Commercial Law I Combined Slides 2 PDF

MR.SOWAH UGBS 203 MR.SOWAH COMMERCIAL LAW 1 SOWAH NII LARYEA MAXWELL Session 1 – Introduction to Law HOPEFUL BHJCR FIN CONTROLLER' 25 Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the concept and sources of law. Slide 2 Session Outline The key topics to be covered in the session are as follows:  What is Law?  Functions of Law  Classiﬁcations of Law  The Legal System of Ghana  Sources of Law in Ghana  Source of Commercial Law Slide 3 Reading List 1. The Courts Act, 1993 (Act 459) 2. The 1992 Constitution 3. Criminal and other Offences Act, 1960 (Act 29) 4. Emmanuel Kwaben Quansah, (2011) The Ghana Legal System (Blackmask Ltd, Accra) 5. Glanville Williams (1982), Learning the Law (11 Ed) th (Sweat & Maxwell, London) 6. Denis Keenan (1998), Smith & Keenan’s English Law (12th Ed)(Financial Times & Pitman Publishing, London) 7. Jeffrey L. Harrison (2007), Law and Economics in a Nutshell (Thomson West) 8. Geoffrey Samuel (2000), Sourcebook on Obligations and Legal Remedies (2 Ed)(Cavendish Publishing Ltd, nd London) Slide 4 Topic One WHAT IS LAW? Slide 5 What is Law There is no single deﬁnition of what is Law The system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties. “The body of principles recognized and applied by the state in the administration of justice” – Salmond “Rules forbidding or enjoining certain types of behaviour under penalty” “Rules specifying what must be done to achieve certain legal effects” Slide 6 “Rules conferring rights and creating obligations and providing remedies for breach of duties and obligations” Some have even extended the deﬁnition to cover the institutions associated with the law in one way or another. “Courts and other judicial or administrative bodies to determine what the rules are (interpretation), breaches thereof, remedies thereof, and enforcement of decisions and orders” “ A Legislature to make new rules or abolish old ones” - H.L.A Hart, The Concept of Law Slide 7 Functions of Law Its to maintain order To provide justice and fairness To protect the rights of individuals To punish wrongdoers Slide 8 Topic Two CLASSIFICATION OF LAW Slide 9 Classiﬁcation of law CLASSIFICATION OF LAW Law can be classiﬁed into different categories depending on the basis of classiﬁcation such as effect, source and nature. For purposes of this course we will look at law under the following broad classiﬁcation (a)Public Law (b) Private Law Slide 10 Slide 11 Topic Three DIFFERENCES BETWEEN CIVIL AND CRIMINAL LAW Slide 12 Difference between Civil Law and Criminal Law The difference between civil law and criminal law turns on the difference between two different objects which law seeks to pursue - redress or punishment. The object of civil law is the redress of wrongs by compelling compensation or restitution: the wrongdoer is not punished; he only suffers so much harm as is necessary to make good the wrong heSlide has 13 done. The person who has suffered gets a deﬁnite beneﬁt from the law, or at least he avoids a loss. On the other hand, in the case of crimes, the main object of the law is to punish the wrongdoer; to give him and others a strong inducement not to commit same or similar crimes, to reform him if possible and perhaps to satisfy the public sense that wrongdoing ought to meet with retribution.” Slide 14 Slide 15 Topic Four THE LEGAL SYSTEM OF GHANA Slide 16 The Legal Systems of Ghana - The Structures and processes by which the legal machinery of a country is operated. - It encompasses the legal tradition, the sources of law, the court structure and operations among others. - There are several legal traditions :- common law, civil law etc. - Ghana’s legal system is based on the Common Law Tradition. - The Tradition is based on Judicial Precedence - The Court Structure:- Superior Courts and Inferior Courts Slide 17 Sources of Law in Ghana SOURCES OF LAW By sources of law we are looking at how we get our laws in Ghana. Article 11 of the 1992 Constitution enumerates the sources of law in Ghana as follows; 1. 1992 Constitution 2. Enactments made by or under the authority the parliament established by the 1992 Constitution – eg. Banking Act,2004 (Act 673) 3. Orders, Rules and Regulations made under a power conferred by the Constitution – eg. Bye laws of the Assemblies. 4. Existing Law:- both written and unwritten laws before the coming into force of the 1992 Constitution –eg. Contracts Act, 1960 (Act 25) 5. Common Law – the common law, equity and customary law Slide 18 THE COMMON LAW AND EQUITY The term common law is confusing as it has different meanings depending on the context. So it could be used to refer to law crafted by judges when they decide cases, this is what we refer to as “case law” and this is in contrast to law established by legislation, by the legislature enacting legislation, also known as “statutory law”. It can also be used to refer to law that is not equity. And, ﬁnally, it can be used to describe the law of countries which follow the common law, like the United States and England as opposed to countries that follow Roman law or French law or the civil law tradition. Slide 19 Equity is the name that we give to the set of rules that traditionally supplemented the common law where the application of the common law would have operated too harshly. This was done to achieve what is sometimes referred to as natural justice, or more simply speaking, fairness. Slide 20 Maxims of Equity 1. Equity will not suffer a wrong to be without a remedy. 2. Equity follows the law. 3. Where the equities are equal, the law prevails. 4. Where the equities are equal, the ﬁrst in time shall prevail. 5. He who seeks equity must do equity. 6. He who comes to equity must come with clean hands. 7. Delay defeats equity; equity aids the vigilant but not the indolent. Slide 21 8. Equality is equity. 9. Equity looks to the intent and not to the form. 10. Equity looks on as done that which ought to be done. 11. Equity imputes an intention to fulﬁll an obligation. 12. Equity acts in personam. Slide 22 Topic ﬁve THE SCOPE OF COMMERCIAL LAW Slide 23 WHAT IS COMMERCIAL LAW? The body of laws that deal with the rules and institutions of commercial transactions, including banking, commerce, contracts etc. GENERAL CHARACTERISTICS 1. Based on contract 2. The main sources of law are statutory and case law 3. It combines both civil remedies and criminal sanction eg. Sale of unwholesome goods for human consumption is a criminal offence – Food & Drugs Law, 1992 s.1(1)(a) 4. It is both enabling and regulatory Slide 24 RELEVANCE OF LAW IN COMMERCIAL ACTIVITIES 1. Facilitates business planning through improved understanding of rights and obligations. 2. Facilitates assessments of legal and commercial roles and the allocation of protection against risk. 3. Ensures businesses operate within regulatory requirements – failure to comply comes with cost. 4. Avoids unnecessary and costly business transactions and unenforceable contracts. WHY REGULATE? 1. Consumer protection 2. Public interest 3. Information inadequacies Slide 25 SAMPLE QUESTION Discuss the sources of law in Ghana Slide 26 References 1. The Courts Act, 1993 (Act 459) 2. Contract Act , 1960 (Act 25) 3. Criminal and other Offences Act, 1960 (Act 29) 4. Emmanuel Kwaben Quansah, (2011) The Ghana Legal System (Blackmask Ltd, Accra) 5. Glanville Williams (1982), Learning the Law (11th Ed) (Sweat & Maxwell, London Slide 27 UGBS 203 COMMERCIAL LAW 1 Session 2 – Law of Contract Formation of a Contract Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the law governing contracts in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: INTRODUCTION TYPES OF CONTRACT  INT RODUCTION  TYPES OF CONTRACT  ELEMENTS OF A VALID CONTRACT  VITIATING FACTORS  TERMS OF CONTRACT  MISTAKES  TERMINATION OR DISCHARGE OF A CONTRACT Slide 3 Reading List Statute Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 4 Topic One INTRODUCTION TO THE LAW OF CONTRACT Slide 5 What is Contract? eaHuman interactions and co-existence necessarily requires that we engage one another for one reason or another. In the course of these engagements, there are bound to be trade-offs of wants and needs. Each might require something that the other possesses. In order to gain access to what others posses, there is a trade-off of promises; one to provide or perform what is needed in exchange for something. Thus one promises to do an act or refrain from doing an act in exchange for a promise from the other to do an act or equally refrain from doing an act. In effect there is an Agreement based on the respective promises. People may for their own good honour choose to fulﬁll their promises or perform acts they have agreed to, conversely people may for reasons best known to themselves refuse or fail to fulﬁll promises Slide 6 or perform acts It is undoubted that social cohesion would be greatly affected if society allowed people to make promises for the sake of making them. This gives birth to the Law of Contract which is simply that branch of the law that governs the effort to achieve and carry out voluntary agreements. 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. son or another. In the course of these engagements, there are bound to be trade-offs of wants and needs. Each might require something that the other possesses. Slide 7 In order to SOU RCES OF THE LAW OF CONTRACT English Law of Con SOURCES OF THE LAW OF CONTRACT English Law of Contract; –Common Law Principles; –Doctrines of Equity; and –English Statutes of general application. Legislation; Contracts Act, 1960 t since individuals are deemed to be the best of judges of their own interest. a.Vitiating Factors: these are factors that emanate from mistake, misrepresentation, illegality, duress and generally any conduct that would render a contract Slide 8 unenforceable. DOCTRINES THAT HAVE SHAPED THE LAW OF CONTRACT Certain theoretical foundations have inﬂuenced the law of contract whether same is expressed in decisions of the courts or in statutes. These are; a.Freedom of Contract: this Doctrine recognizes the liberty of people to enter into Agreements without interference or limitation from any court since individuals are deemed to be the best of judges of their own interest. b.Vitiating Factors: these are factors that emanate from mistake, misrepresentation, illegality, duress and generally any conduct that would render a contract unenforceable. c. Sanctity of Contract: this Doctrine seeks to emphasize that obligations agreed upon must be adhered to by all parties. Slide 9 1960 DEFINITION OF CONTRACT Sir Frederick Pollock deﬁned Contract as “a promise or set of promises which the law will enforce” The American Restatement (second) of Contract (1982) deﬁnes a Contract as “a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty”. Slide 10 The above deﬁnition emphasizes three (3) important aspects of a Contract, namely; a. The concept of a promise; b. Legal duty; and c. Legal remedy. – In effect, for every case therefore, the courts concern themselves with three (3) issues, that is; – a. What is the promise or promises that have been made by the parties; – b. Does the promise or do the promises create any legal duty; – c. Upon determination of a promise and a duty, what kind of remedy is available for any breach? Slide 11 1. FORM OF CONTRACT a. It could be Oral; b. It could be Written; c. It could be Implied. 2. ELEMENTS OF A VALID CONTRACT A Contract must have the following elements to be valid and thus enforceable; Slide 12 a. Offer and Acceptance (Agreement) b. Intention to Create a Legal Relationship c. Capacity to Contract d. Consideration It is important to emphasize that though a contract may seem to be valid because of the apparent presence of these elements, the law would in certain instance refuse to deem a contract enforceable This gives rise to where the Contract is affected by a vitiating factor. understand the clear distinction between contracts and agreements. 1. FORM OF CONTRACT Slide 13 Topic Two TYPES OF CONTRACT Slide 14 TYPES OF CONTRACT Contracts can exist in many forms and thus there could be as many types of contracts as may exist depending on the mode of classiﬁcation being employed. We shall however for our purposes limit ourselves to the following types of contract… I.UNILATERAL and BILATERAL CONTRACTS II. FORMAL AND INFORMAL CONTRACTS III. EXPRESS AND IMPLIED CONTRACT IV. EXECUTED AND EXECUTORY CONTRACT V.VOIDABLE, VOID AND UNENFORCEABLE CONTRACTS VI. QUASI CONTRACT a.It could be Oral; b.It could be Written; c.It could be Im plied. 1. ELEM ENTS OF A V ALID CONTRACT Slide 15 A Contract m ust have the following elem ents to be valid and thus enforceable; a. Offer and Acceptance (Agreem ent) b. Intention to Create a Legal Relationship I. UNILATERAL OR BILATERAL CONTRACTS:- a. UNILATERAL CONTRACTS: These are contracts that require a party to perform an act in exchange for the promise of the other. b. BILATERAL CONTRACTS: These are contracts where the parties give promises in exchange for promises. Thus one party promises to perform an act in exchange for the promises to perform an act by the other. Slide 16 FORMAL AND INFORMAL CONTRACTS:- the criterion here is the mode of formation. a. FORMAL CONTRACTS: These are Contracts that require following a speciﬁed mode in order to be deemed valid and enforceable. Contracts under seal are an example. b. INFORMAL CONTRACTS: These are Contracts that do not follow any formal pattern or mode. Slide 17 iii. EXPRESS AND IMPLIED CONTRACT:- the criterion here is whether the Contract and its terms are spelt out or they are inferred. a. EXPRESS CONTRACTS: These are Contracts where the Contracts and their terms are expressly stated and agreed to by the parties. This could be oral or written. b. IMPLIED CONTRACTS: These are Contracts that come into existence not by express agreement but rather inferred from the conduct of the parties. Slide 18 IV. EXECUTED AND EXECUTORY CONTRACT:-the criterion here is the state of performance of the Contract. a. EXECUTED CONTRACT: These are Contracts that have been fully performed by the parties. b. EXECUTORY CONTRACT:- These are contracts that have not been fully performed either by both parties or by one party after the other has performed his part of the obligations. Slide 19 VOIDABLE, VOID AND UNENFORCEABLE CONTRACTS:-the criterion here is the enforceability of the Contract. a. VOIDABLE CONTRACT: These are contracts that are valid but can be avoided or ratiﬁed at the option of either or both parties. b. VOID CONTRACT: These are contracts that are deemed by the law as not having been made at all in spite of the seeming existence of the elements of validity. c. UNENFORCEABLE CONTRACT: These are contracts that cannot be enforced even though all the elements of validity are present. Such contracts though legal are unenforceable because of failure to satisfy a legal requirement. VI. QUASI CONTRACT: this is a type of contract that is a variant of implied contract except that in this instance the inference is not based on the conduct solely but is imputed by law based on conduct. They are more of equitable contracts than legal. Slide 20 References Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 21 UGBS 203 COMMERCIAL LAW 1 Session 3 – Law of Contract Elements of a valid Contract Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information:[email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the law governing contracts in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: ELEMENTS OF A VALID CONTRACT Offer Acceptance  INT RODU CTION  TYP ES OF CONTRACT ELEM ENTS OF A V ALID CONTRACT  V ITIATING FACTORS TERM S OF CONTRACT  M ISTAK ES  TERM INATION OR DISCHARGE OF A CONTRACT Slide 3 Reading List Statute Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 4 Topic One OFFER Slide 5 Elements of a valid contract An agreement must contain the following essential elements to be regarded as a contract. If any one of them is missing, the agreement will not be legally binding. 1. OFFER 2. ACCEPTANCE 3. CONSIDERATION 4. INTENTION TO CREATE A LEGAL RELATIONSHIP 5. CAPACITY TO CONTRACT Slide 6 Elements of a valid contract 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 Treitel, soon as it is accepted” – the law of contract. Slide 7 An offer is an expression of readiness to do something which, if followed by the unconditional acceptance of another person (see item (iii)), results in a contract. For example, if a company tells you that it will sell you 100 boxes of red wine at the price of $100,000, that company is making you an offer To qualify as an Offer, the statement or conduct must; i. indicate a willingness to enter into a bargain, that is by prescribing what the offeror requires of the offeree by way of acceptance in return for the promise; ii. indicate the terms on which the offeror is prepared to be bound; iii.it must be made with the intention that it is binding, once accepted thus bringing some sense of ﬁnality. Slide 8 1.1 FORMS OF AN OFFER An Offer may be made Orally, in Writing or Inferred from conduct. 1.2 TYPES OF OFFERS Speciﬁc Offer: An Offer made to a speciﬁc person or to a group of persons in which case it can be said to be a speciﬁc offer; General Offer: An Offer made to the whole world and any one can accept and perform the acts speciﬁed therein. CARLILL V CARBOLIC SMOKE BALL Slide CO.9 Q.B. 256 (C. A.) 1.3 RULES GOVERNING OFFER 1. An Offer becomes binding as soon as it is accepted by the person or persons to whom it is made. 2. An Offer must be communicated to the person or persons to whom it is made to be valid. 3. A person who knows the reward of an offer is entitled to it if he performs the act prescribed in the offer, though his motivation for performing the act was something other than the reward. WILLIAMS – V COWARDINE (1833) 110 ER 590 4. An Offer once made remains open until it lapses, accepted, rejected or revoked Slide 10 Termination of offers An Offer can be terminated in any of the following ways; 1. Revocation:- This is where the Offeror withdraws the Offer. (a) An Offer can be revoked at anytime before it is accepted by the Offeree. –DickinsonV Dodds (1876) 2 Ch D 463 (b) Revocation can only be valid or effective when it is actually received by the Offeree.Byrne V Van Tienhoven 5 CPD 344 (c) Communication of a revocation though must reach the Offeree needs not necessarily come from the Offeror. It suﬃces if same is received by the Offeree through a reliable third party.Dickinson – V Slide 11 Dodds (d) In Unilateral Contracts the offer cannot be revoked where the Offeree has started to perform the act that constitutes acceptance Errington – V Errington 1 KB 290 (e) A promise to keep an Offer open for a speciﬁed period of time is not binding on the Promisor or Offeror in the absence of consideration from the Promisee or Offeree. Routledge – v Grant (1828) 4 Bing 653 Slide 12 It is important to emphasize that this common law position has been reversed by Section 8 of the Contracts Act, 1960 the which provides that “ promise to keep an offer open for acceptance for a speciﬁed time shall not be invalid as a contract by reason only of the absence of any onsideration”. 2. Rejection:- This is where the Offeree declines to accept the Offer. This can happen in one of two ways; Slide 13 (a) Outright Rejection: By this the Offeree simply refuses to Counter Offer: By this the Offeree instead of accepting or rejecting the offer made, rather makes another offer in return as in whilst not rejecting the price offered, the Offeree then quotes another price, invariably lower than the one contained in the original offer. This subsequent offer operates to cancel the original offer. – Hyde v Wrench EWHC Ch J90 3. Lapse of Time:- This is where a time limit is set for the offer to be accepted and when the offer is not accepted within the time limit, the offer would lapse upon the expiration of the time. Where no time limit is ﬁxed, the offer lapses after a reasonable time. What constitutes a Slide 14 reasonable time is dependent on surrounding factors. DISTINCTION BETWEEN OFFER AND INVITATION TO TREAT There are instances where the conduct of a party in a bid to procure a promise from the other is confused with an offer, when in essence all that the party is doing is to solicit an Offer. Such preliminary activities, which usually are only intended to solicit offers from potential customers are not deemed by the law as contractual offers in themselves, capable of being converted into a contract upon acceptance but rather mere invitations to the public to make offers, and are thus referred to as “invitations to treat” Slide 15 Common examples of Invitations to treat include; (a) Tender Notice – SPENCER V HARDING (1870) LR 5 CP 561 (b) Display of goods in a shop window with prices attached – FISHER V BELL 1 QB 394 (c) Advertisement of goods or services in the newspaper – PATRIDGE V CRITTENDON 1 WLR 1204 (d) Circulation of Catalogues and Price Lists – GRAINGER & SON V GOUGH AC 325 (e) Auction Sales – HARRIS V NICKERSON (1893) L.R. 8 Q.B. 286. Slide 16 SAMPLE QUESTION With the aid of decided cases, distinguish between offer and invitation to treat Slide 17 Topic Two ACCEPTANCE Slide 18 ACCEPTANCE ACCEPTANCE  It is the ﬁnal and unqualiﬁed expression of assent to the terms of an offer.  Acceptance may be by Words, Conduct or in Writing. 2.1 RULES GOVERNING ACCEPTANCE 1. Communication of Acceptance:  Acceptance is not effective unless and until it is communicated to the Offeror. –Entores Limited v Miles Far East Corp 2 QB 327  For Acceptance to be effective, it must come from the Offeree Slide 19 himself or his authorized agent –Powell V Lee (1908) 99 LT 284. The Postal Rule:  The Postal Rule states that an acceptance communicated by post is complete and effective when the letter is posted or placed in the hands of the relevant postal authorities Adams – v Lindsell (1818) 106 ER 250  For the Postal Rule to apply, the letter of acceptance must have been posted and for this purpose a letter is deemed to have been posted when it is in the control of the Post Oﬃce.  The Rule applies only when it is reasonable to use the post as a means of communicating acceptance- Henthorn V Fraser 2 Ch 27  The Rule applies even if the letter of acceptance is delayed or wholly lost in the post and never reached the Offeree –Household Fire and Carriage Accident Insurance Co. V Grant (1878–79) LR 4 Ex D 216 Slide 20  The Rule can be excluded by the terms of the Offer, as where it states that acceptance is effective only when actually received – Holwell Securities Ltd V Hughes 1 WLR 155  The Rule applies exclusively to acceptances communicated by post and telegram but not telephone, telex, fax.  The Rule does not apply to letters that contain rejections, counter offers or revocation of offers or revocation of acceptance. Slide 21 Prescribed method of acceptance:  Generally, where a mode of acceptance has been indicated by the Offeror, the Offeree has to communicate the acceptance in the prescribed mode.  Where the Offeror prescribes silence as the mode of acceptance, the silence of the Offeree would not amount to acceptance Felthouse – V Bindley (1862) EWHC CP J 35 Slide 22 References Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 23 UGBS 203 COMMERCIAL LAW 1 Session 4 – Law of Contract Elements of a valid Contract Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the law governing contracts in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: ELEMENTS OF A VALID CONTRACT Consideration The Doctrine of Privity of Contract The Doctrine of Promissory Estoppel  TYP ES OF CONTRACT ELEM ENTS OF A V ALID CONTRACT  V ITIATING FACTORS TERM S OF CONTRACT  M ISTAK ES  TERM INATION OR DISCHARGE OF A CONTRACT Slide 3 Reading List Statute Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 4 Topic Three CONSIDERATION Slide 5 CONSIDERATION CONSIDERATION Consideration is the price paid for the promise of the other party. The price must be something of value, although it need not be money. Consideration may be some right, interest or beneﬁt going to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party. Slide 6 Types of Consideration  Consideration can generally be categorized into three types; (a) Executory Consideration:- it refers to a Promise given exchange for a promise to be performed or redeemed at a future time, such as a bilateral contract to be performed in future. (b) Executed Consideration:- it refers to an act done in exchange for the promise of the other party as in unilateral contracts where one party performs an act prescribed Slide 7 by the offeror. (c) Past Consideration:- this type of Consideration consists in an act that was completely done or the forbearance had already been suffered before the promise was made.  Past Consideration is not suﬃcient consideration and therefore cannot support a promise to create a contract – Re Mcardle (1951) Ch 669 ; EASTWOOD V KENYON (1840) 113 ER 482.  There are however instances where Consideration though past, is still suﬃcient to support a contract; (i) Acts speciﬁcally requested by the Promisor: if at the onset the promisor did not make any promise to pay, but after the service had been done he promises to pay for the service, such a promise is enforceable although the consideration is past – LAMPLEIGH V BRATHWAITE EWHC KB J 17 (ii) Acts done by way of business:- where the act was done by way of business and both parties understood at the time of performance that the act was one to be paid for – Re Casey’s Patent 1 Ch. 104 Slide 8 Rules Governing Consideration (a) Consideration must be suﬃcient  By suﬃciency of consideration, the standard is whether the act performed is recognized by law.  The common law over the years has recognized certain acts which do not suﬃce as consideration, some of which have been modiﬁed by Statute Slide 9 in Ghana, and (i) Performance of an existing legal obligation:- this may arise in one of two (2) ways; (1)Where a public duty is imposed by law: under Common Law where the law imposes a public duty, its performance cannot be deemed as consideration – COLINS V GODEFROY(1831) 1 B & Ad 950 (2)Performance of a contractual duty owed to the other party:- under common law where a person was under a contractual obligation to do something for the other party, and does it, it would not be deemed suﬃcient consideration for any promise made for its performance. – Stylk V Myrick EWHC KB J58 Slide 10  It is important to note that this position has been changed by S.9 of the Contracts Act, 1960.  Thus under Ghanaian law where a public duty is imposed by law, performance of that duty would suﬃce as consideration – Kessie V Charmant. GLR 194  Similarly performance of an existing contractual obligation would suﬃce as consideration Slide 11 (ii) Part payment of a Debt (the Rule in Pinnel’s Case)  At Common Law a promise to waive or forego a debt or part payment of a debt is not enforceable against the promisor unless there is a fresh consideration from the PromiseePinnel’s – Case ; Foakes v Beer 5 Co. Rep. 117a (1883-84) LR 9 App Cas 605  This position has been altered by S.8(2) of the Contracts Act, 1960 which provides that “a promise to waive the payment of a debt or part of the debt or the performance of some other contractual or legal obligation shall not be invalid as a contract by reason only of the absence of any consideration therefor” (iii) Promise to keep an Offer open for a speciﬁed period of time  At Common Law a promise to keep an Offer open for acceptance for a speciﬁed period of time is not binding on the promisor in the absence of consideration. Slide 12  This position has been altered by S.8(1) of the Contracts Act, 1960 (b ) Consideration needs not be Adequate This means that Consideration does need to be of the same value as the promise, and the Courts would not undertake an inquiry into its adequacy. It suﬃces if it has some economic value, and the promisor gets what he asked for in return for his promise. (c) Forbearance is Consideration It means refraining from doing what one has the right to do, and if a person refrains from doing what he has a right to do and on the promise of another, it amounts to good consideration – HAMMER V SIDWAY 124 N.Y. 538, 27 N.E. 256 Slide 13 d) Consideration must move from the Promisee  At Common Law the person to whom a promise is made must be the one to provide the Consideration before the promise would be binding on the promisor or be enforceable against him. Thus where the Consideration was provided by a third party, other than the Promisee, the promise cannot enforce the contract against the promissor – TWEDDLE V ATKINSON EWHC QB J57, (1861)  The Common Law position has been changed by S.10 of the Contracts Act as“No contract shall be invalid as a contract by reason only that the consideration for it was supplied by someone other than the promise” Slide 14 Doctrine of Privity of Contract  It is to the effect that a contract creates a contractual relationship between the parties and no other. Thus only the contracting parties acquire enforceable rights – Dunlop Pneumatic Tyre v Selfridge HL 26 Apr 1915 Exceptions to the Doctrine; – Statutory Exceptions Motor Vehicles (3 Party) Insurance Act. rd Conveyancing Act, 1975 – S.15 Contracts Act, 1960 – S.5 – Common Law Exceptions Agency Relationship Privity of Estate – Equitable Exception Trust Arrangements Slide 15 Doctrine of Promissory Estoppel  It is an equitable intervention to the effect that a promise to not enforce a contractual right is given effect even in the absence of consideration, particularly where allowing the promisor to enforce that promiseCentral London Property Trust v High Trees House Limited KB 130  would be inequitable –the promise as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance that affects the legal relationship between them and to be acted on accordingly, then once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to the revert to the previous legal relations as if no such promise or assurance has been made by him, but he must accept the legal relations subject to the qualiﬁcation which he himself has so introduced, even though it is not supported in point of law by any consideration, but only his word” – per Lord Denning in Combe v Combe 2 KB 215  Requirements of the Doctrine – Existing contractual relationship between the parties – Clear unequivocal promise not to insist on strict legal rights for the period – The promisee must show that his position was altered in reliance on the promise – It must be inequitable to resile Slide 16 SAMPLE QUESTION The Contracts Act of Ghana, 1960 (Act 25) has introduced signiﬁcant departures from the Common Law in some key areas of the law of contract”. With the aid of decided cases where possible, discuss this statement with particular reference to departures from the common law position on “consideration” as an element of a valid contract. Slide 17 References Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 18 UGBS 203 COMMERCIAL LAW 1 Session 6 – Law of Contract Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the law governing contracts in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: TERMS OF A CONTRACT VITIATING FACTORS  INT RODUCTION  TYPES OF CONTRACT  ELEMENTS OF A VALID CONTRACT  VITIATING FACTORS  TERMS OF CONTRACT  MISTAKES  TERMINATION OR DISCHARGE OF A CONTRACT Slide 3 Reading List Statute Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 4 Topic One TERMS OF A CONTRACT Slide 5 Terms of a contract They deﬁne the scope and extent of the obligations undertaken by the parties to the Contract the breach of which entitles the other party to some enforceable legal right or remedy.  They could be wholly oral, wholly written, or partly oral and partly written.  Though all terms of the Contract need to be performed, they all do not have equal signiﬁcance when it comes to the consequences for their breach.  Terms can thus be classiﬁed into three (3) categories; (i) Conditions; (ii) Warranties; (iii) Innominate Terms Slide 6 (i)Conditions:- A Condition is a term of a Contract which is so essential that its breach entitles the injured party to withdraw the Contract and sue for damages. In effect, a Condition goes to the very roots of the Contract such that its non performance may fairly be considered by the other party as substantial failure to perform the Contract at all – WALLIS V PRATT (ii) Warranties:- A Warranty, as compared to a Condition, is a subsidiary term the breach of which does not go to the roots of the Contract and therefore the innocent party cannot repudiate or rescind the Contract, but can sue for damages only – BETTINI V GYE, POUSSARD V SPIERS Slide 7 (iii) Innominate or Intermediate Terms:- They are terms that are not pre-classiﬁed as Conditions or Warranties but could be treated as either a Condition or a Warranty depending on the nature of breach and the extent of its consequence – Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd EWCA Civ 7 Slide 8  Express Terms:- they are terms that have been explicitly stated or indicated in the Contract whether orally or written or a combination of both.  Implied Terms:- they are terms which though not explicitly provided in the Contract are agreed to by the parties, would nevertheless be deemed to be a term of the Contract. The terms of a Contract may be implied by; Slide 9 (a) The Court:- to ensure business eﬃcacy where implying the term would achieve the objective of the business – THE MOORCOCK (1889) 14 PD 64 (b) Custom and Usage of the business or trade – HUTTON V WARREN (1836) 1 M&W 460 (c) Statute:- A Statute implies the term – Sale of Goods Act, Conveyancing Act, Hire Purchase Act. Slide 10  Exemption / Exclusion Clauses:- they are terms of a Contract that seek to limit or totally exclude the liability of a party to a Contract as against the other. They are prevalent with standard form Contracts where a Company which has to deal with various people in respect of the same subject matter prints it terms in a wholesale manner and applicable to all, on receipts, tickets, cards etc. Slide 11 To a very large extent, the Courts try to limit the extent to which a party can rely on exemption clauses and have provided certain conditions that would have to be met before a party can rely on exemption clauses. These conditions are; (i) The exemption clause must be proven to be properly incorporated into the Contract for it to have effect, and this can be done by way of; (a) Signature of the other party (b) Notice to the other party (c) Previous course of dealing Slide 12 Topic Two VITIATING FACTORS Slide 13 Vitiating Factors They are factors or errors that affect the validity or enforceability of a Contract. The Vitiating Factors can be classiﬁed into three (3); (i) Mistake (ii) Misrepresentation (iii) Undue Inﬂuence or Duress Slide 14 (i) Mistake:- an error or being wrong as to a matter of fact that inﬂuences the making of a Contract.  For a Mistake to have effect, it must exist at the time of the Contract was concluded.  The legal effect of Mistake is that it renders a Contract void ab initio. Types of Mistake  There are three types of Mistakes; (a) Common Mistake, (b) Mutual Mistake, (c) Unilateral Mistake Slide 15 Mistakes (a) Common Mistake:- with this kind of Mistake, both parties agree but in the mistaken belief that some fact which forms the basis of the Contract exists when in actual fact, that fact does not exist – COURTURIER V HASTIE UKHL J3 (b) Mutual Mistake: - with this kind of Mistake one party enters into the Contract believing the subject matter to be one thing, and the other party also understands it to be another. In essence there is no agreement – RAFFLES V WICHELHAUS EWHC Exch J19, ADDAI V PIONEER TOBACCO CO [1989-90] 1 GLR 526 (c) Unilateral Mistake: - this is where only one party to the Contract is mistaken, and the other party knows of the mistake of the other such as Slide 16 mistake as to the identity of a contracting party – PHILIP V BROOKS Non Est Factum The general principle is that where a party signs a document, he is bound by it irrespective of the fact that it was not the type of document he intended to sign, or that he failed to read it. Where however the document is radically different or fundamentally different from what he thought he was signing and was not careless, he may plead non est factum – it is not my deed or document. – Saunders v Anglia UKHL 5 /Quao v Squire Slide 17 Misrepresentation This is a false statement of material fact made by one of the parties, before, or at the time of entering into the Contract which was intended to, and actually did inﬂuence the other party to enter into the Contract. Slide 18 Types of Misrepresentations (a) Fraudulent Misrepresentation:- a statement made, which the person making it did not honestly believe it to be true, either because he knew it to be false or he made it recklessly without caring whether it was true or not – DERRY V PEE (1888) LR 14 App Cas 337 (b) Remedies: (i) Rescission of the Contract (ii) Claim for damages , (iii) Claim for damages Slide 19 for deceit (c) Negligent Misrepresentation:- a representation made carelessly and in breach of a duty owed by the person making it to the person he is making it to, to take reasonable care that the representation is accurate – NOCTON V BURN AC 932 (d) Innocent Misrepresentation:- the representor made his statement with the honest belief that it was true, although in fact, his representations were not true – NEWBIGGING V ADAM (1886) 34 Ch. D. 582 Slide 20 Duress and Undue Inﬂuence Duress:- it is the use or threatened use of illegitimate forms of pressure or intimidation to procure a party to enter into a contract – KAUFMAN V GERSON 1 KB 591 / HEMANS V COFFIE SC. GLR 596  Economic Duress: the law recognizes this form of Duress as where a party threatens to break an existing Contract as a means to induce the other party to enter into another contract – D&C BUILDERS LTD V REES EWCA Civ 3 The conduct must always amount to a coercion of will which will vitiate consent Slide 21 (b) Undue Inﬂuence: it refers to the equitable doctrine of coercion which deals with forms of pressure that are usually less direct as what pertains under Duress, and may take one of two forms;  Express use of Inﬂuence or Domination of the other party: where it can be shown that one party exercised such domination over the mind and will of the other such that his consent to contract cannot be said to have been given independently, the party who was so dominated can rescind the contract – MORLEY V LOUGHMAN 1 Ch 736  Presumption of undue inﬂuence when there is a ﬁduciary relationship: this is where parties stand in a relationship of conﬁdence to one another, which puts one party in a position to exercise over the other an inﬂuence which is capable of being abused such as; Slide 22 (a) Parent and Child (b) Guardian and Ward (c) Solicitor and Client (d) Physician and Patient (e) Trustee and Beneﬁciary (f) Religious/Spiritual Advisor and follower Any contract procured by Duress or Undue Inﬂuence can be rescinded at the option of the person on whom same was applied. The right to rescission would however be barred under the following circumstances; (a) Aﬃrmation – where after Duress or Undue Inﬂuence the party aﬃrms the Contract – NORTH OCEAN SHIPPING CO V HYUNDAI CONSTRUCTION CO. LTD QB 705 (b) Lapse of time (c) where party recognizing that he/she might have rights, yet failed to ﬁnd out or exercise same. Slide 23 , Illegal and Unconscionable Contracts Unconscionable Contracts are contracts that equity views as being excessively harsh, where on the account of the special disability of one party, he or she is placed at a serious disadvantage in relation to the other. The Courts would not enforce any such contract – CFC CONSTRUCTION CO (W/A) LTD, RITA READ V ATTITSOGBE 2005/2006 SCGLR 858 Illegal Contracts are Contracts whose formation is prohibited by law or its performance is prohibited by law, and involves an element which is unlawful, immoral or prejudicial to the interest of the public or state. Slide 24  Among the contracts which are deemed illegal and unenforceable on grounds of public policy are; (a) Contracts to commit a crime, tort, or fraud on another party – BERG & SADLER V MOORE [I937] I All. E. R. 637 (b) Contracts which promote sexual immorality – PEARCE V BROOKS 1866) LR 1 Ex 213 ( (c) Contracts which interfere with Regulations of Foreign Countries – REGAZZONIA V SETHIA CA ( 2 QB 498, (d) Contracts prejudicial to the administration of Justice – KEIR V LEEMAN 9 QB 371 Slide 25 (e) Contracts leading to ineﬃciency and corruption in public life (f) Contracts to deceive public authorities – ALEXANDER V RAYSON (1936) 1 KB 169 (g) Contracts to oust the jurisdiction of the Courts – LEE V THE SHOWMEN’S GUILD OF GREAT BRITAIN 2 QB 329 (h) Contracts to use oﬃcial position or public oﬃce to secure private reward – AMPOFO V FIORINI 1981 GLR 829/KESSIE V CHARMANT - REVISITED Slide 26 References Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 27 UGBS 203 COMMERCIAL LAW 1 Session 7 – Law of Contract Discharge of Contract Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview This is to enable students understand the law governing contracts in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: TERMINATION OR DISCHARGE OF CONTRACT  INT RODUCTION  TYPES OF CONTRACT  ELEMENTS OF A VALID CONTRACT  VITIATING FACTORS  TERMS OF CONTRACT  MISTAKES  TERMINATION OR DISCHARGE OF A CONTRACT Slide 3 Topic One DISCHARGE OF CONTRACT Slide 4 Discharge of Contract  A Contract is discharged when it ceases to operate and the parties thereto become relieved of their obligations under the Contract.  A Contract can be discharged in the following ways: (a) Agreement (b) Performance (c) Breach 1. Total failure 2. Anticipatory 3. Incomplete or Defective Slide 5  d. frustration  It describes the situation where there has been a change in an obligation to be performed by a party that is fundamentally different from what he undertook to perform.  Contracts for personal service;  Non-occurrence of an event – Taylor v Caldwell  Commercial purpose defeated – Krell v Henry  Government intervention  Frustration will not apply in the self induced events – Barclays Bank v Sakari Slide 6 Topic Two REMEDIES FOR BREACH OF CONTRACT Slide 7 REMEDIES FOR BREACH OF CONTRACT 1. Damages 1. Based on loss to innocent party and not gain to the guilty party 2. Loss must be due to breach 3. Mitigation 2. Injunction 3. Speciﬁc Performance – Redco v Sarpong 1991 2 GLR 457 CA 4. Action for price 5. Rescission Slide 8 References Contract Act 1960, (Act 25) Text Books 1. Christine Dowuona-Hammond, (2011) The Law of Contract in Ghana (Frontiers Printing & Publishing Co, Accra) 2. J. Beatson et al (ed)(2010), Anson’s Law of Contract (29th Ed) (Oxford University Press) 3. Paul Richards (1997) Law of Contract (3rd Ed) (Pitman Publishing, London) 4. P. Ebow Bondzi-Simpson (2010), Law of Contract (2nd Ed) 5. Cheshire, Fifoot & Furmston's Law of Contract, 15th Edition Slide 9 UGBS 203 Commercial Law Session 8 – Sale of Goods Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview To enable understand the rules that govern a sale of goods contract both in Ghana and internationally. Slide 2 Session Outline The key topics to be covered in the session are as follows: Nature and Formation of a Contract for the Sale of Goods Slide 3 Reading List Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 4 Topic One NATURE AND FORMATION OF A CONTRACT FOR SALE OF GOODS Slide 5 SALE OF GOODS It is a contract whereby the Seller transfers or agrees to transfer the property in goods to the Buyer for a Consideration called Price consisting wholly or partly of money – S.1, Sale of Goods Act, 1962 (Act 137) (SOGA) FORM OF CONTRACT OF SALE A contract of sale of goods may be made in writing or by word of mouth, or partly in writing, and partly by word of mouth or may be implied from the conduct of the parties – S.3 SOGA GOODS The term “Good” has been deﬁned to include movable property and growing crops or plants and any other things attached to or forming part of land which are agreed to be severed before sale by or under the contract of sale – S.81 Slide 6 Types of Goods The Act identiﬁes two (2) types of goods; (a) Speciﬁc Goods and (b) Unascertained Goods. (a) Speciﬁc Goods: they are goods identiﬁed and agreed upon at the time a contract for sale is made. Such goods exist and are identiﬁable from other goods at the time of the contract. (b) Unascertained Goods: they are goods not identiﬁed or agreed upon at the time of the contract. They may or may not be in existence at the time of the contract. Slide 7 PRICE – S.6 Price refers to that which must be given as consideration in a contract of sale. It may consist wholly or partly of money – ALDRIDGE V JOHNSON 7 E & B 885 Price may be determined in any of the following manners; (i) Expressly ﬁxed by the contract (ii) In a manner agreed between the parties (iii) Course of dealing between the parties (iv) Where price is not determined under any of the above, the buyer must pay a reasonable price which is a question of fact dependent on circumstances. Slide 8 Forms of Sale (i) Sale in Market Overt: Market Overt means an open, public and legally constituted market. Where a person buys goods in a market overt in good faith without any notice of defect or lack of title and in accordance with the usage of the market, the sale is valid. (ii) Sale to a part owner: This is where goods are sold by one person to another who is a part owner of the same goods. Under the common law, a sale to a part owner was null and void, but under Ghanaian law, a sale to part owner is valid – S.1(3) Slide 9 (iii) Sale or Return Contracts: This is where goods are delivered to the buyer with an option that the goods may be purchased or returned.  Ownership under this type of sale is transferred to the buyer when; (a) he communicates his acceptance to the buyer or does an act adopting the transaction, eg, reselling or pledging the goods. (b) he does not communicate acceptance but retains the goods without giving notice of rejection within the time ﬁxed for rejection, or if no time is ﬁxed, within a reasonable time. Slide 10  If goods are damaged or lost while in the buyer’s possession, he cannot be held liable unless the loss or damage was due to his negligence.  If the buyer sells or pledges the goods to a third party and there is default in payment, the seller cannot recover the goods from the third party – KIRKHAM V ATTENBOROUGH (1897) 1 QB 201, POOLE V SMITH’S CAR SALES (BALHAM) LTD (1962) 1 WLR 744 Slide 11 (iv) Sale by Sample: This is where a contract is based on sample of goods given or shown to the buyer. In a sale by sample, the goods must correspond exactly with the sample. (v) Sale by Description: The buyer in this instance does not or has not seen the goods but enters into the contract of sale based on a description of the goods. The goods must correspond with the description. Slide 12 (vi) Auction Sales: Sales This is where goods are entrusted into the hands of an auctioneer for purposes of sale by putting up the goods for auction and inviting offers through a bidding process.  An Auction Sale can either be with a reserved price or without a reserved price. Slide 13  The bidders are the offerors, and every bid is therefore an offer.  The sale is complete when the auctioneer announces its completion with the fall of the hammer or any other customary manner.  Auction Sales can be undertaken subject to a reserved price or without a reserved price Slide 14 (a) Auction Sales without Reserved Price: Price  The Auctioneer is enjoined to sell the goods to the highest bidder irrespective of the bidding price, and a bidder can sue for the refusal of the Auctioneer to accept the bid or complete the sale.  A bidder may retract the bid before the completion of the sale. Slide 15 (b) Auction Sale subject to Reserved Price: Price  With this type of auction, there is a minimum price below which a bid would not be entertained.  The Seller or his Agent or anyone acting on his behalf can participate in the bid, but can only bid once, which shall be openly declared at the auction before any other bid is received. – McMANUS V FORTESCUE 1907, 2 K. B. 1. Slide 16 TERMS UNDER A CONTRACT OF SALE TERMS UNDER A CONTRACT OF SALE; CONDITIONS AND WARRANTIES CONDITIONS: it is a stipulation in a contract that goes to the root of the contract. Its breach gives the other party a right to repudiate the contract. WARRANTY: it is a stipulation a contract which is not of such importance as to go to the root of the contract, but is collateral to the main purpose of the contract, such that its breach would give rise to a claim of damages by the other party, but not a repudiation of the contract. Slide 17 SAMPLE QUESTION Discuss the forms of sale of goods in Ghana Slide 18 References Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 19 UGBS 203 Commercial Law Session 9 – Sale of Goods Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview To enable understand the rules that govern a sale of goods contract both in Ghana and internationally. Slide 2 Session Outline The key topics to be covered in the session are as follows: Transfer of Property and Risk in the Goods Transfer of Property in Goods by a Non-Owner Kinds of Obligation created by the Sale of Goods Act Slide 3 Reading List Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 4 Topic One TRANSFER OF RISK AND PROPERTY IN GOODS Slide 5 TRANSFER OF PROPERTY IN GOODS It refers to the transfer of title or ownership in the goods from the seller to the buyer.  The issue of importance is “at what point in time does the title or ownership in goods move from the seller to the buyer?”  The transfer of property from the seller to the buyer is dependent on the form of sale; Slide 6 (i) Speciﬁc Goods:- (a) Where the contract is for speciﬁc goods in a deliverable state, property passes the moment the contract is made – TARLING V BAXTER (1827) 108 E.R. 484 (b) Any subsequent agreement that property will pass at a certain time will be inoperative – DENNANT V SKINNER & COLLOM 2 KB 164 Slide 7 (b) Where the contract is for speciﬁc goods and the seller is bound to do something to put the goods in a deliverable state, property does not pass until this has been done – UNDERWOOD V BURGH CASTLE BRICK & CEMENT SYNDICATE 1 KB. 343 (c) Where the goods are in a deliverable state but the seller is required to do other things like packaging, weighing, etc, property does not pass until it has been done and the buyer notiﬁed. Slide 8 (ii) Unascertained Goods:- Property passes when goods which ﬁt the description in a deliverable state are unconditionally appropriated to the contract by one party with the assent of the other – PIGNATARO V GILROY (1919) 1 KB 459 (iii) Sale or Return Goods:- (Already treated under “Forms of Sale” on slides 6 & 7. Please refer) Slide 9 TRANSFER OF RISK IN GOODS RISK refers to the loss, damage or deterioration of the goods that form the subject matter of the sale.  Risk is usually initially with the seller but is transferred at a point in time to the buyer – HEALEY V HEWLETT & SONS 1 KB 337  As a general rule, risk is transferred from the seller to the buyer at the time the parties intended it to be transferred. Slide 10  Unless otherwise agreed to the contrary, risk passes to the buyer at the same time that property in goods pass.  Where there is a delay in delivery attributable to either party, the party responsible for the delay will be liable for any loss, damage or deterioration caused by the delay – STERN LTD V VICKERS 1 KB 78 Slide 11 TRANSFER OF PROPERTY IN GOODS BY NON-OWNER – S.28 (NEMO DAT QUOD NON HABEIT )  The general rule is that a person who is not the owner of goods cannot transfer the property in the goods to a third party.  This is generally known as the principle of Nemo Dat Quod Non Habeit EXCEPTIONS TO THE NEMO DAT QUOD NON HABEIT PRINCIPLE (i) Doctrine of Estoppel: this operates where the real owner of the goods, by his words or conduct misleads the buyer into thinking that the seller is the owner of the goods – PICKARD V SEARS 2 Ex. 654 EASTERN DISTRIBUTORS V GOLDBERG (1967) 2 QB Slide 12 (ii) Power of Sale conferred by Statute: this is where even though the seller is not vested with title, the provisions of an enactment, empowers the person in possession of the goods to sell them, e.g. Pawn brokers ordinance, 1959. (iii) Sale by Merchantile Agent: A Merchantile Agent in possession of goods, or the documents of title to goods with the consent of the owner, may sell, pledge or dispose of the goods in the ordinary course of business and bind the owner thereby, whether the owner authorized it or not – FOLKES V KING 1 K. B. 282, LLOYDS BANK V BANK OF AMERICA ASSOCIATION 2 K.B. 147. Slide 13  To suﬃce, a sale by the Merchantile Agent must be under the following conditions; (a) the Agent was in possession of the goods or document of title with the consent of the owner; (b) in selling, the Agent was acting in the ordinary course of business of a Merchantile Agent; (c) the purchaser did not at the time of sale have notice that the Agent had no authority. Slide 14 (iv) Sale under a voidable contract –A – Voidable Contract is one which is valid until terminated at the instance of one party. Any sale under a voidable contract to a person who buys in good faith is valid. (v) Disposition by a buyer in possession of goods or documents of title –when a buyer who has bought or agreed to buy goods obtains, with the seller’s consent, possession of the goods, or the documents of title to them, any sale by such a buyer to a third party who takes it in good faith, without notice, the third party acquires good title – CAHN V POCKETT’S BRISTOL CHANNEL CO 1 Q.B. 643. Slide 15 (vi) Disposition by seller in possession –: where property in goods has passed to the buyer but the seller is in possession of the goods, he may pass good title to a third party who buys the goods in good faith for value without notice of the default in title of the seller. (vii) Sale in Market Overt: where goods are sold in a market overt according to the custom of the market, the buyer acquires good title to the goods in so far as he buys them in good faith and for value and without notice of the defect in title of the seller. It is important to note that this position has been amended by the Sale of Goods (Amendment) Act, 1994 in the UK. Slide 16 SAMPLE QUESTION Under a contract for sale of goods, only an owner can transfer property in goods to a third party. Discuss the accuracy and truthfulness of this statement. Slide 17 Topic Two KINDS OF OBLIGATIONS CREATED BY THE SALE OF GOODS ACT, 1962 Slide 18 DUTIES OF A SELLER (i) Deliver the goods to the buyer – Fundamental Obligation. Where sale is by sample or description, goods delivered must correspond to the sample or description. (ii) Supply goods of merchantable quality (iii) Supply goods ﬁt for the purpose for which they are intended (iv) Supply goods of the right quantity (v) Supply goods within the stipulated time, or a reasonable time Slide 19 DUTIES OF A BUYER (i) To pay the price (ii) Accept delivery of the goods Slide 20 REMEDIES OF AN UNPAID SELLER An unpaid seller is a seller of goods for which the whole of the price has not been paid or tendered – S.34 The unpaid seller has two (2) main categories of rights or remedies; Real Rights and Personal Rights (i) Real Rights: these are rights that are exercisable on the goods that form the subject matter of the transaction; (a) Lien on the goods (b) Stoppage in transit (c) Resale of the goods (d) Recovery of possession Slide 21 (ii) Personal Rights: these are rights that the seller has against the buyer himself; (a) Sue for the price of the goods (b) Damages for non acceptance Slide 22 RIGHTS OF THE BUYER (i) Real Rights: (a) Reject the goods where; 1. Seller is in breach of a fundamental obligation 2. Seller is in serious breach of a condition of the contract. 3.The buyer entered into the contract as a result of an innocent or fraudulent misrepresentation. Slide 23 References Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 24 UGBS 203 Commercial Law Session 10 – Sale of Goods Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview To enable understand the rules that govern a sale of goods contract both in Ghana and internationally. Slide 2 Session Outline The key topics to be covered in the session are as follows: International Sale of Goods Slide 3 Reading List Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 4 Topic One INTERNATIONAL SALE OF GOODS Slide 5 INTERNATIONAL TRADE CONTRACTS (i) (i FREE ON BOARD CONTRACTS (F.O.B)  It is the type of international contract where the seller undertakes to supply the goods by arranging to have the goods delivered over the ship’s rail, and to deposit them on board the ship.  The price quoted for the goods covers the actual price of the goods, as well as all charges incurred up to the time the goods are placed on the ship.  In an F.O.B contract, the seller’s obligation ends immediately the goods are placed on board the ship.  Both property and risk pass to the buyer when the goods are put on board the ship named by the buyer – CARLOS FEDERSPIEL&CO SA V CHARLES TWIGG & CO 1 Lloyd's Rep. 240.. Slide 6 DUTIES OF THE SELLER IN A F.O.B. CONTRACT (i) To place the goods on board the ship named by the buyer. (ii) To be responsible for all charges incurred up to, and including the delivery of the goods on the ship. (iii) To complete declaration required by custom oﬃcials. (iv) Immediately inform the buyer that the goods have been placed on board the ship. Failure to do so will leave the risk on the seller. (v) Forward all relevant documents to the buyer. Slide 7 DUTIES OF THE BUYER IN A F.O.B CONTRACT (i) To nominate a ship and communicate same to the seller (ii) To procure space in the ship for the goods (iii) To arrange and pay for freight and insurance of the goods. Slide 8 (ii) COST, INSURANCE FREIGHT CONTRACT (C.I.F) Under this type of contract, the seller agrees to deliver goods at a price which comprises the cost of the goods, the cost of freight, and insurance. The characteristic feature of this type of contract is that performance by the seller is by delivering the shipping documents to the buyer, and not by delivering the goods. Slide 9 It is usually said that, a C.I.F contract is not a sale of goods but a sale of the documents relating to the goods. The relevant shipping documents are; (a) The bill of lading – represents the contract of carriage by sea (b) Insurance Policy or Certiﬁcate – represents the contract of insurance (c) Invoice – represents the contract of sale Slide 10 If goods are lost in transit, the seller is obliged to deliver the documents to the buyer and claim payment for the price. If the price has already been paid, the buyer cannot ask for a refund, but to claim against the insurer or the owner of the carrier. Slide 11 DUTIES OF A SELLER UNDER A C.I.F CONTRACT (i) To ship at the port of shipment, goods of the description contained in the contract. (ii) To procure a contract of carriage under which the goods will be delivered at the port of destination. (iii) To arrange for an insurance of the goods (iv) To prepare an invoice of the goods (v) To tender, within a reasonable time after shipment, the shipping documents to the buyer, to enable delivery of the goods to the buyer. Slide 12 Under a C.I.F contract, a buyer has the right to reject both the documents and the goods – KWEI TEK CHAO V BRITISH TRADERS AND SHIPPERS LTD 2 QB 459 If a buyer accepts the documents, knowing that they are not in order, he is stopped from trying to reject it later – PANCHAUD FRERES S.A. v ESTABLISSEMENT GENERAL GRAIN CO. LTD 1 Lloyd's Rep 53 Slide 13 DUTIES OF A BUYER IN A C.I.F CONTRACT (i) To pay the contract price upon receipt of the shipping documents. (ii) To pay the cost of unloading, and landing at the port of destination. (iii) To pay all import duties and wharfage charges Slide 14 References Sale of Good 1962, (Act 137) P.S.Atiyah, Sale of Goods(8th Ed) R. M. Goode, Commercial Law Chow Schoenbaum (2005), International Business Transactions, Problems, Cases and Materials (Aspen Publishers, New York) Michael Furmston & Peter Shears, (1995) Commercial Law (Lecture Notes Series)(Cavendish Publishing Ltd, London) Slide 15 UGBS 203 Commercial Law Session 11 – Hire Purchase and Conditional Sale Agreements Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview To enable students understand what hire purchase generally is and to understand speciﬁcally the rules governing hire purchase in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: The Nature of hire-purchase agreement Formation of Hire-Purchase Agreement under the Hire- Purchase Decree, 1974 (NRCD 292) Slide 3 Reading List Hire Purchase Decree 1974, (NRCD 292) R. M. Goode, Hire-Purchase Law and Practice(2nd Edition) Memorandum to the Hire-Purchase Decree,1974 NRCD 292 Slide 4 Topic One NATURE OF A HIRE PURCHASE AGREEMENT Slide 5 HIRE PURCHASE A Hire Purchase contract is a contract by which goods are delivered to a person who agrees to make periodical payments by way of hire, with an option of buying the goods after the stated hire installments have been paid. Until the option is exercised, there is no agreement to buy the goods. A Hire Purchase contract has three (3) main components; Slide 6 (a) Contract of bailment: the hirer obtains possession of the goods but ownership vests in the owner. (b) Option: this entitles the hirer ownership after payment of the periodic installments, and for nominal consideration to purchase the goods. (c) Contract of sale: this makes the hirer the owner of goods already in his possession in the course of installment payments Slide 7 CONDITINAL SALE AGREEMENT It is an agreement for the sale of goods under which the purchase price or part of it is payable by installments and the property in the goods remain with the seller notwithstanding that the buyer is to be in possession of the goods and under which certain conditions in the agreement are to be fulﬁlled by the buyer Slide 8 Differences between Conditional Sale and Credit Sale  In a Credit Sale property in the goods pass immediately to the buyer, in a Conditional Sale property passes in the future but under conditions;  In a Credit Sale price needs not be paid in installment; payment by installments is a requirement for a Conditional Sale;  In a Credit Sale the cash price and total purchase price may be the same; in a Conditional Sale the total purchase price is higher than the cash price. Slide 9 Topic Two FORMATION OF A HIRE PURCHASE AGREEMENT Slide 10 FORMAL REQUIREMENTS OF A HIRE PURCHASE /CONDITIONAL SALE AGREEMENT The Hire Purchase Decree, 1974 (NRCD 292), which governs Hire Purchase transactions in Ghana provides two (2) formal requirements; (i) Requirements before Agreement, and (ii) Requirements of the Agreement itself Slide 11 Requirements before the Agreement The seller or owner needs to tell the buyer both orally and in writing, the cash price, or the hire purchase price, or the total purchase price of the goods. Slide 12 Requirements of the Agreement The Agreement must state; (a) The Cash Price and the Hire Purchase Price, or the Total purchase price of the goods. (b) The amount of each installment and the date of payment of each installment. (c) A description of the goods or list of the goods to which the agreement relates. Slide 13 (d) A notice indicating the rights of the hirer or buyer to terminate the agreement; restricting the owner’s right to repossess the goods after payment by the hirer beyond a certain percentage; buyer to pay installment arrears upon termination at his instance. (e) A copy of the Agreement must be delivered to the hirer or buyer within fourteen (14) days. Slide 14 AVOIDABLE PROVISIONS IN A HIRE PURCHASE AGREEMENT The Hire Purchase Act excludes certain provisions from being included in a hire purchase agreement. The following provisions are deemed void when put in an Agreement; a provision (a) which gives an owner or any person acting on his behalf to enter onto a premises or private land to take possession of goods let under a hire purchase agreement. (b) restricts or excludes a hirer’s right to terminate the agreement, or imposes a liability beyond that prescribed by the Act – S.6 Slide 15 (c) which seeks to treat a person who acts on behalf of the owner or seller as an Agent of the hirer or buyer. (d) which seeks to relieve the owner or seller of liability for the acts or defaults of a person acting on behalf of the owner or seller. Slide 16 SAMPLE QUESTION Discuss the requirements of a hire purchase agreement in the light of the Hire Purchase Decree 1974 (NRCD 292) Slide 17 References Hire Purchase Decree 1974, (NRCD 292) R. M. Goode, Hire-Purchase Law and Practice(2nd Edition) Memorandum to the Hire-Purchase Decree,1974 NRCD 292 Slide 18 UGBS 203 Commercial Law Session 12 – Hire Purchase and Conditional Sale Agreements Lecturer: Dr. Olivia Anku-Tsede, UGBS Contact Information: [email protected] College of Education School of Continuing and Distance Education 2014/2015 – 2016/2017 Session Overview To enable students understand what hire purchase generally is and to understand speciﬁcally the rules governing hire purchase in Ghana. Slide 2 Session Outline The key topics to be covered in the session are as follows: Termination of hire-purchase agreement. Restriction on owner’s right to recover protected goods Implied terms in hire-purchase agreement. Slide 3 Reading List Hire Purchase Decree 1974, (NRCD 292) R. M. Goode, Hire-Purchase Law and Practice(2nd Edition) Memorandum to the Hire-Purchase Decree,1974 NRCD 292 Slide 4 Topic One TERMINATION OF HIRE PURCHASE AGREEMENT Slide 5 TERMINATION OF HIRE PURCHASE AGREEMENT – S.6 The hirer or buyer is entitled to terminate the Agreement at anytime before the ﬁnal payment by giving written notice to the person entitled to payment. When the hirer terminates the Agreement, he is liable to pay the difference between the total of money paid, and one half of the hire purchase or the total purchase price, or a lesser amount speciﬁed by the Agreement. Slide 6  Where an Agreement is terminated by the hirer, the goods shall be returned to the premises from where they were taken at the expense of the buyer.  A hirer who fails to take reasonable care of the goods shall compensate the owner upon termination.  A hirer who retains possession of the goods after termination shall be denied the option to buy the goods if the owner brings an action for recovery of possession Slide 7 COMPLETION  Completion is effected by the hirer giving notice to the owner of his intention to complete the purchase by tendering or paying the balance due on a speciﬁed date and tendering or effecting payment on the speciﬁed date.  The balance payable is the net balance, that is, the difference between the amounts paid and the total purchase price. Slide 8  The hirer’s right can be exercised at anytime during the subsistence of the Agreement, or within twenty-eight (28) days after the owner has taken possession of the goods, in which case he would have to pay for the owner’s expense in taking possession of the goods as well as cost of maintaining the goods.  An owner who takes possession of goods cannot resell them until after twenty-eight (28) days. days Slide 9 Topic Two PROTECTED GOODS Slide 10 PROTECTED GOODS A Protected Good is one which; (i) has been let under a hire purchase agreement, or a conditional sale agreement; (ii) for which one half of the price or total purchase price has been paid, whether pursuant to a judgment, or otherwise, tendered by or on behalf of the hirer or buyer, or a guarantor, and (iii) in relation to which the hirer or buyer has not terminated the hire purchase or conditional sale agreement or the bailment Slide 11 Recovery of Protected Goods:  An Owner or seller can only recover possession of a protected good through a court action.  Where an owner or seller recovers possession of protected goods, not through a court action, the agreement is deemed terminated and the hirer or buyer is released from any liability and can sue the owner or seller for money paid by the hirer and any security given.  The Court may however on an application by the hirer or buyer, order the return of the goods to the hirer or buyer and a rescheduling of payments. Slide 12 Topic Three IMPLIED TERMS IN A HIRE PURCHASE AGREEMENT Slide 13 TERMS OF A HIRE PURCHASE AGREEMENT – S.13 The following terms are implied in every hire purchase agreement; (i) that the hirer shall have and enjoy quiet possession of the goods; (ii) that goods are free from any charge or encumbrance; (iii) that the owner has the right to sell the goods; (iv) that the goods are reasonably ﬁt for the purposes for which the hirer requires them Slide 14 (v) that the goods are of merchantable quality. This term as to merchantable quality will not be implied in the following instances; (a) where the goods were examined by the hirer and the defect should have been seen by the examination. (b) where the goods are sold as second hand goods and there is a statement in the Agreement to the effect that the term does not apply (c) where the goods are sold subsequent to a defect which is speciﬁed in the Agreement, with a statement that the term as to merchantable quality shall not apply. Slide 15  A seller or owner can not rely on a clause excluding or modifying this term unless.  The owner or seller brought the statement to the notice of the hirer and made its effect clear to him;  and That the defect was brought to the attention of the hirer or buyer A breach entitles the hirer or buyer to rescind the contract. (vi) where goods are let or sold by reference to a sample, it is implied that the bulk shall correspond exactly with the sample; and that the hirer will have the opportunity of comparing the bulk with the sample – S.15 Slide 16 (vii) where goods are let or sold by description, there is the implied term that the goods correspond with the description. (viii) where the goods let or sold were by sample and description, there is the implied term that the goods correspond with the sample and the description.  A breach by the owner or seller will entitle the hirer or buyer to rescind the Agreement Slide 17 References Hire Purchase Decree 1974, (NRCD 292) R. M. Goode, Hire-Purchase Law and Practice(2nd Edition) Memorandum to the Hire-Purchase Decree,1974 NRCD 292 Slide 18

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