Q&A – 4 July 2011

Police focusing on petty things

Crime in Tanzania is on the rise as arms flow in from the neighbouring countries; citizens of the EAC are also taking advantage of our stability. I have noticed that when there is a serious issue, the police don’t show up on time or start blaming the party that has been victimized. I work for a bank where we had a very large computer fraud. The police came, blamed the management for laxity and have not done anything since. Actually it seems like they are siding with the staff who colluded in the crime. What irked me the most is when few months after the fraud there was a minor issue at a restaurant in the city centre, and the police showed up in two of the new Toyota’s they have, arrested one guy and took him to Court the next day! Is there no law that disallows the police to venture into petty issues which make them lose sight of bigger crime? Why should the Police focus on petty crime?
JH, Dar

A famous poet once said that laws and police regulations can be compared to a spider’s web, that lets the big mosquitoes through and catches the small ones. We do not entirely agree with the statement but it may be partially true!

Unfortunately a crime is a crime- if you steal, it does not really matter what amount you steal. Unfortunately in Tanzania there is no prioritization of crime and what the police can and cannot do with such crime. But logically you do make sense in that instead of focusing on minor issues that can be resolved without police interference, the police should be fighting serious crime.

We must mention that the police normally do not entertain issues that are in Court, issues that are related to commercial aspects which do not have any criminal element to it and property disputes. We suggest you write to the Inspector General of Police with your specific complaint and follow it through.

Unconscionable contract

A relative of mine entered into a contract that was signed by both parties. After the signing we realized that the terms do not make sense for us as we have to supply wooden logs to a local factory whereas we can sell them in Dar for double the price. What should we do?
PO, Iringa

Normally when a contract is signed it is hard to simply get out of it. In law there is a doctrine of unconscionability but it is almost always a losing argument. The doctrine was partially developed by Courts when the Court is sympathetic to the pleading party in that the contract is so one sided, so unconscionable, that it would be inequitable to enforce it. Other factors including the person’s education and bargaining power are also considered. In your case we doubt if this will apply and advice you to contact your attorney.

You must also understand that whilst contracts are meant to be kept, you can get out of a contact by paying damages- either expectation damage, reliance damages or restitution. If the cost of paying damages is less than the incremental income you will make by selling the logs in Dar es Salaam, it is an option that will still turn out to be profitable and you may consider it, provided the party that is breached does not apply for specific performance in Court.

Reserving name of company

I intend to register a company in Tanzania but do not have board approval. We have gotten clearance from the Registrar of Companies that the name under which we intend to register is available. How can we be assured that the name will still be available when we proceed to register? How long does the registration process normally take? Does a name of a limited company must have the word limited at the end of the name?
LP, Dar

The law states that the Registrar may, on written application, reserve a name pending registration of a company or a change of name by a company. Any such reservation shall remain in force for a period of thirty days or such longer period not exceeding sixty days, as the registrar may, for special reasons allow and during such period no other company shall be entitled to be registered with that name.

The law further states that no name shall be reserved and no company shall be registered by a name which, in the opinion of the Registrar, is the same as or too like a name appearing in the index of company names or is otherwise undesirable. From the above, it is possible to reserve the name and you should immediately make an application for this.

Provided you have the memorandum and articles of association of the company in place and have filled out some standard forms, the registration of companies in Tanzania is very quick and takes only a few days.

As to dispensing with the word limited at the end of your company’s name, this might not be possible as the law requires all limited liability companies to have the word limited at the end. There is an exception that we believe does not apply in your case where it is proved to the satisfaction of the Registrar that an association about to be formed as a private company is to be formed for promoting commerce, art, science, education, religion, charity or any other useful or social object, and intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Registrar may by licence direct that the association may be registered as a private company with limited liability, without the addition of the word ”limited” to its name, and the association may be registered accordingly and shall on registration, enjoy all the privileges and be subject to all the obligations of limited companies.