Gift Tax and the Holiday Season

Christmas as they say is a time of giving. Many people exchange gifts with friends, loved ones and businesses partners and associates. As we celebrate, we have to remember that under Ghanaian Tax Law, any gifts exceeding GHc 50 is taxable at the rate of 5%. The Gift tax is not limited to cash gifts, it applies also when the value of a gift you have received exceed the taxable amount of GHc 50. Note that failure to pay any taxes including Gift tax may subject you to both criminal prosecution and civil liabilities.

Due Diligence and Real Estate Property in Ghana – Part 2

Extra care is needed when you are buying or leasing a property owned by more than one person (jointly owned property). You need the consent of all the property owners in any transaction involving the property if you want to avoid any future litigation. Under no circumstance should you deal with only one or some of the owners of the property in any transaction involving the property. Whatever assurances you get from one or some of the owners should not suffice. To avoid any problems, you have to make sure you have obtained the consent of all the parties who are listed as joint owners of the property.
For practical purposes, one or two of the joint owners may lead the negotiations for any transaction involving the property. If this is the case, then make sure that before you sign unto any transaction, you obtained a properly executed letter of consent from the ‘absentee’ owners saying that they have consented to the transaction. The letter of consent from the absentee owners must not be just a general letter of consent. It must specifically speak to the transaction under consideration. The letter must also state clearly that payment can be made to those persons leading the negotiations for disbursement to all the owners.
For total peace of mind, engage the services of a qualified lawyer to lead you in any transaction especially when it involves landed property.

Due Diligence and Real Estate Property in Ghana

There seem to be a mad rush for commercial real estate property in Ghana. However, leasing a landed property in Ghana has a lot of hidden traps. The key to a hassle free commercial property lease is to conduct a thorough due diligence. The seasoned lawyer would know that in a country like Ghana, a thorough due diligence goes beyond the usual title search at the land title registry, zoning law verifications and building code requirements. First, it is important to go beyond the side plan and then visit the site to physically see that the property is in existence. When you find occupants on the property, seek directly from them the basis of their occupation. Also, you need to talk to the neighboring property owners to confirm ownership of the property. Then before you seal the deal, get the seller to sign an undertaking that he has the lawful right to alienate the property in question. The undertaking should also state that the seller will indemnify the buyer and agree to a full refund of the lease price in the event that there is an adverse claim to the property. For a total piece of mind, the buyer must purchase title insurance on his own or arrange with the seller to jointly purchase title insurance.

Construction Contracts – The STX Deal

The STX deal has now been approved by parliament and a local STX affiliate has been registered in Ghana. The next stage of course is the construction phase. There are many important legal considerations that must be borne in mind in awarding contracts for the STX construction. The awarding company must consider whether to award a package deal contract or individual components contract. Different liability regimes come into play depending on the type of contract that is awarded. In a package deal contract, a main contractor is hired and the main contractor then hires sub contractors to perform various components of the construction. In the absence of specific contractual terms, the main contractor will be liable for all and any negligence of the subcontractors. In fact under common law, the main contractor will be liable for any defect in the project even if sub contractors exercised all professional care.
In an individual component contract, various contractors are hired by the awarding company to execute various components of the contract. In this type of contract, individual contractors will be held liable for any defect in their specific work. It is important to know that the construction business is so complex that it is impossible sometimes to determine who bears responsibility for a defect. For instance there are builders, designers, regulators and purchasers who are often involved in a construction deal. Each of these actors plays an important part to ensure the success of the construction deal. Their roles are also so intertwined that it becomes very difficult to untangle and apportion blame when there is a defect.
The international practice is that in most big contract such as the magnitude of the STX deal, a package deal contract is chosen. In an individual component contract, the awarding company or the owner of a facility may face the problem of suing multiple contractors/professional when there is a defect.

Personal Injury in Ghana

In law, personal injuries occur when someone suffers physical and or emotional harm resulting from the willful or negligent behavior of another. An individual who has suffered a personal injury can recover damages against a responsible person or entity. Thus under Ghanaian law, a person as well as a company can be liable for the personal injury of another person. The law will normally allow an injured person to recover damages for medical expenses (present and future), lost wages, loss of potential future wages and pain and suffering resulting from the injury.
Although personal injury victims may be able to recover monetary damages associated with their injury, their success and the amount they are able to recover will depend on their legal representation. Success in a personal injury suit will also be greatly enhanced depending on the actions or inactions of the victim after the injury is sustained. It is therefore important that you contact a lawyer for advice as soon as you sustain a personal injury.

Providing Professional Services With No Express Contract

In the real estate and construction industry, there may be instances where a party may start the provision of certain services without any express contract. Here is an example of a case we dealt with. (Client’s written permission has been sought to write about this case) A client company wanted a painting subcontract at the building sites of a main contractor. The main contractor wanted client to demonstrate their work by painting a room at the building site. Main contractor was impressed by client’s work and client ended up painting 5 housing units. Before a formal agreement for the subcontract was drawn, the relationship between subcontractor and main contractor turned sour. Main contractor sacked client from the site and refused to pay for the cost of painting the 5 houses arguing that there was no express or implied contract between them. We sued under Quantum Meruit claiming payment of the reasonable value of work done for the main contractor. Client was reimbursed with what a fair commercial rate would have been for the services rendered.

Liability for Defective and Dangerous Imported Goods

The last ten years has seen a steep increase in the importation of goods from all over the world, especially China. All too often, importers assume that the foreign companies they buy their products from will bear responsibility/liability for any defect in the imported goods in the event of a product liability claim. The foreign manufacturing company will indemnify the importer only if the foreign company has a product liability policy. Even with this, the importer may have to sue at the foreign country to take advantage of the foreign company’s product liability policy.

In practice, the importer has a responsibility to ensure that any product brought into the country is safe for public use. It is therefore not a defense to a product liability suit that the importer did not in good faith know about the defect in the goods. Thus, it is very important that the importer takes steps to inspect the products thoroughly to make sure there are no defects. Professionals may be hired to inspect for any latent defects. Also, it is important to find out about the product liability policy of the manufacturers. The importer should also consider taking out its own product liability policy in the country where the goods would be sold.

Trade Marks

To succeed in the business world, you have to distinguish and brand your products. In the process, certain marks, insignia, or combination of letters may be adopted or may emerge to distinguish your products. These marks, insignia or signs are called Trade Marks. Once your products or service start performing well in the market, others may seek to free ride on your success by either directly or indirectly using your ‘signs’ to market their products. The practice of these free riders may undercut your profit or consumers may associate their inferior goods with your quality goods. Under Ghana law, you can retain proprietary interest in the use of your trade marks by Registering them under the Trade Marks Act of 2004 (Act 669). Act 669 makes it an offense to use someone’s registered Trade Mark and section 9 provides that the owner of a Trade Mark can sue anyone (including a company) who uses their registered Trade Mark without their permission. In this suit, the owner can ask for an injunction from the court that will forbid the 'infringer' from ever using the Trade Mark. Punitive damages can also be awarded for infringing on someone’s Trade Mark.