BUSINESS AND MANAGEMENT

BBA 125: BUSINESS LAW

Date: 15th May, 2023 Time: ………………………

Time allowed: ……….
INSTRUCTIONS TO CANDIDATES
1. Attempt ALL Questions
2. Read each question carefully before you answer.
3. Apportion your time according to the marks allocated for the question.
4. Number the answers to the questions clearly before answering.
5. Upload of Answers should be word format “NOT” PDF

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ANSWER ALL QUESTIONS
Q.1.
“Ideally, everyone is ought to know what the law is and why the law is an important aspect of
our life and the business at large” Do you agree with the statement? Give reasons to support your
answer. (12 marks)
Law is those rules and principles that governs and regulates social conduct and the observance of
which can be enforced in courts. It operates the actions of persons in respect to one another and
in respect to the entire social group or society.
Law is that;
i. Which establishes uniformity of conduct
ii. Seeks to achieve an ethical purpose
iii. Law expresses social solidarity
Law comprises the rules which protect interest of individual or groups.
Three meaning of law:

1. Law is legal order that is the regime of adjusting relation and ordering conduct by the
systematic application of force of organized political society.
2. The whole body of legal principle which obtain a political organized society.
3. It is used to mean all official control in a politically organized society.
The law is important in our lives and business aspects in the following ways;
Importance of law in our lives
(1) Defending us from evil
The first and most basic function of law is to defend us from evil – that is, those who would seek
to harm us for no good reason. This function of law underlies 20th century developments in
International Law such as the Nuremberg Trials and the creation of the International Criminal
Court.
(2) Promoting the common good
Law is not just concerned with bringing evil people to account for their actions. A community
made up of people who bear no ill-will to anyone else and are simply concerned to pursue their
own self-interest needs law because there are situations where if everyone pursues their own self-
interest, everyone will be worse off than they would have been if they acted differently. (This is
the reverse of the ‘invisible hand’ phenomenon where if everyone pursues their own self-interest,
everyone in the community is made better off, as if everyone’s actions were guided by an
‘invisible hand’ to achieve that end.) So a community of self-interested actors needs law: (i) to

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solve ‘Prisoner’s dilemma’ situations; (ii) to distribute into private hands property that would
otherwise be exploited by everyone, thereby avoiding a ‘tragedy of the commons’
situation arising; (iii) to prevent people acting on their natural desire to extract ‘an eye for an
eye’ in revenge for actual or perceived wrongs that they have suffered at other people’s hands.
(3) Resolving disputes over limited resources
As every family knows, in any community there will always be disputes over who should have
what of a limited number of resources. Law is needed to resolve these disputes, as exemplified
by the famous story of the Judgment of Solomon.
(4) Encouraging people to do the right thing
It was thought even from classical times that law performed a fourth function – that of
encouraging and helping people to do the right thing. For example, Aristotle (384 BC – 322 BC)
argued that people needed the discipline of law to habituate them into doing the right thing, from
which standpoint they could then appreciate why doing the right thing was the right thing to do.
Importance of law in business
1) Law ensures that business persons follow established procedures. Procedures promote
transparency, consistency, uniformity, efficiency and certainty in what is expected of the
business
2) Business law is promotes the observance of the principles of natural justice (Article 42 of
the constitution) and also Article 28.
3) It also promotes accountability in the business undertakings. In other words, business law
is expected to protect private and public resources.
4) It protects and promotes human rights. Business law embodies procedures and doctrines
which naturally recognise and protect human rights and liberties of citizens.
5) It promotes legal welfare between the government and the business owners.

1 b ) As a student of business law, describe the form of laws that inform a business legal
framework (13 marks)
Tax Law
Complying with federal and state tax code is one of the most challenging legal aspects of running
a business. In most cases, it is strongly advised that businesses hire a business lawyer with tax
experience to help them figure out their various tax obligations. These obligations typically
include the payment of income taxes, sales taxes, property taxes, as well as other types of taxes.
A business lawyer will be able to advise the specific types of taxes applicable to each business in
order to remain legally compliant.
Employment Law
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Arguably one of the most important areas of business law is employment law, which handles all
types of different legal issues surrounding the hiring, termination and management of employees.
The goal of employment laws is to ensure fair treatment of employees as well as making sure
they have a safe work environment. Oftentimes this can involve compliance with a large number
of OSHA requirements, especially for manufacturing and construction businesses where there is
an inherently higher risk of injury to employees.
Hiring a business lawyer specializing in employment law will help you ensure you’re following
all regulations and protecting yourself from financial liability. Whether you’re required to
provide health insurance or workers’ comp insurance, your lawyer will keep you updated on all
current and relevant employment laws.
Contract Law
Business contracts can be especially tricky for business owners and executives to navigate, as a
poorly written contract can open themselves up to not only financial liabilities but even possibly
legal ones as well. A business contract lawyer can help businesses with a wide range of different
contracts that can be used to negotiate and leverage better terms for your business. The most
common types of contracts for businesses include lease and purchasing agreements as well as
product sale contracts with third-party vendors.
Intellectual Property Law
One of the most valuable things a business has is its intellectual property. It is therefore critical
that this is legally protected from theft and other issues. Because of the highly technical nature of
US intellectual property laws, it is strongly recommended that businesses hire an attorney
specializing in intellectual property law in order to best protect a company’s intellectual
property. They can also work with businesses to negotiate the sale of intellectual property
rights to others, as either the buyer or seller in the transaction.
Bankruptcy Law
Filing for business bankruptcy is a difficult and complicated process. Working with a business
attorney specializing in business bankruptcies is important in order to ensure a business selects
the best option for their particular situation. They will also ensure that the filling is completed
accurately and ensure compliance with all requirements. This will keep the business owners out
of trouble and prevent ongoing issues resulting from improperly processed paperwork.
Total 25 Marks

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Q.2.
A constitution is the basic law of nations or a state. It is believed that each nation has got its
unique constitution that establishes he states government structure. Similar lily Uganda
has got its constitution and the body of law that makes it up is the constitutional law.
Taking a case of Uganda, refer to the information provided above and describe the court
structure pointing out the role played by each court in admission of justice to the citterns of
the country.

As shown above Uganda has a pyramidal judicial structure with the Supreme Court, the Court of
Appeal and the High Court of Uganda being superior courts of record. This is according to
article 129 of the 1995 Constitution of Uganda
The judicial system or structure of a country or nation is concerned with the resolution of
disputes and the administration of justice as per the laws. The judicial system interprets and
implements the laws in a country. Their main goal is to provide justice and render a fair
judgment on criminal, civil matters and disputes.
 
The judicial system of Uganda comprises the Supreme Court, the Court of Appeal, the high
court, and the other tribunal courts or magisterial courts or courts established by the parliament.
The following points highlight the role of each court:

Supreme Court:

The Supreme Court

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This is the court of the last instance of the whole judicial realm and is the most powerful court in
the land. This means that the Supreme Court stands out at the top of the judicial pyramid as a
final court of Appeal in Uganda.
It only decides cases on appeal from lower courts e.g. presidential election petition i.e. the
decisions of the Supreme Court form precedents which all lower courts are required to follow.
The chief justice is the head of the Supreme Court. Benzamin Odoki has recently been re-
appointed Chief Justice of Uganda (August 2013).

It is the most superior or highest court in the judicial system of Uganda. It is also called the final
court of appeal.

Its decision cannot be appealed in any court. Cases are directly not filled in the supreme court.
Instead, it hears and determines the cases appealed by the lower courts.

All the lower courts are required to follow the decision of the supreme court. Its bench includes
six or more than six chief justices.

The supreme court can also interpret the Constitution, and laws, and can also resolve disputes
related to constitutional laws. The presidential election petitions are directly to be filed with the
supreme court. 

Court of Appeal:

This court was established by the Uganda constitution in 1995.

It plays the role of an intermediary between the superior that is the supreme court and the high
court.

The cases heard and judged in the court of appeal can be filed for appeal in the supreme court.
However, in the case of parliamentary elections petitions which are filed after the election, it is
the final court. Its main role is to review the judgments of the lower courts on the cases which
have been filed for an appeal.

It works to ensure that the lower courts were correct in their judgments and interpretation of
laws, and if not the court of appeal can reverse their decision.

It can also hear cases regarding constitutional matters and issues, however when it hears cases as
a constitutional court a bench of five judges is mandatory.

High court:

In the order of hierarchy it is the third court in the constitution of Uganda.

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It is provided unlimited original jurisdiction which means it can hear and judge cases concerning
a wide range of crimes and matters. In simple words, it can hear and judge all the cases
irrespective of the range of crime or the value involved.

It can hear the appeals of the magistrate courts.

The high court has five divisions which are civil division, criminal division, family division,
commercial division, and land division.

The judge of the high courts also exercises supervisory powers over the lower or magistrate
courts. 

Magistrate courts:

Magistrate's Courts handle the bulk of civil and criminal cases in Uganda. There are three
levels/layers of Magistrates courts: i.e:
- Chief Magistrate
- Magistrate Grade I
- Magistrate Grade II
These are subordinate courts whose decisions are subject to review by the High Court.

These are the courts that hear and judge the bulk of criminal, and civil cases in Uganda.

The judgments of these courts can be reviewed by the high courts. These courts have limited
jurisdiction.

Their main role is to resolve disputes, and crime cases and ensure justice at the grassroots level.
These courts can judge cases except for those in which the minimum punishment is the death
penalty or life imprisonment. Their justification is limited by their area. 

Tribunal courts:

Certain special courts are also a part of the judicial system of Uganda. These courts can be
industrial courts, land tribunals, tax tribunals, human rights tribunals, etc.

Their role is limited to jurisdiction in their field of interest only. For example, any Uganda
citizen who is aggrieved by any decision of the revenue authorities, the citizen can file a case
with the tax appeal tribunal court for reviewing the decision of the revenue authorities.

The local council court

Below the judicial hierarchy are the local council courts.

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Powers of the local council court
They have the following powers:
- Reconciliation - Compensation
- Apology - Declaration
- Resolution - Costs
- Caution - Attachment and sale
- Community service
- And other penalties as spelt by the ordinance or bye-laws

Military courts
A parallel judicial system also exists for the military with the court martial court established
under the UPDF Act of 2005. The panel judges consist of the serving army officers headed by
the chairman.
NB: A binding precedent is a decided case which a court must follow; but a previous case is only
binding in a later case of the legal principles involved is the same and the facts are similar.

Conclusion
Hence the judicial system of Uganda includes the Supreme Court, court of Appeal, high court,
magistrate, and tribunal courts. Total 25 Marks

Q.3.
Joseph requested Amos to transport his goods from Gulu to Kampala city for the sum of
500,000. Amos replied that he was only prepared to transport the goods for 600,000/-.
Joseph wrote back to Amos asking him to consider the initial price BUT Amos did not
reply to his letter. Two days later, Joseph delivered the goods to the premises of Amos who
transported the goods to Kampala. Joseph afterwards refuses to pay the sum of 600,000/-
demand by Amos saying that there was no concluded contract.
a) As a student with knowledge on Business law, advise the parties using relevant
authorities. (13 marks)
Joseph made an initial offer to Amos to transport his goods from Gulu to Kampala for the sum of
500,000/-. However, Amos responded with a counteroffer of 600,000/-. A counteroffer operates
as a rejection of the initial offer and creates a new offer. Since Amos did not reply to Joseph's
letter asking him to consider the initial price, there was no acceptance of the initial offer.

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Therefore, there was no concluded contract between Joseph and Amos based on the information
provided. Joseph delivered the goods to Amos voluntarily without a mutually agreed-upon price
or terms. As a result, Joseph may argue that there was no valid contract and may refuse to pay
the demanded sum of 600,000/-.

b) Elucidate the circumstances under which a valid agreement may be set aside.
(12 marks)
Mistake:
The doctrine of mistake in law is all about circumstances in which the law permits a party to a
contract to repudiate it, on the grounds that had the true position of the facts been known to him,
he would never have entered into the agreement. The general rule is that the mistake of a party
does not affect the validity of a contract. In essence, the parties are bound by the terms agreed
between them and neither can escape his obligations under the contract by claiming that the
agreement was not what was intended. Likewise, mistake of law never affects the validity of a
contract since ignorance of the law never avails a party, otherwise every party will plead that he
was mistaken as to the law. However in some circumstances mistake of fact may affect a
contract, and if sufficiently serious may spoil the contact, render it void. These include; mistake
as to the existence or identity of the subject matter of the contract or mistake as to the kind of
contractual document signed or as to its contents. Proof of mistake in any of the above cases
renders the contract void ab initio and no right can be derived the refrom. In other words, the
contract is a total nullity conferring no rights and imposing no obligations. But, to have any
effect at all, the mistake must be one which exists at the moment the contract is concluded.

Misrepresentation:
A misrepresentation is a false statement of fact made by a party to the contract which is one of
the causes which induces the other party to enter into the contract. A misrepresentation is a false
statement of fact relating to the past or present, made by one party in a contract to the other,
which induces the latter to enter into the contract. A representation is an inducement only and its
effect is to lead the other party merely to make the contract. A representation must be a statement
of some specific existing and verifiable fact or past event. It becomes a misrepresentation, of
course, when it is false. Misrepresentation is an expression used to describe a situation in which
there is no genuineness of consent to a contract by one of the parties. It may be innocent,
negligent or fraudulent. The effect of misrepresentation on a contract is less serious than that of
mistake because the contract becomes voidable and not void. This means that the party misled
can ask the court to rescind the contract. That is to put the parties back into the positions they
held before the contract was made.
Duress:

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Duress will affect all contracts and gifts procured by its use. Duress is pressure brought to bear
upon one of the contracting parties to induce him to enter into the contract. Duress, which is a
common law concept, means actual violence or threats of violence to the person of the
contracting party or those near and dear to him. The treat must be calculated to produce fear of
loss of life or bodily harm. Also, the threat must be illegal in the sense that it must be a threat to
commit a crime or a tort. Duress vitiates a contract. However, it must be established that the
threats were the reasons for entering into the contract, but, it not be shown that they were the
only or even the main reason.
Undue influence:
The doctrine of undue influence was developed by equity. The concept of undue influence is
designed to deal with contracts obtained without free consent by the influence of one mind over
another. Undue influence means any improper or wrongful constraint, machination, or urgency,
or persuasion whereby the will of a person is over-powered and he is induced to do or forebear
an act which he should not do or do if left to act freely. It is influence which deprives the person
influenced of free agency or destroys the freedom of his will and renders it more of the will of
another person. It connotes a misuse of a position of confidence or taking advantage of a
person’s weakness, infirmity of distress, to change improperly that person’s actions or decisions.
Undue influence applies where influence is acquired and abused and confidence is reposed and
betrayed. The effect of undue influence is to allow the weaker party to rescind the contract
promptly after the withdrawal of the overbearing influence; otherwise it will be termed as
consent. It also renders a contract voidable and not void. Accordingly, to maintain the plea of
undue influence, the party concerned must apply timeously to avoid the contract and must not be
guilty of undue delay. Additionally, for a defendant to succeed on his claim of undue influence,
he must prove by credible evidence the existence of such by establishing the following five
mandatory requirements: (a) that the other party to the transaction had the capacity to influence
the complainant, (b) that the influence was exercised, (c) that the exercise was undue, (d) that the
exercise brought about the transaction in question, and (e) that the transaction was to the
manifest disadvantage of the complainant.
Illegality:
As a general rule, the court will not enforce a contract which is illegal or contrary to public
policy. Illegal contracts are those prohibited either by statute or at common law and the making
of which will in most cases be visited by some form of sanction other than merely declaring the
contract void and unenforceable. Illegal contracts include: a contract to commit crime, a tort or a
fraud on a third party; a contract that is sexually immoral; a contract which is prejudicial to
public safety; a contract liable to corrupt public life and a contract to defraud public revenue. A
contract which is adjudged illegal will not be enforced. Such a contract will be absolutely void
and of no effect whatsoever.
Incapacity:

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Sometimes the capacity of either natural or artificial persons to either enforce contracts, or have
contracts enforced against them is restricted. For instance, very small children may not be held to
bargains they have made, on the assumption that they lack the maturity to understand what they
are doing; errant employees or directors may be prevented from contracting for their company,
because they have acted ultra vires (beyond their power). Another example might be people who
are mentally incapacitated, either by disability or drunkenness. In these cases the contract is
either void or voidable.
Conclusion:
It is clear from the foregoing that vitiating elements of contract such as mistake, duress,
misrepresentation, undue influence, illegality and incapacity, are determinants of the validity of a
contract. They are the various factors which can affect the validity of a contract once it has been
formed. The implication of which is that the validity of a contract is normally unquestioned when
vitiating elements are absent.

Total 25 Marks

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Q.4.
A revocation is the calling back of the offer by the offeror, with the exception of an option
contracted in a firms offer, an offer may be revoked any time before it has been accepted” Make
a justification of the narrative by clearly explaining the methods and the circumstances under
which the offer may be revoked. (25 marks)
Revocation
This is also known as withdrawal of an offer. An offer may be revoked or withdrawn by the
person who made it at any time before it has been accepted. For revocation to be effective it must
be communicated to the offeree. However if the offeree has information or knowledge that the
offer has been revoked he or she cannot accept it, even if he obtained this information from a
third party.

Dickinson vs. Dodds (1876) 2 Ch D 463

In this case the Dodds offered to sell a house to Dickinson for £800 and the offer was to be left
open until 9 am on Friday. On Thursday Dodds sold the house to Mr. Allan. Dodds then asked
Mr. Belly to tell Dickenson the offer was withdrawn. On hearing the news, Dickinson went
round to Dodds’ house first thing Friday morning purporting to accept the offer. Dickinson then
brought an action seeking specific performance of the contract.

Court Held that there was no contract, the offer having been withdrawn before acceptance and
communication by a third party being valid. An offer to sell a particular item is withdrawn by
implication if that item is sold to another person. The offeror is free to withdraw the offer at any
time before acceptance takes place unless a deposit is made.

Methods and circumstances under which revocation may occur

Rejection
An offer is terminated when the offeree communicates his rejection to the offeror. Hence, the
offeree making a counter-offer and introduces a new offer amounts to a rejection of the original
offer. In Hyde v Wrench, Lord Langdale held that the counter offer offered by the offeree
terminated the original offer. Hence, “…thereby rejected the offer previously made by the
defendant (the offerer).” However, this should be distinguished from the situation when the
offeree merely seeks further information from the offeror, and does not make a counter-offer. In
Stevenson, Jacques v McLean a mere inquiry would not be considered as rejection.

Lapse of time
As it would be impracticable if an offer could be accepted after an unreasonable delay on the part
of the offeree, the court stated in Ramsgate Victoria Hotel v Montefiore that an offer will lapse if
it is open for a specific length of time and that time limit expires. Where there is no express time

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limit, an offer is normally open only for a reasonable time. The length for a reasonable time will
depend on the circumstances of the case with respect to offers involving other types of subject
matter, definition of a reasonable time depends upon the demand for the subject matters and
upon the volatility of its price. 

Conditional Offer
An offer which expressly provides that it is to terminate on the occurrence of some condition
cannot be accepted after that condition has occurred; and such a provision may also be
implied. In other words, termination of an offer may also occur due to a condition not being met.
For example, in Financings Ltd v Stimson the offer was made in an implied condition, namely
the car maintaining in its undamaged state is a conditional precedent. Since the car was stolen
from the dealers and damaged, the offer was terminated when the condition fails and became
incapable of being accepted.

Another issue concerned in regards to the condition required would be the capability of both
parties for a contractual obligation. The loss of contractual capacity by either offeror or offeree
will terminate an offer and such loss of capacity is usually evidenced by the appointment by the
court. 

Death
The death of either the offeror or the offeree will cause such termination: the right to accept an
ordinary offer is not transferable. The unaccepted offer of a deceased person cannot be converted
into a contract binding upon his estate.  In Dickinson v Dodds Mellish LJ stated ‘if a man who
makes an offer dies, the offer cannot be accepted after he is dead.’ On the other hand, in
Reynolds v Atherton Warrington LJ stated that an offer “made to a living person who ceases to
be a living person before the offer is accepted…is no longer an offer at all”.

Acceptance
Once the offer was accepted by the offeree, the contract is formed and brought the offer to an
end. It can be made either orally, in writing, or by the implication of conduct when they are
received by the offeror. However, in Felthouse v Bindley the court refuse to impose an
obligation on the offeree to reject the offer and further stated that silence does not amount to
acceptance.

Illegality
Finally, a change in the law which makes a potential contract illegal will terminate an offer, since
courts will not enforce an illegal contract. 

In conclusion, offer can be terminated by Revocation, Rejection, Lapse of time, Conditional

Offer, Operation of law, Death, Acceptance and Illegality.

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Total 25 Marks

………………..SUCCESS…………

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