KENYA INSTITUTE OF MANAGEMENT

COURSE

: INTRODUCTION TO LAW (WBA)

UNIT CODE

: CCM 103

VENUE

: FH10

BRANCH

: NAIROBI

LECTURER

: MR. BONYO

DURATION

: OCT 2011 - MARCH 2012

DONE BY

: GISIRI N. PAUL

ADM NO.

: 48930

In relation to law of persons, explain the legal personality of:a) The State y The State has privileges, rights, protections, responsibilities and liabilities. y The State can incur debts y The State can sue or be sued. y The State can enter contracts. y The State can own property. b) Persons of the unsound mind y Does not have the right to vote y A marriage contracted by any person of unsound mind is not valid y Insanity is a defense to a prosecution for any crime, although the accused must prove that he was insane at the time the crime was committed y The contracts of mentally disordered persons are voidable at the option of the mentally disordered persons c) Minors or infants y A minor or infant is a person below the age of majority. y Infants can sue and be sued in tort. y An infant is not eligible to vote until he has attained the age of eighteen years and whose name appears on the register of voters. y An infant can own personal property. y As regards immovable property, an infants name can be entered in the register as the owner of registered land. y An infant cannot own immovable property. y An infant is subject to minority, i.e. an infant cannot get a driving license.

d) Trade Unions y It cannot sue and be sued and be prosecuted under its registered name. y They do not have a distinct legal personality. y Are unincorporated associations. y It cannot enter into contracts and own property. y They are not separate legal entity of their own and cannot be treated as corporations.

Distinguish between contract of guarantee and contract of indemnity.

Guarantee There are three parties; Principal debtor, Creditor & the surety The guarantor generally has no interest in the the Principal contract between the other two parties

Indemnity There are two parties; Indemnor and Indemnee The indemnor has some interest in principal contract between the indemnee and the person to whom the credit is extended. The indemnor is primarily liable to indemnee and there is no liability at all.

Theres primary liability on the principal the Debtor and secondary liability on the secondary Guarantor. Guarantors liability arises only after the principal debtor has failed to pay. There must be written evidence of the contract before it can be enforced

There is no need for writing; an oral contract is enforceable as a written one

The guarantor is discharged when the principal Contract is discharged

The indemnors liability continues even after the principal contract has been Discharge

The surety generally gives the guarantee at the Request of the principal debtor

Its not necessary for the indemnifier to act at request of the indemnity holder

The liability of the surety is secondary in nature

The liability of the indemnifier is Primary in nature

Outline the duties of a Bailor and a Bailee Bailor: Is the person or company that pledges to pay the bail of someone convicted of a crime if he or she does not show up in court.

Duties: y Duty to disclose faults in the goods bailed y Duty to bear extraordinary expenses y Duty of indemnifying the bailee y Duty to receive back the goods Bailee: Is a person with whom some article is left, usually pursuant to a contract of bailment" who is responsible for the safe return of the article to the owner when the contract is fulfilled. Duties: y y y y y y

Duty not to make unauthorized use of the goods bailed Duty to take reasonable care of the goods bailed Duty to return the goods Duty not to mix the goods bailed with his own goods Duty to return the increase in the goods bailed Duty not to set up on adverse title against the bailor

Describe ways by which a surety maybe discharged in a contract of guarantee 1. Variation of terms In a contract of guarantee, any material alteration in terms of agreement between the principal creditor and debtor without the guarantors knowledge and consent will have the effect of releasing him from the liability under the guarantee. 2. Extension of time If without the consent of the surety, the creditor makes a binding contract to extend the agreed time of repayment of the loan 3. Concealment Any guarantee which the creditor has obtained by means of keeping silent as to the material circumstances is valid 4. Fraud A guarantee which has been obtained by means of misrepresentation made by the creditor or with knowledge and assent concerning the material part of the transaction is valid 5. Revocation A contract of guarantee may be either specific or continuing. Specific guarantee relates to one transaction, and cannot be revoked. A continuing guarantee is one that extends to a series of transactions and may be revoked by giving notice to the creditor for future transactions. 6. Discharge of the principal debtor If the principal debtor is discharged from his liability by any act or omission of the creditor, then the surety is discharged as well.

7. Rights of surety If the creditor does any act which is against the rights of the surety, or omits to do anything which he is obliged to do for the protection of the securities in his possession, the surety is discharged.

END