This lesson brief is under Construction

Ascertaining the Facts and Terms of an Agreement

1. Introduction

In contract law, it is essential to determine what the parties actually agreed upon. This involves identifying both the facts surrounding the formation of the agreement and the express and implied terms of the contract. Courts apply objective standards, considering the words used and the conduct of the parties, as well as the context.

2. Sources of Terms in a Contract

The terms of an agreement may be derived from:

• Express Terms (written or oral)

  Implied Terms (by law, custom, or conduct)

• Terms implied by courts or statutes

• Previous dealings or industry standards

3. Ascertaining the Facts of the Agreement

The facts of the agreement refer to the surrounding circumstances that indicate whether there was a meeting of the minds (consensus ad idem). Courts examine:

• The language used (expressed orally or in writing)

• Conduct of the parties

• Pre-contractual negotiations

• Context and background facts (the “matrix of fact”)

Case Law:

(a) Appenteng v Bank of West Africa Ltd. [1962] 1 GLR 377

• The court emphasized interpreting conduct and external behaviour to determine if an agreement was reached.

(b) GIHOC v Hanna Assi [1977] 1 GLR 365

• The court looked at the actual dealings and correspondence between the parties to determine whether a binding agreement existed.

4. Ascertaining the Terms of the Agreement

Once the existence of an agreement is confirmed, courts move to determine its terms. This can include:

A. Express Terms

These are terms clearly stated by the parties—either orally or in writing.

Example: If A contracts in writing to sell B 100 bags of cement at GHS 60 per bag, this is an express term.

B. Implied Terms

Terms not expressly stated but assumed to exist because of law, trade practice, or business efficacy.

• Implied by Law – required by statutes (e.g., Sale of Goods Act).

• Implied by Fact – to give business efficacy (i.e., making the contract workable).

• Implied by Custom/Usage – where standard industry practices exist.

Case Law:

(a) The Moorcock (1889) 14 PD 64

• Implied term that the berth would be safe for mooring a ship. The term was necessary for the contract to make business sense.

(b) Ghana Cocoa Marketing Board v Agbotui [1984-86] 1 GLR 444

• Implied term that the Board would act in good faith and fairness in executing its obligations.

5. Parol Evidence Rule

The Parol Evidence Rule prohibits the introduction of oral or extrinsic evidence to add to, vary, or contradict a written contract.

Section 117 of the Evidence Act, 1975 (NRCD 323): “When the terms of a contract have been reduced to writing, oral evidence shall not be admitted to contradict or vary the terms.”

Exceptions to the Rule:

• Proving misrepresentation or fraud

• Clarifying ambiguous terms

• Showing that the written document was not intended to be the whole agreement

6. Statutory Provisions

• Sale of Goods Act, 1962 (Act 137), Sections 10 – 14:
  Implies terms as to quality, fitness, and description in sale contracts.

7. Examples

Example 1:

• Facts: A agrees in writing to supply B with 500 chairs. Nothing is said about delivery.

• Implied Term: That delivery would be made within a reasonable time (Sale of Goods Act, s.13).

Example 2:

• Facts: A signs a contract with B without reading a standard clause that excludes liability.

• Rule: If B took reasonable steps to bring the exclusion to A’s attention, the clause is binding (as per L’Estrange v Graucob [1934] 2 KB 394).