Q&A – 23 August 2010

Termination by mutual consent

I have entered into a contract for the supply of raw materials for the manufacture of solar panels. The goods are to be exported to China and the company has sent me a three year contract in Chinese. It is not terminable by me but it may be terminated by the importer. I got the contract translated and found that there is a clause of termination by mutual consent. Does that not defeat the purpose of having a contract in the first place? There is also a clause on renegotiation should the price of the material fluctuate plus or minus 10 percent. Is that okay?
DF, Sumbawanga

You have translated the contract into English but are surely going to end up signing the contract in Chinese. It would be wiser for you to request the importer to send you an English version of the contract. Translations have their challenges and there is no shortage of case law where one or two words in one language may not have an exact translation leading to disputes that take years to settle.

The clause on termination by mutual consent does not defeat the purpose. Under the rules of contract law, the parties may not only freely conclude contracts but may also terminate them by mutual consent. This clause would simply say that should both parties want to terminate the contract they can.

However we see it slightly conflicting with the non-termination of the contract by you. For us to be extra sure we would have to read the entire contract.

We also wish to point out that the termination by mutual clause is infrequent and does not have any additive value to the drafting. You should however seek your attorney’s opinion before concluding this deal.

Whether the renegotiation clause makes sense to your business is a commercial decision. We must point out that you must specify what will happen during the renegotiations and how long such negotiations will last and what happens if these are unsuccessful. For example you could have a clause that suspends the performance of the contract during renegotiations.

Matters that can go to Commercial Court

My issue stems from a transaction I entered into, as an individual, to supply spare parts to a firm in the agriculture sector. I have not been paid on grounds that I supplied substandard parts, an allegation that I believe has no basis at all. I wish to file a case at the High Court Commercial division in Dar es Salaam, but have been informed by lawyers that I will not be able to file a suit at this Court because my matter is not a commercial dispute as I am an individual. Whilst I do acknowledge that I have not been trading as a company, I do not understand the rationale behind being disallowed. Do I have any remedy?
FG, Dar

The High Court Commercial Division is a Court that has proved to be highly efficient and we understand why you want to file your case there.

Under the law, a commercial case is define as one which involves a matter of commercial significance, including but not limited to the formation of business or commercial organization; the governance of a business or commercial organization; the contractual relationship between a business or commercial organization with other bodies or persons outside it; the liability of a commercial or business organization or its official arising out of its commercial or business activities; the liabilities of a commercial or business person arising out of its commercial or business activities; the restructuring or payment of commercial debt by or to a business or commercial organization or person; the winding up or bankruptcy of a commercial or business organization or persons; the enforcement of awards of a regional Court or tribunal of competent jurisdiction made in accordance with a treaty or mutual assistance arrangement to which Tanzania is signatory and which forms part of the laws of Tanzania;the enforcement of arbitration award; admiralty proceedings and arbitration proceedings.

The definition of a commercial matter is quite wide and we fail to see why your matter, according to your lawyers, cannot be classified in any one of these categories above.

Unless the value of the claim is below the pecuniary jurisdiction of the High Court, Commercial division, we do not see why you should not be able to file your case there. You may want to seek a second opinion..

Judge made fun of my lawyer

I filed a suit at the High Court in Mwanza and lost the case. My lawyer told me that in the judgment the Judge has made fun of him, showing clearly the Judge’s biasedness. He has poked jokes at my lawyer and it is clear in the judgment. What can I do?
GF, Mwanza

A judgment amongst others contains facts of both party’s’ case, summary of witnesses testimony, reasons for a decision and the decision.

We have not read the judgment but merely because a judge has tried to use some humor, which judges do use at times, doesn’t mean that he was biased.

Different Judges have different writing styles- some are sober and straight; others write in a sarcastic and humorous manner. We have read judgments of judges in the western world who have actually written judgments in the form of

As long as the Judge has addressed the issue at hand, we do not see any valid reason for your lawyer to complain. He might be complaining about the Judge merely because he lost the case.

Instead of focusing on trivial points, look for important mistakes of fact or law in the judgment and file an appeal.