CHAPTER ONE
SOURCES OF BUSINESS LAW
1.1 Introduction
Malawi law is basically received law having been adopted from English law on 4th August
1902. The legal system is fashioned on the British system (Common Law) owing to the fact
that Malawi was colonised by Britain. However, since 1902, the law has undergone tremendous
changes culminating in the 1994 Constitution which is the supreme law of Malawi. Specific
examples of sources of commercial law follow below.
1.2 The Republican Constitution of Malawi (1994)
This is the supreme law of Malawi. It provides in section 5 that any act of Government or any
law that is inconsistent with the provisions of the Constitution is, to the extent of such
inconsistency, invalid. In section 12 it provides that all legal and political authority of the State
derives from the people of Malawi and shall be exercised in accordance with the Constitution
solely to serve and protect their interests. According to section 4 of the Constitution, the
Constitution binds all executive, legislative and judicial organs of the State at all levels of
Government and all the peoples of Malawi are entitled to the equal protection of the
Constitution, and laws made under it.
The Constitution prohibits imprisoned for inability to fulfil contractual obligations (section
19(6)(c)). It provides for equality and non-discrimination in business (section 20); right to
privacy (section 21); right to property (section 28); right to economic activity (section 29);
labour rights (section 31); freedom of association (section 32); access to information (section
37); access to justice and legal remedies (section 41) etc.
1.3 Legislation
Legislation is the body of rules which have been formally enacted or made by Parliament.
Parliament can enact law directly in the National Assembly or sometimes it gives powers to
some other bodies to make law on its behalf. This is called delegated legislation. Laws made
by parliament are referred to as statutes.
Parliament is the only body in Malawi that can pass or change the law; Parliament may repeal
earlier statutes, overrule case law developed in the courts and make law on subjects which have
1
Allan Hans Muhome, Lecturer, MSG - +265 888 304 274 tmuhome@[Link]
not been regulated by law before. Various statutes on commerce and corporate law will be
referred to throughout this manual.
1.4 Custom
Custom includes rules of human actions established by usage which are adopted by the courts
because they are followed by the society as a whole or in part. If an alleged custom is to be
incorporated into law, it must be proved to exist in court. The following tests must be satisfied
for the existence of a custom to be recognized:
(a) Local custom must have existed since time immemorial;
(b) The right to exercise the custom must not have been interrupted;
(c) It must have been exercised through common consent and not by use of force;
(d) It must be reasonable- it must conform to the general view of right and reason prevailing
in the community; and
(e) It should not be in conflict with statute law.
In commerce and trade there are a number of customs that are usually unwritten for example
in banking, insurance, freight and forwarding etc. Take time to find specific examples.
1.5 Common Law
Refers to the law that was applicable throughout England. It was originally based on the
unification of the various local customary laws of England. This law was used by Royal Judges
in the Royal Courts to decide cases and is part of case law. The rules of common law were rigid
and were applied strictly. Common law introduced the concept of precedent or stare decisis
(let the decision stand).
1.6 Equity
Equity is a system of doctrines and procedures developed by the Court of Chancery in its
attempt to remedy some of the defects of the common law. It is part of case law. It introduced
the concept of fairness and flexibility. Examples of equitable remedies include rescission,
specific performance, injunction and right of redemption for a mortgagor.
1.7 International Law
It refers to international conventions and treaties. These do not become part of Malawi law
until they are incorporated by an Act of Parliament or other domestic legislation. Section 211
of the Constitution provides as follows: -
2
Allan Hans Muhome, Lecturer, MSG - +265 888 304 274 tmuhome@[Link]
1) Any international agreement entered into after the commencement of this Constitution
shall form part of the law of the Republic if so provided by an Act of Parliament.
2) Binding international agreements entered into before the commencement of this
Constitution shall continue to bind the Republic unless otherwise provided by an Act
of Parliament.
3) Customary international law, unless inconsistent with this Constitution or an Act of
Parliament, shall form part of the law of the Republic.
Examples include United Nations conventions such as the New York Convention 1958, various
UNCITRAL rules. African Union, SADC, COMESA and International Labour Organisation
(ILO) treaties, among others.
1.8 Academic Writings
Legal textbooks and articles by reputable authors are occasionally accepted as persuasive
evidence of the law where no precedents are available. The weight accorded such evidence will
depend on the author’s legal standing.
READING LIST
The Republican Constitution of Malawi 1994
Attorney General v MCP &Others (The Press Trust Case) MSCA [1997] 2 MLR 181 and
High Court decision thereof.
Chirwa D, (2012) Human Rights under the Malawi Constitution Junta & Co.
[Link]
3
Allan Hans Muhome, Lecturer, MSG - +265 888 304 274 tmuhome@[Link]
