JAPAN MOTORS TRADING CO., LTD. v. RANDOLPH MOTORS LTD.

JUDGMENT OF ABBAN J.

The claim of the plaintiffs is for ¢14,620. The amount is made up of the balance of purchase price of ¢12,920 plus interest of ¢1,700.

The parties are motor dealers. In or about October 1970, the plaintiffs intending to sell their motor workshop consisting of [p.538] showrooms, spare parts store, parking space, office machinery and equipment all situated at house No. C.920/3, Asylum Down, Accra, entered into negotiations with one Mr. Jonas Kwamina Randol who was interested in the said property. The negotiations ended up in the signing of the deed of agreement, exhibit A, between the plaintiffs on one hand and the said Mr. Jonas Kwamina Randolph on the other hand. The agreement was dated 15 October 1970. The purchase price agreed upon and which was to be paid by Mr. Randolph within three months from 15 October 1970 was ¢122,000.

At the time of the agreement, the plaintiffs were in the process of putting up another motor workshop at the Industrial Area of Accra and it was envisaged that the construction would be completed within three months from the date of the agreement. Consequently, it was agreed under clause 3 of the agreement that the plaintiffs were to remain in occupation of the premises for three months and to pay to Mr. Randolph ¢1,020 a month as rent. It was further agreed in clause 14 of the agreement that if for any cause, not due to any wilful default, the full purchase price of ¢122,000 could not be paid within the three months, that is by 15 January 1971, the said Mr Randolph was to pay to the plaintiff ¢5 per cent per annum on any outstanding balance until the full purchase price of ¢122,000 was paid.

Mr. Randolph failed to pay the purchase price or any part thereof within the stipulated period. And in January 1971 or thereabout he approached the plaintiffs and asked them to allow him more time, for he was trying to negotiate for a loan from the National Investment Bank to pay for the full purchase price and that further extension of time would enable him to complete the loan transaction with the said bank. The plaintiffs agreed to accommodate him.

However, in his negotiation with the said bank, Mr. Randolph came against another obstacle. The bank, not being disposed to granting huge loans of this nature to individuals, insisted that Mr. Randolph should float a limited liability company to take over the negotiation from him. Mr. Randolph readily complied with the bank's request. Hence he formed the defendant-compa