Introduction to contract law notes (meaning, sources, formation, etc)

Welcome to your foundational guide to Contract Law tailored specifically for law students in Tanzania.

In this comprehensive set of notes, we delve into the fundamental principles and concepts that underpin the law of contracts within the Tanzanian legal framework.

Specifically, these notes will cover;

  • meaning of contract
  • sources of contract law in Tanzania
  • How a contract is formed
  • elements of a valid contract
  • classification of contract
  • etc.

I will use examples, illustrations, and case laws to make these notes authoritative and easy to digest.

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Meaning of contract

Section 2(1)(h) of the Law of Contract Act of Tanzania Cap 345 R.E 2019, (LCA) defines a Contract as an agreement that is enforceable by the Law.

I’m sure, that definition is still unclear.

What does it signify when we say that a contract is an agreement enforceable by the Law?

Well, this implies that for a contract to be considered as valid, it must meet all the requirements set by the Law.

These requirements include the essential elements of a Contract i.e. offer, acceptance, and consideration, and other elements as provided under Section 10 of the Law of Contract Act of Tanzania Cap 345. (more about this in the coming sections)

This brings us to the popular notion under Contract Law which states that;

“All contracts are agreements but not all agreements are contracts”

For an agreement to be considered a valid and enforceable contract, it must encompass the basic elements of the Contract as prescribed by the Law.

Imagine agreements as a larger circle and contracts as a smaller circle within it.

All contracts fall within the category of agreements, but not all agreements qualify as contracts.

For instance, let’s consider a situation where two friends agree to meet for coffee. This agreement constitutes an agreement because there is a mutual understanding between them. However, it does not meet the necessary requirements to be considered a contract under the law because there is no intention to create legal relations or enforceability by law.

On the other hand, if two parties agree to buy and sell a car for a certain price and both parties intend for the agreement to be legally binding, it meets the requirements to be considered a contract.

Here, the agreement satisfies all the essential elements of a contract, such as offer, acceptance, consideration, and intention to create legal relations, making it enforceable by law.

So, while all contracts are agreements, not all agreements rise to the level of contracts because they may lack the necessary legal intent or formalities required by law.

These elements are the essential factors that any contract must adhere to, and if any contract falls short of any of these elements then it is easy to say that such a contract is void ab initio and unenforceable.

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Meaning that it cannot be considered to be a valid contract at all in the eyes of the Law. (Refer to Section 2(1) (g) of the LCA)

Before we have a look at the essential elements of a Contract, Let us discuss first what are the Sources of Contract Law in Tanzania.

Sources of Contract Law in Tanzania

The following are the sources of contract law in Tanzania.

Customary Law

Section 4 of the Interpretation of Laws Act, CAP 1 R.E 2019 defines Customary Law as

any rule or body of rules whereby rights and duties are acquired or imposed, established by usage in any African Community in Tanzania and accepted by such community in general as having the force of law, including any declaration or modification of customary law made or deemed to have been made under section 12 of the Judicature and Application of Laws Act, and references to “native law” or to “native law and custom” shall be similarly construed;”.

Also, Customary Law is recognized by virtue of section 11-12 of the Judicature and Application of Laws Act, CAP 358 R.E 2019(JALA) which is to the effect that customary law shall be applicable to, and courts shall exercise jurisdiction in accordance therewith in, matters of a civil nature.

The Application of Customary Contracts in Tanzania was also influenced by The Tanzania Order in Council of 1920, which required the governor when making Acts to respect the existing native laws and customs provided they were not opposing to justice and every court was called upon to respect customary laws.

Examples of customary laws were;

  1. Cory & Hartnoll, Customarily Law of the Haya Tribe of 1945.
  2. Sukuma Law and Customs of 1953.
  3. Law and Justice in Buganda.

In the light of the above definitions, customary Contracts are those contracts that are regulated or governed by customary law.

The applicability of customary law is also affirmed in several court decisions which have recognized the validity and legitimacy of customary law.

For example, in the case of MAAGWI KIMITO V. GIBENO WEREMA,[1985] TLR 132 where the Court of Appeal of Tanzania held that;

Customary laws of this country now have the same status as any other law subject only to the constitution and other statutory laws that may provide to the contrary

Statutes

This is another source of contract law in Tanzania.

In Tanzania, most of the general principles of Contract Law are provided in the LCA.

In fact, LCA acts as main legislation providing the legal framework relating to contracts.

It covers various aspects such as the definition of terms like proposal, acceptance, and consideration, as well as provisions regarding coercion, fraud, misrepresentation, and undue influence in agreements.

See also  Classification of law in Tanzania notes (guide + pdf)

The Act also addresses the validity of contracts, including agreements in restraint of marriage or trade, mistakes in contracts, and the enforceability of contingent contracts.

Case Laws/Precedents

Various cases decided by the High Court, and the Court of Appeal have played a pivotal role in shaping the principles of Contract Law.

These cases serve as crucial sources of Contract Law, offering interpretations and establishing precedents that guide legal understanding and decision-making.

As a result, the decisions rendered by the courts not only resolve immediate disputes but also contribute to the development and evolution of Contract Law over time.

Common Law Principles

The Law of Contract Act (LCA) in Tanzania leaves some gaps in certain aspects of contract law, meaning it doesn’t address principles for all contract-related matters.

In such cases, the principles of common law of England regarding contracts apply.

Prof. Nditti, an expert in Contract Law, states in his book “General Principles of Contract Law in East Africa” that English common law, as modified by equity and acts of parliament, applies when the LCA is silent on specific aspects of contract law.

Additionally, he suggests that English cases decided based on common law can be utilized to interpret matters addressed in the Contract Act.

Common law principles are applicable in Tanzania by virtue of Section 2(3) proviso of JALA.

Elements of a valid contract

In Tanzania, the elements of a valid contract can be drawn from Section 10 of LCA which provides that

All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void

From that section, the following elements may be drawn

  • competent parties
  • free consent
  • consideration
  • lawful object

Other key elements are always added as key elements for a valid contract i.e. offer and intention to create legal relations.

Let’s now discuss them one by one in detail;

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Conclusion

As we conclude this Introduction to Contract Law, I trust that the concepts elucidated here have been comprehensible and enlightening.

Please don’t hesitate to share your thoughts or pose any questions you may have regarding this discussion. Your feedback is greatly valued and encouraged.

Don’t forget to like and share these notes with your colleagues

This post was originally written by Kelvin John and edited, fact-checked, and enhanced by Isack Kimaro.

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