Business Law 255 study notes

Discuss the alternative ways of resolving disputes and include there advantages and
disadvantages.
Disputes are disagreements or differences of opinion usually between people who have to live or
work together. Not all legal disputes will be settled by bringing an action in a court of law such
as the Supreme Court. Instead they can be settled through the use of: Conciliation, Mediation,
Negotiation, Tribunals and Arbitration.
Conciliation: Conciliation looks for common ground to help resolve the matter to the satisfaction
of both parties so that both can move beyond the dispute. All gathered information is kept
confidential and is not available to court proceedings. Conciliation is completely voluntary and
should the parties reach a settlement; the agreement signed by the parties is a contract and is
legally binding. Conciliation can be in the form of an apology, monetary settlement. Etc.
Therefore, some advantages of conciliation is that:

It is free
Less time consuming than going to court
No media exposure
Less formal as compared to a court trial
It is voluntary

Another method used for resolving legal disputes is Mediation.

Mediation is a voluntary process in which two or more parties involved in a dispute work with an
impartial party, the mediator, to generate their own solutions in settling their conflict. Mediation
is about finding a solution that works for both parties.
Advantages of mediation include:

Promotes communication and cooperation

It is confidential
It usually costs less than litigation
It allows the parties, not the court, to make decisions affecting their future

Disadvantages include:

Because the mediator is neutral, he or she cannot personally advise either party.
If one party has been domineering during the relationship, the other party may not feel as
fully capable of expressing important concerns as he or she would if the lawyers were
present.

Additionally, negotiation is a bargaining process between two or more parties seeking to discover
a common ground and reach an agreement to settle a matter of mutual concern or resolve a
conflict.
Advantages of negotiation include:

Negotiation limits the number of players to those involved in the dispute. This allows for
a focused approach to problem solving while a disadvantage is that when the viewpoints
of the parties are too distant then progress is difficult to achieve.

The most widely used methods for resolving legal disputes are Tribunals and Arbitration.
Tribunals: A tribunal is an entity that is given the authority to pass judgment on an issue that has
been brought to its attention. The tribunal has the power to hear and determine trade disputes,
register industrial agreements, hear and determine matters relating to the registration of such
agreements; make orders or awards and award compensation on complaints brought and proved
before the tribunal.

Tribunal courts are usually informal in comparison to Supreme Court hearings although the
tribunal takes into account the legal representatives of each party when deciding whether to
apply strict rules of evidence. Remedies may be awarded for example reinstatement and
reengagement. At the end of the hearing unsatisfied parties may apply to the court of appeal only
on questions of the law.
Some advantages of tribunals are:

Cheapness
Accessibility
Freedom from technicality
Expert knowledge of their particular subject.
Help reduce the workload of the judiciary

Some disadvantages of tribunals are:

There is an unfair imbalance between represented and unrepresented parties.

The no cost rule and lack of legal aid penalize poor litigants, although they do keep costs

down
They may lack some of the perceived independence of the Judiciary

The final alternative method of resolving legal disputes is Arbitration.

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or
more arbitrators who make a binding decision on the dispute.
The arbitrator is an independent, impartial but knowledgeable neutral, jointly appointed by the
parties, who pay his fees and expenses. The arbitrators decision is legally binding. An arbitration
clause is usually included in a variety of contracts.
Advantages of arbitration are:

Speedier resolution
Less Costly
Exclusionary rules of evidence do not apply.

A disadvantage of arbitration is that arbitration awards must be enforced by the courts as

arbitrators have no power to enforce the awards that they make.
These alternative methods of resolving legal disputes are similar in that they all involve the use
of a third party; although the differences lie in the process involved in each method and the way
agreements are reached. Each of the aforementioned alternative methods has its advantages and
disadvantages, but in comparing all of these alternative methods to litigation it is obvious that
these alternative methods are less costly and speedier.

In order for a contract to be legally binding several elements must exist; List and discuss
those elements
A Contract can be defined as an agreement between two or more parties which is intended to
have legal consequences. The reference to the aforementioned word, agreement means a
meeting of the minds which is called in law, Consensus ad idem and signifies that parties are
agreed together about the same thing. The definition also emphasizes that the parties must intend

that their agreement shall be legally enforceable, because unless the law recognizes this and
enforces the agreement of parties it would be impossible to carry on commercial or business life.
The terms of a contract can be expressed or implied.
Expressed terms: Where a contract has been put into writing the parties are precluded from
adducing evidence to add to, vary or contradict its terms. However, if the written contract is not
complete and does not represent the whole transaction oral evidence will be admitted by the
court to prove a collateral damage.
Implied terms: One of the basic rules of contract is that the parties are free to make their own
terms. It is not the function of the court. However, the law may imply terms into the contract to
bring about good business efficacy.
It is important to note that every contract is an agreement but not every agreement is a contract.
The objective of the law of contract is to identify those agreements it will enforce and those it
will not. This objective is met by 7 essential elements of a valid contract.
1.

Offer and Acceptance: It must be an offer by one party and an acceptance by the other.
An offer can be made orally, in writing or by conduct. The rejection of an offer can take
place when the offeree communicates the rejection to the offer or when the offeror makes
a counter offer.
Another important element of an offer and acceptance is the revocation of an offer.
Revocation or withdrawal must be communicated to the offeree before acceptance and
must be made directly or indirectly by the offeror himself.
Lastly an offer can be terminated on the death of either the offeror or the offeree before
acceptance, by not accepting the offer within the allotted time for acceptance, when it is
revoked before acceptance and when it is rejected by the offeree.

2. Intention to create legal relations: A contract is an agreement that is intended to have

legal consequences. The requirement of intention to create legal relations in contract law
is aimed at sifting out cases which are not really appropriate for court action.
3. Capacity of the parties: each party must have the legal capacity to make or enter into the
contract or agreement (this refers to mental capacity or age).
A natural person who enters a contract possesses complete legal capacity to be held liable
for the duties he or she agrees to undertake, unless the person is a minor, mentally
incapacitated or intoxicated.
A contract made by a minor is voidable at the minors discretion.
Contracts entered into by persons under the influence of alcohol and drugs are also
voidable at the persons discretion, but only if the other party knew or had reason to know
the degree of impairment.
4. Consent: The consent must be genuine and must not have been obtained by fraud or
duress. Consent of parties must be free, for example it must not have been through
coercion, undue influence, fraud, misrepresentation or mistake.
5. Consideration: Consideration in legal terminology, is what one party to a contract will get
from the other party in return for performing contractual obligations.
Consideration requires that something must be supplied in return for the promise made by
the offeror, must not be unlawful or gratuitous and must not be something already done or
suffered.
6. Legality of object: The object of the contract must not be one of which the law
disapproves. To result in a contract, an agreement must create an obligation; and it does
not create an obligation if it is an agreement that the courts cannot enforce. An agreement
therefore which is illegal or unlawful is in fact no contract at all. For example, X
promises to obtain for Y an employment in the public service, and Y promises to pay X
1000 for that. This agreement is void as the consideration in this case is unlawful.

7. Possibility of performance: The contract must be possible to perform. If the act is

impossible of performance, physically or legally, the agreement cannot be enforced by
the law.
If any of these elements are missing the contract is void, voidable and unenforceable.

Statutory Interpretation. Give all that you know. The Meaning and Effectiveness of a
statute when interpreted by a judge.
Statute refers to enacted laws put together by legislation. The meaning and effectiveness of a
statute may only become apparent when judges have interpreted it.
In ordinary life if someone says something to you that you do not understand you ask them to
explain fully. This is impossible with the interpretation of statutes because when Parliament has
passed an act the words of the act are authoritative. The individual members of Parliament
cannot be put in the witness box to supplement or interpret what has formally been enacted. It is
because of the sort of disembodied or dehumanized act that the words of an act carry that the
courts have employed various tools and aids to assist in interpretation along with the three rules
or theories of statutory interpretation.

According to Lord Griffiths in Pepper V. Hart (1993), The Courts now adopt a purposive act
which seeks to give effect to the purpose of legislation and are prepared to look at much
extraneous material. In this case the House of Lords accepted for the first time that
judges could refer to the Parliamentary debates reported in the Hansard in order to ascertain the
meaning of an Act of Parliament.
Caribbean Courts look to Interpretation Acts which give limited guidance in the interpretation of
all statutes. E.g. the singular includes the plural and he includes she. This was used in a
Barbadian case in which the Privy Council ruled that the decision of a single Minister of
Government could be imputed to the Cabinet.
In addition the Literal Rule, Golden Rule and Mischief Rule are also used in interpreting statutes.
1.

The Literal Rule: posits that the will and intention of Parliament is best discovered by

applying the literal or natural meaning of the words in the statute

The Bahamian Case of Brown v Brown illustrates the caution in presuming Parliaments
intention. In that case the court contemplated the Matrimonial Causes Act which allowed for the
maintenance of order for adult children of a marriage who remained dependent until 22 years.
The Appellant husband contented that the application had to be made before the childs 18th
birthday. The court held that if that were Parliaments intention, it would have said so in clear
and explicit language.
Application of this rule may lead to absurdity but if the words of the act are clear, you must
follow them, even though they lead to a manifest absurdity. A Trinidadian case in which the
Court of Appeal held that where the appellant was charged and convicted of ...being found in

any building with intent (to commit a felony) it did not suffice that he was actually found
outside, with his hand through a window choking the female occupant.
Some defects of this rule are: words often have alternate dictionary meanings which require
interpretation and interpretation is subjective.
2.

The Golden Rule is the rule that a statute may be construed to avoid obscurity. In an

effort to avoid an absurd or ineffective result, words will be implied into a statute if absolutely
necessary. Lord Dunedin in Whitney v IRC stated that, A statute is designed to be workable.
Therefore a court should seek interpretation consistent with that aim.
Some criticisms of this rule are that it is applied only when the judges view to apply the literal
rule would be manifestly absurd or unreasonable; and it allows judges to apply their own
subjective interpretation (which may nullify Parliaments intention).
3.

The Mischief Rule: This rule is known as the Rule in Heydons Case. Four questions

were posed in this case:

a.

What was the common law before the act was passed?

b.

What was the defect or mischief for which the law had not provided?

c.

What remedy did Parliament propose to cure the defect?

d.

The reason of the remedy

Through the use of this rule the judges duty is to interpret the legislation so as to suppress the
mischief and advance the remedyaccording to the true intent of the makers of the Act..
The modern application of this rule is grounded in the purposive approach that is to look at the

statutes background and determine whether there is some unsatisfactory state of affairs which
Parliament intended to remedy.
In the Guyana Labor Union v McKenzie the Court looked at a Report on the legislation to find
the mischief.
Some implications of using the Mischief Rule is that the language can only be understood in
context and the rule allows for broad approach but does not indicate how far the Court may go.
When interpreting statutes the courts often announce that they are trying to discover the intention
of the Legislature. The various theories and tools used to aid in interpreting statutes overlap in
most instances. This means that the various rules and approaches work hand in hand when
interpreting statutes and attempting to get the best possible result in accord with the Statute/Act.

4. Precedent Stare Decisis

The doctrine of precedent particularly binding precedent (stare decisis) is the foundation of
common law. This Latin term translates as, To let the decision stand.
In determining a question of law, where no statutes exist to guide, a judge looks to the
case law (Judicial Precedent). The two types of Judicial Precedent are Binding Precedent and
Persuasive Precedent.
1.

Binding Precedent (stare decisis): A judge does not create a law but decides the legal

issue consistent with existing law, applying the principles found therein. In the London Tramcars
Case (1898) AC 375 Lord Halisbury stated, A decision of this house once given upon a point of

law is conclusive upon the house afterwards and it is impossible to raise that question again as if
it was res Integra and could be re argued.
2.

Persuasive Precedent: These may come from lower courts or other courts outside of the

jurisdiction (i.e. The Commonwealth or in particularly the Commonwealth Caribbean). For

example Precedents from The European Court of Human Rights are persuasive authority because
of the similarity of constitutional instruments of those jurisdictions in The Bahamas.
Simply put, under the doctrine of stare decisis the decision of a higher court within the same
jurisdiction acts as binding authority on a lower court within the same jurisdiction while courts in
other jurisdiction only act as persuasive authority. The doctrine of precedent declares that cases
must be decided the same way when their material facts are the same obviously it does not
require that all the facts must be the same. We know that in the flux of life all the facts of a case
will never recur, but the legally material facts may recover and it is with those that the doctrine is
concerned.
As with all processes of the law some advantages and disadvantages exist when using the
Doctrine of Judicial Precedent. Some advantages of Judicial Precedent is equality before the law,
the prevention of the dislocation of rights and the lessening of the prospect of litigation while
some disadvantages include: locating legal principles rendered difficult due to volume of
precedents and the danger of illogical, technical distinctions made when distinguishing
precedent, leading to excessive legalism and absurdity.
One component of the Doctrine of Precedent is Ratio Decidendi which refers to the reasons or
ground upon which a case is decided.