CONTRACT AGREEMENTS AND ITS ENFORCEABILIY IN NIGERIA

In Nigeria, we cannot deny the fact that daily dealings and interfaces are characterized
by contractual/transactional agreements, however, it is important that we critically
analyze the elements of contracts, its forms and mode of enforceability in Nigeria.

A contract can be defined as an agreement which the law with recognize as affecting
the legal rights and duties of parties.it is an agreement between two or more parties
that is binding and which creates reciprocal legal obligations to do or not to do
particular things.

Also black’s law dictionary defined a contract as:

“An agreement between two or more parties creating obligations that is enforceable or
otherwise recognizable under the law”

CLASSIFICATION OF CONTRACTS

1          FORMAL CONTRACT

A formal contract is always in writing. It is also known as contract under Seal or deed. It

is executed and given full legal effect by the signing, Sealing and delivering of it by the
party executing it. The seal is the most important feature of a formal contract. It is
known as authentication. A formal contract is useful on land matters.

2. SIMPLE CONTRACT

On the other hand are contracts other than a formal contract. The major distinguishing
factor between a simple contract and a formal contract is the seal. A simple contract
can be in written or oral form (parole). Only a person who has furnished consideration
can enforce a simple contract.

3. BILATERAL AND UNILATERAL CONTRACT

Bilateral contract is simply exchange of promise between parties. Mr. A promises to do

something or refrain from doing something in exchange for what the Mr. B promises to
do in return. The consideration on both sides is known as Executory consideration.

Unilateral contracts on the other hand exists were the consideration consists of an
actual performance in return for a promise. Mr. A makes a promise and becomes
bound by the promise. Mr. B is at liberty whether or not to do his own part. Once Mr. B
does his own part, Mr. A must fulfill his promise.
4. EXPRESS AND IMPLIED CONTRACTS

An express contract is one whose terms or contents are clearly and specifically stated
and agreed upon by the parties. Implied contract on the other hand is that type of
contract which its terms are not expressly stated. 

FORMATION OF A CONTRACT

There are four elements necessary for a valid contract, these elements include;

 Offer
 Acceptance
 Consideration
 Intention to create legal relation (capacity to contract)

OFFER

An offer may be defined as a definite undertaking or promise made by one party with
the intention that it shall become binding on him (the maker) as soon as it is accepted
by the party to whom it is addressed. An offer can be made expressly or impliedly by
conduct.

INVITATION TO TREAT

An invitation to treat is a preliminary move in negotiation which may produce a valid

offer and thereafter lead to a contract. An invitation to treat is not an offer, it is a
solicitation for an offer i.e. offers to receive offers. 

“For instance, a “FOOD IS READY” signage is deemed as an invitation to treat for

prospective customers to buy food from food vendors”

Invitation to treat is not capable of an acceptance which will result to a contract.

Invitation to Treat exists in different forms, to wit:

1. Display of goods in a supermarket

2. Advertisement of goods for sale in newspaper, trade catalogue etc
3. Auction.       
4. Advertisement by transport companies.

ACCEPTANCE
Furthermore, for a valid contract to exist, there have to be acceptance. An offer must be
accepted in order for a transaction to crystalize into a contract. An acceptance must be
communicated either expressly or impliedly (by the conduct of the parties) for it to be
able to stand as valid or effective. Silence does not constitute Acceptance.

  “Acceptance is the agreement of Mr. B to enter into a legally binding contract with
the Mr. A in the terms of Mr. A’s offer’’

To be effective and valid, an acceptance must be clear, plain, unequivocal, unconditional

and without disagreement of any sort to the offer. However, any deviation or distraction
from the terms of the offer does not amount to an acceptance.

However, it has been established that some acceptance are invalid despite their
purported form of validity. These include:

(a) COUNTER OFFER

      It has been established that an offer must be unconditionally and unqualifiedly be
accepted.

A valid acceptance is one which does not vary the terms of the offer in any form. Where
Mr. A claims to accept an offer made to him by Mr. B but it turns out that he did not
totally agree with the term contained in the offer and goes further to subtract or add to
the terms of the offer, it is known as a counter offer. A counter offer when presented
does two things. It destroys the previous offer and present a new offer.

“Thank you for the offer but we will kindly request that period of payment be
extended”

(b) CONDITIONAL ACCEPTANCE

A conditional acceptance is not a valid acceptance, when acceptance of an offer is

predicated on a condition, there is no contract between the parties until the specified
condition has been fulfilled. Conditional acceptance can be in two forms:

(c) SUBJECT TO CONTRACT

It is noteworthy that when the phrase ‘subject to contract’ is employed in an appropriate

situation, with a clear measure of intention, there cannot be valid contract until formal
contracts are exchanged.
Pursuant to the foregoing, where agreement is made “subject to contract”, a binding
contract is nonexistent between the parties until a formal contract has been executed
between them.

(d) CROSS OFFER

Cross offers occurs when two offers, identical in terms are sent by two parties to each
other. When an offer proceeds from one party to another by some coincidence and in
total ignorance by both parties, it is known as cross offers and there is no contract yet
between the parties because for a contract to emerge, there must be a meeting of the
minds (Consensus ad idem-consensual agreement).

CONSIDERATION

For a party to be entitled to bring an action on an agreement, he must demonstrate that

he contributed to the agreement. It is this contribution that is called consideration.

In a simple language, consideration is the price, money value or for the contract. It is the
advantage one party conforms on the other or the disadvantage he would suffer in
exchange for what he would get from that other party. A promise which is not supported
by consideration cannot be enforced.  

CAPACITY TO CONTRACT

Capacity to contract refers to the competence or ability that a person has to enter into a
contract. It looks beyond the purpose of the contract. It is the legal competence or legal
ability of a person to validly enter into a contract under the existing legal framework.

Although the general rule is that parties have freedom of contract, the lack of
competence based on the person’s states as imposed by the law is an exception to this
general rule.

Flowing from the above, a contract can be declared invalid not because of the purpose
of the contact in itself but because of the status of the persons entering into the
contract

Categories of Persons that lacks the Requisite legal capacity

 Illiterates
 Infants or Minors
 Lunatics
 Drunkards
  Unincorporated entities 

ILLEGALITY AND UNENFORCEABLE CONTRACT

The term ‘’illegality’’ is used in a wide, vague and imprecise manner in relation to

contracts. It embraces simply illegal and void contracts, contracts rendered illegal and
void under the law. A court of law will not enforce an illegal contract, even though all the
elements required for the formation of a valid contract are present. Generally, contracts
that are illegal, unconstitutional or fraudulent are not enforceable and are seen as
criminal under the relevant laws.

REMEDIES

Remedies of Breach of Contract

When a contract has been breached, the injured party is entitled to claim its
enforcement or to rescind the contract, and in addition to or in lieu of one of the said
remedies he is entitled to compensation, all as provided for in the law.

When a contract is broken, the injured party may have several courses of action open to
him, to wit:

1) To refuse further performance of the contract, i.e., rescission

2) Compensation.
3) Enforcement of contracts.
4) An action for specific performance.
5) An action for damages

Enforcement of Contracts:

The injured party is entitled to enforcement of contract, unless in any of the following
cases:

1. a) It is impossible to perform the contract.

2. b) Enforcement of the contract consists of compelling the performance or
acceptance of personal work or of a personal service.
3. c) Implementation of the enforcement order requires an unreasonable level of
supervision on behalf of a court or an execution officer.
4. d) Under the circumstances of the case, enforcement of the contract is unjust.