UNIT 4

CONTRACT OF SALE OF LAND

A contract of sale of land is a legal agreement between two parties known as the vendor or seller and the purchaser or buyer for the transfer of ownership in land from the vendor to the purchaser. This contract, while generally governed by principles of contract law, has special considerations under Nigerian property law due to the nature and importance of land. It is essential for the contract to be in writing and meet certain legal requirements to be enforceable. Essential elements of a contract of sale of land includes the following:

1. Offer and acceptance: Like any other contract, the sale of land must begin with an offer by one party and an acceptance by the other. The vendor typically offers to sell the property, and the purchaser accepts the offer under agreed-upon terms. This can be done via written communication such as a letter of offer or a contract document.
2. Consideration(price): For a contract of sale of land to be valid, there must be consideration. The price, which is the consideration in a sale of land, must be definite and ascertainable. Without an agreed price, the contract may be void for uncertainty. See the case of Bojang v. National Investment & Properties Co. Ltd. (2000) 4 NWLR (Pt. 651) 493 where the court held that the price of land must be ascertainable to enforce the contract.
3. Capacity to contract: Both the vendor and purchaser must have the legal capacity to contract. Under Nigerian law, certain people, such as minors, persons of unsound mind, or those under duress, may not be able to enter into a binding contract. Additionally, the vendor must have a valid title to the land they intend to sell. This means the vendor must either be the owner or have legal authority to sell the land.
4. Formality(writing and signature): See section 4 of the statute of frauds 1677, which applies in Nigeria and provides that contracts for the sale of land must be in writing and signed by the parties or their authorized agents. Oral contracts for the sale of land are generally unenforceable unless some form of part performance can be proven, which acts to remove the transaction from the statute’s requirement of writing. See the case of Adedeji v. Oloso (2007) 5 NWLR (Pt. 1026) 133 where the court held that an enforceable contract for the sale of land must be evidenced in writing. This helps prevent fraud and establishes clear terms of agreement.
5. Description of the land: The contract must clearly describe the land in question. Ambiguity or uncertainty about the boundaries or identity of the land could invalidate the contract. Survey plans, site plans, and other documents may be used to provide this description. See the case of Ugo v. Obiekwe (1989) 1 NWLR (Pt. 99) 566 where the court stated that the description of the land must be specific and ascertainable.
6. Consent requirement under the land use act: Under the land use act of 1978, all land in urban areas is vested in the governor of the state, and any sale or transfer of such land requires the governor’s consent. Failure to obtain the governor’s consent makes the transaction null and void. See section 22 of the land use act and the case of Savannah Bank Ltd v. Ajilo (1989) 1 NWLR (Pt. 97) 305 where the supreme court of Nigeria held that failure to obtain the required consent under the land use act renders a purported transaction of sale of land invalid.

STAGES IN A CONTRACT OF SALE OF LAND

1. Pre-contract stage: At this stage, both parties negotiate the terms of the sale. The purchaser typically conducts a thorough investigation to ensure that the vendor has good title to the property. This investigation may involve verifying title documents and checking for encumbrances such as mortgages or liens.
2. Contract stage: Once the parties have agreed to the terms, the contract is drafted and signed by both parties. The contract outlines the purchase price, the description of the land, the completion date, and any special conditions. Upon execution, the purchaser may pay a deposit, often 10% of the purchase price, while the remainder is paid at completion.
3. Post-contract stage(completion): Completion occurs when the purchaser pays the full purchase price, and the vendor transfers ownership of the land. This usually involves the signing of a deed of assignment or conveyance, which officially transfers title to the purchaser. This document must be registered at the appropriate land registry under section 2 of the land instruments registration law to give notice to the public of the transfer.

REMEDIES FOR BREACH OF CONTRACT

1. Specific performance: Since land is considered unique, a common remedy for breach of contract in the sale of land is specific performance. This equitable remedy compels the defaulting party to perform their obligations under the contract. Specific performance is often granted where damages would be inadequate to compensate the purchaser. See the case of Owoniboys Technical Services Ltd v. Union Bank of Nigeria Ltd (2003) 9 NWLR (Pt. 825) 513 where the court is instructive on this point.
2. Damages: The innocent party may also seek damages for any losses suffered as a result of the breach. These damages are compensatory, aiming to restore the injured party to the position they would have been in if the contract had been performed.
3. Rescission: A party may also rescind, that is, cancel the contract where there has been a fundamental breach. This puts both parties back in their original positions as if the contract had never been made.

PART PERFORMANCE DOCTRINE

In some cases, where an oral agreement for the sale of land has been partly performed, the court may enforce the contract notwithstanding the statute of frauds requirement for writing. Acts such as taking possession of the land, making substantial improvements, or making payment of the purchase price may constitute part performance. See the case of Ude v. Nwara (1993) 2 NWLR (Pt. 278) 638 where the supreme court recognized the doctrine of part performance as a basis to enforce an otherwise unenforceable contract for the sale of land.

CONCLUSION

The contract of sale of land in Nigeria is a formal transaction that requires careful attention to statutory requirements and legal principles. Essential elements such as writing, price, capacity, and description of the land must be clearly satisfied to avoid disputes. Moreover, obtaining the necessary governor’s consent under the land use act is critical to ensuring the validity of the sale. The courts provide remedies such as specific performance and damages to address breaches of contract, ensuring that parties fulfill their obligations or are compensated for their losses.