CORAM

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PARTIES

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GODWIN GEORGE (JP)

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ABAK LOCAL GOVERNMENT

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AREA(S) OF LAW

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Not Available

 

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SUMMARY OF FACTS

The Appellant sued the Respondents in the High Court of Justice, Akwa Ibom State, sitting at Abak via a writ of Summons, claiming for a declaration the Respondent was in breach of the contract with the Appellant; perpetual injunction retraining the Defendants from closing the private motor park opened by the Plaintiff on the authority of the 1st Defendant; N100,000,000.00 (One Hundred Million naira) being general damages for the unlawful act of breach of contract by the Defendants and cost of the action. The court below dismissed the claim of the Appellant and entered judgment for the Respondents. Dissatisfied with the decision, the Appellant has lodged an appeal before this court.

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HELD

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Appeal Allowed

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ISSUES

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Whether having regards to the State of pleadings and the Evidence adduced, the Learned Trial Judge was wrong to have dismissed the Suit of the Appellants?

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RATIONES DECIDENDI

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CONTRACT – DEFINITION OF A CONTRACT

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“A contract was defined in the case of Best (Nig.) Ltd. Vs. Blackwood Hodge Nig. Ltd. & Anor. (2011) LPELR-776 where the apex court held:
“A contract may be defined as a legally binding agreement between two or more persons by which rights are acquired by one party in return for acts or forbearances on the part of the other. In effect a contract is a bilateral affair which needs the ad idem of the parties, therefore where the parties are not ad idem, the Court will find as a matter of law that an agreement or contract was not duly made between the parties. Odutola vs. Papersack (Nigeria) Limited (2006) 18 NWLR Pt. 1012 pg.470. Olowofoyeku vs. A G Oyo State (1990) 2 NWLR Pt. 132 pg. 369 Oreint Bank (Nigeria) Plc. vs. Bilante International Limited (1997) 8 NWLR Pt. 515 pg. 37 Societe General Bank (Nigeria) vs. Safa Steel and Chemical Manufacturing Limited (1998) 5 NWLR Pt. 548 pg. 168.” –

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CONTRACT- ESSENTIAL ELEMENTS OF A VALID CONTRACT

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“The most important element in a contract is consideration as held in the case of Chabasaya Vs. Anwasi (2010) LPLER-839(SC) as follows:
“The court below stated the elements of a valid contract which are, offer, acceptance, consideration and an intention to enter into legal relations. That for a simple contract to be binding there must be consideration which must move from the promise.”
For a more detailed explanation see A.G. Gombe State Vs. Gadzama (2014) LPELR-23423(CA) wherein the Court said:
“At this juncture, I think, it is pertinent to know what is an enforceable contractual relationship in law. In FIC Construction Ltd. v. NDIC (2013) 13 NWLR Pt.1371 p.390 @ 406 – 407, it has been enunciated that a contract is an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law. It is a promise or a set of promises the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Parties must reach a consensus “ad idem” for a contract to be regarded as binding and enforceable. The two or more minds of the parties must meet at the same point, event or incident. Where they say different things at different times, they are not ad idem and no valid contract is formed. The meeting of the minds of the contracting parties is the most crucial and overriding factor or determinant in the law of contract. Furthermore, in Best (Nig.) Ltd. vs. BH (Nig.) Ltd. (2011) 5 NWLR Pt.1329 P.95 @ 127, the Supreme Court defined a contractual relationship to mean a legally binding agreement between two or more persons by which rights are acquired by one party in return for acts or forbearances on the part of the other. It is a bilateral affair which requires the ‘ad idem’ of the parties. See Odutola vs. Papersack (Nig.) Ltd. (2006) 18 NWLR Pt.1012 P.470; Orient Bank (Nig.) Plc. vs. Bilante Int’l Ltd. (1997) 8 NWLR Pt.515 P.37 and S.G.B. (Nig.) Ltd. vs. Safa Steel and Chemical Manufacturing Ltd. (1998) 5 NWLR Pt.548 P.168.” –

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ELEMENTS OF A CONTRACT – FACTORS TO CONSIDER IN DETERMINING THE ENFORCEABILITY OF A CONTRACT

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“It is elementary to state that there are three basic essentials to the formulation of a contract. These are: (a) agreement; (b) Contractual intention; and (c) Consideration. The normal test for determining whether the parties have reached an agreement is to determine whether an offer has been made by one party and accepted by the other. In considering whether an enforceable contract has been formed or entered into, there are certain factors to be considered. In Amena Suits Hotels Ltd. vs. PDP (2007) 6 NWLR Pt.1031 P.453 @ 476 it was held by the Court that for a contract to be validly formed or entered into there must be: (i) offer (ii) Acceptance (iii) Consideration (iv) Intention to create legal relationship, and (v) Capacity to enter into contract. All the five (5) elements or ingredients enumerated supra must be satisfied before there can be a valid contract in law. A contract cannot be legally entered into if any of these elements or ingredients is not satisfied or fulfilled. See Amena Suits Hotels Ltd. vs. PDP (2007) 6 NWLR Pt.1031 P. 453 @ 476; Okubule vs. Oyegbola (1990) 4 NWLR Pt.147 P.723 and PTF vs. Uwamu (2001) 5 NWLR Pt.705 P.112. The formation of contract is therefore governed by the making of an offer by the offeror and the acceptance of it by the offeree. The offer and the acceptance constitute an agreement of the two parties as “consensus ad idem”, that is, the intention of both parties are same. Therefore, for a contract to be valid in law, there must be an offer and an acceptance. An acceptance of an offer may be in writing, by conduct or by other means agreed to or acceptable to the parties. See Johnson Wax (Nig.) Ltd. vs. Sanni (2010) 3 NWLR Pt. 2010 P. 235 @ 245. In Neka B. B. B. Manufacturing Co. Ltd. vs. ACB Ltd. (2004) NWLR Pt. 858 P. 521 @ 554, the Supreme Court held that:-
“It is trite law that for a contract to exist there must be an offer and an unqualified acceptance of the offer and a legal consideration. Indeed, there must be mutuality of purpose and intention. The two contracting parties must agree. In other words, there must be an offer and an acceptance.” In Johnson Wax (Nig.) Ltd. vs. Sanni (2010) 3 NWLR Pt.1181 P.235 @ 245, this Court, per DONG-BAN-MENSEM, J.C.A.; had this to say. ”It is trite law that the formation of contract is not governed by rigid but flexible rules, namely, that there must be a definite offer by the offeree and been communicated to the other party called the offeree who accepts the offer unless the offeror, the first party, dispenses with such communication.”
In other words, a contract is formed once there is an offer by the offeror to the offeree which is accepted by the offeree backed by consideration. At that point in time, the parties to the contract are said to be ad idem or in agreement and that agreement or contract is binding on both parties and is enforceable by action. It has been held in the case of Yaro vs. Arewa Const. Ltd. (2007) 17 NWLR Pt.1063 P.333 @ 377 that an agreement or a contract is formed where there exist: (a) an offer; (b) an acceptance; (c) consideration (d) capacity to enter into contract and (e) intention to create legal relationship. –

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CONSTRUCTION OF A CONTRACTUAL DOCUMENT – WHETHER PARTIES OR THE COURT CAN IMPORT INTO A CONTRACTUAL DOCUMENT WHAT IS NOT IN IT

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“No party or the Court can read into a contract document what is not in it, see The Northern Assurance Co. Ltd. Vs. Wuraola (1969) LPELR-25562(SC) which held thus:
“It is trite law that in the construction of documents the primary rule is that effect should be given to the literal contents in their ordinary way as they appear on the documents and that anything which does not appear ex facie on such documents should NOT be imported into them.”-

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BREACH OF CONTRACT – WHAT CONSTITUTES A BREACH OF CONTRACT?

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“A breach of contract was restated in Adedeji Vs. Obajim (2018) LPLER- 44369 (SC) thus:
“Suffice to say, that when a party to a contract fails, neglects, or refuses without a lawful reason or excuse to perform the obligation he undertook under the contract, or when such a party performs the obligation defectively or makes it impossible for himself to perform the contract, a contract has been breached. Please see: Best Nigeria Ltd. Vs. Blackwood Hodge (Nigeria) Ltd. & Ors. (2011) 5 NWLR (Pt. 1239) 95 where this Court held per Fabiyi JSC (as he then was) that:- “There is no gain-saying the point that a breach of contract is committed when a party to the contract without lawful excuse fails, neglects or refuses to perform an obligation he undertook in the contract or incapacitates himself from performing same or in a way back down from carrying out a material term.” See also Adeoti & Anor Vs. Ayorinde & Anor (2001) 6 NWLR (pt.703) 336.”Per BAGE, J. S. C. –

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BREACH OF CONTRACT – GUIDING PRINCIPLES ON THE AWARD OF DAMAGES IN A BREACH OF CONTRACT

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“Indeed, any party to a contract can bring an end a contract but that must be done lawfully and not unilaterally as was done in this case. The right of a party to repudiate a contract is not at the whims and caprices of such a party. If no condition is stated in the contract, a reasonable period of Notice is given to give the other party the opportunity to wind up its services to avoid losses. The Respondents gave 7 days when the payment made was still subsisting and unexhausted. They did not offer to refund nor compensate in damages. They are liable for breach of contracts for which damages is the only remedy. In the case of Cameroon Airline Vs. Otutuizu (2011) LPELR-827(SC) the apex Court restated the principle of awarding damages in breach of contract thus:
“A breach of contract means that the party in breach has acted contrary to the terms of the contract in the instant case by performing a contract negligently and not in accordance with its terms. Pan Bisbilder (Nigeria) Ltd. vs. First Bank of Nigeria Ltd. (2000) 1 SC 71. In awarding damages in an action founded on breach of contract, the rule to be applied is restitution in integrum that is, in so far as the damages are not too remote, the plaintiff shall be restored as far as money can do it, to the position in which he would have been if the breach had not occurred. Okongwu vs. N.N.P.C. (1989) 4 NWLR Pt. 115 Pg. 296. Oshin & Oshin Ltd. vs. Livestock Feed Ltd. (1997) 2 NWLR pt.486 pg.162. Udeagu vs. Benue cement co. Plc. (2006) 2 NWLR pt.965 pg.600.” Per ADEKEYE ,J.S.C
Where the claimant has difficulty in proving special damages in a breach of contract, he can claim in general damages as held in several cases, see SPDC (NIG) Ltd. Vs. Okonedo (2008) 9 NWLR (Pt. 1091) 85 @ 123 – 124 which held:
“…it is a settled law, that where a claimant has some difficulty in proving special damages, he may claim general damages for breach of contract, et al, as in the instant case. See International Messengers Nig. Ltd. Vs. Towose (2004) 11 NWLR (Pt. 884) 272 @ 288 paragraphs C – E; Kusfav Vs. UBC Ltd. (1994) 4 NWLR (Pt. 336) 1; Oyo State Vs. Fair Lakes Hotel Ltd. (NO.2) (1989) 5 NWLR (Pt. 121) 255; –

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BREACH OF CONTRACT – PRINCIPLES IN ASSESSING DAMAGES IN A BREACH OF CONTRACT

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“Upon the finding of a breach, the sole issue of the Appellants is meritorious. The court shall proceed to assess damages; the principle of assessing damages has been restated in Agu Vs. General Oil Ltd. (2015) LPELR-24613(SC) as follows:
“It is now well settled that in a claim for damages for breach of contract, as in the instant case, the court is concerned only with damages which are natural and probable consequences of the breach or damages within the contemplation of the parties at the time of the contract. See Mobil Oil Nig. Ltd v. Akinfosile (1969) 1 NMLR 227, Arisons Trading & Engineering Company Ltd. vs. The Military Governor of Ogun State (2009) 15 NWLR (Pt. 1163) 26.” Per OKORO, J.S.C.-

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CASES CITED

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Not Available

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STATUTES REFERRED TO

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Constitution of the Federal Republic of Nigeria, 1999 (as amended)|Evidence Act, 2011|

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