UNIT 5

MISTAKE

A mistake in contract law refers to an erroneous belief held by one or both parties at the time of contracting. See section 20 of the Nigerian Contract Act 1872 which addresses the impact of mistakes on contracts and states that an agreement is void if both parties are under a mistake as to a matter of fact essential to the agreement and the case of Igbokoyi v. FRN (2005) 9 NWLR (Pt. 929) 109 which is a Nigerian case illustrating the principle that a mistake must relate to a fundamental aspect of the contract to render it void. Mistakes can be categorized into three main types: unilateral mistake, mutual mistake, and common mistake.

1. Unilateral mistake: This occurs when only one party is mistaken about a material fact. If the mistake is about the terms of the contract or a fundamental aspect, and the other party is aware of the mistake, the contract may be voidable. See the case of Solel Boneh (Nig.) Ltd. v. Ayodele, where the court held that a unilateral mistake can render a contract void if the non-mistaken party knew or ought to have known of the mistake.
2. Mutual mistake: This happens when both parties are mistaken about the same fact. If the mistake is about a fundamental aspect of the contract, it can be void. See the case of Bell v. Lever Bros Ltd. where a mutual mistake regarding a fundamental term rendered the contract void.
3. Common mistake: This occurs when both parties make the same mistake regarding a fundamental fact. The contract is void if the mistake significantly impacts the agreement. See the case of Couturier v. Hastie, where both parties mistakenly believed the subject matter existed when it did not, resulting in a void contract.

MISREPRESENTATION

Misrepresentation refers to a false statement of fact made by one party to another, which induces the other party to enter into a contract. See section 19 of the Nigerian Contract Act 1872 which provides that a contract is voidable if consent to an agreement is caused by misrepresentation and the case of Akintunde v. Nigerian Army (2003) 16 NWLR (Pt. 845) 89 where the court held that a contract induced by misrepresentation could be voided. It can be categorized into three types: fraudulent, negligent, and innocent misrepresentation.

1. Fraudulent misrepresentation: This occurs when a false statement is made knowingly, without belief in its truth, or recklessly. See the case of Derry v. Peek, where the court defined fraudulent misrepresentation as a statement made with the intention to deceive.
2. Negligent misrepresentation: This happens when a party makes a false statement without taking reasonable care to ensure its truth. See the case of Hedley Byrne & Co Ltd v. Heller & Partners Ltd which established that negligent misrepresentation can result in liability if a duty of care exists.
3. Innocent misrepresentation: This occurs when a false statement is made without fault. The misled party can rescind the contract but not claim damages unless it results in a loss.

DURESS

Duress involves coercion or threats to force someone into a contract. Duress renders a contract voidable, allowing the victim to rescind the contract. See section 15 of the Nigerian Contract Act 1872 which states that consent is not free when it is obtained by coercion and the case of Union Bank of Nigeria Ltd v. Ozigi (1994) 3 NWLR (Pt. 333) 385 where the court recognized that a contract signed under duress could be voided. To constitute duress, the following elements must be present:

1. Threat of harm: this is where there must be a threat of physical, economic, or psychological harm.
2. Lack of free will: this is where the victim must lack free will due to the threat.
3. Inducement: this is where the threat must induce the contract.

ILLEGALITY

An illegal contract is one that involves actions prohibited by law. Contracts involving illegality are void and unenforceable. See section 23 of the Nigerian Contract Act 1872 which declares agreements void if their object or consideration is unlawful and the case of Eromosele v. Ehiorobo (1993) 8 NWLR (Pt. 310) 365 where the court held that a contract with an illegal purpose is void and unenforceable. Illegality can arise in various forms:

1. Statutory illegality: this is when the contract involves actions forbidden by statute.
2. Common law illegality: this is when the contract involves actions contrary to public policy or common law.

UNENFORCEABLE CONTRACT

An unenforceable contract is one that, while valid, cannot be enforced in a court of law due to certain technical reasons. This could be due to lack of written evidence (for contracts required to be in writing), expiration of the statute of limitations, or lack of capacity of one party. See section 4 of the Statute of Frauds 1677 (applicable in Nigeria through received English law) and it requires certain contracts to be in writing and signed to be enforceable and the case of Tobi v. Odogwu (1997) 7 NWLR (Pt. 514) 571 where the court held that a contract not evidenced in writing, as required by law, is unenforceable.

CONCLUSION

These notes provide a comprehensive overview of mistake, misrepresentation, duress, illegality, and unenforceable contracts, highlighting the key principles and relevant Nigerian cases and sections.