Breach Of Contract Analysis

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Summary

MSC Limited (ML) submitted a proposal to Ability Company Limited (ACL) for a payroll system. ACLs response was a counter-offer, changing the terms. Under Ghanaian law, a counter-offer nullifies the original offer, as supported by Deegbe v. Nsiah. MLs silence to the counter-offer is seen as rejection, making it difficult for ML to claim a breach of contract. Additionally, in the case of NTHC Ltd v. Antwi, silence does not amount to acceptance. Therefore, no valid contract was formed, and MLs lawsuit may not succeed.

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*. You are the Procurement Manager of MSC Limited (ML), a company that deals in the development and installation of software for Institutions. ML has submitted a proposal to Ability Company Limited (ACL) for the development and installation of payroll system for ACL at GHS650,*.* for completion in 5months. The Chief Executive Officer of ACL has written to ML to develop and install a payroll system including the training of Staff at the Head Office of ACL in Accra at a price of GHS600,*.* to be completed in 5months. ACL has written again to ML for over for the commencement of the project two months ago but ML has not responded to the letter. ACL has advertised in the “Daily Graphic’ for tendering of the project to a new Service Providers. ML intends to file a writ at the High Court (Commercial Division) for a breach of contract against ACL. With the aid of decided cases; a. Advise the managing director of ML on the success of the suit. b. From the facts of the case above and decided cases, distinguish Offer from Counter Offer Use IRAC method to answer. Consider the case of Deegbe v Nsiah as well. Jurisdiction is ghana
Hello Afia,
Based on the facts, it seems like ACL's response was a counter-offer rather than an acceptance of ML's initial offer. This is because they changed the terms of the offer (price and scope of work). In Ghana, counter-offers destroy the original offer, making it impossible to be accepted later. This is supported by the case Deegbe v Nsiah.
As for the success of the suit, it may be difficult for ML to prove a breach of contract as there was no official acceptance of their initial offer. ML's lack of response to ACL's counter-offer might have been interpreted as a rejection.
STATE THE ISSUE/ISSUES HERE
The main legal issues here are:
*. Whether there was a valid contract between ML and ACL.
*. The distinction between an offer and a counter-offer in Ghana's legal context.
*. The possible outcomes of the breach of contract lawsuit filed by ML against ACL.
WHATS THE RULE HERE
The legal rules applicable in this scenario are:
*. For a contract to be valid, there needs to be an "offer" and an "acceptance".
*. In Ghana, a counter-offer destroys the original offer.
*. Non-response to a counter-offer can be seen as rejection of it.
ELABORATE ON THEM
Sure, here's the elaboration:
*. A valid contract requires an offer and acceptance. ML made an offer which ACL did not accept as is, but provided a counter-offer.
*. Under Ghana law, a counter-offer terminates the initial offer. This means when ACL proposed different terms, the original offer by ML was nullified.
*. Silence or non-response to a counter-offer can be deemed as a rejection. ML's lack of response to ACL's counter-offer might have been interpreted as a rejection.
USE A DECIDED CASE TO EXPLAIN
Certainly, let's consider the case of Deegbe v Nsiah in Ghana. In this case, the court held that a counter-offer nullifies the initial offer. Thus, when ACL made a counter-offer to ML, it effectively terminated ML's original offer. Hence, ML's non-response to ACL's counter-offer could be seen as a rejection. This case supports the argument that there was no valid contract between ML and ACL.
USE THE IRAC METHOD TO EXPLAIN IN DETAIL THE FULL QUESTION
Issue: Was there a valid contract between ML and ACL, and can ML successfully sue ACL for breach of contract?
Rule: In Ghana, a valid contract requires an offer and an acceptance. A counter-offer nullifies the original offer (Deegbe v Nsiah). Non-response to a counter-offer can be interpreted as rejection.
Application: ML made an offer to ACL. The CEO of ACL made a counter-offer, nullifying ML's original offer. ML did not respond to the counter-offer, which could be interpreted as rejection.
Conclusion: It doesn't appear that a valid contract was formed, so ML might not succeed in a lawsuit against ACL for breach of contract.
•NTHC Ltd v Antwi [*] SCGLR *, per Dr Date-Bah JSC
According to the case NTHC Ltd v Antwi [*] SCGLR *, the court held that silence does not amount to acceptance of an offer. In this case, ML's silence to ACL's counter-offer may not be interpreted as acceptance. Therefore, it may be challenging for ML to sue ACL for breach of contract, as it seems there was no valid contract formed.
Deegbe v. Nsiah & Another [*-*] * GLR *
In the case of Deegbe v. Nsiah & Another [*-*] * GLR *, it was held that a counter-offer nullifies the original offer. In your case, ACL's counter-offer would have nullified ML's initial proposal, and ML's silence could be interpreted as rejection of the counter-offer. Therefore, it appears there was no valid contract formed.
ELABORATE ON THE RULING OF THE CONTRACT
In Ghana, a valid contract requires an offer and acceptance. However, ACL's response to ML's offer was a counter-offer, changing the price and scope of work. This counter-offer nullified ML's original offer, as per Ghana law and supported by Deegbe v. Nsiah case. ML's silence to the counter-offer could be seen as a rejection. Therefore, it seems no valid contract was formed, making it difficult for ML to sue ACL for breach.
ELABORATE ON THE RULING OF THE Deegbe v. Nsiah & Another [*-*] * GLR *
In the Deegbe v. Nsiah & Another case, the court ruled that a counter-offer nullifies the original offer. This means that once a counter-offer is made, the original offer cannot be accepted unless it is re-offered. In the context of your situation, when ACL made a counter-offer to ML, the original offer by ML was effectively nullified.
*. The Ghana Education Service (GES) has awarded a contract to Joe Men’s Automobile Limited (JMAL) for the supply of 4x4 vehicle without a valid procurement process. The Ghana Education Trust Fund (GETFund), the financiers and paying agency of the GES project has refused to Honour the payment of the supply of vehicle by JMAL citing illegal contract as the reason. JMAL has brought an action against the GES for breach of contract. You are the Arbitrator appointed by the Ghana Arbitration Centre for the settlement of the dispute. i. With the aid of decided cases, advise both parties on legality or otherwise of the Contract ii. As Arbitrator discuss the initial task for the resolution of the Dispute between GES and JMAL
In order to provide the best advice, I need to understand the situation better. Could you please clarify whether JMAL had knowledge of the invalid procurement process at the time of contract award?
THIS is a likely exam question. jmal did not know
Understood, thank you for the clarification. In this case, the main legal issues are:
*. The validity of the contract between GES and JMAL.
*. The legal implications of entering into a contract without a valid procurement process.
*. The initial tasks for arbitration to settle the dispute.
use irac
Issue: The legality of the contract between GES and JMAL and the initial tasks for dispute resolution.
Rule: In Ghana, a contract procured without following the legal process may be deemed invalid.
Application: If GES didn't follow legal procurement procedures, the contract with JMAL may be invalidated.
Conclusion: JMAL may have difficulty enforcing the contract, but as they were unaware of the procurement issues, they have some ground for dispute resolution.