Course name: LAW OF CONTRACT

Course code: 2101

Level of course: Year 2 Semester 1
Credit units: 3 CU

IMPORTANT NOTICE: THE CONTRACT ACT 2010 CAME INTO FORCE IN 2011. IT EITHER
RETAINED THE COMMON LAW PRINCIPLES, MODIFIED OR COMPLETELY CHANGED
THEM. ACCORDINGLY, YOU ARE ADVISED TO COMPLETELY ABANDON OLD LECTURE
NOTES. INSOFAR AS THEY FOCUS MAINLY ON COMMON LAW, RESOURCE MATERIALS
FROM THE INTERNET, ENGLISH AND CURRENT UGANDAN TEXT BOOKS ARE ONLY
RELEVANT TO THE EXTENT THAT THEY DO NOT CONFLICT WITH THIS ACT AND
SHOULD THEREFORE BE READ WITH THE GREATEST CARE.

INTRODUCTION TO LAW
Meaning of law, Classification and sources of the law, definitions of concepts, Acts of
Parliament and delegated legislation, common law, equity, case law, customary law, the
court system in Uganda

CONTRACT LAW
Definition of a contract, Freedom of contract, Consensus ad idem, formalities S.2, 10, 13

ESSENTIALS OF A VALID CONTRACT

a)Offer S.2, 3(1) &(3), 4(1) & (3), 5 & 6

Meaning of offer, Offer to the whole world, Invitation to treat, Display of goods in a shop
window and in shelves Advertisements, Auction sales, Tenders, Termination of offer:
Revocation, Lapse of time, Rejection and Counter Offer, Conditional offers

(b)Acceptance S.2, 3(2) & (3), 4(2) & (3), 5(2), 7, 8, 9

Definition, importance of acceptance, Must be communicated to the offeror, effect of
Silence, specification of mode of communication

(c)Consideration S.2, 19, 20 & 65, 41(2), 38(2) 33(2)

Definition, types of consideration, rules governing consideration—the doctrine of privity--

(e) Intention to Create Legal Relations

Domestic and commercial agreements

(f)Capacity to Contract S. 11, 12, 57, Article 34 of the Constitution, S.32 Employment
Act, S.15(2) Companies Act, S.28 &43 Cooperative Societies Act, etc
Unincorporated Companies, Ultravires company transactions, Minors, Contracts voidable at
common law, persons of unsound mind

VITIATING FACTORS

(a)Fraud S.13, 15 &16

Meaning of fraud, legal effect of fraud

(b)Misrepresentation S.2, 13 & 16

Representations v Mere puffs, Representation as a statement of Fact, Statement of Belief or
Opinion, Statement of Law; Statement of Intention, Silence and Misrepresentation; Half
Truths, Insurance Contracts. Types of Misrepresentation: fraudulent, Negligent and
innocent Misrepresentations, legal effect, Remedies to Misrepresentation—Rescission,
Indemnity, Damages

(c)Mistake S.13, 17 & 18

Common mistake, Mutual mistake, unilateral mistake—Documents signed mistakenly and
the plea non-est factum, legal effect of mistake

(d)Illegality of consideration and objects of an agreement S.19

Illegality by statute, S.40 of the Land Act and S.2 of the Money Lenders Act Cap, 264, Illegal
for being contrary to public policy, examples: Contracts to commit a crime, to promote
sexual immorality etc, Consequences of illegality

(d)Coercion S.2, 13
Meaning, coercion in the economic context, Exercise of one’s legal right, illegal threats, and
the legal effect of duress

(e) Undue Influence S.2, 13, 14, 16(1) & (5)

Definition, Origins, relationships which may give rise to the presumption of undue
influence, the legal effect of undue influence

EXEMPTION/EXCLUSION CLAUSES S. 67 of the Contract Act and , S.54 Sale of Goods Act
Definition, Unfairness of exclusion clauses, Approaches used by courts to protect
consumers from the unfairness of the use of exclusion clauses.

RELEASE/DISCHARGE OF PARTIES FROM PERFORMANCE

(c)Performance S.33, 35, 36, 37, 51, 52, 53, 56, S.66, 74
Precise or exact performance, Substantial but not exact performance, Performance of entire
contracts, Partial Performance V Substantial Performance, divisible contracts

(a)Discharge by Frustration
Definition of Frustration, The doctrine of strict performance, force majeure clauses,
circumstances constituting frustration, legal effect of frustration, limitations of frustration

(b)Discharge by Agreement
Alteration of contractual terms, rescission, novation

REMEDIES FOR BREACH OF CONTRACT S.61, 62, 63, 64

Damages, types of damages, Remoteness of damages, Injunction, specific performance
COURSEWORK
You will be required to do two courseworks one being a problem and the other an essay
question. Reading materials, answer guidelines and revisions questions will be availed to
supplement your own research. You are advised to check on constantly check on your e-
mail addresses for any materials dispatched online.

CLASS DISCUSSIONS
Revisions questions will be availed online for class discussions. Marks may be awarded to
active students as the lecturer may in the exercise his discretion determine

EXAM
The exam will be divided into two sections A and B covering company and partnership law
respectively. You will be requested to answer four questions one being compulsory.

THE LAW APPLICABLE

(I)ACTS:
 The Contract Act 2010.
 The Sale of Goods Act Cap. 82
 The Bills of Exchange Act, Cap. 68

(II)TEXT BOOKS
Cheshire, Fifoot & Furmston’s Law of Contract (11 th ed. Butterworth’s 1986.
Sweet & Maxwell. (2003) Treitel: Law of Contact. 11th edition. London: TThompson
Hodgin, Law of Contract in East Africa, E.A.L.B., Nairobi, 1975.
Bakibinga, D.J. (2004) Law of Contract in Uganda. Kampala: Fountain Publishers Kampala,
Uganda
Beale, G. H., Bishop, W. D., and Furmston, M. P. (1995) Contracts: Cases and Materials. 5 th
edition. Butterworths Tolley Limited
Atiyah, P. (1986) The Rise and Fall of Freedom. Oxford: Clarendon Press.
Simpsons, A. W. B. (1987) A History of the Common Law of Contract. Oxford: Clarendon
Press
Macneil, I.R. (1968) Contracts in East Africa. USA: Rothman, New Jersey.
Mckendrick, E. (2011) Law of Contract. 9th edition. London: Palgrave Macmillan

(III) UNWRITTEN LAW

 Common law
 Case law
 Doctrines of equity
 Customary law