Business Law-THE NATURE, PURPOSE AND KINDS OF LAW

1.1 The Nature of Law


The term ‘law’ is used in a variety of senses. There are laws of
physical sciences, laws of social sciences, moral laws and laws of state.

Laws of physical sciences
Laws of physical sciences are those facts which have been proved correct
and do not change over a period of time. Such laws establish the
relationship between the cause and effect of related facts. These laws
are permanent and universal e.g Law of motion, law of gravity etc.

Laws of social sciences


The laws of social sciences also establish the relationship between the
cause and effect of certain facts but these laws are true under certain
given conditions only e.g. laws of economics
Laws of Sociology etc.

Moral laws


Moral laws are laws of human conduct as members of a society. These laws
guide us as how we should live in society. The examples of moral laws
are ‘Do not tell a lie’ or ‘Treat your fellow men with courtesy’.

Laws of state


The laws of state are those laws which are made or enforced by a state.
It is the duty of the citizens of a country to obey these laws. If they
disobey them, they are punished e.g. theft is a crime and whoever breaks
this law will be punished by the state. In this course the concern is
with the laws of state only. The term ‘law’ used in this course means
the law of the state. The law is part of everyone’s life. There is need
to understand the prevailing laws because the individuals can be
affected by them one way or another. For example, a person may find
himself being prosecuted and punished for an offence he has committed.
Similarly, he may find himself being sued for compensation (or some
other remedy) for an injury which has resulted from a wrong doing by him
against some person.

1.2 Definition of the word ‘law’.


There is no generally acceptable definition of the word ‘law’.
Different schools of law define it in different ways. Some important
definitions of law are given below:-

1) Woodrow Wilson has defined law in the words “That portion of the
established thought and habit which has gained distinct and formal
recognition in the shape of uniform laws, backed by authority and power of government”
2) According to Holland, ‘A law is a general rule of external human
action enforced by a sovereign political authority’.
3) In other words of Salmond,” ‘A law is the body of principles
recognized and applied by the state in the administration of justice
4) Law may be defined in the words” A rule of human conduct, imposed
upon and enforced among the members of given state”

Notice the following points from the above definitions of law:

  • Set of Rules
    Law is a set or body of rules. These rules may originate from
    customs, acts of parliament, court cases or some other acceptable
    sources.
  • Guidance of Human Conduct:
    These rules are enforced for the guidance of human conduct. Human
    beings follow these rules for their own safeguard and betterment.
  • Applicable to a Community:
    These rules apply to a specific community. This community may be a
    sovereign state or a business community. The laws of different
    communities may be different e.g. what is law in Kenya may not be
    law in Uganda or Tanzania.
  • Change of Rules:
    The law changes over a period of time. It means law is not a static
    phenomenon. It keeps changing with time
    i.e. what was law in Kenya in the 1960’s may not be the law in 1990’s
  • Enforcement
    The law must be enforced otherwise there would be anarchy. The law
    enforcing agencies include police and courts of law.

From the above definitions, we may conclude that law refers to a set of
rules or principles that govern the conduct of affairs in a given
community at a given time, whereby machinery is provided for an
aggrieved party to enforce his rights in case any of these rules or
principle is broken.

1.3 Law and Morality


Law, as defined above, must be distinguished from morality. The rules of
law may be enforced by an action of courts. Morality, on the other hand,
does not attract the sanction of court for its enforcement, unless it
also forms a part of the law. The requirement that a person should
respect his elders is a rule of morality, not of law; no one can be sued
for failing to respect the elders.

Fortunately, the rules of law are always defined by the law itself and
can therefore be ascertained in a given circumstance without being
confused with rules of morality. Rules of morality are defined by
morality itself and vary from community to community, but
wherever they exist they do not as such attract the sanction of law;
otherwise they would cease to be rules of morality and become rules of law.

1.4 Purpose of law


Each society or community has its laws which regulate the mutual
relations and conduct of its members. The laws are enforced to ensure
that the members of the society may live or work together in an orderly
and peaceful manner. The main purposes of law are as under:
1) To regulate the conduct or behavior of the persons
2) To provide justice to the members of the society
3) To maintain the political and economic stability
4) To protect the fundamental rights and freedoms of the individuals
5) To establish the procedures and regulations regarding the dealing among the individuals.
6) To maintain peace and security in the country.

1.5 Kinds of Law or Classification of Law


Law may be classified in different ways. The main kinds of law are;

  • Public Law and Private Law
  • Civil Law and Criminal Law
  • Procedural Law and Substantive Law
  • International Law

Public law and private law
In any given state, it is the practice to draw a distinction between the
law that governs the relations between the state and its citizens on the
one hand, and that which governs the relations of the citizens amongst
themselves on the other. The former is known as public law while the
latter is called private law. It means private law is that part of the
law which is primarily concerned with rights and duties of persons
towards persons. Private law is also called as civil law. Public law is
that part of the law in which the state has an interest Public law
consists of constitutional Law, Administrative Law and Criminal Law
Constitutional law consists of those rules which regulate the
relationship between different organs of state. These organs of state
are, Legislature, judiciary and executive.
Administrative law is the law which relates to the actual functioning of
the executive instruments of the Government. Criminal law consists of
wrongs committed against the state.

Civil Law and Criminal Law:


Civil law (or private law) is that law which governs the relations of
individuals amongst themselves as opposed to the relations between the
individual and the state. This includes the law of contract, the law of
succession, the law torts, the law of property etc. In general
individual interaction attracts the sanction of private law, so that any
person aggrieved by the act of his friend or neighbour may seek the
assistance of the civil law of the 1and.

Criminal law falls within the purview of public law. This is because it
is the duty of the state to protect its citizens and it is the state
which must therefore seek redress for any public wrong (crime) committed
against any citizen. The state prosecutes the criminal on behalf of the
citizenry as a whole.

Differences Between Criminal and Civil Wrongs


A crime is a public wrong the commission of which may result in the
prosecution and punishment of the wrong doer. The punishment is usually
by a term of imprisonment or imposition of a fine. The Penal Code of
Kenya contains the bulk criminal wrongs and the details of punishment
relating to criminal wrongs. Crimes include theft, rape, murder etc. A
civil wrong is a violation of the private rights of an individual.

Such violation of private rights may be tort, a breach of contract, a
breach of trust etc. Some offences are crimes as well as civil wrongs.
An example is assault. It is both a crime and a tort. Such an offence of
a dual nature are exceptional. In the majority of cases, crimes are
quite independent of civil wrongs.

Below are the differences between these two types of wrongs:-

Crime

  1. It is a public wrong against the state.
  2. The parties are the prosecution and the accused. The prosecution
    represents of the state, while the accused is the offender who is being
    prosecuted
  3. Since this is a public wrong the action cannot be compromised by the
    parties. It is only in exceptional circumstances that the public
    prosecutor may withdraw a prosecution against a particular accused.
  4. The prosecution must prove its case against the accused beyond
    reasonable doubt. Any slight doubt must be resolved in favor of the
    accused.(Note: Every person is presumed to be innocent until proved guilty)
  5. Punishment is usually by imprisonment or fine, or the death penalty
    in the case of capital offences.

Civil Wrong

  1. It is a private wrong against an individual.
  2. The parties are the plaintiff and the defendant. The plaintiff is the
    aggrieved party who is suing, while the defendant is the wrong doer who
    is being sued.
  3. This being a private wrong, the parties are free to compromise any
    action brought by one of them and the plaintiff may at any time choose
    to withdraw his action against the defendant.
  4. The plaintiff needs only to prove his case on a balance of
    probabilities, not beyond reasonable doubt, i.e. the evidence must be
    such that it is more probable than not that his case merits success
    compared to that of then defendant
  5. A defendant found to have committed a civil wrong is usually ordered
    to pay the plaintiff damages (i.e. monetary compensation): or some other
    civil remedy may be granted to the plaintiff.

Procedural Law and Substantive Law


Procedural law consists of the rules which determine the manner in which
the court proceedings are required to be conducted in civil and criminal
cases. This law guides how a right is enforced under civil law or a
crime is prosecuted under the criminal law.
Substantive law consists of actual rules regarding the civil, criminal
or other fields of law. Mainly, this law defines civil and criminal
wrongs and provides remedies for each type of offence or civil wrong.

International Law


International Law may be further classified as public International Law
and Private International Law. Public international law consists of
those rules which regulate the relations between states. This law is
based on treaties, conventions and rules of wars. The disputes between
states can be settled by The International Court of Justice. This court
does not have any authority to enforce its
judgments.

Private International Law is mainly concerned with determining which
national law governs a case in which there is foreign element. For
example, a Kenyan signs a contract with a Ugandan in Uganda to construct
one dam in Sudan and if there is breach of contract then Kenyan wants to
sue the other party in Kenya. In this case, the Kenya Court will decide
which national law to
apply.

THE NATURE, PURPOSE AND KINDS OF LAW

1.6 Divisions of Civil Law


Main divisions or branches of civil law are:

  • Law of Contract
    A contract is an agreement or promise which is legally binding or
    enforceable by law. The law of contract determines whether a promise
    is legally enforceable and what its legal consequences.
  • Law of torts
    Salmond has defined tort in the words “A civil wrong for which the
    remedy is a common law action for unliquidated (i.e. unspecified or
    unascertained) damages and which is not exclusively the breach of a
    contract or breach of trust or any other merely equitable
    obligation”. The examples of torts are negligence, defamation,
    trespass and nuisance. The law of torts deals with various types of
    torts.
  • Law of property
    Law of property deals with the nature and extent of the rights which
    people may enjoy over land and other property.
  • Law of Succession
    Law of succession deals with the transfer of property on the death
    of a person to his heirs.
  • Law of Trusts
    A trust is a relationship which arises whenever one person called
    the ‘settlor’ transfers his property to another person called the
    ‘trustee’ on the condition that the trustee holds the property for
    the benefit of another person the ‘beneficiary’. Law of trusts deals
    with the various aspects of trusts and imposes a strict obligation
    on the trustee to administer the trust property in accordance with
    conditions of the trust.

1.5 The Sources of Kenyan Law


The expression ‘source of law’ refers to the various factors which
contribute to and determine the content of law and the organs through
which laws are created. Every law must have a source. A source of law is
that which may be pointed out as forming the basis of law i.e. what
gives it force and validity. It means that the existence of a particular
principal of law can only be justified when it has a base or origin.

A source of law may be written or unwritten and this leads to the
distinction between written and unwritten laws. Legislation (including
the constitution) is the best example of written law while customary law
may be cited as an example of unwritten law.
Again a source of law may determine whether the law is local or foreign
origin. Local laws in Kenya include enactments of our own parliament as
well as the various customary laws observed in Kenya. Foreign laws
applicable in Kenya includes foreign enactments having the force of law
in Kenya (e.g. certain English statutes) as well as certain rules of
English common law and equity. The sources of law in Kenya have been
contained in Section 3 of the Judicature Act (Cap. 8).

The sources of Kenyan Law are as under:-

  1. The constitution of Kenya and subsequent amendments to the Constitution
  2. Acts of Parliament of Kenya
  3. Specific Acts of the Parliament of the United Kingdom, cited in the
    part 1 of the schedule to the Judicature Act and the Law of Contract Act
    (Cap 23). One Act of the Parliament of India.
  4. Subsidiary (Delegated) Legislation.
  5. English Statutes of general application in force in England on 12th
    August 1897
  6. The Procedure and Practice observed by courts of justice in England
    on the 12th August 1897
  7. African Customary Law
  8. Case Law or Judicial Precedent
  9. Islamic Law

Due to its great importance as a source of law, the constitution is
discussed below.

The Constitution of Kenya


Constitution law as we have seen falls within the public law. A
constitution is a public document, which regulates the relations between
the state and the citizens, as well as the relations between the organs
of the state. According to Lord Bryce, the constitution consists of
those rules or laws which determine the forms which determine the form
of its government and the respective rights and duties of its government
and the respective rights and duties of it towards a citizen and of the
citizen towards the government.

The constitution may be classified as written and unwritten
constitutions. A written constitution has most of the fundamental
principals and law of the land included in written form in a formal
document. E.g. Kenya Constitution is a written constitution. An
unwritten constitution is that in which most of the fundamental
principals and laws of the land are not given in written form in a
formal document e.g. the constitution of United Kingdom is an unwritten
constitution.

The constitution of Kenya was originally enacted on 12th December 1963.
It was amended on 12th December 1964 in order to establish a Republic
with a President as Head of State. The further amendments were included
in the Constitution of Kenya Act, 1969. Since 1969 some more amendments
have been made in the Kenya Constitution which is incorporated in the
annually revised editions of the volumes of the Laws of Kenya. Section
47 of the Kenya Constitution empowers parliament to make amendments by
voted of not less than 65% of all of the members of the National
Assembly. Such an amendment also requires the assent of the president.
In 2010 ,Kenyans passed the a constitution. The current Kenyan
constitution contains the following parts:

Chapter Content

  1. Sovereignty of the people and supremacy of this constitution
  2. the Republic of Kenya
  3. Citizenship
  4. The Bill of Rights
  5. Land and Environment
  6. Leadership and integrity
  7. Representation of the people
  8. The Legislature
  9. The Executive
  10. The Judiciary
  11. Devolved Government
  12. Public Finance
  13. The Public Service
  14. National Security
  15. Commissions and Independent offices
  16. Amendment of this constitution
  17. General provisions
  18. Transitional and Consequential provisions

SCHEDULES
1 – Counties
2 – National symbols
3 – National oaths and affirmations
4 – Distribution of functions between national and the county governments
5 – Legislation to be enacted by the parliament
6 – Transitional and consequential provisions

The Constitution of Kenya is that source of law from which all other
laws derive their validity. Thus any law that conflicts or is
inconsistent with the constitution is void. The importance of the
Constitution of Kenya as a source of law is made clear by section which
is reproduced as under:- This Constitution is the constitution of the
republic of Kenya and shall have the force of law throughout Kenya and,
subject to section 47 of the constitution, if any other law is
inconsistent with this constitution the constitution shall prevail and
the other law shall to the extent of the inconsistency, be void. Any law
which is inconsistent with the constitution can be passed only if the
constitution is first amended. But the amendment of the constitution is
not easy.

Summary for the topic

  1. Definition of law
  2. Purpose of law
  3. Classification of law
  4. Divisions of civil law