MZUMBE UNIVERSITY

FACULTY OF LAW
TASK : GROUP ASSIGNMENT
SUBJECT TITLE : LAW OF CONTRACT
SUBJECT CODE : LAW 124
LECTURER : MR. COSMAS
COURSE : LLB 1
GROUP NUMBER : NO. 5 STREAM A
S/N NAMES OF STUDENT REG. NUMBER
01 STEPHANIA .J. TENGA 1236022/T.21
02 WILLIAM JONATHAN MATIKU 1236198/T.21
03 GOODLUCK B. HUMBI 1236021/T.21
04 JOSHUA A. ALAGWA 1236027/T.21
05 RUKIA DAUDI MUNYAGANE 1236019/T.21
06 AIRINI BARTALOME SHIRIMA 1236023/T.21
07 JOSHUA L. CHAULA 1236013/T.21
08 DOREEN A. TENGA 1236025/T.21
09 HALIFA O. MCHIU 1236267/T.21

QUESTION;
Discuss the right of the parties in the following situations;
A. Tapeli and Mhujumu are partners in an engineering company. Tapeli is having financial
problems and as a result he wants to sell his share in the partnership to Mhujumu.
Mhujumu is not interested to buy the shares owned by Tapeli. On Thursday night, Capeli
took an agreement for the sale of his share to Mhujumu’s house where he found
Mhujumu enjoying dinner with his family. After the dinner Tapeli told Mhujumu that if
he did not sign the agreement “something bad” would happen to his wife and children.
Having threatened, Mhujumu signed the agreement to serve his beloved family.
Advice Mhujumu if he can avoid such a contract.
B. Advice Alan in the following situations;

i. Alan is a qualified accountant, last year he agreed with his father Ben who owns a
small manufacturing business. That he would prepare his tax return for him for a fee
of 1 million. Alan did the accountancy work and Ben submitted the accounts to the
tax authorities. Ben now refuses to pay Alan, saying it is not right for a son to charge
his father for doing him a favor.

ii. Two years ago Alan separated from his wife cath. As part of a written agreement
between them, Alan agreed to pay Cath 100,000 per month in order to maintain her
and their daughter Joan. The money also had to be used to pay off the mortgage on
the house that Alan and Cath jointly owned. Alan promised that when the mortgage
was paid off he would transfer his share of the property to cath. Now however,
although the mortgage has been paid off Alan refuses to transfer his title in the house
to cath.

iii. At the time he was leaving the family home Alan in an attempt to encourage Joan in
her studies promised that he would buy her a new car if she passed all of her final
extermination.
Now however although Joan has passed all of her exams Alan is refused to buy her
the promised car.
TABLE OF CONTENT

1. QUESTION 5(A)
I. FACT OF THE SCENARIO AND SCOPE
 Shorty summary and explanation on the scope of scenario

II. ISSUE RAISED TO DETERMINE THE LIABILITY OF HAMZA

 Whether the contract was made with free consent.

III. LAW APPLICABLE AND ARGUMENT

 The law of Contract Act [CAP 345 R.E 2019]

CONCLUSION

2. QUESTION 5 (B)

Issue raised to each of the question are as follow;

i. Whether the parties made a contract with intention to create legal relation.
ii. Whether there is a valid contract made between husband and wife which intended to
create legal relation.
iii. Whether the domestic agreement between father and son has intention to create legal
relation.

CONCLUSION
REFERENCE
QUESTION 5 (A)

I. FACTS AND SCOPE OF THE QUESTION

Tapeli and Mhujumu are partners in an engineering company. Tapeli is having financial
problems and as a result he wants to sell his share in the partnership to Mhujumu. Mhujumu is
not interested to buy the shares owned by Tapeli. On Thursday night, Tapeli took an agreement
for the sale of his share to Mhujumu’s house where he found Mhujumu enjoying dinner with his
family. After the dinner Tapeli told Mhujumu that if he did not sign the agreement “something
bad” would happen to his wife and children. Having threatened, Mhujumu signed the agreement
to serve his beloved family.

The scope of the question requires to discuss about the contract made between two parties (tapeli
and mhujumu), whereby we based on assessing the elements of the valid contract, where we
based much on one element of free consent. Also we discussed the ability of the contract. In
explaining the question, we raised one issue as follows;

II. ISSUE RAISED

 Whether the contract was made with free consent.

III. LAWS APPLICABLE AND ARGUMENT

 The Law of Contract Act [CAP 345 R.E 2019]

 Whether the contract was made with free consent.

Mhujumu can avoid the contract made between him and Tapeli because he was threatened
hence he signed it unwillingly. Free consent is one among the elements for a contract to be valid.
Section 10 of the Law of Contract Act,1 provides that, “all agreements are contracts if they are

1
[CAP 345 R.E 2019]
made by the free consent of parties competent to contract, for a lawful consideration and with
lawful object and are not hereby expressly declared to be void:” In free consent there must be
two parties to contract who willingly and knowingly enter into agreement or a valid contract.
Also Section 14 (1) (a) of the Law of Contract Act, 2 provides that a consent is said to be free
when it is not caused by coercion.

Coercion is the committing or threatening to commit any act forbidden by the penal code or
unlawful detaining or threatening to detain any property to the prejudice of any person whatever
with the intention of causing any person to enter into an agreement, as provided under section 15
of the law of contract act,3

According to the scenario above Mhujumu was threatened by Tapeli that ‘something bad will
happen to his family’ if he could refuse to sign the contract, therefore the threat lead to Mhujumu
signing the contract without his willing. Therefore in that contract there was no free consent
between the parties, the contract was signed under the influence of one part (Tapeli) who forced
Mhujumu to sign contract without his free consent.

Referring from the case of William v Bayley,4 where Mr. Bayley’s son forged his father’s
signature on promissory notes and gave them to Mr. William. Mr. William threatened Mr.
Bayley that he would bring criminal prosecution against his son unless he granted an equitable
mortgage to get back the notes. In the case it was held by House of Lords upheld the cancellation
of the agreement, on account of undue influence. The agreement was cancelled on the ground
that he was influenced by threat.

CONCLUSSION

Therefore, in the scenario there was no free consent between the parties since one party acted in
a result of coercion, where one part forced the contract to be signed to his favor as a result a void
contract was made between the parties. So, Mhujumu can avoid such contract because it was
signed without free consent of the adverse party which is contrary to the validity of the contract
as per Section 10 of The Law of Contract Act.5

2
[CAP 345 R.E 2019]
3
[CAP 345 R.E 2019]
4
( 1866) LR 1 HL 20
5
[CAP 345 R.E 2019]
QUESTION 5 (B)

i. Whether the parties made a contract with intention to create legal relation.

Agreements of the domestic nature between parents and children are presumed not to be intended
to be binding, though again the presumption can be rebutted. 6 In commercial agreements there is
a strong presumption that parties intends to be legally bound, 7 However in a commercial
transactions the parties may expressly exclude any intention to enter into any legal relations.8

Referring from the case of Rose and Frank Co v JR Crompton and brothers Ltd, 9 where the
parties entered into agency arrangement for the sale of tissues which was clearly a commercial
transaction, The agreement was not entered into, nor is the memorandum written, as a formal or
legal agreement, but it is only a definite expression and record of the purpose and intention of the
parties concerned. It was held in the case that, “parties are capable of forming an agreement that
does not give rise to legal relation. The reason of this is that the parties do not intend that their
agreement shall give rise to legal relations. This intention may be implied to the subject matter of
the agreement but it may be also expressed by the parties. In social and family relation such and
intention is readily implied, while in business matters, the opposite results would ordinarily
follow”

In our scenario the parties made a domestic agreement between father (ben) and son (Alan),
which is presumed to be not legally binding because of their family relationship. But on the other
side, the parties intended to create legal relationship in their agreement because it included
commercial transaction between the parties that is father needed his commercial job of
accountancy to be performed by his son in the fee of 1 million, so this made their agreement to
be legally binding leading to a valid contract.

Therefore in accordance to the facts of the scenario, Alan has an ability to content his money
from his father with any legal procedures, and he is capable to win the case since the agreement
made was a legally binding due to the fact that it involved commercial transactions.

6
Elliott C. & Quinn F. [2009] Contract Law 7thEd. Page 94
7
Robert D. (2015) Contract Law 10th Ed. Page 22
8
Smith J.C. ( ) The Law of Contract 4th Ed. Page 22
9
[1925] AC 445
 ii. Whether there is a valid contract made between husband and wife which intended
to create legal relation.

Where a husband and wife living together as one household makes an agreement, the agreement
is presumed not to be intended to be legally binding, unless the agreement states to the
contrary.10

Referring from the case of Balfour v Balfour,11 where the married couple went to England for
vacation but Mrs. Balfour become ill and needed medical attention. So they agreed Mrs. Balfour
to remain in England for such medical care when Mr. Balfour left back to Ceylon (Sri Lanka).
Also they orally agreed that Mr. Balfour would pay 30 pounds per month until he returned. Later
on Mr. Balfour. It was held that there is a rebuttable presumption against an intention to create a
legally enforceable agreement when the agreement is domestic in nature.

Also in the case of Merritt v Merritt,12 Which this case was standing as an exception to the
general rule given under the case of Balfour, where it say that the social and domestic agreement
will stand as contract where that promise will have effect to the promised one. In this case is
where Mr. Merritt and Mrs. Merritt 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 pound
monthly sum, 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. The case was
held that, the nature of the dealings and the fact that the Merritt were separated when they signed
their contract, allowed the court to assume that their agreement was more than arrangement. In
this case, the doctrine laid in Balfour v Balfour,13 that “domestic agreements between spouses are
rarely legally enforceable” was rebutted.

In our scenario, the parties made a domestic agreement as husband and wife while they were
apart. So in regard to the general principle their agreement can be enforceable by the law and is a
legally binding, hence it is a valid. And due to the fact that the contract was signed, then it
intended to create a legal relationship.

10
Robert D. ( ) Nutshells Contract Law 10th Ed, Page 23
11
[1919] 2 KB 571
12
[1970] 1 WLR 1211
13
[1919] 2 KB 571
Therefore in accordance to the facts of the scenario, and the principle of the contracts between
the spouses, Alan is required to transfer the title of the house to his wife as they were agreed.

iii. Whether the domestic agreement between father and son has intention to create
legal relation.

Domestic agreements between parents and children are also presumed not to be intended to be
binding, though again the presumption can be rebutted14.

In the case of Jones v Padavatton,15 where the mother told her daughter to quit her secretary job
in Washington and train to be a barrister in London. She also promised her daughter that she will
provide her with monthly allowance for the whole duration of her Bar studies in London. Later
on, they made a second unwritten agreement under which the mother bought a house for her
daughter to live and in which she could rent out rooms to support herself instead of receiving
allowance. The daughter then failed her exams and the mother sought the possession her house.
In the case it was held that, domestic agreements such as that of a mother and daughter are
presumed not to be legally binding unless there is clear intention.

In our scenario the parties made a domestic agreement between father and son, their agreement
was not written anywhere. So according to the general principle and the resolution of the case
above their agreement was not legally binding, hence it is not a valid contract

Therefore; in regard of the facts of the scenario there is no any element to show that the
agreement was a contract. So Alan can escape to buy a car to his daughter

CONCLUSION

REFERENCE

14
Elliott C. & Frances Q. (2015) Contract Law 10th Ed. Page 62
15
[1968] EWCA Civ 4
BOOKS

Elliott C. & Quinn F. (2009) Contract Law 7thEd.

Robert D. (2015) Nutshells Contract Law 10th Ed.

Smith J.C. (2015) The Law of Contract, 4th Ed. Sweet & Maxwell; London.

Robert D. (2015) Nutshells Contract Law 10th Ed.London

Elliott C. & Frances Q. (2015) Contract Law 10th Ed.

STATUTE

The Law of Contract Act [CAP 345 R.E 2019]

CASES

William v. Bayley (1866) LR 1 HL 20

Rose and Frank Co v. Crompton Bros & Ltd [1925] AC 445

Balfour v. Balfour [1919] 2 KB 571

Merritt v. Merritt [1970] 1 WLR 1211

Jones v. Padavatton [1968] EWCA Civ 4