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CONTRACT OF SERVICE AT COMMON LAW VS IN STATUTORY FLAVOUR

Dictum

It is important to recognise the distinction between a contract of personal service and a contract of service. There is also the distinction between a contract of service at common law, and a contract with statutory favour. Whereas at common law a contract of personal service is determinable by the master at will without cause a contract of service is determinable by the master on reasonable notice or on the notice stipulated in the contract of the parties. A strict compliance with the statutory requirements for determination is required in contracts re-enforced by Statute or created by statute.

— A.G. Karibe-Whyte, JSC. Olaniyan & Ors. v. University of Lagos (1985) – SC.53/1985

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WHAT IS A FUNDAMENTAL TERM OF A CONTRACT

Niger Insurance Company Ltd v Abed Brothers Ltd & Anor (1976) LPELR-1995 (SC), thus:- “A fundamental term of a contract is a stipulation which the parties have agreed either expressly or by necessary implication or which the general law regards as a condition which goes to the root of the contract so that any breach of that term may at once and without further reference to the fact and circumstances be regarded by the innocent party as a fundamental breach and thus is conferred on him the alternative remedies at his option”.

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WHEN A CONTRACT OF SALE EXISTS

A contract of sale exists where there is a final and complete agreement of the parties on essential terms of the contract, namely the parties to the contract, the property to be sold, the consideration for the sale and the nature of the interest to be granted. Once there is agreement on these essential terms, a contract of sale of land or property is made and concluded. In a contract for sale of property, where part, payment was paid, the law is that the contract for purchase has been concluded and is final, leaving the payment of the balance outstanding to be paid, The contract for the sale and purchase is absolute and complete for which each party can be in breach for non-performance and for which an action can be maintained for specific performance.

— O.O. Adekeye, JSC. Mini Lodge v. Ngei (2009) – SC.231/2006

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FORMING A CONTRACT – MUTUAL ASSENT

The nature of the plaintiffs/appellants’ claim, as averred in their amended Statement of Claim, which of course they failed to prove, was that there was a subsisting contract between the parties. Whether or not there is a semblance of a legally binding agreement between the parties, that is, a situation where the parties to the contract confer rights and impose liabilities on themselves, will largely depend on whether there exists a mutual assent between them. Where there is doubt on whether the parties have concluded a legally binding agreement, the court has the responsibility to analyse the circumstances surrounding the alleged agreement and determine whether the traditional notion of ‘offer’ and “acceptance” can be distilled from the purported agreement. The mutual assent must be outwardly manifested. The test of the existence of such mutuality is objective. See Norwich Union Fire Insurance Society v Price (1943) AC 455 at 463. When there is mutual assent, the parties are said to be ad idem. Now the two items, “offer” and “acceptance”, earlier referred to, call for some explanation in order to recognise whether or not the parties are ad idem. An ‘offer’ is an expression of readiness to contract on the terms specified by the offeror (i.e. the person making the offer) which if accepted by the offeree (i.e. the person to whom the offer is made) will give rise to a binding contract. In other words, it is by acceptance that the offer is converted into a contract.

— Achike, JSC. Sparkling Breweries v Union Bank (SC 113/1996, 13 July 2001)

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DRAFTING MAJOR COMMERCIAL CONTRACTS INVOLVING A STATE

585. It was a complete imbalance in the contributions of the parties that enabled the GSPA to be in the form it was. Many reading this judgment will recognise that, although in the present case bribery and corruption were behind that imbalance, it happens in other cases without bribery and corruption but simply where experience, expertise or resources are grossly unequal. This underlines the importance of professional standards and ethics in the work of contract drafting, including in the approach to other parties to the proposed contract. It is why some contributions of pro bono work by leading law firms to support some states challenged for resources (this is not to say, one way or the other, that Nigeria is one of those) is so valuable, in the interests of their, often vulnerable, people. In the present case there were other contracts too, with different counterparties. Their terms and circumstances are not identical, but the overall risk could have been a multiple of the US$11 billion now involved in the present case.

— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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A DIVISIBLE CONTRACT

A divisible contract is separable into parts, so that separate parts of the agreed consideration may be assigned to severable parts of the performance. Such divisible agreements admit of pro rata payments for each portion that was performed, and is independent of performance of other parts of the contract.

— J.A. Fabiyi, JSC. BFI v. Bureau PE (2012) – SC.12/2008

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ILLEGALITY OF A CONTRACT VIS-À-VIS PLEADINGS

In Northern Salt Co. v. Electroytic Alkaki Co. (1914) A.C. 461, Viscount Haldane, L.C., stated this rule at page 469, thus: “My lords, it is no doubt true that where on the plaintiff’s case it appears to the court that the claim is illegal, and that it would be contrary to public policy to entertain it, the court may and ought to refuse to do so. But this must only be when either the agreement relied on is on the face of it illegal, or where, if facts relating to such an agreement are relied on, the plaintiff’s case has been completely presented. If the point has not been raised on the pleadings so as to warn the plaintiff to produce evidence which he may be able to bring forward rebutting any presumption of illegality which might be based on some isolated fact, then the court ought not to take a course which may easily lead to a miscarriage of justice. On the other hand, if the action really rests on a contract which on the face of it ought not to be enforced, then, as I have already said, the Court ought to dismiss the claim, irrespective of whether the pleadings of the defendant raise the question of illegality.”

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