a)  Explanation of “Consideration must be real or sufficient but need not be adequate”

In Ghanaian contract law, which is largely influenced by English common law principles as embedded in the Contracts Act, 1960 (Act 25), consideration is a fundamental element required for the formation of a valid contract. It refers to something of value given by one party to another in exchange for a promise or act, ensuring that the agreement is not gratuitous but involves a bargain.

• Real or Sufficient Consideration: This means the consideration must have some legal value, even if minimal. It must be something the law recognizes as capable of supporting a contract, such as a promise to do or refrain from doing something. For instance, in banking, when a customer opens an account, the bank’s promise to provide services (e.g., safekeeping funds) is supported by the customer’s deposit, which has real value. However, past consideration (something already done before the promise) is generally insufficient, as seen in cases like Re McArdle (1951), unless it fits exceptions like requested acts.
• Need Not Be Adequate: Adequacy refers to the fairness or equivalence of value between what is given and received. The courts do not inquire into whether the bargain is economically balanced, as long as it is sufficient. This principle prevents judicial interference in free bargaining. A classic example is Thomas v Thomas (1842), where a nominal rent of £1 per year was deemed sufficient consideration for a house promise. In Ghanaian banking practice, this applies when a bank lends at a low interest rate to a valued customer; the court won’t void it for inadequacy if the rate covers some value (e.g., administrative costs). However, if consideration is illusory (e.g., a promise to pay “as much as I like”), it fails sufficiency.

Practically, in day-to-day banking, this ensures contracts like loan agreements are enforceable even if terms seem one-sided, promoting commercial certainty. Banks must ensure consideration is documented to avoid disputes, aligning with BoG’s Corporate Governance Directive 2018, which emphasizes clear contractual terms for risk management.

b) Whether B Can Succeed in Demanding the Balance

Based on common law principles applicable in Ghana (via the Courts Act, 1993 (Act 459), which incorporates pre-1874 English law), B may succeed in claiming the remaining GHS500.00, as the partial payment lacks fresh consideration, following the rule in Pinnel’s Case (1602) and Foakes v Beer (1884). However, exceptions like promissory estoppel could bar success if equity intervenes.

• General Rule on Part Payment of Debt: A creditor’s promise to accept less than the full debt is not binding without new consideration from the debtor, such as early payment, payment in a different form, or at a different place. Here, A’s payment of GHS500.00 is merely part of the existing debt, providing no additional benefit to B. Thus, no accord and satisfaction exists, and B can sue for the balance. In Ghana, this was affirmed in cases like Amankwah v Osei (1973), where partial settlements without extra elements were unenforceable.
• Application to Scenario: B’s promise was gratuitous, and A’s agreement and payment add no new value. No facts suggest extras like third-party involvement or practical benefit (e.g., avoiding bankruptcy costs, as in Williams v Roffey Bros (1991), which Ghanaian courts might consider for practical benefits). Therefore, B is not estopped from claiming the full amount.
• Exceptions Where B Might Not Succeed: If A relied detrimentally on B’s promise (e.g., incurring costs believing the debt settled), promissory estoppel under Central London Property Trust v High Trees House (1947) could apply, suspending B’s right to the balance. In banking, this mirrors scenarios where a bank waives part of a loan due to customer hardship (e.g., post-2022 DDEP impacts on borrowers); BoG guidelines on fair lending under the Borrowers and Lenders Act, 2020 (Act 1052) encourage such forbearance but require documentation to avoid disputes.

In practice, Ghanaian banks like GCB Bank advise documenting partial settlements with deeds or additional consideration to ensure BoG compliance and prevent litigation, enhancing resilience amid events like the 2017-2019 cleanup where poor loan recoveries led to bank collapses (e.g., UT Bank).