Business and Contract Law in Ghana Overview

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Business and Contract Law in Ghana

Ghana's legal system is primarily based on common law, with the 1992 Constitution serving as the supreme law of the land. This article provides an overview of key aspects of business and contract law in Ghana, including considerations, misrepresentation, and the illegality of contracts.

Consideration

Consideration refers to the price for which a promise is made in a contract. It must be lawful and not forbidden by law, immoral, opposed to public policy, fraudulent, or involve injury to the person or property of another. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd (1915) AC 847 gave a comprehensive definition of consideration as "an act or forbearance of one party, a promise thereof, is the price for which the promise of the other is bought … ". The consideration must be lawful, not forbidden by law, not immoral, not opposed to public policy, not fraudulent, and not involve injury to the person or property of another.

Misrepresentation

Misrepresentation involves a false statement of fact made by one party which has the effect of including that party in the contract. It may be either fraudulent or innocent, but the remedies available are the same.

Illegality of Contracts

The concept of illegal contracts in Ghana has been expanded to cover constitutionally illegal contracts. Contracts cannot be said to be illegal upon a breach of a statute and public policy only; but in the peculiar case of Ghana, the 1992 constitution. The article provides a comprehensive understanding of an unconstitutional or constitutionally illegal contract and its incidence on the rights of contracting parties.

Contract Law in Ghana

There are various laws governing contracts in Ghana, depending on the subject matter and parties in question. Some of the laws include the Contract Act, 1960 (Act 25), Conveyancing Act, 1973 (NRCD 175), Copyright Act, 2005 (Act 690), Sale of Goods Act, 1962 (Act 137), PPP Policy & Draft Bill, Minerals & Mining Act, 2006 (Act 702), Public Procurement Act, 2003 (Act 633), Ghana Investment Promotion Centre Act, 1994 (Act 478), and Local content Laws.

Competence of Parties

The parties to an agreement must be competent to contract. The common law age of majority is 21 years, but under the common law, the age of majority is 18 years. A company incorporated under the Companies Act, 2019, Act 992 automatically attains a contractual capacity. If any of the parties to the agreement suffers from minority, lunacy, idiocy, drunkenness, or other disqualifications, the agreement is not enforceable at law, except in some special cases.

Free consent of all the parties to an agreement is another essential element. Consent should be made and it should be free of any pressure or misunderstanding.

Lawful Object

For the formation of a valid contract, it is also necessary that the parties to an agreement must agree for a lawful object.

Description

Explore key aspects of business and contract law in Ghana, including consideration, misrepresentation, illegality of contracts, competence of parties, free consent, and lawful object. Learn about the laws governing contracts in Ghana and the importance of free consent and lawful object in forming valid contracts.

Business and Contract Law in Ghana Overview

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Questions and Answers

What is a necessary element for the formation of a valid contract?

Under the common law, what is the age of majority?

What is required for consent to be valid in a contract?

Which law automatically grants contractual capacity to a company in Ghana?

What happens if any party to an agreement suffers from lunacy or minority?

What must be agreed upon by the parties for the formation of a valid contract?

What does consideration refer to in a contract?

According to Lord Dunedin, what is consideration in a contract?

In a contract, what should the consideration NOT involve?

What is misrepresentation in a contract?

What type of misrepresentation has the same remedies available in a contract?

What has the concept of illegal contracts in Ghana been expanded to cover?

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