Business Law Lecture Notes - ATSWA Study Text

Sources of Law

  • Meaning of Law: A body of rules and regulations designed to shape and regulate human conduct within a society. To ensure compliance, law incorporates elements of sanctions against acts of violation or defiance.

  • Senses of "Source of Law":

    • Formal Source: The origin of the legal system's validity (e.g., the will of the electorate or a dictator).

    • Literary Source: Materials containing the actual rules (e.g., statute books, law reports, and textbooks).

    • Legal Source: The fountain of authority from which a rule derives its status as part of the body of law (e.g., legislation, judicial precedents).

  • Sources of Nigerian Law:

    • The Constitution: The supreme, written, and rigid document setting the framework for government. Provisions are binding on all persons, and inconsistent laws are null and void. Features include the federal system (three tiers: Federal, State, and Local), separation of powers (Executive, Legislative, Judicial), and Fundamental Rights (Life, Dignity, Liberty, Fair Hearing, etc.).

    • Received English Law:

      • Common Law: Developed by old English courts (King’s Bench, etc.); found in judicial decisions.

      • Doctrines of Equity: Developed by the Court of Chancery to mitigate the rigidity of common law. Governed by 12 maxims (e.g., "Equity follows the law," "He who comes to equity must come with clean hands"). Rule of equity prevails in conflicts with common law.

      • Statutes of General Application: English statutes in force on January 1, 1900.

    • Nigerian Legislation: Acts (Federal) and Laws (State) passed by the National Assembly or State Houses of Assembly.

    • Customary Law: Ethic/indigenous (unwritten) and Islamic/Sharia (written) laws. Characteristics include flexibility and acceptance as binding by a community. Validity tests: Must not be repugnant to natural justice, equity, and good conscience; must not be incompatible with existing law; must not be contrary to public policy.

    • Judicial Precedents: Law found in judicial decisions. The ratio decidendi (reason for the decision) forms the precedent, while obiter dictum (remarks by the way) does not.

    • Treaties: Formally ratified agreements between sovereign states.

The Court System

  • Role of the Judiciary: Interpretation of the constitution, protection of citizen rights, and conflict resolution.

  • Classification of Courts:

    • Superior Courts: Supreme Court, Court of Appeal, Federal High Court, State High Courts, National Industrial Court, Sharia/Customary Courts of Appeal.

    • Inferior/Lower Courts: Magistrate Courts, District Courts, Area/Customary Courts.

  • Hierarchy and Jurisdiction:

    • Supreme Court: The highest apex court. Original jurisdiction in disputes between states or between the Federation and states. Final appellate court.

    • Court of Appeal: Hears appeals from High Courts and specialized tribunals. Original jurisdiction over presidential election validity.

    • Federal High Court: Specific jurisdiction over Federal revenue, taxation, banking, admiralty, and treason.

    • National Industrial Court: Exclusive jurisdiction over labor, employment, and trade union matters.

  • Legal Liability and Specialized Courts:

    • Criminal vs. Civil Liability: Criminal law punishes (imprisonment/fines) with a burden of proof "beyond reasonable doubt." Civil law compensates (damages/injunctions) with a burden of "balance of probabilities."

    • Specialized Courts: Juvenile Courts (for young offenders), Coroners Courts (inquests into unnatural deaths), and Military Courts (Court Martials).

  • Tort and Professional Ethics:

    • Tort: A civil wrong involving a breach of duty fixed by law.

    • Vicarious Liability: Liability imposed on a master for the torts of a servant committed in the course of employment.

    • Negligent Misstatement: Liability for financial loss caused by careless statements where a duty of care exists (established in Hedley Byrne v Heller).

  • Cybercrimes and Data Protection:

    • Cybercrimes Act 2024: Penalizes identity theft, hacking, phishing, and cybersquatting.

    • Data Protection Regulation 2019: Governed by principles of lawfulness, data minimization, accuracy, and security.

Law of Contract

  • Definition: A promise or set of promises that the law will enforce.

  • Essential Elements: Offer, Acceptance, Consideration, Intention to create legal relations, Capacity, and Legality.

  • Offer and Acceptance:

    • Offer: A definite promise made with the intent to be bound upon acceptance. Distinguished from Invitation to Treat (e.g., goods on display, auctions, tenders, advertisements).

    • Acceptance: Unconditional assent to the offer. Must be communicated. A Counter-offer (proposing different terms) destroys the original offer.

  • Consideration: The price paid for a promise. Types: Executory (future promise) and Executed (act completed in exchange for promise). Rules: Must move from the promisee; past consideration is generally no consideration.

  • Capacity: Minors (under 18) are generally not bound except for "necessaries" (items suitable to their condition in life). Corporations are bound by the ultra vires doctrine (acting within their objects clauses).

  • Privity of Contract: Only parties to a contract can sue or be sued on it. Exceptions: Insurance, trust, agency, and land covenants.

  • Vitiating Elements:

    • Mistake: Common (both parties share mistake), Mutual (parties at cross-purposes), or Unilateral (one party mistaken, e.g., identity).

    • Misrepresentation: False statement of fact that induces a contract (Fraudulent or Innocent).

    • Duress: Pressure through actual or threatened violence/imprisonment.

    • Undue Influence: Wrongful use of influence over a vulnerable party (fiduciary relationships).

  • Discharge/Termination: By performance, express agreement (Waiver, Novation, Accord and Satisfaction), breach, frustration (impossibility due to external events), or death (personal services).

  • Remedies: Damages, Quantum Meruit, Specific Performance, Injunction, Rescission, and Rectification.

Special Contracts: Agency, Sale of Goods, Hire Purchase

  • Agency: A relationship where an Agent acts for a Principal to create legal relations with a Third Party. Created by express appointment, implication, necessity (emergency), ratification (adopting an unauthorized act), or estoppel.

  • Sale of Goods: A contract where a seller transfers property in goods for a price.

    • Implied Terms: Title (right to sell), Description, Sample, and Quality/Fitness for Purpose.

    • Nemo Dat Rule: A non-owner cannot pass title. Exceptions: Estoppel, Sale in Market Overt, Sale by seller/buyer in possession.

  • Hire Purchase: A contract of bailment where the Hirer has an option to purchase after installments are paid. Ownership remains with the Owner until the option is exercised.

  • Leasing:

    • Operating Lease: Short-term; lessor maintains equipment.

    • Finance Lease: Long-term; lessee maintains equipment and bears risks/rewards of ownership.

Law of Business Associations

  • Partnership: Persons carrying on business in common with a view to profit.

    • General Partnership: Unlimited liability; all partners can manage.

    • Limited Partnership (LP): At least one general partner (unlimited liability) and one limited partner (liability limited to investment; no management role).

    • Limited Liability Partnership (LLP): Separate legal entity; partners have limited liability.

  • Companies:

    • Types: Private (max 50 members, restricted transfer) and Public (min 2 members, transferable shares, can invite public to subscribe). May be limited by shares, by guarantee, or unlimited.

    • Promoters: Fiduciaries who form the company. owe duty of disclosure for secret profits.

    • Directors: Fiduciaries managing the company. Duties: Good faith, care, skill, and avoiding conflicts of interest.

    • Winding Up: Liquidation via Court order, voluntarily (Members/Creditors), or under Court supervision.

Banking, Trusts, and Dispute Resolution

  • Banking: Relationship is debtor/creditor. Banker has duties of confidentiality and mandate adherence.

  • Negotiable Instruments: Choses in action transferable by delivery (e.g., Cheques, Bills of Exchange, Promissory Notes).

  • Trusts: Relationship where a Trustee holds property for Beneficiaries. Requisites: Certainty of Intention, Subject Matter, and Object.

  • Alternative Dispute Resolution (ADR): Methods includes Negotiation, Mediation, Arbitration, and Conciliation. Advantages include speed, lower cost, and privacy compared to litigation.