QUESTION 1

Explain the functions of the following courts

1a (i) Supreme Court (2mks)
Officers of the Supreme Court compose of The Hon Chief Justice/President of Court,
Hon.Deputy Chief Justice/Vice president of the Court and Five other Judges.
Functions of the Supreme Court include;
It has exclusive original jurisdiction to hear and determine disputes relating to the
elections to the office of President
Gives advisory opinion at the request of the National Government with respect to any
matter concerning the county government
It has appellant Jurisdiction to hear and determine appeals from the court of Appeal and
any other court or tribunal as prescribed by the National Registration.

1b (ii) Industrial tribunal (2mks)

Industrial tribunal is established to deal with labour disputes. The judge of the Industrial
tribunal is appointed by the president and four other members.\in \kenya the above tribunal
has been established in accordance with the provision of trade dispute act Chapter 234
Its functions include;
They are independent judicial bodies that hear and determine claims to do with employment
matters. These include a range of claims relating to unfair dismissal, breach of contract,
wages/other payments, as well as discrimination on the grounds of sex, race, disability, age
e.t.c
1c) Explain the following with reference to law of contract
(i)Undue Influence (2mks)
Undue influence exists where a contract has been entered as a result of pressure which falls
short of amounting to force, the party subject to the pressure may have a cause of action in
equity to have the contract set aside on the grounds of undue influence. Undue influence
operates where there exists a relationship between the parties which has been exploited by
one party to gain an unfair advantage

A contract is said to be induced by undue influences where the relations subsisting between
the two parties is such that one of them is in a position to determine the will of the other party
and uses the position to obtain an unfair advantage over the other.E.g a Contract between a
father and Child, Doctor and Patient e.tc
1d. Define the following
(i) Law of tort (3mks)
A tort is a legal wrong, for which the law provides a remedy. It is a civil action taken by one
citizen against another and tried in court. A person who sustains injury or suffers pecuniary
damage as a result of the wrongful act of another person is known as the plaintiff and the
person who is responsible for inflicting the injury and incurs liability for the damage is
known as the defendant.
Tort law can be split into three categories:
Negligent torts.
Negligent torts encompass harm done to people generally through the failure of another to
exercise a certain level of care (usually defined as a reasonable standard of care). Accidents
are a good example of negligent torts.
Intentional torts
Intentional torts, on the other hand, refer to harms done to people intentionally by the willful
misconduct of another, such as assault, fraud and theft.
Strict liability
Strict liability torts, unlike negligence and intentional torts are not concerned with the
culpability of the person doing the harm. Instead, strict liability focuses on the act itself: if
someone commits a certain act (say, producing a defective product) then that person is
responsible for the damages from that act regardless of the level of care exercised or their
intentions

QUESTION 3.
3 a) Draw a structure of Kenyan Courts

3 b) In relation to the law of contract, discuss various circumstances under which a

contract may be discharged by frustration.(5mks)
Illegality
If performance of the contract becomes illegal due to change of law or otherwise, it is frustrated
and the parties discharged. This is because there is no obligation to perform that which becomes
illegal
Death or Permanent incapacitation
The death on permanent incapacitation of a person frustrates the contract hence discharging the
parties. This may occur in contracts such as employment when an employee dies.
Destruction of subject matter
The contract is frustrated if the basis of the contract or the subject matter is destroyed and the
parties discharged. Its discharged if only the subject matter of the contract is completely
destroyed and it must be evident that the subject matter was the sole foundation of the contract.
Non-occurrence of events or state of affairs
If a contract is based on a particular event of state of affairs existing at a particular time, its nonoccurrence nay frustrate the contract, however for the contact to be frustrated, it must be proved
that the event or state of affairs was the sole foundation of the contract.
Government Intervention or interference
If Government Acts or Policies render performance of a contract impossible, the same is
frustrated and the parties discharged.

Supervening events

These are circumstances which intervene and thereby render performance of a contact impossible
or delay the same thereby changing the commercial characteristics of the contract.e.g in outbreak
of political violence may render it impossible to perform and thereby frustrate

QUESTION 4
4 a) Explain the essentials of contract(5mks)
(i) Offer
There must be a definite, clearly stated offer to do something. For example: A quotation by subcontractor to the main contractor and an offer to lease.
An offer does not include ball park estimates, requests for proposals, expressions of interest, or
letters of intent.
An offer will lapse:
When the time for acceptance expires;
If the offer is withdrawn before it is accepted
After a reasonable time in the circumstances (generally the greater the value of the contract, the
longer the life of the offer).
(ii) Acceptance
Only what is offered can be accepted. This means that the offer must be accepted exactly as
offered without conditions. If any new terms are suggested this is regarded as a counter offer
which can be accepted or rejected.
There can be many offers and counter offers before there is an agreement. It is not important who
makes the final offer, it is the acceptance of that offer that brings the negotiations to an end by
establishing the terms and conditions of the contract.
Acceptance can be given verbally, in writing, or inferred by action which clearly indicates
acceptance (performance of the contract). In any case, the acceptance must conform with the
method prescribed by the offerer for it to be effective.
(iii) Lawful Consideration
In order for a contract to be binding it must be supported by valuable consideration. That is to
say, one party promises to do something in return for a promise from the other party to provide a
benefit of value (the consideration)
Consideration is what each party gives to the other as the agreed price for the other's promises.
Usually the consideration is the payment of money but it need not be; it can be anything of value
including the promise not to do something, or to refrain from exercising some right. The payment
doesn't need to be a fair payment. The courts will not intervene where one party has made a hard
bargain unless fraud, duress or unconscionable conduct is involved.

(iv) Intention of legal relationship

A contract requires that the parties intend to enter into a legally binding agreement. That is, the
parties entering into the contract must intend to create legal relations and must understand that
the agreement can be enforced by law.
The intention to create legal relations is presumed, so the contract doesn't have to expressly state
that you understand and intend legal consequences to follow.
If the parties to a contract decide not to be legally bound, this must be clearly stated in the
contract for it not to be legally enforceable.
(v) Free Consent
Consent' means the parties must have agreed upon the same thing in the same sense.
Consent is said to be free when it is not caused by Coercion
Undue influence
Fraud,
Mis-representation
Mistake.
An agreement should be made by the free consent of the parties
(vi) Lawful Object.
The object of an agreement must be valid. Object has nothing to do with consideration. It means the
purpose or design of the contract. Thus, when one hires a house for use as a gambling house, the object
of the contract is to run a gambling house.
The Object is said to be unlawful if(a) it is forbidden by law;
(b) it is of such nature that if permitted it would defeat the provision of any law;
(c) it is fraudulent;
(d) it involves an injury to the person or property of any other;
(e) the court regards it as immoral or opposed to public policy.
(vii) Legal Formalities.
An oral Contract is a perfectly valid contract, expect in those cases where writing, registration etc. is
required by some statute. Mostly writing is required in cases of sale, mortgage, lease and gift of
immovable property, negotiable instruments; memorandum and articles of association of a company, etc

(viii) Capacity to Contract.

Any person may enter into any kind of contact however there are certain classes of persons to whom
specific rules applies with regards to their capacity to contract
Minors,
Persons of unsound mind
Married women
Alien or non-citizens
Corporations
Trade unions
Foreign Sovereign
An insolvent or bankrupt
(ix) Not declared to be void or Illegal.
The agreement though satisfying all the conditions for a valid contract must not have been expressly
declared void by any law in force in the country
4 b) Explain 5 disadvantages of the use of administrative tribunals in dispute resolution (5mks)

They are sometimes held in private so the basic requirement for justice may not be
fulfilled

The parties are sometimes not permitted to be represented by their lawyers

Rights of appeal are limited in some cases

The discretion of the tribunal is sometimes so wide that the decision may be inconsistent
and illogical

The officials do not work impartially in most of the cases

REFERENCE
1. Business Law and the Regulation of Business / Edition 10 by Richard A. Mann, Barry S.
Roberts
2. Business law by Ogola, JJ. Nairobi, Kenya Focus Books 2010
3. General Principles and Commercial Law of Kenya by Ashiq Hussain East African Publishers,
1978
4. Constitution of Kenya, 2010