The Law of Contract in Ghana (2011) PDF

THE LAW OF CONTRACT IN GHANA Christine Dowuona-Hammond 2011 Published in 201 1 by Frontiers Printing & Publishing Company ChadwickHouse, #8, BirimRoad, Adabraka P.O. Box CT 195 3, Cantonments. Accra. Ghana (www.firontiers-group.com) Printed in Ghana by Buck Press Ltd. (www.buckpress.com)...

THE LAW OF CONTRACT IN GHANA Christine Dowuona-Hammond 2011 Published in 201 1 by Frontiers Printing & Publishing Company ChadwickHouse, #8, BirimRoad, Adabraka P.O. Box CT 195 3, Cantonments. Accra. Ghana (www.firontiers-group.com) Printed in Ghana by Buck Press Ltd. (www.buckpress.com) ISBN : 978-9988-1-5216-1 © Christine Dowuona-I lammond PREFACE Contract law is not only a significant source of regulation of most activities in society, it is also one of the most important building blocks for a variety of other subjects traditionally taught in the law student's training. Over the years, in addition to the statutory reforms made in the law on consideration, guarantees, third party rights and frustration of contracts via the Contracts Act of Ghana, 1960 (Act 25), judicial innovation in the law of Contract has also been refreshing and engaging. The courts have adapted and developed the Common Law rules in areas such as the formation of contracts, consequences of illegality, privity of contract and remedies. The book therefore seeks to present the Common Law principles of contract as modified by Ghanaian statute and judicial developments. Having had the privilege of teaching the Law of Contract at the Faculty of Law, University of Ghana, for the past twenty years, this book represents for me, a great opportunity to contribute to the comprehensive statement of the law of Contract as it applies in Ghana. The book aims to provide an in depth understanding of the basic and traditional principles and concepts of contract law as they apply in Ghana. It is recognized that in order to equip lawyers to plan, predict, advocate and make or reform the law, they must have more than a static knowledge of the legal rules. They must be acquainted with the reasoning behind the rules as well as the practical issues which arise in their implementation. An attempt is therefore made to discuss as many cases as possible, giving an insight into the adjudicative process and the reasoning of the courts in fashioning and applying the principles of contract law. In order to give some perspective on the trends and reasoning behind the principles, the book includes useful commentaries and academic opinions on the impact of the concepts and principles presented. A number of extracts from journal articles arc included to present the perspectives and views of some scholars as well as novel approaches which have been suggested for the solution of problems in contract law. The material has been organized and structured in a simple manner to ensure that readers easily grasp the import of the principles discussed and appreciate the interactions between the various concepts. The materials presented in the book are outlined in considerable detail, with an elaborate table of contents and numerous sub-headings. This is intended to facilitate ease of reference for users, flexibility in selection and to guide and direct the user's attention. Ultimately, it is hoped that the book will serve as a comprehensive and useful resource for the study of the law of contract in Ghana. ACKNOWLEDGEMENTS I am profoundly grateful to Professor G. K. A. Ofosu-Amaah, who taught me the Law of Contract some twenty-seven years ago at the Faculty of Law, University of Ghana and got me interested in a career of teaching law. I would like to express my sincerest gratitude to Justice S. K. Date-Bah, Justice of the Supreme Court of the Republic of Ghana, who painstakingly read through the manuscript and made very important suggestions for its enhancement. I thank all my colleagues at the Faculty of Law, University of Ghana, for their support and encouragement throughout the years. I am especially grateful to Professor C. E. K. Kumado, Professor Nii Ashie Kotey, and Mrs. Ama Hammond, who read through the manuscript and made comprehensive comments and suggestions for its improvement. Special thanks also go to Miss Zeinab Ayariga who assisted with the editing of the book. To my husband, Arthur and children, Joel, Sharon and Christine, you are my greatest source of inspiration. I am grateful to God for making you a part of my life. Notwithstanding all the inputs and contributions acknowledged, I remain exclusively responsible for any shortcomings or errors that may be found in the book. CONTENT Preface v Acknowledgements vi Table of Statutes xiii List of Cases xv CHAPTER ONE: THE NATURE AND ESSENCE OF CONTRACT 1 1.0 Introduction 1 1.1 Promises and Contractual Obligations 3 1.2 Elements of a Valid Contract 3 1.3 Ascertaining the Fact of Agreement 4 1.3.1 Nature and Test of Agreement 5 1.3.2 The Objective Test 5 1.3.3 Application of the Objective Test 7 CHAPTER TWO: OFFER AND ACCEPTANCE 16 2.0 Introduction 16 2.1 Process of Formation of Contract 16 2.2 What Constitutes an Offer? 18 2.3 Offer Distinguished From "Invitation to Treat" 21 2.3.1 Tender Notices 22 2.3.2 Display or Exhibition of Goods for Sale 26 2.3.3 Advertisements 28 2.3.4 Circulation of Catalogues and Price Lists 30 2.3.5 Auction Sales 30 2.4 Bilateral and Unilateral Contracts 33 2.5 General Offers 34 2.6 Acceptance 36 2.6.1 Acceptance by Conduct 36 2.6.2 Acceptance and Counter-offers 37 2.6.3 Counter-offer and Inquiry 38 2.6.4 Communication of Acceptance 40 2.6.5 Prescribed Method of Acceptance 48 2.7 Termination of Offers 51 2.7.1 Rejection of Offer 51 2.7.2 Lapse of Time 52 2.7.3 Revocation of Offer 52 2.8 Problems of Communication Battle of Forms 56 CHAPTER THREE: INTENTION TO CREATE LEGAL RELATIONS 59 3.0 Introduction 59 3.1 Establishing an Intention to Create Legal Relations 59 3.2 Agreements Made in the Domestic or Social Setting 62 3.2.1 Agreements Entered into Between Husband and Wife 62 3.2.2 Agreements Entered into between Parent and Child 65 3.2.3 Other Domestic Arrangements 65 3.3 Commercial Agreements 66 CHAPTER FOUR: CAPACITY TO CONTRACT 68 4.0 Introduction 68 4.1 Contractual Capacity of Minors 68 4.1.1 Contracts for "Necessaries" 69 4.1.2 Beneficial Contracts of Service 71 4.1.3 Voidable Contracts 73 4.1.4 Minor's Liability in Loan Contracts 75 4.1.5 Minor's Liability in Torts 76 4.1.6 Minor's Right to Enforce Contract Against Adult Party 78 4.2 Contractual Capacity of Mentally Incompetent Persons 79 4.3 Contractual Capacity of Drunken or Intoxicated Persons 80 CHAPTER FIVE: CONSIDERATION 82 5.0 Introduction 82 5.1 Definition of Consideration 83 5.2 Kinds of Consideration 84 5.3 Rules Governing Consideration 85 5.3.1 Past Consideration 85 5.3.2 Exceptions to Past Consideration Rule 86 5.3.3 Consideration Need not be Adequate 88 5.3.4 Forbearance as Consideration 89 5.3.5 Sufficiency of Consideration 92 5.4 Reform of Specific Rules on Consideration by the Ghana Contracts Act, 1960 (Act 25) 93 5.4.1 Promise to keep Offer Open for Specified Period of Time - Section 8( 1) of Act 25 93 5.4.2 Part Payment of Debt - Section 8(2) of Act 25 95 5.4.3 Pre-Existing Legal Obligations 98 5.4.4 Pre-Existing Obligations & Section 9 of Act 25 99 5.5 Overall Impact of Section 9 of Contracts Act, 1960 (Act 25) 104 5.6 Section 10 of Act 25 - Consideration Need Not Move from Promisee 107 5.7 The Doctrine of Promissory Estoppel 108 5.7.1 Scope of the Doctrine 111 CHAPTER SIX: TERMS OF CONTRACT 119 6.0 Introduction 119 6.1 Ascertaining the Terms of the Contract 120 6.1.1 Tests for Ascertaining the Terms of an Oral Contract 121 6.1.2 Collateral Contracts 126 6.1.3 Written Contracts 129 6.1.4 Signed Contracts 131 6.2 Classification of the Terms of the Contract 141 6.2.1 Conditions 142 6.2.2 Warranties 143 6.2.3 Innominate or Intermediate Terms 145 6.3 Implied Terms 148 6.3.1 Terms Implied by the Court 148 6.3.2 Terms Implied by Custom 151 6.3.3 Terms Implied by Statute 153 6.4 Standard Form Contracts and Exemption Clauses 154 6.4.1 Exclusion Clauses 155 6.4.2 Enforcement of Exclusion Clauses in Contracts 156 6.4.3 Incorporation of Exclusion Clauses in the Contract 157 6.4.4 Interpretation of the Clause 163 6.4.5 Contra Proferentem Rule 163 6.4.6 Exclusion of Liability for Negligence 165 6.4.7 Exclusion of the Liability of Third Parties 167 6.4.8 Doctrine of Fundamental Breach of Contract 168 CHAPTER SEVEN: PRIVITY OF CONTRACT 175 7.0 Introduction 175 7.1 Rule on Privity of Contracts 175 7.2 Legislative Changes to the Doctrine of Privity Contracts Act, 1960 (Act 25) 177 7.3 Section 5 (1) of the Contracts Act, 1960 (Act 25) Conferment of Benefit on Third Party 178 7.3.1 Incidental Beneficiaries 180 7.4 Section 10 of Contracts Act 182 7.4.1 Exceptions to the Rule on Third Party Rights 183 7.5 Related Provisions Section 6 CHAPTER EIGHT: MISTAKE 187 8.0 Introduction 187 8.1 Mistake 187 8.1.1 Legal Effect of Mistake 188 8.1.2 Effect of Mistake at Common Law 188 8.1.3 Effect of Mistake in Equity 189 8.2 Different Kinds of Mistake 189 8.2.1 Mutual Mistake 189 8.2.2 Unilateral Mistake Mistake as to the Identity of a Contracting Party 190 8.2.3 Common Mistake 190 8.2.4 Mutual Mistake or Mistake as to the Terms of the Contract 191 8.2.5 Unilateral Mistake Mistake as to the Identity of a Contracting Party 193 8.2.6 Mistake as to Identity Induced by the Fraud of One Party 194 8.2.7 Establishing Mistake as to Identity of Contracting Party 195 8.2.8 Common Mistake 202 8.2.9 Mistake in Equity 210 8.3 Summary of Law on Mistake 217 CHAPTER NINE: MISREPRESENTATION 219 9.0 Introduction 219 9.1 What Constitutes an Operative Misrepresentation? 219 9.1.1 Silence as Misrepresentation 222 9.1.2 The Representation Must Be Addressed to the Party Misled 223 9.1.3 Inducement 224 9.2 Kinds of Misrepresentation 227 9.2.1 Fraudulent Misrepresentation 227 9.2.2 Negligent Misrepresentation 229 9.2.3 Innocent Misrepresentation 232 9.3 Rescission 234 9.3.1 Discretion of the Court 236 9.3.2 Restitution 236 9.3.3 Affirmation of Contract 237 9.3.4 Lapse of Time 238 9.3.5 Third Party Rights 238 CHAPTER TEN: DURESS AND UNDUE INFLUENCE 239 10.0 Duress And Undue Influence 10.1 Duress 239 10.1.1 Economic Duress Duress by Threatened Breach of Contract 240 10.2 Undue Influence 241 10.2.1 Express Use of Influence or Domination of Other Party 242 10.2.2 Presumption of Undue Influence where there is a Fiduciary Relationship between Parties 243 10.3 Unconscionable Contracts 245 CHAPTER ELEVEN: ILLEGALITY AND THE ENFORCEMENT OF CONTRACTUAL OBLIGATIONS 250 11.0 Introduction 250 11.1 Contracts Which are Illegal on Grounds of Public Policy 250 11.1.1 Contracts to Commit a Crime, Tort or Fraud on Another Party 251 11.1.2 Contracts Which Promote Sexual Immorality 252 11.1.3 Contracts which Interfere with Regulations of Foreign Countries 252 11.1.4 Contracts Prejudicial to the Administration of Justice 253 11.1.5 Contracts Leading to Inefficiency and Corruption in Public Life 253 11.1.6 Contract to Deceive Public Authorities 255 11.1.7 Contracts to Oust the Jurisdiction of the Courts 256 11.1.8 Contracts to use Official Positions or Public Office to Secure Private Reward 257 11.2 Contracts In Restraint of Trade 257 11.2.1 Restraint Clauses in Contracts for the Sale of a Business 258 11.2.2 Restraint Clauses in Employment Contracts 259 113 Effects and Consequences of Illegality 261 11.4 Illegality in Performance 262 115 Recovery of Money or Property Transferred Under an Illegal Contract 265 11.5.1 Exceptions to General Rule that Moneys Paid and Property Transferred Under an Illegal Contract are Irrecoverable 266 CHAPTER TWELVE: DISCHARGE OF CONTRACT 273 12.0 Introduction 273 12.1 Discharge by Agreement 273 12.2 Discharge by Performance 275 12.2.1 Requirement of Exact and Precise Performance of Entire Contracts 275 12.3 Discharge by Breach 282 12.3.1 Anticipatory Breach 282 12.4 Discharge by Frustration 288 12.4.1 Applying the Test for Frustration 290 12.4.2 Illustrations of the Doctrine of Frustration 292 12.4.3 Application of Doctrine of Frustration to Leases 296 12.4.4 Self Induced Frustration 297 12.4.5 Consequences of Frustration 298 12.4.6 Contracts Act, 1960 (Act 25) Statutory Provisions on the Consequences of Frustration of Contracts 300 CHAPTER THIRTEEN: REMEDIES FOR BREACH OF CONTRACT 304 13.0 Introduction 304 13.1 Recovery of Damages for Breach of Contract 305 13.2 Test Of Reasonable Foreseeability Remoteness of Damage 305 13.2.1 Likelihood of Loss 311 13.2.2 Assessment of Damages for Breach of Contract for the Sale Of Goods 313 13.2.3 Compensation for Wasted Expenditure 314 13.3 Mitigation of Damages 315 13.3.1 Scope of "Duty" to Mitigate 319 13.4 Mitigation and Anticipatory Breach 120 13.5 Damages Fixed by the Contract Liquidated Damages and Penalties 322 13.5.1 Distinction between Liquidated Damages and Penalties 323 13.6 Recovery of Non-economic Losses 325 13.7 Equitable Remedies 326 13.7.1 Specific Performance 326 13.7.2 Injunction 335 Index TABLE OF STATUTES Ghana Auction Sales Law, 1989 (P.N.D.C. Law 230) 30, 31, 32 Bills of Exchange Act, 1961 (Act 55) 119 Children's Act, 1998 (Act 560) 69 Contracts Act, 1960 (Act 25) 53,85,93,94,96,97,99,100,101,103,104, 105,106,108,118,119,168,177,178,180,181,182, 183,184,185,186,270,271,300,301,302,303 Conveyancing Decree, 1973 (N.R.C.D. 175) 74,119,153,249268329 Copyright Act, 1985 (RN.D.C.Law 110) 89 Electronic Transactions Act, 2008 (Act 772) 46, 47, 51 Football Pools Authority (Amendment) Decree, 1975 (N.R.C.D. 358) 61 Hire Purchase Decree, 1972 (N.R.C.D. 292) 119,153,154.268 Illiterates' Protection Ordinance, Cap 262 (1912 Rev.) 139 Incorporated Partnership Act, 1962 (Act 52) 74 Marriage Ordinance, Cap 127(1951 Rev.) 52,64 Mortgages Decree, 1972 (NRCD 96) 119,154 Motor Vehicle (Third Party Insurance) Act No. 42 of 1958 182 Sale of Goods Act, 1962 (Act 137) 30,31,32,33,70,142,153,154,164,204, 205,277 313314,315,321,322,327 Students Loan Scheme Law, 1992 (P.N.D.C. L 276) 75 U.K. Infant Relief Act, 1874 68 Unfair Contract Terms Act, 1977 157,174 Family Law Reform Act, 1969 68 Unfair Terms in Consumer Contracts Regulations, 1994 174 Unfair Terms in Consumer Contracts Regulations, 1999 156 Contracts (Rights of Third Parties) Act, 1999 177 NEW ZEALAND Illegal Contracts Act, 1970 270 LIST OF CASES Acheampong v. Acheampong G.L.R. 34 64 Adams v.Lindsell (1818) 1 B& Aid 681; 106 ER 250 43 Addis v. Gramaphone Co. Ltd A.C. 488; 78 LJKB 1122 325 Addison v. A/S Norway Cement Export Ltd 2 G.L.R. 151 14 Addy v. Irani 2 G.L.R. 30 267 Adjabeng v. Kwabla G.L.R. 37 88 Adjayi v. R.T. Briscoe (Nigeria) Ltd 3 All ER 556 112,114 Adlerv.Dickson 1QB 158 167,185 Afordi & Others v. Ghana Publishing Corporation [2005-2006] S.C.G.L.R. 1104 290 Ahumah v.Akorli(No.2) 1 G.L.R. 473 327,328 Ailsa Craig Fishing Co. Ltd. v. Malvern Fishing Co. Ltd 1 WLR 964.172 Alderslade v. Ilendon Laundry Ltd 1 All ER 244 166 Alexander v. Railway Executive 2 All ER 442 171 Alexander v. Rayson All ER Rep 185255 Allcard v. Skinner (1887) LR 36 Ch D 145, CA 242,243,244 Allen v. Pink (1838) 4 M & W 140 131 Alliance Bank v. Broom (1864) 62 E.R. 63 91 Amalgamated Investment & Property Ltd v. John Walker 3 All ER 509, CA 188 Amar Singh v. Kulubya 3 All ER 499, PC 266 Ampofo v.Fiorini.G.L.R.829 257 Anderson v. Daniel 1 K.B. 138 262 Andrews Bros (Bournemouth) Ltd v. Singer & Co. Ltd 1 K.B. 17 164 Anglia Television Ltd v. Reed 1 Q.B.60; 3 All E.R. 690 314 Anning v. Kingful GL.R. 404 52 Appleby v. Myers (1867) L.R. 2 C.P. 651; 16 L.T. 669 281 Archibold v. Spanglett 2 W.L.R. 170; 1 All E.R. 417 263 Argy Trading Development Co. Ltd. v. Lapid Developments Ltd. 1 W.L.R. 444 2 Asare v. Antwi 1 GLR 16, CA 33 Ashmore & Ors v. Dawson Ltd 1 W.L.R. 828; 2 All E.R. 856 264 Ashun v. Accra Brewery Limited S.C.G.L.R. 81 310,315 Associated Japanese Bank (Int'l) Ltd. v Credit Du Nord 3 All ER 902, 1 WLR 255 209,217 Atta Kwamin v. Kufour (1914) P.C. 74-'28, 28; 2 Ren. 808, P.C 138 Attica Carriers v. Ferrostal 1 Lloyd's Rep 250 288 Attitsogbe v. Post Telecommunications Corporation [1995-96] 1 G.L.R. 582.317 Atwood v. Small (1838) E.R. 684 225,226 Avery v. Bowden (1855) 5 E. & B 714; 119 ER 647; 25 LJ.Q.B. 49 285 Ayarna & Anor. v. Agyemang & Ors 1 G.L.R. 306 244 B &S Contract & Designs Limited v. Victor Green" Publication Limited 1 CR 654; affd B.P. (West Africa) Ltd. v. Boateng (1963)1 G.L.R. 232 141 Baidoo v. Sam [1987-88] 2 G.L.R 666 CA 181 Baker v.Jones 1 W.L.R. 1005 256 Balfour v.Balfour 2 K.B. 571 63,66 Ballet v. Mingay 1 A11ER 143; KB. 281 76 Banco de Portugal v. Waterlow [ 1932] All ER Rep 181, HL; [ 1932] A.C.452 320 Bank of West Africa Ltd v. Appenteng 1 GLR 153 91 Bannerman v. White (1861) 10 CB (NS) 844121,124 Barclays Bank v. Sakari [1996-97] S.C.G.L.R. 639 290,294 Barton v. Armstrong 2 All ER 465 239 Bell v. Lever Bros. AC 161 203,205,206,207,209,210 Berg & Sadler v. Moore 1 All ER 637; 2 KB 158, CA 251 Beswick v. Beswick A.C. 58 177,183,330 Bettini v. Gye (1876) 1 QBD 183, [1874-80] All ER Rep 242 144 Bigos v. Boustead 1 All ER 92 251,272 Bisset v. Wilkinson A.C. 177; 42 T.L.R. 727 220 Boakyem and Others v. Ansah 2 G.L.R 223 140 Board of Directors Orthodox Secondary Schoolv. Tawlma Abels 1 G.L.R.419 : 137 Bolton v. Madden (1873) L.R. 9 Q.B. 55 2,88 Bolton v. Mahadeva 2 All ER 1322, CA 276 Boughton v. Knight ( 1873) LR 3PD 64 80 Boulton v. Jones 1857 E.R. 232; 6 W.R. 107 193 Bowmakers-Ltd. v. Barnet Instruments K.B. 65; 2A11E.R.579 266 Bridge v.Campbell Discount Co. Ltd 2 All ER97,CA 325 Brinkibon v. Stahag Stahl und Stahlwarenhandelsgescllschaft MBH 2 A.C. 34; 2 WLR 264, H6 46 British Crane Hire Corporation v. Ipswich Plant Hire Ltd Q.B. 303; All ER 1059 162 Brogden v. Metropolitan Railway Co. (1877) 2 App Cas 666, HL 36 Brown Jenkinson & Co. v. Percy Dalton 2 All ER 844, 2 QB 621, CA 251 Buckpitt v. Oates 1 W.L.R. 975; 1 All ER 1145 65 Butler Machine Tool Co. v. Ex-Cell O Corporation (England) Ltd I All ER965 57 Byrne & Co. v. Leon Van Tienhoven (1880) 5 CPD 344 44,53 C. & P. Haulage v. Middleton 1 W.L.R. 1461; 3A11ER94,CA 320 C.A.S.T. v. Nketia 1 GLR 363 128 C.C.C. Films (London) Ltd, v. Impact Quadrant Films Ltd. Q.B1 16 314 Callisher v. Bischoffsheim (1869-70) L.R. 5 Q.B. 449 91,92 Canada Steamship Lines v. The King A.C. 292; 1 All ER 305, PC " 165 Candler v. Crane Christmas 2 K.B. 164; 1 All ER 426 230,231 Car & Universal Finance Co. v. Caldwell 1 Q.B. 525; 1 All E.R. 290 235 Carlill v. Carbolic Smokeball Co. 2 Q.B. 484; affd. 1QB 256 30,34,42,43,55,221 Carter v. Silber 2 Ch. 278 74 Cehave N.V. v. Breme Handelsgesellschaft MBH (The Hansa Nord) 3 All ER 739; QB 44, CA 147 Central London Property Trust Ltd v. High Trees House Ltd K.B. 130; 1A11ER256 110,111,116 CFC Construction Company (WA) Ltd. & Read v. Attitsogbe [2005-2006] SCGLR858,SC 245,247 Chandler v. Webster i KB 493, CA 298,299 Chanter v. Hopkins (1838) 4 M. & W. 404 169 Chapelton v. Barry UDC 1 K.B. 532; 1 AH E.R. 356 27,160 Chaplin v. Leslie Frewin (Publishers) Ltd [1966J Ch. 7i 70,72 Chappell & Co. Ltd v. Nestle Co. Ltd 2 All.ER 155, CA 88 Chappie v. Cooper (1844) 13 M &W252 '.'„'. 69,70,71 Charrington v.Simons Co. Ltd 1 WLR 725 335 Chaudry v. Prabakhar 1 W.L.R 29; 3 All ER 718 232 Cheliniv.Nieril96P.2d915(1948) 326 Christmas v. Beauchamp A.C. 607 74 City & Country Waste Ltd v. Accra Metropolitan Assembly [2007-2008] SCGLR409. 269,270 City and Westminster Properties Ltd v. Mudd 2 All ER 733; [ 1959] Ch. 129 127 Clarke v. Dickson (1858) EB & E 148, 120 ER 463 236 Clarke v. Dunraven A.C. 59 16 Clements v. London North West Rly Co 2 Q.B. 482, CA 71 Cohen v. Roche 1 K.B. 169 327 Colins v. Godefroy (1831) 1 B & Ad 950 99,100,103 Combe v. Combe ; sun nom. Coombe v. Coombe 2 K.B. 215 ; 1 All ER 767, CA 111,115,116 Cooper v. Phibbs (1867) LR 2 HL 149 205,211 Cork & Bandon Rly v. Cazenove (1847) 10 Q.B. 935 74 Corpe v. Overton (1838) 10 Bing 252; Holmes v. Blogg (1818) 8 Taunt 508 74 Couturier v. Hastie (1856) 5 HL.C. 673; 10 E.R. 1065 203,204 Cowan v. O'Connor (1888) LR 20 Q.B.D. 640 43 Coward v. Motor Insurers Bureau 1 All ER 531; 2 WLR 663; 1QB 259, CA 62 Cowern v. Nield 2 K.B. 110 73 Cox v. Phillips Industries Ltd 3 All E.R. 161 326 Crane v. Hegeman-Harris Co.Inc. 1 All E.R.662 216 Cricklewood Property & Investment Trust Ltd. v. Leigh tons Investment Trust Ltd 1 All ER 252; AC 221, HL 296,297 Cundy v. Lindsay (1878) 3 App. Cas 459; 38 L.T. 573; 26 W.R. 406 195,196,197,201 Curie v. Misa E.R. 10 Exch. 153 4,82,83 Curtis v. Chemical Cleaning And Dyeing Co. [ 1951 ] 1 K.B. 805 30,132,167,223 Cutter v. Powell (1795) 6 T.L.R. 320; 101 ER 573 275 D & C Builders Ltd v. Rees 3 All ER 837; 2 Q.B. 617 97,115240 Darlington Borough Council v. Wiltshier Northern Ltd 3 All E.R. 895; 1 WLR 68. CA 177 Davies Contractors Ltd v. Fareham U.D:C A.C. 696; 3 W.L.R. 37 290,293 Davies v. Benyon-Harris (1931) 47 T.L.R. 42 74,75 De Francesco v. Barnum (1890) 45 Ch. D 430 70,71 De Lassalle v. Guildford 2 K.B. 215 CA 126 Deegbe v. Nsiah & Antonnelli [1984-86] 1 G.L.R. 545 3738 Delle & Delle v. Owusu-Afriyie [2005-2006] S.CG.L.R. 60 89 Delmas Agency Ghana Ltd v. Food Distributors International Ltd [2007-2008] 2 S.C.G.L.R. 748 318 Dennant v. Skinner 2 All ER 29 28 Denny, Mott & Dickenson v. Fraser 1 All ER 678; AC 265 295 Derry v. Peek (1889) LR 14 App.Cas. 337; (1889) 5 TLR 625; [1886-90] All ER1,HL 227 Dick Bentley Production Ltd v. Harold Smith Ltd 1 WJL.R. 623 122,123 Dickenson v. Dodds (1876) 2 Ch.D. 463 53,54 Dimmock v. Hallet (1866-67) LJR 2 Ch. App. 21 221 Domins Fisheries Ltd v. Bremen-Vegesacker-Fisheries 2 G.L.R. 490 H.C 39,330 Dormenyor v. Johnson Motors Ltd [1989-90] 2 G.L.R. 145 18,29 Doyle v. Olby (Ironmongers) Ltd 2 Q.B. 158; 2 All E.R. 119 228,229 Doyle v.White City Stadium Ltd 1 K.B. 110 71,72 Dunlop Pneumatic Tyre Co. Ltd v. New Garage & Motor Co A.C. 79 84,176,183,185,323,324 Eastern Power Ltd. v. Azienda Communale Energia and Ambiente 125. O.A.C. 54 48 Eastwood v. Kenyon ( 1840) 11 A& E438 86 Ecay v. Godfrey (1947) 80 Lloyds L.R. 286 121,122 Edgington v. Fitzmaurice (1885) 29 Ch. D. 459 221 225 Edwards v. Carter A.C. 360 74 Edwards v. Skyways Ltd 1 All E.R. 494; 1 WJL.R. 349 67 Ejura Farms (Ghana) Ltd. and Anor. v. Hartley 1 G.L.R. 158 179 Elder Dempster & Co. v. Paterson, Zochonis & Co. A.C. 522 186 Entores Ltd v. Miles Far East Corporation 2 Q.B. 327; 2A11E.R.498; 40,41,46 Erlanger v. New Sombrero Phosphate Co (1878) 3 App Cas 1218; [1874-80] All ER Rep 271, HL 236 Errington v. Errington 1K.B. 290; [1952 1 All E.R. 149 34,35 Esso Petroleum v. Mardon Q.B. 801 123,232 Evans Marshall & Co v. Bertola 2 Lloyd's Rep. 17 315,320 Eyre v. Measday 1 A11ER488.CA 150 Faccenda Chicken Ltd v. Fowler Doman Ch 117 259 Farah v. Robin Hood Flour Mills Ltd and Another GLR 377 154 Fawcett v. Smethurst (1914) 84 LJ.K.B. 473 71,76 Federal Commerce Navigation Co. v. Molena Alpha Inc. A.C. 757 283 Felthouse v. Bindley (1862) 11 CD. (N.S.) 869; 142 ER 1037 49,50 Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd (The Fibrosa Case) 2 All ER..122, AC 32, HL 299,300 Financings Ltd. v. Stimpson 1 WJLJR.1184; 3 All ER 386 48 Fish & Meat Co. Ltd v. Ichnusa Ltd 1 G.L.R. 314 273 Fisher v. Bell 3 All ER 731; 1 Q.B. 394 26 Flight v. Bolland (1828) 4 Russ. 298 78,334 Flint v. Brandon (1803) 8 Ves 159 327 Foakes v. Beer (1884) 9 App. Cas. 605 95,96,97,109 Fofie v.Zanyo 2G.L.R.475 S.C 40,41,326,332 Foley v. The Queen (2000-08-04) T.C.C. 1999-1768-IT-I 46 Foster v. Driscoll 1 KB 470; AH ER 130, CA 252 Foster v. Mackinnon (1869) L.R. 4 C.R 704 133 Frafra v. Boakye 2 G.L.R. 332 CA 308 Frederick E. Rose Ltd v. William Pirn 2 All ER 739, CA 14,189,193,206,208,210,211,216,217 Freeman v. Cooke (1848) 2 Exch 654 7 Frost v. Knight (1872) L.R. 5 Ex. 322; 26 L.T. 77 282 Gallie v. Lee A.C. 1004 130,134 George Mitchell v. Finney Lock Seeds 2 All ER 737 173 Gibbons v. Proctor (1891) 64 L.T 594 35,36 Gibson V.Manchester City Council 2 All ER 583, C A 16,20 Glasbrook Bros. Ltd v. Glamorgan County Council A.C. 270 100 Godley v. Perry 1 W.L.R. 9 326 Godsoll v.Goldman lCh.292 261 Gore v. Van der Lann 2 Q.B. 31 2 Grainger & Son v. Gough A.C. 325 28,30 Great Northern Railway v. Witham (1873) L.R. 9 C.R 16 23,25,26 Grist v. Bailey Ch. 532 189,212,218 H. West & Sons Ltd. v. Shephard A.C. 326 326 Hadley v. Baxendale [1843-60] All ER Rep 461; 9 Exch. 341 305,306,307,308,311 Hamer v. Sidway 27 N.E. 256; 124 N.Y. 538 66,89,90 Hammond v.Ainooson 1 GLR 176 61 Hardman v. Booth (1863) 1 H & C 803; 158 ER 1107 199,200 Hardwick Game Farm v. Suffolk Agricultural Producers Association 1 W.L.R. 125; 1 AER 309; 1 WLR 287 161 Harris v. Nickerson (1873) L.R. 8 QB 286 31 Harrison & Jones Ltd v. Bunten & Lancaster Ltd 1 All ER 903 207,210 Hart v. O'Connor 2 All E.R. 880 80 Hartley v. Posonby (1857) 7 E. & B 872 101 Hartog v. Colin & Shields 3 All E.R. 566 193, 214,12 Hasnem Enterprises Ltd v. IBM World Trade Corporation [1993-94] 1 GLR 172, HC 112 Head v. Tattersall ( 1871) L.R 7 Ex. 7 237 Hedley Byrne v. Heller & Partners A.C.465; 3 W.L.R. 101 230,231,232 Heilbut, Symons & Co v. Buckleton AC 30 125,126 Henthorn v. Fraser 2 Ch. 27 44 Herbert Morris Ltd. v. Saxelby 1 AC 688 259 Heme Bay Steamboat v. Hutton 2 K.B 683 293 Heywood v. Wellers Q.B. 466 326 Hill v. CA Parsons Co Ltd. Ch 305 333 Hochester v. De la Tour(1853) 2 E. & B. 678; 22 LJ.Q.B. 455 283 Hoenig v. Isaacs 1 T.L.R. 1360; 2 All E.R. 176 277 Hollier v. Rambler Motors Ltd 1 All ER 399 162 Holman v.Johnson (1775) 1 Cowp 341; [1775-1802] All ER Rep. 98, KB 262 Holwell Securities v. Hughes 1 All E. R. 161; 1 W.L.R. 155 45 Hong Kong Fir Shipping Co. Ltd v. Kawasaki Kisen Kaisha Ltd. 2 Q.B. 26 146,147 Hornal v. Neuberger Products Ltd 1 Q.B. 247 7 Horsfall v. Thomas (1862) 1 H & C 90, 158 ER 813; (1862) 6 L.T. 462 222,224 Hounslow London Borough Council v. Twickenham Gardens Development Ltd 3 All ER 326; 1 Ch 233; 3 WLR 538 288 Household Fire and Carriage Accident Insurance Co. v. Grant (1879) 4 Ex. D. 218, CA 44 Hughes v. Liverpool Victoria Friendly Society 2 KB 482; [1916-17] All ER Rep. 918 266 Hughes v. Metropolitan Railway Co. (1877) 2 App. Cas. 439; [1874-80] All ER Rep 187, HL 109,112 Hutton v. Warren (1836) 1 M & W466 130,152 Hyde v. Wrench (1840) 3 Beav 334; 49 ER 132 37,51 Imperial Loan Co v. Stone 1 Q.B. 599 79,80 In Re Mahmoud & Ispahani All ER Rep 217, CA 261 In Re Timber & Transport Kumasi-Krusevac Co. Ltd; Zastava v. Bonsu & Anor. G.L.R. 370 284 Ingram v. Little 3 All ER 332, CA 198,199 Interfoto Picture Library Ltd v. Stiletto Visual Programme 1 All E.R. 348 158,159 Inusah v. DHL Worldwide Express 1 GLR 267 131 Jackson v. Horizon Holidays Ltd 3 All E.R. 92; 1W.L.R. 1468 326 James Finlay & Co. Ltd. v. N. V. Kwik Hoo Tong H.M. 1 K.B. 400 319 Japan Motors Trading Co. Ltd v. Randolph Motors Ltd [1982-83] GLR536 274 Jarvis v. Swan's Tours 1 Q.B. 233; 1 All EH. 71 326 Jones v. Padavatton 2 All ER 616; 1 WLR 328 65 Jones v.Vernon's Pools Ltd. 2 All ER 626 61 Joscelyne v. Nissen 2 Q.B. 86; 1 All E.R. 1213 131,189,215 Joseph Constantine Steamship v. Imperial Smelting Corporation [ 1941 ] 2 All ER 165; AC 154;165 L.T.27,HL 298 Joseph v. Boakye 2 GLR 392 284,285 Jiixon-Smith v. KLM Dutch Airlines [2005-2006] SCGLR 438 309 Karsales (Harrow) Ltd v. Wallis 2 All ER 866 170 Kaufman v. Gerson K.B. 591, CA 239 Kearley v. Thomson (1890) L.R 24 QBD 742 271 Keir v. Leeman (1846) 9 Q.B 371 253 Kessie v. Charmant 2 G.L.R. 194 100,105,257 Keteley's Case (1613) 1 Brown 120 74 King's Norton Metal Co. Ltd. v. Edridge, Merritt & Co. Ltd (1897) 14 T.L.R. 98 CA 195,196 Khiri Cotton Co. Ltd v. Dewani 1 All ER 177 268 Koah v. Royal Exchange Assurance 1 G.L.R. 158 179,181,182 Kores Manufacturing Ltd v. Kolok Manufacturing Ltd 3 All ER 158; 2 W.L.R. 858; 2AUE.R.65 260 Kiell v. Henry 2 KB 740 293 Kwaddey v. Okantey 2 GLR 84 91,254 Kwamin v. Kufuor 2 Ren. 808, P.C 138,246 Kwarteng v. Donkor 1 GLR 20 253,267,272 L'Estrange v. F. Graucob 2 K.B. 394 131,132,133,157 Lake v. Simmons All ER 49,HL 200 Lamare v. Dixon (1873) LRS HL414 Lampleigh v. Brathwaite (1615) Hob. 105; 80 ER 255 86 Lancaster v. Walsh (1938) 4 M & 16 34 Lartey v. Bannerman 2 G.L.R. 461 75,78,334 Lasky v. Economy Grocery Stores, 319 Mass 224,65 N.E. 2d 305 (1946) 27 Laurence v. Lexcourt Holding Ltd 2 All ER 810 213 Law v.Redditch Local Board 1 Q.B. 127 323 Leaf v. International Galleries 1 All ER 693 207,210,238 Lee v. Showmen's Guild of Great Britain [ 1952] 1 All ER 1175, [ 1952] 2QB329 256 Lefkowitz v. Great Minneapolis Surplus Stores 86 N.W 2d 689 (1957) 30 Lemenda Trading Co. v. African Middle East Petroleum Co. Ltd Q.B.488 253 Lempiere v. Lange (1879) 12 ChD. 675 77 Les Affreteurs R6unis Soci6te* Anonyme v. Leopold Walford Ltd A.C. 801 152 Leslie Ltd v.Sheill 3 KB 607, [1914-15] All ER Rep 511, CA 77 Levisonv.Farin2AHE.R. 1149 320 Lewis v.Averay 3 All ER 907; 1 Q.B. 198 196,199,202,238 Lewis v. Clay 67 C.J. Q.B. 224 133 Lloyd v. Stanbury 1 W.L.R. 535 314 London and Blackwall Railway Co. v.Cross (1886) 31 Ch D 354,369 335 London v. Northern Estates Co. V. Schlesinger 1 K.B. 20 296 Long v. Lloyd 2 All ER 402 237 Lovell and Christmas Ltd v. Wall 104 L.T. 85,88 215 Lowe v. Griffiths (1835) 1 Scott 458; (1835) 4 LJ.C.P 94 73 Luxor (Eastbourne) Ltd. & Others v. Cooper A.C. 108; 1 All E.R. 33 34,55,149 Mabsout v. Fara Bros (Ghana) Ltd GLR 437 277 Maddisonv.Alderson(1883)8App.Cas467 220 Magee v. Penine Insurance Co Ltd 2 All ER 891; 2 Q.B. 507 189,212 Malins v. Freeman 48 E.R. 537 189,214 Manchester Diocesan Council for Education v. Commercial and General Investments Ltd W.L.R. 241; 3 All E.R. 1593 49 Marfo & Others v. Adusei G.L.R. 365 82 Maritime National Fish Ltd v. Ocean Trawlers Ltd A.C. 524; 1.53 L.T. 425 297 Mason v. Provident Clothing and Supply Co. Ltd A.C. 724 258,259 Matthews v Baxter LR 8 Exch 132 80 Mccutchem v. David Macbrayne 1 W.L.R. 125 161 McManus v. Fortescue 2 KB 1, CA 32 McRac v. Commonwealth Disposals Commission (1951) 84 CLR 377 204 Mercantile Union Guarantee Corp. v. Ball 2 K.B. 498; 3 All E.R. 1 73 Mercer v. Brempong II 2 GLR 376 244 Merritt v. Merritt 1 W.L.R. 1211; 2 A11E.R. 760 63 Mersey Steel & Iron Co. v. Naylor Benzon (1884) 9 App. Cas. 434 283 MoltonvCamroux(1848)2Exch487 80 Monarch Airlines Ltd v. London Luton Airport Ltd C.L.C. 698 165 Morgan v. Manser 1 K.B. 184; All ER 666, CA 292 Morleyv.Loughmah lCh.736 242 Moschi v. Lep Air Services A.C. 331; 2A11E.R.393 283 Motor Parts Trading Co v. Nunoo 2 G.L.R. 195 129 Mutual Finance Ltd v John Wetton & Sons Ltd 2 KB 389 242 Nash v. Inman 2 K.B. 1,CA 70 National Carriers v. Panalpina (Northern) Ltd 1 All ER 161 297 National Westminster Bank Pic v. Morgan AC 686;{1985] IA11.E.R.82......243 Neoplan (Ghana) Ltd v. Harmony Construction Co. Ltd [1995-96] 1 G.L.R. 662 HC 142,144 Newbigging v. Adam (1886) 34 Ch. D. 582 233 Nichol v.Godts(1854) lOExch. 191 169 Nicholson & Venn v. Smith-Marriot (1947) 117 L.T 189 209 Nkrumah v. Serwah & Others [1984-86] 1 GLR 190 135 Nocton v. Ashburn [1914| A.C. 932 229 Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Ltd [ 1894] A.C. 535 184,258,259 North Ocean Shipping Co. Ltd v. Hyundai Construction Co. Ltd (The Atlantic Baron) 3 All ER 1170 240 North Western Railway Co. v. McMichael (1850) 5 Exch. 114 74,75 Norton v. Relly (1764) 2 Eden 286 242 Nottidgev. Prince (I860) 2 Giff 246 242 NTHC Ltd v. Antwi SCGLR 117 18,19,21 Nutakor and Another v. Adzrah GLR 445 316 Offord v. Davies (1862) 12 C.B. (N.S.) 748 53 Olatiboye v. Captan GLR 146 261 Ouey v. Marlborough Court Ltd 1 K.B. 532; 1AHER127,CA 160 Oscar Chess v: Williams 1 W.L.R. 370; 1 All ER 325 122,123 OwusuAsiedii v. Adomako & Adomako [2007-2008] SCGLR 591 4 P. Y. Atta & Sons Ltd v. Kingsman Enterprises Ltd [2007-2008] 2 SCGLR 946 6 Page One Records, Ltd v. Britton 1 WLR 157 334,336 Pao On and Others v. Lau Yiu Long and Others A.C. 614; 3 All E.R. 65 87,241 Parker v. Clark 1 All ER 93, 1 WLR 286 65,66 Parker v. South Eastern Railway(1877) 2 CRD. 416 157 Parkinson v. College of Ambulance Ltd All ER 325 253,265 Parsons Ltd v. Uttley Ingham & Co. 1 All ER 525 312 Partridge v. Crittendon 2A11E.R.421 28,29 Payne v. Cave (1789) 3 Term Rep. 148 52 Payzu v. Saunders 2 K.B. 581; 121 L.T. 563 315 Pearce v. Brooks (1866) LR 1 Exch 213; [1861-73] All ER Rep 102 252 Peek v. Gurney (1873) L.R. 66 H.L. 377; [1861-73] All ER Rep 116 224 Perbi v. Attorney General 2 GLR 16723,24,25 Percival Ltd. v. London County Council Asylums & Mental Deficiency Committee (1918) 87 L.J.K.B. 677 24 Peters v. Fleming (1840) 6 M & W 42 70 Pettittv. Pettitt 1 All ER 1053 64 Pharmaceutical Society of Great Britain v. Boots Cash Chemist (Southern) Ltd: 2 Q.B. 795 26,28 Phillips v. Brooks 2 K.B. 243 197,199,200,238 Photo Production Ltd. v. Securicor Transport Ltd A.C. 827. HL 169,172 Pilkington v. Wood Ch. 770; 3 W.L.R. 522 319 Pinnel's Case (1902) 5 Co.Rep.117a 95,96,97,109 Planche v. Colburn (1831) 8 Bing. 14 278 Pokua v. State Insurance Corporation 1 G.L.R. 335 182 Poussard v. Spiers (1876) 1 QBD 410,45 LJQB 621,34 LT 572 144 Powell v. Lee (1908) 99 L.T. 284 41 Prah & Others v. Anane GLR 458 327,329 Price v. Easton (1833) 4 B & Ad 433 175 Printing & Numerical Registering Co. v. Sampson (1975) LR 19 Eq 462 88 Pym v. Campbell (1856) 6 E & B 370 130 Quao v. Squire 1 G.L.R. 270 134,136 Quartey v. Norgah G.L.R. 319 CA 152 R. v. Braithwaite 1 W.L.R. 385 2 R. v. Clarke (1927) 40 CL.R. 227 34 R.T. Briscoe (Ghana) Ltd v. Essien 2 G.L.R. 265 112,296,302 Raffles v. Wichelhaus (1864) 2 Hurl & C 906; 159 ER 375 10 11,192 Ramsgate Victoria Hotel Ltd v. Montefiore (1866) L.R. 1 Ex. 109 52 Rann v. Hughes (1778) 7 T.R. 350n 4,82 Ray v. Sempers A.C 370; 2 W.L.R. 359 222 Re Casey's Patent, Stewart v. Casey 1 Ch. 104 87 Re Jones ex. p. Jones (1881) 18 Ch. D. 109 73 Re London & Northern Bank ex p. Jones 1 Ch. 220 44 Re Mahmoud & Ispahani 2 K.B. 716 261 Re Mcardle Ch. 669; 1 All E.R. 905 85,86 Re Moore & Co. v. Landauer & Co. 2 K.B. 519 275,276 Re National Permanent Benefit Building Society (1869) L.R. 5 Ch. App. 309 75 Re Nothumberland and Durham District Banking Co., ex p. Bigge (1858) 28 LJ. Ch. 50 224 Re Rhodes (1890) 44 Ch D 94 80 Redco Ltd. v. Sarpong 2 GLR 457, C.A 327 Redgrave v. Hurd (1881 82) LR 20 Ch.D. 1, CA 226,227233 Regazzoni v. KC Sethia (1944) Ltd 1 All ER 229; AC 301; 3 WLR 752, HL 252 Reigate v. Union Manufacturing Co. (Ramsbottom) 1 K.B. 592 149 Richardson, Spence & Co v. Rowntree A.C. 217 158 Riverlate Properties v. Paul Ch. 133; 3 W.L.R. 564; 2 All ER 656 189,217 Roberts v. Gray 1 K.B. 520 71,72 Robertson v. Jackson (1845) 5 C.B. 412 130 Robophone Facilities v. Blank 1 W.L.R. 1428; 3 All E.R. 128 323 Rockson v. Armah 2 G.L.R. 116 154 Ronbar Enterprises Ltd v. Green 2 All E.R. 266 258,259 Rookes v. Barnard 2 All ER 825 97 Roscorla v. Thomas (1842) 3 Q.B 234 85 Rose & Frank Co v. Crompton Bros 2 K.B. 261 59,60,66 Routledge v. Grant (1828) 4 Bing 653 53,93 Routledge v. McKay 1 W.L.R. 615 125,126 Royal Dutch Airlines (KLM) and Anor. v. Farmex Ltd [1989-90] 2 G.L.R. 623 S.C 305 S-ATurqui & Brothers v.Lamptey 1 GLR 190 5 Saunders v. Anglia Building Society (Gallic v. Lee) A.C. 1004; 1 All ER 243 134 Schandorfv.Zeini 2 GLR 418 263 Schawel v. Reade 2 LR. 81 124,125 Scott v. Avery (1855) 5 HLC 811; [1843-60] All ER Rep 1 256 Scott v. Brown, Doering, McNab & Co. 2 QB 724 265 Scott v. Coulson 2 Ch 249 209 Scriven Bros v. Hindley & Co. 2 H & C 906; 3 K.B. 564 12,192 Scruttons v.Midland Silicones Ltd 1 All ER 1, AC 446, [ 1962] 2 WLR 186 167,168 Seddon v. North Eastern Salt Co. Ltd 1 Ch. 326 237 Selby v Jackson (1844) 6 Beav 192 80 Shadwell v. Shadwell (1860) 9 CBNS 159; 142 ER 62 103 Shanklin Pier Ltd v. Detel Products Ltd 2 K.B. 854 127,128 Sheikh Bros Ltd v. Ochsner A.C. 136; 2 W.L.R. 254 209 Shirlaw v. Southern Foundries (1926) Ltd 2 K.B. 206 149 Short v.Morris WALR 339, HC 5 Shuey v. United States 92 U.S 73 (1875) 54 Simpkins v. Pays 3 All ER 10 65 Skanska Jensen International v. Klimatechnik Engineering Ltd [2003-2004] SCGLR698 279 Smeaton Hornscom & Co. Ltd v. Sasson I 2 All ER 1588; 1 WLR 1468 172 Smith and Snipes Hall Farm Ltd. v. River Douglas Catchment Board 2 K.B. 500 I 177 Smithv.Chadwick(1884)9A.C. 187 225 Smith v. Hughes 2 All ER 859 7,13,191,222 Smith v. Land & House Property Corp. (1884) 28 Ch D 7, CA 220 Smith v. Leech Brain & Co. Ltd 2 Q.B. 405 312 Societe Generate de Compensation v. Moshie Ackerman 1GLR413 316 Sollev. Butcher 1 K.B.671 189,211,212 Spencer v. Harding (1870) L.R. 5 C.P. 561; 23 L.T. 237 22 St. Enoch Shipping Co. Ltd v. Phosphate Mining Co. 2 KJB. 624 277 Staffordshire Area Health Authority v. South Staffordshire Waterworks Co. 1 W.L.R. 1387; 3 All ER 769 290, 295 Steinberg v. Scala (Leeds) Ltd 2 Ch. 452 74 Stevenson, Jacques & Co. v. McLean (1880) 5 Q.B.D. 346 38 Stickney v. Keeble A.C. 386,419 326 Stillk v. Myrick (1809) 2 Camp 317 97,101,102 103 Stroud v.Austin & Co. (1883) Cab & El 119 314 Suisse Atlantic Case (Suisse Atlantique Soci6t6 D'armament Maritime SA. v. N.V. Rotterdamsche Kolen Centrale) A.C. 827 172 Sumpter v. Hedges 1 QB 673, CA 275,278 Sze Hai Tong Ltd. v. Rambler Cycle Ltd 3 All ER 182, AC 576, 3 WLR 214, PC 170 Taddy & Co. v. Sterious & Co. 1 Ch. 354 176 Tamplin v. Anglo-American Petroleum Production Ltd [ 1916] 2 AC 397, " [1916-17] All ER Rep 104 289 Tamplin v. James (1880) 15 Ch. D. 215; [1874-80] All ER Rep 560, CA 9,191214 Taylor v. Caldwell (1863) 3 B & S 826 289,292 Taylor v. Chester [1861-73] A1J ER Rep 154 265 The Heron II 1 A.C. 350; 3 All E.R. 686 311,312 The Mihalis Angelos3AHER 125,CA; 1 Q.B. 164 147 The Moorcock (1889) 14 P.D. 64; [1886-90] All ER Rep 530, CA 120,148,149,151 The Pas ( Town of) v. Porky Parkers Ltd et al 1 Canada Supreme Court Report 51 232 Thomas v. Thomas (1842) 2. Q.B 851 83 Thompson v. London, Midland and Scottish Rly Co. 1 K.B. 41 CA 137 Thornton v. Shoe Lane Parking Ltd 1 All ER 686; 2Q.B.163 158,159,160 Tinn v. Hoffman & Co (1873) 29 L.T. 271 36,49 Tool Metal Manufacturing Co. Limited v. Tungsten Electric Company 1 W.L.R. 761 111,112,113 Tredegar Iron & Coal Co. v Hawthorn Bros. & Co (1902) 18 T.L.R 716 322 Trollope and Colls Ltd v. North West Metropolitan Regional Hospital Board 2 All E.R.260 149 Tsede and Others v. Nubuasa and Another GLR 338 116,117 Tweddle v. Atkinson (1861) 1 B & S 393; [1861 -73] All E.R. 369 107,108,175,182,183 Vancouver Malt Co. v. Vancouver Breweries A.C. 181; AC 181, All ER Rep 38 259 Victoria Laundry Ltd. v. Newman Industries 1 All ER 997, 2 KB 528 307,308,311 WJ. Alan & Co. Ltd v. El Nasr Export and Import Co. 2Q.B. 189 112,113 Wallis,Son & Wells v. Pratt & Haynes A.C. 394; [1911-13] All ER 989, HL 142,144,164,172 Walters v. Morgan (1861) 3 De GF & J 718,45 ER 1056 222,332 Warlow v. Harrison [1843-60] All ER 620 33 Watts vSpence Ch 165 332 Waya v. Byrouthy WiA.L.R. 413 HC 140 Webster v. Cecil (1861) 30 Beav. 62 213 Wells (Merstham) Ltd v. Buckland Sand and Silica Ltd 1 All ER 41; 2 QB 170; 2 WLR 453, QBD 128 White & Carter (Councils) Ltd v. McGregor 3A11ER1178,HL 287,288 White v. Blackmore 2 Q.B. 651; 3 WLR 296, CA157 White v. Bluett (1853) 23 L.J Ex. 36 91 White v. John Warwick & Co. 2 All E.R. 1021 166 Whitehall Court Ltd v.Ettlinger 1 KB 680 296 Whittington v. Seale-Hayne (1900) 82 LT49; 16TLR 181 233 Whitwood Chemical Co. V. Hardman 2 Ch.416 337 Whywall v. Campion (1738) 2 Stra. 1083 73 Williams v. Roffey Bros. & Nicolls Contractors Ltd 1 All ER 512, CA 102 Wilson v. Brobbey 1 GLR 250 130,134,136 Wilson v. Darling Island Stevedoring & Lighterage Co. Ltd (1955) 95 C.L.R.43 186 Wilson v. Northampton and Banbury Junction Rly Co. (1874) 2Ch.App.279 327 With v. O'Flanagan Ch. 575 223 Woodar Investment Development Ltd v. Wimpey Construction (UK) Ltd 1 All E.R. 571 177,283 Wroth v. Tyler 1 All ER 897; Ch. 30312 Yeboah & Anor. v. Krah (1969) C.C. 42. Civil Appeal No. 27/64. (Judgment delivered on 23rd December, 1968 by Amissah J.A. on behalf of the Court of Appeal) 179,180,181 Zagloul Real Estates Co Ltd (No 2) v. British Airways Ltd [1998-99] SCGLR378 332 Chapter One: THE NATURE AND ESSENCE OF CONTRACT 1.0 INTRODUCTION The subject of contract law deals with a form of activity which is characteristic of and essential to community life the making of bargains and consensual transactions for the fulfillment of day to day requirements. Contracts are made by people every day, whether the parties recognize it or not. Each time one spends money on anything a newspaper, a bus ticket, an airline ticket, a pair of shoes, a meal in a restaurant, laundry services, books, or signs a lease, one concludes a valid and legally binding contract. Contract law is relevant to most of the major relationships which individuals enter into in society: employment, housing (whether by purchase or by renting) and generally as consumers of goods and services. Contract law is also of great importance to corporate organizations since most companies conduct their business transactions through contracts with customers, suppliers and employees. Contracts differ widely in size, content, form and duration. The contents and subject matter of the contract may differ widely: sale, hire purchase, insurance, employment, marriage, mortgage, leases etc. Some of the agreements or transactions made in everyday life are recognized by the law as giving rise to enforceable rights and obligations, while others are not. The law of contract is simply that branch of the law which governs the effort to achieve and carry out voluntary agreement. The principles of the law of contract are basically concerned with determining whether or not an agreement or transaction is legally enforceable and if so, what should be the consequences of its breach. The term "contract" is often used to refer to an agreement, consisting of the exchange of promises, which is recognized by law as giving rise to enforceable rights and obligations. Sir Frederick Pollock states that the most popular and exact description of a contract that can be given is one which defines a contract as a promise or set of promises which the law will enforce.1 This definition emphasizes the fact that a contract consists essentially either of an exchange of promises between two or more parties or a promise given in exchange for the performance of an act. The American Restatement (Second) of Contracts (1981)2 defines a contract 1 Pollock, Frederick (1902) Principles of Contract: A Treatise on the General Principles Concerning the Validity of Agreements in the Law of England, 7th ed., London: Stevens & Sons Limited, p.l. 2 The Restatement of Contract is one of nine Restatements produced by the American Law Institute, which was founded in 1923 to promote the clarification and simplification of the law. As a statement of law, it has no binding force, but has been extremely influential, with many of its sections being adopted by state courts as representing the law as a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognises a duty? This definition emphasises three important aspects of a contract: the concept of promise, legal duty and remedy. In every case involving a contract the courts are concerned with three basic issues: 1. What exactly is the promise or promises that have been made by the parties? This inquiry helps to determine the terms of the contract which define the scope of the contractual liabilities undertaken by the parties to the contract. 2. Does the promise or do the promises create any legal duty? This involves a determination of whether the essentials of the formation of contracts have been complied with such as to make the parties' promises legally enforceable. This inquiry often involves the determination of issues relating to the existence of consideration, capacity, vitiating factors or the legality of the object of the contract. 3. Upon determination of (a) and (b) the final issue is what kind of remedy should be given to the aggrieved party in the event of a breach or failure of the other party to perform the contractual duty. The common law has long emphasized the commercial essence of contract and stressed the fact that the central notion of contract is the concept of a bargain4. Contract law only enforces promises which are made as part of a bargain, i.e. promises which are given in exchange for something else. A bargain has been defined as an agreement of two or more persons to exchange promises or exchange a promise for a performance? Thus every contract, by definition, involves at least two parties and consists of an exchange of promises or the exchange of a promise for an act. Conventional learning establishes that a "bare" or "naked" promise, i.e., a promise for which nothing has been given or promised in exchange is not enforceable as a contract. 1.1 PROMISES AND CONTRACTUAL OBLIGATIONS Contracts are essentially about promises and undertakings. The distinguishing feature of contractual obligations is that they are not imposed by the law but are rather undertaken by the contracting parties voluntarily. A party is bound by a contract only because he/she has voluntarily undertaken to do or not to do something, in which case if he/she performs that thing badly, or fails to perform at all, the party to whom the promise was made can have a cause of action against him/her for breach of contract. The word "promise" is generally used in ordinary speech to refer to a commitment or an undertaking to do or not to do something in the future and most contracts do contemplate the future performance of some obligation by one or more of the parties. However, even though the word "promise" bears this meaning in the law of contract, it could also be used in a wider sense to refer to any statement or undertaking about existing facts. Thus a party could be deemed to have made a promise as to the present state of affairs or even as to past events. A statement or undertaking as to the present state or condition of a thing to be sold for example, would constitute a promise in that it guarantees ascertain state of affairs, and if such statement or undertaking turns out not to be true it would amount to a breach of promise. 1.2 ELEMENTS OF A VALID CONTRACT Generally, the following elements are the traditional tools of analysis on the creation of a valid and enforceable contract. (1) Offer and Acceptance Contracts are bargains and the most usual way to make a bargain is for one party to propose the terms or conditions on which he is prepared to transact with the other party and for the other party to accept, modify or reject them. The determination of the existence of agreement is therefore usually made within the context of "offer and acceptance". Thus in determining whether or not a contract has been made, the courts usually begin by looking out for a promise by one party, which usually takes the form of an "offer" and a corresponding "acceptance" of the offer by the other party. This exchange of promise for promise or promise for an act is what constitutes the bargain or agreement. (2) Intention to Create Legal Relations The second element which must be established for the creation of an enforceable contract is an intention to create legal obligations, which simply requires that the parties must have clearly evinced or manifested an intention that their agreement, or exchange of promises was intended to have legal consequences or to be legally enforceable. This requirement is important because in everyday domestic and social life, a great majority of the consensual agreements and arrangements made are often not intended to create any legal relations between the parties. (3) Capacity to Contract Further, it must be established that the parties have capacity or power in law to create contractual relations between them. Issues of capacity arise where the ability of one or both parties to assume contractual obligations is limited by the law to ensure their protection for policy reasons. Such special categories of persons whose capacity to contract is limited by statute or under the common law include infants, mentally incompetent persons and drunkards. (4) Consideration Lastly, the promise that is to be enforced must be supported by "consideration" unless the agreement is in the form of a deed, that is, if it is in writing, signed and attested.9 The element of consideration is crucial in the determination of whether or not a valid contract has been made. The element of consideration in a sense provides the court with a reason to enforce the contract. Thus the courts will enforce a promise made in favour of a party only if such party can show that he/she has given something of value in exchange for the promise made to him/her, i.e., consideration. Consideration may be in the form of a return promise or the actual performance of a stipulated act. 1.3 ASCERTAINING THE FACT OF AGREEMENT The concept of agreement is the basis or essence of every contract. A contract is essentially the outward manifestation of agreement between the parties with regard to a common objective. This manifestation of agreement may be made wholly or partly in writing, orally, by conduct or by a combination of all three. Thus one of the first inquiries in dealing with any contractual dispute is to determine whether or not there is an agreement between the parties at all. 1.3.1 Nature and Test of Agreement How do the courts determine whether the parties have in fact agreed to enter into a particular contract? In other words how do the courts decide whether the words or conduct of the parties constitute a manifestation of agreement? Earlier judicial opinion seemed to suggest that actual agreement or consensus ad idem or "meeting of minds" was essential for the formation of a contract. It has been held that the absence of consensus ad idem has the effect of putting the parties at cross purposes and unless the courts can find evidence of actual agreement on the part of both parties it may be compelled to hold that there is no contract.10 The phrase "meeting of minds" seemed to suggest that the existence of agreement required that the parties must have arrived at the same mental state with regard to the contractual terms. This, however, is not the object of the court's investigation when seeking to determine whether the parties are agreed. In determining whether or not the parties have come to an agreement the courts lay particular emphasis on external appearance rather than the actual intent or slate of mind of the parties. The courts operate on the basic principle that agreement is not a mental state but rather an act and, therefore, a matter of inference from conduct.12 In ascertaining the existence of agreement, therefore, the parties are to be judged, not by what they had in mind but by what can be objectively inferred from what they have said, written or done (external appearance). 1.3.2 The Objective Test It is a fundamental principle of common law that the test of agreement is an objective one and not a subjective one.14 The objective test of agreement is premised on the judgment of intention from the reasonable meaning of the words and conduct of a person as opposed to his actual intentions. This approach is contrasted with the subjective test which attempts to ascertain the intentions of the parties from their actual state of mind. It has been emphasized that the function of the judge is not to seek to discover some elusive mental state of the parties, but rather to ensure that as far as possible, the reasonable expectations of honest men are not disappointed. In the Ghanaian case of P. Y. Ana & Sons Ltd v. Kingsman Enterprises Ltd:" The plaintiff company, P.Y. Atta & Sons Ltd, held a lease from the Government of Ghana in respect of a plot of land at the Ring Road South Industrial Area, Accra, for a term of 50 years from 11 May 1972. PYA put up buildings on the land and carried on business there. In 1993, pursuant to the request of the defendant-company, Kingsman, for a lease of a portion of the land to construct stores for its business, the parties executed a document, exhibit B. Although (as stated in the habendum of the document) PYA conveyed to Kingsman " all the residue now unexpired of the said term of 50 years granted by the head lease", the terms of the agreement indicated, among others, that Kingsman would pay rent, give two of the stores to be constructed to PYA and Kingsman could not assign or underlet any part of the stores without the prior consent of PYA. Between 1993-1997, the parties dealt with the terms of exhibit B as if it was a sublease and Kingsman complied with its terms, paid rents and gave the two stores to PYA. Subsequently, in November 1997, Kingsman wanted to construct another building on top of the store for use as offices but PYA refused to give its consent as required under the agreement. Kingsman in response alleged that it did not need the consent of PYA after all because by the habendum in the agreement, it was an assignment that was conveyed to it and not a sublease; and that consequently, it has never been a tenant of PYA. Kingsman therefore started construction. PYA sued at the Hight Court for, inter alia, an order for rectification of the agreement by the addition to the habendum, of the words "less one day" or less such other period as would make the agreement reflect the true character of a sublease. Kingsman counterclaimed for a declaration, inter alia, that on its true and proper construction, the agreement constituted, an assignment and not a sublease. The High Court found for Kingsman. The Court of Appeal affirmed the decision of the trial High Court. PYA further appealed to the Supreme Court. The Supreme Courts noted that in considering every agreement, the paramount consideration was what the parties themselves intended or desired to be contained in the agreement. The intentions should prevail at all times. The general rule was that a document should be given its ordinary meaning if the terms used therein were clear and Unambiguous. In conflicting situations, the process of determining the intentions of the parties should be objective. The objective approach in that context, implied the meaning that the words in the document would convey to a reasonable person seized with the facts of the case. In such exercise, the entire document, the effect it had on the parties, the conduct of the parties and the surrounding circumstances would have to be taken into account. And where two or more clauses were found to be inconsistent, effect was to be given to that which was calculated to give real effect to the intention of the parties. The Supreme Court held, unanimously allowing the appeal, that it was clear from the agreement signed by the parties and on the evidence, especially the conduct of the defendant company between 1993 and 1997, all against its own interest, that the agreement was not a correct version of the concluded contract, because it was expressed in terms amounting to an assignment rather than a sublease. That on the evidence, was a mutual mistake and when in 1997, differences arose between the parties as to the real nature of the written agreement, the plaintiff company commenced legal action early enough to avoid laches on its part. The plaintiff company had not, by conduct, disentitled itself in equity to the remedy of rectification. 1.3.3 Application of the Objective Test Sometimes there is a disparity between a person's actual intentions and the objective and reasonable meaning of his words or conduct. In such cases, the courts generally apply the objective test and give effect to the reasonable objective meaning of the words or conduct of the parties as opposed to what they allege to be their actual intentions. In applying the objective test, the court imputes to the parties an intention corresponding to the reasonable and objective meaning of their words or conduct and enforces the contract in its objective sense. The court considers what the parties said or did and how such statements or conduct would have been understood by a reasonable, objective bystander and imputes that intention to the parties, rather than seeking to establish the actual state of mind of the parties. The application of the objective test represents a more pragmatic approach since it is almost impossible to ascertain the actual state of mind of the parties to the contract. The application of the objective test ensures certainty. It has been noted that if the objective test were not applied a party to a contract could never rely on a contract he had made since there is always the possibility that the other party had some undisclosed misunderstanding or intention with respect to the nature and effect of the contract. The objective principle has been clearly summed up in Freeman v. Cooke and adopted by Lord Blackburn in Smith v. Hughes as follows: Thus if party A behaves in such a manner as to lead B to reasonably believe that he (A) was accepting B's offer to enter into a particular contract, and party B acts on that belief and enters into a contract with A, there will be deemed to be a contract, even if in fact, A did not intend to accept B's offer at all. Conversely, if A makes an offer which can reasonably bear only one meaning and B, understanding the offer in that reasonable sense, accepts it, A cannot escape liability by saying, however truthfully, that he intended the offer to mean something else. The objective test comes into play where one party makes an offer to another, which is accepted in a sense different from that intended by the offering party. Even though on the face of it the parties appear to have agreed, there is in fact no real consensus because the offer that has been accepted is not the offer that was made. For example, A offers to sell his Toyota car to B. B accepts thinking that the car being offered for sale is A's Mazda car. Is there an enforceable contract between A and B? If it is assumed that contracts are normally formed by a correspondence of offer to acceptance, then applying the objective test would yield the following logical sequences: 1. A makes an offer of X to B. B accepts, thinking that what was being offered is Y. If a reasonable man in the position of B would have understood the offer to mean X then, applying the objective test, the court would conclude that there is a contract between A and B for X. 2. A makes an offer of X to B. B accepts thinking that what was being offered is Y. If a reasonable man in the position of B would have understood the offer to mean Y, then the courts, applying the objective test, would conclude that there is a contract between A and B for Y. 3. A makes an offer to B, intending to offer X and B accepts thinking that what is being offered is Y. A reasonable man in the position of B would have understood the offer to mean either X or Y. In this case, no contract may be deemed to exist between the parties because of the lack of correspondence between the offer and the acceptance. The case law as discussed below illustrates the application of the objective test and the broad principles which guide the process of determining of the existence of agreement in different situations. Where there is no Ambiguity Generally, if there is no ambiguity in the words or conduct of the parties, and any reasonable observer of the promisor's conduct would have supposed, and the promisee did suppose, that the promisor was making a particular promise, for example X, the promisor will be bound by promise X if it is comprised in a bargain. In Tamplin v. James: The defendant attended an auction at which a certain property, called the "Ship Inn" was put up for sale as Lot 1. The particulars of the sale and the plan, which was openly displayed at the auction showed clearly the extent and dimensions of the property. The defendant did not bid for the property at the auction, but afterwards he made an offer privately to the auctioneer to buy the property and the offer was accepted. Later, defendant refused to complete the contract on the ground that he had made the offer in the mistaken belief that the property being sold as Lot 1 included two adjacent plots which the plan showed were not part of the property at all. Defendant admitted that he had not examined the plans at all, but had assumed that the property included the adjacent plots because he had known the property since his infancy and had always observed that the Inn and the two adjacent plots had always been occupied by the same tenants. The court held that the defendant was bound by the contract to buy Lot 1 without the adjacent plots. Since there was no ambiguity in the plans, the defendant could not be allowed to avoid performance simply by alleging that he had made a mistake. In coming to this decision the court disregarded the defendant's actual state of mind at the time he made the offer and applied the interpretation that any reasonable man would have given to his conduct in the circumstances. Here the vendor reasonably believed that in making the offer the defendant meant what he said, that is, he intended to purchase the Inn as it had been shown in the plan and nothing more. Where Words and/ or Conduct of Parties are Ambiguous In Tamplin v. James, the statements and conduct of the parties were clear and unambiguous, allowing a straightforward application of the objective test. In some cases the facts may be ambiguous in that they may be capable of two different but equally reasonable interpretations. Where the words used or the conduct of the one party are capable of two different but equally reasonable interpretations and the parties actually misunderstand each other, neither party intending to mislead the other, the court is likely to hold that there is no contract on the ground that there is no correspondence between the offer and the acceptance. Two things may have the same name and the parties may have concluded the contract using that name, but each intending a different meaning from the other. Here the words used are capable of two different but equally reasonable interpretations and the parties, unknown to each other, intend the two different meanings and therefore misunderstand each other. The question is whether any contract results. In Raffles v. Wichelhaus: The case involved a written agreement for the sale of 125 bales of cotton by plaintiff to defendant. The contract stated that the cotton was to "arrive ex Peerless from Bombay". Unknown to both parties, there were two ships called "Peerless" arriving from Bombay, one leaving Bombay in October, the other in December. Seller's cotton was on the December Peerless. Buyer had assumed it was the October Peerless. Buyer refused to accept the cargo of the ship arriving in December. Seller sued for breach of contract. Even though this case is often cited as authority for the court's application of the objective principle, the court for procedural reasons never really made a determination as to whether or not there was a contract between the parties. What was decided was that it was open to the defendant to show that the contract was ambiguous and that he had intended the October ship. As Cheshire, Fifoot and Furmston explain, if the case had gone to trial it would then have been open to the jury to determine, either that there was no contract or that there was a contract for the sale of the cotton on board the October ship or the December ship. This would likely have involved the application of the objective test, that is, whether a reasonable man would have deduced that the agreement as made related to the October ship or the December ship. The interesting question which remained was what if the jury thought that the parties intended different ships and there was no way of determining which particular ship the contract related to? The case itself does not provide the answer to this conundrum even though it has been speculated that the result would have been that there is no contract between the parties. Simpson states: In terms of contract law the judges seem to have thought that, once it appeared that there were two ships sailing from Bombay which answered the contractual description, and no way of telling which of the two was intended, the contract was latently ambiguous. Consequently a jury should have been allowed to hear the evidence and decide whether the parties meant the same ship, and if so which, or different ships. What would have happened if there had been no demurrer, and the case had gone to a jury? Obviously if the jury thought the agreement related to the October ship, the plaintiff would lose; if the December ship was meant, then the plaintiff would win. But what if the jury thought the parties meant different ships or that there was just no way of telling to which ship the contract related? The judge would then have the tricky task of directing them as to what consequence followed, as a matter of law, from this. But in Raffles v. Wichelhaus there was no need for the judges to reach any conclusion on what a suitable direction would have been. What then was to be done? This has all the seductive fascination of a conundrum, and it has subsequently captured the imagination of generations of scholars and students of the law of contract. Consequently they have tried, with some desperation, to prise an answer to the conundrum out of the texts of the reports of the case". Thus even though Raffles v. Wichelhaus is often cited by law teachers to support the principle that there will be deemed to be no contract if the words used are capable of two different but equally reasonable interpretations and the parties intended different things, it would appear that the case is cited more for what it was expected to decide than what it actually decided. In Falck v. Williams: The plaintiff sent an offer in code to the defendant by telegram. The offer was rendered ambiguous because of the lack of punctuation. The telegram could refer to one or the other of two contemplated transactions. The defendant accepted the offer, thinking that it related to a contract for the carriage of coal from Sydney to Barcelona. The plaintiff intended it as a contract for the carriage of coal from Fiji to the U.K. The plaintiff brought the action to enforce the contract in the sense in which he intended it. It was held that since it was not possible to determine one reasonable objective meaning of the words used and the parties were clearly at cross purposes there was no contract between the parties. In determining whether or not the parties are agreed, the courts have held that where one party is misled by the conduct of the other party into misunderstanding the nature of the offer, the party whose conduct misled the other may not be able to enforce the contract in the sense in which he intended it. In Scriven Bros v. Hindley & Co. The defendants bid at an auction for two lots, believing them both to be hemp. It turned out that Lot A was hemp, but Lot B was tow, a commercially inferior commodity of a much lower value. Defendant's mistake arose from the fact that both lots were sold under the same shipping mark "S.L". It was established from the evidence that hemp and tow were never landed from the same ship under the same shipping mark. The auctioneer knew that the buyers were mistaken, but he thought they were simply mistaken as to the value of the tow. Defendant refused to pay for the second lot containing tow and the plaintiffs sued. The court held that the plaintiffs could not enforce the contract since the plaintiff's conduct had contributed to the defendant's mistake. The plaintiffs could only succeed if the defendants were estopped from relying on what was now found to be the truth, and this was not the case. Where the offeree knows that the offer as stated does not represent the real intention of the offeror but seeks to take advantage of the error the court will not allow the offeree to enforce the contract in that mistaken sense. In Hartog v. Colin & Shields: The defendant offered to sell to plaintiffs 30,000cedis skins at prices quoted per pound. In so quoting the defendants had mistakenly stated the prices as per pound instead of per piece which made the skins much cheaper. In all their previous negotiations both parties had quoted the price as per piece. It was customary in their trade to quote prices per piece and not per pound. Plaintiffs however quickly accepted the offer and sued to enforce the contract. The court held that the plaintiff's action must be dismissed. The plaintiff could not reasonably have supposed that the offer made by the defendants contained their real intention. This decision suggests that in appropriate cases, the courts apply the subjective test in ascertaining the state of mind of the party seeking to enforce the contract. It follows from the objective test that the courts would not ordinarily be concerned about one party's unilateral, undisclosed private misconceptions about the quality of the subject matter of a contract, as long as such misconception was not induced by the other party's words or conduct. Thus if one party is mistaken only about the quality of the subject matter and that mistake was not caused by the other party, the court will uphold the contract in spite of that party's unilateral and undisclosed mistake. This principle was emphasized in the case of Smith v. Hughes, the facts of which were as follows: The plaintiff, a farmer, asked the defendant's manager, who was a trainer of horses, if he would like to buy some oats and showed him a sample. Defendant wrote to say he would like to buy the whole quantity of oats. Plaintiff delivered a portion of the oats, but defendant, upon seeing the oats, refused to accept them, saying the oats were new and he had no use for new oats. Plaintiff refused to take the oats back and sued. It was not clear from the evidence whether the word "old" had been used. Defendant insisted that plaintiff had said he had some "good old oats" for sale while plaintiff insisted that the word "old" was never used. At the trial the judge directed the jury as follows: (i) Was the word "old" used? If so, verdict must be given for the defendant; (ii) If the word "old" was not used, did the plaintiff believe that the defendant believed or was under the impression that he was contracting for old oats? If so, the verdict must be given for the defendant. The jury found a verdict for the defendant and plaintiff appealed. A new trial was ordered on the ground that the directions given to the jury at the trial were misleading. According to the Court of Appeal, the issue was not whether or not the plaintiff believed that the defendant believed or was under the impression that the oats were old, for in that case, there would have been no liability on the part of the plaintiff as long as he did not induce that belief in the mind of the defendant. According to the court, the question of whether under such circumstances, the passive acquiescence of the seller in the self-deception of the buyer would entitle the latter (buyer) to avoid the contract could only be answered in the negative. The relevant issue was whether the plaintiff believed that the defendant believed that he the plaintiff was contracting that the oats were old. The former represents a mere mistake as to the quality of the subject matter which was not disclosed to the plaintiff or caused by him in any way, but the latter if found to be so, would constitute a mistake as to the terms of the contract. Cockburn C. J. noted in his judgement: It only remains to deal with an argument which was pressed upon us, that as the defendant in the present case intended to buy old oats, and plaintiff to sell new, the two minds were not ad idem; and that consequently there was no contract. This argument proceeds on the fallacy of confounding what was merely a motive operating on the buyer to induce him to buy with one of the essential conditions of the contract. Both parties were agreed as to the sale and purchase of this particular parcel of oats. The defendant believed the oats to be old, and was thus induced to agree to buy them, but he omitted to make their age a condition of the contract. All that can be said is, that the two minds were not ad idem as to the age of the oats; they certainly were ad idem as to the sale and purchase of them. The case law shows that the courts take the position that as far as possible, apparent contracts must be upheld to ensure certainty in commercial practice. Thus where the parties are agreed with respect to the same terms on the same subject matter, it is irrelevant that in entering the contract they were both influenced by some misunderstanding or mistaken assumption with regard to the quality or value of the subject matter. In Frederick E. Rose (London) Ltd. v. William H. Pirn Jnr & Co. Ltd: The plaintiffs in London received an order from their house in Egypt for "Morooccan horsebeans described here as feveroles". The plaintiffs, not knowing what feveroles were, asked the defendents, who responded that feveroles were the same thing as horsebeans, adding that they (the defendants) were in a position to supply them. The plaintiffs therefore went ahead to enter into an oral contract with the defendants for the purchase of horsebeans and the contract was subsequently reduced into writing. The defendants later delivered the horsebeans to the plaintiffs, who in turn sold and delivered them to an Egyptian firm. Upon being delivered in Egypt, it was found that although what was delivered was horsebeans, they were not feveroles and an action was brought for damages for breach of warranty. The Court of Appeal refused to declare the contract void even though the plaintiffs had apparently entered into the contract on the mistaken assumption that feveroles were the same thing as horsebeans. Lord Denning L.J. explained: The goods contracted for horsebeans were essentially different from what they were believed to be 'feveroles'. Nevertheless the parties to all outward appearances were agreed. They had agreed with sufficient certainty on a contract for the sale of goods by description, namely, horsebeans. Once they had done that, nothing in their minds could make the contract a nullity from the beginning. The position taken in the Ghanaian case of Addison v. A/S Norway Cement Export LtdMseems to follow this line of thinking. In that case: The respondents, a company resident in Norway, jointly financed with the government of Ghana a new company, C. Ltd., which took over the former Ghana Cement Works. The respondents were also awarded a contract for the supply of £4,000,000 worth of clinker, gypsum and paper bags to C. Ltd. The appellant, having assisted the respondents in the negotiations for both the creation of C. Ltd. and the subsequent contract, apparently agreed with the respondents that he be remunerated with cash, shares in C. Ltd. and an option to purchase further shares at an agreed price. Differences arose between the two parties and protracted negotiations to resolve them were unsuccessful. The appellant therefore brought an action against the respondents on an amended claim for N80,000 cedis as the commission for work with respect to the clinker contract which was allegedly the subject of an oral agreement made on July 27,1969. The trial judge, on the evidence before him, was unable to ascertain with certainty the terms of the alleged agreement of July 27, 1969. He therefore held that there was no consensus ad idem between the parties and therefore there was no binding contract existing between them. It was submitted on appeal, inter alia, that the judge was wrong when he held that the parties were not ad idem since the respondents had not pleaded this or mistake. Kingsley Nyinah J. A. stated: It is my understanding of the facts in evidence that when the parties to this suit entered upon their transaction, they each and both of them had, as an essential part of their business contemplation, the eventual enjoyment of the fruits and benefits that they both knew and expected would accrue from that enterprise. And as has been so cogently pointed out in both judgments, just read, the evidence is clear and undisputed that the defendants themselves readily acknowledged, both before the suit and then at the trial, the great and helpful part that the plaintiff had so actively played, not only at the negotiations stage of their venture, but also thereafter. It is a matter of no mean significance, strongly supporting the plaintiff's posture at the trial, that the defendants furthermore conceded the plaintiff's just entitlement to certain benefits under their venture with him. That being so, I deem it only fair and proper that this court to which the plaintiff has properly turned for redress does not stultify due justice by being too legalistic and too technical when considering the question of whether or not the plaintiff was able to discharge the burden that his own writ and statement of claim committed him to execute. In all the circumstances of the interpretation of the transaction herein, therefore, and in order that the true intention of the parties be duly respected and recognised, I would prefer equity to technicality and strict law. This court has a duty to protect the substance of the parties' agreement and not to destroy it. I have no doubt at all in my mind, having regard to the facts and circumstances of this case, that the parties herein did agree on the sum of 80,000cedis as properly due unto the plaintiff. Here, the court was able to construct a contract out of the exchanges between the parties even though the terms of the oral agreement appeared to be uncertain. The court relied on the available documentary evidence to determine the terms of the oral contract. The majority decision was clearly influenced by the court's perception that its role is to uphold apparent contracts where possible and to ensure that the express intentions of contractual parties are not defeated. Chapter Two OFFER AND ACCEPTANCE 2.0 INTRODUCTION In determining whether the parties have reached agreement, the courts normally begin by looking out for an offer and a corresponding acceptance. It is important to note from the outset, however, that not all contracts are formed by a process of a direct offer and an acceptance. In some cases a contract may be inferred from the conduct of the parties without necessarily establishing the existence of a direct offer made by one party to the other and a corresponding acceptance.1 this chapter provides an overview of the basic principles of offer and acceptance which are often considered to be the starting point for the formation of contracts. 2.1 PROCESS OF FORMATION OF CONTRACT The process of formation of any contract is never simple, easy or instantaneous. It usually involves an extended period of negotiation and bargaining, during which offers are made, considered, modified and explained. The offer may ultimately be accepted by the other party, but such purported acceptance could be made in clear or uncertain terms, it may be made hesitantly, conditionally, with or without enthusiasm, or may introduce new terms. In most cases therefore, in order to determine whether or not an agreement has been made, the courts have to conduct a meticulous examination of all the statements made or correspondence exchanged between the parties and/or their conduct, to establish whether a definite offer was made by one party which has been clearly accepted by the other. This process of examination of written correspondence had to be undertaken by the court in the case of Gibson v. Manchester City Council, the facts of which were as follows: In November 1970 the Manchester City Council sent to their tenants details of a proposed scheme for the sale of Council houses at favourable prices. Gibson responded immediately by paying the administration fee of £3 and forwarding his application on a printed form. The Council wrote back stating that the Council may be prepared to sell the houses at certain prices. The Council's letter stated: "This letter should not be regarded as a firm offer of a mortgage. If you wish to make a formal application, fill this form and return it". Gibson filled the form but left out the purchase price and asked for a reduction. The Council refused to reduce the price, whereupon Gibson asked the Council to proceed with the processing of his application. Before further action could be taken the Labour government took over control of the Council and ordered that no house be sold unless there was already an existing contract to sell the house. The Council refused to sell the house to Gibson and Gibson sued. The court examined the correspondence that had been exchanged between the parties to see if at any point in time a definite offer had been made by the Council which had been accepted by Gibson. The court held that it was impossible to construe the letter of the Council as a contractual offer, which was capable of being converted into a contract upon acceptance by Gibson. The wording of the letter made it clear that the Council was not making any definite or firm offer of a mortgage. The court noted further that the application forms returned by Gibson could not be deemed as an acceptance because no offer had been made as yet. The more accurate interpretation was that it was Gibson who made an offer to buy the house by submitting his filled application form, but that offer had not yet been accepted by the Council. There was therefore no legally binding contract concluded between the parties for the sale of the house and the Council was therefore not liable for the breach of any contract. The Ghanaian case of Aidoo and Others v. Attorney General and Another also illustrates the investigative process which the court has to conduct in seeking to ascertain the existence of a contract. The facts of the case are as follows: The Kanda Estates, comprising 233 houses and 120 flats, was established for allocation to Ghanaians. All but 61 of the houses were allocated to Ghanaians on hire purchase basis. The 61 houses were reserved for occupation by Members of Parliament. After the 1966 coup d'etat, the Members of Parliament who had failed to pay their rents on the respective houses they were occupying within the 61 houses were ejected from them and the National Liberation Council government then decided to allocate all the houses which were then vacant to those who needed them. In 1967, the Kanda Tenants Association, of which all the plaintiffs in this case were members, was formed. The first plaintiff was the Secretary of the Association. The Association entered into negotiations with the then Progress Party government for the sale of the 61 houses to its members who were individually occupying the houses. It was agreed between the government and the Association that those houses should be sold individually to the then sitting tenants. When the National Redemption Council government came into power in 1972, the Kanda Estates Tenants Association took up the matter with that government. The result was that the government caused a letter to be written to the individual tenants, offering to sell to them the houses occupied by them. Each letter included a form, which was required to be filled by applicants for further action by the government. Each of the plaintiffs accepted the offer by filling in the forms as required. Subsequently, the plaintiffs received letters from the Ministry of Works and Housing, indicating that only 13 of the said houses would be sold to the sitting tenants. The defendant further threatened the plaintiffs, who were retired civil servants with forcible ejection if they failed to vacate the houses. The plaintiffs, members of the Kanda Estate Association, brought the action against the government alleging that the government had agreed to sell to them certain houses in Kanda Estates of which they were tenants. The court considered the various correspondences exchanged between the parties on the proposed sale and held that there was in existence a completed contract between the parties for the sale of the said houses to the plaintiffs. Anterkyi J., in his judgement stated as follows: When the National Redemption Council assumed the reigns of government, the Association of the plaintiffs repeated to that government their request for the sale to them. This request was met by the government by Exhibit A (through the Ministry of Works and Housing), which stated that the sale of the house was to be "at its current replacement value", and that the Ministry was "working out the terms and conditions for the sale, the results of which will be communicated to you in due course" The forms Exhibit B attached to Exhibit A were to be completed and forwarded for further action. These forms were accordingly completed by the plaintiffs and sent to the Ministry. The Ministry of Works and Housing did receive them. It is my view that a direct offer was made by Exhibit A for sale with conditions and terms which even though the defendants had not seen or known might be accepted by the tenant upon his filling in the forms in Exhibit B. I cannot read into Exhibit A that the sale was to be made subject to the terms and conditions being agreed upon by the tenant by a reply that he would first like to know the conditions and terms before filling in the forms in Exhibit B. In effect the decision in Exhibit A is to this effect: "I offer to sell you the house at its current value and with certain terms and conditions. You may accept by filling in the attached forms and sending them to me." The filling in and the return of the forms constituted an unconditional acceptance of the offer. It was absolute and corresponded with the terms of the offer. There was therefore a complete contract. 2.2 WHAT CONSTITUTES AN OFFER? An offer may be defined as a statement or conduct indicating a willingness to contract on terms stated or on terms which can reasonably be inferred from conduct, and made with the intention that it will become binding as soon as it is accepted. In the case of NTHC Ltd v. Antwi, an offer was defined as an indication in words or by conduct by an offeror that he or she is prepared to be bound by a contract in the terms expressed in the offer, if the offeree communicates to the offeror his or her acceptance of those terms? An offer may be made to a particular individual, groups or classes of persons or to the world at large. To qualify as an offer, the statement or conduct must indicate a willingness to enter a bargain. This is shown by indicating in the offer what the offeror requires of the offeree by way of acceptance in return for the promise. It is this notion which distinguishes a contractual offer from a bare gratuitous promise. Further, the statement or conduct must indicate the terms on which the maker is prepared to be bound. An offer must be made with the intention that it will become binding once it is accepted by the other party. In other words the making of a contractual offer carries with it some sense of finality, in that it solicits a definite acceptance leading to a contract. In this regard, a contractual offer is distinguished from an "invitation to treat" which in essence constitutes an attempt to initiate the bargaining process by soliciting or attracting offers from the party to whom it is addressed. As explained in Chitty on Contracts: A communication by which a party is invited to make an offer is commonly called an invitation to treat. It is distinguishable from an offer primarily on the ground that it is not made with the intention that it is to become binding as soon as the person to whom it is addressed simply communicates his assent to its terms." In NTHC Ltd v. Antwi, the Supreme Courts had to determine whether an offer had been made which was capable of being converted into a contract upon acceptance. The facts of the case were as follows: The plaintiff at some point worked for the defendant. During the period of her employment, she received a letter dated 17th of January 2005 signed by the Board secretary informing her about the decision of the Board of Directors to sell the company's houses being occupied by staff and the first offer was made to her. She was to indicate her interest in writing by the 31st of January 2005 if she was interested. The house in question was house No 4 Plateau Close, East Legon Extension, the cost price of which was quoted as $70,307 or its cedi equivalent and payment was to be made in 6 months. The plaintiff indicated her acceptance of the offer in writing on the 31st of January 2005 and requested that the necessary bank accounts details into which payment was to be made should be made available to her. There was no further correspondence between the parties until the plaintiff received a letter from the defendant dated 7th November 2005, stating that the Board of Directors had decided to withdraw the offer of sale of the said property signed by the Deputy Managing Director. The plaintiff had, however, by this time left the employment of the defendant and had begun working for a different employer on 8th August, 2005. The defendant in a second letter addressed to the plaintiff requested that she vacate from the house in question following her resignation from the company. Based on these, the plaintiff instituted an action against the defendants, claiming that the exchange of letters in January 2005 resulted in an agreement that the defendant would sell the house to the plaintiff which was enforceable, the remedies of specific performance and a perpetual injunction to restrain the defendants from ejecting her from the property. The defendant on the other hand asserted that the letter of 17th January 2005 was not an offer but an invitation to staff to make an offer to purchase the premises. There was therefore no enforceable contract between the parties. The High Court held that no contract had been formed and that the company's proposal to sell the property was not a definite enough offer of the property to the plaintiff. Hence the plaintiff's actions were dismissed since no contract had been formed. On appeal, however, the judgment was reversed. The Learned judge concluded that the letter of 17th January, 2005 contained an offer because the letter was not that of an enquiry but referred to a specific house and the offer was made to the appellant and a certain price was to be paid within a certain period and the appellant was only to indicate her acceptance if she accepted the terms offered. The defendant/respondent then appealed to the Supreme Court that the Court of Appeal erred in holding that the communications between the parties constituted an offer. The Supreme Court had to decide which of the interpretations given to the letter of 17th January, 2005 was right. The court in coming to its conclusion considered the basic principles of offer and invitation to treat and distinguished them. The court stated that an invitation to treat is distinguished from an offer on the basis of the proposal's lack of an essential characteristic of an offer, namely, its finality which gives a capacity to the offeree to transform the offer into a contract by the mere communication of his or her assent to its terms. The appellant in this case relied heavily on the case of Gibson v. Manchester City Council. The Supreme Court was, however, of the opinion that there were marked differences between the two cases, noting that the Manchester City Council letter obviously lacked finality, unlike the proposed sale of the house in the current case to the plaintiff 'which was an offer of an identified property at a price certain, leaving only the details of the bank accounts to be communicated and the price to be paid. These, however, according to the court, were subsidiary questions which did not affect the finality of the offer. The letter of 17th January, 2005 in which the plaintiff was given the first offer to purchase the house was therefore held to constitute an offer and not an invitation to treat. 2.3 OFFER DISTINGUISHED FROM "INVITATION TO TREAT" As noted, to qualify as a contractual offer, the statement or conduct must have been made with the intention that it would become binding as soon as it was accepted. The law therefore distinguishes between contractual offers (which are converted into contracts as soon as they are accepted) and statements of intention which are only intended to solicit or attract offers from other people and are not intended to result in any immediate binding obligation. In NTHC Ltd v. Antwi, the Supreme Court, in establishing the distinction between offers and invitations to treat explained: Accordingly, the offer has to be definite and final and must not leave significant terms open for further negotiation. By significant, we here mean terms that are essential to the bargain contemplated.... It is this need for finality and definiteness which leads to the analytical need for the concept of invitation to treat. If a communication during negotiations is not the final expression of an alleged offeror's willingness to be bound, it may be interpreted as an invitation to the other party to use it as a basis for formulating a proposal emanating from him or her that is definite enough to qualify as an offer. Thus the indefinite communication may be what generates an offer from the other side. An invitation to treat is thus to be distinguished from an offer on the basis of the proposal's lack of an essential characteristic of an offer, namely, its finality which gives a capacity to the offeree to transform the offer into a contract by the mere communication of his or her assent to its terms. The distinction between offers and invitations to treat has been said to be based on intention, convenience and commercial usage and practice.13 In commercial practice, a seller of goods or services or a person seeking business would usually have to first of all solicit offers for possible bargains by way of display of the goods, circulation of brochures or catalogues or the placing of advertisements announcing or publicising the availability of the goods or services and providing information about them. Such preliminary activities, which are usually only intended to solicit offers from potential customers are not normally considered by the law as contractual offers in themselves, capable of being converted into a contract upon acceptance. Such statement of intention or conduct are merely invitations to the public to make offers and attempts to initiate the bargaining process and are, therefore, referred to as "invitations to treat". Common Examples of "invitations to treat" include: (a) Tender notices (b) Display of goods in a shop window with prices attached (c) Advertisement of goods or services in newspaper. (d) Circulation of catalogues or price lists (e) Auction notices In the absence of evidence to the contrary, such statements or conduct are deemed to be invitations to treat and not contractual offers. 2.3.1 Tender Notices A notice stating that goods are to be sold by tender and inviting people to submit tenders for their purchase is an invitation to treat and not an offer which is deemed to have been accepted when a person submits the highest tender. Similarly, a notice inviting suppliers to submit tenders of the lowest price at which they are prepared to supply goods is not deemed as an offer to buy from the person with the lowest price, but is simply an invitation to treat. Thus, tender notices are merely intended to invite tenders and to ascertain whether an acceptable offer can be obtained. It is the tender which constitutes the "offer" which may or may not be accepted. In Spencer v. Harding: The defendants sent out a circular stating that they were instructed to offer for sale by tender certain goods and gave the date and time when the tenders would be received. The plaintiffs alleged that the circular amounted to an offer to sell the goods to the highest bidder and they, the plaintiffs had submitted the highest bid, and defendants had refused to sell to them. The court held that the circular or tender notice was not an offer. It amounted to nothing more than a mere proclamation that the defendants were ready to chaffer for the sale of the goods and to receive offers for the purchase of them. The advertisement inviting tenders was held to be mere invitation to the public to send in tenders. It contained no promise, either express or implied, to accept the highest tender. Acceptance of Offers and Standing Offers It follows that since the tender notice or invitation constitutes an invitation to treat, it is the tender that is considered to be the offer which may or may not be accepted by the invitor. Thus the acceptance of the tender would normally conclude a contract between the invitor and the party who submits the winning tender. However, it has been noted that whether or not the acceptance of the tender will result in a binding contract between the parties depends on the nature and wording of the invitation. Basically, if the invi