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When it cannot be said that a party has suffered unfair business practice in negotiation of a contract


United Bank for Africa v. Gemex International Limited

CITATION: (2020) LPELR-50977 (CA)

In the Court of Appeal
In the Enugu Judicial Division
Holden at Enugu


Suit No: CA/E/115/2018

Before Their Lordships:
Justice, Court of Appeal
Justice, Court of Appeal
Justice, Court of Appeal


– Appellant(s)



– Respondent(s)


The Respondent as Plaintiff instituted the suit at the High Court of Enugu State claiming among others, damages arising from the grossly negligent acts of the Appellant to the Respondent to the effect that it will fund the Respondent’s Awka Residential Estate project.

The Respondent’s case was that the Appellant and the Respondent had series of discussions which culminated in an agreement by the Appellant to grant a 50 Million Naira project finance loan to the Respondent to facilitate the execution of its housing project in Awka, Anambra State. The Respondent satisfied all the terms and conditions stipulated by the Appellant but the Appellant failed to honour its own contractual obligation, which failure made the Respondent suffer losses and damages.

The Appellant admitted that there was a business discussion for a grant of N50 Million facility to enable the Respondent to continue its building project but denied that there was a contract because the Respondent did not fulfill the conditions given by the Appellant for the grant of the facility. The Appellant stated that the discussion was still ongoing and had not been consummated when the Respondent took out the instant suit.


In a considered judgment, the High Court entered judgment in favour of the Respondent. Being dissatisfied with the judgment, the Appellant appealed to the Court of Appeal.

Issues for Determination
The Court of Appeal determined the appeal on the following issues:
1. Whether the Court below erred in law when it held that there was a valid contract implied by law between the Appellant and the Respondent for a grant of N50, 000,000 loans.

2. Whether the Court below erred in law when it entered judgment and awarded damages in favour of the Respondent.

Appellant’s Submissions
On issue 1, Appellant’s Counsel submitted that the findings of the High Court that there was an agreement between the parties for a grant of N50, 000,000 loans and that the Respondent performed its own side of the contract are not borne out of the evidence on record and the wrong findings led to a miscarriage of justice. He further submitted that until an offer is unequivocally accepted, no binding contract has been made, citing BIOKU INV. PPTY LTD. V. LIGHT MACHINE INDUSTRY LTD. (1986) 5 NWLR (PT. 39). P.T.I V. UWAMU (2001) 5 NWLR (PT.705) 112. Counsel argued that the finding of the High Court that there was an implied contract connotes that there was no agreement by the parties by consent and inference of implied contract was not the case of the parties.


On issue 2, Appellant’s Counsel submitted that the Respondent’s claim did not include any of the declarations made by the Court below and the Court is not allowed to make a case for any of the parties or grant to a party any claim different from the claim before the court. He referred to IKEANYI V. A.C.B LTD. (1997) 2 NWLR (PT.489) 509. On the award of damages, Appellant’s Counsel submitted that the claim for special damages was not strictly proved as required by law and the Court was wrong in relying on the Respondent’s statement of account which was merely dumped on the Court without any reference to it. Citing ALAO V. AKANO (2005) 11 NWLR (PT. 935) 160 AT 178.

Respondent’s Submissions
In response to Appellant’s arguments on issue 1, Respondent’s Counsel submitted that on the evidence before the Court, the Respondent proved that there was a contract between it and the Appellant and that the Respondent fulfilled its own part of the contract but the Appellant did not.

In response to Appellant’s arguments on issue 2, Counsel for the Respondent submitted that the disappearance of all the documents sent to the Appellant on ten occasions is a mark of gross negligence, the extent of frustration caused to the plaintiff, and a sign of irresponsibility. He submitted further that the Respondent suffered monetary losses from the bank charges on the deposits in the Respondent’s account made for the sole purpose of facilitating the housing project to the tune of N50 million. Counsel finally submitted that an appellate Court can only interfere with an award of general damages if it is made on the wrong principle of law or the amount is so high or so low as to make it an entirely erroneous estimate.


Resolution of the issues
In resolving issue 1, the Court stated the position of the law as espoused in EAGLE SUPER PACK NIG. LTD. V. A.C.B. (2006) LPELR-980 (SC) AT 27-28 (G-B) that where a plaintiff who brings an action in tort is driven to rely on a contract to sustain his suit, the action must be seen as an action in contract. In the instant case, the Respondent’s claim which is based on the alleged agreement of the Appellant to grant a loan of 50 Million Naira to the Respondent and breach of same is one in the contract. Therefore, the Respondent had the onus to lead cogent and credible evidence to establish all the elements of a valid contract, which are a definite offer, unqualified acceptance, and consideration. See OMEGA BANK (NIG) PLC V. O.B.C. LTD. (2005) LPELR-2636 (SC) AT 40 (D-E) and ABBA V. S.P.D.C.NIG.LTD (2013) LPELR-20338(SC) AT 32-33 (G-D).

The Court then considered the record of appeal to determine whether all the elements of a valid contract were established by the Respondent. According to the pleadings of the parties, one of the conditions for the grant of the loan was that the Respondent would deposit its title documents with the Appellant which the Respondent failed to prove was complied with. The Respondent also failed to lead evidence to show that other conditions for the grant of the loan, apart from a guarantee for payment by a reputable bank, were complied with. On this, the Court held that the law is settled that 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. See BPS CONSTRUCTION & ENGINEERING CO. LTD. V. FCDA (2017) LPELR-42516 (SC) AT 40-41 (F-B) and ATIBA IYALAMU SAVINGS & LOANS LTD. V. SUBERU & ANOR. (2018) LPELR- 44069(SC) AT 19 (B-C). The Respondent thus having failed to establish by cogent evidence that the conditions for the grant of the loan were complied with, the High Court seriously erred both on the facts and in law when it held that the Respondent had performed its own side of the contract.

On the finding of the High Court that there was an implied contract between the parties, the Court held that there cannot be an implied agreement or contract where a party fails, refuses or neglects to comply with a term of a written agreement. The Appellant clearly set out in a written agreement the conditions on which it may grant the request of the Respondent for a 50Million naira loan. Where parties have agreed on the terms and conditions of their contract and reduced them into writing, the contract document must be the guide for determining any question or dispute, which arises in respect of the contract. See ONYKWELU V. ELF PETROLEUM (NIG) LTD. (2009) LPELR-2733 (SC), B.F.I. GROUP CORPORATION V. B.P.E. (2012) LPELR-9339 (SC) AT 23-24(C-A).


In resolving issue 2, the Court stated the position of the law that parties and the Court are bound by the pleadings and the Court must confine itself to the issues joined by the parties in their pleadings. See FAGBENRO V. AROBADI & ORS (2006) LPELR-1227 (SC) AT 10 (A-E), OMOKUWAJO V. FRN (2013) LPELR-20184 (SC) AT 30-31(C-A) and KAYILI V. YILBUK & ORS. (2015) LPELR-24323 (SC) AT 52 (A-F). Applying the foregoing to the instant case, the Court stated that from the pleadings of the Respondent, no allegation of unfair business practices, misrepresentation, and false assurances was made against the Appellant and no evidence given in that respect. The Respondent’s claim was for special and general damages for alleged negligent acts of the Appellant and no more. The declaration made by the High Court amounted to building a case for the Respondent different from that presented for adjudication and granting a relief different from the one sought.

Going further, the Court held that the onus was on the Respondent to plead and lead credible evidence to prove the elements of negligence to wit: (1) the negligent act and the particulars of negligence (2) the existence of a duty of care owed by the defendant to the claimant (3) the breach of the duty of care (4) the damages or loss suffered as a result of the breach of duty of care by the defendant. All the elements of negligence must co-exist and failure to plead and prove any of the elements is fatal to the case of the Respondent. See I.M.N.L. V. NWACHUKWU (2004) LPELR-1526 (SC) AT 22 (B-D), UNIVERSAL TRUST BANK OF NIG. V. OZOEMENA (2007) LPELR-3414 (SC) AT 14 (D-E) and IYERE V. BENDEL FEED AND FLOUR MILL (2008) LPELR-1578 (SC) AT 40-41(G-E). The Court then considered the facts as pleaded by the parties in the record of proceedings and came to the conclusion that the Respondent failed to establish the elements of negligence against the Appellant.


On the award of damages by the High Court, the Court held that before a claim for special damages for breach of contract is awarded, the existence of a contract must first be clearly established. Since the Respondent failed to prove that there was a valid contract between it and the Appellant, there was no basis for the award of special damages to the Respondent. In addition, the special damages which the Respondent claimed it suffered as a result of the Appellant’s failure to grant the loan were charges to which the Appellant was entitled and there was no evidence to show that the Respondent was entitled to a refund of the charges for banking services already rendered by the Appellant.

The Court resolved both issues in favour of the Appellant and allowed the appeal.

Ogochukwu Onyekwuluje

For Appellant
P.U. Maduka, Esq.
For Respondent
Compiled by LawPavilion.


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