age of sixteen to have accounts.
A minor who is self-supporting and staying alone may be regarded as an anticipated minor who can enter
into unassisted contracts. In Dama v Bera a girl of 20 who lived with her parents has worked for four
years worked as a maid. She had her own income and paid board to her parents. The court said she was
emancipated. However in the case of Venter v De Burgersdorp stores, a boy lived with his parents. He
had a few possessions but still depended on his parents for everything. It was held that he was not
 25

emancipated. A minor who misrepresented his or her true age is liable in delict- See Dickens v Daley
1956 (2) SA 11 (N)
A minor who misrepresents his age cannot claim restitution. He can however ratify a contract on attaining
majority either tacitly or expressly. In the case of Stuttaford v Oberholzer, a minor bought a motor cycle
on hire-purchase. After he became a major, he continued to use it and repair it. He fell in arrears and the
seller sued him. When he raised the defence of minority, the court said he had ratified the contract.
Insane persons
If a person is not of sound mind and is suffering of insane delusions or some other mental disease, he or
she cannot enter into valid contracts. Such person has no contractual capacity. It does not matter whether
the person has been declared insane by the court or not. A curator bonis is usually appointed to deal with
the insane person. An insane person can however enter into valid contracts during the moments of
lucidity.
Intoxicated persons
It has been said that alcohol affects different people differently. While that may or may not be correct, if a
person was intoxicated by alcohol or drugs, at the time, then the contract cannot be valid since the person
was not in control of his mental faculties at the time. The person will be liable for unjust enrichment
however.
Insolvents
An insolvent is not precluded from entering into contract by the fact alone. He can enter into contracts but
cannot do those things which might affect the estate. He may not act to the detriment of his creditors. A
curator is appointed to assist the insolvent and can ratify the contracts made by the insolvent person.
Prodigals
Like the Biblical prodigal son in the parables of Jesus, this person recklessly squanders his assets and his
estate. Such a person may be stopped or interdicted from contracting without the assistance of a curator.
See Trorkel Bpk v Niemand 1970 (3) SA 455. A prodigal is a spendthrift who loves to waste his money
and assets. When the court declares him to be a prodigal, then he cannot enter into contracts without the
assistance of the curator.
Co-debtors
Where the parties incur a liability as co-debtors, they are liable jointly and severally. Liability may be pro-
rata, that is, each of the debtors is liable only for his part (joint liability).
It may be in Solidum hence the entire debt may be from one debtor. This is a joint and several liabilities.
 26

Third-parties
Although a contract normally excludes third parties, it is possible for a contract to be made for the benefit
of third parties. This is called stipulatio alteri. The intention of the parties must be to benefit the third
party and the third party must wish to accept the benefit.
 27

CHAPTER 3

Enforceability of contracts

One of the requirements for the validity of a contract is that it must be enforceable at law. A lot of factors
will tend to militate against enforceability.

Void contracts

A void contract cannot be enforced by law. An agreement to carry out an illegal act is an example of a
void agreement. For example, a contract between drug dealers and buyers is a void contract simply
because the terms of the contract are illegal. In such a case, neither party can go to court to enforce the
contract. A void agreement is void ab initio, i.e. from the beginning while avoidable contract can be
voidable by one or all of the parties. A contract can also be void due to the impossibility of its
performance. For instance, if a contract is formed between two parties A & B but during the performance
of the contract the object of the contract becomes impossible to achieve (due to action by someone or
something other than the contracting parties), then the contract cannot be enforced in the court of law and
is thus void. A void contract can be one in which any of the prerequisites of a valid contract is/are absent
for example if there is no contractual capacity, the contract can be deemed as void. In fact, void means
that a contract does not exist at all. The law cannot enforce any legal obligation to either party especially
the disappointed party because they are not entitled to any protective laws as far as contracts are
concerned.

An agreement may be void if any of the following:

 Made by incompetent parties (e.g., under the age of consent, incapacitated)

 Has a material bilateral mistake

 Concerns an unlawful object (e.g., heroin)

 Has no consideration on one side

 Restricts a person from marrying or remarrying

 Restricts trade
 28

 Restricts legal proceedings

 Has material uncertain terms

 Incorporates a wager, gamble, or bet

 Contingent upon the happening of an impossible event

 Requires the performance of impossible acts

Voidable contracts

Void contracts are different from voidable contracts, which are contracts that may be (but not necessarily
will be) nullified. However, when a contract is being written and signed, there is no automatic mechanism
available in every situation that can be utilized to detect the validity or enforceability of that contract.
Practically, a contract can be declared to be void by a court of law.

A voidable contract is not void ab initio; rather, it becomes void later due to some changes in condition. In
sum, there is no scope of any discretion on the part of the contracting parties in a void contract. The
contracting parties do not have the power to make a void contract enforceable. Contracts can become
voidable owing to a number of factors. These factors will be considered in turn.

Misrepresentation

Misrepresentation vitiates the contract. A party is said to have misrepresented to the other party if he has
not presented the facts as they truly are to the other party. Rather, he would have misled the other party to
the contract, whether deliberately or innocently. The party to whom the misrepresentation is made enters
into the contract with a mistaken or distorted impression as to the real state of affairs. An example will be
were a person represents to another that he is selling him some tomatoes, when he knows that he is selling
him potatoes instead. The other party will enter into the contract believing that he is buying tomatoes.
Such misrepresentation will vitiate the contract......See Harper v Webster 1956 R &N 10
The misrepresentation must be so serious, and so fundamental that it goes to the root of the contract. The
misrepresentation must be material, there must be intention to induce the contract and finally the contract
must have been induced by misrepresentation. Three types of misrepresentation exist namely;
1. innocent misrepresentation,
 29

2. negligent misrepresentation and,

3. fraudulent misrepresentation
 A person who intentionally makes a false declaration is liable for the fraudulent misrepresentation.
 A person who thinks the facts are true but makes no effort to verify the truth is liable for
negligence.
 A person who makes a false representation genuinely and honestly believing it to be true cannot be
liable as there are no damages for innocent misrepresentation.

Remedies for misrepresentation

If the misrepresentation is material and goes to the root of the contract, the aggrieved party may resile
from the contract. If it is fraudulent misrepresentation, he may sue for damages as well. The innocent
party, subject to the principle that he should not be overcompensated, is at liberty to claim restitution. This
means that he can claim the return of his money or property. There are no damages for innocent
misrepresentation.
A mere puff cannot constitute misrepresentation for which remedies may be sought. Puffs are mere
statements of commendation or praise. If a person says to another, “this car which I am selling is a bullet”,
that is not misrepresentation. It is merely a commendation. Advertisers for instance use flowery and
exaggerated language. A gullible person cannot claim for misrepresentation.
A statement of opinion, as opposed to a statement of fact will not constitute misrepresentation.
A dictum et promissum is a representation made by a seller regarding the quality of the thing being sold. It
becomes a term of the contract and it is broken, the buyer can enforce or set aside the contract.
Duress
A person is said to have acted under duress when he did not exercise his own free will to enter into a
contract, but was instead forced into the contract. An example will be something like this:
Morris holds a gun to Chitiki’s head and tells him that if he does not sign a document which Morris is
holding, he will blow his brains out. Chitiki, fearing for his life quickly signs the document, and prima
facie, a contract has come into being. However, the contract is vitiated by duress because there was no
consent, any intention or animus contrahendi to enter into the contract.

Duress vitiates consent. The threat must be such that it leaves the other party with no option but to enter
into the contract. See Assurity v Truck Sales 1960 R & N 236. The duress will make the contract
 30

voidable at the instance of the party who alleges it. In Blackburn v Mitchell, a ship ran aground and was
in danger of sinking. Another ship offered assistance on condition that the captain of the ship in trouble
agreed to pay two thousand pounds. When he said it was too much, the other ship threatened to leave him
to sink where upon he agreed. It was held that he had agreed under duress.

Requirements for duress

These requirements were laid down in Broodryk v Smuts. Broodryk alleged that he had entered into a
contract for military service because two government workers had threatened him with arrest. The court
said that there was indeed duress.

1) The fear must be reasonable

2) It must be caused by a threat of considerable evil directed at the contracting party, his property or
family
3) It must be a threat of immediate danger
4) The threat must be contra bonos mores

In addition to having the contract set aside, the threatened party can also claim damages.

Undue influence

The requirements for undue influence as follows:

1) The other party exercised an influence over the other,

2) That the influence weakened his powers of resistance and made his will pliable and,
3) That the other party exercised this influence in an unscrupulous manner to induce him to consent
to the transaction which is to his detriment and which he, with normal free will, would not have
concluded”,
A contract induced by undue influence is voidable at the instance of the aggrieved party. A simple
example of undue influence is the following: -
In Preller v Jordaan, a farmer donated two farms to his doctor. Later Jordaan claimed that he had been
sick, spiritually weak and mentally and physically weak and totally at the mercy of his doctor. The court
said that there was undue influence.
 31

In this case, the consent is vitiated by undue influence because it is not true consent, it may best be
described as submission. The phenomenon was borrowed from English Law where it is presumed that the
influence exists in special relationships such as doctor and patient, guardian and minor, etc.

Mistake (error)
Parties to the contract may be mistaken, as to what the contract really is, or as to the terms of the contract.
The parties may also disagree as to their contract. It is important to examine the types of mistakes that
exist.

Requirements for mistake

1) It must be a misunderstanding regarding material facts of the contract. In Maritz v Pratley, items
were displayed for auction. A mirror was at the top of the table. Pratley bid for the table thinking
the mirror was part of the table. When he refused to pay separately for both items, the auctioneer
sued him. The court said there was material mistake therefore no contract.
2) It must be reasonable (Justus error).

a. Reciprocal mistake (mutual error)

In this case, both parties are mistaken as to the nature of their agreement. There is no true agreement
because each party mistakenly thinks that the other party agrees with his version, or his interpretation of
the contract.
Parties may honestly think that they are entering into a contract of sale when in fact they are entering into
a contract of pledge. It is not enough that the parties had intended otherwise because they ought to have
the animus contrahendi to enter into a particular contract and not another. On the basis of reciprocal
mistake, the contract cannot stand and none of the parties may claim damages for reciprocal mistake.
See also Diamond v Kernick (supra)

b. Joint mistake (common error)

This should be distinguished from reciprocal mistake. In joint mistake, although the parties are both
mistaken, they are labouring under the same mistake. In reciprocal mistake, as shown above, the parties
are mistaken, each in his own way. The contract where the parties are jointly mistaken is void ab inito.

c. Unilateral mistake
 32

Where the person is mistaken, but the other person is not mistaken, then this is called unilateral mistake.
The mistaken party will not be allowed to avoid the contract unless he can show that his error was
justified-Justus error. The error must be reasonable otherwise if the error is reasonable or is the type of
error which would not have been made by a reasonable person, the mistaken party will be held to the
contract. The authority for this proposition is the case of National and Grindlays Bank v Yelverton
1972 (1) RLR 364.
In George v Fairmead, George was a guest at a hotel. He signed a register without reading it and when
his goods were stolen and the hotel refused to pay, he said he was mistaken. The court said his mistake
was unreasonable (Justus error).

Illegality (ex turpi causa)

Illegality does not necessarily mean criminal. It may be that there are reasons of public policy which
initiate against enforcement of the contract. Illegality has two aspects to it, namely common law illegality
and statutory illegality. These will be examined in turn:-
a. Common law illegality
A contract which violates the common law cannot be enforced. Such contracts like trading with a state
enemy, agreements that the courts have no jurisdiction and contracts to engage in crimes also fall under
this category. The case of:-
Kennedy v Steenkamp 1936 CPP 113 is illustrated on the point.
The plaintiff sued the defendant for $200. The defendant admitted but stated that the money was obtained
from the illegal sale of diamonds. The contract could therefore not be enforced.

Ericsen V Germine motors 1986 (4) SA 67

A person asked another person to sell a stolen car to Ericsen who acting in good faith sold it to the
defendant. The court allowed the defendant to claim damages against – Ericsen.

b. Statutory illegality
An agreement which contravenes an Act of Parliament cannot be enforced. The parties to the contract
cannot agree that the relevant statute will not apply to their contract. Such a contract is void ab initio, and
a complete nullity.
See Lion Match Co. V Wessels 1946 OPD 376
In that case, plaintiff sued the defendant for the price of firewood delivered to the later. Defendant
 33

excepted on the grounds that the sale was illegal because the seller had not obtained a permit in terms of
the relevant legislation. The court of appeal agreed that the sale was illegal.
Another case which illustrates statutory illegality is that of Osman v Reis 1976 (3) SA 710 (c)
The facts of that case were that the defendant purchased shares in a business. However, the agreement to
purchase the shares was illegal as it contravened section 17 of the Group Areas Act. The agreement was
therefore invalid.
The maxim ex turpi non oritur action is an expression that the law will not enforce illegal contracts.
Illegality and immorality are not the same and should be distinguished.
However, the presence of an illegal term in the contract will not necessarily result in the court striking
down the whole contract. The court may severe the illegal parts and enforce the rest of the contract.
A person who has lost money or property in an illegal contract cannot run to the courts for mercy. He
ought to have clean hands first. In this case, if the hands are not clean, the loss will lie where it falls, and
he will not get redress from the court. This is called the first law of equity.
Contracts in frauem legis
These are contracts to avoid the law. The courts do not enforce such contracts because they are also illegal
such as contracts to evade taxes.
Immoral contracts
Immoral contracts are contra bonos mores. They are against public policy and good morals. A prostitute
for instance, cannot claim money due to her or to him in terms of an agreement to have sexual intercourse.
This is immoral and cannot be enforced in any court of law. In Zimbabwe, sodomy is not immoral, it is
criminal.

Contracts in restraint of trade

Legal contract between a buyer and a seller of a business, or between an employer and employee, that
prevents the seller or employee from engaging in a similar business within a specified geographical area
and within a specified period. It intends to protect trade secrets or proprietary information but is
enforceable only if it is reasonable with reference to the party against whom it is made, and is not contrary
to the public policy.
These are contracts where the parties agree that one of them will not engage in trade in competition with
the other party. The other party may be restrained from trading in close proximity with the other party for
a certain period of time or within a certain limit of kilometres from where the other party carries out
business.
 34

Contracts in restraint of trade are by their very nature restrictive. While the courts generally leave the
parties to their contract, no matter how oppressive or unreasonable, they do not adopt that approach with
contracts in restraint of trade. The court sometimes interferes with contracts of this nature especially
where they are oppressive.

Is the restraint reasonable?

A restraint of trade is an obligation voluntarily undertaken by the employee to refrain from the exercise of
freedom of trade in favour of the employer in the exercise of freedom of contract. It is therefore prima facie
valid and the onus is on the employee who seeks to resile from its burden to show that it is nonetheless against
public interest and unenforceable. See;
Magna Alloys and Research ( SA ) ( Pty  ) Ltd v Ellis 1984 (4) SA 874(A);
Book v Davidson 1988 (1) ZLR 365(S) at 385D.
In considering the question of reasonableness the court must be satisfied that the agreement as a whole is
reasonable in the sense that the factors of area covered, period of time and the scope of the restraint are all
properly balanced against another. The court is likely to allow a wider area, where, for instance, the time
factor is shorter.
 A contract which is in restraint of trade therefore cannot be enforced unless
(a) It is reasonable as between the parties;
(b) It is consistent with the interests of the public.
When a contract has been classified as in restraint of trade it will nevertheless be upheld if the restraint is
reasonable in the interests of the public and of the parties.
The courts have also endorsed the position that a restraint that is unreasonable because it is too wide can sometimes be
saved by severing what is too wide and enforcing as reasonable what remains, provided the two portions are separately
identified in the contract so that the severance can be said to be the act the court.
Our courts have also adopted the doctrine of restriction, permitting them to restrict an unreasonable
restraint to what is reasonable, even if the division is not made in the contract itself. See Mangwana v
Mpraradzi
The court, in analysing the contract enquires into the reasonableness or otherwise of the contract. If the
contract is unreasonable, the court will not uphold it. The question then is the restraint in the interests of
the parties and the public? If the restraint clause is too wide and all-encompassing and therefore
unreasonable, the court might, instead of striking the whole contract down limit it to a more reasonable
extent. The court may apply the blue pencil test until the contract is not unduly harsh and oppressive as
 35

held in Commercial and Industrial Holdings v Leigh-Smith 1982 (1) 2LR 247 (S).
A restraint which is too wide may be so unreasonable that it induces a sense of shock. An example will be
were two Zimbabweans agree that one of them will not work anywhere in Zimbabwe. It may be such that
it prohibits a wide range of activities or the period of time may be too long. Everything will however
depend on the particular circumstances of each case.
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CHAPTER 4

Performance of contract
For a contract to be of any meaning or benefit to the parties, it should be performed. When both parties to
the contract have performed their respective obligations in terms of the contract, the contract may then be
discharged.

Sanctity of contracts

 This principle says that a valid contract is binding upon the parties. It can only be modified or
terminated by consent of the parties or if provided for by the law. The parties to a contract must,
unless legally excused from performance, perform their respective duties under the contract.
 A valid unilateral promise or undertaking is binding on the party giving it if that promise or
undertaking is intended to be legally binding without acceptance.   

 The Principle is an expression of the general principle of good faith which above all signifies the
keeping of faith. Without such a rule contract law would be a mere mockery.

 The respect for this principle requires parties to execute their contractual undertakings.

 In spite of its pivotal importance, the principle of sanctity of contracts is not without exceptions.
One such exception is the principle of hardship. However, since the principle of sanctity of
contracts is the rule, the hardship defence is available only in exceptional cases.

 The Principle applies only between the parties to the contract. It does not prejudice any effect
which the contract may have vis-à-vis third parties.

Freedom of contract
 37

 The doctrine which states that people have the right to legally bind them is known as freedom of
contract. Freedom of contract is a judicial concept which holds that contracts are based on mutual
agreement and free choice.
 Therefore, contracts are not be hampered by external control such as governmental interference.
This is the principle which supports that people are able to fashion their relations by private
agreements, when opposed to the assigned roles of the feudal system.

 Freedom of contract embraces two closely connected, but two different concepts. Firstly, it
indicates that contracts were based on mutual agreement. Secondly, it emphasizes that the creation
of a contract was the result of a free choice unhampered by external control including the
government or the legislature.

Who should perform?

Unless the contract states that performance may be made by a third party, the parties to the contract
themselves should perform.
See Aronowitz v Atkinson 1936 SR 45
The performance must be exact, unless the parties have agreed otherwise. Equivalent or even better
performance will not suffice. An example will be:-
A agrees to sell B an old car. A instead delivers a brand new car.
In this case, the performance is not in terms of the contract because it is not exact performance. See
Homes v Palley 1975 (2) RLR 98 (A)
Payment by cheque
The parties may agree in their contract that payment will strictly be by cash. In that case, if the other party
purports to pay by cheque, that will not be sufficient payment. Generally, payment will only be deemed to
have been made if the cheque is honoured. If the cheque is dishonoured, it goes without saying that no
payment would have been made.

Failure to perform
This will render the contract unworkable and may terminate the contract. A party who fails to perform his
obligations in terms of the contract lays himself open to a lawsuit by the other party. Failure to perform is
 38

breach of the contract to which the remedies are available will be dealt with in the ensuing pages.

Discharge of contracts

There comes a time in the life of a contract when all is said and done. That time is the end of the contract
and the release of the parties from their obligations in terms of the contract.

1) Performance
The commonest way for the discharge of contract is through performance. When the parties have
duly performed their respective obligations, they will be released and the contract accordingly
discharged.

2) Agreement
The parties enter into contract by agreement; they can also by agreement discharge their contract.
The parties will be freed from their obligations upon their agreement to discharge the contract.
Waiver of rights takes place when one or both parties indicate that they will not enforce their rights
in terms of the contract. When all rights have been waived, the contract terminates.
3) Novation
When the existing contract is replaced by a new one, this called novation. The original contract
will accordingly be discharged.
4) Compromise
This is a form of novation. The parties, may after a disagreement have reached a settlement and
replace the disputed obligation with one reached by compromise.
5) Delegation
This is a form of novation. In this case, the original debtor is substituted by a third party who steps
into the shoes of the original debtor. As far as the original contract is concerned, it will be
discharged and he will be freed from all the obligations in terms of the contract.
6) Cession
This is yet another form of novation where the original creditor is replaced by a third party who
steps into the shoes of the original creditor. The consent of the debtor is not required.
7) Supervening impossibility
Performance may become impossible owing to a multitude of factors. It could be that the
 39

performance becomes illegal. The subject matter of the contract may be destroyed. It could be that
the other party has become insane, or is suffering from some disability, physical or legal.
It could be vis major or an act of god such as a storm, flood or an earthquake. The parties to the
contract should not have foreseen that performance will become impossible. It will not be
impossible if the parties had seen or anticipated the impossibility. It could be an act of the state
such as legislation or declaration of war. This is referred to as casus fortuitous. The principle of
frustration or supervening impossibility of performance is applicable to a great variety of contracts.
It is not possible to lay down an exhaustive list of situations in which the doctrine is going to be
applied. Yet the following grounds of frustration have become well-established.

1. Destruction of subject matter: A contract is discharged  if a specific thing which is essential to

the performance of the contract is destroyed. The doctrine of impossibility applies with full force
'where the actual and specific subject-matter of the contract has ceased to exist.
Taylor Vs. Cladwell is the best example of this class. There, A music hall was let for a series of
contracts on certain days. The hall was burnt down before the date of the first concert. The contract
becomes void.

2. Change of law: A contract is discharged when its performance becomes impossible on account
of a change in the existing law. Persons generally contract on the basis of the law existing at the
time of the contract. If this law is subsequently changed, they are not expected to honour their
obligations by committing a violation of the law.

3. Death or Incapacity of party: Where the nature or terms of a contract require personal
performance by the promisor, his death or incapacity puts an end to the contract. 
In case of Robinson vs. Davison, 'There was a contract between the plaintiff and the defendant's
wife, who was an eminent pianist that she should play the piano at a concert to be given by the
plaintiff on a specified day. On the morning of the day she informed the plaintiff that she was too
ill to attend the concert. The concert had to be postponed and the plaintiff lost some of money. The
court said that, the contract was discharged because the player could have insisted on performing
when she was unfit to do so.
4. Intervention of war: Intervention of war or warlike conditions in the performance of a contract
has often created difficult questions. The closure of Suez Canal interrupted the performance of
 40

many contracts.
A contract entered into during war with an alien enemy is void ab initio.
A contract entered into before the war commenced between citizens of countries subsequently at
war, remains suspended during the pendency of the war. After the termination of the war, the
contract revives and may be enforced.
5. Non-Occurrence of contemplated event: If a state of things on the basis of which a contract was
made, does not exist or occur, the contract is discharged. Sometimes the performance of a contract
remains entirely possible, but owing to the non-occurrence of an event contemplated by both
parties as the reason for the contract, the value of the performance is destroyed. Krell Vs. Henry is
an apt illustration. There, H hired a room from K for two days with the object of using the room to
view the coronation procession of Edward vii. Owing to the king's illness the procession was
abandoned. Held, that the contract was discharged and H was excused from paying rent for the
room as the existence of the procession was the basis of the contract.
8) Set-off (compensation)
This occurs when the parties to the contract are reciprocally indebted to each other and there will
be no need to exchange what they owe each other. They are automatically released from their
respective rights and duties in terms of the contract.
9) Prescription
Debts prescribe, or put in the simplest form possible, they expire after a certain period of time. The
following are the prescription periods for various kinds of debt

If prescription is interrupted, it starts to run afresh.

10) Insolvency
Liquidation will discharge a contract in terms of the insolvency act. However, the trustee or
liquidator may elect whether to abide by or terminate the contract.
11) Death
Generally, death will terminate the contract for the simple reason that one of the parties is not
there, so performance is impossible. However, the parties may agree that in the event of death, the
executor will take over and continue with the obligations in terms of the contract. a contract may
expressly state that it will be discharged upon the death of one of the parties.

Breach of contract
 41

A contract is meant to be enforced and the parties to perform their respective duties. If one party
breaches the contract, then he has not acted in accordance with what the parties agreed. The
innocent party will therefore be entitled to remedies for the breach of contract. The wrong party
may not automatically cancel the contract because he will not be allowed to profit from his own
wrong. See, Associated Mines v Claasens 1954 (3) SA 768.

Mora
A debtor who fails to perform or performs out of time is said to be in mora. If a debtor fails to pay
in time, the mora arises exRE. If he fails to perform on demand for payment, this will be regarded
as mora ex persona
See Laws v Rutherford 1924 AD 173
Smart v Rhodesian Machine Tools 1949 SR 226

In the presence of a forfeiture clause, the creditor will cancel the contract. If the creditor refuses to
accept payment when it is tendered, he places himself in mora creditoris and the debtor will be
relieved of the duty to pay. A debtor who fails to perform is in mora debitoris.

Requirements for mora debtors:

1. The debtor fails to perform on time
2. The debt must be due
3. The delay must be deliberate

Requirements for mora creditoris:

1. Creditor fails to accept performance
2. Debt must be due
3. Performance must be proper
4. Failure to accept must be deliberate

Remedies for breach of contract

1) Specific performance (informa specifica)

 42

Specific performance is an order of a court which requires a party to perform a specific act, usually what
is stated in a contract. The injured party may elect to sue or demand for specific performance. The court’s
decision whether or not to order specific performance will be guided by judicious principles. Where
performance is impossible or where it could cause hardship on the wrong party, the court would not
readily grant it. An order of specific performance is generally not granted if any of the following is true:

 Specific performance would cause severe hardship to the defendant.

 Common law damages are readily available or the detriment suffered by the claimant is easy to
substitute, then damages are adequate.

 The plaintiff has misbehaved (unclean hands).

 Specific performance is impossible.

 Performance consists of a personal service.

 The contract is too vague to be enforced.

 The contract was terminable at will (meaning either party can renege without notice).

2) Interdict
An interdict is an order of Court prohibiting certain things from being done. A person who threatens to
breach the contract may be stopped or interdicted from doing so. An interdict may also be granted to
maintain the status quo, that is, for the parties to remain in their positions until the court has made a
determination.
See Gideon v Ngumo 1975 (2) RLR 197
Flame Lily Investment Co. v Zimbabwe 1980 ZLR 378.
A peremptory interdict orders a person to behave in a certain way. A prohibitive interdict prohibits a
person behaving in a certain way. An interdict is granted only as a last remedy when all others have been
exhausted. The requirements for a final interdict can be summarised as follows:
1. A clear right which must be established on a balance of probabilities.
2. Irreparable injury actually committed or reasonably apprehended
3. The absence of a similar protection by any other remedy
 43

3) Cancellation
The innocent party need not cancel the contract, but he must elect what he wishes to do within a
reasonable period of time. He must elect whether to cancel or enforce the contract. If the breach is so
fundamental and so material that it goes to the root of the contract, then the contract will have to be
cancelled.
See United Dominions v Van Eyssen
Cancellation is available where:-
1) An essential term is breached i.e. breach goes to the root of the contract.
2) Where there is positive malperfomance
3) Where the repudiation has been accepted by the creditor
4) Where time is of essence to the contract
5) Where there is the Lex commisioria or right to resile in the event of a breach.

4) Declaration of rights
In our jurisdiction, the High Court has powers to declare the parties rights in terms of their contract. It is
important that the parties know exactly where they stand instead of wondering in the dark.

5) Damages
The purpose of damages is to try and place the innocent party in the position he would have enjoyed had
the contract been duly performed. The court will try not to cause undue hardship on the wrong party. The
damages are only for actual and not sentimental loss.
Damages also provide solace to the wronged party. He will get the feeling that at least, even though he did
not get anything out of the contract, he has somehow received some form of redress.

Duty to mitigate losses

The innocent party has a duty to try and curb his losses. He should not just sit and watch while his losses
multiply and increase. He has a duty to mitigate or lessen his losses.

Further, the plaintiff must not be overcompensated by choosing several remedies at the same time. Some
remedies do not go hand in hand. The innocent party cannot choose specific performance, damages and
cancellation at the same time because the remedies are inconsistent and mutually exclusive.
Conclusion
 44

It is of utmost importance that one follows the systematic flow of events- from formation of contract,
performance and discharge. Once the basic principles have been mastered, everything else will fit into
place like a jigsaw puzzle. When one has understood everything about the law of contract, it will then be
safe to deal with other forms of special contracts like the law of sale, hire- purchase, agency, lease, and
banking.

CHAPTER 5
THE LAW OF SALE

Introduction
The contract of sale is like any other contract dealt with earlier on. It has its peculiar features however
which make it stand out of the crowd. These features will be examined in detail in this chapter.
Definition
A sale may be defined as a contract where one person, the seller(vendor)promises to deliver a thing
(property, goods) to another who is the purchaser or buyer, who on his part promises to pay a certain price
(the purchase price).

Essentials of a contract of sale

1. Consent
2. The thing sold should exist
3. The price should be certain and ascertainable
The above three requirements constitute the litmus test for a contract which is alleged to be one of sale.
Once the contract satisfies the above three requirements then it is a contract of sale. Let us briefly consider
the requirements individually.
1. Consent
Just like any other contract there must be consent on both parties to enter into a contract of sale. One party
must intend to sell and the other party must intend to buy. It is important that the parties agree that their
contract is one of sale and not any other type of contract. The importance of this fact lies in that if the
parties are labouring under an error as to the true nature of their contract, then the contract will not be
upheld by a court of law. As has been seen in the previous chapter, mistake vitiates consent.
 45

2. The merx or property sold

The merx is the subject matter of the sale and it must be defined and ascertainable. The property to be sold
need be in existence at the time of the sale. The parties must be consensus ad idem as to the nature of the
merx. If the merx is not in existence at the time of sale, there must be a possibility of its coming into
existence at a later stage.
Things which may not be sold
The parties are not at liberty to sell whatever they wish. Certain things may not be sold or bought. These
are as follows: -
a. Right of inheritance to a person who still lives.
b. Public property (subject to exceptions).
c. Human beings.
d. Things prohibited by public policy.

3. Pretium or price
The price must be in current money. Money is defined in Section 13 of the Reserve Bank Act as coins and
banknotes. The price must be fixed and it must be real. The payment by goods is not good enough. If
payment is in goods, then the contract cannot be one of sale. If it is payment in both goods and money,
then it can only be a sale if money is the major consideration.
The parties may agree that the price will be fixed by a third party who may be an arbitrator.
In Zimbabwe, there can be no sale on what is generally described as a reasonable price. In Smith v
Markerite HH 186/90, the parties entered into a contract for the sale of nuts. There was no agreement as
to the price. Both parties believed that the price would be fair and reasonable. Chinengundu J ruled that
whether the sale was true sale or an ignominious contract, the result was the same either way.
Effects of the contract
A valid contract of sale will transfer ownership to the purchaser. Upon the mere agreement of the parties,
the contract becomes perfecta. Ownership will only pass upon delivery of the goods. Agreement alone will
suffice because consideration is not a requirement in Dutch law.

Delivery or traditio
Delivery is important in a contract of sale in the sense that ownership in the goods sold can only pass if
delivery is made.
 46

Immovable Property
Delivery is made upon the acquisition of title deeds. The transfer of immovable property is called
conveyance and is done by only appointed conveyancers. Registration of the property is done at the deeds
office and Companies Registry in the Ministry of Justice.

Movable Property
Delivery of movable property takes place in different ways. It is necessary to briefly examine each of the
many kinds of delivery.

a. Actual delivery
This involves the actual handing over of the property to the buyer e.g. where a buyer buys a radio, the
seller gives him the radio and the customer takes it away with him.

b. Constructive /fictitious delivery

In this case, actual delivery is not possible so the goods are symbolically delivered. An example is the
handing over of car keys.

c. Attornment
An agent who has control of the goods on behalf of the seller will henceforth continue with the control,
but this time on behalf of the buyer.

d. Delivery by long hand or traditio longa manu

In this case, the goods are pointed out to the buyer so that he can collect them in his own good time. The
property is usually pointed out to the buyer as happened in the case of Xapa v Ntsoko where cattle
intended for payment of lobola were pointed out to a father in law and the court said delivery by the long
hand had in fact taken place.
The determining factor is whether a purchaser is placed in control of the merx. In Botha v Mazeka
1981(3) SA 191, some cattle were driven to a separate camp at the seller’ premises but since the purchaser
was not in total control of the cattle, tradition longa manu had not taken place.

e. Delivery by short hand (traditio brevi manu)

 47

The buyer in this case already has the goods in his possession and he finally becomes the owner thereof.

f. Constitutum Possessorium
The seller retains possession of the goods but contracts those goods as the agent of the buyer.

Duties of the Seller

1. To care for the property until delivery.
2. To deliver the goods.
3. To make the correct delivery.

Duties of the buyer

1. To pay the price
2. To accept delivery

Rights of the buyer

1. If there is improper deliver, he can sue for specific performance with or without damages.
2. He can elect to cancel the contract with a claim for a refund of the purchase price.
3. He can elect to rescind the contract with a claim for a refund of the purchase price.

Warranties
Every contract of sale has an implied warranty against latent defects. It also has an implied guarantee
against eviction and disturbance. The buyer has the right to enjoy quiet and undisturbed possession of the
property. The implied warranty against latent defects will obviously not apply if the sale is voet stoots.

The passing of risk

Risk is the danger or harm that may befall the property. Upon conclusion of the contract, the risk passes to
the buyer, notwithstanding the fact that the buyer has not yet assumed possession of the property.
There are circumstances which militate against the general rule that the risk will pass upon the conclusion
of the contract of sale. The following are some of the instances which prevent risk from passing to the
buyer upon conclusion of the contract: -
a. If the seller is negligent or by his own free will destroys the property.
b. Agreement of the parties. The buyer and the seller are at liberty to vary the general rule and in the
 48

event of such agreement, the risk will not pass.

c. Where the sale is subject to a suspensive condition, and
d. If the seller fails to deliver the merx timeously, even though the risk would have passed to the
buyer
Remedies for breach of contract

It has been seen that the seller does not make the proper delivery that constitutes breach of contract
entitling the buyer to sue for specific performance with or without damages. It is important to look at some
other remedies available to the buyer.

Aedilition remedies

a. The actio redhibhitoria

This remedy is available where the seller breaches the warranty and the buyer can elect either to cancel the
contract or to sue for the return of the purchase price. It is available where the defect is so serious that it
renders the merx unsuitable for the purpose for which it was bought. The buyer must return the merx.

b. The actio quanti minoris

Instead of cancelling the contract, the buyer may elect to have the purchase price reduced. This is
available if the defect is such that it merely reduces the value of the goods. It entitles the buyer to claim
the difference between the value of the goods and the price.
c. Damages
The buyer is also entitled to damages ex empto for latent defects where: -
The seller was fraudulent in failing to disclose a latent defect he was aware of.
1. Where the seller is the manufacturer or dealer of the thing sold.
2. Where the seller gives a warranty against latent defects or breaches a dictum et promissum which
is simply a representation bearing on the value or quality of the thing sold.

Remedies for the seller

An unpaid seller can sue for the purchase price or the return of the goods. He may elect to cancel the
contract as well. The seller has the right to re-sell the goods and if he sells them at a loss, he can claim the
 49

balance as damages. If the buyer refuses to accept delivery, the seller can sue for damages which are the
difference between the price and the value of the goods. If the seller is a dealer in those goods he can
claim for loss of profit as well.

Special sales

Sale by description and by sample

This is a sale of unascertained goods in which the parties agree that the goods sold will be of a particular
type e.g. a sale of 2000 Indian Banana trees. The seller therefore warranties that the goods will meet the
description. Should the goods comply, there cannot be any contention of latent defects because the seller
merely guaranteed that the goods will be suitable for the purpose for which they have been bought, he will
be liable if they are not in fact fit for such purpose. If the sale is by sample, the parties agree that the goods
will be according to the sample.

CIF and FOB Sales

CIF means Cost, Insurance and Freight. This is a sale to the following conditions:-
1. the seller is required to contract with a carrier for the carriage of the goods to the agreed
destination, ship the goods at the port of shipment and procure a bill of lading:
2. the seller arranges the insurance of the goods;
3. the goods are invoiced to the buyer;
4. Delivery is symbolic i.e. by delivery of the bill of lading, insurance certificates and invoice. These
are called shipping documents.

Bill of Lading
This is a document which contains all the information pertaining to the goods sold. When the buyer is in
possession of the bill of lading he is symbolically in possession of the goods. He is entitled to the rights as
if he were holding a negotiable instrument.
FOB (free on Board).
The contract stipulates that the goods have to be delivered to a ship or train (if it is FOR-Free on Rail) by
the seller. The transporter is the agent of the buyer and delivery to him amounts to delivery to the buyer.
Actual delivery is therefore done.
Sale or return
 50

This is a contract subject to a suspensive condition. The buyer will only become owner when the condition
has been met.
Auction
See your notes on Agency.

SECURITIES
These are intended for purposes of securing the payment of debts or the performance of certain obligations
in terms of the contract. There are three common forms of securities, namely the mortgage, pledge and
surety ship.
Surety ship
This is a contract of guarantee where a third party (surety) undertakes liability to a creditor for the
obligation of a third party (principal debtor). The principal debtor remaining bound.
The contract need not be for payment of money, it could be for services. If the principal contract is void,
then the surety ship is also void. There cannot be a surety without a principal debtor.
The surety must have the capacity to enter into contracts generally.
Benefits of surety

Benefit of excussion (beneficum excussionis seu ordinis)

This entitles the surety to demand that before the creditor can proceed against the surety, he should excuse
the principal debtor first.
Benefit of division (beneficum divisions)
Applies where there are co-sureties and entitles each to limit his liability to his appropriate share.
Benefit of cession of actions (beneficum cedendarum actonun)
This enables a surety to delay the claim until he has ceded any claims he has against the principal debtor
and other sureties.
A surety who has paid more than his fair share can sue the other sureties. He also has the right of recourse
against the principal debtor. It is possible for a surety for another surety or for there to multiple sureties for
the same obligation (co-sureties). A surety can be for a fixed period of time or it can end with the principal
obligation.

Mortgage
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This is a form of security that binds immovable property. The mortgage will be valid if the debt it covers
is also valid. It must bind specific immovable property and not generally any property. Mortgages have
the right to foreclosure or call the bond and have the property sold in the case of insolvency. Depending
on the terms of the agreement, the mortgagor may let the property but he must not impair the value of the
property. A mortgagee is a preferred creditor in the case of insolvency of the mortgagor.
Liens
A lien is a right of retention. It is not a real right but is a right of possession. A garage owner can exercise
a lien by retaining a repaired car if he is not paid. The landlord’s tacit hypothec is another form of lien, so
is a builder’s lien.
Pledge
This is equivalent to a mortgage bond. The pledge will bind movable property. It takes two forms
depending on whether the property is corporeal or incorporeal. To create over corporeal property, it must
be registered by a Notary Public.

Hire-purchase law
Please study this topic in conjunction with the Hire-Purchase Act.
Hire-purchase is a type of credit sale which is regulated by the Hire-Purchase Act. It is in simple terms a
way of selling to a buyer who does not have ready cash to pay in one lump sum. The buyer will therefore
be allowed to pay in instalments. The seller will however retain ownership of the goods but not possession
until the final instalment has been paid. Unlike in the ordinary sales where ownership passes upon delivery
of the goods, with hire-purchase ownership will only pass when the purchase price has been paid in full
and the seller therefore has the right to repossess the goods if default in payment is made. The contract
must be reduced to writing and must be signed by both parties to the contract, and then it will not be a
hire-purchase sale. A statement of the cash price must also be contained in the agreement. The deposit
payable must be contained as well together with interest on arrears.
A hire-purchase sale of immovable property is called a deed of sale and ownership here will only pass
when the purchase price has been paid in full and when the seller has lodged the deed of transfer for
registration with the Registrar of Deeds.
The Hire-Purchase Act deals with sales of movable property. Usually, financial institutions arrange with
the seller to fund the sale. These are often referred to as finance houses. Under the arrangement, the
finance house will get the rights of the seller by way of cession.
The finance house will in turn pay the cash price of the goods to the seller. The buyer will then make
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payments in instalments to the finance house. The instalments are of course more that the cash price of the
goods because there is a difference which is added there called finance charges. That is how the finance
house makes profit.
If the transaction goes according to plan, everybody will be happy. The seller receives his cash price from
the finance house, the finance house makes a profit out of the deal and the purchaser will pay in
instalments.
However, problems usually arise. The Act seeks to protect the parties by providing for the rights of the
seller and also the rights of the buyer. The contract must be in writing. It must also state the cash price.
Before the goods are delivered to the purchaser, a percentage of the purchase price must have been paid.
This is often called a deposit. The percentage paid however, unlike in the ordinary sales, may be in money
or in goods. It is possible for instance to exchange an old motor vehicle as part payment for a new one.
The finance charges made by finance hoses may from time to time be regulated by the Minister.
These rules are meant to protect the buyer from committing himself to pay more than he can afford. The
seller and the finance houses know that it is important to keep the rules because if they break them, the
Act provides that the seller will lose ownership of the goods which will be presumed to have passed on
delivery as in the ordinary credit sales. In addition, the Act imposes punitive measures in that the sale will
be deemed to be at 25% less than the cash price.
In addition to this, the Act also provides other protective rules where the price does not exceed $3 000.00.
It is an implied term of the contract that the purchaser will have quiet possession of the goods during the
time he pays the instalments. The buyer is at liberty to pay up the balance outstanding at any time in cash
and the finance charges will be reduced.
If the seller repossesses the goods because of failure to pay the instalments, then the buyer is entitled to
have the goods returned to him if he pays the instalment within 21days.
When the buyer has paid half the purchase price, the seller may not repossess them but they will have to
be sold by a person appointed by the magistrate. If the seller realises more than the balance outstanding,
the buyer is entitled to the surplus.
The buyer must give his address to the seller and must be careful not to take the goods outside Zimbabwe
without the consent of the seller. It is a criminal offence to disobey the rules in the Act.
The courts have also held that if the buyer sells the property which is on hire-purchase, he will be
committing the offence of theft because the property does not belong to him.
The agreement must be printed legibly and the seller must give the buyer a copy as soon as possible.
Failure to supply the copy within 14days of a request made makes the seller guilty of a criminal offence.
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Those who argue that the act protects the buyer rely on the criminal sanctions in Part 1of the Act.
Summary of the parties’ rights;
Buyer’s rights in the Act

1. The right to be given information about outstanding amounts in order to accelerate

payments.
If buyer owes money to the seller under more than one contract the buyer can elect which of the contracts
the money should go.
If the goods are repossessed, the buyer can reclaim them if he pays within 21days.
If the buyer pays the outstanding balance as a lump sum before it is due, he will benefit from the reduction
which may be effected to those instalments not due of 5% per annum for the period by which the payment
is brought forward.
2. Right to ownership upon payment of the last instalment.
Right to terminate the agreement at any time before final payment falls due by giving written notice to the
seller, return the goods to the seller after paying an amount which makes up half of the purchase price.
Note however those damages are payable if the buyer has not taken reasonable care of the goods. The
buyer can be sued if he returns the goods worse off than they were.
Any waiver of the buyer’s rights is not binding upon him.
Seller’s rights
To demand to be kept informed of the buyer’s present address and location of the goods. If the buyer
breaches this, he is criminally liable.
If the seller has in writing informed the lessor /landlord of the premises where the goods are kept that he is
the owner of the goods, the landlord will not have any rights over the goods for his arrear rentals.
The seller may state that the goods may be removed from Zimbabwe without his consent. If the seller
breaches this, he is criminally liable.
If the seller lawfully ends the agreement after being paid 50% of the purchase price, he may not recover
the goods but they will be sold by a person appointed by a magistrate. Proceeds of the sale will go towards
discharging the buyer’s indebtedness. The surplus will be given to the buyer.
A purchaser who sells goods under hire-purchase commits theft; R v Ellinas 1949(2) SA 560
The Hire-purchase Act is also important for the discussion of the whole concept of consumer protection
because it contains the rights of the buyer which are protected by the state in the form of criminal
sanctions. Some people however argue that the rights are not helpful because they are designed to protect
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the seller.
Conclusion
The law of sale as we have seen entails that the contract of sale comes into being upon the mere agreement
of the parties. Consideration is not necessary for the validity of the contract, because unlike in English
law, consideration is not a requirement in Roman –Dutch law. Thereafter, the rights and obligations of the
parties follow from the contract. The contract has to be performed like any other contract and in the event
of breach; the remedies available to the aggrieved party are as have been dealt with in this chapter.

CHAPTER 6

THE LAW OF LEASE

Many contracts of hiring deal with various aspects such as hiring of labour in a contract of employment,
hiring of services, hiring of animals and even hiring of movable property under the provisions of the Hire-
Purchase Act. In this chapter, we are concerned however only with the letting and hiring of immovable
property i.e. lease agreements or the law of landlord and tenant.

Definition
Letting and hiring of immovable property, or the lease is a contract entered into between two persons
namely the landlord (lessor) and the tenant (lessee), for the letting by the former and the hiring by the later
of specified immovable property, in terms of which the lessor grants the use and occupation of the
property to the tenant for a period in return for a specified sum of money, or share in the fruits of the
property, called rent.
From the above definition, it emerges that the essentials of a contract of lease are the following:-
a) Specified immovable property
b) The time or period or duration
c) The rentals.
Formation of the contract
Because the locatio conductio is a contract like any other contract; it comes into existence following the
ordinary rules of contract. No formalities are required; as the general rule following the position in
Roman-Dutch law that no formalities are required for a contract to be valid. However, leases of ten years
or more must be in writing.
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Obligations of the parties

Duties of the lessor

1. Delivery of the leased property (the res)
This is the most important duty which the lessor must perform. He must deliver the premises to enable the
tenant to occupy and use them since this is the reason why he would have entered into the agreement in
the first place. The lessor must therefore give free and undisturbed possession, which means that the
premises must not be subject to adverse claims or be contested. This duty is not fulfilled if at the time of
delivery the premises are occupied by some other person, whether the person is trespasser or not is neither
here nor there, or where a security guard refuses the tenant entry acting on the instructions of the lessor.

2. In addition, the leased property must, at the time of delivery be in a proper state of repair, meaning
that in effect, the premises must be in a usable state both internally and externally. The premises, it
has been held, must be in a state of reasonable repair, that is to say, it must be fit for the purposes
for which it was let.

3. In addition, the landlord has a duty to maintain the premises both internally and externally. It has
been held that, essentially the landlord must maintain the property in “good and tenantable repair
and condition”, during the subsistence of the lease. He has a duty to maintain the property in a
condition which makes the premises suitable, continuously for the purpose for which they were let.
The question that has often been asked is:-
What is maintenance of the premises? It simply means remedying wear and tear, dilapidation and
other undesirable conditions affecting the property which would interfere with the use for which
the property was leased. The landlord of course is not duty-bound to repair the property where the
fault was clearly that of the tenant.
It is however possible for the parties to expressly agree that the duty of maintenance will be borne
by the tenant during the currency of the lease. Where the tenant accepts the property which is
defective, he may be regarded as having waived his common law right to oblige the landlord to
deliver the property in a state of repair.
4. The landlord has a duty to warrant against interference. This is similar to the tacit warranty against
eviction in the contract of sale. The warranty against interference is also implied in the contract of
lease. The landlord is also affected by the warranty in the sense that he must not interfere with the
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tenant during the currency of the lease. He also warrants that the tenant will not be disturbed by a
third party. He, however, does not warrant that the tenant will not be disturbed by a third party who
has no legal right to be on the premises e.g. where a squatter or a mad woman decides to ‘camp”
on the premises.
Summary of the lessor’s duties
1) To deliver the property which is the subject matter of the lease to the tenant at the time agreed
upon;
2) Not to interfere with the tenant’s use of the property and to protect him from interference by
others;
3) To maintain the property in a proper condition in order that the tenant may have proper use for
it;
4) To compensate the tenant for damages caused as a result of material defects in the property;
5) To abide by such special terms of the lease as there may be.

Duties of the tenant

1. The primary duty of the tenant is to pay the rent agreed upon and in the manner agreed upon. The
parties tend to agree on the nature and amount of the rent and also the manner of payment e.g.
payment into the landlord’s bank account. In the absence of an express agreement relating to the
manner of payment, the tenant must make endeavour to pay on or before the due date at a place
convenient to make lawful performance.
The due date is calculated on the basis that in the absence of an express agreement, it is implied
that the rent is payable in arrear, that is to say, at the end of the period and in advance. It is implied
that the rent is payable in a sum certain money, unless the parties have expressly agreed that it
shall be a share in the fruits of the property.
2. The tenant is duty bound to ensure that the property is not misused and that it is used for only for
the purpose for which it was let. If he uses the property unreasonably or improperly, he will be
liable to pay damages to the lessor. Normally, the parties expressly agree on the use to which the
property will be put such as residential, industrial etc. In the absence of such agreement, it is
implied that the property must be used for the same purpose it was used before the lease.
3. At the end of the lease, the tenant must return the property in a proper state of repair, that is to say,
he must return it undamaged and in a condition it was at the conclusion of the lease. The tenant is
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however relieved of this duty if the property has been destroyed or stolen in circumstances where
the tenant was not negligent such as vis major.
Let us now summarise the duties of the tenant in point form:-
1) To pay rent as agreed
2) Not to use the property for any other purpose than that for which it was let
3) To ensure that the property is not misused
4) To return the property undamaged at the end of the lease
5) To abide by such special terms of the lease as there maybe

Remedies for breach of contract

The remedies available for breach of contract are essentially the ordinary contractual ones. If the breach is
of a material term, the aggrieved party has an election to abide by the contract, sue for specific
performance and claim damages or simply treat the contract as cancelled and sue for damages.
If the breach is that of non-essential term, he may not resile from the contract but may sue for damages.

The Tenant’s Remedies

1. If the landlord does not deliver the property, it has been held that this amounts to a material breach
and the tenant is at liberty to treat the contract as cancelled and sue for damages or claim specific
performance and damages.
2. If the landlord fails to maintain the property in a proper state of repair, the tenant has the same
remedies as where the landlord fails to deliver the property.
3. Where the landlord is in breach of the warranty against interference, the tenant may obtain an
interdict against the landlord if he is the one interfering.
4. He can also claim damages and if the interference is serious.
5. He may elect to cancel the contract and claim damages. The position is the same where the
interference is caused by a third party who has no right to the property, and then the tenant has no
recourse against the landlord but against the third party.
The lessor’s remedies
1. If the tenant fails to pay rent, this has been held not be a material breach which the landlord may,
at common law terminate the contract. In the case of Spies v Lombard 1950(3) SA 487 it was
held that:-
“It is trite law that non-payment of rent is not per se good cause for cancellation”
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The landlord therefore may sue for the rent. However, contracts of lease nowadays contain a forfeiture
clause in which the parties specifically agree that the landlord will be entitled to cancel the contract for
failure to pay rent.
2. Where the tenant misuses the property, the landlord has the ordinary contractual remedies. If the
misuse is material, he may cancel the contract and eject the tenant, with or without damages. If the
misuse is not material, he may only sue for damages.
3. Where the tenant fails to return the property at the conclusion of the lease, the tenant is a trespasser
and may be lawfully ejected from the premises. He can also claim damages for the wrongful
“holding over”

The statutory tenant

If the lease expires, the tenant must move out of the premises, unless the lease is renewed. If he does not
do either but continues to remain in occupation while paying the rent, he will be considered a statutory
tenant, provided the landlord accepts the rentals and makes no effort to evict him. A statutory tenant
occupies the premises as if he has a valid lease agreement and is subject to the usual terms of the lease
such as notice period and payment of rentals.
The landlord’s tacit hypothec

The landlord’s tacit hypothec is a form of real security recognised in Zimbabwean law. The hypothec is
“tacit” because it is understood or implied without being stated; in other words, the hypothec comes into
effect by operation of law and not by agreement between the Landlord and Tenant.

 The hypothec secures the lessee’s obligation to pay the rent in terms of the agreement of lease. It does this
by allowing the landlord to burden the movables present on the leased land or while in transit to a new
destination subsequent to the removal from the land.

 What this means is that the Landlord is able to obtain a limited real right in the movable goods present on
the property on the date that rent is in arrears. However, this right does not accrue to the Landlord
automatically; it first needs to be perfected. In other words the landlord has to obtain an interdict
restraining the removal or sale of the goods on the property pending an action for rent or an order for their
attachment by the court.
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The landlord’s automatic rent interdict is applicable where the tenant fails to pay rent. When the landlord
issues out summons for the rent due and owing, he can include in the summons a clause to the effect that
no property should be removed from the premises. The landlord therefore exercises a lien over the
property of the defaulting tenant.
The huur gaat voor koop
When the landlord sells the property, the general rule is that the buyer is bound by the lease in accordance
with the principle. It has been said that this is an equitable principle but it is subject to some derogations,
e.g. a lease for ten years is not effective against the landlord’s successors in title unless it is registered.

Improvements
The rights of the tenant who has effected improvements are governed by the Placaat which essentially are
laws of Holland and not Roman. In terms of the Placaat, a tenant has a right on the termination of the lease
to remove improvements or to claim compensation for the value of those improvements. The right to
remove applies only to useful improvements and not to improvements which were necessary for the
protection of the property. In addition, the right to remove applies where the removal will not damage the
property. Once the lease has terminated, the improvements become the property of the landlord and the
tenant can only seek compensation, provided the improvements were effected with the consent of the
landlord.
Termination of lease
The following are the various ways in which the contract of lease can come to an end:-
1) Performance
2) Expiration of time
3) Upon due notice by either party
4) Where either party elects to cancel for material breach
5) By agreement
6) Death of either party
7) Destruction of the premises
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CHAPTER 7

THE LAW OF AGENCY

Introduction
It often happens that a person has no time to do certain things personally. He may lack the skills to do the
act himself. He has to resort to employing an agent in the circumstances.

Definition
Agency may be defined as a contract whereby one person (the principal) employs another (the agent) to
act for him and enter into contracts with third parties.

Agent’s Mandate
The above definition spells out what is called the agent’s mandate. The mandate is what the agent is
tasked to do by his principal. He should, as will be seen later, do only those things which the principal has
asked him to do.

Creation of the Contract

Agency is a contract and is therefore created in the same way with other contracts we have dealt with.
There has to be an offer and acceptance, and the parties must have the requisite intention to be bound by
the terms of their contract.

Essentials of agency
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The following are the requirements for a valid contract of agency. They constitute the acid test for one to
say that a particular contract is a true contract of agency.
1) There must be a contractual relationship between the principal and the agent. The relationship
therefore can only be contractual, since as we have seen above, agency is a contract.
2) Representation of the principal by the agent.
Agency is all about one party representing another. If the contract is not about representation, then
without doubt it cannot be a contract of agency.
3) Authorisation of the agent by the principal.
A person cannot purport to act on behalf of another without being duly authorised to do so. The agent
must only do those things which are authorised by the principal. If he goes beyond what has been
authorised by the principal, he is not acting in accordance with the authority granted to him by the
principal. Acts which are beyond his authority will not bind the principal.
The Agent’s Authority

1. Actual authority
This is the commonest type of authority. This authority can either be verbal or written. The principal
however cannot confer greater authority than he has and cannot overreach himself. See Contract Banking
& Trust Co v Estate Hughes 1932 AD 11

2. Implied authority
This authority can be implied from the facts of the given case. If an agent is employed in the course of his
duties he has the authority as is usual in such a profession.

3. Authority by estoppel
If a person creates an impression that a person is his agent, and a third party acts on the faith of that to his
detriment, then the ‘principal’ will be bound.

Agency relationship may arise where, in fact, no formal agency agreement is in effect. A principal may
give an appearance of agency relationship by, for example, furnishing his or her firm's call cards or other
stationery to the agent. In such cases, the existence of an agency may be presumed, and the principal may
be bound by the acts of the agent performed on the principal's behalf. It is also called presumption of
agency.
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4. By operation of law
This happens with trustees and curators of minors, guardians etc who act on behalf of others by law.

5. Authority of Enrichment
If a principal is enriched by the acts of an agent and yet refuses to ratify the acts of such an agent, he can
still be sued for the profits or the property in question on the basis of authority by enrichment.

6. Authority by Ratification
Sometimes, a person may act without but when the principal gets to hear of the actions, he agrees with
them and accepts them. If that happens, the person who acted without authority will, hitherto, be held to
have authority by ratification. His actions will be treated as if they had been authorised from the onset.

Essentials of Valid Ratification:

1. The person, who is going to give ratification, must be in existence at the time of activity.
2. The person who is going to give ratification should have capacity to contract, at the time of activity
as well as at the time of ratification.

3. Ratification should be given within reasonable period after the activity the concept of reasonable
period depends upon nature of the situation.

4. Ratification must be absolute. To entire activity ratification is to be given. Partial ratification

carries no validity.

5. Ratification attains validity only when it is given with full knowledge of facts relating to the
activity.

6. The activity which is going to be ratified must be a lawful activity. For example: for the sake of A,
B has murdered C. If A gives his support to B`s activity, it is not valid ratification.

7. The person who is going to give ratification should have right to do such activities. Ratification
relates back to date of activity. Though ratification takes place after the date of activity, it will be
assumed that ratification is given on the date of activity.

8. Ratification should not lead to breach of contract. In other words ratification should not be harmful
to third party.
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7. Negotiorum Gestor
This agency of necessity e.g. if a person sees his neighbour’s house burning and he puts out the fire, he is
entitled to his expenses under the doctrine. This does not arise out of contract therefore and is not true
agency.
Doctrine of the undisclosed principal
An undisclosed principal generally refers to a principal person whose existence is unknown to the third
party with whom the agent deals and so, in the eyes of the third party, the agent is the principal. Common
law doctrine on undisclosed principals confers rights and imposes liabilities on the undisclosed principal,
notwithstanding that he is not made a party to the relevant contract. This doctrine is an exception to the
general rule that only a party to a contract may sue and be sued thereon. The rules under this particular
doctrine may be illustrated by considering the respective relationships between the principal and the agent,
the principal and the third party, and the agent and the third party. 

 1.Undisclosed principal and agent

    
The rights and duties between the principal and the agent in an undisclosed principal situation are
basically the same as in a disclosed principal situation, as discussed in Sections 5 and 6. The agent is to
   be treated as a trustee for the undisclosed principal of any goods or payments received or any benefit
that he derives from the contract with the third party and is liable to account to the principal for such
goods, payment or benefit, as in the case of the disclosed principal.
    
 2.Undisclosed principal and third party
    
Before the undisclosed principal may enforce any right or be liable for any obligation under a contract
  
apparently made between the agent and the third party, two pre-conditions have to be met:
    
• The agent must have actual authority, whether express or implied, to enter into the contract in
question with the third party; and
      
• The agent on entering into the contract with the third party must have intended to act on behalf of
the undisclosed principal, not for his own benefit.
    
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Types of Agents
 
1 . Auctioneers:
An auctioneer is primarily the agent of the seller but on the drop of hammer, he also becomes the agent
of the buyer.
2 . Factors:
A factor is an agent if it is in the customary course of his business as such agent to sell goods, or to
consign goods for sale, to buy goods or to raise money on the security of goods.

3 . Brokers
A broker is an agent who negotiates and contracts for the purchase and sale of goods and other property.
He is an agent of both parties but he does not have actual possession of goods
4. Del credere agent
He is one who, in return for an extra commission, gives an undertaking that he will indemnify his
principal if the third party introduced by him does not pay for the goods delivered to him.
5 . Bankers
The general relationship between bankers and customer is that of debtor and creditor. The banker
may also be an agent of his customer for collecting payment on cheques drawn on other banks which have
been paid into his account by the customer.

6 . Estate Agent
An estate agent is not a proper agent. This is because he does not make a contract for the parties.
His mandate is to introduce the buyer to the seller and that is all. He earns his commission upon
completion of the mandate and is registered in terms of the Estate Agency Act.
Duties of the agent
1) To perform the designated mandate fully and to the best of his ability.
2) To obey the principal’s instructions and act within the scope of those instructions.
3) To exercise due care and diligence in the performance of his duties.
4) To keep accurate records of his activities
5) To exercise the utmost good faith and not to make secret profits or commission.
Agent’s rights
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1) To receive his commission upon fulfilment of his duties and completion of the mandate.
2) An agent has the right of retention (lien) over the property for what he is owed by the principal.
Duties of the principal
1) To pay the agent’s commission upon completion of the mandate
2) Not to give authority which is more than he already possesses.

Rights of the principal

1) To be informed of the activities of the agent
2) To have the agent account properly for his activities
3) To sue for any amounts received as secret profits and bribes, including any interest thereon.

Termination of Agency
Agency, being a contract, albeit a special type of contract, terminates much in the same way as any other
contracts. The following are some of the ways in which a contract of agency may be terminated.

1) Performance
When the agent has duly completed his mandate and received his commission, the contract will
come to an end and the parties will accordingly be released from their obligations.
2) Time Limit
If the contract is for a stipulated time and that time runs out, then the contract will be terminated.

3) Incapacity
Where the agent is no longer able to execute his duties, the contract will come to an end.
Incapacity can either be physical or legal e.g. insanity.

4) Impossibility
If the performance of the contract becomes impossible or illegal, then the contract will come to an
end.

5) Agreement
Since the parties enter into the contract of agency by agreement, they are also free to agree to
terminate the contract.
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6) Renunciation by Agent
An agent who unilaterally renounces his mandate will thereby terminate the contract of agency.

7) Renunciation by principal
If the principal, also unilaterally renounces the contract, the contract will be terminated.

CHAPTER 8

THE LAW OF DELICT

A delict is the act of a person which in a wrongful and culpable manner causes harm to another. All five
requirements or elements, namely, an act, wrongfulness, fault, harm/damage and causation must be
present before the conduct complained of may be classified as a delict. It is essential that all five elements
be present; if any one (or more) of them is missing, there is no question of a delict and consequently, no
liability. The aggrieved party may thus only render the wrongdoer liable if his conduct satisfies all the
requirements of a specific delict. So, in sum, a delict is an infringement of another’s interests which
results in harm or prejudice.
CONDUCT:
In order to constitute a delict, one person (the doer or actor) must have caused damage or harm to another
(the person suffering the loss) by means of an act or conduct and therefore conduct is a prerequisite for
delictual liability. Conduct is a voluntary human act.
• The conduct must be that of a human being.
• The act must be performed voluntarily.
• Conduct must be in the form of either a positive act - active conduct, (commissio) or an omission
(omission).
WRONGFULNESS:
For delictual liability to be conferred on a defendant, prejudice must be caused in a wrongful way, that is,
in a legally reprehensible or unreasonable manner. In the absence of wrongfulness, a defendant may not
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be held liable. To determine wrongfulness one must determine whether a legally recognised individual
interest has been in fact infringed or encroached upon. In essence the act must have caused harmful result.
Secondly, to establish wrongfulness, legal norms must be used to determine whether such prejudice
occurred in a legally reprehensible or unreasonable manner. Violation of a legal norm must be present.
An act may therefore be described as delictually wrongful when it has as its consequence, the factual
infringement of an individual.
Thirdly, the general norm or criterion to be employed in determining whether a particular infringement of
interest is unlawful is the legal convictions of the community. Legal convictions of the community (bonis
mores) are basic test or wrongfulness, the basic question is whether, according to the legal convictions of
the community and in light of all the circumstance of the case, the defendant infringed he interests of the
plaintiff in a reasonable or an unreasonable manner.
FAULT:
Two main forms of fault are intention (dolus) and negligence (culpa). It is accepted that fault or culpa is a
general requirement for delictual liability to follow. Intention and negligence refer to the legal
blameworthiness or the reprehensible state of mind or conduct of some who has acted wrongfully. It
mainly refers to a person’s attitude or disposition and it can only be present if a person has acted
wrongfully. The existence of either intention or negligence on the part of the defendant is sufficient to
blame him, that is, to find that there was a reprehensible attitude or reprehensible conduct on his or her
part.
CAUSATION:
The causing of damage through conduct, or, in other words a causal nexus between conduct and damage,
is required for delictual liability to attach. It follows that a person cannot be held liable for any damage if
he has not cause it. A causal nexus is something which factually exists or does not exist. What is true is
that an actor is liable for all the consequences of his negligent conduct.
HARM OR DAMAGE:
A delict is a wrongful and culpable act which has a harmful consequence. The harmful consequences are
damage. Damage is the diminution, as a result of a damage-causing event, in the utility of quality of a
patrimonial or personality interest in satisfying the legally recognised needs of the person involved. The
general compulsory function of the law of delict implies that there must be some loss or damage for which
the law makes compensation available to the victim. The law of delict has a compensatory function.
Therefore, damages is a monetary equivalent of damage awarded to a person with the object of
eliminating as fully as possible his past as well as future patrimonial and where applicable, non-
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patrimonial damage. Money is thus intended as an equivalent of damage.

The Aquillian Action
This is the most important part of the law of delict.
 It concerns wrongs resulting in loss through negligence.
Negligence
 Put in simple terms, this is carelessness.
 Negligence is a carefree attitude which results in loss. If a person’s behaviour falls short of the
expected behaviour of the average reasonable person then he is negligent. However, where it is a
professional person like a doctor or a lawyer, the test will obviously be set higher and it will be the
standard reasonable professional in the same career, i.e. failure to do what a reasonable person
would have done in the circumstances.
Res ipsa loquitur
 This means the occurrence speaks for itself.
 It is invoked where the situation itself tends to point towards negligence if for no reasonable care
has been exercised.
See Donoghue v Stevenson 1932 AC 562, where the facts were briefly as follows:
A lady was drinking from a bottle of ginger beer. Half way through, she discovered to her utter alarm and
utter dismay, a decomposing snail in her drink. She successfully sued for shock and suffering (she claimed
she suffered from gastro-enteritis)

Damages
 In assessing damages, the court will consider whether the claimant did not contribute to the loss
and apportion the damages appropriately. Aquilian damages are meant to compensate the injured
party.
 Other examples of delicts are nuisances, fraud and trading in another person’s name (passing off)
INJURIA /THE ACTIO INJURIARUM
 Damages for injuria are different from those under the Aquilian action.
 These are meant to bring solace for injured feelings.
Defamation
 This refers to a publication of words which bring the good name of another into disrepute. It may
lead to people shunning the person defamed e.g. calling someone a thief, a prostitute or a liar.
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 If the words are said only to the plaintiff, there can be no defamation because there is no
publication, but he may sue for injuria.
 Companies can also claim damages for defamation. Newspapers are usually sued for defamation
where it is alleged that they published defamatory words or statements.
Defences
A person sued for defamation can raise these defences: -
Justification
He should show that the statement was not only true, but was for the public benefit. It would not benefit
the public to show that a businessman committed adultery thirty years ago, for example.
Fair comment
A person is entitled to voice his opinion on matters of public interest. It should be a comment, not a
statement of fact. The comment must be genuine and honestly held and not actuated by grudge, spite or
malice.
Privilege
Members of Parliament have absolute privilege to say anything while in Parliament. This does not extend
to their statements outside the House of Parliament. Other people have qualified privilege, provided the
statement made is not actuated malice, e.g. statements by a judge or a magistrate during proceedings,
relevant to those proceedings.
Compensation
If the plaintiff also replied in equal measure, then it will constitute a valid defence, e.g. Kamba says to
Gudo, “You are a stupid liar. Voetsoak!” And Gudo also replies likewise, “You stupid liar! Voetsoak!”
then there will be compensation.

Jest
If the maker of the statement was only joking, then there can be no defamation. A person may be laughing
with a friend and may say something like this;

“Ha! Ha! My friend, you are lying. You are a liar comrade!” the friend will be taking it too far if he were
to go to Court and say, “I was laughing with my friend and he said i am a liar”
Rixa
A person, in the heat of the moment or in anger or provocation may, without meditation utter words which
the other person may consider defamatory. This can be a defence if the speaker of the words did not
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persist with those words.

Consent
If it can be shown that although the words complained of were indeed defamatory, but the person to whom
they were directed consented to those words, then no liability for defamation can be found.

VICARIOUS LIABILITY
 Vicarious liability refers to a situation where someone is held responsible for the actions or
omissions of another person.
 In a workplace context, an employer can be liable for the acts or omissions of its employees,
provided it can be shown that they took place in the course of their employment. This doctrine is in
fact a rule of policy and is deliberate allocation of risk.
 Vicarious liability means that the employer will be held liable for the delicts or civil wrongs
committed by his employees during the course of their duties.
 As far as the employer is concerned, this is a no-fault doctrine i.e. the employer need not be the
one at fault.
Justification of the doctrine:
1) When an employer employs people to work for him, he takes the implied risk that should the
employer cause harm or loss, he will be liable. The employees are figuratively speaking an
extension of the employer himself.
2) The employees usually are not in a financial position to redress the harm, so it is better to proceed
against the employer because he has the financial means to make good the loss.
3) It follows also from the above point that the employer can absorb the loss better than the individual
employee. He can take out insurance policy, for instance.
4) Since the employer gets profits through his employees, it is only fair that he also gets losses
through them!!!!
How the doctrine operates
The doctrine vicarious liability will apply in the following circumstances:-
1) Where the employee is a “servant” of the employer. This “servant” is subject to the direct control
of the employer in the manner he carries out his duties. He should not be an independent contractor
who does the work on his own rules. See Colonial Mutual Assurance v Macdonald 1931 AD
412
2) The employee must have committed the delict in the course of his employment. He must not have
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been on a frolic of his own. See Nott v ZANU (PF) 1983 (2) RLR 208
Gorah v Mahone S -88 -84
In the case of Biti vs. Minister of State Security 1999(1) ZLR 165 (S) , the driver of a government
vehicle which was involved in an accident at a place about 5km deviation from the routes, he would have
to drop government officers. The driver was charged not only with transporting of government officers to
their homes but also with the keeping of the vehicles in safe overnight custody. It was held that although
the driver deviated from his authorized route the deviating in times of time and space was not such as to
convert it into a “frolic of his own”, the improper mode of exercising his duty of keeping the vehicles
safely over night was still done within the course of his employment and the ministry which employed
him was vicariously liable.

The courts have given a wide interpretation of vicarious liability to exist where there is an employer
employee relation and the employee is acting in the course of his employment. Where there is a slight
deviation in times of distance and time and the employee was acting within the parameters of the scope of
his employment. The employer has been held vicariously liable in the case of Coldchain (Private
Limited) vs Robson Makoni SC9/12. Sandura JA in dismissing an appeal against a finding of vicarious
liability by this court stated that the driver who was an employee was involved in an accident whilst on the
authorized route. He was to return the vehicle to the company premises at Chitungwiza that evening and
there was no deviation in terms of time and space which would remove the employer from liability.

Nyakabambo v Minister of Justice H-H-23-89

DEFENCES IN DELICT
1) Contributory Negligence
The Law Reform (contributory Negligence) Act allows the court to apportion damages according to the
respective degrees of negligence of the parties. This Act will obviously not be invoked where only one
person causes the harm. This is not a full defence.
2) Negligence of a third party
It may be that a person other than the defendant or plaintiff was negligent resulting in the harm. If this is
proved, then this will constitute a valid defence.
3) Trivialities –de minimis non curat lex
Where the harm or loss complained of is slight, the court will not bother with it. This is because the courts
have more important business to attend to.
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4) Public Policy
It may be that harm resulted while the plaintiff was engaged in an illegal or immoral activity. He will be
allowed to recover on the grounds of public policy.
5) Inevitable Accident
This is often regarded as vis major or casus fortuitous. There are certain events in life which the Romans
called the Act of God. This usually refers to inevitable disasters such as lightning, floods and earthquakes.
6) Authority
The law may permit the doing of certain actions. The law allows corporal punishment for instance in
prison and schools. Where the defence of authority is raised successfully, action in delict will not lie. The
basic underlying principle is that the authority must be lawful. One cannot purport to act on authority of a
person who himself has no authority. See S v A juvenile 5-64-89
7) Necessity
Situations arise where it might be necessary to take an action which may turn out to be a delict. In this
case, for the defence to succeed,
a) The threat must have been directed at the defendant.
b) The threat must have commenced or is imminent
c) The defendant must not have caused the fault
d) The action must be necessary to avert the threat
e) The action must be reasonable in the circumstances.
See S v Ndlovu HB -31-84
8) Voluntary assumption of risk or volenti non fit injuria
If a person on his own free will voluntarily does or allows something to be done when he is aware of the
risks, he cannot be heard to complain at a later stage.
See Mutandiro v Mbulawa HH-354-84
9) Private defence
In this case, a person resorts to this action to prevent harm to himself or to his property. To succeed, the
defendant must prove the following:-
a) There must be a unlawful attack
b) The attack must be on the defendant, a third party or property
c) The attack must be imminent or it must have commenced
d) The action taken by the defendant must be necessary to avert the attack
e) The action taken by the defendant must be reasonable in the circumstances
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OTHER TYPES OF ACTION

In the preceding chapter, we discussed the Acquilian action and Actio injuriarum. There are many other
actions that are available in delict. We will examine some more important ones.

HARM CAUSED BY ANIMALS

Animals, whether wild or domesticated often cause harm resulting in damages. A person who has suffered
harm, loss or damages as a result of the behaviour of the animals has several remedies at his disposal.
These are some of them:-
1) Acquilian Action
2) Pauperian Action
3) Quasi-Pauperian Action
4) Edict about wild animals(Edictum de feris)
5) Harm caused by grazing animals (Actio de Pastu)
6) Nuisance
(From G Feltoe- Guide to the Zimbabwean Law of Delict- with full acknowledgements)
The Acquilian Action
As we said before, this action is available where there has been negligence. Thus, if a person negligently
fails to exercise full control over his animal such as a fierce dog which decides to use its canines on a
passer-by, the person may be liable for delictual damages.
The Acquilian Action is available notwithstanding that the animal is wild hence it is available for both
wild and domesticated animals. The test applied to determine negligence is the usual one for reasonable
foreseeability i.e. whether it was reasonably foreseeable that if the dog was left at large it would cause
harm. The owner or custodian is liable under this action.
The Pauperian Action
This is available only for domesticated animals and then, only against the owner.
This is a strict liability action hence there is no need to prove negligence or intention.
What ought to be proved here is simply that the animal acted Contra natuaram sui generis i.e. contrary to
its nature e.g. a dog biting a person without provocation.
However, if the injured party was to blame such as where he inflicts pain or provoke the animal, he cannot
claim damages. Prof Feltoe itemises situations where this action is available:
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1. Where the harm resulted from vis major or casus fortuitous e.g. a horse kicking out in pain
after being kicked by another resulting in plaintiff being injured.
2. Where the injured party was to blame for his injuries e.g. provoked the animal
3. A third party was to blame e.g. third party provoked the animal
4. The injured party was unlawfully at the place e.g. he was trespassing.

Quasi-Pauperian action
This is applicable only to wild animals. The animals should have been kept in captivity such as lions in a
circus.
The action can only be brought against the owner of the animal. There is no need to prove that the animal
was acting contra naturam sui generis. It is also irrelevant that the animal was to an extent domesticated.
The exceptions to this action are the same as those detailed under the Pauperian action.

Edict about Wild Animals (Edictum de feris)

In this case, any person who keeps a wild animal close to, or in the vicinity of a public place is strictly
liable of the animal causing injury.
Grazing animals (Actio de Pastu)
Where animals which graze, stray into another’s property and damages crops, damages can be claimed
under this action.
Nuisance
If animals cause a nuisance, then this action can be brought e.g. barking dogs causing disturbances in the
neighbourhood.

OTHER DELICTUAL CLAIMS

We will not discuss these delicts except to mention them so that our students appreciate their existence:-
1. Unlawful detention
2. Malicious prosecution
3. Seduction
4. Adultery
5. Breach of promise to marry
6. Enticement and harbouring
7. Fraud
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8. Illegitimate and unfair trade practises such as passing off and injurious falsehood
9. Stealing trade secrets
10. Trespass
11. Nuisance
12. Assault
13. Things falling or hanging from buildings

CHAPTER 9

THE LAW OF NEGOTIABLE INSTRUMENTS

Introduction

The law of negotiable instruments has its origin in the law created by the merchants because of the
difficulty of transmitting large amounts of notes and coins.

There are documents, which entitle the holder thereof to a sum of money. The holder's right to that money
being transferrable with ease and safety but without the inconvenience of transmitting large amounts of
notes and coins.

Simplicity and safety are the cornerstones of negotiable instruments.

Negotiable instruments are written notes or instruments. In order for them to be negotiated they have to
comply with certain prescribed formalities. Negotiability refers to the ability the rights in the instruments
to be transferred from one person to another. Transfer is done by signing or endorsing at the back of the
instrument, followed by delivery.

The nature of a negotiable instrument

These are essentially instruments of credit and they are convenient than handling large sums of money.
People resort to “plastic money” more often these days.
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A negotiable instrument is a legal document entitling the holder thereof to a sum certain in money.

Its main characteristics or distinguishing features are the following:-

1) The possibility of transfer of the instrument. The rights embodied in the instrument are transferred by
simple delivery if the instrument is a bearer instrument, by endorsement and delivery if it is an order
instrument.

2) A transferee (endorsee) who takes the instruments in good faith and for value acquires good title even
though the transferor had no title to it. The transferee becomes a holder in due course.

Three types of negotiable instruments

1) Bill of Exchange

This is an unconditional order in writing addressed by one person to another, signed by the person giving
it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future
time, a sum certain in money to a specified person or his order, or to bearer (Section 3 Bills of Exchange
Act)

2) Promissory Note

It is defined in Section 89 as “an unconditional promise in writing made by one person to another, signed
by the maker, engaging to pay on demand or at a fixed or determinate future time a sum certain in money
to, or to the order of, or to the bearer.

3) Cheques

In terms of Section 72, “a cheque is a bill of exchange drawn on a banker payable on demand”.

PARTIES TO A NEGOTIABLE INSTRUMENT

1. The drawer- This is the party who gives the order to pay the money, or the one who draws the
instrument.

2. The drawee-with cheques, the drawee is always a bank. This is the party to whom the order to pay
the money is made.

3) The payee- this is the person to whom the money should be paid.
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4) The bearer –This is the person in possession of the bearer instrument.

5) Holder-this is the payee or endorsee of an instrument who is in possession of it.

6) Endorser-this is a holder who negotiates an instrument by putting his endorsement (signature)

on the reverse side thereof and delivering it another person, the endorsee.

7) Endorsee-This is the person to whom the instrument is made payable by the endorser.

Cheques
A cheque is an unconditional order in writing addressed by one person to another, who must be a banker,
signed by the person giving it, requiring the banker to pay on demand a sum certain in money, to a
specified person or to the bearer.
The drawer
This is the person who makes out the cheque. The drawer has an account with the bank and a cheque is his
order to the banker to debit his account and pay the payee.
The drawee
The drawee is the banker. The endorser is the person who endorses or signs the cheque while the endorsee
is the person to whom the cheque is payable.

The following diagrams illustrate these definitions:-

River Bank

Pay john Bearer sum of $10.00 only

Back
Pay Peter
Endorsee

John’s signature
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Crossings on Cheques
This is covered by Section 30-35 of the Bills of Exchange Act.
It is important that the drawer of a cheque be extremely careful in the manner he draws his cheque. Open
cheques present problems if they fall into the wrong hands.
Crossings on cheques give greater protection to the drawee because they restrict the negotiability of the
cheque. There are two types of crossings made on cheques. These are the general and special crossings.
A general crossing may have two parallel traverse lines like this.

Or

Effects of general crossing

A cheque which is crossed generally instructs the banker that he must not pay the cheque to another
person except to another banker. The cheque therefore cannot be paid (cashed) over the counter.

Not-Negotiable cheques

The effect of such a crossing is to prevent the payee from negotiating or transferring the cheque. If the
payee effect a transfer, that is, negotiates the cheque, the transfer will be subject to equities, or to the
defences against the transferor. Ownership will therefore not pass.

A cheque which is crossed not negotiable will appear like this:-

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NOT NEGOTIABLE

NOT NEGOTIABLE __________________

The words not negotiable must be between the lines; otherwise they will be of no effect

Pay Account Payee Only

This is a direction to the banker that only a specified payee should be paid. The cheque will appear in this
form:-

PAY A/C PAYEE ONLY

See also in this regard, the case of UDC v Bank of Credit and Commerce HH-9489 and Zimbabwe v
Pyramid Motors 1985 (4) SA 553

Not transferable cheques

Such cheques cannot be transferred. If transfer is made when it is prohibited, it will be done subject to
equities.

The cheque will appear in this form

NOT NEGOTIABLE
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The words “not transferable” need not necessarily be between the lines. They render the cheque
completely untransferable and only a named payee can pay it into his bank account.

Special crossings

Special crossings are the second type of crossings after general crossings which may be made on a cheque.
An example of a cheque in a special crossing will be something like this:-

RIVER BANK

_______________________

NOT NEGOTIABLE

_______________________

The effect of the crossing is to direct the banker to pay the banker specified, in this case, Sea Bank.

The Issuing of Cheques

For it to be operational, a cheque must be issued. The Bills of Exchange Act defines issuing as the first
delivery of a bill or note complete in form to a person who takes the bill as a holder.

The holder is defined as the payee or endorsee of a cheque that is in possession of that cheque. If it is a
bearer cheque, then it will be the bearer of that cheque.

Delivery

Delivery is defined as the transfer of possession, actual or constructive from one person to another.

It is most important that the cheque be complete in form. If for instance, the amount payable is left blank
and the cheque is signed, then that cheque is incomplete in form and is therefore not a properly issued
cheque.

Section 19 however provides that if a blank cheque or inchoate cheque is delivered by the drawer, then it
must be filled in within a reasonable time.
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The holder in due course

This is a person who takes an instrument in good faith and becomes the owner thereof. He is entitled to
payment notwithstanding the fact that the person who transferred it to him had defective title or had no
title to it at all e.g. a thief.

He must accordingly take the instrument in good faith in good faith and for value. He must not have had
notice of any defect in the title of the transferor. Secondly, he must have become the holder before the
instrument was overdue or without notice of dishonour.

Duties of the holder

These duties are in terms of the Act. The relevant sections are 38-51.

1. To present the bill for acceptance where it is payable after sight, where it expressly stipulates that it
should be presented for acceptance and where the bill is drawn payable elsewhere than at the residence or
place of business of the drawer.

2. To present the instrument for payment failure to present as required by the Act will discharge the
drawer and indorser from liability.

3. To give notice of dishonour. When the bill is dishonoured, the holder acquires a right of recourse
against the drawer and indorser.

4. To protest upon dishonour. Protest is done by a Notary Public attaching to the instrument and compiling
a document setting out the facts of the protest.

Essentials of negotiable instruments

1. Unconditional

There must be no conditions attached to the order or promise to pay. Any conditions will render it invalid.

2. In writing

Negotiable instruments cannot be verbal. They must be in writing.

3. Order or Promise
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It should not be a mere request but an order (or a promise in the case of a promissory note)

4. Addressed by one person to another

This means precisely what it says hence the implication is that at least two persons are required.

5. Signed by the drawer or Maker

An unsigned instrument is of no force or effect. The signature can be by means of a stamp, by an agent or
done personally.

6. A sum certain in money

The payment ordered or promised should only be in money. It ought to be certain hence the need for
specify and exactitude. The amount must be certain ex facie the instrument.

Negotiating an instrument

An instrument is negotiated when it is transferred from one person to another. An instrument payable to
bearer is negotiated by delivery alone. An order instrument is negotiated by endorsement and delivery.

Endorsement is the signing at the back of the instrument with animus indorsandi or the intention to
indorse. An indorser may make the instrument payable to someone else-the endorsee.

Types of endorsement

Blank endorsement
This type of endorsement does not specify an indorsee hence the instrument is payable to bearer.
Special endorsement
A special endorsement specifies the indorsee to whom it is payable. The instrument is an order instrument.
A holder can convert a blank indorsement into a special indorsement by simply inserting the name of the
endorsee.
Restrictive endorsement
This endorsement restricts payment and affects negotiability of an instrument by prohibiting further
negotiating e.g. “Pay Joe Boss only” or “Pay Peter for the account of Joe”
DISCHARGE OF A NEGOTIABLE INSTRUMENT
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Acceptor becoming holder at maturity

If the maker or acceptor himself becomes the holder of the instrument or if the instrument matures, then it
will accordingly be discharged.

Payment in due course

When holder takes an instrument in good faith and payment is made in full by the drawee, the instrument
is thereby discharged.

Waiver
Where the holder renounces his rights against the maker or acceptor, the instrument is discharged.
Cancellation
When the holder cancels an instrument, it is discharged. The cancellation must be apparent on the face of
the instrument.
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CHAPTER 10
THE LAW OF INSURANCE

Introduction
Insurance plays a vital part in modern business. It is difficult to imagine what become of commerce if the
insurance industry suddenly became non-existent. The businessman whose supermarket burns down will
be completely ruined.
The transporter whose lorry becomes a write-off in an accident will have nowhere to turn. Many people
are quite aware of the existence of life insurance policies, endowment policies, third party and
comprehensive motor insurance and the educational assurances. The long and short of it is that insurance
is extremely important. It is therefore vital that one has an understanding of the law relating to this
industry. Insurance is regulated by the Insurance Act.

Definition
Birds, a famous author in his book Insurance Law defines Insurance as follows:-
“........................a contract whereby one party assumes the risk of an uncertain future event not in his
control in which the other party has an interest and under which the first party is bound to pay money or
provide its equivalent if the uncertain future event occurs”
From the above definition, several factors emerge which require consideration. These factors are as
follows:
-Insurance is a contract
-The element of risk
-The uncertain future event
-Insurance interest
-Payment of money (Premium)
-Indemnity
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UNCERTAINTY
When one takes out a policy, he is preparing for the unknown future event. In his mind, he will be saying,
“I f anything happens, i don’t know what it may be, but i have prepared myself for it”. The insured must
therefore be uncertain. If it is certain, there cannot be insurance contract. The exception is death, which is
a certainty.

Parties to the Contract

The Insurer
Usually this is a company. The insurer takes over the risk of the future uncertain event and indemnifies the
insured in the event of such a loss.
Reinsurer
The reinsurer usually acts as the insurer to the insurer and does not come into contract with the ordinary
insured.
The Insured
The insured is the person, company or organisation which buys an insurance policy from the Insurer to
protect him or itself from financial or other disasters.
The Broker
He must be registered in terms of the Insurance Act. A broker is considered to be the agent of the insured
and can be sued for breach of his duties by the insured if he acts on the insurer’s instructions.

Insurable Interest
This means that the insured would benefit from the continued existence of the subject matter and would
suffer loss if such subject matter were to be damaged or destroyed. Insurable interest is the subject matter
insurance. The exception is life, the assumption being that everyone has an interest in his or her life.

Formation of the Contract

A contract of Insurance comes into existence like other ordinary contracts and the general principles of
contract apply.
The proposal form usually, but not always, acts as an offer by the insured which may or may not be
accepted by the insurer. If the insurer gives some conditions for acceptance, this will constitute a counter-
offer.
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As with other contracts, there must be an agreement as to:

1. The premium to be paid
2. Nature of risk
3. Subject –matter of insurance
4. Period of claim

The Proposal Form

The insurer might require the client to complete a proposal form which contains some questions. From the
answers, the insurer will decide whether to insure or not.
It is important that the applicant provides correct answers since he has the duty of good faith and a duty to
disclose all material facts which might influence the granting or otherwise of the policy.
The insured should volunteer information since these are contracts of the utmost good faith.
A Cover Note
While the insurer makes up his mind, the insured may be issued with a cover-note which will afford
immediate protection.
Doctrine of Disclosure & uberrima fides (contracts of the utmost good faith)

The premium
While in Roman –Dutch law, consideration is not a pre-requisite for the validity of a contract, the contract
of insurance is an exception. The premium is the consideration given by the insured in return for the
insurer’s undertaking to cover the risk.
See Lewis v Norwich Union Fire Insurance
The premium need not be money. It could be an undertaking.
If the parties are not agreed as to the premium payable, then there cannot be a contract.
Renewal of the policy
Every single renewal of the policy is a new contract. The duty to disclose therefore still exists. The insured
is required to disclose any changes or new risks which may materially affect the issuing of the new policy.
The renewal therefore cannot be held to constitute a continuation policy. This however depends on the
terms of the agreement. See in this regard the English case of Phoenix Life Assurance Co v Sheritdan
(1860) 11 ER 621 (HL).

OTHER TYPES OF INSURANCE

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Motor -vehicle Insurance

In Zimbabwe, motor –vehicle insurance is compulsory. Owners have the option to take third party policies
or Comprehensive Insurance policies which cover thefts, accidents etc

Marine Insurance
This concerns insurance of ships and the need not to bother the average Zimbabwean businessman, seeing
as it is that Zimbabwe is a land-locked-country.

THE DOCTRINE OF SUBROGATION

The doctrine means that the insurer steps into the shoes of the insured to enforce the rights of the insured
against the wrong doer. It is important in Insurance although it is not confined to Insurance alone. It
applies also to the buyer and seller situations and also to the employer’s vicarious liability in delict.
The insurer, unlike in assignment may bring the action against the wrong doer using the insured’s name.
Insurers prefer subrogation to assignment because with subrogation, the insurer will use the Insurers name
without necessarily seeking his permission to do so. The fact that the Insurer’s name means that
unnecessary publicity will be avoided.
The insurer is obliged to account for the surplus he has recovered to the Insured.

The Rationale for Subrogation

1. For the survival of the Insurance Industry. The insurer will minimise his losses by proceeding against
the wrong-doer.
2. May influence the Insurer to lower his premiums when he knows that he may recover from the wrong-
doer.
3. The insurer has the resources at his disposal to pursue the wrong-doer.
4. The insured cannot be over-compensated
See Lister v Ramford 1957 AC 555
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CHAPTER 11
ACQUISATION OF PROPERTY RIGHTS
CLASSIFICATION OF THINGS

Before one can begin to understand the concepts of real rights, personal rights and other rights associated
with legal ownership and possession, it is important that there be an appreciation of how things are
classified. These classifications come from ancient Roman law and as such, the names given to things are
in Latin.

Things have traditionally been classified in two ways:

1) According to their nature

2) According to their relationship with mankind

According to their nature

1) Corporeal and incorporeal

2) Consumable and inconsumable

3) Movable and immovable

4) Fungible (being something (such as money or a commodity) of such a nature that one part or
quantity may be replaced by another equal part or quantity in paying a debt or settling an account)
and non-fungible
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5) Divisible and indivisible

According to their relationship with man

1) Res in commercio-things capable of being privately owned

2) Res extra commercium-things not capable of being privately owned

ACQUISITION OF REAL RIGHTS

A real right establishes a direct link between a person and a thing. The person consequently has the right
to control the thing within the limits of his rights. It effectively becomes enforceable not in consultation
with any other person, but is enforceable against the whole world at large.

A personal right on the other hand,

“a person becomes bound to the holder of the right to render particular performance itself being
the object of the right. It never establishes a direct legal connection between its holder and the
things, if any, in respect of which a performance has to be rendered”.
(Silbeberg, 43)

ORIGINAL METHODS OF ACQUISITION

Under this topic, we are concerned with the ways in which a person can become the owner of a thing
originally. This means he becomes the very first person to own it without a predecessor in title. He
assumes ownership unilaterally.

The methods for original acquisition are:

1) Occupation

2) Accession
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3) Specification

4) Commixitio

5) Acquisitive prescription

Occupation

This refers to the unilateral taking of possession by a person of a corporeal thing which is res
nullius (i.e. belonging to no one), with the intention of becoming owner thereof. The most common
situations are the acquisition of wild birds and animals, although this now is rather difficult with
wildlife and environmental conversation laws. There is therefore the need that the acquisition be
lawful hence in the case of Dun v Bowyer, a person obtained a licence to shoot hippo. He however
asked his brother to shoot the hippo. When the matter went to court, it was held that the licence
was not transferrable hence the licensee never acquired any ownership of the hippo.
In the case of R v Mafohla 1958(2) A 373, the complainant had wounded a Kudu. He chased it
for some time but eventually lost track of it. He resumed following the animal the following day.
As he looked for the Kudu, he found Mafohla and his friends already skinning the animal. Mafohla
and his friends were then charged with the theft of the Kudu. The question was whether the Kudu
in fact belonged to the complainant for purposes of the offence of theft. The court held that they
were not guilty of theft because when they captured the animal, it did not belong to the
complainant since he had lost control of it. It was therefore a “res nullius”.

Res derelict

Res derelicta refers to abandoned things. The person who seeks to establish ownership of “res
derelict” must prove the following: -

1) That the property was abandoned

2) That the previous owner had the intention to abandon the property
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In the case of S.M. Goldstone v Gerber 1979(4) SA 930

A road roller was left by workers for several weeks exposed to the elements. The owner failed to
find it when he came looking for it, only to find it at a scrap yard. The Defendant had taken it in
order to cut it up for scrap. The defendant alleged that the roller had been abandoned. The court
held that there was no evidence of intention to abandon to hence the defendant was liable for the
damages.

Accession

This refers to an increase or addition to a thing whereby two or more things come together to form
one entity e.g. fruits of trees and offspring of domestic animals. Where two things are joined
together the greater part attracts the lesser hence the lesser loses its identity and the new thing
belongs to the owner of the greater part.

According to the principle of “Supercies solo cedit set quid est Superficious”, everything which is
attached to an immovable, such as a piece of land, or everything built on land is attached to the
land.

There are many forms of accession such as;

1) Natural accession e.g. birth of young animals. Owner of mother is owner of the offspring. A
bona fide possessor is also entitled to ownership of the offspring.

2)Avulsio-where a piece of land is torn off by flooding water and is washed up against another’s
land, the owner of the land to which the torn piece of land is attached becomes the owner of
everything. This only happens if plants start to grow.

3) Commixitio-mingling of liquids etc so that they become inseparable.

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4) Specification-creation of a new thing out of somebody else’s material which can no longer be
restored to its original form. It involves labour in creating a new thing and good faith since it
involves another’s property.

An employee cannot claim ownership of something he creates during the course of his
employment.

5) Acquisitive prescription- a person who is continuously in possession of another’s property as if

he was the owner for a period of thirty (30) years acquires ownership. Bona fide or mala fides are
irrelevant hence a squatter can acquire ownership through prescription. This is because
prescription always operates against the will of the true owner and the possession is always
unlawful. The rationale for this is historical; to punish people who through carelessness throw
injuries on the state by creating uncertainty about ownership of property. If prescription is
interrupted, then it will either be suspended or it will start afresh (i.e. de novo)

DERIVATIVE ACQUISITION OF REAL RIGHTS

The acquisition of ownership here is dependent on whether the property is movable or immovable.
For a person to transfer the real right of ownership to another, he must be the owner of the property
or a duly authorised agent. If the property is transferred without the consent of the owner, then
ownership does not pass as the true owner always has the right to follow up his property from
whoever took it, including bona fide possessors or purchasers. This real right to follow up the
property is called the right of vindication or the “rei vindication”

However, the owner may be prevented from exercising the right of vindication if he led a person to
act to his detriment through negligence.

This is the operation of estoppel. We can summarise the requirements for a valid transfer of
ownership as follows:-

1) Res in commercium-property must be capable of private ownership

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2) capacity-transfer must be legally competent to transfer ownership

3) Transfer must be effected by the holder of the real right or a duly authorised agent i.e. “nemo
dat qui non habet”- you cannot transfer a right which you do not hold.

4) Transferee must have capacity to acquire ownership

5) There must be intention to transfer and to accept transfer (the requisite animus)

DELIVERY OF IMMOVABLES

Since actual delivery is not possible, delivery is constituted when registration of title is made at the Deeds
Office.

Registration involves the recording of the existence and description of a corporeal thing and hence
effectively gives notice of the rights of ownership.

The register at the Deeds office is a public document and is open for inspection by the public.

DELIVERY OF MOVABLES (TRADITIO)

In this case, use is made of either actual delivery or constructive/ fictious delivery.

Transfer of ownership is subject to certain conditions:

1) Cash sales

2) Suppositions

In cash sale, ownership passes immediately upon delivery whereas in suppositions the intention of the
seller may be subject to certain conditions such as suspensive conditions where notwithstanding delivery
ownership does not pass to the buyer.
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ACTUAL DELIVERY (TRADITIO)

This is physical delivery and the intention of the parties to determine the real right which is being passed.
This is delivery de manu in manum i.e. from one hand to the other such as delivery of a ruler or a loaf of
bread to another person.

CONSTRUCTIVE / FICTIOUS DELIVERY

No physical handing over of the property takes place but the transferee is put in apposition to control the
property in question.

The following are the various forms of fictious delivery known in our law of property and sale:-

1) Delivery by the Short hand (Traditio brevi manu)

Where the property is sold or donated to a transferee who already is in possession of it, it shall not
be necessary to physically deliver it.

2) Delivery by the long hand (Traditio longer manu)

This is suitable where the goods are bulky and difficult to move such as a heap of coal, timber,
stones etc. The property is thus placed at the disposal of the acquirer so that he can deal with it in
his own good time and at his pleasure. The property is usually pointed out to the acquirer as
happened in Xapa v Ntsoko where cattle intended to be payment for lobola were pointed to the
father in law and the court said delivery longa manu had in fact taken place.

The determining factor here is whether a purchaser or acquirer is placed in control of the property
hence in Botha v Mazeka 1981(3) SA 191, some cattle were driven to a separate camp at the
seller’s premises but since the buyer was not in control of the cattle, delivery by the long hand had
not taken place at all.
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Symbolic delivery(Traditio symboica)

In this case, the transferor supplies the transferee with the means to deal with the property, e.g.
delivery of car keys or keys to a warehouse.

The transferee must acquire full control of the property. In C.I.F contracts, delivery of the bill of
lading constitutes symbolical delivery of the property.

Constitutum Possessorium

The transferor retains possession of the goods which he has agreed to transfer. Here, it is the
intention that matters-the mental attitude to transfer ownership. The seller of goods may keep the
goods on behalf of the buyer e.g. as a lessee. This clearly is the reverse of tradition brevi manu
(although people tend to assume wrongly that the opposite is tradition longa manu)

Attornment

The property to be transferred is not at the time of delivery in possession of either the transferor or
the transferee but it is under the control of a third party who is an agent of the transferor calling
upon the third party to hold the property hence for the transferee.

For a further discussion of this, see the Section on the law of sale

Possession
Possession is said to be the foundation of the law of property but it is not easy to define. It is
therefore a nebulous concept.

Generally, it involves physical control and the mental state to possess. This is a question of fact
since a person may possess something which he is not “physically possessing” such as your radio
which you left at home or your money in your drawer. Here clearly possession is not synonymous
with having the property on your person.
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Alternatively, if a person drops a twist of “mbanje” in your pocket without your knowledge or
consent, are you in possession of “mbanje?”

Possession is a real right “sui gereris”ie it is in a class of its own.

1) Possessor is protected from unlawful deprivation including against the owner of the property. If
a possessor loses property, the court can grant a Spoliation Order which is a remedy used to
summarily undo unlawful disturbance of existing control by restoring the possession. The court
restores possession without looking into the merits of the parties’ rights to possession, the rationale
being that people should not take the law into their own hands by depriving others of their property
without a court order. People should not resort to self-help. Theoretically, a thief can utilise it,
even though in practice the criminal law will step in.

The possessor is also entitled to fruits of the property during the period of possession.

The true owner can however claim the property through the rei vindication if the possessor cannot
show the basis of returning such possession.

In Oglodinski v Oglodinski 1976 (4) SA 273, a spoliation order was held to be available in the
husband and wife situation as well. This is also similar to the case of Maria v Murimbika 1976
(I)RLR 385 where the wife removed furniture from the matrimonial home which she claimed
belonged to her. The court ordered restoration of the property.

Consider also these interesting cases:-

Council 1977 (3) SA 113- the council had unlawfully demolished the applicant’s squatter house
made of corrugated iron. The council was supposed to have given the squatter notice as required
by the law. The court ordered the council to re-erect the dwelling!

Tshabalala v West Rand Admin Board 1980 (2) SA 520

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After a dispute, the applicant’s dwelling ceiling was summarily removed and his possessions were
thrown out into the streets. The court ordered restoration of the property.