Chartered Institute of Logistics & Transport (Fiji) The Basic Principles of The Law of Business and Carriage Viren Kapadia, Sherani & Co Solicitors Wednesday 26th August 2009 LAWS OF FIJI The Constitution of Fiji Now revoked By a democratically elected parliament. Legislation Now by the President pursuant to Executive Authority of Fiji Decree 2009 Regulations Made pursuant to statues by Parliament or by the executive authority of the Minister Judge made law which are binding Common Law decisions following principles of stare decisis,ratio decidendi and obiter dicta Customary Law Village level, status based, obligatory and group focused THE COURTS OF FIJI SUPREME COURT – has appellate jurisdiction on appeals from the Fiji Court of Appeal and for The Administration of Justice Decree, Constitutional Redress matters. Supreme Court Act & Rules COURT OF APPEAL –Hears appeals from the High Court. of The Administration of Justice Decree, Fiji generally Fiji Court of Appeal Act and Rules HIGH COURT – Has unlimited original and inherent jurisdiction involving all claims in civil and criminal The Administration of Justice Decree, matters High Court Act and Rules 1988. MAGISTRATES COURT – Statutory Jurisdiction for claims of upto $50,000. Hears appeals from The Administration of Justice Decree, small claims tribunal Magistrates Court Act & Rules SMALL CLAIMS TRIBUNAL – Hears claims for sums below $5000 Small Claims Tribunal Decree OTHER STATUTORY TRIBUNALS IN FIJI DEALING WITH SPECIFIC LEGISLATION 1. Court of Review – Income Tax Act 2. Vat Tribunal – Vat Decree 3. Land Transport Appeals Tribunal – Land Transport Act 4. Sugar Tribunal – Sugar Act 5. Employment Court – Employment Relations Promulgation 6. Central Agricultural Tribunal – Agricultural Landlord and Tenants Act 7. Commerce Commission – Commerce Act 8. Telecommunication Appeals Tribunal – Commerce Act 9. Copy Right Tribunal – Copy Right Act 10.Public Service Disciplinary Tribunal – Public Service Act 11.Native Lands Appeals Tribunal – Native Lands Trust Board Act 12.Liquor Tribunal – Liquor Act DISTINCTION BETWEEN CRIMINAL AND CIVIL LAW Criminal Law: Certain behavior is illegal and punishable by fines and/or imprisonment. Criminal behavior is prescribed in the Penal Code and the procedure for Criminal Courts is set out in the Criminal Procedure Code. Presumption of innocence applies. The right to remain silent when questioned by police or other agencies is a basic human right. Proof of guilt required on a higher standard of beyond reasonable doubt. Onus on prosecution to prove each ingredient of the charge Civil Law: By contrast, civil laws are not generally punishable by imprisonment. It governs rights and responsibilities between individuals and organizations based on principles of contract, tort, trust decided cases under common law and equity and legislation. Onus on party asserting right. Proof required on balance of probability ELEMENTS OF A CONTRACT CONSIDERATION CAPACITY OFFER PERFORMANCE CONTRACT LEGALITY INTENTION COMMUNICATION ACCEPTANCE CONTRACT v TORT • Distinction between contract and torts are common law based • A contract is a legally binding agreement between two people who intend it to have legal effect. • In contract there must be offer, acceptance and consideration. Doctrine of Privity of Contract. • Advertisements for sale or displayed goods are not offers but invitation to treat • In torts the following principles are relevant: duty of care, standard of care, vicarious liability, breach, damages , contributory negligence. • A party can be sued both in contract (breach) and in tort (negligence) but can only recover one set of damages. AGENCY • Agency is concerned with relations between principal and agent in which one person has legal authority to act for another. Such relationship can arise from explicit appointment or by implication. Agency relationships generally include guardianship, executor, trustee, administrator and employee. • The central feature of Agency relationship is the agent’s authority to bind his principal. • As a general rule the principal is only bound by acts of the agent that are within the agent’s authority. An agent acting beyond his authority may be liable to his principal for breach of contract, or to the third party for breach of implied warranty of authority based on principles of implied or ostensible authority. TYPES OF AGENTS SOLICITORS MERCANTILE STEVEDORES AGENTS AGENCY FREIGHT REAL ESTATE FORWARDER AGENTS CUSTOMS BROKERS REVOCATION OF AGENCY MUTUAL AGREEMENT This occurs when the purpose of the agency is fulfilled and the agent has been remunerated. NOTICE OF REVOCATION BY THE PRINCIPAL The Principal may give notice and the revoke the agency agreement with the Agent. Revocation will not affect any existing claims which the agent and principal have against each other. For example, the Principal can still sue the agent for breach of contract, and agent can sue the principal for indemnity. NOTICE OF RENUNCIATION BY THE AGENT In this case the Agent will give notice that he no longer wishes to be bound by the agency agreement. BANKRUPTCY OR DEATH Death or Bankruptcy of the Principal terminates the agency. FRUSTRATION The contract between principal and agent can also be terminated by frustration i.e if it becomes illegal, impossible, or useless to continue the relationship. SALE OF GOODS ACT 1980 • The Act codifies the common law that has developed around the sale of goods in the UK. • Section 3 states that the contract for sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. Where property in goods is transferred from the seller to the buyer the contract is called the sale. Where the transfer of the property in the goods is to take place at a future time or subject to some condition to be fulfilled the contract is called an agreement to sell. • Section 6 states that a sale of goods on credit shall not be enforceable by action at the suit of the seller unless an invoice with certain details is given at the time of the sale and at the time of the delivery of the goods the original or duplicate of the invoice is delivered to the buyer. • Section 41 states unpaid seller has a lien on the goods even if the title has passed to the buyer provided he has possession of the goods. WHAT TERMS ARE IMPLIED IN A CONTRACT FOR SALE OF GOODS • Seller has right to sell goods. The goods must be unencumbered so that title can be given to buyer. • Sale by sample of goods will correspond with the sample shown to buyer. Sale by description must correspond to the description • Goods are of merchantable quality • Goods are fit for the purpose for which buyer indicated they are being bought • In an unconditional contract title and property in goods will pass to buyer when contract is made whether or not delivery has been made • Fair Trading Act implies further warranties and restricts unfair trade practices i.e. false and misleading representations HIRE PURCHASE RETAILER no link invoice CONSUMER agreement FINANCE COMPANY • The basic concept of a hire purchase agreement is that the purchaser who has possession of the goods is merely hiring them during the period of credit. The vendor retains title to them until full price and/or loan is paid. Title then passes to the hirer. • For example, at the Land Transport Authority although a vehicle maybe registered under the hirers name as owner he is not the owner of the vehicle but merely the hirer and the owner may be the finance company pursuant to the asset purchase agreement, hire purchase agreement or lease agreement. INSURANCE • A contract of Insurance is a contract whereby one person, the Insurer, agrees in return for money or other consideration called the premium, to pay a sum of money or its equivalent to another person, the insured, upon the occurrence of a specific contingency which affects an interest which the insured has in the subject matter of the insurance. LOSS OF PROFITS TRAVEL LIFE TYPES OF GUARANTEE HEALTH INSURANCE MARINE PROPERTY LIABILITY CARRIAGE • Carriage is simply the transportation of goods and cargo from one location to another. • It is the final step in a contract of sale of goods. • The international carriage of goods by sea from any port in Fiji to any port outside Fiji is governed by Sea Carriage of Goods Act which incorporates the Hague-Visby Rules 1924 as amended by Protocols in 1968 and 1979. • The international carriage of goods by air from Fiji is governed by Warsaw Convention 1929 as amended by Guadalajara and Montreal Conventions. • Land carriage or even coastal carriage of goods within Fiji is governed by Contract and Tort Law and Sale of Goods Act. Conventions are generally there to limit liability of the carriers. • Common Law distinguish between common carrier, private carrier and bailee for reward. Private carriers and bailee for reward enter into ad hoc arrangements for carriage and are generally liable only for failure to take reasonable care of goods. The onus of proof is on the private carrier bailee to show that it took reasonable care. • At common law, common carriers are those who hold themselves out as carrying goods for everyone on regular scheduled routes. Common carriers are strictly liable for loss or damage to goods. CONTRACTS FOR CARRIAGE OF GOODS • Carriage involves loading, storage, transportation, unloading and delivery. Cargo maybe containerized, bulk or liquid. • Carriage is frequently the final step in a contract for sale of goods. • The Shipper is often the vendor of the cargo. The ultimate consignee is often the buyer of the cargo. • Risks and title to the goods will pass during the course of the contract of carriage. General presumption is that title passes when risk passes but this is a rebutable presumption. Generally risk passes when goods are loaded on ship. • Who has title has important consequences as it determines who has a valid cause of action against the carrier for loss or damage. ORDER AND BURDEN OF PROOF IN CLAIMS In domestic carriage of goods the order and burden of proof is governed by common law. The Plaintiff has to prove: 1. Right and title to sue 2. Receipt of goods by carrier in good order and condition 3. Failure to deliver or delivery in damaged condition 4. Damages suffered by Plaintiff as a consequence. The burden then shifts to the Defendant carrier to establish a common law defence, contractual defence, exclusion or limitation of liability. SEA CARRIAGE • Responsibilities and obligations of a carrier of goods by sea established by common law are as follows: - to provide a sea worthy ship - to care for the cargo - to deliver the cargo without delay - not to deviate - share in general average • The responsibilities and obligation of the shipper is to pay the freight, not to ship damaged goods without warning and to share in general average. • In domestic inland carriage if a bill of lading is issued then the Hague-Visby Rules apply unless specifically the contract states that the Rules do not apply. • Liability can usually be limited in a contract of carriage. Limitation period of 1 year applies. • Onus and burden of proof in sea carriage of goods is governed by Hague Visby Rules given effect in Fiji by Sea Carriage of Goods Act. LEGISLATION RELATING TO SEA CARRIAGE The following laws in Fiji relate to carriage of goods by sea:- –Marine Insurance Act –Sale of Goods Act –Sea Carriage of Goods Act –Sea Ports Management Act –Wreck and Salvage Act –Marine Act –Marine Spaces Act –Ports Authority of Fiji Act –Insurance Act –Insurance Law Reform Act BILL OF LADING Bill of Lading is a legal binding commercial document and has 3 functions: - Evidence of the terms of contract of carriage - Acknowledges receipt of cargo by carrier - It is a document of title to goods that is negotiable. Way bills or sea bills are evidence of contract of carriage and receipt of cargo but are not documents of title to goods. They are not negotiable. FOB – Free on Board delivery occurs when goods are loaded past the ships rails CIF-Cash insurance and freight. Seller must pay costs of delivering cargo to destination but risk passes to buyer when goods are loaded past the ships rail. CARRIAGE BY AIR CONVENTIONS • International carriage of goods by air from or to Fiji is governed by the Warsaw Convention 1929 as amended by the Hague Protocol, Guadalajara and Montreal Conventions. • These are set out in the Civil Aviation Act Cap 174 which incorporates the Carriage by Air Act of UK. • Convention applies to passengers as well as cargo • Airline ticket is prima facie evidence of contract of carriage for passengers. • Airway bill is prima facie evidence of the contract for carriage of cargo. • Liability of carrier is limited by the Convention. KEY POINT IN THE AIR CONVENTIONS • Application only to international carriage by air • Every carrier and consignor must have an air way bill signed by both consignor and consignee • Carrier not entitled to exclusion and limitations in Convention if no air way bill • Carrier liable for delay on loss or damage to cargo. Period of liability includes during carriage by land or water for purpose of delivery. • Liability limited to specified SDR, prohibits contracting out. Notice of damage must be given within 14 days. Limitation period is 2 years to bring claims. CONCLUSION • The law relating to business and carriage is complex and numerous legislation, conventions and case law have varying effect on its applicability to the facts of a particular case. • Insurance and alternative dispute resolution mechanism are essential if disputes arise to avoid time consuming and costly legal battles that may produce unforeseen results. • In cases of doubt or potential claim it is always prudent to take specific legal advice. • The Sea Carriage of Goods Act Cap 231 which contains the Hague Visby Rules and the Warsaw Convention attached to the Civil Aviation Act Cap 174 should be studied for further details of the Conventions.
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