UNIT 1

NATURE OF CONTRACT

A contract is an agreement between two or more parties that is enforceable by law. The essence of a contract lies in the mutual consent of the parties involved, where they agree to perform or refrain from performing certain acts. Contracts are foundational to commercial transactions and personal agreements. In Nigeria, the legal framework governing contracts is largely based on common law principles, statutes, and case law. The Nigerian courts often refer to English law, especially where local statutes are silent. Where the Nigerian Contract Law and the Sale of Goods Act are pivotal in contractual agreements, the Nigerian courts have developed a rich body of case law that interprets and applies contract principles. To form a valid contract, several key elements must be present and they include the following:

1. Offer and acceptance: this is where one party must make an offer, and the other party must accept it. The acceptance must be unconditional and communicated effectively to the offeror. See the case of Carlill v Carbolic Smoke Ball Co (1893) which established the principles of offer and acceptance.
2. Intention to create legal relations: this is where parties must intend for their agreement to be legally binding. See the case of Rose & Frank Co v JR Crompton & Bros Ltd (1925) which highlights the importance of intention in creating legal relations.
3. Consideration: this is where there must be something of value exchanged between the parties. Consideration can be a benefit to the promisor or a detriment to the promisee. See the case of Currie v Misa (1875) which defines consideration as some right, interest, profit, or benefit accruing to one party or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other.
4. Capacity to Contract: this is where parties must have the legal ability to enter into a contract. This generally excludes minors, mentally incapacitated individuals, and intoxicated persons. See the case of Nash v Inman (1908) which discusses the capacity of minors in contract law.
5. Legality of purpose: this is where the contract’s purpose must be lawful. Contracts for illegal activities are void. See the case of Everett v Williams (1725) which involved an illegal contract between highwaymen, which was deemed unenforceable.

SOURCES OF LAW

The sources of law in Nigeria include:

1. The constitution: The 1999 Constitution of the Federal Republic of Nigeria is the supreme law of the land.
2. Legislation: these are acts of the National Assembly and laws passed by State Houses of Assembly. See the Nigerian Contract Law.
3. Case law: these are judicial decisions from Nigerian courts, which interpret and apply statutes. See the case of Oke-Bola v Molake (1975) where the Supreme Court of Nigeria relied on past decisions to resolve contractual disputes.
4. Customary law: these are traditional customs and practices recognized by the courts.
5. International law: these are treaties and conventions Nigeria is a party to, which are incorporated into domestic law.
6. English common law: these remains a significant influence, especially in commercial law.

CONCEPT OF BARGAIN

A bargain in contract law refers to the exchange of promises between parties. Each party must provide something of value (consideration) for the contract to be binding. See the case of Best (Nigeria) Ltd v Blackwood Hodge (Nigeria) Ltd (2011) which reinforces the necessity of consideration in a valid contract and The Sale of Goods Act which highlights the need for consideration in commercial transactions. The elements of bargain includes the following;

1. Mutual assent: this is where both parties must agree on the terms of the contract.
2. Consideration: this is where each party must give and receive something of value.
3. Exchange: this is where the consideration must be exchanged between the parties.

CLASSIFICATION OF CONTRACT

Contracts can be classified in various ways based on their formation, performance, and enforceability.

1. Classification by formation
   1. Express contracts: this is where the terms are clearly stated by the parties, either orally or in writing. See the case of I.C.I. (Nigeria) Ltd v M. A. Nwabueze & Co (1986) which illustrates an express contract.
   2. Implied contracts: this is where the terms are inferred from the conduct of the parties. See the case of Niger Insurance Co Ltd v Abed Brothers Ltd (1976) which involved an implied contract.
   3. Quasi-contracts: this are not actual contracts but imposed by law to prevent unjust enrichment. See the case of Uwaifo v A-G Bendel State (1982) which discussed quasi-contractual obligations.
2. Classification by performance
   1. Executed contracts: these are contracts that have been fully performed by both parties.
   2. Executory contracts: these are contracts yet to be fully performed by one or both parties. See the case of Akinyemi v Odu’a Investment Co. Ltd (2006) which involves an executory contract.
3. Classification by enforceability
   1. Valid contracts: these are contracts enforceable by law.
   2. Void contracts: these are contracts not enforceable by law due to illegality or lack of essential elements. See the case of Solanke v Abed Brothers Ltd (1962) which involved a void contract.
   3. Voidable contracts: these contracts are valid until one party chooses to void it. See the case of Okonkwo v CCB Ltd (2003) where a contract was voidable due to misrepresentation.
   4. Unenforceable contracts: these contracts cannot be enforced due to technical defects. See the case of Oke-Bola v Molake (1975) where the contract was unenforceable due to lack of proper documentation.

CONCLUSION

By understanding these foundational concepts, individuals and businesses can navigate the complexities of contract law more effectively, ensuring their agreements are valid, enforceable, and legally binding.