Kojo Atua, a businessman, who had a contract to supply timber logs to Okofoh Timber Co. Ltd, hired a tractor from Mary Arthur, at a rate of GH¢1,000.00 a day to enable him haul the timber logs from his timber concession in Okofoh. Under the agreement, Kojo Atua paid a deposit of GH¢10,000.00. It is the case of Kojo Atua that Mary Arthur assured him that her tractor was in good condition and could haul at least 30 logs a day.
Kojo Atua, however, found the tractor to be defective almost from the beginning, with the tractor hauling a maximum of seven (7) logs a day, and a total of 60 logs during a period of a little over one month. Kojo Atua brought an action for damages for breach of contract. The Court awarded Kojo Atua special damages of GH¢20,000.00 on the basis of total failure of consideration.
Required:
i) Explain whether in the circumstance of the case, there was either a breach of condition of the contract or a breach of warranty. (10 marks)
View Solution
- The terms of a contract are classified as conditions, warranties, or innominate terms. Parties will usually designate which classification a contract term falls. Breach of condition of a contract can constitute a breach of the contract as a whole. This may allow the non-breaching party to sue for damages as well as rescission of the contract.)
- An owner who let out a chattel on hire must take reasonable care to see to it that it was in a reasonably fit for the purpose condition for which the bailee was to use it; the owner would impliedly warrant the suitability of the chattel for that purpose, and was liable to the bailee for breach of the warranty.
- In the instant case, there was indeed a breach of implied warranty, and which would not have resulted in the repudiation of the contract. Therefore, Kojo Atua rightly sued for damages.
ii) Explain in THREE (3) ways whether the court was justified in the award of GH¢20,000.00 to Kojo Atua for the failure of consideration. (10 marks)
View Solution
- The issue arising in the question is whether the Court rightly awarded the special damages of GH¢ 20,000.00 to Kojo Atua for failure of consideration.
- A claim for money had and received was not maintainable if the contract had been partly performed and some benefit has been derived from the part performance.
- In the present case, the evidence clearly showed that although the tractor was defective and operational at a rate substantially below the declared capacity, it did some work, having hauled a total of 60th logs.
- The Court erred in law in basing the award of the special damages on a total failure of consideration. There was part performance, and for which reason one cannot say that consideration had failed.