This note is still developing.

1. Essentials of Law
IS 2220
Reference: Learning the Law by Glanville Williams (15th
edition)
Introduction to Law
Set of rules and regulations enforced by legislature (parliament)which governs the society or the state
What is law?
 Law is defined as the Set of rules and regulations enforced by legislature (parliament)which
governs the society or the state.
 Law varies from country to country.
Ex: In England, they practice English Law. Meanwhile in Saudi Arabia, they practice Sharia Law.
Nature of the law:
 No one is above the law.
 Ignorance of the law is not a defense.
Factors that affect the law other than the country:
 Culture
 Religion
 Socio-economy
 Technology
Importance of the law:
 No civilized society can function without law.
 Law is an integral part of any society.
Purposes and functions of law:
 Establish standards
 Maintaining order
 Resolve disputes
 Protecting liberties (නිදහස) and rights

2. Classification of law:
Figure 1: Classification of law
Constitutional law: ආණ්ඩුක්රම ව්යවස්ථා නීතිය
Law
Human Rights
Criminal Law
(Public Law)
Civil Law
Public Law
Tax Law
Administrative
Law
Constitutional
Law
Private Law
Person/ Family
Law
Property/ Land
Law
Law of
Obligations
Law of Contract
Law of delict/
tort
Business Law
(Both Public and
Private Law)
Mercantile Law Law of Agency
Banking Law Partnership Law
International Law
Public Law Private Law

3. Comparison of Civil and Criminal Law:
Criminal Law Civil Law
Definition The word “criminal” derived from the
word “crime” are known as criminal
law. The word crime can be defined as
an act which has been prohibited by
law in a specific land, which affects the
society at large or affects the whole
state.
Ex:
1) prostitution
2) theft
3) murder
4) fraud
5) domestic violence
The word “civil” derived from the
“civilian”. Any dispute which arises
between persons is known as “civil
disputes”. All civil disputes are handled
by civil law. Therefore civil law can be
defined for civilian disputes which does
not affect the society at large or the
state.
Types of Civil Law:
1) Law of property (land disputes etc)
2) Law of persons (divorce cases etc)
3) Law of contracts
4) Law of delicts(torts)
Aim Aim is to punish or to penalize the
wrong doer. Therefore Criminal law is
also called “Penal Law”.
Aim is to compensate or to give better
relief to the innocent party.
Compensations are of 2 types.
1) Financial compensations (non-
equitable remedy)
Ex: maintenance in divorce, damege
2) Non-financial compensations
(equitable remedy)
Ex: specific performance, injuctions
Case bought by Minor crimes: PHI, Local government
Bodies, Police
Grave crimes: Attorney General
Department
The victim
Terminology Figure 1 Figure 2
Standard of proof In Criminal Law standard of proof
refers to that the Accused do not have
any rights to bring counter claim.
i.e. Prosecution has been given sword
only, and Accused has been given
shield only.
In Civil Law standard of proof refers to
that the Defendant has all rights to bring
any number of counter claims.
i.e. Defendant has been given both the
sword and the shield.
Burden of proof In Criminal Law burden of proof states
that the Accused will be given
punishment only after proven guilty.
In legal terms it takes Prosecutor
needs to proven beyond reasonable
doubt(Even one doubt is enough).
In Civil Law burden of proof refers to the
quantum of evidence which has been
caught by the parties concerned. In Civil
law, burden of proof depends on the
balance of probabilities. i.e. Who brings
more weightage will be considered to be
the innocent party.
Courts Minor crimes: Magistrate Court
Grave crimes: High Court
District Court

4. Figure 2: Structure of a Criminal Court
The authority brings the case is known as Prosecution. The person who is considered to be the wrong
doer is called Accused. A criminal action is Prosecute.
Figure 3: Structure of a Civil Court
The person who brings the original claim is known as Claimant or Plaintiff, and the person who defends
himself against the case is known as Defendant. The civil action is called Sue.

5. Law of torts/ Law of Delicts
For any damage of compensation events, aggrieved party (claimant/plaintiff) can get actions under the
Law of torts.
Relevant courts for delictual matters are the District Courts.
Following delictual matters are governed by District Courts
1. Breach of duty of care and all negligible matters in the society
2. Professional negligence
Any professional (charted accountant, architect, engineer, IT professional) infringed ()
his or her duty of care, that professional is liable to pay compensation.
Ex: Cassidy Vs. Ministry of Health- South Africa
Caparo Industries plc Vs. Dickman (UK)
Arsekularatne Vs. Prof. Priyani Soysa
3. Deformation statements (අපහාස ප්රකාශ)
4. Manufacture’s negligence
Ex: Grant Vs. Australian Knitting co.
Donoughue Vs. Stevenson
Law of Property
Terminology:
 Ownership - අයිතිය
 Possession - භුක්තිය
 Mortgage -උකස
This category of Civil Law consist ownership, possession, mortgage, etc of movable and immovable
properties. In Sri Lanka, Law of property is governed by Roman Dutch Law (our common law). However
some concepts are developed by English Law. Therefore professionals must adhere to legal provision of
Law of properties.
Ex 01:
At present, private properties (real properties- නිශ්චල දේපල : land and building) ownership are limited
by different legislation.
Under the Mines and Minerals act of 1992, all mines and minerals in Sri Lanka are considered as
government properties. i.e. Government is the absolute owner of mines and minerals in Sri lanka.
Therefore if you have a granite (කළුගල්) in your garden, you cannot get utilization of it unless you get
the permission from the government.

6. Ex 02:
Under the prescription ordinance 3rd
party can get prescriptive title (හිමිකම) if he possesses 10 years of
an independent period.
Intellectual Property Law
This category of law is a subcategory of Civil Law. However some areas of intellectual property law are
governed by Criminal Law
The relevant Jurisdiction (අධිකරණබලය) court for intellectual property is a Commercial high Court.
Intellectual properties intended to cover all the creations of the mind of any person which law
recognizes such as patent, trade mark, brand name, IT software.
Ex01:
Munchee vs Maliban case for Maliban imitating the Package of Munchee hawaiian Cookies
Ex02:
An author of a book has copyright to protect his interest and to see that the book is not published and
said without his knowledge and consent (අනුමතිය).
“all rights reserved” “සියලු හිමිකම් ඇවිරිණි”

7. Some more terminologies related to law:
 Offence: illegal action
 Crime: an act/offence that can be punished by law
 Civil wrong/ matter: legal matters of people or person
 Delict / tort: civil wrong consisting of an intentional or negligent breach of duty of care
 Custody: taken to prison
 Deed: a legal document
 Arrest: taken to custody
 Plaintiff: the person who bringing the case
 Defendant: accused in the court of law
 Eye witness: person who have seen a particular activity
 Fraud: a kind of crime of deceiving someone to get money or goods
 Rigorous imprisonment: strict keep in prison
 Suspect: believed to be guilty without a certain proof
 Trial a case: an examination of evidence in a court to decide if a person is guilty of a crime
 Homicide: the killing of one person by another, whether intended (murder) or not
(manslaughter). Not all homicide is unlawful; killing in self defense, for example, is not a crime.
 Theft: stealing of something
 Constitution: a set of fundamental principles or established precedents according to which a
state or other organization is governed. Constitution will deal with 3 main functions of a state.
o Legislature
o Executive
o Judiciary
 Evidence: information presented to law court to support the case

8. Sources of Law
Anything which accounts for the existence of a legal rule or any place in which the law is stated
Sources of law:
 Legislation (නීති සම්පාදනය)
o A legislature is the law-making body of a political unit, usually a national government,
that has power to amend and repeal public policy. Laws enacted by legislatures are
known as legislation.
 Judicial precedents (Judges-made Law or Case Law )
o A judicial precedent is a decision of the court used as a source for future decision
making. This is known as stare decisis (to stand upon decisions) and by
which precedents are authoritative and binding and must be followed.
 Equity (සාධාරණතාව)
 Religion
 Customs (සිරිත්)
 Public international law
 Opinions of Jurists (නීතිදව්දියා)/ writers
Legislation
Also called Enacted Law, Statute Law
Three branches of government:
 They are the legislative branch (make law), the executive branch (put law into action) and
the judicial branch (investigate the correct application of law in country).
 Each branch is independent from the others, but each holds a similar amount of authority.
Legislature (නීතිකාරකය /ව්යවස්ථාදායකය):
 A deliberative body of persons, usually elective, who are empowered tomake, change, or repeal
the laws of a country or state
 Ex: Parliament
Legislation (නීති):
 Legislation (or statutory law) is law which has been promulgated (or enacted) by a legislature or
other Governing Body or the process of making it. Before an item of legislation becomes law it
may be known as a bill, and may be broadly referred to as "legislation", while it remains under
consideration to distinguish it from other business.
Purposes of legislation:
 to regulate, to authorize, to proscribe, to provide (funds), to sanction, to grant, to declare or to
restrict

9. Five types of local legislation:
1. Regulations and proclamations (දරගුලාසි හා නිදව්දන) issued by the governor between 1801 and
1833
o Regulations for can confirming the tax on roads and bridges (No 3 of 18031)
o Proclamation regulating the duty on the exportation of Tobacco from the Island (23rd
July, 1804)
2. Ordinances (ආඥා පණත) passed by colonical legislatures of Ceylon between 1833 and 1947
o Land Settlement Ordinance – No 20 of 1831
o Forests Ordinance – No 16 of 1907
3. Acts (පනත) passed by the parliament after 1948 to 1972
o Fertilizer Act – No 21 of 1961
o Motor Traffic Act – No 14 of 1951
o Land Acquisition Act – No 09 of 1950
4. Laws passed by National States Assembly under the 1972 Republican Constitution (ආණ්ඩුක්රම
ව්යවස්ථාව)
o Agricultural Insurance Law – No 27 of 1973
o Janawasa Law – No 25 of 1976
5. Acts passed by the parliament under the 1972 Republican Constitution
o Fisheries & Aquatic Resources Act - No 02 of 1996
o Town and Country Planning (Amendment) Act – No 49 of 2000
o Civil Aviation Authority of Sri Lanka Act – No 34 of 2002.
o Electricity Reform Act – No 28 of 2002.
o Intellectual Property Act – No 36 of 2003
o Etc…
o IT Related Acts
 Computer & Information Technology Council of Sri Lanka Act No 10 of 1984
 Computer Crime Act No.24 of 2007
 Payment Devices Frauds Act No 30 of 2006
 Electronic Transaction Act No.19 of 2006
 Payments and settlements Act No.28 of 2005
 Information communication Technology Act No.27 of 2003
 Intellectual Property Act 36 0f 2003
 Telecommunications Act No .25of 1991
Subordinate Legislation (යටත් නීති සම්පාදන):
o National environment (Protection and quality) regulations
o Vehicle emission control regulations
o National environnent ( noise control) régulations 1996

10. Judicial precedents (Stare Decisis)
Judges-made Law or Case Law, the law as established by the outcome of former cases, introduced to Sri
Lanka during British period
What are Judicial Precedents:
 A judicial precedent is a decision of the court used as a source for future decision making. This is
by which precedents are authoritative and binding and must be followed.
Some of the Famous Case Laws:
 Cassidy Vs. Ministry of Health- South Africa
 Caparo Industries plc Vs. Dickman (UK)
 Arsekularatne Vs. Prof. Priyani Soysa
 Grant Vs. Australian Knitting co.
 Donoughue Vs. Stevenson
 Rylands Vs. Fleture.
Refer this link to study few cases:
http://www.lawteacher.net/free-law-essays/judicial-law/previous-decisions-made-by-judges-in-similar-
cases-judicial-law-essay.php
Brief explanation of the court system in UK:
Figure 4 : Court System
Superior courts are Supreme Court (House of Lords) and the Court of Appeal. The supreme court of Sri
Lanka is the final court of justice in Sri Lanka. On any new matter which is not covered by any existing
law, a judgment of a superior court for such any new matter will become law for future court of justice
in Sri Lanka.

11. Equity
Natural Justice
 A historical law that was developed by the court of chancery to fill the gaps in the common law
 Non monetary compensations such as injunction orders, specific performances were considered
 Responsible for the development of the law of trust
 Does not provide rules, but an abstract concept of principle behind the law
The two manifestations (versions) of equity:
1. Equity is viewed as the just and reasonable interpretation of the law
2. Equity used to fill gaps in a legal system
Maxims of law of Equity:
 Equity follows the law
 Those who come to courts must come with clean hands. i.e. they must not be wrong doers or
must not violate the law
Religion
Today religion is a source of law through legislations or custom. In ancient societies, customary rules
were derived from the tenets of religion or morality. Hindu law and Muslim law have shaped the laws of
many Asian countries. Thus sphere of application of religious law through diminished still continues in
these countries.
In Sri Lanka the in own religious are Buddhism, Christianity, Hinduism and Islam. While there religions
have had their effect on the law of Sri Lanka a special emphasis may be placed on Islam, Hinduism and
Buddhism. Our courts administer legal rules derived from there religions.
Custom
A traditional and widely accepted way of behaving or doing something that is specific to a particular
society, place, or time
Custom is also regarded as a source of law. However, for courts to recognize a custom it must be:
 Ancient and well-established
 Reasonable
 Certain
 It must have been uniformly used
In all societies the custom is in operation. The courts have the authority to recognize and enforce certain
custom as legal customs. Legal customs are binding and their sanctions are comparatively complete and
uniform.

12. A good illustration of a customs that has been recognized by our courts, is the right of any member of
the public to fish in the open sea. Hence every citizen can catch fish in the sea. It is held Fernando Vs.
Fernando (19 CLW31- CLW means Ceylon Law Weekly Law Reports) case in Sri Lanka. Our courts have
also recognized customary marriages in Sri Lanka as valid marriages. In recent years, there have been
few claims to enforce customs in our courts.
Jurists define custom as an unwritten right brought in gradually by the usage these who practice it and
having the force of Law.
Public international law
 Conventions
 Covenants
 Protocols
 Agreements
Opinions of Jurists/ writers
Opinions of writers or the tradition of textual precedent as a source of law have a limited application
compared to the Doctrine of Judicial precedent. In fact is a very important source of Roman Dutch law
and the systems of law derived from it. Accordingly, the opinions of writers on the Roman Dutch-Law
are considered to be authoritative. The Roman Dutch Law developed not so much through
interpretation by courts but through the opinions of learned jurists.
Among the jurists who are most frequently, cited in the Sri Lankan courts are “Voet” “Grotius” “Van der
Linden” and Van- Leeuwen.
The opinions of eminent authors or writers of Sri Lanka are also cited as authorities such as C.G.
Weeamanthri for contract law , E.B. Wickramanayake for Law of Delict , Prof. G.L. Peiris for Law of
Property.
Constitution (ආණ්ඩුක්රම ව්යවස්ථාව)
In Sri Lanka, Constitution was passed by the parliament in1978. Up to now there are 19 amendments.
Main content of the constitution are:
 Establishment of legislature
 Executive president, prime minister and cabinet of ministers (establishment of an executive)
 Independent judiciary (establishment of a court of law)
 Introduction to human rights by law (fundamental rights law)
 Establishment of independent commissions
o National Police Commissions
o Human Rights Commission

13. Constitutional law:
Law that related to state is called constitutional law.
This category of law is also called supreme (basic) law in the country.
Administrative Law
Law that governs the government officials
Under this law, if a government officer exceeds his powers (ultra vires), the affected citizens can get
actions under the administrative law.
Local Government Law
Law that governs the Municipal councils, Urban councils, pradeshiya sabha
Generally, constitution activities, sewerage (the provision of drainage by sewers) on sanitary matters are
regulated under this law.
Legal System of Sri Lanka
What are the legal systems of Sri Lanka?
 Roman Dutch Law (Common law in Sri Lanka)
 English Law
 Kandyan Law (Special Personal Law)
 Thesawalamei Law (Special Personal Law)
 Muslim Law (Special Personal Law)
What are the legal systems of UK?
 English Law / English common Law
 European Union Law

14. Court System in Sri Lanka
Courts of first instance:
 A court in which legal proceedings are begun or first heard
 Examples:
o The High court (in SL for both Civil and Criminal cases)
o The District court (Civil cases)
o The Magistrate court (Criminal cases)
o The Primary court (Civil cases)
Courts of second instance (appellate court/appeal court):
 A court exercising jurisdiction to rehear a case de novo, or its appellate jurisdiction to hear an
appeal, from the court of first instance in which the matter originated.
 Examples
o The High court
o Court of Appeal
o Supreme Court
Court of last resort:
 The Supreme Court is the highest court in its jurisdiction. It decides the most important issues of
constitutional and statutory law and is intended to provide legal clarity and consistency for the
lower appellate and trial courts.
 A Supreme Court’s decisions also produce finality, therefore it is the court of last resort.
Alternative dispute resolutions
 Some disputes can be resolved outside the court process, but such bodies exercise important
judicial functions.
 Examples:
o Arbitration
o Adjudication
o Mediation
o Conciliation

15. Statutory Interpretation
The process by which courts interpret and apply legislation
Some amount of interpretation is often necessary when a case involves a statute.
Sometimes the words of a statute have a plain and straightforward meaning. But in many cases, there is
some ambiguity or vagueness in the words of the statute that must be resolved by the judge.
Three rules of statutory interpretation:
1. Literal Rule
2. Golden Rule
3. Mischief Rule
Literal Rule
Words must be given their plain, ordinary, everyday, dictionary meaning
Example case: Fisher v Bell (1961) 1 QB 394
 Fisher v Bell [1961] 1 QB 394 is an English contract law case concerning the requirements
of offer and acceptance in the formation of a contract. The case established that, where goods
are displayed in a shop together with a price label, such display is treated as an invitation to
treat by the seller, and not an offer. The offer is instead made when the customer presents the
item to the cashier together with payment. Acceptance occurs at the point the cashier takes
payment.
Fact:
The Defendant displayed a flick knife in the window of his shop next to a ticket bearing the
words "Ejector knife – 4s." Under the Restriction of Offensive Weapons Act 1959, section 1(1), it
was illegal to manufacture, sell, hire, or offer for sale or hire, or lend to any other person,
amongst other things, any knife "which has a blade which opens automatically by hand pressure
applied to a button, spring or other device in or attached to the handle of the knife". On 14
December 1959, the Claimant, a chief inspector of police force, brought forward information
against the Defendant alleging the Defendant has contravened section 1(1) by offering the flick
knife for sale. This loophole was closed by Restriction of Offensive Weapons Act 1961 [1] Ban on
Flick Knives: which inserted after the words “offers for sale or hire” the words “ or exposes or
has in his possession for the purpose of sale or hire”."
The court held that the shopkeeper was not guilty.

16. Golden Rule
Where literal rule gives more than one meaning/ ambiguity, golden rule allows a judge to depart from a
word’s normal meaning in order to avoid an absurd (inappropriate) result.
Example case: Adler v George [1964] 2 QB 7
 Under the Official Secrets Act 1920 it was an offence to obstruct a member of the armed forces
'in the vicinity' of a prohibited palace. The defendant was actually in the prohibited place, rather
than 'in the vicinity' of it, at the time of obstruction.
Held:
The court applied the golden rule. It would be absurd for a person to be liable if they were near
to a prohibited place and not if they were actually in it. In the vicinity of" should be interpreted
to mean on or near the prohibited place. The defendant was guilty of the offence.
Mischief Rule
The literal and golden rules are concerned with finding out what parliament said. The mischief rule is
applied to find out what parliament meant.
It looks for the wrong: the mischief which the statute is trying to correct. The statute is then interpreted
in the light of this.
The rule is based on the Heydon’s Case [1584] – Very OLD!...in which certain steps were identified as a
way of interpretation.
Heydon’s Case [1584]
In this case it was stated that judges should:
 Consider what the law was before the Act was passed
 Identify what was wrong with the law
 Decide how parliament intended to improve the law through the statute in question
 Apply that finding to the case before the court
The main aim of the rule is to determine the mischief and detect that the statute in question has set out
to remedy, and what ruling would effectively implement this remedy. In applying the mischief rule the
court is essentially asking what part of the law did the law not cover, but was meant to be rectified by
the parliament in passing the bill.

17. Example case: Smith v Hughes [1960] 1 WLR 830
 According to Section 1(1) of the Street Offences Act 1959 it is an offence for a prostitute to loiter
or solicit potential customers in a street or public place.
 The defendant in that case was a prostitute. The defendant, had been sat at the window on a
house tapping on a window in order to attract the attention of male passers-by.
 It was argued that no offence had been committed as soliciting from a first floor window was
not ‘soliciting in a street’.
 Lord Chief Justice Parker stated;
 “I approach the matter [of interpretation] by asking what is the mischief aimed at by this Act?
Everybody knows that this was an Act intended to clean up the streets, to enable people to walk
along the streets without being molested or solicited by common prostitutes.
 Viewed in this way it can matter little whether the prostitute is soliciting while in the street or
standing in a doorway, or on a balcony, or at a window, or whether the window is shut or open
or half open; in each case her solicitation is projected to and addressed to somebody walking in
the street.’
 The court held that defendant had committed an offence under Section 1(1) of the Street
Offences Act 1959.
Refer:
http://sixthformlaw.info/02_cases/mod2/cases_stat_interp.htm#Adler v George [1964] QBD
Ejusdem or Eiusdem Generis:
 Of the same kind or nature. A rule of interpretation that where a class of things is followed by
general wording that is not itself expansive, the general wording is usually restricted things of
the same type as the listed items.
Example case: Powell V. Kempton Park Racecourse (1899)
 According to Betting Act 1853 “betting in a house, office or other place” is prohibited.
 The Court held phrase “other place “meant indoor places. A ring on a racecourse was not fall
within the category of “other place”.
Noscitur a sociis:
 The meaning of a word is or may be known from the accompanying words. Under the doctrine
of noscitur a sociis, the meaning of questionable words or phrases in a statute may be
ascertained by reference to the meaning of words or phrases associated with it.
Presumption:
 A statute does not have any retrospective effect
 presumptions are rebuttable

18. Law of Contract
Law of contract is a civil and a private area under legal system of SL. The Law of Contract will apply to
anyone who breaches an agreement or contract.
As per the syllabus we must learn 4 sub categories of Law of Contract.
1. Definition of contract and elements of a valid contract
2. Contents of contract (conditions, warranties, exemption liability clauses)
3. Termination (discharge) of a valid contract
4. Remedies for breach (an act of breaking) of contract
Definition of contract
Generally a contract forms when one person makes an offer, and another person accepts it by
communicating their assent or performing the offer's terms.
This includes Rights, obligations, liabilities, breach of duty of care in terms of contracts. Therefore this
falls under Civil Law. The police cannot intermediate.
Figure 5: Definition of Law of Contract
Areas of Law of Contract:
 Conditions
 Termination of contract
 Remedies of breach/ violence/ infringe
Sources of Law of contract:
 Case law
 Legislation (10% of all sources of contract Law)
 Opinions of jurists

19. Figure 6: Sources of Law of Contract
*note
Roman Dutch Law does not try to legalize effectively.
Ex:
 Marriages are not compulsory to register
 Land ownership depend on user, not the legal document
Therefore Law of Contract governed by English law.
Contract is an agreement which is enforceable by courts of law. Under the law of contract, all
agreements are not considered as valid contracts.
For an example social and domestic contracts/ agreements are not considered as valid contracts becoz
there is no intention to create legal relationship by parties to contract.
It was held (trialed/ decided) by famous case Law Balfour v Balfour.
Balfour v Balfour (1919) 2 KB 571
In this case House of Lords (Supreme Court of UK) held that there was no enforceable valid contracy
becoz that the parties did not intent to create legal relations.
Fact:
Mr Balfour was a civil engineer, and worked for the Government as the Director
of Irrigation in Ceylon (now Sri Lanka). Mrs Balfour was living with him. In 1915, they both came back to
England during Mr Balfour's leave. But Mrs Balfour had developed rheumaticarthritis. Her doctor
advised her to stay in England, because a jungle climate would be detrimental to her health. As Mr
Balfour's boat was about to set sail, he promised her £30 a month until she came back to Ceylon. They
drifted apart, and Mr Balfour wrote saying it was better that they remain apart. In March 1918, Mrs
Balfour sued him to keep up with the monthly £30 payments. In July she got adecree nisi and in
December she obtained an order for alimony.
Case Law
Legislation
Opinions
of jurists

20. Held:
At first instance, Sargant J held that Mr Balfour was under an obligation to support his wife. But Lord
Justice Atkin[2] took a different approach, emphasising that there was no "intention to effect legal
relations". That was so because it was a domestic agreement between husband and wife, and it meant
the onus of proof was on the plaintiff, Mrs Balfour. She did not rebut the presumption.
Merrit v Merrit [1970] 1 WLR 1211
However some domestic contracts were considered as legal contracts. If there is any intention to create
legal relationship by the parties to contract social or domestic contract can be considered as valid
contract. It was held by Merrit v Merrit.
Fact:
Mr. Merritt and his wife jointly owned a house. Mr. Merritt left to live with another woman. They made
an agreement (signed) that Mr. Merritt would pay Mrs. Merritt a £40 monthly sum, and eventually
transfer the house to her, if Mrs. Merritt kept up the monthly mortgage payments. When the mortgage
was paid Mr. Merritt refused to transfer the house.
Held:
The agreement was binding. The Court of Appeal distinguished the case of Balfour v Balfour on the
grounds that the parties were separated. Where spouses have separated it is generally considered that
they do intend to be bound by their agreements. The written agreement signed was further evidence of
an intention to be bound. Therefore Mr Merrit had to transfer the ownership of the house to Mrs
Merrit.
Different contracts in the business world
There are different legal contracts in the business environment.
Those are;
Contract Parties
Insurance Contract insure, insuree
Lease lessor, lessee
Rent Land Lord, tenant
Mortgage mortgagor, mortgagee
Sale of good contract (movable goods) vendor, vendee
Higher Purchase bailor, bailee
Leasing bailor, bailee or lessor, lessee
Construction Contract client, contractor
Consultancy client, consulter
Employment employer, employee
Partnership agreement partner, partner

21. Formation of a contract
Formation of a contract can be categorized as follows.
1. By word of mouth
2. By writing
3. By conduct of parties (implied contract)
By word of mouth
Verbal contracts/ simple contracts
Examples:
 Get a bus ticket
 Purchase a cup of tea from the canteen
By writing
Written contracts
Under the law of contract some agreements should be in writing. These contracts are agreements
regarding immovable property.
Examples:
 Lease, rent, mortgage, sale agreements for lands and buildings
This provision is legalized by prevention of frauds ordinance.
Those agreements affecting to lands and building should be attested (certified) by a Notary Public and
two witnesses.
*note
Under Law of Contract, lessee must pay stamp duty. Otherwise (if no stamp) the document of contract is
considered as null and void document.
Elements of a valid contract
Under the law of contract, the following elements must be included in a valid contract.
1. There should be an offer.
2. There should be an acceptance.
3. There should be a consideration (Justa causa and valuable consideration).
4. Parties must have contractual capacity.
5. Not contrary to the public policy.
6. Reality of consent (consensus ad idem->mind+same, I.e., same mindset)
7. There should be an intention to create legal relationship.

22. Jurisdiction Courts for Contracts
Courts of first instance:
 District court
 Commercial high courts
Appellate courts:
 Civil appeal high court
 Court of appeal
 Supreme Court