QUESTION 1

(a) Explain what is meant by case law and precedent within the context of the hierarchy of the
courts. (10 marks)
(b) Frank requested a ride in an official car to run an errand on a route that the official car was
going. While in the car, Frank ignored caution by the driver not to rest his arm through
the window of the car with the glass rolled down.
The driver of the official car decided to race another vehicle with the support of Frank and
in the process an approaching car ran into the official car and injured Frank whose arm
was severely mutilated.
Frank is contemplating asking the company to compensate him for his injury indicating
that the accident occurred while in the official vehicle. The company on the other hand
intends to terminate Frank’s appointment on the grounds that he has become disabled.
Required:
Advise management on whether compensation should be given to Frank and whether there
is justification in law for Frank’s termination. (10 marks)
(Total: 20 marks)

QUESTION 2
(a) In building the capacity of staff in gaming commission, management has engaged a
consultant from Las Vegas, (a well-known gaming state) under a contract to provide
training. Some board members have opposed this engagement of the consultant from Las
Vegas on the ground that their operational jurisdiction is different. In order to ensure that
your company has full benefit of the signed contract and also reduce its legal risks.
Required:
Prepare an Internal Memo to the Chief Executive Office and explain the following:
i) the basic elements of a contract and the circumstances under which the contract can be
vitiated (7 marks)
ii) the remedies for a breach of contract (3 marks)

(b) Alex, aged 25, is a premiership footballer who lives in a large house at Bawaleshie in
Kumasi. His girlfriend Bevelyn and their one-year-old daughter, Nyhira, live with him
and the house has a swimming pool in the garden. Gideon who lives next door to Alex
has erected a canopy for parking vehicles, which is four metres high, close to the fence
with Alex’s garden and passing over the boundary into Alex’s airspace.
Two weeks ago Eric, a farmer, was driving his tractor towards Santasi round-about at
high speed and he lost control of the tractor. It suddenly crossed the middle of the road
and collided with Alex’s new sports car. Alex was unable to avoid the collision and he
suffered broken ribs and a broken leg as a result of the impact. Alex was taken to hospital
for treatment and was in pain for a week. Doctors had to amputate his damaged leg. As
a result he is unable to play football again and has found a job as a sports reporter on his
local newspaper at a modest salary. He is unable to continue his hobby of ballroom
dancing too.

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 Required:
Advise Alex of the remedies he may obtain in respect of the above torts. (5 marks)

(c) Explain any two of the following agency terms:

(i) General agent,
(ii) Special agent, and
(iii) Agency by necessity (5 marks)

(d) Explain any two of the following terms:

(i) Bills of Exchange,
(ii) Holder in due course,
(iii) Promissory Notes (5 marks)
(Total: 20 marks)

QUESTION 3
(a)i. Under what circumstances will the Registrar refuse to register regulations of a Company?
(3 marks)
ii. Explain the circumstances under which the corporate veil could be lifted or pierced.
(7 marks)
(b) Kofi is a shareholder in Kakraba Limited for the past 20 years and has been receiving his
dividend as and when declared and paid except for 2017 which other shareholders have been
paid. A secretary at the company’s head office informed Kofi on phone that his annual
dividend for 2017 may not be forthcoming due to non-payment for shares.
Required:
(i)Advise Kofi. (6 marks)
(ii) State with examples the particulars for registration of charges (4 marks)
(Total: 20 marks)

QUESTION 4
(a) Discuss the circumstances under which a court will order a winding up of a company?
(6 marks)
(b) Under what circumstances is a company deemed unable to pay its debts? (4 marks)
(c) Explain the Rules of Natural Justice with specific regard to ‘Audi Alteram Partem’ and
‘Nemo Judes in Causa Sua’. (10 marks)
(Total: 20 marks)

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QUESTION 5

(a) ‘With the high level of graduate unemployment in Ghana, all corporate directorship
positions must be reserved for graduates” Discuss the qualifications for being a director.
(8 marks)

(b) Sika Company is to hold its annual general meeting (AGM) at the National Theatre soon.
Due to a disagreement between the Managing Director (an Economics Professor), and the
Board Chairman (a school drop-out who trades at Kantamanto), the new company
secretary (a non-lawyer), is uncertain who will determine the agenda for the meeting and
also chair the AGM. The secretary has called for your views. Write down your views so
you can WhatsApp a snapshot to him. (7 marks)
(Total: 15 marks)

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SUGGESTED SOLUTION
QUESTION 1
a)
 The Constitution;
 Enactments made by or under the authority of the Parliament established by the
Constitution [or legislation];
 Any Orders, Rules, and Regulations made by any person or authority under a power
conferred by this Constitution [or subsidiary or subordinate legislation];
 The existing law or the written and unwritten laws of Ghana that existed immediately
before the coming into force of the 1992 Constitution; and
 The common law [or the English common law, English doctrines of equity, and the rules
of customary law]
(b)
 Explain duty of care and indicate that the driver owes Frank a duty of care likewise John
owes himself a duty of care using the appropriate decided case (Caparo Industries v
Dickman).
 Explain that an employee is regarded as an agent of the employer if he gives another
employee a lift using appropriate decided case.
 Employer is vicariously liable for the torts his employee committed in the course of his
employment. The accident occurred while the driver was in his line of duty. Frank
sustained the injury while in the official vehicle
 Management shall be advised to compensate Frank.
 A contract of employment may be terminated by the employer because of the inability of
the worker to carry out his or her work due to (i) sickness or accident, section 15 (a) (i)
of Labour Act, 2003, (Act 651)

QUESTION 2
(a)
 The elements of a valid contract are: Agreement constituted by offer and acceptance,
Consideration, Intention to create a legal relation, Contractual Capacity and Legality.
Each of these must be explained with decided cases or illustrations.
 Candidates are to define vitiating factors which make the contract unenforceable’.
 Candidate shall identify factors that may vitiate a contract (Mistake, Duress, undue
influence, Public Policy, Unconscious, Fraud and Misrepresentation –any 4 or 5).
 Candidate shall explain how these factors can or cannot vitiate a contract.
 Candidate shall indicate that when these factors are not present in a contract the contract
is not binding.

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(b)
 Candidate should be able to identify that this is a case of tort
 Trespass to land is a wrong against possession of the land rather than its ownership. A
person in actual possession can bring an action against any intruder including the true
owner, so far as possession was wrongful.
Land includes:
 the surface of the land
 things attached to the land e.g. buildings, trees, crops
 the airspace above the land
 The ground below the surface.
Alex can sue for trespasses on property (airspace) against Gideon, with relevant case.

(c)
 General Agents have authority to act for their principals in all matters connected with
a particular trade or business. A general agent has implied power to bind his principal
in all matters of ordinary business in the enterprise of the relationship. In Watteau v
Fenwick (1893) 1 QB 346
 Special Agents are appointed to act in respect of a particular transaction or a series of
transactions and usually have only limited powers or authority
 Agent by necessity occurs where in emergency situations; a person is compelled to act
in order to protect the property or interest of another. Springer v Great Western Railway
Company (1921) 1 KB 257
(d)
 A bill of exchange is an unconditional order in writing, addressed by one person to
another, signed by the person giving it, requiring the person to whom it is addressed to
pay on demand or at a fixed or determinable future time a sum certain in money to or to
the order of a specified person, or to bearer.
 holder in due course is a legal term for an original or any subsequent holder of a
negotiable instrument (check, draft, note, etc.) who has accepted it in good-faith and has
exchanged something valuable for it. For example, anyone who accepts a third-party
check.
 A promissory note is an unconditional promise in writing made by one person to another
signed by the maker, engaging to pay, on demand or at a fixed or determinable future
time, a sum certain in money, to, or to the order of, a specified person or to bearer.

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QUESTION 3
(a) i. Section 14 (b) of Act 179
 Failure to comply with the code e.g. sec 16 (contents of regulations)
 An infant or person of unsound mind is a subscriber to the regulations
 A person named as a director in the regulation is incompetent to be appointed for
under section 182
 The objects or business to be carried out is unlawful.

ii. The artificial person is incapable of illegal or fraudulent acts hence the façade of
corporate personality might be removed to identify the real guilty persons.
 Salomon v. Salomon, Mokor v. Kumah, etc.
 Courts generally go by the separate legal entity principle except in exceptional
situations such as:
 When the number of members or director is reduced below the statutory
minimum, but the company continue to operate beyond the period stipulated for
bringing the number to the required level, all those involve will be liable upon
piercing the veil.
 Misrepresentation in prospectus-subscribers can sue promoters/directors
individually on the faith of untrue statement.
 An officer who signs a contract, bill of exchange etc. on behalf of a company
without naming the company will be liable personally
 Fraudulent acts and mischievous schemes uncovered during winding up with the
intent to defraud creditors
 Ultra vires acts by directors and officers.
 Avoiding contractual performance/transaction using the company as a front
 Jones v. Lipman, Gilford Motors Co. v Horne
 Where a company is a façade, or a subsidiary is an agent of a holding company.
(b) (i) Kakraba Ltd
 Issued shares require valuable consideration paid or payable to the company being in
cash or kind (section 42 of Act 179) A shareholder does not get shares free of charge.
 Valuable consideration in cash or kind must be given by him or someone on his behalf.
For cash payment, the company shall actually have received cash for the shares at the
time of or subsequent to the agreement to issue the shares – sec. 45.
 Membership could arise by subscription to the Company’s Regulations or by agreement
after incorporation and membership in the absence of a valid forfeiture was not
dependent on full or partial payment (Adehyeman Gardens Ltd vs. Assibey)-Supreme
Court.
 Non- payment for shares does not terminate the rights or interest of a shareholder unless
provided for in the regulations (sec 31(2).

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  A subscriber remains a fully-fledged member even if he has not paid or is liable to pay
a pesewa for his shares.
 The inability of Kofi to pay for his shares does not affect his interest and obligations as
a shareholder in the company.
 Kofi can sue for the payment of his 2017 dividend.
(ii) Particulars for registration of charges - Section 107 (4)
 Date of creation of the charge
 Nature of the charge-e.g. fixed or floating
 Short particulars of the property charged-e.g. sales inventory, delivery van
 The person entitled to the charge-company’s banker
 The nature of any restrictions on the company’s power to grant further charges, in case
of floating charges, ranking in priority etc.
 The amount secured by the charge, or the maximum sum deemed to be secured

QUESTION 4
(a) Circumstances under which a court will order a winding up of a company, (Sec 4 (2)
& 64 of Act 180)
 No members for the company-a company must have at least one member
 Inability to pay debts
 The company is unable to carry on all of its authorized business within a year of
incorporation of suspends business for a whole year
 In the opinion of the court, winding up is just and equitable e.g. serious disagreement
among members that threaten the survival of the company
 Unlawful, unauthorized or illegal business by the Act 179 or its regulations-petition could
be the Attorney-General, etc. 4 marks for each point well discussed.

(b) Sec 3 (3) of Act 180

 Anyone the company is owing and the company could not pay or secure or compound
for the sum to the reasonable satisfaction of the creditor within 21 days upon a service of
written demand on the company for the sum due.
 If any execution of court order issued on a judgment, decree etc. in favor of a creditor is
returned unsatisfied in part or in whole.
 If it is proven to the satisfaction of the registrar that the company is unable to pay its
debts considering the contingent and prospective liabilities of the company.

(c) Natural justice as a procedural safeguard against improper exercise of powers by a public
authority. It has been characterised as fair administrative procedure and it consists of two
elements, namely audi alteram partem (right to be heard) and nemo judex in causa sua
(rules against bias).

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 In Aboagye v Ghana Commercial Bank Ltd [2001-2002] SCGLR 797 at 806, it was held
that the defendant bank, which took disciplinary procedure rules, should have followed the
said procedures in those rules and were bound to apply the rules of natural justice. The
bank’s failure to give the plaintiff a hearing breached the audi alteram partem rule.
In Ghana, crimes in business have been categorized as follows:
i.Misrepresentation in financial statements of corporations.
ii.Manipulation in the stock market.
iii.Commercial bribery.
iv.Bribery of public officials directly or indirectly.
v. Misrepresentation in advertisement and salesmanship

QUESTION 5
(a) Qualifications for being a director
 Act 179 provides no educational qualification for directors Disqualifications
provided for under sec 182 of Act 179 include: Infants-some graduates could be
below 21 years.
 Unsound mind determined by a competent court
 Body corporate
 Undischarged bankrupt unless with leave of the court
 Order under sec 186 unless with leave of the court
 Section 186:
 Adjudged bankrupt in Ghana or elsewhere
 Convicted on indictment for fraud, dishonesty or any offence involving corporate
formation, promotion, management in Ghana or elsewhere
 It appears a person has been guilty of any criminal offence, whether convicted or not,
or fraud or breach of duty in relation to body corporate
 Some graduates may fall into any of the above.
 Some company have share qualification for directors, a condition an unemployed
graduate cannot meet depending on his financial position vis-à-vis the number of shares
and the price per share-section 183.
 The statutory minimum number of directors per company is two (sec
 180) and companies’ regulations specify various numbers-this may not impact much on
graduate unemployment.
 The Act 179 has no requirement for experience (work)-but companies appoint as
directors, persons with varied experiences, skills and abilities in fields that promote the
corporate business and image-just being a graduate may not be enough.
 A person shall be appointed a director of a company only with his written consent-it
involves nominations by current directors, shareholders (class rights), certain

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 individuals/groups as contain in the regulations (sec 180) etc.- not many graduates may
have the ‘network’ to get nominated, let alone consenting.
 Section 203, among other, provides for directors’ duties. The directors are subject to
liabilities (e.g. sec 209)-some graduates cannot or are not ready to endure the
responsibilities and liabilities-out of fear, uncertainty, unpreparedness etc.
 Many graduates can competently be directors-but reservation may not the answer.
Directorship must be on merit (competency, experience, skill, etc.). Some non-
graduates possess these attributes and the blending may work.

(b) Chairman of meetings-sec 166 of Act 179

 There is no educational qualification for BOD members or the chairman.
 The Managing Director’s economic professorship gives him no right to usurp the
chairmanship position.
 It is the BOD that appoints the MD from among themselves and confer on him powers
and restrictions to act on their behalf/ and for company as the BOD thinks fit- Sec193 of
Act 179.
 The roles/powers of the MD are different from that of the chairman, unless the company’s
regulations states otherwise.
 Unless provided by the company’s regulations, the BOD chairman, despite disagreement
with the MD, must chair the AGM and all general meetings.
 In the absence of a chairman, or the refusal of the chairman to preside, or he is late for
more than fifteen minutes for the meeting, the directors present shall elect one of them to
be the chairman of that meeting If no director is present or not is ready to preside,
members present shall choose one of their own to chair the meeting.

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