1. Contracts: Nature and Terminology ‘Níyì Àbe © Contracts: Nature and Terminology ‘Níyì Àbe ©

2. Learning objectives At the end of this class you should understand: how to define contracts according to validity, performance and formation how contracts can be classified how to distinguish formal contracts from simple contracts the essential elements required to make a valid contract. what is meant by an intention to create a legal relationship and how this is determined by the law the distinction between an offer and an invitation to treat

3. Learning objectives (contd) rules with respect to offer and acceptance including the postal acceptance rule the meaning of ‘consideration’ and the consequence for a contract lacking consideration the rules regarding consideration how a contract lacking consideration may be enforceable if placed in a particular form the requirements of contracts required to be in writing and those required to be evidenced in writing.

4. Instructors Níyì Àbe (08036288636, o.abe@abuad.edu.ng)o.abe@abuad.edu.ng Ngozi Odiaka (07060583934, ngodiaka@abuad.edu.ng ) ngodiaka@abuad.edu.ng Tina Clark (07061648378, tobotina@yahoo.com ) tobotina@yahoo.com

5. What is a Promise? What is a contract?

6. Introduction Promise is a declaration that something will or will not happen in the future. What is a Contract? Contract is an agreement (based on a promise) that can be enforced in court.

7. 1: Function of Contract Law Designed to provide stability and predictability, as well as certainty, for both, buyers and sellers in the marketplace. Necessary to ensure compliance with a promise or to entitle the innocent party to some form of relief. Designed to provide stability and predictability, as well as certainty, for both, buyers and sellers in the marketplace. Necessary to ensure compliance with a promise or to entitle the innocent party to some form of relief.

8. 2: Definition of a Contract A contract is a: promise or set of promises, for breach of which, the law provides a remedy, or the performance of which the law in some way recognizes as a duty. A contract is a: promise or set of promises, for breach of which, the law provides a remedy, or the performance of which the law in some way recognizes as a duty.

9. What are elements of a contract?

10. 3: Elements of a Contract Agreement (Offer and Acceptance). Consideration. Contractual Capacity. Defense: Legality. Genuineness of assent. Form. Agreement (Offer and Acceptance). Consideration. Contractual Capacity. Defense: Legality. Genuineness of assent. Form.

11. 4: Types of Contracts Bilateral v. Unilateral. Bilateral - Offeree must only promise to perform (“promise for a promise”). Thus it is an exchange of mutual promises. Unilateral - Offeree can accept the offer only by completing the contract performance (“promise for an act”). Irrevocable: Offer cannot be revoked once performance has begun. Carbolic Smoke Ball Co., [1893] 1 Q.B, 256 Other cases?? Bilateral v. Unilateral. Bilateral - Offeree must only promise to perform (“promise for a promise”). Thus it is an exchange of mutual promises. Unilateral - Offeree can accept the offer only by completing the contract performance (“promise for an act”). Irrevocable: Offer cannot be revoked once performance has begun. Carbolic Smoke Ball Co., [1893] 1 Q.B, 256 Other cases??

12. Types of Contracts Express v. Implied In Fact. Express: Words (oral or written). terms of the contract are clearly stated. Implied: Conduct creates and defines the terms of the contract. Courts will look at the conduct of the parties rather than their words or correspondence. (See Brogden v. Metropolitan Railway Co., (1877) 2 A.C. 666) Requirements: Plt furnished good or service Plt. expected to be paid Def. had chance to reject and did not. Attn. Gen. Kaduna State & ors v. Victor Bassey Atta & ors [1986] 4 NWLR, (Pt. 38), 785. CA. Express v. Implied In Fact. Express: Words (oral or written). terms of the contract are clearly stated. Implied: Conduct creates and defines the terms of the contract. Courts will look at the conduct of the parties rather than their words or correspondence. (See Brogden v. Metropolitan Railway Co., (1877) 2 A.C. 666) Requirements: Plt furnished good or service Plt. expected to be paid Def. had chance to reject and did not. Attn. Gen. Kaduna State & ors v. Victor Bassey Atta & ors [1986] 4 NWLR, (Pt. 38), 785. CA.

13. Types of Contracts [3] Quasi Contracts - Implied in law. Fictional contracts created by courts. Imposed on parties for the interest of fairness and justice. Equitable remedies. Quantum Meruit. Quasi Contracts - Implied in law. Fictional contracts created by courts. Imposed on parties for the interest of fairness and justice. Equitable remedies. Quantum Meruit.

14. Types of Contracts [4] Formal v. Informal. Executed v. Executory. Executed - A contract that has been fully performed on both sides. Executory - A contract that has not been fully performed on either side. Formal v. Informal. Executed v. Executory. Executed - A contract that has been fully performed on both sides. Executory - A contract that has not been fully performed on either side.

15. Types of Contracts [5] Formal Contract made by deed(contract under seal). Simple Contracts May be in writing or by parole. Only a party who has furnished consideration can bring an action to enforce simple contract. Formal Contract made by deed(contract under seal). Simple Contracts May be in writing or by parole. Only a party who has furnished consideration can bring an action to enforce simple contract.

16. Format FORMAL Written Does not require consideration passing in both directions. SIMPLE Verbal, written, implied Consideration must pass in both directions Contract of record Contracts under seal (deeds)

17. Valid contract (cont.) Intention to create Legality legal relations of object Terms: express/implied Offer Form Acceptance Conditions Warranties Consideration Exclusionary clauses Reality of Capacity of consent parties

18. Classifications of contracts Classifications Validity Performance Formation

19. Validity ValidVoidVoidableUnenforceableIllegal All essential elements present, therefore law will enforce on behalf of either party No legal effect Entitled to be rescinded by innocent party Essential elements present but technicality prevented from being enforced Purpose or object of contract is illegal

20. voidable An agreement which is enforceable by law at the option of one party but not at the option of the other or others is a voidable contract. The party whose consent is not free may either rescind (avoid or repudiate) the contract, if he so desires, or elect to be bound by it. A voidable contract continues to be valid till it is avoided by the party entitled to do so. For example: A promises to sell his car to B for N3million. A’s consent is obtained by use of force. The contract is voidable at the option of A. He may avoid the contract or elect to be bound by it.

21. Void An agreement not enforceable by law is said to be void. Such include an agreement with a minor or an agreement without consideration. A contract which ceases to be enforceable by law is a void contract. E.g., A contract to import goods becomes void, when war breaks out between the countries.

22. Illegal An illegal agreement is one which transgresses the public policy or which is criminal in nature or which is immoral. E g.,An agreement to import prohibited goods. All illegal agreements are void but all void agreements are not necessarily illegal. An illegal agreement is not only void as between the parties but has this further effect that even the collateral transactions to it become tainted with illegality. A collateral transaction is one which is subsidiary, incidental or auxiliary to the principal or original contract.

23. Unenforceable An unenforceable Contract is one which cannot be enforced in a Court of law because of some technical defect such as absence of writing or where the remedy has been barred by lapse of time. The contract may be carried out by the parties concerned; but in the event of breach or repudiation of such a contract, the aggrieved party will not be entitled to the legal remedies.

24. Performance Executed Executory Both parties have Performed their respective Obligations. Bilateral vs. Unilateral Both parties have obligations to perform

25. Formation Express Implied Quasi w Written Spoken Dependent on associated conduct By operation of law

26. Cases!!! Over a cup of coffee at ABUAD Int’l Restaurant, Uzor invites Pelumi for dinner at his self-contained apartment inside ABUAD hostel on Sunday as a way of happily ending the matriculation ceremonies. To look nice, Pelumi hires a very expensive gown and hires a taxi/friends car. Pelumi gets to Uzor’s apartment at the appointed time, however, for reasons best known to him, Uzor fails to perform his promise. Can Pelumi recover any damage …???

27. See: Nwankwo v. Nwankwo Balfour V. Balfour [1919] a husband on leaving England for Ceylon agreed to give his wife in England, some ₤ 30 per month but defaulted. The wife sued unsuccessfully because such agreement was social in nature and not legally enforceable. Held, agreement such as these were outside the realm of contract altogether.

28. Case 2 (a)John engages Queen for a certain work and promises to pay such remuneration as shall be fixed by David. Queen does the work. (b) Joshua and Mary promise to marry each other. (c)Joshua takes a seat in public vehicle.

29. ( a) There is a contract between John and Queen and John is bound to pay the remuneration as shall be fixed by David. If David does not fix, or refuses to fix the remuneration, John is bound to pay a reasonable remuneration. (b) There is a contract between Joshua and Mary. (c)There is a contract.

30. Case 3 Tofunmi forced Maryjane to enter in to a contract with a pistol aimed at her head. What remedy is available to Maryjane, if she does not want to be bound by the contract..??

31. Maryjane can repudiate the contract as her consent is not free.

32. Joshua orally offered to pay Gbenga, an auto mechanic, N3,000 for testing a used car which Joshua was about to purchase from Wisdom. Gbenga agreed and tested the car. Joshua paid Gbenga N3, 000 in cash for his services. Is the agreement between ‘Joshua’ and ‘Gbenga’, (a) express or implied, …..??? (b) executed or executory, … ??? (c) Valid,void, voidable or unenforceable … ???

33. The agreement is, (a) express, (b)executed, and (c) valid.

34. Dotun promises to pay Onyinye N50,000, if Onyinye beats Austin. Onyinye actually beats Austin but Dotun refuses to pay. Can Onyinye recover the amount.. ???

35. No as the agreement is illegal.