Historical Overview and Central Doctrines to the Law of Contract

Imagine that you pay a carpenter GH¢3,000 to build a wardrobe. The carpenter agrees to deliver it within two weeks. You pay the money, but the carpenter neither builds the wardrobe nor returns your money. What has happened? Is the carpenter merely someone who has broken a promise, or has the law been broken? Can you go to court? What would you have to prove? What remedy could you seek?

Now imagine a different situation. Your friend promises to give you a birthday present but later changes their mind. Can you sue your friend simply because the promise was not fulfilled?

These questions introduce us to the central concern of the law of contract: when does an agreement or promise create a legal obligation that the law will recognise and enforce?

Human beings make promises and agreements every day. We agree to buy food, pay for transportation, rent rooms, employ workers, purchase land, provide services, lend money and undertake business transactions. Some of these arrangements are legally enforceable contracts; others may be social, moral or personal arrangements that do not create contractual obligations.

The law of contract provides the legal principles for distinguishing between them. It explains how contracts are formed, what obligations they create, when those obligations must be performed, what happens when a party fails to perform, and when the law will refuse to enforce an agreement.

As first-year law students, your first task is not to memorise complicated legal rules or the names of cases. It is to understand the problems that contract law seeks to solve and the principles through which it solves them.

What is a Contract?

A contract according to Dowuona-Hammond refers to “an agreement, consisting of the exchange of promises, which is recognised. by law as giving rise to enforceable rights and obligations.”¹ This definition contains four important ideas: agreement, promise, obligation and enforceability.