Gavin Howe
The sources of contract law in Tanzania include customary law, legislation such as the Law of Contract Act, case law, and English common law. Customary law, defined in Section 4 of the Interpretation of Laws Act, CAP 1 R.E 2019, consists of customs, practices, and beliefs that are considered legal requirements or obligatory rules of conduct. The Law of Contract Act defines a contract as an agreement enforceable by law, and outlines the requirements for a valid contract, including free consent, lawful consideration, and lawful object. Case law, including decisions made by Tanzanian courts, also influences contract law, with court decisions recognising the validity and legitimacy of customary law. English common law is applied when the Contract Act is silent on a particular aspect of contract law.
| Characteristics | Values |
|---|---|
| Contract definition | An agreement that is enforceable by law |
| Contract types | Deed contracts, simple contracts, formal contracts, and customary contracts |
| Contract requirements | Free consent, competence to contract, lawful consideration, lawful object |
| Competence to contract requirements | Age of majority, sound mind, not disqualified by law |
| Sound mind requirements | Capable of understanding and forming a rational judgment |
| Customary law | Customs, practices, and beliefs that are treated as laws |
| Sources of contract law | Customary law, legislation (e.g., Law of Contract Act), case law, and English common law |
| Offer | A definite proposal with clear and certain terms made willingly |
| Acceptance | Agreement to the offer by the other party |
| Exemption clauses | Notice of conditions, reasonable notice for the offeree, contractual document |
| Free consent | Meeting of two minds upon a common purpose |
| Void agreements | Mistake, duress, undue influence, coercion, misrepresentation |
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What You'll Learn
Customary law
The primary courts are the lowest courts in the hierarchy of the Tanzania court system. They exercise jurisdiction within their respective districts and have original jurisdiction in all proceedings of a civil nature where customary law and Islamic law are applicable. In civil cases on property and family law matters, the primary courts are the first to handle cases where customary law and Islamic law are applied. Magistrates in these courts sit with lay assessors (normally laypersons) to hear cases in minor civil and criminal offences.
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Legislation, e.g. the Law of Contract Act
The Law of Contract Act is a critical piece of legislation in Tanzania, providing a framework for the enforcement and understanding of contracts. This Act defines the parameters within which agreements are considered contracts and outlines the enforceability of these agreements by law, outlining the rights and obligations of parties in a contractual relationship.
One of the key principles established by the Act is the distinction between void and voidable contracts. According to the Act, an agreement that is not enforceable by law is considered void. On the other hand, a voidable contract is one that is enforceable by law at the option of one or more parties but not at the option of the others. This distinction is essential as it determines whether a contract can be legally enforced or not.
The Act also clarifies the concept of "consideration," which is fundamental to the formation of a contract. Consideration refers to the act or abstinence of a promisee or any other person at the desire of the promisor. It can also be when a person promises to do or abstain from doing something. This consideration forms the basis of reciprocal promises, which are promises that constitute the consideration for each other.
Additionally, the Law of Contract Act addresses contingent contracts. It states that a contract contingent on an uncertain future event cannot be enforced until that event occurs. If the event becomes impossible, the contract becomes void. This provision ensures that contracts remain practical and adaptable to changing circumstances.
Furthermore, the Act provides clarity on the competence of parties entering into contracts. It states that every person who is of the age of majority, of sound mind, and not disqualified by law is competent to contract. This ensures that individuals fully understand the implications of their agreements and can make informed decisions.
The Law of Contract Act serves as a comprehensive guide to the formation, enforcement, and termination of contracts in Tanzania, providing a legal framework that promotes fairness, mutual understanding, and compliance with the law.
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Case law
In the case of Hyde v. Wrench, 1840, the defendant offered to sell a farm to the claimant for £1,000. The claimant counter-offered £950, which was rejected. The claimant later purported to accept the original offer of £1,000, but it was held that there was no contract, as the counter-offer had impliedly rejected the original offer. This case law established that the introduction of new terms is a counter-offer, which ends the original offer and replaces it with a new one.
In the case of Entores v Miles Far East Corpn [1955] 2 QB 327, an English company received acceptance sent by telex from a Dutch company. It was held that the contract was made in England, as the telex of acceptance was received in England. This case law established that the postal rule does not apply, and acceptance is communicated when 'received' by the offeror.
Another case, Brinkibon Ltd v Stahag Stahl GmbH [1983] 2 AC 34, involved a telex of acceptance sent from London to Vienna. In this instance, it was held that the contract was made in Vienna, where the acceptance was received.
In the Tanzanian case of Nittin Coffee Estates Ltd and another v. United Engineering Works Ltd and another, the parties concluded agreements of sale without stating the price. The Court of Appeal of Tanzania stated that since the price is a fundamental term in a sale agreement, its absence makes the agreement uncertain.
Additionally, in Blakeley v Muller & Co 19 TLR 186, it was determined that a common mistake would void a contract if the following conditions are met: there must be a common assumption about the existence of a state of affairs, no warranty by either party that the state of affairs exists, the non-existence of the state of affairs must not be attributable to either party, and the non-existence of the state of affairs must render the performance of the contract impossible.
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Common law
The legal system of Tanzania is largely based on common law. This is one of the sources of contract law in the country, along with customary law, legislation such as the Law of Contracts Act, and case law. Common law is established under Section 2.3 of The Judicature and Application Laws Act, Chapter 358 of the Laws of Tanzania [R.E. 2002] (JALA).
The Reception Date for English Law in Tanzania is deemed to be 22 July 1920. The sets of received law include common law, the doctrine of equity, and statutes of general application in force in England before this date.
Customary law, the other source of law in Tanzania, is called upon in personal or family matters. It applies only to members of the community concerned and only when there is no written law and it does not conflict with statutory law. Customary laws include codified customary laws, Islamic laws, and other religious laws.
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English law
The sources of contract law in Tanzania are identified as customary law, legislation such as the Law of Contract Act, case law, and English common law to fill in the gaps.
English common law is applied in Tanzania when the Contract Act is silent on any particular aspect of contract law. According to Prof. Nditti, an expert in contract law in East Africa:
> Where the contract Act is silent on any particular aspect of contract law, English common Law of contract as modified by equity and acts of parliament is applicable.
English cases that have been decided on common law may be used in interpreting the matters provided in the contract Act.
English contract law recognises formal contracts, which are valid even without consideration. These include 'Contracts under Seal' and 'Contracts of Record'. Contracts under seal are in writing and signed by the parties to them. Contracts of record include contracts without consideration, lease of land for a period of more than three years, and contracts by corporations. All contracts other than the formal ones are called simple contracts and may be made orally or in writing.
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