BACKGROUND

The concept of the contract arose when humans began to produce surplus products, forcing them
to begin exchanging products in order to obtain the products they lacked in order to meet their
needs.This type of exchanging caused humans to begin acquiring various properties, and the exc
hanging of properties continued to increase and create classes among them from feudalism to the 
capitalist stage of development, in the societies and the only way to bring order was through the
development of the contract system among them which was linked directly to the trade which
societies were doing, this means the idea of the contract was increased and went hand in hand
with the development of the trade system in the society and rules and regulations were
established as a means to bring order like sanctity to contract, freedom of contract as the means
which were
intended.This idea of the contract continues to develop day by day in order to meet the needs of s
ociety and cover every issue that continues to develop in the contract we can see to the way back 
where rules were unwritten until today where rules were put into writing like the way we have L
aw of Contract Act.

INTRODUCTION

Contract is an agreement enforceable by the law, as per section 2(1), (h) of The Law of Contract
Act [ Cap.345 R.E.2019]. Contract normally characterized with several features that including
free consent of parties, competent to contract, lawfully consideration, lawfully object as per
section 10 The Law of Contract Act [ Cap.345 R.E.2019], other essential features of the contract
including offer, intention and legality.

CONCEPTS

Unenforceable, is the valid contract that contain some substantive technical or procedural defect,
most of this contract are illegal either on its formation or performance and made the law to not
enforce it based on the defect it has, refers to the case of Zakaria Barie Bura vs Theresia Maria
John Mubiru [1995] Tanzania Court of Appeal case no.16, the vendor and purchaser collided by
signing two different agreement in order to pass lower taxes.
Voidable is the valid contract that contain some defect in substances or in its manner of
formation that allows one party or both parties to rescind it. It usually remains valid, create legal
obligations and legal rights till one party decided to rescind it, as per section 2(i) its illustrated
that an agreement that enforceable by the law at option of one or more parties, but not at the
option of the other or others is termed to be voidable contract. The case of Miiso Eliakim Kaaya
vs National Ranch Company limited Land Case 05 of 2019 High Courts Division The defendant
unilaterally changed the terms of the lease contract, varying the agreed-upon lease rent, which
the plaintiff disputed. The defendant required the plaintiff, via letter, to treat the former lease
contract as terminated and to sign a new lease contract with new lease contract rates. The
defendant is ordered to adhere to the terms of the lease contract between him and the plaintiff,
until when such terms are expressly varied in accordance with the law.

Void Contract, it’s a kind of contract that lack legal validity and does not create legal rights or
obligations, this implies that the contract that lack one or more of the elements specified based
on the law is tend to be void, as per section 2(1)(g) and (j) of LCA, an agreement not enforceable
by the law is said to be void, contract which ceases to be enforceable by law becomes void.
Example of the void contract is the case of Nakayaga v. Fina Bank Ltd & Anor [2015]
UGCOMMC 8 where the applicant did not consent to the loan facility obtained by the second
respondent (his husband) nor did she acquired any independent advice from the bank and she
did not understand english language as the contract and the offer letter was in english language.

Illegal Contract, is the kind of the contract that does go beyond the rules of basic public policy
and its normally criminal in nature or immoral, it’s usually contains unlawfully items that
including objects and consideration as per section 23 of LCA. Ulf Nilson vs Dr. Tito Mziray
andrew land case no. 66 of 2007 HCD,both parties signed three loan agreement for three
months period the loans had the interest of 5% (five per cent) per month compounded monthly
which later the defendant failed to repay the loan, The court rule that the contract was termed
illegal since the plaintiff was not registered as lender nor licensed. So charging of interest is
tainted with illegality, it is unlawful for unlicensed individual or organization to lend money and
take security for it.

MAINBODY
VOIDABLE CONTRACT

Is the kind of the contract that can be cancelled, changed under certain legal circumstances, it
normally a formal contract that parties can agreed to be void on variety of several grounds when
fault tend to be detected, that include , coercion , undue influence, misrepresentation and legal
incapacity to enter into contract, failure of both parties to disclose a material fact and breach
contract and once the parties detected the fault in the voidable contract has option of accepting or
repudiating the contract.

Voidable contract characterized with several features that’s including, the voidable contract is
initially valid till one party discover the ground of invalidity, contract can be voidable from the
beginning or after it has been signed, a party who believe isn’t obligated by the contract has the
option of accept or reject the contract, the courts can decide if the contract is voidable or not,
voidable contract tend to remain enforceable until one part decided to invalidate it.

There are several circumstances that makes contract voidable at the option of the other part as
per section 19(1) of LCA and that are: -

Misrepresentation is the positive assertion in a manner not warranted by the information of the
person making it, of that which isn’t true, though he believes it to be true, also can be defined as a
deceptive statement of fact or law used to persuade the other party to enter into the agreement. In
general, such statements must be made before the contract is entered into. Thus, the requirements
of a misrepresentation action are that it must purport to be a statement of fact or law, that it must
have induced the other party to enter into the contract, and that it be a false statement, we have
several types of misrepresentation and are unwarranted statement, breach of duty to speak and
inducing mistake of the subject matter of the agreement, as per section 18(1) of LCA.

Fraud, as per section 17(1) of LCA, means any of the following acts committed by a party to a
contract, or with his connivance, or by his agent, with intent to deceive another party thereto or
his agent, or to induce him to enter into the contract, an intentionally deceptive action intended to
provide the perpetrator with an unlawful gain or to deny a victim's right. involves the intentional
withholding of important information or the provision of false statements to another party for the
purpose of obtaining something that would not have been provided without the deception.
Undue influence

Coercion

VOIDABLE’S LEGAL CONSEQUENCES

The legal consequences that resulted from the voidable contract, refers to LCA and Common law
position

Rescission, as per section 64 of LCA When a person at whose option a contract is voidable
rescinds it, the other party thereto need to perform any promise therein contained in which he is
promisor. The party rescinding avoidable contract shall, if he has received any benefit thereunder
from another party to such contract, restore such benefit, so far as may be, to the person from
whom it was received

Compensation as per section 75 of LCA A person who rightly rescinds a contract is entitled to
compensation for any damage which he has sustained through the non-fulfilment of the contract.

Legally binding, if accepted by both parties that contract became legally binding both parties into
contract.

Revocation as per section 66 of LCA, the party can have decided to rescind the contract during
the reasonable time and communication or revocation can be done in the same manner as applied
to the same rule of revocation as referred to section 6 of LCA.

The Courts will decide whether or not the contract is voidable and if the part failed to return into
the original position, courts will decide the matter, Indemnity- The court may order payment for
expenses necessarily incurred in complying with the terms of the contract.

Damage, the injured part will claim damage and court will determine the damage and the
responsible party will pay refers to the case of With v O'Flanagan [1936] Ch 575 The claimant
began talks with the defendant about purchasing the defendant's medical practice. During the
negotiations, the defendant informed the claimant that the practice earned approximately £2,000
per year. The defendant signed the purchase contract five months later, but by that time, the
practice had declined significantly due to the defendant's ill health. When the claimant took
possession of the practice, it was discovered to be nearly non-existent. The claimant sought to
cancel the contract on the grounds that the income representation had been false. The Court of
Appeal overturned the first-instance decision. It was determined that the defendant's
representation was made to induce the claimant to enter into the contract and thus would be
considered ongoing until the contract was signed.