UNIT 1

MEANING OF COMMERCIAL LAW

Commercial law, also known as mercantile law or trade law, encompasses the legal principles that govern business and commercial transactions. It deals with issues of both private and public law, regulating trade practices and ensuring fair dealings in the marketplace. Commercial law covers various areas including contracts, the sale of goods, agency, hire purchase, and more. See the Sale of Goods Act 1893, the Companies and Allied Matters Act (CAMA) 2020, the Arbitration and Conciliation Act, Cap A18, LFN 2004 and see also the case of Nigerian Bottling Co. Ltd v. Ngonadi (1985) 1 NWLR (Pt. 4) 739 where the court highlighted the application of commercial law principles in ensuring the quality of goods sold.

NATURE OF COMMERCIAL LAW

The nature of commercial law is dynamic and multifaceted, reflecting the complexities of modern trade. It aims to facilitate commerce by providing a clear legal framework that parties can rely on. It also seeks to resolve disputes efficiently and promote fairness and stability in commercial relationships. Commercial law has the following features;

1. Facilitation of Trade: it simplifies the conduct of business transactions.
2. Regulation: it ensures compliance with legal standards.
3. Protection: it protects the rights and interests of parties involved in commerce.
4. Dispute Resolution: it provides mechanisms for resolving commercial disputes.

SOURCES OF COMMERCIAL LAW

See the case of Agu v. Enugu North Local Government (2010) 3 NWLR (Pt. 1180) 287 where the court illustrated the application of statutory provisions in regulating corporate activities. The sources of commercial law in Nigeria include:

1. Statutes: these are laws enacted by the legislature, such as the Sale of Goods Act 1893 and CAMA 2020.
2. Common Law: these are judicial decisions that create precedents for future cases.
3. Customary Law: these are traditional practices recognized by law.
4. International Conventions: these are agreements that Nigeria is a party to, influencing domestic commercial law.

MEANING OF SALE OF GOODS

A sale of goods is a transaction where the seller transfers or agrees to transfer the ownership of goods to the buyer for a monetary consideration, known as the price. See section 1 which defines a contract of sale, section 12 which implies the seller has the right to sell the goods, section 13 which provides that goods must correspond to their description and section 14 which provides that goods must be of satisfactory quality and fit for the purpose. See also the case of Nigerian Bottling Co. Ltd v. Ngonadi (1985) 1 NWLR (Pt. 4) 739 which emphasized the need for goods to be of merchantable quality.

SALE OF GOODS DISTINGUISHED FROM OTHER COMMERCIAL TRANSACTIONS

The sale of goods is distinct from other commercial transactions in several ways and they includes:

1. Transfer of Ownership: This is where the primary objective is the transfer of ownership of tangible goods.
2. Nature of Goods: this involves tangible, movable items.
3. Price: this involves a monetary consideration.

In contrast, other commercial transactions such as leases, hire purchase, and services do not necessarily involve the transfer of ownership or may include intangible goods and non-monetary considerations. See the Hire Purchase Act 1965 which regulates hire purchase agreements which differ from sales as ownership transfers only after certain conditions are met and the case of F.G. Onyezili v. Oriental Building Society (1956) 1 FSC 95 where the court distinguished between hire purchase agreements and sales of goods.

FORMATION OF THE CONTRACT OF SALE OF GOODS

A contract of sale of goods is formed when there is an agreement between the buyer and seller. The essential steps include offer, acceptance, and consideration. See section 4 which provides that a contract of sale may be made in writing, verbally, or implied by conduct and section 5 which details how the price may be fixed by the contract, left to be fixed in a manner agreed, or determined by the course of dealing. See the case of Carlill v. Carbolic Smoke Ball Co. (1893) 1 QB 256 where the court applied in Nigeria to emphasize the necessity of offer, acceptance, and consideration in forming a contract.

ESSENTIAL ELEMENT OF A CONTRACT OF SALE OF GOODS

See section 6 which provides for specific and unascertained goods; and that contract for sale of specific goods is void if the goods perish before the contract is made and section 7 which provides that where goods perish before sale but after agreement to sell, the agreement is avoided. See also the case of Aminu & Sons Transport Ltd. v. A.G. Plateau State (2003) 8 NWLR (Pt. 821) 147 where the court highlighted the importance of these elements in validating a contract of sale. The essential elements of a contract of sale of goods include:

1. Offer and Acceptance: This is where there must be a clear offer by the seller and acceptance by the buyer.
2. Consideration: This is why the buyer must provide something of value, typically money, in exchange for the goods.
3. Intention to Create Legal Relations: this is where both parties must intend to enter into a legally binding agreement.
4. Capacity: this is where both parties must have the legal capacity to enter into the contract.
5. Legality: This is where the contract must be for a lawful purpose.

CONCLUSION

Understanding the meaning, nature, sources, and essential elements of commercial law and the sale of goods in Nigeria is crucial for ensuring compliance and protecting the interests of all parties involved in commercial transactions. The legal framework provided by statutes like the Sale of Goods Act 1893 and judicial precedents ensures that commercial activities are conducted fairly and efficiently.