- 20 Marks
BCL – L1 – Q23 – Breach of Contract
Question
Akosua Mensah, a businesswoman, who had a contract to supply timber logs to Asante Timber Co. Ltd, hired a tractor from Mavis Boateng, at a rate of GH $1,000.00 a day to enable her to haul the timber logs from her timber concession in Asankrangwa. Under the agreement, Akosua Mensah paid a deposit of GH $10,000.00. It is the case of Akosua Mensah that Mavis Boateng assured her that her tractor was in good condition and could haul at least 30 logs a day.
Akosua Mensah, however, found the tractor to be defective almost from the beginning, with the tractor hauling a maximum of seven (7) logs a day, and a total of 60 logs during a period of a little over one month. Akosua Mensah brought an action for damages for breach of contract. The Court awarded Akosua Mensah special damages of GH $20,000.00 on the basis of total failure of consideration.
Required:
(a). Explain whether in the circumstance of the case, there was either a breach of condition of the contract or a breach of warranty.
Explain in THREE (3) ways whether the court was justified in the award of GH $20,000.00 to Akosua Mensah for the failure of consideration.
Answer
(a). The terms of a contract are classified as conditions, warranties, or innominate terms. Parties will usually designate which classification a contract term falls. Breach of condition of a contract can constitute a breach of the contract. This may allow the non-breaching party to sue for damages as well as rescission of the contract.
An owner who let out a chattel on hire must take reasonable care to see to it that it was in a reasonably fit for the purpose condition for which the bailee was to use it; the owner would impliedly warrant the suitability of the chattel for that purpose and was liable to the bailee for breach of the warranty.
In the instant case, there was indeed a breach of implied warranty, and which would not have resulted in the repudiation of the contract. Therefore, Akosua Mensah rightly sued for damages.
(b). The issue arising in the question is whether the Court rightly awarded the special damages of GH $20,000.00 to Akosua Mensah for failure of consideration.
A claim for money had and received was not maintainable if the contract had been partly performed and some benefit has been derived from the part performance.
In the present case, the evidence clearly showed that although the tractor was defective and operational at a rate substantially below the declared capacity, it did some work, having hauled a total of 60 logs.
The Court erred in law in basing the award of the special damages on a total failure of consideration. There was part performance, and for which reason one cannot say that consideration had failed.
- Tags: Contract Law, Damages, Failure of Consideration, Part Performance, Remedies
- Level: Level 1
- Topic: Contract Law
- Uploader: Samuel Duah