Contract Law Basics

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Questions and Answers

What serves as the foundation of forming a contract?

Trade-offs of promises (correct)

Witness signatures

Written documents

Legal penalties

Which of the following is NOT a key topic in the session outline?

Elements of a Valid Contract

Vitiating Factors

Types of Contract

Contract Drafting Techniques (correct)

What could be a consequence of failing to fulfill a promise within a contract?

Increased trust

Mutual understanding

Legal action (correct)

Social cohesion

What might happen if society allows promises to be made without intention to fulfill them?

Erosion of trust Signup and view all the answers

Which textbook focuses on the Law of Contract in Ghana?

Law of Contract by Christine Dowuona-Hammond Signup and view all the answers

What is one of the purposes of entering into a contract?

To perform or refrain from performing an act Signup and view all the answers

Which of the following is a crucial element when assessing the validity of a contract?

Intent to create legal relations Signup and view all the answers

What does 'vitiating factors' refer to in contract law?

Aspects that make a contract void or voidable Signup and view all the answers

What is Consideration in the context of a contract?

The price paid for the promise of the other party Signup and view all the answers

Which of the following is NOT a type of consideration?

Advisory Consideration Signup and view all the answers

What does Executory Consideration refer to?

A promise to be performed or redeemed at a future time Signup and view all the answers

Which doctrine ensures that only parties involved in a contract can enforce it?

Doctrine of Privity of Contract Signup and view all the answers

Which of the following elements is crucial for a contract to be valid?

Consideration Signup and view all the answers

What is the relationship between consideration and a contract?

Consideration is necessary for a contract to be enforceable Signup and view all the answers

Which term describes a promise that is exchanged for another promise, to be fulfilled in the future?

Executory Consideration Signup and view all the answers

Which of the following best defines a valid contract?

An agreement that includes consideration and mutual assent Signup and view all the answers

What does the Doctrine of Promissory Estoppel allow?

A promise to not enforce a right to be upheld even without consideration Signup and view all the answers

Which is a requirement for the Doctrine of Promissory Estoppel to apply?

Existing contractual relationship between the parties Signup and view all the answers

According to Lord Denning, what must occur for a promise to be binding under the Doctrine of Promissory Estoppel?

The promisee must show reliance on the promise Signup and view all the answers

What case is commonly associated with the Doctrine of Promissory Estoppel?

Central London Property Trust v High Trees House Limited Signup and view all the answers

How does the Doctrine of Promissory Estoppel affect legal relations between parties?

It modifies the legal relations based on the promise made Signup and view all the answers

Which of the following is NOT a requirement for the Doctrine of Promissory Estoppel?

Existence of a benefit for the promisor Signup and view all the answers

What does the term 'inequitable' refer to in the context of Promissory Estoppel?

Unjust or unfair treatment of a party Signup and view all the answers

What is a primary feature of the equitable exception in the context of contract law?

It can prevent unjust outcomes in absence of consideration Signup and view all the answers

What is the primary obligation of a buyer in a F.O.B contract?

To nominate a ship for the seller Signup and view all the answers

In a C.I.F contract, what does the seller deliver for the buyer?

The shipping documents Signup and view all the answers

What is a key feature of a C.I.F contract?

The sale of the shipping documents Signup and view all the answers

Which document represents the contract of carriage by sea in a C.I.F contract?

The bill of lading Signup and view all the answers

If goods are lost in transit under a C.I.F contract, what can a buyer do?

Claim against the insurer or the carrier Signup and view all the answers

What must a buyer do upon receipt of shipping documents in a C.I.F contract?

Pay the contract price Signup and view all the answers

Which of the following is NOT a duty of the seller under a C.I.F contract?

To pay the unloading costs Signup and view all the answers

What happens if a buyer accepts documents knowing they are incorrect?

They lose the right to reject the documents Signup and view all the answers

What happens to an offer once it is made?

It remains open until lapses, accepted, rejected, or revoked. Signup and view all the answers

Which of the following describes revocation of an offer?

It can occur at any time before acceptance by the Offeree. Signup and view all the answers

How is a revocation effective?

When it is received by the Offeree. Signup and view all the answers

In a unilateral contract, when can the offer not be revoked?

When the Offeree has started to perform the act of acceptance. Signup and view all the answers

What is required for a promise to keep an offer open to be binding on the Promisor?

Consideration from the Offeree. Signup and view all the answers

What happens when an Offeree makes a counter offer?

The original offer is automatically canceled. Signup and view all the answers

How is rejection of an offer categorized?

Rejection can be outright or through a counter offer. Signup and view all the answers

What provision is made by Section 8 of the Contracts Act, 1960 regarding keeping an offer open?

It allows for offers to remain open without consideration. Signup and view all the answers

What is a key characteristic of a conditional sale agreement?

The buyer gains ownership only after fulfilling certain conditions. Signup and view all the answers

In a credit sale agreement, how does the transfer of property differ from a conditional sale?

Property in a credit sale passes to the buyer immediately. Signup and view all the answers

What must a hire purchase agreement specify according to the formal requirements?

The total purchase price and amount of each installment. Signup and view all the answers

What is required of the seller before entering into a hire purchase agreement?

Inform the buyer of the cash price or hire purchase price in writing. Signup and view all the answers

What does the total purchase price in a conditional sale typically compare to the cash price?

It is higher than the cash price. Signup and view all the answers

What must be delivered to the hirer or buyer within fourteen days of the agreement?

A copy of the agreement itself. Signup and view all the answers

What condition is typically included regarding the return of goods in a hire purchase agreement?

The owner's right to repossess is limited after payment beyond a certain percentage. Signup and view all the answers

What distinguishes a conditional sale from a credit sale?

Installment payments are a requirement in conditional sales. Signup and view all the answers

Study Notes

UGBS 203 Commercial Law

Course comprises commercial law principles, including introductions, legal systems, contract law, sale of goods, and hire purchase.

Session 1 - Introduction to Law

A session overview is to enable law students understand the concept and sources of commercial laws
Session outline includes; what is law, functions of law, classifications of law, the Ghanaian legal system, sources of law in Ghana, and the source of commercial law
Reading list comprises; The Courts Act, 1993 (Act 459), The 1992 Constitution, Criminal and other Offences Act, 1960 (Act 29), Emmanuel Kwaben Quansah, (2011) The Ghana Legal System, Glanville Williams (1982), Learning the Law, Denis Keenan (1998) Smith & Keenan's English Law, Jeffrey L. Harrison (2007), Law and Economics in a Nutshell, and Geoffrey Samuel (2000)
Definitions of law; the body of principles recognized and applied by the state in the administration of justice (Salmond), rules forbidding or enjoining types of behavior under penalties, rules specifying what must be done to achieve legal effects
Functions of law; maintain order, provide justice and fairness, protect rights of individuals, and punish wrongdoers.
Classifications of law; Public and Private Law
Public Law; constitutional Law (constitution of the state, arms of state, powers and limitations, rights and obligations of citizens) and administrative law
Private Law; Law of Tort (legal issues between private individuals) and Property Law
Differences between civil and criminal law; civil law: redress of wrongs by compelling compensation or restitution, criminal law aims to punish wrongdoers
Legal system of Ghana; based on the Common Law tradition, which relies on judicial precedence. The court structure includes superior courts and inferior courts
Sources of law in Ghana; 1992 Constitution, enactments by Parliament (eg. Banking Act), orders, rules, regulations, existing law (written and unwritten laws), and common law, equity, and customary law

Session 2 - Law of Contract - Formation of a Contract

The session is to enable students understand the law governing contracts in Ghana
Session outline; Introduction, types of contract
Reading list comprises Contract Act 1960, (Act 25), Christine Dowuona-Hammond, (2011) The Law of Contract, J. Beatson et al (ed) (2010), Anson's Law of Contract, Paul Richards (1997), P. Ebow Bondzi-Simpson (2010), and Cheshire, Fifoot & Furmston's Law of Contract
What is a contract? A promise (or set of promises) that the law compels or allows to be performed (Pollock), A promise, or set of promises for the breach of which the law gives a remedy, and the performance of which the law in some way recognizes as a duty (Restatement of Contracts)
Sources of contract law; English law (common law, doctrines of equity, and English statutes of general application), Legislation (Contract Act 1960)
Doctrines shaping contract law; freedom of contract (the liberty for people to enter agreements without interference), vitiating factors (mistake, misrepresentation, illegality, duress), and sanctity of contract (the need for people to keep their promises)
Definition of contract; a promise or set of promises which the law will enforce, a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty (American Restatement of Contracts).
Elements of a valid contract; offer, acceptance, consideration, intention to create a legal relationship, and capacity to contract

Session 3 - Law of Contract - Elements of a Valid Contract

Session overview: to enable students understand the law governing contracts in Ghana
Session outline: Offer, Acceptance
Reading list comprises the Contract Act 1960, Christine Dowuona-Hammond (2011), J. Beatson et al (ed) (2010), Paul Richards (1997), and P. Ebow Bondzi-Simpson (2010)
Offer; a statement or conduct indicating a willingness to contract on terms stated or on terms which can be reasonably inferred from conduct and made with the intention that it will become binding as soon as it is accepted (Reitel)
Acceptance; unconditional acceptance of an offer
Types of offer; specific offer, general offer
Rules governing offer; an offer becomes binding as soon as it is accepted by the person or persons to whom it is made, and an offer must be communicated to the person to whom it is made to be valid.
Termination of offers; revocation (an offeror withdraws an offer), rejection (the offeree declines to accept an offer), and lapse of time

Session 6 - Law of Contract – Terms of a Contract, Vitiating Factors

Session topics; Terms of a Contract, Vitiating Factors
Terms of contract; conditions (a term so essential that its breach entitles the injured party to withdraw the contract and sue), warranties (a subsidiary term whose breach may give rise to a claim for damages), and Innominate Terms
Vitiating Factors; mistake, misrepresentation, undue influence, duress, and illegal contracts

Session 7 - Law of Contract - Discharge of Contract

Session topics; Discharge of Contract, Remedies for breach of contract
Discharge of contract; agreement, performance, breach (including total failure and anticipatory breach), and frustration
Remedies for breach of contract; damages, injunction, specific performance, action for price, and rescission

Session 8 - Sale of Goods

Session topics; Nature and Formation of a Contract for the Sale of Goods
Sale of Goods; a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer in exchange for a price, which may be wholly or partly comprised in money.
Forms of contract of sale; Sale in Market Overt, Sale to a Part Owner, Sale or Return Contracts, and Sale by Sample or Description
Types of Goods; Specific Goods, and Unascertained Goods.

Session 9 - Sale of Goods

Session topics: Transfer of Goods, Risk and Property
Transfer of Risk; Risk passes to the buyer when property in the goods passes.
Transfer of Property; specific goods contract: property passes the moment when the contract is formed. In specific, goods contract in a deliverable state: property passes immediately when the contract forms.
Duties of a seller; deliver the goods, supply goods of merchantable quality, supply goods for the intended purpose, supply goods for the right quantity, and supply goods within the stipulated or reasonable time.
Duties of a buyer; to pay the price, and accept delivery of the goods.
Remedies of an unpaid seller; lien on the goods, stoppage in transit, resale of the goods, and recovery of possession.
Rights of a buyer; to reject the goods (where the seller has breached the contract or there has been an innocent or fraudulent misrepresentation)

Session 10 - Sale of Goods - International Sale of Goods

Session topics; International Sale of Goods, Duties of the Seller and Duties of the Buyer
International Sales of Goods; free on board (F.O.B), cost, insurance, freight (C.I.F.)

Session 11 - Hire Purchase and Conditional Sale Agreements

Session topics: Hire Purchase Agreement; Nature, Formation. Conditional Sale Agreement, Differences between Conditional Sale and Credit Sale, Formal Requirements of a Hire Purchase/Conditional Sale Agreement
Hiring Purchase; A contract by which goods are delivered to a person who agrees to make periodic payments by way of hire, with an option of buying the goods after the stated hire installments have been paid
Conditional Sale; an agreement for the sale of goods where the purchase price payable by installments and the goods remain with the seller until all installments are paid.
Differences between conditional sale and credit sale; ownership transfer, payment method, pricing. Formal requirements of hire purchase decree: requirements before agreement, and requirements of the agreement

Session 12 - Hire Purchase and Conditional Sale Agreements

Session topics; Termination of Hire Purchase agreement, Protected Goods, Implied Terms in Hiring Purchase agreement
Termination of Hire Purchase Agreements; where buyer/hirer terminates agreement, buyer/hirer is liable to pay the difference between amount of money paid, and one half of the total initial purchase price or a lesser amount.
Protected Goods; A good protected is one which: (i) has been let under a hire purchase agreement or a conditional sales; (ii) one half of the price or total purchase price has been paid; (iii) in relation to which the hirer/buyer has not terminated the hire purchase agreement or bailment.
Implied Terms; quiet possession, goods are free of all charges, the owner's right to sell the goods, the good is reasonably fir for purpose. Exclusions from this implied term include; goods examined for defects, second hand goods, or where the agreement explicitly states the term is excluded.

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Description

Test your understanding of contract law principles in Ghana. This quiz covers foundational concepts, key elements required for a valid contract, and important doctrines associated with contract formation. Assess your knowledge on consideration, vitiating factors, and the consequences of breaking a contract.

Contract Law Basics - Ghana

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