Business Law and Corporate Governance
Legal foundations and governance
Candidates should understand the law of contract (offer, acceptance, consideration, intention, capacity, legality, vitiation by misrepresentation, mistake, duress and undue influence, discharge and remedies), the law of agency, and the essentials of sale of goods and negotiable instruments. Company law matters: incorporation, separate legal personality, the constitution, share capital, directors' duties, meetings and resolutions, minority protection, and winding up. Governance content covers the board's role, independence, committees (audit, risk, remuneration), the separation of ownership and control, stakeholder accountability, and the codes and principles applicable in Rwanda.
Traps to watch
- An invitation to treat is not an offer; a counter-offer destroys the original offer.
- Consideration must move from the promisee, though it need not be adequate.
- Separate legal personality protects shareholders, but courts may pierce the veil in fraud or agency situations.
- Directors' duties are owed to the company, not to individual shareholders.
- Governance is not just compliance; it is about effective oversight and accountability.
Worked example
A advertises goods at a stated price. B responds asking whether delivery is possible within a week. This is an inquiry, not a counter-offer, so the original offer survives and B can still accept it. If B instead offers a lower price, that is a counter-offer and A's original offer lapses.
Rule of thumb
For every legal scenario, identify the parties, the nature of the obligation, whether a valid agreement exists, and the available remedy before discussing governance.