Lecture Notes BT 3-1 Law

Law of contract & arbitration institute of distance learning
KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY,

KUMASI
INSTITUTE OF DISTANCE LEARNING
DEPARTMENT OF BUILDING TECHNOLOGY
BT 361 LAW OF CONTRACT AND ARBITRATION
Credit 2]
DICKSON OSEI-ASIBEY, ESQ
dosei-asibey, esq i 09/09
Publisher Information
IDL, 2011
All rights reserved. No part of this book may be reprodued or utili!ed i" a"y form or by
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holders.
For any information contact:
Dean
nstitute of Distance Learning
!ew Library "uilding
#wame !$ruma% &ni'ersity of (cience and )ec%nology
#umasi, *%ana
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dosei-asibey, esq ii 09/09
Course Author
D9#(:! :(5-;("5<, is Lecturer in t%e De=artment of "uilding )ec%nology of
9ollege of ;rc%itecture and +lanning of #wame !$ruma% &ni'ersity of (cience and
)ec%nology, #umasi in t%e >e=ublic of *%ana7
?e %olds "(c @?onsA "uilding )ec%nology, B(c7 9onstruction Banagement and
"ac%elor of Laws @LL7"A Degree from t%e #wame !$ruma% &ni'ersity of (cience and
)ec%nology and "arrister-at-Law @"7LA 9ertificate from t%e *%ana (c%ool of Law,
;ccra7
Dic$son :sei-;sibey is =rofessional Cuantity (ur'eyor and Legal +ractitioner7 ?e is also
member of *%ana nstitution of (ur'eyors @*%(A and *%ana "ar ;ssociation @*";A7 ?e
is t%e 9%ief 53ecuti'e of :9;D( 9onsult Limited @+roDect Banagement and
9onstruction 9ost 9onsultantsA in #umasi7 ?e is member of ;dansiman 9%ambers
@"arristers and (olicitors of (u=reme 9ourt of *%anaA also in #umasi7 :sei-;sibey is
member of "oard of Directors of !wabiagya 9ommunity "an$ and currently, t%e
!ational Eice +resident of t%e ;ssociation of >ural "an$s @;>"A7
?e was a==ointed Lecturer to t%e #wame !$ruma% &ni'ersity of (cience and
)ec%nology in Bay, -009 and teac%es +rinci=les of Law, 9onstitutional law and
9om=any Law and Law of 9ontract, )ort and 9onstruction Dis=ute >esolution at t%e
De=artment of "uilding )ec%nology7
dosei-asibey, esq iii 09/09
COURSE INTRODUCTION
9onstruction is a com=le3 industry wit% interrelated =rocesses of conce=tion, =lanning
design and associated acti'ities on =roDects t%at are carried out in t%e industry7 )%ese
=rocesses are constrained by time, resources @labour, land, money, materials and
equi=mentA and quality =erformance7 t also in'ol'es a wide range of indi'iduals wit%
=ractical and =rofessional s$ills7 )%e sta$e%olders in t%e industry include t%e go'ernment,
statutory bodies, general =ublic, client, wor$ers, su==liers, manufacturers, sub
contractors, =rofessionals, guarantors, financiers, etc7
)%e 9onstruction ndustry %as t%erefore been one of t%e commercial entities
c%aracteriFed wit% dis=utes7 (tudy of law is an indis=ensable subDect in t%e curriculum for
t%e training of =rofessionals in t%e construction industry7 Law, as a subDect equi=s t%e
student to =ro'ide analytical and logical t%in$ing in sol'ing =ractical =roblems and also
to be armed wit% =rinci=les of law to reduce t%e occurrence of dis=utes t%at %a'e
c%aracteriFed t%e industry7 ;s future Cuantity (ur'eyors, +roDect/construction managers,
9onsultants, "uilding and 9i'il 5ngineering 9ontractors etc, t%e t%ird year students of
Cuantity (ur'eying and 9onstruction 5conomics and 9onstruction )ec%nology and
Banagement are to %a'e t%e general $nowledge of legal =rinci=les of tort, contract and
dis=ute resolution mec%anisms and %ow t%ey affect t%e construction industry7
Course Description
)%e 9ourse is entitled, BT 361 LAW OF CONTRACT AND ARBITRATION and
constitutes - credits7
)%e Law of 9ontract and ;rbitration t%erefore co'ersG
+rinci=les of t%e law of tort H deals #ith preve"tio" of harm, i"$ury a"d damage
to life a"d property. It overs ob$etives of la# of tort, trepass, "eglige"e
i"ludi"g o"ept of duty of are, oupiers liability, employer%s liability,
professio"al "eglige"e, dotri"e of res ipsa lo&uitor, "eglige"t misstateme"t,
viarious liability a"d breah of statutory duties, rule i" 'yla"ds a"d (lether
a"d "uisa"e,
+rinci=les of law of contract- it ide"tifies pri"iples u"derlyi"g formatio" of
o"trat, o"te"ts of o"trat, u"e"foreable o"trats, disharge of o"trat
a"d speial o"trats affeti"g the o"strutio" i"dustry
Dis=ute resolution in construction industry - it ide"tifies the methods for
settleme"t of disputes i" o"trats) traditio"al litigatio" i" ourts, a"d
alter"ative dispute resolutio" *AD'+ methods i"ludi"g arbitratio" overi"g
ustomary arbitratio", formal arbitratio" a"d other "o")arbitral meha"isms
suh as Negotiatio", ,ediatio" et u"der the Alter"ative Dispute 'esolutio" At,
dosei-asibey, esq i' 09/09
2010 *At -./+. It also overs the proedure i" o"strutio" dispute settleme"t
both i" loal a"d i"ter"atio"al o"trats.
Course objectives
;fter reading t%is course, you s%ould be able to:
07 53=lain t%e fundamental legal =rinci=les go'erning: t%e elements of contract and
arbitrationG rules and defences a'ailable to actions in contract and arbitration
-7 ;==ly t%ese =rinci=les to %y=ot%etical and real situations
.7 :utline t%e basic %istorical de'elo=ment and growt% of t%e law of contract and
arbitration
47 ;==reciate and criticiFe t%e o=eration of t%e law of contract and arbitration in
=ractice
Course Outline
&nit 0: Law of )ort
&nit -: Formation of 9ontract
&nit .: Eitiation, Disc%arge and >emedies
&nit 4: Dis=ute >esolution
Teaching and Assessment
)%e course is taug%t by lecture and seminar session in w%ic% students underta$e case
studies7 ;ssessment is in t%e form of an end-of-semester e3amination, counting towards
20I of a studentJs grade and a grou= =resentation counting towards .0I of a studentJs
grade7 )%e e3amination questions reflect broadly t%e content of t%e lecture and seminars7
)%e =ur=ose of t%e e3amination is =rimarily to test studentsJ ability to t%in$
inde=endently and engage in analysis of legal issues from 9ontract and ;rbitration
=ers=ecti'es7
dosei-asibey, esq ' 09/09
TABLE OF CONTENT
Publisher Information ii
Course Authors iii
Course Introduction iv
Table of Content v
Reference vi
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(ession --4 ;D> Bec%anisms
--470: Forms of ;rbitration
--47-: !on ;rbitral Bec%anisms
--47.: Dis=ute >esolution in *%anaian 9onstruction ndustry
REFERENCE
07 9urson, L7 "7, 0991, Dictionary of Law, Fift% 5dition, Financial )imes +itman
+ublis%ing,
-7 "radgate >, -0007 9ommercial Law, )%ird 5dition, ;ntony >owe Ltd7
.7 "raFier, B7 et al, (treet on )ort, 00
t%
5dition
47 ?odgson, K7 et al, "lac$stoneJs Law of )orts
L7 >ogers, 87 E7 ?7, 8infield and KolowicF on )ort, 04
t%
5dition
/7 Lewis, K7 >7, 092/7 Law for t%e 9onstruction ndustry, )%e Bacmillan +ress Limited
27 &ff, K7 09997 9onstruction Law, 2t% 5dition, (weet & Ba3well Limited
17 "ondFi-(im=son, +7 57 -00-7 Law of 9ontract, 53cellent +ublis%ing and +rinting
97 Furmson, B7 +7 -0007 9%es%ire & FifootJs Law of 9ontractG 04
t%
5ditionG
007 "radgate >, -0007 9ommercial Law, )%ird 5dition, ;ntony >owe Ltd7
007 8illis, 97 K7 et al7 +ractice and +rocedure for t%e Cuantity (ur'eyor- 00
t%
5dition,
:3ford "lac$well (cientific +ublications
0-7 "robbey, (7 ;7 -0017 )%e law of 9%ieftancy in *%ana, ;d'anced Legal +ublication,
dosei-asibey, esq 'i 09/09
0.7 9oe, K7 K7 Kr7 09927 nternational 9ommercial ;rbitration: ;merican +rinci=les and
+ractice in a *lobal 9onte3t

Table of Cases

Page
>5 9;(5<J( +;)5!)( @019-A 0 9? 004

dosei-asibey, esq 'ii 09/09
TABLE OF STATUTES
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dosei-asibey, esq 'iii 09/09
Unit 1
LAW OF TORT
Introduction
)%is unit =ro'ides t%e essential basic materials concerning t%e tortuous liability of =arties
of a construction contract7 )%e =rinci=les of t%e law of tort go'erning t%e subDect %a'e
been %ig%lig%ted7
Learning objectives
;fter readings t%is unit, you s%ould be able to:
1. Defi"e a"d desribe the "ature of la# of tort
-7 01plai" t%e basic elements of a negligence affecting construction
acti'ities
.7 01plai" t%e underlining =rinci=les of 'yla"d v (lether
47 Ide"tify t%e ot%er areas of tortuous liability affecting construction
acti'ities
L7 Apply t%e =rinci=les of law of tort to %y=ot%etical and real
solutions

Unit outline
(ession 0-0 !ature of )ort
0-070 Definition of )ort
0-07- )res=ass
0-07. !egligence
(ession --0 (tatutory Duty , >yland ' Fletc%er >ule and !uisance
--070 ndustrial (afety Legislation s
--07- >yland ' Fletc%er >ule
--07. !uisance
--074 *eneral Defences and >emedies
dosei-asibey, esq 0 09/09
SESSION 1-1 NATURE OF TORT
1-1.1 Definition of Tort:
t is not easy to gi'e a satisfactory definition of a tort7 )%e word tortJ is deri'ed from t%e
Latin NtortusO meaning croo$ed or twisted7 t s also deri'ed from Frenc% NtortO meaning
wrong7 n 5nglis% law, tort denotes certain ci'il wrongs @a =ri'ate offence against
indi'idualsA as distinct from criminal wrong @=ublic offence against t%e stateA7 )ort may
be defined as a ci'il wrong inde=endent of contract, or as a liability arising from breac%
of a legal duty owed to =ersons generally7
)%e aims of t%e law of tort are =rinci=ally to =rotect interests in t%e =erson, land, c%attels
and re=utation of anot%er and to award damages for in'asion of t%ese interests7 )%ere are
ot%er interests of lesser im=ortance w%ic% may not be =rotected and t%ese include
interests in economic and family relations7
)%e main remedy for tort is com=ensatory damages to com=ensate t%e 'ictim of t%e
wrong7 )%e courts, %owe'er, %a'e =ower to award =uniti'e or e3em=lary damages in
s=ecial circumstances7
Distinctions Between Tort and other legal actions

A Crime
)%e obDect of criminal =roceedings is =rimarily =unis%ment7 )%e =olice are t%e =rinci=al
agents to enforce t%e criminal law w%ic% in'ariably is a =iece of statute7 ; =ri'ate =erson
may also =rosecute a criminal offence7 )%e same facts of a case may disclose a crime and
a tort7 )%us, if a wor$er at a construction site steals t%e contractorJs material at site, t%ere
is @iA a crime of t%eft, and @iiA tres=ass to goods @a tortA and con'ersion @also a tortA7
A Breach of Contract
n contract t%e duties are fi3ed by t%e =arties t%emsel'es7 )%ey im=ose terms and
conditions t%emsel'es by t%eir agreement7 n tort, on t%e ot%er %and, t%e duties are fi3ed
by lay down rules @common law or statuteA and arise by t%e o=eration of t%e law itself7
?ere, too, t%e same circumstances may gi'e rise to a breac% of contract and a tort7
Batty v Metropolitan Property Realisation 1978] 2 WLR 500
A purhaser of a defetive house brought a" atio" agai"st a developer for breah of a
#arra"ty that the house #as fit for habitatio" a"d for "eglige"e i" havi"g the house
o"struted o" u"suitable grou"d.
It #as held that a" atio" by the lie"t agai"st his Arhitet or e"gi"eer #ill ge"erally be
brought i" o"trat. 2o#ever, professio"als a"d others i" the o"strutio" i"dustry o#e
parallel duties i" tort both to the lie"t a"d others #ho may be i"$ured by their
"eglige"e.
Spartan Steel and Alloys Ltd v Martin & Co (Contractors) Ltd 1972] 3 All ER 557
3he defe"da"ts% "eglige"e aused the able arryi"g eletriity to the plai"tiff%s fatory
to be ut through i"terrupti"g the supply for 14.5 hours. 3he 6lai"tiff avoided the molte"
metal solidifyi"g i" the fur"aes, a"d used o1yge" to melt it. 3his redued the value of
dosei-asibey, esq - 09/09
the metal a"d ost the plai"tiffs the 400 pou"ds profit they #ould have e1peted to make
o" that melt. 3he plai"tiff also lost a further 1,-7- pou"ds o" the other four melts #hih
they #ould "ormally have ompleted i" the time that the eletriity #as ut off. 3he
ma$ority of the 8ourt of Appeal held that they ould reover o"ly the loss i" value of the
metal atually i" the fur"aes a"d the loss of profit o" that melt. 3he remai"i"g loss #as
peu"iary loss u"related to a"y physial damage a"d irreoverable.
)%e law of tort is im=ortant in t%e 9onstruction ndustry due to t%e fact t%at t%e
o=erations wit%in t%e industry in'ol'e great ris$ of dangerous situations7 )%e maDor areas
of tort t%at affect t%e industry include )res=ass, !egligence, (trict Liability >ule under
t%e doctrine of >ylands ' Fletc%er, "reac% of (tatutory Duty and !uisance,
1-1.2 TRESPASS
)res=ass may be defined as an act affecting oneJs =ersonal liberty or =ro=erty wit%out
any in'itation of any sort or if aware, is obDected to7 t may be to +erson @wor$ers in t%e
industryA, land including building @real =ro=ertyA or goods @=ersonal =ro=ertyA including
materials and equi=ment use in t%e construction of infrastructural wor$s7 )res=ass is
actionable =er se7
1-1.2.1 Trespass to the Person
)%e usual to=ics treated under t%is %eading are battery, assault and false im=risonment7
?owe'er, %ere we will treat also t%e subDect of malicious =rosecution because alt%oug% it
is not a direct act to t%e =laintiff it affects t%e liberty of t%e =erson7
Battery:
;ccording to 9treet, battery is any act of t%e defendant w%ic% directly and eit%er
intentionally or negligently causes some =%ysical contact wit% t%e =erson of t%e =laintiff
wit%out t%e =laintiffs consent7 :i"field, %owe'er states t%at Nbattery is t%e intentional and
direct a==lication of force to anot%er =erson7
)%e essential =oints to note are t%atG
- t%e act must be a==lied directly to t%e body of t%e =laintiff and t%at it must be
intentional7
- f t%e contact or force is not direct from t%e defendant at all, t%ere is no batteryG
for e3am=le, if ; =us%es " w%ose %ead %its 9, ; is not guilty of battery against 9,
neit%er is " because %e did no intentional act7
;s to w%et%er w%en t%e act is not intentional but merely negligent and it is battery is not
quite certain7
- )%e act need not result in any inDury at all to t%e =laintiff because t%e tort being
tres=ass is actionable =er se t%at is wit%out =roof of any damage7

- )%e act s%ould be wit%out t%e e3=ress or im=lied consent of t%e =laintiff7 )%us to
t%row water u=on, touc%, sla=, $iss, =erform surgical o=eration u=on a =erson
wit%out %is consent is battery7
dosei-asibey, esq . 09/09
- &nli$e assault t%e act need not cause any a==re%ension of contact to t%e =laintiff,
so t%at a blow to t%e =laintiff from be%ind constitutes battery7
?owe'er, it is not e'ery a==lication of force to or contact wit% t%e body w%ic% is battery
t%at is some a==lications of force are =ermitted7
Assault:
9treet defines assault as any act of t%e defendant w%ic% directly and eit%er intentionally or
negligently causes t%e =laintiff immediately to a==re%end a contact wit% %is =erson7
;ordi"g to :i"field ;assault< is a" at of the defe"da"t #hih auses to the plai"tiff
reaso"able apprehe"sio" of the i"flitio" of a battery o" him by the defe"da"t7
Intentional Physical Harm:
)%e offence of intentionally causing =%ysical %arm is t%e willful act or statement of t%e
defendant calculated to cause =%ysical %arm to t%e =laintiff and w%ic% in fact causes
=%ysical %arm to %im is a tort7
Wilkinson v Downton (1897) 2 QB 57
n t%at case t%e defendant by way of a =ractical Do$e falsely told t%e =laintiff t%at %er
%usband %ad been in'ol'ed in an accident by w%ic% bot% legs %ad been bro$en7 "elie'ing
t%e story to be true t%e woman suffered ner'ous s%oc$ resulting in serious =%ysical
illness7 ;n attem=t by =laintiffJs counsel to base t%e claim on deceit required t%at t%e
=laintiff s%ould be intended to act on t%e false statement w%ic% did not a==ly in t%e
=resent case because t%e =laintiff could not be said to %a'e acted on t%e statement, s%e
only belie'ed it7 !e'ert%eless 8rig%t, K %eld t%at t%e defendant was liable for t%e
consequences suffered by t%e =laintiff7
?eldG ;3he defe"da"t has #illfully do"e a" at alulated to ause harm to the plai"tiff)
that is to say to i"fri"ge her legal right to perso"al safety, a"d has thereby aused
physial harm to her. 3hat propositio" #ithout more appears to me to state a good ause
of atio" there bei"g "o $ustifiatio" for the at.<
)%is tort is %owe'er normally treated along wit% tres=ass to t%e =erson because =%ysical
%arm is caused to t%e =erson7
False Imprisonment:
)%e tort of false im=risonment consists in t%e act of arresting or de=ri'ation of freedom
of mo'ement and need not in'ol'e actual incarceration7 f a =erson is de=ri'ed of %is
=ersonal liberty for any time, %owe'er s%ort, t%at is false im=risonment7 t will also be
false im=risonment if a =erson is =re'ented from lea'ing t%e =lace in w%ic% %e is7 f a
=erson is sto==ed in t%e street and told %e is under arrest and t%e arrest %a==ens to be
unlawful t%at would be false im=risonment7
)o constitute im=risonment %owe'er t%e restriction of t%e =laintiff must be completeG
t%at is, t%ere must be on e'ery side a boundary drawn beyond w%ic% %e cannot =ass7
?owe'er, t%e means of esca=e must be reasonable, t%at is, it s%ould not in'ol'e
e3=osure to damage or e3treme incon'enience7
t s%ould be remembered t%at false im=risonment being a tres=ass to t%e =erson is
actionable =er se7
AHEVI v AKOTO IV 1993-94] 1 GLR 512-538
All the parties i" the suit #ere iti!e"s of the Dodome 3raditio"al Area *D3A+ i" the
=olta 'egio". 3he first a"d seo"d respo"de"ts #ere the hief of Dodome)A#iasu a"d
the rege"t of the paramou"t hief of Dodome, respetively. (ollo#i"g a omplai"t to the
first defe"da"t a"d his elders by o"e 0 that o"e > had used $u$u to kill a fetish priestess
i" the to#" a"d that the plai"tiff #as also usi"g $u$u to re"der the hospital mortuary
#here her orpse #as bei"g kept i"effetive so as to de"y the deeased a dee"t burial,
the first defe"da"t alled a to#" meeti"g to go i"to the matter. At the meeti"g >
admitted his guilt a"d he #as duly sa"tio"ed. 3he plai"tiff ho#ever de"ied the
ausatio" agai"st him. I" keepi"g #ith the ustom a"d traditio" of the D3A, the plai"tiff
#as se"t i" the ompa"y of some relatives a"d the hief?s li"guist to a fetish priest at Ada
@u"tio" #here he u"der#e"t a trial by ordeal to vi"diate his "ame. Although he #as
fou"d "ot guilty at the trial, o" their retur" the meeti"g re$eted the verdit of the trial
a"d 0 agai" made further ausatio"s agai"st the plai"tiff for havi"g used $u$u to kill
some members of his *the plai"tiff?s+ family. Aggrieved by those ausatio"s, the plai"tiff
i"itially lodged a omplai"t agai"st her #ith the hief a"d his elders. 2o#ever, as a
result of their i"atio", he summo"ed her before a fetish ult. 9ubse&ue"tly, the
defe"da"ts alled a"other to#" meeti"g to resolve the dispute bet#ee" the plai"tiff a"d 0
but the plai"tiff refused to atte"d the meeti"g. 2o#ever, laimi"g that he had lear"t that
at that meeti"g the defe"da"ts had portrayed him as a murderer a"d a $u$u ma" u"fit to
live i" their soiety a"d had the" ostraised him by ba""i"g all i"teratio"s bet#ee" him
a"d the other iti!e"s of the to#", a"d that those #ords spoke" of him #ere defamatory,
a"d furthermore, the #hole proess of trial by ordeal that he #as ompelled by the
defe"da"ts to u"dergo o"stituted false impriso"me"t a"d maliious proseutio", he
brought a" atio" agai"st the defe"da"ts $oi"tly a"d severally for A10 millio" damages
for defamatio"B a" order direti"g them to have go"g)go"g beate" i" the D3A to retrat
the defamatory #ordsB perpetual i"$u"tio" restrai"i"g the defe"da"ts from utteri"g
those #ordsB a"d A5 millio" for false impriso"me"t a"d maliious proseutio". Although
the defe"da"ts de"ied utteri"g the alleged defamatory #ords, they admitted havi"g stated
that the plai"tiff had "o moral right to i"terat #ith the youth. 3he ourt fou"d o" the
evide"e that *i+ the iti!e"s of the D3A believed i" the effiay of $u$uB *ii+ the plai"tiff
had partiipated i" a"d had a reputatio" for partiipati"g i" $u$u a"d fetish ativitiesB
a"d *iii+ the plai"tiff himself u"dertook to lear his "ame by submitti"g to the trial by
ordeal.
2eldC
A laim of false impriso"me"t implied total restrai"t of o"e?s liberty #ithout his o"se"t.
9i"e o" the evide"e, it #as the plai"tiff #ho, i" aorda"e #ith the ustom of their
traditio"al area, volu"tarily offered to u"dergo the trial by ordeal i" order to vi"diate
his "ame, after he had de"ied the ausatio" made agai"st him, a"d #illi"gly
partiipated i" all the proesses a"d rites at the fetish #hih ulmi"ated i" his
e1o"eratio", a result #hih he duly elebrated, it ould "ot be said that his perso"al
liberty #as i" a"y #ay restrai"ed by the defe"da"ts before, at or after the trial by ordeal.
dosei-asibey, esq L 09/09
Aordi"gly, the plai"tiff?s laim agai"st the defe"da"ts for false impriso"me"t #ould
fail.
Malicious Prosecution
)%is is w%ere a =erson, ; =rosecutes t%e ot%er, " wit%out a Dust cause and t%e defendant
" is acquitted7 )%e defendant, if %e can =ro'e t%at ; broug%t t%e =rosecution out of
=ri'ate s=ite @desired to %urt, annoy or offendA, t%en " may sue ; for t%e offence of
malicious =rosecution7
)%is tort also is not tres=ass to t%e =erson as t%e action itself constituting t%e wrong does
not directly affect t%e =erson of t%e =laintiffG t%e effect on t%e =laintiff is only
consequential7 ?owe'er, it is discussed under t%e tres=ass to =erson because it affects t%e
liberty of t%e =laintiff7 (ince it is not direct tres=ass, damage is required to be =ro'ed7
In an action for malicious prosecution, the plaintiff had the onus of proving that (a)
he was accused of or charged with a criminal offence or both; and (b) the
proceedings terminated in his favour before a court of competent jurisdiction.
1-1.2.2 Trespass to Land
; tres=asser to land %as been defined as one w%o goes on to t%e land of anot%er wit%out
any in'itation of any sort and w%ose =resence is eit%er un$nown to t%e =ro=rietor, or, if
$nown, is obDected to =ractically7 )%e question, w%et%er or not a =erson is a tres=asser or
is t%ere by =ermission is not always easily decided7
)res=ass to land is %owe'er committed in t%ree forms:
8%ene'er a =erson intentionally or negligentlyG
@iA 5nters u=on t%e land of anot%er
@iiA remains on t%e land of anot%erG
@iiiA causes to be =laced or t%rown any material obDect u=on t%e land of
anot%er, e7g7 debris from demolis%ed building
Gregory v Piper (1829), 9B &C 591
)%e +laintiff broug%t an action against t%e defendant w%en rubbis% was =laced on t%e
defendantJs land but was rolled on to t%e +laintiffJs land as a result of natural causes7
?eldG Defendant was liable7
Bere tres=ass on land is not a crime and no =rosecution for it may be broug%t, t%oug% a
ci'il action may be7 ?owe'er a crime is committed if t%e tres=ass is accom=anied by
damage e7g brea$ing fences or trading down growing corn, an offence of willful damage
is committed7
n t%e construction industry, a contractor may tres=ass if %e remains on t%e site of t%e
client after t%e contract %as ended or license is u=7
; tres=ass may be on t%e surface of t%e land, or underneat% it @w%ere e3ca'ations are
being carried outA or in t%e airs=ace abo'e it @w%ere materials =roDect o'er t%e =ro=ertyA7
dosei-asibey, esq / 09/09
Bista$e is no defense in suc% circumstances and =ro'ided t%at t%e =laintiff %as legal
estate and e3clusi'e =ossession, %e may sue and full restitution for t%e loss suffered may
be claimed7 Boreo'er a =erson may be sued e'en t%oug% %e did not $now %e was
tres=assing for mista$e is no defense7
Remedies for Trespass to Land
Damages: t%is is in general t%e amount by w%ic% t%e 'alue of t%e =ro=erty is diminis%ed
as a result of t%e tres=ass, not t%e cost of reinstatement7
nDunction: )%is may be used to =re'ent t%e continuance or re=etition of t%e act of
tres=ass7 )%e +laintiff may a==ly to t%e court for bot% damages and an inDunction7
5Dection: )%e occu=ier of t%e land may eDect a tres=asser after first requesting %im to
lea'e and allowing %im =eaceably to do so7 !o more force may be used t%an is
reasonable in t%e circumstancesG ot%erwise t%e occu=ier may be sued for assault7
;n ;ction for >eco'ery: Bay be broug%t for reco'ery of land7
1-1.2.3 Trespass to Goods
)%e tres=ass to goods is t%e intentional or negligent interference wit% t%e =ossession of
anot%er =ersonJs goods7 )%e interference must be direct and forcible @t%oug% a mere
touc%ing may be tres=assA7
1-1.3 NEGLIGENCE
1-1.3.1 Concept of Duty of Care
!egligence may arise w%ere t%e =laintiff establis%es t%at t%ere is duty by t%e defendant to
ta$e care of t%e =laintiff7 )%us, t%ere is duty %eld by t%e defendant to =rotect t%e inDured
=arty from t%e $ind of %arm suffered due to t%e careless act of t%e defendant7 t can
t%erefore be establis%ed t%at t%ere is a breac% of suc% duty w%ic% was found to be t%e
cause of t%e %arm suffered by t%e =laintiff7
n Lochgelly Iron & Coal Co v McMullan 1934] AC 1 25 Lord 8rig%t %eld among
ot%er t%ings t%at "eglige"e mea"s more tha" heedless or areless o"dut, #hether i"
omissio" or ommissio"7 t connotes t%e com=le3 conce=t of duty, breac% and damage
suffered by t%e =erson to w%om t%e duty is owe7
!egligence t%erefore may be defined as an act, %eedlessly or carelessly omitted or
committed to a =erson w%om a duty of care is owed7
)%us for t%ere to be negligence, t%ere must be in e3istence D&)<, ">5;9? and
9;&(;):!7 )%e courts %owe'er recogniFe t%ese elements as one7
)%ere is a duty of t%e defendant to ta$e care of t%e =laintiff
)%ere is a breac% of duty to ta$e care
)%e breac% resulted from a careless act or omission for w%ic% reason a %arm %as
been suffered by t%e =laintiff7
)%e =laintiff in any =articular circumstances, establis%ed t%at t%e defendant owe a duty at
least to somebody to act or refrain from acting and t%at t%e defendant %ad conducted
%imself a manner t%at, t%at duty is owed to t%e =laintiff =ersonally7 ; =erson does not
owe a stranger any duty7
Langbrook Properties Ltd v Surrey County Council 1969] 3 All ER 1424
)%e Defendant carelessly e3ca'ated %is land w%ere %e could foresee t%at by abstracting
=ercolating water from below, t%e adDoining =ro=erty of t%e +laintiff would be caused to
settle7 )%e +laintiff broug%t an action against t%e defendant but was %eld t%at t%e
defendant is not liable because %e owes no duty of care in res=ect of =ercolating water to
t%e =laintiff =ersonally7
8%et%er or not a duty e3ists %as always been a matter of law not fact7 (ometimes t%e
e3istence of duty is 'ery clear e7g, t%e builder owes duty to t%e =ublic t%at may use t%e
site and t%e road contractor, similarly owe a duty to all ot%er users of t%e road7 ; building
ins=ector owes a duty of care, in t%e ins=ection of foundations for com=liance wit% t%e
building regulations to t%e =urc%aser w%o e'entually buys t%e %ouse and t%is ma$es
aut%ority res=onsible @em=loyer of t%e building ins=ector, Betro=olitan, Bunici=al or
District ;ssemblyA, viariously liable under t%e duty7
8%ere a =erson is found to be under duty, t%e e3tent of reco'erable loss does not include
economic loss7 (eeG Spartan Steel and Alloys Ltd v Martin & Co (Contractors) Ltd
)%e trend to raise economic loss to t%e le'el of reco'erable loss in negligence was
%owe'er %alted in t%e case of Murphy v Brentwood District Council 1990]2 All ER
9089357 n t%at case t%e =laintiff was t%e =urc%aser of a %ouse t%e foundation was
defecti'e7 ?owe'er t%e =lans and calculations on w%ic% t%e foundation was based %ad
been =assed by due to t%e carelessness of t%eir engineers w%en submitted for building
regulation a==ro'al =rior to construction7 3he plai"tiff lost a substa"tial sum i" selli"g
the house o" aou"t of the defet. ?e t%erefore sued t%e council in negligence for
damages of t%e %ouse on account of t%e defect7 )%e ?ouse of Lords unanimously %eld
t%at t%e loss claimed was =urely economic loss and as suc% was not reco'erable in an
action in negligence against t%e local aut%ority7 )%eir Lords%i=s declared t%at t%e council
owed no duty to =rotect building owners or occu=iers against suc% loss7 )%is decision
was described as a return to ort%odo3y7 t was em=%asiFed t%at =laintiffs could reco'er
suc% =urely economic loss only t%roug% contracts and t%at t%e law of negligence would
be =ermitted to be a substitute for t%e assistance of t%ird =arties or t%ose w%ose contract
did not =ro'ide for reco'ery7
; defendant may be liable to t%e =laintiff including a =erson wit% a current =ro=rietary
interest in a damaged =ro=erty for =ersonal inDury or damage to =ro=erty but not
economic loss occasioned to t%e =laintiff7 )%us in some circumstances suc% as economic
loss t%e law may deny duty7
Electrocheme Ltd v Walsh Plastics Ltd, 1968] 2 All ER 205
)%e lorry dri'er negligently $noc$ed down a fire hydrant w%ic% caused t%e water su==ly
to t%e =laintiffJs factory to be cut off7 )%ere was no =%ysical damage to any of t%e
=laintiffJs =ro=erty7 )%e +laintiff broug%t an action for reco'ery of loss of =roduction7
?eldG t%e =laintiff could not reco'er for loss of =roduction, for t%e damage recei'ed was
=urely economic in nature7

1-1.3.2 FORESEABILITY AND OMISSIONS
5'en t%oug% a =erson may foresee t%at if %e omits i7e7 fail to act or ta$e somet%ing and
sla= anot%er t%e 'ictim may suffer damage or %arm yet generally t%e law does not %old
suc% a =erson liable if t%e 'ictim in fact suffers %arm due to %is failure to =re'ent suc%
%arm7 t is said t%at one must ta$e care not to cause inDury to ot%ers, but t%en t%ere is no
general duty to act for t%e benefit of ot%ersG in ot%er words, t%e rule is t%at you must not
%arm your neig%bour, not t%at you are required to sa'e your neig%bour7

1unior Books Ltd v Veitchi Co. Ltd 1983] 2 All ER301 HL. n t%at case t%e =laintiff
%ad a contract wit% some main contractors to build a factory for t%em7 )%e main
contractors entered into a contract and t%e +laintiff found t%e floor to be defecti'e w%ic%
t%ey %ad to s=end e3tra money to remedy t%e defect7 )%ey sued t%e defendants in
negligence of damages7 )%e ?ouse of Lords %eld t%at t%ere was a sufficient degree of
=ro3imity to gi'e rise to a duty of care, and t%at duty of care was not limited to a duty to
a'oid causing foreseeable %arm to =ersons or =ro=erty7
;ccording to 9treet, e3actly w%at constitutes t%e necessary =ro3imityJ to gi'e rise to a
duty-situation is difficult to define =recisely7 Foresee ability of %arm to t%e =laintiff
remains a necessary =re-condition of liability7 )%ere can be no =ro3imity wit%out
forseability7 "ut additionally t%e =laintiff must establis% grounds on w%ic% it is =ro=er to
im=ose on t%e defendant res=onsibility for t%at %arm, reasons w%y it is fair to e3=ect t%e
defendant to safeguard t%e =laintiffJs interests rat%er t%an e3=ecting t%e =laintiff to e3=ect
t%e defendant to loo$ after %imself7
1-1.3.3 ASPECTS OF NEGLIGENCE
;s=ects of !egligence affecting t%e 9onstruction ndustry includeG
a. PROFESSIONAL NEGLIGENCE
*enerally, consultants and ot%er =rofessionals are e3=ected by law to dis=lay reasonable
com=etence in t%e deli'ery of t%eir ser'ices7 )%e duty of care required by t%e =rofessional
is normally based on t%e contractual arrangement between t%e two7 ?owe'er, t%e duty of
care may arise concurrently in tort and contract @Professional Bodies Registration Act,
1973 (NRCD 143)).
)%e standard of reasonableness de=ends on t%e com=etency of t%e =rofessional7 )%us,
less is e3=ected from a young =rofessional t%an e3=erience consultant7 ?owe'er w%ere an
unqualified =erson or young =rofessional %olds %imself as an e3=erience consultant in %is
deli'eries, t%e law would not e3cuse %is negligence7 ?e is deemed to be w%at %e says %e
is and adDudged by t%at standard7
)%e law would e3cuse t%e negligence of t%e =rofessional or consultant if %e a==lies
met%ods and =ractices t%at are commonly acce=ted wit%in t%e =rofession notwit%standing
t%e fact t%at many of t%e =rofessions see t%e =ractice as unwise7
)%e court %owe'er %as t%e discretion to determine w%et%er or not t%e =ractice is general
standard of t%e reasonable man7
Cavanagh v Ulster Weaving Co. Ltd 1959] 2All ER745
)%e arrangement made by t%e defendants in =ro'iding a roof ladder was in accordance
wit% t%e establis%ed =ractice7 )%e =laintiff sli==ed coming down t%e roof ladder and
inDured %imself7 )%e +laintiff sued t%e defendants for negligence7
?eldG t%e defendants were negligent and t%erefore liable7
)%e =rofessional may be found liable to a t%ird =arty ie, someone ot%er t%an t%e client7
;ccording to 9treet, for a duty to arise to a t%ird =arty t%e =rofessionalG
Bust be aware t%at %is ad'ice will be transmitted to t%e =laintiff or to an
identifiable class of =ersons of w%om t%e =laintiff is one
;d'ice must be transmitted in order to forward a s=ecific =ur=ose of transaction
of t%e =laintiffs, and
Bust be reasonable in all t%e circumstances for t%e =laintiff to rely on t%at ad'ice,
rat%er t%an to see$ inde=endent ad'ice of %is own, and t%e =rofessional must be
well aware t%at t%e =laintiff will so rely on %is ad'ice7
n Smith v Bush 1989] 2 All ER 514 HL, t%e defendants were sur'eyors w%o =ro'ided
a sur'ey re=ort based on w%ic% t%e =laintiff mortgagees relied on w%en submitted by t%e
mortgagor as assurances t%at t%e =ro=erties w%ic% t%ey wis%ed to buy were structurally
sound and wort% more or less t%e agreed =urc%ase =rice7
?eldG t%e ?ouse of Lords %eld t%at it was well $nown t%at o'er 90I of %ouse-buyers
relied on t%e building society sur'ey re=ort for w%ic% t%ey ultimately =aid7 )%e defendant
s%ould %a'e a==reciated t%at t%e =laintiffs reasonably entrusted t%em wit% res=onsibilities
for safeguarding t%eir interests and t%erefore liable to t%e =laintiff7
)%e law e3=ects t%e +rofessional to dis=lay t%e a'erage amount of com=etence associated
wit% t%e =ro=er disc%arge of t%e duties of t%eir =rofession7 t is not t%e %ig%est degree of
s$ill s%own by =ersons in t%e =rofession but t%e reasonable com=etence t%at is required7
?owe'er, t%e law also requires t%e +rofessional to u=date %imself reasonably7 ;n
unqualified =erson would not be e3cused of %is !egligence7
9etio" 20 of N'8D 14D provides that EA"y perso" #hoF
*a+ "ot bei"g registered G. as a member of a professio"al body registered u"der this At
represe"ts himself or holds himself out as so registered, or
*b+ "ot havi"g the &ualifiatio" for admissio" to or e"rolme"t i" or for bei"g aepted as
a member of, suh a body k"o#i"gly represe"ts that he has suh &ualifiatio", or
*+ other#ise o"trave"es a"y of the provisio"s of this At,
shall be guilty of a" offe"e a"d liable o" summary o"vitio" to a term of impriso"me"t
"ot e1eedi"g five years or to a fi"e "ot e1eedi"g A1,000.00 or to bothB a"d #here the
offe"e is of a o"ti"ui"g "ature the offe"der shall be liable to a further fi"e "ot
e1eedi"g A50.00 i" respet of eah day o" #hih the offe"e o"ti"ues.
)%e qualified =erson will not be regarded as !egligent if %e uses =ractices w%ic% are
commonly acce=ted wit%in %is =rofession as acce=table e'en if a large number of %is
colleagues feel t%at t%e =ractice are not wise7
)%e $ey issue is w%et%er or not t%e duty of care e3ercised by t%e =rofessional was
reasonable7 ; %ig%er standard is required from an e3=erienced 9onsultant t%an a young
sur'eyor
"7 DOCTRINE OF RES IPSA LOQUITUR (THE FACTS SPEAK FOR
THEMSELVES):
t is t%e general rule t%at t%e =laintiff s%ould =ro'e t%e negligence of t%e defendant by
s=ecific acts or omissions, for e3am=le, t%at a defendant dri'er failed to loo$ forward
w%ile dri'ing, or t%at %e dro'e at an e3cessi'e s=eed7 "ut sometimes it is not =ossible for
t%e =laintiff to detail t%e s=ecific conduct of t%e defendant resulting in t%e accident7 )%is
could wor$ %ards%i= for t%e =laintiff7 )%is %ards%i= was a'oided by t%e de'elo=ment of
t%e doctrine of >es =sa Loquitur7
)%e doctrine a==lies in t%ose situations w%ere t%e %arm is of t%e $ind t%at does not Dust
%a==en but was caused by somet%ing in control of t%e defendant, and t%erefore must
=rima facie @on t%e face of itA be regarded as %a'ing been t%e result of t%e defendantJs
negligence7 For e3am=le, if t%e carcassing of an interior ceiling is being carried out and
someone below is inDured by a =iece of falling wood, res i=sa loquitur, t%e defendant will
%a'e to s%ow t%at %e was not negligent in %andling t%e wood7 )%is a==lies =articularly to
t%ings falling from buildings, any accident arising from defecti'e mac%inery, a==aratus or
'e%icles7
)%ree conditions must be fulfilled before t%e =rinci=le or ma3im can be u=%eld, namely
)%e t%ing causing t%e accident must be under t%e control or management of t%e
defendant or %is ser'ants7
)%e accident must be suc% as ordinarily cannot occur wit%out negligence7
)%ere must be absence of e3=lanation of t%e cause of t%e accident by t%e
defendant7
)%e effect of a =lea of res i=sa loquitur is t%at if no e'idence by t%e defendant t%at t%e
accident could not be due to want of care t%en t%ere must be a 'erdict for t%e =laintiff7 n
ot%er words, a =lea of t%e ma1im casts a burden on t%e defendant to dis=ro'e negligence,
for t%e =lea of t%e ma3im gi'es rise to a =rima facie e'idence of negligence on t%e =art of
t%e =laintiff7
c. OCCUPIERS` LIABILITY
;n occu=ier may be defined as anyone w%o owes sufficient degree of =%ysical control
and =ossession o'er =ro=erty7 )%is includes =ossession of construction site by a
contractor and all t%ose w%o e3ercise control o'er fi3ed or mo'able structures suc% as
lifts, scaffolding etc
)%e general rule is t%at an occu=ier of =remises owes no acti'e duty to tres=asser if %e is
$nown to be =resent, and occu=ier may not inflict damage on %im rec$lessly or
intentionally7 ;n occu=ier may not create dangers intentionally to inDure a tres=asser7
)%us, %e may not set s=ring guns @"ird ' ?olbroo$, 01-1A t%oug% it is =ossible to ta$e
defensi'e measures, suc% as co'ering t%e to=s of %ig% walls wit% bro$en glass7
i. Duty to Visitor
n a case @8%eat ' LaconA, a landlord and a tenant were %eld liable for t%e inDury of a
guest on a stair case7
;t common law liability is owned to a visitor, i7e7 an in'itee or a contractual 'isitor, a
licensee and a tres=asser7
)%e %ig%est degree of care is owe by t%e occu=ier to one w%o enters in pursuance of a
contract wit% %im @e7g7 a guest in an %otelA, in t%at case t%ere is an im=lied warranty t%at
t%e =remises were reasonably safe in using t%e =remises for t%e =ur=ose for w%ic% t%e
=erson is in'ited, contracted or =ermitted by t%e occu=ier to be t%ere7
; lower duty was owed to an ~invitee, t%at is to say, a =erson w%o @wit%out any
contractA entered on business of interest bot% to %imself and t%e occu=ier @e7g7 a customer
coming into a s%o= in 'iew to 'iew t%e waresA: %e was entitled to e3=ect t%at t%e
occu=ierJs e3=ress or im=lied =ermission suggest t%at t%e occu=ierJs duty towards %im
was to warn %im of any concealed danger or tra= of w%ic% %e actually $new7
I" the ase of Cunningham v Reading Football Club [1992] PIQR 141 the plai"tiff
reovered from the defe"da"t #he" loose o"rete slab fell a"d i"$ured him i" a stadium.
It #as foreseeable that the slabs may fall #he" viole"t supporters rioted.
; licensee may be a =erson w%o is on t%e occu=ierJs =remises eit%er by an e3=ress or
im=lied consent of t%e occu=ier7
dosei-asibey, esq 0- 09/09
t must %owe'er be noted t%at according to 9treet o" 3ort t%e distinction is not necessary
in terms of duty of care owed to t%ese =eo=le7
)o a licensee, =ermission s%ould not be im=lied only because t%e occu=ier %ad failed to
ta$e necessary ste=s to =re'ent %is entry rat%er t%ere s%ould be e'idence of an e3=ress
=ermission or t%at t%e land-owner %as so conducted %imself in a manner t%at %e cannot be
%eard to %a'e said %e didnJt gi'e it7 For e3am=le, w%ere signage for 'acancy is =laced in
an unfenced construction site, t%e contractor may be liable7
n t%e case of Edwards v Railway Executives 1952] 2 All ER 430 437G ?ouse of
Lords %eld t%at t%e duty of an occu=ier is to warn t%e licensee of any concealed danger
$nown to %im and w%ic% is not $nown to t%e licensee7 8arning %owe'er does not
disc%arge t%e defendant of %is liability unless it can be =ro'ed t%at t%e warning was
sufficient wit% regard to t%e danger7
ii. Duty of Common Humanity
;t common law t%e occu=ier owes t%e trespasser no duty of care7 )%ere %owe'er e3ists
t%e duty of common %umanity7
)%is duty may arise w%en it can be s%own t%at t%e occu=ier is aware of t%e danger or %as
reasonable grounds to belie'e t%at it e3ist, and %e $nows t%at or %as reasonable grounds
to belie'e t%at t%e tres=asser is in t%e 'icinity of t%e danger or t%at %e is li$ely to come
into t%e 'icinity and t%at t%e danger is one against w%ic% %e can reasonably offer t%e
tres=asser some =rotection7
)%us if a building materials are =laced =recariously on t%e site, in suc% a manner t%at t%ey
are li$ely to colla=se, and inDure a =asser-by, and t%e occu=ier $nows t%at members of t%e
=ublic use t%e site as a s%ort cut w%en wal$ing to t%e main road, according to Lewis, t%e
fact t%at t%e =erson inDured was a tres=asser will not sa'e t%e occu=ier from liability for
t%e inDuries caused by t%e colla=sing materials7
Southern Portland Cement v Cooper 1974] 2 WLR 152
; c%ild wandered onto t%e site and was inDured by t%e cable wit%in reac% of t%e mound of
waste material7 )%e c%ildren were =laying near t%e quarry and %ad been warned off
se'eral times7 )%e defendant %ad ins=ected a dum= of waste material and agreed wit% t%e
local aut%ority for remo'al of t%e cable7
?eldG it was an easy tas$ for t%e defendant to %a'e ta$en ste=s to =re'ent t%e danger
arising and also owed a duty to t%e =laintiff to ta$e t%ose ste=s7 )%e defendant was liable
to t%e =laintiff7
n suc% cases t%e occu=ier owes a duty of care towards tres=assers, to ta$e suc% ste=s as
are dictated by common sense and %umanity, to reduce or a'ert t%e danger7
iii. Children
)%e general rules as to tres=assers a==ly to c%ildren7 )%ere are, %owe'er some s=ecial
=oints w%ic% s%ould be notedG
;n occu=ier must be =re=ared for t%e fact t%at c%ildren are less careful t%an
adults7
dosei-asibey, esq 0. 09/09
w%at may be a warning to an adult may not be so to a c%ild
- f wit% t%e $nowledge of c%ild tres=assers on %is land, and t%e occu=ier ma$es no
attem=t to =re'ent recurrence of t%e tres=ass, e7g by re=airing %is fences,
%is inacti'ity mig%t be e'idence of im=lied =ermission, in w%ic% case t%e c%ild
may qualify as a 'isitorJ7 5g construction of se=tic tan$
- 8%ere a c%ild is unlawfully on land and t%ere is somet%ing on t%e land w%ic% acts as
an allurementJ to a c%ild, e7g mac%inery or attracti'e =oisonous fruits, t%e occu=ier
may be liable e'en t%oug% t%e c%ild is a tres=asser so far as t%e allurement itself is
concerned7
- ;s @i'A abo'e, an occu=ier of land is entitled to assume t%at young c%ildren will
be in t%e c%arge of com=etent adults7 n Phipps v Rochester Corporation [19]
1 !ll "R 129# w%ere a boy aged fi'e, w%o was accom=anied by %is sister aged
ele'en, fell into a %ole and bro$e %is leg, it was %eld t%at t%e res=onsibility for t%e
safety of young c%ildren rests =rimary wit% t%eir =arents7
)%ere may %owe'er arise s=ecial consideration for c%ildren7 +ermission may be im=lied
on t%e basis of an allurement t%at would =resent no tem=tation to an adult7
$ritish Rail%a& $oard v 'errington [19(2]1 !ll "R ((#
?, aged /, tres=assed t%roug% a defecti'e fence adDoining an electrified railway line and
was badly inDured7 ? sued t%e "oard in negligence for =ermitting t%e fence to be in a
dila=idated condition7 )%e "oard $new =re'ious tres=assers %ad occurred7 ?eld: @?ouse
of LordsA: )%e "oard was liable7 ;n occu=ierJs liability to a c%ild tres=asser de=ends on
w%at a conscientious, %uman man @wit% %is $nowledge, s$ill, and resourcesA could
reasonably %a'e a'oided t%e accident7 ; =oor =erson would often be e3cused w%ere a
large organiFation would not7 @=er Lord >eidA
Coo) v* +idland ,reat -estern Rail%a&# Ireland [19.9] !C 229#
Defendants $e=t a turntable on t%eir land near a =ublic road7 )o t%e $nowledge of
defendant c%ildren %abitually came on to t%e land and =layed wit% t%e turntable7
Defendants too$ effecti'e ste=s to =re'ent t%em doing so, a c%ild aged four, inDured
%imself on t%e turntable7 ?eld: t%at t%ere was sufficient e'idence to find t%e defendants
liable7 ;s t%ey %ad acquiesced in t%e tres=asses by t%e c%ildren, t%e =articular c%ild was
in t%e =osition of a 'isitor, and to %im t%e turntable was an allurement7
,lasgo% Corporation v /alor [1922] 1 !C 44*
; c%ild, se'en years of age =ic$ some attracti'e, but =oisonous, berries growing on a
s%rub in a =ublic =ar$ controlled by *lasgow 9or=oration7 )%e c%ild died after eating t%e
berries7 Defendants @t%e cor=orationA $new t%e berries were =oisonous and t%at c%ildren
went to t%e =ar$, but t%ey %ad done not%ing to gi'e effecti'e warning, intelligible to
c%ildren, of t%eir danger7 ?eld: t%at t%e cor=oration was liable in an action by t%e c%ildJs
=arentG t%e berries constituted an allurement7
iv. Independent Contractors
8%ere a danger is caused to a 'isitor as a result of danger due to t%e faulty e3ecution of a
wor$ of construction or of maintenance by an inde=endent contractor em=loyed by t%e
occu=ier, t%e occu=ier s%all not be answerable for t%e danger if in all circumstances %e
acted reasonably in entrusting t%e wor$ to an inde=endent contractor and too$ suc% ste=s
as are necessary to satisfy %imself t%at t%e contractor was com=etent and t%e wor$ was
=ro=erly done7
)%e court t%erefore %as to loo$ at t%ese areas i7e7 w%et%er it was reasonable for t%e
occu=ier to engage t%e inde=endent contractor @t%e wor$ in'ol'ed is s=ecialiFed or
in'ol'es t%e use of s=ecial s$ill or equi=mentA and w%et%er t%e occu=ier c%ec$ed t%e
com=etence of t%e inde=endent contractor7
Haseldine v Daw & Son Ltd 1941] 2KB 343
)%e occu=ier %ad neit%er t%e s$ill nor t%e equi=ment to re=air t%e lift so %e delegated t%
tas$ to a =ro=erly s$illed inde=endent contractor7
?eldG t%e occu=ier was not liable for defects in t%e lift %a'ing delegated t%e duty to t%e
inde=endent contractor and %a'ing be%a'ed reasonably in so doing7
v. Limitation of Occupier`s of Liability
Assumption of Risk
)%e common duty of care does not im=ose on an occu=ier an obligation to a 'isitor in
res=ect of ris$ t%at was willingly acce=ted by t%e 'isitor7 )%e defendant t%erefore brings
no duty of care owed to t%e =laintiff u=on t%e assum=tion of ris$7 =ole"ti "o" fit i"$uria.
Contributing Negligence
9ontributory negligence is to t%e effect t%at a =laintiff cannot enlarge to an e3tent t%e
duty of care owed to %im by t%e defendant by negligent acts on %is =art7 Damages are
t%erefore reduced w%en it is =ro'ed t%at t%e =laintiff failed to ta$e reasonable care of
%imself7
Exclusion of Liability
)%e occu=ier may e3clude liability by way of contract to t%e ot%er =arty in so far as %e is
free to do so7 ?e %owe'er cannot e3clude liability for deat% or =ersonal inDury or inDury to
=ro=erty arising t%roug% %is own negligence7
d7 EMPLOYERS' LIABILITY
)%e em=loyerPs common law duties to %is em=loyees are commonly dealt wit% in four
%eadings, t%e =ro'ision of: @aA com=etent staffG @bA a safe =lace of wor$G @cA =ro=er =lant
and equi=mentG and @dA a safe system of wor$7 )%ese are sim=ly as=ects of t%e broader
dosei-asibey, esq 0L 09/09
duty to see t%at reasonable care for t%e safety of em=loyees is ta$en7
-ilsons and Cl&de Coal 0td v "nglish [191(] 1 !ll "R 223
It #as held by the 2ouse of Lords that *1+ the employers #ere "ot absolved from their
duty to take due are i" the provisio" of a reaso"ably safe system of #orki"g by the
appoi"tme"t of a ompete"t perso" to perform that duty. Although the employers might,
a"d i" some eve"ts #ere bou"d to, appoi"t someo"e as their age"t i" the disharge of
their duty, the employers remai"ed respo"sible. *2+ the dotri"e of ommo" employme"t
does "ot apply #here it is proved that a defetive system of #orki"g has bee" provided.
3o provide a proper system of #orki"g is a paramou"t duty, a"d, if it is delegated by a
master to a"other, the master still remai"s liable.
i. Competent Staff
)%e em=loyer %as an obligation to select com=etent fellow em=loyees, and a correlati'e
duty to gi'e t%em =ro=er instruction in t%e use of equi=ment7
f an em=loyer $nows or can foresee t%at acts being done by em=loyees mig%t cause
=%ysical or =syc%iatric %arm to a fellow em=loyee, it is arguable t%at t%e em=loyer could
be in breac% of duty to t%at em=loyee if %e did not%ing to =re'ent t%ose acts w%en it was
in %is =ower to do so7
ii. Safe Place of Work
;n em=loyer must ta$e suc% ste=s as are reasonable to see t%at t%e =remises are safe7
0atimer v !"C 0td [191] 2 !ll "R 449
:wing to an e3ce=tionally %ea'y storm of rain, a factory was flooded wit% surface water
w%ic% became mi3ed wit% an oily liquid used as a cooling agent for t%e mac%ines w%ic%
was normally collected in c%annels in t%e floor7 8%en t%e water drained away from t%e
floor, w%ic% was le'el and structurally =erfect, it left an oily film on t%e surface w%ic%
was sli==ery7 )%e defendants s=read sawdust on t%e floor, but owing to t%e un=recedented
force of t%e storm and t%e consequently large area to be co'ered, t%ere was insufficient
sawdust to co'er t%e w%ole floor7 n t%e course of %is duty t%e =laintiff sli==ed on a
=ortion of t%e floor not co'ered wit% sawdust, fell, and was inDured7
t was %eld by t%e ?ouse of Lords, inter alia, t%at on t%e facts t%e defendants %ad ta$en
e'ery ste= w%ic% an ordinarily =rudent em=loyer would %a'e ta$en in t%e circumstances to
secure t%e safety of t%e =laintiff, and so t%ey were not liable to t%e =laintiff for negligence
at common law7
)%e em=loyer is also under a duty wit% res=ect to t%e =remises of a t%ird =arty e'en
t%oug% %e %as no control o'er t%e =remises, but t%e ste=s required to disc%arge t%is duty
will 'ary wit% t%e circumstances7
; masterPs duty to %is ser'ant to ta$e reasonable care so to carry out %is o=erations as not
to subDect %is ser'ant unnecessary is one single duty a==licable in all circumstances7 )%e
question w%et%er t%e master was in control of t%e =remises, or w%et%er t%e =remises were
dosei-asibey, esq 0/ 09/09
t%ose of a stranger, becomes merely one of t%e ingredients, albeit an im=ortant one, in
considering t%e question of fact w%et%er, in all t%e circumstances, t%e master too$
reasonable care7
-ilson v /&neside -indo% Cleaning Co [193] 2 !ll "R 22
; s$illed and e3=erienced window cleaner, w%o $new t%at %e s%ould not trust t%e %andles
on windows wit%out first testing t%em, was frequently sent by %is em=loyers to clean t%e
windows of a =articular customer7 )%e em=loyers did not ins=ect t%e customerPs =remises
eac% time w%en t%ey sent t%e window cleaners t%ere, nor did t%ey s=ecifically warn t%e
window cleaner of =articular dangersG but t%ey did instruct %im to lea'e uncleaned any
window w%ic% =resented unusual difficulty and w%ic% %e was in doubt w%et%er %e could
clean safely, to re=ort t%e fact to t%em and to as$ for furt%er instructions7 )%ere was no
e'idence of any =ractice in t%e trade eit%er of ins=ecting =remises for safety before wor$
or of re=eatedly warning wor$men of t%e dangers7 8%ile cleaning t%e outside of a $itc%en
window, t%e woodwor$ of w%ic% a==eared to t%e window cleaner to be rotten, of w%ic% %e
$new t%e sas% to be stiff and of w%ic% one of t%e two %andles was missing, t%e window
cleaner attem=ted to =ull t%e window down by t%e remaining %andle7 )%e %andle came
away in %is %and, causing %im to lose %is balance, fall and sustain se'ere inDuries7
n an action by t%e window cleaner against t%e em=loyers for alleged negligence e3=osing
%im to unnecessary ris$, it was %eld by t%e 9ourt of ;==eal t%at t%e em=loyers %ad ta$en
reasonable care not to subDect t%e =laintiff to unnecessary ris$, because t%e danger was an
a==arent danger, t%e =laintiff was 'ery e3=erienced at t%e wor$, and t%ey %ad instructed
%im not to clean windows w%ic% it mig%t not be safe to cleanG t%e em=loyers, t%erefore,
were not liable7
iii. Adequate Plant and Equipment
;n em=loyer %as a Pduty of ta$ing reasonable care to =ro'ide =ro=er a==liances, and to
maintain t%em in a =ro=er conditionP @=er Lord ?ersc%ell, (mit% ' "a$er Q0190R ;9 .-L,
./-A7 f necessary equi=ment is una'ailable and t%is leads to an accident %e will be liable,
alt%oug% %e is not necessarily bound to ado=t t%e latest im=ro'ements and equi=ment
f t%e em=loyee would not %a'e used t%e safety equi=ment if it %ad been su==lied t%e
em=loyerPs breac% of duty is not t%e cause of inDury7 ;n em=loyer is liable if an em=loyee
suffers =ersonal inDury in t%e course of %is em=loyment in consequence of a defect in
equi=ment =ro'ided by t%e em=loyer, and t%e defect is attributable w%olly or =artly to t%e
fault of a t%ird =arty, w%et%er identifiable or not7
;n em=loyer will not be liable if a wor$er fails to ma$e =ro=er use of t%e equi=ment
su==lied, nor w%ere t%e em=loyee acted foolis%ly in c%oosing t%e wrong tool for t%e Dob,
assuming t%at, w%ere necessary, t%e em=loyee %as been gi'en adequate instruction in t%e
use of t%e equi=ment7
iv. Safe System of Working
t is a question of fact w%et%er a =articular o=eration requires a system of wor$ in t%e
interests of safety, or w%et%er it can reasonably be left to t%e em=loyee c%arged wit% t%e
tas$7 t is usually a==lied to wor$ of a regular ty=e w%ere t%e =ro=er e3ercise of
managerial control would s=ecify t%e met%od of wor$ing, gi'e instruction on safety and
encourage t%e use of safety de'ices7
n some cases a warning of t%e danger to a s$illed em=loyee will be sufficient to disc%arge
t%e em=loyerPs duty, and in ot%ers it may be reasonable to e3=ect e3=erienced wor$ers to
guard against ob'ious dangers7 (ee: Wilson v Tyneside Window Cleaning Co. 1958] 2
All ER 265 (above)
)%ere are two as=ects to t%e =ro'ision of a safe system of wor$:
@iA t%e de'ising of a systemG and @iiA its o=eration7
5'en if t%e system itself is safe a negligent failure to o=erate t%e system, w%et%er by
anot%er em=loyee or an inde=endent contractor, will render t%e em=loyer liable7
,eneral Cleaning Contractors v Christmas [192] 2 !ll "R 111.
)%e =laintiff, a window cleaner, was em=loyed by t%e defendants, a firm of contractors, to
clean t%e windows of a club7 8%ile, following t%e =ractice usually ado=ted by em=loyees
of t%e defendants, %e was standing on t%e sill of one of t%e windows to clean t%e outside of
t%e window and was %olding one sas% of t%e window for su==ort, t%e ot%er sas% came
down on %is fingers, causing %im to let go and fall to t%e ground, suffering inDury7
:n a claim by %im against t%e defendants for damages, it was %eld by t%e ?ouse of Lords
t%at e'en assuming t%at ot%er systems of carrying out t%e wor$, eg, by t%e use of safety
belts or ladders, were im=racticable, t%e defendants were still under an obligation to
ensure t%at t%e system t%at was ado=ted was as reasonably safe as it could be made and
t%at t%eir em=loyees were instructed as to t%e ste=s to be ta$en to a'oid accidentsG t%e
defendants %ad not disc%arged t%eir duty in t%is res=ect towards t%e =laintiffG and,
t%erefore, t%ey were liable to %im in res=ect of %is inDury7
Per 0ord Reid4 8%ere a =ractice of ignoring an ob'ious danger %as grown u= it is not
reasonable to e3=ect an indi'idual wor$man to ta$e t%e initiati'e in de'ising and using
=recautions7 t is t%e duty of t%e em=loyer to consider t%e situation, to de'ise a suitable
system, to instruct %is men w%at t%ey must do, and to su==ly any im=lements t%at may be
required7
e. VICARIOUS LIABILITY
)%is is liability w%ic% arises because of one =ersonJs relations%i= to anot%er7 )%us a
master or =rinci=al is generally liable for t%e acts of %is ser'ant or agent w%ere %e
=erforms negligently in t%e course of %is em=loyment7
'arrison v +ichelin /&re Co [193] 1 !ll "R 919
)%e =laintiff, a tool grinder em=loyed by t%e defendants, was inDured in t%e course of
em=loyment w%ile standing on t%e duc$-board of %is mac%ine tal$ing to a fellow
em=loyee7 )%e inDury occurred w%en (, anot%er em=loyee, w%ile =us%ing a truc$ along a
=assageway @indicated by c%al$ linesA in front of t%e =laintiff, decided to indulge in some
%orse=lay by suddenly turning t%e truc$ two inc%es outside t%e c%al$ lines and =us%ing t%e
edge of it under t%e =laintiffPs duc$-board7 )%e duc$-board ti==ed u= and t%e =laintiff fell
off it and was inDured7 ?e broug%t an action for damages for =ersonal inDuries against t%e
defendants, claiming t%at ( %ad been acting in t%e course of %is em=loyment, and t%at
t%erefore t%ey were 'icariously liable for %is negligence7 )%e defendants denied liability,
contending t%at at t%e time of t%e incident ( %ad embar$ed on a frolic of %is own7
t was %eld in t%e C"D t%at for t%e =ur=oses of 'icarious liability, t%e test w%et%er an
em=loyee was acting in t%e course of %is em=loyment was w%et%er a reasonable man
would say eit%er t%at t%e em=loyeePs act was =art and =arcel of %is em=loyment @in t%e
sense of being incidental to itA e'en t%oug% it was unaut%orised or =ro%ibited by t%e
em=loyer, in w%ic% case t%e em=loyer was liable, or t%at it was so di'ergent from %is
em=loyment as to be =lainly alien to %is em=loyment, and w%olly distinguis%able from it,
in w%ic% case t%e em=loyer was not liable7 ;==lying t%at test, a reasonable man would say
t%at, e'en t%oug% (Ps act was of a $ind w%ic% would ne'er %a'e been countenanced by t%e
defendants, it was none t%e less =art and =arcel of %is em=loyment7 ;ccordingly t%e
defendants were 'icariously liable7
)%e =rinci=le, frolic of his ownJ is commonly t%e defence of t%e master or =rinci=al
w%ere t%e ser'ant or t%e agent does not =erform %is negligent act in t%e course of %is
em=loyment7 )%us w%ere a ti==er truc$ dri'er of a construction com=any, %as been tas$ed
to win gra'el from t%e gra'el =it but %e decides to =ic$ t%e wife to t%e %ouse w%ic% is
situated in an o==osite direction of t%e gra'el =it first and negligently $noc$ down a
sc%ool girl on %is way to t%e %ouse, t%e 9om=any will certainly =lead frolic of %is own as
its defence against t%e 'icarious liability77
f. LIABILTY FOR PRODUCTS
)%e normal liability for =roducts was in res=ect of a contract between a seller and buyer7
)%at is to say under a contract of sale of goods, t%e seller was liable for defects in goods
for w%ic% t%e buyer was not aware7 (ubsequently, %owe'er a liability on t%e =art of a
=roducer w%o was not a contracting =arty at all to t%e =laintiff was recoginised in relation
to t%ings of w%ic% t%e defendant was aware was li$ely to cause danger7
)%e liability in t%e construction industry arises in relation to t%e materials used or tools
su==lied in t%e course of t%e wor$s7
5onoghue v 6tevenson [1912] !*C* 22
8%ere t%e defendant was not aware t%at t%e t%ing was dangerous in itself or was li$ely to
cause %arm, no liability was recogniFed on t%e =art of a non-contracting t%ird =arty7
?owe'er, in Donog%ue ' (te'enson, suc% liability was recogniFed for t%e first time7 n
t%at case t%e =laintiff in 09-1 entered a cafS wit% a friend w%o boug%t for %er bottle of
ginger beer manufactured by t%e defendant, (te'enson, from w%om it was boug%t by t%e
retailer7 )%e beer was contained in an o=aque bottle7 t was alleged t%at t%e bottle
contained t%e decom=osed remains of a snail w%ic% could not be detected until t%e greater
=art of t%e contents of t%e bottle were consumed7 (%e alleged t%at as a result of t%e
nauseating sig%t of t%e snail and t%e im=urities in t%e ginger beer w%ic% s%e %ad already
consumed, s%e %ad suffered s%oc$ and se'ere gastric com=laints7 ; maDority of t%e ?ouse
of Lords %eld, w%en t%e =laintiff sued t%e manufacturer t%at, t%e =laintiffJs allegations
disclosed a cause of action against t%e manufacturers7 Lord ;t$in obser'ed:

;A ma"ufaturer of produts, #hih he sells i" suh a form as to sho# that he i"te"ds
them to reah the ultimate o"sumer i" the form i" #hih they left him #ith "o reaso"able
possibility of i"termediate e1ami"atio", a"d #ith the k"o#ledge that the abse"e of
reaso"able are i" the preparatio" or putti"g up of the produts #ill result i" a" i"$ury to
the o"sumer%s life or property, o#es a duty to the o"sumer to take that reaso"able
are<.
g. NEGLIGENT MISSTATEMENT
!egligent Bisstatement arises w%ere a statement of a =rofessional w%ic% is being relied
on by t%e =laintiff causes an inDury to %im as a result of negligence of t%e =rofessional
during t%e course of %is wor$7 +rofessionals suc% as Cuantity (ur'eyors, 5ngineers,
;rc%itects etc can be %eld liable to =ersons ot%er t%an t%eir em=loyers w%o suffer loss in
t%e form of financial or =%ysical t%roug% reliance on t%eir statements7 ?owe'er w%ere t%e
=rofessional =ro'ides a disclaimer of res=onsibility to t%e notice of t%e =erson w%o is
relying on t%e statement or ad'ise of t%e =rofessional t%e =rofessional can %a'e a defence7
Clay v A. 1. Crump Ltd 1964] 1 QB 533 ;n ;rc%itect was sued because of %is
negligent su=er'ision on a site w%ic% was being de'elo=ed7 ?e was %eld to %a'e a duty of
care and %e was %eld liable for inDuries suffered by t%e =arty inDured by t%e falling wall7
!egligent Bisstatement may include a wrong di'ersion sign t%at may cause accident to
road users7
"rett B7>7 in Heaven v Pender (1883), 11 QBD 503 %eld w%ene'er one =erson is by
circumstances =laced in suc% a =osition wit% regard to anot%er t%at e'eryone of ordinary
sense w%o did t%in$ would at once recogniFe t%at if %e did not use ordinary care and s$ill
would cause danger or inDury to t%e =erson or =ro=erty of anot%er, a duty arises to use
ordinary care and s$ill to a'oid suc% danger7J
Self-Assessment 1 1
1. Explain the statement,to constitute false imprisonment the restriction of
the plaintiff must be complete.
2. Trespass to land is committed in three forms; state one of such forms.
3. A Contractor at the construction of a pool site at K!"T carelessl#
exca$ated his trench but could foresee that b# abstractin% percolatin%
&ater from belo&, the ad'oinin% mast &hich has been erected b# the (T
Compan# on the ad'oinin% propert# of a pri$ate de$eloper &ould be caused
to settle. The (T Compan# has brou%ht an action a%ainst the Contractor.
dosei-asibey, esq -0 09/09
)ill the Contractor be liable*
SESSION 2-1 STATUTORY DUTY, RYLAND V FLETCHER RULE
AND NUISANCE
2-1.1. Industrial Safety Legislations
"reac% of statutory duty arises w%ere a statute =ro'ides certain t%ing to be done and t%e
default results in inDury to anot%er =erson, t%e =erson on w%om t%e duty was im=osed can
be sued for damages by t%e inDured =erson7 t is a se=arate tort because t%ere %a'e been
cases in w%ic% t%e defendant %as been acquitted of negligence but %eld liable on t%e same
facts for breac% of statutory duty7 )%ere %a'e also been cases in w%ic% t%e defendant
fulfilled %is statutory duty but was ne'ert%eless %eld liable for negligence7
)%e =rinci=le is t%at Duty must be owed to t%e +laintiff and t%e Defendant must in fact be
guilty of %is statutory duty or obligation7
ndeed, industrial safety legislations, w%ic% is =enal in nature, is one area w%ere t%e courts
%a'e consistently allowed suc% common law actions7 (ome >egulations w%ic% go'erned
s=ecific areas in construction are t%e nsurance ;ct, -00/ @;ct 2-4A, Factories, :ffices
and (%o=s ;ct, 0920, @;ct .-1A, 8or$menJs 9om=ensation Law, 0912 @+!D9L 012A,
0912, Labour ;ct, -00., @;ct /L0A, 5n'ironmental +rotection ;ct, "uilding >egulations
and Disability ;ct
)%e amount of =rotection gi'en by an action for breac% of statutory duty de=ends, not
only on t%e wording of t%e statute, but more im=ortantly on t%e inter=retation of t%e
courts7
a. The Insurance Act
)%e nsurance ;ct, -00/ ;ct 2-4 requires an owner of a commercial building under
construction to insure t%e liability@iesA in res=ect of constructional ris$ arising out of
negligence of ser'ants, agents or su=er'isors w%ic% may result in t%e followingG
07 @iA bodily inDury to any wor$man on t%e site or any member of t%e =ublic
@iiA loss of life to any wor$man on t%e site or any member of t%e =ublic
@iiiA damage of =ro=erty of any wor$man on t%e site or any member of t%e =ublic
-7 @iA t%e nsurance ;ct also requires t%e owner of a commercial building to insure t%e
building against colla=se, fire, eart%qua$e, storm and flood7
@iiA )%e insurance =olicy obtained from t%e insurer s%all co'er t%e legal obligations of
t%e owner or occu=ier of suc% building in res=ect of loss or damage to =ro=erty, bodily
inDury or deat% suffered by any user of t%e building and t%ird =arties7
)%e nsurance ;ct defines commercial building as a =ri'ately owned building w%ere
members of t%e =ublic enter and lea'e for t%e =ur=ose of @aA obtaining educational or
medical ser'ices or @bA engaging in commercial acti'ity for t%e =ur=oses of t%e recreation
or transaction of business7
b. The Factory, Offices and Shops Act,
)%e Factories, :ffices and (%o=s ;ct, 0920 @;ct .-1A %as t%e following =ro'isionsG
@iA 5'ery factory, office and s%o= s%all be =ro'ided wit% suc% adequate means of esca=e in
case of fire for t%e =ersons em=loyed t%ere as may be reasonable required @(7.A7

@iiA 8%ere any =erson %as to wor$ at a =lace from w%ic% %e will be liable to fall a distance
more t%an eig%t feet @-7LmetresA, means s%all be =ro'ided, so far as is reasonable to ensure
%is safety @(7 .4 @-AA7
@iiiA ;ll floors, ste=s, stairs, =assages, gangways s%all be of strong construction and
=ro=erly maintained and s%all so far as is reasonably =racticable be $e=t free form any
obstruction and from any substance li$ely to cause any =erson to sli= @( .L @0A7
@i'A For e'ery staircase in a building or affording a means of e3it from a building, a
substantial %andrail s%all be =ro'ided and maintained @(.L @-AA
;ny em=loyee inDured as a result of a breac% by t%e em=loyer of any of t%e abo'e
=ro'isions is entitled to reco'er damages for breac% of statutory duty7
c. The workmen`s compensation law, PNDC Law 187, 1987
;not%er statute w%ic% %as made t%e rig%ts of em=loyees against t%eir em=loyers under
common law less significant is t%e wor$manJs com=ensation ;ct09/. @;ct 024A, now
+!D9 Law 012, 09127 )%e =rinci=le of com=ulsory =ayment of com=ensation by t%e
em=loyer is in res=ect of t%e deat% or disablement of a wor$man as a result of accident
occurring in t%e course of %is em=loyment, inde=endently of negligence not =ro'ided for
by t%e Factory ;ct7
d. The Labour Act
)%e ;ct =ro'ides t%at in any contract of em=loyment or collecti'e agreement, t%e duties
of t%e em=loyer include toG
+ro'ide wor$ and a==ro=riate raw materials, mac%inery, equi=ment and toolsG
)a$e all =racticable ste=s to ensure t%at t%e wor$er is free from ris$ of =ersonal
inDury or damage to %is or %er %ealt% during and in t%e course of t%e wor$erJs
em=loyment or w%ile lawfully on t%e em=loyerJs =remises7
)%e duty of t%e wor$er also include toG
8or$ conscientiously in t%e lawfully c%osen occu=ation,
53ercise due care in t%e e3ecution of assigned wor$
:bey lawful instructions regarding t%e organiFation and e3ecution of %is or %er
wor$
)a$e all reasonable care for t%e safety and %ealt% of fellow wor$ers
dosei-asibey, esq -- 09/09
)a$e =ro=er care of t%e =ro=erty entrusted to t%e wor$er or under t%e immediate
control of t%e wor$er
)%e rig%t of wor$er as =ro'ided in t%e ;ct also includeG
)o wor$ under satisfactory, safe and %ealt%y conditions,
)o be trained and retained for t%e de'elo=ment of t%e wor$ers s$illsG and
)o recei'e information rele'ant to %is or %er wor$
e. Environmental Protection Act,
)%e 5n'ironmental +rotection ;gency %as been mandated under t%e ;ct 490G
to ma$e recommendations for t%e =rotection of t%e en'ironmentG
to co-ordinate t%e acti'ities a==ro=riate for t%e =ur=oses of controlling t%e
generation, treatment, storage, trans=ortation and dis=osal of industrial wasteG
to secure t%e control and =re'ention of disc%arge of waste into t%e en'ironment
and t%e =rotection and im=ro'ement of t%e quality of t%e en'ironmentG
to issue en'ironmental =ermits and =ollution abatement notices for controlling t%e
'olume, ty=es, constituents and effects of waste disc%arges, emissions, de=osits or
ot%er source of =ollutants and of substances w%ic% are %aFardous or =otentially
dangerous to t%e quality of t%e en'ironment or any segment of t%e en'ironmentG
to issue notice in t%e form of directi'es, =rocedures or warnings for t%e =ur=ose of
controlling t%e 'olume, intensity and quality of noise in t%e en'ironmentG
to =rescribe standards and guidelines relating to t%e =ollution of air, water, land
and ot%er forms of en'ironmental =ollution including t%e disc%arge of wastes and
t%e control of to3ic substancesG
to ensure com=liance wit% any laid down en'ironmental im=act assessment
=rocedures in t%e =lanning and e3ecution of de'elo=ment =roDects, including
com=liance in res=ect of e3isting =roDectsG
to control =ollution and generally =rotect t%e en'ironmentG
to conduct in'estigations into en'ironmental issues
to =romote studies, researc%, sur'eys and analysis for t%e im=ro'ement and
=rotection of t%e en'ironment and t%e maintenance of sound ecological systems in
*%anaG
to im=ose and collect en'ironmental =rotection le'ies
f. Building Regulation
Chipchase v British Titan Products Co. (1956) I Q B. 545,
; wor$man was inDured w%en %e fell from a =latform nine inc%es wide and si3 feet abo'e
t%e ground7 )%e statutory regulation required t%at Ne'ery wor$ing =latform from w%ic% a
=erson is liable to fall more t%an si3 feet si3 inc%es s%all be at least .4 inc%es wideO7 t
was %eld t%at t%e defendants were not liable on t%e ground t%at t%ey were not in breac% of
t%e regulation because t%e distance from t%e ground was less t%an si3 feet si3 inc%es7
g. Disability Act
Design of =ublic buildings s%ould accommodate t%e needs of disable =ersons to ma$e it
dosei-asibey, esq -. 09/09
accessible to t%em7 ;ll e3isting structures s%ould ensure com=liance wit%in ten years of
t%e ;ct coming into force7
Defences in Breach of Statutory Duty
(a) Volenti Non Fit Injuria:
9onsent or 'oluntary assum=tion of t%e ris$ resulting in t%e inDury is a defence e3ce=t t%at
if t%e defence is raised by an em=loyer against %is em=loyee it will not be u=%eld7
(b) Contributory Negligence:
;t common law w%en t%e =laintiff was guilty of contributory negligence t%at was a
com=lete defence to t%e action and t%e defendant was not liable7
2-1.2 RYLANDS v FLETCHER RULE
2-1.2.1 Facts of case
n >ylands ' Fletc%er @01/1A L> . ?L ..0, t%e defendants em=loyed inde=endent
contractors to construct a reser'oir on t%eir land7 )%e contractors found disused mines
w%en digging but failed to seal t%em =ro=erly7 )%ey filled t%e reser'oir wit% water and as
a result, water flooded t%roug% t%e mines%afts into t%e =laintiffPs mines on t%e adDoining
=ro=erty7 )%e =laintiff was %eld not liable at Li'er=ool ;ssiFes7 )%e 9ourt of 53c%equer
9%amber %eld t%e defendant liable and t%e ?ouse of Lords affirmed t%eir decision7 )%e
=rinci=le %ere %as t%en become w%at is $nown as t%e >ylands ' Fletc%er >ule or t%e
Doctrine of >ylands ' Fletc%er7
2-1.2.2 Requirements
t was decided by "lac$burn K, w%o deli'ered t%e Dudgment of t%e 9ourt of 53c%equer
9%amber, and t%e ?ouse of Lords, t%at to succeed in t%is tort t%e claimant must s%ow:
07)%at t%e defendant broug%t somet%ing onto %is landG
-7)%at t%e defendant made a Tnon-natural useT of %is land @=er Lord 9airns, L9AG
.7)%e t%ing was somet%ing li$ely to do misc%ief if it esca=edG
47 )%e t%ing did esca=e and cause damage7
Foreseeability is now a furt%er requirement,
1. The defendant brought something onto his land
n law, t%ere is a difference between t%ings t%at grow or occur naturally on t%e land, and
t%ose t%at are accumulated t%ere artificially by t%e defendant7 For e3am=le, roc$s and
t%istles naturally occur on land7 ?owe'er, t%e defendants in >ylands ' Fletc%er broug%t
water onto t%e land7
2. Non-natural use of the land
n t%e ?ouse of Lords, Lord 9airns L9, laid down t%e requirement t%at t%ere must be a
non-natural use of t%e land7 ;n e3am=le is:
+ason v 0ev& !uto Parts 0td [192(] 2 !ll "R 22*
)%e Ds stored flammable material on t%eir land7 t ignited and fire s=read to neig%bouring
=ro=erty7 )%e Ds were %eld liable as t%e storage of t%e materials amounted to a non-
natural use of t%e land7
3. Something likely to do mischief
)%e t%ing broug%t onto t%e land must be somet%ing li$ely to do misc%ief if it esca=es7 n
suc% a situation t%e defendant $ee=s it in at %is =eril7
4. Escape
)%ere must be an esca=e of t%e dangerous substance from t%e defendantPs land7
Read v 0&ons 0td [1942] 2 !ll "R 4(1* )%e + wor$ed in a munitions factory7 )%ere was
an e3=losion and s%e was inDured7 )%ere was no e'idence of negligence by t%e em=loyers7
;s t%e e3=losion occurred on t%e Ds =remises, t%ere was no esca=e from t%eir =ro=erty
and t%erefore no liability in >ylands ' Fletc%er7
5. Foreseeability
;ccording to t%e ?ouse of Lords in 9ambridge 8ater 9o Ltd ' 5astern 9ounties Leat%er
=lc Q0994R 0 ;ll 5> L., t%at %arm of t%e rele'ant ty=e must %a'e been foreseeable7
2.1.2.3 Remedies
The owner of land close to the escape can recover damages for:
07 +%ysical %arm to t%e land itself @as in >ylands ' Fletc%erA and to ot%er =ro=erty7 (ee,
for e3am=le: 'alse& v "sso Petrol [1921] 2 !ll "R 14,
w%ere t%e owner of a car reco'ered com=ensation for damage to its =aintwor$ by acid
smuts7
-7 t is no longer clear if a claimant can reco'er for =ersonal inDury, as in:
Hale v 1ennings 1938] 1 All ER 579.
+ was inDured w%en a c%air-o-=lane esca=ed from t%e DPs fairground mac%ine onto %is
=ro=erty7 )%e trial Dudge awarded damages for =ersonal inDury7
Non-occupiers
t is not clear if a =erson w%o is not an occu=ier of land close to t%e esca=e can obtain
damages for =ersonal inDuries, under t%is tort7
9ambridge 8ater ' 5astern 9ounties - it was said t%at t%e rule in >ylands ' Fletc%er is an
offs%oot or 'ariety of nuisance7 )%erefore, according to Hunter v Canary Wharf 1997]
2 All ER 426, an interest in land is a =rerequisite for bringing a claim7
?owe'er, t%ere may be ot%er causes of action, for e3am=le, negligence7
2-1.2.4 Defences
; number of defences %a'e been de'elo=ed to t%e rule in >ylands ' Fletc%er7
1. Consent
)%e e3=ress or im=lied consent of t%e claimant to t%e =resence of source of t%e danger,
dosei-asibey, esq -L 09/09
=ro'ided t%ere %as been no negligence by t%e defendant, will be a defence7
2. Common Benefit
f t%e source of t%e danger was maintained for t%e benefit of bot% t%e claimant and
defendant, t%e defendant will not be liable for its esca=e7 )%is defence is eit%er related to
t%e defence of consent or t%e same t%ing7 ;ccording to 8infield & KolowicF, =LL0,
Tcommon benefit seems redundant @and indeed misleadingA as an inde=endent defenceT7
3. Act of a stranger
)%e defendant will not be liable if a stranger was res=onsible for t%e esca=e7
Ric)ards v 0othian [1911] !C 221*
)%e D was not liable w%en an un$nown =erson bloc$ed a basin on %is =ro=erty and
caused a flood, w%ic% damaged a flat below7
4. Statutory authority
; statute may require a =erson or body to carry out a =articular acti'ity7 Liability under
>ylands ' Fletc%er may be e3cluded u=on t%e inter=retation of t%e statute7
5. Act of God
;n act of *od is an e'ent w%ic% Pno %uman foresig%t can =ro'ide against, and of w%ic%
%uman =rudence is not bound to recognise t%e =ossibilityP @=er Lord 8estbury, )ennent '
5arl of *lasgow @01/4A- B @?LA -- at -/--2A7
6. Default of the claimant
f t%e esca=e is t%e fault of t%e claimant t%ere will be no liability7 ;lternati'ely, t%ere may
be contributory negligence on t%e =art of t%e claimant7
2-1.3 NUISANCE

!uisance, according to t%e dictionary definition is a t%ing, =erson or act t%at causes
trouble or annoyance, in law nuisance is of two ty=es, namely =ri'ate nuisance and =ublic
nuisance7 )%ere are two main ty=es of !uisanceG +ri'ate and +ublic !uisance
2-1.3.1 Private Nuisance:
+ri'ate nuisance may be defined as an act w%ic% causes =%ysical inDury to t%e land or
interferes wit% use and enDoyment of land or an interest in land7 *enerally nuisance is a
state of affairs t%at is eit%er continuous or recurrent7 t is not e'ery slig%t annoyance t%at
is actionable nuisance7 Bany different t%ings may amount to nuisance, for e3am=le,
water, smo$e, gas, smell, fumes, noise, %eat, 'ibrations, 'egetation etc7 but w%et%er t%ey
constitute actionable =er se, nuisance, unli$e )res=ass is not actionable =er se7 )%ere
must be =roof of damage before a =laintiff can succeed in %is action7 )%ere must be a
substantial interference7
dosei-asibey, esq -/ 09/09
2-1.3.2 Public Nuisance:
+ublic nuisance also $nown as common nuisance is a nuisance w%ic% materially affects
t%e reasonable comfort and con'enience of life of a class or t%e =eo=le of a community7
*enerally, =ublic nuisance is a crime, e3am=les include carrying on an offensi'e trade,
$ee=ing a brot%el, selling unw%olesome food, t%rowing firewor$s about, or obstructing
t%e =ublic %ig%way7
t is only t%e =ublic as a w%ole w%o are affected by it7 ; =ri'ate indi'idual cannot ta$e an
action7 t is t%e ;ttorney *eneral w%o can sue for an inDunction to restrain it7 n t%e case
w%ere an indi'idual is inDured in some way w%ic% is =eculiar to %im by t%e =ublic
nuisance @one %as suffered some s=ecial loss o'er and abo'e t%e ordinary incon'enience
suffered by t%e =ublic at large, t%e indi'idual can sue in nuisance for a remedy7 For
e3am=le, w%ere one falls into a trenc% unlawfully or negligently e3=osed by contractor in
a street and suffers an inDury7
2-1.3.3 Damage caused by Nuisance
;s noted nuisance causes two forms of damage, =%ysical inDury to t%e land or =ro=erty on
t%e land, and substantial interference wit% t%e enDoyment of t%e land, t%at is discomfort7
a. Physical Injury to the Land:
f 'ibrations set u= by t%e defendant cause t%e building of t%e =laintiff to colla=se, or
fumes emitted from %is factory destroyed 'egetation of t%e =laintiff t%ere is said to be
sufficient in'asion of t%e interest of t%e =laintiff7
b. Substantial Interference with Enjoyment:
8%ereas already noted, interference of enDoyment is t%e cause of action t%e substantial
interference must be =ro'ed7
2-1.3.4 Reasonableness in Nuisance
>easonableness %ere does not mean ta$ing due to care, as in negligence, but means
w%et%er t%e act done is rational or e3=ected wit%in t%e =articular society7 )%us w%et%er
an act is reasonable or not de=ends on t%e time and place of its commission, t%e
seriousness of t%e %arm done and t%e manner of doing the act, t%at is w%et%er it was
done maliciously or in reasonable e3ercise of rig%ts and t%e effects of its commission,
t%at is w%et%er it was transitory or =ermanent, occasional or continues7 n all case
t%erefore it is a matter of fact ta$ing all circumstances into account, w%et%er a nuisance
%as been committed of not7
)%e modern attitude is t%at t%e question w%et%er a nuisance is committed is to be decided
by reference to t%e o=erations carried out in t%e lig%t of modern building tec%niques7
Andrea v Selfridge & Co Ltd 1938] Ch 1. 109
"uilding demolis%ing o=erations causing noise, dust and 'ibrations interfered wit% a
neig%bouring %otel w%ere no ste=s were ta$en by t%e defendant to minimiFe noise and
dust7 ;n actionable nuisance was created for w%ic% t%e em=loyer was liable7
?eld: a certain amount of t%e wor$ was carried on wit% reasonable care and to t%is e3tent
no damages for loss of custom was =ayable, but an assessment was made as to w%at
=ro=ortion of business loss could be attributed to t%e e3cess of noise and dust, w%ic%
alone was actionable, and damages to t%e assessed amount were =ayable7

n all t%e case w%ere t%e defendantJs act is %eld to be a nuisance because it is considered
unreasonable, malice is t%e most ob'ious7 )%at is, it is w%ere malice is detected t%at t%e
act is most often %eld to be unreasonable and t%erefore constitutes a nuisance7
n considering w%at is reasonable t%e law does not ta$e account of abnormal sensiti'ity in
ot%er =ersons or t%ings7
2-1.3.5 Nuisance Distinguished from other Torts
(a) Negligence:
@iA !uisance generally arises from intentional acts but negligence is not in'o$ed w%ere
conduct is intentional
@iiA !egligence =rotects interests in =erson and c%attels as well as in land, w%ile nuisance
is confined to interest in land7
@iiiA ?owe'er, in bot% negligence and nuisance it %as been %eld t%at foreseeability of
%arm is required
(b) Rylands v Fletcher:
!uisance seems to o'erla= wit% t%e rule in >ylands ' Fletc%er in t%at sometimes t%e
liability in nuisance is strict7 ?owe'er, differences e3ist for e3am=le, w%ile in >ylands '
Fletc%er t%e t%ing causing t%e %arm must be accumulated on or broug%t u=on %is land by
t%e defendant in nuisance t%e defendant need not bring t%e cause of t%e damage from any
w%ere e'en t%oug% in eac% of t%em t%e cause of t%e damage must esca=e onto t%e
=laintiffJs land7
(c) Trespass:
n bot% tres=ass and nuisance t%e act is or may be intentional, %owe'er, w%ereas in
tres=ass t%e %arm must be a direct consequence of t%e defendantJs act, in nuisance t%e
%arm could be and generally is an indirect result of t%e defendantJs conduct7
2-1.3.6 Parties Involved in Nuisance
!uisance is said to be a remedy a'ailable to a =erson w%o can =ro'e t%at %e %as an
interest in t%e land affected7 Nt is clear t%at to gi'e a cause of action for =ri'ate nuisance
t%e matter com=lained of must affect t%e =ro=erty of t%e =laintiff, %e alone %as a lawful
claim w%o %as suffered an in'asion of some =ro=rietary or ot%er interest in land7
6outhpart Corp v "sso Petroleum Co* 71918 1 -0R ((18
N*enerally t%e rig%t to sue rests in t%e =erson w%o is in =ossession of t%e land7 )%us, a
tenant or a licensee wit% a rig%t to =ossess t%e land is entitled to sue7 ; =erson w%o %as
merely t%e use of land wit%out eit%er t%e =ossession of it or any ot%er =ro=rietary interest
in it, suc% as a license wit%out =ossession or a lodger cannot sue7 For t%e same reason t%e
members of t%e occu=iers family cannot maintain an action in nuisance7 ; landlord w%o
is not in =ossession can sue only if %e can =ro'e t%at t%ere is li$eli%ood t%at =ermanent
inDury will be caused to t%e =ro=erty7
)%e following may ta$e action against as defendantsG

@aA )%e creator of !uisance: )%e =erson w%o creates t%e nuisance by some act on %is
=art is liable to be sued in res=ect of it w%et%er or not %e is in occu=ation of t%e
land from w%ic% it originates7
@bA )%e :ccu=ier: f t%e occu=ier of t%e land commits t%e act com=lained of %imself,
or if %e aut%oriFes it to be done, or t%e act is done by a tres=asser or an act of *od,
if %e @occu=ierA $nows or oug%t to $now of t%e e3istence of t%e nuisance and %e
does not ta$e ste=s to remo'e it %e is liable7 8%ere t%e cause of t%e nuisance is
created by a tres=asser or act of *od and t%e occu=ier fails to remo'e it, %e is said
to continue t%e nuisance7
Source of the Interference
)%oug% t%ere does not seem to be any necessity t%at nuisance s%ould emanate from land
occu=ied by t%e defendant it %as traditionally been regarded as of t%e essence of nuisance
t%at t%e interference must emanate from outside t%e =laintiffJs land7 f t%e act causing t%e
inDury or discomfort occurs on t%e =laintiff own land it can not constitute nuisance7
2-1.3.7 Remedies:
)%ere are two remedies a'ailable to t%e =laintiff in nuisance as wit% most ot%er torts,
namely, inDunction and damages7
)%e 'ictim of a nuisance may sue for inDunction to restrain t%e defendant from continuing
w%at causes t%e inDury or discomfort7 ?ere t%e courts do not ta$e muc% account of
w%et%er t%e act is reasonable or not, inDunction will be granted once it is establis%ed t%at
t%e =laintiff is in fact being incon'enienced7 n t%is connection it is often said t%at
liability is strict since t%e court does not consider t%e =robability of t%e defendant7
t is w%en damages are claimed t%at a lot of in'estigation %as to be made as to t%e
circumstances7 ?owe'er as noted earlier w%ere actual inDury to t%e =laintiffJs land occurs
t%e defendant will always be liable7 t is w%ere damages are claimed for interference wit%
=ersonal comfort or con'enience t%at t%e court must be satisfied t%at t%e defendantJs act
was unreasonable7
2-1.3.8 Ghanaian Law Position
):8! @9:L:!<A, 09L0 @9;+ 1/A +art 00
For t%e =ur=oses of t%is :rdinance t%e following are nuisances liable to be dealt wit% in
t%e manner %erein =ro'idedG
@0A any animal so $e=t as to be a nuisance or inDurious to %ealt%G
@-A any growt% of weeds, =ric$ly =ear, long grass, or wild bus% of any sortG
;nimals $e=t in =remises7
@.A t%e $ee=ing or %arbouring of any animal in any =remises in suc% a manner, or in any
=remises so constructed or so situated, as to cause or to be li$ely to cause suc% $ee=ing or
%arbouring to be a nuisance or inDurious to %ealt%G
@4A any %ouse or =art of a %ouse so o'ercrowded as to be dangerous or inDurious to t%e
%ealt% of t%e inmatesG
@LA any =ool, ditc%, gutter, ea'es-gutter, watercourse, well, =ond, tan$, =ri'y, urinal,
cess=ool, drain, or as%=it, w%ic% is, or is in suc% a state as to be, offensi'e, or inDurious or
dangerous to %ealt%, or li$ely to be soG
@/A any accumulation or de=osit of articles or t%ings w%ic% is detrimental to t%e amenities
of t%e =lace, or in res=ect of w%ic% it is certified by a %ealt% officer t%at by reason of its
c%aracter or situation it is or is li$ely to be inDurious or dangerous to %ealt%G
@2A any street, %ouse, or =remises in suc% a state as to be a nuisance or inDurious to
%ealt%G
@1A any wor$, manufactory, trade, or business, inDurious to t%e %ealt% of t%e neig%bours,
or dangerous, or so conducted as to be dangerous or inDurious to %ealt%G
@9A any well, =ond, or tan$, t%e water of w%ic% is so tainted wit% im=urities or ot%erwise
unw%olesome as to be inDurious to t%e %ealt% of =ersons using itG
@00A any rat-infested %ouse or =remises, or any rat-infested =art of any %ouse or =remises,
or any rat-%ole in any =art of any %ouse or =remisesG
@00A t%e $ee=ing of swine:
+ro'ided t%at as regards swine, t%e =ro'isions of t%is =art of t%is :rdinance as to
nuisances s%all a==ly only to t%e towns and wit%in t%e limits =rescribed by order
dosei-asibey, esq .0 09/09
2-1.4 GENERAL DEFENCES AND REMEDIES IN TORT
2-1.4.1 General Defences
)%e following general defences are a'ailable to a defendant in e'ery action for tort w%ere
t%ey are a==ro=riate7
~Volenti Non Fit Injuria (no injury can be done to a willing person)
)%is means t%at a =erson w%o %as 'oluntarily consented to t%e commission of a tort may
not sue on it7 :b'ious e3am=les occur in (=ort7 ; bo3er 'oluntarily runs t%e ris$ of
being =unc%ed on t%e nose by %is o==onent, and cannot com=lain if %e being inDured7
'all v $roo)lands !uto 9 Racing Club 719118 1 :$ 2.
?7 =aid to watc% car races organiFed by t%e defendants7 During one race defendantsJ car
s%ot o'er one of t%e railings and $illed two s=ectators7 ? sued t%e defendants for
negligence7 ?eld, 9ourt found t%at adequate =recautions %ad been ta$en by t%e =ro'ision
of railings7 )%at ty=e of damage suffered by t%ose $illed was in%erent in t%e s=ort, and t%e
=laintiff, ? must be ta$en to %a'e assented to t%e ris$ of suc% an accident7
)%e consent of t%e +laintiff must be a true consent, to bot% =%ysical and legal ris$s, must
be expressed @orally or in writingA or may be im=lied from t%e circumstances of t%e case7
Bere $nowledge of a ris$ is not usually sufficient7 )%ere must be consent to t%e ris$ for
t%e ma3im is 'olenti non fit inDuriaJ @consent is not inDuryA7
Mistake
)%e general rule is t%at mista$e, eit%er of law or of fact, is no defence in tort7 ;s to
mista$e of law, t%e ma3im Nignorantia Duris neminem e3cusatAO or Nignorantia legis non
e3cusatO @ignorance of t%e law is not e3cuseA a==lies7 )o allow a defendant to say t%at %e
mistoo$, or did not $now t%ere was a =articular law, would bring t%e w%ole of t%e
administration of Dustice to a standstill7 Bany defendants would a'ail t%emsel'es of suc%
a loo=%ole7
;s to mista$e of fact, t%ere are e3ce=tions to t%e rule t%at it is no defence7 For e3am=le,
in actions suc% as malicious =rosecution or false im=risonment, a reasonable mista$e may
afford a defence7 )%us w%ere a =olice constable is not liable7 )%e test is: %ad t%e
constable w%o made t%e mista$e reasonable ground for %is beliefU
Necessaries
n some cases damage done intentionally may be e3cused if done from necessity7 )%e
defence is a rare one and is a'ailable only w%en t%e defendant was com=elled by t%e
circumstance to =re'ent a greater e'il7 !ecessaries includes food, water, air and s%elter
Leigh v Hladsto"e *1.0.+. ; suffragette @ =erson wit% rig%t or =ri'ilege to 'ote in an
electionA in =rison went on %unger stri$e7 (%e was forcibly fed by t%e wadens7 )%e
suffragette later sued t%e =rison staff for assault and battery7 ?eld, t%e defence of
necessity was good7 ?ad t%e =rison staff not fed t%e =laintiff s%e would %a'e died7
Inevitable Accident
)%is means some %a==ening w%ic% cannot be a'oided by t%e ta$ing of ordinary
=recautions7 9ta"ley v 6o#ell *1/.1+ +, a member of a s%ooting =arty, fired a s%otgun and
a =ellet %it a tree and ricoc%eted into t%e eye of a beater, (, w%o was wor$ing wit% t%e
s%ooting =arty7 ?5LD: t%at + was not liable to ( for tres=assG (7 %ad failed to establis%
t%at + %ad been negligent7
Statutory Authority:
t is a defence to an action in tort to s%ow t%at a statute @or subordinate legislationA
aut%ourised t%e alleged wrong7 )%e aut%ority gi'en by statute may be eit%er @iA absolute
or @iiA conditional7 ;bsolute aut%ority allows t%e act e'en t%oug%, it may cause %arm to
ot%er =ersonsG conditional aut%ority, on ot%er %and, merely allows t%e act =ro'ided t%at it
causes no %arm to ot%ers7 8%ere t%e aut%ority is im=erati'e it is absoluteG w%ere t%e
aut%ority is =ermissi'e, it is conditional only7
+etropolitan 5istrict !s&lum $oard v 'ill 713318
A hospital authority *appella"ts+ #ere empo#ered by statute to eret a smallpo1 hospital.
3he hospital #as ereted i" a reside"tial distrit #here it aused da"ger of i"fetio" to
reside"ts "ear by.
20LDC that the eretio" of the hospital #as a "uisa"e. 3he statute gave the hospital
authority ge"eral po#er to eret suh hospitals but did "ot sa"tio" the eretio" i"
plaes #here this #ould o"stitute da"ger. A" i"$u"tio"s #as gra"ted. 3he statutory
authority #as o"ditio"al.
Self-Defence
; =erson may use reasonable force to defend %imself @or any ot%er =ersonA against
unlawful force7 ; defendant will not be liable =ro'ided t%at t%e amount of force used is
reasonable and =ro=ortionate to t%e %arm t%reatened7 t a==ears t%at a =erson may also
use reasonable force in t%e defect of %is goods7
Contributory Negligence
9ontributory negligence is a defence bot% to an action in negligence and breac% of
statutory duty7 n general, %owe'er, t%e carelessness of em=loyees as claimants is treated
more leniently t%an t%e negligence of em=loyers, e'en w%ere liability rests u=on t%e
'icarious res=onsibility of t%e em=loyer for t%e negligence of anot%er em=loyee7 (ee:
6tavele& Iron ; Chemical Co v <ones [192] 1 !ll "R 4.1
)%e =laintiff, w%o was em=loyed by t%e defendant com=any as a core-ma$er, was at wor$
in t%e com=anyPs foundry on t%e lifting of a load in an iron =an by an o'er%ead crane7 t
was t%e =laintiffPs duty to assist t%e crane-dri'er to lower t%e %oo$ as nearly as =ossible
o'er t%e centre of t%e =an, but, as t%e =laintiff was standing at t%e side of t%e =an, %is
dosei-asibey, esq .- 09/09
centering could only be a==ro3imate7 )%e crane-dri'er, w%o was also em=loyed by t%e
defendant com=any, s%ould %a'e =aused, but did not =ause, before beginning t%e lift to
see t%at t%e load was centred and %anging 'ertically7 )%e load swung out and t%e =laintiff
was inDured7 )%e =laintiff claimed damages for negligence against t%e defendant
com=any7 )%e com=any denied negligence and =leaded contributory negligence on t%e
=art of t%e =laintiff7
t was %eld by t%e ?ouse of Lords t%at on t%e facts @aA t%e crane was negligently %andled
by t%e crane-dri'er, and @bA contributory negligence was not =ro'ed against t%e =laintiff,
because it was not s%own t%at %is conduct fell below t%e standard required from a
reasonably careful wor$man assisting in suc% an o=erationG and, t%erefore, t%e =laintiff
was entitled to damages in full against t%e defendant com=any7
n *%ana t%e defence of contributory negligence was re'ised by (7 07 of t%e 9i'il
Liability ;ct 09/., ;ct 02/7 &nder t%e section in case of contributory negligence on t%e
=art of an em=loyee, t%e liability of t%e em=loyee is to be reduced by t%e =ro=ortion of
t%e negligence or contribution on t%e =art of t%e inDured em=loyee7
2-1.4.2 General Remedies
1 Injunction
)%ere may be =ro%ibitory, or restricti'e or mandatory inDunction w%en it requires t%e
=erformance of a =ositi'e act suc% as t%e destruction of a building7 f no wrong %as been
committed, but is merely t%reatened, a &uia timet inDunction may be as$ed for, but in
t%ese circumstances an inDunction will be granted only w%ere t%ere is e3treme =robability
of irre=arable inDury7 ;n inDunction is of =articular a==lication in question of tres=ass or
restraint of nuisance committed by building o=erations7
2 Damages
)%e inDunction will not be granted w%ere damages would be an adequate remedyG it is
discretionary, but it will not be wit%%eld merely because t%e loss suffered is small or
because com=liance would be incon'enient or e3=ensi'e eg w%ere t%e outfall from larg
sewers is =olluting a ri'er7

Damages may also be =referable to inDunction w%ere a merely equitable rig%t %as been
infringed eg breac% of restricti'e co'enant against building on certain lands, t%e co'enant
being binding only in equity, not at law7

Self-Assessment 2 1
07 Discuss t%e 'arious statutory duties affecting construction acti'ities7
-7 53=lain t%e doctrine of >ylands ' Fletc%er and its a==lication to construction
acti'ities7
dosei-asibey, esq .. 09/09
.7 8%at are t%e necessary requirements for t%e a==lication of doctrine of >ylands '
Fletc%erU
47 Distinguis% between +ri'ate !uisance and +ublic !uisance
L7 (tate and e3=lain t%e remedies a'ailable in an action for tort
Learning Track Activities
Summary
Unit Summary
07 )%e basis of a contract is agreement between =arties
-7 )%e constituent =arts of a contract are agreement, consideration, ca=acity and
intention to create legal relations
.7 )%e underlying =rinci=les of a contract are t%at indi'iduals s%ould be t%e best
Dudges of t%eir own interest to ensure genuiness of t%e bargain7
Key terms
07 )res=ass, Duty of care, !egligence, :ccu=iers Liability
-7 (tatutory Duty, >yland ' Fletc%er, !uisance
Review Question
07 8%at is tortU Discuss t%e conce=t of duty of care
-7 Discuss t%e =rinci=les of nuisance and distinguis% it from ot%er forms of tort7
.7 (tate t%e conditions t%at t%e 9ourt would loo$ out for before t%e Doctrine of >es
=sa Loquitor can be u=%eld7
Unit assessment 1
1. +iscuss the emplo#ers, common la& duties to his emplo#ees in
construction contracts
2. "tate one of the re-uirements of a claimant in the application of the
doctrine of .#lands $ /letcher 011213 4. 3 54336.
.7 Biss <aa ;sirifua% of Ladies 9are nternational %as boug%t a land adDacent to
;%insan *ate of t%e #!&() 9am=us7 (%e %as obser'ed wit% astonis%ment t%at
;"L)< ?ostel n'estments, a de'elo=er %as commenced a 00-storey %ostel
bloc$ on %er =ro=erty7 Biss ;sirifua% %as decided to ta$e a court action against
t%e de'elo=er7
8%at remedies are a'ailable to Biss ;sirifua% if s%e wins t%is caseU
Unit 2
FORMATION OF CONTRACT
Introduction
)%is unit =ro'ides t%e essential basic legal elements for t%e Formation of 9ontract7 )%e
$ey elements of 9ontract %a'e been %ig%lig%ted to include, :ffer and ;cce=tance to
foster an a==reciation of t%e conce=ts and =rinci=les go'erning t%e subDect7
Learning objectives V
/7 01plai" t%e basic elements of a contract
27 Defi"e and desribe t%e underlining =rinci=les of a contract
17 Ide"tify t%e o=eration of t%e elements in a==lication to contract
formation

Unit outline
Unit 2 Formaion of Contract
Session 12: Elements of valid Contract
1 2.1: Nature of Contract
12.2: Agreement Offer and Acceptance
Session 2 2: Other Elements of Contract
2 2.1: Consensus ad idem, Consideration and Intention to create Legal Relation
2 2.2: Consent, Capacity and Legality of Object
2- 2.3: Performance and Certainty of Terms of Contract
dosei-asibey, esq .L 09/09

Session 1-2 Elements of Contract
1-2.1 Nature of Contract
1-2.1.1 Definition of Contract
8illiam ?anson %as defined contract as a legally binding agreement made between two
or more =arties by w%ic% rig%ts are acquired by one or more to act or forbear @omissions,
not doing somet%ingA on t%e =art of ot%er@sA7
n s%ort it is an agreement between two or more =arties w%ic% is intended to %a'e legal
consequences7 )%us, a contract is a legally binding agreement7
+olloc$, in %is boo$ +rinci=les of 9ontract @012/A also defines contract as a statement or
set of =romises w%ic% t%e law will enforce7
)%e $ey issues of w%at a contract is may be loo$ed at asG
07 8%et%er or not t%ere e3ist a =romise or a statement
-7 8%et%er or not t%ere are two or more =arties
.7 8%et%er or not =romise or statement is enforceable in t%e court of com=etent
Durisdiction and
47 8%et%er or not rig%ts to acts or forbearance %a'e been acquired
1-2.1. 2 Principles of Law of Contract

)%e =rinci=les su==orting t%e Law of 9ontract includeG
(anctity of 9ontracts
+arties are free to determine t%e terms of t%eir contract7 )%e contractual obligations
'oluntarily underta$en under a contract are t%erefore sacred and s%ould be obser'ed by
all =arties as suc%7
Printing and Numerical Registering Co. v Sampson 1875] LR 19 Eg 462
?eld: 9ontract w%en entered into freely and w%en trading s%all be %eld sacred and s%all
be enforced by courts of Dustice7
Freedom of 9ontracts
+arties are at liberty to enter into any $ind of agreement t%at t%ey so desire to unless t%ey
do not %a'e ca=acity to underta$e t%e transaction, t%ere is no legal basis of t%e agreement
or t%e =erformance of it is im=ossible7 ; =erson may not be under com=ulsion to enter
into a contract
9ontracting +arty beware
dosei-asibey, esq ./ 09/09
)%e =rinci=le of caveat emptor @let t%e buyer bewareA a==lies to contracting =arty7 ;
contracting =arty is to ensure t%at a due diligence is underta$en, warranties and
underta$ings are ta$en were necessary, and must see$ =rofessional ad'ice w%ere
necessary7
>easonableness
)%e court considers t%e reasonable manJs test in considering w%at is reasonable in
contracts7 )%e reasonable man is t%e =erson ordinary layman or on tec%nical issues, t%e
ordinary tec%nical =erson reasoning7
ntolerance of Fraud
*enerally, law does not tolerate fraud, =raud omnia vitiate# @fraud 'itiates e'eryt%ingA
Fraud in t%e law of contract is actionable7
+rotection of nnocent )%ird +arty +urc%aser
)%e law of contract =rotects t%e t%ird =arty w%o wit%out fraud or deficiency obtains a
contractual benefit7
1-2.1.3 Sources of Law of Contract in Ghana
)%e modern law of contract de'elo=ed from w%at was $nown as t%e Tlaw of merc%antT,
ie7 t%e customs and rules establis%ed o'er t%e centuries w%ic% were obser'ed by t%e early
traders7
n 'iew of e3=ansion of t%e trading acti'ities in t%e latter =art of t%e 01t% century and in
t%e 09t% centuries, t%e rules of contract were de'elo=ed7
9ontract law in *%ana com=rises t%e 5nglis% law of contract w%ic% includes t%e
common law =rinci=les of contract, doctrines of equity and 5nglis% statutes of
general a==lication @i7e7 5nglis% statutes in force before Kuly -4,0124A and all
current legislation affecting contracts in *%ana suc% asG
9:!)>;9)( ;9) 09/0 @;9) -LA,
B:>)*;*5( D59>55092- @!>9D 9/A,
9:!E5<;!9!* D59>55, 092. @!>9D -9-A,
"LL( :F 5M9?;!*5 ;9), 09/0 @;9) L.A,
?>5 +&>9?;(5 ;9), 0924 @!>9D -9-A,
(;L5( :F *::D( ;9), 09/- @;9) 0.2A,
LL)5>;)5 +>:)59):! :>D!;!95(, 9;+ -/- @09LA >5EG
;&9):!( (;L5( L;8 +!D9 L;8 -.0,
!(&>;!95 L;8, 0919 @+!D9 L;8 --2A etc
1-2.1.4 Classification and Types of Contract
0--7.70 9lassification
9ontract may be classified intoG
07 Deeds or s=ecialty 9ontracts and (im=le 9ontracts
Deed 9ontract is a contract under seal7 t must be in writing
(im=le 9ontracts
)%is includes oral contracts and contracts w%ic% require some writing7
-7 m=lied 9ontracts and 9ontracts of >ecord
m=lied 9ontract arises from t%e assumed intentions of t%e =arties
9ontracts of >ecord arises from obligation im=osed by a 9ourt of record
.7 "ilateral 9ontract and &nilateral 9ontract
"ilateral 9ontract is a contract in w%ic% t%e =arties must fulfill reci=rocal
obligations
&nilateral 9ontract H 9ontract arising w%ere an offer is made in t%e form of a
=romise to =ay in return for t%e =erformance of an act, so t%at t%e =erformance of
t%e act is ta$en to im=ly an assent eg H +olice ad'ertising for a sus=ect for a =rice7
(Carlill v Carbolic Smoke Ball Co 1893] 1 QB 256)
1-2.1.5 Types of Contract
)y=es of 9ontract are basically, :ral and 8ritten 9ontracts
(ection 00 of 9ontract ;ct 09/0, ;ct -L =ro'ides t%at, unless legislation requires, a
contract need not be written7 t may be oral7
;9ub$et to the provisio"s of a"y e"atme"t, a"d to the provisio"s of this At, "o o"trat
#hether made before or after the omme"eme"t of this At, shall be void or
u"e"foreable by reaso" o"ly that it is "ot i" #riti"g or that there is "o memora"dum or
"ote thereof i" #riti"g.<
Hammond v Ainooson 1974] 1GLR176
3here #as a" oral o"trat for the 6lai"tiff to supervise repair #orks of the defe"da"t%s
boat. 3he ourt upheld the oral o"trat.
;lt%oug% contract may be oral it is ad'isable for it to be written because writing
facilitates =roof of contractual terms7 n t%e e'ent of a dis=ute if t%e alleged contract is
oral t%e =arty relying on it %as to
=roof its e3istence ie t%ere was a contract and
=roof its content or terms of contract
1-2.1.6 Parol Evidence Rule
)%e rule states t%at, barring fraud, =arties to a contract cannot lead oral e'idence to
contradicts, 'aries, add to or subtract from terms of t%eir written contract7
-ilson v $robbe& [19(4] 1,0R 2.
6lai"tiff, a retailer, sued the defe"da"t to reover the value of goods he redited the
defe"da"t. 3he 6lai"tiff te"dered as a" e1hibit a" i"voie sig"ed by the defe"da"t. 3he
defe"da"t, a literate, laimed that he #as a guara"tor for someo"e else a"d "ot a
purhaser i" his o#" right.
)%e 9ourt reDected t%e defendantJs contentions %olding t%at oral e'idence could not be
led to contradict t%e terms of a written document7 ;==eal was dismissed7
:ral e'idence is %owe'er, admissible to e3=lain t%e circumstances and terms of a
document7 t may also e3=lain unclear and ambiguous statements in t%e contractual
document7 )%e court considers t%e total e'idence Horal and written documents before
Dudgment7
53ce=tions to +arol 5'idence >ule
9ontract induced by fraud
8ritten contract tainted wit% illegality
8ritten contract binding strangers
Batters related but not directly and immediately co'ered by t%e written contract
:t%er e3ce=tions in 5'idence ;ct, 092L !>9D .- - 6urpose of e1pla"atio" or
suppleme"tary to fi"al #ritte" doume"t shall "ot admit a"y subse&ue"t
i"te"tio"s or previous agreeme"ts eve" if their effets are to o"tradit the fi"al
doume"t.
1.2.2 ELEMENTS OF VALID CONTRACT
)%e general requirements for t%e formation of a 'alid contract include t%e followingG
07 :ffer
-7 &nqualified acce=tance
.7 9onsensus ad idem
47 Ealuable 9onsideration
L7 ntention to create legal relations
/7 *enuineness of consent
27 9ontractual ca=acity of =arties
17 Legality of obDect
97 +ossibility of =erformance
007 9ertainty of terms
1-2.2.1 Offer
Definition
;n offer is a definite =romise to be bound or e3=ression of willingness to contract on
s=ecified terms and be made to a =articular =erson or class of =ersons or =ublic at large7
; =erson ma$ing t%e offer/=romise/statement is offeror and t%e =erson to w%om it is
directed is t%e offeree7
>/'C 0td v !nt%i [2..9] 6C,0R 11( per 5r 5ate?$ah <6C4
N"asically, an offer is an indication in words or by conduct by an offeror t%at %e or s%e is
=re=ared to be bound by a contract in t%e terms e3=ressed in t%e offer,WWWW7
;ccordingly, t%e offer %as to be definite and final and must not lea'e significant terms
o=en for furt%er negotiation7 ;ccordingly, t%e offer %as to be definite and final and must
not lea'e significant terms o=en for furt%er negotiation7J
)%e c%aracteristic of an offer lies in its finality and definiteness7 )%usG
- ;n offer must be lear and u"ambiguous
- ;n offer may be made to a speifiIpartiular perso" or group of or to the
#orld at large
- ;n offer is a statement/=romise or underta$ing w%ic% t%e perso" maki"g it
is prepared to e"ter i"to a legal relatio"ship alo"g the terms stated,
- ;n offer must be firm a"d omplete proposal to anot%er lea'ing %im or
%er to acce=t or reDect7
- ;n offer must be effetive wit%out being a re=ly to a request for
information or an ad'ertisement or in'itation to treat7
Statements/Promise not binding or not constituting an offer
a* Intention to ma)e an o==er@
;n intention to ma$e an offer is also described as in'itation to treat and
9%itty on 9ontracts, -1
t%
5dition 0999 at =age 9. states t%atG
;A ommu"iatio" by #hih a party is i"vited to make a" offer is ommo"ly alled a"
i"vitatio" to treat. It is disti"guishable from a" offer primarily o" the grou"d that it is "ot
made #ith the i"te"tio" that it is to beome bi"di"g as soo" as the perso" to #hom it is
addressed simply ommu"iates his asse"t to the terms.%%
n'itiation to treat or intention to ma$e an offer includes t%e followingG
- 53%ibition or dis=lay of goods for sale, Fisher v Bell
- ;n ad'ertisement t%at an auction sale is to be %eld
- n'itation to tender for t%e construction of building or engineering
wor$s
- t%e circulation of a =rice list
- in'itation to bid or submit a =ro=osal
>/'C 0td v !nt%i [2..9] 6C,0R 11(#
3he plai"tiff)respo"de"t #as formerly i" the employme"t of the defe"da"tJappella"t
ompa"y as head of its legal departme"t. 3he ompa"y #rote to her #hilst i" its
employme"t, the proposal of the ompa"y to sell the house bei"g oupied by the
ma"ageme"t staff at a stated prie a"d period for payme"t of amou"t.
3he plai"tiff respo"ded by a letter aepti"g the offer to purhase the said house at the
stated prie a"d also re&uested for details of the ba"k aou"t. 3here #as "o further
orrespo"de"e u"til #he" the plai"tiff had left the employme"t of the defe"da"t #he"
the defe"da"t #rote to #ithdra# the offer for sale of the said property to e"able the
ompa"y house its ma"ageme"t staff. 3he ompa"y subse&ue"tly re&uested the plai"tiff
to vaate the house follo#i"g her resig"atio" from the employme"t of the defe"da"t
ompa"y. 3he plai"tiff subse&ue"tly sued i" the 2igh 8ourt laimi"g that the e1ha"ge
of letters i"itially had resulted i" a" agreeme"t a"d sought for speifi performa"e of
the agreeme"t amo"g others.
3he defe"da"t ho#ever averred that its first letter #as "ot a" offer but o"ly a" i"vitatio"
to staff to make offers to purhase the premises.
3he trial ourt held that the defe"da"t%s letter #as a mere i"vitatio" to treat. 3he 8ourt
of Appeal ho#ever reversed the trial ourt deisio" holdi"g that the letter o"stituted a"
offer a"d therefore ordered speifi performa"e of the o"trat. 3he defe"da"t therefore
appealed at the 9upreme 8ourt.
2eld, u"a"imously dismissi"g the appeal a"d allo#i"g for payme"t of i"terest
GGGA" i"vitatio" to treat is to be disti"guished from a" offer o" the basis of proposal%s
lak of a" esse"tial harateristi of a" offer, "amely, its fi"ality #hih gives a apaity
to the offeree to tra"sform the offer i"to a o"trat by the mere ommu"iatio" of his or
her asse"t to its terms.%%
Carlill v Carbolic Smoke Ball Co. Ltd (1893)
3he payme"t of 1000pou"ds #hih had bee" deposited at a Ka"k to demo"strate a good
faith #as a promise by a Defe"da"t 8ompa"y to a"yo"e #ho o"trated i"flue"!a after
usi"g the smoke ball as direted i" a" advertiseme"t. 3he plai"tiff bought the smoke ball
a"d used it as advertised a"d yet o"trated i"flue"!a. 3he 8ompa"y said it #as a mere
puff a"d the plai"tiff sued for the 1000pou"ds.
'eld4 3he good faith #hih #as demo"strated by the ompa"y by depositi"g the mo"ey
at Ka"k #as the ompa"ies #illi"g"ess to pay a"yo"e #ho aepts the offer a"d #as "ot
satisfied. 3he "e#s paper advertiseme"t a""ot be o"sidered a mere puff or i"te"tio" to
make a" offer but a" offer to the #hole #orld #hih #as aepted by the plai"tiff, ,rs
8arlill.
-illiam 0ace& 0td 7'ounslo%8 v 5anAs [19(] 1 -0R 912
A o"trator #as led to believe he #ould get the #ork. 3he 8o"trator submitted a
te"der #hih #as "ot aepted but, believi"g that the o"trat #ould be give" to him, he
prepared further estimates, shedules et. #hih the employer used for obtai"i"g a #ar
damage laim. No o"trat #as plaed #ith the o"trator.
'eld@ the 8o"trator #as e"titled to a reaso"able sum for the #ork do"e subse&ue"t to
the te"der. :here a te"derer at the employer%s re&uest does #ork outside the "ormal
sope of te"deri"g eg. desig"s there may be a" implied promise to pay a reaso"able sum
for suh #ork
)%e 9ontractorJs tender constitutes an offer w%ic% t%e client may acce=t or not7 (imilarly
an in'itation for t%e buyer to ma$e an offer to buy, t%e in'itation is not an offer7
)%is is a request made by a =arty to anot%er to ma$e a =ro=osal for consideration7 )%us,
w%ere a client identifies some wor$s to be e3ecuted and as$ =articular contractors to
ma$e a =ro=osal to be considered by t%e client, it does not constitute an offer but an
in'itation to ma$e an offer7
,ibson v +anchester Cit& Council [19(9] 1 !ll "R 9(2
Advertiseme"t about autio" sales a"d te"derers are i"te"tio"s to treat or i"te"tio" to
make a" offer yet to be o"sidered by the employer or lie"ts for its suitability
b. Request for information.
)%is is an inquiry to t%e offeree to su==ly information7 ; tenderer may request for
information in t%e cause of =re=aration for a bid/tender, t%e request does not constitute an
offer7
5ormins Fisheries 0td v $remen9Begesac)e Fischerei [19(1] 2 ,0R 49.
n a res=onse to t%e defendantJs written offer to t%e =laintiff, t%e =laintiff requested a
t%ree mont%s moratorium7
'eld: request was not a 9ounter offer but a request for information7
c. Expression of good intentions
)%is is a statement to anot%er signifying t%at declarant is serious about t%e
)ransaction7
C)ai v Ccanse& [1992?91] 1 ,$0R 1.4( C!
?eld: an intention to grant a lease was not t%e same as an agreement for a lease,
notwit%standing ta$ing =ossession, t%e ma$ing of ad'ance =ayments and understanding
some reno'ation7 ;fter all, t%ere %ad been no agreement between t%e =arties as to rent to
be =aid, duration and commencement7 t is rat%er an e3=ression of good intentions to
grant a lease and not agreement for lease7
Variation of Terms of Offer or Counter Offer
8%ere a term in an offer is wai'ed by t%e offeree, t%e offereeJs document results in
reDection of t%e offerorJs =ro=osal or t%e offereeJs document now forms basis for a fres%
contract or agreement not one initiated by t%e offeror7 )%is new offer is best described as
a 9ounter :ffer to t%e original offer7
>/'C 0td v !nt%i [2..9] 6C,0R 11(#
;If a ommu"iatio" duri"g "egotiatio"s is "ot the fi"al e1pressio" of a" alleged
offeror%s #illi"g"ess to be bou"d, it may be i"terpreted as a" i"vitatio" to the other party
to use it as a basis for formulati"g a proposal ema"ati"g from him or her that is defi"ite
e"ough to &ualify as a" offer.%%
5eegbe v >siah ; !nother [1934?2]1 ,0R 4
3he plai"tiff te"a"t i" the 1
st
defe"da"ts house laims havi"g orally bee" offered to
purhase the house #hih he had #ritte" to aept but asked for redutio" i" prie. 2e
later reeived a letter from the 2
"d
Defe"da"ts la#yer givi"g his "otie to vaate the
house. 2igh 8ourt dismissed this atio".
8ourt of Appeal held i"ter alia that aepta"e must be absolute a"d u"&ualified of all
terms of the offer a"d therefore re&uest for redutio" i" prie re"ders letter a ou"ter
offer.
; qualified acce=tance amounts to reDection7 e7g >equest by tenderer to c%ange t%e "id
(ecurity =eriod or non submission of required information intends to c%ange or 'ary t%e
terms of an offer7
-ithdra%al o= C==er
(ection 1@0A of t%e 9ontracts ;ct 09/0, ;ct -L H N; =romise to $ee= an offer o=en for
acce=tance for a s=ecified time s%all not be in'alid as a 9ontract by reason only of t%e
absence of any consideration t%ereof7
- &ntil t%e offeree acce=ts t%e offer, t%e offeror may wit%draw %is offer at
any time7 )%e fall of %ammer of an auctioneer s%ows t%e acce=tance of an
offer until t%en any offer made may be wit%drawn7
- t%e wit%drawal must be communicated to t%e offeror
5omins Fisheries 0td* B $remen Begesa)er Fischerei [19(1] 2 ,0R 49.
2eldC 3he offeror is at liberty to #ithdra# his offer at a"ytime #ithout obligatio" e1ept
#here the offer has bee" aepted or the offeree has paid the offeror to keep it ope".
;bban K %eld t%at t%e =ur=orted wit%drawal was in'alid coming after acce=tance t%e
=re'ious day7
- )%e offer cannot be wit%drawn w%en t%e offeree %as initiated an act w%ic% forms
=art of t%e =rocess of acce=tance @=art =erforman=ceA7
"rringhton v "rringhton ; -oods 71928
A father bought a house for his daughter a"d the so")i")la# to live i" upo" marriage.
3he father asked the you"g ouple to pay the remai"i"g mortgage i"stalme"t for him to
give them the house. 3he ouple duly omme"ed payme"t of the mortgage i"stalme"t
but the father sought to revoke the offer.
2eldB 3he father ould "ot revoke the offer o"e the ouple had omme"ed performa"e
as speified.
; 9ontractor may wit%draw %is bid at any time before t%e em=loyerJs letter of acce=tance
is recei'ed by t%e 9ontractor7
?owe'er, t%ere is usually sum of money t%at a 9ontractor may forfeit w%en suc%
wit%drawal is made %ence tender security guarantee required by t%e em=loyer as one of
t%e requirements for eligibility to ma$e an offer7
- 8it%drawal of offer t%roug% =ost
8it%drawal of an offer by =ost is com=lete u=on recei=t by offeree7

Termination of offer
;n offer may be terminated w%ere
o )%ere is a la=se of time
nstructions to tenderer included in t%e tender documents always must s=ecify time t%at
t%e offer of t%e 9ontractor s%all be 'alid7
o )%e offeree fails to satisfy =re offer conditions suc% as, failure to su==ly
required information
o Deat% of offeror
o >eDection of offer by t%e offeree
Standing Offer:
8%ere t%e ad'ertisement or in'itation to tender states t%at t%e 9om=any may require
some wor$ to be done if and w%en demanded7 )%e tender t%at 9ontractor made is called a
standing offer7 t may be re'o$ed at any time =ro'ided it %as not been acce=ted in legal
sense7 )%e tender is acce=ted in legal sense as soon as a requisition for a definite wor$ is
made eac% requisition by t%e offeree is an indi'idual act of acce=tance w%ic% creates a
se=arate contract7
)%e ;cce=tance of (tanding :ffer or tender does not con'ert t%e offer into binding
contract7
,reat >orthern Rl& Co* v -itham [13(1] 0R9
Defe"da"t refused to supply goods #ritte" a shedule i" a o"trat #hih speified that
ompa"y may order from time to time.
2eldC Kreah of o"trat for te"der #as sta"di"g offer to be o"verted to servies.
1.2.2 ACCEPTANCE
;cce=tance is t%e assent of all t%e terms of t%e offer7
NTHC Ltd v Antwi 2009] SCGLR 117 125 per Dr Date-Bah 1SC;
NWWW7t%e mere acce=tance of an offer is sufficient to turn t%e offer into a contract,
if t%ere is consideration for it, toget%er wit% an intention to create legal relations7JJ
Essentials of Acceptance
07 ;cce=tance must in all cases be unqualified H
5eegbe v >siah ; !nother [1934?2]1 ,0R 4
3he plai"tiff te"a"t i" the 1
st
defe"da"ts house laims havi"g orally bee" offered to
purhase the house #hih he had #ritte" to aept but asked for redutio" i" prie. 2e
later reeived a letter from the 2
"d
Defe"da"ts la#yer givi"g his "otie to vaate the
house.
2igh 8ourt dismissed this atio".
8ourt of Appeal held i"ter alia that aepta"e must be absolute a"d u"&ualified of all
terms of the offer a"d therefore re&uest for redutio" i" prie re"ders letter a ou"ter
offer.
A &ualified aepta"e amou"ts to re$etio".
/inn v 'o==man [13(1]
A" offer to sell 1200 to"s of iro" #as met #ith a reply aski"g for /00 to"s.
2eldC this amou"ted to a &ualifiatio" of a" offer a"d does"ot o"stitute a" aepta"e.
No o"trat ame i"to bei"g.
)%e unqualified acce=tance meansG
aA ;cce=tance must be =recise
bA nsertion of a new term into t%e agreement by t%e acce=tance really amounts to
a counter offer rat%er t%an acce=tance
cA 8%ere words suc% as NsubDect toO are added t%e effect is to =re'ent t%e
agreement from becoming binding until w%at NsubDect toO refers is made
com=lete
dA ;ddition of meaningless terms suc% as NsubDect to t%e usual terms of
acce=tanceO @w%ere t%ere are no suc% usual termsA will not =re'ent a legal
obDection arising immediately7
-7 (ilence in 9ontract does not always amount to acce=tance
;n offeree may decide wit%in %imself t%at %e %as acce=ted t%e offer but t%is may not
constitute an acce=tance7 For acce=tance to be 'alid it must be communicated to t%e
offeror in an e3=ress or im=lied terms in a manner t%at t%e offeror understands7 t must be
demonstrated in some acts suc% as s=o$en or written7
n +owell ' Lee @0901A it was %eld t%at absence of communication in'alidates t%e
contract7
.7 ;cce=tance of a 9ontract may %a'e a retroacti'e effect if it is s%own t%at t%is was
t%e intention of t%e =arties7
/rollope ; Colls v !tomic Po%er Construction [1921] 1 -0R 111
A o"trator #as i"struted to proeed a"d start #ork #hile the o"trat for the #orks
#as still u"der "egotiatio"
'eld@ parties had i"te"ded suh #orks to be gover"ed by the o"trat as eve"tually made
of a" aepta"e #ill "ot be "eessary
47 ;cce=tance must normally be =ro=erly communicated to t%e offeror7 53ce=tions
ncludeG
a7 8%ere acce=tance is gi'en to an agent of t%e =arty @t%e =ost office, messenger
courier etc7 acts as agent of offeror if %e elects t%is mode of res=onseA7
b7 8%ere t%e offeror %as intimated t%at communication of contracts by t%e
subsequent acts of t%e com=any7
/rollope ; Colls v !tomic Po%er Construction [1921] 1 -0R 111
c7 w%ere t%e agreement %as been concluded t%roug% t%e =ost eg7 w%ere t%e
letter is lost in t%e =ost
L7 :fferee can re'o$e %is acce=tance before t%e offeror actually recei'es t%e earlier
9ommunication of acce=tance - Dormis
Valid Acceptance
t is t%at:
07 :fferee must s%ow t%at %e $nows of t%e offer, intend to acce=t it, actually acce=ts
it and communicated t%e acce=tance to t%e offeror or offerorJs agent
)%is means t%atG
- 8%ere t%ere is no offer t%ere could not be effecti'e communication to t%e offeree
and t%e offeree could not subsequently ma$e an acce=tance7
- )%e offeror or %is agent must actually recei'e t%e acce=tance, t%e offeror is not
bound to use t%e same mode of communication if not e3=ressly stated7
5ormins Fisheries 0td* B $remen Begesa)er Fischerei [19(1] 2 ,0R 49.
Effect of Acceptance of Tenders
8%en com=any in'ites tenders for e3ecution of some wor$s, t%e contractor w%o =uts in a
tender intimating t%at %e is =re=ared to do t%e wor$ o'er a =eriod of time at a certain
=rice w%en t%e client acce=ts t%e tender, t%ere is a binding contract7
Acceptance by Post
;cce=tance is com=lete u=on =osting7 )%is is t%e +ostal >uleT7 )%e word N=ostedO
connotes =utting into t%e control of t%e +ost :ffice, or %is agent, em=loyees aut%oriFed to
recei'e letters7 ;n e-mail system may be described as =osting7
+osting must be reasonable to do so eg7 +osting res=onses to e-mail messages may not be
reasonable unless access to t%e internet is not a'ailable7
; =osted acce=tance is effecti'e e'en if it was ne'er recei'ed as a result of accident
t%roug% t%e =ost7
Self-Assessment 1 2
07 N(anctity of 9ontractsO is one of t%e =rinci=les of contract7 53=lain
-7 Distinguis% "ilateral contract from unilateral contract7
.7 8%at is N+arol 5'idence >uleO U
47 (tate t%e =rinci=les in contract establis%ed by t%e case of Deegbe ' !sia% and
;not%er Q0914-1/R 0 *L> L4L
L7 ;t w%at stage can an offer be wit%drawnU
(tate circumstances under w%ic% an offer could be terminated7
/7 8%at constitute a 'alid acce=tance of an offer in a contract
Session 2-2 OTHER ELEMENTS OF CONTRACT
2-2.1 CONSENSUS AD IDEM, CONSIDERATION AND INTENTION TO
CREATE LEGAL RELATIONS
2-2.1.1 Consensus ad idem (meeting of the minds)
w%ere t%e =arties agree on contractual terms t%ere is t%e meeting of t%e minds or
consensus ad idem7
0A 8%ere t%ere is absent of consensus t%ere is no contract
;nin K; H Addition v A/S Norway Cement Expert Ltd 1973] GLR 151
:llenu K H SA Turgenia & Bros v Lamptey
N)%e minds of t%e =arties were not ad idem Wt%ere is t%erefore no binding contract
between t%e =arties7JJ
-A )%ere must be certainty as to t%e terms offered and acce=ted7 ?owe'er t%e courts
loo$ to t%e substance of t%e agreement not t%e firm and will not =ermit mere
tec%nicality or formalities to destroy a contract7 )%e court %as a duty to =rotect
t%e substance of t%e =artiesJ agreement and not to destroy it7 British Steel Corp
v Cleveland Bridge & Engineering Co. Ltd. 1984] 1 A11 ER 504 H Letter of
t%e intent @9%es%ire & FiforeA
.A +arties to a contract must agree on all material terms7 8%ere t%ere is absence of
certainty on material terms, t%ere is no contract7
Asare v Antwi 1975] 1 GLR 16 CA
9ourt of ;==eal %eld t%at t%ere was no contract w%en t%e =urc%ased =rice of land was not
finaliFed, nor was s=ecific land identified7
4A ;greement may be inferred from conduct words or documents t%at %a'e =assed
between =arties7
2-2.1.2 CONSIDERATION
; binding contract must be bac$ed by consideration e3ce=t in contract under seal7
Eiscount ?aldame L9 in Dunlo= +neumatic )yre 9o7 Ltd7 E (clfridge & 9o7 Ltd:
f a =erson wit% w%om a contract not under seal %as been made is to be able to enforce it
consideration must %a'e been gi'en by limits, t%e =ermission or to some ot%er =erson7 ;t
t%e =romisorJs request consideration is required for all sim=le contracts7 9onsideration is
t%at w%ic% is actually gi'en or acce=ted in return for a =romise7
(ir Frederic$ +olloc$ H 5astwood ' #eryon Q014-R . C" -.4 a" at or forbeara"e of
o"e party or the promise therefore, is the prie for #hih the promise of the other is
brought, a"d the promise thus give" for valuable o"sideratio" is e"foreable
!ature of 9onsideration
;n act i7e7 doing somet%ing t%at one %as s=ecifically requested7 #essie ' 9%armant &
;nor @+laintiff (er'iceA
(ome rig%t, interest, =rofit or benefit accruing to one =arty or H =ayment of money7 Ka=an
Botors ' >andol=% Botors 9o7 Ltd7 +romise to sell oneJs =ro=erty at a s=ecified =rice by
certain duties
Forbearance, detriment, loss or res=onsibility gi'en @"an$ of 8est ;frica Ltd '
;=enteng & ;norA suffered or underta$en by t%e ot%ers
53c%ange of =romises @;frifa ' 9lass +etersA
;cting on t%e basis of anot%erJs unilateral offer- 9arlill ' 9arbolic (mo$e "all e7g7
=ayment of money, =ro'ision of goods, =erformance of wor$, any benefit accruing to one
=arty or detriment to t%e ot%er
>elying on anot%erJs =romise and acting to ones detriment H ;tta & ;not%er ' ;du
Q0912/1R 0 *L> -..7
!ot "inding 9onsiderationG
;nyt%ing w%ic% %as already been done
+romise to do not%ing more t%an w%at t%e =romisee is already bound to do
Bust be legal
Bust not be in t%e =ast
Bust mo'e from t%e =romisee X*%ana H need not @L00AY
Bust not necessarily be adequate but sufficient
;greement may be inferred from obser'ation of written terms
Types of Considerations
a7 ,ood Consideration
t is consideration founded on generosity, natural affection or normal duty7 t is described
as 'oluntary and a =erson w%o =ro'ides good consideration is called a 'olunteer7 ; good
consideration wit%out 'aluable consideration is no consideration e7g7 =romise to create a
trust
b. Valuable Consideration
9onsideration w%ic% is of some 'alue in t%e eye of t%e law- 9urrie ' Bisa Q012LR L> 00
; consideration is described as 'aluable w%en it consists of eit%er or some rig%ts, interest,
=rofits or benefits accruing to t%e one =arty, or some forbearance, detriments, loss or
res=onsibility, gi'en, suffered or underta$en by t%e ot%er7 Ealuable consideration and t%e
=romisorJs =romise must constitute one single transaction and are causally related7
c. Executory Consideration
+romise is made in return for a counter =romise7 t is consideration in t%e form of
=romises to be =erformed at a future date
d. Executed Consideration
9onsideration is e3ecuted w%en t%e act constituting t%e =romise is =erformed7 t is made
in return for t%e =erformance of an act7 57g7 offer of a reward for an act7
e. Past Consideration
9onsideration w%ic% is w%olly e3ecuted and finis%ed before a =romise is made7 "reac% of
suc% =romise is not enforceable7
Difference between Sufficiency and Adequacy of Consideration
9onsideration is described as sufficient or insufficient accordingly as t%e Dudges allow or
disallow t%e 'alidity of =articular acts or =romises
:essie v Charmant ; !nother [19(1] 2 ,0R 194
9onsideration is adequate w%en it is =rocured by t%e offer of some return ca=able of
being e3=ressed in terms of 'alue7
)%e court %eld t%at t%e ambassadorJs =erformance alt%oug% %e was legally bound to
=erform legal duty to be sufficient consideration7
; consideration may %a'e sufficient consideration and yet not enforceable7 n all
circumstances t%e court loo$s for t%e =resence of consideration no matter %ow
insignificant it may be7 )%e courts are not interested %owe'er in determine t%e adequacy
of consideration
Consideration as applied to the Contracts Act 1960 Act 25
07 (7 1@0A
8%ere a =romisor =romises to $ee= %is offer o=en for a s=ecified =eriod, t%e offer cannot
be wit%drawn before t%e s=ecified date only because of lac$ of consideration for t%e offer
in 'iew of t%e fact t%at t%e =romisee may =ro'ide t%e consideration at a later date before
t%e e3=iry of t%e date
-7 (7 1@-A
+romise to wai'e a debt or =art of it or t%e =erformance of some ot%er contractual or legal
obligation is binding for lac$ of consideration7
.7 #essie ' 9%armant
;lt%oug% a =arty may be legally bound to =erform a legal duty, t%e =erformance or
=romise to =erform act may be sufficient consideration7
47 (700 and (7L@0A
9onsideration need not come from t%e =romisee7 t may come from a beneficiary w%o
need not be t%e =romise7
(700 H N!o =romise s%all be in'alid as a contract by reason only t%at t%e consideration
t%erefore is su==lied by someone ot%er t%an t%e =romisee7
Consideration in Building Contracts.
)%e em=loyer t%roug% t%e in'itation of tender ma$e =romises to t%e effect t%at t%e
successful bidder will be =aid for t%e wor$s t%at will be e3ecuted7
)%e 9ontractor in %is bid to submit %is offer or tender also =romise t%e em=loyer quality
wor$ or goods to be deli'ered and on time7
)%e acce=tance of t%e offer confirms t%e =romise to ma$e =ayment on =erformance7 )%e
=ayments of money, deli'ery of quality goods or wor$ are e3am=les of consideration
attac%ed to t%e contract7 t is e3ecutory consideration i7e7 n future7
)%e =romise to ma$e =ayment of money must also relate to t%e =romise to deli'er on
time and quality =roduct must relate wit% one anot%er7
8%ere t%e consideration is in t%e =ast t%e =romisor may be entitled to quantum meriut7
>e 9aseyJs +atents @019-A 0 9% 004
?eld: )%e manager was entitled to a quantum meriut since t%e ser'ices %ad been rendered
before t%e =romise to =ay sum of money7
2-2.1.3 Intention to create Legal relation
n Dalrym=le ' Dalrym=le, Lord (towell said contract must not be t%e s=orts of an idle
%our, mere matters of =leasantry and badinage, ne'er intended by t%e =arties to %a'e any
serious effect w%ate'er7
)%us, w%ere in a contract t%ere is offer and acce=tance and consideration and it is
establis%ed t%at t%e =arties do not %a'e t%e intention to create legal relations t%e contract
could not be enforced7
n domestic agreements suc% as family agreements and ot%er social agreements t%e
=resum=tion is t%at no legal relation is establis%ed7
n marriage or family agreements w%ere relations%i= is cordial, t%e agreement may be
considered not to create legal relations7
$al=our v $al=our [1919] 2 :$ (1# C!
3he 8ourt of Appeal held that "o legal relatio"s had bee" o"templated a"d that the
#ife%s atio" must fail beause #hile o"sideratio" #as prese"t, the evide"e sho#ed
that the parties had "ot desig"ed a bi"di"g o"trat.
dosei-asibey, esq L0 09/09
?owe'er, w%ere t%e family members are not li'ing in %armony t%e =resum=tion t%at t%ere
is a legal relation may e3ist7
+eritt v +eritt [19(.] 2 !ll"R (2.
A" arra"geme"t bet#ee" separated spouses for the o"veya"e of a house as part of a
marriage settleme"t, it #as held by the 8ourt of Appeal that the parties had i"te"ded to
affet their legal relatio"s a"d that a" atio" for breah of o"trat ould be sustai"ed.
n a situation w%ere t%ere is no enforceable contract at law, equity may affect t%e
situation
'usse& v Palmer [19(2] 1 -0R 1232
A mother i" la# lived #ith the family a"d paid for some buildi"g #ork o" the house. 2e
later laimed the amou"t i" ourt. 3he 8ourt held that though there #as "o e"foreable
loa", i" e&uity the value of the #ork do"e #as held o" trust for her.
n commercial agreements, suc% as construction contracts, t%ere is t%e =resum=tion of t%e
e3istence of legal relation, %owe'er t%e =resum=tion may be rebutted7
Carlill and Carbolic Smoke Ball Company
3he ompa"y advertised their preparatio" to pay L1000 to a"y purhaser of their rodut
9moke ball a"d use it for the treatme"t of the i"flue"!a disease a"d "ever had the ure
for that a"d #e"t ahead to deposit L1000 #ith their ba"kers.
3he plai"tiff used the produt a"d yet had i"flue"!a a"d brought a" atio" agai"st the
ompa"y for the L1000. 3he defe"da"t ompa"y laimed that they "ever had the
i"te"tio" to e"ter i"to a legal relatio"s #ith the 6lai"tiff a"d that the payme"t of L1000at
the ba"ker #as a mere bluff. It #as held that the fat of the deposit #as oge"t evide"e
that the defe"da"ts had o"templated legal liability.
+arties may %owe'er ma$e an agreement but may include in t%e terms e3=ressly t%at it is
not to be binding in law7 n suc% situation t%e court s%all res=ect t%e 'iews of t%e =arties7

SESSION 2 2.2: CONSENT, CAPACITY AND LEGALITY OF
OB1ECT
2-2.2.1 Genuine Consent
)%e intentions of t%e =arties must be well understood w%en agreements are being entered
into7 n a situation w%ere one =arty @;A is does not actually intend to enter into contract or
t%e consent is not genuine t%en t%ere cannot be a contract7
)%e effect of lac$ of genuine consent is t%at t%e contract is 'oidable7
2-2.2.2 Legality
; contract is 'alid if t%e subDect matter or t%e obDect of t%e contract is legal7 ; contract is
said to be illegal w%en it is e3=ressly or im=liedly =ro%ibited by law7 ; contract to deal in
narcotic drugs is illegal7 8%ere, t%e obDect of t%e contract is illegal t%e contract is 'oid7
;n e3am=le is a contract to construct an underground trenc% t%at will lead to t%e 'ault of
a ban$er7
2-2.2.3 Capacity
)%e ability of a =erson w%et%er artificial or natural to enter into a contract is referred to as
ca=acity in contract
a. General rule
)%e general rule is t%at +arties are at liberty to enter into any $ind of agreement t%at t%ey
so desire to unless t%ey do not %a'e ca=acity to underta$e t%e transaction7
Exceptions to the general rule
9%ildren, lunatics or drun$ards are e3ce=ted from t%e general rule as =erson w%o do not
%a'e ca=acity or may %a'e a limited ca=acity to enter into a contract7
Children
9%ildren are also called minor or infants7 Earious legislation %as defined c%ildren wit%
different age7 )%e constitution define c%ildren under t%e age of 01 but t%e 9%ildren ;ct,
0991 @;ct L/0A, 8ills ;ct 0920 @;ct ./0A =lace t%e age at 01 w%ilst t%e 9ommon law
and 9om=anies 9ode, 09/. @;ct 029A %as t%e age limit for maturity as -0 years7 n
contracts, t%e age 01 %as often been t%e maturity age for a =erson to enter into7 *enerally
a c%ild or infant cannot be sued or sue to enforce contract7
?owe'er, infants can sue or be sued to enforce t%e following contractsG
Exceptions to children
i. Contract of Necessaries
)%ings necessaries are articles necessary to t%e su==ort of life suc% as food, clot%es,
%ousing etc and ser'ices fit to maintain a =erson in life suc% as intellectual, moral and
religious information, assistance and attendance of ot%ers7 ;rticles of mere lu3ury are
e3cluded7
ii. Beneficial Contract of service
5g 9ontract of a==rentices%i= or of ser'ice
iii. Voidable contracts
9ontracts of benefits during an infancy w%ic% may be re=udiated on maturity7 5g Lease
may be sued for non =ayment of rent, ;cquisition of s%ares
iv. Part performance
dosei-asibey, esq L- 09/09
;n infant may sue to enforce a contract in w%ic% t%e infant %as =erform %is obligation
Drunkards
; drun$ard is a =erson w%o %as lost control of %is senses as a result a substance %e %as
ta$en in7 ; contract wit% suc% a =erson is 'oidable7
)%e drun$enness e3ist at t%e time of contract
t must be ob'ious and $nown to t%e ot%er =arty7
)%e drun$ard may ratify t%e contract u=on gaining %is sobriety7
Lunatics
; lunatic may be described as a =erson of unsound mind, a =erson mentally incom=etent
or an insane =erson7 ; contract wit% suc% a =erson is 'oidable7
)%e insanity must e3ist at t%e time of contract
t must be ob'ious and $nown to t%e ot%er =arty7
)%e insane =erson may ratify t%e contract u=on gaining %is sanity7
b. Third party (Privity of Contract)
)%e 9ommon law rule of =ri'ity is t%at a contract cannot be enforced by or against w%o
is not a =arty to t%e contract7 8it% a few e3ce=tions, no one will be entitled to t%e benefit
or bound by t%e obligations of a contract to w%ic% %e is not a =arty7
53ce=tions to t%e ruleG
i7 &nder t%e law of guarantee or indeminity, t%e insurance com=any granting t%e
guarantee may be sued7
ii7 )%e +rinci=le of ;ssignment, w%ere in t%e 9onstruction contract, a contractor
enters into a contract and directs =ayment in Doint names of t%e contracting
=arty and a financier eg a ban$, )%e interest of t%e com=any is assigned to t%e
ban$7
;gain w%ere a 9ontractor directs =ayment to be made to t%e subcontractor, t%e
subcontractor assumes t%e interest owe by t%e main contractor as far as t%e =ayment of
t%e money is concerned7
iii7 Law of ;gency is allows an agent to assume t%e interest of t%e =rinci=al7
n *%ana, (ection L @0A of t%e 9ontracts ;ct, 09/0 @;ct -LA, =ro'ides t%at,
EA"y provisio" i" a o"trat made after the omme"eme"t of this At #hih purports to
o"fer a be"efit o" a perso" #ho is "ot a party to the o"trat, #hether as a desig"ated
perso" or as a member of a lass of perso"s, may, sub$et to the provisio"s of this part,
be e"fored or relied upo" by that perso" as though he #ere a party to the o"trat.%
)%is =ro'ision e3tends t%e benefits of contracts to a wilder grou= of t%ird =arties t%an t%e
common law7 ?ere t%e qualified t%ird =arty is one t%e contracting =arties so
contem=lates7
Baidoo v Sam 1987-88] GLR 666 679, Taylor 1SC, sitting as an ;==eal 9ourt Kudge
said: #here there is "o provisio" #hatsoever reserved i" the o"trat for the be"efit of
the plai"tiff his atio" i" sui"g to have the o"trat to #hih he is a perfet stra"ger set
aside is &uite #ro"g.%
dosei-asibey, esq L. 09/09
; t%ird =arty or t%e ;ttorney *eneral, under t%e +ublic +olicy =rinci=le may inter'ene to
%a'e a contract declared 'oid or unenforceable7
n *%ana t%e 9ommon law =osition on doctrine of =ri'ity of contract %as been modified
by legislation -t%e contracts law, and case law in =ublic =olicy @;ccra "rewery 9o Ltd '
*uinness *%ana Ltd, 0999A, =rinci=les of agency and equitable =rinci=les of trust7
@'alle& v "Dura Farms [19((] 2 ,0R 1(9 C!8

c. A body Corporate
)%e ?ig% 9ourt @9i'il +rocedureA >ules, -004 @9 42A :rder 4 rule 0@-A =ro'ides t%at EA
body orporate shall "ot begi" or arry o" proeedi"gs e1ept by a la#yer, u"less
permitted to do so by a" e1press provisio" of a"y e"atme"t%.
; body cor=orate suc% as institutions and com=anies, %a'e t%e general ca=acity to ta$e
action against ot%ers but t%roug% a lawyer7
SESSION 2- 2.3: Performance and Certainty of Terms of Contract
2-2.3.1 Performance
; 'alid contract is enforceable if it is ca=able of being =erformed7 f a =arty enters into a
contract t%at cannot be =erformed by t%e reasonable, t%e court may not enforce it7 f a
=arty underta$es to Dum= 00 storey building but rescinds t%e decision t%e contract cannot
be enforced at a court because t%e =erformance is not =ossible7 cannot see adjuge
2-2.3.2 Certainty of Terms of Contract
)erms of a contract are obligations t%at eac% =arty underta$es and t%e re=resentations
made in res=ect of disc%arging t%e contractual obligations7
; term of a contract must be clear and certain but not ambiquous
Carlill v Carbolic Smoke Ball
/&pes o= /erms
)%ere are - ty=es of contractual terms
9onditions
8arranties
; term is eit%er condition or warranty de=ending on t%e e3=ression or t%e intentions of
t%e contracting =arties7
9onditions
)%ey create t%e fundamental obligations of t%e contracting =arties
"reac% of conditions entitles t%e ot%er =arty to re=udiate t%e contract
t is t%e central, fundamental or im=ortant term of a contract
8arranties
8arranties create minor obligations
)%ey are also called minor terms
)%ey may be a re=resentation t%at induces t%e contract or collateral term of t%e
contract
"reac% of warranties entitle t%e ot%er =arty to damages only
8arranties normally co'ers quantity, quality and time for =erformance of t%e
contract7
+arties may %owe'er ma$e any term a condition
Contents of Contract
)%e content of a contract is basically t%e terms t%at t%e contract contents7 n most of
construction contracts, t%ese includeG
)%e terms in t%e offer @Form of )ender or "id FormA
)%e statement of acce=tance @;ward Letter or Letter of ;cce=tanceA
Data and information relied on for acce=tance @(ubmitted )ender DocumentA
9onditions of 9ontract
(=ecifications, if any
+rice, time and ot%er agreed terms @;greement formA
Drawings, if any
"asis for =rice @"ill of CuantitiesA
(ecurities etc

?owe'er in construction contracts ot%er sources of information may constitute additional
terms of t%e contract7 )%ese may include Binutes of site meetings, nstructions of t%e
5ngineer or t%e 9lient to t%e 9ontractor, 9orres=ondence w%ic% %as t%e effect of gi'ing
information to t%e =arties7 ;n e3am=le is a letter from a 9ontractor for submission of
>e'ised 8or$ +rogramme to t%e 5ngineer or t%e 9lient7
Classification of Terms of Contract
9ontractual terms may be classified as
53=ress )erms and
m=lied )erms
Express Terms
)%ey are terms t%at =arties intentionally discuss and agreed on to be =art of t%e contract
eg +rice ;dDustment clause7
Implied Terms
dosei-asibey, esq LL 09/09
Lord 'eid i" the 0"glish ase of 9terli"g 0"gi"eeri"g 8o., Ltd. v. 6athett M1.55N A.8.
5D4 at p. 54-, 2.L. saidC
O . . . a" implied term is somethi"g #hih . . . the la# may read i"to the o"trat if the
parties are sile"t a"d it #ould be reaso"able to do soC it is somethi"g over a"d above the
ordi"ary i"ide"ts of the partiular type of o"trat . . . Kut the phrase Pimplied term?
a" be used to de"ote a term i"here"t i" the "ature of the o"trat #hih the la# #ill
imply i" every ase u"less the parties agree to vary or e1lude it.O
)%ey are terms may not %a'e been discussed and agreed on but are
im=lied by t%e +arties
im=lied by (tatutes
m=lied by 9ustoms or
m=lied by t%e court
Terms Implied by Parties
)%e terms may not %a'e been categorically discussed by all =arties %owe'er, if broug%t to
t%eir attention t%e =arties would %a'e all agreed to t%e terms
)%ere may be no =ro'ision unless on e'idence but may be intended by t%e =arties
British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd 1974]1 AllER 1059,
CA
3he defe"da"ts #ere arryi"g out drai"age #orks a"d urge"tly "eeded a dragli"e ra"e.
6lai"tiff hired o"e to the defe"da"t before paper #ork #as ompleted. 3he ra"e got
damaged a"d 6lai"tiff suessfully sued to reover the ost of repairs a"d argued that
pri"ted o"ditio"s #ere i"orporated i"to the o"trat. Koth parties #ere i" the busi"ess
of hiri"g a"d have similar terms i" their o#" #ritte" sta"dard form o"trats. 3he ourt
i"ferred that reovery for the ost of repairs are deemed to implied by the parties #ithout
a #ritte" agreeme"t.
Terms Implied by Statutes
;lt%oug% t%e =arties may not %a'e discussed and agreed on t%e =ro'ision it may be
e3=ressed or im=lied in t%e statutes eg7
(ale of *oods ;ct, 09/-, ;ct 0.2,
9on'eyancing Decree, 092., !>9D 02L
9ontract ;ct, 09/0 @;ct -LA
Terms Implied by Customs
; course of dealing between - =arties establis%es a =attern of consistent arrangements
w%ic% can be deemed to a==ly to t%eir continued dealings
HASNEM ENTERPRISES LTD v IBM WORLD TRADE CORPORATION 1993-
94] 1 GLR 172-192
A"y o"trat, #ritte" or oral, might be deemed to i"orporate a"y releva"t ustom of the
market or loality i" #hih it #as made u"less the ustom #as "ot o"siste"t #ith the
e1press terms or "ature of the o"trat.
dosei-asibey, esq L/ 09/09
+ractice in t%e industry is to incor=orate 'arious well-$nown terms in t%eir business
transactions eg British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd 1974]1
All ER 1059, CA
6o%ah v $an) =or 'ousing and !nother [1932?31] ,0R1124
I" 1.-4, 9, the proprietor of a buildi"g o"strutio" firm, e"tered i"to a o"trat, e1hibit
K, for the o"strutio" of a buildi"g for 3 at a ost of A12,400. 3he o"trat provided
that 9 #as to provide buildi"g materials for the #orks. 3he o"strutio" #as divided i"to
si1 phases a"d provisio" #as made for the payme"t of speifi sums upo" ompletio" of
eah phase of o"strutio". 3he o"trat further provided that the payme"ts #ere to be
made by 3 or his age"t, the Ka"k for 2ousi"g a"d 8o"strutio" *K28+. 8lauses D a"d 4
provided that i" the eve"t of a breah of the o"trat, 3 #as u"der a" obligatio" to pay 9
the value of #ork properly do"e but "ot paid for. 9 bega" #ork i" Deember 1.-4.
9ubse&ue"tly, by a" oral agreeme"t, 3 ordered ertai" e1tra #orks outside the origi"al
o"trat dra#i"gs. After 9 had ompleted the third phase of the #orks, i.e. up to roofi"g
stage a"d had bee" paid for the #ork do"e, K28 i" 1.-5 e"tered i"to a"other
agreeme"t, e1hibit D, #ith both 9 a"d 3 based o" the same o"trat dra#i"gs a"d
speifiatio"s o"tai"ed i" e1hibit K.
3he 1.-5 o"trat provided, i"ter alia, that the buildi"g #as to be fi"a"ed by a loa" of
A17,5-5 from K28 to 3 a"d that a"y deviatio" from the o"trat dra#i"gs or a"y
additio"al or other #orks o" the pro$et should be #ith the prior approval of K28. It
also provided that 9 #as to be reimbursed for a"y i"rease i" the ost of the #orks
brought about by prie flutuatio"s i" the ost of buildi"g materials. 2o#ever, the ba"k
retai"ed a disretio" to u"dertake a revaluatio" of the #orks a"d reserved the right to
approve or disallo# a"y prie i"reases. A total of A11,0D7 #as eve"tually paid by K28
o" 3?s aou"t to 9. Q" ompletio" of the fourth phase of the #orks, 9 submitted a laim
for A/,7.0 i" respet of the third a"d fourth phases a"d the e1tra #orks re&uested by 3
u"der the oral agreeme"t. 9 also re&uested K28 to revalue the o"trat i" the light of
i"reases i" the pries of buildi"g materials.
Although K28 re&uested a"d #as supplied #ith a breakdo#" of the laim, K28 ig"ored
the all for revaluatio" a"d refused to ho"our the laim o" the grou"d, i"ter alia, that its
approval had "ot bee" obtai"ed i" aorda"e #ith the provisio"s of e1hibit D before the
e1tra #orks #ere e1euted. A" atio" brought by 9 laimi"g a" amou"t of A22,-5D
represe"ti"g the outsta"di"g bala"e a"d ost of the e1tra #orks #as dismissed by the
2igh 8ourt o" the grou"ds, i"ter alia, that e1hibit D superseded e1hibit K a"d therefore
the prior approval of K28 should have bee" sought before the e1tra #orks #ere made.
9?s appeal to the 8ourt of Appeal #as also dismissed. I" the i"sta"t appeal to the
9upreme 8ourt agai"st the deisio" of the 8ourt of Appeal, the ourt fou"d, i"ter alia,
that K28 #as a#are of the e1tra #orks ordered by 3 before the 1.-5 tripartite
agreeme"t #as e1euted by the parties. Q" the issue as to #hether the laim of 9 #as
properly dismissed,
2eld, allo#i"g the appeal *Adade @.9.8. disse"ti"g+C 3here #as to be implied i" the 1.-4
agreeme"t a term that prie flutuatio"s #ould "eessitate variatio" i" the o"trat prie
Fa provisio" #hih #as speifially spelled out i" the 1.-5 agreeme"t a"d i"variably
aepted i" the buildi"g trade.
+er )aylor, K(9
:hatever the positio" may be i" other $urisditio"s, I am satisfied that i" a buildi"g
o"trat i" Hha"a #hether prie flutuatio"s are adverted to or "ot i" suh a #ritte"
o"trat, "o"etheless, due to the u"preede"ted i"flatio"ary fores i" our system, "atural
$ustie a"d fair"ess dema"d that a" o#"er of a house u"der o"strutio", should
reimburse a o"trator if the u"preditable a"d u"o"trollable market fores push the
agreed pries up i" the usual distressi"g #ay they have bee" doi"g for the past
disastrous years, u"less suh a" impliatio" is speifially repudiated i" the o"trat.
A"d #he"ever the o"trat is sile"t o" this matter good busi"ess se"se, ommo"se"se
a"d eo"omi a"d soial o"sideratio"s "eessitate that this should be a" implied term
of the o"trat other#ise a o"trator #ould be totally rui"ed by his i"ability to foreast
prie tre"ds #hih are so u"stable a"d u"o"trollable that "o state or other i"stitutio"s
are i"sulated from their per"iious effet.
Terms Implied by the Court
Chantlani v 'aroutunian
I" the abse"e of e1press agreeme"t, the 8ourt implied that "otie period to termi"ate
employme"t of perso" of ma"agerial ra"k #as D mo"ths.
!r)hurst v ,hana +useum and +onument $oard [19(1] 2 ,0R 1 E1.#
Abba" @ held that i" a o"trat of servie there is a" implied term imposi"g a" obligatio"
o" a" employee to serve his employer #ith good, faith a"d fidelity, breah of #hih
o"stitutes a grave miso"dut.
Exemption Clause Term
)%ere are terms t%at are incor=orated to abridge t%e rig%ts and or limitation to eac% =arty
or one =arty agreeing to acce=t a reduction in liability by t%e ot%er =arty7
Inusah v 5'0 -orld%ide "Fpress [1992]1,0R 22(
3here #as a" operative dislaimer lause that limited the defe"da"t%s liability to R100,
#he" the plai"tiff losses his parel *regardless of the ost of the item*s+ i" the parel+.
4 )y=es of 53em=tion 9lauses
Litigation-Limiting 9lause eg7 ;rbitration 9lause in 9onditions of 9ontract
Liability Limiting 9lause eg7 nusa%Js case
m=lied-term-modifying clause
>estricti'e 9o'enant

Variation of Terms of Contract
; Eariation of 9ontract refers to 'ariation of t%e terms of a contract and not to 'ariations
made =ursuant to an e3=ress =art in t%e contract7 t may be to re=lace a term by a new
contract or e'en its com=lete disc%arge7 f t%e em=loyer, wit%out e3=ress =ower, wis%es
to omit a =iece of wor$ and t%e 9ontractor agrees to t%e omission t%e 'ariation is binding
and no action will lie for breac% of contract by eit%er =arty7

Self-Assessment 2 2
i7 8%at is im=lied term of a contractU
ii7 Discuss t%e im=ortance of e3=ress term of a contract
iii7 5numerate t%e 'arious documents t%e forms a construction contract
' *enerally, infants cannot be sued or sue to enforce contract7 (tate t%e e3ce=tion to
t%is general rule7
Summary
Unit Summary
Key terms
m=lied )erm, 53=ress )erm, 9ertainty of )erm, +erformance
Review Question
07 9omment on four @4A elements of contract wit% t%e e3ce=tion of offer and
acce=tance7
-7 8%at does consensus ad idem in 9ontract meanU
Unit Assignment 2
)%e "uildtec% 5ducation 9om=le3 %as made an ad'ertisement in t%e N*%anaian
)imesO as$ing for 9ontractors to submit offers for t%e construction of .-(torey
Lecture )%eatre "loc$7
53=lain t%e term NofferO to a grou= of 9ontractors w%o %a'e attended t%e =re-
tender conference and distinguis% t%is offer fromG
i7 a mere indication of good intentions
ii7 an in'itation to ma$e an offer and
iii7 a mere request for information
UNIT 3
VITIATION, DISCHARGE AND REMEDIES
Introduction
)%is unit =ro'ides t%e essential basic legal elements for t%e Formation of 9ontract7 )%e
$ey elements of 9ontract %a'e been %ig%lig%ted to include, :ffer and ;cce=tance to
foster an a==reciation of t%e conce=ts and =rinci=les go'erning t%e subDect7
07 Identify factors of 'itiation of a contract
-7 Defi"e and desribe t%e underlining =rinci=les of disc%arge of a
contract
.7 Ide"tify t%e remedies of breac% of a contract

Unit 3: Vitiation, Discharge and Remedies
Session 1 - 3: Factors of Vitiation of Contract
1 3.1: Mistake of Fact, Misrepresentation and Fraud
1- 3.2: Incapacity, Duress and Undue Influence
1- 3.3: Public Policy, Illegality and Unconscionability
Session 2 3: Discharge
2 3.1: Performance
2 3.2: Agreement
2- 3.3: Frustration
dosei-asibey, esq /0 09/09
2- 3.4: Remedies and Special Contracts
SESSION 1-3: FACTORS OF VITIATION OF CONTRACT
Factors t%at in'alidate an a==arent or =ur=orted contract are called 'itiating factors7
)%ese includeG
0 Bista$e of Fact
- Bisre=resentation
. Fraud
4 nca=acity
L Duress
/ &ndue nfluence
2 +ublic +olicy
1 llegality
9 &nconscionability
; contract may be declared 'oid or 'oidable if found by t%e court to be 'itiated7 ; 'oid
contract does not %a'e, and ne'er %ad any force or effect7 ; 'oidable contract is 'alid
until ste=s are ta$en to set it aside by t%e court of law7 +ublic +olicy and illegality ma$es
contract unenforceable and t%erefore 'oid7 Bost mista$es, and ot%er 'itiating factors
ma$e contracts 'oidable7 ;bsence of consensus ma$es contract 'oid7
1.3.1 Mistake of Fact, Misrepresentation and Fraud
1.3.1.1 Mistake of Fact
)%ere are . ty=es of Bista$e
&nilateral Bista$e H t occurs w%en one =arty @;A is wrong about an as=ect of
t%e contract and t%e ot%er =arty @"A is aware t%at ; is mista$en7 f " is not aware
t%at ; is =re'ailing under a wrong =erce=tion, t%e law does not consider t%at
t%ere is a mista$e7
)%e effect of unilateral mista$e in contract is t%at it %as no consequence7
9ross H +ur=ose Bista$e - w%ere t%e =arties are t%in$ing of different t%ings, and
yet bot% are unaware t%at t%ey are on different wa'elengt%s7 5g ; describe two
storey building and " is seeing two floors @t%ree storeyA building7 )%e =arties are
not ad idem, t%ere is no consensus and no contract7 )%e contract is 'oid7
9ommon Bista$e Hw%ere t%e contracting =arties made an identical error about
t%e same subDect matter7 )%is ty=e of mista$e ma$es t%e contract 'oid7
Bista$e generally ma$es a contract 'oidable but not 'oid7
Bista$e relates to a fact not to t%e legal effect of a document or transaction7
Buaful v Construction Pioneers 1982-83] 2 GLR 1058
S"der a #ritte" agreeme"t, the defe"da"ts, a road o"strutio" firm, agreed to pay
A2,000 for 7,000 ubi yards of gravel to be dug from the plai"tiff?s la"d. 9ubse&ue"tly,
the defe"da"ts paid the sum of A2,000 for the 7,000 ubi yards of gravel dug a"d
removed by them from the la"d. Kut they refused to pay for the gravel dug i" e1ess of
the 7,000 ubi yards beause they o"te"ded that #hat they Mp.105.N dug from the
plai"tiff?s la"d #as "ot gravel as agreed upo" but mi"erals #hih #ere vested i" the
Hha"a Hover"me"t. 3he plai"tiff therefore sued for payme"t of the e1ess gravel dug by
the defe"da"ts. A"d the defe"da"ts also ou"terlaimed for the refu"d of the sum of
A2,000 F allegi"g that they had paid it u"der a mistake of la# a"d fat.
2eldC3he defe"da"ts did "ot pay the mo"ey u"der a mistake of fat or la#. 3here #as "o
mistake of fat beause the defe"da"ts bargai"ed to dig for gravel a"d they sueeded i"
doi"g so. 0ve" if the payme"t #as made u"der a mistake of la#, it #as "ot reoverable
beause a voluntar& pa&ment under a mista)e o= la% could not be recovered*
Non est Factum H )%is is a s=ecial ty=e of mista$e o'er documents7 t =rotects
=articularly t%e blind and t%e illiterate7 5g w%ere one is misled into signing a document
t%at was com=letely different from t%at w%ic% %e was made to belie'e %e was signing7
)%ere are four features
i7 )%ere must %a'e been a mista$e
ii7 t%e one w%o made t%e mista$e was misled into ma$ing it
iii7 t%e mista$e relates to a document radically different from w%at one t%oug%t %e
was signing
i'7 t%e one see$ing to rely on t%e =lea s%all not %a'e been guilty of careless ness
negligence7 )%at is, if t%e mista$e would %a'e been detected %ad %e been careful, %e
may not succeed in t%e =lea of non est factum7
1-3.1.2 Misrepresentation
t is a false statement of fact t%at is intended to induce and in fact induces anot%er to enter
into t%e contract7
n <apan +otors /rading Compan& 0imited v Randolph +otors 0imited, it #as held
that ,isreprese"tatio" is a false stateme"t of fat that is i"te"ded to i"due a"d i" fat
i"dues a"other to e"ter i"to a o"trat.
t is untrue re=resentation7 )%us, a statement of fact made by one =arty to t%e contract
w%ic% is not true but %ad t%e intention to and did induce t%e ot%er =arty to enter into t%e
contract7
dosei-asibey, esq /- 09/09
Bisrere=resentation is legally %armless if t%e =laintiffG
!e'er $new of its e3istence
did not allow it to affect %is Dudgement or
was not aware of its untrut%
)%ree facts about Bisrere=resentation
f statement is one of o=inion only and not a statement of fact e'en if false,
t%ere is no misre=resentation7
f statement relates to laws or legal effects, rat%er t%an it being a statement
fact t%ere is no contract7
f e'en t%e statement was false, but t%e one alleging misre=resentation was
not aware of t%e statement or did not rely on it, t%en t%ere is no
misre=resentation because t%ere was no inducement7
"sso Petroleum Compan& 0imited v +ardon 719(28 2 !ll "R
A false fat made by a perso" #ho possessed speial k"o#ledge a"d skill #as "ot a
stateme"t of opi"io" but a stateme"t of fat.
Bisre=resentation may be innocent, negligent or fraudulent7
Innocent misrepresentation H it is one t%at contains false%ood t%at was un$nown to t%e
declarant or t%at t%e declarant belie'ed to be true7 )%ere is no moral blame ascribed to t%e
declarant
; negligent misrepresentation is a false statement made by a =erson w%o %ad a duty of
care towards t%e ot%er7
; fraudulent misrepresentation is one made by a =erson to induce anot%er into a
contract $nowing 'ery well t%at t%e statement %e is ma$ing is false or rec$lessly ma$ing a
statement not caring t%at it is true or false7
"sso Petroleum Compan& 0imited v +adam
; fraudulent misre=resentation is one made by a =erson to induce anot%er into a contract
$nowing 'ery well t%at t%e statement %e is ma$ing is false or rec$less7
5err& v Pee) 719398 14 !pp Cas 11( E 1(4
#nowing and fraudulently stating a matter untrut% w%ic% brings about w%olly or =artially
t%e contract7
:peglo v 6CC! +otors 719228 2 ,0R 32 E 3
; fraudulent misre=resentation ma$es a contract 'oidable, not 'oid7
Two options in realizing MISREPRESENTATION
@apa" ,otors 3radi"g 8ompa"y Limited v 'a"dolph ,otors Limited, per Abba" @
dosei-asibey, esq /. 09/09
;bide by t%e contract and t%en bring action to reco'er damages7
Bay rescind t%e contract, return t%e =ro=erty if already acce=ted,
reco'er t%e =urc%ase =rice if already =aid
f a statement is mere ad'ertising, it cannot amount to an actionable misre=resentation7
In construction contracts, the courts have held that the inclusion of Bill of
Quantities, Specification or even plans in the invitation to tender, or even in
schedules to the contract, does not amount to a collateral warranty that they are
accurate. It lies at the door of the Contractor to ascertain theses facts to himself.
@9onstruction Law by Ko%n &ff, .
rd
5dition =age A
1-3.1.3 Fraud
; contract induced by fraud is not 'oid but only 'oidable at t%e election of t%e =arty
defrauded, and once t%e =arty %as elected to abide by t%e contract, being aware of t%e
fraud, %e cannot afterwards rescind it7
Fraud is defined as a false statement made $nowing, or wit%out belief in its trut% or
rec$lessly7
Fraud ommia 'itiate: Fraud vitiate everything7
Fraud must be s=ecifically =leaded and strictly =ro'en7
Fraud can sometimes be =resumed w%en consideration is woefully and
s%oc$ingly be inadequate7 t can %owe'er be rebutted by e'idence7
Fraud ma$es a contract 'oidable, not 'oid7
:ne see$ing to a'oid t%e contract must act timely u=on disco'ering it7
Fraud is dis%onest and for one to rely on it t%ere must be =ro'ed of reliance7 t is also
im=ortance for one to mention t%e suffering as a result of t%e reliance7
SESSION 1- 3.2: Incapacity, Duress and Undue Influence
1-3.2.1 Incapacity
(ee 9a=acity abo'e
1-3.2.2 Duress
t is actual or t%reatened =%ysical 'iolence to unlawful constraint of a contracting =arty
w%ic% will suffice for t%e =ur=ose7 t is a'ailable to nullify t%e consent and t%ereby nullify
t%e contract w%ere t%ere %as been coercion of will7
'emans v Co=ie [1992?9(] 6C,0R 92
,r 8ofie #as i"arerated by the 6olie i" ells for / #eeks i" attempt to reover debt
allegedly payable by ,r 8ofie to someo"e else. 6rior to that, the so" of ,r 8offie had
bee" detai"ed for 4 days #he" the father ould "ot be loated. 3he 6olie oered him to
sell his house. 3he 6olie fou"d a buyer ,s 2ema"s. After his release, he sued.
2eld, A&uah @98, 3o be apable of givi"g rise to duress the threat must be illegitimate
either beause #hat is threate"ed is a legal #ro"g or #ro"gful
It must be established #hether the perso" relyi"g o" the plea had ated volu"tarily or "ot
by o"sideri"gB
#hether the perso" alleged to have bee" oered did or did "ot protest
#hether at the time he #as allegedly oered i"to maki"g the o"trat, he had "o
reaso"able alter"ative but to agree
:hether he #as i"depe"de"tly advised
:hether after e"teri"g i"to the o"trat he took steps to avoid it
Duress must actually e3ist at t%e time of ma$ing contract7
1-3.2.3 Undue Influence
nfluence connotes t%e =ower to affect anot%erJs c%aracter, beliefs or action t%roug%
admiration, e3ce=tional fiduciary relations%i=, fear etc7
nfluence is undueJ if it is im=ro=er or more t%an is rig%t7
&ndue influence is an equitable defence to a'oid a contract w%ere t%e relations%i=
between t%e contracting =arties is suc% t%at one =arty, being t%e dominant =arty, will
=resumably or in fact %a'e ta$en ad'antage of %is dominant =osition o'er t%e subser'ient
=arty7 8%ereas duress deals wit% t%e coercion of t%e will, notably t%reats and force,
&ndue influence deals wit% t%e im=ro=er mani=ulation of a contracting =arty*
+ercer v $rempong II [19(] 2 ,0R 1(2, =er 5dusei K7 said7
S"due i"flue"e mea"s a"y i"flue"e by #hih the e1erise of free a"d deliberate
$udgme"t is e1luded at a time #he" some i"terest or be"efit is give" to a"other by
someo"e over #hom suh i"flue"e #as e1erised.
)%ere are two o=tions a'ailable w%en undue influence is detectedG
07 >e=udiate t%e contract at once @or soon afterA - t%e undue influence t%en ceases to
o=erate on %im7
-7 ;ffirm t%e contract by e3=ress words or unequi'ocal acts7
Types of Undue Influence
)%ere may be actual or =resumed &ndue nfluence7
A. Presumed Undue Influence
t arises by o=eration of law once certain facts are establis%ed7
'emans v Co=ie# per !cGuah <6C
dosei-asibey, esq /L 09/09
W7in a =lea of =resumed undue influence, t%e unfairness of t%e transaction is a =re
requisite for a successful action7
)%ere is usually a subsisting trust, confidential or fiduciary relations%i= between =arties,
of one =arty being dominant and t%e ot%er being subser'ient7
Examples; The Protected Class
Lawyers and 9lients
)rustees and "eneficiaries
Doctors and +atients
+riests and Disci=les
+arents and 9%ildren
*uardians and wards
(c%ool masters and students
8%ere an undue influence is =resumed, t%e dominant =arty may rebut t%e =resum=tion7
5abu v !nobah [192] ,0R 13
3he appella"t sought to repudiate a doume"t he had sig"ed admitti"g his liability to the
respo"de"t. 3he doume"t #as prepared by the respo"de"t la#yer a"d #as sig"ed by the
appella"t.
:nce t%e relation e3ists t%e transaction is =resumed and it will be u= to t%e =arty see$ing
to u=%old t%e transaction to reduce t%e =resum=tion by s%owing t%at t%e ot%er =arty was
inde=endently and com=etently ad'ised before entry7
)o belong to t%e =rotected class does not mean t%at t%e contract will be set aside7
9ertain relations%i=s =resume undue influence but e'idence may be led to
rebut t%e =resum=tion7
&ndue influence ma$es contract 'oidable not 'oid and by words and deeds,
t%e ser'ient =arty may affirm t%e contract once t%ose influences cease7
+ercer v $rempong II
f t%e terms of t%e contract are so o'erw%elmingly tilted in fa'or of one =arty and against
t%e ot%er t%at t%e courtJs first reaction is to =resume t%at t%e bargain was not between
a==ro3imately equal =arties e3ercising t%eir free wills but some o'erriding influence was
broug%t to bear by a dominant =arty o'er a subser'ient =arty7
)%e =arty alleging undue influence must =lead
Bust set out t%e facts in sufficient muc% detail
)%e bargain can be rebutted by e'idence to t%e contrary7
B. Actual Undue Influence
t occurs w%en a =arty claims and =ro'es t%at %e entered into a contract of t%e ot%er
contracting =arty against %is free will and under t%e direction and dominance of anot%er
=erson7
dosei-asibey, esq // 09/09
)%ereJs no =resumed dominant H subser'ient relation between =arties7
)%e contract on its face does not %a'e to loo$ o'erw%elmingly to=sided7
9ontract may be fair or %a'e generous terms but may be tainted wit%
undue influence7
:ne contracting =arty =re'ailed under t%e im=ro=er force or influence of
anot%er7
)%e =arty alleged undue influence oug%t to =lead it7
+articulars of t%e alleged undue influence must be gi'en so t%at t%e ot%er
=arty becomes aware of t%e facts constituting t%e undue influence7
Self-Assessment 2 3
07 Discuss t%e im=ortance of t%e decision in ?emans ' 9ofie Q099/-92R (9*L> L9/
-7 8it% an e3am=le state t%e circumstance under w%ic% =resumed undue influence in
contract may ariseU
SESSION 1- 3.3: Public Policy, Illegality and Unconscionability
1-3.3.1 Public Policy
; contract is contrary to =ublic =olicy if it offends against t%e =ublic interest7 )%ey
includeG
9ontracts to oust t%e Durisdiction of t%e courts
9ontracts t%at tends to =reDudice t%e status of marriage
9ontracts restraining a =artyJs future liberty to carry on %is trade, business or
=rofession in suc% a manner and wit% suc% =ersons as %e c%ooses
!ccra $re%er& Compan& 0imited v ,uinness ,hana 0imited
"astham v >e%castle Hnited Football Club 0imited and Cthers 719248 1 C' 411
6lai"tiff sued the defe"da"ts #ho #ere all employers belo"gi"g to various employers%
assoiatio"s for maki"g ertai" rules a"d regulatio"s that urtai"ed his freedom of
moveme"t to a"other lub a"d therefore his right to seek employme"t at a"other lub.
3he 8ha"ery ourt agreed #ith his o"te"tio".
>agle v Feilden and others [1922] 2 Q$ 211 7C!8
3he plai"tiff, a #oma" sued the defe"da"ts for a delaratio" that a pratie of refusi"g
trai"i"g lie"ses to #ome" for horseJ rai"g #as o"trary to publi poliy. 2er plea
agai"st the defe"da"ts #as suessful o" appeal.
; contract t%at is contrary to =ublic =olicy is unenforceable7
1-3.3.2 Illegality
; contract is illegal if w%at it intends to ac%ie'e or t%e means to ac%ie'e its obDects are
contrary to statute or Dudicial =recedent7
)%is in'ol'es doing somet%ing t%at is a criminal act or a ci'il wrong, or against t%e =ublic
good7
)%ere are / ty=es of contracts t%at may constitute illegal contractsG
; 9ontract to commit a crime, a tort or a fraud on a t%ird =arty
; contract t%at is se3ually immoral
; contract to t%e =reDudice of t%e =ublic safety
; contract =reDudicial to t%e administration of Dustice
; contract t%at tends to corru=t a =ublic officer
; contract to defraud t%e re'enue of t%e state
llegal contracts are unenforceable at t%e law courts7 )%us =ast =erformance suc% as
money =aid, =ro=erty transferred are irreco'erable7
Zagloul Real Estates Co Ltd (No. 2) v British Airways 1998-99] SCGLR 378
A o"trat breahi"g the ma"datory provisio"s of a statute #as illegal a"d void.
;n illegal contract is t%erefore 'oid ab initio
)%is is a common law =osition subDect to t%e following e3ce=tions
07 8%ere t%e =arties were not i" pari delito @or equally at faultA
-7 8%ere a =arty to an e3ecuted contract re=ented before =erformance
&nder suc% e3ce=tions, t%e =arty w%ose =ro=erty %as =assed or %ad =erformed ser'ices
may be awarded some com=ensation @at a rate below t%e contract rateA7

City & Country Waste Ltd v Accra Metropolitan Assembly 2007-08] SCGLR 409
)%e ;B; failed to follow t%e due =rocess for t%e award of contract to t%e +laintiff7
?owe'er, t%e +laintiff %ad =erformed =art of t%e contract for w%ic% no =ayment %as been
made7 )%e defendant %owe'er terminated t%e contract7 )%e =laintiff sued for breac% of
contract to reco'er claim for %is ser'ice but was denied by t%e trial court and t%e 9ourt of
;==eal on t%e grounds of illegality7
)%e (u=reme 9ourt %eld t%atG e3=ress statutory =ro%ibition of a contract was different
from im=lied statutory =ro%ibition of a contract7
)%e court %owe'er %eld t%at since t%e =arties were not in =ari delicto @only ;B; was at
fault but not t%e contractorA, t%e contractor must be =aid not t%e actual contract rate but a
com=ensatory amount7
; contract could still be im=liedly =ro%ibited by statute e'en t%oug% t%e =ro%ibition
contained in t%e statute was unilateral only ie, t%at t%e =ro%ibition contained in t%e statute
was binding u=on only one =arty to t%e contract yet t%e ot%er =arty may be bound by it
eg =ro'isions in t%e +ublic +rocurement ;ct directing entities on =rocurement =rocess
and yet may %a'e t%e effect of binding any ot%er =arty7 )%e general =ublic es=ecially
9ontractors must t%erefore be abreast wit% t%e =ro'isions t%erein7
; contract may be illegal as formed or =erformed7 ; contract is illegal as formed if itsJ
'ery creation is =ro%ibited7 For e3am=le if a contractor %as no 9lassification 9ertificate
from t%e a==ro=riate Binistry but enters into a contract wit% =ublic institution7
; contract is illegal as =erformed if, t%oug% lawful in its formation, it is =erformed by a
=arty in a manner =ro%ibited by statute7 For e3am=le w%ere t%e law requires a contractor
to request for certification of test of electrical installation from 5lectricity 9om=any of
*%ana or any ot%er body and t%e contractor fails to %a'e suc% a certificate %e may lose all
%is rig%ts e'en t%oug% t%e contract is 'alid as formed7

$aidoo v 6am 7193(?338 2 ,0R 222 E 2(9
)%e a==ellant was a =olice officer w%o undertoo$ business toget%er wit% anot%er using
t%e ot%er as a front man7
:%arteng v 5on)or
3he plai"tiff i"te"ded to reover from the defe"da"t of his debt o#e her as a result of
loa" give" him if the defe"da"t #ould assist a relatio" of plai"tiff to be e"stooled as
Agogohe"e. 3he defe"da"t ould"%t "or #as he able to repay the loa".
Apaloo @, dismiss atio" desribi"g the plai"tiff atio" as orruptio" a"d illegal.
1-3.3.3 Unconscionability
;n unconscionable contract is a transaction t%at is o==ressi'e, grossly unfair or =artially
unreasonable7 5g, ty=ical transaction w%ere t%e =owerful =arties are on one %and and
=oor and ignorant =arties are on t%e ot%er %and7
)%e %allmar$ of unconscionability is its one-sidedness7
)%e relief to an unconscionable transaction lies in equity and in legislation7
5quity relie'es t%e o==ression by refusing an order of s=ecific =erformance w%ic% may
be soug%t by t%e o==ressor7 Legislation may =rotect t%e illiterate eg Illiterate Protection
!ct# C!P 222 7198 R"B4
Legislation may =ro'ide relief against transaction t%at offends against a reasonable
=ersonJs sense of good conscience7
6ection 13 o= the Conve&ance !ct# 19(1 7>RC5 1(8*
)%e court may set aside or modify an agreement to con'ey or a con'eyance of an interest
in land on t%e ground of unconscionability w%ere it is satisfied t%at t%e transaction is
unconscionable, after considering t%e circumstances, includingG
t%e bargaining conduct of t%e =arties,
t%eir relati'e bargaining =ositions,
t%e 'alue to eac% =arty of t%e agreement reac%ed, and
e'idence as to t%e commercial setting, =ur=ose and effect to t%eir agreement,

Self-Assessment 2 3
07 &nder w%at circumstances is a contract described as illegalU
-7 8it% t%e aid of decided cases discuss =ublic =olicy as a factor for t%e 'itiation a
contract
SESSION 2-3 DISCHARGE OF CONTRACT
Disc%arge of 9ontract is a general term for t%e release of contractual obligations to do
anyt%ing furt%er under t%e contract t%us, w%en t%e =arties become freed from obligation7
; contract is disc%arged w%en a =arty is lawfully free from obligations under t%e
contract7 )%us w%en t%e obligations under t%e contract are in one way or t%e ot%er
e3tinguis%ed by lawful means a contract is said to be disc%arged7
)%e general rule subDect to e3ce=tion is t%at literal com=liance wit% t%e terms of a
contract will o=erate to disc%arge a contract7
)%e lawful means by w%ic% one of t%e =arties would be free from obligations are:
+erformance
;greement
Frustration
&nlawful means
"reac% of a condition
2-3.1 Performance
"ot% =arties must carry out fully all t%eir contractual obligations and subsequently
become free from eac% ot%er7
+erformance must be com=lete, =recise and e3act of entire contract terms7 )%ere may be
defences for non =erformance includingG
;greement
m=ossibility of =erformance and frustration e'ents after contract7
m=ossibility of =erformance falling s%ort of disc%arging frustration: eg
due to unforeseeable e'ents7
9ontractual e3cuses for non H =erformance7
;ll t%e standard conditions of construction contracts contains =ro'isions w%ic% may
entitle t%e contractor to e3tension of time for =erformance w%ere t%ere %as been a delay
by suc% matters eg7 ad'erse weat%er conditions7
Limitation7
f ;, one =arty to a contract, cannot com=lete =erformance wit%out t%e concurrence of t%e
ot%er =arty ", it is ob'ious t%at an offer by %im to =erform and a reDection of t%at offer by
" entitles %im to a disc%arge from furt%er liability7 ?is readiness to =erform %as been
nullified solely by t%e conduct of t%e ot%er =arty7 )%e rule is t%at a tender of =erformance
is equi'alent to =erformance7
&nder t%e common law =rinci=le, time is essential in contract e'en t%oug% it %as not been
e3=ressly made so by t%e =arties7 +erformance must be com=leted u=on t%e =recise date
s=ecified, ot%erwise t%e contract must be broug%t to an end7 +erformance %owe'er s%ould
be wit%in a reasonable time7
5octrine o= 6ubstantial Per=ormance
(ubstantial +erformance is w%ere a =arty e3ecutes a contract to a state w%ere
fundamental requirements of t%e contract %a'e been com=leted7 For e3am=le, w%ere a t%e
construction of a road %as been com=leted lea'ing out t%e =lanting of grass to c%ec$
erosion at one end7 ;gain, w%ere a building %as been com=leted lea'ing out minor wor$s
suc% as cleaning of site to be e3ecuted7
)%e doctrine of substantial =erformance leads to substantial com=letion or =ractical
com=letion w%ic% may =re'ail to disc%arge a contract7 )%is is mostly found in t%e
construction contracts7
)%e disc%arge of a contract based u=on a reason t%at t%e reason for t%e disc%arge is in fact
inadequate, may ne'ert%eless be su==orted if t%ere are at t%e time, facts in e3istence
w%ic% would %a'e =ro'ided a good reason7
2-3.2 Agreement
)%e obligations t%at come about by agreement can also be 'aried or terminated by
agreement7
$ilateral Contracts
n "ilateral contracts, for disc%arge by agreement to be effecti'e, t%e 'ariation must be by
mutual agreement7
Disc%arge by ;greement means t%at t%e =arties intend to free eac% ot%er from t%eir
contractual obligations, or one =arty intends to free t%e ot%er from t%e latterJs contractual
obligations7
)%is intention to relie'e eac% ot%er or to relie'e one =arty is t%en manifested in a
subsequent agreement t%erefore merges as t%e latter agreementG t%e subsequent agreement
su=er cedes t%e former7
a7 )%e intention of ;greement may be merely to 'ary or modify t%e terms of t%e =rior
contract wit%out altering t%em in substance7
b7 )%e agreement may also intend to e3tinguis% t%e original contract com=letely and =ut
an end to t%e contractual relations7
c7 )%e agreement may also e3tinguis% t%e original contract and substitute wit% a new
agreement7
d7 )%ere could also be an agreement to wai'e of a contractual term by one =arty at t%e
request of t%e ot%er7
>ovation
; no'ation is a s=ecial form of disc%arge of contract by agreement to substitute at least
one of t%e =arties or t%e contractual terms7
K;+;! B:):>( ' >;!D:L+? B:):>(
!o'ation is a transaction by w%ic% t%e consent of all t%e =arties in'ol'ed a new contract
is ado=ted in =lace of anot%er w%ic% is already in e3istence7
!o'ation in'ol'es t%e disc%arge of t%e original obligation under an e3isting contract and
t%e creation of a new one in its =lace7
For no'ation to be successfully =leaded
)%ere must be an intention to substitute7
)%ere must be a substitution of t%e original obligation wit% a new one7
)%e substituted arrangement must %a'e been mutually agreed to7
Hnilateral Contract
&nder a &nilateral 9ontract, t%ere could be a unilateral disc%arge of t%e contract7
2.3.3 Frustration and Breach of Contract
2-3.3.1 Frustration
L7 "7 9urson @Dictionary of LawA defines frustration as a situation w%ere t%ere is an e'ent
or c%ange of circumstances so fundamental as to stri$e at t%e roots of a contract as a
w%ole and beyond w%at was contem=lated by t%e =arties7 (uc% a contract is considered
frustrated7
; frustration may be caused byG
onesJs own conduct or to t%e conduct of t%ose to w%om one is res=onsible7
?owe'er a =arty cannot rely on a self induced frustration7
a t%ing or =erson essential to t%e attainment of t%e fundamental obDect w%ic% t%e
=arties %ad in 'iew is no longer a'ailable owing to e3traneous cause7
)%e non-occurrence of some e'ent w%ic% must reasonably be regarded as t%e
basis of t%e contract7eg non a'ailability of land for t%e construction wor$s7
nterference by t%e go'ernment in t%e acti'ities of one or bot% of t%e =arties
(ection 0 of t%e ;ct -L =ro'idesG
8%ere a contract %as become im=ossible of =erformance or been ot%erwise frustrated and
t%e =arties t%ereto %a'e for t%at reason been disc%arged from t%e furt%er =erformance of
t%e contract following =ro'isions s%all, effectG
i7 all sums =aid or =ayable to any =arty in =ursuance of t%e contract before t%e time w%en
t%e =arties were so disc%arged s%all, in t%e case of sums so =aid, be reco'erable from
%im, and in t%e case of sums so =ayable, cease to be so =ayable7
ii7 8%ere a =arty %as incurred e3=enses before t%e time of disc%arge in, or for t%e =ur=ose
of, t%e =erformance of t%e contract, t%e 9ourt may allow %im to reco'er or to retain out of
any sum recei'ed by %im under t%e contract,
)%e said amount @if anyA, s%all not e3ceed t%e e3=enses so incurred or t%e total sum
=ayable to %im under t%e contract, as t%e 9ourt may consider Dust %a'ing regard to all t%e
circumstances of t%e case7
2-3.3.2 Breach of Contract
t is t%e refusal or failure by a =arty to contract to fulfil an obligation im=osed on %im
under t%at contract7 )%is may result from e7g re=udiation of liability before com=letion, or
conduct =re'enting =ro=er =erformance7
n construction contracts, a breac% may arise if t%e contractor refused to obey a =ro=er
instruction, eg to remo'e defecti'e wor$ or if wor$ were not com=leted according to t%e
contract7
2.3.4 Remedies and Special Contracts

2-3.4.1 Remedies
1 Damages
Damages is t%e courtJs estimated com=ensation in money for t%e detriment or inDury
sustained by a claimer7 t is a means of monetary award to =lace a =arty of a contract in
t%e =osition %e would %a'e occu=ied if %e %ad not suffered t%e wrong com=lained of7
Damage is reco'erable if it results eit%erG
From t%e natural consequences of t%e breac% or
From s=ecial circumstances of w%ic% t%e =arties %ad actual $nowledge and w%ic%
caused t%e breac% to result in e3ce=tional loss7
!ot e'ery loss arising out of a breac% of contract is reco'erable in damages7 )%us a claim
can be made for most, but not all, losses w%ic% stems from breac% of contract7 Damages
for breac% of contract are reco'erable only if a cause between t%e breac% and loss claimed
is establis%ed7 )%e courts consider two =rinci=les in assessment of damagesG
07 t%ose losses w%ic% may arise naturally out of t%e breac%
-7 t%ose losses w%ic% may reasonably be su==osed to %a'e been wit%in t%e
contem=lation of t%e =arties at t%e time of t%e ma$ing of t%e contract7
?owe'er, t%e =ayment of damages under t%ese =rinci=les is not automatic as t%e court
ensures t%at t%e claimer %as ta$en all =ossible ste=s to mitigate t%e losses7
)%e measure of damages may beG
)%e difference between t%e contract =rice and t%e =rice actually =aid
Full cost of re building w%ere t%ere is no ot%er alternati'e of re-building
;ctual or estimated cost of re-instatement of defecti'e wor$
53tra cost for com=letion of wor$ t%at a =arty %as failed to do at t%e earliest
reasonable time
)%e additional =ayments of losses suc% as rents and =rofits de=ends on t%e rules
of remoteness
8%ere t%e cost of remedial wor$ is dis=ro=ortionate or w%ere ot%er circumstances
dictate t%at remedial cost is not t%e true measure of loss, t%e =arty may be
com=ensated for t%e loss in 'alue to t%e =ro=erty
nflation or fluctuation in building cost is reco'erable
5odd Properties 7:ent8 v Canterbur& Cit& Council [193.] 1 -0R 411
)%e defendants were liable for damaging t%e =laintiffJs garage =remises in 09/17 )%ere
was delay in carrying out re=airs until 0921, w%ic% resulted in a considerable increase in
cost, for w%ic% t%e defendants dis=uted liability7 )%e =laintiffs delayed doing t%e wor$
because t%e cost would %a'e resulted in financial stringency, and t%ey were reluctant to
lay out money before being sure of reco'ering it7 t was %eld t%at t%e =laintiffs could
reco'er t%e 0921 =rice of wor$7
GG.I" a ase i" #hih a plai"tiff has rei"stated his property before heari"g, the osts
prevaili"g at the date of that operatio" #hih #ere reaso"ably i"urred by him are
prima faie those #hih are releva"t. 0&ually i" the ase i" #hih a plai"tiff has "ot
effeted rei"stateme"t by the time of heari"g, there is a prima faie presumptio" that the
ost, the" prevaili"g, are those #hih should be adopted i" asertai"i"g the ost of
rei"stateme"t. 3here may i"deed be ases i" #hih the ourt has to estimate osts at
some future time as bei"g the reaso"able time at #hih to rei"state.
Remoteness o= 5amage
;ll losses falling outside t%e two =rinci=les abo'e can be regarded as too remote to be
com=ensated for7 ; claim can succeed only in res=ect of damage w%ic% is in law not too
remote7 Damage is too remote if t%e =arties must not reasonably %a'e contem=lated it at
t%e time t%e contract was entered into7
)%e rules of remoteness %a'e no a==lication to a claim under a contract as o==osed to a
claim for breac%7 )%us if a dealer warrants t%at a 'e%icle is in good condition and it
brea$s down, t%e =urc%aser may reco'er as damages for breac% of contract t%e cost of
re=airs and t%e cost of %iring an alternati'e 'e%icle7 f, %owe'er t%e dealer =romises only
to re=lace defecti'e =arts, t%e =urc%aserJs entitlement under t%e contract is to t%e cost of
re=airs, and no question of consequential damage arises7 )%us t%e cost of %iring an
alternati'e 'e%icle cannot be reco'ered7
)%e situation is different in construction contracts7 n t%e construction contracts, defect
liability clauses w%ic% oblige t%e contractor to =ut rig%t defects, do not normally =re'ent
t%e contractor also being in breac% so t%at consequential loss may be reco'erable e'en
t%oug% t%e contractor %as re=aired t%e wor$
Types of damages
i. Liquidated damages
t is =re estimated com=ensation in money for antici=ated breac% of contract7 )%us, =arty
to a contract may agree before%and w%at sum s%all be =ayable by way of damages in t%e
e'ent of breac%, t%is sum is referred to as liquidated damages7
)%e courts will only enforce t%e =re stated sum if it is a genuine =re-estimate of t%e loss
t%at will be caused to one =arty, 7if t%e contract is breac%ed by t%e ot%er =arty7 f t%e court
feels t%at t%e sum was inserted was not genuine eg stated i" i"terrorem, @as a security to
t%e =romise t%at t%e contract will be =erformedA, t%e said liquidated damages may not be
enforced7 t is rat%er referred to as =enalty not liquidated damages7
Li&uidated damages a"d pe"alty
f t%e =arties %a'e made a genuine attem=t to =re estimate t%e loss li$ely to be
suffered, t%e sum stated will be liquidated damages and not a =enalty,
irres=ecti'e of t%e actual loss7
)%e sum will be a =enalty if t%e amount is e3tra'agant %a'ing regard to t%e
greatest =ossible loss w%ic% could be caused by t%e breac%7
f t%e sum is to be =ayable on t%e %a==ening of any one of a number of
breac%es t%at are li$ely to gi'e rise to a different amount of damages, it will be
a =enalty7
n construction contracts, em=%asiFe is on t%e =re estimated sumJ and %ence t%e term
ascertained liquidated damages @L;DA7 ;n unascertained liquidated damages t%erefore
becomes =enalty7

ii. Unliquidated damages
Damages t%at are not =re estimated but de=endent on t%e circumstances of t%e case are
referred to as &nliquidated Damages7
iii. Exemplary damages
53em=lary damages is also called +uniti'e damages or Eindicti'e damages7 t is damages
awarded by 9ourt so as to =unis% defendant or to ser'e as deterrent mec%anism and
=re'ent ot%ers from committing suc% wrong7
This type of damages is not applicable in contract.
iv. Contemptuos Damages
)%is is damages awarded wit% t%e sum considered as derisory, ie ridiculously inadequate
v. Substantial Damages
)%is sum awarded is adequate and re=resents com=ensation for t%e actual loss suffered7
vi. Nominal Damages
)%is is w%ere no actual damage %as been suffered yet a =arty is made to =ay an amount of
money to t%e ot%er =erson7
2. Specific Performance
t is an equitable remedy and discretionary7 t is an order of t%e court com=elling a =arty
to a contract to =erform e3actly w%at %e %ad =romised to do7 t t%ri'es on t%e basis t%at in
some circumstances t%e =ayment of damages would not =ro'ide an adequate remedy7 For
e3am=le a contractor w%o fails to build after =ayment of ad'ance may be com=elled to
=erform instead of only claim of damages7
(=ecific =erformance may be ordered if t%e following conditions are satisfiedG
)%e claimer %as a substantial interest suc% t%at damages would not com=ensate
%im
)%e defendant is in =ossession of t%e land so t%at t%e claimer cannot do t%e wor$
)%ere is no consideration, e'en if t%e contract is under seal
9ontract for t%e sale of goodwill of a business wit%out t%e =remises
9ontracts in w%ic% only one side can enforce t%e agreement eg a minorJs contract
n construction contracts, (=ecific +erformance will be granted to enforce a contract but
only in t%ose circumstances w%ereG
)%e construction wor$ to be done is clearly defined in t%e contract
)%e =laintiff %as a s=ecial interest in %a'ing t%e wor$ done @w%ere damages may
be inadequateA
)%e defendant is in =ossession of t%e land so t%at no ot%er contractor could be
em=loyed to carry out t%e wor$s7
@9onstruction law @092/A -Ko%n &ffG .
rd
5ditionA
3. Limitation Periods
5quity always suggests t%at a suit must be broug%t wit%in a reasonable timeJ ot%erwise
t%e claim is barred for lac%es @delayA7 )%e law =ro'ides 'arious limitation =eriod for
'arious contracts 5gG
9laims on a contract under seal eg7 Land -0- years
9laims in sim=le contract eg 9onstruction 9ontract H / years
nsurance claim H . years etc
)%e e3ce=tion to t%is =rinci=le is t%at w%ere t%e rig%t of action is concealed by fraud, t%e
=eriod of limitation does not begin to run until t%e =laintiff disco'ers or s%ould disco'er
it7
4. Injunction
t is a court order directing a =erson to refrain from doing or continuing to do an act
com=lained of, or restraining %im from continuing an omission.
Types of Injunction
a7 +ro%ibitory nDunction forbidden continuation or omission of a wrongful act7 n
contract law it is granted only in t%e case of negati'e =romise ie w%at a =arty %as =romise
not to do7 ; contractor w%o %as =romise not to de=osit gra'els at =articular s=ot but
continue to de=osit t%em t%ere may be forbidden from continuing suc% negati'e act7 t is
sometimes equi'alent to s=ecific =erformance7
b7 Bandatory nDunctionH >estraining continuation of omission by direct =erformance of
=ositi'e act7 )%is is restorati'e in its effect, not merely =re'enti'e7 t directs t%e =arty to
ta$e =ositi'e ste=s to undo w%at %e %as already done in breac% of t%e contract7 5g as$ing
a contractor to remo'e gra'els de=osited at a =articular w%ic% is in contrary to agreement7
c7 nterlocutory nDunction H )em=orary inDunction intended to maintain t%e status &uo
until trial7 t is granted w%ere t%ere is a serious, not fri'olous, for trial or unless granted
somet%ing disastrous may be caused7
; contractor building on a dis=uted land may be as$ed to sus=end wor$s until trial of t%e
action7

d7 +e=ertual nDunction H nDunction granted after t%e %earing of an action
e7 nterim nDunction H >estraining a =arty until some s=ecific date
f7 Tuia timet nDunction- >estraining a =erson for wrong not yet committed but for fear or
t%reatened situation
5. Quantum Meruit
Cuantum meruit means as muc% as %e %as earnedJ7 ;n inDured =arty in contract may be
entitled to claim for wor$ done and ser'ices =erformed on breac% of contract7 ; claim of
quantum meruit can be made in any contract w%ere t%ere is no e3=ress agreement as %ow
muc% t%e contractor is to be =aid for %is ser'ices or %is remuneration is not fully =ro'ided
for7 )%us, w%ere t%ere is an e3=ress sti=ulation as to =ayment a claim on a quantum
meruit will not lie e3ce=tG
8%ere t%e ot%er =arty %as =re'ented %im from com=leting
8%ere t%e claimant %as conferred a benefit u=on t%e ot%er and t%e benefit
%as been acce=ted
8%ere wor$ %as been done under 'oid contract
8%ere wor$ is outside t%e original contract t%at binds t%e =arties @ if wor$
cannot be treated as 'ariation to t%e original contractA
Cuantum meruit o=erates as a legimate remedy in contract and sometimes as a quasi-
contractual remedy7
&nder a =urely contractual arrangement quantum meruit may be used to reco'er
a7 a reasonable =rice or remuneration w%ere a contract %as been made for t%e su==ly of
goods or ser'ices and no =recise sum %as been fi3ed by t%e agreement
b7 ser'e t%e =laintiff w%ere an original contract to w%ic% %e was a =arty %as been re=laced
by a new one, and %e now see$s =ayment for wor$ done or goods su==lied under t%is
substituted agreement
f a =laintiff %as made an agreement to do wor$ for t%e defendant in return for a s=ecified
fee or amount and now sues on a quantum meruit for e3tra wor$ done, %e must satisfy t%e
court t%at t%e original agreement %as been disc%arged7 ?e must be off wit% t%e old
contract before %e can be on wit% t%e new one7
n a quasi contract t%e =laintiff may see$ to,
a7 reco'er reasonable remuneration for wor$ done in =ursuance of a contract w%ic% %as
been disc%arged by t%e default of t%e defendant7 )%us it ser'es as an alternati'e for claim
in damages for breac% of contract7
b7 w%ere t%e =laintiff %as rendered ser'ices in =ursuance of a transaction su==osed by %im
to be a contract but w%ic% in trut% is wit%out legal 'alidity7

6. Rescission
t is remedy for inducing a contract by innocent or fraudulent misre=resentation w%ereby
t%e contract is abrogated7 ; =arty intending to rescind must notify t%e ot%er =arty7 ;
rescission ab initio results in t%e contract being treated as t%oug% it %ad ne'er e3isted7
7 Rectification
t is t%e =ower of t%e court to alter a contract document if by mista$e t%e document does
not record t%e true agreement so as to effect t%e true agreement between t%e =arties7
)%ere can be no rectification of a mista$e in t%e transaction but only of t%e way in w%ic%
t%e transaction was =ut into writing
Roberts & Co v Leicestershire City Council 1961] Ch 555
; building 9ontractor tendered to build a sc%ool in 01mont%s, t%e em=loyer after
acce=ting t%e tender inserted a =eriod of .0 mont%s into t%e formal contract wit%out t%e
contractorJs $nowledge7
?eldG t%e em=loyer $new of t%e contractorJs mista$en belief as to t%e term and t%at t%e
contractor was entitled to %a'e t%e contract rectified by insertion of com=letion =eriod of
01 mont%s7
&sually, t%e mista$e to be rectified is one of fact, but it may also be as to t%e legal effect
of t%e words used7

2.3.4.2 SPECIAL CONTRACTS
)%ere are some s=ecial contracts besides 9lientH9ontractor 9ontract t%at affects t%e
9onstruction ndustry and w%ic% are go'erned by t%eir own s=ecial rule and statutes in
addition to t%e general =rinci=les go'erning contract in general7
1. Sale of Goods
9ontracts for sale of goods are go'erned by t%e (ale of *oods ;ct, 09/-7 )%is field
co'ers transactions ranging from retail =urc%ases in s%o=s to t%e sale of items of great
'olume and 'alue7 )%e act also co'ers %ire =urc%ase but not sale of land @real =ro=ertyA7 t
=ro'ides t%e regulation for t%e =urc%ase and su==ly of construction materials and
equi=ment necessary for construction wor$s7

2. Agency
;gency describes t%e relation between two =arties w%ereby one , t%e agent , acts on
be%alf of t%e ot%er, t%e =rinci=al7 Law of ;gency also regulates t%e relations between
9onsultants and ot%er =rofessional w%o may be engaged by t%e em=loyer or t%e
contractor @not as em=loyeesA but to =ro'ide some ser'ices on t%eir be%alf and t%ereby act
as agents in t%e deli'ery of t%eir ser'ices7
3. Contract of Employment
9ontract of em=loyment is also called 9ontract of (er'ice7 )%is in'ol'es t%e =ro'ision of
ser'ices to an em=loyer7 (tatutes and case law sets out rig%ts and duties of t%e =arties
beyond t%eir e3=ress agreement7 &nder 9ontract of 5m=loyment one =erson =laces %is
ser'ice at t%e dis=osal of anot%er7 ; =erson w%o is contracted to carry a s=ecific wor$s is
an inde=endent contractor as o==osed to an em=loyee or ser'ant7 )%e Labour ;ct go'erns
t%e relations%i= between t%e wor$ers and em=loyers7 )%e collecti'e bargaining
agreements between t%e wor$ers and em=loyers in t%e 9onstruction ndustry also ser'e as
a guide in t%is relation7

4. Contract for Service
)%is is t%e contract for t%e engagement of e3=erts or inde=endent contractors w%o may be
=ro'iding ser'ices for t%e contractor or t%e em=loyer7 )%ese include sur'eyors, arc%itects,
accountants etc
5. Insurance Contract
)%e nature of contract of insurance is t%at one =arty @t%e insurerA underta$es to ma$e
=ayments to or for t%e benefit of t%e ot%er =arty @t%e insuredA on t%e %a==ening of some
e'ent7 )%e contract may generally be in any form e'en oral but it is usually contained in a
document called =olicy7 5g ;ll >is$ +olicy for 9ontractors, +erformance "ond , )ender
(ecurity "ond ;d'ance +ayment guarantee or bond, Ee%icle nsurance bond @ t%ird =arty
or com=re%ensi'eA etc7 )%ese underta$ings are usually by financial institutions suc% as
"an$s, nsurance 9om=anies etc
6. Real Estate Contracts
)%ese are contracts entered into between real estate de'elo=ers and =eo=le offering to
=urc%ase some of t%e =ro=erties7
7. Contract of Guarantee
t is a collateral agreement for engagement to answer for t%e debt or non =erformance,
default or miscarriage of anot%er =erson7

8. International Contracts
)%e a==licable laws under international contracts de=ends u=on t%e nature of t%e contract7
)%e =arties to t%e contract are generally free to c%oose as to t%e =ro=er law, t%e law of
any nation7 )%e international 9onditions of 9ontract for ci'il engineering wor$ regulates
t%e international contracts for ci'il engineering wor$s7 )%e nternational Federation of
9onsulting 5ngineers @FD9A is t%e current international conditions of contract for ci'il
engineering wor$s regulating t%e relations between t%e em=loyer and contractor of
different nationality7
n *%ana all 8orld "an$ and ot%er donor funded =roDects =rescribe to t%e use of FD97

Self-Assessment 2 3
07 Distinguis% between Ngood considerationO and N'aluable considerationO
-7 53=lain t%e statement of section 00 and section L@0A of 9ontracts ;ct, 09/0 @;ct
-LA t%at, 9onsideration needs not come from t%e =romisee7

.7 *enerally, infants cannot be sued or sue to enforce contract7 (tate t%e
e3ce=tion@sA to t%is general rule7
47 NConsensus ad idem is one of t%e elements of a contract7 8%at is t%e meaning
of t%is element of contractU
L7 (tate two sources of an im=lied term of a contract7
/7 8%at do you understand by t%e term N&nilateral Bista$eO
Summary
Unit Summary
Key terms
9onsideration, 9onsensus ad idem, quantum meruit, s=ecial contract
Review Question
07 &nder w%at circumstances is a contract described as illegalU
-7 &nder w%at circumstances is a contract described as disc%argedU

.7 8%at do you understand by Liquidated damagesU
Unit Assignment

a7 8%at is quantum meruitU
b7 <ou are t%e +roDect Banager of ;"9 9onstruction Limited7 )%e Banaging
Director of t%e 9om=any %as decided to ta$e Kames )own District ;ssembly to
9ourt for non-=ayment of nterim +ayment 9ertificate @+9A !o7 L7 <our
Banaging Director %as in'ited you for discussion on w%et%er or not t%e 9ourt will
enforce t%e 9ontract7 ;d'ise %im by stating t%e grounds under w%ic% t%e court
may not enforce t%e contract and briefly comment on two of t%em7
UNIT 4
DISPUTE RESOLUTION
Introduction
)%is unit identifies mec%anisms of dis=ute resolution as a==licable to t%e *%anaian legal
(ystem7 )%e maDor mec%anisms of Dis=ute >esolution %a'e been %ig%lig%ted to include,
Litigation and ;lternati'e Dis=ute >esolution suc% as ;rbitration, !egotiation and
mediation7
12. 01plai" t%e basic mec%anisms of a dis=ute resolutions affecting
construction acti'ities
1D. Defi"e and desribe t%e underlining =rinci=les of a arbitration
14, Ide"tify t%e o=eration of t%e forms of non arbitral dis=ute
resolution

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(ession --4 ;D> Bec%anisms
--470: Forms of ;rbitration
--47-: !on ;rbitral Bec%anisms
--47.: Dis=ute >esolution in *%anaian 9onstruction ndustry
SESSION 1-4 Dispute Resolution Mechanisms
)%e com=le3 nature of construction =rocess requires t%at dis=utes will ine'itable arise7
)%ere are two main met%ods of resol'ing construction dis=utes in *%ana7 )%ese areG
Litigation
;lternati'e Dis=ute >esolution @;D>A
1-4.1 Litigation
"efore t%e middle of t%e 09
t%
century, dis=utes in t%e construction industry were tried in
t%e courts by =rocess of litigation7 )%e basic ste=s in'ol'ed in suc% ci'il action in t%e
courts are in t%ree main stagesG
0-47070 Stage 1 Pleading Stage
i7 )%e issuance and ser'ing of writ by t%e +laintiff
ii7 5ntry of a==earance to t%e writ by t%e defendant
iii7 Filing of statement of 9laim by t%e +laintiff
i'7 Filing of (tatement of Defence wit% or wit%out 9ounter 9laim by t%e
Defendant
'7 Filing of >e=ly to t%e (tatement of Defence by t%e +laintiff
'i7 Filing of (ummons for Direction by t%e +laintiff
'ii7 >es=onse to (ummons for Direction by t%e Defendant
'iii7 53c%ange and ins=ection of documents by =arties
0-4707- Stage 2 - Hearing Stage
Qpe"i"g a"d 8losi"g of ase by 6lai"tiff
i37 5'idence on oat% by t%e +laintiff @9%ief 53amination by t%e +laintiffJs
counselA
37 9ross 53amination by t%e Defendant or DefendantJs 9ounsel
3i7 >e- 53amination by t%e +laintiff or +laintiffJs 9ounsel
3ii7 5'idence on oat% by 8itness@esA @9%ief 53amination by t%e +laintiffJs
counselA
3iii7 9ross 53amination by t%e Defendant or DefendantJs 9ounsel
3i'7 >e- 53amination by t%e +laintiffJs 9ounsel
Qpe"i"g a"d 8losi"g of 8ase by the Defe"da"t
3'7 5'idence on oat% by t%e Defendant @53amination-n-9%ief by t%e DefendantJs
9ounselA
3'i7 9ross 53amination by t%e +laintiff or +laintiffJs 9ounsel
3'ii7 >e- 53amination by t%e Defendant 9ounsel
3'iii7 5'idence on oat% by DefendantJs 8itness@esA @53amination-n-9%ief by t%e
+laintiffJs counselA
3i37 9ross 53amination by t%e +laintiff or DefendantJs 9ounsel
337 >e- 53amination by t%e DefendantJs 9ounsel
33i Address by both 8ou"sels
1-4.1.3 Stage 3- Ruling Stage
33ii Kudgment
33iii 5nforcement and 53ecution of Kudgment if no a==eal is made
)%e =rocedure seems to be straig%tforward but it is more com=le3 t%an t%is since at eac%
stage t%ere are alternati'es and =ossible actions and obDections t%at can be ta$en or raised7
Litigation t%erefore %ad been seen as doing more %arm to t%e industry t%an good due to
t%e following reasonsG
)%e =lace of %earing and conducting t%e trial %as always been unilaterally been
initiated
t is always %eld at =ublic courts gi'en no =ri'acy to t%e business =artners
)%e in'itation to a==ear at t%is =lace is made com=ulsory
t is normally %eld before a Kudge w%o may by %is training $nows a little about t%e
construction =rofession or industry as w%ole7 ;nd may t%erefore gi'e a fair
Dudgment
)%e re=resentation of =arties by legal =rofessionals @lawyersA w%o may also $now
little about t%e industry %ad always =rolong and influence t%e settlement
)%e decision of t%e Kudge %ad always been binding wit% limited rig%t of a==eal as
by law
)%e =rocess %as always ended in se=arating t%e once business =arties as it is eit%er
win or lose situation7
)%e =rocess %ad always been time consuming and uneconomical
)%e =rocess of litigation is confrontational, e3=ensi'e, time consuming and not non-
satisfactory to =arties7
1.4.2 ALTERNATIVE DISPUTE RESOLUTION
;L)5>!;)E5 D(+&)5 >5(:L&):! is a collecti'e descri=tion of met%ods of
resol'ing dis=utes, ot%erwise t%an t%roug% t%e normal trial =rocess7 )%e dis=ute or
difference is referred to a neutral =erson @sA s=ecially a==ointed7 )%e selected =erson @sA
%ears e'idence from bot% =arties to t%e dis=ute and settles t%e dis=utes in amicable
en'ironment7
1.4.2.1 DEFINITION OF TERMS
)%ese notes are to be read in conDunction wit% t%e ALTERNATIVE DISPUTE
RESOLUTION ACT, 2010 (Act 798). )%e ;ct 291 %as re=ealed t%e traditional
;rbitration ;ct, 09/0 @;ct .1A7 ;ll referenced clauses are from t%e ;ct 2917
;>")>;):!: t is t%e 'oluntary submission of a dis=ute to one or more im=artial
=ersons for a final and binding determination7
9&():B;>< ;>")>;):!: )%e 'oluntary submission of a dis=ute w%et%er or not
relating to a written agreement for a final binding determination7 t is reference to one or
more im=artial =ersons7

9:!9L;):!: it is t%e submission of a dis=ute w%ic% is t%e subDect of an arbitration
during t%e cause of t%e arbitration to an im=artial =erson w%o is not t%e arbitrator to
facilitate t%e resolution of t%e dis=ute between t%e =arties7

;>")>;):>: t is one or more im=artial =ersons a==ointed or w%o can be a==ointed to
offer a final and binding resolution to a dis=ute7 )%e =erson to w%om t%e dis=ute is
referred7
9:!9L;):>: t is an im=artial =erson a==ointed to =reside o'er a conciliation
conference7
9&():B;>< ;>")>;):>: t is an im=artial =erson a==ointed or qualified to be
a==ointed as an arbitrator in customary arbitration7
B5D;):!: t is a nonbinding =rocess in w%ic% t%e =arties discuss t%eir dis=ute wit%
an im=artial =erson w%o assists t%em to reac% a resolution7
B5D;):>: t includes an im=artial =erson a==ointed or qualified to be a==ointed to
assist t%e =arties to satisfactorily resol'e t%eir dis=ute and em=loyees and =ersons %ired
by t%at =erson
&B+>5: 8%en two arbitrators are a==ointed t%ey select a t%ird =erson @um=ireA w%o
will ta$e o'er t%e =roceedings w%en disagreement arises between t%e arbitrators7
)?5 +;>)5(: ;re t%e =ersons w%o eit%er agree to refer t%eir differences to arbitration
or are com=elled to do so by statute or order of court7 )%ose w%o agree to submit t%eir
differences to arbitration must be legally ca=able of entering into a binding contract7 )%e
=arties are referred to as t%e 9laimantJ and >es=ondentJ res=ecti'ely7
)?5 ;>")>;):! ;*>55B5!): t is an agreement to submit to arbitration =resent
or future dis=ute7 t is t%e written @actualA agreement made by t%e =arties to submit t%eir
=resent or future differences to arbitration7 )%e ;greement s%ould =referably be in
writing7 t would a==ear necessary to name t%e arbitrator in t%e agreement7 )%e
agreement is sometimes referred to as N)%e (ubmissionO7
)?5 +L5;D!*(: 9om=rise t%e +oints of claimJ and +oints of DefenceJ7 )%ese are
statements of eac% =artyJs case drawn u= before t%e %earing to enable eac% =arty to be
fully aware of t%e case %e/s%e %as to meet at t%e reference7
)?5 >5F5>5!95: s actual %earing i7e7 w%en t%e arbitrator carries out t%e Dudicial
enquiry7
+;>)9&L;>(: ;re furt%er details gi'en in e3=lanation of statements made in t%e
+oints of 9laimJ and or +oints of DefenceJ7
!)5>>:*;):>5(: ;re questions in writing on =ointJs material to t%e arbitration,
addressed by one =arty to t%e ot%er wit% a request t%at t%ey be answered7
)?5 ;8;>D: is t%e decision of t%e arbitrator @sA or um=ire7
Self-Assessment 2 1
07 8%at is are t%e stages in'ol'e in litigationU
-7 8%at is (tatement of claim in litigationU
.7 8%at is t%e difference between ;lternati'e Dis=ute >esolution and LitigationU
47 Discuss t%e =rocedure in'ol'e in t%e ?earing stage of litigation
SESSION 2-4 Alternative Dispute Resolution (ADR) Mechanisms
2-4.1 Forms of Arbitration
n *%ana, t%ere are two forms of ;rbitration recogniFed in t%e ;D> ;ct -000 @;ct 291AG
9ustomary ;rbitration
Formal ;rbitration
nternational ;rbitration >ules may be a==lied on s=ecial contracts including
international contracts7
)%e legal structure allows litigants to o=t for arbitration =roceedings w%ilst t%e matters is
=ending in courts7 )%e legal system in recent times %as enrolled into t%e formal Dudicial
=rocess for settlement of commercial dis=utes a =re-trial session w%ic% ta$es form of
;rbitration by 9ommercial 9ourt action7
2-4.1.1 Formal Arbitration
;rbitration is a met%od of settling dis=utes w%ic% in'ol'es tec%nical or commercial
elements between two or more =ersons ot%er t%an court =rocedure t%roug% an
inde=endent binding equitable decision by a neutral =erson@sA rat%er t%an a lay down
rules7
t is a =rocess w%ereby =arties agree to submit t%e matter in dis=ute to t%e decision of a
=erson or =ersons in w%om t%ey %a'e confidence and trust and underta$e to abide by t%at
decision7 t is a dis=ute tec%nique wit% a legal bac$ing7 )%us =arties are bound to acce=t
t%e arbitration award as final and binding on t%em7
n commercial law, arbitration is defined as a =rocess subDect to statutory su==ort by
w%ic% formal dis=utes may be determined in a binding manner by a tribunal of t%e
=artiesJ own c%oosing7
)%e +rerequisites to a 'alid arbitration areG
The existence of a dispute
)%ere must be a rig%t t%at %as been abused, interest or claim t%at %as been denied7 )%us
w%ere none %as e3=ress concerned of a rig%t, interest or claim or w%ere t%ere is no
solution to a =roblem t%ere could not be arbitration7

Reference of dispute to arbitration
; =arty must ta$e t%e initiati'e to gi'e a notice of an abused rig%t, or denied interest and
claim by t%e ot%er =arty@iesA7 )%is set t%e o=ening of t%e arbitration =rocess7 ?owe'er,
arbitration under some construction contract standard forms cannot usually be o=ened
until after com=letion of wor$s7 )%is is to a'oid sus=ension or slow down of wor$s7
*enerally arbitration may commence at any time e'en in t%e 9onstruction contracts but
t%e =rocess must be managed not to %a'e negati'e im=act on t%e success of t%e wor$7

Mutual submission to arbitration process by parties
*enerally =arties in dis=ute must eit%er agree or %a'e already agreed to refer t%e dis=ute
to a neutral =erson@sA or a s=ecified institution for determination7 n construction
contracts, t%e conditions of contract %a'e usually included t%e =rior agreement to
mutually submit dis=ute to arbitration7 )%e e3tent of t%is mutual agreement must %owe'er
be defined, t%us w%et%er or not all dis=utes or s=ecific dis=utes are to go for arbitration7
8it% suc% clause in t%e conditions of contract, t%e =arties can only by =ass t%e arbitration
=rocess to court w%en t%e clause is abrogated or cancel wit% t%e intention of =ermitting
t%e =arties to go to court7 8%ere t%e =arties agree to ta$e a dis=ute to court t%en t%e court
may be ceased wit% t%e =owers of an arbitrator7
)%e agreement to submit to arbitration =rocess includes t%e fact t%at t%e =arties %a'e also
agreed to be bound by t%e inde=endent fair or equitable decision of t%e neutral =erson@sA7
Advantage of Arbitration
@aA )%e arbitrator may be selected from s=ecialists %a'ing e3=ert $nowledge of
t%e subDect matter of t%e dis=ute7 ;n ;rc%itect, quantity (ur'eyor or engineer
will usually be a==ointed arbitration for a dis=ute arising between =arties to a
building contract7
@bA )%e dis=ute can be broug%t to a %earing and settled more s=eedily t%an by
action at law7
@cA t will usually be less costly t%an an action at law7
@dA )%ere need not be any =ublicity
@eA )%e time and =lace of %earing can be arranged to suit t%e =arties
@fA )%e arbitration =rocess fle3ible and ada=table to suit t%e dis=ute7 )%e
arbitrator can be e3=ressly required to 'isit t%e site, ins=ect wor$s etc7
@gA t de=ends on t%e a==licable contract law
@%A )%e =rocess may be informal wit%out abandoning courtesy7
Disadvantages of Arbitration
;lt%oug% ;rbitration is a =ri'ate alternati'e to litigation, t%e =roceedings are
closely connected wit% t%at of t%e courts7 )%e connection ta$es 'arious forms7 For
instance arbitrator follows t%e ordinary law in ensuring natural Dustice not %is own
conce=t of fairness and rules of Dustice7
)%e t%ree stages of litigationG =leading, %earing and ruling @awardA are usually
followed in arbitration7
)%e re=resentation of =rofessional lawyers in recent times influence t%e settlement
and t%e issue of win or lose $ee= on =ulling t%e =arties a=art7
;rbitration is gradually becoming confrontational and no longer more economical in
terms of time and cost and satisfactory o=tion as e3=ected7
APPOINTMENT OF ARBITRATOR
)%e a==ointment of t%e arbitrator s%ould be dealt wit% in t%e agreement7 )%e =arties are at
liberty to determine t%e number of arbitrators e3ce=t t%at t%e number must be an une'en
number @(ection 0.@0AA7
;++:!)!* ;&)?:>)<
)%e =arties may 'est =ower in any =erson or aut%ority including t%e *%ana ;rbitration
9entre described as t%e Na==ointing aut%orityO to ta$e any action for or on be%alf of t%e
=arties, in relation to t%e arbitration7
; (!*L5 ;>")>;):>
n an arbitration w%ic% requires t%e a==ointment of a sole arbitrator, if t%e =arties fail to
agree on t%e arbitrator wit%in 04 days after recei=t of a request for arbitration by one
=arty from t%e ot%er =arty, t%e a==ointment s%all be made by t%e a==ointing aut%ority
u=on a request by a =arty @(ection 04@4AA7
)?>55 ;>")>;):>(
if no mention is made to t%e number@sA of arbitrators it is im=lied t%at t%e
reference s%all be to t%ree arbitrators @section 0.@-AA7
f =arties fail to agree on a =rocedure for t%e a==ointment of t%e t%ree arbitrators
and t%e agreement does not =ro'ide for t%e settling of t%e disagreement, eac%
=arty s%all a==oint one arbitrator and t%e two arbitrators s%all a==oint t%e t%ird
arbitrator w%o s%all be t%e c%air=erson7
8%ere t%e two a==ointed arbitrators fail to agree on t%e t%ird arbitrator wit%in 04
days from t%e date of t%eir a==ointment, a==ointment s%all be made by t%e
a==ointing aut%ority u=on request by a =arty7
n suc% a reference, t%e award of any two arbitrators s%all be binding7
&B+>5
8%ere t%e arbitration agreement =ro'ides for t%e a==ointment of an e'en number of
arbitrators, t%e arbitrators s%all wit%in 04 days of t%eir a==ointment a==oint an additional
arbitrator to be an um=ire @>ule 00 @-A of t%e ;lternati'e Dis=ute >esolution 9entre
;rbitration >ulesA
f t%e arbitrators are unable to a==oint t%e additional arbitrator wit%in t%e s=ecified time
t%e ;lternati'e Dis=ute >esolution 9entre @or any ot%er a==ointing ;ut%orityA s%all
a==oint t%e additional arbitrator to be an um=ire @>ules 00 @-A and 00@LA of t%e
;lternati'e Dis=ute >esolution 9entre ;rbitration >ulesA
D()!9):! "5)855! ! &B+>5 ;!D )?>D ;>")>;):>
)%e t%ird arbitrator is in t%e %earing from t%e beginning and a - to 0 decision %olds7 ;n
um=ire is only called w%en t%e arbitrators cannot agree7 ?e t%en ta$es c%arge of
=roceedings7 ?e may sit in from t%e beginning to sa'e re=etition H but %e ta$es no acti'e
=art in t%e =roceedings @>ule --A7
!ote: )%e arbitration agreement can =ro'ide for reference to be made to an official
referee w%o is an officer of t%e ?ig% 9ourt called N(9:&)O7
D&)5( :F ;! ;>")>;):> Hsection .0
07 be fair and im=artial
-7 e3=edite resolution of t%e dis=ute
.7 decide on matters of =rocedure and e'idence

>:L5 :F )?5 9:&>) ! ;>")>;):! +>:955D!*(
>eference of an action by court wit% t%e consent of =arties H section 2
;==lication to t%e court to refer a matter to w%ic% t%ere is arbitration agreement to
arbitration H section /
;==lication to t%e court for t%e determination of c%allenge of a==ointment
=rocedure- section 0/@.A
;==lication for t%e re'ocation of arbitratorJs aut%ority Hsection 01
:rder of court for =ayment of fees and e3=enses of t%e arbitrator or re=ayment by
t%e arbitrator of any fees or e3=enses already =aid to %im/%er on re'ocation-
section 01@/A
;==lication to court by arbitrator for granting of relief from any liability incurred
H section 09 @-A
;==lication by a =arty to resol'e issues on fees of arbitrator- section --
;==lication on Durisdiction H section -/
;==lication on non notification on
o Ealidity of arbitration agreement
o +ro=er constitution of =anel
o Batters submitted are in accordance wit% t%e arbitration agreement
o Lac$ of Durisdiction in relation of t%at =arty t%erefore c%allenging t%e
award
o (erious irregularity t%at affects t%at =arty t%erefore c%allenging t%e award
(u==ort t%e arbitral =roceedings by ma$ing an orderG
o For ta$ing of e'idence of witness
o For t%e =reser'ation of e'idence
o For ins=ection, =%otogra=%ing, =reser'ation, custody or detention of
=ro=erty
o For ta$ing sam=les from or t%e obser'ation of an e3=eriment conducted
u=on a =ro=erty
o For t%e sale of any goods t%e subDect of t%e =roceedings
o For aut%oriFing any =erson to enter any =remises in t%e =ossession or
control of a =arty to t%e arbitration
o For t%e granting of an interim inDunction or t%e a==ointment of a recei'er
)%e court s%all act w%ere t%e arbitrator or institution or =erson in c%arge are
unable to for t%e time being to act effecti'ely
;==lication on notice for t%e determination of any question of law t%at arises in
t%e course of t%e =roceedings if t%e question affects t%e rig%t of t%e ot%er =arty
;==lication for t%e deli'ery of award
;==lication for lea'e to enforce an award
;==lication for setting aside award
;==lication to enforce foreign awards
>egistration of arbitral award
Qualification of arbitrator
;==ointed by =arties, a =erson or institution acting under a =ower conferred by
t%e =arties
; =erson wit% qualification or e3=erience t%at t%e =arties may agree on
+arties may agree to a==oint an arbitrator e'en wit%out qualification or e3=erience
rele'ant to t%e subDect of dis=ute
; =erson of any nationality may be a==ointed unless ot%erwise determined by t%e
=arties

The Arbitrator can be disqualified, if he;
@0A ?as =ersonal , =ro=rietary, fiduciary or financial interest in t%e matter to w%ic%
t%e arbitration relates
@-A ?as a relations%i= wit% a =arty or counsel of a =arty to t%e arbitration
@.A +ossess t%e nationality t%e =arties agreed to disqualified
@4A Disqualified from w%ate'er qualification or e3=erience agreed by t%e =arties
!);L );(# :F ;>")>;):>
@0A ;s soon as =ossible after a==ointment t%e arbitrator@sA must familiariFe %imself
wit% t%e ;rbitration ;greement w%ic% is %is terms of reference7 ?e must be
absolutely clear about:-
@aA )%e nature of t%e dis=ute
@bA )%e =owers and duties of t%e arbitrator
@cA )%e sco=e of t%e agreement7 @s agreement limited to a s=ecial matter or all
dis=utes between =artiesA7
@-A ?e s%ould t%en engage a meeting wit% t%e =arties to t%e agreement to determine:
@aA )ime and =lace for t%e %earing
@bA 8%et%er t%e =arties are to conduct t%eir own defence, brief counsel, or %a'e a
solicitor in attendance7 t is im=erati'e t%at eac% =arty be aware of t%e ot%erJs
intention in t%is regard7 )%e arbitrator s%ould state w%at $ing of e'idence t%e
=arties are to =resent7
>5E:9;):! :F ;>")>;):>J( ;&)?:>)< @(ections 02 and 01A
)%e aut%ority of t%e arbitrator or um=ire is irre'ocable e3ce=t by
)%e circumstances under w%ic% t%e =arties %a'e agreed t%at an arbitrator may be
re'o$ed
;==lication on notice by a =arty to an arbitration to ?ig% 9ourt w%ere
- m=artiality of t%e arbitrator
- Lac$ of qualifications or e3=erience under t%e arbitration agreement or agreed
by t%e =arties
- +%ysical or mental inca=ability or Dustification to doubt ca=ability of arbitrator
to conduct t%e =roceedings
- >efusal or failure of arbitrator to conduct =roceedings =ro=erly or to use
reasonable dis=atc% in conducting t%e =roceedings or ma$ing award
;nd substantial inDustice %as or will be caused to t%e a==licant7
;==ointing aut%ority w%ere =ower to re'o$e %as been in'ested in t%e aut%ority
>esignation of an arbitrator @(ection 09A
Deat% of arbitrator unless agreed by +arties @(ection -0A
Lac$ of im=artiality means bias
@aA ill feeling on t%e =art of t%e arbitrator towards one of t%e =arties
@bA f t%e arbitrator s%ows any =reDudice against any of t%e =arties
@cA f t%ere are circumstances w%ic% suggest a strained relations%i= between t%e
arbitrator from any of t%e =arties @litigationA
@dA 9orru=t recei=t of money by t%e arbitrator from any of t%e =arties
B(9:!D&9) "< )?5 ;>")>;):>
@aA Bista$en 9onduct e7g7 errors on =oints of law and rece=tion of inadmissible
e'idence @e7g7 %earsayA7
@bA 8illful 8rong doing
- ;cce=tance of bribes
- ?olding =ri'ate audience
- 9alling witness wit%out consent of =arties
- m=ro=er admission or reDection of e'idence etc7
ARBITRAL PROCESS
07 ;rbitration management conference - section -9
8it%in 04 days of being a==ointed and u=on 2 days written notice to t%e =arties wit% t%e
=arties, or re=resentati'es in =erson or t%roug% electronic or telecommunication media to
discuss =reliminary matters including issues, dates, 'enue, time, rules, form of award fees
etc7
-7 9onciliation conference H section .0
;ny a==ointing aut%ority or any institution or indi'idual but not an arbitrator in t%e
dis=ute, may wit% t%e consent of t%e =arties at any time during t%e arbitration =rocess
arrange conciliation conference to facilitate t%e resolution of t%e dis=ute7
.7 (tatement of claim and defence Hsection ..
)%e claimant s%all state t%e claim and t%e facts t%at su==ort t%e claim, t%e =oints in issue
and t%e relief soug%t7 )%is is t%e statement of claim
)%e res=ondent s%all state in t%e defence t%e =articulars of its case wit% or wit%out a
counterclaim7
47 )%e ;rbitration ?earing H section .4-.1
)%e ;rbitration ?earing unless ot%erwise stated s%all be =ri'ate and confidential
a7 ?earing notice is ser'ed on eac% =arty by t%e arbitrator7
b7 (ubmission of =articulars of witness before %earing begins
c7 %earing begins
o recording of date, time, 'enue, arbitrator =resence, t%e =arties,
re=resentati'es @if anyA, and recei'ing into t%e record t%e statements of
claim and defence
o o=ening statements from =arties to clarify issues before arbitration
o unless ot%erwise stated %earing may be oral
o e'idence s%all be ta$en in t%e =resence of =arties
o documents and ot%er e'idence may be filed after %earing
o arbitrator s%all gi'e notice to t%e =arties if so wis% to %a'e an ins=ection or
in'estigation in connection wit% arbitration stating t%e date and time of t%e
ins=ection or in'estigation
i7 %earing may be =ost=oned at t%e request of a =arty or by t%e arbitrator H
section 44
ii7 a =arty may a==ly for interim relief and t%e arbitrator may grant suc% reliefs at
a cost to t%e =arty H section .1
iii7 an arbitrator may a==oint an inde=endent e3=ert to re=ort in writing on issues
s=ecified by t%e arbitrator H section4.
i'7 a =arty may be re=resented by counsel or any ot%er =erson H section 4-
'7 ;n arbitrator may declare a %earing closed afterG - section 4L
a7 +arties %a'e res=onded negati'e to s=ecific question as to w%et%er a =arty
%as any furt%er e'idence to gi'e
b7 (ubmission of closing statements
'i7 :n agreement of =arties and a==lication by a=arty %earing may be re-o=ened H
section 4/
)?5 ;8;>D
a. Awards to be Final and Binding
(ection L- states t%at, e'ery arbitration award is final and binding on t%e =arties or any
=erson claiming t%roug% t%em7 )%is means t%at:-
@iA )%e same questions cannot be litigated again
@iiA )%ere can be no a==eal against its findings
b. Correction of Slips
(ection L. enables clerical mista$es in t%e award to be corrected or additional award
omitted u=on 04 days notice to t%e =arties by t%e arbitrator
c. Publication of Award
)%e arbitrator notifies t%e =arties t%at t%e award is ready and can be ta$en u= on =ayment
of %is fee H unless some ot%er =rocedure is laid down in t%e agreement7 )%e arbitrator
may wit%%old t%e =ublication for non-=ayment of fees7
c. Time for making award
f a time for ma$ing t%e award is stated in t%e agreement it can only be enlarged by
agreement of t%e =artiesH@section L.A7 8%en no s=ecific time is stated, t%en t%e arbitrator
or um=ire %as =ower to ma$e t%e award at any time wit%in -1 days7 @section L.A7
f. Essentials of a valid Award
+arties are free to agree on t%e form of t%e award and in t%e absence t%e following s%all
a==ly Hsection 49G
i7 (%ould be in writing7
ii7 ;rbitrator must sign, state date and =lace w%ere t%e award was made and state
in writing t%e reason for t%e award
iii7 (ignatures of maDority of t%e arbitrators s%all be sufficient and t%e reason for
t%e omitted signature stated7
i'7 ; co=y of signed document s%all be deli'ered to eac% =arty
'7 Determination of rate of interest and mode of =ayment of any sum w%ere
a==licable s%all be made
'i7 ;ward s%all not be made in =ublic wit%out t%e =arties consent
'ii7 Bust be certain in meaning7 +arties must be left in no doubt as to %ow t%ey are
affected by t%e award es=ecially wit% regard to =ayment of money,
=erformance of any conditions etc7
General features of valid Award;
o Bust not be ambiguous or contradictory7
o Bust not e3ceed t%e sco=e of t%e agreement unless t%e latter %as been e3tended by
consent of all =arties7
o (%ould com=ly wit% any s=ecial directions in t%e agreement7
o Bust legal and ca=able of being =erformed7
o Bust be =ro=erly e3ecuted i7e7 signed by arbitrator@sA or um=ire7
o ;ll matters referred must be incor=orated7 f any matter @sA %as been wit%%eld by a
=arty@sA t%e award will be 'alid in res=ect to t%ose matters of w%ic% t%e arbitrator
%ad $nowledge7
o (%ould contain clear directions necessary for =ro=er =erformance7
2-4.1.2. Customary Arbitration
)%e conduct of t%is form is usually by oral submission7 ?owe'er t%ere may be written
submission7
Pre-requisites of valid customary arbitration.
)%e (u=reme 9ourt in DFasimatu ' Do$osi Q099.-94R 0 *L> 4/., and also "udu '
9easar Q09L9R *L> 420
Fi'e essentials are required for 'alid customary arbitration7 )%ese include
Eoluntary submission of dis=ute for settlement
+rior agreement to be bound by t%e outcome of t%e settlement
Due obser'ance of t%e rules of natural Dustice
9om=liance wit% rules on DurisdictionG and
+ublication of t%e award
Voluntary submission:
Yaw v Amobie (1958) 3 WALR 406, CA; Paul v :o)oo [1922] 2 ,0R 2114
(u=reme 9ourt %eld t%at t%e only solid foundation of a 'alid customary arbitration of a
binding award is t%e 'oluntary submission of t%eir dis=ute to a relati'ely disinterested
t%ird =arty to ma$e a fair in'estigation into it and gi'e a decision on it7
9are s%ould be ta$en to scrutiniFe e'idence led in su==ort of w%at is alleged to be
~Arbitration7
>&ame v Ieboah [1921] ,0R 231# 6C
9%ief 'oluntarily a==ortioning land between =arties %eld not to constitute an arbitration7
Foli v !)ese 7191.81 -!C! 1
Arbitratio" fou"d "o evide"e upo" #hih to ad$udiate bet#ee" the parties, dre# a"
arbitratio" #ith the vie# of bri"gi"g peae bet#ee" them.
2eld, Arbitrator%s a#ard is set aside.
n arbitration, full e3=lanation must be gi'en to t%e =erson com=lained against and t%at
=ro=osal must be acce=ted by %im7
!sare v 5on)or and 6er%ah II [1922] 2 ,0R 1(2 6C
t was %eld t%at merely attending to t%e call of a c%ief out of res=ect due to a stool but
definitely not agreeing to submit a dis=ute for determination by t%at c%ief did not amount
to consent to t%e arbitration7
5ompreh v Pong [192] 192] ,0R 122
)o amount to arbitration it must be s%own t%at t%e =erson com=lained against agreed to
submit to t%e arbitration after it %ad been e3=lained to %im t%at %is o==onent %ad made a
request t%at t%e dis=ute be determined at arbitration and t%at t%e =erson to w%om t%e
com=laint was lodge s%ould =reside o'er t%e dis=ute as t%e arbitrator7
Berely consenting to or 'oluntarily submitting a dis=ute to an
arbitrator is %owe'er not conclusi'e to final arbitration7
t is rat%er see$ing a negotiated settlement t%us, no obligation to acce=t t%e decision of
t%e t%ird =arty w%ic% becomes binding only if acce=ted by t%e =arties7
+anu v :ontre [192] ,0R 1(1# 6C
+ensah v "ssah [19(2] 1,0R 424# C!
2eldC proeedi"g #hereby o"e party re&uests a hief or a" elder to settle a dispute a"
o"ly be desribed as "egotiatio" for a settleme"t.
(ettlement is t%e =resence or ot%erwise of a =rior agreement to be bound by t%e decision
of t%e arbitrator7
Prior agreement to accept the award
i7 9onsent or agreement s%ould be gi'en in ad'ance

Bado v 6ampede 719(8 1 -!0R 1
2eldC 3he esse"e of a valid bi"di"g arbitratio" is o"se"t i" adva"e by the parties to
be bou"d by the Arbitratio" a#ard.
!)unor v C)an [19((] 1 ,0R 1(1# C!
8A forefully held that i"gredie"t of ustomary arbitratio" is satisfied "ot at the time of
the a#ard #he" a" adverse deisio" might ause o"e of the parties to reo"sider his
partiipatio" i" the proeedi"gs but at the begi""i"g of the proeedi"gs.
t is an agreement to be bound by t%e decision made as a =recondition for t%e ;rbitration
ta$ing =lace7
ii7 ; =rior agreement to be bound by an arbitration cannot be dis=laced by a subsequent
act7
iii7 +ayment of a fee is not e'en conclusi'e e'idence of a binding arbitration since it
could be equally consistent of t%e gi'ing of a =resent, according to customs, to t%ose w%o
attem=t reconciliation7
i'7 8%et%er t%e =rior agreement e3ists or not is a question of fact to be determined by
t%e e'idence7
Zogli v Ganyo 1977]2 GLR 297, CA
9; %eld t%atW77 t%e result of negotiated settlement is not binding until it was acce=ted by
bot% =arties7
'7 )%e subDect matter s%ould be certain7
Fordjour v Nimo 1962] 1 GLR 305
A" a#ard stateme"t #as that some properties of the plai"tiff%s father should be give" to
the plai"tiffs but the ide"tities of the properties #ere u"k"o#".
3he a#ard #as held "ot to be a fi"al o"e a"d it had "o bi"di"g effet o" the parties.
'i7 For an arbitration to be effecti'e and binding on t%e =arties it s%ould be a final one in
t%e sense t%at t%e subDect matter is certain7
)%ere must be some overt act to evidence t%e fact t%at a =arty in arbitration %as made u=
%is mind, after w%ic% %e becomes funtus officio:
Publication
)%e find decision or award s%ould be broug%t to t%e notice of t%e =arties in'ol'ed7
)%is may be done orally or by writing informing t%e =arties w%at t%e find award is7
Procedure
9ustomary ;rbitration need not follow any formal =rocedure7
)%ere must be a %earing of bot% sides in a Dudicial manner7
"ot% sides must be gi'en t%e fullest o==ortunity to =resent t%eir case
+ensah v "ssah [19(2] 1,0R 424
A purported arbitratio" #as delared i"valid for, i"ter alia failure to hear both sides i" a
$udiial ma""er.
)a$ing of e'idence
!sano v /a)u [19(1]2 ,0R 112
2eldC Although the la# re&uested that the deisio" of arbitratio" must be arrived at o"
merits, "o formal proedure #as re&uested at the proeedi"gs a"d it #as also "ot o" all
oasio"s that the taki"g of evide"e #ould be re&uested to e"able the arbitrator to
arrive at a fair deisio" o" the merits.
)%ere are circumstances in w%ic% t%e matter in issue is of suc% =ublic
notoriety t%at no e'idence of witnesses, in addition to t%e case =ut forward
by t%e =arties t%emsel'es, is necessary to decide w%ic% 'ersion of t%e story
is correct7
Onus of proof
)%e onus of establis%ing t%at t%ere %as been a 'alid customary arbitration is on t%e =erson
relying on t%e arbitration7
Effect of a valid customary arbitration
)%ere is no rig%t in t%e =arties to arbitration or a negotiation settlement to
rescind from t%e award once t%is %as been made and acce=ted7
C&ete and >tim v "duma%u and !duo 71928 1 -!0R 2(3
2eldC parties #ho had o"se"ted to a" arbitratio" fi1i"g the bou"daries to a piee of
la"d ould "ot resi"d from the arbitratio".
!)unor v C)ran [19((] 1 ,0R 1(1
2eldC the plai"tiff #as stopped from bri"gi"g fresh atio" i" ourt laimi"g the same
property from the defe"da"t #he" the same issue had bee" disposed of i" a ustomary
arbitratio".
+arties cannot reo=en t%e arbitration issue by initiating fres% arbitration or
by initiating court action e3ce=t w%ere t%is is done by consent7
Bado v 6empede
2eldC o"e a" arbitratio" a#ard e1ists, it operates as estoppel per rem $udiature.
!)%ei v !)%ei [1921] ,0R 212
A dispute relati"g to title to a house #as settled by the high ourt. 3he same dispute #as
later submitted to a" arbitrator #hose a#ard #as embodied i" a subse&ue"t o"se"t
$udgme"t.
2eldC that the arbitratio" a#ard #as bi"di"g o" the parties a"d they ould "ot laim
their rights u"der the origi"al $udgme"t.
8%ere a dis=ute %as been decided u=on and award gi'en, if subsequently
anot%er dis=ute arises, t%e =arties may:
;==ly to enforce award
(ubmit t%e dis=ute to furt%er arbitration or
8ai'e t%e award and %a'e t%e dis=ute settle in court7
)%e Dudgment of t%e court will t%en su=ersede t%e awardG and t%e award cannot t%ereafter
be remo'ed or enforced by a==lication in court7
!otwit%standing a Dudgment, =arties can subDect t%e subDect matter of t%e
Dudgment to arbitration and t%e award of t%e arbitration will su=ersede t%e
Dudgment7
Kudgment w%ic% is a nullity cannot be con'erted into a binding lawful
Dudgment by agreement of t%e =arties7
Parties or Privies
; =erson w%o is neit%er a =arty nor =ri'y to a =arty to an arbitration is not bound by t%e
arbitration award7
Crimes
!o criminal case can be dis=osed of by settlement out of court or by
customary arbitration e3ce=t as =ro'ided in ;ct 4L9, L2.
9ustomary arbitration %as no Durisdiction in criminal matters7
)%e finding of arbitration t%at t%e =laintiff %ad stolen from %is concubine was %eld to be
ultra 'ires7
Enforcement of Awards
)%ereJs no mac%inery
)%e only met%od of enforcing suc% an award is by an action in a court of
com=etent Durisdiction7
; =erson w%o desires to enforce a customary award %as to file a writ of
summons forG
Declaration t%at t%at =articular award was actually made
; declaration t%at t%at award was 'alid
;n order for t%e enforcement of t%e award
)%e determination of t%e 'alidity will in'ol'e consideration of w%et%er or not t%ere was a
mere negotiation for settlement or =ro=er arbitration7
9onsent to t%e arbitration
+rior agreement to be bound by t%e award
)%e com=osition of t%e arbitration
)%e terms of reference of t%e arbitration
:t%er rele'ant matters
)%e court may conform t%at award may t%en be enforced by t%e
a==ro=riate e3ecution =rocess7
)%ere is no mac%inery by w%ic% arbitration can enforce an award t%ey
ma$e7 )%e only met%od of enforcing suc% an award is by an action in a
court if com=etent Durisdiction7
Setting aside an award
;n award cannot be set aside on t%e ground t%at t%e decision of t%e arbitration
cannot be Dustified by t%e e'idence or e'en t%at t%e decision is wrong in law7
Foli v !)ese 7191.8 1-!C! 1
;6arties take their arbitratio"s for better or for #orse, both as to deisio" of fat a"d
deisio"s of la#.<
9ustomary arbitration award may %owe'er be set aside w%ere it is =ro'ed t%at
t%e award was as t%e result ofG
9orru=tion
Fraud
;rbitrator com=letely ignored t%e ordinary rules for t%e =ro=er
administration of Dustice7
!disi v Construction and Furniture 7-*!8 Compan& 0imited [1922] 1 ,0R 1.
3he reorder #as a serva"t of the defe"da"t #ho #as likely to reord the proeedi"gs i"
a ma""er pre$udiial to the plai"tiff but favorable to the defe"da"t.
2eldC eve" if the allegatio"s #ere true the defe"da"t had #aived his right to ob$et by
taki"g part i" the proeedi"gs of full k"o#ledge of the alleged improprieties #ithout
protest.
;rbitration award was im=eac%ed on t%e abo'e grounds7
!)a)&ire II v "di&ie [ 19((] 2 ,0R (.# C!
A plai"tiff regarded a" arbitrator as his gra"tor #ho had earlier litigated #ith the
defe"da"t o" the la"d i" dispute.
2eldC the hoie of suh arbitrator offe"ded agreeme"t "atural $ustie a"d the o"ept of
reaso"able"ess #as dis&ualified
Conflict of interest
I" Paul v :o)oo [1922] 2 ,0R 211# 6C# it #as heldC arbitratio" by a perso" #ho is
himself i"volved i" the dispute is "ot reaso"able.
2-4.2 Non Arbitral Mechanisms (NAM)
2-4.2.1 Introduction
;lternati'e Dis=ute >esolution @;D>A ;ct, -000 @;ct 291A also ma$e =ro'ision for ot%er
;D> mec%anism also called !on-;rbitral Bec%anisms @!;BA7
!on ;rbitral Bec%anism @!;BA originated in t%e &(;, ado=ted in "ritain in t%e 0910Js
and is now =racticed worldwide7 t is a non-confrontational tec%nique t%at may resol'e
dis=utes wit%out resorting to traditional litigation or ;rbitration7 !;B =ro'ides
dis=utants t%e c%ance to =artici=ate in t%e =rocess wit%out interference7 t em=owers t%em
to be creati'e in sol'ing t%eir own conflicts and dis=utes7 n t%is res=ect !;B is not new
in t%e construction industry as consultants and ot%er =rofessionals in t%e industry %a'e
o'er t%e years traditionally settled dis=utes t%roug% non binding a==roac%es wit%out any
formal =rocedures7 !;B =rocesses are %owe'er formal ;D> met%ods in'ol'e a =rocess
w%ere =arties t%emsel'es attem=ts to settle t%eir dis=utes t%roug% negotiation or a t%ird
=arty @refereeA is sim=ly in'ited to assist in t%e settlement by issuing a non-binding
e'aluation of t%e dis=ute and sometimes ma$e recommendation of %ow t%e dis=ute could
be resol'ed7
2.4.2.2 Characteristics of NAM
)%e main c%aracteristics of !;B includeG
Preparedness to settle
)%ere must be goodwill of com=romise and win-win attitude on bot% sides to settle t%e
matter on a commercial rat%er t%an a litigious basis7 Dis=utants s%ould be genuinely
=re=ared to settle t%eir difference@sA wit%out litigation or arbitration7

Non-binding Proceedings
+arties come to t%e table of settlement wit% t%e understanding t%at until bot% =arties are
satisfied, any of t%em %as t%e rig%t to wit%draw and result to arbitration or e'en litigation7
)%us in !;B settlement is entered as Dudgment and becomes binding only w%en =arties
are in agreement of t%e decision7
Role of management
n !;B, li$e arbitration and litigation, legal re=resentation is allowed7 ?owe'er ta$ing
of decisions is a =reser'e of management7 )%is leads to amicable settlement7
Business Interest
)%e maDor obDecti'e of =arties in !;B tec%nique is to sustain t%eir business relations7
)%is commercial interest %as always influence t%e tec%niques in ;D> in t%e settlement of
dis=utes rat%er t%an law7
Role of neutral Adviser or Referee
)%e referees in t%e !;B called neutral ad'isers =lays t%e $ey role of guiding and
assisting =arties to ac%ie'e t%eir goal of ac%ie'ing amicable settlement for t%e
maintenance of commercial relations7
Non Confrontational
+roceedings in t%e !;B a==roac% %a'e always been c%aracterised wit% friendliness and
rela3ed en'ironment wit% t%e sole intention of ac%ie'ing t%eir goal of ac%ie'ing amicable
settlement for t%e maintenance of commercial relations7
2-4.2.2 NAM Techniques
)%ere are many tec%niques of resol'ing dis=utes7 )%e most =ractical tec%niques of !;B
in relation to construction dis=utes are as follows:
!egotiation
Bediation
9onciliation
Bini-trial
9laims >e'iew "oard @9>"A
?ybrid +rocesses
+re- trial 9onference
a. Negotiation
)%e !egotiation may be wit% or wit%out neutral ad'iser7 )%us it may be direct or indirect7
n a Direct !egotiation t%e =arties a==oints a member of t%eir team to lead and bot%
=arties do t%eir negotiation wit% or wit%out a neutral ad'iser7 n some !egotiations
@ndirectA t%e =rocess in'ol'es a neutral ad'iser w%o sits in t%e cause of deliberations
wit%out ta$ing acti'e =art w%ilst t%e =arties engage t%emsel'es in t%e art of negotiation7
b. Mediation
; t%ird =arty $nown as Bediator is called u=on to assist in finding common ground for
com=romise w%en negotiations fail between t%e =arties7 )%e mediator may be t%e neutral
ad'iser during t%e negotiation or new =erson altoget%er7 ;greement on mediation may be
made at t%e contract stage =rior to any dis=ute arising7
Bediation is marginally more e3=ensi'e t%an negotiation7 ?owe'er t%e ad'antages of
mediation include informality, s=eed and economy and often lead to an agreed settlement
between =arties7
)%e =rocess of mediationG
=reliminary meeting by t%e mediator to find out t%e substance of t%e dis=uteand to
decide %ow to =roceed wit% t%e =arties
+arties ma$e a formal =resentation in Doint session @all =arties =resentAwit%
=robing and interrogations7
(eries of =ri'ate meetings or caucuses are %eld between t%e mediator and eac%
=arty7
Bediator mo'es from one caucus to t%e ot%er re=orting wit% agreement, t%e 'iews
of eac% =arty in turn7
Bediator finally comes out wit% agreed =ro=osal t%at leads to amicable
settlement7
)%e role of t%e mediator in mediation
?el=s to gain access to necessary factual and legal information %a'ing an
im=ortant bearing on t%e dis=ute7
Ba$es sure t%at eac% =arty understands w%at t%e ot%er is saying and increases
=erce=tion and em=at%y between =arties
+uts into writing any agreement reac%ed by t%e =arties for signature e'en t%oug%
decision is non-binding
c. Conciliation
9onciliation =rocess is similar to mediation e3ce=t t%at t%e conciliator draws u= and
=ro=oses a solution %imself, w%ic% re=resents w%at in %is 'iew, is a fair and reasonable
com=romise of t%e dis=ute7 )%is is done after t%e conciliator %as %ad discussions wit% t%e
=arties7 9onciliation is more formal =rocess t%an t%e bot% negotiation and mediation7 t
sometimes in'ol'es t%e em=loyment of legal re=resentati'es, t%us ma$ing it a more
e3=ensi'e =rocess t%an t%e ot%ers7 t is more regulated and a number of institutional rules
are a'ailable for its administration7
d. Mini-trial
&nder t%e mini-trial =rocedure, to= management officials of eac% =arty 'oluntarily may
=resent t%eir best case and negotiate an e3=edited resolution to a =ending board of
9ontract ;==eals 9ase7 )%e Bini-trial is designed to resol'e dis=utes arising from
matters of fact rat%er t%an matters of law and to ta$e no longer t%an t%ree or four days7
)%e =rocess also =ro'ides a neutral ad'isor w%o can assist t%e negotiators in
understanding matters of law and assessing t%e merits of t%e claim7
)%e role of neutral ad'iser in mini-trial includesG
9ontrolling t%e =roceedings
;cting as ad'iser to t%e =arties in dis=ute
nterrogates witnesses
+ro'iding e3=lanation and comments w%en required by =arties
5nforcing time limits
;cting as c%airman to two assistants w%o may be selected from among t%e senior
cor=orate officers of bot% =arties and w%o are e3=ected to ma$e inde=endent
assessment of t%e issues in dis=ute7
)%e =arties, after t%e initial =resentation, comments from t%e e3=erts and witnesses of
fact %a'e gi'en e'idence, may enter into negotiation to ac%ie'e an amicable settlement7
e. The Claims Review Board
; 9laims >e'iew "oard @9>"A is an additional ;D> met%od in 9onstruction 9ontracts7
)%e "oard consists of t%ree member committee formed at t%e commencement of a
construction =roDect7 5ac% =arty a==oints one member and t%e t%ird member is a==ointed
by t%e two members7 5ac% member is issued wit% a com=lete set of contract documents
including sc%edules, wor$ drawings, minutes of meetings and ot%er documents suc% as
=rogress re=orts7
8it%in t%e 9>" =rocedure, t%e "oard members 'isit t%e site =eriodically but at least
t%ree times annually, to $ee= informed of t%e construction acti'ities, c%allenges and any
de'elo=ment li$ely to lead to =otential claim7 ;t t%e end of eac% 'isit a re=ort is
submitted to bot% =arties7
;s a rule a claim is only referred to t%e "oard after t%e engineers decision w%en eit%er of
t%e =arties %as e3=ressed its obDection of t%e engineerJs decision7 )%e first submission of
claim to t%e "oard is in a written statement of claim by t%e a==ellantJs =arty com=lete
wit% rele'ant corres=ondence and ot%er documentation of t%e a==ellantJs c%oice7 ; co=y
is =ro'ided for eac% board member and for t%e ot%er =arty7
)%e res=ondent also, in writing submits %is defence and reasons for t%e reDection of t%e
claim7 )%e a==ellant re=lies to t%e res=ondent in a written rebuttal and t%e res=ondent
again submit %is re=ly to t%e rebuttal in a written form7 )%is ends t%e submission of
written re=resentations to t%e "oard7 )%e "oard t%en studies t%e documents and finally
sends its decisions to t%e =arties7 )%e ultimate solution is non-binding on t%e =arties and
t%erefore if any do not acce=t t%e 9>"Js decision %as t%e o=tion of see$ing redress at
court or under arbitration clause in t%e contract s%ould t%at be t%e case7
f. Hybrid Processes
?ybrid +rocess is t%e combination of ot%er !;B tec%niques7
g. Pre trial Conference
n *%ana, t%e 9ommercial 9ourt >ules, :rder L1 of 9 42, does incor=orate 9ourt
oriented ;D> as =art of t%e adDudicating =rocess of t%e 9ourt7
)%e =rZ-trial session arises w%en a suit of commercial nature is broug%t before t%e court7
)%e administrator =lace it before a =re-trial Kudge w%o in'ites t%e =arties and t%eir legal
re=resentati'es and in non confrontational atmos=%ere attem=ts to settle t%e dis=utes
wit%out necessary going t%roug% t%e trial7 ?ere t%e Dudge wit% or wit%out assessors
resol'es dis=utes arising from matters of fact rat%er t%an matters of law7 ?e %owe'er
ad'ises on t%e questions of law and ad'ises =arties7
)%e =re-trial settlement conference is a forum w%ere t%e =arties are gi'en t%e o==ortunity
to resol'e t%eir differences t%roug% t%e use of !;B tec%niques and sometimes
;rbitration7
)%e 'enue of t%e =re-trial conference is at t%e commercial 9ourt or any ot%er =lace at t%e
request of t%e =arties7 )%e cost of e3ternal 'enue is borne by t%e =arties7
;n order for cost is made against t%e =arty w%o fails to attend =re-trial, )%is ma$es t%e
conference mandatory7
Pre trial Procedure
8it%in . days after t%e =leadings stage of litigation, t%e ;dministrator assigns t%e
case to a =re-trial Dudge or mediator for settlement7
)%e =re-trial Kudge or mediator s%all cause %earing notice to be issued in'iting t%e
=arties and attem=t settlement of t%e dis=ute7
)%e +arties may %owe'er o=t to refer t%e matter to an e3ternal body or =erson to
ser'e as a neutral for t%e settlement7
)%e Kudge/!eutral /Bediator after o=en =resentation by =arties may in'ite eit%er
=arty to a caucus to discuss some issues arising out of t%e =re- trial session7 )%e
outcome of t%e discussion may not be disclosed to t%e ot%er =arty wit%out t%e
consent of t%e =arty w%o =ro'ided t%e information7
)%e =eriod of settlement may be e3tended by furt%er .0 days but in t%e case of
referral t%e e3tended time is 0L days7
(ettlements made at t%e =re-trial conference are entered as Dudgment of t%e 9ourt7 ;ny
unsettled issues s%all be remitted to t%e ;dministrator of t%e 9ourt w%o s%all =lace t%e
suit before a different Kudge of t%e 9ourt for t%e trial7
)%ere may be full settlement or =artial settlement wit% outstanding issues referred for
trial7
2-4.2.4 Advantages of NAM
!o structured or rigid =rocedure c%aracteriFed t%e ceremony and
confrontation associated of courtroom litigation7
+ro'ides more acce=table met%ods of settling dis=utes7
t creates greater =artici=ation of t%e dis=utants in t%e settlement =rocess7
Cuic$er, less e3=ensi'e and %ealt%ier7
t =ro'ides o==ortunity for emotional needs to be im=ressed and addressed7
Beaningfully contributes to t%e decongestion of t%e courts7
+ri'ate
9onfidentiality is retained7
Lac$ of interference
2-4.2.5 Disadvantages of NAM
)%e ado=tion of !;B route %as t%e following set bac$sG
n t%e e'ent of ma$ing com=romises for amicable settlement =arties are li$ely to
ma$e financial losses
Delays in settlement in 'iew of t%e fact t%at t%e decision is non-binding, =arty
ta$e ;D> route wit% t%e intention to delay settlement under arbitration or t%e
court7
2-4.3 Dispute Resolution in Construction Industry in Ghana
9onstruction contracts %a'e been one of t%e commercial acti'ities c%aracteriFed wit%
dis=utes due to its com=le3ities7 ;rbitration %as been t%e commonest tec%nique for t%e
resolution of dis=utes in t%e 9onstruction ndustry7 ;rbitration to resol'e dis=utes in t%e
construction industry arises from t%e agreement of =arties, eit%er w%en dis=utes arise, or
more often as a term of t%e conditions of contract7
2-4.3.1 Local Contracts
n *%anaJs local or national construction contracts, t%e formal agreement for dis=ute
resolution is found in t%e 9onditions of 9ontract accom=anied t%e +ublic +rocurement
;ct, -00., ;ct//.7 9lauses -4, -L and -/ of t%e 9onditions of 9ontract =ro'ides t%atG
-470 f t%e 9ontractor belie'es t%at a decision ta$en by t%e +roDect Banager was eit%er
outside t%e aut%ority gi'en to t%e +roDect Banager by t%e 9ontract or t%at t%e decision was
wrongly ta$en, t%e decision s%all be referred to t%e ;dDudicator wit%in 04 days of t%e
notification of t%e +roDect BanagerJs decision7
-L70 )%e ;dDudicator s%all gi'e a decision in writing wit%in -1 days of recei=t of a
notification of a dis=ute7
-L7- )%e ;dDudicator s%all be =aid by t%e %our at t%e rate s=ecified in t%e )ender Data
and 9ontract Data, toget%er wit% reimbursable e3=enses of t%e ty=es s=ecified in t%e
9ontract Data, and t%e cost s%all be di'ided equally between t%e 5m=loyer and t%e
9ontractor, w%ate'er decision is reac%ed by t%e ;dDudicator7 5it%er =arty may refer
a decision of t%e ;dDudicator to an ;rbitrator wit%in -1 days of t%e ;dDudicatorJs
written decision7 f neit%er =arty refers t%e dis=ute to arbitration wit%in t%e abo'e -1
days, t%e ;dDudicatorJs decision will be final and binding7
-L7. )%e arbitration s%all be conducted in accordance wit% t%e arbitration =rocedure
=ublis%ed by t%e institution named and in t%e =lace s%own in t%e 9ontract Data7
-/70 (%ould t%e ;dDudicator resign or die, or s%ould t%e 5m=loyer and t%e 9ontractor
agree t%at t%e ;dDudicator is not functioning in accordance wit% t%e =ro'isions of t%e
9ontract, a new ;dDudicator will be Dointly a==ointed by t%e 5m=loyer and t%e
9ontractor7 n case of disagreement between t%e 5m=loyer and t%e 9ontractor, wit%in .0
days, t%e ;dDudicator s%all be designated by t%e ;==ointing ;ut%ority designated in t%e
9ontract Data at t%e request of eit%er =arty, wit%in 04 days of recei=t of suc% request7
2-4.3.2 International Contracts
n nternational 9onstruction 9ontracts including donor funded =roDects and ot%er s=ecial
contracts suc% as >oad construction t%e F5D5>;):! !)5>!;):!;L5 D5(
!*5!5&>(-9:!(9L( @FD9A meaning Federation of nternational 9ouncil of
5ngineers, 9onditions of 9ontract for 8or$s of 9i'il 5ngineering 9onstruction is in use7
9urrently t%e fourt% edition is a==licable7
)%e terms of t%e Fourt% 5dition of t%e 9onditions of 9ontract for 8or$s of 9i'il
5ngineering 9onstruction %a'e been =re=ared by t%e FD9 and are recommended for
general use for t%e =ur=ose of construction of suc% wor$s w%ere tenders are in'ited on an
international basis7 )%e 9onditions, subDect to minor modifications7 are also suitable for
use on domestic contracts7
)%e 'ersion in 5nglis% of t%e 9onditions is considered by FD9 as t%e official and
aut%entic te3t for t%e =ur=ose of translation7
n t%e =re=aration of t%e 9onditions it was recogniFed t%at w%ile t%ere are numerous
9lauses, w%ic% will be generally a==licable, t%ere are some 9lauses, w%ic% must
necessarily 'ary to ta$e account of t%e circumstances and locality of t%e 8or$s7 )%e
9lauses of general a==lication %a'e been grou=ed toget%er in t%is document and are
referred to as +art - *eneral 9onditions7 )%ey %a'e been =rinted in a form, w%ic% will
facilitate t%eir inclusion as =rinted in t%e contract documents normally =re=ared7
)%e *eneral 9onditions are lin$ed wit% t%e 9onditions of +articular ;==lication, referred
to as +art , by t%e corres=onding numbering of t%e 9lauses, so t%at +arts and
toget%er com=rise t%e 9onditions go'erning t%e rig%ts and obligations of t%e =arties,
+art must be s=ecially drafted to suit eac% indi'idual 9ontract7
)o assist in t%e =re=aration of +art e3=lanatory material and e3am=le clauses are
=ublis%ed wit% t%e 9onditions in a se=arately bound document entitled T9onditions of
9ontract for 8or$s of 9i'il 5ngineering 9onstruction, +art - 9onditions of +articular
;==lication, wit% *uidelines for =re=aration of +art 9lauses, Fourt% 5ditionT7
FD9 %as =ublis%ed a PP*uide to t%e &se of FD9 9onditions of 9ontract for 8or$s of
9i'il 5ngineering 9onstructionT w%ic% includes comments on t%e =ro'isions of t%e
Fourt% 5dition of t%e 9onditions7 &sers of t%e Fourt% 5dition may find it %el=ful to refer
to t%is *uide7 t may also be %el=ful for users to refer to ot%er FD9 =ublications, suc%
as: )endering +rocedure @First 5dition 091-A and 9onstruction, nsurance and Law
@091/A and in 09917
+ro'ision for dis=ute resolution in 9lause -0 =ro'ides t%atG
0 f a dis=ute of any $ind w%atsoe'er arises between t%e 5m=loyer and t%e 9ontractor
in connection wit%, or arising out of, t%e 9ontract or t%e e3ecution of t%e 8or$s,
w%et%er during t%e e3ecution of t%e 8or$s or after t%eir com=letion and w%et%er
before or after re=udiation or ot%er termination of t%e 9ontract, including any
dis=ute as to any o=inion7 nstruction, determination, certificate or 'aluation of t%e
5ngineer, t%e matter in dis=ute s%all, in t%e first =lace, be referred in writing to t%e
5ngineer- wit% a co=y to t%e ot%er =arty7 (uc% reference s%all stale t%at it is made
=ursuant to t%is 9lause7 !o later t%an t%e eig%t-fourt% day after t%e day on w%ic% %e
recei'ed suc% reference t%e 5ngineer s%all gi'e notice of %is decision to t%e
5m=loyer and t%e 9ontractor7 (uc% decision s%all state t%at it is made =ursuant to
t%is 9lause7
&nless t%e 9ontract %as already been re=udiated or terminated, t%e 9ontractor s%all-
in e'ery case, continue to =roceed wit% t%e 8or$s wit% all due diligence and t%e
9ontractor and t%e 5m=loyer s%all gi'e effect fort%wit% to e'ery suc% decision of
t%e 5ngineer unless and until t%e same s%all be re'ised, as %ereinafter =ro'ided, in
an amicable settlement or an arbitral award7
f eit%er t%e 5m=loyer or t%e 9ontractor be dissatisfied wit% any decision of t%e
5ngineer7 or if t%e 5ngineer fails to gi'e notice of %is decision on or before t%e
eig%t-fourt% day after t%e day on w%ic% %e recei'ed t%e reference, t%en eit%er t%e
5m=loyer or t%e 9ontractor may, on or before t%e se'entiet% day after t%e day on
w%ic% %e recei'ed notice suc% decision, or on or before t%e se'entiet% day after t%e
day on w%ic% t%e said =eriod of 14 days e3=ired, as t%e case may be, gi'e notice to
t%e ot%er =arty, wit% a co=y for information to t%e 5ngineer, of %is intention to
commence arbitration, as %ereinafter =ro'ided, as to t%e matter in dis=ute7 (uc%
notice s%all establis% t%e entitlement of t%e =arty gi'ing t%e same to commence
arbitration, as %ereinafter =ro'ided, as to suc% dis=ute and- subDect to (ub-9lause 4:
no arbitration in res=ect t%ereof may be commenced unless suc% notice is gi'en,
f t%e 5ngineer %as gi'en notice of %is decision as to a manner in dis=ute to t%e
5m=loyer and t%e 9ontractor and no notice of intention to commence arbitration as
to suc% dis=ute %as been by cit%er t%e 5m=loyer or @lie 9ontractor on or before t%e
se'entiet% day after t%e day on w%ic% t%e =arties recei'ed notice as to suc% decision
from t%e 5ngineer, t%e said decision s%all become final and binding u=on t%e
5m=loyer and t%e 9ontractor7
8%ere notice of intention to commence arbitration as to a dis=ute %as been
gi'en in accordance wit% (ub-9lause 0, t%e =arties s%all attem=t to settle suc%
dis=ute amicably before t%e commencement of arbitration7 +ro'ided t%at unless
t%e =arties ot%erwise agree, arbitration may be commenced on or after t%e fifty-
si3t% day after t%e day on w%ic% notice of intention to commence arbitration of
suc% dis=uter was gi'en, e'en if no attem=t at amicable settlement t%ereof %as
been made7
;ny dis=ute in res=ect of w%ic%
@aA t%e decision, if any of t%e 5ngineer %as not become final and binding
=ursuant to (ub-9lause 07 and
@bA amicable settlement %as !ot been released wit%in t%e =eriod stated in (ub-
9lause -, s%all be finally settled, unless ot%erwise s=ecified in t%e 9ontract,
under t%e >ules of 9onciliation and ;rbitration of t%e nternational 9%amber of
9ommence by one or more arbitrators a==ointed under suc% >ules7 )%e said
arbitrator/s s%all %a'e full =ower to o=en u=, re'iew and re'ise any decision,
o=inion- instruction, determination, certificate or 'aluation of t%e 5ngineer
related to t%e dis=ute,
!eit%er =arty s%all be limited in t%e =roceedings before suc% arbitrator/s to t%e
e'idence or arguments =ut before t%e 5ngineer for t%e =ur=ose of obtaining %is
said decision =ursuant to (ub-9lause 07 !o suc% decision s%all disqualify t%e
5ngineer from being called as a witness and gi'ing e'idence before t%e
"ot% t%e local and international clauses =ro'ides for !;B tec%niques for amicable
settlement as a first ste= in dis=ute resolution in construction contracts7 t is only w%en
t%e !;B fails t%at ;rbitration is resulted to7 )%is met%od is sometimes referred to as
Bed-;rb, )%us Bediation before ;rbitration7 t is im=ortant to note t%at t%e traditional
litigation %as not been recommended in t%e dis=ute resolution of t%e construction
contracts7 t is t%erefore in'o$ed on as a last o=tion7

;D> =ro'ides a dis=ute resolution mec%anism t%at concentrates on resol'ing dis=utes by
consensus rat%er t%an by law7 ;s a non-confrontational tec%nique t%at may resol'e
dis=utes wit%out resorting to traditional litigation, ;D> is welcome in t%e =eriod w%ere
time and cost is described as an ingredient for de'elo=ment7
;bra%am Lincoln once said, ;Disourage litigatio", persuade your "eighbours to
ompromise #he"ever you a". 6oi"t out to them ho# the "omi"al #i""er is ofte" a real
loser i" fees, e1pe"ses a"d #aste of time.<

Self-Assessment 2 1
07 8%at does it mean to say t%at an arbitrator %as misconducted %imselfU
-7 (tate two essentials of a 'alid ;ward
.7 (tate two of t%e initial tas$s of an arbitratorU
47 &nder w%at conditions will t%e aut%ority of an arbitrator re'o$edU
L7 &nder w%at circumstances may t%e court remo'e an arbitratorU
Summary
Unit Summary
Key terms
;lternati'e Dis=ute >esolution, ;rbitration, Bediation, !egotiation
Review Question
07 8%at is ;rbitrationU 5munerate t%e =re-requisites of ;rbitration
-7 8%at is ;lternati'e Dis=ute >esolutionU 5numerate some of t%e mec%anisms in t%e
;lternati'e Dis=ute >esolution7

Unit Assignment 4
)%e 9onditions of 9ontract of most construction 9ontracts %as recommended ;lternati'e
Dis=ute >esolution as t%e mode of dis=ute settlement before =roceeding to 9ourt7 n a
=resentation of a =a=er to con'ince your 9lient to include t%is clause in an im=ending
contract, discuss t%e ad'antages and disad'antages of t%e ;rbitration 9lause as against
litigation7 nform your discussion wit% t%e aid of illustrations, e3am=les or decided cases7

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