The place and nature of agreements in the acquisition and development of real estate (3)

COLLECTION OF AGREEMENTS

In general, contracts are legally enforceable agreements, with the implication that when one party to a contract believes that the other party is failing to fulfill its obligations 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. However, there are several exceptions to the rule that contracts are enforceable agreements, including elements that fall during the formulation of the contract, such as when one of the parties lacks capacity, there is no valuable consideration, there was no intention to enter into a legal relationship , one of the parties was coerced or unduly influenced to enter into the relationship, and so on. See: ORIENT BANK (NIG) PLC v BILANTE LTD (1997) 8 NWLR (PT.515) 37 @ 76 paras CE; 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), an important exception, on which the appellant based its appeal, is the banal legal principle that if a contract is illegal in nature because it violates a specific law or provision, which not only prohibits but also prescribes sanctions for entering into such a contract, it cannot be enforced as the courts are bills of law burdened with the duty of enforcing the law and not assisting its violation . Similarly, in SADIQ v. BALARABE (2020) LPELR-52114(CA), it is stated that: “it is correct that an agreement entered into under duress and duress is not binding and enforceable and is voidable” – OMMAN V. EKPE (2000 ) NWLR (Pt 641) 365.

A court cannot enforce an agreement that is fraudulent/contaminated with fraud or against public order. In NKECHI & ANOR v. ANYALEWECHI (2021) LPELR-55611(CA), a document was declared unenforceable on the grounds that there was no evidence of title or interest at law with respect to either plaintiff or defendant. It was also considered against public order because all the buildings and works that were to be done and had already been done had no required prior regulatory approval or grants, which the parties to the lawsuit mutually agreed upon, without legal authority. More so, in the case of BABATUNDE v. BANK OF THE NORTH LTD. & ORS. (2011) LPELR–8249 (SC), the apex court cautioned that: “However, a court shall not enforce an agreement between parties that is fraudulent or tainted with fraud or against public order.” This is reinforced in ACB LTD v. ALAO, by the Apex Court.

The foregoing is in line with the established legal principle that a party may not profit from its own error or mala fide behaviour. It is a persistent principle of fairness 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 reiterated this principle as follows: “A court would not allow a person to profit from his own mistakes. A person should not create a crisis situation and turn around to advocate the crisis in support of his interest.”

In addition, a party wishing to assert its rights under a contract must demonstrate that it has fulfilled all conditions precedent. Any omission on his part would be fatal to his cause. In TALABI v. FCDA & ORS (2018) LPELR-45969(CA), the applicant was not allowed to deny that it was granted the right of first refusal. It was further ruled that the appellant is not allowed to blow hot and cold in the same transaction after failing to meet the stated conditions as this would amount to a caricature of justice.

It is also noteworthy that a contract is not binding on a person who knows nothing or nothing about it. This principle is based on the concept of the principle of contract, which essentially states that only parties to a contract are entitled to the rights and obligations arising from the contract. Indeed, according to the doctrine of ownership of a contract, only a party to a contract can sue and be sued.

Where the parties voluntarily entered into an agreement or contract and there is nothing to show that it was obtained by fraud, mistake or deceit or misrepresentation, they are bound by the term or conditions of the contract or agreement. This is because a party usually cannot waive a contract or agreement just because it later found out that the terms of the contract or agreement are not favorable to it. This is the whole essence of the doctrine of the sanctity of contract or agreement. The court is obliged to interpret the terms of the contract or agreement and the terms only in the event of a legal claim arising therefrom. See NORTHERN ASSURANCE CO. LTD. against WURAOLA (1969) 1 NMLR 1; (1969) NSCC 22. In AG RIVERS STATE v. AG AKWA IBOM STATE & ANOR. 2011 LPELR (Pt. 633) (SC) the Apex Court ruled as follows:

“Both parties, especially the 1st Defendant, must accept the implications and consequences of the contents of Annex AMB1 and it is not for this court to rewrite the agreement for the parties or to venture into or any other means of sharing. considering that the well-sharing agreement is still in place. Our job as judges is simply to find out each party’s intent when they agree to the content 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.”

From the foregoing, where the terms of an agreement are written in plain, simple and straightforward language that needs no interpretation, only the grammatical meaning should be attributed to them. It is the law that where the words used by the author(s) of a document are simple, plain and clear, the sole duty of the Court is to give the common words their common meaning without further ado. The Court has no authority to construe a contractual document in a way more favorable to a party than what the document strictly states. The parties are bound by the documents they voluntarily and voluntarily signed. The following words of Tobi JSC in ODUTOLA v. PAPERSACK NIG. LTD. (2007) All FWLR (Pt. 350) 1214 on page 1235 are instructive on this issue: “Parties to an agreement may mutually but wrongly agree on its legal content. Nevertheless, a court can only interpret the agreement strictly legally and reach a conclusion about the law and the law only with respect to the agreement. A court cannot interpret the agreement to convey the meaning as understood by the parties if it deviates from the actual meaning of the agreement.”

Again in IDONIBOYE-OBU v. NNPC (2003) FWLR (pt.146) 959 on 1007, the same Tobi JSC said: “A party that has opened its heart, mind and eye to enter into an agreement is clearly bound by the terms of the agreement and he cannot look for better terms halfway through or when the agreement is subject to litigation, when things are no longer at ease. While a party may seek better terms, the court is bound by the original terms of the agreement and will interpret them in the interests of justice.”

It is equally important to mention the concept of contract renewal and what it entails. It is not foreign law for parties to an agreement to change the terms of it by performing another. Renewal is one of the ways parties can change the terms of their agreement. The Court in Case ONEGBEDAN v. UNITY BANK PLC (2014) LPELR-22186 (CA) Pp. 23-24, paragraphs. CC, gave a sound definition of novation, where it read as follows: “Contract by novation is a form of transfer whereby a new contract is entered into by agreement of all parties and substituted for an existing contract. Therefore, one of the essentials of the new contract, i.e. debt novation, is to obtain the consent of all parties. However, such consent need not be in writing; it can be deduced from the behavior of the parties, without explicit words.”

The learned authors of Black’s Law Dictionary, 8th Edition on page 1094, defined novation as: “(1) The act of replacing an old obligation with a new one which replaces an existing obligation with a new obligation or replaces an original party with a new party. A novation can replace (1) a new commitment between the same parties, (2) a new debtor or (3) a new creditor.”

Further, the eminent and learned authors of GC Cheshire and CHS Fifoot, 8th Edition, said on page 504 thereof: “Renewal is a transaction in which, by agreement of all parties involved, a new contract is replaced by one already made. made. The new contract can be between the original parties, for example when a written agreement is later incorporated into a deed, or between different parties, for example when a new person replaces the original debtor or creditor.”

concluded

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