CORAM

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Helen moronkeji ogunwumiju -Justice of the Supreme Court of Nigeria

Tijjani abubakar-Justice of the Supreme Court of Nigeria

Haruna simon tsammani-Justice of the Supreme Court of Nigeria

Habeeb adewale olumuyiwa abiru-Justice of the Supreme Court of Nigeria

Mohammed baba idris-Justice of the Supreme Court of Nigeria

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PARTIES

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1. COL. M. DIXON DIKIO (RTD)

2. MRS. H. A. UMAR

3. MR. MIKE IKENNA IBEH

4. ALHAJI SIKIRU USMAN

5. HON. TONY IBANA-ABASI ESU

6. DR. (MRs) AMINA SAMBO

7. MR. ERHABOR EMOKPAE

8. MRS. TOBERU K. LAWAL DADA

9. ALHAJI NUHU ABUBAKAR

10. MRS. C. ADELEKAN

11. ENGINEER AZU AZUIKE

12. HON. ABDULLAHI B. MOHAMMED

13. EMEKA ODUMEGWU OJUKWU

14. ALHAJI AUDIE MOHAMMED

APPELLANTS 

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1. NIGERIAN SOCIAL INSURANCE TRUST FUND MANAGEMENT BOARD

2. TRUST FUND PENSION PLC

3. PROFUND PROPERTIES LIMITED

RESPONDENTS 

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AREA(S) OF LAW

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CONTRACT LAW, PROPERTY LAW, LANDLORD AND TENANT LAW, OFFER AND ACCEPTANCE, INVITATION TO TREAT, RIGHT OF FIRST REFUSAL, ESTOPPEL, LEGITIMATE EXPECTATION, APPEAL, PRACTICE AND PROCEDURE, EVIDENCE LAW, TENANCY AGREEMENTS

 

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SUMMARY OF FACTS

The Appellants were tenants of properties owned by the first and second Respondents at the National Social Insurance Trust Fund (NSITF) Housing Estate, Gudu District, Apo, Abuja, while the third Respondent was the authorized managing agent. The first and second Respondents became desirous of selling the houses in the Housing Estate and through their managing agent, Osita Okoli & Co, forwarded letters dated 20th June 2006 inviting the first to seventh and ninth to fourteenth Appellants to indicate interest in purchasing the houses they occupied. The letter stated that a prerequisite for consideration was timely payment of rent with no record of default in rent, service charge and other bills. The eighth Appellant was not formally a tenant and received no formal invitation.

The qualifying Appellants filled and returned forms expressing interest in purchasing their respective houses. The Respondents discovered that the first, fifth, tenth and eleventh Appellants had records of default in payment of service charge, rents and utilities, and consequently excluded them from further consideration. The Respondents then sent offer letters dated 26th September 2006 to the second, third, fourth, sixth, seventh, ninth, twelfth, thirteenth and fourteenth Appellants requesting initial payment of 20% of the offer price, with default resulting in forfeiture.

These Appellants requested a reduction of the initial payment from 20% to 10% and a more convenient payment plan. The Respondents agreed and sent revised offer letters dated 10th November 2006 requesting initial payment of 10% with the balance payable in two installments. However, the Appellants failed to make the required payments and instead requested clarification on delineation, demarcation, beaconing, plot numbers, and how to obtain certificates. The Respondents treated this as unwillingness to purchase, forfeited the offers, and sold the properties to other persons who met the terms.

The Appellants maintained they had conducted searches at the Lands Registry which raised issues requiring clarification, and argued that a binding contract existed following their expression of interest. Both the High Court and Court of Appeal dismissed their claims, finding no valid contract existed.

 

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HELD

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1.The appeal was dismissed as completely frivolous and vexatious and devoid of any merit.

2.The Court held that the letters of expression of interest dated 20th June 2006 constituted an invitation to treat and not an offer capable of acceptance.

3.The Court found that no valid contract existed between the parties as the Appellants either failed to meet the conditions precedent or failed to accept the offers as made.

4.The Court rejected the Appellants’ claims of right of first refusal, finding no contractual or statutory basis for such right.

5.The Court held that the actions of some Appellants in requesting clarifications instead of accepting the offers as made constituted counter-offers which discharged the original offers.

6.The judgment of the Court of Appeal was affirmed and the Respondents were awarded costs of N2 Million each against the Appellants jointly and severally.

 

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ISSUES

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1.Whether the learned Justices of the Court below were right in affirming the decision of the trial Court that the letters of 22nd June 2006 from the Respondents to the Appellants were merely expression of interest by the Respondents to enter into negotiations with the Appellants and so was not an offer capable of being accepted?

2.Whether the learned Justices of the Court below were right when they held that the Appellants failed to meet up with the terms of the offer given to them by the Respondents when the case of the Appellants was that the offer made to them by the Respondents was inchoate?

3.Whether the decision of the Court below is not perverse in the circumstances of the case?

 

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RATIONES DECIDENDI

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DISTINCTION BETWEEN INVITATION TO TREAT AND OFFER – BASIC CONTRACTUAL PRINCIPLES

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“An invitation to treat is defined as a mere preliminary move in negotiations which may result into a contract. It is a communication to the other party to come to negotiations to discuss the possible terms of a contract. It is a phenomenon that is incapable of an acceptance that will lead to a contract. It is a forerunner to the formation of a valid contract which is usually ushered in by an offer. Being an initial contractual step, it is not amenable to acceptance by another party. It cannot form the basis of a cause of action.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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ELEMENTARY PRINCIPLES OF CONTRACT LAW – ACADEMIC FOUNDATION

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“This Court is without doubt that if the above reproduced contents of the letters are given to a well taught second year level university student of Law who has completed study of the first three topics in Law of Contract, he will surely, and assuredly, affirm that they constitute an invitation to treat and not an offer capable of acceptance and that the filing and the submission of the Acceptance Forms by the Appellants was merely an expression of their willingness to enter into negotiations over the terms for the sale of the houses.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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RIGHT OF FIRST REFUSAL – CONTRACTUAL OR STATUTORY BASIS REQUIRED

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“A right of first refusal is a contractual or statutory provision that gives a specific party the priority to purchase a property or investment before it is offered to anyone else. Essentially, if the owner of the property decides to sell, they must first offer it to the party holding the right of first refusal on the same terms such as price, etc. It is a mechanism in a contract or statute that affords the holder of such right the preference to buy a particular property, should the owner ever choose to sell it.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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EFFICACY OF UNSIGNED DOCUMENTS – LEGAL VALUE

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“It settled law, as a general rule, that an unsigned document does not have any efficacy in law. Such a document is worthless and commands no legal or judicial value. It is incapable of conferring any legal rights.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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EFFECT OF SALE TO THIRD PARTIES ON RIGHT OF FIRST REFUSAL

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“Going forward and even assuming that the Appellants did possess such a right of first refusal, the law is that it did not vest them any right or interest in the houses and the right evaporated, lapsed and ceased to exist once the houses were sold to other persons and it does not, and cannot, affect the validity of the sale of the houses.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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REQUIREMENTS FOR VALID ACCEPTANCE – UNQUALIFIED ASSENT

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“An acceptance is the reciprocal act or action of the offeree to an offer in which he indicates his agreement to the terms of the offer as conveyed to him by the offeror. By acceptance, the offeree indicates his intention and willingness to be bound by the terms of the offer. For the acceptance to be valid it must be unqualified. It must correspond with the offer. Acceptance is therefore the final and unqualified expression of assent to the terms of the offer.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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CONDITIONAL ACCEPTANCE AS COUNTER-OFFER – REJECTION OF ORIGINAL OFFER

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“In order to constitute an acceptance, the assent to the terms of an offer must be absolute and unqualified. If the acceptance is conditional, or any fresh term is introduced by the person to whom the offer is made, his expression of assent amounts to a counter-offer which in turn requires to be accepted by the person who made the original offer. For an acceptance to be operative it must be plain, unequivocal, unconditional and without variance of any sort between it and the offer.” – Per TOBI, JCA (as quoted by HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.)

 

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EFFECT OF COUNTER-OFFER ON ORIGINAL OFFER – DISCHARGE AND REPUDIATION

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“The doctrine of a counter-offer in a contract postulates an outright rejection of the original offer by the offeror to the offeree. It indeed destroys that offer, making it non-existent, as it were, and not capable, anymore, of any acceptance. It is, in fact, tantamount to a new offer, by the new offeror which may or may not be acceptable to the new offeree.” – Per GALADIMA, JSC (as quoted by HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.)

 

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EXPECTATIONS FROM SENIOR ADVOCATES – PROFESSIONAL RESPONSIBILITY

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“Part of the attendant responsibilities and expectations that should come with the conferment of the rank of Senior Advocate of Nigeria are that Counsel so conferred would leave the realm of the lawyers that engage the scarce judicial time of the Courts with mundane and humdrum cases that require only restatements of elementary legal principles to dispense with, and that cases coming to Court from the Chambers of such Counsel would be one that would excite and challenge existing legal principles and seek to create new jurisprudence.” – Per HABEEB ADEWALE OLUMUYIWA ABIRU, J.S.C.

 

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ESSENTIAL INGREDIENTS OF VALID CONTRACT – CONJUNCTIVE REQUIREMENTS

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“There are five ingredients that must be present in a valid contract. They are offer, acceptance, consideration, intention to create legal relationship and capacity to contract. All these five ingredients are essential, and a valid contract cannot be formed if any of them is absent.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

 

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INVITATION TO TREAT VERSUS OFFER – LEGAL DISTINCTION

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“An invitation to treat is merely a communication by which a party is invited to make an offer. It is therefore different from an offer mainly on the ground that it is made with the intention that it will create a binding relationship as soon as the person to whom it is addressed responds to the invitation… The said procurement, filling and return of the forms… does not unfortunately create any legal relationship or a binding contract between the parties.” – Per this Court in PROFESSOR ANGO ABDULLAHI & ORS VS. MALLAM NASIR EL-RUFFAI & ORS (as quoted by MOHAMMED BABA IDRIS, J.S.C.)

 

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REQUIREMENTS FOR VALID OFFER – SPECIFICITY AND CLARITY

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“A valid offer in contract law must be specific, clear and unambiguous, containing precise terms that leave no room for speculation. It must include a definite promise to be bound, contingent on the acceptance of specified terms. Once accepted, it creates a binding legal obligation.” – Per MOHAMMED BABA IDRIS, J.S.C.

 

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QUALIFIED ACCEPTANCE AS COUNTER-OFFER – LEGAL CONSEQUENCES

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“In law, once an offer is qualified or conditioned, it ceases to be an acceptance and instead constitutes a counter-offer. A valid acceptance must be unconditional, as any addition, subtraction or modification of the terms of the original offer constitutes a counter-offer which legally amounts to a rejection of the initial offer.” – Per MOHAMMED BABA IDRIS, J.S.C.

 

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CASES CITED

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STATUTES REFERRED TO

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Nigerian Social Insurance Trust Fund Act Cap N88 LFN 2004

 

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