Regulation of Financial Markets cheat sheet

Key terms

Public law

Governs the relationship between the state and individuals: constitutional, criminal and administrative law.

Private law

Governs relationships between individuals and entities: contract, tort, property and, central to this chapter, agency.

Substantive law

Defines rights and duties themselves, for example what makes a contract valid.

Procedural law

Governs how those rights are enforced, for example how a claim is brought before a court.

Supreme Court

The apex court, with jurisdiction over presidential election petitions and appeals certified as raising a matter of general public importance.

Court of Appeal

Hears appeals from the High Court and equal-status courts; the highest purely appellate court below the Supreme Court.

High Court

Unlimited original jurisdiction in civil and criminal matters, including judicial review and constitutional interpretation; the Capital Markets Tribunal's decisions may ultimately be appealed here.

Employment and Labour Relations Court

Equal status to the High Court, with exclusive jurisdiction over employment and labour disputes.

Environment and Land Court

Equal status to the High Court, with exclusive jurisdiction over environmental and land matters.

Magistrates' courts

Subordinate courts with jurisdiction limited by the value of the claim (civil) or the severity of the offence (criminal).

Kadhi's courts

Subordinate courts with jurisdiction limited to questions of Muslim personal law (marriage, divorce, inheritance) where all parties profess the Muslim faith.

Tribunals

Specialised, quasi-judicial bodies created by statute for a defined subject area, of which the Capital Markets Tribunal is the example most relevant to this paper.

Formation

Requires offer, acceptance, consideration (something of value exchanged), capacity of the parties, and an intention to create legal relations.

Classification

Contracts may be written or oral, bilateral (both sides promise) or unilateral (one side promises in exchange for an act), and simple or made under seal (a deed).

Terms of a contract

Conditions are terms so fundamental that breach entitles the innocent party to repudiate the contract; warranties are less central terms whose breach gives a right to damages only.

Vitiating factors

Circumstances, mistake, misrepresentation, duress, or undue influence, that undermine genuine consent and can make a contract voidable or void.

Illegal contracts

Contracts whose formation or purpose breaches the law or public policy are unenforceable, regardless of what the parties agreed.

Discharge of contracts

A contract ends by performance, agreement between the parties, frustration (an unforeseen event makes performance impossible), or breach.

Remedies for breach

Damages (financial compensation), specific performance (a court order to perform), injunction (a court order to stop an act), and rescission (unwinding the contract).

Limitation of actions

A claim for breach of contract must be brought within a fixed statutory period, after which the right to sue lapses even if the breach is genuine.

Nature of agency

A relationship in which one party (the agent) is authorised to act on behalf of another (the principal), creating legal relations between the principal and third parties.

Formation of agency

Arises by express appointment, by implication from the parties' conduct, by ratification (the principal later adopts an unauthorised act), or by necessity (emergency circumstances).

Authority of agents

Actual authority is what the principal genuinely gave the agent; apparent (ostensible) authority is what a reasonable third party would believe the agent had, based on the principal's own representations, and can bind the principal even where actual authority was withheld.

Duties and rights of principals and agents

An agent owes duties of good faith, obedience to lawful instructions, reasonable skill and care, and accounting for the principal's property (directly underpinning an intermediary's client-money obligations); the principal owes duties to remunerate the agent and indemnify them for authorised acts.

Personal liability of agents

An agent who discloses that they act for a principal is generally not personally liable on the contract; an agent who fails to disclose the agency, or exceeds their authority, can become personally liable.

Termination of agency

Ends by agreement, completion of the purpose, revocation by the principal, renunciation by the agent, death or incapacity of either party, or frustration.