Oral Contract Cases in Tanzania: Understanding the Legal Implications

Contracts are an essential part of any business activity, and they are typically documented in writing. However, in some instances, contracts may be formed orally, and this is common in Tanzania. An oral contract is a verbal agreement between two or more parties that doesn`t involve a written document. Although oral contracts may be legally binding, they can be challenging to prove in court and enforce. In this article, we`ll explore the legal implications of oral contracts in Tanzania and examine some of the landmark cases that have occurred in recent years.

Legal Framework in Tanzania

In Tanzania, the Law of Contract Act (Cap. 345 R.E. 2002) governs the formation and execution of contracts. The Act defines a contract as an agreement between two or more parties that creates rights and obligations enforceable by law. The Act requires that contracts be made in writing, and any agreement not in writing is considered invalid. However, the Act also recognizes that an oral contract may be enforceable in certain circumstances.

Enforceability of Oral Contracts

Oral contracts are enforceable in Tanzania under specific conditions. Firstly, the contract must involve a legally binding agreement between two or more parties. Secondly, there must be evidence that the parties involved intended to create a legally binding agreement. Finally, there must be proof that the parties agreed to the terms of the contract.

The challenge with oral contracts is that it`s challenging to prove the existence of an agreement and its terms in the absence of a written document. This is why it`s generally recommended that contracts be documented in writing, where possible, to avoid disputes and legal challenges. Nonetheless, oral contracts can be legally binding, and parties can take legal action to enforce them.

Oral Contract Cases in Tanzania

Several cases related to oral contracts have been litigated in Tanzania in recent years. Here are some of the most notable ones:

1. Mohammed Kurji vs. Ndahamana

In this case, the plaintiff, Mohammed Kurji, and the defendant, Ndahamana, entered into an oral agreement to purchase a property. The plaintiff claimed to have paid the full purchase price to the defendant, but the defendant later denied the existence of the agreement and refused to hand over the property. The court found in favor of the plaintiff, ruling that the parties had indeed entered into a binding oral contract for the sale of the property.

2. LTM Enterprise vs. Mombasa Maize Millers

In this case, the plaintiff, LTM Enterprise, and the defendant, Mombasa Maize Millers, entered into an oral contract for the supply of maize. The plaintiff alleged that the defendant had breached the agreement by failing to pay the full amount owed for the maize. The court found in favor of the plaintiff, ruling that an oral contract existed, and the defendant was liable for breach of the agreement.

3. Tanzania Electric Supply Company Ltd vs. East African Paper Mills

In this case, the plaintiff, Tanzania Electric Supply Company Ltd (TANESCO), and the defendant, East African Paper Mills, entered into an oral agreement for the supply of electricity. The defendant later disputed the terms of the agreement and claimed that TANESCO was overcharging for the electricity supplied. The court found in favor of TANESCO, ruling that the parties had entered into a binding oral contract, and the defendant was obligated to pay the amount due for the electricity supplied.

Conclusion

Oral contracts are an essential part of business transactions in Tanzania, and they can be legally binding in certain circumstances. However, they can be difficult to prove in court, making it challenging to enforce them. It`s generally recommended that contracts be documented in writing, where possible, to avoid disputes and legal challenges. Nonetheless, parties can take legal action to enforce oral contracts and protect their rights and interests. As a business owner, it`s crucial to understand the legal implications of oral contracts and seek legal advice when entering into such agreements.