The law applicable to contractual obligations in consumer contracts of adhesion in Ghana

Abstract

This thesis argues for the inclusion of adequate choice of law rules for consumer adhesion contracts to ensure suitable protection measures for weaker parties in Ghana. To this end, the research seeks to add to existing literature by engaging in a comparative study of the legal development of choice of law rules in the jurisdictions of the European Union (EU) and the United States of America (US/USA), with specific reference to California and China. This study will assist in developing a theoretical framework to advance the jurisprudence of choice of law rules in consumer adhesion contracts in Ghana. The research considers the choice of law rules specifically in Articles 6 and 9 of Rome 1 where special rules have been promulgated to ensure the further protection of the consumer. Rome I ensures that the parties to a consumer contract may decide on the applicable law in accordance with Article 3 of Rome I. However, there are additional provisions to ensure the consumer’s protection in the form of mandatory provisions of the law applicable in the absence of a choice of law which under Rome I is the law of the country of the consumer’s habitual residence. The Restatement (Second) as it applies in California was designated for the comparative study. Sections 187 and 188 of the Restatement (Second) grant the parties to a consumer contract autonomy to incorporate a choice of law clause in their contract indicating the choice of the law of a particular state to govern their contract thereby limiting party autonomy in consumer contracts to the substantive provisions of the law of the state of their choice. The Restatement (Second) enhances the policies that are fundamental to the state with a material interest in the contract. The Chinese choice of law rules on consumer contracts follow the position in Rome I but are not as developed as regards interpretation and application of the 2010 Conflicts Statute and terminology. The promulgation of Article 42 provides expressly that a consumer contract is governed by the law of the consumer’s habitual residence. Article 42 further provides that the consumer contract is also governed by the law of the place where the commodity or the service is provided in absence of a choice by the parties. With respect to mandatory rules and public interest, China promotes policies that are fundamental to the state by ensuring the application of their mandatory rules and public interest. The research arrives at the conclusion that Rome I is the preferred standard worth emulating when developing a theoretical framework for Ghana. The absence of a Consumer Protection Act in Ghana will lead to the application of harsh common law principles of contract law which will not ensure the protection of weaker parties. Therefore, it is suggested that Ghana establish a consumer protection act in which choice of law rules on consumer adhesion contracts must be included. In light of attaining justice, the research equally considered through a comparative lens the effects of conflicts justice as against material justice in choice of law and arrived at the conclusion that choice of law rules must strive to attain a result-oriented form of justice in deciding the applicable law in consumer adhesion contracts. Recommendations are made to the effect that a theoretical framework mirroring the development of Rome I on the special rules for consumer adhesion contracts, which are tailored to suit the specific form of consumer transactions in Ghana, is best suited to consumer adhesion contracts and the protection of weaker parties in Ghana.