LECTURE ONE

GENERAL PRINCIPLES OF LAW

1.1 Introduction
The terms 'business', 'commercial' and 'mercantile' are synonymous. Commercial Law
is a branch of General Law. It relates to industry, trade and commerce. It includes law
relating to contracts, sale of goods, partnerships, negotiable instruments, companies, co-
operative societies etc. Before we analyze all these concepts, it is important for us to try
and understand law in general. We need to know what law is and why it is important for
one to study it.

1.2 Need and purpose for law

As noted by Chawla and Garg (1987), no society can exist without Law. Law is required
for the preservation of peace and orderlines in the society. Society creates and imposes
law to make organized living possible. Without law, life and business would soon
become a matter of the survival not only for the fittest but also of the most ruthless. In a
free and competitive economy like ours, the rights of the individual are considered of
primary importance, consequently, one important function of law is to regulate the
transaction of business and the acquisition and ownership of property.

Law has a very intimate relationship with the society. Law is a perfect mirror of the
goals, values, institutions, conflicts, problems and ways of doing things in the society as a
whole. Law is also a powerful instrument of social change. Infact, law and society are
inseparable companions and have profound effect upon each other.
Laws are therefore, necessary. Basically, they are sets of rules that make it possible for
people to coexist in the same city, state, country, or even on the same planet. If you live
alone on an island, in the middle of a desert, or on a hilltop that you never left, you
wouldn't cause problems for anyone else. But once people start sharing food, space and
other necessities for life, they need rules for their conduct towards each other.

The basic purpose of law is to give every individual the room and the opportunity to
exist as he chooses while leaving other people free to have their own space for their own
activities. Under a system of laws, everyone has both rights and responsibilities. It is
important that you know and understand your rights and responsibilities so that you can
enjoy freedom under the law and avoid problems that can come from misunderstanding
or breaking laws.

The main purposes of law are:

1. To regulate the conduct or behavior of the persons.
2. To provide justice to the members of the society.
3. To maintain the political and economic stability of a nation.
4. To protect the fundamental rights and freedoms of the individuals.
5. To establish the procedures and regulations regarding the dealings among
the individuals.
1.3 Definition of Law
'Law ' in simple term means 'rules'. It is a very wide term and includes different sets of
rules regulating external human actions and conduct of individuals in their dealings with
other individuals and with the Government.

With the growth of society and welfare state, civilization has demanded a reformed set of
rules time and again. Law has, therefore, been often subject to changes to meet the
practical needs of society and the same time, attempting to achieve some sort of security
and uniformity in its application. The following few definitions below will show the
disagreement on anyone definition among different jurists.

 Cicero has defined law in the following words: "It is the highest reason, implanted
by nature, which prescribes those things which ought to be done and forbids the
contrary".
 Salmond defined law as 'the body of principles recognized and applied by the state in
the administration of justice.'
 Austin defined law as 'rule of external human actions enforced by the sovereign
political authority.'
 Holland defined law as 'rule of external human actions enforced by sovereign
political authority'.
 Panton defined law as 'a body of rules which are seen to operate as binding rules in
a community by means of which sufficient compliance with the rules may be secured
to enable the set of rules to be seen binding'.
 Woodrow Wilson defined law as 'that portion of established habit and thought of
mankind which has gained distinct and formal recognition in the shape of uniform
rules backed by the authority and power of Government'.

According to Anson: 'The object of law is order, and the result of order is that men are
enabled to look ahead with some sort of security as to the future. Although human
actions cannot be reduced to the uniformities of nature, men have now endeavored to
reproduce by law something approaching to this uniformity'.

A well recognized definition however, is the one given by Blackstone. "Law is a rule of
civic conduct, prescribed by the supreme power of a state, commanding what is right and
prohibiting what is wrong'.

Although there is no universally recognized definition of law, its objectives undisputedly

is the maintenance of peace and order. It can be described as 'a collection of rules of
human conduct prescribed by human beings for the obedience of human beings'. As R. J.
Lewis noted 'the law is part of everyone's life, a living part, a determining part, a
controlling part and a giving part. It concerns people, it is alive.

Thus, the law of the state consists of those rules of conduct and standards prescribed
by the people in authority for governing and regulating peaceful relations between
members of a particular community or state.
 From this definition if follows that there are three essential characteristics of law.
(i) Law is a rule relating to the actions of human beings.
(ii) Law attempts to regulate the external actions of human beings.
(iii) Law is enforced by the state.

1.4 Law and morality

At school the law student will have learnt something about the laws of science. In life
she/he will learn something about the law of morality, and in her/his study of law she/he
will discover that certain moral wrongs are also crimes, but not all forms of immoral
conduct are visited by the sanctions of public and private law.
Why should legal wrongs be distinguished from rules of morality?

Legal wrongs are to be distinguished from rules of morality, which are not enforced by
the courts unless the moral Laws are also part of the laws of the state. For example, for a
person to watch a child drown would offend moral instincts of most people, but the
'offender' will not have to answer for his or her conduct on this earth, although she/he
may well have to answer for it in a higher place at a later date. Also if a person fails to
honour his/her parents, she/he has broken the fifth commandment, but has not broken the
Law, and is not liable to any court proceedings. However, if she/he breaks the eight
commandment and steals, apart from it being immoral she/he can be prosecuted in a
criminal court. There are several crimes in the penal code which are embraced by the
crime of theft. One should however remember that the laws of any country are said to
some extent to be an expression of the morality of that country.

1.5 Law and justice

The function of the courts is to administer justice according to the law. Whether the
courts achieve justice is another matter.

What is justice?

Lord Denning in his book 'The Road to Justice' gives us the example of William
temple, sometime Archbishop of Canterbury, opening address to law students said, 'I
cannot say that I know much about the law, having been far more interested in justice'.
At the other end of the scale is the lawyer, who, in addressing a class of students said, 'I
can only tell you what the law is, if you are interested in justice, you had better go to the
school of Divinity.

It is not easy to define justice. Justice is not something you see or feel, but rather what
the ordinary man in the street believes to be fair.

WHY STUDY LAW?

 What is the Layman's perception of Law?
The Layman's ideas of what is law will be expressed in different manner from that of the
law student. He will have a rough idea of where the law came from - the politicians
(which are his description of parliament) and the judges. He knows that if she/he steals
and is caught he will be punished. He knows that if some drunken driver of a motorcar
knocks him down 'she/he will have the law on him'. But he will know nothing about the
rule of law, which gives him/her a claim to damages. He will normally obey laws
because of the sanction behind them, but he will also obey many of them because they
appear to him/her to be common SENSE. It has infact, been said that common law is
common sense.

Why is it important for citizens of a country to have some knowledge of law?

 As noted by Kurian, law seeks to regulate the day-to-day life of people. People can
be happy only if the Laws that govern them are made by themselves or by their
chosen representatives. If the Laws of a country are imposed on the people they may
obey them out of fear. Now that we are an independent country, we have our own
laws. We need not fear them. They represent the wishes of our nation as a whole and
we obey them freely.

 Another reason why it is important to study law is as a result of the principle that
'Ignorance of Law is no defense'.
This means that if you break a certain law and plead ignorance as a defense in the
court, and that was the only thing you had to say in defense, you would be found
guilty and punished. This does not mean that everyone must know all the laws of the
country. But everyone can acquire some legal training in the areas of one's profession
or interest and thereby decide in every situation what is legal and therefore good and
what is illegal and therefore bad.

 There is yet another reason why all should get some legal training. The law as made
by the authorities cannot cater for every set of circumstances that my arise, yet the
courts will have to decide on all disputes, whether within or outside the law. The
judges do not decide just as they please. Their decisions are based not on impulse,
but on well-established principles of law. This source of law is called 'case law' or
judicial precedence.' Therefore, it is necessary to acquire some knowledge of the
principles that underline our laws, and the system of thought which has inspired them.
If a person has undergone such instruction she/he can more or less predict what a
court will decide, if the law on the matter is open to any doubt.

1.6. The Nature of law

The Law of a particular state is a body of rules designed to regulate human conduct
within that state. Broadly speaking law is:

(i) A collection of rules

 (ii) Binding
(iii) Binding on specific persons
(iv) Made and altered by certain institutions; and
(v) Enforced by the machinery of government

 Law is a collection of rules concerning the society as a whole.

The primary objective of law is to regulate human relations with other individuals
and with the state. As a social being, man comes in contact with people from
different capacities; with the landlord as a tenant, with Government as a tax payer
and so on and so forth. In all these associations she/he is expected to observe a
code of conduct or a set of rules. These sets of rules embodied in ‘law’ and
enforced by the state make human associations possible and conducive to the
welfare of the state and its people.

 Law is binding.
This means that law is not something you may or may not obey. It is compulsory
and you have no choice in the matter.

 Law is binding on specific persons.

Meaning that it is only applicable on people with whom it is concerned. Thus the
laws of our country are binding on people of this country. They are not binding
on people living in other countries, but they are binding on everyone living in this
country. No one in Kenya, except the President or person acting as President is
above the law up to a limited extent (as we shall see later).

 Law is made and altered by certain institutions.

This means that not everyone can make laws or change them. Only certain
institutions, depending on each country's system of legislation can make or
change laws. A few other institutions also make and change laws, because the
parliament has given them power to do so, but for the present it can be safely said
that parliament is the institution which makes and changes the laws of Kenya.

 Law is enforced by the machinery of the government.

As stated earlier, there is no choice in the matter - you have to obey laws.
Government will make sure that you obey laws, in other words it will enforce the
law. Government does this through the Police, Law Courts and the Prison System
to make sure that you do obey laws, and that, if you break them, you are punished.

1.7. Classification of law

Law has been classified into a number of categories. It depends upon the purpose in
view. The classifications that follow are general and relatively simple.

1.7.1 Public and Private Law

The law of the state is divided into main categories - Public Law and Private Law.
 Public Law is that branch of law, which is concerned with the relations between
private persons and the government. It includes constitutional, administrative and
criminal law. It is basically concerned with the functions of the many different kinds
of governmental organizations, including local authorities and their legal relationship
with the citizen and each other.
Constitutional Law consists of those rules, which regulate the relationship
between the different organs of the state.
Administrative law is the law relating to public administration.
Criminal Law consists of wrongs committed against the state.

The penal code of Kenya contains the bulk of these wrongs and contains, inter alia,
offences against the property and offenses against the security of the state.

 Private Law is that part of the law which is primarily concerned with the rights and
duties of the persons towards persons. It embraces the law of tort, the law of contract,
the law of property the law of succession sales of goods act, etc. Therefore, it is
concerned with the legal relationships of ordinary persons in everyday transactions.

For our purpose, the two main branches of law here are Criminal Law and Civil
Law.

Activity 2
What is a crime? What is the difference between a crime and a
civil wrong?

A crime may be described as an act, default or conduct prejudicial to the community, the
commission of which, by law renders the person responsible liable to be prosecuted and
punished accordingly. In simple terms, a crime is regarded as a wrong done to the state.
Legal proceedings are generally commenced by the state although a private citizen may
bring them. Prosecution for crimes is always conducted in the name of the state.

It is the duty of the prosecution to establish the guilt of the accused beyond any
reasonable shadow of doubt. Some crimes, for example, rape, have specific victims;
others, for example treason, can be committed without causing loss to any particular
person. If there is a victim, he will usually not have a say in whether or not a prosecution
should be brought, nor will he benefit from a conviction, since fines are payable to the
state. Crimes include offences like murder, rape, grievous bodily harm, robbery and
theft. The punishment for crime ranges from a fine to hanging (capital punishment).

Civil law is primarily concerned with the violation of private rights belonging to and
individual in his/her capacity as an individual, for example, refusing to pay a loan, or
defaming another. Unlike criminal cases, the proceedings to civil cases are instituted in
the courts by the plaintiff and the burden of proving any claims rest on him. If the
plaintiff (person instituting the case) succeeds in a civil action, the defendant (the
accused) will be ordered by the court to compensate him by paying damages. Their
purpose is to compensate the plaintiff for his loss rather than to punish the defendant. The
remedies available in civil actions are damages, specific performance and injunction.

The distinction between a crime and a civil wrong is not found in the nature of the act
itself, but in the legal consequences that follow it. The same act may constitute both
a crime and a civil wrong. Thus, a bus you were travelling in crashes, the driver may
commit;
 A breach of contract, namely failure to transport passengers to their destination;
 A tort, namely negligence, if he causes damage to any property or injury to any
person;
 A crime, for example, dangerous driving.

In some situations the act will both constitute a criminal offense and expose the person
doing the act to a possible civil action. In such cases, the victim will have to start a civil
action separate from any criminal action brought by the state. An example is assault. It is
both a crime and a tort. Such offenses of a dual natures, it must be emphasized are
exceptional. In the majority of cases, crimes are quite independent of civil wrongs.
Below are the differences between these two types of wrongs:-

CRIME CIVIL WRONG

 1. It is a public wrong against the state.
2. The parties are the Prosecution and the
Accused. The Prosecution represents
the state, while the Accused is the
offender who is being prosecuted.
3. Since this is a public wrong, the action
cannot be compromised by the parties.
It is only in exceptional circumstances
that the public prosecutor may
withdraw a prosecution against a
particular accused.
4. The prosecution must prove its case
against the accused beyond reasonable
doubt. Any slight doubt must be
resolved in favour of the accused.
5. Punishment is usually by
imprisonment or fine, or the death
penalty in the case of capital offenses.
1. It is a private wrong against the
individual.
2. The parties are the Plaintiff and the
Defendant. The Plaintiff is the
aggrieved party who is suing, while the
Defendant is the wrongdoer who is
being sued.
3. This being a private wrong the parties
are free to compromise any action
brought by one of them and the plaintiff
may at anytime choose to withdraw his
action against the defendant.
4. The plaintiff needs only to prove his
case on a balance of probabilities not
beyond reasonable doubt, i.e. the
evidence must be such that it is more
probable than that of the defendant.
5. A defendant found to have committed a
civil wrong is usually ordered to pay to
the plaintiff damages (i.e. monetary).

 In criminal cases the plaintiff is the state and hence will be known as the state or the
Attorney General Vs John (the name of the defendant).

In civil cases, the plaintiff's name is placed first, for example;

Odundo vs. Njuguna

In this case, Odundo is the plaintiff and Njuguna the defendant.
 In appeal cases, when a party appeals, he is called the appellant, and the other party
is the respondent.

 Since the plaintiff's name is always placed first, when a defendant appeals, the name
of the case will be reversed.

For example, in the case of Odundo vs. Njuguna in the High court, on appeal it becomes
Njuguna vs. Odundo in the Court of Appeal.
 There are many categories of civil law, the most important include; contract, tort,
trusts, law of succession, law of property, company law etc.

1.7.2 Written and unwritten Law

The distinction between the written and unwritten law is that written law emanates from
the legislative branch of the government while the unwritten law emanates from the
judicial branch of the government. Written law includes constitutions, statutes,
ordinances, treaties and rules (regulations) of the various government agencies. The
unwritten law, also referred to as, 'common law' or 'case law' consists of courts decisions.
The term 'unwritten law' represents the law developed by courts in contrast to the law
 enacted by legislative bodies as written law. An example of unwritten law is common
law, a term used in England to denote the case law as distinguished from law enacted by
legislative bodies. This law is based upon judicial precedents handed down from
generation to generation. Common law was not devised at once but gradually developed
as new situations and problems come before the courts. Common law existed in England
even before the parliament came into existence.

1.7.3 International Law

This consists of that body of law, which regulates the relations between States. It is based on
custom, treaties and conventions. Disputes between states can be settled at the International
Court of Justice at the Hague in Holland, but the litigant states must consent to its jurisdiction.
There are no means of enforcing its judgements (apart from member countries threatening to
impose trade sanctions to a country). There is no such thing as an international Police force, or a
legislature for the enactment of rules of International law. The United Nations Organization
(UNO) does not perform either of these functions.

1.7.4 Private International Law

It is mainly concerned with determining what system of State law shall apply in a case,
which contains a foreign element. If, for example, Kenyan entries into a contract with a
Ugandan in Tanzania, which will be performed in South Africa and a breach of that
occurs and the Kenyan wishes to sue in Kenya, the Kenyan Court will have to decide
which system of law to apply.

1.7.5 Procedural Law and Substantive Law.

Procedural law is actually adjective law which is concerned with the procedural
machinery by which legal rights and duties are enforced. In other words, it lays down the
rules in details for the guidance of the courts regulating the manner in which the
proceedings are required to be conducted in civil and criminal cases.
Substantive law, on the other hand, includes the actual rules of law as opposed to the
procedure. It is the law, which the courts establish to administer. It defines civil and
criminal wrongs, and provides remedies for each type of offence or civil wrong.

1.7.6 Business Law.

What then is business/commercial or mercantile law?

The growth of business made it imperative for the parliament and local governments to
introduce new pieces of legislation and amend the existing legislation's to regulate
various business transactions. Business Law is a branch of general law. It relates to
industry, trade and commerce. The subject matter of business transactions is usually what
is known as merchandise or movable property or goods as distinguished from immovable
property. This branch of law includes the general principles of law of Contract, sale of
goods, partnership, negotiable instruments, insurance, carriage and the law of insolvency.
 In other words, business law is that branch of law that has been established to regulate
business relationships and to ensure the smooth functional of the commercial system'. It
oils business transactions and establishes remedies where there is breach.

The Kenyan mercantile law is more or less based on English Mercantile Law. It should
be noted that Business Law is not altogether distinct and separate from other branches of
law. In its application, recourse is often taken to other pieces of legislation. Laws as
such are all interrelated. It is only a matter of convenience that legislation is classified
into Business Law, Labour Law, and Mercantile Law etc.

1.8 Summary
In this lecturer we have looked at the various definitions of law and concluded that the
primary object of law is to regulate human relations with other individuals and with the
state. Man, as a social being, must observe a code of conduct or a set of rules, and these
set of rules, embodied in 'law' are enforced by a sovereign authority. We do not choose
to obey laws, we are forced to do so. We noted that although it is not possible for a
layman to learn every branch of law, yet he must acquaint himself with the general
principles of law of the country for, ignorance of law is no excuse. We have also looked
at the nature of law in general and the various classifications that exist of law. We
concluded that business or commercial law is a branch of General Law and that it relates
to industry, trade and commerce. It regulates the various transactions of the business
community.