Contract Law

Sri Lanka, formally known as Ceylon, is a multi-ethnic and multi-religion island nation in the Indian Ocean, near the southern coast of India. The ethnic and religious diversity of the nation, and also its colonial history, have a direct bearing on aspects of the legal system of Sri Lanka. The country’s largest ethnic group is the Sinhalese whose native tongue is the Sinhala language. European control of what is now Sri Lanka began a few years after 1505 when inclement weather drove a Portuguese fleet of ships, commanded by Lourenco de Almeida, into what is now the Colombo harbor.

Almeida, who also realized the strategic value of the island-nation in the context of trade routes, established cordial relations with the King in Kotte. The Portuguese did not introduce their laws in the coastal regions they controlled. The Portuguese were ousted by the Dutch during the 1600s. With the Dutch gaining control of Sri Lanka, primarily in the coastal regions, Roman-Dutch law gained a presence in the country. This “Roman-Dutch law has withstood many a tide of legal and political change to remain as the foundation of Sri Lanka’s general and common law.”

The Dutch judicial system was well organized. Three major courts of justice were established: one each in Colombo (west), Galle (south), and Jaffna (north). The customary and personal laws are based on ancient customs of the Sinhalese and Tamils whose ancestors hailed from specific regions in the country, as well as the customs of the Muslims. In 1815, when the Kandyan Kingdom in central Ceylon fell to the British, for the first time in history, the entire country of Ceylon came under the rule of a foreign power. At this point, the application of Roman-Dutch law was extended to the whole country.

The British established a modern system of judicial and civil administration. They respected the prevailing laws, namely the Roman-Dutch laws, and the customary laws that applied to the different ethnic groups. British rule lasted through 1948, when Sri Lanka gained its independence. Legal System of Sri Lanka:

- British Low- Kandiayan Law - Muslim Law- Thesawalamai Law - Roman-Dutch law

English Law has worked its way into Sri Lanka; partly through statutes which themselves enacted rules of English law, partly by tacit adoption by judicial decisions and partly by tacit use of English legal concepts. Among the statutes directly introducing English law into Sri Lanka is the Civil Law Ordinance No. 5 of 1852 (Cap. 79), which, by sections 2 and 3, introduced the law of English and in maritime and commercial matters (unless there is a contrary provision in a statute of Sri Lanka). Roman-Dutch Law now generally applies in Sri Lanka when statutes and indigenous laws do not regulate the issue in question.

Roman-Dutch Law represents in Sri Lanka an inherited legal tradition. It has co-existed with several systems of indigenous laws, and the English common law, creating a “distinct legal culture that is described today as a ‘mixed’ civil and common law system. In fact, when the British themselves declared Roman-Dutch law as the common law of Ceylon, Roman-Dutch law assumed even greater importance under the British than it had enjoyed under Dutch rule of Ceylon. Today, Roman-Dutch law exists only in Sri Lanka and South Africa. Kandyan Law applies to ethnic Sinhalese whose can trace their lineage back to the Kandyan provinces during the period of the Kandyan monarchy in central Sri Lanka.

The Kandyan monarchy ceased to exist with the British takeover of central Sri Lanka in 1815. Kandyan Law does not apply to all Sinhalese who are now resident in the Kandyan provinces. However, Kandyan Law does apply to Kandyan Sinhalese who now do not reside in the Kandyan provinces in central Sri Lanka. Kandyan Law that remains applicable to Kandyan Sinhalese in present day Sri Lanka relates to marriage, divorce, and interstate succession. Theswalamai Law is based on ancient customs of Jaffna Tamils in Sri Lanka. It applies to Tamil inhabitants of the Jaffna Peninsula in Northern Sri Lanka. This customary and personal law also applies to numerous Jaffna Tamils who no longer live in the Jaffna Peninsula.

“Offer is an expression of willingness to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, he or she will be bound by a contract. A genuine offer is different from what is known as an "invitation to treat", i.e. where a party is merely inviting offers, which he is then free to accept or reject. The following are examples of invitations to treat.”

Essentials of valid offer:

1. Offer must be capable to create legal relations. The offeror must intend the creation of legal relations. He must intend that if his offer is accepted a legally binding agreement shall result. The leading case on the point is Balfour v Belfour case (1919) The plaintiff wife and defendant husband were married in 1900. The parties lived together in Ceylon until 1915 when, the defendant on leave from his government post, they moved to England.

When, in 1916, the defendant's leave was up, he returned to Ceylon. On her doctor's advice not to travel, the plaintiff remained in England. Before the defendant returned to Ceylon, the parties orally agreed that the defendant would pay the plaintiff 30 pounds a month until she was able to return to Ceylon. The parties expected that the plaintiff would return within a few months.

However, their marriage soon deteriorated and the defendant refused to continue to make the monthly payments. In addition to receiving an order for alimony, the plaintiff brought this action to enforce their oral agreement. The trial judge found the parties' agreement to be a binding contract and ordered the defendant to pay the plaintiff 30 pounds per month. The defendant appealed. The agreement in this case was held to be unenforceable on the grounds that agreements between spouses are presumed to not have been intended to create legal relations

2. Offer must be certain, definite and not vague. No contract can come into existence if the terms of the offer are vague and indefinite. To constitute a valid agreement, it is essential that the proposal must be so certain, that the rights and obligations of the parties arising out of the contract can be exactly fixed. The leading case on the point is Taylor v. Portington case (1855) In Taylor v. Portington (1855) E.R 128 a contract for the lease of a house for three years at £85 per annum if the house was put into thorough repairs and the drawing rooms handsomely decorated according to the present style, the court refused specific performance on the ground that the terms were indefinite. 3. Offer must be communicated to the offeree. There can be no offer by a person to himself.

It must always be communicated to the offeree. If there is no communication of an offer, there is on acceptance resulting in the contract. The leading case on the point is Lalman Shukla vs. Gauri Dutt (1913) In this case, G (defendant) sent his servant l (plaintiff) in search of his missing nephew. G afterwards announced a reward for information concerning the missing boy. It traced the boy in ignorance of any such announcement. Subsequently when he came to know of this reward, he claimed it. It was held that since the plaintiff was ignorant of the offer of reward, his Act of bringing the lost boy didn’t amount to the acceptance of offer and therefore he was not entitled to claim the reward.

4. Offer must be made with a view to obtaining the assent of the other party. An offer must distinguish from mere expression of intention. An offer or proposal to do or to abstain from doing anything must be made with a view to obtaining the assent of the other party to whom the offer is made. Mere enquiry is not an offer.

5. An offer may be conditional. An offer can be made subject to a condition. In that case it can be accepted only subject to that condition. It is open to a person to whom a conditional offer is addressed to accept or no to accept condition. A conditional offer lapses when the condition is not accepted. 6. Offer should not contain a term the non-compliance of which would amount to acceptance. One cannot say while making the offer that if the offer is not accepted before a certain date it will be presumed to have been accepted. 7. Lapse of an offer. An offer lapses.

a. If either offeror or offeree dies before acceptance. b. If it is not accepted within i. The specific time ii. A reasonable time, if no time is prescribed,

iii. If the offeree does not make a valid acceptance. iv. An offer can also lapse by revocation. An offer may be revoked by the offferor at any time as long as it has not been accepted by the acceptance 8. An invitation to offer is not an offer. An offer must be distinguished from an invitation to treat or as it is sometimes called an invitation to offer. In the case of an “invitation to offer” there is no intention on the part of the person sending out the invitation to obtain the assent of the other person to such invitation. The display of goods in a shop with price tags attached is an invitation to offer. Comparison between offer and invitation to offer

1. Not capable of being accepted. 2. Objective is to seek offer. 3. May or may not generate offer. 4. If offer is generated the offeree has the available options under the law.