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i
BUSINESS LAW
FOR
ACCOUNTING TECHNICIANS SCHEMEWEST AFRICA
(ATSWA)
STUDY PACK
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Copy (c) 2009 by Association of Accountancy bodies in West Africa (ABWA). No rights
reserved. No part of this publication may be reproduced or distributed in any form or by
any means, or stored in a database or retrieval system, without the prior written consent of
the copyright owner. Including, but not limited to, in any network or other electronicstorage or transaction or broadcast for distance learning.
Published by
ABWA PUBLISHERS
Akintola Williams House
Plot 2048, Michael Okpara Street
Off Olusegun Obasanjo WayZone 7, P. O. Box 7726
Wuse District, Abuja, FCT
Nigeria.
DISCLAIMER
The book is published by ABWA, however, the views are entirely that of the writers.
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PREFACEINTRODUCTION
The Council of the Association of Accountancy Bodies in West Africa (ABWA)
recognized the difficulty of students when preparing for the Accounting Technicians
Scheme West Africa examinations. One of the major difficulties has been the non-
availability of study materials purposely written for the Scheme. Consequently, students
relied on text books written in economic and socio-cultural environments quite different
from the West African environment.
AIM OF THE STUDY PACK
In view of the above, the quest for good study materials for the subjects of the
examinations and the committee of the ABWA Council to bridge the gap in technicalaccounting training in West Africa led to the production of this Study Pack.
The Study Pack assumes a minimum prior knowledge and every chapter reappraises basic
methods and ideas in line with the syllabus.
READERSHIP
The Study Pack is primarily intended to provide comprehensive study materials for
students preparing to write the ATSWA examination.
Other beneficiaries of the Study Pack include candidates of other Professional Institutes,
students of Universities and Polytechnics pursuing first degree and post graduate studies in
Accounting, advanced degrees in Accounting as well as Professional Accountants who
may use the Study Pack as reference materials.
APPROACH
The Study Pack has been designed for independent study by students and as concepts have been developed methodically or as a text to be used in conjunction with tuition at schools
and colleges. The Study Pack can effectively be used as course text and for revision. It is
recommended that readers have their own copies.
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STRUCTURE OF THE STUDY PACK
The layout of the chapters has been standardised so as to present information in a simple
form that is easy to assimilate.
The Study Pack is organised into chapters. Each chapter deals with a particular area of the
subject, starting with learning objective and a summary of sections contained therein.
The introduction also gives specific guidance to the reader based on the contents of the
current syllabus and the current trends in examinations. The main body of the chapter is
subdivided into sections to make for easy and coherent reading. However, in some
chapters, the emphasis is on the principles or applications while others emphasise methods
and procedures.
At the end of each chapter is found the following
Summary Points to note (these are used for purpose of emphasis or clarification) Examination type questions and; Suggested answers
HOW TO USE THE STUDY PACK
Students are advised to read the Study Pack and attempt the questions before checking the
suggested answers.
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FOREWORD
The ABWA Council, in order to actualise its desire and ensure the success of students atthe examinations of the Accounting Technicians Scheme West Africa (ATSWA), put in
place a Harmonisation Committee, to among other things, facilitate the production of Study Packs for student. Hitherto, the major obstacle faced by students was the dearth of study text which they needed to prepare for the examinations.
The Committee took up the challenge and commenced the task in earnest. To start off the process, the existing syllabus in use by some member Institute were harmonised andreviewed. Renowned professionals in private and public sectors, the academia, as well aseminent scholars who had previously written books on the relevant subjects anddistinguished themselves in the profession, were commissioned to produce Study packsfor the twelve subjects of the examination.
A minimum of two Writers and a Reviewer were tasked with the preparation of a StudyPack for each subject. Their output was subjected to a comprehensive review by
experienced imprimaturs. The Study Packs cover the following subjects:
PART I1. Basic Accounting Processes and Systems2. Economics3. Business Law4. Communication Skills
PART II1. Principles and Practice of Financial Accounting2. Public Sector Accounting3. Quantitative Analysis4. Information Technology
PART III1. Principles of Auditing2. Cost Accounting3. Preparing Tax Computation and Returns4. Management
Although, these Study packs have been specially designed to assist candidates preparingfor the technicians examinations of ABWA, they should be used in conjunction with other materials listed in the bibliography and recommended text.
PRESIDENT, ABWA
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PAPER 3: BUSINESS LAW
AIMS:
To examine candidates knowledge and understanding of:
the legal environment in which organisations in general and the accountancy
profession in particular operate; and
the legal implications of business relationships and the relevance of legal rules to
business sector, commerce and industry.
OBJECTIVES :
On completion of this paper, candidates should:
a. know the structure, jurisdiction and functions of the legal systems and the rules
applicable to them;
b. have a working knowledge of the general principles of contract to aid their daily
accounting activities;
c. be familiar with the legal rules governing specific contracts;
d. be able to distinguish between the various forms of business associations and be
conversant with the main rules governing their operations;
e. be able to identify and appreciate the respective duties of bankers and customers and
recognise the nature of negotiable instruments as may be suitable for use asappropriate in their daily activities as Accounting Technicians; and
f. be able to apply the principles of law to simple case studies.
STRUCTURE OF THE PAPER
The paper will be a three-hour paper divided into two sections:
Section A (50 Marks): This shall consist of 50 compulsory questions made
up of 30 multiple-choice questions and 20 short
answer questions covering the entire syllabus.
Section B (50 Marks): Six questions, out of which, candidates are expected
to answer any four, at 12 marks each.
1. The Legal System 15%
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(a) Sources of Law: Common law, equity and statutes of general application; JudicialPrecedent, Legislation, Customary Law and International treaties.
(b) The Court System: An outline of the structure and hierarchy of courts;Qualification of judges; composition and jurisdiction of the various courts. Special
courts.(c) Forms of Legal Liability: Distinction between criminal and civil liability
(d) Professional Ethics: Negligent misstatements
2. Law of Contract 20% Nature and essential elements of a valid contract: offer, acceptance, consideration,intention to create legal relations, capacity and consent.Conditions, warranties and exemption clauses.Illegal contracts and contracts in restraint of trade, vitiating factors.
Discharge of contracts and remedies for breach of contract.3. Special Contracts 30%
(a) Agency:Creation and types; authority of agents; rights and duties of principals andagents and termination of agency
(b) Sales of GoodsMeaning and Types of goods. Implied terms. The Caveat Emptor Doctrine.Transfer of title, passing of risk and the Nemo Dat Quod Non Habet rule.Breach of contract for sale of goods and remedies of the parties.
(c) Hire Purchase and Equipment LeasingMeaning Formalities under the Common Law and the Hire Purchase Act.Implied and Void terms. Rights and Obligations of the parties. Termination.Operating and Finance Leasing.
(d) Contract of Employment Nature and formation. Rights and Duties of the parties. Termination andDismissal. Remedies for breach of contract. Redundancy.
(e) Insurance:Meaning and Classification. Share capital. Meaning and features of thefollowing concepts and principles insurable interest, premium, indemnity,utmost good faith, conditions and warranties, subrogation and contribution.
4. Law of Business Associations 20%
(a) Partnership
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Types and determination of existence. Authority of partners. Rights and duties of partners inter se. Partners and third parties. Dissolution of partnership.
(a) Companies: Nature and functions of the Corporate Affairs Commission. Types of
companies. Process of incorporation. Company securities (shares anddebentures), directors, company meetings. Majority Rule and Minority protection. Winding-up or liquidation.
(a) Others:Business Names, Incorporated Trustees and Unit trusts.
5. Banking and Negotiable Instruments 15%
(a) The legal relationship between banker and customer and their respective duties.
(b) Meaning and characteristics of Negotiable Instruments. Bills of exchange,
Cheques and Promissory notes. Crossing of cheques.(c) Holder, Holder for value and holder-in- due-course.
(d) Rights and Duties of the parties.
RECOMMENDED TEXTS
1. ATSWA Study Pack on Business Law
2. Obilade, A.O. - The Nigerian Legal System, Spectrum Books.
3. Bondzi-Simpson, P.E. - Company Law in Ghana, Methodist Book Depot,Accra
OTHER REFERENCE BOOK Atiyah, P. S. - Sales of Goods, Pitman, London
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TABLE OF CONTENTSPREFACE .. iiiFOREWORD ........ vACKNOWLEDGMENT .......... vii
CHAPTER 1 - SOURCES OF LAW1.0 - Learning Objectives ......... 191.1 - Introduction ......... 191.2 - Law and its S ources.......... 19
1.2.1 - Meaning of Law............ 191.2.2 - Sources of Laws............ 19
1.3 - The Common Law . .......... 201.3.1 - Meaning Of Common Law........... 201.3.2 - Nature and Development of The Common Law ......... 201.3.3 - Meaning, Nature and Development of Equity.............. 20
1.4 - Customary Law........ 21
1.4.1 - The Meaning and Development of Customary Law.........21 1.4.2 - Examples of Customary Law........21 1.5 - Legislatio n.........22
1.5.1 - Sources of L egislation.......... 221.5.2 - Interpretation of Statutes........ .. 23
1.6 - Case Law, Precedent and Law Reporting....... ............. 251.6.2 - Law Re porting.......... 26
1.7 - Summary and Conclusion........ 261.8 - Revision Questions....... 26
CHAPTER 2 - THE COURTS SYSTEM2.0 - Learning Objectives......... 272.1 - Introduction...... 272.2 - The Courts- Hierarchy and Structure......... 272.3 - The S uperior Courts......... 27
2.3.1 - The Supre me Court.......... 272.3.2 - The Court Of Appeal........ 282.3.3 - The High Court and others of coordinate jurisdicti on...... .29
2.4 - The Inferior Courts........... 302.4.1 - The Circuit Court 302.4.2 - The District Court 302.4.3 - Other Lower Courts. 30
2.5 - Important Judicial Processes 302.5.1 - Writ of Summons. 302.5.2 - Writ of Execution 30
2.6 - Criminal and Civil Liability.. 312.6.1 - Criminal Liability 312.6.2 - Civil Liability. 31
2.7 - Basic Tortious Liability. 322.7.1 - Defamation.. 32
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2.7.2 - Negligent Misstatements. 322.7.3 - Passing Off.. 33
2.8 - Summary and Conclusion. 332.9 - Revision Questions.... 33
CHAPTER 3 - LAW OF CONTRACT 13.0 - Learning Objectives.. 353.1 - Introduction... 353.2 - Definition and Elements of Contract 35
3.2.1 - Definition of Contract.. 353.2.2 - The Elements of Contract. 35
3.3 - Offer and Acceptance.... 363.3.1 - Offer... 363.3.2 - Invitation to Treat.... 363.3.3 - Acceptance.. 38
3.4 - Consideration... 38
3.4.1 - Definition.... 383.4.2 - Types... 393.4.3 - General Rules.. 393.4.4 - Modifications.. 40
3.5 - Intent ion to Create Legal Relations...... 413.5.1 - Domestic and Social Agreements.... 413.5.2 - Commercial Agreements..... 42
3.6 - Capacity..... 433.7 - Summary and Conclusion..... 453.8 - Revision Questions.... 45
CHAPTER 4 - LAW OF CONTRACT II4.0 - Learning Objectives.......... 474.1 - Form and Contents o f a Contract.............. 47
4.1.1 - Form of a Con tract.......... 474.1.2 - Contents (or terms) of a Contract............ .. 48
4.2 - Vitiating Elements of Contract............. 524.2.1 - Mis take......... 534.2.2 - Misrepresentation........ 554.2.3 - Duress......... 574.2.4 - Undue Influence......... 574.2.5 - Illegality......... 584.2.6 - Termination or discharge of Contract.......... 62
4.3 - Summary and Conclusions ......... 664.4 - Revision Questions ....... 67
CHAPTER 5 - AGENCY5.0 - Learning Objec tives................. 695.1 - Introduction.......... 695.2 - Definition a nd Types......... 69
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5.2.1 - Definition of Agency.......... 695.2.2 - Types of Agency......... 70
5.3 - Creation of Agency 1- Consent......... 715.3.1 - Express Agency.......... 715.3.2 - Implied Agency.......... 71
5.4 - Creation of Agency 11- Operation of Law............ 735.4.1 - Agency of Necessity......... 735.4.2 - Agency of Cohabitation....... 73
5.5 - Creation of Agency 111- Ratification........ 745.6 - Obligations of Agency......... 74
5.6.1 - The Duties of the Agent....... 745.6.2 - The Duties of the principal and the rights of the principal and
the agent5.7 - The Effects of Agency....... 75
5.7.1 - Where the agent contracts as an agent for a named principal... 755.7.2 - Where th e agent contracts for an unnamed principal........ 76
5.7.3 - Where the agent contracts for an undisclosed principal....... 765.8 - Terminatio n of Agency...... 775.8.1 - Act of the Par ties...... 77
5.8.2 - Operation of Law. 775.9 - Summary and Conclusions 77
5.10 - Revision Questions. 78
CHAPTER 6 - SALES OF GOODS6.0 - Introduction... 796.1 - Classificati on of Goods..... 806.2 - Form of the Contract..... 826.3 - The terms of the contract of sale of goods..... 83
6.3.1 - Title.. 846.3.2 - Description.. 856.3.3 - Merchantable Quality.......... 866.3.4 - Sales by sample........ 88
6.4 - Other Terms....... 886.4.1 - Implied terms as to time....... 896.4.2 - Implied terms as to price........ 896.4.3 - Transfer of property between seller and buyer...... 896.4.4 - Passing of Risk...... 92
6.5 - Transfer of a title by a Non- owner....... 956.5.1 - The exceptions......... 95
6.6 - Breach of Sale of Goods Contract and the Remedies of theParties
6.6.1 - Buyers' Rights........ 986.6.2 - Sellers' Ri ghts........ 99
CHAPTER 7 - HIRE PURCHASE
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7.0 - Introduction............... 1037.1 - Definition of Hi re Purchase....... 103
7.1.1 - A Credit Sale Agreement........ 1047.1.2 - A Condi tional Sale Agreement......... 104
7.2 - Obligations of the Parties to a Hire Purchase........... 104
7.2.1 - Reasons for the adoption of the Hire Purchase System ..1057.3 - Obligations and Rights of the Parties. ....... 1067.3.1 - Obligations of the Parties at Common Law...106 7.3.2 - Rights of the Parties at Common Law...108
7.4 - The Hire- Purchase Act 1965......108 7.4.1 - The Purpose of the Act..108
7.4.2 - The Contents of th e Act............. 1097.4.3 - Effect of Non- compliance................ ............. 1107.4.4 - Void Provisions.... 1107.5 - Obligations and Rights of the Parties under the Hire Purchase Act
7.5.1 - Implied Terms Under the Hire Pur chase Act............ 1117.5.2 - Exclusion of the Terms Implied by the Ac t........... 1127.5.3 - Hirer's right to terminate agr eement.............. 1127.5.4 - Re covery of Goods................ 1137.6 - Summary and Conclusio ns .................. 125
7.7 - Revision Questions .................... 126
CHAPTER 8 - CONTRACT OF EMPLOYMENT8.0 - Learning Objectives..... 1178.1 - Introduction..... 1178.2 - The Nature and formation of the Contract of Employment... 118
8.2.1 - Formation of the Contract of Emp loyment..... . 1188.2.2 - Approaches to determining the nature of the Contract of
Employment8.2.3 - Incidents of the Contract of Service and Contract for Service.. 119
8.3 - The Rights of the Emp loyer and the Worker......... 1208.3.1 - The Rights of the Employer...... 1208.3.2 - The Rights of the Worker..... 120
8.4 - The Duties of the Employer and the Worker.... 1208.4.1 - Duties o f the Employer.. 1208.4.2 - Duties of the Worker....... 122
8.5 - Contracts in Restraint of trade..... 1228.6 - Te rmination of Employment.... 123
8.6.1 - General grounds for termination..... 1238.6.2 - Fair termination...... 1238.6.3 - Unfair termination ..... 124
8.7 - Redundancy ........... 1248.8 - Remedies . ........... 1258.9 - Summary and Conclusions ............. ........... 125
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8.10 - Revision Questions ... ......... 126
CHAPTER 9 - LAW OF INSURANCE9.0 - Learning Objectives . 127
9.1 - Introduction 1279.2 - Formation of Contract of Insurance 1289.2.1 - Temporary Cover. 1319.2.2 - Insurable Interest.. 131
9.3 - Types of Policy 1329.3.1 - Life Insurance 1329.3.2 - Personal Accident Insurance.. 1339.3.3 - Fire Insura nce 1339.3.4 - Liability Insurance. 1339.3.5 - Motor Vehicle Insurance. 1339.3.6 - Marine Insurance.. 134
9.3.7 - Burglary Insurance... 1349.3.8 - All Risks Insurance.. 1349.4 - The Concepts of Indemnity and Subrogation 134
9.4.1 - Indemnity 1349.4.2 - Subrogation. 1359.4.3 - Contribution 135
9.5 - Re- insurance. 1369.6 - Summary and Conclusions 1369.7 - Revision Questions 137
CHAPTER 10 - LAW OF BUSINESS ASSOCIATIONS 1- COMPANIES10.0 - Learning O bjectives 13910.1 - Introduction. 13910.2 - Definition and Types of Companies.. 139
10.2.1 - Definition 13910.2.2 - Types of Companies 140
10.3 - Incorporation and Effects. 14010.3.1 - Promoters.. 14010.3.2 - Pre- Incorporation Contracts. 14010.3.3 - Registration 14110.3.4 - Effects of Incorporation 141
10.4 - General Principles.. 14210.4.1 - Regulation of the Company... 14210.4.2 - The Ultra vires principle 14310.4.3 - Lifting the Corporate veil.. 144
10.5 - Company S ecurities.......... 14610.5.1 - Shares... 14610.5.2 - Debentures.... 147
10.6 - The Securities and Exchange Commission.... 14810.7 - Notices, Meeting s and Resolutions 149
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10.7.1 - N otices...... 14910.7.2 - Meetings... 14910.7.3 - Resolutions... 150
10.8 - Liquidation...... 15010.8.1 - Private liquidation.... 150
10.8.2 - Official liquidation............151 10.9 - Summary and Conclusion.......... 15210.10 - Revision Questions... .......... 153
CHAPTER 11 - PARTNERSHIPS11.0 - Introduction Learning Objectives............... 15511.1 - Types of Partnership................. 155
11.1.1 - General/Limited Partnership... .......... 15511.1.2 - Features of Limited Part nership........... 15611.1.3 - Dormant or Sleeping P artner............ 15611.1.4 - Partner by Estop pel........... 156
11.2.0 - Formation of Partnership......... 15611.3.0 - Determining the Existence of Partnership............ 15711.3.1 - Joint Tenancy and Tenan cy in Common...... 15711.3.2 - The Sharing of Gross Returns...... 15811.3.3 - Receipt of a Share of t he Profits....... 15911.4.0 - Examples of Relationships where Persons carry on Business
but Are not Partners .............................................................. ........ 15911.4.1 - Legality of Partn erships........ 16011.4.2 - Relationship betwe en Partners...... 16011.4.3 - Remedy for Breach of Partnership Agr eement..... 16211.5.0 - Relations of Partners and Third Parties............ 16211.5.1 - Partners' Po wers........ 16211.5.2 - Extent of Power.... 16211.5.3 - Partner's Liabilities...... . 16311.6.0 - Dissolution of Pa rtnership........ 16511.6.1 - On Application by Partner the Court may decree Dissolution..... 16511.6.2 - The Effect of a Dissolution....... 16611.6.3 - Application of Partnership Property on Dissolution......... 166
11.7 - Summary and Con clusions ...... 16711.8 - Revision Ques tions .... .. 167
CHAPTER 12 - NEGOTIABLE INSTRUMENTS AND BANKING12.0 - Learning Objectives............. 16912.1 - Introduction................. 16912.2 - Meaning, Types and Characteristics of Negotiable Instruments
12.2.1 - Negotiable Instrument s................ 16912.2.2 - Promissory Notes.................. 17012.2.3 - Certificates of Deposit.................. 17012.2.4 - Bill of Exchange.................... 170
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12.2.5 - Cheques................ 17012.2.6 - Negotiability................. 17112.2.7 - Order Paper and Bearer Pap er.................. 17112.2.8 - Endorsement................. 171
12.3 - Rights and Duties of Parties to a Bill of Exchange..................... . 172
12.3.1 - Holders.................. 17212.3.2 - Dishonour................. 17212.3.3 - Discharge.............. 173
12.4 - Rig hts and Duties Bankers and Customers................. 17312.4.1 - Banking............. 17312.4.2 - Relationship of Banker and Customer.............. 17412.4.3 - Termination of Duty to pay.............. 174
12.5 - Unit Trusts................ 17512.6 - Summary and Conclusion............ 17512.7 - Revision Ques tions........... 176
APPENDIX ........177 APPENDIX II ........... 195
SAMPLE QUESTION 2 ...........197
SAMPLE II ........205
BIBLIOGRAPHY ...... ..209
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TABLE OF CASES
AAngu v Atta (1916) PC '24-28
Ashbury Railway Carriage Co v Riche (1875) L R 7 H L 653BBuama v Oppong, [1992] 2 GLR 213
CCarlill v Carbolic Smoke Ball Company [1893] 1 QB 256Curie v Misa (1875) LR 10 Ex 153
DDe Francesco v Barnum [1890] 45 Ch.D. 430, Ch.D
Diab v Quansah [1974] 1GLR 101Doyle v White City Stadium Ltd [1935] 1 KB 110 CADunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] A C 847, H L
EEdwards v Skyways Ltd [1964]1 WLR 349
GGordon v Essien, [1992] 1 GLR 232
HHughes v Metropolitan Railway Co. (1877) 2 App Cas 439 H.LHyde v Wrench (1840) 3 Beav 334
IIn Cohen (WA) Ltd v Comet Construction Co Ltd; Ghana Commercial Bank (Claimants)[1966] GLR 777In Re McArdle [1951] Ch 669In Republic v James Town Circuit Judge Ex parte Annor [1978] GLR 453
JJones v Padavatton [1969] 1WLR 328
K Kessie v Charmant [1973] 2 GLR 194
MMerritt v Merritt [1970] 1 WLR 1121, CA
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N Nash v Inman [1908] 2 K B 1
OOrthodox School of Peki v Tawlma Abels [1974] GLR 421
PPartridge v Crittenden [1968] WLR 204Payne v Cave (1789) 3 Term Rep. 148Pharmaceutical Society v Boots Cash Chemists Ltd [1953] QB 40Pinnel's case (1602) 5 Co Rep 117Pioneer Construction Products Ltd v Faddool [1974] 1 GLR 76
R Rose and Frank Co. v Crompton Brothers [1925] AC 445 HL
SSalomon v Salomon [1897] AC 22Spencer v Harding (1870) L.R.5.C.P. 561
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1
CHAPTER 1
SOURCES OF LAW
1.0 LEARNING OBJECTIVES
Upon completion of this chapter, readers should be able to: Define law. Explain the purpose of law. identify the laws of Ghana as Ghanaian candidates and the laws of Nigeria as
Nigerian candidates discuss the scope of each of the laws of Ghana and Nigeria mention and explain the forms of legislation in Ghana and Nigeria differentiate the approaches to legal interpretation
1.1 INTRODUCTION
Legal issues confront us all the time. Some legal knowledge is therefore important
for everybody. Laws ensure orderliness in society and every human activity is
regulated by law. To be very functional persons we need to appreciate the laws
that regulate the various activities we are engaged in. The purpose of this chapter
is to explain what the law is and its role in society. The chapter is also to identify
all the laws of Ghana and Nigeria and where they are derived from. To avoid
chaos and ensure orderliness every human grouping must have rules and
regulations that guide behaviour. The development of the law and how the laws
are applied are also discussed. Finally the chapter examines the various ways by
which the laws are interpreted to give meaning to them.
1.2 LAW AND ITS SOURCES1.2.1 Meaning of Law
The primary area of interest is the law and where it is derived from. It is
important to know that the law basically is the rules and regulations by
which a society is governed. All human behaviour is shaped in one way or
the other by various laws. People may not voluntarily want to meet the
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expectations of the law. However they may conform because of the
realisation that failure to do so will attract sanctions.
1.2.2 Sources of LawsThese laws may originate from several sources. Article 11 of the
Constitution of the Republic of Ghana, 1992 enumerates the laws of Ghana.
Article 11. (1) States:
The laws of Ghana shall comprise - (a) this Constitution; (b) enactments
made by or under the authority of the Parliament established by this
Constitution; (c) any Orders, Rules and Regulations made by any person or
authority under a power conferred by this Constitution; (d) the existing law;
and (e) the common law.'
1.3 THE COMMON LAW
1.3.1 Meaning of Common Law
Article 11(2) of the 1992 Constitution defines the common law of Ghana
as the rules of law generally referred to as the common law, the rules
generally known as the doctrines of equity and the rules of customary law.
The general concept of common law therefore has three components
namely the rules of common law, the principles of equity and customary
law. Sometimes common law refers to both the rules of common law and
the principles of equity which were received from England and other times
only to the rules of common law developed in England.
1.3.2 Nature and development of the common law
The rules of common law are the body of laws which were developed inEngland in the 12th Century. They emerged out of the mass of customary
law of the English. After the Norman Conquest, a body of important and
powerful men known as the Curia Regis (Kings Council) assisted the
Norman Kings to rule. They performed many functions. It eventually led
to the development of courts to hear cases of a particular kind. By the 13th
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members of a particular community as binding upon them. The Constitution,
however, prohibits all customary practices which dehumanize or are injurious to
the physical and mental well-being of a person.
Under the Supreme Court Ordinance of 1876, customary laws were applied and
enforced if they were not repugnant to natural justice, equity and good conscience.
Under the High Court (Civil Procedure) Rules, 1954, the content and existence of
customary law was regarded by the court as question of fact in much the same way
as English courts treat foreign laws as facts. A further indication of the direction of
development of customary law is stated in Angu v Atta (1916) PC '24-28, 43 thus:
As is the case of all customary law, it has to be proved in the first instance by
calling witnesses acquainted with the native customs until the particular customs
have, by frequent proof in the Courts, become so notorious that the Courts take
judicial notice of them.
The situation in Ghana is almost the same in Nigeria. Customary Law is one of the
sources of Nigerian Law. Under the received clause, Customary laws and practices
that are repugnant to natural justice and good conscience are not recognised as part
of the Nigerian legal system.
1.4.2 Examples of customary law
Customary law continues to be the major law that regulates matters relating to
chieftaincy, family relationships and property rights. Customary rules and
practices regulate the institution of chieftaincy in terms of enstoolment or
enskinment, operation and removal. Acquisition of rights in land especially family
or stool ones is also based on customary practices. The whole spectrum of family
relationships covering marriage, birth, adultery, divorce, death, succession andinheritance among others are mainly on customary law. Generally there is
patrilineal and matrilineal inheritance and succession and different communities
are regulated by one or the other. There are also a variety of customary practices
that regulate various economic activities in different communities. There is,
therefore, a multiplicity of customary laws. Due to the impact of political and
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socio-economic changes in society existing customary laws are increasingly
ceasing to be applied in their traditional forms.
In Nigeria, the 1999 Constitution recognises the supremacy of the constitution, andalso the principle of federalism which devolves power between the Federal
Government and the federating 36 States and the Federal Capital Territory, Abuja.
1.5 LEGISLATION
1.5.1 Sources of legislation
Legislation is law passed by Parliament in the form of Acts of Parliament or
Statutes. Legislation may also be exemplified by the Constitution, Acts, Decrees,
Edicts and Subsidiary legislation.
A body usually set up to draft a constitution for a country is known as a
Constituent Assembly. The body that was formed to draw up the 1992 Constitution
was called the Consultative Assembly. The Constitution is the highest and
fundamental law of any country. The 1992 Constitution is therefore the supreme
law of Ghana and as indicated in Article 1(2) of the Constitution any law that is
inconsistent with any provision of the Constitution is to the extent of the
inconsistency void. This is also applicable n Nigeria. Sect of 1999 Constitution
marks the constitution as the grand norm. The Constitution determines the kind of
government suitable for the country and in the preamble identifies it as that
ensuring liberty, equality of opportunity and prosperity. Other principles are
universal adult suffrage, the rule of law and the protection and preservation of
fundamental human rights and freedoms. Article 4(1) of the 1992 Constitution
shows Ghana as a sovereign state which is a unitary republic. Under Article 3(1) of the Constitution, Parliament has no power to pass a law to make Ghana a one-party
state. The Constitution regulates many aspects of the country. It creates and
defines the scope and powers of the three organs of state namely the Executive, the
Legislature and the Judiciary. It also touches on citizenship, fundamental human
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rights, chieftaincy and the code of conduct for Public Officers among others. This
provision is also applicable to Nigeria.
Statutes cover a very broad scope. They may be received English Statutes,colonial ordinances, Acts of Parliament and Decrees made under military regimes.
It is important to note that some statutes of England apply in Ghana as statutes of
general application by virtue of S 119 of the Courts Act, 1993 (Act 459). They are
however subject to the statutes of Ghana and so where there is a conflict the laws
of Ghana will prevail. Laws passed by military governments are known as
Decrees. They constitute an important part of the existing written laws. The
National Liberation Council Decrees, (NLCDs) National Redemption Council
Decrees, (NRCDs) the Supreme Military Council Decrees (SMCDs), The Armed
Forces Revolutionary Council Decrees (AFRCDs) and the Provisional National
Defence Council Laws (PNDCLs) are still part of our statutes. In Nigeria, the 1 st
day of January 1900 is the bench mark. Any law that was in force as at 1 st January
1900 is a statute of General Application.
Since the coming into force of the Constitution, 1992 many Acts of Parliament
have been passed. These are the enactments made by or under the authority of the
Parliament established by the Constitution. Their numbers are growing by the day
and it is expected that the dire need for law reforms in many areas will continue to
increase their scope.
Finally there are the body of laws referred to as delegated or subsidiary legislation.
These are Orders, Rules and Regulations made by any person or authority under a
power conferred by the Constitution or any other law. Parliament confers this power by an Act of Parliament. They may come by way of constitutional
instruments, executive instruments or legislative instruments. They are subsidiary
laws because they are subject to being published in the Gazette and also being laid
before Parliament before they come into effect.
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Legislation constitutes today the most widespread of the laws and will continue to
be so because the law has to respond to changes taking place in society and
therefore the necessary laws will have to be passed to meet that need. In addition
the need to keep the law effective and up to date will call for reforms and newlegislations.
Edicts are proclamations of laws made. Historically, they could be royal
pronouncements from the King or the Queen or commands from the Chiefs and
their council of elders.
The situation in Ghana is almost the same with that of Nigeria, except for the
federal constitution operating in Nigeria while Ghana has a unitary constitution. In
Nigeria, the military Decrees are now part of the Laws of the federation, with each
codified as an Act of the Parliament; while military Edicts at the State level are
being referred to as the Laws of the various component States.
1.5.2 Interpretation of statutes
The courts are responsible for analysing, interpreting and construing the language
of Acts of Parliament in order to determine the intention of the Legislature. To
enable judges interpret statutes properly, they are guided by statutory rules or
common law rules. Among the statutory rules are reference to the interpretation
section of any Statute, the Interpretation Act, 1960 (CA 4) and the common law
rules on statutory interpretation. Among the common law rules are the literal rule,
the Golden rule, the Mischief rule, the Ejusdem generis rule, the Expressio unius
est exclusio alterius rule, the Noscitor a sociis rule and the various presumptions.
Acts usually have an interpretation section which contains definitions of certain
key words used in that Act. These are of immense help to not only judges but all
who require the understanding of such Acts. In Ghana, the Interpretation Act,
1960(CA 4) is the major guide to statutory interpretation. It lays down certain
basic rules of interpretation for all Acts. The internal aids include the long title of
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the Act and its preamble. Headings, side notes and punctuation may also be
looked at to bring out the meaning of ambiguous words. There is also the use of
extrinsic material. These are the sources of information about a legislation apart
from the Act itself. There was a severe restriction on their use but this is nowrelaxed. Reference may be made to international conventions and treaties which
form the basis of the legislation, reports to the Law Reform Commission and the
Hansard.
The Literal rule, is for giving words their ordinary and plain meaning if they are
clear and unambiguous. Under this rule it is argued that even if the interpretation
produces an absurd or perverse decision it was up to Parliament to put matters right
and not judges.
Under the Golden rule the judge adopts the interpretation which produces the least
absurd result. This is adopted especially where the words of a statute are
capable of two or more meanings. It is even argued that it can be resorted to where
the words have only one meaning but a literal interpretation would lead to an
absurdity.
The Mischief rule is based on looking at what mischief or defect in the common
law the Act was passed to remedy and do the interpretation on that basis. It is
associated with the modern purposive approach to interpretation on that basis. It is
associated with the modern purposive approach to interpretation where the
construction which will promote the aims and purposes underlying the provision is
what is adopted by the judge. Under the Ejusdem generis rule where general words
follow particular words the general words should be construed as meaning personsor things of the same class or genus. For example if the Act referred to 'lions,
tigers and other animals', the general words 'other animals', should be interpreted in
terms of the particular words, lions, tigers to mean other kinds of wild animals and
not domesticated animals.
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The expressio unius est exclusio alterius rule means that the express mention of
one or more things implies the exclusion of others. For example if the Act simply
mentioned 'lions and tigers' other kinds of wild animals are excluded.
The Noscitur a sociis rule is where the meaning of a word is derived from the
context in which it is found.
All these collectively facilitate statutory interpretation and thereby make for the
understanding of the Acts.
1.6 CASE LAW, PRECEDENT AND LAW REPORTING
1.6.1 Case law and Precedent
Decisions of judges constitute a large part of the laws. The existing unwritten law
is the decisions of the Superior Courts of Ghana. The doctrine of stare decisis et
non quieta movere is followed both in Ghana and Nigeria. It simply means stand
by past decisions and do not disturb things at rest. This is also known as the
doctrine of binding judicial precedent. The principle is that a c ourts decision
based on a particular set of circumstances is binding on other courts in later cases n
situations where the relevant facts are the same or similar. In simple terms it
means judges make use of previously decided cases. This is however within
certain limits since it is linked with the succession of Courts. Courts are bound by
the decisions of courts superior in the judicial hierarchy. This however is not
applicable to inferior courts since higher inferior courts do not bind lower inferior
courts. The High Courts and Regional Tribunals are not bound by their own
decisions but their decisions bind all lower courts. The Court of Appeal is bound
by its own previous decisions which also bind all Courts lower than it. Thedecisions of the Supreme Court bind all other courts. All those constitute
authoritative precedent which is generally binding and must be followed. The
Courts of Ghana also respect the decisions of the Superior Courts of other common
law jurisdictions. They may be referred to and relied upon but only of persuasive
authority. Judicial precedent brings out rules of law which help to ensure
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uniformity, consistency and certainty. This is also applicable in the Nigerian
judicial system
1.6.2 Law ReportingThe most meaningful way of showing the application of the doctrine of judicial
precedent is the reporting of such cases. The reporting of a series of cases on a
matter or issue will help to illustrate the relevant rule of law running through it.
Precedents have to be reported and available. Law Reports are the repository of the
precedents. In Ghana the Council for Law Reporting has the responsibility for the
preparation and publication of the Ghana Law Reports which contain the
judgments, rulings and opinions of the Superior Courts of the country. The
Council for Law Reporting also publishes the Review of Ghana Law which is
made up of legal articles, opinions, critiques and general expositions on various
aspects of the Law.
In Nigeria, there are different Law Reports, which also contain judgements of the
superior courts. These include the Supreme Court Law Report, Nigerian weekly
Law Report, Nigerian Monthly Law Report etc.
1.7 SUMMARY AND CONCLUSIONS
The chapter surveyed the concept of law and its role in society. Then followed an
identification of the various sources of law. It also delved into the scope of each of
the sources. There was also a look at the law in practice by the use of case law and
judicial precedent and the keeping of records by way of law reporting.
1.8 REVISION QUESTIONS1. Explain what you understand by law.
2. What purpose do laws serve?
3. Make a list of the laws of Ghana / Nigeria.
4. Discuss the scope of the common law.
5. Explain what you understand by equity.
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6. What is customary law and what is its scope today?
7. Make a list of the various sources of legislation.
8. Describe three common approaches to the interpretation of statutes.
9. What do you understand by judicial precedent?10. Describe the scope and purpose of law reporting.
MULTIPLE CHOICE QUESTIONS
1. Which of these statements is true on the meaning of Customary Law?
A. Customary Law is used as an instrument by the rulers to fix the power sector.
B. The Customary Law is not required to pass validity test because it isderived from the culture and customs of the people.
C. Customary Law deals with customs accepted by members of a particular community as binding upon them
D. Customary Law is a written law.
E. Customary law is rigid and not flexible.
2. Which of these statements is true?
A. The rules of English Common Law are the body of laws which weredeveloped in England in the 12 th century.
B. The rules of English Common Law and the doctrine of Equity have their origin in African Customary Law.
C. The English Common Law is not rigid but finds its adaptation in our legalsystem very cumbersome.
D. The Status of General Application is a law only applicable to England.
E. The English Common Law is a written Law.
3. Which of these statements is true concerning the literal rule?
A. It is very absurd.B. It is a rule manufactured by the judges for the courts convenience.C. It is for giving words their ordinary meaning.
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D. It is a rule that developed from long usage of cannon of interpretation bythe lawyers.
E. It is a rule developed from the Customary Law usage and practice.
4. The doctrine of stare decisions is basically onA. Decision of customary court.B. The decision of superior court as binding on the lower courts.C. Decision of the Chancery court.D. Decisions only emanating from tribunal.E. Decision of a Chief Judge of a State.
5. The Supreme Court of Nigeria is composed of how many justices ?A. 22B. 21C. 23D. 26E. 19
SHORT ANSWER QUESTIONS1. Common Law has its origin in. 2. The Doctrine of Equity emanat ed from 3. The bench mark for the statute of General application as one of the sources of
Nigerian Law is . 4. The concept of stare decisis in the Nigerian Legal system means 5. The appointment of a justice to the Supreme Court in Nigeria requires
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CHAPTER TWO
THE COURTS SYSTEM
2.0 LEARNING OBJECTIVESUpon completion of this chapter, readers should be able to:
explain the role of courts in the administration of justice identify the two broad groups of Courts and list the courts under
them explain the composition of each of the courts discuss the scope of the jurisdiction of each of the courts explain the process of initiating and enforcing an action distinguish between criminal and civil liabilities explain defamation, misstatement and passing off
2.1 INTRODUCTION
The courts are the major places for conflict resolution and the interpretation
of laws. Courts are institutions designed for settling disputes. They are
concerned with the administration of justice. The processes within these
courts and the ease or difficulty with which justice may be obtained all
have a strong impact on business.
2.2 THE COURTS HIERARCHY AND STRUCTURE
The Courts for a long time have been divided into two main groups namely the
Superior Courts of Judicature and the inferior or lower courts. The Superior Courts
of Judicature consist of the Supreme Court, the Court of Appeal and the High
Court or Regional Tribunal. The inferior courts are made up of the MagistrateCourts (Nigeria), Circuit Court, the District Court, the Juvenile Court, the National
House of Chiefs, the Regional House of Chiefs and every Traditional Council in
respect of the jurisdiction of any such House or Council to adjudicate over any
cause or matter affecting chieftaincy (all in Ghana); Customary/Area Courts
(Nigeria); and such other lower courts as Parliament may by law establish.
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2.3 THE SUPERIOR COURTS
2.3.1 The Supreme Court
The Supreme Court is the highest court of the land. It consists of the Chief Justice as the head, and not less than nine (not more than 21 in Nigeria)
other Justices of the Supreme Court. In both Ghana and Nigeria, the
Supreme Court is duly constituted(quorum) for its work by not less than
five Justices of the Supreme Court and for the purpose of reviewing its own
decision by not less than seven Justices of the Court. The qualification for
appointment as a Justice of the Supreme Court is high moral character,
proven integrity and not less than fifteen years standing as a qualified legal
practitioner.
The Supreme Court in Nigeria has the same status with the Supreme Court
of Ghana in terms of composition, powers and requirement for
appointment. The Supreme Court in Nigeria is created under S. 230 of the
1999 Constitution of the Federal Republic, as amended. S.232 gives
original jurisdiction to the Supreme Court in any matter between the
Federal Government and the States, or between any two or more States, or
the National Assembly and the Federation, or State Houses of Assembly
and the Federation.
The Supreme Court has original, appellate, supervisory, review and special
jurisdiction. The Supreme Court has exclusive original jurisdiction in all
matters relating to the enforcement or interpretation of the Constitution and
all matters arising as to whether an enactment was made in excess of the
powers conferred on Parliament or any other authority or person by l aw or
under the Constitution.However, by S.233 of the Constitution, the Supreme Court shall not have
original jurisdiction in respect of criminal matters.
The Supreme Court is the final appellate court. In Ghana, the Supreme
Court shall have appellate jurisdiction to the exclusion of the Court of
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Appeal to determine matters relating to the conviction or otherwise of a
person for high treason or treason by the High Court. An appeal from a
decision of the Judicial Committee of the National House of Chiefs shall lie
to the Supreme Court with the leave of that Judicial Committee or theSupreme Court.
The Supreme Court has supervisory jurisdiction over all courts and over
any adjudicating authority and may in the exercise of that supervisory
jurisdiction, issue orders and directions including orders in the nature of
habeas corpus, certiorari, mandamus, prohibition and quo warranto for the
purpose of enforcing or securing the enforcement of its supervisory power.
The Supreme Court may also review any decision made or given by it.
The Supreme Court has special jurisdiction which it exercises in three
ways. It has the exclusive jurisdiction to determine whether an official
document should not be produced in Court because its contents will be
prejudicial to the security of the state or will be injurious to the public
interest. In Ghana, the Supreme Court has the jurisdiction to entertain a
petition challenging the validity of the election of a person as President of
Ghana. It also has the jurisdiction for the removal of the President on
stated grounds.
In both countries, only the Supreme Court can entertain appeals from the
Court of Appeal.
2.3.2 The Court of Appeal
The Court of Appeal is the next most senior court to the Supreme Court. In
Ghana, it has only appellate jurisdiction and no original jurisdiction; andconsists of the Chief Justice and not less than ten Justices of the Court of
Appeal. The Chief Justice is however empowered to request other Judges
of the Superior Courts of Judicature to sit in the Court of Appeal to hear
and determine a particular cause or matter. The Court of Appeal is duly
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constituted by any three of its Judges and when so constituted the most
senior of the Judges presides.
In Nigeria however, the Court of Appeal is presided over by the Presidentof the Court of Appeal; and in addition to being an appellate court, by
virtue of S, 239 of the 1999 Constitution, has original jurisdiction to hear
and determine any question as to whether any person has been validly
elected into the office of the President or Vice President; or whether their
terms of office have ceased, or their office have become vacant.
The qualification for appointment to the Court of Appeal is high moral
character, proven integrity and not less than twelve years standing as a
lawyer. A single Judge of the Court of Appeal is empowered to sit alone to
deal with applications to the Court which do not involve the decision of a
cause or matter before the Court of Appeal.
2.3.3 The High Court and others of Co-ordinate jurisdiction
In Ghana, the High Court is made up of the Chief Justice and not less than twenty
Justices of the High Court and such other Justices of the Superior Court of
Judicature as the Chief Justice may by writing signed by him request to sit as High
Court Justices.
In Nigeria, the High Court is known as the State High Court, created under S.270
of the 1999 Constitution, headed by a Chief Judge, consisting of as many Judges as
there are Courts. The State High Courts have unlimited jurisdiction in both civil
and criminal matters.
The High Court has jurisdiction in all matters and in particular in civil and criminalmatters and such original, appellate and other jurisdiction conferred on it by the
Constitution or any other law. In addition the High Court has jurisdiction to
enforce the fundamental human rights and freedoms guaranteed by the
Constitution. The High Court has appellate jurisdiction in the judgment of the
Circuit Court in the trial of a criminal case. It also has appellate jurisdiction in any
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judgment of a District Court or Juvenile Court. The High Court has supervisory
jurisdiction over all lower courts and any lower adjudicating body and may issue
orders and directions including orders in the nature of habeas corpus, certiorari,
mandamus, prohibition and quo warranto for the purpose of enforcing or securingthe enforcement of its supervisory powers.
2.3.4 Federal High Court
S.251 of the Constitution provides for the creation of the Federal High Court with
jurisdiction to entertain matters relating to the revenue of Government, taxation,
customs and excise, banking, banks and other financial institutions, Companies and
Allied Matters, aviation, arms, drugs and poison, explosives, diplomatic and
consular matters etc. The Federal High Court has both civil and criminal
jurisdictions.
2.3.5 . Regional Tribunal
This is applicable only in Ghana. Each region in Ghana is expected to have a
Regional Tribunal established in it. A Regional Tribunal consists of the Chief
Justice, one Chairman and such members who may not be lawyers as shall be
designated by the Chief Justice to sit as panel members. A Regional Tribunal shall
have concurrent original jurisdiction with the High Court in all criminal matters
and shall in particular try the special offences of causing loss, damage or injury to
public property; import of explosives and using public office for profit.
In addition, it tries offences arising under Customs, Excise and Preventive Services
Management Law, Income Tax Decree Narcotic Drugs (Control, Enforcement and
Sanctions) Law and any other offence involving serious economic fraud and loss
of state funds or property. A Regional Tribunal shall have appellate jurisdiction tohear and determine appeals from the judgment or order of a Circuit Court or
District Court in any criminal trial.
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2.4 THE INFERIOR COURTS
2.4.1 The Circuit Court
In Ghana, the civil jurisdiction of a Circuit Court consists of original jurisdiction in
civil matters in personal actions arising under contract or tort where the amountinvolved is not more than100 million cedis. It includes cases or matters involving
the ownership, possession and occupation or title to land. The Circuit Court may
grant injunctions or orders in any action to stay waste or alienation or for the
detention or preservation of any property which is the subject matter of that action
or restrain breaches of contract or the commission of any tort. There is jurisdiction
for the Circuit Court in claims for relief by way of inter pleader for land or
property attached by order of a Circuit Court.
There is no equivalent of Circuit Court in Nigeria.
2.4.2 The District / Magistrate Courts
In Ghana, the District Court has jurisdiction in virtually all the areas identified for
the Circuit Courts with the exception that the value must not exceed 50 million
cedis.
In Nigeria, the Magistrate Courts are the equivalent of the District Court in Ghana;
they are not mentioned in the Constitution, but are the creation of various states
and governed by the various States Magistrate Courts Laws. Magistrate Courts,
like the High Courts, have jurisdiction in civil and criminal matters in most
southern states. They also administer both common law and equity, with powers to
grant virtually all legal and equitable remedies, up to certain prescribed limits
specified by the law setting them up in each instance.
In addition, both the Magistrate and District Courts act as Juvenile Court by
hearing and determining matters affecting juveniles and also function as familytribunal.
2.4.3 Other lower Courts
In Ghana, these include the National House of Chiefs, the Regional Houses of
Chiefs and every Traditional Council in respect of the jurisdiction of any such
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House or Council to adjudicate over any cause or matter affecting chieftaincy and
such other lower courts as Parliament may by law establish. In Nigeria, the lower
courts include Customary Courts, Sharia Court, Area Courts in the Northern States.
The Customary Court is presided over by a President, while the Alkali presidesover Area Court.
In Nigeria, Tribunals (especially under the military), are inferior courts exercising
judicial or quassi-judicial functions, complimentary to the regular courts in the
judicial system. Tribunals, in most cases, handle specialised matters or cases which
require specialised experience and expertise.
2.5 IMPORTANT JUDICIAL PROCESSES
2.5.1 Writ Of Summons
Civil proceedings are generally commenced by the filing of a writ of summons.
The writ is prepared by the plaintiff or claimants, his solicitor, the Registrar of the
court or a letter writer. Every writ shall be endorsed with a statement of the nature
of the claim, relief or remedy sought in the action.
2.5.2 Writ of Execution
There are various modes of execution of a judgment based on the relief claimed
and granted. A judgment for the payment of money can be enforced through a writ
of fiera facias (fi fa ), garnishee order and summons to show cause among others.
Judgment for the delivery of property other than land may be enforced by a writ of
sequestration, writ of attachment and writ of delivery. If the judgment is for the
recovery of possession of land then the mode of execution is by a writ of
possession. The writ of fi fa and the garnishee order will receive attention by way
of example in this text.Writ of Fieri FaciasA writ of fi fa commands the sheriff to cause to be made out a writ of attachment
on the property of the judgment debtor and by it the property is sold in satisfaction
of the judgment debt and costs and immediately after such sale the sheriff should
bring the money realised into court to be paid to the judgment creditor. The
principle is that if the judgment debtor has sufficient immovable property which
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when sold will satisfy the judgment debt and cost then his movable property must
not be attached.
2.5.3. Garnishee Orders
When the judgment creditor knows that a third party has money due to the judgment debtor he can apply for a garnishee order by which the court may order
the third party called the garnishee to appear before the court to show cause why he
should not pay to the judgment creditor the debt due him to the judgment debtor in
satisfaction of the judgment debts and costs.
2.5.4. Others
In Nigeria, there are other means of civil proceedings e.g. originating summons
which is used for declarative reliefs; and undefended list procedure which is for
action in recovery of money owed under liquidated sum.
2.6 CRIMINAL AND CIVIL LIABILITY
2.6.1 Criminal liability
A crime is an unlawful act or default which is an offence against the public and
renders the person who is guilty of the act or default liable to legal punishment. It
is an offence against the state. The sanctions are so severe that the criminal law
requires an element of moral fault on the part of the offender.The prosecution must
establish two essential requirements; actus reus (prohibited act) and mens rea
(guilty mind). For most criminal offences both elements must be present to create
criminal liability. There are however the crimes of strict liability where no proof
of mens rea is required. The standard of proof in a criminal matter is beyond
reasonable doubt.
2.6.2 Civil liability
The civil law deals with the private rights and obligations which arise between
individuals. The purpose of the action is to remedy the wrong that has been
suffered. Two great areas of civil liability are in contract and tort. The plaintiff
sues the defendant and will be successful if he can prove his case on a balance of
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probabilities. The distinction between the criminal and civil law is not based on
the nature of the wrongful act because the same act may give rise to both civil and
criminal proceedings.
2.7 BASIC TORTIOUS LIABILITY
2.7.1 Defamation
Every man is entitled to his good name and to the esteem in which he is held by
others, and has a right to claim that his reputation will not be disparaged by
defamatory statements made about him to a third person without lawful
justification or excuse. Defamation in an oral or some other transient form
constitutes the tort of slander. Defamatory statements made in writing or some
other permanent form constitutes libel for which the law presumes damage.
In order to establish a prima facie case in an action for libel or slander it is
necessary for the plaintiff to prove that the words complained of were published
against him, that the words were defamatory to him and that the words were
published by the defendant in circumstances in which the defendant is responsible
for the publication. The main defences to an action for libel or slander are
justification that is the words are true; fair comment on a matter of public interest;
absolute privilege; qualified privilege; apology and payment into court.
The Freedom of Information Act has created a paradigm shift in our jurisprudence,
in that the Act makes it possible as of right for the ordinary citizen to obtain
information from and in respect of government functionaries.
2.7.2 Negligent misstatements
Tort of negligent misstatement arises where there is a false statement of fact madeknowing it to be false, or be covering it to be false, or recklessly not caring
whether it is true or false. It is made with the intention that it should be acted upon
by another, and if so acted upon it can then constitute a ground for an action
against the maker. The principle is that if someone possessed of a special skill
undertakes, quite irrespective of contract to apply that skill for the assistance of
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another person who relies upon such skills, a duty of care will arise. The duty of
care with regard to negligent misstatement was limited to cases where a special
relationship existed. Four requirements for the existence of a special relationship
have been laid down by the judicial authorities.They are:
i) there must be an inquirer who consults another with special
knowledge,
ii) reliance by the inquirer,
iii) Such reliance is reasonable and the person of whom the inquiry was
made knows reliance is likely and
Iv) the person relying on the representation suffers loss.
Thus a duty of care exists where one party seeking information and advice was
trusting the other to exercise such a degree of care as the circumstances required
where it was reasonable for him to do that and where the other party gave the
information or advice when he knew or ought to have known the enquirer was
relying on him.
2.7.3 Passing off
The tort of passing off occurs/arises whenever a person, company or other business
organisation carries on or proposes to carry on business under a name, trademark
or appearance calculated to deceive the public or where a person in a manner
calculated to deceive in the course of trade, passes off his goods or business as
those of another. It may be done by imitating their appearance or selling them
under a similar name or trademark Its essence is deceit practiced on the public. The
purpose of an action for passing off is to prevent one trade from damaging or exploiting the goodwill and reputation built up by another. The principle is that no
man is entitled to represent that his goods or his business are that of another.
A valid course of action for passing off may be granted on a misrepresentation,
made by a trader in the course of a trade to prospective customers of his or ultimate
consumers of goods and services he supplies, calculated to injure the business or
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goodness of another trader and which causes actual damage to the business or
goodwill of the trader who brought the action.
2.8 SUMMARY AND CONCLUSIONSCourts are important institutions within the legal environment. A general study of
the courts in terms of the hierarchy and their general jurisdictions is required for a
proper appreciation of their role. The introduction to the basic judicial processes
by which an action may be initiated and the various forms of enforcement will
further expose the candidate to other aspects of the legal system. Attention was
also placed on the critical distinction between criminal and civil liability. The
chapter also introduced candidates to tort which in no small measure will
contribute to their understanding of the law.
2.9 REVISION QUESTIONS
1. Identify the two main groups of Courts in Ghana or Nigeria and list the
Courts under them.
2. What jurisdiction has the Supreme Court of Ghana or Nigeria?
3. Explain the qualifications for appointment as a judge to the courts of Ghana
or Nigeria.
4. Describe the jurisdiction of the Court of Appeal.
5. Identify and describe the jurisdiction of the High Court.
6. What is the jurisdiction of the Regional Tribunal?
7. Compare the jurisdictions of the Circuit and District
Courts.
8. Write brief notes on each of the following:
a) Writ of Summons b) Writ of Fifa
c) Garnishee order
9. Distinguish between criminal and civil liability.
10. Define defamation and describe the main types.
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MULTIPLE CHOICE QUESTIONS
1. The highest court in Nigeria or Ghana isA. Court of Appeal.B. Federal High Court.C. National Industrial Court.D. The Supreme Court.E. Customary Court of Appeal.
2. The Supreme Court in Nigeria or Ghana is headed byA. The Deputy Chairman National Judicial Council.B. The Chief Justice of Nigeria.C. The President Court of Appeal (PCA)D. The Minister of Justice and Attorney General of the Federation.E. The President of the Nigerian Bar Association.
3. The fastest means of resolving dispute in Nigeria Ghana isA. Litigation.B. Arbitration.C. Adjudication.D. Self help.E. Petition to the National Judicial Council (NJC).
4. The major disadvantage of Arbitration isA. PrivacyB. ConfidentialityC. High costD. Publication in the Newspaper E. Swearing of oath in the Court.
5. Civil Law is associated with one of the followingA. Punishment to the litigants.B. Award of damages to the claimants.C. Imprisonment.D. Death sentence,E. Arraignment.
6. The Customary Court of Appeal has appellate and Supervisory Jurisdiction over proceedings coming on appeal from.. A. Magistrate CourtB. Customary CourtC. Industrial CourtD. National Judicial Council (NJC)E. Rent Tribunal
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7. Civil Law is associated with one of the followingA. Punishment to the litigantsB. Award of damages to the claimantsC. ImprisonmentD. Death sentenceE. Arraignment
SHORT ANSWER QUESTIONS1. The Justices of the Supreme Court of Nigeria Ghana including the Chief Justice are
to be appointed by the President on the recommendation of 2. The Supreme Court of Nigeria or Ghana when it is exercising its original
jurisdiction or when matter before it involves questions as to the interpretation of the Constitution would sit as a panel of .justices.
3. A person is not qualified for appointment as a Justice of the Court of Appealexcept he has been qualified to practice as a legal practitioner in Nigeria for at leastyears.
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3.2 DEFINITION AND ELEMENTS OF CONTRACT
3.2.1 Definition of contract
Whenever two or more people undertake to engage in an activity for which either of them may resort to the law for it to be enforced if a party fails to perform, a
contract is said to have been formed. A contract has therefore been simply referred
to as a promise or set of promises which the law will enforce.
3.2.2 The elements of contract
For a valid contract to be in place there must be some essential elements. These
are agreement, consideration, intention to create legal relations, form, capacity and
legality. There is the requirement that there must be two or more parties to the
contract who have agreed to it. Such agreement must have been entered into freely.
The parties must also give promises which are supported by consideration. It
means each party must give or do something for the other. The intention to create
legal relations means that each party is ready to have his or her promise enforced
by the law. Some contracts must also meet a certain form; they will only be valid
when they are in writing. Again only persons who are legally competent or have
capacity can enter into a contract. Finally the agreement must not be for an illegal
purpose and also not contrary to public policy.
3.3 OFFER AND ACCEPTANCE
3.3.1 Offer
Whenever a person proposes terms to another person and shows willingness that if
that person accepts those terms he is ready to contract with him, then those terms
constitute an offer. For example if Kofi tells Adenuga that he will sell his house to
him at a certain price, that constitutes an offer which will bind him shouldAdenuga agree to buy the house on the same terms. An offer is thus a definite
promise made by one party with the intention that it shall be binding on him
once it is accepted by the party to whom it is addressed. Generally an offer may be
made expressly by words but may also be implied from the conduct of the person
making the offer (the offeror). An offer may be directed to an individual, a group
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of persons or the world at large. It means an offer has to be communicated to the
person intended for (the offeree). It is said that if one is ignorant of an offer he
cannot accept it. There are a number of ways by which an offer may be
terminated. These include the offer or withdrawing the offer before it isaccepted which amounts to a revocation and the offeree not accepting the terms of
the offer which is a rejection. Where an offer is made and it is to be accepted by a
particular time failure to do so terminates the offer by lapse of times. The death of
the offeror or offeree before acceptance terminates the offer. Even death after
acceptance where personal service is involved terminates the contract.
3.3.2 Invitation to treat
This precedes an offer. It is thus a preliminary communication which indicates a
willingness to enter into negotiations. It is an invitation to the person to whom it is
directed (the recipient) to make an offer. It is therefore described as an offer to
negotiate or an offer to receive an offer. An invitation to treat cannot be accepted
to bring a contract into being. Circumstances which amount to invitation to treat
include advertisements, display of goods for sale, auctions and tenders. When there
is an advertisement it is only intended to be an invitation to treat ie. to negotiate. In
Partridge v Crittenden [1968] (WLR) 204 where an advertisement was put in the
periodical 'Case and Aviary Birds' which stated 'Bramble finch cocks, bramble
finch hens, 25 shillings each, a reader wrote in for a hen which Partridge sent to
him. The appellant was charged with unlawfully offering for sale a wild live bird
contrary to the Protection of Birds Act. His conviction was quashed by the
Divisional Court on the ground that he had made no offer for sale, merely an
invitation to treat.
Goods on display with price tickets attached in a self service store exemplify an
invitation to treat. Any potential customer who enters the shop is invited to makean offer. The picking of the goods by the customer and the presentation to the
cashier constitute the offer. The cashier then has an option to either accept the
offer or reject it. If he accepts the offer a contract comes into being but if he rejects
it no contractual obligation would be imposed. In Pharmaceutical Society v Boots
Cash Chemists Ltd [1953] (QB 40) , the defendants, Boots, operated a self-
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service supermarket with a pharmacist on hand, to supervise the sale of specified
drugs which could only be lawfully sold under him. Two customers selected such
drugs from the shelves and put them in a wire basket provided by the defendants.
The Pharmaceutical Society brought an action alleging an infringement of the Act.The Court of Appeal held that the display was merely an invitation to treat. The
customer by presenting the goods at the cash desk, made an offer to buy which the
cashier under the pharmacists supervision could accept or reject.
When an auctioneer makes a request for bids it amounts to an invitation to treat.
The bids that are made in response to the request constitute offers. It is when a bid
is accepted that a contract is made. In Payne v Cave (1789) 3 Term Rep. 148,
KB , Cave withdrew his bid at an auction before the fall of the auctioneer's
hammer. It was held that the bid was the offer, the auctioneer only made an
invitation to bid. As Cave's offer had been withdrawn before the auctioneer had
accepted it, there was no contract.
Invitations for tender are also invitations to treat. The tender is the offer and it may
be accepted or rejected. In Spencer v Harding (1870) L.R.5.C.P. 561 , the
defendants sent out a circular inviting tenders for the purchase of certain stock-in-
trade. The plaintiff's tender proved to be the highest submitted but the defendants
refused to sell to them. Judgment was given to the defendants because a tender
itself is an offer, which the party who invited it may or may not accept. The
defendants could only have been bound if they had promised to sell to the highest
bidder.
3.3.3 Acceptance
It is the expression of assent to the terms of the offer made by the person to whom
the offer was made (the offeree). In the example where John offered his house toAdenuga at a certain price, the agreement by Adenuga to buy the house on those
terms constituted acceptance. An offer is not accepted by mere silence on the part
of the offeree. Acceptance has to be communicated to the offeror. It is not
deemed to be communicated until it is actually brought to the notice of the offeror.
When acceptance is by a return promise its performance leads to a unilateral
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Executed consideration is an act by one party in exchange for a promise made or
an act done by the other. A promise for an act gives rise to a unilateral contract as
in Carlill vs. Carbolic Smoke Ball Company [1893] 1 QB 256 . An
advertisement by the company promised to pay one hundred pounds to anyonewho caught influenza after using the carbolic smoke ball as directed. Mrs Carlill
purchased the ball and used it as directed but contracted influenza. She therefore
sued for the one hundred pounds. The Court of Appeal decided that the Company
had made an offer to the whole world which would ripen into a contract with
anybody who bought and used the ball in the specified way.
3.4.3 General rules
Past consideration is no consideration. It is a promise which follows a completed
act. Such a promise is independent of the act or service performed. It is therefore
not enforceable. In Re McArdle [1951] Ch 669 , on the death of McArdle his
widow under his will obtained a bungalow for her lifetime and their children were
to become owners after that. Monty McArdle and his wife, Majorie who lived
there made extensive repairs to the bungalow after which all the children wrote to
Majorie promising to pay her 'in consideration of your carrying out certain
alterations and improvements'. The money was not paid and the widow died. The
Court of Appeal held that, as all the work had been finished before the promise
was made, the work was past consideration and so there was no obligation to pay.
A promise to perform an existing obligation is not good consideration but a
promise to do something different is good consideration. Thus if a creditor agrees
to take a smaller sum of money in full satisfaction its payment is not a satisfaction
of an agreement to pay a larger sum. In Pinnel's case (1602) 5 Co Rep 117 it was
stated that 'payment of a lesser sum on the day it is due in satisfaction of a greater
cannot be a ny satisfaction for the whole The payment and acceptance beforethe day in satisfaction of the whole would be good satisfaction'.
The doctrine of promissory estoppel adds a new dimension to consideration. It
applies only to a promise made between parties who are already in a contractual
relationship. Where one of the parties makes a promise which is intended to be
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binding and is relied on and acted upon, the promissor would be prevented from
enforcing his original rights since it will amount to his going back on his promise.
In Hughes v Metropolitan Railway Co. (1877) 2 AppCas 439 H.L ., the appellant
landlord gave the respondents six months in which to repair some houses as theywere expected to do under their lease. They later started negotiations to purchase
the freehold and based on that did nothing about the repairs. The negotiations
however failed two months after commencement and the appellant when the
original six months were up brought an action to eject the respondents for their
failure to repair. The House of Lords held that the appellant must fail since the
respondents had relied on the negotiations as being in effect, a promise that the
appellant landlord would not enforce his demands while the negotiations
continued. The six months notice must run from the failure of the negotiations.
Consideration must move from the promisee. Its import is that the promisee must
provide the consideration. It is based on the principle that a stranger to a contract
cannot sue on it. This is the doctrine of priority of contract. In Dunlop
Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] A C 847, H L , the
appellants sold some of their tyres to Dew & Co. under a contract whereby they
undertook not to sell the tyres below Dunlop's hit prices and agreed, as Dunlop's
agent to obtain a similar undertaking from other traders. Dew & Co sold some of
the tyres to the respondents who agreed not to sell below Dunlop's list prices.
They broke this contract and Dunlop sued for its breach. They failed. Dunlop
could not enforce the contract because no consideration moved from