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WHEN TERMS OF CONTRACT ARE CLEAR, INTERPRETATION IS NEGLIGIBLE

Dictum

In the construction of a contract, the meaning to be placed on it is that which is the plain, clear and obvious result of the terms used. A contract or document is to be construed in its ordinary meaning, When the language of a contract is not only plain but admits of one meaning, the task of interpretation is negligible. See: Union Bank of Nig. Ltd & Anr Vs Nwaokolo (1995) 6 NWLR (Pt. 400) 127: Aouad & Anor Vs Kessrawani (1956) 1 FSC 35: Nwanowu Vs Nzekwu & Anor (19571 3 FSC 36: Orient Bank (Nig) Plc Vs Bilante Int. Ltd (19971 8 NWLR (Pt. 515) 37 @ 78 B-D.

— K.M.O. Kekere-Ekun JSC. B.O. Lewis v. United Bank for Africa Plc. (SC.143/2006, 14 January 2016)

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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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WHERE CONTRACT IS MADE SUBJECT TO CONDITION PRECEDENT

It is noteworthy that a contract of sale of the nature is guided by the basic rules of contract. Where a contract is made subject to the fulfillment of certain specific terms and conditions the contract is not formed and not binding unless and until those terms and conditions are complied with or fulfilled. Tsokwa Oil Marketing Co. v. B. O. N. Limited (2002) 11 NWLR Pt.777 pg.163.

— Adekeye, JSC. Best Ltd. v. Blackwood Hodge (2011) – SC

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SUCCEEDING IN BREACH OF CONTRACT

In BEST NIGERIA LTD. v. BLACKWOOD HODGE NIGERIA LTD. (2011) LPELR-776(SC) (P.42, Paras.D-E) Per Adekeye, J.S.C. thus: “For a claimant to succeed in an action for breach of contract, he must establish not only that there was a breach but also that there was in existence an enforceable contract which was breached.”

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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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PLEADED OR NOT, COURT WILL NOT CLOSE ITS EYES TO ILLEGAL CONTRACT

The attitude of the Courts to the issue of apparent or ex-facie illegality is certainly well settled. When a contract is ex-facie illegal, whether the alleged illegality has been pleaded or not, the Court would not close its eyes against illegality, as it is the duty of every Court to refuse to enforce such a transaction. In other words once illegality has been brought to the attention of the Court, it must be considered and resolved. See Gedge v. Royal Exchange Assurance Corporation (1900) 2 Q.B. 214 at 220; Akagbue and Ors. v. Romaine (1982) 5 S.C. 133; Nasr v. Berini (Betrut-riyad (Nigeria) Bank Ltd. (1968) 1 All N.L.R. 274 and Sodipo v. Lemminkainen (1986) 1 N.W.L.R. (Pt. 15) 220.

— Mohammed, JSC. Fasel v NPA (2009) – SC.88/2003

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WHAT IS BREACH OF CONTRACT?

Breach of contract arises in a situation wherein a party to an agreement, fails to perform his own obligations, thereby causing damages to the other party or parties to the agreement, who have taken certain steps on the basis of the agreement. In order to prove breach of contract, the party asserting must clearly show what actions or omissions the defaulting party is guilty of that constitutes the breach.

– Tukur JCA. Odulate v. FBN (2019)

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