TO: Supervising Partner FROM: Trainee Solicitor DATE: 29 May 2024 RE: Mr Owusu – Breach of Contract by Ms Serwaa
1.0 Introduction
This memorandum provides a preliminary legal analysis of the position of our client, Mr Owusu, concerning a contract for the sale of a printing machine to Ms Serwaa. The client seeks advice on his available options following Ms Serwaa’s failure to pay the outstanding balance of the purchase price.
2.0 Summary of Facts
Based on the client’s instructions, the relevant facts are as follows:
- In March 2026, Mr Owusu entered into a contract with Ms Serwaa for the sale of a printing machine for GH₵40,000.
- Ms Serwaa paid an initial GH₵20,000 upon agreement.
- The remaining balance of GH₵20,000 was due to be paid within two months of the agreement.
- The two-month period has now expired, and Ms Serwaa has failed to pay the outstanding sum.
- The printing machine is currently in Ms Serwaa’s possession.
- Mr Owusu has attempted to contact Ms Serwaa by telephone without success and has written to her on three separate occasions regarding the outstanding payment.
3.0 Legal Analysis
The agreement between Mr Owusu and Ms Serwaa constitutes a contract for the sale of goods, which is governed by the Sale of Goods Act, 1962 (Act 137) of Ghana.
3.1 Breach of Contract
Under section 27(1) of Act 137, it is the fundamental duty of the buyer to “pay the price for the goods in accordance with the terms of the contract”. Ms Serwaa agreed to pay the full price of GH₵40,000, with the final GH₵20,000 payable within two months. Her failure to pay this balance constitutes a clear breach of this contractual duty.
3.2 Client’s Remedies as an Unpaid Seller
As the full purchase price has not been paid, Mr Owusu is an “unpaid seller” as defined by section 46(1) of Act 137. An unpaid seller has several remedies available. The two most relevant remedies in this situation are an action for the price and the right to retake possession of the goods.
#### 3.2.1 Action for the Price
The most straightforward remedy for Mr Owusu is to bring a legal action for the outstanding contract price. Section 49(1) of Act 137 provides that where the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller may maintain an action against the buyer for the price of the goods.
Under section 26(2) of Act 137, in a contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made. As the contract concerned a specific printing machine which was subsequently delivered to Ms Serwaa, it is highly likely that property in the machine passed to her at the time of the agreement. Therefore, Mr Owusu has a strong claim to sue for the outstanding GH₵20,000.
#### 3.2.2 Repossession of the Goods
The client has enquired about taking the machine back. This is unlikely to be a lawful option. An unpaid seller has a right of lien (the right to retain possession of goods until payment), but this right is lost once the buyer lawfully obtains possession of the goods (section 48(1)(b) of Act 137). Since the machine was delivered to Ms Serwaa, Mr Owusu no longer has a seller’s lien.
Unilaterally repossessing the goods from Ms Serwaa without a court order or a specific contractual provision (such as a retention of title clause, which we are not instructed was present) would be unlawful and could expose our client to a claim for trespass or conversion. Therefore, this course of action is not advised.
4.0 Recommendations
- Letter of Demand: I concur with the initial view that we should proceed by issuing a formal letter of demand to Ms Serwaa. This letter should clearly state the facts, confirm the breach of contract, and demand payment of the outstanding GH₵20,000 within a specified period (e.g., 14 days). The letter should also state that if payment is not received, we have instructions to commence legal proceedings to recover the debt and associated legal costs without further notice.
- Avoid Repossession: We should advise the client in clear terms not to attempt to repossess the printing machine himself, as this would be unlawful.
If the letter of demand fails to elicit a satisfactory response, the next step would be to file a claim in court for the recovery of the debt.
References
Dowuona-Hammond, C. (2011) The Law of Contract in Ghana. Accra: Frontiers Printing & Publishing.
Sale of Goods Act, 1962 (Act 137) (Ghana).
