Q.

The question above demands an exposition on Vitiating factors specifically mistake as to

identity, restraint clauses in employee contracts and economic duress.

The following issues have been derived for consideration

1. Whether Mr. Asante could recover the gold bar from the gentleman in his shop.
2. Whether Mr. Asante could enforce David’s restraint clause against him
3. Whether Mr. Asante can set the contract between him and AA productions aside on
for economic duress against Mr. Asante in withholding the delivery of his furniture for
extra payment.

Whether Mr. Asante could recover the gold bar from the gentleman in his shop

A unilateral mistake occurs when one party makes a mistake in the contract and the other
party is aware but does nothing to rectify the mistake as seen in Hartog v Colin & Shields.

At common law, mistake to the identity of the contracting party renders the contract void and
no title or right of ownership is passed as held in Cundy v Lindsay.

Mistake as to identity arises when the offeror contracts with a different party than the one he
intended to contract with. Where the parties contract in each others’ presence, there is a
presumption that the offeror intended to contract with the person before him per Philips v
Brooks.Thus there is a contract made with the person within the presence of the offeror to
whom a valid title is passed onto.

A contract formed on this basis is not held to be void however it is voidable on the grounds
of fraudulent misrepresentation. However, the contract must be avoided before a third party
buys the goods and gains a valid title therein, as seen in Lewis v Avery. This would bar
recovery by the offeror

This presumption can be rebutted if the offeror proves; the identity of the buyer was crucial
to the contract; there was a definite person to be contracted with and; a reasonable attempt
was made to ascertain the identity of the rogue as espoused in the case of Ingram v Little
and again in Lake v Simmons.
In this instance, no title is transferred to the offeree hence it cannot be passed onto a third
party.

In this case, Asante transferred a valid title to the rogue when he sold the gold bar to the
latter. Asante is presumed to have formed a contract with the person before him and this
allowed the rogue to pass possession of the gold bar to the man in his shop. This happened
before Asante avoided the contract so the third party obtained a valid title.

Whether Mr. Asante could enforce David’s restraint clause against him

Contracts concerning restrain of trade are prima facie void since such contracts are contrary
to public policy. However, such contracts will be upheld if proven to be reasonable between
the parties. This principle was established in Nordenfelt v Maxim Nordenfelt Guns and
Ammunitions

An employer can enforce a contract with his employee to restrain the latter from competing
against him after leaving his establishment where it is necessary to protect trade secrets and
connections as seen in Faccenda Chicken Ltd v Fowler Doman.

If a restraint clause is far wider in scope than is necessary for the protection of the parties
involved such that it prevents an individual from using personal skills and experience to earn
an income, it will be unenforceable as it becomes prejudicial to public interest per the cases
of Herbert Morris Ltd v Saxelby and Kores Manufacturing Limited v Kolok Manufacturing
Limited.

In the present instance, David has only been restricted from being employed within food
businesses. The restrain clause is not harsh because it does not prevent him from utilising
his security expertise in any other sector of employment. The only prohibition placed on him
is food establishments within the boundaries of the Ashanti Region. Hence he has the
discretion to choose between a plethora of different business to offer work for. The restraint
clause can be enforced against him.

Whether Mr. Asante can set the contract between him and AA productions aside on for
economic duress against Mr. Asante in withholding the delivery of his furniture for extra
payment

Where a party is induced to enter a contract due to a threat from another party to break an
earlier contract, it constitutes economic duress which enables the injured to avoid the
contract made, per the case of DSDN Subsea Ltd v Petroleum Geo-Services ASA. and
D&C Builders Ltd v Rees

Economic duress can render a contract voidable where the conduct in question is coercion
of will which vitiates consent as seen in Pao On and other v Lao Yiu Long.

However, the right to set aside a contract on the grounds of economic duress can be lost
through a delay in instituting an action to avoid the contract as seen in North Ocean Shipping
Company v Hyundai Construction Limited.

In the matter at hand, AA Production is coercing Mr. Asante to accept a contract that will be
prejudicial to hm financially but because of the predicament he find himself in concerning
lack of time, he is forced to agree to the proposal by paying more.

This contract can be set aside for economic duress suffered by Mr. Asante.

Advice To Mr. Asante

1. Mr. Asante cannot recover the gold bar from the individual in his shop because that
person has gained valid title from the rogue when the gold bar was sold to him. Any
legal actions against him would prove futile
 2. Mr. Asante should seek an order of injunction to enforce the restraint clause against
David to prevent any breached.
3. Mr. Asante is advised to rescind the contract between himself and AA Productions as
the latter is liable for economic duress.

Q.2

The area of the law in this question is vitiating factors specifically Undue influence and
negligent misrepresentation

The issue to be determined are;

1. Whether Lawyer Amakye unduly influenced Jeffrey to enter into a contract with him

2. Whether Zed Bank can be held liable for negligent misrepresentation against Jeffrey

Whether Lawyer Amakye unduly influenced Jeffrey to enter into a contract with him

Undue influence is the improper use of power by one party to dominate the mind and will of
another party so as to coerce that party into a contract as seen in Allcard v Skinner.

There is a presumption of undue influence in situations where there is a fiduciary relationship

between both parties. That is, a relationship where one party reposes confidence in another
party. This principle is held in the case of Credit Lyonnais Bank Nederland v Burch.

The onus of rebuttal falls on the benefiting party to prove that the other party acted
independently of any influence from the benefiting party as shown in the case of Mercer v
Brempong II.

The effect of undue influence is to render the contact voidable at the option of the injured
party per the case of Barclays Bank v O’Brien.

In the instant matter, there is a fiduciary relationship between Lawyer Amakye and Jeffrey as
the former is the family lawyer of the latter. Any agreement that is formed between these
parties will be presumed to have been formed by the position and power Lawyer Amakye
possess over Jeffrey.

It can be evidenced from the fact that Jeffrey entered this agreement to appease his family’s
lawyer thus it can be said that Lawyer Amakye unduly influence Jeffery to enter this contract.

Whether Zed Bank can be held liable for negligent misrepresentation against Jeffrey

Negligent misrepresentation is a false statement made honestly but without reasonable

grounds for its truth. This statement is made carelessly and without any regard for the duty
of care between the representor and the representee as seen in Nocton v Ashburton.
The initial scope of negligent misrepresentation was that it could only arise out of a
contractual relationship wherein there was a duty of care between parties as held in Candler
v Crane, Christmas & Company.

However, this scope was expanded upon to allow parties to establish a duty of care in the
absence of a contractual relationship in the case of Hedley Byrne v Heller & Partners. In the
absence of a contractual relationship, a special relationship will be presumed to have been
formed between the parties leading to a duty of care with any other party who would
reasonably be inclined to rely on the former’s information.

Losses suffered because of a reliance on the representor’s superior skill can be recovered
by damages if the representation was negligently made as seen in Esso Petroleum v
Mardon.

From the facts, there was a duty of care created between Zed Bank and Jeffrey. There was
a reasonable inference that the information Zed Bank provided would be relied on. This
placed a demand for care to be taken by the bank to ensure that the information being
provided was accurate.

Failure to act responsibly to ensure the accuracy of the information provided meant Zed
Bank acted carelessly hence the bank can be held liable for negligent misrepresentation.

Advice to Jeffrey

Jeffery is advised to set aside his contract with Lawyer Amakye on the grounds of undue
Influence

Jefferey is also advised to sue Zed Bank for damages resulting from their negligent
misrepresentation.

Q.3

For a contract to be discharged by performance, there must be precise and exact

performance. Discuss the accuracy of this statement.

The doctrine of discharge of contract deals with all the ways parties to a contract may be
released from their obligations without incurring any legal ramifications. A contract may be
discharged by;
1. Agreement
2. Performance
3. Breach
4. Frustration
This essay will elucidate discharge of contract through performance to ascertain whether
there must be precise and exact performance of a contract in order for it to be discharged.

It is trite law that a party must perform all his obligation under a contract to be discharged
from the contract and be entitled to enforce the performance of the duties of the other party.

Traditionally at common law, the position on performance was for it be precise and exact in
order for a party to be discharged completely from the contract. Thus where a party tendered
incomplete performance of the contract, the other party was discharged from compensating
the former party. This principle is seen in the case of Cutter v Powell.

This mean a party who provided service could not recover the value for work done unless his
performance of contract was completed in its entirety per Sumpter v Hedges and Bolton v
Mahadeva.

Moreover, a buyer was entitled to reject products provided by the seller if the products did
not exactly match the measurements he desired as held in Re Moore v Landauer and Arcos
v EA Ronaasen & Son.

This positon of the law resulted in multiple injustices. These include;

1. It would be unjust for a workman to receive no compensation for a trivial fault in

performance.
2. The buyer is unjustly enrichened from the partial performance of the other party

The common law developed certain measures to remedy these injustices. These
developments will be discussed below

The Doctrine of Substantial Performance

This doctrine is based on the premise that a trivial defect in the performance of an obligation
will not completely discharge the party not at fault from the contract and from compensating
the the other party. Instead, the party not at fault would pay the price agreed upon for work
done then may counterclaim to recover any losses suffered because of the defective
performance. This doctrine can be traced to the case of Boone v Eyre.

In ascertaining what constitutes substantial performance, the courts look at the total nature
of the contract. It determines the total cost of the contract and compares it with the amount it
would take to rectify the defective performance.

Where the cost of rectifying the defect is relatively small as compared to the total contract
sum, the court will hold such a contract as substantially performed as seen in Hoening v
Isaacs.

Acceptance of Partial Performance

Partial performance arises when some work has been done but to a degree where it doe not
satisfy the conditions needed for substantial performance. In such an instance, the party not
at fault has the option to accept or reject the service that has been provided for him. In that
instance, the innocent party must pay for the partial performance done. This is seen in
Mabsout v Fara Bros Limited.

The party who performed the service is also entitled to sue on quantum meruit; which means
a reasonable price for work done or, quantum valebat; which is also reasonable sum for
good supplied. This principle is espoused in the case of Osei Kwaku v Cletus Barro Kufia.

However, this principle does not apply where the innocent party is forced to accept the
performance. If the innocent party does not have the option to deny the performance, partial
performance cannot apply as held in Sumpter v Hedges.

Prevention of Performance by the promisee

If the party performing his obligation is prevented from completing said obligations under the
contract, that party can recover on a quantum meruit basis for work that has been done. The
performing party can also sue to recover damages for breach of contract as seen in Planche
v Colburn and expanded upon in Skanska Jensen International v Kilmatechnick Engineering
Limited.

Finally, a contract which is divisible in sections is an exception to the precise and exact
doctrine. A contract is said to be divisible when it is completed in segments so the
completion of each segment gives rise to some payment. This enables the performing party
to be compensated for work done on separate sections of the contract even if the contract as
a whole might not be completed. This principle is seen in the case of Ritchie v Atkinson.

It is submitted that the statement in question is not accurate because developments have
been made in the doctrine of discharge of contract to allow a party to be discharged from the
contract without performing said contract precisely and exactly.

It is a rigid statement which has proven to be archaic in modern law and as such, these
exceptions are a testament to the continued evolution of the law to uphold justice and
fairness in all contracts.