|
JUDGMENT:
The Plaintiff herein has sued
the Defendant for the following
reliefs:
1.
An
ORDER that the Defendant pay the
sum of US$40,145.00 (Forty
Thousand One Hundred and
Forty-Five United States
Dollars) being consultancy fees
due the Plaintiff from the
Defendants for the Period,
August to December, 2009 as
agreed in the consultancy
contract between the parties.
2.
An
award of interest on the sum of
US$40,145.00 at the prevailing
commercial bank rate from 1st
day of January, 2010 till its
whole sum is fully paid to the
Plaintiff.
3.
An
ORDER that Defendants pay a sum
of US$1,000.00 (One Thousand
United States Dollars) to the
Plaintiff being refund of the
money expended by the Plaintiff
to purchase GRIDCO bid forms on
behalf of the Defendants.
4.
An
award of interest on the sum of
US$1,000.00 at the prevailing
commercial bank rate from the 25th
day of August, 2009 till the
whole sum is fully paid to the
Plaintiff
5.
An
ORDER that Defendant pay GH¢100,000.00
(One Hundred Thousand Ghana
Cedis) to the Plaintiff as
General Damages for breach of
the consultancy contract between
the parties.
6.
Cost.
By his pleadings and the
evidence adduced, the
Plaintiff’s case is that he was
employed as Country Manager
(Ghana) of the Defendant’s
Company effective 1st
June 2009. His monthly salary
was US$10,900.00. Plaintiff
contends that during the
negotiation leading to his
employment, he advised that he
be engaged as a consultant
rather than an employee, but the
Defendant preferred to engage
him as an employee. The
Plaintiff contends that due to
differences between his
directors in Lagos and he
regarding his approach or
strategy, he was summoned to
Lagos, Nigeria where it was
agreed that he should be engaged
as a consultant to the Defendant
rather than an employee.
It is the Plaintiff’s further
case that the terms of the
Consultancy Contract were
discussed while he was in Lagos
and he eventually signed the
contract (Exhibit “D”) towards
the end of August 2009. It was
also the Plaintiff’s case that
the Consultancy Contract was to
commence on the 1st
of August 2009. He testified
that the Defendant failed or
refused to pay his consultancy
fees for August 2009 because,
according to the Defendant, it
had not executed the contract
and so there was no Consultancy
Contract. The Plaintiff also
testified that he continued to
perform services for the
Defendant from August 2009 to
December 2009 while still
pursuing his fees which the
Defendant had still refused to
pay. The Plaintiff‘s case
therefore is that he realised in
December 2009 that the Defendant
was no longer interested in his
services, hence the filing of
the instant suit.
On the other hand, the
Defendant, per its pleadings and
the evidence of Olawunmie
Juliette Ilawole (D.W.1),
admitted that it employed the
Plaintiff as Country Manager for
Accra. Defendant also admitted
that there was divergence in its
preferred business strategy and
that pursued/adopted by the
Plaintiff which necessitated the
Plaintiff being summoned to
Lagos where it was agreed that
his employment be mutually
terminated effective 31st
July 2009. It was further
agreed that the Plaintiff should
be engaged as a Consultant. The
parties thereafter commenced
negotiations towards the
engagement of the Plaintiff as a
Consultant.
The Group Head, Corporate
Services, was mandated to handle
the negotiations. The
negotiations went on over a long
period largely by means of
electronic mail, during which
the Plaintiff suggested several
amendments until he unilaterally
printed out a copy, signed,
scanned and e-mailed it back to
the Defendant on 24th
August 2009. The Defendant did
not sign the contract because it
was still under review. The
Plaintiff immediately after
signing sent an invoice for
August 2009, and his attention
was immediately drawn to the
fact that the contract had not
yet been signed by the
Defendant. The Plaintiff was
also asked to justify his demand
for his fees since as far as the
Defendant was concerned, the
Plaintiff had done no work for
the Defendant since the contract
of employment was mutually
terminated, effective 31st
July 2009.
According to the Defendant, all
the work the Plaintiff alleged
to have done was work he had
done in July 2009 prior to the
termination of the contract of
employment. In the course of
the exchanges between the
parties over the Plaintiff’s
claim for his fees for August
2009, matters relating to
Plaintiff’s stewardship as
Country Manager became a dispute
between the parties which
strained the relationship to the
extent that the Defendant
decided not to go ahead with the
intended Consultancy Contract.
The evidence of D.W.1 was that
per Exhibit @6@, Plaintiff
requested for a final settlement
payment of US$17,600 to cover
his fees for September, October
and November, 2009. Defendant
however offered Plaintiff
US$10,000 as compensation for
the Plaintiff’s time and
whatsoever he might have done
for the Defendant in
anticipation of the Consultancy
Contract. There was no response
from the Plaintiff till his
lawyers put in a claim for his
salary under the contract of
employment. This was followed
by the present court action.
The position of the laws is that
a contract which is rescinded by
agreement is completely
discharged and cannot be
revived. A rescission of the
contract will also be implied
where the parties have effected
such an alteration of its terms
as to substitute a new contract
in its place. In my opinion
therefore the earlier agreement
between the parties evidenced by
Exhibit “A” was discharged by
mutual consent. It is also my
opinion that the fact that there
was an understanding or
agreement to enter into
consultancy services for the
Defendant is not in dispute.
What is in dispute is whether or
not there was indeed a new
contract between the parties;
i.e. what is referred to by the
parties herein as the
Consultancy Contract. In my view
therefore, the main issues for
determination by the Court are;
whether or not there was a valid
and binding consultancy contract
between the parties, and if
there was, when it was
terminated; and whether or not
the Plaintiff is entitled to his
reliefs.
In order to exhaustively examine
the first issue set down for
determination, I deem it
necessary to discuss into some
detail the formation of a
contract; as basic as it may
be. There may be said to be
three basic essentials to the
creation of a contract;
agreement, contractual intention
and consideration; this is trite
learning. The normal test for
determining whether the parities
have reached agreement is to ask
whether an offer has been made
by one party and accepted by the
other. Even where an agreement
has been reached, it may fail to
give rise to a binding contract
because it is incomplete or not
sufficiently certain.
In deciding whether the parties
have reached agreement, the
courts normally apply the
objective test. Under this test,
once the parties have to all
outward appearances agreed in
the same terms on the same
subject matter, then neither
can, generally, rely on some
unexpressed qualifications or
reservation to show that he had
not in fact agreed to the terms
to which he appeared to have
agreed. Such subjective
reservations of one party
therefore do not prevent the
formation of a contract.
It is also trite learning that
the offer is an expression of
willingness to contract made
with the intention (actual or
apparent) that it is to become
binding on the person making it
as soon as it is accepted by the
person to whom it is addressed.
Under an objective test of
agreement, an apparent intention
to be bound may suffice. Any
acceptance is a final and
unqualified expression of assent
to the terms of an offer. The
objective test of agreement
applies to an acceptance no less
than to an offer. Thus, in
Daniele Construction v. Mabey &
Johnson [2006]
4 M.L.R.G. 101 @116,
V. Akoto Bamfo J.A. (as she then
was) stated thus:
“An agreement is reached by a
process of offer and acceptance
and for a determination as to
whether parties have reached an
agreement, one should find
whether there has been a
definite offer by one party and
an acceptance of that offer by
the other, the test being
whether the parties have all
outward appearances as agreed in
the same terms upon the same
subject matter”.
Again, the position of the law
is that, a promise is not, as a
general rule, binding as a
contract unless it is either
made in a deed or supported by
some “consideration”.
Consideration may be expressly
stated or implied. Curie v
Misa [1875] LR 10 Ex.
provided the classical
definition of consideration, as
follows:
“ A valuable consideration, in
the sense of the law, may
consist either of some right,
interest, profit, or benefit
accruing to the one party, or
some forbearance, detriment,
loss or responsibility, given,
suffered or undertaken by the
other.”
As stated above, the intention
to create legal relations is an
essential component of a
contract. Amongst other matters,
parties can only enforce
promises if they mean the
promises to be taken seriously,
and if in fact they are taken
seriously by each other. In such
cases, the parties intend to
create legal relations between
them. Generally speaking, in
commercial agreements, there is
a presumption that the parties
intend to create legal
relations.
Thus, in the case of NTHC Ltd
v Antwi, [2009] SCGLR 117,
the Supreme Court held that:
“In the instant case, the letter
of January 17, 2005 constituted
an offer and not an invitation
to treat, and that offer was
converted into a contract by the
plaintiff’s acceptance letter of
January 31, 2005. There was,
therefore, clearly an intention
to create legal relations and
the plaintiff’s undertaking to
pay the purchase price was
consideration enough to result
in the formation of a contract.”
It is a cardinal principle that
there must be certainty as to
the terms offered and accepted.
As Anin JA explained in his
dissenting judgment in the case
of
Addision v. A/S Norway Cement
Export Limited [1973] 2 GLR 151
@162-3;
“The law is quite settled that
if the terms of an agreement are
so vague or indefinite that it
cannot be ascertained with
reasonable certainty what is the
intention of the parties, there
is no contract enforceable at
all…. The parties must make
their own contracts; and the
courts will not make a contract
for them out of terms that are
indefinite or illusory.
Admittedly, in appropriate
cases, the court attempts a fair
and broad construction of
business transactions and
agreements, duly concluded; even
though recorded in summary
fashion, applying such maxims as
verba ita sunt intelligenda ut
res magis valeat
quam pereat
(words are to be so understood
as that the subject-matter may
be rather preserved than
destroyed), and id
certum est quod certum reddi
potest
(that which can be reduced to a
certainty is a certainty
already). I am also aware of
the principle that where
bargains have in fact been
concluded, the courts should
enforce them lest they should be
criticized for being the
destroyer of bargains”
The Courts however, look to the
substance of the agreement and
will not permit mere
technicalities or formalities to
destroy a contract. As
Kingsley-Nyinah JA said in
Addison v. A/S Norway Cement
Export
Limited
supra; “This court has
a duty to protect the substance
of the parties’ agreement and
not to destroy it”
The Plaintiff is claiming that
the fact that there was a
contract can be gleaned from the
correspondences and negotiations
tendered in evidence as Exhibit
“E”, even though Exhibit “D” had
not been signed by the
Defendant. So, would a
determination as to whether a
valid contract had been formed
be affected by the fact that it
was based on correspondence? The
common law position is that a
contract can be made by
continuing negotiations by
correspondence. In the case of
Harmony Shipping v. Saudi-Europe
Line Ltd [1981] I Lloyds Rep 377
at 409,
it was held that:
“….where a contract has been
found from correspondence, the
whole of that which passed
between the parties must be
taken into consideration.
Although once there is an offer
and acceptance, the complete
contract cannot be affected by
subsequent negotiations”.
The position of the law is that
where the essential terms of a
contract have been agreed, the
fact that the parties have
agreed to negotiate as to the
remaining terms does not
preclude the establishment of a
contract. The court may infer
an agreement to negotiate in
good faith to settle the
remaining terms:
Donwin Production Ltd v. EMI
Films Ltd [1984]
Times, 9th March
(Pain J). The common law
position further states that it
is entirely possible that an
apparent unqualified acceptance
has concluded a contract even
though negotiations are
ongoing. Such negotiations do
not affect the existence of the
contract:
Perry v. Suffields [1916] 1 WLR
1293.
Furthermore, an agreement may be
deemed to be complete although
all its meticulous details have
not yet been worked out:
First Energy (UK) Ltd v.
Hungarian International Bank
Limited [1993] 2 Lloyd’s
Rep. 195.
In this case, it was held that
some of the surrounding
circumstances which should guide
a court in determining whether a
contract had been concluded
where the enthusiasm of the
parties about the success of the
transaction, and the apparent
expression of confidence that it
would be possible to reach
agreement on outstanding
matters.
It is the position of the law
that the fact that there was no
signed contract does not
necessarily mean there was no
valid contract. As was opined by
Acquah JSC, in Koglex Ltd
(No2) v Field [2000] SCGLR 175,
to establish facts amounting to
part performance, what is
required of a plaintiff is to
show that he had acted to his
detriment and that the acts in
question are such as to
indicate, on a balance of
probabilities, that they were
performed in reliance of a
contract with the defendant.
The fact that the terms of the
contract were not written down
in one signed document is also
not at all an issue in law. This
is because even oral agreements
are recognised by the law:
Contracts Act, 1960 (Act 25);
section 11. It is also the case
that the binding force of an
oral agreement is not even
affected by the fact that after
its conclusion, one party sends
the other a document containing
terms different from that agreed
in the oral contract:
Jayaar Impex Limited v. Toaken
Group
Limited [1996] 2 Lloyds Rep.437.
It is therefore the position of
the law that contracts, or
apparent or purported contracts,
may for various reasons not be
enforceable or enforced by the
courts. If a contract is found
by the court to be vitiated, the
contract may be declared void or
voidable. A void contract does
not have, and never had, any
force and effect; a voidable
contract is valid until steps
are taken to set it aside by a
court of law. Most vitiating
factors make contracts voidable,
but the absence of consensus
makes contracts void. The
parties to a contract must be of
the same mind concerning all the
terms of the offer and
acceptance. Where there is
agreement on contractual terms,
there is said to be consensus ad
idem (i.e. a meeting of the
minds). If there is the absence
of consensus, there is no
contract. Therefore, in S. A
Turqui & Bros v Lamptey [1961] 1
GLR, 190, Ollenu J observed
that “the minds of the
parties were not ad
idem....There is therefore no
binding contract between the
parties.”
The evidence of the Plaintiff is
that after various discussions
with the Vice Chairman and the
Group Head, Corporate Services
(DW1) the Defendant sent a draft
of the Consultancy Contract at
the end of July, 2009. The
contract was to take effect from
the 1st of August,
2009. Plaintiff’s evidence was
that he had issues with the
draft because it did not reflect
the conversation he had had with
the Vice Chairman in Lagos.
Subsequently a new draft was
sent to him. After this back and
forth movement, the Plaintiff
testified that he signed and
sent the contract (Exhibit “D”)
to the Defendant on the 20th
of August, even though the email
to which the signed contract was
attached was dated 24th
August, 2009. There is no doubt
that Plaintiff’s claim before
this Court is based on Exhibit
“D”.
However, two days after sending
Exhibit “D” to Defendant,
Plaintiff sent an invoice for
payment for work done by him in
August, 2009; the Defendant
immediately reminded him that
the contract had not been
signed. According to D.W.1 the
Defendant had referred Exhibit
“D” to its lawyers and the Board
of Directors for approval before
it could sign it.
The facts do indeed show that
there was an agreement as per
the discussions between the
Plaintiff and the Vice Chairman,
to enter into a Consultancy
Contract. The parties tried to
agree on the terms of the
proposed Consultancy Contract.
The Defendant sent a first draft
of the contract, Exhibit “1”,
which it asked the Plaintiff to
review and execute if he was
alright with it. The Plaintiff
did not execute it but rather
introduced several amendments to
reflect the understanding he had
reached with the Vice Chairman.
I have no doubt in my mind that
the parties herein wanted their
intended relationship to be set
out in a written document and
executed. It was obvious from
the evidence adduced that D.W.1
was not the final authority to
conclude the contract, and so on
different occasions the
Plaintiff had discussions with
the Vice Chairman of Defendant
Company. Exhibit “5” also
indicates that Plaintiff was
informed that some of the
demands he was making would be
referred to Management for
approval. In short, it is my
opinion that the parties never
reached consensus; they were not
ad idem, and therefore the
contract was never concluded,
and I will so find.
Plaintiff is asking the Court to
make an order for the Defendant
to pay the sum of US$40,145.00
being consultancy fees due to
him under the Consultancy
Contract, together with
interest. Apart from the fact
that the Court has made a
finding that there is no valid
Consultancy Contract, the
Plaintiff also did not lead any
evidence as to how he arrived at
the said sum. The Plaintiff did
not even tender in evidence the
invoice it submitted to the
Defendant for payment. In the
circumstances I will dismiss
this claim.
I am however of the opinion that
the Plaintiff is entitled to
some “compensation” as was
offered by the Defendant. I am
of this view in spite of the
fact that I have made a finding
that there was no valid
contract. I am convinced that
there was an intention to enter
into a contract which did not
materialize. In my view
therefore this is a case in
which the equitable remedy of
quantum meriut should apply. As
Abban J (as he then was) said in
Hammond v. Ainooson [1974]
1GLR 176 at page 183:
“In any case, even if I had
found that there had been no
concluded and enforceable
agreement between the parties as
to the amount of allowance the
Plaintiff was to receive for her
services during the time the
boat was under repairs, or for
the other consideration supplied
by her, I would still have held
that the Plaintiff could recover
on quantum meruit basis for the
value of the benefit she
conferred on the Defendant and
the Defendant accepted. The
principle is that where a person
rendered services in pursuance
of a transaction, supposed by
him to be a contract, but which
in truth, is without legal
validity, he can recover for the
value of his services in quantum
meruit.
The implied obligation to pay
reasonable remuneration is an
obligation imposed by law and
not in inference of fact arising
from the performance and
acceptance of the services.”
Similarly, in SA Turqui &
Bros. v. Lamptey [1961] 1 GLR190
at page 191, Ollenu J. said:
“It is quite clear to me that
the minds of the parties were
not ad idem as to what the
estimated cost of [45 Ghanaian
Pounds] included. There is
therefore no binding contract
between the parties.
…There being no enforceable
contract between the parties,
their minds not being ad idem,
each must be restored to as
nearly the same position he was
in immediately prior to the
conclusion of the abortive
agreement; that is to say, the
Plaintiffs must have back their
vehicle in the same or nearly
the same condition that it was,
or in as reasonable condition as
intervening circumstances
warrant, i.e. with the spare
parts purchased with their money
fitted to it , or delivered
separately with it; and the
Defendant too must be paid
remuneration on quantum meruit
basis for the work he did on the
vehicle.”
Thus assuming the Consultancy
Contract was to have been
effective from 3rd
August 2009, the date stated in
Exhibit “D”, and the Plaintiff
performed some services for the
Defendant in anticipation of the
contract in August 2009 as he is
claiming, he would be entitled
to be paid some money for work
done; the Plaintiff would have
worked for a month. Plaintiff’s
own testimony was that he did
not perform any services for
Defendant in September and
October because Defendant did
not request him to do any work.
Let me state here that payment
or “compensation” under Exhibit
“D” was not in the nature of a
retainer, which is a fee for
being available whether or not
any services were performed. I
am however not able to make any
award even on quantum meruit
basis because the Court is not
able to ascertain the work or
services the Plaintiff was
invoicing for because, as stated
above, I have not been furnished
with the invoice that Plaintiff
submitted to the Defendant for
payment. However, the evidence
placed before the Court is that
the Defendant had offered the
Plaintiff “compensation” of
US$10,000. I will therefore
make an order that the Defendant
pays the said US$10,000 it
offered to Plaintiff.
Plaintiff is also claiming
General Damages of GH¢100,000
for breach of the Consultancy
Contract. It is a fact that
equity will not suffer a wrong
to be without a remedy, nor
should the law. And therefore
if a contract has been breached,
or if a breach is threatened or
imminent, there must be a
remedy. Damages, it is trite
learning, are the normal remedy
for a contracting party who
suffers as a result of a breach
of contract by the other party.
And therefore if there is no
valid contract there can be no
breach. So, again I will
dismiss the claim for general
damages.
With regard to the Plaintiff’s
claim that Defendant should pay
a sum of US$1,000.00 to him
being refund of money expended
by Plaintiff to purchase GRIDCO
Bid Forms, the Defendant has
admitted that the non-refund of
the said sum is an oversight,
and that it has no objection to
paying same to the Plaintiff. I
will therefore grant this relief
and order the Defendant to
refund to the Plaintiff, the
amount of US$1,000.00 or its
cedi equivalent, together with
interest at the prevailing
commercial bank rate from the 25th
day of August, 2009 until date
of final payment.
In summary, I will order the
Defendant to pay to the
Plaintiff;
1.
The amount of US$1,000, or its
cedi equivalent, together with
interest at the prevailing
commercial bank rate from 25th
August, 2009 until date of final
payment.
2.
An amount of US$10,000, or its
cedi equivalent, as
“compensation”.
All the other claims of the
Plaintiff are dismissed. Costs
assessed at GH¢3,000.00 in
favour of Plaintiff.
(SGD)
BARBARA ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
BEN KUWUONU
- PLAINTIFF
A.T. TAMAKLOE
-
DEFENDANT
|
