Assignment of Contract (Ghana)

An Assignment of Contract in Ghana conveys a defined interest from the assignor to the assignee and fixes the effect of that transfer.

The law governing assignment of contractual rights in Ghana is principally the Contracts Act 1960 (Act 25), which codified the common law of contract applicable in Ghana. Under Ghanaian common law as applied by the High Court, Court of Appeal, and Supreme Court, a party may assign the benefit of a contract — the rights to receive money, goods, or services — to a third party without the obligor's consent, provided the contract does not expressly prohibit assignment (a non-assignment clause). Written notice of assignment must be given to the obligor to make the assignment effective at law, so that the obligor directs performance — including all future payments — to the assignee rather than the assignor. An oral notice may be effective in equity but written notice is required for the assignment to operate at law.

The burden of a contract — the obligations and liabilities owed to the other party — cannot be transferred to a third party without the obligor's consent. This fundamental distinction between assigning the benefit (permissible without consent) and delegating the burden (requiring the obligor's consent) is central to Ghanaian assignment law. Where both the benefit and the burden are being transferred, the transaction is properly characterised as a novation rather than an assignment: the original contract between the assignor and the obligor is discharged by agreement, and a new contract between the assignee and the obligor is substituted — requiring the obligor's express written agreement.

Assignment of Contract is of particular importance in Ghana in the construction and infrastructure sectors. Under the Public Procurement Act 2003 (Act 663), a contractor awarded a public procurement contract may not assign that contract without the prior written approval of the procuring entity. Unauthorised assignment is a ground for contract termination, clawback of advance payments, and debarment from future public procurement proceedings under the Public Procurement Authority (PPA) blacklisting procedures.

In the financial services sector, banks and financial institutions licensed by the Bank of Ghana routinely take assignments of trade receivables, insurance proceeds, government contract revenues, and other contract rights as collateral security under the Borrowers and Lenders Act 2020 (Act 1052). A security assignment of contract rights differs from an outright assignment: the assignor retains equitable ownership of the assigned rights, and the assignee (lender) holds the assignment as security only, releasing it back to the assignor upon full repayment of the secured debt. Security assignments must be registered with the Collateral Registry established under Act 1052 by filing a financing statement to perfect the lender's interest against third-party creditors.

An Assignment of Contract in Ghana should be distinguished from a novation — where all three parties agree to substitute a new party for the original party, discharging the original contract — from a subcontract — where the original contractor remains liable to the principal while engaging a third party to perform part of the work — and from a delegation — where the obligor's consent is obtained to transfer both rights and obligations to the assignee. The Assignment of Contract is the appropriate instrument when the assignor wishes to transfer its right to receive performance without the obligor's consent and without necessarily remaining jointly liable alongside the assignee.

Stamp duty under the Stamp Act 2005 (Act 689) may be payable on an Assignment of Contract where the underlying contract is itself a stampable instrument — for example, an assignment of a real property agreement of sale, or an assignment of a hire purchase agreement. The Ghana Revenue Authority (GRA) administers stamp duty and issues an assessment notice before the instrument can be registered.

An Assignment of Contract in Ghana is required in a range of specific commercial, financing, and corporate restructuring scenarios.

An Assignment of Contract is needed when a business in Ghana is selling its trade receivables — the debts owed by customers under outstanding invoices or purchase orders — to a factoring company or invoice discounting provider as a means of accelerating cash flow. The Assignment of Contract records the transfer of the right to collect those debts directly from the buyers. Factoring arrangements in Ghana are subject to Bank of Ghana guidelines governing non-bank financial institutions providing factoring services.

An Assignment of Contract is required when a developer or contractor awarded a revenue-generating agreement by a Ghana government entity — such as a power purchase agreement with the Electricity Company of Ghana (ECG), a water supply agreement with the Ghana Water Company Limited (GWCL), or a government service contract — wishes to assign the benefit of the right to receive payments under that contract to a bank as security for a project finance loan. The lender registers the security assignment with the Collateral Registry under the Borrowers and Lenders Act 2020 (Act 1052).

An Assignment of Contract is needed when a company in Ghana is restructuring its operations — transferring customer contracts, supply agreements, intellectual property licences, or distribution arrangements from one group entity to another — as part of a corporate reorganisation. The Assignment of Contract records the transfer for accounting and tax purposes under the Companies Act 2019 (Act 992) and the Income Tax Act 2015 (Act 896).

An Assignment of Contract is required when an individual contractor, consultant, or sole proprietor in Ghana is selling their business and wishes to transfer the benefit of existing client retainer agreements, software licences, or service contracts to the buyer as part of the business sale documentation, alongside any Asset Purchase Agreement.

An Assignment of Contract is needed when a real estate developer in Ghana has entered into a purchase agreement with a landowner and subsequently assigns their right to acquire the land to a third-party investor before the formal land transfer is completed and registered with the Lands Commission under the Land Act 2020 (Act 1036). This transaction is sometimes called a contract flip or pre-registration assignment of purchase rights.

An Assignment of Contract is required when an insurance policyholder in Ghana assigns the benefit of an insurance policy — such as a key man life insurance policy or a property insurance policy — to a bank as security for a loan. The assignment must be notified to the insurer licensed under the Insurance Act 2021 (Act 1061) for the insurer to recognise the assignee's interest and direct any claim proceeds to the assignee as loss payee.

Parties in Ghana should prepare an Assignment of Contract (Ghana) before any rights transfer takes effect. The Contracts Act 1960 (Act 25) governs assignment of contractual rights. The Borrowers and Lenders Act 2020 (Act 1052) governs security assignments and the Collateral Registry. The Public Procurement Act 2003 (Act 663) restricts assignment of public procurement contracts. The Companies Act 2019 (Act 992) governs corporate authority to assign. The Stamp Act 2005 (Act 689) imposes duty on stampable assignment instruments.

A valid Assignment of Contract in Ghana under the Contracts Act 1960 (Act 25) must contain the following essential elements.

Parties: Full legal names, addresses, and Ghana Revenue Authority (GRA) Tax Identification Numbers (TINs) of the assignor and the assignee. The obligor — the party from whom performance is due under the original contract — may also execute the document where its consent is required or where it is being formally notified of the assignment. If any party is a company, its ORC registration number under the Companies Act 2019 (Act 992) must be stated, together with a board resolution authorising the execution.

Description of the Original Contract: The full title, date, names of original parties, subject matter, and any registered reference number of the contract being assigned. A certified copy of the original contract should be attached as a schedule. Where the contract is a public procurement contract under the Public Procurement Act 2003 (Act 663), the procuring entity's reference number and the approval letter for the assignment must also be attached.

Rights Being Assigned: A precise description of the specific contractual rights, benefits, and claims being transferred. Where the entire benefit is assigned, this should be stated expressly. Where only specific rights are assigned — for example, the right to receive payment only, while the assignor retains performance obligations — the scope must be precisely defined to avoid later disputes about what was and was not transferred.

Consideration: The sum paid by the assignee to the assignor in Ghana Cedis (GHS), or confirmation that the assignment is made for no monetary consideration in an intra-group transfer. Where a substantial gain arises to the assignor, the Ghana Revenue Authority (GRA) may assess income tax or capital gains tax under the Income Tax Act 2015 (Act 896).

Notice to the Obligor: The obligation to give written notice of the assignment to the obligor, specifying the effective date of the assignment, the assignee's identity and payment details, and the instruction that all future performance under the original contract should be directed to the assignee. Under Ghanaian common law, an assignment of a legal chose in action is only complete and effective at law from the date the obligor receives actual written notice.

Warranties by the Assignor: That the assignor has the legal capacity and authority to assign, that the original contract does not contain a non-assignment clause (or that any required consent has been obtained), that the rights being assigned are subsisting and not already charged or assigned to another party — including under the Collateral Registry under Act 1052 — and that there are no outstanding breaches by the assignor that could extinguish the assigned rights.

Ongoing Liability: Confirmation of whether the assignor remains liable for the obligations under the original contract after the assignment date (the default position at Ghanaian common law) or whether the obligor has released the assignor. Where the assignor is released, the document constitutes a novation rather than a simple assignment, requiring the obligor's execution.

Security Assignment Provisions: If the assignment is by way of security only — for example, as collateral for a loan from a Bank of Ghana-licensed institution — the agreement must clearly state this, specify the secured obligation, and confirm that a financing statement will be filed with the Collateral Registry under the Borrowers and Lenders Act 2020 (Act 1052).

Stamp Duty and Registration: Where the original contract is a stampable instrument under the Stamp Act 2005 (Act 689), the Assignment of Contract must also be assessed for stamp duty by the Commissioner-General of the GRA before it is executed or filed with any registry.

Governing Law and Dispute Resolution: Ghana law, with disputes referred to the High Court (Commercial Division) in Accra or to arbitration under the Alternative Dispute Resolution Act 2010 (Act 798). Forms-legal.com provides this template as a starting point for Ghana-compliant assignment documentation. Parties should obtain legal advice from a Lawyer enrolled with the Ghana Bar Association before executing the agreement.

Additional compliance elements for an Assignment of Contract (Ghana) include: Data Protection Act 2012 (Act 843) — where personal data of customers or employees is transferred with the contract, the data subjects must be notified; VAT Act 2013 (Act 870) — any consideration for the assignment may attract VAT if the assignor is VAT-registered; and competition implications under the Fair Wages and Salaries Commission Act if the assignment concentrates market power. Forms-legal.com provides this template as a starting point for Ghana-compliant documentation.

Conflicts with Non-Assignment Clauses: Before executing an Assignment of Contract in Ghana, the assignor must review the original contract carefully for any express prohibition on assignment or any clause requiring the obligor's prior written consent. Non-assignment clauses are common in government contracts awarded under the Public Procurement Act 2003 (Act 663), in franchise agreements, and in technology licences where the obligor has a legitimate interest in controlling who its contracting counterparty is. An assignment made in breach of a non-assignment clause may be voidable at the obligor's option and may give the obligor a right to terminate the original contract for breach. Where consent is required, the assignor should obtain the consent in writing before executing the Assignment of Contract, and the consent letter should confirm that the obligor waives any right to terminate arising from the assignment.