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CHINHOYI UNIVERSITY OF TECHNOLOGY BUSINESS SCIENCES AND MANAGEMENT BUSINESS LAW INTRODUCTION The following are summaries of cases that you may find useful in this module. However, the list is not exhaustive. Laws governing the business world are not static, they are dynamic hence changes and developments to such laws are reflected in current cases. The cases below however shows the standard and famous cases in our subject area. You are strongly advised to be familiar with them as this will make life easier for you in future as a practising manager and currently for your examination. Acknowledgement: In this task I made use of E.C. MacColl : Case briefs in Contract and Sale for Zimbabwean Students. Students are referred to this rich and fuller text. However, I remain fully responsible for content and for presentation and typographical accuracy. The following approach is proposed in studying cases: Summarise the facts of the case. Be sure you understand the court ruling and the principles raised in the judgement. Read related cases and establish similarities and differences illustrated in each case. In the examination/assignment: give a brief description of the case [if necessary] and then the decision that the court arrived at together with the underlying principles ratio decidendi . Sometimes even a simple citation of the case may suffice. A lot depends on the argument you wish to make.
Case Citation Using Humphrey V Cassell 1923 TP 280 The first party cited to a case is the plaintiff i.e. the one who brings the case to the courts (in our example HUMPHREY) and the last party to be cited is the defendant (in our example CASSEL). 1923 is the year in which the case was tried TP stands for Transvaal Province. This will vary from case to case. 280 the number of the case that year that the court tried. From a Zimbabwean point of view, all the cases that are tried at the High court and the Supreme Court are recorded in the Zimbabwe Law Report (ZLR), which is published annually for subsequent use by stakeholders in law. For example in AG v Paweni Trading Corp (Pvt) Ltd 1990 ZLR 24. This means o o o o o AG Attorney General is the plaintiff Paweni Trading Corp (Pvt) Ltd is the respondent/ defendant 1990 the year the case was tried ZLR the Zimbabwe Law Report 24 the case number.
It is very helpful to remember the names of the parties in question. The year is far less important.
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HYDE v WRENCH, 1840 The defendants offered to sell land to the plaintiff for 1000. The plaintiff said he would pay 950 only. The defendant rejected this. Plaintiff then agreed to pay 1000 after all. But by now the defendant no longer wished to sell. The court ruled that a counter-offer had been made which amounted to rejection of the original offer. BOERNE v HARRIS 1949 SA (AD) A lessee had an option to renew a lease for five years from 15 April 1947 provided such option was exercised by 15 October 1946. On 5 October 1946, lessee wrote that he intended to renew the lease for a further period of five years from 15 October 1946. It was held that there was no acceptance. There were contradictory dates and an acceptance of an offer must be unequivocal i.e. positive and unambiguous. An offeror is entitled to know in clear terms whether the offeree accepts his proposal An offeror is entitled to know in clear terms whether the offeree accepts his proposal. It is not enough that the words of a reply justify a probable inference of assent It must leave no room for doubt. HOUSEHOLD FIRE AND CARRIAGE ACCIDENT INSURANCE CO. V GRANT (1879) Grant wrote offering to buy 100 shares in the company enclosing a deposit. The company replied with a letter of allotment, thus accepting his offer, but the letter never arrived. Nevertheless, when the company later went into liquidation, the liquidator sued for money owed by Grant for payment of the shares. SHEPHERD v FARRELS ESTATE AGENCY, 1921. The agencys advertisement read: Business wanted. Our motto: no sale, no charge. All advertisements at our expense. Shepherd responded and signed a document which, contrary to the advert, gave the agency sole selling rights to receive commission even if the property was sold by another. Held: The contract Shepherd signed departed most seriously from the advertisement. Though adverts are not offers, if a contract arises from an advertisement, then its terms must be followed unless the other party is notified of such departure. BLEW v SNOXELL 1931 TPD Blew offered to buy a piece of land from a company, Richard Currie Ltd. However, the land in fact belonged to Snoxell who, upon becoming aware of the offer wrote to Richard Currie Ltd, accepting it, whereupon Blew was notified. In a law suit later, Blew argued that there was no contract between him and Snoxell and the Court agreed holding that, it is trite law that an offer made by one person to another cannot be accepted by a third party. In this case, the offer was made to Richard Currie Ltd and not to Snoxell. In short, if A offers to B, then C cannot accept and bind A unless A so wishes. EAST ASIATIC Co. v MIDLANDS MANUFACTURING 1954 SA The plaintiff argued that the defendant, by failing to timeously refuse to accept a counter offer, had in fact accepted it by silence. The court held that no contract existed since mere silence cannot be taken as acceptance unless there is some duty upon the defendant to speak. FELTHOUSE v BINDLEY, 1862 Felthouse had a nephew who owned a horse, which Felthouse wanted to buy. He wrote to the nephew to buy the horse saying, If I hear no more about him I will consider the horse to be mine. The nephew did not reply but decided to keep the horse for Felthouse. Bindley, an
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Van den Heever, JA: In Roman-Dutch law, the judgement of a minor is considered immature throughout his minority and he is consequently not bound by his contracts
A contract entered into by a minor without the assistance of his guardian is not binding upon the minor. STUTTAFORD v OBERHOLZER 1921 CPD Oberholzer a minor bought a motorcycle on hire- purchase. When he became a major, he continued to ride the motorcycle but failed to pay instalments. When sued he pleaded minority at the time of the contract as defence. Oberholzer was bound due to ratification by deed as he continued to use the bike in full knowledge of his legal position. TONNE v FOGGIT 1938 TPD Foggit a minor child entered into a contract without the knowledge of his father or natural guardian to take lessons at a college for two weeks in March and for the whole of April -fees being payable in advance. He paid only for the March lessons and attended them but neither paid nor attended the April lessons. Held he was liable for only the two weeks that he had attended since he had no fraudulently misrepresented anything. The court focussed on the benefits actually enjoyed. A minor is liable to the extent enriched and so Foggit paid only for services received. DURESS BLACKBURN v MITCHELL (1897) SC A ship was in danger of sinking in bad weather. A tug came to the rescue and its captain demanded 2 000 from the captain of the ship in peril. When the latter said it was too much, the captain of the rescuing tug threatened to leave them to drown, whereupon the beleaguered captain agreed. The court said the contract was void for duress. The captain of the stricken ship had signed under protest. I will sign this bill, but you will never get paid. The sailors were however entitled to fair and reasonable recompense assessed at 1 000 instead of the original 2 000 demanded. In the case of duress of goods [as here] as opposed to duress of person, the court will require that in addition to the five points listed in Broodryk, there must have been a categoric protest at the time of the contract. BROODRYK v SMUTS NO 1942 TPD
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Par delictum one party has performed and he seeks recovery. That party has not received a reciprocal benefit for performance on his side.
PETERSEN v JAJBHAY 1940 Facts are as above; Jajbhay had sublet to Petersen who (unlike Cassim) defaulted in his monthly payments. Jajbhay sought to eject Petersen. This time, ruling was in Jajbhays favour, though he could not recover the unpaid rent. The par delictum rule was relaxed to avoid unjust enrichment. Note: Ex turpi causa non oritur actio. From an evil cause no action will arise. By this rule no party can bring an action founded on the agreement; specific performance cannot be claimed. it makes no difference (even) if the plaintiff has himself made performance of his own obligations for performance does not validate the agreement. If, again, there has been performance of their undertakings by both parties, neither can obtain relief or redress. Each has obtained what he bargained for.
Christie: an illegal contract, even though unenforceable, will not be upset if it has been fully performed on both sides.
XAPA v NTSOKA 1919 EDL A sonin-law pointed out some cows to his father-in-law which constituted marriage dowry (lobola/roora). It was held that the pointing out of the cows constituted delivery by the long hand (traditio longa manu). POPPE, SCHUNHOFF & GUTTERY v MOSENTHAL & Co. 1879 The plaintiffs sold brandy to the defendants but before the brandy was set aside for the buyer (defendant), the government imposed a new excise duty on brandy. The question was who should bear the cost of the new surcharge? It was held that the seller bore the risk because the goods had not yet been set aside for the buyer.
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Ruling: All interferences with individual liberty of action in trade and all restraints of trade are contrary to public policy and are therefore void. However restraint may be justified by the special circumstances of a particular case if it is reasonable. Thus Clause 2 was held to be wider than necessary and therefore unacceptable while Clause 1 was reasonable as it merely gave adequate protection. In Book v Davidson, 1988, Dumbutshena CJ held that the party in breach of such an agreement must justify his action. RHODESIAN MILLING CO. PVT LTD v SUPER BAKERY PVT LTD. 1973. Rhodesian Milling Company sublet bakery premises to Super Bakery. In the agreement Super Bakery was to buy all its flour for that bakery and any other it had or might have in future from Rhodesian Milling. Super Bakery violated the agreement for the purchase of flour except for the sublet premises. Ruling: The provisions which Rhodesian sought to enforce were reasonable. Many apparently restrictive contracts are acceptable and are treated as part of normal commercial practice not restraint of trade. PEST CONTROL[CENTRAL AFRICA] LTD v MARTIN & ANOTHER. 1955. Martin left the Pest Control Co and promptly set up a company identical to his previous employer. The company claimed breach of Martin's previous employment contract which prohibited him from engaging in any agricultural, horticultural or medical control within the existing Central African Federation for two years after termination of employment. It was held that the company had a proprietary interest in its clientle. This was a specialised asset which the company was entitled to protect. The restriction was not excessive and the restraint was reasonable. CONTRACTUAL CAPACITY OF INSANE UYS v UYS Uys met his future wife in a caf one afternoon. He told her he owned a farm in the Orange Free State but was having problems running it. In the morning they were married. Then Mrs Uys started noticing questionable behaviours in her husband. She soon found out that he didnt even have a farm. She filed for divorce. It was established that Mr. Uys was mentally disturbed and thus not able to contract a marriage. PURCHASE AND SALE
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Note : In the case of disguised agreements the court would interpret the agreement for what it really is i.e. a contract of sale. This is what happened in Treasurer-General v Lippert [1881] where an agreement of sale was described as a contract of agency & surety in order to evade payment of transfer duty.
THERON LTD [in liquidation] v GROSS 1929. The liquidators sold book debts to Gross at an auction for 16 10s. The auctioneer exhibited a list of the debts but disclaimed any guarantee for its accuracy. Neither the liquidators nor Gross knew at the time that some of the debts totaling 38 7s 7d had already been collected by the liquidators agents. Gross sued the liquidators for that amount. The court ruled in favour of Gross and awarded him the full amount of 38 7s 7d even though he had paid a lesser amount.
Principle: In general, a contract of sale for a nonexistent thing is void. But the company, by their own fault, had failed to inquire diligently into the matter. So they were defendants bound to deliver what was sold and if they could not....owing to their own conduct they were bound to pay the value of what they sold
XAPA v NTSOKA 1919 A sonin-law pointed out some cattle and identified them by their markings to his father-inlaw which constituted marriage dowry (lobola/roora). The cattle had not been collected at the time. It was held that the pointing out of the cattle constituted delivery by the long hand (traditio longa manu) which a fictitious form of delivery especially appropriate where the item is bulky or heavy making actual delivery difficult. Further, the court said two genuinely contracting parties can adopt which form of delivery they please. For this from of symbolic delivery there must be: An intention to adopt that from of delivery There must be pointing out in praesenti Placing the item at the disposal of the buyer Clear identification and ascertainment of the thing beyond any doubt and placing the merx at the disposal of the deliveree. POPPE, SCHUNHOFF & GUTTERY v MOSENTHAL & Co. 1879 The plaintiffs sold brandy to the defendants but before the brandy was set aside for the buyer (defendant), the government imposed a new excise duty on stocks of brandy in hand. The question was who should bear the cost of the new surcharge. The seller had paid duty and sought to recover this amount from the buyer. He had however not set it aside or marked or in any way appropriated it to the buyer. It was held that the seller bore the risk because the goods had not yet been set aside for the buyer. This was based on the principle that for fungibles goods which have to be drawn from a larger stick of identical item- risk passes from the seller when such goods have been appropriated to the buyer. TAYLOR & CO v MACKIE, DUNN &CO 1879. The case is similar to above except that though delivery had not been made, the seller had in accordance with the contract measured off the brandy,, reduced its strength and placed it in casks marked with the buyers name before the duty was imposed.
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Platnauer v Morrison 1910 concerning defective seed potatoes and Montagu Co-operative Wines Ltd v Lewin 1912 concerning under strength wine. Neither could be returned but the buyers were able to recover the purchase price
To my Students : I hope you derived some value from these selected cases. No doubt you will identify many imperfections of one kind or another. Please assist me improve on this for the benefit of future students. Mbizi Rangarirai +263 773 984 672 +263 733 227 732
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