How Ghana’s Contract Law Handles Breaches by the State: What Global Investors Must Know

By ClintonOur Publications

When international investors, contractors, and service providers enter into agreements with the Government of Ghana or its agencies, the assumption is often that the state will uphold its end of the bargain. But what happens when the state breaches a contract?

The answer lies in Ghana’s contract law—and understanding your rights, remedies, and enforcement options is essential.

At Clinton Consultancy, we advise global clients on how to draft enforceable contracts, navigate state breaches, and pursue remedies both domestically and through international arbitration mechanisms.

?? The Basics of Ghana’s Contract Law

Ghana’s contract law is derived from English common law principles, supported by statutes such as:

  • The Contracts Act, 1960 (Act 25)
  • The State Proceedings Act, 1998 (Act 555)
  • The Alternative Dispute Resolution Act, 2010 (Act 798)

These laws apply equally to both private and public entities. In theory, the Government of Ghana can be sued for breach of contract just like any private party—provided proper procedures are followed.

? Common Scenarios of State Breach

Foreign investors often face breaches such as:

  • Unilateral contract cancellation
  • Failure to pay under procurement contracts
  • Non-renewal of licenses despite contractual obligations
  • Delays in performance due to political transitions or policy shifts
  • Government interference in concession agreements or public-private partnerships (PPPs)

? Key Legal Principles & Protections

1. Privity & Capacity

  • The government must have legal capacity and authority to enter contracts through the proper channels (Ministries, MMDAs, or SOEs).

2. Immunity Waivers

  • The state can waive sovereign immunity by agreeing to arbitration or jurisdiction clauses in the contract.

3. Notice & Procedures under the State Proceedings Act

  • Lawsuits against the state require prior written notice (not less than 30 days before filing).
  • The Attorney-General must be served, and special procedures apply to enforcement of judgments.

4. Enforcement through International Arbitration

  • Ghana is a signatory to the New York Convention and ICSID Convention.
  • This gives investors international recourse where the local system may be slow or politically influenced.

? The Clinton Consultancy Advantage

At Clinton Consultancy, we help international clients: ? Draft Strong Contracts with the Government

  • Including waivers of sovereign immunity, dispute resolution clauses, and payment securities

? Mitigate Breach Risk Before It Happens

  • Through compliance reviews, contract vetting, and enforcement planning

? Pursue Remedies When the State Breaches

  • Engage in pre-litigation negotiation, arbitration, or court proceedings
  • Represent clients in ICSID, UNCITRAL, or LCIA proceedings
  • Enforce judgments or arbitral awards locally and internationally

? Structure Protective Local Entities

  • Use nominee directors, holding companies, and regulatory tools to minimize exposure

? Call us: +233 (0)27 252 2695
? Email: info@clintonconsultancy.com

? Why This Matters for Global Investors

Whether you’re in mining, construction, energy, or infrastructure, doing business with governments in emerging markets always carries risk. But with the right legal framework, that risk can be anticipated, contractually managed, and legally enforced.

Clinton Consultancy gives you the local insight, legal strategy, and cross-border experience to protect your investment—before and after any breach.