In summary, there wasn t any contract because there was no acceptance because the offeree accepted on terms not specified by the offeror.

Transcription

1 ASSIGNMENT 1. Mama Lit circulates leaflets on the campus of IPS. On the leaflet is written tomorrow launch will be at a special low price of only GH Has Mama Lit made an offer and is she bound to sell to all at GH 1.00 on the said day? ANSWER The area of law in the case above is an invitation to treat. Whether or not it is an invitation to treat? Certain acts looks like offer but in law are not. They are called invitation to treat or invitation to negotiate. Invitation to treat lacks the contractual intention which an offer has. They rather have the intention to negotiate. Thus, accepting an invitation to treat does not lead to a contract but leads to negotiation. Although invitation to treat contemplates eventual contractual relationship, their acceptance is not intended to immediately result in a contract. Examples of instances that signify invitation to treat are; 1. Display of goods: Display of goods either in the shop window or on shelves of a shop for sale, with or without price attached. The shop keeper in such situation does not offer to sell the goods but rather invites members of the public to negotiate with him. 2. Advertisement: Advertisement of the sale of goods is not an offer to sell the goods but invitation to the general public for negotiation. In some circumstances, however, promises contained in advertisement can constitute valid offers if there is a clear indication of the intention to enter into a contract with whoever acts on the promise contained in the advertisement. 3. Auction sales: Is a notice advertising the auction sale or notifying the public about the auction. It describes the item to be auction and provides other relevant information pertaining to the auction. The case above is an invitation to treat because the act of advertisement can be recognised as in the case of GRAINGER V GOUGH (1896), where a wine merchant was approached to produce a price list of his wines but it was misconstrued as a contract to supply unlimited quantities. Therefore, the court held that circulation of price list does not mean an offer to supply unlimited quantities of wine but an invitation to treat to negotiate. From the premises above, the case of Mama Lit is not an offer because an offer doesn t constitute an advertisement if only there is an invitation to create legal intentions which there is not but rather an offer is when the offeror indicate his intention to enter into a contractual relationship with anyone who accept the terms of

2 the offer (offeree). Therefore from the above argument the case of Mama Lit is not an offer but invitation to treat and she isn t bound to sell to all at the said day. 2. Does an airline schedule constitute an offer and why? ANSWER The area of law is an offer. Whether or not it is an offer? An offer refers to a proposal which a person called the offeror makes to another person called the offeree in which the offeror expresses his willingness and intention to do business with the offeree if the offeree accepts the offer. The rules of an offer state that; 1. An offer must have terms: The terms of an offer are the conditions on which the offeror is ready and willing to do business with the offeree. These conditions are the things the offeror proposes to do them. 2. The terms of an offer must be clear, precise and definite: The terms of an offer must not be vague, uncertain or ambiguous. Clarity of the terms of an offer is critical to the formation of a contract because it has both practical and significance in so far as the formation of a contract is concerned. 3. An offer must be communicated: An offer is a proposal that seeks to establish a business relationship between the offeror and the offeree. Communicating the offer will make persons aware of the offer and its terms and then decide to accept or reject. 4. It must be made to a specific person or to the general public. Based on the premises above, we can say an airline schedule is an offer because it has terms, it is communicated, it involves a commercial transaction, and it is made to the public and specific persons. The certainty and the intentions with which an airline schedule is made also make an airline schedule to be an offer. This can be supported with the case of CARLILL V CARBOLIC SMOKEBALL CO (1839) where the defendants were proprietors of carbolic smokeball. They issued an advertisement in which they offered to 100 to any person who contracted influenza after having used one of their smokeball in a specified manner for a specified period of time. The plaintiff bought one of the balls and used it in the manner but contracted the flu. The company refused to pay the claim. The court held that when an advertisement is made to the whole world, then any person who performs the act is entitled to the reward. Therefore a definite offer may be made to a class of person or to the world at large. In summary, an airline schedule constitute an offer and when accepted there will be a contractual relationship.

3 3. Koo wrote to his friend Aki offering to sell him one hundred bags of onions at GH per bag. Aki wrote back indicating that he was very interested but needed to know whether it was Bawku red. The following day soon after Koo read Aki s letter, Aki heard a rumour that the price of onion was about to rise. He immediately sent a fax to Koo stating I accept your price of GH for Bawku red. Assuming that the onions are actually Bawku Red, is there a contract? Explain your reasoning. ANSWER The area of law in the case above is offer and acceptance. Whether or not there is a contract? Offer refers to a proposal which a person called the offeror makes to another person called the offeree in which the offeror expresses his willingness an intention to do business with the offeree if the offeree accept the terms of the offer. From the case above, the offer had terms, it was clear and definite, it was communicated. An acceptance of an offer refers to the unqualified agreement of an offeree to do business with the offeror on the terms and conditions specified in the offer. Acceptance must constitute some elements; 1. It must be absolute: This means that the offeree must not merely accept the offer but must agree to all the terms of the offer exactly as they appear in the offer without making changes or seeking to make changes to them. 2. It must be communicated: Acceptance of the offer must be communicated by the offeree or by a person authorized by him to the offeror, who must receive it in order for a contract to come into being. A contract does not come into being if the offeree fails to communicate his acceptance of the offer to the offeror. From the case above, there is no contract because the terms specified by Koo (offeror) were not accepted by Aki (offeree). However, it can be seen in the case of HARVEY V FACEY (1893) where the plaintiff sent a telegram to the defendant, Will you sell bumper hall pen? Telegraph lowest cash price. The defendants reply was lowest price 900. The plaintiff telegraphed we agree to buy for 900. It was held by the Privy Council that the plaintiff second telegraph could not be an acceptance. From the premises above the case of Koo and Aki is not a contract because a contract must have an element of offer and acceptance where by the acceptance must be based on the terms specified by the offeror. In summary, there wasn t any contract because there was no acceptance because the offeree accepted on terms not specified by the offeror.

4 4. State six Maxims of equity and explain any three. ANSWER Equity does not suffer a wrong to be without a remedy: This maxim imports that where the common law confers a right it gives also a remedy or right of action for interference with or infringement of that right. Thus, it states that once a wrong is acknowledged to have been committed, there must be a legal solution to it, and it is the duty of the courts to create a legal rule based on justice and fairness, and not say because there is no pre-existing rule then the wrong should not be corrected. Where there is a right there is a remedy. Application of this maxim can be understood from; e.g. In Ashby v White, wherein a qualified voter was not allowed to vote and who therefore sued the returning officer, it was held that if the law gives a man a right, he must have a means to maintain it, and a remedy, if he is injured in the enjoyment of it. Equity follows the law: The maxim indicates the discipline which the Chancery Courts observed while administering justice according to conscience. Thus, equity respected every word of law and every right at law but where the law was defective, in those instances, these common law rights were controlled by recognition of equitable rights. Snell therefore explained this maxim in slightly different way: Equity follows the law, but not slavishly, nor always. Application of this maxim can be understood from; e.g. Stickland v Aldridge. At a common law, where a person died intestate who owned an estate in fee-simple, leaving sons and daughters, the eldest son was entitled to the whole of the land to the exclusion of his younger brothers and sisters. This was unfair, yet no relief was granted by Equity Courts. But in this case it was held that if the son had induced his father not to make a will by agreeing to divide the estate with his brothers and sisters, equity would have interfered and compelled him to carry out his promise because it would have been acting against conscience to allow the son to keep the benefit of a legal estate which he obtained by reason of his promise. He who seeks equity must do equity: The maxim means that to obtain an equitable relief the plaintiff must be prepared to do equity. Thus, a person who goes to court seeking an equitable relief must be ready and willing to act fairly and justly towards the other party to dispute or be willing to make fair and reasonable concessions to him as a condition to having his own granted. Application of this maxim can be understood from; e.g. Illegal loans: In Lodge v National Union Investment Co. Ltd., the facts were as follows. One B borrowed money from M by mortgaging certain securities to him. M was an unregistered money-lender. Under the Money-lenders Act, 1900, the contract was illegal and therefore void. B sued M for return of the securities. The court released to make order except upon the terms that B should repay the money which had been advanced to him. Equity looks at the intent rather than the form Equality is equity.

5 Equity looks on that as done which ought to be done:

6 LEGAL ENVIRONMENT OF BUSINESS BANKING AND FINANCE G1 SUBGROUP 3 QUESTION 8 A. Billy works into the night to complete an important report for his boss, Madam Kardija. Madam Kardija is very pleased with the report and says I know you have worked very hard on this, I will make sure you get an extra GH 200 on your pay at the end of the month. Can Billy enforce this promise and why? The area of the law is PAST CONSIDERATION Question: Whether or not is a past consideration? Past consideration is where one of the contracting parties depends on an act previously performed to be used as consideration in a later agreement or when an act or service is done or provided before the promise to which it relates is made. Rules: the rule is that past consideration is no consideration so it is not valid and cannot be used to sue on a contract. Supporting cases: ROSCORLA v. THOMAS (1842). ROSCORLA v THOMAS: A seller sold a horse to a buyer. After the sale, the seller promised that the horse was sound. This however turned out to be false. The buyer then sued the seller for damages for breach of warranty. The court rejected his argument and held that the consideration (the payment of the price) was made and finished before the promise. To summarize the case, Billy was promised an extra amount of GH 200 after he has completed a report for his boss Madam Kardija. In conclusion, Billy cannot enforce the promise because past consideration is no consideration and hence not valid. B. Francoise a Frenchman who understands very little English buys a ticket for entry into the Legon Botanical Gardens. The ticket states on it that no liability is accepted for the loss or damage to property belonging to entrants. Will this clause be regarded as being incorporated into Françoise contract? The area of the law is EXCLUSION CLAUSE Question: Whether or not is an exclusion clause?

7 An exclusion clause refers to provisions in a contract that exempt a party from liability arising from breach of obligations under the contract. Exclusion clauses protect a defaulting party from the legal implications of the breach. Rules: Bring to the attention of the other party in the contract before entering into it, if the exclusion clause is a separate document, it should be incorporated into the contract also the scope and content of the exclusion clause must expressly and clearly communicated to the other party at the time the contract was made. Supporting cases: CURTIS V CHEMICAL CLEANING AND DYEING CO, LEVISON v. PATENT STEAM CARPET. CURTIS V CHEMICAL CLEANING AND DYEING CO.: In this case, a laundry company accepted a dress from a customer for laundry. A provision in the contract stated that the company would not be liable for any damage that may be caused to the dress. The provision was contained in a receipt that was given to the customer for signing which she did. By signing the document the customer had indicated her agreement that the company should not be held liable for any damages that might be caused to the dress. The court held that for a party to a contract to successfully rely on an exclusion clause in his favor, the scope and extent of the exclusion clause must have expressly and clearly been communicated to the other party at the time the contract was made. Hence the company is liable for damages caused to the dress. To summarize the case: Francoise bought ticket for entry into the Legon Botanical Garden on which it was written, no liability is accepted for damages to property belonging to entrant. In conclusion, the clause will not be regarded as being incorporated into Francoise contract because the scope and content of the exclusion clause was not expressly and clearly communicated to him at the time the contract was made. C. Tony offers to sell his car to Martin for ten thousand Ghana Cedis (GH 10,000) and ask Martin to think about it and let him know by Monday. On Saturday he calls Martin and tells him to forget because he wants to keep his car. Can tony do this and why? The area of law is REVOCATION OF OFFER Question: Whether or not is a revocation of offer? Revocation of an offer means to withdraw an offer. Revocation of an offer represents a change of mind of the offeror not to do business with the offeree.

8 Rules: The offeror must revoke the offer before the offeree unconditionally accepts it. Also, where an offeror uses the post as a medium to communicate his notice of revocation, he must ensure that the offeree actually receives the notice. Supporting cases: PAYNE v CAVE (1789), DICKINSON v DODDS PAYNE v CAVE (1789): Payne offered to buy Cave s house for a fixed sum, requiring acceptance within six weeks. Within the six weeks specified, Payne withdraws his offer. It was held that Payne was free to withdraw his offer at any time before acceptance, even though the six weeks had not expired. To summarize the case: Tony offers to sell his car to Martin for GH 10,000 and latter calls Martin to forget it. In conclusion, Tony can do this because; he revoked the offer before the offeree unconditionally accepts it.

9 QUESTIONS A. What is constitution? List the sources of law in Ghana and explain Judicial Precedent noting the two condition precedent. B. List five principles based on which laws can be classified and explain any three of them. C. What is business Law and state the functions. D. Kumba promises to deliver goods to Willie upon the payment of the price for the goods. Willie pays and Kumba fails to deliver. Willie is reluctant to seek redress through litigation. What other options are available to Willie? State their differences. ANSWER A A constitution is a set of principles or established precedents according to which a state or other organization is governed. These rules together make up what the entity is within states, a constitution defines the principles upon which the state is based, the procedure in which laws are made and by whom. Some constitutions, especially codified institution, also act as limiters of the state power, by establishing lines which a state rulers cannot cross, such as fundamental rights Sources of law is a legal term that refers to the authorities by which law is made. There are a number of different sources that are used to define the creation and forces of law, though not all are used equally. According to article 11 of the 1992 constitution of Ghana, the laws of Ghana comprises of 1. The 1992 constitution 2. Enactment made by or under the authority of the Parliament established by the 1992 constitution 3. Orders, rules and regulations made by person or authority under a power cantered by the 1992 constitution. 4. The existing law 5. The rules of law known as the common law 6. The rules of law known as the doctrine of equity and the rules of customary law Precedent means something that has happen before. The judicial means judiciary. The judiciary refers to the various courts of law that are set up to interpret the laws of the country and to resolve legal disputes. Judicial precedent means the process whereby judges follow previously decided cases where the facts are of sufficient similarity. Judicial precedent means a body of legal rules developed by courts. There are three conditions that must exist to oblige a court to apply the decision of another court. Firstly, the ruling to be applied must be statement of law which explains the legal reasons for the ruling (ratio decidendi) Second, the court whose ruling must be applied by a superior court Third, the material facts and the legal issues of the previous case must be similar to the current

10 ANSWER B Classifications of laws, Laws are classified into 1. Subject matter 2. Criminal law/ civil 3. Substantial or procedural law 4. Public international/ private international law 5. Public/ private/ domestic law 1. Criminal law is the law through which public commitment of crimes are prosecuted by governing bodies whereas civil law is the law through which private parties bring lawsuits against one another. For read real or imagined wrong doing s. E.g. criminal law must deal with the prosecutions of a crime such one person hitting another with their car, and civil law deal with the lawsuit as the person hit will sue the driver of the car for monetary compensation. 2. Substantial laws are the social right and duties of a person and procedural law are guidelines through which government bodies or court deal with breaches in substantive law. E.g. Substantive law will state that hitting someone with a car and driving off is a crime, while procedural law will define how law court could try and sentence in the case. 3. Public law is the frame work of guidelines between government and individuals. Whereas Private law is the guidelines through which individuals or groups interact with one another e.g. public law have subdivisions that include constitutional and criminal laws, whereas private laws will cover such areas as contracts and properties. ANSWER C Business law encompasses all of the laws that dictate how to form and run a business. This include all of the laws that govern how to start, buy, manage and close all sell any type of business Business law establish the rules that all business must follow. Business law include state and federal laws, as well as administrative regulation. Functions of business law 1. It help us to facilitate planning and the realization of reasonable expectations. 2. Business law helps in promoting peace and justice among businesses 3. Business law helps to protect the environments 4. It helps to resolve dispute among organizations 5. Business law promotes economic growth through free competitions

11 ANSWER D ADR is another option for Willie. ADR which simply means Alternative Dispute Resolution methods therefore refers to a set of method for resolving disputes other than litigating in the laws. ot Examples of ADR that Willie can use are; Negotiation is the Process for resolving dispute by which the parties to the dispute attempt by themselves settle their differences without the involvement of a third party for to succeed, the parties must be willing and ready compromise. They must act in good faith and be responsive the legitimate interests concerns and fears of each other. Mediation is also another way which Willie can use Mediation is a process by which parties to a dispute invite a third party called a mediator to assist them resolve their difference. To succeed, the mediator must be neutral and must enjoy the confidence and trust of the parties. In addition, the mediator must identify the real interests and fears of the parties, which constitute the basis for the dispute and then to get the parties to see understand and focus on measures and factors that address such fears. The role of the mediator is to facilitate the process of resolving the disputes by assisting the parties to recognise and acknowledge each other fears and interest thinks of ways in which to address them Arbitration is a process by which parties to a dispute agree to refer their differences to a third party called an arbitrator for resolution. The arbitrator listens to the parties in a judicial manner by hearing all parties to the dispute, and makes a determination as to who is right and who is wrong. The decision of the arbitrator is called the arbitration award, the arbitration award is binding on the parties and enforceable as a contract, arbitrator plays a passive role in the dispute resolution process, an arbitrator plays an active role and actually decides who is right and wrong and the parties are required to abide by the decision. Litigation is the term used to describe proceeding initiated between two opposing parties to enforce or defend a legal rule. Difference between Litigation and ADR 1. ADR is less costly whiles litigation is expensive 2. ADR is simpler than litigation 3. ADR is more flexible than litigation 4. Litigation is time consuming compared to ADR 5. Litigation has ineffective remedies compared to ADR

12 Question Nine. a. Explain the significance of the doctrine of consideration in the law of contract and define past consideration. Consideration is the price paid for the promisor s promise and is the benefit or pain one gets in a contract. The doctrine of consideration is that unless a promise is made in a deed, it will not be contractually binding (though it may still give rise to legal consequences under the law on promissory estoppel, or the law of tort, or public law) unless it is supported by consideration. The significance of the doctrine of consideration in the law or contract is that: 1. It lays the basis that shows the existence of a bargain of exchange. Before a contract is established there is an offer and acceptance. For instance, two friends establish a contract between themselves and they agree to exchange a deed to another. This deed on one party's side can be a gain or a pain. Hence it shows the existence of an exchange. 2. It helps the law in determining which promises should be enforced and which are regarded as gratuitous 3. It gives effect to the intentions of the parties and provide protection to both parties of the contract. 4. It ensures that there will be a remedy if the agreement is not carried out according to the terms laid by the parties. Past consideration: It is a type of consideration where the promise comes after the activity has been done. It is not enforceable thus it is not a voidable consideration. b. Suppose that Jane arranges for Betty to clean her room and promises to pay her GH 10 per week. How does the analysis of benefit and detriment apply in identifying the consideration supplied by Betty for Jane s promise of payment? The analysis of benefit and detriment says that a contract must be to the benefit (gain) or detriment (loss) of either the promisor or promisee to constitute consideration. In this case, both the promisor and promisee can either gain or lose. There is gain or loss because consideration has value. From the question, the benefit to Jane (promisor) is that she gains a clean room and her detriment is that she loses GH thus the money she gives to Betty (promisee).

13 Also, Betty (promisee) gains GH from Jane as her benefit and her detriment is the effort she used to clean Jane s room. c. Conka Ltd. contracted SK & Co. Ltd. to build its new restaurant complex. The Swallow was completed and started serving the public a variety of meals. Conka just after commencement discovered extensive cracks in isolated areas on the building and refused to pay the amount due under the contract. As a Business Law student SK & Co. Ltd. have approached you for assistance. Advise them. The area of law pertaining this case is discharge of contract by substantial performance. Whether or not there is satisfactory discharge of contract? Discharge of contract by substantial performance is the fulfilment of the obligations agreed to in a contract with only slight variances from the exact terms and minor defects. The rule of the discharge of contract by substantial performance says that if one party has completed the essential work and in doing so has completed a very large part of it, he may claim the contract price less a deduction for the minor work outstanding. This case is supported by HOENIG V ISAACS (1952) which was held that the plaintiff be paid the full contract rate less the cost of making the defective furniture good since he had substantially completed the work. With the case of Conka Ltd and SK & Co. Ltd., after the completion of the restaurant and commencement of their work, Conka Ltd. noticed extensive cracks on the building at isolated areas which was a discharge of contract by substantial performance on the part of SK & Co. Ltd. As a law student, I would advise that SK & Co. Ltd. to complete the contract by fixing the cracks in the wall and get paid or they are paid the amount in the contract less the cost of fixing the cracks. d. What are vitiating factors? Mention three of them, explain their meaning and discuss their legal effect. Vitiating factors are things that make a contract void or voidable. They include mistake, duress and undue influence. 1. Mistake: It refers to a situation in which a party ends up contracting on terms he does not intend to contract on. There are two types of mistakes which are; unilateral and common mistakes.

14 Unilateral mistake is where a party intends to contract on certain terms but ends up contracting on different terms, not as a result of a change of mind but as a result of error of judgement. Its legal effect is that it makes the contract voidable thus a party can decide to rescind the contract even though it is binding on both parties. Common mistake is where the parties to a contract enter into that contract with different views of what is involved, this makes the contract void thus it doesn t become a binding contract at all. 2. Duress: It is the concept that is used to refer to a situation in which unlawful and illegitimate pressure is exerted on a person to enter into a contract against the will of that party. The legal effect of duress makes the contract voidable. 3. Undue influence: it arises where a person uses the influence which he wields over another person to get that person to enter into a contract or to transfer property on terms that are disadvantageous to him. Its legal effect is that, it makes the contract voidable.

15 Question 1 Explain when a statement forms part of a contract and when it does not and discuss their effects. Answer: Statement: It is a definite or clear expression of something in speech or writing. In law a statement is known as a clause which indicates what the parties to a contract have agreed on. What parties to a contract have agreed on is known as terms of contract. A contract is a legal agreement between two or more parties. A statement forms part of a contract when it is endorsed, that is part of the terms of the contract. If a statement is a mere representation then it doesn t form part of the terms of a contract. Effect of statement when it forms part of a contract It gives rise to a contractual obligation: When statements form part of a contract, it allows the parties involved to know their duties in the contract that is, what they are obliged to do. Effect of statements when it doesn t form part of a contract If a statement doesn t form part of a contract, its effect is that, it has no legal consequences: This means that if there is a breach of contract, the parties involved in the contract cannot take any legal actions against themselves. Question 2 Distinguish between conditions and warranties and explain the effect of their breach Answer: Conditions are obligations created by a contract which are so vital to the existence of a contract that their non-performance will render the contract useless whilst Warranty is a stipulation collateral to the main purpose of the contract, the breach of which gives rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. Effect of breach of a condition A breach of a condition can lead to the termination and claiming of damages. For instance when a seller agrees to transport goods to a buyer then he fails, the buyer will then go into a contract with a different supplier which will terminate the existing contract. The buyer will then sue the first supplier for damages. Effect of breach on a warranty

16 It gives right to a party to claim damages only but cannot terminate the contract. For instance if one buys a mobile phone and is being given a one year warranty, if there is a problem with the phone in cause of the one year period, the party involved in the damage has the right to claim back the damage from the other party. But the contract cannot be terminated. Question 3 Jackie is married. She and her husband agree that her husband will pay all the household expenses whilst she remains at home to care for the children. Jackie secretly acquires a Tertiary Diploma from IPS and subsequently takes up paid employment and gets her mother to care for the children. Must her husband continue to pay for the household expenses? Area of law: Intention to create legal relationship: Answer: It is a concept used in contract law to denote whether a contract should presume that parties to an agreement wish it to be enforceable in a law court. Not every agreement leads to a binding contract which can be enforced through the court. Issue: Whether or not there is intention to create legal relation? No, because under domestic contexts promises and agreement are presumed to lack the intention to create legal relations. Rule: The general rule of intention to create legal relation is that, when an intention is not expressly stated, the court will consider whether parties have suffered lose as a result of carrying out their duties. But in situations of family matter, the general rule is that the contract is not subjected to contractual interpretation, even when consideration exist. Facts: From the above case, the husband and the wife did not intend to create legal relations as seen in the case of BALFOUR V BALFOUR (1919) where the defendant was employed in Ceylon. He and his wife returned to UK on leave but it was agreed for health reasons the wife will not accompany him back. He promised to pay her Ghs 30 a month. Later there was a divorce and the wife sued for the monthly allowance the husband no longer paid, Conclusion: He has to continue to pay because it was under a domestic setting and none of them has lost so much. So here, there is no breach. They did not intend to create legal relation.

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