Commercial Contracts 2025 Comparisons

The general rules for choice of the applicable law of a commercial contract (sometimes also referred to as the proper law of the contract) is well settled: the law which the parties elect to apply shall be applied. This will be discerned or ascertained by the intention expressed in the contract, if any. Where it is expressly stated, it will be conclusive. If it is not expressly stated in the contract, the intention will be inferred by the court based on the terms of the contract and the relevant surrounding circumstances; this includes ascertaining the legal system with which the contract is most closely connected.

This general rule is primarily based on common law principles of conflict of laws (the Courts Act No 31 of 1965 of the laws of Sierra Leone incorporates, among others, the common law of England in force on 1 January 1880 as well as the common law as defined by Section 170 of the Constitution of Sierra Leone). It should be noted that Sierra Leone does not have a statute passed by parliament that specifically provides for this; for example, the Contracts (Applicable Laws Act) 1990 in the United Kingdom, among others, addresses the application of choice of law rules in contract. This rule is subject to a few exceptions, usually based on (i) acting in good faith and (ii) that the choice of law so nominated was for a legal purpose. For example, the courts in Sierra Leone can refuse to apply this rule if it conflicts with Sierra Leone’s public policy or laws against corruption and anti-money laundering.

Sierra Leone does not have any statutory enactment such as the Contracts (Applicable Laws Act) 1990 that stipulates the general rules for the form of a commercial contract. That said, contracts under Sierra Leone law fall into two categories: (i) a contract by deed under seal and (ii) a simple contract. A contract by deed under seal must meet the following criteria:

• be evidenced in writing;
• with or without any consideration being provided;
• be duly executed under the hand and seal of the person signing; and
• be witnessed.

On the other hand, a simple contract must tick the following boxes:

• an offer and acceptance;
• intention to create legal relations;
• consideration;
• legality of purpose; and
• capacity of the parties to enter into the contract.

A simple contract can be oral, written, partly oral and partly written, or by conduct. It should be noted that there are a number of commercial contracts that are required by statutes of specific applications to be in writing or evidenced in writing. For example, transfer of shares of a company are by virtue of Sections (126) and (132) of the Companies Act required to be evidenced by an “instrument of transfer”; contracts for the sale or disposition of land or an interest in land must be evidenced in writing by virtue of the Statute of Frauds 1677 (which is incorporated into the laws of Sierra Leone by virtue of the Courts Act No 31 of 1965).

In Sierra Leone, there is no single or specific legislation that mainly applies to or deals with commercial contracts. There is no “Commercial Contracts Act” that comprehensively governs all commercial agreements.

On the contrary, the legal framework for commercial contracts is a combination of:

• common law and equitable principles (inherited from England); and
• a range of local statutes that regulate specific types of contracts or commercial transactions (by way of example, see the following).

The Companies Act 2009 governs the formation and operation of companies. It sets out how companies enter, execute and are bound by contracts (Sections 58–63). It provides rules on:

• director authority;
• share transfers; and
• ultra vires acts.

The Sale of Goods Act (Chapter 225) governs:

• contracts for the sale of goods;
• implied terms (fitness, merchantable quality);
• transfer of property; and
• remedies for breach.

The Bills of Exchange Act (Chapter 227) governs negotiable instruments:

• bills of exchange;
• cheques; and
• promissory notes.

The Borrowers and Lenders Act 2019 sets out requirements for:

• loan contracts;
• registration of security interests; and
• enforcement of credit agreements.

The Employment Act 2023 governs the terms of employment contracts/contracts of service.

The Sale of Goods Act (Chapter 225) of Sierra Leone, modelled on the English Sale of Goods Act 1893, governs domestic sales and focuses on property transfer, implied terms, and the distinction between conditions and warranties, with remedies rooted in common law principles. In contrast, the United Nations Convention on Contracts for the International Sale of Goods (CISG) applies to international sales between parties in different states and emphasises performance obligations, conformity of goods, and uniform interpretation based on good faith rather than domestic precedent. The CISG dispenses with formalities and the concept of consideration, separates risk from ownership, introduces the notion of fundamental breach, and codifies foreseeability and mitigation of damages. Overall, while Chapter 225 reflects a traditional common law approach to contract formation and title transfer; the CISG adopts a more flexible, internationally harmonised framework aimed at facilitating cross-border trade.

In Sierra Leone, there are no comprehensive or mandatory statutory rules specifically governing particular types of commercial contracts such as franchise, distribution, agency or licensing agreements, unlike in many US states or certain civil law jurisdictions.

Over the past three years, the most significant legal development in Sierra Leone affecting commercial contracts has been the enactment of the Arbitration Act 2022, which modernised dispute resolution by adopting (among others) the UNCITRAL Model Law and implementing the New York Convention, making arbitration more accessible and enforceable. Regionally, the ECOWAS Court’s decision in Algom Resources Ltd v Republic of Sierra Leone highlighted state liability for wrongful interference with contractual and property rights, reinforcing investor protection.

Internationally, the Jenner & Block v Republic of Sierra Leone case in the USA demonstrated that contractual obligations with foreign entities can override claims of sovereign immunity where waiver is implied. Domestically, recent High Court and Court of Appeal cases such as Vitafoam (SL) Ltd v Leone Construction and Dynamic Fuel SI v MC Shin have reaffirmed strict adherence to contract terms, proof of obligations and party identity in enforcement actions.

Collectively, these developments signal a stronger emphasis on contractual certainty, procedural fairness and modern dispute resolution within Sierra Leone’s commercial landscape.

In Sierra Leone, the applicable law of a commercial contract is primarily determined by party autonomy – the express or implied choice of the parties. In the absence of such a choice, courts apply the closest and most real connection test, while preserving public policy and mandatory law exceptions. The framework mirrors English common law conflict rules, ensuring flexibility for international commerce while maintaining domestic legal safeguards.

When a commercial contract has no express choice of law, Sierra Leonean courts apply the law with the closest and most real connection to the agreement. In most cases involving local transactions or performance within Sierra Leone, that will be Sierra Leonean law, unless the circumstances clearly indicate a stronger connection to another jurisdiction and no public policy issue arises.

Sierra Leonean courts will generally respect a foreign choice of law in commercial contracts, but will override it when:

• the chosen law conflicts with mandatory provisions of Sierra Leonean law;
• the application of the foreign law would breach public policy; or
• procedural matters or enforcement require application of Sierra Leonean law or regulations.

If one of the contract parties is from Sierra Leone, a foreign choice of jurisdiction can be chosen if this is what the parties agree to. Likewise, if both parties to the contract are from Sierra Leone, they can both choose a foreign jurisdiction as the seat for resolution of a dispute.

Under Sierra Leone’s Arbitration Act 2022, parties (including where one or both are Sierra Leonean) may validly agree to resolve disputes by arbitration, whether domestic or international. Sierra Leonean courts are required, under Section 4 of the Act and Article II(3) of the New York Convention, to respect such agreements and refer the matter to arbitration if a party brings court proceedings in breach of the clause, unless the agreement is void or inoperative. Likewise, foreign or domestic arbitral awards will generally be recognised and enforced in Sierra Leone in line with Sections 65–66 of the Act and Article V(2) of the Convention, except where the subject matter is non-arbitrable or enforcement would contravene Sierra Leonean public policy. However, mandatory local laws (such as those protecting Sierra Leonean distributors or employees) or other statutory rights may still apply, as these cannot be excluded by contract or arbitration agreement.

A contract in Sierra Leone can be concluded in writing, orally or by conduct, as long as the essential elements of contract formation exist, except where statute expressly requires written form (eg, land, guarantees or regulated contracts). Written form remains the best practice for enforceability and proof.

Sierra Leonean law does not explicitly recognise the doctrine of culpa in contrahendo as such.

However, its effects are achieved through common law principles that protect parties against bad faith or negligent conduct in pre-contractual negotiations:

• misrepresentation;
• negligent misstatement;
• estoppel; and
• restitution.

Remedies depend on the nature of the conduct and the loss suffered. They include:

• damages;
• rescission; and
• restitution.

Under Sierra Leonean law, a party’s standard terms and conditions become part of a commercial contract only if they are properly incorporated, meaning they were communicated and accepted before or at the time of contracting, either by signature, notice, course of dealing, or reference. Terms introduced afterwards, or not reasonably brought to the other party’s attention, will not be binding.

The law on standard terms in Sierra Leone applies whenever one party seeks to rely on its pre-drafted conditions. Such terms are binding only if they were clearly communicated, reasonably accessible, and accepted before or at the time the contract was made. Terms introduced afterwards or not reasonably brought to attention will not apply.

Standard terms in Sierra Leone can be invalidated or limited if they are:

• unfair;
• unconscionable; or
• contrary to public policy.

Even without specific legislation, the courts can use common law and equitable principles to prevent the abuse of standard-form contracts that impose unreasonable disadvantage on one party.

In Sierra Leone, the result of a battle of forms is that the contract is generally governed by the terms last communicated and accepted without objection before performance (the “last shot” rule) unless no clear acceptance occurred, in which case only mutually agreed or reasonable terms will apply.

There is no specific commercial contract for which Sierra Leone law requires an original signature or notarial deed. However, for the purposes of registration and pursuant to the Registration of Instruments Act, a document executed out of Sierra Leone to be registered in Sierra Leone will require a notarial certificate.

A contract can be effectively concluded via electronic signature pursuant to the Electronic Transactions Act No 11 of 2019.

Official registration of a commercial contract in Sierra Leone is only required for specific contracts, especially those involving:

• land;
• charges/mortgages;
• debentures;
• certain partnership deeds;
• bills of sale; and
• regulated sector agreements.

Most other commercial contracts do not require registration unless specifically mandated by statute.

Under Sierra Leonean law, the mutual consent of parties is fundamental but must be accompanied by:

• intention to create legal relations;
• consideration;
• capacity to contract;
• lawful object;
• certainty of terms; and
• compliance with required formalities (where applicable).

These requirements ensure the contract is not only valid but also enforceable before a court.

The different laws to be obeyed are as follows.

• B2B contracts in Sierra Leone are governed mainly by common law and commercial statutes with broad contractual freedom.
• B2C contracts are governed by consumer protection principles, statutory implied terms and sector-specific regulation, which limit contractual freedom in order to protect the weaker party.

The main consumer protection rights to be obeyed in B2C contracts under the Consumer Protection Act of 2020 are:

• consumer’s right to safe, good quality goods (Section 46);
• implied warranty of quality (Section 47);
• warranty on repaired goods (Section 48); and
• consumer’s right to demand quality service (Section 49).

In Sierra Leone, liability means being legally answerable for a breach of duty that causes harm or loss. It exists in contract, tort and statute, and may be limited by agreement where the law allows – but always subject to fairness, reasonableness and public policy.

Under Sierra Leonean law, there is no general statutory maximum liability for damages. Liability is usually full compensation for proven loss, including loss of profit if foreseeable and proven, unless the parties have agreed otherwise in a contract or unless statutory rules limit liability (especially in B2C cases). Punitive damages are exceptional and rarely awarded.

Under Sierra Leonean law, liability without fault exists but only in specific categories, including:

• vicarious liability;
• employer’s liability;
• product liability;
• liability for dangerous activities (Rylands v Fletcher); and
• certain statutory offences.

These rules protect public safety, the environment and weaker parties, and operate alongside the general fault-based liability framework.

A contractual imitation on liability is permissible under Sierra Leonean law. The parties to the agreement can agree to limit liability for a specific named event or scenario. It makes no difference if the respective clause is a standard term provision or individually negotiated.

The concept of force majeure in a contract is applicable and enforceable under Sierra Leonean law. Relief from performance in circumstances outside a party’s control in the absence of specific provision in the commercial contract is also applicable under the doctrine of frustration of contract when the common object of the contract can no longer be achieved, because, in light of the circumstances, a situation fundamentally different from that contemplated when the parties entered into the contract has unexpectedly emerged. There is, however, a duty to notify and to mitigate loss.

In Sierra Leone, including a force majeure clause in commercial contracts is standard practice. Its absence does not automatically prevent a party from claiming relief as relief is still possible under the doctrine of frustration – but this is much more restrictive, uncertain and less flexible than a well-drafted contractual clause.

Under Sierra Leonean law, there is no general principle or statutory rule allowing contract renegotiation for hardship. The only possible relief is under the doctrine of frustration, which terminates (not adjusts) the contract. Therefore, parties must expressly include hardship or renegotiation clauses in their contracts if they want such relief.

While hardship or renegotiation clauses are becoming standard practice in major commercial agreements in Sierra Leone, there is no statutory or common law right to renegotiate in cases of hardship.

Thus, if a contract omits such a clause, the affected party cannot claim any right to renegotiate or amend under Sierra Leonean law. Only frustration may apply, leading to termination rather than adjustment.

Under Sierra Leonean law, the following warranties and remedies are available.

• Breach of a condition – termination + damages.
• Breach of a warranty – damages only.
• Late performance – damages and possible termination if time is essential.
• Non-fulfilment – damages and possible termination or specific performance.
• Warranties under statute include:
1. fitness for purpose;
2. satisfactory quality;
3. correspondence with description;
4. quiet possession; and
5. right to sell.

Parties to a commercial contract can deviate from the main warranty and remedy provisions, provided that:

• the deviation is mutually agreed upon;
• it does not violate any law, public policy or mandatory statutory provisions; and
• the contract allows for such deviation (either expressly or through a valid amendment or waiver clause).