When buyers and sellers transact business with clear terms, a contract is said to have been established for the purpose of the said transaction. The contract so established will be binding on both parties in respect of the good; price; mode of payment; quantity and quality, delivery terms, and many more. These terms will form the very fundamentals of the contract of the sale. Violation of the terms so agreed by either party to the contact will constitute a breach of the sale agreement; and will entitle the injured party the right to seek remedy for losses suffered. The rights of the injured party resulting from such breaches are personal rights. In general, all parties to a sale agreement have an obligation of performance towards one another; but in circumstances where one party fails to meet or performs its obligation towards the other, this will then provoke the right of the other party. The remedies that may accrue to the injured party may take the form of specific performance, repudiation of the contract, damages in the form of money.
In the Ghanaian jurisdiction, the law that governs sale transactions is embodied in a document known as the Sale of Goods Act 1962 (Act 137) hereafter referred to in this paper as “The Act”. An attempt will be made in this paper to evaluate the scope of the rights of the buyer under the Act in the event that the seller breaches any of the agreed terms. Personal rights are rights in personam. That is, those rights that one individual has against another individual, for injury suffered by him or her resulting from the action or non-action of another person for which a remedy may be sought in civil proceeding in the court of law. Sections 53 through 58 of the Act discuss what constitutes the personal rights of the buyer. The following five decided cases by courts in Ghana will be discussed to explore how these rights of the buyer are employed in the event of a breach of contract of sale.
The cases are:
I TAWIAH v. GHANA CIVIL AVIATION AUTHORITY AND OTHERS
ii ROCKSON v. ARMAH
iii KWETEY v. BOTCHWAY AND ANOTHER
iv BIRCH v. ASEMPA AND ANOTHER
v NANOR v. AUTO PARTS LTD.
In the case of TAWIAH v. GHANA CIVIL AVIATION AUTHORITY AND OTHERS, the case was about a breach of contract for refusal to deliver after sale. Tawiah (Plaintiff) bought and paid at a public auction, a Ghana Civil Aviation Authority’s (GCAA) unserviceable old water storage tank. Four days after the sale, Tawiah went to the GCAA to collect the tank but the management of GCAA refused to give up the tank to the Tawiah. The reason for the refusal was that, the Ministry of Health (MOH) had directed that the tank was to be given to Pantang Hospital to solve that hospital’s water problem. Tawiah therefore sued for breach of contract. His action for breach succeeded.
In his judgment, PIESARE AG. J. relied on section 4 (1) (b) of the Act, and said that the GCAA was under statutory obligation to deliver the tank to Tawiah because the sale had been completed. GCAA’s refusal to deliver the tank to Tawiah constituted a breach of the contract. Tawiah was therefore entitled to the remedy of damages under section 53 and assessed according to sections 54 (1) and 56 applied for the assessment of damages.
In ROCKSON V. ARMAH, the issue bordered on repudiation of a contract by the buyer of a second-hand Mercedes Benz car for reason of “latent defects” The facts of the case are that the appellant, Mr. Rockson sold his used Mercedes Benz car to the respondent, Mr Armah for ¢3,200. The Mr Armah made cash payments of ¢2,200. He then issued two post-dated cheques of ¢500 each to complete the payment of the purchase. Armah used the car for two months and mileage of 300 miles but later attempted to repudiate the sale by stopping payment of the last post-dated cheque. His claim was that, he had discovered some “latent defects” in the car.
The court was to determine whether or not, considering the circumstances, the buyer could do so under the Act? At the Circuit Court, the trial judge held that Armah was justified in repudiating the contract. Rockson appealed the decision and it was reversed by the Court of Appeal. The ground for the reversal was that the appellant had not broken any warranty or condition which could entitle Armah to repudiate the sale.
The Court of Appeal decision was based on the fact that since the car was a second-hand car, and the respondent had used it for two months, the car could not be categorised as not fit “for the purpose for which a car is usually used.”
In arriving at the decision, the Court of Appeal relied on Bartlett v. Sidney Marcus Ltd, an English Court of Appeal decision, and applied the principle given therein by Lord Denning to arrive at its judgement in Rockson v. Armah on the rights of the buyer to repudiate the sale of a second-hand car on the ground of latent defects.
Prof JEA Mills observed that in deciding the Rockson case, two errors were committed. The first was the court’s acceptance of the English Court of Appeal decision in the case of Bartlett v. Sidney Marcus, Ltd. as being applicable under Ghana law; secondly the adoption and subsequent application under the Ghanaian law to govern the rights of the buyer to repudiate the sale of a second-hand car on the ground of latent defects as enunciated by Lord Denning M.R.
Prof Mills therefore argued that although the outcome/judgment of the court was right, their reasoning for reaching such a conclusion was incorrect especially since there was nothing like that under Ghanaian law.