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CPA
Foundation Leval
Introduction to Law and Governance May 2017
Suggested Solutions

Introduction to Law and Governance
Revision Kit

QUESTION 1a

Q Alex Kombo entered into a five year written lease agreement for office premises with Mercy Omagwa. After the end of the lease period, the parties agreed that Mercy Omagwa would continue occupying the office premises for another five years. On that basis, Mercy Omagwa made extensive renovations to the office premises. She installed new carpets, painted the premises and put in a new heating system.

Alex Kombo later changed his mind and told Mercy Omagwa to vacate the office premises claiming that the lease agreement has expired.

With specific reference to promissory estoppel in the law of contract, advise Mercy Omagwa on her legal rights.
A

Solution


Legal Advice for Mercy Omagwa


Promissory estoppel is a legal doctrine that may prevent a party from going back on a promise, even if the promise is not supported by consideration. In this case, it seems that there is a potential argument for promissory estoppel in favor of Mercy Omagwa.

  1. Promise: Alex Kombo made a promise to Mercy Omagwa that she could continue occupying the office premises for another five years after the initial lease period.
  2. Reliance: Mercy Omagwa relied on this promise by making extensive renovations to the office premises, including installing new carpets, painting the premises, and putting in a new heating system.
  3. Detrimental Action: The extensive renovations made by Mercy Omagwa can be considered a detrimental action taken in reliance on Alex Kombo's promise.
  4. Unjust Enrichment: It would be unjust for Alex Kombo to benefit from Mercy Omagwa's renovations without allowing her to continue occupying the premises as promised.

Considering these elements, Mercy Omagwa may have a valid claim of promissory estoppel. It is advisable for her to explore her legal rights and potential remedies.She can request for compensation for the cost and damages incured or sue Alex combo for the same.





QUESTION 1(b)

Q Describe five grounds upon which a patent registration might be revoked
A

Solution


Grounds for Revocation of Patent Registration


A patent registration may be subject to revocation under certain circumstances. Below are common grounds upon which a patent registration might be revoked:

  1. Non-Compliance with Patent Requirements: If the patent application or granted patent does not comply with the legal requirements set forth by the patent office, it may be subject to revocation.
  2. Public Disclosure: If the invention covered by the patent has been publicly disclosed before the filing date, it may lead to revocation as patents generally require novelty and non-obviousness.
  3. Prior Art: Discovery of prior art that was not considered during the patent examination process and could affect the patent's validity may be grounds for revocation.
  4. Incorrect Inventorship: If there are errors or inaccuracies in listing the inventors, it might be a basis for revocation.
  5. Failure to Pay Maintenance Fees: Some patent offices require the payment of maintenance fees to keep a patent in force. Failure to pay these fees within specified deadlines can lead to revocation.
  6. Fraud or Misrepresentation: If it is discovered that there was fraud or intentional misrepresentation during the patent application process, the patent may be revoked.
  7. Violation of Antitrust Laws: In some jurisdictions, antitrust violations related to the use or enforcement of a patent may lead to revocation.
  8. Non-Working or Insufficient Working: Some jurisdictions require a patented invention to be worked or used. If the patented invention is not worked or the working is insufficient, the patent may be subject to revocation.




QUESTION 2(a)

Q With reference to the law on the sale of good:

(1) Highlight two purposes of incoterms.

(ii) Outline three duties of the seller under delivered at place (DAP) contracts of sale.

(iii) Describe five salient features of "price" in a sale of goods contract
A

Solution


Law on the Sale of Goods


(i) Purposes of Incoterms


Incoterms, or International Commercial Terms, serve several purposes in international trade:

  • Define the responsibilities of the buyer and seller in the international sales contract.
  • Allocate the risk between the parties during the different stages of the transportation process.
  • Clarify the point at which the cost and risk transfer from the seller to the buyer.
  • Facilitate international trade by providing a common set of rules for interpreting trade terms.

(ii) Duties of the Seller under Delivered at Place (DAP) Contracts


Under a Delivered at Place (DAP) contract, the seller has the following duties:


  1. Arrange and pay for the delivery of the goods to the named place of destination.
  2. Bear all risks and costs associated with transporting the goods until they are delivered to the buyer at the agreed-upon destination.
  3. Handle export and import formalities, including customs clearance.
  4. Provide the necessary documentation for the buyer to take delivery of the goods.

(iii) Salient Features of "Price" in a Sale of Goods Contract


The concept of "price" in a sale of goods contract includes the following salient features:


  • Agreed Upon: The price is a fundamental term of the contract and must be agreed upon by the parties.
  • Certain or Ascertainable: The price must be either certain or capable of being determined in accordance with the contract terms.
  • Fixed or Determinable: The price should be fixed by the contract or determinable by a formula specified in the contract.
  • Payment Terms: The contract may specify the time and method of payment, and any conditions or discounts applicable.
  • Currency of Payment: The contract should specify the currency in which the price is payable.
  • Time of Payment: The contract may specify the timing of payment, whether it's due on delivery, in installments, or at another agreed-upon time.




QUESTION 2(b)

Q (i) Explain three conditions that should be fulfilled for agency by necessity to arise.

(ii) Identify two circumstances when an agency relationship might come to an end by an act of the parties.
A

Solution


Agency in Law


(i) Conditions for Agency by Necessity


For agency by necessity to arise, the following conditions should be fulfilled:

  1. Emergency Situation: There must be an emergency or urgent situation that requires immediate action.
  2. Agency Action Necessary: The agent's action must be necessary to protect the principal's interests during the emergency.
  3. No Time for Instructions: There is no time for the agent to obtain instructions from the principal or the principal is unavailable.
  4. Acting in Principal's Best Interest: The agent must act in the best interests of the principal under the circumstances.

(ii) Circumstances for Ending an Agency Relationship by Act of the Parties


An agency relationship may come to an end by an act of the parties under various circumstances:


  • Expiration of Term: If the agency relationship is created for a specific term, it ends upon the expiration of that term.
  • Fulfillment of Purpose: The agency relationship ends when the purpose for which it was created is fulfilled.
  • Revocation by Principal: The principal may revoke the agency relationship at any time unless it is coupled with an interest or is irrevocable by agreement.
  • Renunciation by Agent: The agent may renounce the agency relationship at any time, provided it is not coupled with an interest or is not made irrevocable by agreement.
  • Death or Incapacity: The death or incapacity of either the principal or the agent terminates the agency relationship.
  • Bankruptcy: If either the principal or the agent becomes bankrupt, it may result in the termination of the agency relationship.




QUESTION 3a

Q With reference to negotiable instruments:

(i) Highlight four types of endorsements that could be used on a bill of exchange.

(ii) Summarise three ways through which a bill of exchange might be discharged.
A

Solution


Negotiable Instruments


(i) Types of Endorsements on a Bill of Exchange


Endorsements on a bill of exchange play a crucial role in transferability. Various types of endorsements include:

  • Blank Endorsement: The endorser signs on the back of the bill without specifying the new endorsee, making it payable to the bearer.
  • Special or Full Endorsement: The endorser specifies the new endorsee, effectively transferring the bill to that particular party.
  • Restrictive Endorsement: The endorser restricts further transfer or specifies the purpose for which the bill can be used, providing additional instructions.
  • Conditional Endorsement: The endorser imposes certain conditions for the validity of the endorsement.
  • Qualified Endorsement: The endorser disclaims liability or limits responsibility for payment, providing some protection against default.

(ii) Ways a Bill of Exchange Might be Discharged


A bill of exchange can be discharged in several ways, including:


  • Payment: When the drawee pays the amount specified in the bill to the holder.
  • Acceptance and Return: If the drawee accepts the bill and then returns it to the drawer, the bill is considered discharged.
  • Cancelled or Surrendered: The holder cancels the bill or surrenders it to the acceptor or drawer.
  • Renunciation: The holder renounces their rights against the parties liable on the bill, discharging the instrument.
  • Release: A release or discharge agreement between the parties involved in the bill of exchange.
  • Alteration: If the bill undergoes a material alteration, it may be considered discharged unless the alteration is agreed upon by all parties.




QUESTION 3(b)

Q Describe four purposes of law.
A

Solution


Purposes of Law


Law serves various essential purposes within societies, aiming to achieve:

  1. Order and Stability: Laws provide a framework that helps maintain order and stability within a society, allowing individuals to coexist peacefully.
  2. Justice and Fairness: One of the fundamental purposes of law is to establish a system of justice that ensures fairness and equality for all individuals. It defines and protects rights and responsibilities.
  3. Protection of Individual Rights: Laws safeguard the rights and freedoms of individuals, preventing arbitrary actions and ensuring a balance between individual liberties and the common good.
  4. Resolution of Disputes: Legal systems provide mechanisms for resolving conflicts and disputes through established processes, such as courts and alternative dispute resolution methods.
  5. Promotion of the Common Good: Laws are designed to promote the welfare and well-being of society as a whole by addressing public health, safety, and other common interests.
  6. Regulation of Conduct: Legal frameworks establish standards of behavior and conduct, outlining acceptable and unacceptable actions. This helps guide individuals and organizations in their interactions.
  7. Social Progress and Change: Laws can be instrumental in fostering social progress and facilitating positive changes within a society, adapting to evolving values and needs.
  8. Economic Regulation: Legal systems often include regulations that govern economic activities, promoting fair competition, consumer protection, and the overall stability of financial systems.
  9. Protection of the Vulnerable: Laws may include provisions to protect vulnerable groups within society, such as children, the elderly, and individuals with disabilities.
  10. Prevention of Unjust Enrichment: Legal principles aim to prevent unjust enrichment and ensure that individuals and entities are held accountable for their actions, fostering a sense of accountability.




QUESTION 3(c)

Q One of the remedies available on breach of contract is action for specific performance. However, there are cases when the remedy might or might not be granted.

With reference to the above statement, identify three cases when specific performance might be granted and three cases when it might not be granted.
A

Solution


Specific Performance in Breach of Contract


Specific performance is a remedy available in breach of contract cases, but its availability depends on the circumstances. Here are cases when specific performance might or might not be granted:

Cases When Specific Performance Might Be Granted


  • Unique Subject Matter: Specific performance is more likely to be granted when the subject matter of the contract is unique or rare, such as a piece of art or real estate with distinctive features.
  • Inadequacy of Legal Remedies: When monetary damages are deemed inadequate to compensate the non-breaching party and specific performance is necessary to provide complete relief.
  • Land Contracts: In many cases involving contracts for the sale of land, courts are more inclined to grant specific performance since each parcel of land is considered unique.
  • Custom or Personal Service Contracts: Courts may grant specific performance in contracts involving unique skills or personal services where monetary compensation alone would not be sufficient.
  • Express Terms of the Contract: When the contract explicitly states that specific performance is an available remedy in case of breach, courts are more likely to enforce it.

Cases When Specific Performance Might Not Be Granted


  • Adequacy of Legal Remedies: If monetary damages are considered adequate to compensate the non-breaching party, courts may be less inclined to grant specific performance.
  • Impossibility or Impracticability: If it is impossible or impractical to perform the specific terms of the contract, courts may deny the remedy of specific performance.
  • Unconscionable or Inequitable Terms: If enforcing specific performance would result in unfairness or inequity, the court may choose not to grant this remedy.
  • Personal Services Contracts: In some cases, specific performance may be denied for contracts involving personal services due to the involuntary nature of such enforcement.
  • Uncertain or Vague Terms: If the terms of the contract are uncertain, vague, or not sufficiently defined, specific performance may not be granted.




QUESTION 4(a)

Q (i) Outline four types of partnerships.

(ii) Explain three types of disclosures that the partners in a partnership must make
A

Solution


Types of Partnerships and Partner Disclosures


(i) Types of Partnerships


Partnerships are business structures where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed. There are several types of partnerships:

  • General Partnership: In a general partnership, all partners have unlimited liability for the debts and obligations of the business. They share equally in the profits and management responsibilities.
  • Limited Partnership (LP): A limited partnership consists of both general partners and limited partners. General partners have unlimited liability, while limited partners have limited liability up to the amount of their investment.
  • Limited Liability Partnership (LLP): In an LLP, all partners have limited liability, protecting them from the debts and liabilities of the business resulting from the actions of other partners. It combines elements of partnerships and corporations.
  • Joint Venture: A joint venture is a specific type of partnership formed for a temporary purpose, such as completing a specific project or business transaction. Partners contribute resources and share in the profits or losses.
  • Public-private Partnership (PPP): PPP involves collaboration between a government agency and a private-sector company for the purpose of financing, designing, implementing, and operating projects and services traditionally provided by the public sector.

(ii) Types of Disclosures in a Partnership


Partners in a partnership have a duty to disclose certain information to ensure transparency and maintain trust within the business. Types of disclosures include:


  • Financial Disclosures: Partners must provide accurate and up-to-date financial information about the business, including profits, losses, assets, and liabilities.
  • Material Transactions: Partners should disclose any material transactions that may affect the partnership, such as entering into significant contracts or agreements.
  • Conflicts of Interest: Partners must disclose any potential conflicts of interest that may arise between their personal interests and the interests of the partnership.
  • Changes in Partnership Agreement: Any proposed changes to the partnership agreement should be disclosed and discussed among partners before implementation.
  • Personal Liabilities: Partners should disclose any personal liabilities or legal issues that may impact their ability to contribute to the partnership.
  • Changes in Partner Status: Changes in the status of partners, such as additions, departures, or changes in roles, should be disclosed to ensure all partners are informed.




QUESTION 4(b)

Q Discuss five circumstances under which the High Court might set aside an arbitral award.
A

Solution


Circumstances Under Which the High Court Might Set Aside an Arbitral Award


Arbitral awards are typically considered final and binding; however, there are circumstances under which the High Court might set aside an arbitral award. These circumstances may vary depending on the applicable laws and regulations. Common grounds for setting aside an arbitral award include:

  1. Invalid Arbitration Agreement: The party applying for the setting aside of an arbitral award may argue that the arbitration agreement is invalid or not legally binding according to the governing law.
  2. Procedural Irregularities: The High Court may intervene if there were serious procedural irregularities during the arbitration proceedings that affected the fairness of the process or the parties' ability to present their case.
  3. Excess of Authority: If the arbitral tribunal exceeded its authority or acted beyond the scope of the arbitration agreement, the High Court may set aside the award.
  4. Public Policy Violation: The High Court may intervene if the arbitral award is contrary to public policy. This ground is often narrowly interpreted and may include situations where the award involves fraud, corruption, or a serious breach of law.
  5. Failure to Follow Due Process: If one of the parties was not given proper notice or an opportunity to present its case, the High Court may set aside the award due to a failure to follow due process.
  6. Conflict of Interest: The presence of a conflict of interest that was not properly disclosed by an arbitrator may be grounds for setting aside an arbitral award.
  7. Illegality in Substance: If the subject matter of the dispute or the award itself is illegal under the governing law, the High Court may set aside the award.
  8. Non-Arbitrability: In some jurisdictions, certain types of disputes may not be arbitrable. If the subject matter is not capable of settlement by arbitration, the High Court may set aside the award.




QUESTION 5(a)

Q State four ways through which the independence of the judiciary might be actualised
A

Solution


Ways to Actualize the Independence of the Judiciary


The independence of the judiciary is crucial for the proper functioning of a democratic society. Various measures can be taken to ensure and actualize the independence of the judiciary:

  1. Appointment Process: Implement transparent and merit-based processes for the appointment of judges, ensuring that appointments are made based on qualifications, experience, and integrity rather than political considerations.
  2. Security of Tenure: Guarantee judges' security of tenure by establishing mechanisms to protect them from arbitrary removal, transfer, or intimidation. This helps judges make decisions without fear of reprisal.
  3. Financial Independence: Ensure adequate and secure funding for the judiciary, separating the budgetary process from political influence to prevent financial pressure that may compromise judicial independence.
  4. Training and Professional Development: Invest in ongoing training and professional development for judges to enhance their knowledge and skills, enabling them to make informed and impartial decisions.
  5. Ethical Standards: Establish and enforce high ethical standards for judges, promoting integrity, impartiality, and accountability in their conduct both inside and outside the courtroom.
  6. Judicial Independence Legislation: Enact and enforce legislation that explicitly recognizes and protects the independence of the judiciary, outlining the rights and responsibilities of judges and insulating them from external pressures.
  7. Access to Justice: Ensure that the judiciary has the resources and infrastructure needed to provide efficient and accessible justice to all citizens, regardless of their social or economic status.
  8. Judicial Oversight Bodies: Establish independent oversight bodies to monitor the conduct of judges, investigate complaints, and ensure accountability within the judiciary, while respecting the principle of separation of powers.
  9. Public Awareness and Education: Educate the public about the importance of judicial independence and the role it plays in upholding the rule of law, fostering a greater understanding and appreciation for the judiciary's role.
  10. International Standards: Align judicial practices with international standards and best practices to reinforce the importance of judicial independence and demonstrate a commitment to global principles.




QUESTION 5(b)

Q Explain three advantages of the doctrine of separation of powers.
A

Solution


Advantages of the Doctrine of Separation of Powers


The doctrine of separation of powers, as articulated by political philosophers such as Montesquieu, emphasizes the division of government functions into distinct branches. This separation offers several advantages for the stability and effectiveness of a government:

  1. Prevention of Abuse of Power: Separating powers among different branches (legislative, executive, and judicial) prevents the concentration of power in the hands of a single authority, reducing the risk of abuse and tyranny.
  2. Checks and Balances: Each branch has the authority to check and balance the actions of the other branches. This mutual oversight helps maintain accountability and prevents any one branch from becoming too powerful.
  3. Protection of Individual Rights: The separation of powers contributes to the protection of individual rights by creating a system where each branch acts as a safeguard against potential infringements on citizens' liberties.
  4. Efficiency and Specialization: Specialization within each branch allows for a more efficient and focused execution of tasks. The legislative branch creates laws, the executive implements them, and the judicial branch interprets and applies them.
  5. Promotion of Judicial Independence: The independence of the judiciary is fostered by separating it from the legislative and executive branches. This independence is vital for ensuring impartial adjudication and upholding the rule of law.
  6. Political Stability: The division of powers helps prevent political instability by creating a system where each branch operates within its defined sphere, reducing the likelihood of conflicts that could disrupt the governance structure.
  7. Adaptability to Change: The separation of powers allows for a more adaptable and responsive government. Different branches can respond independently to emerging challenges, facilitating a more flexible and resilient governance system.
  8. Promotion of Democracy: The doctrine of separation of powers is integral to the functioning of democratic systems, providing a framework that distributes authority and ensures that decision-making reflects the will of the people through their elected representatives.
  9. Prevention of Arbitrary Rule: By distributing powers and responsibilities, the doctrine helps prevent arbitrary rule and fosters a system where decisions are made based on legal principles and constitutional provisions.
  10. Facilitation of Constitutionalism: The separation of powers is closely linked to constitutionalism, as it establishes a framework for governance based on a constitution that defines the powers and limits of each branch.




QUESTION 5(c)

Q Highlight three disadvantages of case law as a source of law.
A

Solution


Disadvantages of Case Law as a Source of Law


While case law plays a crucial role in the legal system, it is not without its disadvantages. Some of the key drawbacks include:

  1. Uncertainty and Lack of Predictability: Case law can lead to uncertainty and lack of predictability in legal outcomes. Similar cases may be decided differently, and legal principles may evolve, making it challenging for individuals to anticipate the consequences of their actions.
  2. Overreliance on Precedent: Overreliance on precedent may lead to inflexibility. The adherence to established precedents can hinder the development of the law and its ability to adapt to changing societal norms and values.
  3. Complexity and Volume: Legal systems generate a vast volume of case law over time. The sheer complexity and volume of precedents can make it challenging for legal professionals to navigate and apply the relevant principles effectively.
  4. Inconsistency: The possibility of inconsistent decisions in different jurisdictions or by different courts may undermine the coherence and uniformity of the legal system. Similar cases may be decided differently based on the interpretation of precedent.
  5. Time and Cost: The process of relying on case law involves significant time and cost. Legal professionals may need to conduct extensive research to identify relevant precedents, and the litigation process can become protracted and expensive.
  6. Stare Decisis Limitations: The doctrine of stare decisis, which requires lower courts to follow decisions of higher courts, can create rigidity and may prevent the correction of legal errors or the adaptation of the law to changing circumstances.
  7. Subjectivity in Decision-Making: Judicial decisions in case law are subject to the personal perspectives and biases of the judges involved. This subjectivity may lead to decisions that are influenced by individual values rather than objective legal principles.
  8. Lack of Legislative Authority: Case law is created by judges, not elected representatives. Critics argue that unelected judges should not have the authority to create law, and that legislative bodies are better suited to address complex societal issues through democratic processes.
  9. Difficulty in Finding Precedents: The process of finding relevant precedents can be challenging, especially for non-legal professionals. The lack of centralized and easily accessible databases may hinder individuals' ability to understand and apply the law.
  10. Resistance to Change: The legal system's reliance on precedent may create resistance to change. Established doctrines may persist even when societal values or legal principles evolve, slowing down the adaptation of the law to new circumstances.




QUESTION 5(d)

Q During legislation, a bill might either undergo assent or referral. Summarise the process of Presidential assent.
A

Solution


Presidential Assent in the Legislative Process


Presidential assent is a crucial step in the legislative process where a bill passed by the legislative body receives approval from the head of state, usually the President. The process typically involves the following steps:

  1. Passage of the Bill: The bill must first go through the entire legislative process, including debates, committee reviews, and voting in both houses (if applicable in a bicameral system). The bill is required to secure the majority vote of the legislators.
  2. Transmittal to the President: Once the bill is passed by the legislative body, it is transmitted to the President for consideration. In some countries, the bill may be automatically sent to the President after passage, while in others, it may require formal submission.
  3. Review by the President: The President reviews the bill carefully, considering its content, implications, and conformity with the constitution. The President may seek legal advice and consult relevant stakeholders during this stage.
  4. Decision by the President: After reviewing the bill, the President has several options. The President can:
    • Give Assent: If the President approves the bill, they provide formal assent, signaling that the bill will become law.
    • Withhold Assent (Veto): The President may choose to withhold assent, expressing objections or concerns about the bill. Depending on the constitutional provisions, the President's veto power may be absolute or subject to override by the legislature.
    • Take No Action: In some systems, if the President takes no action within a specified period (often called the assent period), the bill may automatically become law without the need for formal assent.
  5. Promulgation: If the President gives assent, the bill is officially promulgated as law. The promulgation is the formal announcement or publication of the law, indicating its enactment.
  6. Notification and Implementation: The law is then officially notified to the public and relevant authorities. Depending on the legal system, there may be specific procedures for the implementation and enforcement of the new law.




QUESTION 6(a)

Q Agnes Pure purchased a sewing machine from High Hopes Limited under a hire purchase agreement. High Hopes Limited did not disclose to Agnes Pure that the sewing machine was being let on second hand basis as it had been repossessed from another hirer. Agnes Pure took possession of the sewing machine but on reaching home, she realised that it was not in a working condition. When Agnes Pure read the terms of the hire purchase again, she discovered that High Hopes Limited had exempted themselves from any liability whatsoever.

Analyse the legal principles applicable in the above case and advise Agnes Pure who intends to sue High Hopes Limited.
A

Solution


Legal Analysis and Advice for Agnes Pure


1. Misrepresentation:


Issue: High Hopes Limited did not disclose that the sewing machine was second-hand and had been repossessed.

Legal Principle: Failure to disclose material information can constitute a misrepresentation.


Advice: Agnes Pure may argue that the non-disclosure was a misrepresentation, leading her to believe the sewing machine was new. This could be a basis for seeking remedies.


2. Implied Terms:


Issue: The sewing machine is not in a working condition.


Legal Principle: Hire purchase agreements often imply terms that the goods are of satisfactory quality and fit for purpose.


Advice: Agnes Pure can argue that the sewing machine's non-functionality breaches the implied terms of satisfactory quality and fitness for purpose. This breach could be grounds for legal action.


3. Unfair Contract Terms:


Issue: High Hopes Limited exempted themselves from any liability whatsoever in the hire purchase agreement.


Legal Principle: Contract terms that attempt to exclude or limit liability unfairly may be considered unfair contract terms and could be unenforceable.


Advice: Agnes Pure may challenge the fairness and reasonableness of the exemption clause, especially considering the non-disclosure and non-functionality issues. This could be another avenue for legal action.





QUESTION 6(b)

Q Explain three conditions that must exist in order for a plaintiff to maintain an action for negligence.
A

Solution


Conditions for Maintaining an Action for Negligence


Negligence is a legal concept that forms the basis for a plaintiff to bring an action against a defendant. To maintain a successful action for negligence, certain conditions must exist:

  1. Duty of Care: The defendant must owe a duty of care to the plaintiff. This duty arises when it is reasonably foreseeable that the defendant's actions or omissions could cause harm to the plaintiff.
  2. Breach of Duty: There must be a breach of the duty of care by the defendant. The defendant's conduct falls below the standard of care expected in the circumstances, and they fail to exercise reasonable care to prevent harm to others.
  3. Causation: There must be a direct and proximate cause-and-effect relationship between the defendant's breach of duty and the plaintiff's injury or harm. The plaintiff must establish that, but for the defendant's actions, the harm would not have occurred.
  4. Foreseeability: The harm suffered by the plaintiff must have been reasonably foreseeable by the defendant at the time of the breach. The defendant is held responsible for foreseeable consequences of their actions.
  5. Damages: The plaintiff must have suffered actual harm or damages as a result of the defendant's breach of duty. Damages can include physical injuries, emotional distress, financial losses, or other measurable harm.
  6. No Contributory Negligence: In some jurisdictions, the plaintiff's contributory negligence (their own failure to exercise reasonable care) may be a factor. However, many jurisdictions follow the principle of comparative negligence, where the plaintiff's damages are reduced based on their percentage of fault.




QUESTION 6(c)

Q Describe two defences available to a person who is being sued for nuisance
A

Solution


Defenses for a Person Being Sued for Nuisance


When a person is being sued for nuisance, various defenses may be available to challenge or mitigate the claims. These defenses include:

  1. Statutory Authority: If the activity causing the alleged nuisance is authorized or regulated by relevant statutes, regulations, or permits, the defendant may argue that they are operating within the legal framework and should be exempt from liability.
  2. Consent: If the plaintiff gave express or implied consent to the alleged nuisance, the defendant may use this as a defense. However, the consent must be genuine, informed, and not obtained through coercion or misrepresentation.
  3. Contributory Negligence: In some jurisdictions, if the plaintiff's own actions or negligence contributed to the nuisance, the defendant may argue contributory negligence. This defense may reduce the defendant's liability proportionally.
  4. Coming to the Nuisance: If the plaintiff moved to the location knowing that the alleged nuisance already existed, the defendant may argue that the plaintiff "came to the nuisance" willingly. This defense may be used to challenge the reasonableness of the plaintiff's expectations.
  5. Abatement: The defendant may argue that they took reasonable steps to abate or minimize the nuisance once they became aware of it. This could include implementing measures to reduce the impact of the alleged nuisance.
  6. Necessity: In some cases, the defendant may argue that the alleged nuisance was necessary to prevent a greater harm. This defense often requires demonstrating that there was no reasonable alternative and that the harm prevented was significant.
  7. Public Nuisance vs. Private Nuisance: If the alleged nuisance is categorized as a public nuisance, the defendant may argue that it is a matter affecting the general public and not a specific individual or group. Defenses related to public policy may be raised.




QUESTION 7(a)

Q With specific reference to the contract of insurance

(i) Highlight six essentials of an insurance contract.

(ii) State four types of marine insurance policies
A

Solution


Essentials of an Insurance Contract


  1. Offer and Acceptance: The insured makes an offer by applying for insurance, and the insurer accepts or rejects the offer.
  2. Legal Purpose: The purpose of the insurance contract must be legal, and the subject matter must be insurable.
  3. Legal Capacity: Both parties must have the legal capacity to enter into a contract.
  4. Consideration: The insured pays a premium, and in return, the insurer promises to compensate for covered losses.
  5. Utmost Good Faith: Both parties must disclose all relevant information honestly and in good faith.
  6. Insurable Interest: The insured must have a financial interest in the subject matter of the insurance.
  7. Proximate Cause: The insured peril must be the proximate cause of the loss.
  8. Indemnity: The insurer agrees to compensate the insured for the actual financial loss suffered, up to the policy limit.
  9. Subrogation: After paying a claim, the insurer acquires the right to take legal action against third parties responsible for the loss.
  10. Warranties and Conditions: The insurance contract may include warranties (specific promises) and conditions (requirements) that must be fulfilled for coverage.

Types of Marine Insurance Policies


  1. Hull Insurance: Covers damage to the ship's hull and machinery.
  2. Cargo Insurance: Protects the cargo on the ship against damage or loss during transit.
  3. Freight Insurance: Covers the loss of freight revenue due to damage or loss of the insured goods.
  4. Time Policy: Provides coverage for a specified period, regardless of the number of voyages during that time.
  5. Voyage Policy: Covers a specific voyage or journey from one point to another.
  6. Builder's Risk Insurance: Protects the ship under construction against damage.
  7. Port Risk Insurance: Covers risks while the ship is at a specific port or location.
  8. War Risk Insurance: Provides coverage for losses related to war, civil unrest, or similar perils.
  9. Loss of Hire Insurance: Compensates the shipowner for loss of income during repairs resulting from an insured event.
  10. Protection and Indemnity (P&I) Insurance: Covers third-party liabilities not covered by standard hull and machinery policies.



QUESTION 7(b)

Q Explain two instances when the guarantor will not be held liable on the principal debt.
A

Solution


Instances When the Guarantor Will Not Be Held Liable on the Principal Debt


A guarantor is a person or entity that agrees to be responsible for the debt or obligation of another party (the principal debtor) in the event of default. However, there are instances when the guarantor may not be held liable on the principal debt:

  1. Expired Guarantee: If the guarantee agreement has a specific expiration date or condition, the guarantor may not be held liable once the agreed-upon term or condition has lapsed.
  2. Lack of Legal Capacity: If the guarantor lacked the legal capacity to enter into the guarantee agreement, such as being a minor or mentally incapacitated, the guarantee may be considered void.
  3. Fraud or Misrepresentation: If the guarantor was induced to provide the guarantee through fraud, misrepresentation, or undue influence, the guarantee may be deemed invalid.
  4. Illegality: If the underlying contract or debt is illegal or against public policy, the guarantee associated with it may be unenforceable.
  5. Failure to Meet Formalities: If the guarantee agreement fails to meet certain legal formalities, such as lacking proper signatures or witnessing, it may be unenforceable.
  6. Material Change in Terms: If there is a material change in the terms of the underlying contract without the consent of the guarantor, the guarantee may no longer be applicable.
  7. Release or Discharge: If the guarantor is released or discharged from their obligations through a formal agreement between the parties, the guarantor may not be held liable on the principal debt.
  8. Invalid Consideration: If the consideration provided by the principal debtor to the guarantor is invalid or lacks legal sufficiency, the guarantee may be unenforceable.
  9. Breach of Contract by Creditor: If the creditor breaches the terms of the underlying contract, it may impact the enforceability of the guarantee, especially if the breach is significant and prejudicial to the guarantor.
  10. No Demand on Principal Debtor: Some guarantee agreements require the creditor to make a demand on the principal debtor before seeking payment from the guarantor. If such a demand is not made, the guarantor may not be held liable.




QUESTION 7(c)

Q Describe the composition and jurisdiction of the Environment and Land Court
A

Solution


Environment and Land Court Structure and Jurisdiction


Composition of the Environment and Land Court


The Environment and Land Court (ELC) is a superior court established by Article 162(2) of the Constitution of Kenya. The court is composed of:

  • Presiding Judge: Elected under section 6 of the Environment and Land Court Act for a non-renewable term of five years. The Presiding Judge has supervisory powers over the court and reports to the Chief Justice.
  • Judges: There are 53 judges of the court led by the Hon Presiding Judge.
  • Registrar: The Registrar of the court is responsible for the day-to-day administration of the court.
  • Chief Registrar of the Judiciary: On administrative matters, the Presiding Judge works with the Chief Registrar of the Judiciary.

Jurisdiction of the Environment and Land Court


The Environment and Land Court, established by the Environment and Land Court Act no.19 of 2011 (ELCA), has broad jurisdiction to hear and determine disputes relating to the environment and the use and occupation of, and title to land. The court exercises jurisdiction throughout Kenya, including:


  • Original and appellate jurisdiction to hear and determine all disputes in accordance with Article 162(2)(b) of the Constitution and with the provisions of the Act or any other written law relating to environment and land.
  • Dealing with disputes relating to land administration and management.
  • Hearing cases related to public, private, and community land, as well as contracts, choses in action, or other instruments granting any enforceable interests in land.
  • Exercising appellate jurisdiction over decisions of subordinate courts and local tribunals in matters falling within its jurisdiction.

Supervisory Jurisdiction


The Environment and Land Court further exercises supervisory jurisdiction over:


  • Subordinate courts.
  • Local tribunals.
  • Persons or authorities in accordance with Article 165(6) of the Constitution.

The court's supervisory jurisdiction extends to various tribunals, including the National Land Commission, Business Premises Rent Tribunal, Rent Restriction Tribunal, National Environment Tribunal, and the Cooperative Tribunal (insofar as the dispute relates to land).





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