Contract Design and Contractual Intent: Towards the Objective Theory of Contractual Interpretation in Ghana

Abstract (250 Word Limit)

The contract laws of Ghana generally govern the circumstances under which parties would be bound by the contracts that they make. Underpinning the law of contract is the principle that the state must respect the autonomy of the individual when it comes to the domain of contract design and formation. After making contracts, contracting parties are usually confronted with disputes which revolve around the meaning and effect of words expressly provided by the parties to the written contract. Courts or other similar tribunals superintend over the task of construing the contract terms with a view to identifying the true intentions of the contracting parties. These tribunals ascertain the meaning that documents would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time of making the contract. Accordingly, in arriving at the presumed intention of the parties, a number of principles have been developed under Ghanaian law, over the course of time, on how contracts are to be construed. The Superior Courts of Judicature in Ghana adopt a “purposive objective approach” to the interpretation of contractual agreements. The Courts are concerned about identifying the intention of the parties by reference to what a reasonable person would have understood them to be using the language in the contract. Indeed, the purposive objective approach has been developed to ensure that contracting parties do not use words lightly or loosely in the making and design of binding contracts.