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CONTRACTS ACT, 1960 (ACT 25)
As amended by
VOLTA RIVER PROJECT (SUPPLEMENTARY
PROVISIONS) ACT, 1962
(ACT 96)1
ARRANGEMENT OF SECTIONS
Section
PART I—FRUSTRATION OF CONTRACTS
1. Adjustment of rights and
liabilities of parties to
frustrated contracts.
2. Severance of frustrated
contracts.
3. Parties may contract out of
Part I.
4. Application of Part I.
PART II—THIRD PARTY RIGHTS
5. Provision in contract for
benefit of third party.
6. Rights of third party not to be
altered, etc., without his consent
but subject to equities.
6A. Section 5 and 6 of Act 25 not
to Apply to Certain Agreements.
7. Assignment of legal rights.
PART III—CONSIDERATION AND
FORMALITIES
8. Certain contracts to be valid
despite lack of consideration.
9. Law as to consideration
clarified in certain cases.
10. Consideration need not move
from promisee.
11. Contracts need not be in
writing except in certain cases.
12. Contracts, etc., of
corporations.
13. Application of Part III.
PART IV—CONTRACTS OF GUARANTEE
14. Guarantees, etc., to be in
writing.
15. Revocation of continuing
guarantee by change in
partnership.
16. Rights of guarantor against
debtor, etc.
PART V—CONSEQUENTIAL
17. Contracts, etc., of the
Republic.
18. Repeals.
19. Statutes ceasing to apply.
SCHEDULE
Schedule—Statutes Ceasing to
Apply.
First Schedule to Act 96
THE TWENTY-FIFTH
ACT
OF THE PARLIAMENT OF THE REPUBLIC
OF GHANA
ENTITLED
THE CONTRACTS ACT, 1960
AN ACT to amend the law of
Contract and to replace certain
Imperial enactments.
DATE OF ASSENT: 22nd December,
1960
BE IT ENACTED by the President and
the National Assembly in this
present Parliament assembled as
follows:—
PART I—FRUSTRATION OF CONTRACTS
Section 1—Adjustment of Rights and
Liabilities of Parties to
Frustrated Contracts.
(1) Where a contract to which this
Part applies has become impossible
of performance or been otherwise
frustrated and the parties thereto
have for that reason been
discharged from the further
performance of the contract the
following provisions of this
section shall, subject to sections
2 and 3 of this Act, have effect
in relation thereto.
(2) Subject to subsection (3), all
sums paid or payable to any party
in pursuance of the contract
before the time when the parties
were so discharged (in this Part
referred to as "the time of
discharge") shall, in the case of
sums so paid, be recoverable from
him, and in the case of sums so
payable, cease to be so payable.
(3) Where a party has incurred
expenses before the time of
discharge in, or for the purpose
of, the performance of the
contract, the Court may allow him
to recover or to retain out of any
sum received by him under the
contract, such amount (if any),
not exceeding the expenses so
incurred or the total sum payable
to him under the contract, as the
Court may consider just having
regard to all the circumstances of
the case.
(4) In estimating, for the
purposes of the foregoing
provisions of this section, the
amount of any expenses incurred by
any party to the contract, the
Court may, without prejudice to
the generality of those
provisions, include such sums as
appear to be reasonable in respect
of overhead expenses and in
respect of any work or services
performed personally by that
party.
(5) In considering whether any sum
ought to be recovered or retained
under the foregoing provisions of
this section by any party to the
contract, the Court shall not take
into account any sums which have,
by reason of the contract, become
payable to that party under any
contract of insurance unless there
was an obligation to insure
imposed by an express term of the
frustrated contract or by or under
any enactment.
Section 2—Severance of Frustrated
Contract.
Where it appears to the Court that
a part of any contract to which
this Part applies can properly be
severed from the remainder of the
contract, being a part wholly
performed before the time of
discharge, or so performed except
for the payment in respect of that
part of the contract of sums which
are or can be ascertained under
the contract, the Court shall
treat that part of the contract as
if it were a separate contract and
had not been frustrated and shall
treat section 1 of this Act as
only applicable to the remainder
of that contract.
Section 3—Parties may Contract Out
of Part I.
Where any contract to which this
Part applies contains any
provision which, upon the true
construction of the contract, is
intended to have effect in the
event of circumstances arising
which operate, or would but for
that provision operate, to
frustrate the contract, or is
intended to have effect whether
such circumstances arise or not,
the Court shall give effect to
that provision and shall only give
effect to the provisions of this
Part to such extent, if any, as
appears to the Court to be
consistent with that provision.
Section 4—Application of Part I.
(1) This Part applies to contracts
made before or after the
commencement of this Act, in
respect of which the time of
discharge is after the
commencement of this Act.
(2) This Part does not apply—
(a) to any charterparty, except a
time charterparty or a
charterparty by way of demise, or
to any contract (other than a
charterparty) for the carriage of
goods by sea; or
(b) to any contract of insurance.
PART II—THIRD PARTY RIGHTS
Section 5—Provision in Contract
for Benefit of Third Party.
(1) Any provision in a contract
made after the commencement of
this Act which purports to confer
a benefit on a person who is not a
party to the contract, whether as
a designated person or as a member
of a class of persons, may,
subject to the provisions of this
Part, be enforced or relied upon
by that person as though he were a
party to the contract.
(2) Subsection (1) does not apply
to—
(a) a provision in a contract
designed for the purpose of resale
price maintenance, that is to say,
a provision whereby a party agrees
to pay money or otherwise render
some valuable consideration to a
person who is not a party to the
contract in the event of the
first-mentioned party selling or
otherwise disposing of any goods,
the subject matter of the
contract, at prices lower than
those determined by or under the
contract; or
(b) a provision in a contract
purporting to exclude or restrict
any liability of a person who is
not a party thereto.
Section 6—Rights of Third Party
not to be Altered, Etc., Without
His Consent but Subject to
Equities.
Where under the provisions of
section 5 of this Act a person who
is not a party to a contract is
entitled to enforce or rely on a
provision in the contract—
(a) no variation or rescission of
the contract shall prejudice that
person's right to enforce or rely
on the provision if he has acted
to his prejudice in reliance
thereon, unless he consents to the
variation or rescission; and
(b) subject to paragraph (a), any
party against whom the provision
is sought to be enforced or relied
on shall be entitled to rely on or
to plead by way of defence,
set-off, counterclaim or otherwise
any matter relating to the
contract which he could have so
relied on or pleaded if the
provision were sought to be
enforced or relied upon by the
other party to the contract.
Section 6A—Sections 5 and 6 of Act
25 not to Apply to Certain
Agreements.
The provisions of sections 5 and 6
of the Contracts Act, 1960 (Act
25) shall not apply to the
agreements specified in the First
Schedule hereto, except as
otherwise expressly provided
therein.
Section 7—Assignment of Legal
Rights.
(1) Subject to any rule of law,
and subject to any contrary
intention appearing from any
transaction giving rise to any
legal rights, a person may, after
the commencement of this Act,
assign a legal right to another
person as hereinafter specified.
(2) An assignment, whether given
for consideration or not, of a
vested legal right, transfers the
full right and interest therein to
the assignee and extinguishes the
right and interest therein of the
assignor if—
(a) it is absolute and not by way
of charge only; and
(b) it is in writing and is signed
by the assignor or his agent; and
(c) written notice thereof is
given to the debtor or other
person against whom the right is
enforceable.
(3) A purported assignment of a
conditional right operates as a
promise to assign the right if and
when the condition occurs.
(4) An assignment, whether given
for consideration or not, is valid
notwithstanding that it does not
comply with all or any of the
requirements of subsection (2)
but—
(a) no right so assigned shall be
enforced or relied upon against
the debtor or other party against
whom the right is enforceable
unless the assignor is a party to
any proceedings in which it is
sought to be enforced or relied
upon, or unless the Court is
satisfied that it would be
impossible or impracticable so to
join the assignor; and
(b) no such assignment shall
prejudice the debtor or other
person against whom the right is
enforceable unless he has written
notice thereof.
(5) Where there are two or more
assignments in respect of the same
debt or right, a later assignee
shall have priority over an
earlier assignee if the debtor or
other person liable had not
received written notice of the
earlier assignment at the time
when the later assignment was
made.
(6) A debtor or other person
against whom a right is
enforceable is entitled as against
any person to whom the debt or
other right is assigned, to rely
on or plead by way of defence, set
off, counterclaim or otherwise,
any matter relating to the right
which he could have so relied on
or pleaded against the assignor at
the time when he received written
notice of the assignment.
PART III—CONSIDERATION AND
FORMALITIES
Section 8—Certain Contracts to be
Valid Despite Lack of
Consideration.
(1) A promise to keep an offer
open for acceptance for a
specified time shall not be
invalid as a contract by reason
only of the absence of any
consideration therefor.
(2) A promise to waive the payment
of a debt or part of a debt or the
performance of some other
contractual or legal obligation
shall not be invalid as a contract
by reason only of the absence of
any consideration therefor.
Section 9—Laws as to Consideration
Clarified in Certain Cases.
The performance of an act or the
promise to perform an act may be a
sufficient consideration for
another promise notwithstanding
that the performance of that act
may already be enjoined by some
legal duty, whether enforceable by
the other party or not.
Section 10—Consideration Need not
Move from Promisee.
No promise shall be invalid as a
contract by reason only that the
consideration therefor is supplied
by someone other than the promisee.
Section 11—Contracts Need not be
in Writing Except in Certain
Cases.
Subject to the provisions of any
enactment, and to the provisions
of this Act, no contract whether
made before or after the
commencement of this Act, shall be
void or unenforceable by reason
only that it is not in writing or
that there is no memorandum or
note thereof in writing.
Section 12—Contracts, Etc., of
Corporations.
A
contract or other transaction
entered into on behalf of a
corporation may be made, varied or
discharged by the corporation's
duly authorized representative in
the same manner as would be
required if the corporation were
an individual of full age and
capacity.
Section 13—Application of Part
III.
This Part applies, subject to
section 11 of this Act, to
transactions taking place after
the commencement of this Act.
PART IV—CONTRACTS OF GUARANTEE
Section 14—Guarantees, Etc., to be
in Writing.
(1) Any agreement made before or
after the commencement of this Act
whereby a person (hereinafter in
this Part called "the guarantor")
guarantees the due payment of a
debt or the due performance of any
other obligation by a third party
shall be void unless it is in
writing and is signed by the
guarantor or his agent, or is
entered into in a form recognized
by customary law.
(2) Any promise or representation
made after the commencement of
this Act, relating to the
character or credit of any third
person with the intent that that
third person may obtain credit,
money or goods, from the person to
whom the promise or representation
is made, shall be void unless it
is in writing and is signed by the
party to be charged therewith or
his agent.
Section 15—Section Revocation of
Continuing Guarantee by Change in
Partnership.
(1) A continuing guarantee given
to a third person in respect of
the transactions of a partnership
is, in the absence of agreement to
the contrary, revoked as to future
transactions by any change in the
constitution of the partnership.
(2) A continuing guarantee given
to a partnership is not, in the
absence of agreement to the
contrary, revoked by any change in
the constitution of the
partnership.
Section 16—Rights of Guarantor
Against Debtor, Etc.
(1) Any guarantor, or any other
person being liable together with
another for any debt or legal
duty, who pays the debt or
performs the duty, shall be
entitled to have assigned to him
any security held by the creditor
and to stand in the place of the
creditor and use all remedies
available to him in respect of the
debt or duty.
(2) Nothing in this section shall
entitle the guarantor or other
person liable together with
another to recover from the
co-guarantor or other person
liable together with him more than
his due proportion of the debt.
PART V—CONSEQUENTIAL
Section 17—Contracts, Etc., of The
Republic.
This Act applies to contracts and
transactions entered into on
behalf of the Republic as it
applies to other contracts and
transactions.
Section 18—Repeals.
Section 6 (3) of the Motor
Vehicles (Third Party Insurance)
1958 (No. 42) is repealed.
Section 19—Statutes Ceasing to
Apply.
Each statute indicated in the
Schedule to this Act shall, to the
extent indicated in the third
column of the Schedule, cease to
apply in Ghana.
SCHEDULE
STATUTES CEASING TO APPLY
Section 19
29 Chas.
2,c.3
Statute of
Frauds
Sections 4 (except insofar as
relates to any (1677) contract or
sale of lands) and 17 (which
relates to contracts for the sale
of goods to the value of ¢G10 and
upwards, sometimes known as
section 16).
9
Geo. 4, c.14
Statute of Frauds
Amendment Section 7.
(1828)
19 and 20 Vict.,
Mercantile Law Amendment
Sections 3,4 and 5.
c.97 (1856)
30 and 31 Vict.,
Policies of
Assurance The
whole Act.
c.144 (1867)
FIRST SCHEDULE TO ACT 96
The Master Agreement.
The Power Contract.
The Smelter Site Lease.
The Water Agreement.
The Port Agreement.
The Currency Agreement.
The Voting Trust Arrangements.
The Subscription Agreement.
[Inserted and to be cited as the
Volta River Project (Supplementary
Provisions) Act, 1962 (Act 96),
s.1].
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