Legal concept of witness, guarantor

In everyday parlance and engagement, the terms “Witness” and “Guarantor” have been used interchangeably, with the misconception that they are synonymous and refer to the same thing.

In legalese, however, these terms are quite different in their meanings in everyday usage and practice.

In the Ghanaian legal system, a guarantor refers to someone who makes either a verbal or written undertaking or promise to pay a borrower’s debt to a lender or commits to performing a legal obligation to a lender if the borrower defaults in paying a debt.

This promise or commitment by the guarantor is a serious legal commitment that is often used in banking, savings and loans and microfinances’ scheme of things.

In this regard, the guarantor acts as a risk shield for the lender. 

Thus, a guarantor is technically a debtor because, where the principal debtor fails to pay their debt, the guarantor will be called upon to pay the money owed.

A guarantor makes a guaranty or gives security for a debt.

A guarantor’s liability, however, does not begin until the principal debtor is in default.

It is important to note, however, that in Ghana, there is a distinction between the use of the term guarantor in the respect of the voter registration system and its usage in the legal domain. 

In the usage of a guarantor in the voter registration system, individuals are required to swear an oath to confirm the identity of an applicant, with consequent sanctions for knowingly making false statements as enforced by the Electoral Laws of Ghana.

Legal framework, requirements

Under section 14 of the Contracts Act of Ghana 1960 (Act 25), a Contract of Guarantee is void unless it is in writing and signed by the guarantor.

A guarantor must have the capacity or be legally competent to repay the loans or credit if the borrower defaults.

In the Ghana Legal System, there are two types of guarantees.

These concern personal, involving individuals, and corporate, involving companies

Responsibilities, liabilities  

Secondary liability: In this case, a guarantor’s liability arises only after the borrower defaults.

However, if the contract is a Guarantee of Payment, the creditor can pursue the guarantor immediately the borrower defaults on the payment of the loan.

Full Liability: Here, the guarantor is often liable for the payment of the full loan amount, including the principal, interest and penalties thereon.

Joint and Several Liability: This is in respect of cases with multiple guarantors, where a creditor may sue one guarantor for the recovery of the entire debt.

Effect of Default: Here, if the borrower defaults, the guarantor is liable to pay the outstanding balance, which can lead to legal action against the guarantor.

Rights

After paying the debt, the guarantor can step into the shoes of the lender or creditor and use legal means against the principal debtor to recover the money paid.

This is called the

Right of Subrogation.

The guarantor also has a right to be reimbursed by the principal debtor. 

A guarantor may, however, be discharged from liability if the debt is fully settled.

This also applies when the creditor alters the loan contract in a way that prejudices the guarantor without their consent or when the creditor breaches the terms of the guarantee.

Potential guarantors are thus advised to thoroughly review a loan agreement before they make a commitment and not rely on trust.

A guarantor may be able to withdraw if the contract allows that.

However, many agreements are irrevocable.

In fact, per the Bank of Ghana’s directive, becoming a guarantor for a debtor is a serious financial decision and not a mere formality.

Witness

A witness in the Ghanaian legal system, on the other hand, refers to a person who provides either an oral or written testimony in a judicial proceeding to assist a court of competent jurisdiction to determine the truth or establish facts in a dispute.

While a witness has no connection with the transaction, a guarantor is legally bound by the terms and clauses of the transaction.

Under the Evidence Act, 1975 (NRCD 323), the law emphasises the quality of the testimony in respect of the number of witnesses, with emphasis on the principle that witnesses are weighed and not counted.

Key aspects, concept

As a general rule, every person is competent to be a witness regardless of age or mental capacity, unless disqualified by the Evidence Act. Under section 59(1) of the Act, a person is disqualified to be a witness if they are incapable of expressing themselves to be understood, either directly or through an interpreter, or incapable of understanding the duty to tell the truth.

While most individuals are competent to testify, some may not be compelled to testify, such as accused persons in a criminal trial who, though they are competent to testify, may not be compellable to do so. Children or minors are competent to testify.

However, in criminal cases, they generally give evidence without an oath administered on them as long as they can appreciate and understand the facts and communicate the same.

An independent witness is a person who, specifically in a criminal investigation, is not under police control or influence and whose role is to authenticate statements given by suspects, thus ensuring neutrality.

In Ghana’s Civil Procedure, under the Civil Procedure (Amendment) Rules, 2014 (CI 87), a Witness Statement is a signed, written statement containing the evidence a witness would have given orally.

This statement stands as their evidence-in- chief for which the witness must attend court for cross-examination, or their evidence would be expunged from the record. Witnesses who do not submit themselves for cross-examination are generally not counted.

Their evidence-in-chief is mostly structured out. An independent witness must not be closely tied to the police.

They are needed to ensure the voluntary nature of confessions.

The Witness Protection Act, 2018 (Act 975) protects witnesses who may face danger because of their testimony. 

An expert witness is a person with specialised knowledge acquired through their profession, expertise or business experience to provide ready-made inference to assist the judge or jury.

Witnesses are usually not parties to the transaction.

They are essentially used to just confirm they saw a document signed, an event happened, a transaction executed, or to give primary information about an occurrence.

They do not owe anything and are not held liable if things go wrong. 

Witnesses do not have any obligations or responsibilities relating to the contract or transaction they are witnessing.

Witnesses may even sign in order to prove the authenticity of such a transaction.

Witnesses are there to confirm and protect the assumption that everything went well during the execution of a transaction.  

Witnesses in court are to help the court establish the truth, through oral testimony, documentary evidence or by attesting that a signature or document is genuine.

They do not have a stake in the outcome, and they are not liable for the parties’ obligations.

The writer is a lawyer/historian.