When Ozozo was about to travel out of the country, he promised his wife Julie that he would remit her the equivalent of GH¢2,000 every month for the upkeep of the house. However, when he got to his destination, after sending money for two months he failed to honour the promise. He has just returned after two years stay outside the country. Julie has approached you to advise her whether she can claim the arrears in the contract with Ozozo.
Ozozo promised his daughter Anita before travelling that, he would buy a car for her on his return. Anita insisted that her father put that promise into writing and sign, which he did. On his return, Ozozo is dragging his feet in respect of his promise.
Required:
i) List FOUR elements of a valid contract. (4 marks)
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- An offer.
- An acceptance.
- Competent parties who have the legal capacity to contract.
- Lawful subject matter.
- Mutuality of obligation.
- Consideration.
- Intention to create legal relations. (Any 4 points)
ii) Explain to Julie whether the agreement with Ozozo constituted a valid contract. (3 marks)
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Julie will not succeed (Balfour v Balfour). The parties in domestic or social arrangements are generally presumed not to intend legal consequences.”. “For a contract to exist the parties to an agreement must intend to create legal relations Usually, the presence of consideration will provide evidence of this – if the promisor has specified something as the price for the promisee this – in most cases – carries with it an intention that the parties be bound. Intention remains, however, an independent requirement and must be separately demonstrated and there are cases in which consideration has been present but no contract found to exist because this pre-condition has not been fulfilled. In determining if there is contractual intent and objective approach is taken.
iii) Advice Anita on the effect of putting the agreement in writing. (3 marks)
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Anita will succeed on the rebuttable presumption that they intend to claim legal relationship although it is the same social/domestic agreement
b) Explain the meaning of the following in the law of contract.
i) Term of Contract (2 marks)
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In the course of negotiations that should lead to the formation of a contract, the parties to the contract may make a number of statements. These statements may or may not form part of the contract. If a statement becomes a core part of a contract, it is a term of the contract. A term of a contract then creates a legal obligation for which it entitles the innocent party to sue for damages for breach of contract.
ii) Rescission (2 marks)
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Rescission of a contract is an equitable remedy that allows the parties to a voidable contract to treat it as if it had never been made and to recover from one another any money or property that had changed hands before the defect came to light. It is a standard remedy in case of breach of a condition. The remedy requires that the person has acted equitably himself. It will not be available if the person claiming it delays in acting on his right and a third part’s rights have arisen, the person claiming (third party) has affirmed the contract and property being reclaimed has passed to a third party.
c) Bizee Company Limited is a wholesaler storing large quantities of goods in the port city of Takoradi. Kofi Gee an employee of the Company is a well-trained and skilled driver in a specialty truck. As part of the Company’s routine retraining, the need for Kofi Gee to take time, drive the truck carefully and safely, taking into consideration always people on the premises was over-emphasized. One day in a hurry to complete the day’s scheduled duty, Kofi Gee drove back the truck so quickly through the partition of the client part of the wholesale department. Two clients on the sales section of the Company at the time were injured.
The Board of Directors of the Company foresaw the potential consequence to compensate the injured. At their meeting therefore, you were consulted for your idea on the compensation.
Required:
Explain to the Board the possible liability of the Company and Kofi Gee to the two injured clients. (6 marks)
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Every individual is liable for his own tort. However employers are vicariously responsible/liable for the tort of their employees while the employees are acting in the course of employment. The employer ceases to be liable only where the employee is on the frolic of his own.
Kofi Gee was employed to drive the specialty truck and was doing that when the accident occurred. Therefore, the Company becomes vicariously liable for the tort of Kofi Gee in the tort of negligence, despite the instructions and despite providing him with the needed training.
The law imposes a duty on everyone and to everyone to take care, in particular professionals. Kofi Gee breached that duty by failing to apply the skill and expertise in driving the specialty truck. Kofi Gee will also be liable in the tort of negligence.