LAW

TEXTS 1. The 1992 Constitution of the Republic of Ghana 2. The Courts Act (1993) Act 459 3. The Courts Amendment Act (2002) Act 620 4. The Limitations Decree (NRCD 54) 5. The Contract Act (1960) Act 25 6. The Civil Liability Act (1960) Act 7 7. The Sale of Goods Act (1962) Act 137 8. The Bill of Exchange Act (1960) Act 55 9. The Arbitration Act (1960) Act 38 10. The Banking Act (2004) Act 11 The Labour Act (2003) Act 651 12. The Bank of Ghana Act (2002) Act 612 13 The Hire Purchase Decree (1974) NRCD 292 14. The Mortgages Decree (1972) NRCD 96 15. The Auction Sales Law (1989) PNDCL 230

- LECTURE 1 -

INTRODUCTION TO LAW
Professor HL.A. Hart in his book entitled the Concept of Law indisputably points out the fact that there is no single all-embracing definition for the subject law. To him the ort on the subject law and their variation in ideas. Definition depends upon ones outlook in life and personal idiosyncrasy. It is for this reason that one finds it necessary if not imperative to consider the various schools of thought on the subject law. Among some of these schools are the following:1) The Historical School of Thought: The leading proponents of this theory where St. Augustine and St. Thomas Aquinas. St. Augustine in his book entitled the City of God simply defines law as a set of canon predetermine by God without any human input and handed over to priests and other men of royal descent for enforcement in our society. St. Thomas Aquinas also identified himself with this definition of law and went on to identify ecclesiastical law as the best form law. This school of

thought propounds further that the development of the law is always by divinity and not through secular thinking. CRITICISMS For in as much as the leading proponents of this school of thought were church men their definition of what constitutes law is not devoid of criticisms , the commonest of which are as follows a. Some scholars of jurisprudence consider this definition as a piece of sublime nonsense because law thrives on empirical proof and not belief .The concept of God evolving law for human society is an issue of belief without physical proof. Therefore defining law though the eyes of belief is a muddle of confusion . The scholars of the church lost sight of the fact that vast majority of law determine social relationship and regulate civil society and have nothing to do with God. For example the law of contract, sale of goods and the law of negotiable instruments. b. Again granted without admitting that law is predestined as the church men are putting across , the argument arises as to why there are deviants to the law since its origin and obedience is spiritually controlled. The International Court of Justice and courts all over the world are inundated or over loaded with cases pointing to human departure from laid down laws. Thus it casts a deep shadow of doubt to perceive law as of divine origin .

2) The Sociological School of Thought: Among the leading proponents of this school thought are Von Savigny , Emile Durkheim and Von Geist . They contend that law evolves from the ethics, beliefs, practices, usages and conventions of a given society. They argue further that there is an underlying respect in society for those who obey the law whereas society has

developed sanctions for those who disobey the law .To them it is the social norms formulated by the leadership of society to be followed en masse which with time are regarded as law. The said joy and respect informing societys obedience to the law is termed as numena. CRITICISMS a By implication this school of thought creates an impression that the formulation of law and it passage in civil society is not a deliberate act but a natural development in human society. Yet history abounds in instances where law and order have broken down simply because society was presumed to know the law whereas in actual fact it did not it. In other words there cannot be coexistence in modern society if the governing such society is not deliberately made and publicized to the knowledge of all It is thus not surprising that in societies where the law is still allowed to evolve by convention , spurious issues like the way and manner of greeting could spark off a civil war . A critical analysis of these conventions renders law static. If law is seen as emanating from the ethics, beliefs, practices, conventions etc. of a given society , then the presupposition is that law takes care of past events and not the challenges of The future .However since human society is dynamic and always undergoing changes the law governing g same is also not static but constantly undergoing changes. The sociological school of thought states emphatically that the best form of law is customary law. Nevertheless it is clear that customary law is subject to a lot of lapses. It suffers from exaggerations and distortions. Customary laws become completely embellished after 400 years according to Professor Florence Abena Dolrphyne in her book entitled Lingua and Linguistics. The learned author makes the point clear without any controversy that once a piece of custom is not documented but passed on from one generation to another by word of mouth, after 400 years changes completely. On this basis alone customary law cannot be said to be a good form of law. 3) Leninists / Marxists School of Thought: This school of thought was championed by people such as Karl Marx, Lenin and Stalin. They defined law as a set of rules and regulations invented by the burgeosie (i.e. the rich minority popularly referred to as the haves) to protect themselves and their property from the aggression and social upheaval of the proletariat (i.e. the poor majority , popularly referred to as the have nots ). In simple terms this school of thought sees law as nothing but a device invented by the rich to obstruct the poor from either disturbing them or tempering their property.

c.

CRITICISMS

a. The fundamental flaw with this definition is that it limits The subject Law to class difference between the rich and the poor. Yet it is of trite knowledge that law in general is not confined to the rich and the poor. There are clear instances whereby an applicable law has nothing to do with social class. For example the law affecting patent rights , matrimonial causes and city planning regulations . Being rich or poor does not matter in the application of laws. It simply protects the citizenry and the state irrespective of the social status of people who contravene such laws. b. Communism as a political has become obsolete or outmoded And given way to capitalism or Centre right ideas. If indeed law is intertwined with communism then with the face out of communism law should have automatically faced out as well . But this is not the case rather enactments meant to open the economies of these nations fleeing from socialism to private external capital inflow has become the lots of the parliaments of these nations. Thus communism and its philosophy of socialism cannot be the moving factors for the definition of what constitutes law.

4) The Realists School of Thought: The leading proponents of this School of thought was Chief Justice Oliver Wendel Holmes of USA. This school of thought law is of the conviction that law is nothing than a discretion exercised by a judge in the law court . Briefly put , they define law as that which is in the bosom of the judge. Realistically speaking , this school of thought postulates that it is not parliament which make laws but rather the judges enforcing the laws in court. To them it is the demeanor of the judge for the day which determines the kind of interpretation to be Put on the law. This school of thought argue further that a judges inclination of interpretation , his upbringing , his belief , his social life and level of education determines the meaning of the law. They argue further that a judge has the power to turn a bad case into a good case and the vice versa. That a judge can do anything except changing a man into a woman. In brief they argue that it is the whims and caprices of a judge which largely determines his judgments. CRITICISMS 1. In as much as this definition looks attractive it is not absolutely acceptable simply because a judges inclination does not make the total or whole gamut of law . Submissions made by lawyers with regard to the exact provisions of the law in a particulars study of the law cannot be ignored by a judge . 2. Functionally judges only place an interpretation on laws passed by Parliament, therefore they themselves do not make laws.

3. Most laws have an interpretative section and the judges only invoke the Interpretation of the law from the law itself without much insertion of His own view point of the issue at stake. 4. When it comes to the punishment of convicts it is the gravity of the Offence that determines the sentence handed down to the convict and Not the discretion and desires of the Judge.

CONCLUSION From the foregoing it needs not be over emphasized that there is not an all-encompassing definition of the subject law. There is an element of truth in all the definitions of the various schools of thought but none of their definitions could on its own suffice for what constitutes law .In brief law is the by-product of social changes and not the means of social change and it develops faster in a society where there is no superstition and conservative thinking.

LECTURE

EVOLUTION OF THE COMMON LAW AND PRINCIPLES OF EQUITY

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England occupied a buffer zone in Europe. For this reason it was constantly subdued by one political overlord after the other in its drive towards conquest and expansion to create an empire. For this reason the Vikings, Celts, Babylonians, Prussians and the Romans at one point or the other in their history subdued England. Each of these political overlords established its system of administration and law in different counties or towns in England. Thus each of them left a legacy of its culture, language administration and law among the inhabitants of that county even after their political kingdom had collapsed. This unfortunate political history did not augur well for a unified state with a central system of administration in England. It was amidst this diversity of culture, political system of administration and law that various classes based on property qualification also emerged in England. A class of very rich men with large tracts of land emerged and became known as Barons. Beneath the barons were the Patricians. These were people with long leasehold interests in land. Below the Patricians were the Manors who rented land from the Patricians. Under the manors were the Plebeians who worked for salary from the manors. Under the plebeians were the Serfs. These were poor people in English society who voluntarily subjected themselves under Labour to the upper classes for necessities of life. This was the socio political circumstance in which King Henry VII ascended the English throne. He therefore organized a national conference with the aim of establishing a single system of law and administration and this was known as Lex Concillium . By this council meeting all the political overlords of the various counties in England transferred their political sovereignty to the King Henry VII as the supreme overlord .. A treaty was signed to this effect known as |Magna Carta. Under this treaty the Kings chief legal advisor known as Lord Coke was given the power to move from county to county on a circuit to administer a single form of law and justice . With time the type of law practiced by Lord Coke otherwise known as the Lord Chancellor developed certain common features as compared to the different set of laws practiced by the different political conquerors. It is the common features of the law applied by the Lord Chancellor which gained for it the name , Common Law. In brief, the common law refers to the unwritten rules and regulations as well as procedure which the Lord Chancellor applied in his circuit to administer justice. It was so similar in features wherever it was applied that it gained the name Common Law. FEATURES OF THE COMMON LAW 1. The first feature of the common law is Stare Decisis otherwise known as Judicial Precedent.

2. The second feature of the common law is Ratio Decidendi (decidendum for singular) meaning to follow the issue of law. 3. Is third feature is obiter dicta (dictum for singular ) meaning things said just by the way. 4. The fourth feature is hierarchy of Courts 5. The fifth feature is good system of recording.

1. STARE DECISIS NON PAS VOBIS JURIS PRECEDENTO The first feature of the common law is stare Decisis. This Latin expression simply means follow the way by which things have been arranged and do not disturb their peace or equilibrium. In plain language this is referred to as Judicial Precedence simply meaning that where the facts of a given case correspond to an already determined case then the judge should make sure that he does not depart from the application of the law from the first case in order to ensure consistency of the law. 2 RATIO DECIDENDI

In following judicial precedence the judge need not follows the whole judgment. He is rather mandated to follow the central point of law in previous judgment. This central point of law is the pivot around which the whole previous judgment is based. In other words known as ratio decidendi . It is the principle of law in a past judgment which is applicable to a current case under consideration . 3. OBITER DICTA

This principle simply means things that were said just by the way before arriving at the main issue of law under consideration .In brief it is the distinction between the obita dicta and ratio decidendi which determines whether a particular piece of judgment is applicable as judicial precedent or not . 4. HIERARCHY OF COURTS

It is not the judgment of every court that can be cited as a judicial precedent in Ghana. In Ghana under Article 2 of the constitution it is only the judgments of the superior courts of records which could be cited as judicial precedents . The courts of record are the Supreme Court , Court of Appeal , High Court and the Regional Tribunals . These are referred to as the Superior Courts of Ghana as compared to the Circuit Court and the District Courts which are referred to as the Inferior Courts or the Lower Courts.

Even with the superior courts application of the judicial precedence follows the courts structure or hierarchy. The decision of a subordinate court cannot bind a higher court. For this reasons the decisions of the Court of Appeal cannot bind the Supreme Court being the highest courts of the land . By the 1992 Constitution of Ghana the Supreme Court is the only Court in Ghana which is not bound by its own decision .Yet its decision binds all other courts in Ghana. Article 129 (2) therefore reads ;

The Supreme Court shall not be bound to follow the decision of any other court . In this regard Article 29 (3) puts the argument to rest when it states categorically that ;The Supreme Court may , while treating its own previous decisions as normally binding , depart from a previous decision when it appears to it right to do so ; and all other courts shall be bound to follow the decisions of the Supreme Court on questions of law . This therefore means that decisions of the Court of Appeal binds the Court of Appeal itself and all other courts under it. It decisions do not bind the Supreme Court. Likewise decisions of the High Court or the Regional Tribunal bind these 2 courts themselves and all other courts under it. It must be emphasized here that a decision by a supreme court outside Ghana could be cited in a Ghanaian court as a judicial precedent . However such authority is only of persuasive effect and the judge is not bound to follow it as compared to a decision of a superior court in Ghana whose ratio decidendi is applicable. Such foreign authorities are referred to in law as Persuasive Authority . Where Ghana is a signatory to an international treaty or protocol ,it behooves on parliament to ratify such treaty in the nature of an act of Parliament otherwise the application of such international law in the Ghanaian Court shall be considered as of only persuasive effect. Finally a decision of a court of concurrent jurisdiction in Ghana is of only a persuasive effect. 5 GOOD SYSTEM OF RECORDING

One other characteristic of the Common Law is that there should be good system of recording decided cases otherwise the judges will live in oblivion without knowing current developments in the law. In Ghana among the recorded judgments of the courts are the Ghana Law Reports which started from 1959 to date, the Supreme Court of Ghana Law Report which started from 1993 to date. The Criminal Assizes Law Reports from 1960 to date and the Ghana Bar Law Report

6.

NATURAL JUSTICE

This is the fifth characteristic of the Common Law . The foundation of the Common Law was equality before the law. Therefore this evolved as a mechanism to ensure the promotion of such equality before the law. It is only when all citizens are equal before the -8law that it could be said there is Rule of Law . The Rule of Law by itself refers to a situation where all citizens irrespective of their status are subjected to obedience to laws passed by parliament . It is only when this prevails that the law could be said to be supreme with its sovereignty over every citizen . Thus the state could be said to be under the rule of law. Natural justice therefore evolved as the medium through which one could achieve the rule of law and equality before the law. However the doctrine of Natural Justice has three main features namely : i) Nemo Judex Causa Sua This means one cannot be a judge of his own cause in a state . In other words whenever 2 persons are involved in a dispute there must be an impartial, unbiased and unprejudiced person to either judge, mediate or arbitrate between them . One of the disputants cannot at the same time be his own judge. This principle is even stretched to the effect that where the judge in the dispute is related any of the contestants by blood, relation or by social acquaintance he must decline jurisdiction. ii) Audi Alteram Partem This criterion in Latin simply means let the other party also be heard. There are 2 sides to every dispute, a claimant and a defendant . By this principle the person presiding as the judge cannot listen to only one side and conclude. This principle of natural justice requires that after the judge has heard one side he/she must hear the other side before he concludes. A decided case in support of this is Perpetual Amegashie vrs University College of Education, Winneba. The plaintiff in this case was a first year student in U.C.E.W. offering among other disciplines English Language. The defendant a lecturer in English had proposed amorous love relationship to the plaintiff to which the plaintiff declined and instead resorted to disclosing this to her friends on campus . Those friends of the plaintiff started ridiculing the lecturer by calling him names and designating him as better luck next time. On one occasion the lecturer singled out the plaintiff for a question in class to which she failed to answer . Instantly the lecturer embarked on verbal assault against the lady saying this is what you did last semester and you failed so miserably that I have to top up your marks . In a state of embarrassment the plaintiff insulted the lecturer resulting in the lecturer abandoning that particular class . The university set up a committee to go into the matter. The lecturer was allowed to state his case and call six witnesses whereas the plaintiff was not allowed to call a single witness. In the end the Committee recommended the suspension of the plaintiff for a year but this was challenged by counsel for the plaintiff who filed a certiorari at the High Court question the decision of the university as same was seen as a sin against the doctrine of natural justice (Audi Alteram Partem). iii) Lex Retrospectum.

This Latin expression simply means that parliament cannot pass a law to have retrospective effect or simply put back date an enacted law. This means that the date on which a president appends his signature to an act of parliament to become law is the date by which the law comes into force and thus takes effect. A law therefore cannot be Passed and back dated to criminalize the activities and conduct of people which at the time of commission did not amount to a crime. The presidential endorsement given to a piece of legislation is termed as presidential assent. Until this is done a piece of legislation however unanimously passed is referred to as a Bill. It is only the presidential assent which turns a Bill into an Act or law .

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EVOLUTION OF THE COURT OF EQUITY

I. PROBLEMS OF THE COMMON LAW It is apparent that the Lord Chancellor appointed to go on circuit to administer the Common Law was himself a member of the nobility class in England . As a result his system of administration of justice turned out to favour his class men thus bringing in its wake some form of nepotism. So the masses started agitating for a reform. Besides the Common Law was so rigid due to its strict adherence to judicial precedents and the forms of writ to the extent that the Common Law courts rejected any writ which did not conform to known precedents under the law . This was so rigidly followed to the point where there was no remedy in law for non-conformists. The commonest explanation under the common law for these denials was Sine Danum Injuria meaning that one could be injured but because his injury does not have a remedy under the Common law there is no justice for him . Under this system for example if a person who has being assaulted sued for battery he was bound to lose because he had sort for a wrong remedy. Moreover because the law chancellor acted in persona, he and those worked under him had to go on circuit from one county to another. This system occasioned a lot of delays which made the masses constantly clamor for reforms because in the eyes of the law justice delayed is justice denied. Finally the law chancellor become amenable to corruption and by so doing he denied the poor majority justice. From all these it became it became evident that there was a need for reform or invention of a parallel system of administration of law to cater for the lapses of the common law ranging from delays, corruption, rigidity, fovouritism etc. The system of justice which emerged to abate all these problems was the Court of Equity . II. EVOLUTION OF THE COURT OF EQUITY Although the Kings Bench was the court of appeal , people who were dissatisfied with its decisions could appeal directly to the King himself in the Curia Regis Eventually so many people did so that the case load became too heavy for the King alone He then referred them to one of his high ranking counsellors who was usually a member of the clergy . The department charged with this work became known as the Court of Chancery and later in time the Court of Equity .It was called the Court of Equity because the people who petitioned this forum sought equity , that is a fair or just decision , unlike the purely legal decisions handed down in the court of the Kings Bench .

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It must be said with all due emphasis that Equity did not come to abolish the common law but rather to supplement or augment it . The ordinary English word equity means fairness, equality and deep sense of justice. However in law equity refers to the principles governing the kind of justice that evolved in the Court of Equity. In feature did not develop as a handed down written laws but emerged out of the common practices of the Court of Equity . With time these practices took reference from some common sayings which became known as Maxims of Equity . It is from these maxims that one gets a clue as to the meaning of an equitable remedy. There are 14 significant Maxims of Equity namely ; 1. Equity is as big as the chancellors foot. 2. He who comes to Equity must come with clean hands. 3. He who comes to Equity must himself do Equity. 4. Delay defeats Equity 5. Equity came not to abolish the law but to fulfill it. 7. Equity looks at the intents rather that the form. 8. Where there is a clash in equity the first in time prevails . 9. Equity follows the law 10. Equity abhors greed and ill-gotten gains. 11. Equity acts in persona not in realm. 12. In Equity there is always a redemption (Equity of redemption) 13. Equality is Equity 14. Equity aids the vigilant not the indolent. 15. Equity sees as done that which ought to have been done.

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MAXIMS OF EQUITY _____________________________ 1. EQUITY IS AS ABIG AS THE CHANCELLORS FOOT The principle behind this maxim is that equity will intervene to protect a right which perhaps because of some technical defect is not enforceable at the Common law . It is not sufficient that the defendant may be guilty of some moral wrong , the plaintiffs right must be suitable as well for enforcement by the Common Law Courts . This maxim is an imaginary denoting how unlimited the powers of the courts of Equity could be . . In other words unlike the court law where ones form of writ determines his remedy , in equity the chancellor is at liberty without any limitation to do justice to correct any wrong even if same was not stated in the plaintiffs writ of summons . Thus this maxim should not be given any literary meaning to denote that the chancellors foot was big. It is in this light that some scholars simply couch this maxim as Equity will not suffer a wrong to be without a remedy. 2. HE WHO COMES TO EQUITY MUST COME WITH CLEAN HANDS This maxim means that Equity will not grant remedy to litigants who seem to have contributed to the wrong doing or by themselves perpetrated a similar wrong against others . In other words a plaintiff who seeks equitable relief must be prepared to act fairly towards the defendant . The operation of this principle can be seen where the court of equity in allowing rescission of a contract for mistake , puts the plaintiff on terms which appear to the court to be just and equitable . Likewise a plaintiff seeking an injunction will not succeed if he is unable or unwilling to carry out obligations imposed on him by the courts . Thus in MRS ARGYLL vrs ARGYLL the court held that the fact that the plaintiffs adultery had led to a divorce application before the Court was not ground for the husband defendant to publish unchecked stories about the plaintiff . 3. DELAY DEFEATS EQUITY The English adage justice delayed is justice denied explains this maxim. Among the criticisms leveled against the Common Law Court was undue delay. Under Equity justice was much appreciated if it came expeditiously rather than coming with so much delays and its associated cost otherwise referred to as a pyrrhic victory. 4. EQUITY CAME NOT TO ABOLISH THE LAW BUT TO FULFIL IT The law here refers to the common law. Therefore the true rendition of this maxim is that equity did not come to throw away the common law but rather to supplement the common law. Thus the 2 are to be operated simultaneously without any fear of contradiction. In this sense where the remedies for a common law suit are harsh on either party equity could be applied to mitigate such hardship .

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5. EQUITY PREVAILS The full rendition of this maxim is equity prevails over the common law. In other words whenever there is a clash or conflict as to whether to apply a common law remedy or an equitable remedy, the latter should be made to take precedence over the former . In brevity this maxim simply means that equitable remedies supersede common law remedies.

6. EQUITY LOOKS AT THE INTENTS RATHER THAN THE FORM This simply means that in equity the court is concerned with the purpose or the rationale, for an act of omission or commission rather than the form by which an act is executed. This was unlike the common law which strictly adhered to forms of a writ. This therefore means that Equity is accommodative to technical lapses and a case in point was SACKEY v SACKITEY . The defendants late brother rented a room in his property to the plaintiff. There was so much trust between the parties to the extent that the tenancy agreement was not reduced to writing instead the defendants late brother wrote a letter to the plaintiff disclosing the total rent advance taken from him , and the effective date of the tenancy . Shortly afterwards, the defendants said brother died. The defendant being the successor in title instructed the plaintiff to produce his tenancy agreement or otherwise vacate the premises. All that the plaintiff had was the letter which was shown the defendant but he rejected same . In his desperation the plaintiff commenced this action at the Accra High Court. In his judgment Sowah (J) as he then was indicated that so long as the veracity or truthfulness as well as the authenticity or originality of the letter exhibited was not in dispute, although the essential elements of a tenancy agreement are missing in it , yet by the invocation of the equitable maxim equity looks at the intent rather that the form, there was a valid contract between the parties and the plaintiff could not just be ejected. 7. EQUITY WILL NOT SUFFER A WRONG TO BE WITHOUT A REMEDY The meaning of this equity is the same as the explanation under 1 . 8. EQUITY FOLLOWS THE LAW The simple meaning of this maxim is that one could go to a court of equity only when his right of action has accrued under the common law and yet same is denied him due to technicalities . This therefore means that where ones right does not exist under t he Common Law same cannot exist under Equity . Clearly equity may not depart from

statute law, nor does it refuse to follow the common law rules . It is because of this that that one cannot have an equitable interest in land unless he has a legal right to the land

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10. EQUITY ABHORES GREED AND ILL-GOTTEN GAINS This maxim reflects the fact that intrinsic within Equity is a deep sense of fairness . Therefore this maxim means that equity will not allow a person whose cause has been declared successful in a litigation to take advantage of the losing party by exploiting him. Thus being declared by the court to be the owner of a piece of land does not mean the judgment victor could annex everything on such land without compensation to the losing party . This maxim was brought to bear on the parties in the decided case of MALM v. LUTTERODT . The plaintiff in this case was a member of the Gbese family in Accra who owned the Kokomlemle lands . Without consulting the elders of the family the plaintiff took it upon himself to pitch up a farm on this virgin land and also put up a Dutch building containing four rooms on the land .Although the entire family became aware of the plaintiffs presence on the land no one raised any objection . Subsequently the plaintiff fell sick and had to be conveyed to a medicine man in another village treatment . After 3 years his property became weedy and dilapidated . The elders of his family without consulting the plaintiff made a grant of the land to the defendant who cleared everything on the land and begun cash cropping on it. Upon his recovery the plaintiff sued the defendant for recovery of possession. Presiding over the Accra High Court Ollennu J, ( as he then was ) did not mince words in arriving at the conclusion that indeed the land was for the plaintiff. That the presence of the Dutch building on the land was an indication of an animus revertendi (intention to return to the land). Therefore the land was not abandoned as contested by the defendant. In giving his judgment, Ollennu (J) invoked the maxim equity abhors greed and ill-gotten gains to compel the plaintiff-judgment creditor to cause an evaluation of the defendant farm and pay him off accordingly before taking possession of the land. Otherwise the plaintiff was to offer to the defendant the first option to buy the land. 11. EQUITY ACTS IN PERSONAM AND NOT IN REM The maxim means Equity has jurisdiction over the defendant personally . The personal nature of the jurisdiction is illustrated by the fact that failure to comply with an order such as specific performance or an injunction, is a contempt of court punishable by imprisonment. Provided that the defendant is within the jurisdiction( or can be served outside it ), it is no objection that the property which is the subject- matter of the dispute is outside it . Thus in the leading case of PENN v. LORD BALTIMORE , specific performance was ordered by the court in an agreement relating to land boundaries in Pennsylvania and Maryland because the defendant was in Maryland . Actually personam refers to corpus humanis that is a human being or a living human being whereas rem refers to property. Under the common law all remedies for an injured party lies in damages. This situation made the rich and the affluent in society immune to punishment because they were in the position to pay any damages irrespective of the quantum . Equity sought to reverse this situation by spelling out punishment which could go directly against the wrong doer instead of his money. However the court will grant an order for specific performance only when

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a. There is no alternative way of doing justice in the matter b. Where the order could be enforced against the defendant c. Where damages do not constitute sufficient remedy to the plaintiff

12. EQUITY OF REDEMPTION This maxim relates to mortgages and Common Law pledges . Whereas under the Common law, a mortgagor could lose his property used to secure a loan by an auction sale upon an order of the law court for a judicial sale if he defaults in repayment , in Equity if a person in need should secure his property for a loan ,such person passes neither legal nor beneficial interest in his property to the lender . Thus the borrowers default towards repayment notwithstanding, the lender has no right to dispose of the property without the owners consent. The lenders interest in the property lies with recovery of his money . Because of this the law obliges the borrower to go for his property no matter the time lag It is this right of recovery irrespective of time by the borrower which in Equity is termed as the Equity of Redemption . 13. EQUALITY IS EQUITY This maxim in one sense carries emphasis the concept of the rule of law in that in the eyes of the law there is no gender or property difference among the citizenry . As a result of this irrespective of the status of a person once he is caught under the web of the law , he must be treated according to the full rigorous of the law through the application of the principles of natural justice. One other meaning of this maxim is that where 2 or more persons are entitled to an interest in the same property, then the principles of equity is equal division , if there is no good reason for any other basis for division. Equity therefore dislikes joint tenancy whereby the doctrine of survivorship or the principle of the last survivor takes all applies .This may be contrasted with tenancy in common where the interest of each party devolves to upon his personal representative on his death . In the absence of an express declaration to the effect that the equitable interest is held jointly , equity presumes a tenancy in common where at law the parties are joint tenants . Another area where the maxim can be seen in operation is entitlement to matrimonial property . Where the parties have both made substantial contributions to the acquisition of property and no other basis for division clearly appears , equity prefers to treat the parties as equally entitled rather than to examine their precise contributions .

14. EQUITY AIDS THE VIGILANT AND NOT THE INDOLENT Under the common law once a person can proof legal ownership to a property he was always adjudged the owner no matter how he had abandoned his title to the property . But under equity the owner of a property who commits Laches and acquiescence was bound to forfeit his property to a disputing claimant . In law this forfeiture is termed as estoppel.

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Laches means taking financial advantage of your opponent whereas acquiescence means condoning or allowing the trespass to happen to your property . 15. EQUITY SEES AS DONE THAT WHICH OUGHT TO HAVE BEEN DONE

The explanation for this maxim is the same as Equity looks at the intents rather than the form as explained at point 6 above . 16. WHERE THE EQUITIES ARE EQUAL THE LAW PREVAILS

The explanation for this maxim is the same as Where the equities are equal the first in time prevails . In other words the first party to invoke equity n a litigation is the one who shall have same availing to him . Thus if the other party to the dispute should also invoke equity , due consideration only be given to the first in time

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LECTURE

RECEPTION OF THE COMMON LAW

According to Professor Allot in his book entitled the Reception of Common Law , essentially speaking the acceptance of the common law into the Gold Coast could be classified into three phases namely , - Pre-colonial, Colonial and Post-Colonial. 1. PRE COLONIAL PHASE Acceptance of the common law and principles of equity during this era has been aptly described by Professor Adu Boahene in his contribution to the History of Ghana as voluntary. The advent of the British to the Gold Coast was in 1608 and they successfully ousted the Portuguese and Dutch who had preceded them to trade in the Gold Coast . The British took over the forts and castles erected by their predecessors and built more of them along the coast with the aim of establishing their monopoly over gold and other essential resources derived from the hinterland of the Gold Coast. Unfortunately trade and commerce in the Gold Coast could not flourish as expected due to the constant wars between the Ashantis and the Fantes which was precipitated by several reasons with the most predominant being the middleman position occupied by the Fantes which prevented the Ashantis from trading directly with the British on the Coast . All attempts by various Secretary Generals and the British merchants in the Gold Coast to resolve this problem proved futile as both sides took entrenched positions . Considering the enormity of loss to the English economy stemming from this protracted wars , in 1821 the British Crown transferred Sir Charles McCarthy then governor of Sierra Leone which was the seat of British West Africa to the Gold Coast to assume the reins of government as the new Secretary General . McCarthys appointment witnessed the height of theses wars and he mistakenly became a victim of the wars . Sir Charles McCarthy became a victim of local politics when he ignorantly accused the Ashantis as being belligerent for which reason he threw the might of the British squadron stationed at Cape Coast and its environs behind the Fantes to form a joint front against Ashanti aggression . Events reached a climax in 1822 when McCarthy arrogantly sent a dispatch to the King of Ashanti refusing to release to the King for execution 2 fugitives who had insulted the King and taken refuge among the Fantes. As a result the King descended to the coast in 1824 in a very big military campaign in an attempt to shatter the Fantes resistance once and for all. McCarthy miscalculated when he accepted to go to the rescue of the Fantes by mobilizing British forces together with local war bands (Asafo) to do battle with the Ashantis. Surprisingly McCarthy went to war in person and led a contingent of British forces to fight the Ashantis at the famous battle of

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Nsamankow in 1824 where he was beheaded and his head was taken as homage to the Ashanti King in Kumasi. - 18 Afraid of Ashanti attack , more and more leaders of the Fantes states flocked to the British for protection and as a compromise for British protection and security against the Ashantis , the Fantes yielded some of their political power to the British and voluntarily accepted British law and system of justice . Among these were payment of fish tax and window tax for the maintenance of British garrisons and repair of military equipment for protection in the event of Ashanti attack. The payment of this tax served as the prelude to the acceptance of British administration and system of justice. Moreover the Fantes accepted modest British ethics and conventions of the Common Law and all these were done voluntarily without any compulsion. With the untimely death of Sir Charles McCarthy, the British Crown indicated to all British merchants in the Gold Coast that it could not guarantee their safety so a vast majority of them returned to England . However a courageous minority of these merchants under Captain George Maclean decided to stay and continue to trade in the Gold Coast. They were remitted by the Crown to maintain the forts and castles with the express instruction that they should not dabble in local politics in the Gold Coast . No sooner had Maclean assumed leadership in Gold Coast than he displayed political diplomacy by constantly courting the friendship of the Asantehene. Not only did Maclean make countless gifts to the Ashantehene but he also traveled personally to Kumasi to pay homage to the golden stool. These maneuvers and overtures by Maclean promoted good friendship between the Ashantis and the British and by so doing extended to the Fantes. To maintain the status quo Maclean entered into an unofficial treaty with the Fantes in 1831 in to enable the British establish dominion over the Fante states. Under this treaty Maclean and his colleague English elite merchants in the Gold Coast were given unlimited access to the traditional courts and palaces of the native chiefs to sit together to try cases. Also practices such as pawning and panyarring, human sacrifice, incest, arbitrary increase of trade route tolls and unnecessary closure of trade routes as well as condemning perpetrators of crime to the beast of the forest were banned among the Fantes. In brief the pre-colonial phase of the reception of the Common Law and the Principle of Equity by the people of the Gold Coast was an unconscious voluntary act facilitated by military protection and economic gains.

2. COLONIAL PHASE The success recorded by Maclean brought him fame and personal economic prosperity because he was not accountable to the British crown. He was not officially appointed as a governor neither was he to account for any money received as tax to the Crown .

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Everything done up to this point was out of his personal strides . Therefore by 1843 the British government decided to resume political control over the Gold Coast by - 19 officially appointing a governor in the person of Commander Hill . Upon his taking over the reins of government from Captain Maclean in 1843, Hill formalized all the achievements of Maclean into a treaty known in history as the Bond of 1844. By this treaty all the Fantes states ceded their independence to Britain for security and protection and George Maclean was appointed as a Judicial Assessor i.e. a Chief Justice) of the Gold Coast. The coastal state became known as the Crown Colony and the Common law and doctrines as well as all laws in existence in England were to be automatically applicable in the Gold Coast. From this point onwards the were deliberate attempts to impose the British laws and practices on the Gold Coast as even the chiefs owed allegiance to the Crown . Hence their use as agents of British indirect rule . Indeed by this treaty the Gold Coast excluding Ashanti became colonized . However the British were very much mindful of the fact that the coastal over which they had extended their political authority were by themselves not the producers of any of the items of trade which they required and were always on the look out to extend their political authority to the hinterland especially Ashanti . The opportunity offered itself in 1873 the Ashantis attacked the Fante states and revolted against British dominion. The British forces under Sir Garnett Worseley descended upon Ashanti to quell the revolt. This was so ruthlessly to the extent that Kumasi was put to fire and the Ashanti forces were brutally massacred . With the demolition of Ashanti challenge the Crown passed the Judicature Act of 1874 by which every law passed in England automatically became applicable in the Gold Coast including Ashanti . It was under this same Act that the Supreme Court of the Gold Coast as established . Under this same 1874 Act the existing customary laws of the people of the Gold Coast could qualify as part of the laws of the Gold Coast provided they were not repugnant to the principles of equity, good conscience and natural justice. Indirectly customary law was treated as a question of fact and not a law because it always required proof of the absence of the above criteria anytime it was to be applied. From the above discussion it is evident that the colonial phase of the reception of the Common Law and principles of Equity was in the nature of an imposition on the natives .

3. POST COLONIAL ACCEPTANCE OF THE COMMON LAW On the 6th of March 1957 , the Gold Coast gained its political independence from the British and subsequently changed its name from Gold Coast to Ghana . Again it attained its republican status in 1960 . The first parliament of Ghana was constituted in 1960 and by Act 1 , the 1960 constitution was passed in the wake of which Osagyefo Dr. Kwame Nkrumah moved the motion for continuous promulgation and practice of the existing laws

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of the Gold Coast in Ghana and these were mainly the Common Laws and principles of Equity . The rationale for the passage of Act 1 was to fill any vacuum known in law as a Lacuna which would have confronted Ghana as a state without governing laws because no alternative laws has been drawn up to replace the Common Law and the principles of Equity at the time of independence . It must however be pointed out that by so doing Ghana consciously received the Common Law even after independence .

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- 21 LECTURE 6

SOURCES OF LAW IN GHANA ______________________________

Sources of Law in Ghana refer to the base from which the laws of Ghana are derived . On the authority of Article 11 Clause 1 (b) of the 1992 constitution of the Republic Ghana , the sources of law in Ghana are as follows ; (a) (b) (c) (d) (e) The 1992 Constitution Enactments made by parliament Delegated Legislation The existing laws of Ghana The Common Law

(a) The 1992 Constitution A constitution could aptly be described as a set of rules and regulations representing the hopes and aspirations of a sovereign state as well as its nationals . Under the 1992 Constitution of the Republic of Ghana these aspirations are captured in the preamble to the constitution to include among other things liberty , equality of opportunity and prosperity , peace with all peoples of the world , freedom , justice , probity ,and accountability . It also includes the principle of Universal Adult Suffrage, the Rule of Law and protection of Fundamental Human Rights etc. . . . The 1992 Constitution is the fundamental law of the land . In other words it supercedes any other law in Ghana . That is to say whenever any provision in the Constitution is to contradict the express or implied provision of any other law in Ghana the Constitution is to hold sway over any other such law . It is for this reason that Article 1(2) states that : This Constitution shall be the supreme law of Ghana and any other law found to be inconsistent with any provision of this Constitution shall to the extent of the inconsistency , be void . A case in support of this assertion is MENSIMAH v. ATTORNEY GENERAL . In 1960 due to the prevalence at which Ghanaians particularly in the Northern Region were dying from the consumption of local gin otherwise known as akpeteshie , lawyer ,VC 10, ogogoro among others , because the drink was mostly adulterated with other substances to increase its quantity before offering same for sale to the general public , Parliament passed an Act making it an offence for one to produce or sell akpeteshie without belonging to a

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co-operative society . One other usefulness of this law as to assist the government in the collection of tax from the distillers . The plaintiff herein belonged to the Saltpong Akpeteshie Co-operative Society and it turned out that in the name of testing - 22 the quality of the drink , the men employed by the society could take away as much as a barrel of the drink . Thus the plaintiff opted out in 1992 from the society . The plaintiff was constantly threatened that once she had opted out of the society she was banned by law from producing and selling akpeteshie . The plaintiffs drink meant for sale in the city was impounded by the society which compelled the plaintiff to take the instant action .before the Cape Coast High Court. This Court considered the intendment of the 1960 law as noble and gave judgment against the plaintiff . However this decision was reversed on appeal on the grounds that compelling the plaintiff to belong to an association which he does not want to be part of was against the plaintiffs Fundamental Human Rights because Article 21 (1)( e) provides for freedom of association in Ghana . And most importantly once this is a constitutional provision it takes precedence over any legislation sought to be enforced . Generally speaking there are 2 methods of drawing up a national constitution namely ; i. By a constituent Assembly ii. By proportionate Representation

i. Constituent Assembly This is the most civilized form of drawing up a national constitution. By this method various constituencies within a political sovereignty are allowed to elect their own representatives based on universal adult suffrage to represent them in a national assembly called at this stage as a Constituent Assembly to participate in the formulation of a national constitution . ii. Proportionate Representation This method of drawing up a constitution has been declared uncivilized and abandoned as far back as the 19th century in England. It simply refers to a situation whereby members of a constituent assembly are either elected or nominated based upon the size of their professional or carrier groupings. The disadvantage of this system is the wrong presumption it makes that numerical superiority of a professional representation is equivalent to intelligence. Because ironically , in Ghana the debasing professions turn to have large following . And the quality of a constitution drawn up by an assembly dominated by these debasing and mostly unlettered folks could be anyones guess. Be it made by a constituent assembly or proportionate representation every drafted constitution must be put to referendum .This is the process whereby the draft constitution is put to a vote of acceptance or refusal by the general electorate (i.e. a yes or no vote) to

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determine it acceptance. If such constitution attracts an acceptance vote the Head of State is required to put his signature to it . It is only when this is done that the Constitution could be said to be promulgated . - 23 Enactments made by Parliament

(b)

This is also referred to as legislation, and in other text books referred to as Statute or Act Under the 1992 constitution all bills passed into law by parliament and given presidential assent are referred to as ACTS OF PARLIAMENT. However it is imperative to know the circumstances under which Acts are passed in parliament. There are 2 distinct methods of introducing an issue in parliament to be passed into law namely ; i. Private member memorandum ii. Executive memorandum i. Private Member Memorandum The standing orders of parliament permits every parliamentarian who is not a minister of state as well as an ordinary citizen of Ghana who is eligible to vote to introduce a memoranda in parliament raising peculiar issues of national concern. This is done by way of memorandum addressed to the clerk of parliament. ii. Executive Memorandum The executive arm of government is charged with the responsibility of managing the nation and enforcing the laws made by parliament. This therefore exposes the executive arm of government to identifying lapses in the existing laws of Ghana . It is due to this that it is given a special prerogative to introduce laws in parliament. This is termed as Executive Memorandum STAGES OF PASSING BILL INTO AN ACT IN PARLIAMENT i. Forwarding of a memoranda to the clerk of parliament. The clerk of parliament is vested with an unfettered discretion to decide as to which memoranda merits deliberation on the floor of the house and those which should be shelved . ii. Reading of the memorandum on the floor of the House . This is popularly referred to as first reading. This is where the Speaker of Parliament hurriedly reads through the memorandum to elicit comments from members of parliament as to whether the memorandum merits consideration by the House. At this stage acceptance is not by head-count of votes but by acclamation . Likewise a rejection of same is also by acclamation.

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In line with Article 106(4) after the bill has been read for the first time same is referred to the appropriate committee for examination in detail and for such enquiries considered necessary before the acceptance of the bill - 24 After the bill has been deliberated upon by the appropriate committee it is reported back to the floor of the House. iii. Consideration of the work of the Appropriate Committee on the Bill This is popularly referred to as the 2nd Reading . At this stage the report on the bill together with the explanations offered by the members of the appropriate committee form the basis for a full debate on the bill for its passage . Again it is at this stage that the necessary amendments or rejection of the bill is made . It is at this stage that members vote on the bill . And if the bill obtains a success vote it is forwarded from Parliament to the President for his assent . iv . Presidential Assent Where a bill passed by parliament is presented to the president for assent he shall signify within 7 days after the presentation to the Speaker that he assents to the bill or that he refuses to assent to the bill unless the bill has been referred by the President to the Council of State . Where the President refuses to assent to a bill , he shall within 14 days after the refusal state in a memorandum to the Speaker of Parliament any specific provision of the bill which in his opinion should be reconsidered by Parliament including his recommendations for amendments or informs the Speaker that he has referred the bill to Council of State for consideration and comment , parliament shall reconsider the bill taking into account the comments made by the President or the Council of State as the case may be . However if the bill is still supported by a resolution supported two-thirds majority of the members of Parliament, the President shall have no choice than to assent to it.

(c ) Delegated Legislation This simply refers to laws made a by a subsidiary legislative body ranking lower to parliament. It is argued within some quarters that the work of this body is an arrogation of the powers of parliament . Be it true or not the need arises for a delegated body to make laws to augment or supplement the laws made by parliament . Typical examples of delegated legislated bodies are the District Assemblies . Delegated legislation could be classified into 3 namely ; 1. Executive Instrument ( E I ) 2. Legislative Instruments ( LI ) 3. Orders in Council

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- 25 1. EXECUTIVE INSTRUMENTS (E .I .) The law gives to the executive arm of government a limited power to make laws by way of extending an existing legislation in the form of a subsidiary legislation to capture a situation which was not captured by an existing law . Thus an Executive Instrument could simply put be referred to as an additional law made by the Executive arm of government to augment an existing piece of legislation already passed by parliament. The policy purpose for the passage of an executive instrument (EI) is to allow the executive to relate an existing law to the realities on the ground in order to facilitate enforcement of the law. An executive instrument is initiated by the president in consultation with his cabinet. It must be borne in mind that an executive instrument EI can never be made to cover a national concern which has not yet being passed into law by parliament. An Executive Instrument is made and amended without reference to parliament although parliament reserves the right to be notified of it so that it could be apprised of the existence of such a law in the national statute books . An Executive Instrument is a prerogative of the executive arm of government so that lapses identified with an existing Act could be easily corrected by a supplementary law without the pain of going through for the second time in parliament the various processes by which a memorandum eventually becomes law .

2. LEGISLATIVE INSTRUMENTS (L I)

Within parliament itself the need arises at times for the taking of a second look at laws already passed . Such concerns often turn out to be an extension of an existing legislation However considering the workload of parliament in general it becomes inconceivable for any such extension of an existing law to go through the same procedures and processes meant for the making of a new legislation .In the light of this the law accords to parliament the right to make subsidiary laws to an existing law on the floor of the House without reference to the president for his assent . Such laws are often handled by a Committee of Parliament in consultation with the general leadership of Parliament . Nevertheless Parliament has an obligation to notify the executive of any passage of a Legislative Instrument . The rationale for vesting parliament with this power is to prevent a possible aggravation of the situation where parliament becomes inundated with work to the extent that a simple law required to be passed to enable the executive achieve a particular result cannot be made . To avoid discrepancy confusion and inconsistency in reference Legislative Instruments just like Executive Instruments are to be named sequentially .

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- 26 -

3. ORDERS IN COUNCIL Although this is considered as out of use it was also regarded as a subsidiary legislation. On the political map of the world , the British commonwealth is depicted as colour orange and ruled by the English Crown . This included the Gold Coast and by the Judicature Act of 1874 all the laws passed England were automatically applicable in the Gold Coast. However since development in this colonies were not the same it was impossible to rule by a uniform law. For this reason the queen introduced what became known as orders in council often in the form of a dispatch directed towards the Governor General of the Gold Coast to take certain steps. This could only be construed or interpreted in the light of an existing law in England. It must therefore be noted that delegated legislation has certain advantages and disadvantages which are worth considering i. Advantages of Delegated Legislation 1. It saves time As already noted for a memorandum to go through parliament to become a bill and subsequently an Act of parliament it goes through not less than 3 readings needless to mention the possibility of the president refusing his assent to such a Bill . All these are time consuming as compared to a subsidiary legislation which is either passed by the cabinet or a parliamentary select committee . A single sitting of an expeditious and diligent work could mean the disposal of subsidiary legislation . 2. It saves money Essentially speaking the work of Parliament under the 1992 Constitution are 2 namely to conduct thorough research into matters tabled before parliament and to constantly be in touch with their constituencies in order to inform them about the trend of events in the country particularly parliament . It must be admitted without any difficulty that an achievement of either of this cannot be less expensive hence the eyebrows raised by most Ghanaians against the national budgetary allocation for the completion of the offices for the 230 Honourable Members of Parliament . In the same vein mention could be made of the sum of USD 20,000 granted to every MP over the past 8 years as a car loan , not to mention MPs quest for research assistants and sitting allowance . When one compares this to the work of a subsidiary legislative body it becomes obvious that the latter is convincingly less expensive . 3. Delegated legislation benefits from expert imputs. Under Article 94 of the 1992 Constitution , academic and professional qualifications are not one of the prerequisites for qualification as an MP . As a result parliament has become the clamour of political rhetorics . To the extent that fluency in English language as a

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medium of communication in the house is not compulsory could be anyone s guess as to the sort of members parliament stands the risk of attracting . For this reason political - 27 Popularity has over the years not matched or commensurate with intellectual capacity to deliver. On the other hand , a typical delegated legislative body like a district assembly is by the local government Act, Act 420 mandated to permit the executive to nominate 50% of its membership. And the criteria for selection here is professional background and contribution to the assembly. Therefore comparatively speaking laws made by the assemblies turn to be precise panacea for the assemblys problems than the Acts of parliament which are generic. 4. Laws made by delegated legislative bodies are pragmatic This simply means that the laws of delegated legislative bodies are practical and time testing . For qualification to become an M. P. the Constitution emphasizes on popularity at the expense of familiarity with the challenges. For this reason, contributions by M. Ps on matters affecting their own constituencies turn out sometimes to be hazy weird , absurd and illusive. This has given course to a situation where parliamentary select committees are sent to affected constituencies to conduct feasibilities and on the ground assessment of issues before laws are made unlike delegated legislative bodies whereby members are said to represent the maxim vox populi vox deum meaning the voice of the people is the voice of God. For this reason their insight into problem in their locality are indispensable . No wonder therefore that laws passed by the subsidiary legislative bodies informed by these people are pragmatic and time testing. 5. Delegated legislative bodies benefit from in- depth deliberation of issues as compared to Parliament . This is simply explained by the fact that unlike parliament which is inundated with work to the extent that it sometimes sits overnight , subsidiary legislative body on the other hand is not so overloaded . Therefore the latter always make the time to thoroughly and critically examine bills before it unlike parliament which is constantly been lobbied by people outside for the passage of certain laws. For this reason the bulk of its work is done by selected committees .

ii. Disadvantages of Delegated Legislation 1. It rather waste time The notion of time saving under delegated legislation is a misconception. This is borne out by the fact that because delegated assemblies pass bye- laws so easily without elaborate sittings , they end up using subsequent sittings to re-deliberate on the same law. This simply adds credence to the fact that subsidiary legislative are not exhaustively discussed. A typical example is the cyclical sanitation laws in Accra by the A.M.A. 2. It rather waste money

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The notion of delegated legislation saving money is regarded as conceptual and not realistic simply because the value of money is appreciated when it is used for a worthy cause rather than a piece meal expenditure on the same subject matter which turns to be - 28 Cumulatively higher. A realistic approach to this matter is a comparison of local government budget for a year to that of the annual budget of parliament visa-a-vies their respective output. The obvious conclusion is that central government spends thrice of what it spends on Parliament on the district assemblies . 3. It usurps the functions of Parliament . The recognized law making body in Ghana is Parliament. .Apart from this institution any other organ which takes upon itself to be making lass could be said to be seizing or arrogating to itself the powers of parliament not to mention the likelihood of confusion in the event of a conflict between a bye law and an Act of Parliament. 4. The perception that subsidiary legislation benefits from expect input is not always true. The notion of subsidiary legislation benefiting from expect professional opinion is not always true . Modern politics has the tendency of naturally projecting intellectuals and professionals at the detriment of semi literates and illiterates. For this reason professionals often make significant inroads into national legislation than their semi literate and illiterate counter parts. For example the 2004 parliament of Ghana can boast of not less 70 lawyers , 50 holders of a second degree and there are all shades of professional representations . This is no mean an achievement to be over shadowed by the speculation that subsidiary legislatures benefits from higher professional representation than national parliament. 5. Subsidiary legislations are not pragmatic The notion that laws made by delegated legislation are much more pragmatic, realistic and last longer than Acts of parliament should not engage any serious mind as true. The truth of the matter is that in real governance the executive arm of government and the judiciary turn to lean more on Acts of parliament than bye- laws and legislative instruments. The obvious reason being that in terms of importance , Acts of parliament supercedes all subsidiary legislations . For this reason most subsidiary legislations have an ephemeral or short life span. They are often than not allowed to go into oblivion than being revoked. Atypical example is the bill board tax passed by the A.M.A. in 1987 . This law has gone into oblivion as same is often over looked over by even professional accountants in the income and expenditure accounts of the Assembly. And the spate and easiness at which such bye- laws go into oblivion speak volumes about their relevance to society. 5. Delegated legislation does not benefit from in-dept. deliberations One other notion about subsidiary legislation which could be seen as a double absurdity is the allegation that benefits from in depth deliberation .Acts of parliament enjoy higher level of meticulousness that subsidiary legislation. This steams from the fact that even a

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private member motion on the floor of parliament is by the standing orders of parliament not to undergo less than 3 readings . When this is juxtaposed (put aside) - 29 against a subsidiary legislation preferably the district assemblies which sit at most 4 times in a year and to deliberate and consider different subject being passed into bye laws , it becomes obvious that there is much pain staking in the making of Acts of Parliament than subsidiary legislation . Needless to mention the numerous proof reading that Act of parliament undergo.

(d)

The Existing Laws of Ghana

Every human society is dynamic and not static . For this reason danger looms immediately it is not governed by any laws . Thus it was impossible to regard the 1992 Constitution alone as the only source of law in Ghana . It would have certainly led to violence of some sort . It is for this reason that Article 11 of the 1992 constitution recognizes all the existing laws before the promulgation of the 1992 constitution as part of the application laws of Ghana. Simply put these laws can be itemized as follows ; All laws passed by the English Parliament from 1840 - 1957 All Acts of the first Republican Parliament of Ghana from 1960 - 1966 All Decrees passed by the National Liberation Council from 1966 to 1968 (NLCD) All Acts of the 2nd Republican Government of Ghana from 1969 - 1972 All Decrees of the National Redemption Council from 1972 to 1973 (NRCD) All Decrees by the Supreme Military Council I (SMCD) from 1973 - 1978 All Decrees by the Supreme Military Council II (SMCD) from 1978 - 1979 All Decrees by the Armed Forces Revolutionary Council (AFRCD) from 1979 - 1979 All Acts by the 3rd Republican Government of Ghana from 1980 - 1981 All Decrees by the Provisional National Defense Council from 1981 to 1992 (PNDCL) All Acts of the 4th Republican Government of Ghana from 1993 date. The existing laws of Ghana refers to laws in Ghana before the passage of the 1992 Constitution . In brief the legal system of Ghana prior to the 1992 constitution is what is captured under the 1992 constitution as part of the laws of Ghana.

( e ) The Common Law and Principles of Equity Please refer to lectures 2, 3,4 and 5

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THE LAW OF CONTRACT _________________________

Generally speaking a contract is an agreement between two or more persons which gives rise to rights and liabilities enforceable in law . Other scholars define a contract as an agreement between two or more persons intended to have legal consequences . The most commonly accepted description of a contract is that it is promise or a set of promises which the law will enforce . In all these definitions the parties involved are by law required to have unanimity of minds otherwise termed in law as consensus ad idem. Thus without this element it cannot be said or inferred that the existed between any two people a legal contract. The court often adopt an objective test to determine what purported parties to a contract intended to achieve. Here the objective test refers to an assessment of the contract by the ordinary man on the street. So in enforcing a piece of contract on the strength of what the parties have agreed upon, the law does not employ any technicality but what to a lay man could constitute an enforceable legal agreement. One other factor which the court adopt in enforcing such contract or promises is that those promises should have been bargained for or given in exchange for some other promise of act. The only exception here is a contract under seal which could be enforced even if it is discerned. TYPES OF CONTRACT Essentially speaking the are two types of contract namely 1. simple contract 2. special contract 1. Simple Contract A simple contract is the type of contract which could be in any form of writing or may not be in writing at all. It is simple in the sense that it does not require any formalities. The most important requirement here is that the parties to the contract must have mutually and consciously consented to the contract. Where the contract is in writing this is deducted from the signatures appended by the parties to the contract documents.

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When a simple contract is not written but made orally it is known in law as a parole contract. The validity of the a parole contract is deducted from the conduct of the parties. For example in Accra the clenching of the fist of a passenger by a road side with only the ring finger pointing downwards denotes a charter of a taxi service. In any such contract the parties need not exchange words yet the court will enforce the contract as one of parole in nature because the gestures speak loudly of the intentions of the parties. A simple tenancy agreement, issuance of receipts from a pharmaceutical shop with a warranty are all instances of a simple contract. 2. A Special Contract Simply put a special contract is a contract under seal. In other words, it is the type of contract which follows a special formality. The law requires such formality to include signing of the contract by both parties, sealing of the contract and delivery of the contract to each other. Such a contract is again required to be signed by the parties contracting in the presence of witnesses. Examples of this include conveyance of land, contract of seal of immovable property, a mortgage agreement and the high purchase agreement to mention but few. A special contract requires more formal procedure before they could be valid. They include the contract of sale of land which can only be valid when it is written, signed by at least one witness and attached with a surveyors plan as well as being registered at the Deeds Registry. Some other scholars classify a contract into 2 namely 1. void contracts 2. voidable contract 1. Void Contracts A contract is said to be void where it is said not to exist at all under the law or where it is tainted with mistakes or yet still where one of the parties to the contract did not have the capacity to contract. For example under the criminal law of Ghana a complainant in a criminal case cannot contract for the services of a private lawyer to prosecute the accused. If any such contract is entered into by a complainant, the law shall not recognize such a contract under the laws of Ghana. Likewise a child below 18 years, an imbecile person or an insane person cannot contract under the laws of Ghana although there exist exceptions to these laws. Where the law does not recognize such a contract right from it onset the contract becomes void abs initio i.e. a nullity from the beginning. 2. Voidable Contracts A voidable contract is a contract which was considered valid but subsequently declared unenforceable because one of the parties agreed to the contract under misrepresentation, duress or undue influence. In this regard until the affected party raises his concern and tries to stop the contract, the contract is for all intents and purposes deemed valid.

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Lately some modern scholars of law further classify a contract into 2 namely 1. Bilateral Contracts 2. Unilateral Contracts

1. Bilateral Contracts This is a contract between two separate parties or individual or yet still a contract between one group of persons and another group of persons. The dominate feature here is that such contract must be between either two natural persons or two artificial persons. Be it as it may, the requirement of consensus ad idem is still needed to make such a contract binding in law. Instances of this include contracts relating to sale of goods, bill of lading and drawing up of checks. All international agreement and protocols as well as multilateral contracts are all treated as bilateral agreement. 2. Unilateral Contracts This the type of contract whereby only one party makes a promise to the general public for any member of the public to perform according to the person making the promise specification. In this type of contract although the promisor does not have any particular person in mind to which he contracted with, the law still regards such a contract as binding on the promisor. Any member of the public who comes out to prove that he has performed according to the prescription of the promisor becomes entitled to his claim. This was exactly the situation in CARLILL V. CARBOLIC SMOKE BALL CO. In the heat of the 1919 outbreak of influenza, the defendant company splashed an advertisement in a newspaper in UK claiming that anybody who used their product the carbolic smoke ball, a kind of medicated soap, according to the manufacturers prescription and still contracted influenza shall be entitled to 100 pound sterling. The plaintiff Mrs. Carlill relying upon this advertisement purchased some of the products of the defendants company, used it so religiously according to the prescription but still contracted influenza. She therefore applied for the reward only to be denied by the defendant company on the grounds that the advertisement was only an invitation to treat and not a direct contract with any particular person. The plaintiff therefore sued. The court held that although this particular unilateral contract was made with no one yet any person who came out of the general public to perform according to the requirement of the promise was to be regarded by the law to have contracted with the promisor. Therefore the promisor should have anticipated the legal consequences of a unilateral contract. Thus for all intents and purposes the promisor was liable. Again a contract could further still be classified into 2 namely 1. Executory Contracts 2. Executed Contracts 1. Executory Contracts

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This arises where both parties to the contract assume obligation to perform under the contract. In other words the parties to the contract are required to simultaneously fulfill their respective parts of the bargaining. A classic example is a contract of sale, for in as much as the buyer is prepared to pay for the price; the seller is equally obliged to make the item of sale available to the buyer. If one the parties to the contract fail to perform his part of the bargaining waiting for the other party to finish his part before he does so, the contract ceases to be an Executory contract. 2. Executed Contracts This is the type of contract whereby one party performs all his obligations under the contract only to wait for the other party to also perform his part of the bargaining. In this case it is the approval or indication of satisfaction to the performance of the party which has performed which determines whether the contract could proceed. A typical example is a standard contract. In this type of contract the offeror is required to finish his part of the contract before contracting with the offeree. A ready instance in mind is the students loan scheme. It will be recalled that in this transaction the student only endorse documents already prepared by SNITT without any form of bargaining. All that is required of the students is to sign and take the money. Finally a contract could be classified into two namely 1. Express Contracts 2. Implied Contracts 1. Express Contracts This the type of contract which by law it is compulsory for its terms to be reduced to writing. The law requires every minute details of such a contract to be intimated on paper. It is only from the terms of such a contract that the court shall interpret the contract. In other words the court shall not rely on any extenuating evidence apart from what the parties by themselves have agreed upon on paper. Usually transactions affecting payments of money are classified into this category of contract. The principle of law behind this type of contract is expressio unius est exclusio alterius meaning the express mention of one thing means the exclusion of all others. 2. Implied Contracts This is the type of contract whereby the law does not regard it as necessary for all the terms of the contract to be expressly stated on paper or reduced to writing. Yet in the eventuality of a breach, the law shall imply terms which the parties were presumed to have agreed upon. For example, under the Conveyance Decree (NRCD 175 ) a landlord who rents out his apartment to a tenant is presumably required, whether stated in the tenancy agreement or not to give the tenant a peaceable and quiet enjoyment of the rented apartment. Any interference in this respect shall go against the landlord. Conclusion

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In brief, it is the nature of contract made, its terms and form which determines how it must be classified and the rights and liabilities which may flow from it.

THE ESSENTIAL ELEMENTS OF A VALID CONTRACT _________________________

For a valid to come into existence there must be i. ii. iii. iv. v. vi. vii. viii. ix. x. An Offer An Acceptance A Consideration An Intention To Create Legal Relationship Terms of the Contract Capacity of the Parties to Contract The Object of the Contract must be legal Consent or Consensus Ad Idem Discharge or forfeiture Clause Remedies for breach of Contract

i)

An Offer

An offer is an undertaking or an expression of willingness by a party to a contract known as an offeror to enter into an agreement binding in law with another person known as an offeree . In other words the initiator of a contract is known as an offeror whereas the party invited to consider the terms of the agreement is known as an offeree . For an offer to be considered valid and enforceable the law insists on the presence of 3 things in the offer package namely a. the offer has to be definite b. the offer must be clear c. the offer has to be concise The abbreviation DECLECO is often used to memorize this . Whereby DE stands for definite . An offer must be definite simply means that it must not be ambiguous or ambivalent or yet still carry two meanings . Simply the offer determines the object of the contract and where it is ambivalent , the entire contract also stands the risk of being ambivalent . CLE in the said abbreviation also stands for clarity. Clarity here means the exactness of the offer to the offeree .

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CO stands for concise . This means that the offer must be properly conveyed to the offeree. The duration for acceptance must be categorically stated and the indication of refusal of the offer must also be stated. It is against this background that one will be in a position to indicate whether or not an offer made is valid. Thus in CLUTCHING V. LYNN, the defendant purchased a horse for sporting and promised the plaintiff an additional 5 pounds sterling if the horse proves lucky. The defendant won several trophies with the horse but refused to make good his promise to the plaintiff based upon which the plaintiff got disgruntled and sued. Without mincing words, the court held that the plaintiff was not bound to pay the five pounds because it was not part of the offer , an attempt to pay the 5 pounds will render the offer anomalous. However a valid offer must be distinguished from an invitation to treat. INVITATION TO TREAT An invitation to treat is by form and content an invitation to make an offer. The person making the invitation to another person to come and treat a subject matter is rather the offeree whereas the person who comes to treat the subject matter because he is coming to propose his terms becomes the offeror. An invitation to treat essentially takes 4 forms namely:i) display of goods in a shop ii) auction sale iii) advertisement iv) tenders. Display Of Goods When goods are displayed on shelves in a shop whether with or without price tags, the implication in law is that the customer is been asked to make an offer. It is only when he picks the goods, takes them to the cashier and the cashier accepts his payment that it could be said that an offer has been made by him. The cashier may or may not accept the offer. A case in support is FISHER V. BELL. A law in England prohibited the sale of offensive weapons which included flick knife. The defendant, a shop keeper displayed a flick knife for which he was arraigned before the court for prosecution. He argued that he was not selling the flick knife but only making an invitation to treat. Admitting the fact that an invitation does not amount to an offer, the court acquitted and discharged the defendant. Another case in support of this area of the law is PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V. BOOTS. An English law stipulated that drugs containing poisonous substance should only be sold under the supervision of a qualified pharmacist. The defendant company displayed some of these drugs in its shop in a self-serving shop, this was simply taken by the plaintiff society as a breach of the law for which reason the defendant was prosecuted. The defendant company contended that there was no sale until the customer picks a drug, took it to the cash desk and offered to pay for them under the

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supervision of a qualified pharmacist stationed there. The argument of the defendant was admitted by the court in totality . Therefore display of goods in a pharmaceutical shop is classified as an invitation to treat.

Auction Sale An auction sale is another form of invitation to treat. The goods listed for are auction are not mandatorily required to be offered for purchase at the auction. Likewise prices quoted as reserve price for sale are not binding on the auctioneer. In an auction sale the public is at liberty to come and make an offer. However, their quotations are not binding on the auctioneer. They are regarded as offers and the actioneer is at liberty to either refuse or accept them . The mere fact that a person makes the highest bid for an action does not make it compulsory for the auctioneer to sell to that person. The case of HARRIS V. NICKERSON best illustrates this point . An auctioneer advertised the sale of certain goods including an office furniture. The plaintiff went there with the intention of buying the furniture only to discover to his amazement that the auctioneer had deliberately removed the furniture from the list of goods. Therefore the plaintiff sued the auctioneer for breach of contract. The court held that the auctioneer had committed no breach, goods listed for an auction sale do not constitute an offer but rather an invitation to treat. And the defendant was under no obligation to display them at t5he auction . Advertisement This is also not an offer but an invitation to treat. It is only upon an application by a reader whereupon a seller agrees to the sale that an offer could be said to have been made. Every language of an advertisement is construed by law as a marketing gimmick. An advertisement would constitute an offer only when it comes with conditions in the nature of a unilateral contract as was the case in CARLLIL V. CARBOLIC SMOKE BALL (supra). Otherwise advertisement simplicity is nothing but an invitation to treat. PATRIDGE V. CRITTENDON also illustrates the point in issue. There was an advertisement in a newspaper for the sale of a particular breed of fowls for 20 shillings per one. The plaintiff wanted to buy some of the species but the defendant refused to sell to him on the grounds that they were not selling in singles but by batches of 500 each. Subsequently the plaintiff sued the defendant for breach of contract. Without hesitation the court dismissed the case illumine by holding that an advertisement does not constitute an offer but an invitation to treat. They only become an offer when a proposal for purchase by the reader is accepted by the person who placed the advertisement . Tenders This is another category of an invitation to treat. A tender is an invitation to a person to submit estimate for his rendition of a service or contract. When such quotations are submitted a selection is made from the lots. It is only when a person is selected from a tender that it could be said that an offer has been made to him. All other participants of tenders are to regard the exercise as an invitation to treat. The case of SPENCER V.

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HARDING best illustrates this point . The defendant issued a circular by inviting tenders for his stock of shares in a trading company. The plaintiff responded to the circular by forwarding his cheque to the defendant. The defendant declined the cheque and returned same to the plaintiff only for the to sue for breach of contract. The court held that a tender was only an invitation to treat. Therefore the defendant could not be compelled by any applicable law to sell to the plaintiff.

ii)

Acceptance

This is a statement be it express or implied from an offeree indicating a full compromise or admission of the terms of offer spelt out by the offeror. This must always come from the offeree without a counter proposal. There are certain rules of acceptance and these are as follows: i) acceptance must be communicated to the offeror from the offeree. The general position of the common law is that acceptance must always be communicated from the offeree to the offeror. It must be noted that mere intention to communicate acceptance in itself does not constitute an acceptance. Indicating acceptance to a party who is not privy to the contract does not constitute acceptance. Thus in FELTHOUSE V. HEDLEY BYRNE the plaintiff wrote to his nephew indicating his willingness to buy a horse belonging to his nephew. He indicated as follows: if I hear no more from you, I shall consider the horse as mine at that price. The nephew intended to accept the offer made by the plaintiff but due to a mistake the horse was sold on auction to another person. the plaintiff then sued for breach of contract but the court dismissed his case on the grounds that mere silence does not constitute acceptance. ii) mere silence does not constitute acceptance. The case of TAYLOR V. LAIRD supports this assertion. The plaintiff helped the captain of a ship during a voyage to pilot the ship safely to berth. This was at a time when they had met bad storms at sea . Since the service was solicited for at a time of danger, both parties never negotiated on reward. Upon their safe arrival, the plaintiff sought for payment and he was refused. The court held that since the plaintiff did not communicate his acceptance or refusal of the contract to the defendant , the court had not right to infer acceptance therefrom . iii) it must always move from the promisee to the promisor. The only exception to these rules arises under WAIVER OF COMMUNICATION. There are clear instances where the nature of the contract will waive acceptance although the law will deem acceptance to have taken place. This is particularly so in the case of unilateral contract. In a unilateral contract, the offer is made to the whole world. Any person out of the populace been able to prove that he has complied with the conditions of the offer regardless of the fact that he did not communicate acceptance to the offeror shall be deemed to have accepted the offer although communication of the acceptance was waived. Over here WILLIAM V. COWARDINE becomes an instructive authority . There

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was an offer made by the defendant to any person who could volunteer information leading to the arrest of a murderer. The plaintiff gave these information leading to the arrest and conviction of the murderer. She however said she gave the information to clear her conscience at a time and she did not know of any reward. The court held that so long as she later got to know of the reward, in conformity with the condition of the law, communication of her acceptance, was waived and was therefore entitled to the reward.

TERMINATION OF OFFER An offer is said to have been terminated when its validity for existence is withdrawn or the compromise based upon which the offer was purportedly made is put asunder . It must however be mentioned that when an offer is accepted same comes to end. The following are the diverse ways by which an offer may be terminated. i) acceptance When an offer is accepted it transforms into a valid legal contract based upon consensus ad idem (unanimity of mind). By so doing the offer can no longer be seen in isolation. It becomes an integral part of the contract for these reason by law the offer is said to have come to an end. ii) revocation Until an offeree indicates his acceptance of an offer, the offeror is by law granted the liberty to withdraw or revoke his offer. This liberty even covers a situation whereby the offer has been communicated to the offeree and has unduly delayed acceptance. Some authorities in support of this accession are as follows: RUTHLEDGE V. GRANT the defendant offered to the plaintiff a house which he wanted to sell and requested the plaintiff to indicate acceptance within six weeks. The six weeks did not elapse yet the defendant withdrew the offer and this caused the plaintiff to sue for breach of contract. The court held that the defendant was right in revoking the offer although the six weeks had not expired simply because the plaintiff had not indicated his acceptance. The principle was re-emphasized that until acceptance an offeror was at liberty to revoke his offer. PAYNE V. CAVE the defendant offered the highest bid at an auction but before the auctioneers gavel could fall, the defendant withdrew his bid yet the auctioneer sued him for breach of contract. The court held that in an auction sale, there is only one indicator of acceptance being the auctioneers gavel. Until the gavel falls, there is no acceptance and going by the common law principle that is at liberty to withdraw his offer before acceptance. The withdrawal of the defendant who offered the highest bid in this case could not constitute breach of contract. Another instructive authority in this area of the law is DICKENSON V. DODDS

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On the 10th day of June, the plaintiff received a letter from the defendant offering for sale a certain house. The offer was to be kept open until 9 am of the 12th of June. The plaintiff was informed on the 11th day of June, that the defendant has offered the same house to another person. the plaintiff immediately communicated his acceptance to the defendant by which time, the defendant had already sold the house to a third party. In a state of disappointment the plaintiff sued the defendant for breach of contract arguing that the defendant was bound by law to sell the house to him. The court held that the defendants promise to keep the offer open until 12th June 9 am was binding on him provided the plaintiff had indicated his acceptance but once the plaintiff did not indicate his acceptance, the defendant was at liberty to withdraw or revoke the offer. Until acceptance is indicated, no law makes it mandatory for the offeror to put the offeree on notice before withdrawing the offer. iii) Rejection An offer comes to an end when it is expressly rejected outright by the offeree. There are two instances of such rejection in law : a) Where the offeree makes a counter offer. A counter offer is when the offeree rejects the offer from the offeror by proposing a new term or offer awaiting acceptance from the offerror. In other words, when an offer is not met with an acceptance but rather a different offer by the offeree for consideration by the offeror, it constitutes a counter offer and not acceptance. The implication in law is that it terminates the original offer and no right or liability could arise from the original offer. This is best decided by the leading case of HYDE V. WRENCH . The defendant offered to sell his farm to the plaintiff for 100 pounds to which the plaintiff agreed to buy. Instead 100 pounds the plaintiff indicated that he would buy it for 95 pounds and this was rejected outright by the defendant. Subsequently the plaintiff agreed to go by the original offer by accepting the 100 pound for the farm. But the defendant ignored the plaintiffs change of mind and sold the farm altogether to a third party. The plaintiff there after sued him for breach of contract. Without hesitation, the court dismissed the case of the plaintiff on the grounds that his proposal of 95 pounds amounted to a counter offer which in law implied a rejection of the offer . Therefore the defendant was at liberty to dispose off the farm. The plaintiffs subsequently acceptance of the 100 pounds was a non sequitur (i.e. out of logic or out of context). The case of HARVEY V. FACEY further illustrates this point . The plaintiff telephoned the defendant to ask for the price of pens and the defendant returned the call of the plaintiff that the minimum price for that kind of pens was 9 pounds per set. The plaintiff replied on phone we agree to buy the pens at 9 pounds each. The plaintiff did not hear from the defendant again until it reached his notice that the defendant had sold the pens elsewhere at 11 pounds each. The plaintiff therefore sued for breach of contract . The Court held that the telephone message sent by the defendant to the plaintiff on phone was not an offer but a statement of fact. Moreover the identity of the contracting parties was unknown. But most importantly the plaintiff could not have given acceptance when there was no offer made to him.

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b) Where the offeree makes a Cross Offer . A cross offer is another form of rejection of an offer. A cross offer takes place when parties to a contract make offers to each other on one specific chartel whereby their respective offers coincide or bypass each other in the post. This is a domain of the postal rules in offer and acceptance. By implication of law, once this takes place both offers are regarded by the law as a rejection of the other for which reason there is no offer. This pertains to the postal rules and it arises where the offerors offer letter and the offerees offer letter by pass each other through the post. Over here the determining factor is not the price of both offers but the fact that both offers crossed each other. The effective date for such an offer is not the date that the letters were received but rather the date that both letters were posted.

iv) Lapse of time An offer is said to have been terminated when acceptance is not indicated to the offeror within the time specified for acceptance or yet still within reasonable time. This was the situation in DJAN V. OWOO. The defendant Mrs. Owoo had only one child domiciled in U.K. Unfortunately the young man involved himself in narcotics and got arrested and arraigned before Court to the point of conviction to imprisonment if no service of a lawyer was engaged for him. When this message got to the defendant in Ghana, she did everything possible to raise money to enable her go to the rescue of her son and yet to no avail. In her desperation she decided to sell her only house. The plaintiff showed interest in the house. It turned out that the plaintiff could not pay outright for the house, he offered 30% of the price as part payment with the understanding that the remaining 70% would be paid in 2 weeks time by transfer to the defendant. In the defendants eagerness to reach UK she accepted the 30%. For 4 good months the remaining balance never came until the defendant returned to Ghana to re-sell the house to a third party only for the plaintiff to sue for specific performance. Without mincing words, the court held that the offer had elapsed because time was the essence of the whole offer. One other instance of this was RAMSGATE VICTORIA HOTEL V. MONTEFIORE In June the defendant offered to buy shares in the plaintiff company. The shares were allotted to him put he never paid for them until November and the plaintiff company refused to accept the purchase arguing that there was undue delay . The plaintiff company therefore sued the defendant for breach of contract and same was upheld by the court.

v) Failure of Condition Precedent Where an offer is impinged upon certain conditions being fulfilled before the offer takes place, if those conditions are not fulfilled , the offer cannot be complete but rather end . This was the precise situation in FINANCE COMPANY LTD V. SIMPSON. The defendant signed a form for the hire purchase of a vehicle this was on the 16th of March. It was expressly stated on the form that the agreement was binding only if the plaintiff company also signed the form. On the 24th of March, the vehicle was stolen from the

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defendants premises. On the 25th of March , the plaintiff company signed its part of the form. Discovering this development, the defendant refused to pay for the car. The court held that the loss of the vehicle was immaterial and of no usefulness to the plaintiff. the truth of the matter is that a condition precedent to the contract, that is appendage of the plaintiffs signature to the contract had been fulfilled , therefore there was a binding valid contract.

vi) Death In a contract situation the death of either party to the offer before acceptance brings the offer to an end. This is simply because a dead man has no compus mentis to accept or reject an offer or yet still to negotiate. The only exception here is a co-operate entity which has perpetual existence. The decision in BRADENBURG V. MORGAN is a pointer to this . In this case the defendant offered to guarantee repayment by a debtor of the plaintiff. Unfortunately the defendant died and the plaintiff in ignorance of the defendants death continued to supply goods to the debtor . The plaintiff got to know of the guarantors death at a time the debtor had gone bankrupt. The plaintiff sued the executors of the estate of the defendant. The court held that he had no case against the defendant because the defendant did not secure the excess debt .

COMMUNICATION OF ACCEPTANCE Acceptance must be communicated to the offeror. The communication ought to be made expressly in writing or by word of mouth. Communication of acceptance could also be deduced from the offerees conduct. Acceptance becomes effective only when it is communicated. It is for this reason that act performed in ignorance of an offer does not constitute acceptance. The locus classicus here is WILLIAM v. COWARDINE (Supra).

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THE POSTAL RULES ON OFFER AND ACCEPTANCE

This is a method of making a contract through the post and it comes with a lot of rules which are exceptional to the general rules on offer and acceptance. Whereas the general rule is that acceptance must be received by the offeror before it becomes complete and effective, under the postal rules, if an acceptance is required from an offeree through the post, such acceptance becomes valid immediately the letter of acceptance is posted. It is immaterial to insist on the issue of delay or the letter getting lost. So long as the letter was validly posted acceptance becomes effective. For a letter of acceptance to be said to have been validly posted : i) the offeror must have expressly stated that the mode of communication of acceptance must be through the post and nothing else . the letter of acceptance must be properly addressed stating the exact name and address of the offeror without a mistake.

ii)

This is because the correctness of names and addresses of people cannot be presumed. The fundamental principle of law applicable here is Expressio unius est exclusio alterius . iii) the letter must be registered at the post office with a return slip as evidence of postage .

An ordinary postage without registration does not constitute a valid indication of acceptance through the post because there will be no prove of postage. iv) The letter must be directly posted by the offeree, his agent or servants assigns, privy etc. And not through any unlawful interloper irrespective of where he is coming from.

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If the parties to a contract contemplate the use of the post as a medium of communication, then the letter of acceptance must be directly posted by the offeree or his legal representative and not a busy body.

The following cases illustrate the above mentioned factors ADAMS V. LINDSELL . The defendant offered to sell wool to the plaintiff. The offer was through the post and immediately it reached the plaintiff the plaintiff indicated acceptance through the post. The letter of acceptance delayed for two days. By the time it + -got to the defendant he had sold the wool. Meanwhile it was the defendant himself who indicated that acceptance should be through the post. The plaintiff sued. The court held that a valid contract came into existence immediately the letter of acceptance was posted. The delay for 2 days was immaterial. Therefore the defendant was liable for breach of contract. HOUSEHOLD FIRE INSURANCE CO. LTD V. GRANT. The defendant was offered shares by the plaintiff company and had an ultimatum of seven days to indicate acceptance by the post. The defendant saw a secretary in the plaintiff company and handed over the letter of acceptance to her to be posted. She posted the letter but the letter got lost through the post for which reason the defendant never paid for the shares. After some months, the defendant was called upon by the plaintiff company to pay for the shares and he refused on the grounds that he had already paid for the shares . The plaintiff company therefore sued. The court held that the contract would have become complete immediately the letter of acceptance was posted. However since the latter was not properly posted , the offerors were not liable . HOWELL SECURITY CO. LTD V. HUGHES. The defendant granted to the plaintiff an offer to purchase his land. He added in the letter that acceptance should be exercised on notice by writing. The plaintiffs letter of acceptance got lost in the post. As a result of which the defendant sold the land to a third party. The plaintiff therefore sued but the defendant argued that notice in writing did not mean postage of acceptance. The court without mincing words found the defendant liable for breach of contract because among the numerous meanings of notice in writing could be postage IN RE LONDON & NORTHERN BANK (EX PARTE JONES). A letter of acceptance was handed to a postman but he did not post it immediately. He kept it in his drawer for five days as a result of which the offer expired its deadline for acceptance. Interestingly the offerors letter of revocation reached the offeree before the postman posted the letter of acceptance. Upon receiving the letter of revocation the offeree commenced the present action arguing that by handing over the letter of acceptance to the postman, it signified postage therefore under the postal rules, it amounted to valid acceptance. The court held that handling over a letter of acceptance to a post office worker

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does not amount to direct postage. The postman is not the legal representative of the offeree but a busy body or an interloper , therefore the offer was lawfully terminated. BRYNE V. VANTIEN HOVEN. On the 1st of October, the defendant posted a letter from Cardiff in UK to the plaintiff in New York offering to sell to the plaintiff tin plates. On the 8th of October the defendant wrote again to the plaintiff in New York revoking the offer made to him on the 1st of October. On the 11th of October the defendants letter making the offer was received by the plaintiff in New York. On that same day the plaintiff telegraphed the defendant whereupon he indicated his acceptance in the telegraph. On the 15th day of October, not been satisfied with the telegraph message, the plaintiff wrote a letter of acceptance and posted it on that same day to the defendant in UK. On the 20th day of October, the defendants letter of revocation of the offer got to the plain tiff in New York. But the plaintiff insisted that the revocation was invalid and sued the defendant for breach of contract. The court held that the revocation of the offer was not effective because under the postal rules revocation must be communicated to the offeree before it becomes effective and in this particular instance where the offeree has indicated his acceptance the offeror was bound by a valid contract which came into existence on the 15th of October.

RULES UNDER ELECTRONIC COMMUNICATION OF ACCEPTANCE (INSTANT COMMUNICATION) Examples of this type of communication are telex, E-mail, fax, telephone etc. . . . The general rule here is that the offer takes effect immediately it is made because it is presumed that by the speed of communication through electricity, the offer would reach the offeree on the same day and in a matter of a moment. The law does not concern itself with the offeree accessing his own chosen electronic medium. However when it comes to acceptance under electronic communication the law deems acceptance to be incomplete until it is received by the offeror, otherwise there cannot be a valid contract. And here it must be emphasized that the place of reception of the acceptance is the place where the contract is presumed to be made. ENTORES VRS MILES FAR EAST CO. clearly illustrates this point . The plaintiff was based in London. He made an offer to Amsterdam by telex to buy goods from the defendant. The defendant accepted the plaintiffs offer but subsequently sold the goods to a third party. The plaintiff commenced an action against the defendant in England. The court held that indeed the defendant accepted the offer in Amsterdam in Holland, therefore the contract was made in Holland and not in London. So the plaintiffs action incompetent on grounds of suing at a wrong forum . The action should rather have been commenced in Holland. The fundamental rule under the electronic system of communication is that there is no binding contract until the offerees acceptance is received by the offeror. But the offer in itself is said to be valid immediately same was communicated through the electronic c media and that and that the place where the acceptance was received is presumed to be the place for the making of the contract.

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ACCEPTANCE OF A STANDING OFFER A standing offer refers to a situation where there is a mutual understanding between the offeror and the offeree for the offeror to be making intermittent or regular offers to the offeree. The only difference between this type offer and other forms of offer is that the offeree herein is given assurance of constant offers . However this notion of constant offers does not create a legal relationship enforceable in law, if either party should fail to honour their respective parts of the bargaining .It does not in the least give to either the offeree or the offeror the right to commence any action, simply because the offeree has not provided any consideration for a binding contract to come into existence. Should the offeror regularly supply to the point where the offeree can no longer take delivery of the supplies the offeror does not have any legal right to commence any action against the offeree simply because the offeree has not provided a standing acceptance. The fundamental principle of law in this area of contract is that each consignment delivered is treated in isolation and it comes with its own rights and liability. The acceptance for a previous consignment cannot be transferred to a subsequent one. This explains why this type of contract immediately a consideration is provided is described as a severable or divisible contract because every offer to which consideration is provided stands on its own.

iii

Consideration

Every contract including even a simple agreement must be supported by a consideration. It is as a result of this that it is said that until consideration passes there is no valid contract. In other words, a contract is said to be void ab initio when it has no provision for consideration in it . Simply put, consideration is defined as the price that is to be paid by an offeree for a chattel or service . It could also be the loss to be suffered by one party to the benefit of the other party. The courts have experienced some difficulties in formulating a satisfactory definition of consideration. However what has been able to stand the test is the definition in CURIE v MISA where consideration was defined as Rights, interests, profits or benefits occurring to one party due to the forbearance, the detriment, loss, assumed responsibility suffered or undertaken by the other party. In DUNLOP v. SELFRIDGE , consideration was defined as an act of forbearance on the part of one party or the promise thereof been the price which the promise is bought. Such promise is given monetary value and is enforceable in law.

Types of Consideration
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Essentially there are two types of consideration; executed and executory consideration. EXECUTED - Is an act performed in return for a promise EXECUTORY is a promise made in return for another promise.

RULES OF CONSIDERATION These are the criteria for determining as to whether a consideration provided is a good one in law or not . It must be noted for exams purposes that not all the factors about to be set out ought to appear for consideration to be valid.. An issue could be made of the existence of a valid consideration if a reasonable number of these factors are present. These factors are as follows:1) Consideration must be executed or Executory but never in the past. Past consideration is not consideration at all and is not even recognized by law. A consideration is said to be past when a promise is made after a person has performed an act relying on his mere performance for a reward without actually entering into a consensus ad idem with the benefactor on the kind and quantum of his reward. A case in support is IN RE McCARDLE : MS McCARDLE v MRS McCARDLE . In this case a woman made a will in which she stated that her children were entitled to her house upon her death. During the testators life time, one of her children and his wife being the plaintiff herein lived in the said house. Interestingly the wife took it upon herself to renovate their apartment without the express approval of the brothers and sisters in law. Afterwards, all the children held a meeting and agreed in writing to refund to the wife her total expenditure for the renovations . The said in-laws did not honour their promise and as if to add insults to injury relocated the plaintiff and her husband after the death of their mother to a different portion of the same premises. This informed the wifes decision to sue for recovery of her expenses incurred on the rehabilitation. Unfortunately the wifes action was dismissed by the court because her claim was in the nature of past consideration. It must however be noted that there are exceptions to consideration which are as follows ; the principle of past

So far as negotiable instruments are concerned (i.e. cheques, promissory notes, bills of lading) a past consideration is sufficient to create a legal relationship. This is borne out by section 27 of the Bills of Exchange Act (Act 55) which states that so long as a cheque is not counter manded it is presumed to have a good value.

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Another exception to past consideration arises in a mortgage situation. If a mortgaged property is not redeemed within 12 years or an ordinary debt is not settled within 6 years they become statute barred and an attempt to recover same shall be stopped by law because it is a past consideration. Again, where services are rendered at the express or implied request of a benefactor in circumstances which raised an implication of a promise to pay within a dead line or stipulated time and there is a breach by the promisor failure to pay on grounds of past consideration is unacceptable in law. A case in support is IN RE : CASSEYS PATENT . In this case, the joint owners of a patent right asked their employees to find licensees to work with their patent right without a discussion of any reward . After the employees had done so, the patent right owners agreed to reward the employee for their past service by allotting to him one-third of the proceeds of the patent but they later failed to honour their words and the employee commenced this action.. The Court of Appeal decided that the promise to the employees was binding since by the promisors conduct they gave their consent to the work of the employees. 2) Consideration must move from the promise to the promisor The promisee is the same as the offeree and the promisor the same as the offeror. This principle means that the party who wishes to enforce the contract must show that he has provided a consideration otherwise an offeree cannot sue upon the contract. This position must be distinguished from the Ghanaian position where by the tenets of section 8 of Act 25, (i.e. The Contract Act) part - consideration is sufficient to bring a valid contact into existence. This Ghanaian position is contrary to the common law. A case in support of this is TWEDDLE V. ATKINSON. The plaintiff was married to the daughter of a certain man. To assist the couple the plaintiffs father-in-law promised to give the plaintiff and his daughter 2,000 pounds as seed money to begin life with the understanding that the plaintiffs father will also top it up with 1000 pounds to make a total of 3000 pounds. The plaintiffs father-in-law died at a time when he had not paid the 2000 pounds as promise. As a result, the plaintiff sued the executors of the will of her father-in-law for the 2,000 pounds. The court held that the action cannot not be successful because no consideration was provided. It must be emphasized that under Ghanaian law this case would have succeeded because by section 12 of Act 25, love and affection is a good consideration. 3) Consideration need not be adequate but sufficient. Although the law insist that consideration must exist before a contract could be valid, the adequacy of such consideration is purely at the discretion of the parties especially the offeree . All that the law is interested in is that some consideration was provided however minimal the value to seal the contract . EXCEPTIONS : - The exception to this principle of consideration is where the offeree played a fraud on the offeror. The court will interfere in a case of fraud or criminal misrepresentation to refix consideration for the contracting parties. In such event the court

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will vitiate the consideration provided by the offeree. This is supported by the case of THOMAS V. THOMAS : - The executors of a will promised to convey a house to a widow in return of the widows promise to pay an annual property rate of 1 pound on the house. It turned out that the widow was being deceived and no house was conveyed to her as a result of which she sued. The court held that the amount provided by the woman for the existence of a legal contract was woefully inadequate but so long as the promisor accepted it for its worth the test for a valid consideration is not on its adequacy but sufficiency to create a legal relationship. For this reason there was a valid contract. Again in WHYTE V. BLUETT a father made a promise to his son that should the son stop worrying him about why he is an illegitimate child he would not demand repayment of certain loans granted this boy. No sooner had the father said this than he died. Unaware of this promise, the fathers executors went to the illegitimate son to demand repayment of the amount he owed his late father. The son refused to pay and the executors sued him. The court held that the boy was under obligation to repay the amount because he did not pay any valuable consideration for the waiver . In MONTFORD V. SCOTT the plaintiff paid the debt of 1 pound owed by the defendant to another person for an option to purchase the defendants house for 100 pounds. Subsequently the plaintiff sought to exercise the option to which the defendant refused to complete the sale claiming that the 1 pound he took was a mere token and insufficient to support a legally binding contract. When the matter went to court the court decided that the 1 pound paid by the plaintiff for the option to purchase the house however small in comparison to the value of the house was a sufficient consideration for the existence of a valid contract. 4) Consideration must be good and not illegal. The position of the law on this is SALLUS REPUBLICAE SUPREMA LEX meaning the safety of the republic is the supreme law. Therefore any consideration for the invocation of a valid contract must be lawful and not against public policy. A case in support of this is KESSIE V. CHARMANT. In this case the plaintiff used to be Ghanas ambassador to Liberia. He was approached in Liberia by the defendant as a businessman and a timber merchant for that matter who wanted him (Kessie) to assist him acquire timber concession in Ghana so that he could extend his operations to Ghana and export therefrom. As his consideration for his assistance, the plaintiff demanded 50% of the total shares of the company to be floated. The company was duly formed and registered some dividends. It was around the same time that the plaintiff was re-called from Liberia as Ghanas ambassador. He went to the defendant to demand his 50% shares as promised to which the defendant declined as a result the plaintiff sued. The court held that the portfolio of the plaintiff in Liberia was to attract business to Ghana and to enhance diplomatic relations between Ghana and Liberia. Securing the timber concession for the defendant was not a departure from his official duties for which he was lawfully paid. Therefore his demand for 50% shares was against public policy. Thus rendering the contract between the parties a nullity because the consideration which sealed the contract was unlawful and against public policy.

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iv.

Intention To Create Legal Relationship

This is sometimes referred to as the form of the contract . It is not every offer which when accepted would bring into existence an enforceable contract. Some offers are mere social or domestic offers . In other words the offeror did not intend establishing a legal contract with the offeree. For example; In RE LILLENTON : The deceased promised her daughter who had sat the English Bar Exams three times and failed that should she intensify her effort and endeavour to pass the said exams, she would buy her a house. The girl became studious and passed the bar exams after which the mother only congratulated her but declined to give her the house. She sued but the court dismissed her action illumine on the ground that the mother did not intend creating legal a relationship. Intention to create legal relationship is determined from the form of the contract. This is ascertained from the terms of the contract. These terms of a contract are not of equal importance. Some are more significant than others. It is the category of a term breached which determines whether the contract should continue or not. The form of a contract could also be determined from custom, usages, practices etc. They may also be inferred from statute. Finally the form of a contract is essentially determined from the language of the contract.

v.

Terms of a Contract

The terms of a contract cannot be implied from extrinsic factors. The judge is by law compelled to interpret the contact according to its express terns. The terms of a contract may be classified into conditions, warranties, innominate terms, exemption clauses etc. CONDITIONS A condition in a contract is a fundamental term of the contract which forms the basis of the contract. It is figuratively described as the type of term which goes to the root of the contract, a breach of which could entitle the injured party to repudiate the contract and ask for damages for breach of contract . The case of DJAN V. OWOO (SUPRA) amply demonstrates this In identifying a condition, the court considers the total impact of a breach of a term on the rest of the terms of the contract. A breach of condition gives the injured party the right to terminate the contract unless he decides otherwise. If the injured party compromises his right of breach upon certain conditions and continues with the contract he is said to have committed ACCORD and SATISFACTION. WARRANTIES A warranty is a subsidiary term to the main term of a contract. A breach of a warranty gives the injured party the right to claim damages but not the right to terminate or repudiate the contract. A warranty is a subsidiary term of a contract in the sense that a breach of it is not fatal to the execution of the contract. A case in support hereof is BETTINY V. GYE . An opera singer undertook in advance to appear 5 days ahead of a

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concert show for purposes of rehearsals. She arrived only three day to the show. The people who engaged her sought to terminate the contract on grounds of lateness. The court held that the rehearsal clause in the contract was subsidiary to the main purpose of the contract being the singing at the show . Therefore the rehearsal was a warranty, a breach of which could not lead to termination of the contract, at best the defendants were entitled to damages. A breach of warranty does not call for accord and satisfaction because such breach is insignificant in magnitude. The straight common law remedy for such breach is damages. However for a continuation of a contract after a breach of a condition the strict common law remedy is accord and satisfaction. INNOMINATE TERMS These are terms which are anomalous in the whole piece of contract. They are neither classified as conditions nor warranties. The lay person may describe them as conditions whereas in actual fact they are not. The court adopts a wait and see attitude in dealing with such terms. The court asses an innominate term by looking at the depth of benefits deprived the injured party through such a breach. If the effect of the breach is not that serious, it could be remedied in damages. Where it is serious, the innominate term may bring about a rescission of the contract in other words for a breach of an innominate term the effect could be damages or rescission of the contract. This is supported by the decided case of HONG KONG FIR SHIPPING CO. V. KAWASAKI KISA KAISH LTD . The defendants chartered a ship from the plaintiff for a period of 24 months. The duration of the charter was described in the contract as a condition. Among the terms of the contract was a term that the plaintiffs was to provide a ship which was in every way fit for cargo service. In this instance, the ship provided by the plaintiffs was a bit defective and it required a complete engine room crew to manage the ship and this the ship owners failed to provide. The defendants used the ship for seventeen months and could not use it any further hence decided to terminate the contract stating that the plaintiffs were in breach of contract and therefore went to court. It was held that the term in dispute being the 24 month duration of the charter party was indeterminate because it could either be construed as a warranty or condition. Its consequence was fatal to both parties but considering the fact that the plaintiff had used the ship for more than 3 of the duration, the term becomes an innominate term. HOPKINGS V. TANQUERAY The plaintiff was inspecting a horse on a day before an auction sale . The defendant came to tell him that you have nothing to look for, the horse is in a perfectly good state. The plaintiff therefore ended his inspection and bought the horse. The horse proved to be of unsound mind and threw the plaintiff ajar, trampled upon him and fatally wounded him for which reason he sued the defendant- sellers. The court held that what the defendant said on the eve of the purchase was not intended to be part of the contract. It was a mere marketing gimmick for which no damages could be recovered but considering the fact that its repercussions were fatal to the plaintiff purchaser the term could be seen as innominate.

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EXEMPTION CLAUSES These are sometimes referred as ouster clauses. It is a term in a contract which aims at limiting or excluding one party from liability for breach of contract. It is for this reason that such terms are often referred to as Exclusions Clauses . An exemption clause sometimes comes into existence not to totally repudiate liability but to establish a limit of liability. Exemption clauses are frowned upon by the courts and the court will not enforce it unless they are clearly intended to be binding. The reason being that it promotes inequality among contracting parties whereas under the common law, parties to a contract are presumed to be acting in parri passu (meaning the parties must be at par or equal). Moreover the principle of equity to the effect that equality is equity is applicable here. Therefore exemption clauses could clearly be seen as violation of both common law and equity. It is for this reason that the court insist on the following criteria before enforcing an exemption clauses as binding. 1) The exemption clause must be incorporated into contract. The court will hold an exemption clause as valid unless it is satisfied that the clause was stated expressly in the contract document. In other words, an exemption clause must be an integral part of the contract and the party or person being restricted must be made sufficiently aware of such a term in the agreement . This means that exemption clause must be read and understood by both parties before appending their signatures to the contract. A case in support hereof is THOME V. BARCLAYS BANK GH. LTD The plaintiff leased his premises to the defendant for purposes of banking. The agreement was evidenced in writing and there was a forfeiture clause in the agreement to the effect that the defendants were not to carry out structural changes in the said premises without the written consent and approval of the plaintiff otherwise they will forfeit the entire 60 years lease without any refund. The defendant embarked on a major renovation and demolished certain pillars and beams which according to them did not make the banking hall spacious. Indeed, the renovations enhanced the beauty of the property and appreciated its value. Yet the plaintiff contended that it amounted to a waste and sued for enforcement of the forfeiture clause. The court held that the forfeiture clause was unequivocal or unambiguous. Therefore irrespective of the beauty of the house the exemption clause was applicable and the defendants were ordered to vacate forthwith. Likewise in LESTRANGE V. GRACOUB, the plaintiff signed a document for the purchase of a machine without reading it. He later discovered that the machine was faulty. It was there and then that his attention was drawn to the exemption clause in the document. He argued that he signed before noticing the exemption clause. The court held that so long as the exemption clause was incorporated into the contract and the plaintiff had every opportunity to read it but failed to do so, he was bound by the exemption clause. The court decided in obiter dictum that the only people who were not affected by this provision are illiterates but even so should the exclusion clause be interpreted to them and they seem perfectly to understand same, they cannot later in time

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repudiate liability under the exemption clause. It is only when an exemption clause is misrepresented that it becomes invalid.

2) Exemption clause must not be misrepresented . The trite position of the common law on misrepresentation is that misrepresentation is synonymous to fraud . For this reason a contract built on misrepresentation is of no effect. The law regards such a contact as void abinitio. Consequently any mechanism factored into the contract by one of the parties to exonerate himself from future liability is equally null and void. The applicable Common Law maxim here is ex nihili et nililus. (you cannot put something on nothing and expect it to remain there.) A case in support of this is CURTIS V. CHEMICAL CLEANING AND DYEING CO. LTD The plaintiff took her wedding dress to the defendant company for cleaning and she was asked to sign a document containing an exemption clause which read this dress is accepted on condition that this company is not liable for any damage whatsoever arising from cleaning it. The plaintiff became apprehensive and wanted to take her dress back but an agent of the defendant company and to be precise one of the workers for that matter told the plaintiff that the exemption was applicable to only the beads and other decorations in dresses and nothing more. As a result the plaintiff signed the document. When the dress came out it was discovered to be stained all over through colour pigmentation from other clothes. The plaintiff drew the attention of the defendant company to this and they invoked the exemption clause in the agreement as their defence. The court held that the exemption clause was void and ineffective as same could not be invoked against the plaintiff simply because but for the misrepresentation made by the worker to the plaintiff ,the plaintiff would not have entered into the contract by signing the contract.

3) An exemption clause cannot be enforced where the contract document in which it was stated was not signed by one of the parties. If the exemption clause is contained in an unsigned document, the party who wants to rely on it must prove that both parties signed the document otherwise the exemption clause outlives its usefulness . A case in support is CHAPLETON V. BARRY UDC . The defendants were in the business of hiring out chairs to the public. There was a notice containing the terms of their service pasted on the door where the chairs were kept. The plaintiff hired two chairs and paid for them and was given a receipt which he straight away put into his pocket. When he took the chairs home and sat on one of them it got broken and he fell and fatally injured himself. He sued the defendants for negligence but the defendants came to court relying on an exemption clause at the back of the ticket which read we the council would not be liable for any accident or damage arising from the use of the chairs. The court held that, the terms of the contract were contained in the notice displayed at the place where the chairs were kept. The tickets issued were mere receipts and any inscription at the back of it were not part of the contract because they were not conspicuous and much more importantly both parties did not sign the receipt.

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4) Previous Dealings If the parties to a contract have had previous dealings in which an exemption clause has always been relied upon then the party trying to rely on an exemption clause must prove from the previous dealings that the exemption clause has become a convention in their dealings. This will be regarded by the court as a constructive notice to make the exemption clause binding . A case in support is SPURLING V. BRADSHAW . The defendant has been dealing with the plaintiff for some time He delivered some barrels of orange juice for storage by plaintiff. He later received a printed documents from the plaintiff in which the plaintiff claimed an exemption clause while storing the orange juice. When the juice was later collected by the defendant, it was detected that some of the barrels were damaged, thus flattening the juice and making it unwholesome. As a result, the defendant refused to pay for the storage charges for which reason the plaintiff sued. The court held that due to their previous dealing in which no such exemption clause was invoked , its sudden imposition in this contract was unacceptable especially when it comes after the plaintiff had accepted the juice into their storage facilities. 5) It must be timely The common law requires barest notice. An exemption clause must be brought to the notice of the other party before the contract and NOT after the execution of the contract. OLLEY V. MALBOROUGH FORECOURT HOTEL settles this . The plaintiff checked in at a hotel and after concluding the contract at the reception she was taken to her room. During her stay at the hotel, she lost some personal items. It was there and then that the defendants drew her attention to the notice pasted behind the door to her room stating among other things that management could not be held liable for articles lost or stolen. For this reason the owners of the hotel refused to pay. The court held that the notice in the plaintiffs room did not form part of the terms of the contract by the reason that the contract was concluded at the reception before the plaintiff was shown her room. Therefore the plaintiff was not given adequate notice to accept or refuse the exemption clause. As same could not be invoked against him . 6) The exemption clause must not be ambiguous. If an exemption clause is not well constructed so as to make it precise, a breach thereof cannot not be enforced because the law court cannot engage itself in speculation. A leading case here is HAUGHTON V. TRAFALGUR INSURANCE . CO. LTD. A five seater bus was crushed whilst carrying six passengers . The insurance policy covering the bus was from the defendant company. In the said policy the defendant company disclosed their preparedness to repudiated liability for any damages caused to the bus if it ever carries a load in excess of what its capacity could contain. The insurance company relied on this exemption clause to refuse liability for which reason the insurer sued. The court held that the expression excess load was ambiguous because it was amenable to double meaning Load refers much more particularly to cargo than passengers . Passengers are not referred to as load, therefore excess passengers is not the same as excess load . Because of this the did not give effect to the exemption clause on grounds of ambiguity.

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7) The exemption clause must not constitute a fundamental breach of the contract. Even if the exemption clause is clear, the court will not allow a party to rely on it when an invocation of such an exemption will constitute a breach of a fundamental term of the contract. This is simply because the law would not allow an exemption clause to undermine a term in a contract constituting a condition . Such permission will amount to using an exemption clause to vary the terms of the contract which constitutes a condition. Should this be allowed to happen the contract will exist without a foundation. The case of PHOTO PRODUCTION LTD V. SECURICOR TRANSPORT settles this . The defendant agreed to guard the plaintiffs factory . In the agreement the defendant repudiated liability for damage caused by the plaintiffs own employees. One of the plaintiffs employees set fire to the factory during an industrial protest and the fire intensely damaged the factory for which the plaintiff sought to hold the defendant company liable for negligence. The plaintiff argued that the defendant company had failed to secure the company premises, had the defendant done so , the perpetrator could not have set the place ablaze. However the same court did not allow the defendant company to rely on the exemption clause to repudiate liability. The court held that there is no principle of law which protects failure to perform . Once the exemption clause was on performance which was a condition of the contract the defendant cannot hide behind it to neglect their responsibility.

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MISREPRESENTATION This is a remedy available to a person who has been induced into a contract by relying on a statement made by another person which he know at the time of making same for the execution of the contract to be untrue . Misrepresentation has the following elements :i) ii) iii) iv) It must be a statement of fact. It must have been made directly from the party in breach or through his lawful agent to the victim The statement must be made with the intention of defrauding the other party. The victim must have relied upon the statement and incurred a loss.

STATEMENT OF FACT Statement of fact could be made orally or in writing. It is said to be factual because it is precise, pointing to a promise . A statement of law is not a statement of fact. Likewise an advertising gimmick, a religious prophecy or a wishful thought are not statements of fact. A statement of fact must be made with the intention of creating legal relationship and it must be such that any reasonable person would believe it. MUST BE DIRECTLY MADE Because the principle of non est pactum (i.e. it was not my act) could be a defence for a person who has allegedly made a misrepresentation, the law requires the victim to proof that the statement alleged to be a misrepresentation was made either directly to him or through the lawful agent of the party in breach. Acting upon a speculated statement will not let an action lie in misrepresentation . In the same vein eavesdropping from a third party cannot let an action lie in misrepresentation . MADE WITH INTENTION TO DEFRAUD A statement constitutes misrepresentation where right from its beginning the maker of the statement knew within his conscience that it was not true and yet he went ahead to make the statement. In law the maxim is you cannot give what you do not have (Nemo dat quod non habet).

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RELIANCE ON THE STATEMENT The plaintiff in proving misrepresentation must show that he actually relied on the statement. If it is established that the plaintiff sought advice or assurance from other persons before relying on the statement, he cannot sue for misrepresentation because there was intervening event known in law as actus intervenes. But where the statement was directly made and it turns out to be false leading to a loss, it will constitute a misrepresentation. A case in support is R. V. KYLSANT CO. LTD . In its prospectus, the defendant company made a publication to the effect that it was even paying dividends during the year of economic depression . It turned out that the company paid dividends for only 2 years before the economic depression set in . The plaintiff relied on this statement and acquired a number of shares in the defendant company only to secure huge losses as a result of which he logged a complaint with the law enforcement agents for fraud. The court held that the publication was a clear statement of misrepresentation in conformity with the ingredients of misrepresentation . BISSET v. WILKINSON : - The defendant a vendor of a piece of land which everybody knew had been grazed upon before by sheep made the representation to a prospective buyer that the land could support the grazing of 2000 sheep. It turned out to be untrue. As a result the plaintiff suffered congestion and a diminishing output for which reason he sued. The court dismissed the action of the plaintiff because he did not reasonably rely on the defendants promise. He did not do a total assessment of the plot as compared to his flock. HORSEFALL v. THOMAS : - The defendant bought a gun from the plaintiff. The gun had a defect which the plaintiff concealed from the defendant and the defendant himself did not examine the gun before he purchased it . In the course of using the gun, it exploded fatally wounding the defendant . Subsequently the defendant went about slandering the plaintiff for selling to him a defective gun. The He claimed further that he was misled into selecting the gun. As if these were not enough, the defendant started pursuing the plaintiff for compensation for his injury and refund of the price paid. The court held that this was not a misrepresentation simply because the defendant had every right to examine the gun before purchase but he either failed ,neglected or refused to do so. Therefore he was estopped by the doctrine of caveat emptor (let the buyer beware).

TYPES OF MISREPRESENTATION FRAUDULENT MISREPRESENTATION : - This is a false statement of fact made with the knowledge of the maker of its falsehood yet it is recklessly or carelessly made to constitute an extortion or exploitation of the other party. For fraudulent misrepresentation to succeed, there must be an absence of honest belief in the accuracy of the statement. A case in support of this is DERRY V. PEAK . The plaintiff published a prospectus inviting the public to apply for shares in the plaintiff company. It was stated in the prospectus that the company has statutory permission to operate trams by horses or by steam power. The law under which the plaintiff company was established required the plaintiff company to

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obtain a license before it could operate a steam power. The directors of the plaintiff company assured that the defendant company that it would be automatically granted the license to use steam, hence the publication. Unfortunately their application was refused. When the plaintiff company was pressed by the defendant for misrepresentation they commenced the present action to vindicate their course. The court held that since the directors of the plaintiff company sincerely believed in the statement they made at the time of the contract, their conduct does not amount to fraudulent misrepresentation. NEGLIGENT MISSREPRESENTATION : - This occurs where a person makes a statement which he himself knew was unreasonable to be believed . In other words the maker of such a statement did not take the necessary steps to find out the truthfulness of the statement before making same .Here three (3) things must be proved which are ; a) The maker of the statement should concede the fact that he owed the recipient of the statement a duty of care. b) That it is obvious that the maker of the statement has breached this duty of care by acting carelessly. c) As a result of points 1 and 2 above the recipient of the statement becomes entitled to damages. The locus classicus here is HEDLEY BYRNE CO. LTD. V. ST. HELIER SMELTING CO. The defendant being bankers gave information about the credit worthiness of one of their customers to the plaintiff. The statement was made without a cross check and it turned out to be incorrect. Thus causing the plaintiffs to suffer financial losses. However the bankers had indicated that they could not be held responsible for any loss arising from the defendant relying on their assessment . The House of Lords held that the bankers were not liable although they made a negligent misrepresentation. They were covered by the ouster clause which exempted them from liability.

INNOCENT MISREPRESENTATION : - This may be defined as incorrect statement of fact made without the intention to mislead or the knowledge that the statement was false. Yet under the common law it is still regarded as deceit and the remedies to the recipient of such a statement lies in damages, recission, affirmation, accord and satisfaction, or yet still ius ter tii (3rd party proceedings).

DISCHARGE OF CONTRACT
A contract is discharged when the obligations created under the contract ceases to be binding on the parties. These are several forms of discharge and these are as follows : 1) By Performance

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A contract is discharged by performance when both parties have carried out their respective obligations under the contract .For e.g. under the Sale of Goods Act , a contract is discharged immediately the seller delivers the goods and the buyer pays for them provided no warranty was given by the seller . It is a general principle under Ghana law, Act 25 of 1960 that performance must be complete and exact before a promisor could be discharged from his obligation under a contract. A case in support of this is CUTTER v. POWELL . The defendant solicited for the assistance of one Charles to be his mate in piloting a ship to shore . The voyage began on the 2nd of August. Unfortunately Charles died on the 2nd of September at a time the ship was left with about 19 days to reach port. Upon the arrival of the ship at the port , Charles widow who is the plaintiff herewith, sued for proportionate payment of Charles wages. The court held that the widow could not succeed because Charles has not completely performed his part of the bargaining. This case evoked a lot of public sympathy for which reason it was subsequently reviewed on the following exceptions; a) Substantial performance It was held that where one party can prove that he has performed a substantial part of the contract, the court should allow him to re rewarded accordingly. This is equitable. 2) Acceptance of Part Performance The court again said in CUTTER v. POWELL that when a contract is partly performed but for reasons beyond control of the defendant he is unable to complete the remaining part , the law requires the defendant to be paid proportionately based on Quantum Meruit . This simply means that he should be paid according to your degree of performance. SUMPTER v. HEDGES further settles this. The plaintiff agreed to put up a building for the defendant but abandoned the project when it was partly completed .The defendant had no option than to complete the building himself and the plaintiff sued the defendant for part of the work he did before the defendant came to complete it. The court held that the plaintiff was entitled to partial performance. It was emphasized that partial performance requires proportionate compensation and not full compensation. 3) Time If the time of performing the contract is stated as a term in the contract agreement, then it must be decided whether it is a condition or a warranty. If time is not stated as a term, then the contract must be performed within a reasonable time. It is time which would be used to determine proportionate payment. Over here BOLTON v. MAHADEVA is an instructive authority .The plaintiff agreed to install a central heating system in the defendants house for 560 pounds within 2 minutes. A week to the expiration of the deadline, the job was not even half way through. As if this was not enough, the little installation done also produced fumes instead of heat. This made the plaintiff to put in a request for more money to correct the defect but the defendant ordered him to stop the contract altogether and asked for a refund of his money. The court held that for the plaintiff time was essential to the contract and considering the volume of work left undone there was no way the defendant could execute same. Therefore the defendant was right in terminating the contract.

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4) Discharge by Agreement Just as contractual obligation arises through an agreement reached by the parties, it could equally be discharged by an agreement. The most important requirement here is that the parties to the contract must reach a consensus ad idem as to discharging parties from their contractual obligations. Where the contract is Executory, then in the event of a discharge by agreement, each party should give a consideration for his decision not to continue with the contract. On the other hand where the contract is executed i.e. where one party has performed his part of the bargaining whereas the other party has done nothing and yet wants to discharge himself from the contract, the latter must provide consideration which in law is called CANCELLATION FEE. WHYTE & CARTER v. MCGREGOR amply demonstrates this . The plaintiff undertook to advertise the defendants garbage bins for him for a period of 34 years. The advertisement was to take the form of the defendant company having their name and logo printed on a tin plate to be attached to every litter bin produced by the plaintiff company. The defendant terminated the agreement on the very day it was signed , yet the plaintiffs affirmed the contract by preparing some tin plates and placing them on the bins on that very day. Subsequently the plaintiffs claimed full payment for which the defendant refused to pay. The plaintiff then sued. The court held that the plaintiffs were entitled to full payment because they had performed their part of the bargaining. However in the interest of justice, since they did not achieve the entire quota as requested for by the defendant, they should be proportionately compensated for what they produced because equity abhors greed and ill - gotten gains. 5) Discharge by Frustration The classical common law position was that a party was not relieved of his obligation under a contract merely because he found himself unable to carry out these obligations. This was the position in the case of PARADINE v. JANE. In this case, during a war time some unruly soldiers threw out the defendant who was a tenant from the room she was occupying on the grounds of national security. For the period that the soldiers stayed in the room, the defendant decided not to pay for the rent for which the plaintiff landlord sued her for recovery. The court held that the frustration caused by the soldiers in taking over the room did not discharge the defendant from paying rent but it must however be noted that this was an application of the old Common Law. By public agitation, the court began to mitigate the severity of this position by evolving the doctrine of frustration. Under this doctrine, frustration was defined as a premature termination of a contract owing to the occurrence of an event beyond the control of the contracting parties which has rendered the performance of the contract impossible. Recently the doctrine of frustration has been extended beyond impossibility of performance to cover situations where due to the occurrence of factors beyond the control of the parties making the achievement of the object of the contract radically different from the intention of the parties. The remedy for frustration of contract is that no right accrues to the contractual parties. They are restored to the positions they were before the contract which is referred to in law as status quo ante bellum. If a contract becomes frustrated, parties to the contract are automatically discharged from their contractual obligation. These are circumstances under which frustration occurs.

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i) Where the subject matter of the contract is destroyed. Thus in TAYLOR V. CALDWELL, the plaintiff entered into an agreement with the defendant to hire a concert hall of the defendant for series of concert. The plaintiff had paid in advance the days of his intended use of the hall. The night before the first concert show, the entire hall was guttered by accidental fire. The destruction of the hall was so intensive that both parties were prevented from discharging their obligations. The plaintiffs were so disappointed and sued the defendant for breach of contract. The court dismissed the action on the grounds of pure frustration. The subject matter of the contract was destroyed beyond the control of the parties. ii) Frustration caused by personal incapacity . If a contract is one of personal service And the promisor dies or suffers from an illness making it impossible for him to perform his part of the contract, the said contract is deemed frustrated. This was the situation in CONDOR V. BARON & KNIGHT . The defendant who happened to be drummers were employed by the plaintiff for seven nights in a week for a concert show. On the 4 th night of their performance, the audience got carried by their performance which spurred them to do more and more of what was humanly impossible. In the cause of doing that they both collapsed and were advised by the doctor not to work for 4 days. The plaintiff did not concern himself with their health and sued for breach of contract. The court held that the contract was frustrated by the incapacity of the defendant because it involved personal skills which they could not render .Therefore no right or liability could be derived from the contract. iii) Supervening illegality . A contract is frustrated by supervening illegality where performance of all obligation under the contract becomes illegal due to the passage of a law in - between the agreement. The case of AVERY V. BODEN illustrates this . The defendant agreed to load cargo for the plaintiff at the port of Odessa . Before the time for loading could reach, war broke out between Russia and England and the English besieged the port of Odessa. The English passed a law making it a criminal offence to trade with an enemy nation. Had the defendant loaded the cargo it would have meant violating this law because the cargo was bound for Russia. In spite of this the plaintiff company in Russia sued the defendant for breach of contract. The court dismissed this action illumine on the grounds of frustration stemming from supervening illegality. iv) Non Occurrence of an Event . If the basis of a contract is the occurrence of an event and unfortunately that event fails to occur, the contract would be deemed frustrated and the parties discharged of their obligations. KRELL V. HENRY illustrates this . The defendant hired the plaintiffs flat to view a procession of the Kings coron ation. Unfortunately due to illness of the king, the programme was cancelled but the owner of the flat still insisted for payment to which the defendant refused resulting in this action. The court held that although the action had become impossible due to the kings illness and the parties were discharged, the defendant must still pay for the flat because they enjoyed the comfort and luxury of the apartment. It was established that by law if a contract has more than one object and one of the objects becomes frustrated, it does not automatically discharge the parties from their contractual obligation.

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In HEROES BAY STEAM BOAT Co. V. HOUGHTON , the plaintiff company agreed to hire out a steam boat to the defendant for two days with the purpose of taking passengers to cruise around a fleet of ship to watch a naval parade on the occasion of the kings coronation. The parade and the coronation were cancelled but the boat was still used to cruise around the ship. Subsequent to which the defendant refused to pay for the boat service because the parade and the coronation could not come on. The court held that the defendant should pay because the contract was not wholly frustrated. The parade and the coronation were not the only event for which the boat was used. v) A contract becomes frustrated where there is extensive interruption of performance. This may render the subject matter of the contract radically different from what was anticipated. The result of this is often an impossibility on the part of the defendant to perform his part of the bargaining due to his inability to overcome the extenuating factors. The case of METROPOLITAN WATER BOARD v. DICK KERR & Co. LTD is instructive here. In this case the defendant agreed to create a water reservoir for the plaintiff during world war 1. The British Minister for crimes and defence ordered the work to stop and a demolition of what was done so far. The plaintiff sued the defendant company for breach of contract but the court held that the contract was frustrated by virtue of the interruption of the work by the state which fundamentally made the contract exclusively impossible.

EXCEPTIONS TO FRUSTRATION : i) Mere difficulty in performing a contract does not render the contract frustrated . A case in support hereof is TSAKILOGLOU V. NOBLEE THOR . A contract was entered into by the parties for the sale of groundnut. The contract included shipping cost from Sudan to Hamburg. The contract was assessed on the basis of the shortest shipping route through the Suez carnal. The carnal was unexpectedly closed at the time of the execution of the contract. This meant that the groundnut had to be shipped around the Cape of Good Hope for which the seller saw as costly and decided not to convey the groundnut at all on the excuse that the contract was frustrated. This contention was dismissed by the court simply because the contract was not impossible to be performed. Sailing around the Cape of Good Hope was a mere difficulty and possibly an inconvenience but not an impossibility. ii) Mere increase in the contractual sum or expenses does not render a contract frustrated Over here it is instructive to consider the case of DAVIS CONTRACTORS V. FAREHAM . The plaintiff contracted to build a number of houses for the defendant at a

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contract price of 94 pounds per unit over a specified period. Due to economic hardships and shortages of materials, the contract sum shot up to 110 pounds per unit of house. Upon a feasible assessment of his expenses the plaintiff decided not to build at all arguing that the contract had been frustrated. The House of Lords rejected these arguments as baseless and emphasized the need to keep the doctrine of frustration within narrow confines. Viscount Simmonds gave the ratio decidendi to the effect that mere financial disappointment does not amount to frustration. iii) If a party by his own act induces an impossibility which could have been avoided it does not amount to frustration. In simply terms frustration should not be induced or anticipated. It should not be a willful act neither should it be a wishful act. And the case of MARITIME NATIONAL FISHERIES V. OCEAN TRAWLERS demonstrates this . A contract for the hiring of a trawler which required a license was alleged to be frustrated when the owner obtained inadequate license for all his boats including the trawler in issue which had been hired. The plaintiff who hired the trawler became offended and sued. The court held that the contract had not been frustrated. The party relying on the frustration has caused it himself. Frustration must come unaware. It must not be expected.

REMEDIES FOR BREACH OF CONTRACT

Circumstances leading to breach of contract vary. As a result of this, the corresponding remedies and compensation also vary. However the variation ranges from damages, action of the price, quantum Meruit, specific performance, mesne profit, a tracing, order of garnishee, incarceration, restitution to injunction. 1) Damages These are compensation for loss suffered often assessed in the form of cash. Damages are intended to restore the injured party to a position he would have been had the breach not occurred. It must be emphasized that damages is a common law remedy and not an equitable remedy. However for a claim to damages to succeed, there must be justification. In as much as damages come with justification , the presiding judge of a court has an unfettered discretion in the award of damages. When the court is making an award of damages, it takes into consideration two main issues namely - i) whether or not the injury suffered in relation to the damage claimed is not far and remote. In other words, where the damage is remote form the breach, the court will not award it. ii)Whether or not the damages could have been abated. An injured party is by law required to minimize the extent of his loss by trying to find an alternative method of halting the loss. Failure to do this would not put the total loss at the door step of the party in breach. Rather the court will regard the conduct of the injured party as contributory negligence. The case of BRACE v CHALDER amply demonstrates this . The plaintiff was a manager of a business with four other partners. Two of the partners died and surviving partners wished to continue and so gave the plaintiff a technical dismissal with the option to re-apply for the job with the assurance that he would be employed . The plaintiff resented the dismissal and refused to accept the offer letter re-engaging him. He stayed off

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work for some years and later sued for wrongful dismissal. The court found that indeed there was a wrongful dismissal but held that since the plaintiff was given an option which he declined, he contributed towards his dismissal. Therefore he was only entitled to nominal damages because he failed to mitigate his loss. Essentially speaking damages could be classified into two namely : i) Liquidated Damages ii) Unliquidated Damages LIQUIDATED DAMAGES These are damages expressly stipulated in the contract and quantified in cash with certainty. If a contract contains a clause that in the event of a breach damages of a certain amount would be demanded, the court becomes obliged to accept the figure as damages. This is what is termed as liquidated damages. It is a Liquidated damage because the parties had agreed among themselves on the certainty of the damages before the commencement of the contract. So damages which could be quantified in cash is what is termed as liquidated damages .This was the situation in DUNLOP TYRE CO. V. NEW GARA GES . The plaintiff supplied tyres to the defendant at a minimum retail price. It was agreed that for any breach per tyre sold below the agreed price, defendant would pay damages of 5 pounds. In order to dispose off their old stock of tyres, the defendant sold the tyres below the agreed price. Upon hearing this the plaintiff sued the defendant .The defendant raised the argument of market forces determining the price but to the plaintiff that was neither here nor there. The defendant further argued that so long as they have paid fully for the tyres, the plaintiff had no interest in how much they sold them whether low or high. The court held that so long as damages for selling below the agreed price was stipulated in the agreement, a breach of same should be enforced as liquidated damages. UNLIQUIDATED DAMAGES These are damages arising out of a cause which cannot be quantified in cash. For example a breach of promise to marriage, nervous shock among others cannot be strictly quantified in cash . It is usually assessed by the court taking into consideration several factors . 2) Action For The Price This arises if the breach is in respect of failure to pay for the contractual price. In that respect, the seller is the only person who can invoke this remedy. Where, however the seller also unilaterally increases the price of a sale, this remedy will lie in the bossom of the buyer. 3) Quantum Meriut This is an equitable remedy and is simply means claiming compensation in respect of proportionate performance. It arises where the party in breach has performed but not to total satisfaction. As a result the injured party seeks to terminate the whole contract without any compensation to the party in breach. The maxim in equity is equity abhors greed and ill gotten gains. Impliedly for part performance, equity recommends part compensation. The only task on the court is to cause a valuation of part performance to ensure that the due compensation commensurates with the degree of work performed so far .

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4) Specific Performance This is also an equitable remedy. It is an order from the court directed at a party to a contract to do exactly what he undertook to do under a contract and not to be relieved of such duty merely because he is prepared to pay compensation to the inured party . This is because not every situation can be remedied by money. This remedy arises from the equitable maxim that equity sees as done that which ought to have been done. Specific performance therefore is one of the methods by which equity mitigate the hardships of the common law. The court however has an essential criteria to consider before making an order of specific performance. And this is whether the injury could not be taken care of by award of damages. If specific performance is not awarded with circumspection , it could become a butus fumin order ( ie an order resulting in nothing ) This simply means an impossible order or yet sill an order which cannot be enforced. 5) Mesne Profit This is a common law remedy meant to enable an injured party from a breach of contract recover his total loss against a party in breach to the extent of recovering the profit he would have made had the contract not been breached. Mesne profit therefore means anticipated profit had the contract not been breached. This type of damages are often granted by the court because the court takes into consideration all the prevailing factors of the breach. The policy intendment behind the position of the law is Sallus Republicae Lex (ie the safety of the Republic is the supreme law ). 6) Tracing Order This is a common law remedy meant to enable the injured party recover his loss by every possible means. In this regard, the law is often applied in financial transactions especially where a lawful debtor is refusing to pay his debt. By a tracing order of the High Court, any item or property which could be established to have been purchased by the debtor with the money could be allowed to be confiscated and sold to defray the debt. 7) Order of Garnishee This arises where in a judgment a debtor is refusing to pay his just debt by feigning to be poor yet it is established that he has a fatty bank account. By an application for an order of garnishee, a high court could extend its discretion to the freezing of his account in satisfaction of his debt. 8) Incarceration It is one of the remedies under the common law available to unpaid judgment creditor. The judgment creditor can opt for incarceration by satisfying only one condition to the court. That is proving by balancing of probabilities that any attempt to get the debtor an extension of time to pay his debt will only amount to waste of time because he is abjectly poor. In this regard sending the person to jail becomes the only remedy of compensating the creditor. However the law insist that the creditor must pay the remittance of the person convicted whiles in jail. Because of this the creditor determines the duration of the sentence. The process by which a judgment creditor yet the judgment debtor jailed, convicted incarcerated or goaled in by summons to show cause. This summons to show

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cause is a dare to the judgment debtor to came and explain to the court why he should not be sent to jail. 9 ) Restitution Under the Common Law this is a remedy available to a judgment creditor proved to have been extorted. In this regard as away of recompense, the defeated party is subjected by the court to paying twice or more what he extracted from the judgment creditor. The essence of this Common Law remedy is to deter the judgment debtor from repeating his conduct. 10 ) Injunctions This is an equitable remedy meant to preserve the subject matter of litigation so that the eventual winning victim does not lay hand to a subject of depreciated value . There are two types of injunctions namely . i. Interlocutory Injunction and ii. Perpetual Injunction.

Interlocutory Injunction Forms part of the prerogative writs to be issued concurrently by either the High Court or the Supreme Court under its supervisory jurisdiction. However every court of first instance in Ghana has the equitable jurisdiction to grant interim or interlocutory injunction simply because justice and justiceability are equitable. Perpetual Injunctions This is a remedy available to only the successful party to a litigation. Whenever a court determines a case of declaration of title, the law enjoins the judge to order perpetual injunction against the party losing the case. 11 ) Order of FI FA The full expression of this abbreviation is a writ of fierri facias. Fifa is a derivative of the first two alphabets. It is an order of the court issued against a judgment debtor to have his property sequestrated (seized) to be sold by the court in satisfaction of a judgment debt. After the High Court has issued a writ of FIFA the next judgment creditor is to put the property to auction. However, the High Court will not permit the sale of a property put to auction until it has determined the reserve price. The reserve price is the minimum value of which the property should be sold. If it turns out that the reserve price is high on the market, making the property indisposable the judgment creditor could return to court with another application for review of the reserve price . This is a value lesser than the reserve price and determined at the courts discretion. However the law insists that in both an application for reserve and forced sale value, the judgment creditor must be put on notice by the judgment creditor.

THE GHANAIAN CONTRACT LAW

THE CONTRACT ACT (ACT 25) 1960

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The Common Law was received by the peoples of the Gold Coast unconsciously into their legal system. Ultimately this unconscious reception was formalised by the promulgation of Judicature Act of 1874. Interestingly the local custom, usages practices and conventions of the peoples of the Gold Coast were not regarded as part of the received Common Law of contract. Consequently problems arose as to how to relate the received law to the local situation .This is what has become known as conflict of laws . The fundamental reason being that at the local economic front most transactions thrived on trust but this was unknown to the received Common Law. Matters got aggravated by the fact that transactions in the Gold Coast were predominantly carried out by people who were unlettered therefore could not conform to the rigidity of any written laws . This situation brought about what became known as conflict of laws between local practices and the received Common Law. It was against this background that the first parliament of post independent Ghana came out with its own medium of exchange and some modifications of the Contract Laws received as part of the Common Law of England . These new law was the Ghanaian Contract Act (Act 25)1960 . It became apparent from the preamble of Act 25 that whenever there was conflict between the received Common Law and the Ghanaian Contract Act (Act 25), Act 25 was to prevail. However these 2 laws show some fundamental differences which are essentially as below SECTION 1 - Whereas under the Common. Law, proof of frustration discharges parties of their contractual obligation, under the Ghanaian law, particularly section 1 (5) the court will consider a contract as frustrated only when it has taken into consideration the following a) Sums of monies spent by reason of the contract. b) Insurance obligations c) Any legislation. This means that frustration is not automatic to bring a contract to an end. The Ghanaian court could order refund of monies spent on the contract. Again where the contract is insured, an act of nature cannot bring the contract to an end, the insurers shall be expected to mitigate the situation for the contract to continue . Besides if there exist a special law to take care of such contingency frustration will not lie SECTION 2 - This section limits the scope of frustration. This section establishes that so long as a contract is severable that is to say it could be classified into series, when one class is affected by frustration it does not affect the total contract. Whereas under the common law, the right to classify a contract as severable is the sole preserve of the judge. SECTION 5 - This section is on third party rights(privity of contract). The Common Law position is that if a person is not a party to a contract, he cannot derive any right, benefit or liability from such a contract. Section 5 of Act 25 however distinguishes this position. This section give exceptions to the Common Law . Under the Ghanaian Law found at section 5 (2), once a person can prove that he is a beneficiary of the contract the law will

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allow him to make a claim or be sued under the contract. This is the underlying principle for the application of Third Party Insurance Act No 42 1958 in Ghana whereby an accident victim who has not entered into any agreement with an insurance company is automatically entitled to a claim of compensation once it could e proven that he has been injured by their insured . Again a donee beneficiary could sue under such a contract , likewise a creditor beneficiary . SECTION 8 This is the most crucial section of the Ghanaian law. It is on consideration Section 8 in generality agrees with the Common Law that consideration must move from the promisee to the promissor. However by section 8(b), the Ghanaian law does not consider consideration as the sole criteria for the validity of a contract. Unlike the Common Law which states that until consideration passes, there is no valid contract. It is in this same sense that section 8(2) makes a difference between the Common Law sense of consideration and the Ghanaian Law sense of the concept. Under the Common Law consideration must always have value but under Ghanaian law , consideration could be in kind. Thus love and affection constitute good consideration in Ghana .

SECTION 9 - Whereas under the Common Law a mere promise is regarded as an invitation to treat, and does not bring into fruition a valid contract under Ghanaian Law a promise backed by an intention to create legal relationship constitute a valid offer ..By this same section, part payment constitute a valid consideration whereas under the Common Law until payment or the provision of consideration is complete it does not bring into existence a valid contract. SECTION 10 - This is an elaboration of privity of contract. Under the Common Law , if payment of debt is made to a person other than the legal creditor, it is a nullity no payment is presumed to have been made. Realising the likelihood of mischief to be created by this law, the Ghanaian Law regards such payment as valid provided there is proof . SECTION 16 : - This also differs from the Common Law position on payment to a party who is not a party to a contract . Payment on behalf of a debtor by a person who is not a privy to a contract is acceptable under Ghanaian Law whereas it is not acceptable under the Common Law . The Common Law insist that payment should be made by the debtor himself regardless of the source of the fund. Finally there are other Ghanaian laws which have inadvertently amended the Common Law position that an infant cannot contract . For example the University Students Credit Scheme Law of 1975 ( NRCD 365 ) treats a student below 21 years as a full adut and capable to contract. Likewise the Marriage Ordinance cap127 treats an infant as having the full capacity to contract a marriage one he secures the consent of the parents Again the Bills of Exchange Act provides that irrespective of his age . a bill drawn by an infant is valid

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LAW OF TORT
The word Tort is a French word meaning civil wrong. A civil wrong is distinguished from a criminal offence by the fact that in a civil wrong it is the individual who has been wronged who sues the person who wronged him whereas it is the state which prosecutes accused persons in a criminal offence. All remedies in the law of tort lie in damages. Equity does not apply here. Tort evolved gradually from the discovery of one tort after the other. However trespass is regarded as the mother of all torts.

TORT OF TRESPASS The tort of trespass is a civil wrong committed against the personal rights or the proprietary rights of another person. In tort a person who commits a civil wrong is known as a tortfeasor and the person who is wronged is known as the victim or the injured party. The wrong by itself is referred to in tort as malfeasance. It must however be pointed out that all remedies in the law of tort lie in damages. Equitable remedies are not applicable in tort. Trespass is regarded as the parent law of tort because all forms of tort ranging from nuisance, negligence, malicious prosecution, false imprisonment, occupiers liability, nervous shock etc. emanated from it and they all have elements of trespass in them. Trespass is an incursion or intrusion into another persons personal or proprietary right without the persons consent . It could also mean an unlawful limitation of a persons physical movement without his consent or permission. Trespass is broadly classified into two namely Trespass in Personam and Trespass in Rem. Trespass in personam is where the intrusion is against the person of the victim whereas trespass in rem is where the intrusion was against the property of the victim . ELEMENTS OF TRESPASS : i) In trespass motive is immaterial. Once a person has made an intrusion against another persons property or person, the law is not interested in why he did so, that will rather go into mitigation of damages. The law rather concerns itself with whether or not the tortfeasor had indeed intruded against the person of the victim or against the victims

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property. This is what is referred to in legal parlance as res ipsa loquitur, meaning - . Let the matter speak for itself. ii) The intrusion should be without the victims consent or permission . In other words an incursion into somebodys person or property with the permission of the person cannot constitute trespass and permission here is either express or implied

. A case in support is AMAKOM SAWMILLS V. MENSAH . The defendant was in the employment of the plaintiff and was the workshop supervisor and at the same time a union leader. He had several confrontations with management on workers welfare. One day he was checking on a machine when suddenly the turbine went off and chopped off his hand . He was rushed to the hospital and upon recovery sued his employers for negligence. He argued that because he was a union leader, that was why management deliberately set the turbine to trap him. His action was based on trespass impersonam. He succeeded at the court of first instance but upon appeal this judgment was reversed because his entire cause of action was based upon motive which is immaterial in the law of trespass. Another authority in support of this is WISEWAY CLEANERS V. EKEM (Supra) THE REPUBLIC V. OTSIBA settles this same point. Otsiba was a hunter in the Assin district of the Central Region. He went on a hunting expedition and for the whole night he had no game. There was a common spot in the forest where usually all the hunters took their rest. On his way to this spot, he set his eyes upon an apparition. He therefore flipped the light on his forehead and the apparition was still motionless therefore Otsiba shot. No sooner had he fired than he heard screams , wailing and pangs of pains only for him to realise that he had shot a human being who was asleep but with his eyes opened. Upon his prosecution for manslaughter his defence was that he did not intend the consequences of his act. His motive was killing an animal and not a human being. The judge in dismissing his contention based his argument on forseability. In the case of THE STATE V. AMETEWE , Kwame Nkrumah declared a unitary government in Ghana ie to say banning all political parties except the party in power. This was disliked by majority of Ghanaians. Nkrumah had personal bodyguard by name Ametewe who got himself influenced by some opposition elements to eliminate Kwame Nkrumah. Nkrumah had just returned from a trip abroad and was being conveyed from airport to the state house. Upon reaching state house, immediately he came out of his vehicle, Ametewe fired at his direction but missed target. Rather the pellet(bullet) landed on the chest of one of Nkrumahs bodyguard who died instantly. Ametewe was arraigned before the court on a charge of murder. His defence was that he did not intend his act against the victim but this was dismissed on the grounds that he should have forseen the consequences of his action. iii) There must not be an act of voluntary contribution by the victim towards the trespass against him. This is termed in law as voluntae non fit injuria, meaning voluntary assumption of risk. This is a complete defence in the law of tort . Needless to mention the case of THE REPUBLIC V. TSIBA . The accused was on his way to his farm. He came across two persons who had killed a woman for ritual purposes and were

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dissecting the chest to remove her heart. The accused was noted in the vicinity to be a first class gossiper. Therefore the murderers grabbed him and gave him a matchet to chop off the head of the victim else he himself would be killed. This was meant to make him part of the crime . After this he was made to swear an oath never ever to disclose this event. Tsiba came home and could neither eat nor sleep. He claimed to be haunted by a ghost until eventually he himself went to the police station to report himself. The two murderers were convicted for murder whereas Tsiba was set free. The argument raised by the murderers was that Tsiba contributed to the murder but the court established the fact that Tsiba acted under duress. In any event, he only chopped off the head of a dead person and could therefore not be the murderer. But the ratio was established that had the accused voluntarily contributed to the killing of the victim, he would not have been exonerated. In RYLANDS V. FLETCHER , the defendant was a driver of a tanker which plied a certain route. The said route had a stream nearby. The defendant burst a pipe on the tanker as a result of which there was a spill of oil into the said stream, killing all creatures in the stream and in the process emitting a bad odour in the neighbourhood thus creating a nuisance. The plaintiff who happened to be in the neighbourhood sued the defendant for trespass and even added the defendants employer as been vicariously liable. The defendant argued that he did not voluntarily spill the oil so could not be liable. In dismissing his argument, the court gave an analogy concerning a dog by saying that if one brings an unruly dog into his home and the dog jumps his wall to bite people in the adjoining house the owner cannot deny liability for the act of the dog although it was not his voluntary act. Therefore the defendant and his employers were vicariously liable for the spill from the tanker.

TORT OF NEGLIGENCE After the development of the tort of trespass the next to develop was the tort of negligence. Negligence developed from the tort of trespass. The noun negligence is derived from the verb to neglect which connotes being indifferent to a situation one could have averted. In other words it connotes being intentionally or deliberately irresponsive to an occurrence. Negligence could take several forms ranging from contractual negligence, professional negligence, criminal negligence or tortious negligence. ELEMENTS OF NEGLIGENCE The elements of negligence are three abbreviated as (D B D) 1) The tortfeaser must have owed the victim a Duty of Care. 2) The tortfeaser must have Breached this Duty. 3) As a result of this breach, the victim is entitled to Damages. The case of DICKSON V. BELL illustrates this. A maidservant was sent to collect a gun from the masters neighbour. Unknown to the maidservant, the gun was loaded with the

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magazine. On her way to the master, he used the gun to bring to order a little boy who was misbehaving. Surprisingly the pellet (bullet) went off, killing the boy instantly. The victims parent sued in the tort of negligence against the master of the servant. The court held that the master was vicariously liable because he should have foreseen that the maidservant could cause a mischief with the gun, considering the fact that younger persons are adventurous. This case gave birth to the concept of Action Upon the Case termed in some textbook`ks as Assumpsit. This is an inadvertent or indirect act of a tortfeasor which was not directly aimed at the victim but rather exposes a larger section of the whole community to danger to the extent that anybody within that community could have been a victim of the danger. Such actions are sometimes referred to as trespass but the proper description is action upon the case. LANGRIDGE V. LEVEY underscores this same point. The defendant defiantly sold a defective gun to a child to the full knowledge of the defendant that it was defective. The child got fatally wounded when he tried using the gun. The parent of the child sued in negligence. The court held that the defendant-seller was liable because all the elements of negligent were at stake not to mention the illegality of the transaction. GEORGE V. SKIVINGTON . The subject matter of this case was hair washing in a salon. There was the sale of hair product upon which the plaintiff herein bought all for his wife. The wife took some of the products to the salon to wash her hair and in the process large patches of her scalp came off with the hair. The husband sued the manufacturers of the products being the defendants for negligence. The defendants in their defence contended that the husband had no capacity to sue them because he did not personally use the product. The court identified all the elements of negligence in the case and added that the defence put up by the defendants was a ruse because in the eyes of the law, a man and his wife are one. One of the leading cases in this area of the law termed in Latin as locus classicus is HAVEN V. PENDER . This is a dry dock case. A ship berthed at a drydock for scrapping and repainting by workers. The drydock authorities erected a scaffold in the form of ropes for use by the workers. In the cause of painting, the plaintiff stepped on a loose portion of the rope and it tore off so the plaintiff slipped headlong. The head collided with a nail as a result of which he sustained fatal injuries. The plaintiff sued the drydock authorities in the tort of negligence. The court held that the defendant is liable for negligence all due to D B D because they should have foreseen the accident in the event of lack of inspection of the ropes. DONOGHUE V. STEVENSON is another locus classicus. A woman bought a drink and in the course of taking it she saw a rotten snail in the bottle as a result of which she had a shock and she sued the manufacturers of the drink. But the court of first instance dismissed her case so she went on appeal and she succeeded on the grounds of DBD. It was in this case that Lord Atkin gave his famous dictum about who is your neighbour in law. According to him, ones neighbour in law is any body one should have foreseen, a person one should have had in contemplation as likely to suffer the palpable (probable) consequences of his action and acts. From this dictum four essential elements come out

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to establish neighbour in law namely : consequences.

forseability, contemplation, probability and

Forseability was defined as anyone one should have foreseen before the commission or omission of an act. Contemplation was defined as anyone one should have anticipated as likely to bear the effect of his act. Palpability is defined as an victim should have assessed the degree of risk with regard to his

Consequences was defined as a person acting recklessly to the extent that another person is bearing the effect of his act. It was from consequences that in law it became established that motive is immaterial. It is from this that the maxim ex turpi causa came to stay (meaning suffering from the direct cause of another persons act). To seal the line of cases in this regard it is instructive to consider the case of HOME OFFICE V. DORSSET YATCH CO. LTD. . In this case the plaintiff being a law and security office in the UK had to champion the cause of the parents of five school children who were badly injured by a yatch parked at the beach. The five boys were students of Borstal Home who managed to break bounds to go to the beach to play. They tampered with the parking position of the yatch and it fell on them as a result of which they were fatally wounded. Because the Borstal Home was a government institution the plaintiff were made to take up their case and prosecute the defendant . Their action was in negligence. It was held that there was no negligence on the part of the defendant because children loitering around the beach was scarcely plausible in the UK. The court added that should there be any negligence, it should go against the school authority who owed a duty of care to keep the children within the school boundaries.

NERVOUS SHOCK The tort of nervous shock developed from tort of negligence. Therefore the elements for proving the tort of negligence (ie DBD ) are equally applicable here. The only difference between nervous shock and negligence lies in the type of injury suffered by the victim. In nervous shock, the injury must relate to loss of consciousness, whereas in negligence, it could relate to any bodily harm. The other essential difference between nervous shock and negligence has to do with notice. In nervous shock, one must always prove that there was no notice. In nervous shock, one must always prove that there was no notice and notice here ought to be conspicuous ,frequent and timeous. If this two things (loss of conscious and notice) are absent, an action in nervous shock will not succeed. It is as a result of this that the two legal defences Danum Sine injuria & Sine danum injuria evolved in law. Danum sine unjuria means you have suffered a wrong and yet there is no remedy for you. This happens when the victim is unable to establish the element of the

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tortious wrong for which he is suing . Sine danum injuria on the otherhand means ones cause of action is founded . One cannot sue in nervous shock without proving the elements. The elements of nervous shock are therefore as follows 1) 2) 3) 4) 5) Motive is immaterial The shock should be without notice The person should not have contributed to the shock . The danger must be proximate to the victim The victim should not be aided into collapse by her own aided senses

VICTORIA RAILWAY CO. V. COULTROS. A pregnant woman crossed a railway line . Just after crossing, a train with full speed passed by the line. Upon seeing the speed at which the train was moving, she collapsed for having narrowly escaped death and sued the railway company for nervous shock. The court held her action as successful in nervous shock because she lost consciousness and there was no notice of danger. The defendant company owed her (DBD) . The judges also held that the danger was proximate (very close). It must however be mentioned that if there is a cooling off after shock, then one cannot bring an action in nervous shock. In DELIEU & ANOTHER V. WHYTE, a woman and her son were in a pub taking some drinks. Whilst drinking , they saw a stray horse which had been left unfettered jumping aimlessly and heading towards the pub. The horse was about 50 metres from the pub. The plaintiff collapsed immediately she saw the horse . Subsequently she sued the defendant the owner of the horse for nervous shock. The court held that under normal circumstances the plaintiff should have succeeded but there was no eminence of danger. 50 metres apart was quite a distance. Danger was not proximate. It was from this case that proximity to danger was added as an element of the tort of nervous shock. In HAMBROKE V. STOKES , the defendant left his vehicle negligently parked on a hill. In no time the vehicle started descending without a driver behind the steer. The plaintiff is a pregnant woman who had just left the son off to school by making him cross the same street. Just after the son had crossed the street she saw the vehicle and collapsed. She had a miscarriage and died. The successor of her estate took this action against the owner of the vehicle. The court of first instance dismissed her claim arguing that the woman was aided into collapse by her own vulnerability. On appeal, it was determined that even if the woman collapsed out of mere fear, it was aroused by the negligence on the part of the driver of the vehicle. To the English court the danger was within proximity. However the court added another element to the tort of nervous shock and that is you should not loss consciousness by your own aided sense of fear. In BRUNNEL V. YOUNG , a pregnant woman was on top of a storey building drying her articles. In no time two vehicles collided on a nearby street due to wrong overtaking by one of the vehicles. She was an eye witness to both the mistake and the accident. She collapsed immediately she anticipated the clash . She commenced the present action upon

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her recovery claiming nervous shock. Her action was dismissed on the grounds that she was not within proximity. In BOARDMAN V. SANDERSON, a man negligently parked his car on a street. The car started moving without the driver and a small boy who happens to be in front of the car was run over. The plaintiff being the father of another boy who was not at the scene but of the same age upon seeing the accident collapsed. He commenced an action in nervous shock against the owner of the vehicle. The action failed woefully. It was from this case that Lord Omrod extended proximity in tort of nervous shock to include parents and relatives of infants killed accidentally who were not even at the scene but are likely to get shock. JONES V. WRIGHT : - Sixteen people watched a live football match on a television. In the course of the match, there was riot as a result of which several spectators died from stampede and 400 of them got fatally injured. A T.V. station did telecast the incident live and a man who had left his immediate family at home to watch the match was seen to be among the dead. His wife, children, sisters, brothers, and in-laws were among those who watched the match and they all collapsed. They all commenced an action in nervous shock against the TV station. 10 other people who did not see the death of the victim but heard of it from the radio also claimed to have collapsed and joined the action. Two other persons who also heard of it through a conversation also collapsed and joined the action. It was from this case that the court added another element to the tort of nervous shock. The court held that, proximity should not only be biological but must conform to time and space. For this reason it was held that all the people who watched the programme live were bound to succeed because picturesque impressions are very real. It was further held that those who heard of the incidence on radio provided they heard it spontaneously were also bound to succeed because audio aid is also real although not as powerful as visual. But those who heard of it through conversation would not succeed because it was not first hand evidence. LINING V. FAWLER : - The plaintiff was well known (renowned) for this patriotic spirit. There was a fatal accident in his vicinity whereby human parts could be gathered as debris. The plaintiff displayed a lot of bravery to the admiration of the people attracted to the scene by collecting human part with his bare hands and was prepared to go places where even medical experts were daring. After the incident, the plaintiff went home and started having psychological trauma from the work he did. He was haunted by the scenes and was found screaming and yelling whenever found alone. He was referred to a psychotherapist and upon recovery sued the owner of vehicle for nervous shock. The plaintiff failed on the ground that he voluntarily assumed that risk. Applying the defence of voluntae non fit injuria, the court dismissed his action. However Lord Diplock gave a dissenting judgment in favour of the plaintiff in the sense that if he was not compensated the court will kill public spiritedness simply because danger invites rescuers.

TORT OF NUISANCE

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This is defined as any human conduct being induced or artificial which is a deviation from normal social norm, custom and practices of a given people. It also refers to an invasion of ones right to the use of his land or chattel. Nuisance is not actionab le per say, it requires prove of damage. The tort of nuisance must relate to the five senses, ie smell, sight, taste, hearing and touch. In spite of this, the law does not recognise personal fastidy. Broadly speaking nuisance could be grouped into two, namely,

PUBLIC AND PRIVATE NUISANCE PUBLIC NUISANCE : - It is a type of nuisance committed against the whole society. No single member of such society can commence an action against the tortfeasor. Such actions could only be commenced by the state or its apparatus. It is for this reason that in Ghana public nuisance is considered as a crime, as such offenders are prosecuted by the state. PRIVATE NUISANCE : - It is a type where the invasion is against an ordinary citizens personal land or chattel. ST. HELIER SMELTING CO. V. TIPPINGS : - The plaintiff company bought an estate just 1 miles form where the defendant company had their copper mine. The defendant company emitted obnoxious fumes which settled on the plaintiffs property as a result of which the plaintiff sued for nuisance. The court held that the plaintiff had proved invasion of his personal property and should have succeeded but for the fact that the nuisance has persisted for 25 years without complain therefore the plaintiff had committed laches and acquiescence and was estopped. ELEMENTS OF NUISANCE : i) Motive is immaterial.That is whether the nuisance was committed intentionally or unintentionally is irrelevant. The nuisance must be proximate to the victim or his property . Nuisance is not actionable per se, it requires prove of damages. The victim must prove that the tortfeasor did not exercise the doctrine of neighbourhood in law. Ryland v. Fletcher (supra)

ii) iii) iv)

A case in support hereof is NANA OHENE DJAN V. NTOW . The plaintiff was the brother of the Akwapimhene Nana Addo Danquah who was at the same time the customary owner of all West Legon lands. The plaintiffs land was bounded by a stream. Some estate agency owned by the defendant owned the land beyond the stream. The defendant realised that any time it rained heavily his land got flooded as a result he raised his land and the floods finding it impossible to meander its way upwards went unto the

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plaintiffs land for which reason the plaintiff sued the defendant in nuisance . At the court of first instance, it was held that the defendant was at liberty to use his land the way he wants it provided he obtained clearance from the necessary statutory agents and that if the plaintiff likes he should also raise his land. Dissatisfied with this judgment, the plaintiff went on an appeal and it was held that the defendants act constituted a nuisance based on the elements established. It was said most particularly that the defendant was changing the terrain of the land and should have therefore foreseen the probable consequences of his act on his neighbour.

THE TORT OF ASSAULT This is an action of the defendant or tortfeasor which directly, intentionally or negligently causes the victim to apprehend immediate fear of physical danger to his body. ELEMENT OF ASSAULT : Must be direct act of the tortfeasor against the victim. It could be done intentionally or negligently and is still an assault. Apprehension must be immediate not remote. There must be an apprehension or fear of danger. LETANG V. COOPER : - The plaintiff went to the beach and was relaxed on a bed chair and sun bathing. The defendant who has parked his jaguar (car) convertible some few meters from where the plaintiff was sun bathing suddenly started the engine and reversed at a terrific speed toward the plaintiff. Upon the sight of the vehicle the lady jumped and no amount of apology from the defendant could appeal her. She therefore sued and succeeded in the tort of assault because she could establish all the elements. Eg. LINNING & FOWLER (supra).

TORT OF BATTERY Battery refers to any act of the defendant which directly , intentionally or negligently causes harm or injury to a victim through physical contact without the victims concern. ELEMENT : 1) 2) 3) 4) 5) Must be a direct physical act of the defendant. It must be committed intentionally or negligently. There must be a direct physical contact not withstanding degree of injury There must be no concern on the part of the victim. Degree of contact is immaterial

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DIFFERENCE BETWEEN ASSAULT & BATTERY : 1) In battery there must be a physical contact whereas in assault there must be only an apprehension not physical contact. 2) In assault the degree of apprehension will require prove and establish whether truly there was an assault whereas in battery, the degree of contact is immaterial. This makes battery actionable per se and assault prove of damages. DUNN V HAMILTON : - A drunkard driver was seen driving furiously by a woman who knew the plaintiff was drunk stopped him and asked for a lift. In the course of the ride they shared pep-talks. The defendant gave the driver a touch and he skidded off the road. Subsequently the driver sued for battery. The court held that the driver could have succeeded because all the elements of battery except consent was present. Once the touch emanated for a pep-talk it amounted to consent. HOPKINS V. BAKER : - The defendant owned a mine and some of his workers got trapped underground. Their condition worsened by the fact that the underground was full of silicon which ended up poisoning them through inhalation and exhaustion. The defendant immediately engaged the services of a medical doctor for a rescue operation. A rope was put around the waist of the doctor to enable him to be dropped underground. On his way down, the rope got torn and was badly injured. He sued for battery and negligence. The doctor succeeded in negligence but failed in battery because it was not the direct act of the defendant, more so when the consent of the doctor was sought. The court held that this was a trite case of action upon the case.

TORT OF FALSE IMPRISONMENT This is an act of a defendant which directly intentionally or negligently causes a total confinement of a victim to a limited area or space determined by the defendant without any opportunity left for the victim to escape. ELEMENTS : 1) 2) 3) 4) 5) It must be a direct act of the tortfeasor It can be intentionally or negligently caused The confinement must be absolute The victim must be confined to a limited area There must be a limit in movement.

MERRING V. GRAHAM WHITE AVIATION CO. The police were investigating a case of murder along a certain road which the plaintiff used around the same time of the murder. When the police came across this information they dialled the Managing Director of the defendant and ordered the Managing Director to inform the plaintiff not to move out of his office until the police arrive to interrogate him.

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The MD carried out the order and the plaintiff stayed in his office from morning till evening. Eventually the plaintiff was found to be innocent. Thereafter he sued his employers for false imprisonment. The plaintiff lost the case because one essential element of the tort of false imprisonment being absolute confinement could not be established. The court admitted rather that the plaintiff went through a mental torture and from this case mental confinement was added to false imprisonment. YEBOAH V. BOATENG : - The parties were contestant to a stool.The plaintiff was the first to lodge a complaint with the police that the defendant faction had issued a threat of death against him and promised to go ahead with the enstoolment of the defendant as a chief. The police unit commander of the area took no action. The plaintiff therefore took no action. The plaintiff therefore took no secure and anticipated a snatch of the stool from him. The plaintiff therefore quickly organised his supporters and got himself enstooled as a chief. The defendant in the company of the police unit commander and some other policemen effected the arrest of the plaintiff. The police detained the plaintiff in cells for some days in order to halt his enstoolment ceremony. Subsequently the plaintiff was released but he saw his detention as humiliation and therefore sued the defendant for false imprisonment. The action failed because it was not a direct act of the defendant simply because the plaintiff was arrested by the law enforcement agency. It must however be noted that had the plaintiff commenced the action in malicious prosecution instead of false imprisonment he would have succeeded. BRYD V. JONES : - The plaintiff wanted to use a public footpath leading to a bridge. Upon reaching the bridge he realised the place was choked by spectators watching regatta. As a result, the path leading to the bridge was barricaded temporally. The plaintiff insisted on using the path and even attempted to climb the barricade so the defendant held his coat to pull him back. The defendant then positioned 2 policemen at the spot to prevent the plaintiff and all others from crossing. The plaintiff was then directed to use another route but he refused and remained there for over thirty minutes. Subsequently he sued the defendant for false imprisonment. He failed because his confinement was not absolute. The court held that there was no limitation whatsoever on the liberty of the plaintiff to move from one place to another. HERRING V. BOYLE : - The plaintiff had a boy of about 6 years in the boarding school. The plaintiff never ever showed up to pay his fees in spite of repeated demand notices of the school authorities. The boy was sacked several times to go home and bring his fees but he was so studious that he always find a way of avoiding school authorities for remaining on campus. On one occasion when school vacated and parents were picking their wards, the school came across the boy waiting for his father. The defendant ordered the boy to follow him to his office. At his office he told the boy in the face that he would not allow him to go home until his parent had shown up to pay his bill. When the plaintiff eventually showed up he found his boy weakened by the maintenance of one posture to wait for him. He therefore sued on behalf of the boy for false imprisonment. It was held that the plaintiff should succeed because the minor suffered physical confinement and mental torture.

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HEARD V. WERDALE STEEL COKE LTD. : - The defendant was a mining company which operated a shift system of its employees. It was the defendants duty to bring the workers from underground any time they completed their shift. The plaintiff in this case closed from his shift but the light operator was not there to bring him up and he remained underground for several hours as a result of which he sued his employers in false imprisonment. The court held that the commission to perform a contractual duty did not necessarily mean the employer is liable to the tort of false imprisonment. The company in this instance was an artificial person and could be sued only by a representative action. The court continued to say that best , the plaintiff could sue for breach of contract and not false imprisonment. TORT OF MALICIOUS PROSECUTION This area of tort is sometimes loosely referred to as abuse of the legal system. The aim of this tort is to safeguard the citizenry of the land against unwarranted prosecutions. This kind of tort is meant to protect peoples reputation. For the tort of malicious prosecution to lie, the victim must prove damages. In other words this type of tort is not actionable per se. According to Lord Diplock in his ratio decidendum in the case of Berry V. Bic, the tort of malicious prosecution is an action upon the case referred to in Latin as in cosmilli casius and requires prove of by balance of probabilities. ELEMENTS : 1) The prosecution must constitute a damage to the victims fame, thus making the whole circumstance scandalous. 2) That the tortfeasor by embarking on malicious prosecution did directly or indirectly put the victim or his property to the danger of loss. 3) The victim must prove expenses incurred in acquitting himself from the malicious prosecution. 4) There was no reasonable or palpable cause of prosecution. 5) That the tortfeasor was actuated by wickedness or malice. DIFFERENCES BETWEEN IMPRISONMENT MALICIOUS PROSECUTION AND FALSE

1) In False Imprisonment there is no malice afore thought 2) The issue of liberty of the victim which is so crucial in false imprisonment is immaterial on malicious prosecution. 3) Malicious prosecution is wider in scope that False Imprisonment. SIMILARITIES : 1) Both are meant to protect the citizens reputation.

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2) They are both meant to protect the fundamental human rights and liberties of the citizens. 3) The two torts are meant to serve as watch dog on the executive arm of government and the law enforcement agencies. MOHAMMED AMEEN V. KUMAR : - The plaintiff was a farmer and the defendant a timber merchant. The defendant awarded contract to certain people to fell timber and cut them out of his concession. In the process the workers virtually destroyed the crops of the plaintiff which he had cultivated on the adjoining land. The plaintiff was disposed to out of court settlement and demanded certain sum of money from the defendant which the defendant was willing to pay but the defendants solicitor advised him to the extent that the amount demanded by the plaintiff was too much and that should the plaintiff even sought court action he would be awarded a lesser sum. Therefore the defendant failed to pay and the plaintiff sued. The matter protracted in court for seven years eventually the plaintiff won after which he sued the defendants solicitor. The action failed because the solicitor only acted in professional capacity. MUSA V. LIMO WARANA : - The defendant was the chief of a village called Limo and he reported to the police that the plaintiff has been fishing in a dam in the village which was their only source of drinking water. The police prosecuted the plaintiff but loss the action. The defendant as a chief and complainant was not happy and upon threats and intrigues, the defendant made the police lodge an appeal of the matter with the Court Of Appeal. The Court Of Appeal held that the police could not prove that they saw the plaintiff fishing in the dam because according to them the plaintiff did so in the night. The only incriminating evidence against the plaintiff was the type of fishes found in his basket the next morning which were common in the dam. The court held that this was not conclusive of fishing in the dam therefore the plaintiffs action against the chief defendant succeeded. Indeed the chief was actuated by malice.

TORT OF DEFAMATION This is an action in personam. In other words, only a person whose image and reputation is impugned can commence an action in defamation The law does not recognise remoteness of consequencies in this action. Defamation simply refers to any tort of malfeasance be it viva voca (oral) printed, cartooned, pamphleteering etc. and meant to lower the image and reputation of the victim in the eyes of the society. Defamation evolved during the reign of King Henry VIII when he snatched the wife of his brother. The Pope spoke against this and Henry was excommunicated from the Catholic Church. He broke away from the Catholic Church and formed the Church of England whereupon he allowed the clergy to marry let alone the king. In effect he destroyed the law of celibacy (not marrying for religious reasons) among the holy orders of the Catholic Church. This single decision of the king exposed him to public ridicule especially in Ireland which was predominantly Catholic. All manner of cartoons were drawn about the king and unending allergies became the favourite of time of the English press. To savage his image, the king ordered the Lord Chancellor to make a new set of laws to prohibit any

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publication calculated to lower the image of a person before the public. The remedy lied in damages or imprisonment. Tort of defamation was among the common law received into Ghana by the judicature act of 1876. Defamation can take different forms namely : 1) Slander/Oral defamation which is often referred to as customary law defamation simply because customary law knows no writing to amounts to unleashing defamatory words or derogatory remarks by word of the mouth. The elements of customary law defamation are as follows : a) The words must have come directly from the tortfeasor. b) The tortfeasor must have made the statement irrespective of his audience, be they the right thinking members of that society or not. c) There must be a publication where publication is defined as dissemination of the information A supporting case is CAPITAL & COUNTY BANK V. HARTY. The managing director of the plaintiffs bank went extravagant whereas interest rates on deposits were dwindling. A customer remarked to the hearing of the managing director at the banking hall that interest declines whereas stomach blossoms. The managing director became highly offended and sued in slander of customary law defamation. The court dismissed the action saying that the standard for the determination is not one of self esteem but lowering of ones image in the eyes of the right thinking members of that society. The court said so because the managing directors choice of the law was that of the common law. SIM V. STRETCH : - The plaintiff in this case was a son of a knight(esquire). He attended a public ballad where introduction of dignitaries his name was barely mentioned without recognising the fact that his father was a knight and he himself an esquire. He took offense at the organisers and sued them in slander. The court held that his action was of no merit because the tort of defamation is not about self esteem or injured feelings but how society perceives you. DEFENCES TO ORAL DEFEMATION 1) Justification of the alterance 2) There was no publication 3) The defamation must have been heard by society simplicita irrespective of their status. WRITTEN DEFAMATION OR LIBEL This is also referred to as common law defamation. It refers to the situation where the defamatory words are put in a permanent form and because its in a permanent form, the victim will always depend on res ipsa loquitor to prove his case. Until recentl y libel in

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6h was a criminal offence but same has been repeated and being made a civil wrong. The elements of libel are as follows : i) ii) iii) iv) v) There must be a publication The publication must have lowed a persons image or reputation before the right thinking members of a society. The publication must have been made in a permanent form. The victim must not suffer damage through self esteem or inward feelings. It must be a direct act of the tortfeasor.

A supporting case is REPUBLIC V. WALLACE JOHNSON. The defendant was a Sierra Leonean journalist and a member of the Nationalist Movement of Sierra Leone. He was pursued by his home government for which reason he sought refuge in Gold Coast. Whilst in the Gold Coast., he splashed an article in which he stated that if people complete polytechnics and technical schools in England and cannot find jobs in England, they are brought to Africa to rule as governors. It is in the same light that if a white man misplaces his money in England he is given a lantern by his home office to came and look for it in Africa. This publication ridiculed the colonial regime and Wallace Johnson was prosecuted in criminal libel. An English high court judge Jackson J sentenced him to imprisonment for arousing public anger against the colonial masters. AMUZU AWOONOR WILLIAMS V.THE GUIDE : - The editor of the Guide, a weekly publication in Ghana indicated in a column a letter purported to have been written by one Amuzu Williams to the effect that the Egyptian Embassy in Accra was colluding with the government of Ghana to defraud the Egyptian government through fictitious rent increases over the property the embassy occupies in Ghana. Amuzu sued the Guide for defamation in libel and succeeded because he could not be linked to any such publication. Libel could also take other forms like inuendos, cartoons. Libel could also take the form of pamphleteering in defamation of conduct. CUSTOMARY LAW DEFAMATION Customary law defamation is the type of defamation normally called slander. It refers to utterances made in a manner meant to defame another person. One could succeed in this tort when he is able to prove that 1) 2) 3) 4) 5) The utterance was made orally Whether it is made in public or not is immaterial Whether it was made to the right thinking members of society is immaterial. It is actionable per se. It applies only where ones choice of law ruling is that of customary law.

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THE TORT OF OCCUPIERS LIABILITY

Under the common law an occupier does not only refer to the owner of a landed property but any one who is in possession or occupation. In some instances people who are not owners in possession but merely exercising control over the property could become liable eg. caretakers. The circumstances under which an occupier becomes liable could be intentional or unintentional. To determine the liability of the occupier, the law classifies trespassers into three groups. (1) invitees (2) licenses (3) trespassers. 1) INVITEES : - An invitee is a person who is in the premises with the express consent of the occupier. Any danger or injury suffered by such a person automatically makes the occupier liable. 2) LICENSEES : - These are people who have the authority of the occupier to be in the premises but without his express permission. Their presence may be in the interest of the occupier for which reason he is tolerating them but has not given them any express permission to stay there. Any danger or injury affecting such class of people is at the liability of the occupier. BYRD V. HOLDBROOK : - The plaintiff was a servant sitting in front of his maters house. He saw a colleague servant chasing his maters fowl. The plaintiff decided to assist the colleague. The fowl jumped over somebodys wall into the yard and t he plaintiff also jumped into the yard. He landed on a spring gun which fatally wounded him for which reason he sued. The court admitted that the plaintiff had no case because there was notice. All the same the court found for him on grounds of religion and humanity. In the case of licensees the occupier is deemed to be aware of their presence on his property but has impliedly agreed to their presence. Therefore he becomes liable. 3) TRESPASSERS : - The development of the tort of occupiers liability has undergone phases of changes with regard to trespassers. The first phase was determined by economic, social and political conditions of the medieval ages. Prior to this age society owed each other a duty of care whereby every member of the society was liable for any act of damage done to his fellow humanity, be it intentional or unintentional. The first phase which necessitated the development of this area of tort was due to social

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and economic factors. This took place during the era of the industrial revolution and the policy of laisez fairesm. This was the age of mechanic inventions, mass production, identification of extended market and fierce competition. It was around this time that the maxim came to stay in the law of tort that motive is immaterial. BRADFORD CO. V. PICKLES : - The plaintiff and the defendant shared the same boundary. The plaintiff was using his portion of land for mining. The source of water for the mining flowed from the defendants land. The defendant needed money and so asked the plaintiff to buy his land which he refused. The defendant therefore blocked the water on his land from getting to the plaintiff thus bringing the mining operation of the plaintiff to a halt. The defendant was sued for trespass. The court held that the land in issue belonged to the defendant and could do what he like to his land. His motive for doing so is immaterial. The cruelty and atrocity resulting from the principle of motive being immaterial called for a change which crystallized in the determination of the case between JAY V WHITEFIELD. The son of the plaintiff want to cut stalk for animals. In the cause of doing so, he came into contact with a spring gun and was fatally wounded. The father sued the owner of the land and was awarded 120 pounds as damages. The defendants argument was that his motive for putting the gun there was immaterial because he had every right to protect his land and property. But the court dismissed this argument and dwelt on the issue of humanity. It was in this case that the dictum was given that you cannot do indirectly what you cannot do directly. ELLIOT V. WIKES : - The plaintiff entered the defendants woodland. He knew before going there that there was a spring gun but did not know the exact place of the gun. Unfortunately he stepped on the gun and it blew up his limbs. He sued the owner of the woodland and he failed on the grounds of volunti non fit injuria and contributory negligence. From this decision, the law assumed a new term that where there is notice of danger the occupier cannot be liable. For what constitutes valid notice such notice must be (a) conspicuous (b) consistence and frequent (c) conveyed in a language and symbol conversant to a given community. The third phase of the law on occupiers liability was informed by the economic depression in England after the 2nd world war. In this light Englands economic supremacy in Europe was shattered. Consequently the landed gentry who were noted for supporting government and economy agitated for a second look on occupiers liability. The rationale being that with an economic slum it was impossible to be each others keeper. The first of the case to be decided in this vein was ADDIE V. DUNBREK. A child of 4 years trespassed to the defendants land to play. The defendant had a haulage machine on his land and without knowing that the child was fidgiting with the machine, the defendant started the machine. The machine mutilated and killed the child instantly. Subsequently the plaintiff being the father of the child sued the defendant but his action was dismissed on the ground that it was not the duty of the occupier to made his land safe for trespassers.

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The case of COOKE V. MIDLAND RAIL CO. LTD re-iterate this fact. The defendant company cut the hedges on the side of a segment of their railway line. The hedges had been put there to prevent horses and other beast of burden from crossing the railway line. Some children ignorantly trespassed onto the railway line through the point where the hedges has been cut. The sudden appearance of a train crushed all the children to death. The parent of the children acting per the plaintiff sued the defendant company. Once again the court held that it is not the duty of the occupier to made his land safe for the trespassers. Since the children were there on their own frolic (foolishness) they were deemed as trespassers who needed no protection. EXCESSOIR ROPE CO. V. CALLIEN : - The plaintiff company complained and applied against a judgment which found them liable in a case where children pierced through the hedges of their school to play in a turbine machine. Anytime the machine was to be started certain safety precautions were exercised through inspection of the mechanism to ensure that there was no one in it. But on this single occasion, the machine was not inspected but just started. A nine year old girl and her brother who happened to be in the machine got mangled. Subsequently their father sued the owners of the machine. At the court of first instance, it was held that the company was liable based on morality because children were said to be vulnerable. On appeal, this judgment was reversed as a misapplication of the law because an occupier was not to make his land safe for trespassers. MOULTON V. POTTER : - The defendant was in the process of felling a tree. Half way through a particular tree, he saw children heading towards the place, and possibly attracted to the place by the sound of the machine he was using. The defendant did not ask them to go back, neither were they driven away. He operated the machine in honest believe that should the tree come down, it could not reach where the children were. Unfortunately the tree fell on the children and crushed them to death. Over here a strict application of occupiers liability would have exonerated the defendant but the court applied the test of forseability and notice. From thenceforth notice and forseability became the fourth phase of occupiers liability. It must be emphasized that it was the third phase of occupiers liability which was received into the Gold Coast under the judicature act of 1876 and has to date not undergone any changes. Therefore in Ghana the position of the occupier under the law is that it is not his duty to make his chattel or property amenable or susceptible to trespassers.

FORSEABILITY AND NOTICE Forseability and notice demonstrated in the fourth phase of the law were reflected in the following cases ; -

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SHADRICK V. B.T.C. : - The plaintiff was a window cleaner. One day he operated so close to a railway line. There was a horrific accident brought about by the skidding off of a train from its line for which it sumersaulted. There was gruesome blood shed. The plaintiff took it upon himself to help in the rescue operation. The plaintiff did this to the admiration of all. He later developed a trauma. The plaintiff sued BTC in damages whereas BTC raised the defence of volenti non fit injuria. The court held that the plaintiff must succeed on grounds of patriotism otherwise it will kill public spiritedness. VIDEAN V. BTC : - The plaintiff was a railway station master. He had his office so close to the railway line. There was an area at the station demarcated as dangerous and prohibited. His 5 yrs old son come with the mother to visit him. The boy trespassed onto the prohibited area. Suddenly the father saw his son at the verge of being crushed by a train. The father dived through the window to rescue the son. He was successful but he himself died in the process. The boys mother sued in the name of the husband which the court of first instance dismissed the case on the basis that the father was a trespasser. Upon appeal Lord Dening (MR) indicated that the duty of an occupier towards a rescuer was different from the duty of an occupier towards trespasser. It was here that Dening gave his famous dictum that Danger invites Rescuers. OGO V. TAYLOR : - The plaintiff in this case volunteered to rescue the inmates of a house which had caught fire. He rescued three people and the fire smoldered the rest of the people. The plaintiff in the cause of the rescue burnt his face and his beard therefore he commenced an action against the house owner for compensation to which he refused. The house owner conducted his own investigation on the background of the plaintiff which revealed that he was working with the fire brigade therefore to the defendant, the plaintiff was only responding to a duty call. The court found for the plaintiff on the ground that although he works with the fire brigade, he was not on duty at that particular moment and therefore acted out of patriotism and that the fundamental principle in the law of tort with regards to occupiers liability towards rescuers is that danger invites rescuers. In conclusion, it must be noted that it is unfortunate that the third phase of the law received into Ghana has become static. In all other commonwealth jurisdiction, it is the social and economic dictates which determines the development and interpretation of this tort.

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SALE OF GOODS
(ACT 137 OF 1962) Until 1962 when Act 137 was passed by the first Republican Parliament of Ghana, the general principle of the common law as it existed under the law of contract applied to all transactions involving the sale of goods. This mainly stemmed from the fact that until 1962, the Common Law of England received under the Judicature Act of 1876 continued to be the applicable law of the Gold Coast. Unfortunately the application of the Common Law in the Gold Coast brought in its wake a lot of difficulties mainly because the Common Law and principles of Equity were incompatible with indigenous local practices. Typical examples were for instance the principle of caveat emptor meaning the buyer beware. This for instance was not acceptable to the people of Gold Coast. Therefore under Act 137, the doctrine of caveat vendetta meaning let the seller beware was introduced to mitigate some of the hardships of the Common Law . Other areas of difficulty to the people of the Gold Coast included transfer of risk. The Common Law put this strictly on the seller but under Act 137 there evolved clear instances where this responsibilities could shift to the buyer . Stoppage in transit cannot also be overlooked. Act 137 spelt out clear exemptions to this doctrine. It is against this background that Act137 of 1962 was passed to formalize local trade practices as part of the regulations and laws governing business in Ghana. In the light of the foregoing, it needs not be over emphasized that when ever there is a conflict between Act 137 and the Common law, Act 137 must prevail. It must also be noted that any conflict, difficulty, perceived inconsistency are to interpreted or construed in conformity with the general rules of interpretation and the existing laws of Ghana. The significant highlights of Act 137 are as follows :SECTION 1 This section defines what constitutes a sale of goods as a contract whereby the seller voluntary transfer his property in goods to a buyer at an agreed consideration called the price consisting wholly or partly of money. Property in Goods here refers to both tangible and intangible goods. In law tangible goods are referred to as corporal hereditaments
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which includes shoes, hats etc. Intangible goods are incorporal hereditaments which are invisible goods and titles like rendering of service eg. teaching, cheques, promissory notes, bills of lading etc. It must be noted that under Act 137, consideration for a sale need not be in cash. It could be in kind or partially in kind or cash. It must also be emphasized that a contract of sale in Ghana could either be absolute contract, a conditional sale, provided the subject of sale is goods or service and nothing more. The deduction to be made from this definition of a contract of sale of goods is that the seller must have full title or ownership of the goods or the goods must be vested in him. This implies that mere possession of goods does not confer ownership. Thus the mere fact that a party is in possession of goods does not automatically give him the right to sell. Again it could be inferred from this definition that the seller must freely or voluntarily agree to sell the chattel. Thus a seller who sells under coercion or duress cannot be said to have entered into a contract of sale. Finally it could be deduced from this definition that in a contract of sale the consideration is always the price and same could be wholly in cash or partly in cash. It is still a good consideration. Interestingly section 1 (3) of Act 137 (The Sale of Goods Act) makes it conspicuously clear that even if the seller is a part owner or a joint owner of the chattel he can still sell his part of the goods provided consideration is given. This explains why shareholders of a company can disposed off their shares. Section 1 (4) indicates that a contract of sale may be absolute or conditional. All that this means is that a contract of sale could be subjected to a preceding condition before the sale is concluded. This is what is termed as a conditional sale. For example during the price control regime of the Acheampong administration in Ghana untreated cocoa powder was conditionally attached to the sale of provisions in Ghanaian shops in order to encourage local consumption of cocoa. An absolute sale on the other hand is the situation whereby the seller sell the goods outright without any condition . SECTION 2 This section is on capacity to enter into a contract of sale. In law capacity is referred to as locus standi. The Sale of Goods Act does not create any new rule concerning capacity simply because Act 137 derives the capacity of parties to a contract from the Contract Act of Ghana (Act 25 of 1960). For this reason Section 2(1) of Act 137 reads as follows : Capacity to buy and sell is regulated by the general laws and rules concerning capacity to contract and to transfer or acquire a property. By section 4 of Act 25 a person is said to have capacity to contract if he or she attains the age of 21. However this position is no longer valid because Act 25 itself is subjected to the 1992 Constitution which makes a person of 18 years and above an adult and eligible to vote. Therefore eligibility to contract is presently 18 years.

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By this same section 2 of Act 137 , the mere fact that a contract of sale was not reduced to writing does not vitiate such a contract. Contract for sale of goods could be oral or parole. The only exemption here has to do with hire - purchase which the law insists must be written. It must also be noted that the age qualification notwithstanding Section 2 (2) provides that where the goods involved are necessaries to an infant then the age clause is waived provided the infant paid reasonable price for the goods. Necessities are defined as goods suitable to conditions of life and are actual requirements at a particular time. These naturally include food, shelter, clothing and education. SECTION 3 Section 3 of Act 137 gives certain requirements which are mandatory in certain types of sales particularly auction sale. These are categorized as follows : a) Where the goods for auction are presented in tranches , there must be separate written agreement for each tranche b) That in an auction sale, the sale is complete immediately the auctioners gavel falls. c) That until the gavel falls, the offeror is at liberty to withdraw his offer. d) That the mere mention or bidding of the highest price does not guarantee a sale d) Where there is a reserved price, the auctioneer cannot sell below the reserved price. SECTION 4 Section 4 of Act 137 is a total devotion to auction sales and it spells out the 3 main types of auction in Ghana namely 1. An ordinary auction sale Under this type of sale the conclusive presumption is that the fact the goods are put up for sale in lots does not mean they could be sold in bulk. Each item must be sold on merit and each is governed by a separate contract of sale. Again in an ordinary auction sale the ordinary rules of contract apply. It is the bidder who makes the offer and the auctioneer indicates acceptance if his gavel falls. Until the auctioneers gavel falls, the bidder may withdraw his offer. Finally nothing prevents the auctioneer from refusing a bid even if it is the highest price. 2. An auction Sale subject to a reserve price

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In this type of auction the auctioneer is expected to indicate the minimum price at which he may sell the chattel even before the auction begins. In that case the auctioneer is not bound to accept a highest bid if it is below the reserve price. The law even permits the auctioneer to set aside any sale mistakenly made by accepting a bid below the reserved price. The case of MCMANUS V. FORTESCUE illustrates this. Here the auctioneer indicated before an auction that the goods about to be sold were subject to a reserved price. A bid was made which was below the reserved price but the auctioneer mistakenly knocked down the gavel. When he realized his mistake he wanted to recover the goods to which the bidder resisted and the auctioneer sued. The court held that the auctioneer was right in recovering the goods. 3. An auction sale without reserve price If an auctioneer indicates that an auction sale is without reserved price he is under an obligation to sell to the highest bidder whether the auctioneer accepts the bid or not. In other words, in such instances the auctioneer looses his right to pick and choose. SECTION 5 This section classifies the type of goods we have under a contract of sale into 2 namely i) ascertained goods ii) unascertained goods. Ascertained Goods These are goods which are tangible and can be identified in units or other forms of measurements for either identification, measurement, registration or examination before the formation of the contract of sale. For example cartons of milk etc. Unascertained Goods These are goods which are described by sample and for which reason are difficult to identify in terms of quantity and quality. For this reason the entire lots of such goods are not examined before the execution of the contract of sale. For example purchase of fuel in large quantity. In brief unascertained goods could be described as goods which where not necessarily in existence at the time of the contract. SECTION 6 This section is on price of goods otherwise known in the law of contract as consideration. It must be noted that without consideration there is no valid contract. By section 6, the law stipulates 3 different methods of determining the price in a contract of sale. These are enumerated as follows : a) it may be expressly fixed after haggling or bargaining by the parties in the contract of sale.

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b) it may be determined by the parties in the course of execution of the contract for example on a building project, the performance of the artisan may determine his charges. c) where non of the above applies the law permits the buyer to pay a reasonable price. What amounts to reasonability here is a question of fact. However Section 7 of Act 137 proposes valuation of the subject of sale by a third party to determine reasonable price.

SECTION 8 This section is on the duties of a seller. It may be recalled that in the treatment of the terms of a contract under our study of the law of contract, it was established that the terms of a contract could be classified into 3 namely conditions, warranties and innominate terms. These are different from the classes of obligations which the law imposes on a seller under the Sale of Goods Acts (137). Under the Sale of Goods Acts, the terms of a contract could be classified into 3 namely i) fundamental terms ii) conditional terms and iii) warranties. i) fundamental terms Section 8(i) of the law imposes an obligation on the seller in the sale of specific goods to deliver goods which are exactly as what was identified and agreed upon for purchase by the buyer. Here it must be mentioned that specific goods are the same as ascertained goods and the seller has an obligation to deliver to the buyer goods in exact correspondence as to what the buyer chose. Failure to do this amounts to a breach of a fundamental obligation of the contract of sale and the buyer shall be at liberty to terminate the contract asking for damages from the seller for breach of contract. ii) Conditional terms Section 8 (ii) of the law provides that in the sale of an unascertained goods the fundamental obligation of the seller is to deliver to the buyer goods substantially corresponding to the description or sample by which they were sold. This is a a condition placed on the seller failure upon which the buyer could terminate the contract. Thus a seller who pledges to supply a buyer with ideal milk and goes to the extent of showing the buyer the kind of ideal milk she intend s to sell cannot in the end supply to the buyer carnation milk . This shall amount to a breach of section 8(2) hereof. Akin to Section 8 (ii) is Section 9 of the law wherein it is stated that in a contract of

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sale of specific goods there is an implied condition on the part of the seller to ensure that the goods he is offering for sale are in existence at the time when the contract is made. Failure to do this will amount to fraud. This is what under Ghanaian Law has developed into the doctrine of nemo dat quod non habet meaning you cannot give what you do not have. Thus Section 9 of Act 137 is meant to minimize fraud on the part of the seller against the unsuspecting buyer. However there are some exceptions to this doctrine among which is where the seller disclosed the source of his supply and same is frustrated to the full knowledge of the buyer.

iii)Warranties It flows from Section 9 that if there is an implied condition on the seller to ensure that the goods he is offering for sale exist at the time of entering into the contract of sale, then it follows that the seller has an implied warranty to sell the goods. This is what is captured in Section 10 of the law. Meaning that if a seller has not taken any consideration from a buyer and he decides at any point in time not to sell the goods again, his breach of the contract is not too serious and is in the nature of a warranty for which there is always the remedy of accord and satisfaction. SECTION 11 This section is on sale by description which is the same as sale by sample. Over here the law provides that it is the sellers duty to supply goods in exact correspondence to his description or the sample shown the buyer . This is an implied condition of sale The difference between section 11 and section 8 (2) is that whereas section 8 (2) is indispensable and must be followed by the seller at all times , section 11 is as a minor obligation to a fundamental obligation . Thus a breach of section 11 may certainly not lead to a termination of the contract . However section 11 is best understood in the light of section 49 (b) which prevents a buyer from rejecting goods sold to him due to trivial breach of a condition . In this regard the buyer is only entitled to damages for such deficiency . It is however very important to note that the seller who fulfills section 8 (2) cannot have section 11 construed against him as a condition of sale . Section 11 shall then becomes trivial obligation under a fundamental obligation . SECTION 12 This is very close to section 11 and again highlights exact correspondence as a condition of sale. Sale contracts falling under section 12 must correspond in the minutest detail with the sample or description shown. But once again this type of condition is implied and it is treated as trivial under a fundamental obligation just as section 11. It is for this same reason that section 13(1) of Act 137 insist that contract under section 12 of the Act should be free from any defect upon reasonable inspection. The case of GEORGINA TIMER V. KOOMSON illustrates this. The parties entered into an oral agreement under which the
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defendant who was a contractor was to construct a house for the plaintiff within 12 months. The plaintiff took the defendant to a different building site and showed him a model of the house she wanted. The defendant responded that he had the skill and equipments to put up a similar house and even a much more nicer one than what the plaintiff has shown him. Under the contract, the plaintiff was to pay specific amounts of money to the defendant at various stages of the construction but due to the plaintiffs inability to make payments on schedule, the work could not be completed within the stipulated time and the parties agreed on extension of time. During this period, the sorts of materials required for the plaintiffs model house got finished on the market and the defendant had to make alternative purchases. This rendered his final work different from what was shown him. Dissatisfied with the building, the plaintiff sued under section 12 and 13 for failure to deliver on quality. The court held that although the initial breach was committed by the plaintiff, the defendant in continuing with the contract without asking for damages waived his right . Therefore the final breach by the defendant was what actually constituted a breach of the contract. The model house shown by the defendant subjected the contract to section 12 of the sale of goods Act. There was therefore a condition on the defendant to deliver by exact correspondence of which his final work was an apology. SECTION 13(1) (a) This section is on quality and fitness of goods meant to be sold to a buyer. This provision emphasizes with all clarity that in a contract of sale there is always an implied condition on the seller to supply goods free from any defects at the time of sale to the buyer. This is strictly the case if the goods are of the kind usually supplied by the seller in the ordinary course of his business. But where the goods involved are not the type usually sold by the seller in the ordinary course of his business, then the parties may agree that this provision shall not apply. Nevertheless in instances where this provision even applies, the law gives the seller certain exemptions. One of such an exemption is where the buyer was given the opportunity to examine the goods to ensure that they were free from default and suitable for his use and he fail to do so. In this respect, any breach by either substantial or exact correspondence cannot hold against the seller. This circumstance informed the development of the doctrine of caveat emptor under Ghanaian Law. This doctrine simply means let the buyer beware and could be invoked against the buyer in such circumstances. It must however be pointed out that Act 137 places an onerous obligation on the buyer to be diligent in examining what he intends buying because failure to do so shall not be entertain by law as an excuse to saddle the seller with liability. On the other hand where the defect is latent, intrinsic or embedded, the seller will have the obligation to disclose such defects otherwise this exemption will not avail to the seller. Secondly section 13 cannot be invoked by a buyer where the buyer in the case of a contract of sale by sample has examine the sample in respect of defects which could have been discovered by reasonable examination. Finally section 13 cannot be invoked by a buyer against a seller where the seller does not normally sell that type of goods in the ordinary course of his business and the defects was such that he was not and could not reasonably have been aware of it.

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In examination there must be 2 criteria ; a) Unrestricted access to the chattel intend to be sued. b) The buyer should have the option to solicit the assistance of a specialist in the chattel he intends to acquire. Section 13 is best illustrated by the following cases THORNETT V. BEARS & SONS : - The plaintiff in this case went to purchase a glue. He went himself without any expert. When offered the opportunity to examine the glue in the defendants warehouse where the goods were kept in barrels , he only examined the label on the barrel in which the glue was contained and concluded that he was satisfied. He purchased same and went to use it only to realize that the glue were not of standard quality and sought to return it to the sellers to which the defendants refused to accept it. So the plaintiff sued. The court held that so far as the plaintiff was unrestricted in his examination of the glue but he himself elected to limit his examination to the content label on the barrel, his conduct amounted to a waiver of his right of examination. The doctrine of caveat emptor slaps him in the face and the implied condition in section 13 cannot be invoked. A comparison of this case to the case of WRENCH V. HOLT shows that where the buyer was not in the position to know of the defects affecting the goods he intends buying even upon reasonable examination ,section 13 cannot be invoked against him. In this case the defendant was a the owner of a beer supply depot from where he supply beer to the plaintiffs. The plaintiff was a regular customer and on this occasion detected after drinking the beer that it contained a poisonous substance which affected his health so he sued. The court held that the poisonous substance could not have been discovered by the plaintiff upon reasonable examination so he must succeed. SECTION 13 (1) (b) This section is on fitness of the goods which are reasonably fit for the intended purpose. This means that where the goods are of a description normally sold by the seller in the ordinary course of his business and the buyer expressly or by implication makes known the purpose for which the goods are required, there arises an implied condition on the seller to ensure that the goods are reasonably fit for that purpose. In this wise it must be pointed out that mere mention of brand names does not amount to indicating the purpose. It is for this reason that section 13 (2) indicates that the buyer must disclose to the seller his intended purpose for the goods. Again where by the usage of trade there have been established warranties and conditions as to quality and fitness for particular purposes in respect of goods sold in that trade then these warranties and conditions will be applied in addition to what obtains under section 13 (3) hereof.

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Besides the sellers duty as to quality and fitness of goods cover not only the goods themselves but also extends to all boxes, things, bottles or other containers in which the goods were delivered. These principles came to the fore in the case of GEDDLING V. MARSH . The plaintiff bought a drink from the defendant and after consuming the consuming the contents the bottle exploded and injured her to which the seller denied liability. The court held that the seller was in breach because the duty as to quality and fitness extended to the bottle. Thus three elements came out from this case as obligations on the seller. 1. the goods must be reasonably fit for the intended purpose in terms of specification 2. a buyer must made known to the seller the real purpose for the purchase 3. the buyer must be clear and precise in his offer. SECTION 14 This section dwells on the duty of a seller to deliver the right quality of goods requested by the buyer and is an implied condition in a contract of sale . Five main interpretations have been put on section 14. a) where the seller delivers less than the contract quantity the buyer may accept the quantity delivered and pay as per the agreed price per one . b) Where the seller delivers more than the contract quantity the buyer may not reject all the goods delivered by reason only of the excess quantity. The buyer may accept only the contract quantity but can sue the seller for cost if any of separating the goods from what he accepted. Alternatively he may accept all the goods delivered, paying the contract price for the excess goods. c) where the seller delivers both contract type goods and non-contract type goods less than the contract quantity the buyer may reject all the goods delivered. He may, however, accept all the goods delivered, paying a reasonable price for the noncontract goods. Or he may accept the contract goods and reject the non-contract goods and sue for the cost (if any) of separating the contract goods from the noncontract goods. d) in other case where the contract goods are either of the right quantity or more than the contract quantity, the buyer may not reject all the goods delivered. i) he may accept all the contract goods and where the contract goods exceed the contract quantity, he should pay the contract rate for the excess. ii) he may accept only the contract quantity and reject the excess contract goods and the non-contract goods, and sue for the cost if any of separating the accepted goods from the rejected goods.

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iii) he may accept all the goods delivered paying the contract rate for the excess contract goods, if any, and a reasonable price for the non-contract goods. Thus the only time the buyer can reject is when the goods are less than the contract quantity. The leading case here is OLATIBOYE v. CAPTAN . The plaintiff sued for recovery of a certain sum of money being the value of diamonds sold to the defendant. The defendant denied the sale contending that the quality of diamonds delivered by the plaintiff far surpassed what he requested for under the contract of sale. Moreover the defendant had just detected that the plaintiff had no license under the mining industry protection ordinance to deal in diamonds. Therefore to the defendant, he suspected the diamond to be a stolen booty and this was the reason why although he was in possession of the diamond , he has refused to pay for them. The court presided over by Archer J. as he then was pointed it out that in the light of section 14 of Act 137 all that was required of the defendant was to reject all the goods or to accept all the excess and pay for them according to the contractual price. He had no power to confiscate in the name of the excess. In any case the defendant was not an inspector of diamond licenses. His conduct was a breach of section 14. SECTION 15 This is on the fundamental obligation on the seller as to delivery . The seller is obliged to deliver the goods he intends selling. This means that the seller must be ready to part with the goods in accordance with the terms of the sale of contract. It is only when the seller has delivered the goods that the buyer can also assume the obligation to pay for the goods at the contractual price. It must be emphasized that unless otherwise agreed upon by the parties there cannot be any further haggling or negotiation or bargaining over the contractual price after delivery. In a contract of sale this type of negotiation is regarded as ubimi post factum meaning an after thought. An after thought cannot be enforced in law . The only exceptions permitted by the law are as follows : 1) Where delivery was unreasonably delayed so that the contract price become necessary for further negotiations due to the delay on the part of the seller. This exception is applicable where a fixed time was given for the seller to deliver. 2) Where the time for delivery was frustrated by an act of nature. 3) On authority of section 16(1) the sellers fundamental obligation to deliver to the buyer becomes waived immediately the buyer becomes uncertain (oscillate) as to the destination for delivery. Here it must be noted that the party causing the frequent change in destination for delivery is by law obliged to bear the resultant cost. 4) Where delivery is by post, the onus on the seller to deliver becomes waived immediately the buyer gives indication of his unpreparedness to accept the goods at the particular time agreed upon. In such regard, payment notwithstanding the seller shall not be required to deliver the goods. Rather the buyer shall be required to make
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his own arrangement to take delivery of the goods when prepared. However he must put the seller on notice when coming for the goods. 5) Where the parties have agreed to a delivery to be postponed by fixing a new date, the seller must deliver at a reasonable time and reasonable here is defined to mean the seller giving the buyer notice of delivery without failure. SECTION 16 This section is on tome of delivery and it spells out the 6 circumstances from the time of delivery could be inferred and they are as follows : a) where time is fixed for the delivery of the goods , then the goods must be delivered at the right time b) if no time is fixed for the delivery of the goods then they must be delivered within reasonable time c) even where the parties have stipulated a date and time for delivery ,with or without consideration, but later substitute a new date for delivery then in such a case delivery must e made at the new date unless a further change is made . d) where the parties changed the date agreed upon for the delivery , but did not stipulate any new date then the seller must deliver within reasonable time having regard to the circumstances which occasioned the change . e) In any contract of sale if the seller does not promise to deliver on a particular date , but merely promises to use his best endeavour to deliver the goods on or not later than a date given him , then the seller , unless a contrary intention appears , must deliver the goods within a reasonable time after that date . f) tender of delivery may be treated as ineffectual unless made at a reasonable hour .

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SECTION 17 This section places the responsibility for delivery on the seller . As already noted this is one of the fundamental obligations of a seller . However the issue that comes to the fore is who bears the cost . Section 17 sets out 2 clear panacea to this issue (a) unless a contrary intention appears in the contract the seller must bear the expenses of and incidental to putting the goods in a deliverable state . This implies that should the buyer change the agreed destination for delivery the seller is not by law required to bear the extra cost of transportation . (b) also unless a contrary intention appears , the seller should deliver the goods in exchange for the price

SECTION 18 By this section, delivery is defined as voluntary transfer of goods from a seller to a buyer whereby by a consensus ad idem reached by the parties to the contract of sale, there is an agreement on the means of transport for delivery . Unless the parties themselves stipulate some other means ,any of the following constitutes delivery to the buyer (a) where the seller transfers to the buyer actual physical control over the goods eg taking custody of tins of milk (b) where the seller transfers to the buyer the means of obtaining actual physical control . For eg receiving the keys to a vehicle (c) where the seller transfers to the buyer the documents of title to the goods For eg receiving the bill of lading (d) where the buyer gives authority to a third thirty or a carrier to receive the goods SECTION 19

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This section resolves the issue of where delivery could be deemed to have taken place in law. This provision is explicit to the effect that unless there is a contrary intention , the place of delivery is the sellers place of business , if he has one ,if not it is his residence. The locus classicus here is the case of GALBRAITH & GRANT v. BLOCK . The plaintiffs who were wine merchants claimed to recover from the defendants the price of a case of champagne which the plaintiffs had sold to the defendant on the terms that it should be delivered at the defendants premises . The defence set up was that the wine was never delivered to the defendant . The plaintiffs employed and paid a carrier to take a container of wine to the defendants premises and deliver it . The driver employed by the carrier in giving evidence said that he delivered the goods at the defendants premises at a side entrance to a man , and that someone on the premises signed the delivery sheet in the name of the defendants . The defendants said his premises were closed at the time when it was alleged that the wine was delivered that he had never received the wine and that the signature on the delivery sheet was not his signature and that he had never authorized any one to sign it . The county court gave judgment for the defendant on the ground that the carrier who was the plaintiffs agent did not deliver the wine to the defendant or to any one authorized by him to receive the wine . The plaintiff appealed . It was held that where under a contract of sale the seller of the goods is required to deliver them at the buyers premises , he fulfils his obligation if he delivers them there to a person who apparently has authority to receive them . If therefore the goods are received by an apparently respectable person ,who has obtained access to the buyers premises , and who signs for the goods in the buyers absence and misappropriate them , the loss must fall on the buyer and not on the carrier or seller . It must be noted however that in the case of specific goods ,if to the knowledge of the parties at the time that the contract was made , the goods are in some other place ,unless a contrary intention appears , then that place is the place of delivery . SECTION 20 This section is on the duties of the seller where the goods are dispatched by a carrier . If the parties to a contract of sale agree among themselves that the goods should be sent to the buyer by a carrier then it is the sellers duty to enter into a contract with the carrier on behalf of the buyer .The implied obligation on the seller over here is to ensure that the goods are safely delivered to the buyer . This is a condition of a contract of sale under section 20(1) and could lead to repudiation of the contract and attraction of damages if not followed by the seller. The case of CLARKE v. HUTCHINS amply demonstrates this . Over here a carrier was supposed to deliver the goods to the buyer , and the carrier refused to take any package whose value was more than 5 pounds unless the true value was disclosed by the seller and the appropriate charge was paid on it The seller did not disclose the true values of some of the packages and unfortunately for him those packages got lost on the vessel as a result of which the buyer also refused to pay for them This made the seller sue and the court held that by not revealing the actual value of the package and therefore not paying the appropriate charges on them , the seller has made it impossible for the buyer to claim from the carrier in case of loss .The omission amounted to breach of an implied condition by the seller and the was therefore not liable to pay for the goods.
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On the authority of section 20(2) unless a contrary agreement exists where the goods are to be sent to the buyer by a route involving sea or air transit , and it is the buyers responsibility to cover the goods with insurance , then it is the seller duty to put the buyer on noticeto do the insurance . If the seller fails to notify the buyer , with the result that the goods are not insured, the seller will bear responsibility for any loss ,damage , or deterioration which may occur to the goods during such transit . It is for this reason that we have two main contracts of export by sea. C.I.F. and C.F. A contract is always presumed in the absence of agreement by C.I.F.(cost insurance & freight). However where the parties do not want CIF to apply they must expressly state that the contract is covered by C..F. alone(cost and freight). In brief the obligations of a seller are nothing but safety precautions meant to be exercised by the seller in order to secure the consideration provided by the buyer. This provisions are a novelty in the Ghanaian law and unknown to the common law. That is the more reason why under Ghanaian law there is said to be caveat vendetta. A breach of any of this provisions would entitle the buyer to a refund of his consideration and damages for breach of contract. SECTION 21 This is on the fundamental duties of buyer under a contract of sale . Under section 21 of Act 137 , the buyer has 2 fundamental duties in a contract of sale and all these are to be treated as conditions : (a) to pay the price for the goods at the agreed price (b) to accept delivery of the goods either under exact correspondence or substantial correspondence (c) unless the parties agree otherwise stipulations as to the time for accepting delivery is are not to be regarded as conditions of the contract unless expressly agreed the buyer is not bound to accept delivery in installments

(d)

This is where the doctrine of caveat emptor becomes applicable. This doctrine was not invention in Ghana but received under Common Law. This principle occur under the following circumstances. I . Every buyer has a fundamental obligation to examine goods before purchase otherwise he shall be deemed to have acquiesced to any defect affecting the item so purchased . SECTION 25 & 26 These sections are on transfer of property in goods . The rules governing this area of the law as to transfer of property in goods depend on the type of goods involved in the sale contract. Fundamentally there are three types of goods namely :- i) Ascertained or Specific Goods ii) Unascertained Goods iii) Goods delivered on sale or return basis ( which could either be specific or unspecific goods .

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i) ASCERTAINED GOODS Ascertainment has been defined as the setting aside ,earmarking , the separation or the final preparation before the goods are delivered to the buyer . The general rule is that property in specific goods passes at a time the parties intended it to pass. When such intention appears the law distinguishes between title and possession. Title to specific goods are often not in dispute but possession of it and the effective date of possession are the controversial area. In the absence of any intention by the parties as to when property in the goods was to pass , the law deems it to have passed at the time when the goods were delivered .Ascertained goods are goods which are examinable before purchase. The concept connotes examination of the goods in its entirely. Where the situation invites trust confidence and believe in place of examination, then the sale contract did not concern ascertained goods. ii) UNASCERTAINED GOODS Goods are said to be unascertained when at the time of delivery it could not have been previously examined by the buyer . In another sense, goods are regarded as unascertained where due to the nature of the product the buyer could not have been in the position to examine the goods in its entirety in terms of quality. It is for these reason that in all sale by sample or description are classified as delivery of unascertained goods. It must however be re-emphasized that unascertainment is determined by the type of goods using determinants such as packaging , taping, composition and measurement. The overriding principle in this type of sale contract is that the property passes only when the goods have been ascertained . Ascertainment is the process before which a prospective buyer is given the opportunity to thoroughly examine the product he intends buying by simple unit in order to distinguish it from those he regarded as inferior. When ascertainment is impeded by the package, composition, measurement etc such goods become unascertained. Whether or not there must be an ascertainment is determined by the type of goods on sale be it by substantial correspondence or exact correspondence. GOOD DELIVERED ON SALE OR RETURN BASIS OR APPROBATED/HIRE PURCHASE This is a sale whereby the goods are delivered after examination to a prospective buyer with the common understanding that the goods shall be kept by the buyer over a period of time and where possible the buyer starts utilizing the goods delivered even before payment. It is the type of sale in which the seller has the right or power of lien. A lien is a right exercised by an unpaid seller to reverse the sale due to default in payment. In this type of sale the law requires an agreement between the parties to the effect that until the goods are fully paid for the buyer has no right to transfer to a third party otherwise this will amount to fraudulent misrepresentation. The law on sale on return is that the buyer in possession is regarded on holding an invitation to threat and not an offer. For this reason the seller reserves the right to terminate the sale at any point until 50% of the consideration is provided. Again it must be borne in mind that under (NRCD 96) Mortgages Decree , every hire purchase must be put to writing.

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With such goods property passes under the following conditions unless the contrary appears (a) the buyer must signify his approval (b) the buyer must do an act adopting the transaction In this context the case of WEINER V. GILL demonstrates this . The plaintiff was a manager of jewel shop and she gave a set of necklace to a retailer on approbation sale. The retailer in turn gave the necklace to a third party. The third party was in dire need of money and took it to a pawn broker who also hired it out for sometime. When the plaintiff could not recover the jewel from the first recipient she conducted her own investigation which disclosed that the goods were with the pawn broker. She therefore sued the pawn broker. The pawn broker argued that he had possessory ownership of the necklace because it was used as a security for a loan. The court held that so long as title to the necklace did not pass from the plaintiff to the retailer then no person is deriving title from the retailer could have a good title to the necklace. The only weakness of the plaintiffs case was her failure to have sued the defendant jointly and severally with the other person who was in possession of the necklace. CIRCUMSTANCES UNDER WHICH PROPERTY WILL PASS TO THE BUYER UNDER SALE ON APPROBATION 1) Where after examination the buyer signifies his acceptance of the goods by asporting(taking ) the goods to his preferred destination . 2) Where prospective buyer by his conduct deals with the goods in the manner which is inconsistent with his right over the goods. 3) Where the goods are utilized or consumed it invariably creates the presumption that the buyer has accepted the goods. Therefore there cannot be any alternative remedy than specific performance. This is what is referred in the law of tort as conversion / trover / Ditinue. The case of GENN V. WINKEL . The subject matter of this case is a heir loom . The plaintiff use the golden heirloom to secure a loan from the defendant. The defendant also used it to secure a loan from the third party who cretin used it to secure a loan from the fourth party. The plaintiff sued for the recovery of the heirloom from the defendant only for the defendant to demand for the return of his money before handling over the heirloom . The court held that the defendants conduct was inconsistent to his right to the goods. The passage of the goods to a third party was a conclusive evidence of the defendants intention to pay for it. Therefore the plaintiff must recover on conversion. 4) Lapse of time for payment the effect of lapse of time is that by so doing the goods passes to the buyer and he becomes compelled to buy them . The case of ELPHIC v. BARNES . The plaintiff sold a horse to the defendant on return basis.

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The expiration state for indication of acceptance was 3 days. The defendant did not pay for the horse within the 3 days and the yet continued to keep the horse. The horse fell sick on the third day and again the defendant failed to notify the plaintiff. On the 8th day the horse died. When the plaintiff was told of this, he immediately demanded for the sale price of the horse to which the defendant refused to pay arguing that once consideration has not passed, the sale on return basis remained on invitation to treat. The court held that so long as the expiration date for the sale on return elapsed and yet the defendant kept the horse, the defendant by his conduct adopted the transaction as complete therefore he was to remedy the plaintiff for the loss by paying for the horse together with the cost and damages. SECTION 27 This section is on transfer of risk . In a sale transaction, risk arises in 3 essential situations a) where there is a lost b) when goods are damaged c) When the goods are destroyed or perished. Usually the transfer of risk is on the seller at the beginning of the contract . It is only under the following circumstances that it becomes transferred to the buyer 1.On the authority of section 27(1) risk for possession of goods get transferred to the buyer immediately the parties agree that the goods should pass to the buyer. In other words if the parties have set a particular date whereby the goods will get transferred to the buyer the law will give effect to that date. 2.However in the absence of any exact time by which the goods will pass to the buyer risk of transfer is still said to be on the seller and shall pass to the buyer only property in the goods pass to the buyer . 3.It therefore need not to be over emphasized that whenever there is a delay with regard to delivery the person who causes the delay assumes the risk of transfer of any loss, damage or deterioration . This is provided for by section 27(3) and is the principle of law which informed the courts decision in STERN v. VICKERS . In this case the plaintiff sold to the defendants120,000 gallons of spirits out of which 200,000 was stored in a tank .A delivery order was issued by the plaintiff to the defendant . However the defendant did not act upon the order for sometime until the spirits deteriorated .It was held that since the spirits would not have deteriorated if the defendant had acted timeously, the defendant was liable . 4. Where any of the parties is in possession of the goods in his capacity as a bailee then he must take reasonable care of the goods otherwise if there is any loss , damage or deterioration of the quality he shall be held liable .

SECTION 28

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This section is on the transfer of property by a non owner. The fundamental principle of law here is that of nemo dat quod non habet meaning you cannot give what you dont have. In other words, the transferor cannot transfer a better title to the goods than what he himself possesses. However the application of the equitable maxim Equity looks at the intent rather than the form had come to mitigate the hardship likely to be suffered by an innocent purchaser without notice. To be able to give exemption to the strict application of section 28, the law provides the following exceptions under section 28 (2) . 1) It does not affect the operation of the doctrine of estoppel . 2) It does not affect any power of sale which may be conferred under an enactment of parliament 3) It does not affect a contract of pledge or otherwise Section 28 explains why the nemo dat quod non habet principle has become an ancillary (subsidiary) to caveat emptor and distinguished by caveat vendetta. On the authority of section 28(2) the nemo dat quod non habet doctrine will not apply where the true owner of the property intended to be sold or sold committed laches and acquiescence. If the court suo matto makes an order for the sale of a property, the buyer obtains a good title against an innocent purchaser without notice and the nemo dat quod non habet rule shall not apply. The case of DCH AMOAKO V. CIVL AVIATION AUTHORITY. In 1983, the plaintiff was arraigned before the citizens vetting committee (CVC) for tax evasion. He was found guilty and his punishment was to forfeit a three storey building at the Airport Residential Area known as the Aviation House. The CVC offered the property for sale to make up for the tax evasion. The defendant herein purchased the property and turned it into an office annex. In 1992, with the promulgation of the constitution, the plaintiff commenced an action against the defendant for the recovery of his property. The court held that once the defendant purchased the property by a judicial sale and the forum which auctioned the sale itself was established by law, the nemo dat quod non habet doctrine shall not apply. In that case the true owner of the property becomes estopped . Estoppel could take several forms including the following :ESTOPPEL BY NEGLIGENCE : - In certain cases, the owner of a property will be estopped where his negligence was the proximate cause for a third party assuming ownership over the property. The case of MERCHANTILE BANK OF INDIA V. CENTRAL BANK OF INDIA illustrates this . A man by name Nasif Bharanika executed a number of contractual projects for the Indian government for which the government paid him by cheques. He falsified some of the cheques into huge sums of money. When he presented the cheques to the plaintiff bank the plaintiff bank did not thoroughly scrutinize the cheques but rather forwarded it to the defendant bank. The defendant bank readily endorsed the cheques as valid for payment relying on the first examination by the plaintiff bank. Upon the receipt of the cheque, the plaintiff bank also relied on the clearance by the defendant bank and paid. It was when they sent their pay vouchers from the central bank for re-imbursement that it was detected that the cheques were forged. The two banks blamed each other for which reason the plaintiff sued . The

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court held that the two banks were separate institutions whose right and liabilities were not the same. The court further held that the defendant bank being a central treasury was negligent because it was their classification which made the plaintiff bank pay and cannot deny liability. They were estopped from denying liability by their own negligence.

ESTOPPEL IN REM. : - This happens in instances where the seller is very much aware that the chattel is a subject matter of dispute and yet he continues to sell it. In this regards, the circumstances under which the seller disposed off the chattel shall operate to estop his claim of title to the chattel. This principle was well captured in TOTAL OIL PRODUCT V. MANU. Manu bought a piece of land from Oyoko stool of Ashanti. The said Oyoko stool was contesting with the Kokofu stool over ownership of the land. Manu was aware of this so after purchasing the land, he in tun sold it to the plaintiffs Total oil Product who were constantly harassed by the stool and eventually they sued Manu for recovery of their purchase price. Whilst in court, the kokofu stool called Manu to testify for them to the effect that there was a pending litigation to the land before his purchase. Manu was estopped by the court from giving evidence in this line simply because he cannot take undue advantage to render as a nullity a transaction he supposedly entered into lawfully. He was estopped in court from testifying altogether. ESTOPPEL IN PESONAM : - This is a situation where the actual person in breach is by a judgment of the court estpppel from doing what he has done again. Such judgment extents to his privy, agent, assign servant. The fundamental principle behind estoppel in personam is intereste republicae et finis litium. Meaning it is in the interest of the Republic that litigation must come to an end. ESTOPPEL PER RES JUDICATEM : - This is a situation where one brings an action against a person he had sued before and lost for the 2nd time over the same property . The risk of re-opening litigation over which a judgment has been given in respect of the same subject and parties shall be deemed to be making a new law but fundamentally it is not the duty of the courts to make laws but to interpret the law. This is the principle known as Est juridices et jure credere. A judge interpret the law, he does not make law. SECTION 29 This section is on DISPOSITION UNDER VOIDABLE TITLE Where a person who has a voidable title to goods offers for sale or pledge the sale of any such goods , the sale could be declared nul and void by a person who has a better title to the goods . This is an extension of the nemo dat quod non habet rule. The fundamental principle is that you cannot put something on nothing and expect it to remain there. Et nilili est nuhulus . The only exception to this rule is where the disposition was made in utmost good faith. Uberrimae fidei. This exception equally applies to a mercantile agent (sellers liability).

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SELLERS LIEN / RIGHT A sellers lien could broadly be classified into three namely 1) Right to lien 2) Stoppage in transit 3) Recovery and re-sale of chattel 1) RIGHT TO LIEN - This is meant to mitigate the loss of a seller. It is a right of a charge exercised by an unpaid seller to re-claim or seize the goods sold out simply because the buyer has not paid for them within the schedule period. The law confers on such a seller the right to re-sell the goods in full and final satisfaction of the unpaid price. Within a lien there are 2 types namely General Lien and Specific Lien. a) GENERAL LIEN is exercised by a seller in a situation where the contract agreement stipulated that in the event of default in payment the seller could attach any property whatsoever. Section 34 therefore is a typical example of a general lien. This section further categorise general lien into 3 namely Equitable lien, Possessory lien and particlar lien. i. EQUITABLE LIEN this is the type of lien where the general goods so attach is equivalent to the sum owed. ii. POSSESSORY LIEN this is exercised by the unpaid seller in anticipation of payment from the same buyer. The seller only has equitable interest but no beneficial interest in the property seized. In other words he can keep a confiscated property on the buyer for sometime but has no right of instant sale. iii.PARTICULAR LIEN this arises where a buyer actually never parted with the particular goods or property to the seller but mentioned it to the seller as the specific item to be attached in the event of failure to payment. In that event the buyer cannot make an alternative item available to the seller when it comes to executive. b) SPECIFIC LIEN - It is the same as particular lien. SECTION 36 & 37 STOPPAGE IN TRANSIT This is another right reserved for an unpaid seller . This concept arises where an unpaid seller manages to recover possession and title to the goods before delivery is made to the buyer. In one other sense stoppage in transit could mean the seller refusing to confer legal title to the chattel to the buyer simply because the buyer has

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defaulted in payment. Possession of the goods of the buyer notwithstanding stoppage in transit arises where the buyer perpetrated fraud on the seller. It again arises where the seller does unlawful delivery through misrepresentation. Finally it arises where the buyer has gone bankrupt .(Section 38 ) SECTION 40 This section shows how stoppage in transit could be exercised. The law mentions 3 specific methods which are as follows : 1. it can be exercised by taking actual possession of the goods. 2. by giving notice either to the carrier or its principal. 3. by the principal instructing his servants or agents to return the goods before they are mistakenly delivered. In all these it must be borne in mind that a sellers right of stoppage in transit is lost when the seller agrees to a re-sale of the goods or a disposition to another buyer. Again the sellers right to stoppage in transit becomes lost where the buyer disposes off the goods in such a way that a third party acquires a valid title over it under the nemo dat quod non habet rule. RECOVERY AND RE-SALE This type of recovery has to do with where final delivery was made to the buyer and the goods were delivered to the final destination of the buyer. SECTION 41 This section is on the rights and duties of a carrier. In brief a carrier has the following duties : 1. he has priority over the sellers right of stoppage 2. where the seller successfully exercises his right of stoppage in transit over the goods he must inform the carrier what next he must do with the goods. 3. where a need arises for re-delivery then the seller must pay for the extra rate. SECTION 42 This section is on the insurance cover for goods sold out. The law is certain to the effect that where the goods are insured then the seller must be paid for any loss arising out of any damage. Other wise in all other cases the buyer has to bear the cost of damage. SECTION 44 This section captures the circumstances under which the sellers right to recover possession of goods delivered to the buyer may arise

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1. where property in the goods have not passed to the buyer 2. where a clause in the sale contract confers a right of re-possession on the seller after a breach by the buyer 3. where the buyer breaches his fundamental obligation by failing to pay for the price in accordance with the terms of the contract

SECTION 49 REMEDIES OF A BUYER - Essentially a buyer has two main remedies namely Sue for the price and sue for non delivery or specific performance. All this rights are conditions which when breached will automatically terminate the sale contract. It must however be noted that whenever a buyer buys goods under innocent misrepresentation, the term so misrepresented becomes an innominate clause. SECTION 49(2). If there is a contract of sale by installment such a contract becomes divisible contract in law and each consignment of sale comes with its own right and liability. The buyer is at liberty to reject any consignment. The terms of each consignment stands on its own. But most often that not trade practices usages and conventions of that particular field of business will bind the contract. SECTION 59 Is an explanation of terminologies in commerce. C.I.F. - Cost Insurance and Freight F.O.B. Free on Board C. & F. Cost and Freight F.O.R. Free on Rail F.A.S. Free Along Side SECTION 60 On the authority of section 60 of the Act it is the duty of the seller to obtain the necessary export license and this must include C.I.F. By section 60(2) it is the buyers duty to obtain the necessary import license and this include F.O.B. On the authority of Section 60(4) in a C.I.F. contract as will as any express agreement as to whether payment should be made to any party to the contract is determined by their statutory obligation. SECTION 61 On the authority of section 61 C.I.F. is always on the seller. The seller has on obligation to transfer the C.I.F. document to the buyer before the goods arrive. Nothing stops the seller from surcharging the C.I.F. on the goods.

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Section 60 is on F.O.B. contract. Every buyer is under an obligation to take an F.O.B. contract except under the following circumstances. 1) Where apart from destination of the shop the buyer give indication as to where he would like to the vessel to off load the goods for him. In that respect the risk and responsibility of C.I.F. between the final destination and the new destination falls on the buyer. 2) Should the buyer select his own carrier to convey the goods, it does not in any way waive the C.I.F. responsibility on the seller but the insurance company can deny liability. 3) In an F.O.B. contract unless the contrary is expressed, the seller is bound at his own expense to have the goods loaded into a vessel chosen by the buyer. 4) Under an F.O.B. contract, a seller is bound to transmit the C.I.F. and the bill of lading to the buyer before the arrival of the goods. 5) When the bill of lading of the goods is delivered by implication of law, property in the goods get transferred to the buyer. Where the bill of lading is delivered upon the order of the buyer property in the goods get transferred to the buyer immediately the goods are shipped.

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HIRE PURCHASE
This is a classical example of sale on return basis. It is Common Law device meant to ensure durability of currency and maximization of profit. The law on hire purchase is strictly an application of the common law. On the authority of section 74 of act 137 the Minister of State responsible for trade is seised with the power of delegated legislation to make rules by way of executive instrument to govern the mode and manner by which hire purchase should be conducted. The powers conferred on the minister notwithstanding section 72(2) of Act 137 requires certain essential element in every hire purchase agreement which are : i) The form of the contract Hire Purchase must be expressly stated. ii) The rate of interest and other charges must be expressly stated. iii) The minimum deposit to be paid by the buyer must be expressly stated iv) The maximum payment period by installment must be expressly stated. v) The appropriation of any payment made by the buyer for all other goods purchased on hire purchase must be expressly stated. vi) The express terms of the hire purchase must be present. From all these it is obvious that a hire purchase agreement must always be in writing. It is for these reason that a complete new law developed totally was passed in the form of NRCD 292 (Hire Purchase Decree). Section 8 of the decree provides that where the seller has recovered 50% or more of the sale price the law will not permit him to enforce recovery of the items sold unless he is given the right to do so by a court of competent jurisdiction. EXCEPTIONS 1) The purchase of gambling machines. Section 3 of Act 174(Gambling Act) provides that no person shall sell or let out a gambling machine. He can only do so with the express consent of the Minister of Interior. 2) The lotteries and betting Act (Act 31 of 1960) section 1(30 of this law states that the tickets and coupons for any such game shall not be on sale by hire purchase otherwise the perpetrators shall be liable to imprisonment.

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3) Prices and regulation law (LI 805 of 1973) sect (1) of this regulation states categorically that no person should increase the price of any chattel or service already sold on hire purchase without the prior consent and approval on writing of the prices and income board. UTC MOTORS V. J. OKORO The defendant bought some vehicles on hire purchase from the plaintiff and could not pay for them within the schedule time. He went to negotiate for extension of time to which the sellers agreed. When the managers of the plaintiff company heard about this, they held their own agent who did the negotiation personally liable and declared the negotiation as illegal. They tried to retrieve the vehicle to which the purchaser disagree and went to court. Without mincing wants, the court declared that so long as 50% of the sale price has been paid, it cannot be retrieved. MASON V. BERMINGHAM The plaintiff sold wine to the defendant on hire purchase to which the defendant made 48% of the purchase price. The defendant intend transferred the wine to a retailer whereas he has not fully paid for it. When the plaintiff got wind of this he sued the defendant for recovery of the wine. The court held that under a hire purchase agreement until full and final payment is made by the buyer legal title to the chattel sold still vest in the seller. He therefore cannot dispose off it without the consent and concurrent of the seller. NISBLET V. CONFECTIONARIES LTD. The court held that the buyer can dispose of the chattel where he has paid 50% of more of the sale price. DANSO V. TAYLOR Danso was an agent for G.B. Olivant, he had a number of retailers to which he consigned goods. Among this retailers was the defendant. The defendant was to pay within 21 days. The defendant had paid 53% of the sale price yet Danso recovered the goods unpaid for. Invoking section 8 of NRCD 292, the Kumasi high court held that so long as 50% of the sale price the goods could not be recovered. The contract was therefore incresible. MENSAH V. OSEI The plaintiff was installed as a sub-chief in Kumsi. He approached the defendant his old time friend to hire six sets of kente cloth and other ornaments on hire purchase. The plaintiff was to pay in 3 months time. Because of mutual trust and respect the contract was not reduced to writing to which the defendant defaulted in the 3 months time. The plaintiff sued and surprisingly the defendant came out to say that goods were gift inter-vivos. Technically judgment was entered for the defendant simply because every hire purchase contract must be reduced to writing. YAYO V. NYINASE In this case the Accra high court held that if a hire purchase agreement is not put to writing, the seller cannot enforce it against the buyer but the buyer can enforce it against the seller. DIFFERENCE BETWEEN CONDITIONAL SALE AND HIRE PURCHASE

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1) In conditional sale payment is outright whereas in hire purchase payment is deferred. 2) A conditional sale could be reversible but hire purchase is irreversible so long as 50% of the purchase price is paid. 3) In conditional sale the buyer is vested with both legal and beneficial title immediately he pays for the goods but in a hire purchase until full and final payment the buyer has no legal title. 4) Every imaginable item could be governed by conditional sale but hire purchase has limitations. 5) A conditional sale is a standard contract to which the buyer has no bargaining power but hire purchase is subject to negotiations. 6) When a conditional sale could be made orally, every hire purchase must strictly be put to writing.

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ALTERNATIVE DISPUTE RESOLUTION

Since the reception of the court law through the passage of the judicature Act of 1876, the court system inherited in the Gold Coast has been adversarial without reconciliation. This has in its wake brought about blood feud and tensions between persons and families. Figuratively the situation was to be compared to the hammer and anvil. It was in the light of this tension that the ADR system was invented as an optional method for rejoining disputes without tension. PROS 1) It promotes reconciliation simply because whereas the traditional court system is governed by winner take all, in ADR the principle is equal pacification. 2) It sues time. It needs not be over emphasized that the traditional court is overloaded inundated with cases. For this reason cases undergo long adjournment making litigation costly and time wasting. With regards to ADR elders hearing a case hardly adjourn without a decision. It is only in very rare circumstances that they would adjourn to take a decision even though the hearing must have finished. 3) It promote real justice based on truth entire society benefits, and moral conscience. This is unlike the traditional court system which gives judgment and intricacies of lawyers. 4) It reduces cost 5) The forum does not create congeniality. 6) It promotes will unformed decisions simply because when cases are referred to ADR And they are technical in nature, the parties themselves ensure that the case is handled by experts. Comparatively speaking, the traditional law courts in Ghana are manned by judges who most often that not have no practical experience in life neither can they boast of any knowledge apart from the general knowledge of law. CONS 1) It has the tendency to breach

the doctrine of

natural justices. This is simply

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because the rules of court prohibiting bias by curtailing an interested arbitrator from going into a matter which affects him are not strictly applicable in ADR. Adjourned to this is the fact that sometimes cases at ADR are not determined on merit. Consideration is often given to age, prominence, vocation and royal status which sins against the doctrine of audi alteram partem. 3) ADR from experience over the years do not completely and effectually terminate disputes. It has become a stepping stone to the law court. Therefore it is criticized as rather a medium of prolonging litigation.

3) Verdicts given at ADR are said to be based not on empirical evidence but rather Morality and superstition beliefs. 4) Finally it is an imposed justice system without the right of appeal. As the custodian of the land, the indigenous African cannot ignore this invitation. For this reason most people involuntarily submit to their court. Much more interestingly parties dissatisfied do not have the right to appeal than to go to the traditional law court. This procedure tends to make ADR a duplication. ADR could be classified into 3 namely Arbitration, Mediation and conciliation. ARBITRATION It is an informal method of resolving disputes whereby non professional lawyers and judges are made to go into matters. The people adjudicating the case are referred to as arbitrators but where the subject involve a specialized knowledge specialist are called upon to handle the dispute. The specialized are referred to as an Arbitrators. In arbitration, the sitting arrangement of the parties do not matter likewise the sitting arrangement of the arbitrators. What is important is for them to remain neutral. Under the judicature Act of 1876 every arbitration is to conform to the principle of natural justice, doctrine of equity and good conscience. Therefore at every arbitration, the disputant are to be given the opportunity to state their case and must be at liberty to call witnesses. It must however be emphasized that there is no rigid method for conducting arbitration. The defendant court be asked to state his case first. Likewise a party need not finish his case and call all his witnesses before the other party is heard. Witnesses from each side could be interspersed. Finally in arbitration the disputant may not be permitted to cross examine each other rather the team of arbitrators may do so on their behalf. Cross examination could be the presence of the arbitrator. The most remarkable thing which distinguishes arbitration from all other forms of ADR is that the parties are pitched up against each other without a middleman yet confrontation is minimized. Realising that most arbitration were not bringing litigation to an end, the first Republican parliament of Ghana passed the Arbitration Act of `960 (Act 37). By section 20 of this act the provision is made that where the disputants submit themselves to this law that on an going arbitration between them should be govern by this law. The law shall require the arbiters or arbitrators to

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reduce their findings into writing to be signed by both disputant as the full and final compromise between them without any further recourse to the law court. Section 20 operate as both estoppel per res judicatem. Section 74 of the courts Act (Act 459 of 1993) gives credence to arbitration. Te law states that the court must promote reconciliation between families and blood relations by encouraging out of court settlement. Further more matter for settlement out of court must not be a felony. Where parties settle out of court and it is successful the law obliges them to reduce the settlement into writing and furnish same on the court to adopt it as a consent judgment which cannot be appealed against. It also operates as an estoppel. MEDIATION It is another form of ADR mechanism where due to common hatred, bitterness and rancour settlement comes to a deadlock. The mediator in this respect must be a common choice of both parties and preferably a confidant by both parties referred in law as Alter ego or a mediator for short. He is also sometimes referred to as an intercessor. The work of a mediator is completely different from an arbitrator or arbitor. Whereas an arbitor is absolutely impartial, a mediator is bias because he hold the brief of one of the parties who come consult him. In mediation the mediator cannot introduce his own term, he must always act within instruction unlike arbitration whereby an arbitrator can impose a fine on the defaulting party. In mediation whenever new proposals are made, the mediator is to postponed the meeting and consult the parties. This means that a mediator could be sued if he acts in ultra vires. Unlike arbitration in mediation the final decision does not lie with the mediators. It lies with the parties themselves. Again unlike arbitration there is no common change for the mediators. Each party must negotiate the mediators change. Finally mediation is not expressly mentioned by Act 459 but where the parties themselves submit the out come of a mediation to the court, the court must adopt some as its judgment. CONCILIATION - It is another method of ADR. It is a system whereby the parties appoint a common adjudicator to sum and psyche them into coming together. The conciliator must do it in such a way that they will be accepting each other at their knowing. By this method the adjudicator is referred to as a conciliator and is required to confer with each of the parties separately under the impression that they have a genuine case against each other. In conciliation the sitting arrangement is very important. It establishes neutrality. The conciliator must not establish proximity to one party at the exclusion of the other. He must endeavour to promote the principle of parri passu. The conciliator must be extremely careful in not pitching the evidence of the parties against each other. He has a fundamental obligation to ensure that he does not betray their secret to a third party. Finally fanatics and supporter or even family members should not be entertained at conciliation It must however be pointed out that the only disadvantage of conciliation is mutual hatred by the parties after they have reconciled for the conciliator because he has trespassed into their secrecy. It must however be pointed out that where the conciliator seek permission from the court to reconcile the parties then by section 74 of the court Act he has the duty to announce settlement in court.

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DIFFERENCE BETWEEN MEDIATOR AND CONCILIATOR 1) Although both mechanism aim at promoting unity, they leave in their wake marked differences. 2) Whereas the mediator is on alter ego between the parties, in conciliation the conciliator skins and psyches the parties into accepting each others. 3) Whereas in mediation the mediator is biased and prejudice, in conciliation the conciliator assumes impartiality. 4) Whereas in mediation confidentiality is absolute in conciliation there could be secret leakages meant to psyche a party into spitting or compassion. DIFFERENCE BETWEEN ARV. AND CONCILIATION 1) Whereas arbitration is handled by one or more persons, conciliation is expediently handled by a single person. 2) Whereas arbitration is held in the open, conciliation is held in camera. 3) Arbitration has the tendency to involve specialist whereas conciliation is the field for the laity. 4) Finally whereas arbitration involves wrong finding, conciliation focuses on the things that could rather unite the persons. CONTRACT - Under the posted rule, an offer is raised immediately the offer letter is posted. It must be validly addressed. However the offer becomes valid only when it is received by the offeree.

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- LECTURE 13 -

CONTRACT OF EMPLOYMENT (LABOUR ACT , ACT 651 , 2003) ________________________________

Until the recent passage of the Labour Act ( Act 651 , 2003 ) , different laws with concerning employment were operated in Ghana . These ranged from the Labour Decree , Trade Unions Act , Industrial Relations Act to the Factories Act . However these laws concerning employment in Ghana have been consolidated under the Labour Act , Act 651. It must however be pointed out that Act 651 does not apply to employment in the Ghana Armed Forces , the Police Service and all the Security and Intelligence Agencies . Essentially speaking an employment contract could be defined as a situation whereby a person otherwise known as an employee who possesses special skill or training is required by another person known in law as an employer for the utilization of his skill or service for a reward and upon specific agreed terms . A. TYPES OF EMPLOYMENT Essentially speaking the are two types of employment in Ghana namely ; a) Contract of Employment b) Contract for Employment a) A Contract Of Employment This is classified as the type of employment whereby the employee is engaged by the employer so long as he or she remains below the statutory retiring age of 60 years. Provided also that the employee does not violate any of the conditions forbidden by the terms of his employment. Thus this type of employment is referred to in some legal quarters as permanent employment. Permanent because the contract of employment is

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never renewed so long as the employee conforms to the terms of his employment and is not 60 years or above. Examples of such employment are civil servants and all manner of persons serving in the public service except politicians. It is very difficult to determine as to whether the simply employment of a person is in the nature of a contract of employment especially when there is no provision to this effect in the letter of appointment. It is for this reason that Act 651 states categorically at section 12 (1) that where a person is employed for a period equivalent to 6 months or more within 1 year such employment shall be regarded as contract of employment. The exact provision of the law is as follows : The employment of a worker by an employer for a period of six months 55 Or more or for a number of working days equivalent to six months or more within a year shall be secured by a written contract of employment The rationale behind this provision was to forestall an emerging situation in Ghana whereby employers developed the habit of intermittently terminating peoples employment whenever it was close to 6 months and re engaging them just to avoid the employees qualification for consideration as people doing contract of employment. With the new law irrespective of the fact that a person might not have worked continuously for 6 months if it is still found out that within the year he has worked be it continuously or intermittently for a total period equivalent to 6 months the employee still becomes qualified as a person doing a contract of employment. One other feature of contract of employment is that all the employees in such a system become entitled in the event of injury or death to a claim under the Workmens Compensation Act. This is to say that the employer has the responsibility to insure all his employees in the name of the company so that in the event of injury the company could make the requisite claim for compensation for the employee. This is unlike ordinary insurance where the worker could make personal claim directly to the insurance company. Again every machinery , equipment or vehicle of such a company must also be insured against the employees of the company and the employees alone . Thus if any person not employed by the company should permit himself to be injured by any such machinery or equipment it becomes his personal risk and the company is not liable. Finally, in a contract of employment there is monthly salary, social security contributions and other working incentives needless to mention periodic promotion. The decided case of MANSA VRS. S. I.C. illustrates this point. In this case the plaintiff was a petty trader in Accra but residing in Tema. She was among a number of persons who conveyed at Danquah Circle in the evenings for a possible means of transport to Tema. A driver of one of the GHAPOHA buses who had finished conveying staff decided to take passengers on board which included Mansa. In the course of the journey the bus skidded off the road and somersaulted leading to the amputation of Mansas legs. She sued S.I.C. being the insurers of the bus for GHAPOHA for compensation but the writ was dismissed by the

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court on the grounds that the vehicle was covered by the Workmens Compensation Act and not an ordinary insurance. So long as Mansa was not a staff but risked to join the bus she did so at her own folly. b) A Contract For Employment This is the type of employment whereby a person with a special skill or training who operates on his own is engaged by an employer for a specific contract to be completed within an agreed time for an agreed reward. In such transaction the employee may be working for the company yet he is still regarded as an outsider. For example, a mechanic 56 engaged to fix a number of air - conditioners for a company. The company does not owe such persons any duty of protection different from the general duty it owe to the public. Besides such persons are entitled to a contract fee and not monthly salary. Further more any injury sustained by them on the work does not affect the company although nothing stops the company from giving such people some form of medical assistance but this is not a legal obligation. Arising from such injury they can make a claim from an insurance company provided they have insured themselves with that company otherwise they are not covered by the Workmens Compensation Act. Thus if such persons tamper with the companys machines and equipments and they get injured they do so at their own risk without any form of compensation. Finally, the end of a specific work which they were engaged to perform severs their relationship with the company. As a matter of fact the law shall regard them as trespassers if they are found on the premises of a company for which they once worked for.

DUTIES OF AN EMPLOYEE 1) He must exercise due care in the execution of work assigned him. By the 1993 ILO Convention on Labour an employer of more that ten is by law required to promote division of labout in order to ensure dexterity. In order words, a worker has a fundamental duty to avoid waste and injudicious use of tool and equipment. 2) He must be obedient towards the laws governing his employment. 3) He must observe precautions towards his colleague workers. 4) He must protect the interest of the employer taking note that mere partition of labour does not take away corporate responsibilities. 5) He must take proper care of the properties of the employer under his immediate control. 6) He must work consciously , punctually and regularly. In other words the worker must

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avoid malingering. 7) He is to enhance productivity. In other words, a worker must not confine his duties and responsibility to his personal will and what he has been strictly shown to do. Anything which is in furtherance of his employment must be his responsibility. 8) Work conscientiously in the lawfully chosen occupation. 9) Report for work regularly and punctually. 57

10) Enhance productivity 11) Exercise due care in the execution of assigned work 12) Obey lawful instructions regarding the organization and execution of his or her work; 13) Take all reasonable care for the safety and health of fellow workers. 14) Protect the interests of the employer 15) Take proper care of the property of the employer entrusted to the worker or under the immediate control of the worker.

DUTIES OF AN EMPLOYER Section 9 of Act 651 of 2003 spells out the following to be included in the duties of an employer :1) provide work and appropriate raw materials , machinery , equipment and tools for the employee 2) pay the agreed remuneration at the time and place agreed in the contract of employment or collective bargaining agreement 3) take all practicable steps to ensure that the worker is free from risk of personal injury or damage to the workers health or during and in the course of his employment or while lawfully on the employers premises . 3) develop the human resources by way of training and retraining of workers 4) provide and ensure the operation f an adequate procedure for discipline of the workers 5) furnish the worker with a copy of the workers contract of employment

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6) keep open the channels of communication with workers 7) protect the interests of the workers

Since every responsibility or duty is conditioned upon a right , Act 651 equally spells out the Rights of the worker . It must be emphasized that these rights and duties are 58 completely different and one should not be mistaken for the other . These rights are as follows : RIGHTS OF AN EMPLOYEE 1. work under satisfactory, safe and healthy condition 2. receive equal pay for equal work without distinction of any kind 3. have rest, leisure and reasonable limitation of working hours and period of holidays with pay as well as remuneration for public holidays. 4. form or join a trade union 5. be trained and retrained for the development of his or her skills. 6. receive information relevant to his or her work. Likewise the employer also has certain rights which are different from his duties and these are also as follows : RIGHTS OF AN EMPLOYER 1. has the right to employ a worker of his choice without question 2. has the right to terminate the employment of a worker 3. has the right to promote a worker 4. has the right to discipline a worker 5. has the right to transfer a worker 6. has the right to formulate policies, execute plans and programmes to achieve targets 7. has the right to modify or cease operations without any challenge

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8. has the right to determine the type of product to make or sell 9. has the right to determine the prices of its goods and services. As a result of these rights and duties enjoined on either party to a contract of employment the law obliges every contract of employment to contain 7 essential elements otherwise known as the cardinals of a contract of employment. These are as follows ; 59 the commencement date of employment the position the remuneration per annum the terms of employment social security fund contribution retirement date compensation in the event of injury

a. b. c. d. e. f. g.

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ESSENTIALS OF A CONTRACT OF EMPLOYMENT

Under the Labour Act ( Act 651 ) it is mandatory for 7 essential elements to exist in every contract of employment . These 7 elements are therefore expected to appear in an employees letter of appointment and they are sometimes referred to as the cardinals of employment . The absence of even one of them in an agreement may have far reaching consequences . They are as follows :1. 2. 3. 4. 5. 6. 7. Salary per annum Date of appointment Position to be occupied Social Security Fund Contribution Terms of employment Annual leave Retirement

1. Salary Per Annum This is the basic reward for every employee doing contract of employment. In Ghana it is paid by the employer to the employee at the close of every month . To forestall any controversy with regards to the workers remuneration , the Labour Act (Act 651) insists that the salary of the employee must be expressly stated in the appointment letter . To this end section 67 states as follows : every contract of employment shall stipulate that the whole of the salary , wages and allowances of the worker shall be made payable in legal tender in addition to any non- cash remuneration and accordingly a contract of employment that contains provisions to the contrary is void. It is against this background that in the decided case of WORKERS OF ACCRA CHEMICAL CO. LTD v ALHAJI TESODJI the High Court held that the 60

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conspicuous absence of a salary clause in the plaintiffs appointment letters was an attempt by the defender as their Managing Director to play a mischief by paying low salaries . Thus the plaintiffs could enforce their perceived salary against the defendant but not the vice-versa. It must therefore be noted that the payment of remuneration on daily basis is not salary but wages and they are meant mostly for unskilled labourers. In every employment situation 3 fundamental elements determine quantum of remuneration and these are qualification or training , experience and degree of responsibility at the workplace

2. Date of Appointment The duration of every contract is determined from the effective date of commencement. So in employment too the employees entitlement to salaries, benefits and entitlement and any other incentives is determined by the effective date of his appointment. A contract of employment without a commencement date is by law a nullity and same cannot be enforced against the employee but the employee could enforce it against the employer . It is the effective date of commencement of an employment which helps to determine ones duration of employment and also helps to determine seniority in a working environment . This is a condition sine qua non or indispensable in a letter of appointment. Thus in JAMES PERNOR v BLACK STAR LINE ( STATE SHIPPING CORPORATION ) where the plaintiff alleged to be a permanent staff of BSL and yet could not prove by any appointment letter the effective date of his appointment nor any appointment letter in the first place , the court dismissed his cause of action as unfounded From this case the High Court established the stare decisis that an employee must insist on an appointment letter. Failure to do so will presumably make employment contract however long one of contract for employment .

3. Position to be Occupied It is paramount in every contract of employment to disclose the position to be occupied by the employee. This requirement stretches to include even temporal workers or casuals In law the situation as to whether or not an act of an employee could bind or be taken as an act of his employer depends upon the position occupied by the employee in the working set up. It must be categorically stated that it is only the acts of senior officers of an organization like managing director, director and a manger which could bind a company. Thus in the absence of an express instruction an employee of junior status becomes personally liable for any lost or accident which is inconsistent with his daily routine of work. The case of BENTSIL ENCHIL v. MAXWELL CONSTRUCTION 61

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LTD illustrates this point. The plaintiff was the head of family of one Professor Bentsil Enchil who lectured at University of Ghana, Legon. The said Professor Bentsil Enchil traveled with the wife from Accra toward Cape Coast. The defendant company were resurfacing segments of the Accra Cape Coast highway. A foreman of the defendant company had ordered a heap of gravels on one of the 2 lanes of the road which obstructed one lane. By the close of work the entire heap could not be spread and therefore remained a mound on the road. Professor Bentsil Enchil and the wife drove into it and died instantly for which reason his head of family sued the employers of the foreman in damages. In their defence the company argued that the negligence was the personal liability of the foreman but this was dismissed by the court on the grounds that the foreman was a junior officer and for all intents and purposes he acted upon the instruction therefore his act was binding on the company. But for the express instruction to the foreman the company could not have been held vicariously liable for the conduct of the foreman.

4. Social Security Fund Contribution The recent position on this issue is that by law every employee doing a contract of employment is required to contribute towards the Social Security Fund. This is a mandatory requirements and employer as well as the employee cannot circumvent the law. Hitherto only employers who employ persons above 5 were required to make SSF contributions. But this situation has changed with regards to the difficulties a lot of pensioners who did not contribute towards the Social Security Scheme go through. Thus the employer is by law required to pay 12% more of the employees monthly salary as the employers corporate contribution whereas the employee contributes 5 %. The law establishing the Social Security Scheme gives the managers of the scheme the power to prosecute corporate defaulters. Likewise an employee cannot opt out on the social security scheme in Ghana.

5. Terms of Employment The terms of every contract of employment are spelt out in 2 essential documents namely the collective bargaining agreement and the conditions of employment. The collective bargaining agreement is often issued by unionized workers mostly affiliated to Trades Union Congress (TUC). It mostly concerns junior staff whereas the conditions of employment are terms meant for senior staff in an organization. Categorization of staff into these 2 sets depends upon their entry qualifications, experience and enormity of responsibility taken up in the company. The terms of employment discloses workers rights and sanctions for ill behaviour and it

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is often the terms of reference for all disciplinary action. Any purported action of management not founded upon the CBA or conditions of employment is said to be unlawful and arbitrary. The trade unions congress(TUC issues 2 types of collective bargaining certificate to the unionised workers of every establishment. The junior staff are governed by the collective bargaining agreement(CBA) whereas the senior staff are governed by the senior staff agreement(SSA). It is category of the position of which the person is employed which will determine where he will fall. It must however be pointed out that each of this 2 agreement has its own right and liabilities. Example: unless expressly instructed. An act of the junior staff cannot bind the company. For example under the conditions of employment junior staff are often entitled to 21 days annual leave with 2 days traveling time. Whereas under the SSA senior staff are often entitled to 35 days and 3 days of traveling time. It must however be pointed out that when either of these 2 certificate is not registered with the trade union congress it has no legal backing. effect. So no right or liability could be derived there from. The workers can enforce it against management but not the management. 1) Annual Leave:- One other condition of employment is annual leave. This is backed y international legislature organisation to which Ghana is a member of the UN was a signatory. At the 1945 Geneva Convention Ghana was a signatory to the first plenary section of the ILO international labour for every member country state to ensure the work force enjoy a minimum of 28 working days leave. This convention was ratified implement by Ghana under NLCD 157 for this reason it is a must and one of the cardinals of employment for the employer to state the leave entitlement of the employee. The labour decree further provides that where for reasons beyond the control of the employer he is unable to allow the employee to proceed on leave. Such leave must accumulated but where the employee so wishes same should be committed into cash. 2) Retirement :- By chapter 6 of the 1992 constitution of the republic of Ghana which is on the direct principles of state policy all civil servants are required to proceed on statutory retirement at the age of 60. This is statutory requirement therefore there cannot be exemptions. The statutory age not withstanding an employer is enshrine 1 enjoined 1 compel to notify an employer to notify an employee in his appointment letter that if he decide to go on voluntary retirement he must put his employment on three months notice or three month salary in place of this(in lieu there off) Apart from voluntary retirement as captured by the workmans compensation the Act permits an employer to retire an employee on grounds of health especially where the incapacitation of an employee is access about 75%. However management does not

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deserve the right to ask an employee to proceed on retirement until the condition of the employee is proved to affect his performance negatively even so management can ask such a staff to proceed on retirement only after a medical board has being constituted on him.

64 LECTURE -14 -

TERMINATION OF EMPLOYMENT ___________________________________

Like any other form of contract, there are certain circumstances bring an otherwise valid employment to an end and these factors are i) Death ii) Dissolution of Employment iii) Incapacitation iv) Retirement and v) Dismissal 1. DEATH The trite position of the Comon Law is that a dead man cannot contract (post mortem non pactum) . It therefore follows by operation of law that upon the death of an employee, any contract of employment with him comes to an end. It must b emphasized that a contract of employment is not hereditary. In other words the death of an employer by law does not call for the substitution of the employee with his e son. Again a contract of employment is a contract for personal skill and upon the death of the employee, even if it tends out that his successor in title is into the same career or trade as the deceased, it is not mandatory for the employee to employ them. It is in this vein that a dead employee cannot make a testamentary disposition to bequeath his contract of employment to a beneficiary. Thus in HARVEY v. TIVOLI MANCHESTER LTD. The death of a member of a troupe of 3 music-hall artists was held to discharge the contract though he had been replaced, and the troupe was ready to perform . 2 . DISSOLUTION OF THE EMPLOYMENT With regard to companies the position of the Common law is that a compulsory winding up of the company operates as a voluntary dismissal of all its employees. However where the company has been taken over by another company or there is an amalgamation the law holds the view that it does not terminate employment provided the new employers are prepared to carry on with the work. 3. INCAPACITATION

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Incapacitation is considered by the common law as a form of frustration of contract. Under the study of the law of contract frustration is considered as an event which makes performance of an obligation under a contract impossible. In Ghana an injury of a worker assessed by a medical officer or a medical team to be above 75% renders the worker incapable of continuing with his contract of employment. However nothing stops the employer from changing the schedule of work of such a worker provided his status in the company does not change. Under the workmans compensation Act, a worker whose injury is assessed to be over 75% is to have his employment terminated unless the employers are capable of re-assigning him under a job which will not tell on his 65 incapacitation. However the declaration of a worker as incapacitated cannot be the sole prerogative of any organ of the company including even the Board of Directors and the chairman of the company at AGM. The law makes it mandatory that a medical doctor specialist together with union representatives go into the incapacitation of the worker. It is in this light that some managing directors will be acting ultra vares if they should ask a worker to vacate employment simply because he is incapacitated. 4. RETIREMENT This is simply regarded as the situation where the worker is by operation of law directed to vacate employment without the commission of a wrong or on grounds of incapacitation. In Ghana by chapter 6 of the 1992 constitution on the directive principles of state policy, there are two forms of retirement namely Statutory and Voluntary Retirements. STATUTORY RETIREMENT Statutory retirement is the situation whereby the entrenched provisions of the 1992 constitution, a civil servant who attains the age of 60 is by law required to retire. The law gives exception to this general provision where the civil servant happens to be in a classified profession. For instance, under article 125 of the 1992 constitution which is on the judiciary practicing lawyers do not have retirement age. Likewise High Court judges retire at the age of 65 and Supreme Court judges retire at the age of 70 . Even so they are retired on salary. Statutory retirement is by convention of employment to be proceeded by an accumulated annual leave. At common law statutory retirement of an employee is regarded as an expiration of a fixed term of contract. VOLUNTARY RETIREMENT - This is sometimes confused with incapacitation. It must however be clarified that termination for incapacitation if willfully opted for by the employer himself could constitute a form of voluntary retirement but where the employee was compelled by management to vacate employment on grounds of incapacitation then it cannot constitute voluntary retirement. Therefore voluntary retirement is the situation where upon personal grounds which need not be divulged an employee could by operation of the law put his employers on NOTICE and end his contract of employment. It must be pointed out that the worker opting for voluntary retirement is by law required to give his employers 3 months notice or in the alternative 3 months salary in lieu thereof This is

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contained in section 51 of Act 651. Failure to do so gives the employer the right to regard the employees termination as vacation of post. For voluntary retirement, age is insignificant. What is important is the validity of your contract and the due notification. The law further insist that there must be a proper handover. 5. DISMISSAL This is a punitive measure which the Common Law allows management of an entity to met out to deviant and recalcitrant employees or perpetrators of serious industrial 66 offences. Again dismissal is meant to serve as a deterrent to other employees who have the propensity to commit the similar offences . Essentially speaking, there are four types of dismissal namely Dismissal by notice, Dismissal for cause, Wrongful Dismissal (unlawful or illegal Dismissal) and Summary Dismissal.

DISMISSAL BY NOTICE Most contracts of employment may be terminated by either party giving the necessary notice of termination. The period of notice may be agreed expressly by the parties, and if there is no such express provision, the law will read into a contract of employment that it is terminable upon reasonable notice. Where an employee is dismissed by notice then he is said to have had his appointment terminated. DISMISSAL FOR CAUSE OR SUMMARY DISMISSAL At Common Law an employer may dismiss an employee summarily (ie without notice) if he has sufficient cause to do so. For example, a relatively minor instance of dishonesty may warrant summary dismissal, particularly if the employees job involved dealing with money; whereas mere negligence may in most cases be amenable only to dismissal by notice . In the second instance summary dismissal may be wrongful. WRONGFUL / UNLAWFUL / ILLEGAL DISMISSAL A wrongful dismissal occurs when the employer terminates the contract of employment without adhering to the procedure to be adopted in the terms of contract for ending the contract. This is especially so where the employment was terminated without notice. By law any employee whose act of commission is seriously enough to warrant a dismissal is to have a committee of enquiry constituted on him. This committee is to be empanelled the industrial relations department and presided over by a lawyer from the legal department. There shall be a representation from the senior staff association and workers union and the employee standing accused is by law entitled to be represented on the board by any worker of his choice. Investigations into the alleged offence must strictly be conducted in accordance with the principles of natural justice. In other words, the company must have the opportunity to state the offence of the worker and the worker must also be given equal opportunity state his case (audi alteram partem). This aside, the committee of enquiry has no right even when the total evidence before it points to dismissal to dismiss the worker standing trial. The best they can do is to make

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recommendations subject to the approval of the managing director and management. It is only by this method that an employee could be said to have been lawfully dismissed. Anything short of this constitutes unlawful dismissal. Offences warranting such dismissal range from absenteeism, disobedience, disclosure of official secrets, deliberate damage to the companys property etc. UNFAIR DISMISSAL Unfair dismissal involves an inquiry into the substance (or overall merits) of the dismissal whereas the Common Law action for wrongful dismissal looks basically into 67 the FORM (procedure) of the dismissal. Thus at Common Law an employer could dismiss for any reason provided he gave the correct length of notice (or wages in lieu thereof). But for the purpose of unfair dismissal, the question of notice is of evidential value only because the fact that proper notice was given will not always mean that the dismissal was fair. Similarly, although a dismissal could be both wrongful and unfair, it could also be one but not the other. Unfair dismissal is the situation where a worker is subjected to dismissal lawfully or unlawfully on grounds which do not warrant a dismissal. It is often done by pent- up resentment against the worker by management. For example assuming leadership in workers demonstration, inter-personal quarrel with management staff. Because the grounds for unfair dismissal are often trivial this form of dismissal is sometimes referred to as victimization. A victim of unfair dismissal has the right to seek remedy in the High Court by invoking the inherent jurisdiction of the high court to issue prerogative writs such as certiorari, mandamus, quo warranto, prohibito, and injunction .Unfair dismissal if found out be the case entitles the victim to compensation.

REMEDIES FOR WRONGFUL DISMISSAL 1. salary for 6 months in lieu of the dismissal without notice 2. entitlement to allowances for the 6 months period 3. damages for humiliation stemming from the manner of dismissal 4. damages for loss of reputation which may result in difficulty in securing another employment.

REMEDIES FOR UNFAIR DISMISSAL 1. reinstatement 2. damages for humiliation

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3. full recovery of severance award

68 THE DOCTRINE OF VICARIOUS LIABILITY IN EMPLOYMENT ____________________________

Vicarious liability is the duty which the employer owes to third parties as a result of injuries meted out to them by the employers employees. It must be noted that in a contract for employment the employer is not liable and this doctrine does not apply. The rationale for the invocation of this doctrine is that between the master and the servant the law deems the master as the one in a better financial position to afford such compensation. One other reason is that the law perceives the master as the ultimate recipient of any glory chalked by the employer. Thus he must be the ultimate recipient of any liability incurred by the employer. It must however be borne in mind that this doctrine will apply only when the employee was working in furtherance of the employer and as such was answerable to the employer. However where the employer was doing something on his own he becomes personally liable. Again where the employer ignored a safety precaution and acted recklessly he becomes personally liable. Thus in LIMPUS V. LONDON GENERAL OMNIBUS where the defendants driver was forbidden from over-speeding and yet he ignored this safety precaution and injured the plaintiff in the process, the court held that the said driver was personally liable and not the defendant company. Again in AKYIGINA V. ADJEI where an employee of the appellant knocked down the respondents relative and killed him in a running down accident the court dismissed the appeal holding that at the time of the accident the car owner was vicariously liable.

In brief this doctrine requires an employer to be vigilant on his employees as he shall be deemed indirectly liable for their excesses.

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69 - LECTURE 8 -

THE COURTS STRUCTURE IN GHANA

( ARTICLE 125 ,1992 CONSTITUTION ) ____________________________________

It must be said without any hesitation that the structure of the Courts in Ghana is an adaptation of the court structure in England under the Common Law. For this reason the Court Structure in Ghana is hierarchical ranging from the lowest to the highest. For purposes of clarification ,the courts structure in Ghana will be treated under this lecture from the highest to lowest which shall render them as follows : 1) 2) 3) 4) 5) The Supreme Court The Court of Appeal The High Court/Regional Tribunal The Circuit Court The District Court/Family Tribunal/Juvenile Court

The Supreme Court , the Court of Appeal and the High Court / Regional Tribunal are referred to as the Superior Courts of Ghana whereas the Circuit Court and the District Court are referred to as the Lower or Inferior Courts of Ghana . Thus any question on the superior courts of Ghana should not be confused with the supreme court .

1.

THE SUPREME COURT OF GHANA

The Supreme Court of Ghana was established under the Judicature Act of 1876 . From that time up to date the supreme court of Ghana has always being autonomous and accordingly recognised as such. The present day Supreme Court is a creature of the 1992 Constitution under Article 126 clause 1. Under the 19992 constitution the stature of the Supreme Court is as follows : -

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Qualification 1. Under Article 128 a person shall not qualify for appointment as a Supreme Court judge unless he meets the following criteria a. He must be a lawyer of not less than 15 years standing . 15 years standing 15 years standing has been interpreted in some legal circles to mean to practising at the bar as an advocate or solicitor. On the other hand any lawyer working in furtherance of the development of the law provided he is done so for the past 15 years or more, qualifies to be a supreme court judge. For eg a law reporter . - 31 b. The person must be of good moral character and proven integrity. c. He must be appointed by the President of the Republic of Ghana in consultation with the Council of State and subject of the approval of parliament. Composition According to the 1992 Constitution , the Supreme Court shall consist of the Chief Justice and not less than 9 judges . When sitting in ordinary, the Supreme Court consists of 5 judges and where the chief justice is a member , he presides . In his absence , the most senior of the 5 judges presides. Seniority in this context is determined not by biological age and neither is it determined by the date of ones call to the bar as a lawyer. It is rather the date of appointment to the Supreme Court which determines seniority. Sitting in ordinary means the Supreme Court sitting as a court of first instance on matters over which they have original jurisdiction. When sitting over interlocutory matters the supreme court shall consist of 3 judges and the most senior of the 3 in the absence of the chief justice presides. Interlocutory matters refers to matters which seek better clarification or particulars from a court below the supreme court. They are usually in the nature of the injucture application custody of a property appointment of receiver/managers.

When sitting to entertain appeals either from the High Court or the Court of Appeal the Supreme Court shall composed of 3 judges and it is the most senior of the 3 judges who shall preside . However where the Chief Justice is a member of the panel he shall automatically preside . When sitting to exercise the power of judicial review, hitherto the constitution stipulated a panel of 7 but there is a recent amendment which permits all available judges of the Supreme Court to sit. Judicial review refers to the power which only the Supreme Court has to take a second look at its own decisions because beyond the Supreme Court there is

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no other court. By this power the Supreme Court is at liberty to depart from its own past decisions. Jurisdiction The Supreme Court exercises the following jurisdiction a. appellate Jurisdiction This simply means that the Supreme Court being the final court of appeal in Ghana beyond which there is no other court is the final court of appeal in Ghana . However - 32 when sitting to entertain appeals the supreme court shall be composed of 3 judges presided over by the Chief Justice or in his absence by the most senior judges on the panel . Appeals to the Supreme Court is not always automatic. There are 2 types of appeal to the supreme court namely (i) appeal with leave and (ii) appeal as of right (i) appeal with leave . Where the appellant has lost twice at the court below including a loss at the Court of Appeal before making up the mind to proceed to the Supreme Court on further appeal , he must be given permission by the last court which returned judement against him . However the Court will only grant this leave after satisfying itself that the appeal is not frivolous. This type of permission is what is termed as appeal with leave . (ii) appeal as of right . This arises where throughout the litigation the appellant has not loss before and he loses for the first time at court of appeal . In such circumstance the losers appeal to the Supreme Court is automatic because the loser has the right of redress against what he perceives as injustice for the first time. In entertaining appeals the jurisdiction of the Supreme Court covers both civil and criminal matters.

b. Concurrent Jurisdiction This is also known as the Co-ordinate Jurisdiction of the Supreme Court. It simply refers to the limited power which the Supreme Court shares with the High Court. This means that when one is wrong in an offence related to this common area of jurisdiction he has the right to go to either the High Court or the Supreme Court. However it is expedient for one to commence such an action in the High Court so that in the event of a loss he can appeal to the Supreme Court. This was the rationale behind the repetition of the application from the High Court in Cape Coast to the Supreme Court in Accra in the case of Mensima Vrs. Attorney General (supra) without reference to the Court of Appeal. This power of both the High Court and the Supreme Court has to do with issues of Fundamental Human Rights as contained in Article 21 of the 1992 constitution. These Fundamental Human Rights include freedom of religion, freedom of movement, freedom of association, freedom of speech etc. However Article 33 clause 2 of the same 1992 constitution confers

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on both the Supreme Court and the High Court the right to issue prerogative writs against persons who trample on the Fundamental Human Rights of their fellow citizens. c. Supervisory Jurisdiction The Supreme Court exercises supervisory jurisdiction over all the courts below it .This includes the Court of Appeal , the High Court , the Regional Tribunal , the Circuit Court and the District Court . In exercising this supervising jurisdiction the Supreme Court is by Article 33 Clause 2 of the 1992 Constitution, vested with the power invoke prerogative writs . These are as follows : - 33 -

i) ii) iii) iv) v) vi)

Habeas Corpus Certiorari Prohibito Mandamus Quo Warranto Injuncto

i) HABEAS CORPUS: - This is a latin expression meaning produce the body. When properly constructed it means produce a person. This is a legal directive issued by either the Supreme Court upon an application made by a concern citizen of Ghana against the detention of a person by the law enforcement agencies for a period beyond 48 hours. The purpose of this writ is to prevent the law enforcement agencies like the police, Ghana Immigration Service etc from abusing their power to arrest. A case in point is J.B A. Amuzu Williams vrs. The Attorney General. In this case the plaintiff was the owner of a property formerly known as Egyptian Embassy at the Airport Residential Area, Accra. By protocol arrangement the government of Egypt rented the property from the plaintiffs through the Ghana Government via the Ministry of Foreign Affairs. The plaintiff was been paid in cedis but it turned out that the Egyptian government was paying dollars to the Officers of the Ministry Of Foreign Affairs whereas they paid the plaintiff a meager sum in cedis. For this reason the plaintiff protested against the payment of rent in cedis. Shortly afterwards a surprise article appeared in the private press accusing the Ghana Government and the personnel of the Egyptian mission in Ghana for colluding with Ghanaians to defraud the plaintiff. Suspecting that the plaintiff was behind this article the NDC government caused his arrest and for 5 days the plaintiff was kept behind bars without any formal charge. Siblings of the plaintiff contacted an Accra based lawyer who issued a writ of habeas corpus against the Attorney General before the Accra High Court to come and explain the reason for violating the plaintiffs Fundamental Human Rights of not being kept by any security agency for more than 48 hours without being presented

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before court. The defendant could not put up any good reason therefore the plaintiff was discharged. ii) CERTIORARI :- This is another directive used by the Supreme Court to exercise its supervisory jurisdiction over all the courts below it and any other quasi judicial body (ie an adjudication body which is not part of the main Courts Structure in Ghana). Certiorari is a writ meant to quash or cancel a decision of a court below the Supreme Court on 2 main grounds namely a) Where there is an error on the face of the record b) where there was a breach of the doctrine of natural justice. Error in the face of the record must be pointed out be it in the nature of a question of fact or a question of law otherwise it shall lead to travesty of justice. On the other hand breach of the doctrine of natural justice could also necessitate invocation of a writ of certiorari. The doctrine of natural justice entail 3 essential elements namely : -

1) Nemo judex causa sua (one cannot be a judge of his own cause). 2) Audi alteram partem (let the other party also be heard )

3) Lex Retrospectum ( one cannot pass a law to have a retrospective effects) A violation of any of these 3 ingredients constitutes a breach of the principle of natural justice and a writ of certiorari will succeed or lie. The case of Perpetual Amegashie vrs University College of Education, Winneba (Supra) is still instructive here.

iii) QUO WARRANTO - This simply means by what authority has a lower court or a quasi judicial body done what it has done. It is another prerogative writ issue by the Supreme Court to set aside the orders of the lower court which has no basis in law. Quo warranto is used to curtail or stop judges of the lower court from exercising unbridled discretion. iv) PROHIBITO - This simply means a prohibited act. It is another prerogative writ invoked by the Supreme Court to stop a lower court judge from acting in ultra vares or contrary to his powers. A writ of prohibition is issued to restrain a judge from going ahead with a prohibited conduct contrary to the powers vested in such a judge under the Courts Act , Act 459 , 1993. For example a district court judge is by the Courts Act prohibited from trying people for contempt of court . Therefore a writ of prohibition will lie to restrain such a judge from trying any such case .

v) MANDAMUS - This word simply means by what mandate is a judicial body or quasi judicial body doing what it is doing . This is another prerogative writ exercised by the Supreme Court to check any abuse of power or authority by the judges of the lower courts. For example when a District Court magistrate reconstitutes his or her court

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into a family tribunal , he or she is by law obliged to sit with 2 lay persons from the community ie a social welfare staff and childrens activist preferable a retired teacher. Should the district court judge make orders on family issues without a panel, the dissatisfied party apply for the issue of a writ of mandamus from the Supreme court to set aside any such decision.

vi) INJUNCTION - This is an equitable remedy and at the same time a prerogative writ of the Supreme Court. An injunction is an order of the Supreme Court to restrain both parties to a litigation from interfering or tempering with the subject matter of the litigation pending final decision of the court. There are 2 types of injunction namely ; 2. Interlocutory or Interim Injunction - This is an injunction pedante litem ie an injunction given when the case or litigation is still pending . It is meant to preserve the subject matter of the litigation so that the ultimate winner in court will not have a pyrrhic victory but rather enjoy the fruits of his labour . 1. Perpetual Injunction - This is invoked after a court of law had delivered its final judgment to stop the losing party from continuously interfering with - 36 -

the right of person adjudged by the court as the owner of the property . This concept constitutes the prerogative of the Supreme Court and the same jurisdiction is exercised by the high Court because it has concurrent jurisdiction with the Supreme Court in supervising the Courts below it d. Original or Exclusive Jurisdiction of the Supreme Court

This refers to matters which are peculiar to the Supreme Court. In other words it refers to the kind of cases which only the Supreme Court has the jurisdiction entertain as a court of first instance.The first of this kind is matters affecting the sanity of the president (compus mentis) . In hearing such a case not every Supreme Court judge is even qualified to be part of the panel . Rather the law enjoins the Chief Justice to appoint the most senior five of the Supreme Court judges to sit and the court must be presided by the Chief Justice . Fially and most importantly any such case is to be determined in camera. The next scope of original jurisdiction of the Supreme Court has to do with inspection of documents affecting the security of the state. This is determined by any 5 of the Supreme Court judges including the Chief Justice who is to preside and again any such case is to be heard in camera . Furthermore matters affecting the interpretation of the constitution from the courts below the Supreme Court is another exclusive jurisdiction of the Supreme Court . The courts

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below the Supreme Court are at liberty to interpret any piece of legislation but when confronted with any issue of constitutional interpretation , they are to refer this to the Supreme Court . This is because the constitution supercedes all other laws of the land of Ghana . Therefore it takes the most experienced and highest court of the land being the Supreme Court to do this . It is for this reason that the Supreme Court as the most highest court of the land is exclusively vested with the power to interpret the constitution. The case of MARTHA EKWAM VRS. KWAME PIANIM illustrates this . By article 94 of the 1992 constitution a person who had attempted to overthrow the government of the Republic of Ghana was not qualified to stand as parliamentary or presidential candidate . In the wind up of the 1996 presidential election one Kwame Pianim filed his nomination to run on the ticket of the NPP as its presidential candidate . It turned out that in 1981 , Kwame Pianim was implicated in an abortive coup to overthrow the government of the state. He was accordingly convicted to death by hanging. The then president of Ghana had a brother by name Michael Susudis was also involved in illegal arm traffic to the US and was convicted to 15 years imprisonment with hard labour. The president of Ghana intervened to seek the repatriation of Susudis to Ghana instead of serving his full sentence in USA, and among the conditions given the president was the immediate release of Kwame Pianim to serve on the IMF desk and this was accordingly carried out. - 37 Considering the pace at which Kwame Pianims candidacy was gaining fame amidst the fears entertained that the NDC the main political rival of the NPP which at the same time was the incumbent was patiently waiting for the NPPs election of Pianim only to invoke article 94 of the constitution at the verge of the election to disqualify him, the plaintiff herein Martha Ekwam, a very active member of the NPP commenced the present action in the Supreme Court for the true and proper interpretation of article 94 of the 1992constitution. In his submission counsel for the Respondent ( Kwame Pianim ) argued that the security of the state is not the same as the security of the Republic and that the security of the state which Kwame Pianim attempted to overthrow was a de facto government whose overthrow was supported by the 1979 Constitution and the preamble to the 1992 Constitution. He argued further that if coup making was to disqualify one as a presidential candidate, the incumbent president would have been the first to be disqualified because he had staged three coup de tats . In his reply , the learned Attorney General Dr. Obed Asamoah adverted the mind set of the Supreme Court to the fact that a person who steals and is not caught is not a thief . And that by interpretation of statutes and the constitution of Ghana , the law is one of strict liability and not morality . Kwame Pianim was an abortive coup maker whereas J.J was successive coup maker and their right and liabilities in law cannot be the same . Therefore article 94 of the 1992 Constitution could debar Kwame Pianim from contesting the presidential slot but same cannot go against President Rawlings .

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e.

The Supreme Court has the Power of Judicial Review .

The Supreme Court is the only court that has the power to revisit its own decision and either confirm or depart from it. This power is vested in the Supreme Court because it is the final court of appeal beyond which there is no other court. In exercising the power of review, the Supreme Court is by law to be fully constituted meaning that every Supreme Court judge available within the jurisdiction is by law required to sit on the matter and express his opinion of the law. This is distinguished from the ordinary sitting composed of 5 judges who hear the cases as a court of first instance. The underlined principle of doctrine of judicial review is intereste ut repulicae litium finis meaning it is in the interest of the republic that litigation must come to an end. For this reason a decision made from a judicial review is a fiat(final). Every court of the land is by law estopped from departing from it . CONCLUSION : - In brief one can safely point to the fact that truly the Supreme Court wields enormous powers over all other courts in Ghana . It is for reason that the Supreme Court is correctly described as the only court which is not bound by a judicial precedent simply because it can depart from it own decision during judicial review .

- 38 -

2.

THE COURT OF APPEAL

This court ranks lower to the Supreme Court and has both criminal and civil jurisdiction . It must be stated without hesitation that the court of appeal has no original jurisdiction. In order words the court of appeal cannot try a case but can only exercise an appellate jurisdiction over a case that has already being tried by examining the records of proceedings which took place during the trial . Qualification For one to qualify as a Court of Appeal judge ,

a. He or she must be a lawyer not less than 12 years standing b. Must be appointed by the President in consultation with the Council of State General Legal Council , subject to the approval of Parliament . c. Must be of good moral character and high integrity. and the

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Composition By Article 136 clause 1 of the 1992 Constitution , the Court of Appeal is composed of the Chief Justice and not less than 10 Justices of the Court of Appeal . When sitting in ordinary , the Court of Appeal shall be composed of 3 judges and the most senior of them presides. It must however be emphasized that if the Chief Justice is a member of a panel at the Court of Appeal he presides and in his absence the most senior of the judges takes over. Besides the Court of Appeal sits to entertain interlocutory matters like whether an appeal to the court of appeal is by right or permission or yet still whether or not there is an ambiguity in an order of the High Court. On such occasion the court is presided over by a single Court of Appeal judge. It must however be pointed out that a Court of Appeal judge who sits on an interlocutory application is disqualified from sitting on the substantive matter when it is listed before the Court of Appeal. It is for this reason that in Amoo vrs. Rebecca Adotey , Justice Lamptey who dismissed the application of Amoo as an interlocutory application before him as a sole court of appeal judge declined to sit on the substantive matter . 39 -

Jurisdiction of the Court of Appeal As stated earlier , fundamentally the Court of Appeal has only one jurisdiction ie to entertain appeals . For for reason it cannot even issue prerogative writs. Again the Court of Appeal lacks original jurisdiction as a result no litigation can commence at the Court of Appeal as a court of first instance. Finally the Court of Appeal does not have a limit in terms of the monetary devalue of cases it can decide. In effect the court of appeal exercises only appellate jurisdiction and in so doing the court is categorised into 2 namely :

1) The Court of Appeal Civil Division 2) The Court of Appeal Criminal Division The mere fact that it is an appellate court does not means that every appeal court can automatically lie at the Court of Appeal. Where a person commences his action at the District Court and he lost for which reason he appealed to the High Court and again lost, if he wants to go to the Court of Appeal, he must be given leave or permission to do so . But where the person commenced the action at the High Court or Regional Tribunal and he lost, appeal to the Court of Appeal is automatic otherwise known as appeal as of right. A

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person dissatisfied with a decision of the Court of Appeal goes on appeal to the Supreme Court. The Court of Appeal has no jurisdiction over matters of constitutional interpretation or matters affecting the security of the state, judicial review and issues of Fundamental Human Right abuses . All these are exclusive jurisdiction of the Supreme Court and because the Court of Appeal does not share concurrent jurisdiction with the Supreme Court over matters affecting human right. An appeal on such cases lie directly from the High Court to the Supreme Court. It is imperative to note that in accordance with the constitutional powers vested in the chief justice, he can suo motto (on his own accord) appoint a Court of Appeal judge to either sit as an additional High Court judge or an additional Supreme Court judge.

Appeals In as much as the Court of Appeal has only appellate jurisdiction in both civil and criminal matters, it is not a final court of its own. A person dissatisfied with a decision of the Court of Appeal can appeal further to the Supreme Court except that where the person lost twice in succession before the matter goes to the Court of Appeal , then any - 40 further appeal from the Court of Appeal to the Supreme Court should be by leave of the Court of Appeal. However where the litigation only began at the High Court and the person registered a lost in addition to another lost at the Court of Appeal, any further appeal to the Supreme Court becomes as of right or automatic ie without leave. In the exercise of it appellate jurisdiction the Court of Appeal does not entertain appeals from quasi judicial bodies (CHRAJ, FEDA, RENT CONTROL etc ). Appeals from quasi judicial bodies automatically lie in the High Court and not the Court of Appeal.

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- 41 LECTURE 10

3.

THE HIGH COURT

This is regarded as the workshop of law simply because it exercises all the functions required of a court ranging from civil to criminal cases. Qualification 1) For a person to qualify as a High Court judge, he must be a lawyer of not less than 10years standing 2) He must be of high moral character and of good integrity 3) He shall be appointed by the Chief Justice in consultation with the Judicial Council subject to the approval of the President . Composition The High Court shall be composed of not less than 20 judges in Ghana including the Chief Justice and any other Justice of the superior court as the Chief Justice may by writing appoint. This means that the Chief Justice is vested with the power to appoint any

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superior court judge above the position of the High Court to sit as an additional High Court judge. When sitting in ordinary to hear a civil or criminal case , the High Court shall be presided over by a single Justice. When determining or trying a case of treason, the High Court is presided by 3 Justices and the most senior of the 3 is the one who presides. This not withstanding the high court in trying a case of treason (coup de tart) is to be augmented by a panel of 7 jurors in addition to the 3 judges. The jurors must be persons who live within the community for that matter conversant with the customs and practices of the given community. Again they must be persons who preferably understand the elected medium of commnicatio of the accused. Jurisdiction The High Court has original jurisdiction over all civil cases above 100 milion . This include cases such as defamation ,trespass, declaration of title, breach of contract, recovery of debt, unlawful dismissal etc. - 42

Concurrent Jurisdiction The High Court shares concurrent jurisdiction with the Supreme Court in determining issues affecting Fundamental Human Right such as freedom of worship, freedom of association, freedom of speech, freedom of movement etc. It must however be pointed out that it has always been diligent to commence any such action at the High Court so that in the event of a dissatisfaction one could appeal to the Supreme Court. The case of Mensima vrs. A G (supra ) puts this issue to rest .

Supervisory Jurisdiction The High Court exercises supervision over all the courts below it.. In the exercise of this supervisory jurisdiction , the High Court just like the Supreme Court employs prerogative writs namely habeas corpus, quo waranto, certiorari, mandamus, prohibito and injuncto . ( Please refer to notes on jurisdiction of the Supreme Court at p. 33 - 37 ) Jurisdiction over the trial of Indictable Offences In law there are 2 types of criminal trial, namely: indictment. (a) Summary trial (b) trial on

(a) A summary trial is what is adopted at the lower courts particularly the District Courts . In a summary trial there is no use of jury and the court is at liberty to

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convict an accuse person on his own plea. Again a judge at a summary trial is not bound to record the entire proceedings. (b) A trial by indictment could only be handled by the High Court . It is ordered in very serious criminal cases such as murder , manslaughter , treason , robbery etc. In a trial by indictment the presiding justice of the High Court only determines issues of law , leaving the determination of issues of fact to the jury . The type of offences tried by indictment are very serious offences referred to as first degree felony . A felony in law simply means serious offence. Where as an offence which is not serious it is referred to in law as a misdemeanor .The High Court is said to have a jurisdiction over indictable offences because a person facing such a trial is first committed from the District Court whereby preliminary statements are taken from the accused . It must also be noted that this power given to the High Court to try indictable offences for all intents and purposes form part of the original jurisdiction of the High Court. Exclusive Jurisdiction The High Court is the only court that could act as court of first instance to determine a matter relating to company law. Again it is the only court with the power to determine - 43 matters involving piracy. It is the only court which could entertain interlocutory applications on matters affecting chieftaincy , although the High Court does not have jurisdiction over chieftaincy matters . Again it is only the High Court which can try a case of murder , treason , robbery and al other first degree felonies . Appellate Jurisdiction The High Court has appellate jurisdiction over both civil and criminal matters commenced at the District Magistrate Court to which a party is dissatisfied .In the criminal domain such cases may range from stealing , assault , impersonation , etc to acts tending to disturb the peace of the public . When one adverts his or her mind to the civil domain such cases may also range from defamation , recovery of debt , declaration of title etc to rent cases . Limitations Unlike the Supreme Court, the High Court has no power of judicial review rather a person dissatisfied with a decision of the High Court must proceed on appeal to the Court of Appeal except on matters of fundamental human rights where he can skip the court of appeal and go directly to the supreme court. Refer to Mensima v. A-G ( supra ) . Again the High Court has no power to interpret the constitution, it is only the Supreme Court which can do so .

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The High Court cannot try a case involving the sanity of the president just as it cannot order an inspection of documents affecting national security. Appeals Since the High Court handles appeals from the District Magistrate courts , a party who lost at the court below and is still dissatisfied with its appellate decision requires leave to proceed to the Court of Appeal . On the other hand where the litigation begun for the first time at the High Court , a party which is dissatisfied with its decision can appeal as of right .

4.

THE REGIONAL TRIBUNAL

This Regional Tribunal has concurrent jurisdiction with the High Court in that a person who qualifies for an appointment as a Regional Tribunal chairman equally qualifies to be appointment as a High Court judge. Qualification For one to qualify as a Regional Tribunal chairman he must be 1) A lawyer of not less than 10 years standing 2) He must be of a high moral character and of a good integrity . In other words he must not have ever being convicted of a dishonest offence such as stealing , fraud , impersonation, etc 3) He or she must be appointed by the Chief Justice in consultation with the Judicial Council subject to the approval of the President . Composition

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According to Article 142 of the 1992 Constitution , each region in Ghana is supposed to have a Regional Tribunal such as shall be determined by the Chief Justice. It could thus be inferred that there must be a minimum of 10 Regional Tribunal chairmen excluding the Chief Justice who is by himself a member of the Regional Tribunal . However the Chief Justice could exercise his discretion by establishing more than one Regional Tribunal in a particular region in Ghana . The Regional Tribunal only sits in ordinarily and when sitting it is to be composed of a Chairman and a panel of not less than 2 or above 4 . And for as much as the panel members of the Regional Tribunals are not lawyers , they are still required to be of good moral character and high integrity . Ideally retired educationists , social welfare officers and civil servants from particularly the Judicial Service and the A-Gs Department suit this type of job.

Jurisdiction It must be emphasized with all certainty that the Regional Tribunal is a special court and deals in only criminal matters. These criminal matters by law must be offences against the state and matters of public interest as shall be determined by Parliament . The implication of this is that the Regional Tribunal cannot try cases involving the interest of - 45 an individual citizen. It is for this reason that Act 459 confers on the Regional tribunals four (4 ) main jurisdiction to the exclusion of all other courts in Ghana. a) It is the only court which has jurisdiction to try a case of tax evasion and all tax related offences under the Income Tax Decree, 1975 (SMCD 5) . Such offences include under invoicing , embezzlement of tax, under assessment of tax etc . b) It is the only court which has the jurisdiction to try a case of smuggling under the Customs Excise and Preventive Services Management Law , 1993 ( PNDCL 330 ). c) It is the only court which can deal with an offence involving sale , peddling or possession of narcotic drugs ( cocaine, marijuana , heroine etc.) under the Narcotic Drugs ( Control Enforcement and Sanctions ) Law 1990 , ( PNDCL 236 ) d) The regional tribunal has exclusive jurisdiction to try all cases involving serious economic fraud , loss of state funds or property and generally all acts of national economic sabotage . It is against this background that the Regional Tribunal will decline jurisdiction over any matter which does not deal with any of these 4 scope of jurisdiction . A case in point is the JONATHAN DEY v. THE REPUBLIC . The accused appellant was employed as a shop assistant in the shop of a wealthy woman who doubled up as the chairperson of the 31st December Womens Movement in Aflao. The young man stole small and in order to

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vent her anger on him , the complainant got the young man arraigned before the Regional Tribunal whereupon he was convicted to 8 years imprisonment with hard labour. Upon enquiries the relatives of the convict engaged a solicitor in Accra who filed an appeal on behalf of the convict for want of jurisdiction by the court of first instance . Without mincing words the Court of Appeal held that the Regional Tribunal had no jurisdiction over the matter since stealing against a fellow citizen was not part of the jurisdiction of the Regional Tribunal. Appeals Presently the Regional Tribunals have no appellate jurisdiction over any of the lower courts . However all appeals from the Regional Tribunal lie in the Court of Appeal ( Criminal Division ) and because the Regional Tribunal itself is a court of first instance all such appeals are automatic or as of right . Limitations 1) The Regional Tribunals do not have appellate jurisdiction over any court in Ghana including the lower courts . 2) The Regional Tribunals do not have civil jurisdiction over any matter.

- 46 - LECTURE 11 -

5.

THE CIRCUIT COURT

This Court ranks lower than both the Regional Tribunal and the High Court. The Circuit Court has both civil and criminal jurisdiction. Hitherto, under Act 459, there existed a Circuit Tribunal which dealt with only criminal cases whereas the Circuit Court dealt exclusively with civil cases. This dichotomy has been taken away under the Courts Amendment Act , Act 620. Under this law the Circuit Tribunal system has been scraped off and their jurisdiction is vested in the Circuit Court. This explains why the Circuit Court has both civil and criminal jurisdiction. Qualification The Circuit Court is classified under the 1992 Constitution as an inferior court or a lower court. It is also regarded as a court of no record because its judgments are not reported. However for one to qualify as a Circuit Court judge he or she must be : 1) A lawyer of not less than 5 years standing. 2) A person of high integrity and good character

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3) Must be appointed by the Chief Justice in consultation with the Judicial Council subject to the approval of the General Legal Council .

Composition For all intents and purposes , the Circuit Court is a one man court. In other words it is presided over by a single judge and has only one sitting ie sitting in ordinary and nothing more. Jurisdiction As indicated earlier , the Circuit Court has both (a) civil jurisdiction and (b) criminal jurisdiction a) Civil jurisdiction Apart from cases involving company law, shipping and piracy the Circuit Court can try any civil matter value of which does not exceed 100,000,000 and not below 60 milion It can try cases such as negligence, declaration of title , defamation, breach of contract, divorce, custody of children, settlement of matrimonial properties, to mention but few.

- 47 b) Criminal Jurisdiction Since the fusion of the Circuit Tribunal and Circuit Court, the Circuit Court has assumed criminal jurisdiction over cases such as stealing, fraud, embezzlement, impersonation, fraudulent breach of trust , arson , forgery etc provided the value of these cases is not below 60,000,000. Appeals All criminal appeals from the circuit court lie in the High Court whereas all civil appeals from the Circuit Court lie in the court of appeal. It must me emphasize that under no circumstance would a civil appeal from the circuit court lie in the civil court. Likewise under no circumstance would a criminal appeal from the Circuit Court lie in the Regional Tribunal. It lies in the High Court. The Regional Tribunals by themselves do not have appellate jurisdiction. Every appeal from the Circuit Court is an appeal as of right.

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Limitation On the criminal front the Circuit Court cannot try the following cases :- treason, armed robbery, murder, man slaughter, arson. On civil front too the Circuit Court cannot try an issue involving the interpretation of the constitution, electoral petition, cases affecting company law, shipping and piracy etc.

6. THE DISTRICT COURT

This is otherwise termed as the District Magistrate Court. It is the lowest court in the hierarchy of courts in Ghana. Until the passage of Act 620 in 2002 the District Magistrate Courts were known as the Community Tribunal. However Act 620 abolished the panel system used by the Community Tribunal and reverted to its former name as the District Court. It has both criminal and civil jurisdiction. Qualification By the 1992 Constitution of the Republic of Ghana for a person to qualify as a District Court magistrate he must be :1) A lawyer of not less than 3 years standing. 2) He must be of high moral character and proven integrity 3) Must be appointed by the Chief Justice in consultation with the Judicial Council subject to the approval of the General Legal Council.

- 48 Composition In trying both criminal and civil cases this court is presided over by the magistrate. It is only when the District Court reconstitutes into a family tribunal that the law makes it incumbent on this court to sit with a panel of 2 lay persons. These lay men and women are supposed to be conversant with the culture, ethics, norms and practices of the district which the court is located . Jurisdiction a) Criminal Jurisdiction The District Court by Act 620 has jurisdiction over all misdemeanors (minor criminal offences) not above fifty million cedis. These include common assault, minor stealing, traffic offences, acts tending to disturb the peace of the public. But on a more important note the District Court is by Act 30 ( ie the criminal proceeding codes), the only court

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which has jurisdiction to conduct committal proceedings for trial by indictment over a first degree felony in the High Court. In other words when someone commits an offence such as murder , armed robbery, rape etc, he cannot be tried by the Magistrate Court but the law enjoins the prosecution to arraign such a suspect before the District Court for the magistrate to elicit his plea and make preliminary enquiries about the nature of his defence before the accused person is transferred to the High Court for his full trial.

b) Civil Jurisdiction The District Court has civil jurisdiction over cases to the tune of not more than 60,000,000 . Anything above this sum must be remitted to the circuit court. Among the civil cases determined by the District Court are slandering as in the case of Comfort Atiasi vrs. Cop. Abobbtey. Both parties resided in Ho. The plaintiff operated a shop whereas the defendant was a police corporal. A quarrel arose between the 2 whereupon the defendant addresses the plaintiff as a prostitute operating prostitution in the shop. Feeling so embarrassed and humiliated the plaintiff sued the defendant before the District Court , Ho where the judge found for her under grounds that under customary law defamation is actionable per say unlike common law libel where the claimant may proof that his reputation has being lowered in the eyes of the right thinking members of the society. Other civil matters such as custody of children, declaration of title to land, recovery of debt , ejection of tenants, unlawful damage and nuisance among others are tried by the District Court . Apart from these issues the District Court has jurisdiction to make interlocutory orders . It must be borne in mind that the District Court is a court of summary jurisdiction meaning that proceeding at this court need not be writing. It also means that a magistrate of the District Court can pronounce judgment over a matter without necessarily taken full evidence. - 49 -

Appeals Since the District Court is a court of first instance, a person dissatisfied its ruling can appeal as of right to the High Court in both civil and criminal matters . Limitations The District Court cannot try company matters neither can it interpret the constitution nor matters affecting shipping and piracy. It has no power of judicial review. The District Court cannot entertain appeal from any judicial body except a quasi judicial body like the rent control. It has no jurisdiction over chieftaincy matters, neither can it issue prerogative writs although it has the power to grant interview injunction as an equitable remedy.

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- LECTURE 12 -

COMMISSION ON HUMAN RIGHTS AND ADMINISTRATIVE JUSTICE ( CHRAJ )

( ARTICLE 216 230 OF THE 1992 CONSTITUTION ) _____________________________________________________ Background The law governing the establishment and functions of this statutory institution can be found at Article 216 of the 1992 constitution. It is one of the novelties to be ever introduced in a Republican Constitution in Ghana. Until the promulgation of the 1992 constitution, some of the functions of CHRAJ were exercised by the Ombudsman . The

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Ombudsman fundamentally concerned itself with only the administration of administrative justice and nothing more . Indeed that was the ambit of authority of the Ombudsman . The concept of the Ombudsman itself evolved in Sweden upon the realization that administrative law was a domain of its own and required special attention For this reason matters relating to employment, interdiction, summary dismissal, compensation for injury on the job and termination of contract for / of employment became the lots of the Ombudsman. . However with the inception of the 1981 coup-de tat in Ghana the office of the ombudsman outlived its usefulness by registering some serious lapses. Its orders were flouted with impunity due to the emergence of revolutionary organs such as C.D.R., P.D.C., Peoples Military etc which usurped the functions of the Ombudsman by also administering administrative justice. As if this was not enough, some members of these revolutionary organs were appointed to sit as panel members with the legal officers of the ombudsman and unfortunately the pronouncement of the laymen held sway over the offers of the Ombudsman. In so doing the office of the ombudsman was over shadowed by the revolutionary elements . This pushed the Ombudsman into oblivion. Again the office of the Ombudsman was bereft of jurisdiction over issues of Fundamental Human Rights as it now exist under Article 21 of the 1992 Constitution namely freedom of worship, freedom of association, freedom of choice, freedom of speech etc . For this reason it has a limited jurisdiction with regard to human right grievances which compelled people with human right grievances to go to the High Court to join the queue of civil cases. This limited jurisdiction also took away the seriousness the citizenry attached to the office of the Ombudsman. Finally this office was perceived as one of a political bigotry bent upon serving the interest of the then ruling government. Interestingly the office of the ombudsman tainted or spoilt its own legal record of rule of law and natural justice by adopting unorthodox revolutionary methods to compel persons who appeared before them to speak the truth . - 51 In brief it was the external showings of the Ombudsman along side other factors which are not far fetched which informed the consultative assembly which drew up the 1992 Constitution to come out with the office of the Commission On Human Rights and Administrative Justice as a replacement . Commission On Human Rights And Administrative Justice ____________________________________________________ Fundamentally CHRAJ is charged with 2 functions namely i) to enforce human rights through the correction of human right abuses and ii) ensuring an even system of administrative law in Ghana. The legal personality and administrative structure of CHRAJ is one of a corporation sole . In other words it is headed by a single commissioner. It is thus the single commissioner

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who is regarded as CHRAJ. In other words the Commissioner has two personalities ie his office and his physical being . It is where the commissioner sits which constitutes CHRAJ and not a permanent office structure. Again every staff of CHRAJ acts for the commissioner and not himself or herself. No act or decision could be taken by any such subordinate without the consent of the commissioner. The commissioner is assisted by 2 commissioners. One is in charge of administration and administrative justice whereas the other is in charge of operations and human right abuses. Beneath these are a chain of legal officers and auxiliary staff who assist the commissioner in carrying out his constitutional mandate . Functions of CHRAJ 1. It is vested with the power to investigate complaint of fundamental human right abuses, corruption, abuses of power and unfair treatment by public officers in the exercise of their duties. 2) It has the power to investigate the activities of the public services commission and all state organs (police service, military service etc) especially with regard to equal access to recruitment . 3) It has the power to investigate the activities and practices of private companies so far as they relate to issues of fundamental human rights. In this regard CHRAJ can champion the cause of the victim in the law court . 4) CHRAJ has the power to investigate cases of alleged misappropriation of public funds , corruption etc . In this direction CHRAJ may forward its grounds of suspicion to either the Attorney Generals Dept or the Accountant General .

- 52 5) CHRAJ has the duty to educate the public on issues of fundamental human rights, of Legality , equality and liberty . This could be done through the organization of symposium , public lecture , publications and dramatic sketches. In addition CHRAJ has the power to issue subpoena requiring any citizen of Ghana to appear before it to give evidence. Any person found to be in contempt of a subpoena could be dealt with by law by a court of competent jurisdiction. A case in support of this is the unreported case of the COMMISSION FOR HUMAN RIGHTS & ADMINISTRATIVE JUSTICE V. TEMA GENERAL HOSPITAL . ( Ex Parte Fokuor and Ansah ) The defendants were gynaecologists of the Tema General Hospital , being the Head of Department and medical officer respectively . On or about May 2001, a lady by name Juliana Somia who was pregnant w3as rushed to the hospital bleeding profusely around 4:00 am . The medical officer on night duty had left the hospital before the arrival of his

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reliever . Therefore at the time the patient was brought inn there was no medical officer around to attend to her . Around 5:30 am Dr Fokuor who was not on duty decided to pass go to consulting room to pick his reading glasses and came upon the case . Upon his investigation he got to know that the patient had being kept in a loca;l church for about 5months without any ante natal attention . The doctor had the patient rushed to the surgical theatre but the absence of a doctor anaesthetist caused further delay . In the end the patient died in the course of the surgery . The deceased persons husband commenced an action in gross disrespect of human life against the defendants before CHRAJ . It took a lot of legal to extricate the defendants from blame . Although CHRAJ is one of the subsidiary bodies under the A-Gs Department Article 225 of the 1992 Constitution indicates clearly that in the performance of their functions CHRAJ is to be completely independent, not subject to the control or direction of any person or authority. Appeals Where an order of CHRAJ is not complied with by any person in Ghana, the aggrieved party may appeal to the High Court for an enforcement of CHRAJs order.

Limitations of CHRAJ 1) CHRAJ cannot try a matter already pending before any law court in Ghana. 2) CHRAJ cannot entertain any grievance involving the government of Ghana and any other foreign government. 3) CHRAJ cannot handle any international case. 4) The Commissioner for CHRAJ cannot exercise a prerogative of mercy or clemency.

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5) The Commissioner and his deputies are by law forbidden from holding any other public office . It is for this reason that they are retired on their salary unless dismissed . This equally applies to all judges at High Court, Regional Tribunal and above . Qualifications of a Commissioner The qualification of the Commissioner is the same as a Court of Appeal judge which implies that he or she must -

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1) be a lawyer of not less than 12 years standing. 2) He must be appointed by the president in consultation with the council of state subject to the approval of parliament. 3) He must be of good moral character and proven integrity. 4) the Commissioner and his 2 deputies shall cease to hold office upon attaining the age of 65 years.

In brief CHRAJ has the dual responsibility to protect, promote and safeguard the human rights of all the citizens of Ghana visa-vis ensuring that the Ghanaian society is free from victimization, gross abuse of employees right as well as compelling people to work under degrading consideration.

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a) Contract of Employment : - A contract becomes applicable in a situation where the employee is appointed permanently by the employer for which reason his reward is determined monthly by salary. In event of injury an employee doing a contract of employment is compensated under the workmans compensation act. It is against this background that NLCD 157 made it mandatory for every employer to issue an employee employed on contract of employment with an appointment letter stating there in that such an employee could remain a casual worker for only six months. After six months if he is still in the employment the law obliges the employer to make him a permanent worker. Failure upon which the employee would be deemed by law to have being made a permanent worker. It is an offence under the employment laws

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of Ghana to terminate the appointment of a casual worker after six months only to re engage him as a casual with the aim of avoiding the mandatory requirement of the law to make him a permanent worker. All the seven cardinal points discussed above are strictly applicable to a contract of employment. Finally the principles of vacarius of employment. The principle of vacarius liability refers to where an act of an employee is deemed by law to be binding on his employers by this doctrine the express authority by the employer is always inferred by the conduct of his employee. The locus calssicus the leading case of case of Rylands vrs Fletcher. In expounding on the principles of vacarious liability Lord Simmon(LJ) appraise the fact of this case where by the defendant purchased an unruly dog to his home. In no time the dog jumped over his wall to bite the plaintiff in his house. The plaintiff sued the defendant for negligence to which the defendant argued that he did not intentionally discharge the dog to bite him. In his judgment, Lord Simmons applied the forceable lest he gave the dictum that the defendant should have foreseen the palpable consequences of bringing such a dog to his home. Any misconduct of the dog in law made the defendant indirectly responsible, therefore the defendant was vicarious liable. This principle was highlighted in the case of Kwamina Bosiako vrs Maxwell construction. The plaintiff was the head of a family of a law professor by name Bentsi Enchil. The professor was travelling from Accra to Cape Coast over the weekend. The defendant Co. were reconstructing a segment of the Accra Cape Coast highway. On that fateful day at the close of work around 6 pm the foreman on site ordered the tipper truck to tip-off a heap of sand and stones on one lane of the high way making only the remaining lane accessible to committers. Upon reaching the site the professor drove into the heap and died instantly. The head of the family related that the foreman was a pauper and commenced his action on his employer Maxwell Construction Company Ltd. The immediate defender of the driver acted ultra varis so he should be held personally liable making use of the Rylands and Flectcher as a vieria deciasis. Justice Fransow held thedeendant vacariously liable for the misconduct of their foreman since he was a contract of employment. c) Contract For Employment : - A contract for employment is accessed as that type of employment where by the employee is employer for a specific period of time to exercise a particular work. Example of a contract for employment is the engagement of a consultant or the engagement of the contractor. The index of this type of engagement is identified in terms of remuneration receive monthly salaries. In a contract for employment consideration is determined by the contract rewarded. In other words the contract sum won at the tender bidding is what a person doing a contract for employment receives.

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One other index of a contract for employment has to do with compensation for injury. Whereas an employment doing a contract of employment becomes automatically entitled to compensation under the workmans compensation Act of 1960 by his employers. In the case of an employee a contract for employment in the event on an injury, he does not become entitled to a compensation under the workmans compensation Act. At best he could be compensated if indemnified by registered insurance company operating in Ghana. A Case in support of this ascertain is Mana vrs. S.J.C. The plaintiff was a petty trader leaving in Tema but trading in Accra. She was among a number of persons who converged at Danquah Circle looking for a possible means of transport to Tema. A driver of a one of the GHAPOHA buses who had finished conveying staff decided to take passengers on board which included Mansa. In the course of the journey the bus skidded off the road and summasulted leading to the amputation of the one hand of Mansa. She applied to GHAPOHA under the doctrine of vicarious liability for compensation to which GHAPOHA refused on the grounds that Mansa was not an employee of GHAPOHA therefore she joined the bus at her own peril. In further application to S.I.C. she was refused compensation on the grounds that she was not doing a contract for employment of GHAPOHA. On other index of a contract for employment is such an employee was not governed by the collective bargaining agreement of the company which has contracted them. On the authority of section 96 of Act 651, the collective bargaining agreement is a negotiated instrument between workers of a company and management based on which the collective bargaining certificate is issued. Therefore employees of external certificate cannot have any right or liability under the C.B.A.

Finally an employee of a contract for employment cannot have his appointment terminated by the company benefiting from his service simply because he is not appointed by such a company. Any misconduct poor performance or disobedience could at worse lead to a variation of the contract reward as a termination of the contract. It is this indices which distinguish a contract of employment from a contract for employment.

d) Wage Earners (Labourers) : - This type of employment is generally referred to as casual employment. A casual employment is a situation whereby a worker is employed temporary. By section 64 of Act 651, a contract relating to the appointment of a casual is a contract of employment except that in this circumstance the casual worker is not to be retained for a period exceeding 6 months. This is a mandatory provision. This is captured by section 75(i) of Act 651. Moreover the law makes it mandatory for a casual worker to be given equal pay for work of equal value done with a permanent staff. The only difference here is that casual worker becomes entitled to payment just after the days work because he takes

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wages and not salary. The law again makes it a shall for a casual worker to be entitled to medical facility. Further more a casual worker is entitled to payment for overtime. Finally by law a casual worker may not be given an appointment letter. In essence a contract which is for a period of 6 months need not be in writing. A casual worker is by law prohibited from deductions by the employers except income tax. A case in support is James Pernovs state Shipping Company (Black Star Line). The plaintiff was a clock working unemployed as a casual worker by period of 35 years although discontinuous after every 6 months. Along the line all the establishments under the ministry of transport and communication used the same pay vouchers. The format was invited for Ghana airways and because that company was not taking casual workers, on coloum was provided for casual workers. The convention therefore was created for Black star Line casuals to have the wages placed under staff car loan which in actual fact did not mean a car loan. The plaintiff surprisingly took B.S.L. to court demanding his car or a refund of the total deductions made against him. Chasing B.S.L. for his unfair labour practices in retaining a casual workers to 35 years, the court deemed the donation of the plaintiff to mean a permanent staff. However considering the fact that the plaintiff had no appointment letter and the fact that he was a casual for which reason his wages was prohibited from deducting except income tax, the plaintiffs case was dismissed but the court ordered an end of service benefit for him. DUTIES OF AN EMPLOYER : - The duties of an employer is captured by section 9 of Act 651. These are essentially 8 in number and they should be distinguished from the essential element of employment otherwise returned to as cardinal of employment. 1) The employer must provide work and appropriate raw material tools, machinery and equipment. It must be noted in this regard that unless the employee decides to be gratitious any use of his tools in furtherance of the employers work should attract a reward.

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NEGOTIABLE NSTRUMENTS
________________________________________________________ There is a class of documents which are treated as documents of title to money. Included in this class are bills of exchange, cheques and promissory notes. An important feature of such documents is that rights and liabilities created by them may be transferred to third parties who thereupon acquire the same rights or incur the same liabilities as the person who made the transfer. For this reason such documents are generally described as negotiable instruments. The main characteristics of negotiable instruments are : a) valuable consideration is presumed; there is therefore no need to state value on the instrument. b) a negotiable instrument may be transferred from one person to

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another either by endorsement or delivery and the transferee is thereby able to sue upon it in his own name and c) a transferee who takes a negotiable instrument in good faith and for value obtains a good title not withstanding any defect in the title of the transferor. DEFINITION The party who draws a negotiable instrument is known as the drawer. The party on whom the instrument is drawn is known as the drawee. When the drawee of a negotiable instrument signifies his assent to the order of the drawer, he becomes the acceptor of the instrument. Acceptance consists of the signification of the assent of the drawee completed by delivery or notification of the assent. The party to who a negotiable instrument is payable is known as the payee. Where an instrument is in the form of a promissory note, the party who makes it is described as the maker. The transfer of possession of an instrument from one person to another whether actual or constructive is know as delivery. The first delivery of an instrument, complete in form, to a person who takes it as a holder is known as the issue of the instrument. An instrument is negotiable when it is transferred for value to a person who then becomes entitled to hold it and can sue on it in his own name. Endorsement takes place when the name of the transferor is written on the instrument and it is delivered to the transferee. The transferor whose name is written on the instrument is the endorser and the person to whom the instrument is transferred by endorsement to the endorsee. The person in possession of an instrument payable to bearer is known as the bearer. The payee or endorsee of an instrument who is in possession of it or the bearer of such an instrument is known as the holder. A holder for value is a holder of a negotiable instrument for which value has at any ;time been given. A holder in due course is a person is a person who is a holder of a negotiable instrument which is complete and regular on the face of it and who has the instrument before it becomes overdue in good faith and for value, without notice of either previous dishonour or of any defect in the title of the person who negotiated it to him. RULES There are some general rules which apply to all negotiable instruments whatever their nature. If a bill contains words prohibiting transfer or indicating an intention that it should not be transferable, it is valid only as between the parties to it but it is not negotiable. Transferability is of the essence of a negotiable instrument. A negotiable instrument may be made payable either to order or to bearer. Negotiable is effected when the instrument is transferred from one person to another in such a manner as to constitute the transferee the holder of the instrument. If the instrument

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is payable to bearer, it is negotiated by delivery. If it is payable to order, it is negotiated by endorsement of the holder completed by delivery. ENDORSEMENT For an endorsement to be effective in negotiating an instrument it must satisfy the conditions laid down in section 30. These are : a) It must be written on the bill itself and signed by the endorser. The simple signature of the endorser on the bill without additional words is sufficient. b) It must be endorsement of the entire bill. A partial endorsement does not operate as a negotiation. Thus an endorsement which purports to transfer to the endorsee a part only of the amount payable or which purports to transfer the bill to two or more persons severally is not an effective negotiation. c) where a bill is payable to the order of two or more payees or endorsees who are partners all must endorse unless one has the authority to endorse for himself and all the others. d) where a bill is payable to the order, the payee or endorsee is wrongly designated or his name is misspelt, he may endorse the bill as therein described, adding if he thinks fit, his proper signature. e) where there are two or more endorsement on a bill, each endorsement is deemed to have been made in the order in which it appears on the bill until the contrary is proved. f) an endorsement may be made in blank or special. It may also contain terms making it restrictive. The endorsement of a bill must be unconditional. If a bill purports to be endorsed conditionally, the condition may be disregarded by the payer and payment to the endorsee is valid whether the condition has been fulfilled or not. An endorsement is said to be blank if it does not specify the endorsee. A bill so endorsed becomes payable to bearer. A bill is specially endorsed if it specifies a person to whom or to whose order the bill is payable. When a bill has been endorsed in bland, any holder may convert the blank endorsement by writing above the endorsers signature a direction to pay the bill to or to the order of himself or some other person. An endorsement may be restrictive. A restrictive endorsement prohibits the further negotiation of the bill or expresses that it is a mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof. A restrictive endorsement give the endorsee the right to receive payment of the bill and to sue any party thereto that his endorser could have sued but gives him no power to transfer his right as endorsee unless it expressly authorizes him

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to do so. Where a restrictive endorsement authorizes further transfer, all subsequent endorsees takes the bill with the same right and liabilities as the first endorsee under the restricted endorsement. BILL OF EXCHANGE A bill of exchange is an unconditional order in writing addressed by one person to another , signed by the person giving it requiring the person to who it is addressed to pay on demand or at a fixed and determinable future time, a sum certain in money to or to the order of the specified person or bearer. From this definition the following conditions for a valid bill of exchange may be deduced : a) an unconditional order in writing must be made by one person known as the drawer or the bill. b) the order must be signed by the drawer. c) the order must be addressed to another person known as the drawee. d) the order must require the drawee to pay on demand or at a fixed or determinable time in the future a certain sum of money and e) the money may be payable to the drawee himself or to his order or to bearer. An instrument which does not satisfy these conditions or which orders any act to be done in addition to the payment of money is not a bill of exchange. The validity of a bill is not affected by the fact that : a) it is not dated b) that it does not specify the value given or that any value has been given for it and c) it does not specify the place where it is drawn or where it is payable. A bill of exchange may be an inland bill or foreign bill an inland bill is one which is or which on the face of it purports to be either drawn and payable in Ghana or which is drawn within Ghana upon some person resident in Ghana. Any other bill is a foreign bill. The holder of a bill may treat it as an inland bill unless the contrary appears on the face of the bill. A. ACCEPTANCE A bill if exchange must be accepted by the drawee upon whom it is drawn. A drawee accepts a bill by signifying his assent to the order of the drawer. An acceptance must, in order to be valid. Be written on the bill and signed by the drawee. The mere signature of the drawee without more is enough indication of acceptance. There must also be no

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indication on it that the drawee will perform his promise to pay by any other means that the payment of money in other words, a bill must relate to the payment of money and nothing else. Acceptance of a bill may be either general or qualified. An acceptance is general if the drawee assents to the order of the drawer without any qualification. If the acceptance in express terms varies the effect of the bill as drawn, it is qualified. The following are examples of qualified acceptance : a) where payment is made dependent upon the fulfillment of a condition stated in the acceptance. b) where an acceptance is partial, that is as to part only of the amount for which the bill is drawn. c) where an acceptance is to pay only at a particular specified place, this is known as local acceptance; merely specifying a particular place for payment is a general acceptance. Acceptance is only local if it provides for payment at a particular place and nowhere else. d) where an acceptance is qualified as to the time of payment e) where a bill is drawn on more that one drawee and some but not all of them accept.

When a bill of exchange payable after sight, that , on demand, is negotiated, the holder must either present it for acceptance or negotiate it within a reasonable time. If he fails to do so the drawer and all endorsement prior to the holder are discharged. What is a reasonable time depends on the nature of the bill, the usage of trade with respect to similar bills and the facts of the particular case

B. PRESENTATION When a bill is duly presented for acceptance and it is not accepted within the customary time, the person presenting it must treat it as dishonoured by non-acceptance. If he does not, the holder shall lose his right of recourse against the drawer and the endorsers. A bill is dishonoured by non-acceptance : a) when it is duly presented for acceptance and acceptance as prescribed by the Bills of Exchange Act 1961, is refused or cannot be obtained or b) when presentation for acceptance is excused and the bill is not accepted. When a bill is dishonoured by non-acceptance, an immediate right of recourse against the drawer and endorser accrues to the holder and no presentation for payment is necessary.

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A bill must be duly presented for payment. If it is not so presented the drawer and the endorsers shall be discharged. Due presentation is effected in accordance with the rules laid down in section 43(2). These rules are : a) where the bill is not payable on demand, presentation must be made on the date it falls due or b) where the bill is payable on demand, presentation must be made within a reasonable time after its endorsement to make render the drawer liable and within a reasonable time after its endorsement to make the endorser liable. What is a reasonable time is determined by the nature of the bill the usage of trade with regard to similar bills and the facts of the particular case.

Presentation must be made by the holder or by some person authorized by him to receive payment on his behalf at a reasonable hour on a business day, at the proper place either to the person designated by the bill as the payer or some person authorized to pay or refuse payment oh his behalf at a reasonable hour on a business day, at the proper place either to the person designated by the bill as the payer or some person authorized to pay or refuse payment on his behalf, if with reasonable diligence, such a person can be found. A proper place is defined in section 43(2)(d) as i) a place of payment specified in the bill

ii) in the absence of a specified place the address of the drawee or acceptor if given on the bill. iii) in the absence of a specified place of payment or an address given on the bill, the drawees or acceptors place of business if shown and if not, his ordinary place of residence if known or iv) in any other case, wherever the drawee or acceptor can be found on his last known place of business or residence. The other rules as to presentation for payment are : a) if a bill is presented at the proper place, and after the exercise of reasonable diligence, no person authorized to pay or refuse payment can be found there, no further presentation to the drawee or acceptor is required. b) where a bill is drawn upon or accepted by two or more persons who are not partners and no place or payment is specified, presentation must made to them all and c) presentation may be sufficiently made through the post where this is authorized by agreement or usage.

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Delay in making presentation for payment is excused when the delay is caused by circumstances beyond the control of the holder and not imputable to his default, misconduct or negligence. When the cause of delay ceases, presentation must be made with reasonable diligence. Presentation for payment dispensed with : a) where after the exercise of reasonable diligence, presentation as required by the Act cannot be affected. The fact that the holder has reason to believe that the bill will, on presentation be dishonoured dies not dispense with the necessity for presentation. b) where the drawee is a fictitious person. c) as regards the drawer, where the drawee or acceptor is not bound as between himself and the drawer to accept or pay the bill and the drawer has no reason to believe that the bill would be paid if presented. d) as regards an endorser, where the bill was accepted or made for the accommodation of that endorser and he has no reason to expect that the bill would be paid if presented. e) by waiver of presentation, express or implied.

C. DISHONOUR A bill is dishonoured by non-payment a) when it is duly presented for payment and payment is refused or cannot be obtained or b) when presentation is excused and the bill is overdue and unpaid. When a bill is dishonoured by non-acceptance or by non-payment, notice of dishonour must be given to the drawer and each endorser and any drawer or endorser to whom such notice is not given is discharged. A valid and effective notice of dishonoured must be given in accordance with the rules laid down in section 47 of the Act. In circumstances specified in section 48 of the Act delay in giving notice of dishonour may be dispensed with. When the bill dishonoured is an inland bill, the holder may if he thinks fits have it noted for non-acceptance or nonpayment as the case may be. He need not note or protest such a bill in order to preserve the recourse against the drawer or endorser. In the case of a bill which appears on the face of it to be a foreign bill if it is dishonoured by non-acceptance, it must be duly protested for non-acceptance. Where a bill has not been previously dishonoured by non-acceptance is dishonoured by non-payment, it must be duly protested for non-payment. If it is not so

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protested, the drawer and endorsers are discharged. Where a bill does not appear on the face of it to be a foreign bill, protest thereof is unnecessary in case of dishonour.

D. LIABILITIES OF ACCEPTOR A bill of itself does not operate as an assignment of funds in the hands of the drawee available for payment thereof. The bill must be accepted by the drawee before he becomes liable. A drawee who does not accept as required by the Bills of Exchange Act, 1961 is not liable on the instrument. When the drawee of a bill becomes an acceptor by accepting it, he engages to pay it according to the tenor of his acceptance. He is precluded from denying to a holder in due course. a) the existence of the drawer, the genuineness of his signature and the capacity to draw the bill. b) in the case of a bill payable to drawers order, the then capacity of the drawer to endorse but not the genuineness or validity of his endorsement. c) in the case of a bill payable to the order of a third person, the payee and his thin capacity to endorse, but not the genuineness or validity of his endorsement..

E. LIABILITY OF DRAWER AND ENDORSER a) engages that on due presentation, it shall be accepted and paid according to its terms and that if it is dishonoured he will compensate the holder or any endorser who is compelled to pay it provided that the requisite proceedings on dishonour are duly taken and b) is precluded from denying to a holder in due course, the existence of the payee and his ten capacity to endorse. a) engages that on due presentation it shall be accepted andpaid according to its tenor and if it is dishonoured, he will compensate the holder or subsequent endorser who is compelled to pay it provided that the requisite proceedings on dishonour are duly taken. b) is precluded from denying to a holder in due course the genuineness and regularity in all respects of the drawers signature and all previous endorsements and c) is precluded from denying to his immediate or subsequent endorsee that the bill was at the time of his endorsement a valid subsisting bill and that he had then good title thereto.

F. TRANSFEROR BY DELIVERY

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Where the holder of a bill payable to bearer negotiate it by delivery without endorsing it he is called a transferor by delivery. A transferor by delivery is not liable on the instrument. If a transferor by delivery negotiates a bill, he thereby warrants to his immediate transferee being a holder for value that the bill is what is purports to be that he has a right to transfer it and that a the time of transfer, he is not aware of any fact which renders it valueness.

G. DISCHARGE OF A BILL A bill is discharged by payment in due course by or on behalf of the drawee or acceptor. payment in due course means payment made at or after maturity of the bill to the holder thereof in good faith and without notice that his title to the bill is defective. When the holder of bill at or after its maturity absolutely and unconditionally renounces his rights against the acceptor, the bill is discharged. The renunciation must be in writing unless the bill is delivered up to the acceptor. The liabilities of any party to a bill may similarly be renounced by the holder before at or after its maturity but this does not affect the right of the holder in due course without notice of the renunciation. Where a bill is intentionally cancelled by the holder or his agent and the cancellation is apparent on the face of the bill, it is thereby discharged. Similarly any party liable on a bill may be discharged by the intentional cancellation of his signature by the holder or his agent. In such case any endorser who would have had a right of recourse against the party whose signature is cancelled is also discharged. A cancellation made unintentionally or made under a mistake or without authority of the holder is inoperative but where a bill or any signature thereon appears to have been cancelled, the burden of proof lies on the party who alleges that the cancellation was made unintentionally or under a mistake or without authority. Where a bill is materially altered without the assent of all the parties liable on the bill the bill is avoided except as against a party who has himself made authorized or assented to the alteration and subsequent endorsers provided that where a bill has been materially altered but the alteration is not apparent and the bill is in the hands of a holder in due course such holder may avail himself of the bill as if it had not been altered and may enforce payment of it according to the original tenor. The following alterations are in particular material : any alteration of the date, the sum payable, the time of payment, the place of payment and where a bill has been accepted generally, the addition of a place of payment without the acceptors assent.

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THE COMMON LAW OF GHANA

1. INTRODUCTION Most often than not this is confused with the either the received Common Law or the Assimilated Customary Law. It is against this background that one finds it important to disclose the content of the Common Law of Ghana as against the received Common Law from England. i) the received Common Law of England ii) iii) iv) The Doctrines of Equity Customary Law Assimilated Customary Law

2. THE DIFFERENCE BETWEEN THE ENGLISH COMMON LAW AND THE COMMON LAW OF GHANA From the foregoing it is evidently clear that whereas the received common Law of England has a long antecedent in English history with the well established notion that it

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evolved out of the system of justice administered by the Lord Chancellor appointed by the King to go on circuit the Common Law of Ghana on the other hand is a creature of the 19992 Constitution. Besides whereas the Common Law of England was not consciously made by the Englishmen to be put into writing or codified for enforcement but rather evolved out of a particular pattern of justice followed by the Lord Chancellor, the Common Law of Ghana is nothing but a constitutional creature mooted out of the work of the Consultative Assembly which did the draft of the 1992 Constitution. Furthermore, whereas the Common Law of England refers to one set of rules received by the pre-colonial, colonial and post colonial era of Ghana, the Common Law of Ghana has a wider scope encompassing the received common Law of England itself together with it Doctrines of Equity to the inclusion of both Customary Law and Assimilated Customary Law. Finally whereas under the received Common Law of England, Customary Law of Ghana was treated as a question of fact whereas the received Common Law was treated as a question of law, by the inclusion of the Common Law of Ghana in the 1992 Constitution the latter has also gained acceptance as a question of law together with the received Common Law.

3. EXPLANATION OF THE ELEMENTS OF THE COMMON LAW OF GHANA i) The Received Common Law of England As already discussed this refers to the set of rules which emanated and eventually got formalized out of the system of justice administered by the Lord Chancellor appointed by the King in order to unify the whole of England under a singly system of Law and Administration as compared to the legacies of different laws and system of administration followed by the various countries in England depending upon their previous political overlord during the age of conquest and expansion. ii) Doctrines of Equity As already noted equity came to mitigate the hardships of the common law. It strictly refers to the set of rules also developed out of the parting of justice administered by the chancellor with the aim of ameliorating the harsh effects suffered by the masses as a result of the application of the common law. Deeply embedded in the doctrines of equity was a high sense of creating fairness, minimizing corruption, avoiding delay and generally doing justice according to the merit of the case and not according to legal technicalities. These were the things absent under the common law which compelled the masses to clamour for a new system of justice. Hence the birth of equity. It was these same underlying factors which informed the invention of the equitable maxims as well as all equitable remedies. With this background explanation, maxims such as delay defeats equity, equity is as big as

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the chancellors foot; equity looks at the intents rather than the form; equity aids the vigilant and not the indolent among others should be easily understood. Moreover, equitable remedies such as specific performance, injunctions and quantum meruit should be placed in context. It therefore stands to reason that a charitable doctrines such as that of equity is seen under the 1992 constitution as part of the Common Law of Ghana. iii) Customary Law This refers to the belief, ethics, norms, practices, rules, conventions and the entire gamut of the social, political and economic life of a given community in Ghana handed down from one generation to another by word or mouth or orally. With the reception of the Common Law into the Gold Coast Customary Law got relegated to the background simply because they were alien to the English men and because they were not put to writing they required proof before they could be administered. For all these reason, the English colonial masters of Gold coast treated Customary Law as a question of fact and not law. This meant that whenever Customary Law was to be established it required proof unlike the Common Law which was in writing and once cited or referred to no more proof was required.

a. Characteristics of Customary Law 1. It is passed on by word of mouth 2. It is amendable to distortion, exaggeration and embellishment 3. It evolves out of the culture of a community and not man made 4. It is often enshrouded in myths, proverbs and traditional arts and symbols Because Customary Law was regarded as question of fact and not Law the need arose for well established criteria to determined the truthfulness or otherwise of a piece of practice claimed to be Customary Law. The following criteria was laid down by the Judicature Act of 1876. 5. It must not be repugnant to good conscience 6. It must not be agisnt the principles of natural justice ie audi alteram partem, nemo dat judex causa sua, and making a law to take retrospective effect. 7. It must not be against the doctrines of equity b. Ascertainment of Customary Law

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It must be pointed out that providing the validity, truthfulness and exigency of a piece of Customary Law is not the prerogative of the law court. Rather Customary Law can gain acceptance as valid and duly existing only when it can be ascertained through any of the following means. 1. Confirmation by repositories of Customary Law in the Community ie House of Chiefs, the chief and his elders etc. This was the decision in Akoninga v Akawagre (supra). In Comfort Attiase v Corporal Abobbtey, the plaintiff was a female trader who stays at Ho and the defendant was a police stationed at Ho. The plaintiff proved at the trial that the defendant had called her a prostitute and said that she practiced in her shop. She alleged that this imputation was slanderous and sued the defendant in respect of it. Taken into consideration the fact that under the Common Law one has to prove lowering of reputation in the eyes of the right-thinking members of society among others in establishing the tort of defamation whereas this was a customary law complaint, the court referred the matter to the chief and is elders at Ho. Whereupon it was held that under Anlo customary law calling a woman a prostitute while she is not in fact practicing prostitution constitutes defamation of character. This decision was confirmed by the Court of Appeal and thus helped to draw up a difference between libel and slander. 2. Written Authorities Although it is evidently clear that from time immemorial Customary Law has been passed down either orally or by word of mouth from one generation to another, it must also be pointed out that some attempts were made by early legal scholars and jurist to codify or document customary laws. These writings have gained so must acceptance and recognition to the extent that they have become points of reference in ascertaining the existence of a customary law and practice. Notable among these works are John Mensah Sarbahs FANTI CUSTOMARY LAWS, which was the earliest compilation of native customs and even cited in Queen of Englands Court. Another work worthy of mention is J. B. Danquahs AKAN LAWS AND CUSTOMS. Professor Kofi Abrefa Busias CHIEFTANCY AMONG THE AKANS is also instructive in this regard. Likewise Ratrays HISTORY AND ORIGIN OF THE MOLE DAGBANI STATES to mention but a few. 3. It must be Notorious The final criteria for ascertaining customary law is that it must be notorious within the community in which it is invoked. In other words it must be a practices or rights or yet still a conversion within the knowledge of everyone in the community to the extent that it becomes needless to teach anybody with the community about it. For instance, it is undeniably known among the Akans particularly the Fantis that a customary marriage could be converted into an ordinance marriage immediately the parties under the customary solemnize their marriage the

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Ordianance ( Cap 127, 1888 ). If the solemnization is not properly done, the customary law still remains valid and the parties would be bond by it. This was the situation in the case of Carr v Carr. In this case were married under Fanti customary law. Subsequently they had the marriage solemnized by a Reverend Minister himself issued them with a marriage officers certificate as required section 31 of the Marriage Ordinance (Cap 127). Yet the minister issued to the parties a marriage certificate in accordance with the ordinance after the celebration of the marriage in the church. In no time the wife filed a petition for divorce in the High Court in Kumasi praying for distribution of the matrimonial properties in accordance with the ordinance marriage. This was resisted by the husband on the grounds that the marriage was a customary one. Taking judicial notice of the notoriety of the fanti customary law to the effect that a customary marriage was deemed valid and less properly converted into another form of marriage, the trial High Court judge upheld the submission made by the husband and dismissed the wifes petition on the grounds that the marriage was a customary marriage and ought to be dissolved at home and not at court. This highlights the fact that for a piece of custom to be ascertained as indeed a valid customary law it must be notorious to the extent that the courts could take judicial notice of it. iv) ASSIMILATED CUSTOMARY LAWS Article 11(2) of the 1992 constitution refers to Assimilated Customary Laws as Customary law determined by the Superior Courts of Judicature. Therefore the main difference between assimilated customary law and customary law is that the former must be so notorious and common to the extent that the superior courts of Ghana could determine matters pertaining to them without recourse to repositories of that piece of custom. In otherwords assimilated customary law must be so conspicuous and common that the judges from the High Court, Appeal Court and Superior Court could pronounce judgment upon them without seeking clarification from any quarters. Thus Taylor J (as he then was) is known to be a Fanti. Yet sitting as a High Court Judge in Tamale on the case of Billa v Salifu pointed out without any challenge the 4 categories of adultery under Dagomba custom without reference to any repository of the custom. This was because that piece of custom was so notorious and of common knowledge in the area. He enumerated as follows ; Gleaning through these constituents of adultery by Taylor, one could deduce that perhaps having sexual intercourse with a woman in her own home or marital home may not constitute adultery in Dagomba. This is a question for the bench to answer but it must be pointed out that the rationale underlying some of the taboos and offences under customary law defy intelligible rationalization. Yet the point ought to be made that once the law for the inferior courts and judicial precedent to follow without seeking any further ascertainment from any repository.

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It is at this stage that it is referred to as Assimilated Customary Law. Assimilated because it has been integrated sort of into the Ghanaian Common Law. Thus John Mensah Sarbah in his Fanti Customary Law at page 237 enumerates the following as customary offences which the common law courts could pronounce upon without recourse to repositories. i) Putting a person into fetish ii) Sexual connection with a chiefs wife or with any woman in an open place iii) Recklessly, unlawfully or frivolously swearing an oath iv) Knowingly using disrespectful or insulting language or offering any insult whether by word or by conduct etc. From the foregoing it is evidently clear that the niceties of customary laws are integrated into the common law under the description Assimilated Customary Law whereas the unacceptable customary practices which perhaps have become obsolete are regarded as customary law simplicita. The issue then arises as to whether this concept of Assimilated Customary Law is not another attempt by out colonial masters to exploit the best out of Ghana to be integrated into their own culture whereas what they regarded as primitive is left for the Ghanaian with a new name. This is a question for posterity to answer.

THE LAW OF AGENCY

The common law rule as to agency is expressed in the maxims Qui per alium facit, per se ipsum facere videtur meaning He who does an act through another is deemed in law to do it himself, or more shortly Qui facit per alium, facit per semeaning He who acts by another acts by himself. The common law always allowed one to contract through agents RELATIONSHIP OF PRINCIPAL AND AGENT The relationship of principal and agent arises where one party, the principal, consents that the other party, the agent, shall act on his behalf, and the agent consents so to act. This means that in every agency relationship consent is a must . The only exceptions to this are as follows ;1.Where there is an agency of necessity 2. Where the assent of both parties is essential 3. Where the consent of the parties may be implied from their positions with regard to each other . Thus a person who is abroad and who has in his hands income tax upon

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English income is in effect an agent who is bound to account to the crown as his Principal 4. But the mere fact of consent by the owner to the use of a chattel is not proof of agency 5. A company whose shares are controlled by another company is not by mere existence of that control properly to be described as agent SERVANT OF INDEPENDENT CONTRACTOR An agent may be either a servant or an independent contractor. If he is a servant he is under the control of his principal not only as to what he doest but also as to the manner in which he executes his work . The independent contractor, on the other hand undertakes to produce a given result and is not under the order or control of the principal in one person and the agent of another in performing the same piece of work . GENERAL AND SPECIAL AGENTS For the purpose of determining the authority of any particular one, agents may also be further classified as general or special agent . A general agent has authoarity to act in all matters of a particular nature or concerning a particular trade or business; or to act in the ordinary course of a business or profession, eg as a solicitor or factor. A special agent has authority only to do some particular act or act in some particular transaction which is not in the ordinary course of his business or profession as an agent DIFFERENT KINDS OF AGENTS 1. FACTORS AND BROKERS A factor is a person or an entity entrusted with the possession and apparent ownership of the goods to be sold by him for his principal. And in this respect he differs from a broker the latter not having, in general, the custody of the goods or other property of his principal but being a mere negotiator empowered to effect contracts of sale or purchase on his behalf Unless otherwise agreed between him and his principal a factor has a lien over the goods belonging to the principal and entrusted to him in the course of his agency in respect of any claim that he may have against his principal provided that it arises out of the agency . 2.DEL CREDERE AGENTS An agent for the sale of goods sometimes acts under a del credere commission; that is, for a higher reward than is usually given, he becomes responsible to his principal for the solvency of the buyer ; or in other words, he guarantees, in every case of sale, the payment of the price of the goods sold, when ascertained and due. He does not become responsible

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to the buyer for the due performance of the sellers contract and the principal may not litigate with a del credere agent in disputes arising out of contracts made him A del credere agency may be implied or inferred from a course of conduct , but an agreement of receiving half commission on business introduced by him to bear half of any loss sustained by the other in connection with such business was held to constitute not a del credere agency but a contract of indemnity. A del credere agency does not need to be in writing because it is not a promise to answer for the debt default or miscarriage of an Order . 3.AUCTIONEERS An auctioneer is agent to sell at an open sale. Representations made by him at the sale bind the principal and he is trustee for the vendor both as to what is sold and as to the purchase money . Although he is primarily an agent for the vendor, he is also the agent of a purchaser to sign a memorandum sufficient to satisfy the sale contract . In this regard the authority of the auctioneer to sign arises immediately the sale contract is concluded Once signed such a contract becomes irrevocable on the part of the vendor .But such power to sign does not extend to the auctioneers clerk unless the purchaser assents to the clerks signing for the him . 4. SHIPMASTER The shipmaster has authority to enter into contracts for usual employment of the ship to contract for repairs and necessaries in a prudent way when he cannot communicate with the owner and when he can in no other way obtain money therefore and to give a customary bond for such necessaries; but this will only bind the owner if given strictly for such necessaries and bona fide . 5. SOLICITORS A solicitor acting under a general retainer has implied authority to accept service of process and appear for the client but has no authority to commence an action unless such authority may be reasonably inferred from the terms of the retainer. As between client and opponent, the former is bound by every act of his solicitor done in the ordinary course of practice thus a solicitor has authority in the absence of express prohibition to compromise an action .Under the Common Law the production of a deed containing a receipt for the consideration money is authority for payment of that money to the solicitor. 6. HOUSE, ESTATE AND LAND AGENTS An agent employed by the vendor to find a purchaser has authority to describe the property and make statements as to its value so as to bind his principal but he has no power without express authority to conclude a contract to grant a lease or a contract for sale . If he be instructed to sell, he is impliedly authorized to sign on behalf of his principal an open contract of sale but not a contract containing special conditions . It is his

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duty to communicate to his principal the best offer received by him at any time before a binding contract for the sale of the property has been actually signed by the principal unless of course he has been informed by his principal that such an offer is not acceptable

APPOINTMENT OF AN AGENT The relationship of principal and agent is created either by an express contract between the parties by implication of law from the circumstances or from necessity or by the ratification of the agents acts by the principal. 1. A contract describing the parties respectively as principal and agent may in law have the effect not of constituting an agency but of establishing a relationship between the parties as principals .But where a letter of credit is opened the relationship between the instructing and confirming bank is unless otherwise agreed that of principal and agent. 2. A deed of inspectorship in the usual form does not constitute the debtors agents of the inspector or of the committee to carry on the business . 3. Persons on board of a ship under the control of a manager in the position of a ships captain are not necessarily his agents for all purpose in the absence of evidence or the delegation of duties to them . 4. If a company director carries out negations for the sale of the shares of the company and during the course of the negotiations he makes a fraudulent misrepresentation for a purpose of his own the shareholders who have merely accepted a price offered for the shares were held to have appointed him as their agent so as to be liable for his fraud. HOW AN AGENT MAY BE APPOINTED 1.An agent for whatever purpose he is appointed may in general be appointed orally. 2.He may be appointed in writing signed by the appointor particularly where the subject involves land . 3 An agent of a corporation must be appointed by deed sealed with the common seal 4. By ordinary usage of mankind 5 By acquiescence 6 . By implication

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CAPACITY TO ACT AS PRINCIPAL As a general rule a person has capacity to appoint an agent to act for him whenever he would have capacity to enter into a valid contract. So that except that an infant cannot give a valid power of attorney ,an infant or person of unsound mind may appoint an agent to make a valid contract on his behalf wherever he could. A corporation may also appoint an agent but only to act within the scope of its Regulations . CAPACITY TO ACT AS AGENT A contract made by an agent on behalf of a principal is in law the contract of the principal [ Qui facie per alium, facit per se ]. The agent is considered merely as the medium by which the contract is effected. And his assent is merely the assent of his principal. He need not therefore be a person sui juris TERMINATION OF AGENCY 1. By the express revocation thereof by the principal 2. By renunciation of the agency on the part of the agent himself

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3. 4. 5. 6.

By the death By lunacy By bankruptcy By effluxion of time where a specific period is fixed either by express agreement or by the usage of trade for the execution of the act to be done by the agent By the execution of his commission whereby the agent becomes functus officio

7.

8 . By the destruction of the subject-matter of the agency 9 By the happening of an event which renders the continuance of the agency unlawful eg the outbreak of war .

NOTICE OF TERMINATION AGENCY The mere happening of the above events will not in each case operate per se to pevent the principal from being liable for the agents acts. In the case indeed of the principals death agency is determined by the death and the principal and his estate are no longer liable without any regard to notice of the death either to the agent or to a third party contracting with the principal through him . But in the case of insanity of the principal where the principal has held out to A that B is his agent and the principal afterwards becomes insane, though the agents authority is revoked, the principal will continue to be bound by any dealing between A and B within the scope of Bs authority until A has had notice of the principals insanity . If the principal countermands the authority of the agent such countermand will not take effect as to third persons until it is made known to them). It must be noted that the rules of law which regulate the extent of an agents authority to bind his principal are in general the same whether such agent be appointed for commercial or domestic purposes. GENERAL AND SPECIAL AGENTS It is necessary and expedient that parties should communicate with each other through the medium of third persons but business would be impeded if it were requisite on all occasions that the public before dealing with the agent should consult the principal. And accordingly the liability of agent . If a servant or agent be accredited and invested by his master with the latter mainly depends not on the instructions which he may have given to the authority to act for him in all his business of a particular kind or if the agent being himself engaged in a particular trade or business be employed by the principal to do certain acts for him in the ordinary course of that trade or business he will in each case beheld to be with reference of his employment as a general agent and the public having no

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means of knowing what are in any particular case within the general scope of the agents powers the wishes and directions of the principal the latter will be liable even though his orders be violated . In such a case the principal having for his own convenience induced the public to consider that his agents was possessed of general powers, is bound by the exercise on the agents part of the authority which he has thus allowed him to assume. But this is not to say that the principal is bound by every act of the agent; the agent must be doing something which is incidental to the ordinary conduct of the trade or business or whatever is necessary for the proper and effective performance of his duties; acts outside the ordinary scope of his employment or duties will not bind his master The implied authority of an agent involves a representation by the principal as to the extent of the agents authority which could amount to a holding out by the principal. If however the agent is appointed only for a particular purpose and is invested with limited powers or in other words is a special agent, it is the duty of persons dealing with such agent to ascertain the extent of his authority; the principal or master will not be bound by any act of the agent not warranted expressly by the Principal or by fair and necessary implication from the terms of the authority delegated to him . If a person dealing with an agent knows such agents authority to be limited the principal is liable only on a contract made in the exercise of that limited authority Apparently no multiplication of acts of special agency can convert a special agent into a general agent so as to bind his principal even in transactions of a like character to those which have been admittedly the subjects of the special agency AGENT ACTING ILLEGALLY The mere fact that an agent is acting illegally does not constitute notice to the third party that the agent is exceeding his authority FACTORS AND BROKERS Factors and brokers are both general agents. And hence it follows that except in cases where it is known to be usual to limit their authority although the actual limit may not be known all contracts made by them in the ordinary course of their employment without notice by the other contracting party of their private instructions and without fraud or collusion on his part are binding on their principals UNWARRANTED ACTS OF SERVANTS AND AGENTS A factor has no power without special authority to that effect to delegate his authority to 1. barter or pledge goods 2. use a bill of lading for goods 3. or borrow money to charge his principal.

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4. a broker has normally no power to contract in his own name 5. cancel contracts made by him 6. pay losses on behalf of his underwriters 7. delegate his authority 8. pledge bills entrusted to him to get discounted 9, sell stocks or shares on credit AGENCY OF NECESSITY GENERAL PRINCIPLES An agent or servant though employed in a particular business only is prima facie authorized to bind his principal by doing such subordinate acts as are necessarily or usually employed for duly carrying into effect the object of the principal power whether such acts are subsequently ratified by the principal or not Moreover emergencies may arise which cast upon the agent a duty to protect the interests of his principal by acts of an exceptional character and upon such occasions he has an implied authority to bind his principal by any act honestly done on his behalf under the presumption of a real commercial necessity. Therefore as the master of a ship is appointed to conduct its navigation to a favourable termination so when payments for which ready money is required must be made during the voyage and the ship is in a port where the owner has no agent and it is not practicable to communicate with the owner himself the master has power to borrow money on the owners credit in order to make such payments for necessaries. Previous notice must be given by the master to the owner if it is practicable for him to do so . Whilst it would appear that any person who is in some contractual relation with another may upon emergency become an agent of necessity for the latter provided that he act honestly in the interest of his principal in the face of a real commercial necessity and without any previous opportunity of communicating with him ,it has been made clear that the courts will not readily increase the number of classes of person who can be looked upon as agents of necessity . Thus in SACHS vrs. MIKLOS the plaintiff stored furniture with the defendant without charge and then ceased to visit the defendant and did not inform him of any change of address. Subsequently the defendant whose premises had been damaged by bombing wished to use the room occupied by the furniture and attempted to communicate with the plaintiff by telephone and two letters. The plaintiffs whereabouts were unknown and there was nothing to show that he ever received the letters. The defendant eventually sold the furniture and in an action by the plaintiff for conversion he was held liable that he could not be held to be an agent of necessity.

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35. MARRIED WOMEN : - In addition to the commercial agents of necessity married women may also become agents of necessity (dd). As the husband is under a duty to maintain his wife his failure to do so gives his wife an implied authority to pledge his credit for necessaries suitable to the style of living which he has fixed for himself and his wife (e). This authority may arise where the wife is living with her husband if he fails to provide her with a proper maintenance (f). The agency of necessity cannot be determined by any prohibition made by the husband whether to the wife or to a tradesman (g). The fact that the wife has a separate income does not of itself exonerate the husband from the obligation of providing her with suitable articles of clothing and other necessaries (h) but in such a case the wife may have no authority to pledge his credit (i). If a wife borrows money in order to purchase necessaries and when she has no adequate allowance (j) the lender has no claim in enforceable at law against the husband (k) whether he has a claim in equity has not been expressly decided as regards a husband and wife living together though the lender has such a claim if they are living apart (l). An agency of necessity is displaced by an agreement to accept a specified allowance and its adequacy is not a question for third parties and therefore it is not one for the jury (m). (d) EFFECT OF AGENTS KNOWLEDGE 36. HOW FAR KNOWLEDGE OF AGENT KNOWLEDGE OF PRINCIPAL : Correlative to the question how far the principal is bound by his agents acts is the question how far he is bout by agents knowledge. It depends on how large is the authority of the agent and whether he represents the principal in everything or has merely a limited authority. Where the employment of the agent is such that in respect of the particular matter in question he really does represent the principal the formula

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that the knowledge of the agent is the principal, the formula that he knowledge of the agent is the authorized to accept notice for the principal in regard to matters concerning the transaction in which he is authorized to act it should be presumed that the agent has acted in the usual way of business and passed on the notice to his principal (n). Where an agent is acting in fraud of his principal the principal deemed to have had knowledge of the agents proceedings merely because the agent himself knew all about them (o) but on the principle that the principal is responsible for the wrongs of his agent 9p) the principal is responsible for the fraudulent representation of an agent made directly by the agent to the third party (q). Further the principal is responsible although the fraudulent representation reached the third party through and by the innocent channel of the principal just as if the principal fraudulently caused an innocent agent to communicate a misrepresentation to the third party (r); also where the principal though having no personal knowledge that the representation is made yet knows through another agent that it is being made and that it is untrue the principal is liable (s). Guilty knowledge is necessary on the part of someone (ss). Where the principal is a limited liability company and payments are made under a bona fide mistake of fact by an authorized agent of the company the fact that some other agent of the company may have had full knowledge of all the facts does not disentitle the company to recover the money so paid provided that the agent with the full knowledge does not know that the payments are being made on an erroneous basis (t). In the case of captains and ship agents, there is imputed to the owner al the information with regard to his own property which the agent to whom the management of that property is committed possessed at the time and might in the ordinary course of things have committed to his employer (u). Knowledge on the part of the agent not acquired by him in the course of his agency eg. knowledge acquired by him before he become agent cannot be imputed to the principal (a). SECTION 4 EXTENT OF AUTHORITY OF AGENT 37. EFFECT OF CUSTOM : - The usage of the trade or business in which an agent is employed will in the absence of express directions frequently determine the liability of the principal (b). But the usage must be reasonable in the consideration of the court otherwise it will not be recognized as binding principals who are ignorant of it and who have not consented to act upon it (c). Thus an agent may bind his principals by selling goods on a reasonable credit if it be customary in the particular trade to dispose of goods on such terms (d). But if the agent be retained to sell goods and to deliver the same according to the terms of the contract to such person as shall become the purchaser and the terms of the contract made by the agent be that the goods are to be paid for on delivery the agent has no authority to part with them except on payment of the purchase-money (e). So it is not usual to sell stock on credit (f) or to give credit for goods sold at an auction (g) but the usage of the trade to accept a cheque at auctions in lieu of cash for the deposit is not unreasonable so that if the cheque is dishonoured thee is no liability for negligence (h). The general rule is that an agent employed to receive money may not take anything but cash unless it is in accordance with the ordinary course of business to receive a cheque (i).

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(f) JOINT AND SEVERAL AUTHORITY 38. JOINT AND SEVERAL AUTHORITY : - Where the authority is given to several jointly without any provision as to action by a quorum they must all join in exercising it or the principal will not be bound (k). But this rule does not apply where an authority is given to two or more persons severally (l). (g) DELEGATION 39. GENERAL RULE : - An agent cannot except with the express or implied assent of the principal delegate his authority (m) and the principal will not be bound by the act or contract of a sub-agent whose appointment is not thus sanctioned. This rule of the civil law delegates non potest delegare especially applies where the personal skill of the agent is essential or where there is a trust confidence or discretionary power reposed in the agent (n). But the assent of the principal may and ought to be implied wherever form the conduct of the parties to the original contract of agency or from the usage of trade or the nature of the particular business that the parties originally intended that the agent should have such authority or where in the course of the employment unforeseen emergencies arise which impose upon the agent the necessity of employing a substitute (o). Thus a country solicitor is impliedly authorized by his client to delegate his general powers to his London Delegation of a power by a corporation does not imply a denudation of authority and a corporation which has delegated it powers can unless statutorily prevented at any time determine the delegation. Thus if there is a power to determine the authority of a commit there is power to determine the authority of a member (q). 40. EFFECT OF DELEGATION : - the effect of delegation is that the sub-agent is responsible to the agent there is no privity of contract between a principal and subagent as such (r). Privity of contract may be created if the agent has a clear authority to create such privity (s) the principals knowledge of or consent to the employment of a sub-agent are not in themselves sufficient to imply such authority (t). The agent is liable to the principal for money received by the sub-agent to the use of the principal (u) and he is liable for the sub-agents breaches of duty (a) whether the sub-agent is appointed with (b) or without the principals knowledge (c). Trustees and personal representatives may employ agents without being responsible for their defaults (d). (h) RATIFICATION 41. EFFECT OF RATIFICATION BY PRINCIPAL : - It is an established rule that an act done for another by a person not assuming to act for himself but for such other person though without any precedent authority whatever becomes the act of the principal if subsequently ratified by him (e) within a reasonable time (f); or in other words as an authority may be presumed from previous employment in similar acts so the same presumption arises from subsequent assent and acquiescence according to the maxim omnis ratihabitio retrotrahitur et mandato priori oequiparatur. An

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unauthorized acceptance of an offer may be ratified een after the offer has been withdrawn (g). Where a broker made a contract in writing for the sale of goods he not being authorized by one of his principals at the time but the latter afterwards assented to such contract it was held that the broker was an agent duly authorized at the time the contract was entered into (h). So if goods are entrusted to an agent for sale, but before the sale the principal dies intestate, and the goods are afterwards sold, the administrator of the principals estate may ratify the sale and sue the buyer for the price (i). In the case of a special agent although the authority given be exceeded the principal will become liable by subsequently recognizing or assenting to the agents contract or other act (k). 42. PROOF OF RATIFICATION : - Slight evidence of ratification is sufficient to bind the principal (l); it will be implied from any act showing an intention to adopt the transaction even silence or mere acquiescence; and if the agency be adopted at all it will be held to have been adopted throughout (m). 43. AGENT MUST PROFESS TO ACT AS SUCH : - A contract made by a person intending to contract on behalf of a third party without his authority cannot be ratified by the third party so as to render him able to sue or liable to be sued on the contract where the person who made the contract did not profess at the time or making it to be acting on behalf of a principal (n). A contract cannot be ratified if the principal had no contractual capacity at the time of the contract as in the case of a contract purporting to be made on behalf of a company not in existence (o). 44. KNOWLEDGE OF CIRCUMSTANCES : - A person ratifying a contract must in order to be bound know fully of all the material circumstances in which the act is done so a principal does not ratify a wrongful distress by receiving the proceeds thereof unless he has full knowledge of the wrongful act (p); and a principal will not be deemed to have ratified a voidable transaction if he did not know that it was voidable (q). But the principal will be bound if he intends to ratify the act in any event thus where an agent wrongfully signed a distress warrant and levied distress the principal when informed said that he would leave the matter in the agents act and to be responsible for irregularities in the levying of the distress (r). The principal will liable even though he has no knowledge of the legal effect of the act ratified (s) or of collateral matters affecting its nature eg that a purchase amounted to a conversion (t). 45. VOID AND VOIDABLE ACTS : - Although a voidable act may be ratified by matters subsequent it is otherwise where the act is originally and in its inception illegal and void. Thus if a bill or note be forged in the name of the principal the act of the forger cannot be ratified (u). 46. EFFECT OF RATIFICATION : - The effect of ratification is to put all the parties concerned in the same positions as they would have been if the act ratified had been previously authorized. If a corporation ratifies an assault it is liable in an action for damages (a); if an action is commenced without authority and is not properly constituted the plaintiff can ratify his solicitors act so that it is not open to the

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defendant to object that the action is not properly brought (b). If an option be exercisable only within a limited period the subsequent exercise of the option by an authorized agent or by the principal himself after the expiration of the period will not relate back so as to ratify the earlier exercise of the option by the unauthorized agent but will be void and the option will be deemed not to have been exercised at all (c). (i) SALE OF PRINCIPALS GOODS 47. POWER OF AGENT TO DISPOSE OF PRINCIPALS GOODS : - At common law an agent authorized to sell goods could not although in possession thereof by permission of his principal pledge them (d) by delivering to pawnee either the goods themselves or any document of title relating thereto 48. MERCANTILE AGENTS : - Special provision has been made by the Factors Act 1889 (e) to regulate the dispositions of property by mercantile agents who are permitted by the owner to be in possession thereof. For the purposes of this statute a mercantile agent is defined as a mercantile agent having in the customary course of his business as such agent authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of goods (f). These words have been held to include a retail jeweler to whom stock was sent for sale by a manufacturing jeweler (g) and a dealer in pictures and furniture on commission (h) but not a mere clerk (i) or a person who has been on a single occasion entrusted with a motor-car for sale (k). It is impossible for a man to be a mercantile agent although he has only one customer (l). A person to whom documents are handed so that they or the goods represented by them shall be sold and the proceeds of sale held in trust for the owner as stipulated in trust receipt given to the owner is a mercantile agent (m). 49. DISPOSITIONS BY MERCANTILE AGENTS : - Section 2 (1) of the Act provides that where a mercantile agent is with the consent of the owner in possession (n) of goods or of the documents of title (o) to goods (p) any sale, pledge (q) or other disposition of the goods made by him when acting in the ordinary course of business of a mercantile agent shall subject to the provision of the act be as valid as if he were expressly authorized by the owner of the goods to made the same faith and has not at the time of the disposition notice that the person making the disposition has not authority to make the same (r). Although it is necessary that the disposition should be made by the agent when acting in the ordinary course of business of a mercantile agent (s), the power to make a binding disposition which the statute confers upon the agent cannot be overridden by the custom of a particular trade that no such dispositions should be made by an agent (t). It is not within the ordinary course of business to sell a motor-car without its registration book (u). 50. CONSENT OF THE OWNER : - It is by no means easy to determine in what circumstances a mercantile agent is deemed to be in possession of goods with the consent of the owner. The goods must not merely be in his possession as a mercantile agent; they must have been entrusted to him as a mercantile agent (a) and must be his

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business as a mercantile agent; it may not actually be for sale, it may be for display or to get offers whatever it is it must be something of that kind before the owner can be deprived of his goods (u). For the purposes of the statute the consent of the owner is to be presumed in the absence of evidence to the contrary (b). In Oppenheimer v. Frazer (c) the court of Appeal expressed the view that when a mercantile agent obtains possession of goods from the owner in circumstances which render him guilty of the crime of larceny by the owner. This however involves the further and still more difficult inquiry into what constitutes larceny by a trick (d). In Folks v. King (e) the court of Appeal were on opinion that where the owner being deceived by the agent intends to confer upon the agent the right to pass the property in the goods the agent does not commit the crime of larceny by a trick by misappropriating the goods, and therefore is in possession of them with consent of the owner; and two members of the court considered that that consent would not be negatived even by circumstances amounting to larceny by a trick on the part of the agent. The decision in Folks v. King (e) was preferred by the court of Appeal to that in Oppenheimer v. Frazer (c) when deciding Pearson v. Rose and Young (u) where it was held that the fact that the agent is guilty of larceny by a trick does not prevent the operation of the Factors Act any more than the fact that he has been guilty of larceny as a bailee. Consent of the true owner obtained by some fraud on the part of the mercantile agent is nevertheless until avoided a consent which enables the factors Act (f) to operate. It is the owners consent which matters and it is his knowledge and intention which have to be assessed (g). it was held in Pearson v. Rose Young (u) that even though the agent was in possession of a motor-car with the consent of the owner the fact that he did not have the registration book with the owners consent prevented the sale being protected by the Act. 51. LIABILITY OF AGENT TO HIS PRINCIPAL : - It is further provided by the Act that nothing shall authorize an agent to exceed or depart from his authority as between himself and his principal or except him from any liability, civil or criminal for so doing or shall prevent the owner of goods from recovering the goods from an agent or his trustee in bankruptcy at any time before the sale or pledge thereof, or shall prevent the owner of goods pledged by an agent from having the right to redeem the goods at any time before the sale thereof on satisfying the claim for which the goods were pledged and paying to the agent if by him required and money in respect of which the agent would by law be entitled to retain goods or the documents of title thereto or any of them by way of lien a against the owner or from recovering from any person with whom the goods have been pledged any balance of money remaining in his hands as the produce of the sale of the goods after deducting the amount of his lien; or shall prevent the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the same or any part of that price subject to any right of set-off on the part of the buyer against the agent (h). 52. COMMON LAW SAVING FOR POWERS OF AGENT : - The provisions of the Act are to be construed in amplification and not in derogation of the powers exercisable by an agent at common law (i).

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(j)

ACTION BY UNNAMED PRINCIPAL

53. WHEN UNNAMED PRINCIPAL MAY BE SUED : - The circumstances under which a principal will be held liable on a contract made by his agent notwithstanding that the agent may in the first instance have been treated as the principal can be thus summarized; If a person sells goods supposing at the time of the contract he is dealing with a principal but afterwards discovers that the person with whom he was dealing is not the principal in the transaction but agent for a third person though he may in the meantime have debited the agent with them he may afterwards recover the amount from the real principal. .. provided there is evidence that the person who ordered the goods was in fact acting within the scope of his authority as agent; but if at the time of the sale the seller knows not only that the person who is nominally dealing with him is not principal but agent and also knows who the principal really is and notwithstanding chooses to make the agent his debtor dealing with him and him alone; then the seller cannot afterwards on the failure of the agent turn round and charge the principal having once made his election at the time when he had the power of choosing between the one and the other (k). 54. PROOF OF ELECTION : - The question whether the seller has made his election is in general for the jury to be determined by them upon all the facts of the case (l). If he intend to proceed against the principal he must make his election to do so within a reasonable time after the latter is discovered (m). 55. DISCHARGE OF THE PRINCIPAL : - If after the principal is discovered the seller allows the day of payment to go by without calling on the principal and in the meantime the latter pays his agent the price of the goods in accordance with the terms of the contract, the seller may thereby be deprived of his right to charge the principal inasmuch as the latter may have been led by the sellers conduct to suppose that he intended to rely solely on the agent for payment (n). but it is clear that if a person orders an agent to make a purchase for him the mere fact of his giving the latter money to pay the debt does not discharge the principal unless the agent pays it accordingly (o). Nor where a person gives credit to an agent for goods supposing him to be the principal or not knowing who the principal is will the mere fact that before the principal is discovered by the seller the state of the account between the agent and the principal has been altered to the prejudice of the latter be any bar to the seller recovering against him (p). 56. EFFECT OF JUDGMENT AGAINST AGENT : - Where the agent having made a contract in his own name has been sued thereon to judgment no action is maintainable against the principal on the same contract (q). The fact that the judgment is obtained against the agent in default of defence (r) or in an action in which the principal and agent are sued jointly (s) or that it is obtained for a part only of the amount claimed (t) does not affect the operation of this rule. SECTION 5 OBLIGATIONS OF PRINCIPAL AND AGENT INTER SE ( DUTIES OF AGENTS)

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57. GENERALLY l: - It is the duty of every agent to act honestly in the interest of his principal to conform to his instructions and in doing so to exercise such a degree of care and skill as is reasonable in the circumstances of the agency. Any act of disobedience, negligence or dishonesty is a breach of the contract of agency and the agent is liable to the principal for any damage which is a direct result thereof or such a result as was within the contemplation of the parties. (i) HONESTY

58. SECRET CONMMISSION : - The taking of a secret commission from the party negotiated with which is a misdemeanour (a) is a fraud which will justify dismissal (b) and negative any right to indemnity or commission (c) whether or not the principal suffer loss in consequence (d). If the commission has been paid the principal is entitled to recover it and if it has not been paid he is not bound to pay it (c). In addition the agent must account to the principal for the full value of the secret commission (e). Both the agent and the person paying the commission are liable in damages to the principal and so where a local authority invited tenders for coal and a supplier paid the authoritys manager one shilling a ton to get his tender accepted it was held that the authority were entitled not only to recover the bribe of one shilling a ton paid but also damages at the same rate for the loss they had sustained through the supplier obtaining the contract (e). Any contract obtained by payment of a secret commission may be repudiated by the principal (f). It will be presumed when a secret commission is given to an agent that the motive of the donor is corrupt and this presumption is irrebuttable , it will also be assumed that damage at least to the extent of the bribe is caused (g). 59. SECRET PROFIT : - An agent must account to his principal for every benefit received by him in the course of the agency without the knowledge or consent of the principal (h). It is no defence to the principals claim that the profit was made by a fraud on a third party (i) or that the agent may be exposed to some liability to a third party in respect thereof (i). One who act as agent for a vendor must not purchase the property himself (k) nor may he accept commission from the purchaser (l) except with his principals knowledge and consent. When an auctioneer was employed to sell goods by auction for a lump sum commission and also all out-of-pocket expenses and in rendering his account for expenses he charged gross amounts without disclosing that he had received traded discounts it was held that he was bound to account to his principal for the discount received although as he had acted in good faith he was allowed to retain his commission (m). Again when an agent was employed to sell only his principals goods but in breach of his contract also sold goods of the trade competitors of his principal it was held that he was bound to account to his principal for the profit so made although he was allowed to retain his commission on those transactions on behalf of his principal in which he had acted honestly (n). If the agency contract has been terminated and the agent has not acquired special knowledge which it his duty not to disclose he may purchase property which has belonged to his principal and sell it for a profit without

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accounting for the profit. The plaintiffs a Danish corporation deposited stocks of crystal insulin in England and these stocks became vested in the Custodian of Enemy Property on the invasion of Denmark during the war. The defendants who had been the plaintiffs agents for the sale of liquid insulin before the war knew as did other people of the stocks of crystal insulin and bought them form the Custodian. The defendants then sold the insulin at a profit but did not have to account to the plaintiffs for the profit (o). When an agent employed to find a house bought a house through a nominee for 2,000 pounds contracted to purchase it for 4,500 pounds and then sold it to his principal for 5,000 pounds telling her that he had bought it for 4,500 pounds, it was held that he was liable to account to the principal for all the profit he had made without the principals consent (p). A sergeant in the army stationed at Cairo on several occasions while in uniform boarded a lorry loaded with cases the contents of which were unknown and thereby enabled it to void inspection by the civil police. On each occasion he received a large sum of money. The Crown took possession of the money and he petitioned for its return. It was held that he obtained the money through the use of his uniform in breach of his duty owned to the crown and the crown was therefore entitled to the money (g). (ii) OBEDIENCE

60. OBEDIENCE TO INSTRUCTIONS : - If the instructions given by the principal are express the agent must carry them out. He must not depart from them even though he reasonably believes that in doing so he is promoting his principals interest (r) . If however his instructions are susceptible of two meanings, he incurs no liability by interpreting them in the sense not intended by the principal (s). An agent who fails whether deliberately or negligently to carry out his orders has no right to remuneration (t) or indemnity (u) and must make good to the principals any loss directly consequent on his failure (a). But where the act which the agent is employed to perform is one which by law is void (such as the making of a wagering contract), the principal cannot recover damages for the failure to perform it (b). (iii) EXERCISE OF CARE AND SKILL

61. EXERCISE OF CARE AND SKILL : - One who acts as agent for another without reward is nevertheless bound to display such skill as he actually possesses and exercise such care as he would in his own affairs (c). An agent for reward is under a more extensive obligation; he must exhibit such a degree of skill and diligence as is appropriate to the performance of the duties that he has accepted (d). But he is not responsible to his principal for a mere mistake or error of judgment not amounting to a failure to exercise proper care or skill (e); and the mere fact that by a different course of action he might have averted a loss sustained by his principal is no evidence of such a failure (f). Where an agent is employed to sell property his duty does not cease when he has procured an offer of purchase which is accepted subject to contract; he remains until final contracts have been signed under a duty to inform the vendor of any better offer which he may receive (g). He must also inform the vendor of anything coming to his knowledge which is likely to influence his principal in the

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making of the contract. Where leasehold premises subject to restrictive covenants were being sold, and the agent learnt that the lessor would be willing to relax the covenants but did disclose this to his principal as a result of which the premises were sold below what they would otherwise have sold for, the agent was held not entitled to his commission (h). The making of a contract is not normally part of the estate agents business (i). ((iv) CONFLICTING INTEREST 62. DUTY NOT TO HAVE CONFLICTING INTEREST : - An agent must not put himself in a position where his duty to his principal is likely to conflict with his interest. A principal with full knowledge of the circumstances may waive the breach by the agent of this duty (k). An agent employed to buy may not be the seller himself even though he sells at the market price (l). An agent purchasing property in his own name but for his principal becomes a trustee of it for the principal (m). Where a large trading company which carried on separately an estate agency and a building business was employed through its estate agency to sell property and subsequently through its building department, inspected the drains on behalf of the purchaser, it was held hat it had committed a breach of duty even though it acted in good faith (n). An agent for sale who takes any interest in a purchase negotiated by him must full disclose all the material facts and the exact nature and extent of his interest. He must not merely put his principal on inquiry and the burden of proving that he has made full disclosure lies upon the agent (o). Failure by the agent to disclose his own misdoing to his principal is not in itself a breach of the contract of principal and agent (p), so that a company director in the absence of fraud is not bound to disclose to the company the such breaches of duty as would give the company the opportunity of dismissing him (q). Special provisions apply to company directors; by section 199 of the Companies Act, 1948 (e\r) they are bound to declare their interest in any contract or proposed contract with the company of which they are directors; they may give a general notice of their interest in all contracts with a specified company or firm. The section does not prejudice the operation of any rule of law restricting directors from having any interest in contracts with the company. (v) DISCLOSURE OF INFORMATION 63. DUTY NOT TO DISCLOSE INFORMATION : - An agent is under a duty not to except with the consent of the principal make use of any material or disclose any information acquired in the course of his agency in any way prejudicial to the interests of his principal (s); thus employee are under an obligation not to disclose information acquired in the course of their employment to trade union officials (t). (vi) MEASURE OF DAMAGES 64. MEASURE OF DAMAGES FOR BREACH OF DUTY : - the measure of damages for breach of duty on the part of the agent is the loss sustained by the principal as a direct result as was within the contemplation of the parties. Where agents incorrectly represented to their principals that they had made a contract on their

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behalf, it was held that the principals could only recover the loss actually sustained by them in consequence of the misrepresentation and not the profits that they would have made if the representation had been true )u). A principal who is induced by the negligence of his agent to enter into an adventure from which loss ensues is entitled to recover from the agent the amount he has actually lost plus compensation for loss of time (a). If estate agents after procuring an offer for their principal which he accepts subject to contract fail to inform him of a later higher offer they are liable for the difference between the price agreed with the first offeror and the second offer (b). RIGHTS OF AGENTS (REMUNERATION 65. RIGHT OF REMUNERATION : - It is the duty of the principal to pay his agent the commission or other remuneration agreed upon. The agreement may be express or implied. When there is an express agreement the right to remuneration depends on the terms of the contract. If the commission which is to be paid is left to the discretion of the principal it is beyond the competence of the court to order an account to be taken. The court could not determine the basis and rate of commission since to do so would be making a new agreement between the parties and transferring to the court the discretion vested in the principal (c). There is an implied agreement to pay remuneration whenever a person is employed to act as an agent under circumstances which raise the presumption that he would to the knowledge of the principal have expected to be paid (d). The amount of the payment and the conditions on which it is payable will depend on the circumstances. If there is a custom or usage of the particular trade regulating the payment of remuneration there is a presumption in the absence of any express agreement to the contrary that the parties contracted for the payment of the remuneration in accordance with this custom or usage (e). But if there be no proof of such custom and no express agreement then a reasonable remuneration is payable (f). In estimating what is a reasonable remuneration, evidence of the bargainings between the parties is admissible as showing the value put upon the agents services by the parties (g). Whilst the Accommodation Agencies Act, 1953 (h) makes it an offence to take certain commissions in respect of the letting houses or flats or advertisements for letting houses or flats it does not make it illegal to demand or accept agents remuneration from the owner or solicitors remuneration (i). The remuneration of an agent frequently takes the form of a commission and the event on which commission is payable depends on the terms of the contract. An agreement to pay commission on shipment of a cargo does not entitle the agent to a commission on demurrage payable under a charterparty (k). An agreement to pay shipbrokers a commission if during the period of a charter the charterers bough the ship for 125,000 pounds does not entitle them to commission if during that period the charterers buy for 56,000 pounds (l). In such a case the agent is not entitled to any payment on the basis of a quantum meruit, because the parties having made an express contract there could be no implied contract (m). An agent for a vendor who with the consent and knowledge of his principal purchases the goods himself does not thereby entitle himself to commission (n).

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66. The parties may provide that commission is to be payable upon any particular event. It the event is the effecting of a sale in the absence of special agreement to that effect the mere introduction of the contracting parties to each other will not entitle the agent to his commission. But if the relation of buyer and seller is really brought about by the act of the agent, he is entitled to commission, although the actual sale was not negotiated by him (o). Thus in the case of estate agents the test to be applied is whether the introduction was the effective cause in bringing about the letting of sale (p). Where there is a completed sale between the purchaser introduced by the estate agent and the principal commission is usually payable, but this is so only if the agent is the prospective purchaser who through lack of money was unable to complete the sale whereupon the principal terminated the agreement with the agent. Subsequently the principal sold the property to the person introduced having come to his financial assistance. The estat agent was not entitled to commission as he was not the effective cause of the sale (q).

67. COMMISSION BEFORE COMPLETED SALE : - The cases on this subject have arisen because estate agents have quite properly been at pains to sue a form of words which will secure to them their commission when they have done all but obtain a completed contract between their principal and the purchaser. It has been said It is possible that an owner may be willing to bind himself to pay commission for the mere introduction of one who offers to purchase at the specified or minimum price, but such a construction of the contract would require clear and unequivocal language (r). In fact it is much more likely that the court will be unwilling to construe the contract of agency in favour of the estate agent unless he procures a binding contract of sale, such is common fairness and the understanding of men (s). Where the agent is to be paid commission in the event of business resulting , the agent must at least introduce someone who enters into a contract which binds both parties and a person who agrees to purchase subject to finding the necessary money does not enter into such a contract (t). Where an agent employed on commission to let a shop spoke to a prospective tenant who in turn gave some information but not the address of the shop to another who eventually became the tenant, it was held that the agent was not entitled to commission as he was not the direct or efficient cause of the letting (u). Where commission is payable upon a sale being effected the agent must in order to entitle himself to commission introduce a purchaser who makes a binding agreement of purchase and is at all material times ready, willing and able to complete (a). He is not entitled to commission if the purchaser merely signs a contract to purchase and refuses to complete or pay the purchase-money. If the agent is to introduce a purchaser (b), find a purchaser (c) or find someone to buy (d), he must introduce a person who makes a conditional offer to complete the purchase. A person who makes a conditional offer is not one who is legally bound to complete so that if an offer is made subject to contract (e) or subject to satisfactory survey (f) it is not an unconditional offer which by acceptance can become binding. If the agent is to secure an offer this means a firm offer and not one subject to contract (g). A conditional acceptance is not sufficient if the condition be not fulfilled; so that where an agent introduced a person who made an offer, which was accepted subject to

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the payment of a deposit within a certain time and the deposit was not paid within the time limit, the agent was not entitled to commission (h). If an agent is to introduce a a person able and will to enter into a formal contract that means that the person must be able and willing to enter into a formal contract the terms of which had been agreed even though only orally so that the contract not being in writing is unenforceable (i).

68. If the agent is to earn his commission on introducing a person ready able and willing to purchase then the proposed purchaser must continue ready, able and willing until completion; so that where the person introduced had agreed to purchase and had paid a deposit but two weeks before completion refused to proceed, the agent was not entitled to commission (k). If the agreement is that commission shall be paid on the total purchase price obtained none is payable on a deposit which is forfeited when a prospective purchaser refuses to complete. The vendor is not bound to sue for specific performance or damages so that the agent may be entitled to his commission (l). But where commission was to be paid to the agent if he introduced a person willing to sign a contract to purchase at an agreed price, the agent introduced a person who signed a draft contract the commission was payable when the vendor refused to complete (m). An agent who is to be paid a commission if he introduces a purchaser who is willing to buy at the sellers price, but the property in the meantime is sold to another because his introduction is not the effective cause of the sale (n). An agent employed to sell property at the sellers price is not entitled to commission if he introduces the property to the notice of a Government Department who acquire the property compulsorily on payment of a sum below the sellers price (o). An agent who introduces a purchaser willing to buy at the sellers price and pays a deposit is not entitled to commission if before there is a binding contract, the vendor changes his mind and decides not to sell (p). If an agent be employed to procure a loan, his contract is completed when he procures a person who is able and willing to advance the money ; and although the negotiation afterwards goes off by the act or default of the intended borrower or it seems of the lender the agent is still entitled to his commission (q). Whilst the ambiguous language used has made it necessary for the court to construe a number of different phrases which have been used the constructions do decided upon have no application where the phrase itself is quite clear. Thus an agent who was entitled to commission on introducing a purchaser who signs a legally binding contract was entitled to commission even though the purchaser was not able to raise enough money and forfeited his deposit (r). 69. AGREEMENTS SUBJECT TO CONTRACT : - It is quite clear that agreements which are made subject to contract are not complete; they require a condition to be fulfilled before they can become binding 9s) and since an agreement made subject to satisfactory survey is also conditional the same principle must apply (t). The possible outcomes of such an agreement have been clearly set forth by Slade J. (u) as being (l) a completed transaction; (2) a legally enforceable contract which has not actually enforceable, eg. because enforceable contract which has be actually

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proceeded to completion; (3) a contract which has not actually proceeded eg because not reduced to writing; and (4) a state of affairs which has not passed beyond the realm of negotiations. If the first tow positions are reached the agent would be entitled to his commission in most cases whilst in the fourth case it would have to be a very clearly worded agency agreement that would entitle him to any commission on a mere introduction. In the third case either side could withdraw from the unenforceable contract and it is therefore difficult to see how any person introduced could be considered legally bound to complete (a) the event upon which commission would normally be earned, if he could withdraw from the unenforceable agreement. It is submitted that in the third case, as well as the fourth only the very clearest wording will entitle the agent to commission before the completion of the contract. 70. AMOUNT OF COMMISSION AND LIABILITY FORDAMAGES : - The amount of the commission payable depends on the contract which may be express or implied from what is usual in the circumstances. If the agent has sent to the principal his scale of charges and no exception is taken to it will be inferred as a general rule that the principal has agreed to pay the scale (b). If a property is sold subject to a mortgage the agent will be entitled to commission on the total of the purchase price and the mortgage (c) but if shares in a company are sold and the companys property is mortgaged, commission is payable only on the purchase price(b). If commission is payable on the completion of the sale, a question arises as to whether the agent is entitled to commission or damages if the sale is not completed owning to the act of the principal. On this it is settled that until a binding contract of sale is entered into the principal may without incurring any liability to the agent refuse to go on with the intended sale (d). Where a sale was effected subject to contract but the principal decided not to proceed with the sale it was held that the agent had no claim for damages against the principal whether or not the principal had just cause or reasonable excuse for his conduct (e). The vendor is not bound to sue for specific performance or damages so that the agent may be entitled to his commission (f). When a binding contract of sale has been entered into which the principal could be ordered specifically to perform the position is different. If the vendor is unable to comply with a requisition as to title and thereupon rescinds the contract under one of the conditions of sale he is guilty of no default and cannot be made liable to the agent in damages (g). But if a contract of sale has been made and the vendor insists upon terms to which he is not entitled and as a result the sale goes off he is in default and the agent may recover damages (h). When an agent was employed to find a purchaser for some land and did so after incurring expenses in advertising and the principal then disclosed for the first time that he had no title to the land, it was held that the agent was entitled to be paid a reasonable remuneration for his services (i) for sale does not prevent the principal from selling the property himself and if he does so before the agent has effected a sale he is under no liability to pay any commission (m). If a person is appointed as sole agent, the principal may not employ agent (n), but if he sells the property himself he is not liable to pay commission or damages to the agent (o). The consideration moving form the sole agent is his promise to use his best endeavours to dispose of the property (p). The measure of damages must be calculated with reference to the probability that the

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agent would have earned his commission (q). 72. OPPORTUNITY TO EARN COMMISSION : - When there is a contract to employ for a time certain on commission this does not in general and apart from special terms deprive the employer of his freedom to dispose of his property or discontinue his business merely because by exercising his freedom the agent cannot earn commission (r). Where a person was employed as sole agent to sell his principals coal for seven years, it was held that there was no implied condition that the principal would not sell the colliery within that period and so deprive the agent of the chance of earning commission (s). On the other hand, where a shirt manufacturer agreed to employ a traveler for five years on the terms that the traveler should do his utmost for remuneration by commission to obtain orders for the goods manufactured or sold by the manufacturer as forwarded by sample to the traveler, it was held that the traveler could recover substantial damages from the manufacturer for not forwarding samples at the end of two years; and further that the manufacturer was not excused from fulfilling his agreement by the destruction of his manufactory by fire (t). Where a steamer was chartered for eighteen months under a charterparty which provide for payment to a broker of commission on the hire paid and earned under the charterparty, it was held that on the sale by the owners of the ship during the currency of the charterparty, the broker was not entitled to any commission for the unexpired period of the charterparty (n). 73. COMMISSION AFTER CESSATION OF AGENCY : - Ordinarily an agents right to remuneration is coterminous with his employment, and therefore ceases upon the termination of the agency (a). Therefore apart from specific stipulation a principal is not liable to pay commission upon orders sent by a customer originally introduced to the principal (b). If however the agreement is to pay commission on repeat orders, commission will be payable after the termination of the agency (c). But where commission was to be paid on all orders whether received direct or indirect and on all repeats, the commission was paid only on orders received during the period of the agency (d), and an undertaking to cover you with an agreed commission on any other business transaction with your friends, in return for an introduction resulting from an advertisement in a newspaper; the condition was not too vague to be enforceable (e). Where commission was payable when advertisements secured by the agent were published and not when orders for them were obtained by him, it was held that the agent was entitled to commission on advertisements published after the termination of his contract (f). Again if the agreement is to pay commission as long as the customer does business with the principal, commission will be payable eve after the death of the agent (g). The question however is one of construction of the terms of the agency agreement. 74. OVERPAYMENT OF COMMISSION : - If the agency contract provides for the payment of advances against commission, what is the result if there are payments to the agent and the agents contract is properly terminated before he has earned sufficient commission to offset the payments? Can the principal recover the overpayments? If the contract provides for this contingency then no problem arises;

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otherwise can a term be implied that the agent should repay the excess? The two recent authorities on this point are conflicting. In Clayton Newbury Ltd v. Findlay (h), McNair J. held that the overpayment could only be recoverable if there could be found whether orally or reduced into writing some implied under which the repayment could be enforced. In that case the agent was allowed to draw 25 pounds per week whilst traveling against the commission which will accrue to you from all accounts. Applying the test of what would have been the answer to a question on this matter from an officious bystander (i), McNair J. held that he could not imply a term for repayment; it would have been inconsistent with the express terms of the agreement. In Revoli Hats Ltd v. Gooch (k) the agent was to be paid 125 pounds per month on account of the commission which will accrue due to him. Hallett J. was willing to imply a term for repayment though he does not appear to have considered the matter very fully in his judgment but his was necessary because he decided that repayment should be made on he ground that the original payment was made in anticipation of something being supplied which was not supplied and there was no term saying that in that even the recipient might retain the payment. He was also willing to treat the payment as a loan which was repayable. An action for money had and received would seem to be the form of action most likely to succeed (l). 75. ILLEGALITY OF SERVICE : - An agent cannot commission upon any transaction which is in itself necessarily illegal, eg for effecting a sale of shares in an illegal association or undertaking (m); or where the commission is agreed to be paid on a consideration which is corrupt 9n); or in respect of any wagering contract 9o). But he may recover commission for doing an act for his principal although such act would be illegal if certain requisites were no afterwards complied with by the principal, the agent not being employed to perform them as for obtaining an insurance on a voyage for which a licenses is necessary (p). 76. LOSS OF COMMISSION BY NEGLIGENCE : - The principal bound to pay any remuneration to an agent who by reason of his misconduct, negligence or unskilfulness renders services which are of no benefit to his principal (q). If a factor or other agent has been guilty of such misconduct in selling the goods of his principal as to render the sale useless, or to subject his principal to an actual loss, he is not entitled to his commission (r). If an auctioneer employed to sell an estate be guilty of negligence or unskilfulness whereby the sale becomes nugatory, he is not entitled to recover any remuneration form the vendor (s). 77. APPRAISER : - A person who acts as an appraiser recover his commission if he be not duly licensed under the Appraiser Licenses Act, 1806 (t). 78. INDEMNITY OF AGENT : - The principal is under a duty to indemnify the agent against all liabilities incurred in the execution of his agency (u). This may be enforced by the agent by action against the principal by exercise of any lien which he or by way of set-off. Accordingly when solicitors instructed stock-brokers to sell shares and by reason of the client of the solicitors refusing to execute a transfer, the sale could not be completed as a result of which the stockbrokers incurred liability to the

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purchaser, it was held that the solicitor were bound to indemnify the stockbrokers (a). There is no right of indemnity in respect of liabilities incurred through the agents negligence or breach of the terms of his agency (b). But the right of indemnity extends to all liabilities incurred by the agent and not merely to actual losses. Thus losses that may not be enforced eg. because of a rule of the Stock Exchange (c) and those incurred under an honest mistake (d) must be met by the principal. 79. EFFECT OF RULES, ETC., OF DEALING : - An agent who deals in a particular place or market is entitled to be indemnified against all losses and liabilities incurred by him in carrying out his authority under the rules, regulations, customs or usages of the place or market. But a principal is not liable if he had no notice of an unreasonable rule , regulation, custom or usage. It was the usual custom on the Stock Exchange for members to ignore Leemans Act (e) which requires the insertion of the numbers of shares on contract notes. A principal employs a broker to purchase shares which the broker does but ignores the provisions in Leemans Act; the principal repudiates the contract before settling day but this broker completes although the contract was void in order to avoid being declared a defaulter. The effect of this is that if the principal had notice of the custom when he employed the broker he is bound by it and must indemnify the broker (f). If he had no notice of the custom of ignoring the Act nor of the rule that the broker must complete the principal is not bound (g). (iii) LIEN 80. LIEN : - Every agent has a general or possessory lien on his principals goods in respect of lawful arising in the course of the agency so that an auctioneer has a lien on goods he is employed to sell in respect of his charges and commission (h). The agent must be in lawful possession of the goods in the course of his agency (i) and in the same capacity as that in which he claims the lien (k). There must be no agreement inconsistent with a lien (l) nor must the goods be delivered with directions or for a purpose inconsistent with a lien (m). An agents lien is usually a particular lien unless by agreement or custom or usage he is given a general lien eg. factors (n) and solicitors have general liens. SECTION 6 UNDISCLOSED PRINCIPALS 81. GENERAL RULE : - As the contract of the agent is in law the contract of the principal the latter may sue thereon although at the time the contract was made the agent appeared to be the principal (o). Evidence is admissible to prove the fact of agency and the identity of the principal. If B contracts with C prima facie that is a contract between these two only but if at the time B entered into a contract he was really acting as agent for A then evidence is generally admissible to show that A was the principal and A can take advantage of the contract as if it had been actually made between himself and C (p). So if in a charterpary one of the parties is described as charter, evidence is admitted to prove that he was only agent for the charterer (q). Again in a lease where one of the parties was described as tenant, who were held liable for arrears of rent (r) . The power of the agent to claim and enforce

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performance of the contract is subservient to this right; so that if the principal has interfered and has required or obtained completion of the contract with himself personally, the agents right of action thereon ceases (s). This rule was held to apply to a contract made between two brokers members of the same stock exchange, one of the regulations of which was that a contract made by a broker for an undisclosed principal should be regarded as the contract of the broker only even though the principal was cognisant of such regulation (t). 82. WHEN PRINCIPAL CANNOT SUE : - The right of the principal to interfere and sue in his won name does not exist where the agent had contracted in such terms as import that he is the real and only principal (u), or by bill of exchange or promissory note. If a contract in which importance is attached to the personality of the contracting party such as a contract to underwrite shares in a company is made by an agent without disclosure of the fact of his agency, the principal cannot sue upon the contract (a). In these cases, the only remedy is in the name of the agent with whom the contract was entered into (b). But the donee of a power of attorney may execute any instrument in his own name and under his own seal by the authority of the donor of the power and every instrument so executed is as effectual in law to all intents as if it had been executed by the donee of the power in the name and under the seal of the donor (c). 83. AGENT APPEARING AS PRINCIPAL : - Where principal permits one who is to known to be an agent to sell as apparent principal, and afterwards intervenes, the buyer is entitled to be placed in the same situation at the time of the disclosure of the actual principal as if the agent had been the real contracting party; and he is entitled to the same defence against the principal whether by common law or by statute as he was entitled to at that time against the agent, the apparent principal (d). Accordingly if in such a case where the agent has been permitted by the principal to hold himself out as the agent was principal and acted on that belief, the defendant has acquired a set-off against the agent before the principal has interposed, the latter will be bound by such set-off (e). But where an agent sells in his own name for an undisclosed principal, and the principal sues the buyer for the price, the buyer cannot set off a debt due from the agent unless in making the contract he was induced by the conduct of the principal to believe and did in fact believe that the agent was selling on his own account (f). If the buyer did believe that the agent was selling on his own account the fact that further inquires would have disclosed that he was only an agent does not affect the right of set-off (g). Where a party who has purchased goods from a factor knowing that they were sold by him as factor only is sued by the principal for the price, he is not entitled to set off in that action a debt due to him from the factor (h), except to the extent that the factor had a lien on the goods (i). 84. WHEN PRINCIPAL WHO CONTRACTS AS AGENT MAY SUE : - It has been said that a party who is described on the face of a contract as an agent but who is in fact the principal cannot in general sue thereon in the latter capacity (k). If such a contract has been in part performed and that part performance has been accepted by the other contracting party with full knowledge that the party who was described as

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agent in the contract was the real principal, the latter may after that sue in his own name for the completion of the contract (l). Where a person professes to contract on behalf of an actual named principal, he cannot afterwards be heard to say that he is the real principal and sue upon the contract (m). But persons who sign charterparties nominally as agents for unnamed principals have been held to be entitled to sue upon the charterparty as principals (n). It is apprehended that this rule is not peculiar to charterparties but equally applicable to contracts of every kind. 85. POSITION OF AGENT CONTRACTING AS SUCH : - One who is in fact an agent cannot ordinarily sue upon a contract entered into by him as such (o). Thus where A. F., a broker who had a parcel of rum for sale made a contract with the defendant and gave him a sale note in the following terms : - Mr. L., - I have this day bought in my own name for your account, T., 259 puncheons of Cuba rum; and this note after stating the price at which the rum was sold and certain other particulars was signed, A.F. broker it was held that A.F. cold not sue the defendant in his won name for the price of the rum (p). And where a shipmaster signed bills of lading covenanting to deliver cargo to the shippers or their assigns at the port of discharge upon their paying freight as per charterparty, it was held in an action by the master against the charterers for freight that in signing the bills of lading he had done so merely as agent for the ship owner and consequently was not entitled to maintain the action (q). But the case is different where the agent has some beneficial interest in the completion of the contract, eg. in respect of commission, or otherwise; or a special property of interest in the subject matter of the contract; as in the case of a factor (r) , or a carrier or warehouseman (s) or an auctioneer (t) or other similar agent acting for reward and not being a mere servant (u). Where a factor has a lien on goods sold in his own name for his principal, and therefore a right to sue in his own name for the price he may insist on such price being paid to himself even in opposition of his principal (a). 86. AGENT CONTRACTING IN HIS OWN NAME : - If the factor or other agent make a contract in his own name for an undisclosed principal he may sue and be sued in his own name thereon because then he is in contemplation of law, the real contracting party (b) and it makes no difference whether the agent in such a case acts under a commission del credere or not (c). But notwithstanding the existence of a del credere agency, the true principal is entitled to sue the debtor in his own name (d). The intervention of an undisclosed principal ordinarily puts an end to the agents right of action (e). But if an agent either sells or purchase goods for a principal with such principals authority but in his , the agents name and the states to the buyer or vendor that there is an unnamed principal and the agent under the same authority agrees to re-sell or otherwise deal with the goods he may sue the vendor or purchaser on the contract in his own name although the principal has renounced it (f). SECTION 7 AGENTS PERSONAL LIABILITY 87. GENERAL RULE : - Upon the principle that the contract of an agent is the contract

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of the principal, an agent is not liable upon any agreement into which he enters merely in his representative capacity (g). He is however liable upon contracts into which he enters personally. Where for example a person verbally contracts on behalf of another but does not disclose to the other party that he is not acting on his account, he is personally liable to the other party upon the contract (h). If the contract is in writing, the question whether the agent is personally liable thereon is one which depends upon the contraction of the document. A person who enters into a contract which is expressed to be made by him for and on behalf of another may still contract thereby in such terms as to bind himself personally. The question is such cases is whether looking at the contract as a whole it appears to have been intended that he should be personally liable thereon or not (i). If the terms of the contract show that it was intended that he should be liable personally, evidence to the contrary is not admissible (k). But he may show by way of equitable defence that there was an agreement between himself and the plaintiff that he should not be made liable personally (l). Even though an agent contracts personally his liability may be expressly limited (m). Thus if an agent by deed under his own hand and seal covenant for himself, his heirs, etc, for the act of another he is personally liable upon his covenant although he describes himself in the deed as covenanting for and on the behalf of another person (n). So where the defendant by a written agreement expressed to be made by himself on behalf of AB of the one part, and the plaintiff of the other par part, stipulated that he the defendant would execute to E, the plaintiff a lease of certain premises, which as it was proved belonged to AB; Best C.J. held that the defendant was personally liable (o) But persons who signed the charterparty as agents were held not to have made themselves personally liable thereon notwithstanding that they were described in the body of the instrument as chreterers (p). 88. DIRECTORS OF COMPANY : - Where the defendants who were directors of a newspaper company gave a promissory not in the following form : On demand we jointly and severally promise to pay to Mr. L.H. or order the sum of 250 pounds, value received for and on behalf of the Wesleyan Newspaper Association, and this note was signed by them as Directors : it was held that the words we severally promise were equivalent to we personally promise and that the defendants were therefore personally liable on the note (q). But if the signature purports to be on behalf of a company which is not in existence the person who signed has no rights or liabilities because the contract is a nullity. A contract was signed Leopold Newborne (London) Ltd and underneath was the name Leopold Newborne. On the back of the document were set out the names Leopold Newborne and U. Newborne as directors of the company. At the time that the contract was made the company was not registered. The signature it was held, purported to be the signature of a nonexistent company so the contract was a nullity (r). Buat a note expressed to be on behalf of a society does not personally bind directors signing it (s) nor does the note of a secretary signed by him as such bind him personally (t). But directors of a company described as such in the body of a promissory note have been held personally liable upon it, notwithstanding that the seal of the company was affixed in one corner of the note (u).

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89. SOLICITORS : - A solicitor is prima facie not personally liable for the expenses of witnesses retained or subpoenaed by him (x). A solicitor who personally undertakes in writing that a record shall be withdrawn and cost paid in a cause which he is conducting is personally liable (a) and so are solicitors undertaking as such to pay a distraining landlord his rent (b). A solicitor who instructs stockbrokers to sell is personally liable even if the stockbrokers knew he was acting on behalf of a client (c). 90. AUCTIONEER : - When an auctioneer sells goods by auction the extent of his liability depend upon the conditions of sale, the nature of the subject-matter and other surrounding circumstances (d). An auctioneer who sells goods by auction for a named principal under the ordinary conditions of sale may be sued by a purchaser for the non-delivery of goods sold to him at such auction (e). If he does not disclose his principal he is deemed to contract personally (f) except where the contract is for the sale of a specific chattel (g). 91. BROKER : - A broker describing himself as having sold goods by order is not personally liable on his signature (h). 92. AGENTS OF THE CROWN : - At common law an agent of the crown is not liable to be sued on any contract which he makes on behalf of the crown (i) unless he pledges his personal credit (k) or acts otherwise than as an agent of the Crown (l). The position is now regulated by the Crown Proceedings Act, 1947 (m) s. 1 of which provides that where a person has a claim which but for the passing of the Act he could have enforced subject to Her Majestys fiat by petition of right then the claim may be enforced as of right by proceedings taken in accordance with the provisions of the Act. 93. LIABILITY OF AGENT ON BILL OF EXCHANGE : - Where a person signs a bill of exchange as drawer, indorser or acceptor and adds words to his signature, indicating that he signs for or on behalf of a principal or in a representative character, he is not personally liable thereon (n); but the mere addition to his signature of word describing him as an agent or as filling a representative character does not exempt him from personal liability (o). In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written the construction most favourable to the validity of the instrument is to be adopted (p). Section 26 (1) does not apply where the indorser merely signs his name (q). 94. INTENTION OF THE INSTRUMENT AND CUSTOM : - If the instrument show an intention that the agent should not be liable he will be held not to be so even though words are used which per se might so render him (r). Evidence of a custom making the agent personally liable upon a contract is inadmissible if it is inconsistent with the terms of the contract (s). There is no presumption of law that an English merchant acting on behalf of a foreigner contracts personally and not merely as agent for the foreigner (t); but the established custom of the trade may render the agent

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personally liable. 95. EXPRESS LIMITATION : - A agent may expressly stipulate on the face of the agreement that after a certain time his liability there-under shall cease (u). 96. FICTITIOUS OR NON-EXISTENT PRINCIPAL : - A person who purports to contract on behalf of a named principal when he had no authority to do so can neither sue nor be sued on the contract (a). His liability is for breach of warranty of authority. If however he contracts on behalf of a principal known to both parties to be non-existent the contract is deemed to have been entered into personally by the actual maker (b). When a contract is made on behalf of a principal whose identity is not disclosed evidence is admissible to prove that there was no principal and on proof of that fact the agent may sue and be sued on the contract (c). Where the plaintiff mistakenly believed the defendant to be contracting on behalf of a principal but was not found to have given exclusive credit to the supposed principal, it was held that he had not lost the right to sue the defendant pon the contract (d). 97. LIABILITY OF AGENT ACTING WITHOUT AUTHORITY : - One who expressly or impliedly warrants that he has the authority of another is liable for breach of warranty of authority to any person to whom the warranty is made and who suffers damage by acting on the faith thereof if in fact he had no such authority. It was formerly thought that a person who misrepresented his authority could not be made liable unless the misrepresentation was due to some wrong or omission of right on his part (e). But although it is true that one who fraudulently misrepresents his authority is liable for the consequences (f), it is clear that the absence of fraud is no defence to an action for breach of warranty of authority. The fact that the professed agent honestly thinks that he has authority affects the moral character of his act; but his moral innocence so far as the person whom he has induced to contract is concerned in no way aids such person or alleviates the inconvenience and damage which he sustains. The obligation arising in such a case as agent expressed by saying that a person professing to contract as agent for another impliedly if not expressly undertakes to or promises the person who enters into such contract upon the faith of the professed agent being duly authorized, that the authority which he professed to have does in point of fact exist (g). The rule is not confined to contracts; it covers every transaction of business into which a third party enters on the faith of a representation that the person with whom he is doing business has the authority of some other person (h). Provided that the authority does not in fact exist at the material time, it is immaterial that the agent originally had such authority and did not know and had no means of ascertaining that the authority had been terminated (i). 98. IMPLIED REPRESENTATION OF AUTHORITY : - It is not necessary that the representation of authority should be made expressly. A solicitor who institutes an action thereby sufficiently warrants that he is properly authorized to do so even though he makes no express statement to that effect (k). If however a limited warranty of authority be expressly given no wider warranty can be implied. Thus where ship-brokers signed a charterparty by telegraphic authority as agents, a

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form of words which was understood in the trade to warrant merely that the agents had such authority as a telegram, possibly erroneous might confer on them, it was held that the shipbrokers were not liable for exceeding their authority owning to a mistake in the telegram (l). the mere fact of an agent entering into a contract without authority will not render him liable to be sued on the contract itself. Accordingly it has been held that where a party who has no authority so to do executes a written instrument in the name of another and adds his own name thereto only as agent for that other, he cannot be treated as a party to that instrument and be sued upon it unless it be shown that he was the real principal (m). 99. REPRESENTATION MUST BE RELIED ON : - It must be shown that the plaintiff accepted and relied upon the defendants representation as a warranty. Therefore where the plaintiff knew that the defendant had no authority he could not succeed (n). So where the facts were equally known to both parties and the representation complained of was as to matter of law only it has been held that the defendant was not liable (c). 100. DAMAGES : - The damages recoverable in these cases from the agent will be such as directly flow from his act. Where an agent bought a ship without authority for 6,000 pound and on the principal repudiating the contract the seller had to resell for 5,000 pounds the agent became liable for the 5,000 pounds (p); brokers selling wool for arepudiating principal became liable to the purchasers for the costs of an unsuccessful action by the purchasers against the principals (q); and the same principle applies to a contract for a grant or for a renewal of a lease (s). A loading broker who carelessly issues a bill of lading in respect of goods which are never received for shipment, owning to the warehousemans negligence is guilty of a breach of warranty and the measure of damages is what the seller suffered from not being able to sue the ship owners since it is well known in the trade that a broker has no authority to sign for unshipped goods (t). 101. REPAYMENT OF MONEY : - An agent who in the course of his employment receives money on behalf of his principal to which the principal has in fact no title is as a rule not liable to repay the money to the person from whom he received it if he has actually paid it over to his principal without notice of the third persons claim (u). If however the money is obtained by means of some wrongful act to which the agent is party, he cannot protect himself by paying it over to his principal (a). And an agent who is relying upon this defence must show that he has actually paid his principal not merely that he has given him credit in account (b); even though he alter his position for the worse by giving the principal further time for the payment of a debt in reliance upon the amount so credited (c). 102. LIABILITY OF AGENT BY USAGE OF TRADE : - By usage of trade in certain cases, an agent who contracts expressly as agent but without naming his principal is held to be personally liable on such contract (d). So by the usage of the Stock Exchange its members deal with each other as principals whether they act as brokers or not but the rights of parties outside who employ members as brokers are not

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affected by that usage (e). So by the usage of the London Dry Goods Market, a broker who contracts for the purchase of goods without disclosing his principal is liable to the vendor for the price of the goods if the principal does not pay (f). And so according to the ordinary course of trade in insurance cases, the insurance broker is held to be prima facie liable to the underwriter for all premiums payable on policies which he effects for him (g). And so by the custom of the hop trade, a broker is liable for an undisclosed principal (h). Lastly when a factor in this country buys for a merchant abroad, the presumption is that the credit is given to the British buyer and not to the foreigner (i). But there is no rule of law which makes the agent personally liable in such cases; his liability always depends on the intention of the parties which intention is to be collected from the terms of the contract itself as explained by the custom or usage of trade where any such can be shown to exist (k). SECTION 8 BRIBERY OF AGENT 103. RIGHT TO REPUDIATE CONTRACT PROCURED BY BRIBERY OF AGENT:A principal is always entitled to repudiate within a reasonable time any act done on his behalf where the agent who did it has accepted a secret commission or bribe form the other party to the transaction. Any surreptitious dealing between one principal and the agent of the other principal is a fraud on such other principal (l). Once the bribe is established there is an irrebuttable presumption that it was given with an intention to induce the agent to act favourably to the payer and thereafter unfavourably to the principal. It is conclusively presumed against the donor that his motive is corrupt and against the donee that he is affected and influenced by the payment (m). A party to a contract who repudiates it may subsequently justify the repudiation on the ground of the fraud of the other party in bribing the agent who negotiated the contract even though he was ignorant of the fraud at the time of the repudiation (n). A principal whose agent has accepted a secret commission is not obliged to prove that the agent has accepted a secret commission is not obliged to prove that the agents mind was actually influenced by the receipt of the commission (o). Besides the right to repudiate a principal whose agent has been bribed has two further remedies. He may recover from the agent the amount of the bribe that he has received; and he may also recover from the agent and the person who has paid the bribe jointly or severally damages for any loss that he has sustained without allowing any deduction in respect of what he has recovered from the agent under the former head (p). The loss sustained by a party to a contract whose agent has been bribed is in ordinary circumstances the amount of the bribe (q). SECTION 9 SETTING UP JUS TERTII 104. WHEN AGENT MAYS ET UP THE JUS TERTII : - An agent cannot in general dispute the title of his principal (r) or set up the right of a third party to the property in the goods or the documents of title to the goods with which he is entrusted by his principal save when the property whilst in his hands and subsequently to his assuming possession thereof (s) is claimed by a third party. In that case he may

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either on behalf and by the authority of such third party repudiate the title of his principal on the ground of eviction by title paramount (t) or alternatively obtain relief by interpleading between the respective claimants (u). And this relief by way of interpleader is available even when the agent or bailee by reason of his attornment is estoppel from repudiating the title of his original principal or bailor (a). But an agent cannot se up the jus tertii except on behalf of and by the authority of the person whose title he sets up (b). And upon the ordinary principals of estoppel, he cannot do so if by his admissions or his conduct he has misled a third party into acting to his detriment (c). who signe he is personally liable upon his covenant has hwren n m d eco upon orders sent by a customer is sold to another because if he introduces on the introduction y his master to purchase rert

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