Introduction
Contracts form the basis of business transactions and relationships in Tanzania. They are legally binding and provide a framework for the rights and obligations of the parties involved. However, contracts can be complex, and it is essential to understand the laws that govern them. This article will explore the laws governing contracts in Tanzania.
The Law of Contract in Tanzania
The law of contract is governed by the Contract Act, 2010 (the Act) and the Common Law. The Act defines a contract as an agreement between two or more parties, which is enforceable by law. The agreement can be expressed or implied, and it can be written or oral.
Contract Formation
For a contract to be binding, it must meet certain requirements. Firstly, there must be an offer. An offer is a statement by one party to another that they are willing to enter into a contract. Secondly, there must be an acceptance of the offer. Acceptance is the expression of agreement to the terms of the contract by the other party. Thirdly, there must be consideration. Consideration is something of value that each party receives in return for their promise. Finally, there must be an intention to create legal relations. This means that the parties must intend to be legally bound by the terms of the contract.
Capacity to Contract
The parties to the contract must have the capacity to enter into a contract. This means that they must be of legal age, of sound mind, and not under any duress. In Tanzania, the age of majority is 18 years.
Form of Contract
Contracts in Tanzania can be written or oral. However, it is recommended for parties to have a written contract as it is easier to prove the terms of the contract. Additionally, where the contract relates to immovable property, it must be in writing.
Breach of Contract
A breach of contract occurs when one party fails to perform their obligations under the contract. In Tanzania, the party who has suffered a breach of contract is entitled to remedies such as damages, specific performance, and injunctions.
Conclusion
Contracts are an essential aspect of business relationships in Tanzania. It is, therefore, necessary to understand the laws that govern them. The Contract Act, 2010, and the Common Law provide the legal framework for contract formation, capacity to contract, form of contract, and breach of contract. It is essential to ensure that contracts comply with these laws to avoid disputes and legal consequences.