Agricultural Law and Economics in Sub-Saharan Africa: Cases and Comments

By Frederick Owusu Boadu

Agricultural Law in Sub-Saharan Africa: Cases and Comments introduces the subject of agricultural law and economics to researchers, practitioners, and students in common law countries in Sub-Saharan Africa, and presents information from the legal system in Botswana, Gambia, Ghana, Lesotho, Malawi, Nigeria, Sierra Leone, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. The law and economics approach entails the use of quantitative methods in research. This is consistent with the expectations in an applied economics field such as agricultural economics.

Covering the general traditional law topics in contracts, torts, and property, the book goes further to introduce cutting-edge and region-relevant topics, including contracts with illiterate parties, contract farming, climate change, and transboundary water issues. The book is supported by an extensive list of reference materials, as well as study and enrichment exercises, to deepen readers’ understanding of the principles discussed in the book. It is a learning tool, first and foremost, and can be used as a stand-alone resource to teach the subject matter of agricultural law and economics to professionals new to the subject area as well as to students in law school, agricultural economics, economics, and inter-disciplinary classes.

• Offers research findings on such topics as food safety, climate change, transboundary natural resources, international sale of goods, patents, and trademarks to highlight the future sources of pressure on the agriculture industry
• Uses case-studies to provide real-world insights into the challenges and considerations of appropriate agricultural law development
• Challenges readers to carry out their own research in their areas of study, and to gain some understanding of the relationship between law, economics, and statistics
• Includes extensive resources, such as chapter summaries, study questions, and challenge questions at the end of each chapter to assist instructors and students in gaining full benefits from using the book
• Provides separate instructor and student study guides, a test bank, and test bank answers, in hardcopy and electronic formats

• Language: English
• Publisher: Academic Press
• Release date: Apr 27, 2016
• ISBN: 9780128018453

Frederick Owusu Boadu

Dr. Boadu holds advanced degrees in Agricultural Economics and law. He has taught a survey of Agricultural law course for over 22 years in the Department of Agricultural Economics at Texas A&M University, College Station, Texas. He has also presented lectures on legal aspects of water resources, climate change, agricultural biosecurity, and bioenergy in the United States and Sub-Saharan Africa (SSA). Dr. Boadu is a member of the State Bar of Texas committee on continuing legal education in agricultural law. He has extensive international development experience and has worked with diverse stakeholders including governments, bilateral and multilateral development institutions, voluntary organizations and private sector entities. He is a Diplomacy and Risk Policy Fellow of the American Association for the Advancement of Science (AAAS), and the recipient of several teaching and research awards. He has published widely in law and agricultural economics journals.

Book preview

them.

Chapter 1

What Is Agricultural Law?

Abstract

This chapter introduces the subject matter of agricultural law and the process of seeking redress before a court in sub-Saharan Africa (SSA). The sources of laws in SSA are discussed and some of the problems facing the courts, including court costs, case delays, and access to court are also explored. The complex interaction between customary laws and the received common law from England is also discussed. The law and economics evidence is of a central concept in the dispute resolution process. Cases from several SSA countries are used to illustrate how courts have explained the role of evidence in the dispute resolution process.

Keywords

Agricultural law; sources of law in your country; common law; written law; latent market; civil action; criminal action; court delay; court costs; plaintiff; defendant; evidence; parol evidence

1.1 Introduction

Agricultural law consists of the laws, regulations, decrees, treaties, and institutions (universities, financial and marketing systems, transportation) that govern the agricultural supply chain (production, marketing, and sales). The central focus is agriculture production (Kershen, 2008; Schneider, 2009). The growth of agricultural law in the United States and Europe has been influenced by the intellectual leadership made possible by the integration of agricultural law into the traditional law school curriculum, and by the participation of a knowledgeable industry/practitioner group that strengthens the industry- and client-based applied focus of agricultural law (Schneider, 2009). Some land grant institutions in the United States teach agricultural law at the undergraduate level in the department of agricultural economics. These schools also have lawyers working with the extension services serving farmers and the food industry. There is no law school in sub-Saharan Africa (SSA) with a formal agricultural law curriculum, and only a few lawyers in Africa list their practice areas to include agricultural law.

Law schools in SSA are currently not preparing lawyers to respond adequately to the needs of farmers, agricultural input suppliers, rural and urban communities, food processors, transporters, warehouses, and environmental groups. Consequently, legal and institutional issues related to contracting in agriculture, food safety and standards, agriculture lending, trade, land use, natural resources, and the environment are not being adequately addressed. A formal agricultural law curriculum in SSA law schools, economics, and agricultural economics departments will serve as a catalyst for the growing number of practitioners willing to explore markets for legal services focusing on agriculture and the food industry.

1.2 The Law and Economics Approach

This book introduces a law and economics approach to teaching agricultural law. This is the first application of this approach and is intended to emphasize the interconnectedness of law and economics and also the fact that agricultural law is today being taught in law schools, agricultural economics, and traditional economics departments. Economic analysis of law applies the tools of microeconomic theory to the analysis of legal rules and institutions (Posner, 2007). The Coase theorem is a central concept in law and economics and has spawned an extensive literature on the relationship between law and economics (Coase, 1961).¹ The theorem can be explained with a simple example.² Consider the following:

A Fulani cattle herder is grazing cattle on open land and causing harm to five crop farmers. Each farmer suffers ₤75 worth of damage for total damage of ₤375.

The crop damage can be eliminated in one of two ways:

Install a fence that costs ₤150.

Buy each farmer a cattle trap that costs ₤50 each for a total of ₤250 (5×₤50).

Clearly the efficient solution is to install a screen for ₤150.

Consider the following two situations:

If the farmers are entitled to safe crops, the cattle herder has three choices: (1) destroy the crops and pay damages equal to ₤375; (2) install a fence at cost of ₤150; or (3) buy cattle traps for the farmers costing ₤250. The efficient solution is to install a fence costing ₤150.

If the cattle herder is entitled to graze anywhere, even if crops are destroyed in the process, the farmers have three choices: (1) suffer crop damages equal to ₤375; (2) purchase cattle traps at a cost of ₤250; or (3) install a fence for the cattle herder at a cost of ₤150. Again, the efficient solution is to install a fence costing ₤150 for the cattle herder.

The example shows that the efficient solution does not depend on the initial allocation of entitlements, that is, whether the cattle herder has a right to graze cattle anywhere or the farmers have a right to safe crops. This means, in the absence of factors that restrain the herders and the farmers from negotiating, the parties on their own would negotiate to an efficient outcome. The theory suggests that the main reason we do not observe widespread negotiations is due to the presence of transaction costs. Transaction costs consist of (1) information costs; (2) bargaining costs; and (3) policing (monitoring) costs (Johnson, 2005).³

Parties to a negotiation need information about each other and the subject matter of the negotiation. Obtaining such information could be quite costly. Bargaining is also costly, especially when one party engages in strategic behavior. For example, in a case where one party is entitled to safe crops, the party could engage in a holdout and insist that cattle herders be banned altogether even though the efficient result could be some type of compensation payment. Even after bargaining, one party may cheat. This imposes costs on the good party in terms of monitoring or policing the arrangement. What the Coase theorem teaches is that laws and regulations to promote the evolution of efficient markets should help to reduce the transaction costs so that parties on their own could negotiate to an efficient outcome in interaction with each other. As the reader goes through the decisions rendered by courts it is useful to ask how the courts are issuing decisions that promote, institution-building, justice, and efficiency to help society achieve maximum social benefits through private negotiations and interactions.

1.3 Sources of Law in SSA Common Law Countries

The sources of law in common law countries in SSA are uniformly based on a mixture of English common law and the customary law that existed in the country before of the introduction of English law. The sources of law in SSA common law countries include, the Constitution, laws passed by the legislature or Parliament of the country, customary law, and the common law.⁴ Countries have defined their laws to reflect their diverse historical, ethnic, and religious backgrounds and experiences. For example, the sources of law in Kenya include Indian and Muslim sources given the significant non-African and Muslim groups in the country.⁵ There is significant Roman-Dutch influence in the laws of Lesotho even though South African precedents are only persuasive (Dube). Nigerian sources of law also reflect the diverse cultural and religious background of the country. In addition to Islamic law, certain regions of the country also practice Sharia Law, the principal feature being the introduction of religious based criminal offences, especially on matters of morality and the introduction of punishments sanctioned by the Koran (Dina et al.).

The Ghana Constitution defines the common law as the rules generally known as the common law, the rules generally known as the doctrines of equity and the rules of customary law including those determined by the Superior Court of Judicature.⁶ The law did not completely replace the existing customary law and practices of the colony so long as such law or custom was not repugnant to natural justice, equity or good conscience, nor incompatible either directly or by necessary implication with any enactment of the Colonial Legislature.⁷

Common law countries in SSA are gradually evolving their own common law. For example, a Ghanaian common law⁸ has emerged out of Ghanaian courts’ interpretation of English law in the Ghanaian context. This trend is also observed in other SSA countries. The ability of courts to fashion a common law consistent with market-led growth raises two issues. First, jurisdictions in advanced countries that accepted the common law shared similar cultural and economic backgrounds with England. Countries in SSA, on the other hand, have a fundamentally different culture, and are only recently pursuing a market-led development approach. The customary rules under which individuals in SSA countries organized their affairs before the introduction of British rule may be inadequate to support the modernization of the country. As Professor Seidman points out, excepting problems of land tenure, most of the claims made upon customary law are not claims of development (Seidman, 1968). This is especially true today when the winds of globalization are moving countries towards new law and regulatory governance regimes that defy the institutional set-up of any single country.⁹ One example of this evolving common legal regime is the United Nations Convention on Contracts for the International Sale of Goods (CISG), which establishes a comprehensive code of legal rules governing the formation of contracts for the international sale of goods, the obligations of the buyer and seller, remedies for breach of contract and other aspects of the contract. The Convention entered into force on 1 January 1988.¹⁰ Buscaglia considers the globalization phenomenon as a powerful force in legal transplantation.¹¹

1.4 Written and Unwritten Law

In the common law tradition, decisions rendered by courts become a part of the law. Thus, law in Ghana consists of those made by the Parliament and those decisions made by courts in the country. These decisions by courts are sometimes referred to as judge-made rules of law or precedents. These are laws because in the common law tradition, judges must follow the decisions from previous court rulings if the facts of a present case are the same as the facts that supported a previous ruling.¹²

1.5 Pressures on the Legal System

There is broad agreement that court costs, court delays, access, and complexity are the main challenges facing the court systems in countries in SSA.¹³ The World Bank group has produced research and indices that help in assessing the empirical evidence on the extent to which these challenges impact the economic development goals of countries in SSA. Countries in SSA do poorly in terms of managing court delays, costs, and access compared to other countries around the world.¹⁴

1. The Cost of Using the Legal System and Access to Courts

The cost of using the legal system may be viewed from both demand and supply perspectives. On the demand side, households and firms are unable to use the services of lawyers and the courts due to low household incomes. One legal expert has observed that, in Ghana, there are whole regions where almost everyone qualifies for legal aid: 7 of 10, 8 of 10, and 9 of 10 in the Central and Northern Regions; the Upper East Region, and the Upper West Region respectively (Atuguba, 2007). Kenya’s recent Legal Aid Law states, inter alia, the objects and purposes of this Act are to establish a legal institutional framework to facilitate (a) provision of affordable, accessible, sustainable, credible and accountable legal aid services to indigent persons in Kenya at State expense in accordance with the Constitution (Commission for the Implementation of the Constitution, 2013). The supply of legal services is constrained by both human and financial resources. Courts lack trained librarians and have poor technology infrastructure to support the processing of cases. Library resources are limited and lawyers and judges are unable to produce services at low cost.¹⁵ Though not an exact measure, the cost of enforcing a contract gives some indication of the cost of using the legal system. According to the World Bank, the cost of enforcing a contract is 83.1% of the claim in Zimbabwe, 69.1% in Malawi, and 57.7% in Nigeria. Most countries have percentage costs above 30%. Ghana and Tanzania have lower percentage costs at 23% and 14.3%, respectively (World Bank, 2014).

2. Court Delay

A major problem facing the court system in SSA countries is delay in disposing of cases. Delays in case disposal lead to loss of confidence in using the system and encourage resort to costly non-judicial methods of dispute resolution. The delay problem has the potential to discourage investments and risk-taking, especially since it affects contract enforcement, an important component of a free market system. To put the discussion in perspective, consider the number of days and procedures one has to go through in enforcing a contract in an SSA country. In Singapore, ranked the most friendly country to do business, it takes an average of 150 days and 21 procedures to enforce a contract compared to, for example, 710 days and 38 procedures in Ghana, 611 days and 35 procedures in Zambia, and 509.8 days and 40.2 procedures in Nigeria (World Bank, n.d.).¹⁶

Several factors have combined to produce the backlog or delays in the courts. At one end of the spectrum are institutional rigidities, such as a failure on the part of an attorney to properly file an action and consequently having to refile if the period within which an action may be brought has not expired. In this context, stricter enforcement of court rules of procedure is needed to check unending adjournments and frustrations in using the courts (Kom, 1988). It is also important for investigating agencies to be diligent in investigations to avoid technical problems during trials (Agyemang, 1988). Court delays are also caused by the lack of court technology infrastructure and personnel. Most courts do not have recording equipment so judges have to record proceedings in longhand, a time-consuming process. The courts lack hardware such as typewriters, photocopy machines, telephones, shelf space, and cabinets, and the country’s law libraries are poorly stocked. The effect of the poor infrastructure is that information processing is slow and consequently there are delays in case disposal. The delay problem has not been adequately addressed by policy makers.

3. Jurisprudential Dissonance

A society in which customary laws operate side-by-side with transplanted modern law faces what might best be described as jurisprudential dissonance. Laws governing modern market practices are simply unknown to customary law (Seidman, 1968). In essence, the evolution of laws in SSA to support economic development may be described as a work in progress, whereby the courts are struggling to fashion rules that promote efficient market interaction without sacrificing the rich cultural values that bind participants in the market place.

1.6 Court Process in Sub-Saharan Africa

While there may be slight modifications in procedure in the various SSA countries, civil litigation normally will proceed as follows, using Ghana as an example. Parties have several options for resolving disputes that arise between them. When a dispute arises, one party or both may choose litigation before a court, settle the dispute between them, or engage a third party as an arbitrator or mediator to settle the dispute.

If the parties decide to resolve the issue in court, one of the parties will file a civil action.¹⁷ A civil action is an action brought to enforce, redress, or protect private rights. An example of a civil action is an action to collect a debt or to stop another person from using your land without permission. A criminal action on the other hand is an action brought to establish the guilt or innocence of an individual for violation of a law. The party bringing a civil action is known as the plaintiff and the party against whom an action is brought is known as the defendant. The plaintiff in a civil action is another private individual while the state represented by the Attorney-General is the plaintiff in a criminal action. The penalty in a civil action is usually money damages against the loser, while a person may be imprisoned when found guilty in a criminal action. The constitution of Ghana makes it possible for citizens to participate in the production of justice through service on juries, participation in the public tribunal system, and assessor systems.

1.7 The Law and Economics of Evidence

Evidence has been defined as any species of proof, or probative matter, legally presented at the trial of an issue, by the act of the parties and through the medium of witnesses, records, documents, exhibits, concrete objects, etc. for the purpose of inducing beliefs in the minds of the court or jury as to their contention (Black, 1990). The definition found in most of the common law jurisdictions in Africa is consistent with the general dictionary definition. For example, Uganda’s Evidence Act states, evidence denotes the means by which any alleged matter of fact, the truth of which is submitted to investigation, is proved or disproved and includes statements by accused persons, admissions, judicial notice, presumptions of law, and ocular observation by the court in its judicial capacity."¹⁸ The rules of evidence are often detailed in a statute but sources of evidence are varied and depend on the nature of the issue at hand.¹⁹

The economic analysis of evidence law falls under the broader topic of the economics of procedural rules. Procedural rules in general are intended to maximize efficiency in the administration of justice by minimization of the sum of two types of costs: ‘error costs’ (the social costs generated when a judicial system fails to carry out the allocative or other social functions assigned to it), and the ‘direct costs’ (such as lawyers,’ judges,’ and litigants’ time of operating the legal dispute-resolution machinery. Evidence rules are focused primarily on the fact-finding aspect of the litigation process. One rule of evidence that helps to minimize error costs and direct costs is the commonly invoked parol evidence rule. The rules of evidence in Nigeria are found in the Evidence Act Chapter 112 of the Laws of the Federation of Nigeria 1990.²⁰ Part VI of the Nigeria Act references this rule, which states in part, When any judgement of any court or any other judicial or official proceedings, or any contract, or any grant or other disposition of property has been reduced to the form of a document or series of documents, no evidence may be given of such judgement or proceedings, or of the terms of such contract, grant or disposition of property extents in cases in which secondary evidence is admissible under the provisions hereinbefore contained; nor may the contents of any such document be contradicted, altered, added to or varied by oral evidence.²¹ What the rule means is that once intentions of a party are reduced to writing, no evidence may add, vary, or contradict the written terms. This rule has been uniformly applied in common law countries in SSA. The Zimbabwe Supreme Court case, Sarudzayi Nhundu v (1) Phineas Chivazve Chiota (2) The Registrar of Deeds, the Malawi High Court case, Joseph Chidanti-Malunga v FINTEC Consultants (1st Defendant) & BUA Consulting Engineers (2nd Defendant) (Malawi), and the Uganda case, Akugoba Boda Boda Transport Development Services Ltd. v (1) Sun Auto Company Ltd and (2) Hajji Swaibu Kizito define and apply the parol evidence rule.²² The Quist v Akuaba case (Ghana) (footnote 23) discusses some of the exceptions to the parol evidence rule.

Sarudzayi Nhundu v (1) Phineas Chivazve Chiota; (2) The Registrar of Deeds

Supreme Court of Zimbabwe

Harare, March 5, 2007 & October 1, 2007

Cheda JA, Ziyambi JA & Malaba JA

ZIYAMBI JA

At the end of the hearing we dismissed this appeal with costs. The following are our reasons for so doing. The first respondent, to whom I shall refer as the respondent, and the appellant concluded an agreement of sale in respect of property known as 139 Rietfontein, Rietfontein Township, Harare (the property). Clause 2 of the agreement provided that the purchase price for the property was Z$28 billion and Clause 11 provided that:

The parties acknowledge that this document constitutes the entire agreement between them and that no other terms, conditions, stipulations, warranties or representations whatsoever have been made by them or their agents other than those set out in this agreement and the parties agree that no variation of this agreement shall be binding on them unless first reduced to writing and signed by both parties.

The agreement was signed by the parties on 25 January 2006 at the offices of the Central African Building Society (CABS). Immediately upon signature by the parties, CABS gave instructions to its attorneys to attend to the registration of a bond which was to facilitate the registration of transfer and payment of the purchase price to the appellant.

On 30 January 2006, the appellant wrote a letter to CABS advising that she had cancelled the agreement of sale. The letter reads in relevant part:

I write to inform you that I have cancelled sale of my house (Known as stand No 139 Rietfontein Township) to Mr Phineas Chivazve Chiota. I have informed him in writing. Cancelled is agreement of sale dated 25 January 2006. Thus done at your Platinum Office. Attached is a copy of my letter to him.

A similar letter was written to the respondent. It read:

I hereby write to inform you that I have cancelled our agreement of sale of my house dated 25 January 2006. I have sent a copy of this letter to CABS. Also attached is a copy of a letter which I wrote to CABS.

The respondent was of the view that there was no basis for the cancellation since he had committed no breach of the agreement nor had any breach been cited in the letter. He therefore refused to accept the cancellation and sought redress in the High Court by way of an interim interdict restraining the appellant from disposing of the property to a third party. He obtained a provisional order granting the interim interdict sought and requiring the appellant to show cause why a final order compelling the transfer should not be issued in his favour.

The appellant opposed the confirmation of the provisional order. In her opposing affidavit, she claimed that the respondent had breached a condition precedent to the agreement, namely, that the respondent, who was then Deputy Minister of Industry and International Trade, orally agreed to make available to her two licences: one for the buying and selling of sugar; and the other for buying and selling of petroleum. For this reason, so she averred, the purchase price was pegged at the low price of 28 billion dollars as she would be able to trade with those licences and obtain, from so doing, such profits as would offset the low price at which the house was being sold. The agreement of sale, she stated, was reluctantly signed at CABS because the respondent had not, at the time of signature thereof, honoured the verbal agreement by issuing the two licences to her. She did not give a date by which the alleged oral agreement was to be performed.

At the hearing for confirmation of the provisional order, the issues for determination by the trial court were whether the appellant had established that there was an oral agreement amounting to a condition precedent governing the written agreement signed by the parties and if so was the respondent in breach of that agreement; and, whether the cancellation by the appellant was valid. The learned Judge decided the issues in favour of the respondent and granted the final order against which the appellant now appeals to this Court.

The appellant submitted in this Court that the written contract is not a true representation of what the parties agreed and therefore evidence ought to be admitted to establish the real and genuine agreement, which is, that the sale was subject to the oral condition precedent. It was contended on behalf of the respondent that the entire agreement between the parties is contained in the written contract and that the parol evidence rule prohibits the leading of extrinsic evidence to prove the existence of the alleged oral condition precedent.

The parol evidence rule was stated by WATERMEYER JA in Union Government v Vianini Ferro-Concrete Pipes (Pvt) Ltd [1941] AD 43 at P 47, where he said:

Now this Court has accepted the rule that when a contract has been reduced to writing, the writing is, in general, regarded as the exclusive memorial of the transaction and in a suit between the parties no evidence to prove its terms may be given save the document or secondary evidence of its contents, nor may the contents of such document be contradicted, altered, added to or varied by parole evidence.

See also The law of Contract in South Africa 3 ed by R H Christie at p 212.

However, the learned JUDGE OF APPEAL went on to say further at the same page:

Whatever may be the correct view as to the precise nature of the rules, it is clear that they do not prevent a party from setting up the case that the contract is not a presently enforceable contract inasmuch as it is conditional upon the happening of some event which has not occurred.

Thus the parol evidence rule does not preclude extrinsic evidence that the contract is conditional upon the happening of an event which has not occurred. However, if the object of leading such extrinsic evidence is not only to prove the alleged oral condition precedent but to incorporate it into the agreement of sale and then to enforce the said condition by relying on the respondent’s failure to comply therewith then the extrinsic evidence would be inadmissible. See Philmatt (Pvt) Ltd v Masselbank Development CC [1996] (2) SA 15 (A) at p 23. See also Johnston v Leal [1980] (3) SA 927 (A) at 943 where CORBETT JA remarked:

Dealing first with the integration rule, it is clear to me that the aim and effect of this rule is to prevent a party to a contract which has been integrated into a single and complete written memorial from seeking to contradict, add to or modify the writing by reference to extrinsic evidence and in that way to redefine the terms of the contract. The object of the party seeking to adduce such extrinsic evidence is usually to enforce the contract as redefined or, at any rate, to rely upon the contractual force of the additional or varied terms, as established by the extrinsic evidence….

And later on the same page:

To sum up, therefore, the integration rule prevents a party from altering, by the production of extrinsic evidence, the recorded terms of an integrated contract in order to rely upon the contract as altered.

The appellant herein seeks, firstly, to prove that, contrary to the provisions of clause 11 supra, there was a condition precedent governing the contract and, secondly, to enforce that condition so proved. In so doing, the appellant was seeking to redefine the terms of the contract. The parol evidence rule precludes her from leading extrinsic evidence with that objective. See also Philmatt (Pvt) Ltd v Masselbank Development supra.

In any event, even assuming for an instant that the court had been persuaded to allow parol evidence of the oral condition precedent, the evidence on record does not support the existence of such an oral agreement as the learned Judge correctly found. It was common cause at the hearing that the appellant’s friend and confidante, Biata Nyamupinga (Biata), was actively involved in the negotiations preceding the conclusion and signature of the agreement. Biata averred in her supporting affidavit that no such condition precedent was ever discussed during the negotiations or at any time before the signature of the agreement by the parties. She relates the events following the offer of 28 billion dollars by the first respondent for the property as follows:

The applicant [the respondent] and [the appellant] shook hands and hugged each other after signing the agreement. All the dealings between the applicant [the respondent] and [the appellant] involved me as I was in essence the link between the two. At no stage during the negotiations for the sale of this property was there any discussion of the licenses that [the appellant] has referred to. This is the first time that I have heard of these licences. Such an issue never formed the basis of the agreement. The [appellant] was selling because of mounting debts. She owed me and several other people in town huge sums of money. The purchase price would have enabled her to pay off all debts and then acquire a smaller property.

Further, the respondent averred, and this was not contradicted, that neither of the two licences allegedly offered by him to the appellant fell within the mandate of his Ministry. In any event, since the alleged condition precedent had not been fulfilled there is no reason given in the papers as to why the appellant signed the agreement of sale and why, when she later cancelled the agreement, no reason was given for such cancellation.

In view of the above, we were satisfied that the judgment of the court a quo was unassailable and that the appeal was accordingly devoid of merit.

Joseph Chidanti-Malunga v FINTEC Consultants (1st Defendant) & BUA Consulting Engineers (2nd Defendant)

High Court of Malawi, Blantyre Registry

Commercial Case No. 6 of 2008 (June 25th 2008)

Hon. Justice Dr. M.C. Mtambo

Facts

FINTEC is an Egyptian firm that won an irrigation contract with the Government of Malawi. FINTEC was working with a local consulting firm, BUA, that in turn had hired the Plaintiff Malunga. All Egyptian personnel fell under the first Defendant while all Malawian personnel fell under the second Defendant. When FINTEC was ready to start the project, the plaintiff was out of the country and was removed from the contract. Plaintiff has brought this action claiming that there is a collateral contract between him and BUA to the effect that he would serve as Site/Resident Engineer. Plaintiff has filed this action for breach of contract and asking for damages to the tune of US$62,370.00.

The court addressed the following several issues including below on parol evidence:

i. Whether the Plaintiff can adduce parol evidence to show that the agreement for the provision of irrigation services was infact between the Malawi Government and both Defendants when the agreement clearly states that it is between the Malawi Government and the first Defendant.

Parol evidence

Parol evidence will not be allowed to add or alter the terms of a contract. This includes an allegation that some other party other than the party in fact appearing in the contract ought to have been the actual party. In the Zeyaur Rahman Hashmi v DHL Express case, the Plaintiff attempted to adduce parol evidence to show that even though it was Finance Bank Limited that appeared to be a party to the contract, the actual party was him only that he was a top official at Finance Bank Limited. Kapanda, J stated:

The question then becomes whether oral evidence can be adduced to add to the express written stipulations in a contract. Put differently, can the Plaintiff be allowed to adduce oral evidence to dispute the fact that the circumstances appearing in the express written contract herein were different from what they in fact prima- facie appear to be. Indeed, can the Plaintiff at this late lay evidence that the parties to the contract were not Finance Bank of Malawi Limited and the Defendant as is clearly shown on PF1 but that it was himself and the Defendant.

The learned judge concluded:

It is obvious from the foregoing authorities that oral or extrinsic evidence cannot be tendered to vary or add to the terms of an express contract. The contract hence remains as it is expressly appearing i.e. that it is between Finance Bank of Malawi Limited and the Defendant.

And in K.S. Kamwendo v Bata Shoe Company Malawi Limited, Civil Cause Number 2380 of 2003, Mkandawire, J stated:

Rules on documentary evidence are very clear that a document speaks for itself. One cannot introduce parol evidence to contradict a document.

As such, learned Counsel for the Defendant argues that as the main contract the subject matter of this action clearly spelt that the parties thereto are the Malawi Government and the first Defendant, the Plaintiff cannot bring parol evidence to show that in fact the second Defendant was also a party to the contract.

Ruling

The parties to the main contract are clearly stated to be the Malawi Government and the first Defendant. The Plaintiff cannot therefore bring extrinsic evidence to show otherwise that it is in fact between the Malawi Government and both Defendants.

I accordingly dismiss the Plaintiff’s claim.

Akugoba Boda Boda Transport Development Services Ltd v Sun Auto Company Ltd v Hajji Swaibu Kizito

The Republic of Uganda

In the High Court of Uganda at Kampala

(Commercial Court Division)

HCT-00-CC-CS-0501-2006 AND HCT-00-CC-CS-0759-2006

The Honorable Mr. Justice Yorokamu Bamwine

Facts

Akugoba Boda Boda Transport Development Services Ltd, herein after conveniently referred to as ‘Akugoba’ where the context allows, is a Limited Liability company. It sued the defendant, Sun Auto Company Ltd, also a Limited liability company, for specific performance by way of delivery of registration number plates for 20 motorcycles, recovery of a certificate of title for land, recovery of one motor vehicle, general damages, interest and costs of the suit.

In its written statement of defence, Sun Auto Company denied dealing with Akugoba. It claimed that it had dealt with a one Hajji Swaibu Kizito in his individual capacity, which Hajji Kizito executed the sale agreement and offered his own property as security for the debt.

As the hearing came to a close, it transpired that Sun Auto Company had indeed instituted a separate suit against Hajji Swaibu Kizito which suit was founded on the same facts. In that suit, HCCS No. 759/2006, Sun Auto Company claims a sum of Shs.26,160,000= being the balance due to it out of the sale of 20 motorcycles, the subject matter also in HCCS No. 501 of 2006. In order to save Court’s time and because the issues in both cases revolve around who the correct parties to the contract were, both counsel proposed, and Court accepted the proposal, that the two suits be consolidated. Hence this judgment.

No point of agreement was generated at the Scheduling Conference. Three issues were framed for Court’s determination in HCCS No. 501/2006:

1. Whether the plaintiff and the defendant entered into any contract.

2. The terms of the contract, if any.

3. Whether the plaintiff is entitled to the reliefs sought.

I will answer the same in the context of both suits.

Opinion

First, whether the plaintiff (AKUGOBA) and the defendant (Sun Auto Company Ltd) entered into any contract.

A contract is simply an agreement enforceable at law. An essential feature of a contract is a promise by one party to another to do or forbear from doing certain specified acts. One party has to make an offer to the other, who in turn must accept the offer, thus formulating an agreement. The agreement may be oral or written. Where complaints of breach are raised, as herein, and it so happens that the parties had reduced their agreement to writing, Courts resort to the said written agreements as an embodiment of the conditions and terms of the contract. And this brings me now to the parol evidence rule.

The parol evidence rule is to the effect that evidence cannot be admitted (or that even if admitted, it cannot be used) to add to, vary or contradict a written instrument. In relation to written contracts, the rule means that where a contract has been reduced to writing, neither party, can rely on evidence of terms alleged to have been agreed, which is extrinsic document, i.e. not contained in it. This rule is fundamental in interpretation of contracts.

In the instant case, the basis of the relationship between the parties is a Sale Agreement, D. Exh. 1. The opening paragraph runs as follows:

On behalf of M/S Sun Auto Company, I have transacted (sold) the above mentioned motor vehicle/cycle to Mr/Mrs/Miss Hajji Swaibu Kizito c/o Akugoba boda boda Transport Ltd.

In law a company and its Managing Director are totally different and distinct persons. It is settled law that a company is a distinct legal entity, separate from such persons as may be members of it, and having legal rights and duties. It may enter into contracts in its own right, own property, pay taxes, employ people and be liable for torts and crimes. These are fundamental attributes of corporate personality recognized long ago in Solomon v Solomon & Co. Ltd [1897] AC 22.

From the agreements, the company, Akugoba, was used merely as the address of Hajji Swaibu Kizito. As such, the presumption is that it had no interest in the transaction. It cannot incur liability under it or take advantage of it. The reason is simple: no stranger to the consideration can take advantage of a contract although made for his benefit. Only a person who is a party to the contract can sue on it.

At the hearing, DW1 Mulinde testified that the person his company transacted business with was Hajji Swaibu Kizito. He did not know him or his company before the incident. He asked for motorcycles on credit and he gave him 20 of them. As security for the payment, Kizito surrendered to the seller his own certificate of title in respect of land described as Block 205 Plot 78 Kyaggwe. On top of that he surrendered to the seller his own vehicle, a Pajero Reg. No. UAF 238 D. The two documents are indeed in the names of Hajji Swaibu Kizito.

From the evidence, Court is satisfied that the transaction was between Sun Auto Company Ltd and Hajji Swaibu Kizito. Akugoba was used as Kizito’s contact address. In all these circumstances, Court makes a finding that the contract was between those two persons, Sun Auto Company Ltd and Hajji Swaibu Kizito.

I now turn to the terms of the contract.

Both parties agree that the contract document is what was tendered in evidence, D. Exh.1. It is a standard form agreement, with terms and conditions printed in clear green ink. They are:

1. The buyer shall gain full ownership after paying the outstanding balance and the interest thereof B (iii) and meet the transfer costs in his names.

2. In the event of not fulfilling the outstanding balance the company shall repossess the above mentioned vehicle/cycle i.e. after the elapse of the agreed period and sell it to off set the balance and interest; plus the costs incurred in recovery and the balance shall be given to the buyer.

3. In case of motor cars, ……………………………………………………….."

The balance stated in the document is Shs.31, 600,000; the date of delivery is 18/7/2005; and the agreed period 5 months only. It is argued for the plaintiff in HCCS No. 501/2006 that the terms were already written, favouring the defendant company. For as long as the terms were clear, not ambiguous, and were duly discussed, I do not see any problem with them to write home about.

It is further argued that the parties agreed that the defendant would deliver the number plates of the motor cycles within a period of 14 days. No such promise appears in the Sale Agreement. It is trite that where the contract is in writing, its terms can be ascertained by means of documentary evidence. Where they are clear, a Court must give them effect. It is therefore not the duty of the Court to re-write an expressly stated contract for the parties. As long as both parties address themselves to the terms of the contract and agree to be bound by them, the duty of the Court is to construe the agreement as it was when it was executed.

From the evidence of DW1 Mulinde and the Sale Agreement itself, the parties agreed that the buyer would gain full ownership of the cycles after paying the outstanding balance. Evidence about the purported giving out of the number plates within 14 days is extrinsic document. It is inadmissible, and even if admitted, it cannot be used to add to, vary or contradict a written instrument, D. Exh. 1.

I now turn to remedies.

From the evidence of DW1 Mulinde, which I found truthful, after the negotiations, Hajji Swaibu Kizito agreed to take the motor cycles on credit. DW1 agreed. Hajji Kizito issued his company’s post-dated cheques to the seller and on top of the cheques pledged his own land and vehicle as security for payment. The goods were specific, ascertained and in a deliverable state. They were for a stated price.

Section 19 of the Sale of Goods Act provides that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery or both are postponed. This is subject to the intention of the parties. In view of this Court’s finding that the agreement of the parties was that the buyer gains full ownership after paying the outstanding balance, their intention was that property in them would not pass till then. In cases of this nature, certain factors must be considered before damages can be calculated. One of these factors is the role of the injured party following the breach: he is expected to do what he can to look after his own interest. He must in other words mitigate his loss.

From the evidence, while Hajji Kizito claims that he had agreed with Mulinde that number plates would be given to him within 14 days, which he didn’t, he (Kizito) went ahead and in turn sold them to third parties without the said number plates. The unpaid for cycles could not therefore be recovered from Hajji Kizito after the contract period of 5 months. In my view, by giving Sun Auto Company Ltd the post-dated cheques which in the end bounced and by surrendering to the company his own personal property (the land title and vehicle), Hajji Kizito committed himself to pay for the cycles on demand. The company has prayed in HCCS No. 759/2006 that it be paid a sum of Shs.26, 160,000= being the balance on the purchase price. In his evidence, DW1 Mulinde admitted receipt of some payment. He gave the outstanding balance as Shs.24, 600,000= although, as stated above, the amount claimed in HCCS No. 759/2006 is Shs.26, 160,000=. PW1 Nabisalu put the figure at Shs.22, 750,000= and Hajji Kizito himself at Shs.24, 000,000=. I take the outstanding amount to be the figure admitted by Hajji Kizito. Accordingly, the sum of Shs.24, 000,000= is decreed to M/S Sun Auto Company Ltd as against Hajji Swaibu Kizito. The decretal sum shall attract interest at the commercial rate of 25% per annum from the date of judgment till payment in full. Given that Hajji Swaibu Kizito has himself parted with custody of the suit cycles, M/S Sun Auto Company Ltd shall maintain custody of Hajji Swaibu Kizito’s certificate of title and the vehicle pending payment. In default, the same shall be sold in execution to recover the amount due and the balance, if any, shall be given to the judgment-debtor.

Ruling

In the final result, judgment is entered for the plaintiff in HCCS No. 0759-2006 against the defendant therein on the terms stated herein above with costs as prayed. HCCS No. 0501-2006 is dismissed with no order as to costs. Upon being paid the decretal amount and costs, M/S Sun Auto Company Ltd shall release the 20 number plates to the judgment debtor.

I so order.

Notes

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¹For an excellent review of the history of Law and Economics, see Kornhauser (2001).

²This example is adapted from Mitchell Polinski (1983).

³Johnson also says: The costs other than the money price that are incurred in trading goods or services. Before a particular mutually beneficial trade can take place, at least one party must figure out that there may be someone with whom such a trade is potentially possible, search out one or more such possible trade partners, inform him/them of the opportunity, and negotiate the terms of the exchange. All of these activities involve opportunity costs in terms of time, energy and money. After a trade has been agreed upon, there may also be significant costs involved in monitoring or policing the other party to make sure he is honoring the terms of the agreement (and, if he is not, to take appropriate legal or other actions to make him do so). These are the main sorts of transaction costs, then: search and information costs, bargaining and decision costs, policing and enforcement costs. …Indeed, many otherwise mutually advantageous trades do not take place because of the very high transaction costs that would be involved.

⁴For example, in Ghana, According to Article 11 of the 1992 Constitution of Ghana, Law in Ghana consists of: (1) the Constitution; (2) Parliamentary enactments or legislation; (3) Orders, Rules, and Regulations; (4) the existing law; and (5) the common law.

⁵In Kenya, Section 3 of the Judicature Act (Chapter 8 Laws of Kenya), enumerates the laws of Kenya to include: (1) The Constitution; (2) Acts of Parliament; (3) Specific Acts of Parliament of the United Kingdom; (4) Certain Acts of Parliament of India; (5) English Statutes of General Application in Force in England 12th August 1897; (6) The Substance of Common Law and Doctrines of Equity; (7) African Customary Law; (8) Islamic Law; (9) International Instruments (not listed in the Judicature Act). See Ojienda and Aloo (2006).

⁶Ghana, formerly the Gold Coast, became a Crown Colony of the British in 1874. The basic law was established under the Gold Coast Supreme Court Ordinance of 1876, the common law, the doctrine of equity, and the statutes of general application which were in force in England on the date when the Colony obtained a local legislature, that is to say, 24th July 1874, shall be in force within the jurisdiction of this court. The Reception date for English Law in Tanzania is July 22, 1920. See Nyanduga and Manning (2006). The Reception date for Kenya is August 12, 1897. See Ojienda and Aloo (2006).

⁷Courts Ordinance, 1876, § 19 (Gold Coast).

⁸The suggestion of an emerging ‘Ghanaian common law’ is valid. As Wabwile explains, Section 17(1) of the Interpretation Act 1960 (Ghana) defines the common law as follows: The common law as comprised in the laws of Ghana consists in addition to the rules of law generally known as the common law, of customary law included in the common law under any enactment providing for the assimilation of such rules of customary law as are suitable for general application. This definition has national elements of native customary law. The courts of Ghana thus have a mandate to assimilate the received common law and blend it with the customs of the local communities. In Wabwile (2003), Wabwile compares the Ghana provisions with Kenya’s Interpretation and General Provisions Act 1956 (Kenya) chapter 2, and writes, notice that in this sense, reference is specifically made to English Law. It is not therefore entirely accurate to say that Kenyan courts have the competence to develop a ‘Kenyan common law,’" p. 79.

⁹If customary law is deficient in the area of commercial and business law, it is completely empty in the area of modern public law. There simply is not even the germ of such institutions as planning, state enterprises, import control, central banking, exchange controls, limitations on the repatriation of profits, income taxation, trade unions and labor law, and a host of others. To search the interstices of customary law for aid in formulating the response to questions posed by the demand for institutions of this sort is to search in vain. See Hutchison (1968), p. 32–33.

¹⁰Adopted 11 April 1980.

¹¹See Buscaglia, at 572, In order to enhance trade openness abroad and at the same time attract foreign investment to their domestic markets, they [developing countries] provide a more stable environment in which to do business. Therefore, competitive pressures arise on LDCs to harmonize their legal systems with those in countries exporting capital by incorporating foreign legal frameworks that developed-country firms perceive to enhance their productive efficiency.

¹²See also Chuks Maduka (2010): In Nigeria legal system judicial precedent is a decision establishing a principle of law that any other judicial body must or may follow when called upon to decide a case with similar issues. Also, "Zambia is a common law jurisdiction and a former British colony. It has adopted many English court practices. These practices include the doctrines of precedent and stare decisis, (Comfort Mulenga, n.d.). In Uganda, The Supreme Court is the highest Court in Uganda, and is the final court of Appeal. The Supreme Court only decides cases on appeal from lower courts save for presidential election petitions, where the Supreme Court has original jurisdiction, which means that any aggrieved candidate in a presidential election has to petition the Supreme Court directly. The decisions of the Supreme Court form precedents which all lower courts are required to follow (Brenda Mahoro, 2006).

¹³Amadi writes of the Nigerian court system, Obstacles to access to justice in Nigerian civil justice system are challenging. These obstacles include: delays, cost of litigation, complex legal rules and procedure, lack of awareness and legal knowledge. The average duration of a trial, from the time of issue of summons to the point in time when a final judgment is delivered by the court is eight years, in many instances, beyond ten years. See Amadi (2009). For similar observations about other common law countries in SSA, see UN Economic Commission for Africa (2003).

¹⁴The World Bank Group’s The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level. One of the measures is Enforcing contracts, which deals with procedures, time, and cost to resolve a commercial dispute. In the 2010 edition of the publication, the law enforcement index was based on the process used by litigants and courts to evict a tenant for non-payment of rent and to collect a bounced check. Of the 183 countries ranked in the publication, Ghana ranked highest (47) among the SSA common law countries. Most SSA countries were near the lower one-third of countries – Botswana (79); Zambia (87); Kenya (126); Uganda (116); Nigeria (94); Malawi (142); Sierra Leone (144); and Zimbabwe (78). See International Finance Corporation (IFC) (2009). The Doing Business website contains extensive literature on the theory and empirical approaches to measuring the challenges facing countries in SSA.

¹⁵For details of the challenges facing governments in sub-Saharan Africa in expanding access to courts and dealing with financial constraints, see, United Nations Office for Drugs and Crime (Vienna) (2011).

¹⁶Other countries in days and procedures are Sierra Leone (515, 39); Uganda (490, 38); Tanzania (515, 38); Gambia (407, 33); Zimbabwe (410, 38). Botswana has the best environment in SSA with 62.5 days (lower than Singapore) and 28 procedures.

¹⁷From an economist’s perspective, a party will file an action if the amount in controversy multiplied by the probability of winning is greater than the cost. This is an efficiency rule.

¹⁸Government of Uganda, Evidence Act 1909 (Cap 6). See also Chapter 6 The Evidence Act of Tanzania, [G.N. No. 225 of 1967, ‘evidence’ denotes the means by which an alleged matter of fact, the truth of which if submitted to investigation, is proved or disproved; and without prejudice to the preceding generality, includes statements and admissions by accused persons; ‘fact’ includes – (a) anything, state of things, or relation of things, capable of being perceived by the senses; (b) any mental condition of which any person is conscious.

¹⁹See, for example, South Africa’s evidence note, There is no all-embracing statute governing the South African law of evidence: Various statutes govern various aspects of it, but the common law is the main source. The Constitution also features prominently. All types of legal procedure look to the law of evidence to govern which facts they may receive, and how: civil and criminal trials, inquests, extraditions, commissions of inquiry, etc. See Note 1.

²⁰For an excellent discussion of how technology is changing evidence rules in sub-Saharan African countries, see Proshare (2012). See also, in the case of Kenya, With increased computerization and technology as well as the rise of the digital office, courts have been forced to allow for the admittance of digital evidence, Mputhia (2008). The importance of the information age on the law of evidence is succinctly stated in The Republic of South Africa’s Electronic Communications and Transactions Act, 2002 (No. 25 of 2002), The objects of this Act are to enable and facilitate electronic Communications and transactions in the public interest, and for that purpose to – (a) recognize the importance of the information economy for the economic and social prosperity of the Republic (Parliament of South Africa, 2002).

²¹Evidence Act, Laws of the Federation of Nigeria, 1990, Chapter 112, Section VI, 132 (1).

²²K. Michael Quist v Akuaba Estates Limited, High Court of Justice (Commercial Division), Accra, Ghana Suit No. BDC/93/06, July 9, 2007, And yet another exception to the parol evidence rule is that in addition to express verbal incorporation, terms may be incorporated by the conduct of the parties. Such conduct may consist in one party drawing to the attention of the other, the terms on which he is willing to contract before the contract is concluded; or it may be inferred from a previous course of dealing between the parties or from their common understanding.

Questions

1. What is the relevance of agricultural law in a developing country?

2. What are the main sources of law in your country? What changes in these sources do you foresee?

3. What is the difference between written and unwritten law?

4. What is the difference between a civil action and a criminal action?

5. What is evidence? Under what circumstances may a court exclude the introduction of evidence in a case?

6. Define maximizing efficiency.

7. What is a latent market?

8. What can be done to alleviate pressures on the legal system in sub-Saharan Africa? Explain.

9. Why does it make sense for decisions of previous court rulings to be upheld if the facts presented in a new case are the same?

Problems

1. Conflict between livestock owners and crop growers is common in sub-Saharan African countries. What ideas from the Coase theorem may be applied to resolve these conflicts? What role may government and private entities play in finding a solution to these conflicts?

2. It has been suggested in this book that there exists a latent market for legal services in sub-Saharan Africa. In what ways may the modern agricultural lawyer take advantage of this latent market? What role if any does government have to play in exploiting this market? What opportunities are made available to economists and lawyers to effectively grow this market?

References

1. Agyemang JK. Delays in the courts. Ghana Bar Bull. 1988;1(1):20–23.

2. Amadi, J., 2009. Enhancing Access to Justice in Nigeria with Judicial Case Management: An Evolving Norm in Common Law Countries. Center for African Law and Development, SSRN. <http://ssrn.com/abstract=1366943> (accessed 05.09.10).

3. Atuguba, R.A., Dr. 2007. Legal aid in Africa: conceptual and practical peculiarities of legal aid in Africa and where should we be going. In: Paper Presented at the Regional Conference on Legal Aid and Access to Justice in West Africa organized by the Open Society Initiative for West Africa, 1–3 April 2007, M-Plaza.

4. Black HC. Black’s Law Dictionary sixth ed. St Paul, Minnesota, USA: West Publishing Company; 1990.

5. Buscaglia E. Law and economics of development. In: Bouckaert B, De Geest G, eds. Encyclopedia of Law and Economics. Washington University in St. Louis, USA: Edward Elgar Publishing; 1999.

6. Chuks Maduka, A. 2010. Understanding the Concept of Judicial Precedent and the Doctrine of Stare Decisis Under the Nigerian Legal System. <http://nigerialaw.blogspot.com/2010/08/understanding-concept-of-judicial_20.html> (accessed 10.09.14).

7. Coase R. The problem of social cost. J Law Econ. 1961;3:1.

8. Comfort Mulenga, n.d. Judicial Precedent in Zambia. Institutional Depository, University of Zambia. <http://dspace.unza.zm:8080/xmlui/handle/123456789/2818> (accessed 10.09.14).

9. Commission for the Implementation of the Constitution, 2013. The Legal Aid Bill.

10. Dina, Y., Akintayo, J., Ekundayo, F. Guide to Nigerian Legal Information, February 2005. <http://www.nyulawglobal.org/globalex/nigeria.htm#_LEGAL_SYSTEM> (accessed 02.12.16).

11. Dube, B.A. The Law and Legal Research in Lesotho. February 2008. <http://www.nyulawglobal.org/globalex/lesotho.htm> (accessed 02.12.16).

12. Hutchison TW, ed. Africa and Law: Developing Legal Systems in African Commonwealth Nations. Madison, Wisconsin: The University of Wisconsin Press; 1968.

13. International Finance Corporation (IFC), 2009. Doing Business: Measuring Business Regulations. <http://www.doingbusiness.org/economyrankings/>.

14. Johnson, P.M., 2005. A Glossary of Political Economy Terms. <http://www.auburn.edu/~johnspm/gloss/transaction_costs> (accessed 21.03.15).

15. Kenya Law Reports, 2007. Laws of Kenya: The Judicature Act. National Council for Law Reporting, Kenya, Africa. <http://www.kenyalaw.org/Downloads/GreyBook/3.%20Judicature%20Act.pdf>.

16. Kershen D. What is agricultural law? Proposing production agriculture as the core. Agric Law Update. 2008;25.

17. Kom ED. Delays in the courts. Ghana Bar Bull. 1988;1(1):20–23.

18. Kornhauser, L., 2001. The economic analysis of law. Stanford Encyclopedia of Philosophy. <http://plato.stanford.edu/entries/legal-econanalysis/> (accessed 26.02.10).

19. Mahoro, B., 2006. Uganda’s Legal System and Legal Sector, Global Lex. <http://www.nyulawglobal.org/globalex/uganda.htm>.

20. Mitchell Polinski A. An Introduction to Law and Economics Canada: Little, Brown & Company; 1983.

21. Mputhia, C. 2008. Kenya: When Digital Evidence Is Admissible in Court. Business Daily (Nairobi, 24 June 2008. <http://allafrica.com/stories/200806241212.html>.

22. Nyanduga, B.T., Manning, C. Guide to Tanzanian Legal System and Legal Research. November 2006. <http://www.nyulawglobal.org/globalex/tanzania.htm> (accessed 02.12.16).

23. Ojienda, T., Aloo, L.O., 2006. Researching Kenyan Law. GLOBALEX. <http://www.nyulawglobal.org/globalex/Kenya.htm#_Sources_of_Kenyan_Law>.

24. Parliament of South Africa, 2002. Electronic Communications and Transactions Act, 2002. <http://www.internet.org.za/ect_act.html>.

25. Posner RA. Economic Analysis of Law seventh ed. Aspen Publishers 2007.

26. Proshare, 2012. Legal Alert – May 2012 – Admissibility of Electronic Evidence under Nigeria’s Evidence Act 2011, Chapter 112, Laws of the Federation of Nigeria. <http://www.proshareng.com/articles/2437/Legal-Alert--May-2012--Admissibility-of-Electronic-Evidence>.

27. Schneider, S.A., 2009. What is agriculture law? Paper Presented at the Association of American Law Schools 2009 Annual Meeting (Agricultural Law Section Program, January 6–10, 2009).

28. Seidman RB. Law and economic development in independent, English-speaking, sub-Saharan Africa. In: Hutchison TW, ed. Africa and Law: Developing Legal Systems in African Commonwealth Nations. Madison, Wisconsin: The University of Wisconsin Press; 1968.

29. UN Economic Commission for Africa. Judicial Reform for Improving Governance in Anglophone Africa A Distance Learning Program for Ethiopia, Ghana, Kenya, Nigeria, Tanzania and Uganda October–November, 2003. <http://www.uneca.org/itca/governance/Documents/Judicial_Reform_for_Good_Governance_tanzania.pdf>.

30. United Nations Office for Drugs and Crime (Vienna). Access to Legal Aid in Criminal Justice Systems in Africa: Survey Report, 2011. Viewed online on 10.13.14. at <http://www.unodc.org/pdf/criminal_justice/Survey_Report_on_Access_to_Legal_Aid_in_Africa.pdf>.

31. Wabwile MN. The place of English law in Kenya. Oxford University Commonwealth Law J. 2003;3:79 1 (note 91).

32. World Bank (n.d.). Doing Business 2015: Going Beyond Efficiency (Country Tables) (published October 29, 2014), viewed at <http://www.doingbusiness.org/reports/global-reports/~/media/GIAWB/Doing%20Business/Documents/Annual-Reports/English/DB15-Chapters/DB15-Country-Tables.pdf> (accessed 18.03.15).

Chapter 2

Contracts

Abstract

Contracts are important to agricultural development in sub-Saharan Africa. Lawyers and economists need to understand basic contract principles to assist stakeholders in the agriculture and agribusiness value chains, including input (seed, fertilizer, equipment) and credit markets, forward contracting and proper contract specification so that resources move to their most-valued uses. Basic elements of contract formation include a meeting of the minds by the parties, competent parties, proper subject matter, offer, acceptance, and consideration. The Coase theorem and the significance of transaction costs in contract formation are discussed. Excuses for nonperformance of a contract, and remedies such as the determination of specific and general damages are also discussed. The use of the principle of balance of probabilities in resolving contract disputes, and the importance of reducing parties’ agreement to writing under the statute of frauds are also discussed.

Keywords

Contract; competent parties; proper subject matter; offer; acceptance; consideration; Statute of Frauds; parol evidence rule; impossibility of performance; frustration of purpose; damages; special and general damages; liquidated damages; specific performance; rescission; Sale of Goods Act, common law contract; meeting of the minds

2.1 The Law and Economics of Agricultural Contracts

A contract has been defined as a legally binding exchange of promises or agreement between parties that the law will enforce (USLaw.Com). There must be a meeting of the minds. Contract law is a classic example of the framework