Ghanaian Law and Equity Concepts Quiz

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Questions and Answers

Which of the following is NOT a source of law in Ghana as stipulated by Article 11 of the 1992 Constitution?

Existing laws before the 1992 Constitution

Orders, rules, and regulations made under constitutional power

International treaties ratified by Ghana (correct)

Enactments made by Parliament

What is the primary function of equity in relation to common law?

To supplement common law where its application would be too harsh. (correct)

To create completely new legal principles unrelated to common law

To strictly enforce common law without exception.

To replace common law entirely.

What does the maxim 'Equity looks to the intent and not to the form' suggest?

Technicalities should always be prioritized over substance.

Only the form of an agreement is relevant.

Legal documents should be interpreted literally.

The spirit of an agreement is more important than its exact wording. (correct)

Which statement best describes the meaning of the maxim 'He who seeks equity must do equity'?

A person seeking fairness must also act fairly themselves. Signup and view all the answers

In what context can 'common law' refers to law made by judges?

When it is contrasted with statutory law. Signup and view all the answers

Which is a common characteristic of commercial law as mentioned in the content?

Based on contracts. Signup and view all the answers

What does the maxim 'Delay defeats equity; equity aids the vigilant but not the indolent' imply?

Those who are quick to seek resolution are favored in equity. Signup and view all the answers

How can the meaning of the term 'common law' be interpreted differently?

It can refer to law made by judges, law not equity, or law of common law countries. Signup and view all the answers

In contract law, a revocation of an offer can be validly communicated to the offeree by:

A reliable third party or the offeror. Signup and view all the answers

According to the common law, a unilateral contract cannot be revoked if:

The offeree has begun the performance of the act that constitutes acceptance. Signup and view all the answers

Under common law, a 'promise to keep an offer open' for a specified time is generally:

Not binding on the offeror unless consideration is provided by the offeree. Signup and view all the answers

What is the effect of the Contracts Act, 1960, Section 8 on the common law position regarding keeping an offer open?

It reverses the common law position by stating that a promise to keep an offer open is valid without consideration. Signup and view all the answers

Which of the following scenarios constitutes a rejection of an offer?

The offeree outright refuses to accept the offer. Signup and view all the answers

What is the primary purpose of an exemption clause in a contract?

To limit or exclude one party's liability to the other. Signup and view all the answers

Which of the following is NOT a recognized method for incorporating an exemption clause into a contract?

Verbal agreement during negotiations. Signup and view all the answers

If an offeree responds to an offer by suggesting a different price, this is considered a:

Counter offer, and cancels the original offer. Signup and view all the answers

When does an offer lapse if a specific time for acceptance is not indicated?

After a reasonable time, depending on circumstances. Signup and view all the answers

What is the legal consequence of a contract found to be affected by a fundamental mistake?

The contract becomes void from the beginning (ab initio). Signup and view all the answers

What is it called when a party's conduct to procure a promise is deemed not an actual offer, but an attempt to solicit an offer?

Invitation to treat. Signup and view all the answers

Which of these factors is LEAST likely to be considered a vitiating factor in contract law?

Mutual Agreement Signup and view all the answers

In what kind of situation would a 'common mistake' most likely occur?

When both parties are mistaken about a fundamental fact of the contract. Signup and view all the answers

Which case is a key example of a 'mutual mistake' within contract law?

Addai v Pioneer Tobacco Co. Signup and view all the answers

What is the main difference between a common mistake and a mutual mistake in contract law?

In a mutual mistake, the parties are at odds over the subject matter, unlike common mistake. Signup and view all the answers

What happens if a contract has been affected by undue influence or duress?

It becomes unenforceable, and can be rescinded. Signup and view all the answers

In a unilateral mistake, what crucial element must be present for the contract to be potentially voidable?

One party is mistaken, and the other party is aware of the mistake. Signup and view all the answers

The plea of 'non est factum' can be valid when:

A party signs a document that is radically different from what they believed and was not careless. Signup and view all the answers

Which of the following is NOT a type of misrepresentation that can invalidate a contract?

Mutual misrepresentation Signup and view all the answers

What differentiates fraudulent misrepresentation from negligent misrepresentation?

Fraudulent misrepresentation involves knowledge of falsity or recklessness, while negligent misrepresentation is careless. Signup and view all the answers

A remedy available for fraudulent misrepresentation is:

Rescission of the contract and damages for deceit Signup and view all the answers

Which best describes 'economic duress' in contract law?

A party threatens to break an existing contract to force another party into another contract. Signup and view all the answers

In the context of undue influence, a 'fiduciary relationship' is characterized by:

A relationship of trust and confidence where one party may abuse the other. Signup and view all the answers

What is the key commonality between duress and undue influence in contract law?

Both involve an illegitimate coercion that vitiates genuine consent. Signup and view all the answers

Which relationship is NOT typically considered a fiduciary relationship where undue influence is presumed?

Business partners in an equal share agreement Signup and view all the answers

If a contract is found to be procured by either duress or undue influence, what is the primary remedy available to the affected party?

To rescind the contract at their option. Signup and view all the answers

Under which of the following circumstances would the right to rescission NOT be barred?

The party immediately seeks to rescind the contract after discovering the duress. Signup and view all the answers

Which of the following factors, if proven, might NOT prevent a claim of undue influence?

The consideration provided was inadequate. Signup and view all the answers

A contract deemed voidable due to undue influence can be best described as:

Valid until the influenced party chooses to void it. Signup and view all the answers

What is the primary reason a court would refuse to enforce an unconscionable contract?

Because it unfairly exploits a party's special disability. Signup and view all the answers

Which of the following contract types is NOT explicitly categorized as illegal in the provided context?

A contract that unfairly favours one company over another. Signup and view all the answers

A contract that aims to prevent any party from seeking recourse in the courts would be considered:

Illegal and unenforceable on public policy grounds. Signup and view all the answers

Which option best describes a contract that is 'discharged'?

It has ceased to operate, releasing parties from their contractual obligations. Signup and view all the answers

Which of the following scenarios represents a contract discharged by breach?

One party only partially completes their obligations under the contract. Signup and view all the answers

What is the primary function of a del credere agent?

To guarantee the fulfillment of contracts by third parties. Signup and view all the answers

Which of the following best describes how agency can be created?

Through consent, operation of law, or ratification. Signup and view all the answers

What is a key characteristic of an express agency agreement?

It is usually established by a formal contract. Signup and view all the answers

Which statement accurately reflects the contractual capacity requirements of an agent compared to a principal?

The principal must have full capacity, but the agent may not. Signup and view all the answers

What is a primary limitation on the actions that an agent can perform on behalf of a principal?

An agent can only perform actions that the principal could legally do themselves. Signup and view all the answers

What is the main legal function of a 'power of attorney' in the context of an agency relationship?

It grants authority to the agent to act on behalf of the principal. Signup and view all the answers

Which statement best illustrates implied agency?

A pattern of behavior between two parties that suggests they have a relationship. Signup and view all the answers

What does 'actual authority' refer to in the context of an agent's powers?

Authority explicitly or implicitly given by the principal. Signup and view all the answers

Study Notes

Commercial Law 1

Commercial law is a body of laws regulating various commercial transactions. It includes banking, commerce, and contracts.

What is Law?

There's no single definition for law.
Law is a system of rules defined by a particular country or community. They regulate member actions and are enforced through penalties.
Descriptions of law include:
- The body of principles the state uses for justice administration.
- Rules that dictate and prevent specific behaviors.
- Rules that set out what must be done to achieve a specific legal effect.
- Rules that establish rights, obligations, and remedies for breaches of duties.
- Law also encompasses institutions associated with it (i.e., courts, administrative bodies).
- The power of legislatures to create and alter laws.

Classification of Law

Law is classified into public and private law.
Public Law: Deals with legal issues between the state and citizens, such as:
- Constitutional Law—addresses the constitution, state powers, and citizen rights.
- Administrative Law—concerns state organizations and complaint processes.
- Criminal Law—deals with societal conduct and the associated punishments.
Private Law: Deals with legal rights and duties among individuals, including:
- Law of Tort—handles disputes between parties.
- Property Law
- Law of Trust

Distinction Between Criminal and Civil Law

Civil law aims to provide remedies for wrongs, not punishments.
Criminal law aims to punish wrongdoers to deter future crimes and possibly reform the wrongdoer.

Criminal vs. Civil Law: Summary

Feature	Criminal Law	Civil Law
Definition	Offenses against the state	Disputes between individuals
Purpose	Maintain order	Correct a wrong
Who Files Case	Prosecutor	Plaintiff
Court Type	Criminal tribunals	Civil courts
Standard of Proof	Beyond reasonable doubt	Preponderance of evidence
Decision	Guilty/not guilty	Liable/not liable
Punishment	Imprisonment, fines	Compensation, restoration

The Legal System of Ghana

The legal system in Ghana is based on the common law tradition grounded in judicial precedence.
The court structure includes superior courts and lower courts.

Sources of Law in Ghana

The 1992 Constitution is a core source.
Parliament creates laws (legislation).
Rules made under constitutional powers (bye-laws).
Pre-1992 laws (written and unwritten).
Common law, equity, and customary law are also legally recognized sources.

The Common Law and Equity

Common law is decided case law from judges.
Equity provides supplementary rules to common law, achieving fairness where common law is inadequate.

Maxims of Equity

Equity will not allow a wrong to occur without a remedy
Equity follows the law
Where the equities are equal, the law prevails
Where the equities are equal, the first in time shall prevail
He who seeks equity must do equity
He who comes to equity must come with clean hands
Delay defeats equity; equity aids the vigilant, but not the indolent
Equality is equity
Equity looks to the intent and not to the form
Equity looks on as done that which ought to be done
Equity imputes an intention to fulfill an obligation
Equity acts in personam

Scope of Commercial Law

Commercial law deals with rules and institutions of commercial transactions (like banking, contracts, etc.)
The main sources of commercial law are case law and statutes
Commercial law encompasses remedies and criminal sanctions (e.g., the sale of unwholesome goods is a crime)

The Law of Contracts- Introduction

Human interactions often involve trade-offs of needs and wants, leading to promises and obligations.
These promises, if recognized by law, establish a contract.

The Law of Contracts- Definition of a Contract

A contract is a promise or set of promises that the law will enforce.
Alternatively, it is a promise or set of promises for the breach of which the law gives a remedy or for the performance of which the law, in some way, is obligated.

The Law of Contracts - Other Key Concepts

Formal vs. Informal Contracts: Formal contracts (e.g. contracts under seal) follow specific steps; informal contracts don't.
Unilateral vs. Bilateral Contracts: Unilateral contracts involve a single act or promise in exchange (e.g., reward for a lost item); bilateral contracts involve mutual promises.
Executed vs. Executory Contracts: Executed contracts are fully performed; executory contracts aren't yet completed.
Voidable, Void, and Unenforceable Contracts: Voidable contracts can be cancelled by either party; void contracts are invalid and unenforceable from the start. Unenforceable contracts are valid but cannot be legally executed.
Quasi-Contracts: These are contracts implied by law, based on conduct and fairness.

Elements of a Valid Contract

Offer and Acceptance (Agreement): An offer is a clear indication of willingness, and acceptance is an unconditional agreement on the terms of the offer.
Intention to Create Legal Relations: The parties must intend to enter a legally binding agreement.
Capacity to Contract: Competent parties (those not minors, mentally impaired, or intoxicated) can enter contracts.
Consideration: One party must exchange something of value (e.g., money, services) to support the promise of another.

Form of Contract

Contracts can be oral, written or implied by conduct.

Forms of Offer

Specific Offer: Made to a target person or party.
General Offer: Made to the world, and anyone can accept.

Rules Governing Offers

An offer becomes binding upon acceptance by the intended recipient.
Properly Communicating the offer.
Revocation of the offer. - Withdrawal of the offer by the offeror.
Termination of the offer. - Offer being rejected.
Validity of the offer
The offeror can withdraw at any time before it's accepted by the offeree, except under certain conditions. Offers to make unilateral contracts cannot always be revoked once the offeror has started consideration (act).
A promise to keep an offer open must be supported by consideration to be legally binding.

Termination Of Offers

Offers are terminated through: - Revocation (withdrawal) - Rejection (explicit or implied) - Counteroffer (a new offer that rejects the initial offer) - Lapse of Time (if the offer had a time restriction).

Distinction Between Offer and Invitation To Treat

Offers are expressions of willingness to enter a contract; invitations to treat aren't.
Invitations to treat are invitations for others to make offers.

Examples of Invitations to Treat

Tender notices
Display of goods in a shop window.
Advertisements
Catalogues
Auction sales

Acceptance

It is an unconditional agreement to the terms of an offer that must be communicated effectively.
Usually in a form that fits the original offer.
It must not materially alter offered terms.
Acceptance may come from an implied act and communicated.
The Postal Rule: Acceptance by mail is complete when the letter is posted, even if the actual letter is not received or if it is delayed. This rule can be excluded by the terms of the agreement.

Consideration

Consideration is what a party exchanges for a promise or a contract.
It must have some economic value to be sufficient.
It must not be inadequate or illusory to a party.
Forbearance can serve as valid consideration in certain circumstances.
Past consideration is generally invalid. Exceptions to this rule (partial payment for a debt). Existing Legal Obligations: Performance of an existing legal obligation does not count as new consideration unless there are special circumstances like in performing more than legally required or an unforeseen duty added.
Consideration must move from the promisee (the person receiving the promise).

Terms Under a Contract of Sale

Conditions are essential terms whose breach allows the other party to cancel the contract.
Warranties are less crucial terms whose breach leads only to a claim for compensation, not cancellation.

Types of Goods

The Sale of Goods Act may be expressed or implied.
Specific Goods—identifiable at contract formation.
Unascertained Goods—not identifiable.

Price

Price is consideration (the payment made).
It can be explicitly stated in the contract.
It can be implied from prior business dealings.

Forms of Sale

Sale in Market Overt
Sale to a Part Owner
Sale or Return Contracts
Sale by Sample
Sale by Description
Auction Sales

Discharge of Contract

A contract is discharged when it ceases to operate.
It can be discharged through agreement, performance, breach (total failure, anticipatory breach, incomplete/defective performance), or frustration.
Frustration occurs when an event makes performance impossible or fundamentally different from what was originally agreed.

Remedies for Breach of Contract

The remedies vary depending on the contract.
They may include:
- Damages (compensation for loss)
- Specific performance (court order to fulfill the contract)
- Injunction (court order to stop a specific action)
These remedies may vary depending on contract type and nature.

Hire Purchase/Conditional Sale Agreements

Hire purchase is a transaction where possessions are obtained in stages rather than outright purchase with ownership being transferred. -The goods belong to the hire purchaser until the hire purchase agreement is completed and paid off.
Conditional Sales are a similar concept, whereby property rights remain with the seller until the buyer fulfills the contract's conditions. -The buyer does not immediately own the goods and there could be specific terms or conditions under which property ownership is transferred.

Legal Requirements Under a Hire Purchase Agreement

Formal requirements in law -Before the agreement: The owner must supply the cash price or hire purchase price of the goods, orally and in writing. -In the agreement: Terms are stated. Key specifics like installment amounts and due dates, as well as a description of the goods. Notice that the hirer has the right to terminate the agreement.

Avoidable Provisions Under a Hire Purchase Agreement

Some provisions are inadmissible under the law and considered void. -The owner or agent cannot enter private property to re-possess any goods without the consent of the hirer.
Restrictions on a hirer's rights to terminate the purchase.
Putting a person acting on behalf of the owner or seller as an agent of the owner/seller in an agreement.
Release of liability for acts of a person acting on behalf of a owner/seller.

Termination of Hire Purchase Agreement

Termination occurs before final payment with written notice.
Pay the difference between the total paid and either half of the purchase price or a lesser amount.

Protected Goods

A protected good is one for which part of the purchase price is paid or agreed to be paid before the owner or seller recovers possession
It is a method of protecting goods from repossession from the hirer or buyer

Duties of the Hirer

Obligated to pay and report any changes.
To care for the goods.
Cannot take goods out of jurisdiction without consent.

Remedies of the Owner

The owner may sue for damages,
Repudiate the contract
Claim a lien over the goods

Agency

It's a relationship in which one person is authorized to act on another's behalf in legal transactions.
There are varying types of agents.

Types of Authority

Actual Authority: The agent's authority is expressly established by the principal.
Usual Authority: The agent has authority based on the usual actions of agents within the trade or industry.
Customary Authority: Authority derived from norms of a specific place or market.
Apparent Authority: The agent's apparent authority to the outside world. The principal creates the appearance of authority either expressly or implicitly.

Agency by Operation of Law

Agency by operation of law arises without formal agreement.
This type of agency includes:
- Agency of Necessity: Occurs when there's an unforeseen emergency requiring immediate action, and the act is done on the principal's behalf.
- Agency of Co-habitation: (e.g, husband/wife)

Obligations of Agency

Duties of the Agent: Duty and loyalty to the principal, care and skill. Not delegating authority.
Duties of the Principle: Pay the agent, reimburse expenses, and indemnify the agent for lawful actions.
The relationship between principal and agent is often defined in a legally binding agreement.

Disclosed Agency

When the agent contracts with a third party, clearly disclosing the agency.
Agent has no liability in dealings, whereas third parties and the principal deal directly with each other.

Undisclosed Agency

When the agency is not disclosed or made apparent and any actions are within the customary or implied authority.
Third party may choose to enforce the contract against either the agent or the principal.

Termination of Agency

Agencies can end by the action of the parties or by operation of law.
Operation of law means there is no prior agreement or any agreement between the parties. This could be the frustration of contract or the inability of one or both of the parties to continue due to death, insolvency or other reasons.
Acts of parties may include through agreement and by either or both parties to terminate the relationship or by revocation.

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Description

Test your understanding of law in Ghana as outlined in the 1992 Constitution, including concepts of equity and common law. This quiz covers important legal maxims and the role of judges in creating law. Explore the implications of various terms and principles in commercial and contract law.