BUSINESS & CORPORATE LAW (ACCN103)

(Lecture notes)
GENERAL INTRODUCTION

NATURE PURPOSE & CLASSIFICATION OF LAW

WHAT IS LAW & ITS MEANING

 According to the oxford dictionaries law can be defined as:
the system of rules which a particular country or community recognizes as regulating
the actions of its members and which it may enforce by the imposition of punishment.

 Law may also be defined or referred to as a set of rules which guide our conduct in
the society and is enforceable by the state via public agencies,OR
 It has been defined as rules [written and unwritten] and regulations governing human
conduct which are recognized as binding by the whole community and is enforceable
by the state.
 Law in its general sense tends to be as a result of the necessary relations
arising from the nature of things. In this sense all things have their laws.
Humans, superior beings and even animals all have their own laws.
 the nature of these relationships tends to determine the nature of the laws.
 Law prescribes what we must, what onemust and must not do.
 Law is an instrument designed to regulate human behaviour so as to achieve
peace and order in the society.
 Law is a social science which is also divided into two divisions, namely, Public
and Private law.
 Public law is the branch, which deals or governs the relationship between the
state and its citizens (vertical application), whereas, Private law governs the
relationship between citizens (Horizontal application)

 However, the intelligent world is far from being so well governed as the
physical because intelligent beings are of a finite nature, and consequently
liable to error; and on the other, their nature requires them to be free agents.
 ------+

 However, law is not the only instrument by which the behaviour of an individual is
regulated. (if all laws prohibiting murder and theft were abolished most of us would
not commit such acts.
 Why not? It is because there are other rules that govern human conduct such as
organisational rules, religious directives and morals on the other hand that govern

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 human conduct within a society or state but the main difference with laws is that they
are not enforceable.
 These other rules are even more effective in ensuring compliance with a particular
act or conduct.
 It is not the effectiveness of the rule or regulation or their goodness or badness that
determine legality. It is in fact the sole effect of enforceability by the state that
determines whether a rule is law or not.
 To distinguish a legal rule from any other rule one should keep in mind that the issue
of enforceability is critical.
 In order to understand the nature of the law reference has to be made to two main
theories of law namely, the positivity theory and the natural law theory.

NATURE OF LAW
 The different schools of thought that have arisen are all endeavours of jurisprudence:
 Natural law school Positivism, realism among others. It is these schools of thoughts
that have steered debates in parliaments, courts of law and others.
 Natural law - theory asserts that there are laws that are immanent in
nature, to which enacted laws should correspond as closely as
possible. ...
This view is frequently summarized by the maxim: an unjust law
is not a true law, in which 'unjust' is defined as contrary to
natural law.
 Legal positivism - is the view that the law is defined by the social
rules or practices that identify certain norms as laws.

 Legal realism - it holds that the law should be understood as being

determined by the actual practices of courts, law offices, and police
stations, rather than as the rules and doctrines set forth in statutes or
learned treatises.
It had some affinities with the sociology of law.

 Legal interpretivism - is the view that law is not entirely based on

social facts, but includes the morally best justification for the
institutional facts and practices that we intuitively regard as legal.
Generally, law has the following characteristics:
i. It is a set of rules,
ii. It regulates the human conduct,
iii. It is created and maintained by the state,
iv. It has certain amount of stability, fixity and uniformity,
v. It is backed by coercive authority,
vi. Its violation leads to punishment,
It is the expression of the will of the people & is generally written down to give it definiteness,

vii. It is related to the concept of 'sovereignty' which is the most

important element of state.

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 PURPOSES OF LAW
 It promotes peaceful coexistence/ maintenance of law and order/ prevents anarchy.
 It is a standard setting and control mechanism. Law sets standards of behaviour and
conduct in various areas such as manufacturing, construction, trade e.g. The law
also acts as a control mechanism of the same behaviour.
 It protects rights and enforces duties by providing remedies whenever these rights or
duties are not honoured.
 Facilitating and effectuating private choice. It enables persons to make choices and
gives them legal effect. This is best exemplified by the law of contracts, marriage and
succession.
 It resolves social conflicts. Since conflicts are inevitable, the rule of law facilitates
their resolution by recognizing the conflicts and providing the necessary resolution
mechanism.
 It controls and structures public power. Rules of law govern various organs of
Government and confer upon them the powers exercisable by them. The law creates
a limited Government. This promotes good governance, accountability and
transparency. It facilitates justice in the society.

CLASSIFICATION OF LAW
 Law may be classified as:
i. Written and Unwritten.
ii. Municipal (National) and International.
iii. Public and Private.
iv. Substantive and Procedural.
v. Criminal and Civil.

Written law
 This is codified law.
 Codified law are rules that have been reduced to writing i.e. are contained in a formal
document e.g. the Constitution of Zimbabwe, Acts of Parliament, Delegated
Legislation, International treaties etc.

Unwritten law
 These are rules of law that are not contained in any formal document. The existence
of such rules must be proved, eg Customary law, Common law. Written law prevails
over unwritten law. Why?
Municipal/ national law
 This refers to rules of law that are applicable within a particular country or state. This
is state law.

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  It regulates the relations between citizens inter se (amongst themselves) as well as
between the citizens and the state. It originates from parliament, customary and
religious practices.
International law
 is a body of rules that generally regulates the relations between countries/states and
other international Organizations such as the United Nations.
 It originates from international treaties or conventions, general principles and
customary practices of states.
 It also refers to rules that are binding on states in their relations with each other.
 It is important to emphasize that the primary focus of international law is to regulate
relations among states, not create rights for individual citizens.
 However, states may agree to create individual rights for citizens and when this
happens national law may be involved in the enforcement of those rights. An
individual citizen has no right of standing before the International Court of Justice
(ICJ).

 In Zimbabwe, a rule of International law emanating from a treaty which has

been ratified by Zimbabwe does not create legal rights for citizens under
national law unless it has been incorporated into an Act of Parliament.

Public law
 It consists of those fields or branches of law in which the state has a direct interest
as the sovereign. It is concerned with the Constitution and functions of the various
organizations of government including local authorities, their relations with each
other and the citizenry.
 It is that law in which the state is a party to a relationship or the dispute.
 The state has direct matters over which it is involved in the day-to-day life of citizens.
 Public law covers constitutional law, criminal law, law of taxation and administrative
law. Here the state is involved in its capacity as a sovereign power, ie public law
asserts state sovereignty.
 Public law includes:
Criminal Law
Constitutional Law
Administrative Law, etc

Private law
 It regulates the rights and duties of persons among themselves.
 it covers the law of property, of obligations (contract and delict) of persons.
 The state may be regulated by private law where it is involved not as a sovereign
power but as an ordinary person.
 Such as where it enters into a contract to purchase goods and services.

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  Private Law consists of those branches of law in which the state has no direct
interests as the state sovereign.
 It is concerned with the legal relationships between persons in ordinary transaction
e.g.
 Law of contract
 Law of property
 Law of succession
 Law of Persons and Family (Family Law)
 Law of delict

 Private Law does not assert state sovereignty – horizontal application.

Substantive law
 It consists of the rules themselves as opposed to the procedure on how to apply
them.
 It defines the rights and duties of the parties and prescribes the remedies applicable.
Substantive law defines offences and prescribes the punishment, for example:
Law of delict
Law of succession
The Law of contract
Law of Persons and Family (Family Law)
Criminal Law

Procedural law
 This is adjectival law. It consists of the steps or guiding principles or rules of practice
to be complied with in the administration of justice or in the application of substantive
law. For example:
Rules of Civil Procedure
Rules of Criminal Procedure.

Divisions of law
 Law may be divided between public and private law at national level.
 Private law is the law that affects or deals with individuals as against individual eg
family law, contract and insurance while public law is the law that involves the state
as a player in some way for example constitutional and administrative law.
 A further division is that between civil proceedings and criminal proceedings,
Criminal proceedings are public in nature while civil proceedings fall under
private law.

(i) Criminal law

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 A crime is a wrong punishable by the state and the main objective of the
criminal law is punishment of the offenders.
 Although a crime is a wrong against an individual, it is considered a wrong
against the state and it has a prerogative of prosecuting.
 Every legal system decides which wrongs against individual are to be
regarded as wrongs against the state that is punishable by the state. It is
clear that wrong becomes a crime solely because of the decision by the
legal system that it be regarded as such that is why a crime in one society
may not be a crime in another.
 A wrong may be both a crime and a civil wrong whereas virtually all crimes
are civil wrongs the reverse is not the case.
 Civil law A civil wrong is a wrong against another person and the main
aspect of civil law is to compensate the victim for the term suffered. Most
civil wrongs are not crimes.
 Example of civil wrongs includes breach of contract, delicts defamation,
assembles and trespasses.
 The prerogative of the state to pursue a criminal prosecution does not
affect the civil remedies available to a person who has been wrongful
where the wrong is both a crime and a civil wrong; it is permissible to
institute both proceedings t the same time or one after another.
 In a civil case the liability of the other party need only be proved on a
balance of probabilities (preponderance of probabilities) i.e. just above
50%.
 This means that people who may not be proved guilty beyond a
reasonable doubt in a criminal court may still be found liable on a balance
of probabilities.
 Accordingly, the fact that an accused personis found guilty in a criminal
court cannot in itself be a basis for not pursuing civil action.
 However, it must be clear that a person found guilty belong a reasonable
doubt is clearly base on a balance of probabilities.
 The distinction between civil and criminal law may be considered as
follows:
 Civil law is a form of private law and matches the relationship
between individual citizens.
 It is the legal mechanism through which individuals can assert
claims against others and have those rights adjudicated and
enforced.
 The purpose of civil law is to settle disputes between individuals
and to provide remedies; it is not concerned with punishments as
such.
 The role of the state in relation to civil law is to establish the general
framework of legal rules and to provide the legal institutions to
operate those rights, but the activation of the civil law is strictly a
matter for the individual concerned.
 Law of Contract, law of delict and law of property are generally
aspects of civil law.

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  Criminal law is an aspect of public law and related to conduct
which the state considers with disapproval and which it seeks to
control and or involves the enforcement of particular forms of
behaviour and the state as the representative of society acts
positively to ensure compliance in criminal law, a prosecutor
prosecutes a defendant (the accused). In civil law, a claimant sues
(brings a claim against) a defendant.

THE NATURE OF THE STATE

 The state is comprised of three main organs, namely the Legislature, judiciary and
executive.
 There is an underlying agreement between the citizen and the state.
 The citizen agrees not to enjoy or exercise some of his rights in exchange for
protection by the state.
1. The Legislature/Parliament- enacts the law, set the rules and
regulations (Makes the law – Normally before they make the law, they
have a policy or idea first).
2. The Judiciary - Interprets the law and makes law. This is a group of
knowledgeable people who interpret the law, Deemed to understand
what people want. IPPA, POSA have passed through judiciary,
fundamental Bill of Rights. The Supreme Court is appointed by the
President of state.
3. The Executive, enforces the law after that has been enacted by the
people’s representatives and interpreted by the judiciary. And enforced
by the executive through the police.

Government Gazettes (general knowledge)

 The government gazette of Zimbabwe is a newspaper publication describing the
laws and government decisions. It is the official medium within which the government
announces the passing of legislation and it is through gazettes that amendments to
legislation are made known to the public.
 The government’s decisions are published in these gazettes decisions such as the:
a) Issuance and invitations of state tenders
b) Notices of appointments of personnel to public offices
c) Changes of name or notarial deeds are also published through government gazettes
d) Title deeds, deeds of transfer are also made public in this method
e) Licenses issued and licenses withdrawn and liquidation of companies
f) Advertisements of government publications on sale
g) Auction and public property

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h) Notice to creditors and debtors
i) Statutory instruments are also published in or alongside government gazettes
proclamations, which in effect. Presidential decrees are made known to the public through
gazettes.

In Zimbabwe, government gazettes are published by government printers. Gazettes are

published in volumes with a volume number and year of publication.

Differences between Delict & Crime

 Delict
A delict is a wrongful and culpable conduct which causes harm to a
person, property or personality of another.
Every person owes a duty of care to prevent harm falling on another
person.
In English law, a delict is called a tort.
Every person is personally liable for the harm he or she causes to another.
The only exception being in the case of an employer who may be held
liable for the conduct of his or her employee if it is committed in the course
and scope of his employment. This is called vicarious lability. An example
is a driver who negligently causes an accident or an employee who steals
customer’s goods he is supposed to guard or transport. The guard’s
employer will be liable for the theft.

 Crime
A crime is a wrongful conduct for which the wrongdoer is liable for
punishment by the state.
This is conduct which the common law or statute has prohibited e.g.
murder, rape, and assault.
If the accused is convicted for the offence he is send to jail, to perform
community service or to pay a fine.
The wronged person does not benefit from the fine or the accused
person’s Labour during the jail term.
In addition, it is the state which uses its resources to pursue the matter not
the complainant.

Parties to the process

 In criminal proceedings - the person aggrieved or injured in his/her rights is called the
complainant and is the one who approaches the police with a complaint. The one
alleged to be the perpetrator of the offence is called the accused/ suspect.

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  In civil proceedings - these are proceedings where an individual seeks or claims a
remedy as against another person from the courts.

The state is not a party in the process unless if it is one of the litigants such as
where it is compelling a person who won a tender to supply the tendered
items. The litigants in a civil process use their own resources to pursue their
cases to conclusion.

Parties to civil proceedings

 The person who institutes an action is called the Plaintiff; he is the person aggrieved
and approaches the court by way of summons seeking a particular remedy such as
payment of damages.
 The person being sued is called the defendant. If the process is commenced by
application procedure (i.e. on affidavits) the person aggrieved is then called the
applicant while the one sued is called the respondent.
 If the matter is an appeal case the one dissatisfied with the previous decision is
called the appellant while the one who won the previous judgment is called the
respondent.

THE RELATIONSHIP BETWEEN BUSINESS AND LAW

 People in commerce often possess an attitude that separates legal issues from
strategic operational concerns of the business.
 In the global economy where goods and investment move across political boarders
subjecting the business to the complexities of regulations and laws of those different
countries there is the need for law or legal issues to be brought in at the initial
discussions of a strategic investment.
 The development of business is heavily influenced by the development of the legal
environment.
 Business takes advantage of opportunities afforded by the legal environment.
 The role of business in society depends on the degree of economic social political
and legal development. Business practice must change to meet the changing
environment including the legal environment also.

Sources of Zimbabwean Law

Zimbabwe has various sources of law namely:
(i). legislature
(ii). Common law
(iii). Customary law

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(iv). Judge made law (judiciary precedents)
(v). Authoritative texts
Of these five only one is not a binding source of law namely authoritative texts which
have a persuasive value.

LEGISLATURE (Parliament)
 These are laws which are promulgated through the two houses of representatives
that is the House of Assembly & Senate. These are invariably written laws and are
called Acts of parliament or statutes.
 Bills pass through the two houses before the president signs them into law. It is
commonly referred to as statute law. The Legislature is free to change the law as
they deem fit subject only to the constitution in a constitutional democracy. The
legislature can delegate the power to make law. This was arrived at after realising
that the parliament would not be able to create all laws.
 Minsters are allowed to create regulations also known as Statutory Instrument (SI)
and Local governing authorities are authorized by the enabling act of parliament to
enact their by-laws for administrative purposes. The major administrative authorities
in Zimbabwe are the Rural District Councils and Urban Councils.
 These may regulate issues like vending, building bye laws and planning rules.
 The constitution is the supreme legal document in Zimbabwe. It is piece of legislation
that was created by the legislature through parliament.
 In terms of section 2 of the constitution any law, practice, custom or conduct that is
inconsistent or contrary to the constitution shall be void to the extent of the
inconsistence. This means if an act of parliament is enacted but has a provision that
conflicts with the constitution the legislation will be invalid. A citizen may approach
the Constitutional Court to have that legislation set aside as unconstitutional.
 The constitution gives the president power to enact temporary laws.
 The Presidential (Temporary Powers) Measures Act mandates the president to enact
temporary laws to deal or avert any situation of emergency. Such law has a life span
of 6 months only.

CUSTOMARY LAW
 These laws emanate from customs or customary practices.
 A custom is a rule established by usage which acquires the force of law because it is
generally followed.
 Customs refer to unwritten laws that develop from the day to day living of the people
in a community.
 Customs are habits or usual practices of behaviour observed by individuals in
society. Not all customs are legally followed by people in the state. For a custom to
be universally enforced in a state it should be a legal custom.
 A legal custom obliges a person to act in a particular fashion and the custom may be
enforced formally by the courts.

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 See the case of Van Breda v Jacobs &Ors 1921 AD 330.The plaintiffs who
were fishermen set their nets after identifying a shoal of fish travelling their
direction. A second group of fishermen then cast their nets a few meters away
from the 1st group’s lines.
The 2ndgroup caught all the fish and the first group sued for damages on the
basis that there was a custom followed by fishermen at the Cape to the effect
that on a free beach once one set their lines to catch fish seen traveling on the
coast, no other fishermen could set their line in front of it within a reasonable
distance from it. It was held that such a custom existed. It was reasonable and
certain and 11 witnesses testified that it had been strictly observed for at least
45 years. Plaintiffs claim succeeded. It appears from this judgment that the
following requirements must be met before a customary rule will be
recognized as a legal rule:
1. It must be reasonable,
2. It must have existed for a long time,
3. It must not be contrary to existing statutory laws,
4. It must be well known.

 In Zimbabwe the payment of bride price (lobola) is a good example of a legally

binding custom practiced by many if not all indigenous people. In addition, various
trades and professions have certain customs that have become legally accepted.

COMMON LAW/ROMAN DUTCH LAW

 In terms of the constitution of Zimbabwe the Roman-Dutch law in force in the colony
of the Cape of Good Hope on the 10th June 1891as modified shall apply in
Zimbabwe. The legislature is free to modify this provision as it has done in a number
of statutes such as the Labour Act, Insurance Act and the Consumer Contracts Act.
It is worth noting that the Criminal Law (Codification and Reform) act section 3
repeals its application in criminal law.
 This is unwritten law which evolved from Roman Dutch precedents.

JUDICIAL PRECEDENTS
 There has been a debate whether the judges can make laws or they simply interpret
law.
 The reality is of course that judges have at times made laws indirectly. However, it is
the superior court’s precedents that are binding and taken as the position of the law.
The position so pronounced remains valid until such position is been changed by the
legislature of by another decision of the court.
 See for example the case of Zimnat Insurance Co v Chawanda 1990 (2) ZLR143 and
Chapeyama v Matende & Anor 2000 (2) ZLR 175.

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  These judgments show to an extent that courts may make law in order to do justice
between men and man and sometimes because the law has a gap that parliament
has not legislated on.
 For example, the latter case deals with the issue of the matrimonial rights of people
married under an unregistered customary marriage. Under customary law a woman
in such a relationship is at divorce only entitled to two forms of property namely, umai
property (such as mombe yeumai) and mavoko property (that which obtained from
her Labour or expertise such as a salary, proceeds from activities like weaving,
herbalist etc). The courts are trying to reduce the hardships faced by such women.
 Recently the courts made law on the issue of damages payable to dismissed
employees who are then reinstated after the lapse of some time. The issue arose
after the introduction of multiple currencies, whereas in the past the Zimbabwean
currency was the one in use.

 Employers wanted to pay damages using the demonetized currency. Justice Mutema
had no problem in ruling in the case of Samanyau & Ors v Pleximail (Pvt) Ltd HH-
108-11 that the fact that legislature had not done its job in stipulating how debts in
Zimbabwean dollars could be claimed; was not a good reason to leave this group of
people without a remedy. He therefore ruled that such damages were payable in the
multiple currencies and not through Zimbabwean dollars.

TEXT BOOKS
Celebrated authors are taken as another source of law in their writings. In Zimbabwe we
have such authors as Prof G. Feltoe, the late Prof Nyapadi and Prof Madhuku.

Courts structure in Zimbabwe

(a) CONSTITUTIONAL COURT

This is a court which has jurisdiction in all constitutional matters in Zimbabwe.
It is presided over by the Chief Justice with five other judges in matters
dealing with the bill of rights or the election of the president or vice president.
In other matters it sits with three judges of the court.
It has no jurisdiction in any other matters.
It serves as a court of referral or a first instance court.

b) SUPREME COURT
The Supreme Court is a court of final appeal for civil and criminal matters from
all the lower courts.
As an Appellate court it sits with any three judges of the court.

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c) HIGH COURT
This is a court of inherent jurisdiction in all matters save for constitutional
matters. It has no monetary or other limitation in its jurisdiction in both in civil
and criminal matters. It applies both civil and customary laws.
The court can sit as a court of first instance or as an appeal court.
It can hear appeals from the magistrate court in both civil and criminal cases.
It is presided by a single judge as a court of first instance and two judges for
appeals and reviews.
When dealing with criminal matters the judge sits with two assessors.
The assessors assist the judge to determine factual issues.
An appeal from the High court goes to the Supreme Court.

(d) LABOURCOURT
It is a creature of the Labour Act.
It is presided over by a President.
It is created to deal with matters of employment law or other disputes arising from the
Labour Act.
It serves as a court of appeal or a court of first instance.
It deals with appeals from decisions of labour arbitrators and other officials in terms
of the labour act.
An appeal against its decision which must be on points of law lies with the Supreme
Court.

(e)ADMINISTRATIVE COURT
It is a court of first instance in administrative issues and also serves as appeal court
against decisions of boards and tribunals.
It is presided over by a president. It deals with planning and other Administrative
matters. See for example the case of Jamu v City of Harare SC279-06 where a
medical doctor was refused permission to build a clinic in a residential area.

(f) MAGISTRATE COURT

it is a creature of the statute and has no inherent jurisdiction.
It is presided over by the Magistrate and applies both customary and civil law.
It has jurisdiction over criminal matters as well as civil matters to the extent so
allowed by the enabling act.
It also serves as appeal court against the decisions of the community court.
Appeals against its decisions are filed with the High Court

COURT LOCAL COURT

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 It is a creature of the statute and has no inherent jurisdiction.
It is presided over by the Magistrate and applies both customary and civil law.
It has jurisdiction over criminal matters as well as civil matters to the extent so
allowed by the enabling act.
It also serves as appeal court against the decisions of the community court.
Appeals against its decisions are filed with the High Court.

(g) COMMUNITY COURT

It is headed by the chief and only applies customary law. It has no jurisdiction in
criminal matters.
An appeal against its decision lies with the Magistrate court.
See the case of Decent Carmichael v Davison Moyo SC-113/94 that involved a claim
for adultery damages by a husband in a customary law relationship.

(h) LOCAL COURT

The head man presides over it and only applies customary law.
A head man is different from a village head.
A headman’s jurisdiction is over a number of villages while that of a village head is
over a single village.
Appeals from the court lie with the community court.
It has no jurisdiction in criminal matters

Self-study
“Judicial precedents are never a source of law in any legal system. The role of a judge is
not to make the law but to interpret it. In purporting to make the law the judge will be
exceeding his powers as the third arm of government.” Discuss the correctness of this
statement. [15]

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