STUDY TEXT: NEW SYLLABUS

INTRODUCTION TO
LAW AND
GOVERNANCE
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MASOMO MSINGI PUBLISHERS

 INTRODUCTION TO LAW AND GOVERNANCE

INTRODUCTION TO LAW
AND GOVERNANCE

FOUNDATION LEVEL
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CPA LEVEL 1
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CCP LEVEL 1
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STUDY TEXT

Revised: September 2021

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 INTRODUCTION TO LAW AND GOVERNANCE

UNIT DESCRIPTION
This paper is intended to equip the candidate with the knowledge, skills and attitude that
will enable him/her to apply the principles of law and legal systems in an entity and ensure
compliance with basic principles of governance and ethics.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
- Demonstrate knowledge of essential elements of the legal system
- Demonstrate knowledge of legal personality
- Apply law of contract and tort in various scenarios
- Apply general principles of business law in practice
- Apply fundamental principles of ethics in practice
- Comply with fundamental principles of governance

CONTENT
1. Nature, Purpose and Classification of Law

1.1 Meaning of law

1.2 Nature of law
1.3 Purpose of law
1.4 Classification of law
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1.5 Law and morality

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1.6 The Constitution

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1.7 Legislation and delegated legislation
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1.8 Substance of common law and doctrines of equity

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1.9 African customary law

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1.10 Islamic law, Hindu law and African customary law

1.11 Judicial precedence
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1.12 General rules of International law and ratified treaties

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2. Administrative Law

2.1 Meaning of administrative law

2.2 Sources of administrative law
2.3 Functions of administrative laws
2.4 Doctrine of separation of powers
2.5 Delegated legislation
2.6 Control of delegated legislation
2.7 Discretion and Judicial count of executive
2.8 Liability of state (contractual/ tortious)
2.9 Principles of natural justice
2.10 Judicial control of the Executive
2.11 Independence of Judiciary
2.12 Remedies in administrative law (mandamus, certiorari, prohibition, habeas
corpus; injunction and declaration)

3. The Court System

3.1 Establishment, structure, composition and jurisdiction of courts

3.2 Supreme Court
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 INTRODUCTION TO LAW AND GOVERNANCE

3.3 Court of Appeal

3.4 High Court
3.5 Employment and Labour Relations Court
3.6 Environmental and Land court
3.7 International Court of Justice
3.8 Magistrates Court
3.9 Court Martial
3.10 Kadhi‘s Court
3.11 Distinction between Courts and Tribunals

4. Alternative Dispute Resolutions (ADR)

4.1 Nature of alternative dispute resolutions (ADR)

4.2 Nature and types of disputes
4.3 Legal framework governing ADR
4.4 General principles of ADR
4.5 Negation and Conciliation
4.6 Mediation
4.7 Arbitration
4.8 Dispute Review Boards
4.9 Traditional dispute resolution mechanisms
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5. Law of Persons
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5.1 Natural and artificial persons

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5.2 Nationality, citizenship and domicile

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5.3 Unincorporated and incorporated associations

5.4 Co-operative societies
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6. Law of Tort

6.1 Nature of tort

6.2 General defenses under tort
6.3 Negligence
6.4 Types of liabilities in tort
6.5 Trespass
6.6 Limitation and survival of actions
6.7 Remedies in tort
6.8 Principles in awards damages
6.9 Defamation

7. Law of Contract

7.1 Definition of a contract

7.2 Classification of contracts
7.3 Essentials of a valid contract
7.4 Terms of a contract
7.5 Exemption clauses
7.6 Vitiating factors
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 INTRODUCTION TO LAW AND GOVERNANCE

7.7 Discharge of contract

7.8 Remedies for breach of a contract
7.9 Limitation of actions
7.10 Contract negotiation
7.11 Information technology and the law of contract

8. Sale of Goods

8.1 Nature of the contract of sale of goods

8.2 Types of goods
8.3 Formalities of the contract
8.4 Terms of the contract
8.5 Implied terms by statute, custom/usage
8.6 Rights and duties of the parties
8.7 Remedies for price and breach of contract
8.8 Auction sales
8.9 International contracts of sale: FAS, FOB, CIF, FCA, CPT, CIP, DAT, DAP,
DDP, CFR, DAF, DDU, Ex-works and Ex-ship

9. Agency
9.1 Meaning and nature of the agency contract
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9.2 Types of agents

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9.3 Parties to the agency relationship

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9.4 Creation of agency
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9.5 Authority of an agent

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9.6 Rights and duties of the parties

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9.7 Personal liability of agents

9.8 Liability of the parties
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9.9 Termination of agency

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10. Partnership

10.1 Nature of partnership

10.2 Registration process and requirements of partnership business
10.3 Types of partnerships
10.4 Rights, duties and liabilities of existing, incoming and minor partners
10.5 Management of partnerships
10.6 Dissolution of partnerships and its consequences

11. Indemnity and Guarantees

11.1 Essential features of indemnity

11.2 Nature and extent of liability of indemnifier
11.3 Commencement of liability of indemnifier
11.4 Nature of the contracts; essential features of contract guarantee; distinction
between contract of guarantee/ indemnity extent of nature and surety
11.5 Obligations of surety
11.6 Discharge of surety
11.7 Letters of credit
11.8 Rights and duties of the parties
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 INTRODUCTION TO LAW AND GOVERNANCE

11.9 Termination of the contract

11.10 Remedies for breach of contract

12. Insurance
12.1 Nature of the contract; types, parties to negotiable instrument
12.2 Formalities of the contract
12.3 Types of risks
12.4 Parties to the contract of insurance
12.5 Principles of insurance
12.6 Types of insurance
12.7 Transfers and amalgamation
12.8 Termination of the contract
12.9 ICT and insurance

13. Negotiable Instruments

13.1 Nature and characteristics

13.2 Negotiability of the instrument
13.3 Types: Cheques, promissory notes, bills of exchange
13.4 Types of crossings
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13.5 Obligations of the parties

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13.6 Banker- customer relationship

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13.7 Presentment; purpose, time, place
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13.8 Discharge from liability

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13.9 Modes of discharge

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13.10 Dishonour, mode of dishonour, nature of protest, penalties for dishonour

13.11 Acceptance for honour
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13.12 Criminal liability

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14. The Law of Property

14.1 Definition of property

14.2 Classification of property (real and personal, movable and immovable, tangible
and intangible)
14.3 Property in land: Private, public and community land
14.4 Interests in land: Estates, servitudes and encumbrances
14.5 Intellectual property: Plant breeder‘s patents, trademarks, copyrights and
industrial designs
14.6 Administration and management of land
14.7 Sectional properties
14.8 Management company
14.9 Obligations of lessor and lessee in sessional property Act
14.10 Transfer of land rights
14.11 Role of professionals (Advocates, Certified Secretaries) in land transactions

15. Introduction to corporate governance

15.1 Corporate governance – Definition and objects

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 INTRODUCTION TO LAW AND GOVERNANCE

15.2 Principles of corporate governance

15.3 Best practice in corporate governance
15.4 Role of stakeholders (shareholders, Board of Directors, Government)
15.5 Conflict of interest - Investor education and protection of shareholders
15.6 Compliance obligations
15.7 Legal Audit- definition and objects

16. Professional Ethics

16.1 Introduction and overview of professional ethics

16.2 Professional misconduct
16.3 Publicity and advertisement
16.4 Morality and etiquette
16.5 Professional ethics for accountants, corporate secretaries
16.6 Ethics and practice within a firm
16.7 Enforcement of professional ethics and standards

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 INTRODUCTION TO LAW AND GOVERNANCE

CONTENT PAGE

1. Nature, Purpose and Classification of Law ……………………………………...…..8

2. Administrative Law ………………………………………………………………...43
3. The Court System …………………………………………………………………..63
4. Alternative Dispute Resolutions (ADR) ……………………………………………80
5. Law of Persons ……………………………………………………………………..95
6. Law of Tort ………………………………………………………………………..106
7. Law of Contract …………………………………………………………………...152
8. Sale of Goods ……………………………………………………………………..186
9. Agency …………………………………………………………………………….201
10. Partnership ………………………………………………………………………..213
11. Indemnity and Guarantees………………………………………………………...227
12. Insurance …………………………………………………………………………237

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13. Negotiable Instruments …………………………………………………………...253
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14. The Law of Property ………………………………………………………………267

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15. Introduction to corporate governance ……………………………………………298

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16. Professional Ethics………………………………………………………………..312
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 INTRODUCTION TO LAW AND GOVERNANCE

TOPIC 1

NATURE, PURPOSE AND CLASSIFICATION OF

LAW
MEANING OF 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

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Law may be defined in the words ―A rule of human conduct, imposed upon and enforced
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among the members of given state‖
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Notice the following points from the above definitions of law:

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1. Set of rules
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Law is a set or body of rules. These rules may originate from customs, acts of
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parliament, court cases or some other acceptable sources.

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2. 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.

3. 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.

4. 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 2021

5. Enforcement

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 INTRODUCTION TO LAW AND GOVERNANCE

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.

NATURE OF LAW
The different schools of thought that have arisen are all endeavors of jurisprudence:
Natural law school Positivism, realism among others. It is these schools of thoughts that
have steered debates in parliaments, courts of law and others.

 Natural law theory asserts that there are laws that are immanent in nature, to which
enacted laws should correspond as closely as possible. This view is frequently
summarized by the maxim: an unjust law is not a true law, in which 'unjust' is
defined as contrary to natural law.
 Legal positivism is the view that the law is defined by the social rules or practices

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 Legal realism- it holds that the law should be understood as being determined by the
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actual practices of courts, law offices, and police stations, rather than as the rules and
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doctrines set forth in statutes or learned treatises. It had some affinities with the
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sociology of law.
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 Legal interpretivism- is the view that law is not entirely based on social facts, but
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includes the morally best justification for the institutional facts and practices that we
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intuitively regard as legal.

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Generally speaking law has the following characteristics

1. It is a set of rules.
2. It regulates the human conduct
3. It is created and maintained by the state.
4. It has certain amount of stability, fixity and uniformity.
5. It is backed by coercive authority.
6. Its violation leads to punishment.
7. It is the expression of the will of the people and is generally written down to give it
definiteness.
8. It is related to the concept of 'sovereignty' which is the most important element of
state.

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