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GIMPA LAW SCHOOL

COMMERCIAL LAW
FIRST SEMESTER
TUTORIAL SHEET TWO (2)
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1. With the aid of decided cases, discuss the authority of an Agent, distinguishing the agency
relationship from other similar relationships such as Sale, Bailment and Trust.

2. The people of GIMPAMAN are reeling under incessant pressure from all angles. Their livelihoods
have been taken away from them. The things that brought happiness and joy to living in
GIMPAMAN have all faded in shadow of the sunset. Businessmen and woman have had to adopt
new ways of transacting business to breakeven.

In these hard times, Mr. Benedict Adeyemi, the Managing Director of Hordibert-Louis Ltd,
importers of high grade cement decided to use intermediaries in their import transactions to
reduce the cost associated with having someone on payroll performing that function.

On the 10th of March 2014, Mr. Adeyemi entered into an agreement with Solace Danso for her to
act as the intermediary for his company. The agreement required Ms. Danso to perform all acts
necessary and incidental for the importation of high grade cements.

In the import and export business of high grade cement, the use of Import Licenses and Letter of
Credits were the normal modes of payment. This was due to high risk associated with the
importation of the cements. Cements have a high risk of getting wet or condensed during
transportation and importers assuaged this risk by posting letters of credits and submitting their
import licenses as guarantee.

In the normal cause of their business relationship in the import of cement, Ms. Danso always
used her own import licence and opened letters of credit on behalf of Hordibert-Louis Ltd. She
also paid all the bank charges connected therewith and charged same to the account of
Hordibet-Louis Ltd Ltd for these expenses plus a commission. Mr. Adeyemi, the MD of Hordibert-
Louis Ltd always took delivery of the quantity of cement and paid the expenses and commission
of Ms Danso.

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With development in technology, cement manufacturers have developed a packaging approach
that keeps the cement safe during transportation and protects it from condensation. The
manufacturers have gotten the International Regulatory Agency of the Sale of Cement (IRASC)
to make it mandatory that importers purchase the packaging casings as part of every
consignment of cement. But this has not lead to the reversal of the usual mode of payment for
cement since the developed technology was still in the trial stages. This meant that the unit price
of the cement had gone up by 25 per cent across all manufacturers of the product.

In its usual line of business on behalf Hordibert-Louis Ltd, Ms Danso placed an order for 2000
bags of cement. The manufacturers of the cement Ltd in line with the new directive from IRASC
sold the 2000 containers with 2000 pieces of protective casing. This raised the price and the
incidental expenses of the consignment by 25 per cent. Benedict Adeyemi has raised issues with
paying Ms. Danso for the consignment, the expenses and the commission due her. The
Manufactures are also worried about their payments.
As freshly minted lawyer from the GIMPA Law School, advise the parties to the transaction.

3. Jaja Swaniker, a professional ambulance chaser and registered insurance claims agent
contacted Nuna Yevugah and offered to make, on her behalf, a claim for compensation for the
injuries against the insurance company of a liable driver. In pursuing the claims, Mr. Swaniker
encountered some challenges in processing the claims. He thus required the services of a lawyer.
He then engaged the services of Jackson Okle, a legal practitioner working with Poku and Poku
an Accra based Law firm. Mr. Swaniker then arranged a meeting between Nuna Yevugah and
Lawyer Jackson Okle. At the meeting, Ms. Yevugah stated I hear you are the only one who can
help me with the processing of my claim due to the complex nature of my claim. I have given
Mr. Swaniker full powers to do whatever is within his power to collect the claim.

Lawyer Okle after writing several letters to the Insurance Company and threatening to issue a
writ, the insurance company made good the claim. They paid the full claim amount of 50,000
Ghana cedis and paid Lawyer Okle 10,000 Ghana Cedis as legal fees. He subsequently paid the
claim amount of 50,000 less 2000 as his legal fees to Mr. Swaniker. Mr. Swaniker also deducted
his expenses from the 4000 received from the amount paid to him by Lawyer Okle and paid the
remainder to Ms. Yevugah. Ms. Yevugah is very upset with the amount of money she finally

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received as her claim. She is threatening to bring legal action to recover the full amount of her
claim. Advice Ms. Yevugah.

4. An offer of purchase was made by Matilda Sasu the Managing Director of Hanson and Inkoom on
the 8th of January 2013 to Fati, who was acting as an agent of Kansuk Ltd. Fati was not
authorized to make contracts but had authority to negotiate for the contract of sale. The offer
was accepted by Agye on the 9th of January 2013 on behalf of Kansuk with the directive that the
companys solicitor had been instructed to prepare the necessary documents to conclude the
sale. On the 13th of January, 2013, Matilda Sasu withdrew her offer on the ground that she had
been misled by the statements that had been made to her as to the value of the property, the
subject matter of the sale. She was also beginning to doubt the authority of Agye to contract on
behalf of Kansuk Ltd. After the withdrawal, the board of Kansuk Ltd on 28 th of January 2013,
ratified the acceptance of the offer and the purported contract of sale by Agye.
As vacation intern at Ogo and Pratt Solicitors, write a memo to you Senior Associate on effect
of the ratification of the board of Kansuk Ltd on the 28th of January 2013.

5. Mrs. Gify Afropong appoints Albert Adu as her agent to buy furniture and to sell it to her trade
customers. She informs her suppliers and customers of Alberts appointment. Gify tells Albert
that he is not to buy any red sofas as she doesnt think they are good sellers. Unbeknown to
Gifty, Albert is a thief and has recently served a term of imprisonment for stealing. Albert visits
Sofas Ltd, one of Giftys main suppliers and, purporting to act for Gifty, agrees to purchase 20 red
sofas for GHC 15,000. In fact, Albert knows that he can sell these sofas to his friend Bismarck for
GHC 20,000 and keep the profit for himself. The following day, Albert enters into an agreement
with Bismarck to sell the sofas for GHC 20,000 without telling Bismarck that he is Giftys agent.
Shortly afterwards, Sofas Ltd found out what Albert was up to and tells Gifty that they will not
honour the agreement to sell the red sofas. Fearing a loss of business, Gifty then purports to
ratify the purchase with Sofas Ltd as well as the sale to Bismarck. With the aid of relevant
authorities, advise Gifty.

6. David was contracted by Afrakoma to negotiate and sell his TV Station- V1 Communication to
enable him raise money to enter into another business venture. Afrakoma agreed to pay David a
commission of 10 percent of the sale value of the TV Station. Before the sale was completed by
David, Afrakoma died suddenly. David, however, went ahead to finalize the sale with Lavison
Multimedia. The Administrator of Afrakomas estate has refused to pay David the agreed

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percentage as his commission. David is threatening to sue to recover his percentage. Advise The
Administrator of the estate of Afrakoma

7. "If courts are too ready to construe written contracts as contradicting the right of the
undisclosed principal to intervene, it would go far to destroy the beneficial assumption in
commercial cases. Per Lord Lloyd in Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 1 All E.R. 213
With the aid of relevant decided cases, discuss the general rule of a Disclosed and Undisclosed
Agency and the exceptions thereof.

8. It is that time of the year again and life at GIMPAMAN is getting interesting. The fall in the value
of the GIMPA dollar and the rising cost of living in the capital is causing serious hardship for
businesses. Mr and Mrs Saah owners of the biggest rice milling company in capital are closing
shop. The Agyepongs on the other hand are also downsizing their bus transport business - Azeez
International Transport Company. Instead of operating from their own bus terminals, they now
operate at terminals owned by the GIMPA Transport Union (GTU).

On the 15th of August 2014, Etse Boaten boarded the one of the buses belonging to the Azeez
International Transport from the GTU terminal in Accra. Etse was then carrying a travelling bag.
On boarding the vehicle he was ordered by one of the station overseers popularly called
bookmen - Mr. Anin-Yebaoh to come down with the bag, and Etse obeyed. Notwithstanding
Etses protest that the bag contained Ipads and mobile phones and therefore wanted to take the
bag on to the bus, but Mr. Anin-Yebaoh insisted and collected his bag and put same into the boot
of the said bus. But before placing the bag in the boot of the vehicle, Mr. Anin-Yeboah showed
interest in purchasing one of ipads. The agreed price for the ipad was 2500 GIMPA dollars. He
however indicated to Etse that he will want to switch his old phone plus 2000 GIMPA dollars.
Etse agreed and collected the old phone plus the 2000 GIMPA dollars. Mr. Anin-Yebaoh then
asked Etse to pay 80 GIMPA dollars as the cost of carriage for the bag. Etse paid the money to
him. Mr Anin-Yebaoh in turn gave the money directly to Kofi Adu a representative and driver of
Azeez International Transport.
On their arrival at Ho, Etses bag was nowhere to be found. The driver of the bus - Kofi Adu and
his mate - Akpene Chintoh had no answers on the whereabouts of the bag. They immediately
broke sweat as Este started raining hell on them. Kofi Adu assured Etse that he was going back
to Accra the next day to look for the bag. Etse has also realized that the old phone given to him

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by Mr. Anin-Yeboah was faulty and freezes when you put in a sim card. Upon his return from
Accra, Kofi Adu in the company of the lawyer of Azeez International Transport came to Etse to
find out from him the cost of the missing bag and its contents. Etse also reminded Kofi Adu of
the purchase made by Mr Anin-Yeboah. The lawyer of Azeez International Transport - Ellis Annan
informed Etse that the company will pay for the entire cost of the loss. The lawyer was however
quick to raise issue with the purchase of Ipad by Mr. Anin-Yeboah and stated that he will inquire
further on the issue.
Subsequent to this Etse who is stationed at Tamale as a civil servant received a wireless message
from Ho through the Regional Administrative Officer, asking him to come down to Ho.
Accordingly, he travelled to Accra by air, and thence to Ho by road only to be told by Managing
Director of Azeez International, Abena Dotse that the Company was not prepared to pay for the
loss and the full price for the Ipad since according to the facts the loss was occasioned by Mr.
Anin-Yeboah who is not in the employ of the Company but work for the GTU - the company that
manages the bus terminal. On the alleged promise of payment, the Managing Director of the
Company stated that the lawyer Ellis Annan had no authority to bind the company and that he
was only to inquire from Etse the facts surrounding the missing bag. Etse Boaten is livid because
of the companys decision. He has rushed to your law firm with the above facts.

With the aid of relevant decided cases resolve the following issues:
a. Etse claims that Mr. Anin-Yeboah acted as an agent for Azeez International Transport when
he collected the fare for bag on their behalf. With your understanding on how the Agency
relationship is created advise him. (7 marks)

b. Etse also insists that the lawyer Ellis Annan was acting on behalf of the company when he
made the promise to pay for the loss of the bag and its content. With your understanding
on how the Agency relationship is created advise him.
(8 marks)

c. What rights if any will accrue to Etse Boaten who believes he transacted business with the
rightful representative of Azeez International Transport Company Limited. (10 marks)

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