Force Majeure Agreement (Ghana)

A Force Majeure Agreement in Ghana governs the relationship between the parties by fixing what each must do.

The Contracts Act 1960 (Act 25) is the primary statute governing contract law in Ghana and incorporates English common law principles of frustration and force majeure as developed by Ghanaian courts. Under common law principles adopted in Ghana, where a supervening event renders performance impossible or radically different from what was contemplated, the contract may be frustrated and the parties discharged from further obligations. A written Force Majeure Agreement supplements this by providing express definitions and procedures that avoid the uncertainty of relying purely on the common law doctrine of frustration before the Commercial Court in Accra.

Ghanian courts, including the Commercial Court (a division of the High Court of Justice of Ghana) and the Court of Appeal of Ghana, have applied force majeure principles in commercial disputes, particularly those involving the oil and gas sector governed by the Petroleum Commission Act 2011 (Act 821), infrastructure projects, and commodity supply agreements in the cocoa sector regulated by the Ghana Cocoa Board (COCOBOD). The doctrine requires that the event be unforeseeable at the time of contracting, that the party relying on force majeure give timely notice, and that the party take all reasonable steps to mitigate the effect of the event.

A Force Majeure Agreement in Ghana must be distinguished from a Material Adverse Change (MAC) clause, which addresses a deterioration in a party's financial condition or market conditions rather than a specific supervening event, and from an indemnity or insurance arrangement under policies issued by insurance companies regulated by the National Insurance Commission (NIC). Companies incorporated under the Companies Act 2019 (Act 992) and registered with the Office of the Registrar of Companies (ORC) should include force majeure provisions in all long-term commercial contracts.

The National Disaster Management Organisation (NADMO), established under the National Disaster Management Organisation Act 1996 (Act 517), declares natural disaster events in Ghana. A NADMO declaration of a disaster area is strong evidence that a force majeure event has occurred within the meaning of a commercial contract. The Ghana Meteorological Agency (GMet) provides official weather data relevant to climate-related force majeure claims.

A Force Majeure Agreement in Ghana is required whenever parties to a commercial contract wish to expressly define and manage the risk of supervening events that may prevent or delay performance under the Contracts Act 1960 (Act 25).

A Force Majeure Agreement is needed when parties entering a long-term supply agreement for cocoa, timber, or other commodities produced in Ghana wish to allocate the risk of crop failure, flooding, or government export restrictions. The Ghana Cocoa Board (COCOBOD) and its licensees frequently encounter force majeure situations in the cocoa supply chain, and express force majeure provisions are standard in COCOBOD-related contracts.

A Force Majeure Agreement is required when a construction contractor and an employer executing a building contract in Ghana — such as a project financed by the Ghana Infrastructure Investment Fund (GIIF) — wish to define which events suspend the contractor's time obligations and which entitle either party to terminate the contract entirely.

A Force Majeure Agreement is needed in energy sector contracts, particularly power purchase agreements (PPAs) between independent power producers (IPPs) and the Electricity Company of Ghana (ECG) or the Ghana Grid Company (GRIDCo), where fuel supply interruptions, hydrological shortfalls in hydroelectric generation at the Akosombo Dam, and transmission failures are foreseeable risks.

A Force Majeure Agreement is required when a company licensed by the Ghana Investment Promotion Centre (GIPC) enters into a joint venture or concession agreement with a government agency and wishes to confirm that political or regulatory actions by the Government of Ghana trigger a defined contractual response rather than an uncertain common law claim.

A Force Majeure Agreement is needed for international trade contracts governed by Ghana law, where the parties wish to incorporate and supplement the UNIDROIT Principles or ICC Force Majeure Clause 2020 within a Ghana law framework that overrides any conflicting common law rule under the Contracts Act 1960 (Act 25).

Parties in Ghana should execute a Force Majeure Agreement (Ghana) at the same time as the underlying commercial contract, not after a potential force majeure event has already arisen. Courts treat agreements concluded in contemplation of a specific event as potentially unenforceable under the Contracts Act 1960.

A valid Force Majeure Agreement in Ghana under the Contracts Act 1960 (Act 25) must contain the following essential elements.

Parties and Underlying Contract: Full legal names, registration numbers issued by the Office of the Registrar of Companies (ORC) under the Companies Act 2019 (Act 992), and a precise description of the underlying contract to which this Force Majeure Agreement applies — including the contract date, subject matter, and the parties' respective obligations.

Definition of Force Majeure Events: An exhaustive or illustrative list of qualifying events, which should include: acts of God (earthquakes, flooding, storms declared by the Ghana Meteorological Agency); war, civil unrest, or national emergencies declared under the National Disaster Management Organisation Act 1996 (Act 517); government orders, sanctions, or regulatory actions by Ghanaian authorities including the Bank of Ghana (BoG), the Ghana Revenue Authority (GRA), or the Minerals Commission; epidemics or pandemics; and failure of utility infrastructure including Electricity Company of Ghana (ECG) power and Ghana Water Company Limited (GWCL) supply.

Notification Obligations: The period within which the affected party must notify the other party in writing — typically 5 to 14 days from the occurrence of the event — and the information that must be included in the notice: a description of the event, its expected duration, and the obligations affected.

Suspension of Obligations: Which contractual obligations are suspended during the force majeure period, the maximum period of suspension before either party may terminate, and whether the time for performance is extended by the duration of the event.

Mitigation Duties: The obligation on the affected party to take all reasonable steps to mitigate the effect of the force majeure event and resume performance as soon as practicable, consistent with Ghanaian common law principles.

Termination Rights: The conditions under which either party may terminate the underlying contract if the force majeure event continues beyond the agreed maximum suspension period, and the consequences of termination — including return of advance payments and the position on costs already incurred.

Governing Law and Dispute Resolution: Ghana law, with reference to the Commercial Court in Accra (a division of the High Court of Justice) or the Ghana Arbitration Centre (GAC) for arbitration of disputes. The forms-legal.com Force Majeure Agreement (Ghana) template covers all essential force majeure provisions in a structured format suitable for commercial contracts under the Contracts Act 1960 (Act 25).

Additional compliance elements for a Force Majeure Agreement (Ghana) used in Ghana include: Under the Companies Act 2019 (Act 992), the Registrar General's Department (RGD) maintains the register of Ghanaian companies. Section 7 of the Companies Act 2019 governs company incorporation. The Ghana Revenue Authority (GRA) administers corporate tax under the Income Tax Act 2015 (Act 896). The Commercial Division of the High Court in Accra adjudicates business disputes. The Ghana Investment Promotion Centre (GIPC) regulates foreign investment under the GIPC Act 2013 (Act 865). Forms-legal.com provides this template as a starting point for Ghana-compliant documentation.