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Agreements in property acquisition and development – Part 4

By Ebun-Olu Adegboruwa
13 February 2023   |   3:55 am
Enforcing Agreements: Generally, contracts are legally enforceable agreements, with the implication that where one party to a contract is of the opinion that the other party is not fulfilling his obligations created under the contract, the offended party can approach the Court to seek enforcement of the contract or receive monetary compensation in the form…

Property

Enforcing Agreements:
Generally, contracts are legally enforceable agreements, with the implication that where one party to a contract is of the opinion that the other party is not fulfilling his obligations created under the contract, the offended party can approach the Court to seek enforcement of the contract or receive monetary compensation in the form of damages. There are however several exceptions to the rule that contracts are enforceable agreements, which include where there were vitiating elements during the formulation of the contract, such as where one of the parties lacks capacity, there is no valuable consideration, there was no intention to enter into legal relationship, one of the parties was coerced or unduly influenced into entering the relationship, and so on. See: Orient Bank (Nig) PLC v. Bilante LTD (1997) 8 NWLR (PT.515) 37 @ 76 paragraphs C- E; Hyundai Heavy Industries Co. (Nig) Ltd V. Asechemie & Ors (2020) LPELR-50584(CA); and ADEWUYI & ANOR v. MRS OIL (NIG) PLC (2019) LPELR-48210(CA).

In Umaru V. Paris & Anor (2021) LPELR-56309(CA), one major exception, which the appellant hinged his appeal on is the trite principle of law to the effect that where a contract is illegal in nature, because it violates a specific statute or provision of law, which not only prohibits but also prescribes sanctions for making such contract, it cannot be enforced as the Courts are creations of law saddled with the duty of upholding the law not aiding its breach. Similarly, in SADIQ v. BALARABE (2020) LPELR-52114(CA), it is stated that: “it is correct that an agreement entered into under duress and coercion is not binding and enforceable and it is voidable” – OMMAN V. EKPE (2000) NWLR (Pt 641) 365.

A court cannot enforce an agreement that is fraudulent/tainted with deceit or against public policy. In NKECHI & ANOR v. ANYALEWECHI (2021) LPELR-55611(CA), a document was declared unenforceable as there was no foundation of ownership or cognizable interest under the law proved in respect of both appellant and respondent. It was also held to be against public policy because all the buildings and works to be done and already done were devoid of requisite prior approval of regulatory authorities or grant, which parties to the suit have carved out amongst themselves, without lawful authority. More so, in the case of BABATUNDE v. BANK OF THE NORTH LTD. & ORS. (2011) LPELR – 8249 (SC), the apex Court warned that: “A Court will not however enforce an agreement between parties which is fraudulent or tainted with deceit or against public policy.” This is reinforced in ACB LTD v. ALAO, by the apex Court.

The foregoing is akin to the settled legal principle that a party should not be allowed to benefit from his own wrong or mala fide. It is an inveterate principle of equity that ex mala dolo non oritur actio. The Nigerian Supreme Court in Green v. Green (1987) 3 NWLR (Pt.61) 480 at pages 516 – 517 restated this principle thus: “a Court would not allow a person to profit by his own wrong. A person may not create a crisis situation and turn around to plead the crisis in support of his interest.”

Furthermore, a party who is seeking to enforce his rights under an agreement must show that he has fulfilled all the conditions precedent. Any default on his part would be fatal to his case. In TALABI v. FCDA & ORS (2018) LPELR-45969(CA), the appellant was estopped from denying that she was given a right of first refusal. It was further held that the appellant cannot be allowed to blow hot and cold in the same transaction, after having failed to meet up with the stipulated conditions, as to do so would amount to a travesty of justice.

It is also noteworthy that a contract is not binding on a person who knows nothing or anything about it. This principle is predicated on the concept of privity of contract which postulates in the main that only parties to a contract can be entitled to the rights and liabilities arising from the contract. Indeed, on the doctrine of privity of contract, only a party to a contract can sue and be sued on it.

Where parties have entered into an agreement or contract voluntarily and there is nothing to show that the same was obtained by fraud, mistake or deception or misrepresentation, they are bound by the provision or terms of the contract or agreement. This is because a party cannot ordinarily resile from a contract or agreement just because he later found out that the conditions of the contract or agreement are not favourable to him. This is the whole essence of the doctrine of sanctity of contract or agreement. The court is bound to construe the terms of the contract or agreement and the terms only, in the event of an action arising therefrom. See Northern Assurance Co. Ltd. V. Wuraola (1969) 1 NMLR 1; (1969) NSCC 22. In A.G. Rivers State v. A.G. Akwa Ibom State & Anor. 2011 LPELR (Pt. 633) (SC) the Apex Court held thus:

“Both parties, especially the 1st defendant, must accept the implications and consequences of the contents of exhibit AMB1 and it is not the business of this court to rewrite the agreement for the parties or venture into or consider other sharing methods, since the agreement for sharing the wells still subsists. Our task as judges is simply to find out the intention of each party, when agreeing to the contents of exhibit AMB1. The clear intention is that each party is satisfied with 86 oil wells each. Section 151 of the Evidence Act creates Estoppel.”

To be continued tomorrow

Adegboruwa is a Senior Advocate of Nigeria (SAN)

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