Engineering Law

2012/2013

J.O.A. Akintayo

TOPIC 1
SOURCES OF NIGERIAN LAW
Definition of law
According to Lloyd, much juristic ink has flowed in an endeavour to provide a universally
acceptable definition of law but with little sign of attaining that objective. We do not intend to
highlight these attempts in terms of the definitions of law proffered by writers and jurists. The law
of a given community may be described as the body of rules regulating human conduct regarded as
obligatory or binding by its members. (Elias, T.O. The Nature of African Customary Law,
Manchester, Manchester Univ. Press, 1956)
Practice of Engineering
The practice of engineering as defined by the Engineers (Registration etc) Act, Cap. E 11, Laws of
the Federation of Nigeria 2004 to include any professional service or creative work requiring the
application of special knowledge of mathematics, physics and engineering in form of consultation,
invention, discovery, valuation, research and teaching in recognised engineering institutions,
planning, operation, maintenance supervision of construction and installation involving
investigating, advising, operating, evaluating, measuring, planning, designing, specifying, laying and
directing, constructing, commissioning, inspecting or testing in connection with any public or private
utilities, structures, buildings, machines, equipment, processes works or projects.
Scope of Engineering Law
Engineering Law may be described as the branch of the law relating to the practice of engineering.
The subject matter of Engineering law is very broad. A contract relating to an engineering activity or
undertaking or one that involves an engineer in his capacity as such comes within the scope of the
subject. In addition to contract, torts or civil law wrongs committed in the course of an engineering
activity is also captured by Engineering law. The relationship between an engineer and his employer
may also come within the scope of Engineering law including how the issue of invention and
intellectual property rights. The law regulating the practice of engineering in Engineering is also an
integral part of the subject.
Sources of Nigerian Law
The objective of the discussion on the Sources of Nigerian Law is to identify the sources that are
relevant to Engineering Law among the sources of Nigerian law. This discussion will also expose an
engineer in training to the different aspects of law in force in the Nigerian legal system.
O.F. Robinson in his book, The Sources of Roman Law: Problems and Methods for Ancient
Historians, said:
A source of law in the lawyers sense is that to which someone- whether a legislator, jurist,
law agent, or private individual goes to find out what the law is. The primary source of
modern western law is statute. Indeed, a source of law is commonly both in Roman and in
modern law, something in writing, but it need not be. (London & New York, Routledge,
1997, p. 25)
By Nigerian law we mean the entire body of rules that are regarded as binding within the
geographical entity known as Nigeria. The expression Sources of Nigeria law is capable of
different interpretations. It relates partly to the origin or place from which a legal rule forms part of
the body of rules accepted as binding in Nigeria. We will be restricted to the legal sources. Our
focus here is to highlight the principal or main sources of Nigerian law. It must however be stressed
that not all the sources of Nigerian law are particularly relevant to Engineering Law. Though the
Sources of Nigerian law are (1) the Constitution (2) Nigerian Legislation (3) Nigerian Case Law
(Judicial Precedents) (4) Customary law (5) Sharia/Islamic Law; and (6) Received English Law, the
sources of Engineering Law in Nigeria generally exclude Customary law and Sharia/Islamic law.
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1.
The Constitution
The current Nigeria Constitution is the Constitution of the Federal Republic of Nigeria 1999 which
came into force on 29 May 1999. As at February 2013, the 1999 Nigerian Constitution has been
amended on three occasions hence the addition of the phrase as amended in formal reference to the
1999 Nigerian Constitution.
The 1999 Nigerian Constitution, as amended, is divided into 8 chapters and schedules. It is arranged
in sections consecutively arranged running through the various chapters. The eight chapters deal
with the following matters:
Chapter 1: General Provisions; Chapter II: Fundamental Objectives and Directive Principles of State
Policy; Chapter III: Citizenship; Chapter IV: Fundamental Rights: Chapter V: The Legislature;
Chapter VI: The Executive; Chapter VII: The Judicature; Chapter VIII: Federal Capital Territory,
Abuja and General Supplementary Provisions.
A constitution does not contain all the laws by which a country is administered but it regulates the
structure of government, provides authority for the exercise of legislative, executive and judicial
powers and other matters of fundamental importance.
The Nigerian Constitution is the supreme law of the land. Section.1 deals with the supremacy of the
Constitution. Section 1(1) states that the Constitution is supreme and its provisions shall have
binding force on all authorities and persons throughout the Federal Republic of Nigeria. By virtue of
Section1 (3) if any other law is inconsistent with the provisions of the Constitution, the Constitution
shall prevail, and that other law shall to the extent of its inconsistency be void. The provisions of the
Constitution override inconsistent legislation and other rules of law including judicial decisions and
rules of customary and Islamic law.
Nigeria being a federation, the Constitution allocates legislative responsibility to both the Federal
and State legislative bodies. Constitutional provisions also deal with both substantive and procedural
matters and departure from these will be set aside by a competent court on a proper petition placed
before them. In the case of Attorney-General (Bendel) v. Attorney-General (Federation) and
Others [1981], the Supreme Court struck down an Act of the National Assembly purportedly enacted
without compliance with the prescribed constitutional procedure.
.
The relevance of the Constitution as a source of Nigerian Engineering Law cannot be
overemphasised. A cursory look at the Legislative Lists (Exclusive Legislative List and the
Concurrent Legislative List) indicates many items relevant to engineering. By virtue of the scheme
of allocation of legislative powers only the National Assembly may validly regulate the engineering
profession. A law made by a House of Assembly which seeks to directly or indirectly regulate the
practice of engineering will be unconstitutional and void.
Human beings are the main focus of every engineering activity. In this regard we may highlight the
provisions on fundamental rights as relevant to engineering law. The Constitution guarantees to
every individual respect for the dignity of his person and prohibits inhuman or degrading treatment,
being held in slavery or servitude and forced or compulsory labour (S. 34). The right to personal
liberty, the right to peaceful assembly and association and right to freedom of movement are all
closely related in employment situations and these are critical issues in Engineering law.
Practice Session
What is the basis for each of the following classification of constitutions?
(a) Federal vs. Unitary Constitution
(b) Republican vs. Monarchical Constitution
(c) Rigid vs. Flexible Constitution
(d) Written vs. Unwritten Constitution
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2.
Nigerian Legislation
After the Constitution, Nigerian legislation is perhaps the most important source of Nigerian law.
Nigerian legislation refers to the laws made by the law-making authorities under successive
governments in Nigeria both military and civilian. The laws made by the Imperial Parliament and
the local legislatures before the attainment of Independence are also included. Under the present
constitutional dispensation, laws made by the National Assembly are referred to as Acts of the
National Assembly while laws made by the Houses of Assembly of States are designated Laws. The
expressions Ordinances and Decrees were adopted under past colonial and military administrations
respectively at the national/federal level while State Military Governors/Administrators made Edicts.
The above are known as primary legislation because they emanate directly from the legislative
bodies established for both the Federal and State governments. In addition to these is subsidiary
legislation or delegated legislation. Delegated legislation relates to the exercise of legislative powers
by persons, bodies or authorities other than the legislature. The same expression is adopted for rules,
regulations, bye-laws made by them. The courts and the legislature can control delegated legislation.
Regulations made by the Council for the Regulation of Engineering in Nigeria (COREN); Minister
of Works; Minister of Science and Technology; Commissioner for Health in exercise of powers
conferred on them by Acts/Laws are examples of delegated legislation
The importance of legislation as a vital source of law can be appreciated in the sense that they can
be used to modify the content of any other source. In fact, it is by virtue of legislation that some
other sources of law can be recognised as such. In a sense the Constitution is a species of legislation.
Under the present constitutional arrangement in Nigeria, primary legislation may emanate from the
National Assembly (at the federal level) and from the Houses of Assembly of States.
The matters in respect of which only the National Assembly can make laws (known as Acts) are
listed in the Exclusive legislative list. Examples are Award of National Honours, Defence, Fiscal
Policy, Banks ad Banking, Foreign Policy, Minting of Currency, Companies and Insurance, Labour;
including trade unions, industrial relations; conditions, safety and welfare of labour; industrial
disputes prescribing a national minimum wage for the Federation or any part thereof; industrial
arbitration. The concurrent legislative list on the other hand contains items in respect of which both
the National Assembly and the State Houses of Assembly may legislate. In the event of the
inconsistency of any Law enacted by the House of Assembly with any law validly made by the
National Assembly, the law made by the N.A. shall prevail and that other Law shall to the extent of
its inconsistency be void (S.4 (5) 1999 Constitution). Examples of such items are collection of taxes,
electric power, industrial, commercial or agricultural development; University, technological and
post primary education, exhibition of cinematograph films.

Practice Session
What are the rationales for delegated legislation?
Identify the items on the Exclusive and Concurrent Legislative Lists relevant to Engineering Law

Outline of the Procedure for Law-Making

The Legislature performs a variety of functions but the most important one is law making. It is
necessary to examine in brief the process for law making in a democratic setting. Though the
constitutional power to make law rests with the legislature, the business of law making is too serious
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to be left in the hands of the legislature alone. In reality many interest groups lobby legislators to
influence law making in one way or the other.
A Bill, that is a legislative proposal, in a bicameral legislature, like the National Assembly that
consists of the Senate and the House of Representatives may originate in either house. When the
originating house it shall be sent to the other passes it house and when the two chambers on any
amendment made it have reached agreement shall be transmitted to the President for assent
(signature). The President shall within 30 days signify that he assents or that he withholds his assent.
Where the President withholds his assent and each house by 2/3 majorities again passes the Bill it
shall become law without the Presidents assent. In the case of a unicameral house as it obtains at
the level of the States the references to the second house in the above will be omitted. Also, it is the
Governor who is the assenting authority.
However, in a legislative house a Bill goes through the following stages:
i. First Reading: This entails the formal reading of the Bill which discloses only the
Subject matter. In reality only the title of a Bill is read nowadays.
ii. Second Reading: At this stage the main principles of the Bill are discussed. A
Bill rejected at this stage cannot progress.
iii. Committee Stage: The house may prefer the Bill to the appropriate Committee
or constitute itself into a Committee i.e. Committee of the whole house. It is at this stage that the
details of the Bill are discussed and necessary amendments are made. The Committee may have
recourse to Public Hearings in order to obtain useful information from members of the Public. This
is a very useful though not binding procedure. Apart from direct lobbying of legislators by interest
groups the facility of public hearing presents an opportunity to persons or groups directly or
indirectly interested in the outcome of a legislative process to bring their case to the public domain
through the appropriate legislative committee.
iv. Third Reading: The general principles of the Bill are debated and verbal amendments are
made where necessary. When a Bill has successfully gone through this stage it will be deemed to be
carried when a vote with appropriate majority is secured in favour thereof.
Separation of Powers and Interpretation of Statutes
The doctrine of separation of powers entails division of governmental powers into three namely: the
legislative, executive and judicial and the vesting of these powers in the Legislature, the Executive
and the Judiciary respectively. Laws are made by the Legislature, executed or implemented by the
Executive and interpreted by the Judiciary (i.e. the courts of law). When there is a dispute as to the
correct meaning of an enactment reference is made to the courts. The courts adopt a number of
principles while construing statutes. These are known as cannons of statutory interpretation.
i.

The Ordinary Meaning Approach: This is also known as the literal rule of the primary rule of
construction. The courts in this instance look at the plain meaning in English Language of
the words used and give the words their ordinary dictionary meaning. Usually the courts
have recourse to the Oxford English Dictionary. Where the words of a statute are plain, clear
and unambiguous it is neither necessary nor permissible to read other meanings to them:
Nabhan v. Nabhan [1967]. This approach was adopted in Awolowo v. Shagari [1979] and
Adegbenro v. Akintola, which they are used. The conveyance illustrates this.

ii.

The Golden Rule Approach: The courts adopt this approach where the literal meaning or
ordinary meaning approach leads to a manifest absurdity or where words are capable of two
or more interpretations. The courts will give them interpretations that will avoid such
absurdity Awolowo v. Sarki [1966]. This is also known as the rule in Becke v. Smith.

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iii. The Mischief Rule: This is also known as the Rule in Heydons case of interpretation by
reference to the statutory purpose. Where there is ambiguity, vagueness or generally in a
statute and the court intends to resolve this problem the statute will be considered as a whole
to discover the original purpose which the legislature had in mind for raising it and interpret
the statute in a way or manner that it will lead to the achievement of the original purpose.
The court looks at the mischief the statute was intended to combat and interpret it in such a
way that it will suppress the mischief or vice and advance the legislative remedy. Savannah
Bank v. Ajilo [1989]; I.B.W.A. v. Imano (Nig.) Ltd. [1988].
iv.

Progress towards a Unitary Approach: This is a combination of the above approaches.

Words are read in their entire context in their grammatical and ordinary and ordinary sense
harmoniously with the scheme of the legislation, the object of the law and the intention of
Parliament (the Legislature). Professor Driedger popularised this approach. See Mausell v.
Olins [1975] A.C. 393.

3.
Nigerian Case Law/Judicial Precedents
A basic though unwritten principle of Nigerian law is that Judges should stand by their decisions and
by those of their colleagues. The doctrine of judicial precedents or stare decisis is a system by
which courts follow previous decisions when deciding cases. A precedent is a judgment cited as
authority for making a decision in a case. Judicial precedent or case law consists of law found in
judicial decisions. It is the principle consists of law found in judicial decisions. It is the principle of
law on which a judicial decision is based. Within the context of Nigeria, Nigerian case law consists
of the decisions of superior courts in the Nigerian legal system. The rules, which emerge from
decisions of the courts, or rules of law made by the Judges while interpreting statutes in cases being
decided by them constitute judicial precedents.
Precedent promotes certainly in the law. Other advantages are possibility of growth, wealth of
detailed rules and practicality. Its disadvantages include rigidity bulk and complexity and slowness
of growth. This is because it depends on accident of litigation. Precedent may either be binding
(authoritative) or persuasive precedent. Binding precedents are decisions that must be followed
irrespective of what the Judge applying them thinks about their wisdom and correctness. Only the
ratio decidendi (literally the reasons for the decision), that is, the underlying principle of law
established in a case, is binding. A persuasive precedent is one, which is considered and may be
followed when the Judge sitting over an instant case, approves of the reasoning in the case since
there is no obligation to follow it. The obiter dicta (passing comments or remarks) of a decision
may have persuasive effect though they do not form part of the ratio. Only pronouncement of law in
relation to the material facts before a judge constitute ratio and hence a precedent.
A Judge may refuse to follow a previous decision if that decision has been given per incuriam i.e.
the court giving the omitted to consider some relevant statutory provisions or some decisions that
were binding on it. A Judge may also avoid a precedent by distinguishing the instant case from the
precedent i.e. identifying some material difference between the facts of the cases and using this
exercise as basis for departing from the controlling influence of the precedent. This is only possible
where the two cases are distinguishable.
The operation of the doctrine of judicial precedents depends on the existence of a well-structured
hierarchy of law and an uptodate system of law reporting. For instance, the decisions of the
Supreme Court of Nigeria, the highest court in Nigeria, constitute binding precedents to all lower
courts. The decision of a High Court is binding on the Magistrates Courts. It must however be
pointed out that the decisions of courts of co-ordinate jurisdiction e.g. Federal High Court and State
High Courts or of a lower court to a higher court only constitute persuasive precedent. The decisions
of courts outside the Nigerian legal system no matter how eminent are not binding on any court in
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Nigeria. They only constitute persuasive precedent. This is became stare decisis operates only
within a legal system.
A large tract of the legal principles regulating industrial relations and other branches of the law were
developed by the judges in the course of deciding cases brought before them. As the body of judicial
decisions becomes larger the legal principles formulated therein continue to be refined and extended
to cover similar situations. Legislation has sometimes confirmed or modified these principles. This
underscores the importance of judicial law making or judge-made law. Nigerian Case Law brings to
forefronts the contribution of the Nigerian Judiciary in this task which is part of the common law
legal tradition.
4. The Received English Law
The scope of English law received into the Nigerian legal system, that is the federal and individual
state legal systems, is not the same. The relevant provision at the federal level is found in section 32
(1) of the Interpretation Act, Cap 1 23 Laws of the Federation of Nigeria 2004 and it provides:
Subject to the provisions of this section and except in so far as other provision is made by the
Federal law, the common law of England and the doctrines of equity, together with the statutes of
general application that were in force in England on the 1st day of January 1990 shall, in so far as
they relate to any matter within the legislative competence of the Federal legislature, be in force in
Nigeria.
From the above, there are three aspects of English law received into the Nigerian legal system and
these are: (i) Common law (ii) Doctrines of Equity and (iii) Statutes of general application.
(i) Common Law
The term common law refers to the basic law of England developed by the judges of the old
common law courts. Originally there were systems of local customs in England and common law at
that time meant the law that was common to the whole of England as opposed to local customs.
Common law was developed in the medieval times by the royal courts as a law common to the
whole kingdom, in England through the judges who went on tour at regular interval. The rules of
common law are to be found in decided cases. The common law is not a static system but the ability
to modify it to suit particular circumstances inheres in judges. A significant portion of Engineering
law like the law of contract, law of torts is based on the common law. In a few respects statutes have
modified the common law.
(ii) Equity
Equity is a case law system developed by the old English Court of Chancery to mitigate the
harshness of the common law. Whenever the rule of common law resulted in hardship or injustice
the Chancellor, acting on behalf of the King as the fountain of justice, granted relief to the aggrieved
party. Initially this was on ad hoc basis and operated on ground of conscience. When the system
became more popular more persons were appointed to administer justice and consequently it became
necessary to follow established principles in the court of equirty, the Court of Chancery. The early
Chancellors were Ecclesiastes but later lawyers were appointed as Judges the system of judicial
precedent was also introduced.
The rules of common law and equity were administered in different courts until the Judicature Acts
1873-1875 were passed. Since then common law and equity have been administered together in the
same courts and it is provided for that where a principle of common law is inconsistent with the
doctrine of equity, the doctrine of equity shall prevail.
At the time common law and equity were received into Nigerian law in 1863 the administration of
the two systems were fused. This was even before the Judicature Acts 1873-75 were passed in
England.
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Equity often acts like a gloss or an appendage to the common law. The only institution equity is
solely responsible for is that of trust. Equity has maxims. Some of these are He who seeks equity
must do equity. He who comes to equity must come with clean hands. Equity aids the vigilant
and not the indolent, Equity acts in personam, Equity follows the law, Equity will not suffer
a wrong to be without a remedy, Equity is equity, Equity regards that done which ought to be
done.
(iii)
Statutes of General Application
These refer to statutes made by the English Parliament before January 1, 1900. Before a statute may
be considered as a statute of general application, it must be such which all the divisions of English
Courts applied it and it must not be restricted to a particular community in operation. These must be
distinguished from English statutes extended to Nigeria by their own force, for such are considered
as part of Nigerian legislation. The repeal of a statute or modification thereof in England does not
affect the operation of such laws in Nigeria. Local legislative bodies may however modify or
abrogate imperial statutes that fall within their respective legislative competences. In the former
Western Region of Nigeria, statutes of general application considered to be appropriate were reenacted as regional laws hence no English statute is in force in the States that formed part of this
region. The situation is however different with respect to the federal legislative competence. Section
32(1) of the Interpretation Act clearly indicates the application of statutes of general application. In
reality, however, the number of statutes, which come under this head, has considerably diminished
because of their replacement by local enactments.
5.
Customary Law
The term Customary law does not suggest that there is a single or uniform system of customary
law in force throughout Nigeria. By customary law we mean the indigenous law of the land, which
still forms part of the body of law. Before the establishment of colonial rule, this was the only
system of law recognised in most of the communities, which now form part of the modern Nigeria.
A significant portion of this law has been jettisoned while the remaining part can be enforced as part
of the Nigerian law if they pass the tests laid down by law.
Customary law has certain features or characteristics. First, it derives its validity as law from its
acceptance or recognition as obligatory by the native community whose activities it regulates. In
Owonyin v. Omotosho [1961] customary law was described as a mirror of accepted usage.
Secondly, the rules of customary law change from time to time, reflecting social and economic
conditions without losing their character as law. This was recognised in Lewis v. Bankole [1908].
The dynamism of customary is illustrated by the following examples. Land was at a time an
inalienable property. Nowadays land may be transferred by sale under customary law. Also, land
was considered to belong to the family or community but never to individuals. Customary law now
recognises individual ownership of land in response to social and economic changes. Thirdly,
customary law is generally unwritten. Over the years scholars have attempted and succeeded in
reducing aspects of the customary laws they studied into writing. Also a written agreement may now
be subject to customary law even though the document means nothing in English/General Law:
Rotibi v. Savage [1944].
Customary law is treated as a question of fact hence it requires proof. This relates mainly to the
English-type courts, as there is no need to prove customary law before customary courts. Customary
courts are presided over by local chiefs or others who are generally versed in the local customs and
traditions of their people. When proof is required a party who claims the existence of a particular
custom will have to prove it by calling witnesses and experts to testify as to the existence thereof
except where courts have taken judicial notice of the rule of customary law in issue.
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Customary law operates largely as a personal law dealing mainly with matters like marriage,
succession and guardianship of children. All these come under civil law. Customary criminal law
has been abolished because it violates the constitutional provision that an offence must be written
and the punishment therefore prescribed in a written law (S. 36 (2) 1999 Constitution) Aoko v.
Fagbemi [1961].
The rules of customary law must pass the tests of validity laid down by the general law before they
can be enforced. These tests are (i) the Repugnancy test (ii) the Incompatibility test and (iii) the
Public policy test.
(i)
The Repugnancy Test: This test is found in the High Court Laws and other court enactments.
This expression is to the effect that a rule of customary law must not be repugnant to natural justice,
equity and good conscience. Courts are therefore empowered to reject outright a rule found to be
repugnant to Natural Justice, Equity and Good Conscience. Let us examine a few cases.
In Edet v. Essien [1932] the appellant had paid dowry in respect of a woman when she was a child.
Later the respondent paid dowry in respect of the same woman to the womans parents and took her
as his wife. The appellant claimed custody of the children of the union on the grounds that under
customary law, he was the husband of the woman until the dowry paid by him was refunded to him
and that he was entitled to any children born by the woman until dowry was refunded to him. The
court held that the alleged rule of customary law had not been established. It then said even if such
rule had been established it was of opinion that the custom was repugnant to natural justice, equity
and good conscience.
Also in Re Effiong Okon Ata [1930] the court rejected a rule of native law and custom which would
have entitled the former owner of a slave to administer his personal property after his death on the
ground that the custom failed the repugnancy test.
In Mariyama v. Sadiku Ejo [1961] the court declined to enforce a rule of Igbira Customary law
whereby a child born 10 months after divorce belonged to the divorced husband and not the new one
on the ground that it would have taken a child away from its natural parents. In this case there was a
clear evidence that the first husband could not be the true father because the woman left him some
months before the divorced. It must be pointed out that the court did not condemn this native law
and custom in its application rather the rule was however said to be invalid with respect to the case.
However, in Dawodu v. Danmole [1958] both the Federal Supreme Court and the Judicial
Committee of the Privy Council refused to uphold the decision of Jibowu J. rejecting on ground of
repugnancy, the Idi-Igi (per stirpes) custom of distributing intestate estate of a deceased Yoruba
man by the number of wives. The deceased died leaving four (4) wives and nine (9) children. The
trial judge was of the opinion that the property should be distributed in accordance with the Oriojori (per capita) system, which to him promoted the modern idea of equality of children.
(ii)
Incompatibility Test: This test is also contained in the same section of the High Court Law
and other relevant enactments as the Repugnancy test. The court will refrain from applying a rule of
customary law which is incompatible directly or by necessary implication with any law for the time
being in force. The reference to law is to written laws as discussed under Nigerian legislation. We
have cases of direct incompatibility and incompatibility by necessary implication. The former is the
case where a written law expressly abolishes a rule of customary law e.g. Abolition of Osu System
Law of the former Eastern Region of Nigeria; see also some sections of the Criminal Code.
Incompatibility by necessary implication relates to situations when rules of customary law and
provisions of written law cannot co-exist. In Agbai v. Okogbue [1991] a case which arose from the
forceful entry of the respondents shop, seizure and carrying away of his sewing machine to enforce
the demand of the development levy imposed by an age group on all its members for the purpose of
building a Health Centre in their village. The Supreme Court considered whether membership of
age group association is compulsory and if so, whether the respondent, who objected to joining such
an association on religious grounds, may be compelled to do so or be deemed to be a member willy8

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nilly and whether self-help was available to the appellants in recovering levies. The Supreme Court
held that the alleged custom compelling the respondent to join the age group association was subject
to the provisions of the Constitution relating to freedom of association and of religion. The Court
said that the respondent was entitled to hold the tenets of his religion, thought and conscience, which
prohibit him from joining the age grade and that any contrary custom is unconstitutional, null and
void.
(iii)
Public Policy Test: This test is contained in the Evidence Act 2011. The Act provides that a
custom shall not be enforced if it is contrary to public policy. Courts hardly make reference to this
test while rejecting a rule of customary law. Based on the public policy test however, a custom
permitting two women to get married to each other was denied enforcement in Meribe v. Egbu
[1976]. In Cole v. Akinyele [1960] the rules of legitimation under the Legitimacy Act and
customary law were considered. The rule of customary law was rejected on the ground of being
contrary to public policy. This decision has been severely criticised.
6.
Sharia/Islamic Law
Sharia/Islamic Law is sometimes considered as part of customary law. There are however some
distinguishing factors. First, Sharia Law is not indigenous to Nigeria as it was introduced as part of
Islam. Secondly, Islamic Law is written. Islamic Law is administered as a variant of customary law
particularly in the Southern States while the Northern States it operates as a distinct system. The
sources of Islamic law include (i) the Holy Quran (ii) the Sunna the facts of the life of the Prophet
and his sayings (iii) Ijma the consensus of Islamic scholars; and (iv) Qujas analogical
reasoning from the Quran and Sunna.
The version of Islamic law received into the Northern States is that of the Maliki School. Though
the Sharia is an all-embracing system of law, it is predominant in matters regulated by the personal
law like marriage, guardianship and inheritance. The Sharia is administered by Alkalis in the Area
courts, Kadis in the Sharia Court of Appeal and Justices of the Supreme Court and the Court of
Appeal and Justices of the Supreme Court and the Court of Appeal learned in Islamic Law. Islamic
law as it operates in the Northern States is provisions of the Constitution.

Conclusion
It must be realised that not all the above-mentioned sources form part of the sources of particular
area of Nigerian Law. For instance, both Customary Law and Islamic Law cannot be regarded as
forming part of Engineering Law in Nigeria, because they do not have any significant contribution to
the body of contemporary legal rules in this area.

Practice Session
Identify the sources of Nigerian law relevant to Engineering law?
How relevant are trade practices and customs regulating the conduct of traditional engineering
practitioners like builders, blacksmiths, goldsmiths etc, to modern Engineering law?

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TOPIC 2
THE NIGERIAN COURT SYSTEM
The word government may be described as the whole machinery for carrying out the business
of a country, including the Legislature, the Executive and the Judiciary. Governmental powers
therefore mean legislative powers, executive powers and judicial powers, all combined. Judicial
powers in Nigeria are vested in the courts established, for the Federation and for the States. The
judicial powers extend to all matters between persons, or between government or authority and
any person in Nigeria, and to all actions and proceedings relating thereto, for the determination
of any question as to the civil rights and obligations of that persons. The above relates mainly to
the power of courts to enforce the law. This manifests in the resolution of legal disputes
between persons, authorities, and governments. It also extends to criminal liability.
The courts in the Nigerian legal system can be categorised on the basis of whether they are
established by the Constitution or by the provision of statutes. Other classifications include
superior courts ad inferior courts; regular/ordinary courts and specialised courts; federal courts
and state courts; courts of original jurisdiction and appellate courts; courts of limited jurisdiction
and courts of unlimited jurisdiction etc. It is not our intention to consider all these
classifications.
Four basic aspects in respect of each court which we intend to consider will be highlighted.
These are the establishment of the court, its composition, appointment of its judicial personnel
and its jurisdiction. We shall consider the Federal Courts first.
A.

The Supreme Court of Nigeria

The Supreme Court of Nigeria is established by the Constitution (S.230(1) 1999 Constitution.
It must however be remarked that the Court came into existence in 1963 following the adoption
of the 1963 Republican Constitution. It has since 1st October 1963 been the apex court in the
Nigerian judicial system. Before this day the highest court in the judicial system was the Judicial
Committee of the Privy Council (J.C.P.C.) based in England.
The Supreme Court consists of the Chief Justice of Nigeria (C.J.N.) and such number of
Justices of the Supreme Court, not exceeding 21 as may be prescribed by an Act of the National
Assembly (S.230(2) of the 1999 Constitution). The Supreme Court Act, Cap 434, Laws of the
Federation of Nigerian, which is regarded as an Act of the National Assembly however provides
that the number of the Justices of the Supreme Court shall not exceed 15. Until this law is
amended, the Justices of the Supreme Court (JJ. S. C.) cannot exceed 15. It must be remarked
that it is not always the case that the S.C.N. has its full complement of Justices. For the purpose
of exercising any jurisdiction conferred on the S.C.N., the Court shall be duly constituted if it
consists of not less than 5 Justices of the Supreme Court. When the Court is sitting to consider
an appeal brought under S.233(2) or (c) or to exercise its original jurisdiction in accordance with
S.232, it shall consist of 7 Justices (S.234; 1999 Constitution). For the purpose of delivering its
decision the S.C.N. shall be deemed to be duly constituted if at least one member of that court
sits for the purpose (S.294 (4).).
The appointment of a person to the office of the Chief Justice of Nigeria or that of a Justice of
the Supreme Court shall be made by the President of the Federal Republic of Nigeria on the
recommendation of the National Judicial Council subject to confirmation of such appointment by
the Senate (S.231 (1) & (2) ). To be qualified for appointment as the C.J.N. or a J.S.C. the
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person must be a legal practitioner in Nigeria and he must have been so qualified for a period of
not less than 15 years (S.231 (5).
The S.C.N. has original and appellate jurisdiction. Its original jurisdiction, which is to the
exclusion of any other court is as respects any dispute between the Federation and a State or
between States ad if and in so far as that dispute involves any question (whether of law or fact)
on which the existence of a legal right depends (S.232 (1) ). The National Assembly save with
respect to any criminal matter (S.232 (2) may confer additional original jurisdiction on the Court.
The appellate jurisdiction of the S.C.N. derives from the Constitution and statutory provisions.
The S.C.N. has exclusive jurisdiction to hear and determine appeals from the Court of Appeal.
Appeals may lie is of right or with the leave of the Court of Appeal or the Supreme Court. The
S.C.N. also entertains appeals from the decision of the Legal Practitioners Disciplinary
Committee of the Body of Benchers established under the Legal Practitioners Act, Cap 207
L.F.N. 1990. The Committee deals with disciplinary matters which involve members of the legal
profession. (Decree 21 of 1994).
B.

The Court of Appeal

The Court of Appeal (C.A.) is next to the S.C.N. in the hierarchy of courts in Nigeria. The
C.A. is established by S.237 (1) of the 1999 Constitution. The Court was however first
established in 1976 as the Federal Court of Appeal. It was designated Court of Appeal in 1984.
The C.A. consists of a President of the Court of Appeal (P.C.A.) and such number of Justices
of the Court of Appeal (JJ .C.A.) not less than 49 of which not less than three shall be learned in
Islamic personal law, and not less than three shall be learned in Customary law, as may be
prescribed by an Act of the National Assembly (S.237 (2) ). Unlike the case of the S.C.N. where
the Constitution stipulates the maximum number of JJ .S.C., the Constitution in the case of the
C.A. specifies the minimum number of JJ .C.A. No Act of the National Assembly may specify a
number lower than the constitutional stipulation in the case of the C.A. For the purpose of
exercising any Jurisdiction conferred upon the C.A. by the Constitution or any law, it shall be
duly constituted if it consists of not less than three JJ .C.A. With respect to appeals from a
Sharia Court of Appeal and a Customary law respectively (S.247). Since the Constitution has
merely indicated the minimum number of JJ C.A. that should sit, the C.A. may by practice
empanel a higher number of Justices. Over the years the Court has evolved the practice of
having five JJ C.A. sit in constitutional matters.
The Court of Appeal operates in judicial divisions. These divisions are scattered throughout
the country. Notwithstanding this, the Court is only one court. The judicial divisions are for
administrative convenience. The President of the Court of Appeal may transfer a case from one
division to the other.
The President of the Federal Republic of Nigeria appoints the President of the Court of
Appeal. This appointment is made on the recommendation of the National Judicial Council and it
is subject to confirmation by the Senate. The President of FRN on the recommendation of the
National Judicial Council (N.J.C.) (S.248) appoints a Justice of the Court of Appeal. The
appointment qualification for both the P.C.A and JJCA is 12 years post-call experience.
The Court of Appeal is vested with both original and appellate jurisdiction. The C.A. has
exclusive original jurisdiction to hear ad determine whether (a) any person has been validly
elected to the office of President or Vice-President under the Constitution; or (b) the term of
office of the President or Vice-President has ceased; or (c) the office of President or V.P. has
become vacant (S.239(1) ). The jurisdiction of the C.A. is largely appellate. It has exclusive
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appellate jurisdiction to entertain appeals from the Federal High Court of a State, Sharia Court of
Appeal (S.C.A.) of the F.C.T.; C.C.A. of a State and from decisions of a court martial or other
tribunals as may be prescribed by an Act of the National Assembly (S.240). The C.A. entertains
appeals from the decisions of the Code of Conduct Tribunals as of rights (.246 (1)). The
decisions of the C.A. in respect of appeals arising from election petitions shall be final S.246 (3).
The power of the National Assembly to confer additional jurisdiction on the C.A. only extends to
appellate jurisdiction (S.246 (2) ).
C.

The Federal High Court

The Federal High Court (F.H.C.) is established by S.249 (1) of the 1999 Constitution. The
Court consists of a Chief Judge (CJ) of he F.H.C. and such number of Judges of the F.H.C. as
may be prescribed by an Act of the National Assembly. A Judge of the F.H.C. sits alone to
exercise the jurisdiction of the Court (S.253). The C.J. of F.H.C. is appointed by the President
(F.R.N.) on the recommendation of the N.J.C. subject to confirmation of such appointment by
the Senate. The appointment of a Judge of the F.H.C. is made by the President Judges of the
F.H.C. must have at least ten years post-call experience (S.250 (1) & (2)).
Section 251 (1) of the 1999 Constitution deals with the jurisdiction of the F.H.C. The
jurisdiction of the F.H.C. The jurisdiction conferred on the F.H.C. is to the exclusion of any
other court. Additional jurisdiction may be conferred by an Act of the National Assembly. The
Federal High Court has jurisdiction in civil causes and matters relating to the revenue of the
Federal Government; connected with or pertaining to the taxation of companies and other bodies
subject to Federal taxation; connected with or pertaining to customs and excise duties and export
duties; connected with or pertaining to banking, banks, other financial institutions including any
action between bank or against by bank against the CBN but not actions arising from bankcustomer transactions; arising from the operation of the Companies and Allied Matters Act; any
Federal enactment relating to copyright, patent, designs, trademarks and passing-off, standards of
goods and commodities and industrial standards; any admiralty jurisdiction including shipping
and navigation and carriage by sea. The jurisdiction of the Court extends to most items on the
exclusive legislative list. All actions against the Federal Government or any of its agencies have
to be instituted in the F.H.C.
The F.H.C. has jurisdiction and powers in respect of some criminal matters. These include
treason, treasonable felony and allied offences and criminal causes related to its civil jurisdiction.

D.

The High Court of the Federal Capital Territory

The High Court of the F.C.T. is established by S.255(1) of the 1999 Constitution. It
consists of a Chief Judge of the High Court of the F.C.T. Abuja and such number of Judges
of the High Court as may be prescribed by an Act of the National Assembly.
The C.J. is appointed in identical terms as the C.J. of the F.H.C. The Judges are also
appointed like the Judges of the F.H.C. and the appointment qualification is 10 years post call
experience (S.256).
Subject to the provisions of S.251 and any other provisions of the Constitution and in
addition to such other jurisdiction as may be conferred upon the High Court of the F.C.T. by law,
the Court has jurisdiction to hear and determines any civil proceedings in which the existence or
extend of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue or
to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture,
punishment or other liability in respect of an offence committed by any person (S.257(1)). The
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High Court of the F.C.T. may exercise both original and appellate/supervisory jurisdiction. Like
the F.C.T. the Court is duly constituted if it consists of at least one Judge.
E.

The Sharia Court of Appeal of the Federal Capital Territory

The S.C.A. of the F.C.T. is established by S.260(1) of the 1999 Constitution. The consists of a
Grand Kadi of the S.C.A. and such number of Kadis of the S.C.A as may be prescribed by on
Act of the National Assembly.
The President makes the appointment of the Grand Kadi in identical terms as the Chief
Judges of the F.H.C. and the High Court of the F.C.T. The President on the recommendation of
the N.J.C. (S.261 (2) appoints the Kadis. The appointment qualifications of the Grand Kadi and
Kadis of the S.C.A. are provided for in S.261 (3). To be qualified one must (a) be a legal
practitioner with 10 years post-call experience and must have contained a recognised
qualification in Islamic law from an institution approved by the N.J.C. and held the qualification
for a period of not less than 12 years. A person appointed under the latter category must in
addition have considerable experience in the practice of Islamic law or be a distinguished scholar
of Islamic law.
The S.C.A. has only appellate and supervisory jurisdiction in civil proceedings involving
questions of Islamic personal law. These include any question of Islamic personal law regarding
a marriage concluded in accordance with that law, including a question relating to the validity or
dissolution of such a marriage, family relationship and guardianship of an infant; where all the
parties to the proceedings are Moslems any question related to the above, any question of Islamic
personal law regarding a Wakf, gift, will or succession where the endower, donor, testator or
deceased person is a Moslem, any question of Islamic personal law regarding an infant, prodigal
or person of unsound mind who is a Moslem or the maintenance or the guardianship of a Moslem
who is physically or mentally infirm; or where all the parties to the proceedings, being Moslems,
have requested the court that hears the case in the first instance to determine that case in
accordance with Islamic personal law, any other question (S.262). The National Assembly may
confer additional jurisdiction on the S.C.A of the F.C.T.. (S.262).
The Court is duly constituted if it consists of at least three Kadis of the Court.

F.

The Customary Court of Appeal of the Federal Capital Territory

Section 265 (1) of the 1999 Constitution establishes the C.C.A. of the F.C.T. The Court consists
of a President of the C.C.A. and such number of Judges of the C.C.A. as may be prescribed by
an Act of the National Assembly.
The provisions on appointment of the President of the CCA and the Judges of the CCA in terms
of procedure and organs responsible therefore are identical with the provisions on the S.C.A. of
the F.C.T. highlighted above. (S.266 (1) and (2). A person shall not be qualified to hold office
of President or a Judge of the CCA of the FCT, unless (a) he is a legal practitioner in Nigeria
with 10 years post-call experience, and in the opinion of the N.J.C. he has considerable
knowledge and experience in the practice of Customary law. (S.266 (3). The National
Assembly is empowered to prescribe additional qualifications.
The C.C.A. of the FCT shall, in addition to such other jurisdiction is may be conferred upon
it by Act of the National Assembly, exercise such appellate and supervisory jurisdiction in civil
proceedings involving questions of Customary law (S.267). Three Judges of the Court are to sit
to hear and determine cases before the Court (S.268).
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State Courts
Though the above Courts are categorised as Federal Courts by the Constitution, in the case of
the S.C.S. and C.A. they also form part of the State judicial hierarchy as the State Court system
dovetails into the Federal at the level of the Court of Appeal. This can be contrasted with the
arrangements in some other Federal States (i.e. countries), where the two sets of courts are
almost in two separate compartments with State courts having power of final determination in
respect of State matters.
The High Court of a State
The Constitution establishes for each State of the Federation a High court. This Court consists of
the Chief Judge of the State and such number of Judges of the High Court as may be prescribed
by a Law of the House of Assembly of the State.
The Chief Judge is appointed by the Governor of the State on the recommendation of the
National Judicial Council subject to confirmation of the appointment by the House of Assembly
of the State. The Governor acting on the recommendation of the National Judicial Council
appoints other Judges. The qualification for appointment as a Chief Judge or a Judge of the High
court is 10 years post-call experience.(S.271).
The jurisdiction of the High Court of a State is couched largely in the same manner similar as
that of the jurisdiction of the High Court of the F.C.T. The High Court of a State has both
original and appellate /supervisory jurisdiction. It appears that except in matters reserved for
other courts by the jurisdiction by the Constitution, the jurisdiction of the State High court is
wide and extensive. Though no express power is given to the House of assembly to confer
additional jurisdiction, be it original or appellate, on the state High Court, this is implied.
At least one Judge of the State High Court constitutes the Court for the exercise of its
jurisdiction. (S.273).
Sharia Court of Appeal of a State
The Constitution establishes a Sharia Court of Appeal for any State that requires it. (S.275(1)).
The Sharia Court of appeal consists of a Grand Kadi of the Sharia Court of Appeal and such
number of Kadis of the Sharia Court of Appeal as may be prescribed by the House of Assembly
of the State.
The appointment of the Grand Kadi is in identical terms with that of the Chief Judge of the
State. A Kadi is appointed by the Governor on the recommendation of the National Judicial
Council. (S. 276(1) and (2)).
The appointment qualifications are as contained in the provisions on the Sharia Court of Appeal
of the Federal Capital Territory. The same thing applies to the jurisdiction of the Court.(S.277).
At least three Kadis constitute the Sharia Court of Appeal (S.279).
The Customary Court of Appeal
The Constitution establishes for any State that requires it a Customary Court of Appeal.
(S.275(1)). The Customary Court of appeal consists of a President of the Customary Court of
Appeal and such number of Judges of the Customary Court of Appeal as may be prescribed by the
House of Assembly of the State. The judicial officers of the Customary Court of Appeal are
appointed in terms similar to the appointment of the judicial personnel of the Sharia Court of
Appeal of a State. Apart from such other qualification as may be prescribed by a Law of the
House of Assembly a person shall not be qualified to hold the office of a President or a Judge of a
Customary Court of Appeal unless he satisfied the requirements spelt out in SECTION 2819309a)
and (b) of the 1999 Nigerian Constitution. The requirements are identical with those contained in
the provisions on the Customary Court of Appeal of the Federal Capital Territory.
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A Customary Court of Appeal of a State shall exercise appellate and supervisory jurisdiction in
civil proceedings involving questions of Customary. It shall exercise such jurisdiction ad decide
such questions as may be prescribed by the House of Assembly of the State for which it is
established(S.282(1) and (2)).
The Court is duly constituted by three Judges. (S.283).
Other Courts
The Courts highlighted above are the superior courts of record established by the Constitution for
the Federation and the States. The Constitution permits the establishment of additional courts by
the National Assembly and the Houses of Assembly to exercise jurisdiction on matters with
respect to which both legislative houses may make laws respectively. These additional courts may
be courts of first instance or appellate courts. These courts however, are not superior courts of
record. These courts include Magistrates/District Courts and Customary/Area/Sharia Courts
which are necessarily inferior courts.
Magistrate/District Courts
Magistrate and District courts are established pursuant to the provisions of State laws, except in
the federal Capital Territory where they are deemed to be established by a federal law.
Magistrate Courts in the Southern part of Nigeria have both civil and criminal jurisdiction while
in the North they have only criminal jurisdiction. District Courts assume their civil jurisdiction in
the North. These courts are courts of limited jurisdiction in the sense that their powers to impose
punishment and award damages are limited to the extent prescribed in their enabling laws or laws
creating particular offences. In addition the power of a particular Magistrate to impose fine,
sentence an offender or to award damages depends on his or her cadre. Magistrates are in grades,
and the usual classification in most States is in the following order: Chief Magistrate I, Chief
Magistrate II, Senior Magistrate I, Senior Magistrate II, Magistrate I, Magistrate II, and
Magistrate III. Magistrates are legally qualified personnel except in Lay Magistrates who
perform the functions of Magistrate III in some States. An appeal from any cadre of a
Magistrates Court goes to the appropriate High Court. If it is a matter within the jurisdiction of
the Federal High Court, the appeal will lie to that court. In other cases the relevant High Court is
the State High Court or the High Court of the Federal Capital Territory. A single Magistrate
constitutes a Magistrates Court.
Customary/Area/Sharia Courts
These are courts at the bottom of the hierarchy of courts in Nigeria. These courts are established
by statutes. Customary Courts are predominant in the South while Area and Sharia Courts are to
be found in the North. Until the adoption of the Sharia legal system by some States in the
northern part of Nigeria, Sharia Courts were not part of the judicial hierarchy in Nigeria. All
these courts are organised in grades. Customary Courts have Grade A, Grade b and Grade C. A
Customary Court Grade A is presided over by a legal practitioner but this grade of Customary
Court is not common. The predominant ones are the Grade C Customary Courts. The Presidents
and members of Grade C Customary Courts are local chiefs, retired public servants and other fit
and proper persons.
Area Courts are organised in form of Upper Area Court, Area Court Grade I, Area Court Grade
II, and Area Court Grade III. Some States of the North have abolished the Area Court system and
replaced them with Sharia Courts also organised along the same manner. Unlike the Area Courts
whose jurisdiction covered all classes of persons the jurisdiction of Sharia Courts is expressed to
relate only to persons of Islamic faith. This is particularly so when a person is arraigned for
committing a sharia offence.
Customary/Area and Sharia Courts have civil and criminal jurisdiction. For Customary and Area
Courts, their criminal jurisdiction extends to simple offences. Sharia courts are however
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empowered to try offences that attract the punishments of the death penalty and amputation
among others notwithstanding the fact that the court is a court of limited jurisdiction.
The court competent to entertain appeals from the decisions of Customary/Area/Sharia Court
depends on the judicial structure of each State or stipulations in its laws. Some of the Courts that
may entertain appeals include Magistrates Court, High Court or Customary Court of Appeal in
respect of Customary Courts; High Court or Sharia Court of Appeal in respect of the decisions
of Area Courts; and Sharia Court of Appeal in respect of decisions of Sharia Courts. In the
North in States that have not adopted the Sharia legal system, appeals from the Area Court on a
question of Islamic personal law lie to Sharia Court of Appeal while on other matters appeals lie
to the High Court. Decisions of these inferior courts may also be challenged by means of
application for judicial review made to the appropriate High Court.
THE NATIONAL INDUSTRIAL COURT
The National Industrial Court is a specialised court. It was originally established under the Trade
Disputes Act, Cap 432, L.F.N. 1990 Section 19(1) of the Act stated There shall be a National
Industrial Court for Nigeriawhich shall have such jurisdiction and powers as are
conferred on it by laws or any other Act with respect to the settlement of trade disputes,
the interpretation of collective agreements and matters connected therewith.
The Third Alteration to the 1999 Nigerian Constitution is devoted to the National Industrial
Court which is now a superior court of record established by the Constitution.
The National Industrial Court (NIC) deals with labour, employment and industrial relations
disputes. Appeal lie from its decisions to the Court of Appeal where human rights issues are
involved. In other circumstances the decision of the court is final.

GENERAL PRINCIPLES OF LAW OF CONTRACT

(FOR ENGINEERING LAW)
Definition
Contract may be defined as an agreement between two or more parties which is intended by them to have
legal consequences. This definition is preferable to the one that defines contract as an agreement
enforceable at law. For instance where an action founded on contract is statute-barred, it does not detract
from the fact that there is a contract even though it is unenforceable. In Obmiami Brick & Stone (Nigeria)
Ltd. v. A.C.B. Ltd. [1992] Babalakin J.S.C. said:
A contract is a voluntary agreement whereby a person undertakes for reward (consideration) to perform
an act for another and its terms are contemplated and admitted by the parties.
Classification of Contract
Contract may be classified as follows:
(a) Formal contract/simple contract or informal contract;
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Formal Contract/Simple Contract

A formal contract is also know as a specialty contract, a contract under seal or a deed. A deed is a
document that is signed, sealed and delivered. A simple contract is any contract made otherwise than by
deed and is sometimes called a parol contract. It may be oral, in writing or by conduct of the parties.
Writing is in many cases unnecessary, and in others it is only used because it is required by some statutes
as condition precedent to proof in court.
Distinctions Between Specialty Contract and Simple Contract
A contract under seal requires no consideration or return for a promise, to support it. Hence, although a
gratuitous promise is not legal binding, a similar promise, if made by deed is binding upon the promisor.
A contract under seal will merge in itself that is, swallow up or supersede, a simple contract made
between the same parties and containing the same terms.
Statements made in a deed are absolutely conclusive against the maker of them, unless duress or fraud is
proved. No evidence is admissible to deny or explain them, unless there is what is called a Intent
ambiguity.
A right of action arising out of a contract under seal is not barred for 12 years. The period allowed for
taking action in the case of a simple contract is six years only. The computation of the limitation period
begins from the time an actionable breach occurs. This rule contained in the Limitation Act and the
Limitation Laws of various States is to ensure that actions are not perpetually maintainable.
Note that when a deed is delivered subject to a condition, the deed is not to take effect if the condition is
not fulfilled it is called an escrow. This conditional delivery is made to a person who is a party to the deed.
Express Contract/Implied Contract
A contract is express when the terms are stated clearly in words either orally or in writing. An implied
contract on the other hand is one in which the terms are not clearly stated. Here agreement is manifested in
conduct.
Bilateral Contract/Unilateral Conduct
A bilateral contract is one created by mutual promises from both parties. There is an exchange of promises.
Where there is actual performance in consequence of a promise, the contract is unilateral: See the case of
Carlill v. Carbonic Smoke Ball Company Ltd. (1893).
Executed Contract and Executory Contract
An executed contract is one in which the object of the contract is at once performed, while an executory
contract is one in which one of the parties binds himself to do, or not to do, a given thing at a future time.
Formation of Contract
For a contract to come into existence the following essentials must be present:
(1) Agreement offer and Acceptance); (2) Consideration; (3) Contractual Capacity (4) Intention to
enter into legal relations (5) Compliance with the form prescribed by law if any (Formality) (6) Legality
and possibility as regards the subject matter (7) Absence of vitiating factors i.e. circumstance which might
show that the agreement entered into was not genuine.
II

AGREEMENT: (OFFER ARE ACCEPTANCE)

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No matter how complicated the nature of an agreement may be there must be a definite offer made by one
party and an unqualified acceptance by the other before a contract is formed. An offer is a definite
statement or an undertaking made by a person called the offeror to another called the offeree stating the
terms under which the offeror is ready to enter into a contract with the offeree. It has also been defined as a
proposition made by one party called the offeree clearly and precisely indicating the terms under which the
offeror is willing to enter has been made there cannot be acceptance and by implication no contract can
come into existence: Ejinyi v. Adio (1993).
However, bearing it in mind that agreement can be manifested in conduct, it follows therefore that an offer
can be made by conduct. Take for instance, the TCTC by running its vehicles offer to carry persons in a
certain direction at a fixed price. Acceptance of the offer is complete as soon as the passenger takes his/her
place in or on the omnibus. A complete contract may therefore be formed between parties by acts and
conduct as well as by words, whether spoken or written.
An offer must be clearly distinguished from an invitation to treat. In Innih v. Farado A & C Ltd. (1999)
the Court of Appeal held that an invitation to treat is a mere declaration of willingness to enter into
negotiation. It is an invitation to offer or an offer to receive offers. It is an invitation to asks for tender to
do certain work or to purchase certain goods, the invitation to tender has of itself no operation at all, the
tender is an offer and it must be accepted before there is any binding contract. A prospectus issued by a
Company is an invitation to apply for shares, it is not itself an offer. The application is the offer and the
allotment is the acceptance. Display of goods for sale in a shop with or without a price tag as a general rule
is not an offer for sale, it is merely an invitation to treat. An offer may thereupon be made by prospective
buyer which the shop owner may accept or reject. Fisher v. Ball (1961), Pharmaceutical Society of Great
Britain v. Boots Cash Chemist (1953).
The significance of the distinction between an offer and an invitation to treat is that is that if a true offer is
made and accepted, the offeror is bound to a contract. It is only an offer that is capable of being accepted.
An invitation to treat is preliminary to an offer. If there is an advertisement tagged Immediate Job
Opportunity on application, it cannot be said to be a true offer as this may be preliminary to other stages
like Application, Shortlisting, Conduct of Interview, Selection, Communication of offer and Acceptance of
the offer. In unilateral contract an advertisement may constitute an offer.
Rules as to Offer
An offer may be made to definite person, to a group of people or to individuals generally i.e. to the whole
world. But there can be no contract until the offer has been accepted by a definite person. Before a person
can accept an offer, it must have been complicated to him.
In Carlill v. Carbonic Smoke Ball Company (1893) the defendant advertised that they would pay a reward
of 100 to any person who contracted influenza after using one of their Smoke Balls according to printed
directions supplied to all purchasers. The plaintiff did suffer from influenza although the directions in the
advertisement had been complied with. It was held that the advertisement was an offer to contract which
the plaintiff had accepted by the performance of the conditions contained therein, and that having regard to
the character of the transaction no notification of the acceptance of the offer was necessary. The contract
was a binding one and under it the defendants were bound to pay the 100. The argument of the defendants
that the advertisement was a puff was rejected.
The offeror is at liberty to prescribe any terms of acceptance he pleases and no matter how ridiculous these
may appear, a strict compliance with them is necessary in order to make a contract.
The offeror must not attempt to bind the acceptor by any such term (s) as would dispense with
communication of acceptance e.g. A wrote to I will buy your horse for 30. If I hear no more about him I
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shall consider the horse is mine B never replied to the letter and sold the horse to another person. It was
held that there was contract between A and B.
When an offer consists of various terms care should be taken to bring the whole of the terms to the notice
of the other party.
Termination of an Offer
An offer after made is considered to remain open for a reasonable time or until it is terminated. What is a
reasonable time is a question of fact depending on the circumstances of each particular case. An offer may
therefore be terminated
(i) by revocation (ii) by rejection (iii) by lapse of time (iv) conditional offer and
(v) by death. Let us highlight these circumstances.
(i) Revocation: If no time is prescribed and if there is no consideration for keeping an offer open, the
offeror has a perfect right to revoke the offer at any time before it has been accepted. Notice of the
revocation must be brought home to the offeree in some manner or other before be accepts. It is immaterial
how the information is conveyed to him. In Pickinson v. Dodds (1876) properly was offered for sale by
A to B and a certain time left open for B to think over the matter (there being no consideration for keeping
the offer open) and before the expiration of the fixed time A sold the property in question to another
person. It was held that the offer was revoked by the act of sale and that if B had any knowledge of the
sale, he could not insist upon accepting the offer which had been made by A and so binding him by
contract.
Apart from revocation in the manner discussed above it may also take the form of withdrawal of an offer.
This must be communicated to the offeree before acceptance.
(ii) Rejection: Rejection may be outright rejection or making a counter-offer. A counter-offer is any
suggested variation in the terms of an offer. In law it is regarded is a rejection of the original offer. Where
the counter-offer made by an offeree is accepted it forms the basis of the contract.
(iii) Lapse of time: Where the time within an offer is to be accepted is prescribed, the offer will terminate
after the period fixed has expired e.g. Offer of appointment which is to be accepted by a particular date will
lapse after the date.
(iv) Conditional Offer: Where the acceptance of an offer is made subject to some conditions, these
conditions must be fulfilled before acceptance.
(v) Death: The death of the offeror before acceptance effects the revocation of an offer although the fact of
the death is unknown to the other party.
Rules as to Acceptance
The acceptance must be plain, unequivocal, unconditional and made in the manner and form prescribed in
the terms of an offer. Any suggested variation amounts to a counter-offer. What a counter-offer does is to
destroy the original offer. In Hyde v. Wrench A offered to sell his property to B at 1,000 B offered to buy it
at 950. After some time B sent the sum of 1,000 to A which he rejected. After some time B sent A was
entitled to reject the 1,000 since his original offer had been destroyed by Bs counter-offer. However, a
simple request for information will not amount to a counter-offer Stevenson v. Mclean (1880).
The acceptance must be made either within the time stipulated or within a reasonable time. If not, the offer
is said to have lapsed.
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If the offer is made to a specified person, it can be accepted only by that person.

J.O.A. Akintayo

The acceptance must be communicated to the offeror either by words or by conduct. Union Bank of
Nigeria v. Ozigi (1991). In many cases it cannot be communicated except by express notice. Conduct
would be the fulfillment of conditions prescribed in an advertisement.
The acceptance (i.e. the offeree after acceptance) must be unaware of the fact that the offer had been
revoked if indeed there has been a revocation.
Acceptance concludes the contract. An acceptance, once communicated cannot be revoked.
Where X writes to Y making an offer to buy his car for =N=200,000 and Y simultaneously writes to X
offering to sell his car to him for =N=200,000 and neither party is aware of the other offer, there cannot be
a contract. What we have is a Cross-offer and two offers do not make a contract. There must be acceptance
by either party before we can have a binding contract.
Contract by Post
It is possible for a contract to be concluded by post, fax, telephone, telex, e-mail and other
telecommunication system. An offer sent by post or any other form can be of no effect unless it reaches the
other party. An offeror may prescribe the mode of communicating acceptance and where he insists that
only acceptance in that mode is binding, then acceptance in any other way even if more expeditions is not
binding on him. Where no mode is prescribed whether an acceptance is binding or not demands
u][p0oil3upon the nature of the offer and the circumstances in which it is made. An acceptance by letter
of an offer made by telegraph or faster communication system may be evidence of unreasonable delay on
the part of the acceptor, justifying the offeror in regarding the offer as having lapsed.
When parties to a contract make use of the post as a means of communication acceptance is deemed
complete at the moment of posting and it makes no difference if in fact the acceptance never reaches the
offeror provided that the letter was properly addressed and adequately stamped. This rule which appears to
be an exception to he rule that acceptance must be communicated to the offeror applies only when, in all
the circumstances, the post is the natural means of communicating the acceptance. It would not apply if the
offeror expressly or impliedly stipulated some other mode of acceptance or if from the circumstance an
acceptance by post would not be reasonable e.g. where acceptance had to be communicated more speedily
than the post permitted.
When an offer communicated by post has reached the offeree, it is always possible for the offeror to revoke
the offer by later communication, however made so long as there has been no acceptance. Where the offer
has been acceptance before a letter of revocation such a letter is of no effect. In Henthorn v. Fraser (1892)
H received from the defendant F an offer to purchase certain property for 750. On the following day the
defendant wrote a letter between 12 and 10clock withdrawing the offer; but the letter was not delivered at
the residence of H until 5 p.m. In the meantime at 3.50 p.m. H had written and posted a letter accepting
the offer which was not delivered to the defendant until 8.30 p.m. On these facts, it was held that there was
a binding contract as soon as H posted his letter of acceptance and that the revocation of the offer was too
late.
A contract made by instantaneous communication e.g. telex, telephone, fax, e-mail is made when where the
acceptance is received. Entores Ltd. v. Miles Far East Corporation (1995).
II.

CONSIDERATION
Consideration is what a promisor demands and receives as the price for his promise. Thus an act,
forbearance or promise of each party to an agreement is the price for which the promise of the other is
bought and this is consideration. A simple contract must be supported by consideration for it to be binding.
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Ordinarily a promise. The law of contract is concerned with bargains not mere promises. If A for example
promises to copy Bs lecture notes, the law will not allow any remedy if A breaks his promises. But if B
promises to give A meal ticket in return so that As promise may turn the arrangement into a contract. As
promise is said to be the consideration for Bs promise ad vice-versa. Consideration consists in interest,
benefit, profit, advantage and detriment, loss, disadvantage. Currie v. Misa (1875).
Rules as to Consideration
1.
Consideration must have some value in the eyes of the law
2.
Consideration need not be adequate but it must be sufficient. The law is concerned with the
sufficiency of consideration and not its adequacy.
3. Consideration must be legal. A promise to commit a crime is not a real consideration.
4. Consideration must move from the promisee to the promisor Price v. Easton (1833). A party who
wishes to enforce a contract must be able to show that he has furnished consideration for the promise of the
other party.
5. Consideration may be executory or executed but it must not be past. Executory consideration is a
promise given for a promise given for a promise e.g. Akin promises to deliver goods to Bola and Bola
promises to pay for them on delivery. There is a binding agreement though performance remains for the
future. Executed consideration on the other hand is an act of forbearance given for a promise that is the
completed performance of one side of the bargain. Past consideration is when an act is done before the
promise which is sought to be enforced is made, that is, promise is subsequent to the act and independent of
it. In Roscorla v. Thomas the plaintiff sued the defendant on a warranty as to the soundness of a horse. In
his statement of claim, he set out that the defendant had warranted the horse was sound in consideration
that he (the plaintiff) had bought it. It was held that the consideration was past and could not support the
defendants promise. In this case the promise that the horse was sound came after the conclusion of the
sale. The act of buying the horse could not therefore constitute the consideration of that promise.
Exceptions:
(a) Where the act is performed at the express or immplied request of the promisor and the act is such
that both parties would normally contemplate payment then the subsequent promise to pay will be regarded
as merely fixing the price and part of the same transaction. The law was settled in the case of Lampleigh v.
Brathwait (1615). B had killed one Patrick Mahume and had then asked L to do all he could to get a pardon
for him from the king. L exerted himself to this end, riding and journeying to and from London and
Newmarket at his own expense, and B afterwards promised him 100 for his trouble. He failed to pay it
and L sued him. It was argued that the consideration furnished by L was past, but the court found for the
plaintiff on the ground that his services had been procured by the previous of the defendants.
(b) A written acknowledgement of a debt barred by statute usually revives the right of action to recover
such debt although no new consideration is given for it. S.38 Limitation Law (Lagos State).
(c) The Bill of Exchange Act, Cap. B8 L.F.N. 2004 provides that any antecedent debt or liability may be
an adequate consideration for a bill of exchange of a cheque.
As part of the rule that consideration must have some value note that a promise to perform an existing
obligation is not a valuable consideration. In Stilk v. Myrick (1809) a seaman sued for wages alleged to
have been earned on a voyage from London to Baltic and back. In the course of the voyage two sailors had
deserted, and as the captain, could not find any substitutes, he promised the rest of the crew extra wages if
they would work the ship home short-handed. The action failed on the ground of absence of consideration.
The court held that the crew were already bound by their contract to meet the normal exigencies of the
voyage and were doing no more than their duty in working the ship home. Had they exceeded their duty, or
if the course of events, by making the ship unseaworthy, had relieved them from its performance, the case
would have been different. Thus in Hartley v. Ponsonby ( 1857) the shortage of labour was so great as to
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make the further prosecution of the voyage exceptionally hazardous, and by discharging the surviving
members of the crew from their original obligation, left them free to enter into a new contract. Also,
payment of a lesser amount does not discharge a debt. The case of Foakes v. Beer (1884) illustrated this
general rule.
Mrs. Beer had obtained a judgment against Dr. Foakes for 2,090. Dr Foakes asked for time to pay. The
parties agreed in writing that if Dr. Foakes paid 500 at once and the balance in instalments, Mrs. Beer
would not take any proceedings on the judgment. A judgment debt bears interest as from the date of the
judgment. The agreement made no reference to the question of interest. Dr. Foakes ultimately paid the
amount of the judgment debt itself, and Mrs. Beer then claimed the interest. Dr. Foakes refused to pay it
and Mrs. Beer applied to be allowed to issue execution or otherwise proceed on the judgment in respect of
the interest. Dr. Foakes pleaded the agreement and Mrs. Beer replied that it was unsupported by
consideration. The House of Lords gave judgment in favour of Mrs. Beer for the amount of the interest.
Exceptions
(a) Where at the creditors request the debtor pays a lesser sum earlier than when the whole debt is due.
Pinnels Case (1602)
(b) Where the debtor at the creditors request pay the smaller sum accompanied by delivery of a chattel.
(c) Where the payment of a smaller sum is made at the creditors request at some place other than the
place at which it is due.
(d) Where payment of the smaller sum is made by a third party Welosy v. Drake (125)
(e) Where there is a composition agreement. This is an agreement whereby creditors of an impecunious
debtor agree to accept individually a stated percentage of his debt in full satisfaction. The consideration for
the composition as it has been suggested is in the fact that each individual creditor agrees to forgo part of
his debt on the hypothesis that all the other creditors would do the same. No creditor will be allowed to go
behind the composition agreement to the prejudice either of the other creditors or of the debtor himself as
this would be a fraud upon all the parties concerned.
(f) Promissory Estoppel. The principle of promissory estoppel states that where one party has by his
word or conduct made to the other a promise which is intended to be binding, is intended to be acted upon
is so acted upon then the person making the promise will be bound by his promise. Central London
Property Trust Ltd. v. High Trees House Ltd. (1947). In Sept. 1939, the plaintiffs leased a block of flats to
the defendants at a ground rent of 2,500 per annum. In Jan. 1940, the plaintiffs agreed in writing to
reduce the rent to 1,250, plainly because of war conditions, which had caused many vacancies in the flats.
No express time limit was set for the operation of this reduction. From 1940 to 1945 the DD paid the
reduced rent. In 1945 the flats were again full, and the receiver of the PP Company claimed the full rent
both retrospectively and for the future. He tested the claim by suing for rent at the original rate for the last
two quarters of 1945. Denning J. was of opinion that the agreement of Jan. 1940 was intended as a
temporary expedient only and had ceased to operate early in 1945. The rent originally fixed by the contract
was therefore payable, and the plaintiffs were entitled to judgment. It must be remarked that the agreement
of Jan. 1940 was not supported by consideration. This formed the basis of the principle of promissory
estoppel.
Limitation:
(i)
It can only be used as a shield (defence) not a sword (a cause of action)
(ii) Where legal rights waived, varied or suspended are of a continuous nature, the promisor may later
insist on his full rights again where he gives reasonable notice of his intention.
(iii) The doctrine will not operate if the agreement or promise was obtained in an inequitable manner e.g.
by force or fraud.
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(iv) The promise will be binding only when it has been acted upon. (Ajayi v. R.T. Briscoe Nigeria Ltd.
(1964).
III.
CONTRACTUAL CAPACITY
It is one of the essentials of a valid contract that the parties must have contractual capacity. The general
principle is that any person who can express intention can enter into a contract. There are provisions of the
law, which are designed to protect infants, mentally disordered persons and drunken persons. Artificial
persons, that is, statutory corporations and companies incorporated under the Companies and Allied
Matters Act, (CAMA), Cap C.20 LFN 2004 may also make contracts for the purposes for which they were
incorporates. S.39(1) of CAMA provides that a company shall not carry on any business not authorised by
its memorandum and shall not exceed the powers conferred upon it by its memorandum or this Act.
Contracts entered into in breach of this provision will be regarded as ultra vires. The law now draws a
distinction between executed and executory contracts that are ultra vires. Furthermore, S.38 (1) of CAMA
provides that: Except to the extent that the companys memorandum or any enactment otherwise provides,
every company shall, for the furtherance of its authorized business or objects have all the powers of a
natural person of full capacity. The practice of drawing up the object clause in a very wide manner makes
nearly all contracts intra vires a company.
Infants
An infant is a person below the age of 21 years according to the provisions of the Infants Relief Act,
(I.R.A.) 1874, a English statute of general application in force in most States of Nigeria. The age of
maturity has been further reduced in England but amendments to the I.R.A. after 1900 do not form part of
our law in Nigeria. Contracts made by infants can be into three namely Valid/Binding Contracts, Voidable
Contract and Void Contracts.
Valid/Binding Contract
(i)
Contract for the supply of necessaries: An exception to the general rule that an infant cannot make
a binding contract is that if the goods supplied to an infant are necessaries, then the contract is binding and
the infant are is bound to pay a reasonable price, and not the contract price if that is excessive. What are
necessaries are a question of fact and they must be goods suitable to the condition in life of the infant and
thus, to his actual requirements both at the time of sale and delivery. The measure might thus be the living
standards of the infant concerned. But if an infants needs are already well provided for these goods
(including foods) may cease to be necessaries and the infant will not be liable. In Nash v. Inman (1908)
where the defendant, an undergraduate and an infant was sued by the plaintiff, a tailor for 22.19s.6d, being
the value of clothes supplied to him (the clothes including 11 fancy waist coats at 2 guineas each), when he
already had adequate supply of clothes suitable for his condition in life, it was held that the clothes were
not necessaries as it was not established that the clothes were suitable to the condition in life of the student
and that he was not already supplied with them at the time of delivery of the clothes. The action therefore
failed. In Peters v. Felming (1840) on the other hand, a wrist watch was held to be a necessary for an
undergraduate. Articles of pure luxury cannot be necessaries. The following have been held to be
necessaries: Military uniforms, means of transport, medical attention, legal advice, and necessaries for a
married infants family are in the same category as necessaries for himself.
(ii) Beneficial contracts of service and education:
These are contracts under which an infant receives training or instruction for his future career. Such
contracts if when read as a whole they appear to be beneficial to the infant are binding. (De Francesco v.
Barnum (189), Clements v. London and N.W, Ry. Co. (1894); Slande v. Metrodent Ltd. (1953). A contract
to enable an infant to gain experience as a boxer has been held to beneficial (Doyle v. White City Stadium
Ltd. (1935), but a trading contract no matter how beneficial is not binding. In Cowern v. Nield (1912) an
infant hay and straw merchant was not liable to repay the price of the goods he failed to deliver.
Voidable Contracts
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A voidable contract is one that is valid until it is avoided. Voidable contracts are those in respect of which
an infant acquires an interest in property of a permanent nature to which continuing obligations attach.
Contracts which have been held valid unless avoided by the infant include a contract for a lease (Davies v.
Beynon-Harris (1931), the purchase of share in a limited liability company Cork and Bandon Ry Co. v.
MMichael (1850), (Steinberg v. Scala (Leeds) Ltd. (1923)), and contracts of partnership (Goode v.
Harrison (1821)). The general rule is that these contracts are binding on an infant even during infancy
unless he repudiates before or within a reasonable time after attaining the age of 21. Thus it was held in
Edwards v. Carter that an infant who was a party to a marriage settlement could no longer repudiate it at
the age of 24 i.e. 3 years after attaining majority, as it was held that it was too late to repudiate. Until the
infant avoids the contract, he is bound to fulfil the obligations under it as they fall due. In North Western
Ry v. McMichael it was held that infant share-holders in companies are liable for calls on their shares. On
the other hand, in all contracts of this case, the effect of avoidance or repudiation by an infant is that he
escapes from liability to perform obligations which have not accrued at the time of repudiation. Moreover,
he cannot recover any money paid or property transferred under such a contract unless there has been total
failure of consideration. In Steinberg v. Scala (Leeds) Ltd., an infant applied for and was allotted shares in
a company and paid amounts due on the allotment and on the first call. It was held that upon subsequent
repudiating the contract during infancy she could not, recover back what she had paid for although she had
received no dividends she had received the very consideration for which she bargained.
The above is the position under the Infants Relief Act/Law
Void Contracts
A void is one, which is destitute of any legal effect. In fact it is a contradiction of terms to say that a
contract is void because a void contract is no contract at all. A contract may be void by statute or by
common law.
The I.R.A. section 1 declares the following contracts absolutely void: Contracts for the repayment of
money lent or to be lent; contracts for goods supplied or to be supplied, other than necessaries; all accounts
stated i.e. I.O.U. and similar admission of debts.
By this provision, a loan of money to buy necessaries cannot be recovered though equity may grant relief.
S.2 of the I.R.A. provides:
No action shall be brought whereby to charge any person upon any promise made after full age to pay any
debt contracted during infancy, or upon any ratification made after full age of any promise or contract made
during infancy, whether there shall or shall not be or any new consideration of such promise or ratification
after full age.
The above section applies only to void contract. It applies to contract for non-necessaries, promises to
marry, and contracts by which no continuing interest is acquired. It means that a person cannot be made
liable after attaining majority for a debt contracted in infancy, even if a fresh promise is made, nor will
ratification render the person liable. As regards liabilities other than debt e.g. a promise to marry a
distinction must be drawn between ratification (Coxhead v. Mullis (1878)), and any entirely new promise
(Ditchman v. Worvall (1880)).
Qualification
(i)
If the money lent to the infant is actually used in purchasing necessaries then the lender can recover
such part that is used for necessaries on the basis of the doctrine of subrogation (Re National Permanent
Building Society (1869)).
(ii) A minor can be made to return ill-gotten goods still in his possession. But restitution will not be
possible if the minor has parted with the goods.
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If an infant fraudulently misrepresents his age by deceiving the other party that he is over 21 years, and if
on that basis the other party contracts with the infants, the plea of infancy and all the privileges associated
with it are still open to the dishonest infant. However, in certain cases, equity will grant relief against the
infant by compelling him to restore his ill-gotten gains or to release the deceived party from obligations in
law induced by fraud. The position is clear where the infant remains in possession of the goods but where
he has parted with the goods, the position is not so certain. If he has sold the goods obtained by fraud he
cannot be compelled through personal judgment to pay an equivalent sum out of pocket, For this would
amount to enforcing a void contract. As Lord Sumner declared in Leslie v. Sheill (1914) restitution
stopped where repayment began. However, in Stocks v. Wilson (1913) Lush J. took a contrary view when
he held that an infant, who had obtained goods by misrepresenting his age and had later sold them, was
accountable for the proceeds of sale.
Note that although an infant cannot be bound by a void contract the other party may, however, be bound, if
the infant has given consideration and money and goods given by an infant are only recoverable if there has
been a total failure of consideration on the other side.
Persons of Unsound Mind and Drunken Persons
The contract of a person of unsound mind is voidable and not absolutely void. In order that anyone may
claim the benefits of repudiation of a contract, which he has entered while in an unsound state of mind,
show that his mental condition was known to the other party to the contract at the time of entering into it.
During a lucid interval a person of unsound mind has the same capacity of contracting as any other person,
and he may also then ratify and confirm any contract entered into while insane. As regards necessaries, he
is only bound to pay a reasonable price.
A druken person who is in such a condition as not to understand what he is doing is in the same position as
to contracts as a person of unsound mind.

IV.
INTENTION TO CREATE LEGAL RELATIONS
Although every contracts is an agreement, there are several agreements which are not contracts.
Agreements may be classified into two broad categories: Domestic/Social Agreements and Commercial
Agreements.
The general rule for domestic agreement is that legal relation is not intended. In Balfour v. Balfour (1919)
the defendant was a civil servant stationed in Ceylon. His wife alleged that, while they were both in
England on leave and when it had become clear that she could not again accompany him abroad because of
her health, he had promised to pay her 30 a month as maintenance during the time that they were thus
forced to live apart. She sued for breach of this agreement. The English Court of Appeal held that no legal
relations had been contemplated and that the wifes action must fail.
There may however be exception to this general rule. In Merritt v. Merritt (1970) the husband left the
matrimonial home, which was in the joint names of husband and wife and subject to a building society
mortgage, to live with another woman. The H & W met and had a discussion in the Hs car during which
the H agreed to pay the wife 40 a month out of which she must pay the outstanding mortgage payments on
the house. The wife refused to leave the car until the H recorded the agreement in writing and the H wrote
and signed a piece of paper which state in consideration of the fact that you will pay all charges in
connection with the house until such time as the mortgage repayment has been completed I will agree to
transfer the property in to your sole ownership. After the wife had paid off the mortgage the H refused to
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transfer the house to her. It was held by the English Court of Appeal that the parties had intended to affect
their legal relations and that an action for breach of contract could be sustained.
The general rule for commercial agreement is that legal relation is intended. This presumption may
however be rebutted by evidence to the contrary. Where it is stated that an agreement is binding in honour
only or that it is a gentlemens agreement the law takes it that there is no intention to create legal
relation (Amadi v. Pool House Group Nigeria (1966)).
In Appelson v. Littlewood Ltd. (1939) the Court held that where it is stated that an agreement is subject to
contract it means the parties are still in the process of negotiation and a contract strictly so called had not
been concluded.
V.
FORMALITY
The law may prescribe certain contracts to be in a particular form. Where the law so provides a contract
entered into other than in the prescribed form will not be regarded as valid. These contracts are generally
unenforceable.
Contract not supported by consideration, conveyances of land, legal mortgages and certain leases which are
to last more than three years must be deed. Some contracts must be in writing. These include Bills of
Exchange, contracts of marine insurance. Some contracts must be evidenced in writing.
The Statute of Frauds 1677 a statute of general application provides in its S.4 as follows:
No action shall be brought whereby to charge any executor or administrator on any special promise to
answer damages out of his own estate; or whereby to change the defendant upon any special promise to
answer for the debt, default or miscarriage of another person; or to charge any person upon any agreement
made upon consideration of marriage; or upon any contract or sale of lands, tenements or hereditaments or
any interest in or concerning them; or upon any agreement that is not to be performed in the space of one
year from the making thereof; unless the agreement upon which such action shall be brought, or some
memorandum or note thereof, shall be in writing and signed by the party to be charged therewith or some
other person thereunto by him lawfully authorised.
See also S.4 of the Sale of Goods Act 1893 in respect of the sale of any goods of the value of ten pounds or
upward.
From the above provisions a contract of guarantee or suretyship, contract of sale of land, sale of goods
above 10 pounds, contract not to be performed within one year must all be evidenced in writing.
The note or memorandum in writing is required to prove the existence of the contract. It need not be made
at the time when the contract is entered into. It must however be in existence before any action can be
brought upon the contract itself. The provisions of the Statute of Frauds that state that in so far as it relates
to contracts not to be performed in one year, and section 4 of the Sale of Goods Act have been repealed by
Federal legislation applicable to Lagos only, and by the legislature of the Western Region. In other parts of
the country the position of the law is as contained in these English statutes.
A contract of guarantee must be distinguished from a contract of insurance. In UAC Ltd. v. Paul Jazzar
(1940) the Court said: contract of suretyship is not, as is a contract of insurance, a contract uberrima fides.
A mere non-disclosure on the part of the promisee is not a ground for avoidance unless it amounts to
misrepresentation or actual fraud. Also a contract of indemnity as the latter does not need to be evidenced
in writing. See Okoye v. John (1956).
VI.

LEGALITY AND POSSIBILITY

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No agreement is of any legal effect if it is unlawful in any of its terms, or if it contemplates the prosecution
of anything which is unlawful in its result. Under this head are agreements to commit a crime or a civil
wrong, agreements opposed to public policy and agreements expressly made void by statutes. It is not easy
to define public policy. It may loosely be described as public interest as declared by the judges. Trading
agreements made with aliens of a country with which this country is at war are invalid. A contract for the
payment of penalty in the event of a breach is opposed to public policy. Contracts promoting corruption in
public life, contract to defraud government of revenue, contracts which interfere with the administration of
justice are illegal contracts. Other group of contracts which may be declared void or unenforceable at
common law include contracts to oust the jurisdiction of the court, contracts prejudicial to marital status
and contract in restraint of trade.
Possibility of Performance
An enforceable contract must be one which is capable of being performed at the time when it is made. An
undertaking to perform an impossibility renders a contract void.
There are 3 kinds of impossibility to be noticed:
(1) Absolute Impossibility: This is the case of an agreement to perform a thing which is incapable of
performance by the laws of nature, as an undertaking to run a mile in a minute.
(2) Legal Impossibility: This is the case where an act is positively forbidden by the law of the land.
(3) Actual Impossibility: This arises where parties have contracted to a certain thing which without
their knowledge is non-existing at the time of entering into the contract Courturier v. Hastie (1852).
Contracts in Restraint of Trade
Contracts which tend to place any undue restraint upon freedom of trade are regarded with suspicion. It has
been held that a partial restraint of trade might be allowed provided there was a limit of time, and space and
that there was also some consideration for the restraint (this includes speciality contracts). Contract in
restraint of trade are enforceable if reasonable with reference to the interest of the parties concerned and
that of the public. What is reasonable depends upon the nature of the trade or profession which is affected.
A contract by a solicitor not to practise within 150 miles of London and a contract by a surgeon not to
practise within 7 miles of a certain country town in England were held to be valid while a contract by a
doctor not to practise within 100 miles of York was held to be bad. Unless the restraint imposed is
considered in all circumstances too harsh the agreement will be held good (Nordenfelt v. Maxim
Nordenfelt).
Effect of Illegality
Illegality with reference to contracts means merely that they will not be enforced by a court of law, A
contract may be rendered illegal or void by statute as well as by common law. As soon as the Court
discovers that a contract is illegal it will refuse to help the plaintiff any further. Thus is a contractor has
done some work for you for which a government licence is required and no licence has been issued the
court will not order you to pay him the agreed price for his work. An illegal contract will never be enforced
by the court, but in exceptional cases the court may allow a party to recover money which he has paid on a
contract that was illegal.
(1)
Where the guilt of the parties is not equal and the plaintiff is less to blame (parties are not in pari
delecto) for the illegality of the defendant.
A mistake of fact induced by the defendant would help e.g. in the above example if the householder was told
by the contractor that he had obtained the licence and the householder then be able to recover it even though
the contract was illegal because of the absence of a license. Where contract class of persons to which the
plaintiff belongs e.g. the Money Lender Act seeks to protect the class of borrowers. A money lender who
has contravened the law cannot recover but the borrower can recover any security which he has given the
money lender in return for the loan (Kasumu v. Baba-Egbe (1956); Abesin v. Iyaegbe (1958); Fashina v.
Odedina (1957).
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(2) Where no substantial part of the illegal act has been performed a party who truly repents would be
able to recover. Repentance must be genuine and not just due to circumstances beyond his control.
VII.
VITIATING FACTORS
These are recognized kinds of behaviour that could operate to take away a persons ability to freely enter
into a contract. They are mistake, misrepresentation, duress and undue influence.
1.
Mistake
Mistake is used here to describe the situation in which one or both parties to an agreement acted under an
untrue belief about the existence or non-existence of a material fact. It must be pointed out that only a
mistake of fact can avail. The position of the law with respect to mistake of law is epitomized by the
maxim that says ignorantia juris non excusat: ignorance of the law is no excuse. We are therefore
concerned with mistake of fact.
There are three types of mistake of fact. They are unilateral mistake, mutual mistake and common mistake.
Unilateral Mistake is when only one of the parties is mistaken and that mistake is known to the other
party. An example is mistake as to the identity of the other contracting party. This usually arises for
instance, where X contracts with Y under the impression that he is contracting with Z. The contract can be
declared and void and X freed from it if X can prove the following:(i)
That he intended to deal with some person other than Y with whom he has apparently made the
contract;
(ii) That Y the party with whom the contract was actually made was aware or ought reasonably to have
known of Xs intention;
(iii) That the identity of Y was material in the sense that the contract would not have been entered into
had the true identity of Y been know;
(iv) That X took reasonable steps to verify the identity of Y. Where the parties dealt with each other face
to face it may be extremely difficult for the party contesting the validity of the contract to prove unilateral
mistake (Philip v. Brooks (1919)) but where the parties did not deal with each other face to face it may be
easier for the party contesting the contract to prove that the mistake was material. In Cundy v. Lindsay
(1879) a rogue called Blenkarn ordered goods by post from Londsay by pretending to be Blenkiron a
reputable firm. Blenkarn resold the goods to Cundy. Lindsay was able to recover because the contract with
Blenkarn was void. The courts in these circumstances apply the subjective test to determine whether there
is a genuine contract in existence (Lewis v. Averay( (1972)).
Mutual Mistake is where the parties misunderstand each other. The parties are at cross- purposes and there
is no correspondence of offer and acceptance e.g. A makes an offer to B about his Peugeot 504 car and B
accepts the offer thinking that A is referring to his Peugeot 505 car. There is no consensus ad idem i. e.
meeting of the mind. The court would apply the objective test to resolve the problem i.e. the question is not
what the parties had in their minds, but what reasonable third parties would infer from their words or
conduct. Where it is impossible to impute any definite agreement to the parties the court must of necessity
declare that no contract whatsoever has been created. In the leading case of Raffles v. Wichelhans (1864) A
agreed to buy and B agreed to sell a consignment of cotton which was to arrive ex Peerless from
Bombay. In actual fact two ships called Peerless sailed from Bombay, one in October, the other in
December. It was held that the buyer was not liable for refusal to accept cotton dispatched by the December
ship.
Common Mistake arises where both parties make the same mistake. The intentions of both parties are
known to each other and they have genuinely contracted in the belief that some that which lies at the root of
the contract is true, but each is mistaken as to the existence of what they are contracting about.
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Cases of Rex Extincta and Res Sua provide us with good examples.
In cases of Res Extincta, the subject-matter unknown to the parties is non-existent at the time of the
contract. Thus in Conturier v. Haste (1850) a contract entered into for the sale of corn on a ship, which
unknown to the parties had been sold by the Master of the ship because of its bad condition before the
contract was held to be void for common mistake.
Res Sua deals mistake as to title and this may arise when a person buys what he already owns. In Cooper v.
Phibbs (1867), a lease obtained by the plaintiff of a fishery which was later discovered to be his own was
held over. Also in Abraham v. Chief Oluwa (1944) the plaintiff who mistakenly bought at an auction a
piece of land that previously belonged to him was held entitled to recover his money.
But apart from cases falling within Res Extincta and Res Sua, the common law rule is that a contract is not
void merely because the parties have made the same mistake, however fundamental the mistake may be.
This was clearly enunciated in Bell v. Lever Brothers Ltd. (1932). L. who had a controlling interest in the
Niger Co. appointing B Managing Director of the latter Co. for 5 years at an annual salary of 8,000. After
3 years the services of Bell became redundant owing to the amalgamation of the Niger Co. with a third
company, and L. agreed to pay him 30,000 as compensation for the loss of his employment. After they
had paid this money, they discovered for the first time that B had committed several breaches of duty
during his directorship which would have justified his dismissal without compensation. They therefore sued
for the recovery of 30,000 on the ground inter alia of common mistake, but they failed. The House of
Lords held that the circumstances of the case itself disclosed no operative mistake.
Mistake as to quality will not generally void a contract especially in the absence of fraud or any warranty.
Mistake as to the Nature of the Document Signed
Where a party signs a document which turns out to be different from what he intended to sign the signer
may be able to plead non est factum i.e. it is not my deed and thus render the document null and void.
The signer to succeed must show:(i)
That he was fraudulently induced to sign;
(ii) That the document was fraudulently different from what he thought he was signing;
(iii) That he was not negligent.
The above can be said to be exception to the general rule that in the absence of fraud or misrepresentation,
a person is bound by a writing to which he has put his signature, whether he has read its contents or has
chosen to leave them unread L.Estrange v. Graucoub (1934).
Effect of Mistake In Equity
Where the mistake as to the subject matter is not fundamental as to render the contract void, equity may
intervene to grant remedy of relief in the form of rescission, rectification or refuse to order specific
performance.
Rescission is the right to have the contract set aside.
The party claiming this remedy must show that he or she was not at fault in any way.
Rectification: The court may order rectification of a document where by mistake the terms of a written
document does not represent accurately what the parties orally agreed.
This is at the discretion of the court.
The court may refuse specific performance if one party has made a mistake which makes it unfair to
enforce the contract against him.
2.
Misrepresentation
A representation is a statement made by one party to another before or at the time of the contract with
regard to some existing fact or some past event which is one of the causes that induces the contract. It is an
assertion of the truth that a fact exists or existed. It has no bearing on future events or promises. But where
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such a statement forms part of the contract and the person making them undertakes and guarantees that it is
true and it proves to be untrue, it becomes a misrepresentation.
Misrepresentation is relevant to a contract only if it satisfies the following:
(i) The statement must have been intended to be acted upon and must actually have induced the other
party to make the agreement.
(ii) It must have been a representation of fact not law. A mere boast or expression of opinion is not
regarded as a statement of fact.
(iii) The statement must be false and must have actually deceived the other party and induced him to make
the contract
(iv) The statement must have been addressed to the party misled.
There are three types of misrepresentation. Innocent misrepresentation: This is an untrue statement of fact
which the maker believes to be true and which is neither negligently nor fraudulently made. Negligent
Misrepresentation: This is a statement which is made carelessly or without reasonable grounds for
believing it to be true.
Fraudulent Misrepresentation: This is an untrue statement made knowingly or without belief in its truth, or
recklessly careless whether it to be true or false. In Derry v. Peck (1889) the House of Lords held that an
absence of honest belief is essential to constitute fraud. The facts of Derry v. Peek were these:
A company, after submitting its plan to the Board of Trade, applied for a Special Act of Parliament
authorizing it to run trams in Plymouth by steam power. The Act which was ultimately passed provided
that the trams might be moved by animal power, or if the consent of the Board of Trade were obtained, by
steam or mechanical power. The directors, believing that this consent would be given as a matter of course,
since the plans had objection, thereupon issued a prospectus saying that the company had the right to use
steam power instead horses. The respondent took shares upon the faith of this statement. The Board of
Trade refused their consent, and the company was ultimately wound up. It was held by the House of Lords,
reversing the decision of the Court of Appeal, that an action of deceit against the directors claiming
damages for fraudulent misrepresentation must fail.
Remedies for Misrepresentation
Where the misrepresentation is an innocent one the misled party may either refuse to perform the contract
or he may ask the court to rescind it (i.e. set it aside). Rescission of a contract is a remedy of equity which
used to be unknown at common law. At common law there was no remedy for innocent misrepresentation.
The purpose of rescission is to revert the parties to their original position before the contract was made. It is
obvious that there can be no rescission of a contract if something has happened which makes restitution in
integrum (return to the previous position) impossible. Also where third parties have acquired interest there
can be no rescission. An action for rescission must be instituted promptly because delay defeats equity.
The House of Lords in Hedley Byrne & Co. Ltd. v. Heller and partners Ltd. (1964) held that in some
circumstances an action would lie in tort for negligent misstatement. In this case the plaintiffs entered into
advertising contracts on behalf of Easipower on terms under which they would themselves be liable if
Easipower defaulted. Wishing to check on Easipowers credit, they asked their bank to inquire of the
defendants who were Easipowers bankers. Relying on the replies, they continued to place order and
suffered substantial loss when Easipower went into liquidation. The House of Lords held that the plaintiffs
action failed since the defendants replies had been given without responsibility, but they also stated that,
but for this disclaimer, an action for negligence could lie in such circumstances. See also Esso Petroleum
Co. Ltd. v. Mardon (1976).
In the case of fraudulent misrepresentation a person who has been misled in addition to the remedy of
rescission which has the effect to nullify the contract ab initio may also claim from the other party damages
for fraud i.e. the tort of deceit. However, it must be borne in mind that it is a fundamental principle that the
effect of a misrepresentation is to make the contract voidable and not void. This means that the contract is
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valid unless and until it is set aside by the representee. On discovering the misrepresentation the
representee may elect to affirm or rescind the contract.
None-Disclosure
The law draws a clear distinction between misrepresentation and non-disclosure. Apart from exceptional
cases where silence amounts to assertive conduct, there is no general duty to disclose information that
would be likely to affect the other partys decision to conclude the contract. Silence or none-disclosure
affords a ground for relief (1) where the silence distorts positive representation (2) where the contract
requires uberima fides and (3) where a fiduciary relation exists
Contracts uberima fides i.e. contracts of utmost good faith are those where one party has full knowledge of
the material facts. The law imposes a duty on that party to make full disclosure of all the material facts
known in him, otherwise the contract may be rescinded. The main examples of this kind of contract
include:
(i)
(ii)
(iii)
(iv)

Contract of insurance
Contract of sale of land
Contract to subscribe for share in a company
Contract involving family arrangement

Where a person had made a representation and before the other party has entered into the contract the
representation has become untrue, the person who made it is bound to correct his earlier statement.
3.
Duress
Duress at common law, or what is sometimes called legal duress, means actual violence to the person i.e.
treats calculated to produce fear of loss of life bodily harm. The majority of writers state that duress makes
the contract voidable but this has been vigorously controverted. Those who believe that a contract made
under duress is void hiage their position on the voluntary character of a contract. In this event consent is not
freely given. For duress to afford a ground of relief it must be duress of a mans person not of his goods
Skeate v. Beale (1840).
4.
Undue Influence
Equity had concurrent jurisdiction with the courts of common law with regards to duress, but by an
application of its comprehensive doctrine of constructive fraud, it exercised a separate and wider
jurisdiction over contracts made without free consent. It developed a doctrine of undue influence. This
doctrine is accurately stated by Ashburner on Equity cited by Cheshire and Fifoots Law of Contract.
In a court of equity if A obtains any benefit from B, whether under a contract or as a gift, by exerting an
influence over B which, in the opinion of the court, prevent B. from exercising an independent judgment in
the matter in question, B can set aside the contract or recover the gift. Moreover in certain cases the relation
between A and B may be such that A has peculiar opportunities of exercising influence over B.
If under such circumstances A enters into a contract with B, or receives a gift from B, a court of equity
imposes upon A the burden, if he wishes to maintain the contract or gift, of proving that in fact he exerted
no influence for the purpose of obtaining it. See Allcard v. Skinner (1887). A contract is voidable on the
ground of undue influence.
Note: Unconscionable bargains and the doctrine of economic duress.
CONTRACTUAL TERMS
In the course of forming contract various statements are made. Some of these statements may be regarded
as contractual terms while others are considered as representations. If a statement is a term of the contract,
it creates a legal obligation for whose breach an appropriate action lies in law.
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A contractual term may generally be classified as either a condition or a warranty. A condition is at the
very center of the contract. It is a fundamental term, that is a term that goes to the root of the contract, the
breach of which entitles the innocent party to repudiate the contract (that is, to treat the contract as having
come to an end or discharged) or to claim damages or both. A warranty is of secondary importance. It is a
term collateral to the main purpose of the contract, a minor term, the breach of which entitles the innocent
party to sue for damages but not to repudiate the contract. If the innocent party wrongly believing a
condition to be breached and thereby repudiate the contract, he will be liable in breach of contract.
It is not always possible from the insertion of a term into a contract to classify it as a condition or warranty,
sometimes they can only be distinguished when the consequences of breach are known. Cehave v. Bremer
(1975). Such terms are known as Innominate terms.
Whether in fact a term in a contract should be treated as a condition or a warranty depends on the intention
of the parties. This intention may have been openly expressed by the parties but failing that the courts will
have to deduce the parties intention from all the facts of the contract. The court is not bound by the parties
choice of word. They may well have used the term warranty when what they really had in mind were
conditions in the legal sense of the word.
Conditions and warranties are stipulations. They may be express stipulations or implied stipulations. A
term may be implied by statute, by common law or by custom.
Exclusion Clauses: These are terms in a contract which seek to absolve a party completely from liability
or limit the extent of his liability e.g. NEPA exempts itself from any liability which its activities may
generate. Exclusion clauses are common in standard form contracts.
There are two situations in which the defendant may seek to rely on an exclusion clause.
(i) Where the plaintiff signed the documents, the exclusion clause will operate.
(ii) Where the plaintiff has not signed a document containing the exclusion clause whether or not the
exclusion clause will operate depends on the circumstances of the case. The defendant cannot rely on an
exclusion clause if he did not notify the other party of its existence at the time of formation of the contract.
Note
(1) The exclusion clause must be brought to the notice of the plaintiff before or at the time the contract
is made. Where it is not communicated until after the contract is made it would have no effect Odebiyi v.
Zard (1972); Thornton v. Shoe Lane Parking Ltd. (1977).
(2) Where the document containing the exclusion clause is signed or has earlier been discussed the
plaintiff is bound except where there is a misrepresentation of the terms in the contract Chargoury v.
Adebayo; Curtis v. Chemical Cleaning & Dyeing Co. (1951).
(3) Where an exclusion clause sought to be relied on is ambiguous the court will interpret it against the
party using it as a defence.
(4) Third parties are not protected from liability by the exclusion clause except when expressly stated
Alder v. Dickson (1954).
(5)

Parties are free to agree to whatever exclusion or modification of their obligations they choose.

(6)

Courts will strictly an exclusion clause: Photo Production v. Securitor Transport (1980.

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(7) A party cannot invoke an exclusion clause where the party is guilty of fundamental breach. Ogwu v.
Leventis Motors (1963); Boshali v. Allied Commercial Exporters Ltd. (1959).
PRIVITY OF CONTRACT
In the law of contract there is a basic rule that a person who is not originally a party to a contract, cannot be
bound by its terms, nor can he receive any benefit from it. A contract thus creates rights and obligations
only between the parties to it. It is a fundamental principle that only a person who is a party to a contract
can sue on it. Tweddle v. Atkinson (1861). In consideration of an intended marriage between the plaintiff
and the daughter of William Guy, a contract was made between Guy and the plaintiffs father, whereby
each promised to pay the plaintiff a sum of money. Guy failed to do so, and the plaintiff sued his executors.
His action was dismissed because of the established rule that no stranger to the consideration can take
advantage of a contract, although made for his benefits. There are however exceptions to this rule. They
include (i) Assignment
(ii) Novation (iii) Restrictive covenants on land (iv) Contract of Insurance (v) Trusts (vi) Agency (vii)
Leases (viii) Ships under charter party (ix) Restrictions upon price.
DISCHARGE OF CONTRACT
Discharge of contract means the extinction of all contractual obligation and corresponding rights under a
contract.
(1) Discharge by Agreement: A contract formed by agreement may also be discharged by agreement.
Where neither party has performed his obligation under the contract a mere agreement will be the release of
the other from his promise (Executory Contracts). Where the contract on the other hand is executed i.e. one
party has performed. The other party who has not performed but wishing to be released must provide the
consideration in return for the others promise of release. This method of discharge by agreement is known
as accord and satisfaction. Accord is the new agreement to discharge the contract and Satisfaction is
the consideration provided by the party seeking the release. One party may be deed unilaterally release the
other party from his obligation.
Novation is a means of replacing the original contract by a new contract either made by the same parties or
made by one of them with a third party. Where the original contract itself contains a term providing that it
should be discharged on the happening of a future event or the fulfillment or non-fulfilment of some
conditions e.g. for the duration of the ward.
(2) Discharge by Performance: A contract is discharged if both parties have performed their respective
undertakings under the contract. If one party tenders performance and this is without good reason rejected
by the other party the affect will vary according to whether goods or money had been tendered. Where
goods have been tendered in performance of a contract and they are not accepted, the party tendering will
be discharged from his obligation. A tender of money not accepted by the creditor does not discharge the
debtor and he may pay the sum into court. Chiozie v. UAC Ltd. (1956).
(3) Discharge by Lapse of Time: A contract is discharged by lapse of time only where the contract has
been entered into for a specific period of time e.g. a contract of employment for one year.
(4) Discharge by Breach: Strictly speaking a contract is not discharge by a breach, but a breach gives the
innocent party a right to treat the contract as discharged if he wishes to. Every breach entitles the innocent
party to claim damages from the guilty party. Not every breach however entitles the innocent party to treat
the contract as discharge.
(5) Discharge of a Contract by Subsequent impossibility: If a person contracts to do something which
can be done but he cannot do it the contract will be valid and he will have to accept the legal consequences
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of his ability to perform. In certain exceptional circumstances however a contract will be discharged by
subsequent impossibility. Examples of this include:
(a) Legal impossibility
(b) Discharge of contract of personal service by death;
(c) Discharge of contract by destruction of subject matter where it expressly or implicitly rests on the
continued existence of a certain subject matter Taylor v. Caldwell (1863) (a contract for the hiring of a
theatre was held to be discharged when the theatre was accidentally burned to the ground). The usual
practice is insert a force majeure clause in a commercial contract to deal with circumstances which render
performance impossible not within the contemplation of the parties. The expression force majeure is used
in commercial contracts to describe events that might happen and that are entirely outside the control of the
parties. Literally it means coercion or irresistible compulsion.
(d) Where a contract has been entered into in contemplation of a future event or state of affair which does
not materialize the contract will be discharged. In Krell v. Henry (1903) (Coronation case) the plaintiff
agreed to let a room to the defendant for the day upon which Edward VII was to be crowned. Both parties
understood that the purpose of the letting was to view the coronation procession, but this did not appear in
the agreement itself. The procession was cancelled due to the illness of the king. The court held that the
plaintiff could not recover the agreed rent from the defendant since it did not fall due until the last minute
of 24 June, and before this moment had arrived the abandonment of the procession had been announced.
(e) Frustration: Where its commercial purpose has been frustrated. The important feature of this ground of
discharge of a contract is that performance must have become a thing radically different from what the
parties undertook in the contract. Note that a party cannot rely upon a self-induced frustration.
Statutes have intervened to modify the common law position on frustration in two ways. First, it is now
possible to recover money prepaid even though at the date of frustration there has been no total failure of
consideration. Secondly a party who has done something in performance of the contract prior to the
frustrating events is permitted to claim compensation for any benefits ha has conferred upon the other.
REMEDIES FOR BREACH OF CONTRACT
When there is a breach of contract the innocent party may sue for damages. It can be liquidation or
unliquidated. They are liquidated when the amount has been agreed upon by the parties themselves in the
contract. They are unliquidated if they are to be assessed by the court. Where a contract contains a clause
providing for the payment of agreed damages if a breach of the contract should take place the innocent
party will be able to claim the sum agreed upon irrespective of the extent of the loss which he has suffered.
A penalty clause will not be enforced by the court. Where a term is hel to be a penalty clause the plaintiff
will have to be satisfied with unliquidated damages.
Liquidated damages must represent a true and fair estimate (at the time of agreement) of the loss likely to
be suffered by the plaintiff in case of breach of contract. Courts will always hold agreed damages to be a
penalty where the obvious purpose of the amount agreed upon was to terrorize the other party into
performing the contract rather than the making of a fair estimate.
Nominal Damages are a small token amount (e.g. to naira) awarded as damages to a person whose
contractual rights have been infringed but who has not suffered any actual loss. T.J. Solomon v. J.D.
Pickering & Co. Ltd. (1926).
Special Damages are usually estimated as being the precise amount of loss actually suffered as a result of
the breach.
Exemplary or Punitive Damages are damages which are not only awarded as a means of compensation but
to punish the party in default.

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Assessment of Damages
(1) Damages to be awarded to a plaintiff for breach of contract should cover such of his losses as may be
fairly considered to arise naturally. This is the rule in Hadley v. Baxendale (1854); S.C.O.A. v. Ogana
(1958).
(2) Where the plaintiff suffers some unusual loss he will be able to recover damages for his loss only if it
has been in the reasonable contemplation of the parties.
(3) A plaintiff must do everything in his power to minimize his loss.
Quantum Meruit
Where the plaintiff has party performed his obligation under a contract he may claim on a quantum meruit
basis a fair price as the value of what he has done. This is particularly suitable when the defendant has
repudiated a contract before the work is complete. V.O. Taiwo v. F. B. Princewill (1961); Obu v. Strauss &
Co. Ltd. (1951)
EQUITABLE REMEDIES
Specific performance is a court order to the defendant to perform his obligation. Equitable remedies are
discretionary remedies. The court will not order specific performance unless it can supervise due
compliance with the order. It would not order specific performance of a contract of employment since the
parties cannot be compelled to carry it out Williams v. Smith (1948).
Injunction is court order which forbids the defendant from breaking some negative prohibition or restrain to
which he has agreed in the contract. The court will not issue an injunction if as a result the defendant is
obliged to perform a contract or give up his business activity altogether. N.K. Zard v. M.J. Satiba (1955).
Equitable remedies are given where damages would be inadequate as a remedy e.g. in contract for the
purchase of land.

TOPIC 4
CONTRACT OF EMPLOYMENT
An examination of the law governing employment relations is of vital importance because it is
difficult to conceive that a person of full age and capacity endowed with good health will not be
engaged either as a employer of employee throughout his/her life. Even self-employed persons do
enter into contracts for services which though closely associated with contract of service must be
distinguished there from.
The term contract of employment emphasizes that the relationship of employer and employee, or
master and servant is a voluntary one governed by contract. Every case of employment necessarily
implies a contract or agreement, Although there may not always be a contract in writing. It has been
pointed out that a valid contract may be entered into otherwise than in writing. A contract of
employment is a contract of service. It must be distinguished from a contract for services, in which a
self-employed person or an independent contractor contracts to perform certain work for another.
Whether or not the relationship of employer and employee exists is entirely a question of fact in each
particular case. Three main tests have been developed by the common law to distinguish a contract
of service from a contract for services.
(i) The Control Test:
The greater the degree of control exercised by an employer, the greater the likelihood of a contract of
service. Sir Frederick Pollocks Law of Torts puts it as follows: The relation of master and servant
exists only between persons of whom one the order and control of the work done by the other. A
master is one who do not only prescribes to the workman the end of his work, but directs, or any at
moment may directs, the means also, or as it has been put, retains the power of controlling the
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work. Sir Frederick Pollock further defines an independent contractor as one who undertakes to
produce a given result, but so that in the actual execution of the work he is not under the order or
control of the person for whom he does it and may use his won discretion in things not specified
beforehand.
Where X employs Y a chauffeur to drive his car, Y is the servant of X but if X goes into the street
and hails a taxi and instructs the driver Z to take him to a certain place, Z is not Xs servant, but an
independent contractor.
In Performing Right Society v. Mitchell & Booker Ltd. (1924) the plaintiffs owned the copyright of
some musical works while the defendants hired a hand and instructed them not to play any piece of
which would be an infringement of copyright. The band nevertheless played the works of the
plaintiffs, thereby infringing their copyrights. The question for consideration was whether the band
were independent contractors or the servants of the defendants. The agreement with the band
provided for seven hours daily service and for the services of the band to be at the exclusive
disposal of the defendants, who were given the right of immediate dismissal for the breach of any
reasonable instructions or requirements. It provided also that the band should play at any place in
London to which they were directed by the defendants, who might also detail the nature of the music
to be played. It was held in consequence that the band were the servants of the defendants, which
were thus liable for the tort which the band committed in the course of their employment.
As Justice McCardie said in the above case: Definition has been difficult. The decisions are
numerous and not always easy to follows. Thus, whilst a labourer employed to cleanse drains at 5s
for the job was held in one case to be a servant and not a contractor, a plumber called in by a
landlord to mend a leaky cistern was held to be an independent contractor and not a servant. The
nature of the task undertaken, the freedom action given, the magnitude of the contract amount, the
manner in which it is to be paid, the powers of dismissal, and the circumstances in which payment of
the reward may be withheld all these hear on the solution of the question. But it seems clear that a
more guiding test must be secured, and the test to be generally applied lies in the nature and degree
of detailed control over the person alleged to be a servant. This circumstance is, of course, only one
of several to be considered, but it is usually of vital importance.
Where a transport company lets out its vehicle on hire to a businessman and provides a driver, the
driver does not become the servant of the businessman for the driver is not placed under his control
except that the businessman may indicate the destination to which he wishes his goods to be taken. If
the businessman actively interferes with the driving and an injury occurs to anyone, he may be
liable-not as a master, but as the procurer and cause of the wrongful act complained of. The case of
Mersey Docks and Harbour Board v. Coggins & Griffiths (Liverpool) Ltd. (1947) illustrates this.
The Harbour Boards lent a mobile crane with a crane-man to a firm of stevedores for loading a ship.
The crane-man was employed and paid and liable to be dismissed by the Board, although the general
hiring conditions stipulated that he would be the servant of the hirers. In the course of operating the
crane McFarlane was injured by the negligent driving of the crane. The injured man sued the
Harbour Board and the Stevedores for damages. The question in the case was whether the crane-man
was, for the purpose of McFarlanes claim, to be regarded as employed by the Harbour Board or by
Coggins & Griffiths, the Stevedores. It was established that although the stevedores had the
immediate direction and control of the operation of picking up and moving cargo, they had no power
to direct how the crane-man should work the crane. Accordingly the relationship of master and
servant did not exist and they were not therefore liable for the crane-mans negligence. The Harbour
Board was liable, as a negligent act was done by its servant in the course of employment.
The control test, according to H.R. Light, The Legal Aspects of Business, is difficult to apply where
the servant exercises professional skill or performs work of a highly technical character.
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(ii) The Organisational/Integration Test:

This is also known as the Business Test. This establishes that work constituting an integral part of
the business indicates a contract of service. This test has proved useful where the servant exercises
professional skill including hospital cases. In Cassidy v. Ministry of Health (1951), the plaintiff was
operated at the defendants hospital by one of their whole-time medical officers. As a result of
negligence in the course of the post-operational treatment the plaintiffs hand was rendered useless
and the defendants were held liable. The English Court of Appeal held that hospital authorities are
liable for negligence in the course of their professional duties by their permanent staff,
radiographers, resident house surgeons and physicians anaesthetists, pharmacists and nurses who are
employed under a contract of service. If the patient selects and employs the doctor, the hospital is not
liable because he is not employed by them.
In Roe v. Minister of Health (1954) the English Court of Appeal held that an anaesthetist who
carried on a private practice but was also under an obligation, with another anaesthetist, to provide a
regular service for the hospital was a servant or agent of the hospital. Lord Justice Morris thought
that anaesthetists wre members of the organization of the hospital.
In Stevenson Jordan & Harrisons Ltd. v. McDonald and Evans (1952) Lord Denning took the view
that whether a person is a servant depends on whether or not a person is part and parcel of the
organization. This test takes account of the degree of integration and thus brings workers like
hospital staff, consultants and other professionals within the theory.
(iii)The Entrepreneurial Test:
Where a worker is working on his own account his contract is likely to be one for services. An
opportunity to make profit of incurs loss indicates self-employed status. See Ready Mixed Concrete
v. Minister of Pension (1968).

Vicarious Liability
The principal significance of distinguishing a contract of service or a contract of employment from a
contract for services lies in fact that the master as a general rule is liable for any tort which the
servant commits in the course of his employment. The liability of a master for the torts of his servant
is an example of vicarious liability in tort. This does not exonerate the servant for a person cannot
excuse himself by saying that he was acting as the agent or servant of another. A self-employed
person or an independent contractor is liable for a wrong he commits and the person taking benefit of
his work is not vicariously liable.
It has been said that a scientific reason for the vicarious liability of a master for the torts of his
servant is hard to find but that It seems to be based on mixture of ideas that the master can usually
pay while the servant cannot; that a master must conduct his business with due regard to the safety of
others; that the master profit from the servants employment, and that by employing the servants has
set the whole thing in motion. The rule would be an intolerable burden on the master but for the
fact that he often covers his risk by insurance.
For the master to be liable the wrong done must fall within the courses of the servants employment.
It is however often an extremely difficult question to decide whether conduct is or is not within the
course of employment. In Marsh v. Moores (1949). Lynskey J. said: It is well settled law that a
master is liable even for acts which he has not authorized provided that they are so connected with
the acts which acts which he has authorized that they may rightly be regarded as modes although
improper modes, of doing them. On the other hand, if the unauthorized and wrongly act of the
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servant is not so connected with the authorized act as to be a mode of doing it, but is an independent
act, the master is not responsible for in such a case the servant is not acting in the course of his
employment but has gone outside it. In all these cases it must be a question of fact whether an
unauthorized act by a servant is within or outside the scope of his employment.
A wrong falls within the scope of employment if it is expressly or impliedly authorized by the master
or is an unauthorized, manner of doing something which is authorized, or is necessarily incidental to
something which the servant is employed to do. The master will not be liable merely because the
wrongful act was done during the servants working hours or with the masters property. In Mitchell
v. Crassweller (1853) the defendants carman took the defendants horse and cart from stables
without authority and used them exclusively for his own benefit, and in the course of so doing he
negligently ran down the plaintiff. It was held that the master was not liable as the carman was a
frolic of his own.
However, if a servant while on his masters business takes the opportunity to further his own
purposes the master will remain liable unless the servant ceases altogether to be on the masters
business. Thus in Whatman v. Pearson (1868), the defendants forbade his drivers to leave their
horses and go home during the luncheon interval. One driver disobeyed this order and left his horse
and cart unattended whilst he went home for a meal. In consequence a third party was injured. The
master was held liable, as the driver had control of the horse and cart during the day.
In the case of willful wrongdoing by a servant, the courts have evolved the following rules: The
master will be liable where the wrongful act done may still be in the course of employment although
expressly forbidden by the master. Thus in the case of Limpus v. London General Omnibus Co.
(1862) the defendants driver, contrary to express instructions not to race with or obstruct other
omnibuses, had upset the plaintiffs omnibus by pulling across the road in front of it. It was held that
the defendants were liable, for the servant was acting in the course of his employment, although he
was acting improperly. Furthermore, a master is vicariously liable for the tortions act of his servant
committed within the scope of his authority whether they are for the benefit of the masteror for the
benefit of the servant. Thus in Lloyd v. Grace, Smith & Co. (1912), the plaintiff went to the
defendants, a firm of solicitors, for the purpose of selling some property, and saw their managing
clerk, who had authority to arrange, negotiate, and carry out sales of real property and also to receive
deeds for safe custody. The clerk fraudulently induced her to execute documents which are in fact
conveyances of the property to himself. He then sold the property in his own name, and absconded
with the proceeds. It was held by the House of Lords that the defendants were liable although the
agent/servant alone benefited by the fraud.
From the foregoing, it is apparent that it is a question of fact in each case whether the wrong was
committed in the course of the servants employment: Ogunmuyiwa v. Solanke (1956). The onus of
proving that a servant was not acting within the scope of his employment is on the master and he
must lead evidence in this regard. Iko v. John Holt & Sons Ltd. (1957).
Nature of a Contract of Employment
A contract of employment to be valid must fulfil the essential conditions of a contracts i.e. the
ingredients of a valid contract must be present. These may be summarized as follows:
(i)
One party must agree expressly or implicitly to perform an undertaking and the other party
must agree to accept such performance that is to say, there must be offer and acceptance.
(ii)
The agreement must be supported by consideration or entered into according to certain
prescribed form.
(iii)
Both parties must be persons who the law acknowledges as competent to enter contracts; they
must have contractual capacity.
(iv)
Both parties must intend that the agreement shall give rise to a legally recognized obligation.
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(v)
The object of the contract must be legal.

J.O.A. Akintayo

There are so many stages which are preliminary to the formation of a contract of employment which
do not seem to have any legal significance. These include advertisement, applications, invitation for
interviews, conduct of interviews. The basis for the formation of a contract of employment can be
found in communication of offer of employment and acceptance. A candidate whose performance at
an interview makes him the most eligible person for a vacant job cannot complain if another person
is preferred. He has no remedy in law for there is no contract in existence between him and the
would-be employer. Even if he has been reliably informed he would be offered the job by officers of
the employers who have no authority to communicate offer of employment, he cannot insist that he
must be employed. The usual practice in contract of employment is for the employer to make an
offer of employment to the proposed employee which he may accept. The offer may be a conditional
offer, for instance, subject to medical examination. The offence must accept the terms of the offer
and his acceptance must be unconditional and unqualified. Any attempt to vary the terms of the offer
would amount to a counter offer. Where a counter offer is accepted it will form the basis of a
contract of employment. In Dr. Adesegun Banjo v. University of Ibadan (1979) Dr. B. amended the
terms of the offer of appointment he was given by the University of Ibadan by inserting new terms.
This amounted to a counter offer. The University went ahead with the arrangement for Dr. B. to take
up the job. This modification was later discovered by the defendant whereupon the defendant
attempted to terminate the contract of appointment and offer the proper contract. Dr. B. rejected this
and decided to contest the defendants action in court. It was held that since the University accepted
the counter offer, there was a valid contract in existence. However, the court finally decided that the
defendant could terminate the plaintiffs appointment under the terms of appointment with three
months salaries in lieu of notice. Dr. B. was held entitled to three months salaries with effect from
21st March 1977 the date he was expected to sign a new contract.
Once a contract of employment is established, it is subject to the common law and relevant statutes.
The Labour Act, Cap 198 L.F.N. 1990 sets out various terms which apply to all contracts of
employment.
Contractual terms may be express or implied. Express terms relate to provisions in a contract of
employment especially agreed to by the parties. Apart from the requirements of the Labour Act,
contracts of employment may be entered into orally or in writing but it is certainly wiser for them all
to be in writing.
Express Terms: Where a contract of employment is in writing the parties are bound by the express
terms and conditions so stipulated. In Olaniyan v. University of Lagos (1988) the Supreme Court of
Nigeria held that public servants in the established and pensionable cadre of the Federal Government
services do not owe their offices at the pleasure of the Federal Government their appointments are
based upon rules and regulations, statutes or memoranda of appointment.
The Labour Act provides that an employee is entitled to a written notice of certain conditions. This
must be given within three months of the commencement of employment. The conditions include:
identity of employer and employee, date that employment began, salary (amount and frequency),
hours of work, entitlement to holidays, sick leave; pension and pension schemes (unless statutory)
notice period for termination or expiry date, job title and rules for resolving grievances and
disciplinary measures, which include naming the person to whom the employee may appeal in the
circumstances (S.7).
If the contract is written there need not be a separate list of particulars and the list may refer to other
more detailed documents with which the employee has been provided or may consult (e.g. Staff
Handbook). The employee must be notified of any changes in the terms in writing within one month
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of that change being made. Collective agreement may also be incorporated into a contract of
employment. For instance, a session in the offer of probationary employment in a company in the
private sector of the economy states: Please note that while in the employment of the company,
you shall be bound by the conditions of service as contained in the Collective Agreement
relevant to your grade.
In a written contract, it is usual to indicate the nature of the duties which an employee would be
required to perform. At times an omnibus provision which states that the employee is to perform
certain duties assigned to him by the employer or his representative (head of department) is inserted.
In this case the job title may give some indication on the nature of the duties an employee is to
perform.
It will also be indicated whether the job is a full time one or not. The terms under which the
employee may engage in other gainful occupation and the conditions precedent thereto may be
specified. The employer is generally justified to impose a restraint on his employee while the latter is
till in the formers employment. This is necessary to protect the business interests of the master.
Some restraints may extend beyond period of employment.
It has been remarked as follows on restraint of trade: The doctrine of restraint of trade is a legal
device to attempt to hold the balance between two competing factors an employees freedom to
take employment as and when he wishes, and an employers interest in preserving certain aspects of
his business from disclosure or exploitation by an employee or, more usually, an ex-employee. In
Littlewoods Organisation Ltd. v. Harris (1977, 1978) IWLR 1472 Denning M. R. adopted the test of
reasonableness. The protectable interests of an employer include trade secrets and customers
connection. A contract that imposes an unreasonable restraint upon a persons capacity to carry on
his trade may be held in certain circumstances to be contrary to public policy, on the grounds that it
is in the public interest that everyone should be at liberty to do whatever work he chooses and to do
it where he chooses. For a restraint to be reasonable in the interests of the parties it must afford no
more that adequate protection to the party in whose favour it is imposed. In Fitch v. Dewes (1921)
the defendant undertook to serve a Tamworth solicitor as managing clerk for three years, and agreed
that on the expiration of his service he would never practise as a solicitor or enter the service of any
other solicitor within a radius of 7 miles of Tamworth Town Hall, except in respect of a particular
business mentioned in the agreement. The restraint was upheld because the defendant had personal
contract with and confidential information regarding his employers clients. The restraint was held
not to be too wide in regard to either place or time.
Implied Terms
Some terms are implied into a contract of employment. They may be implied either by statute,
common law or by custom. It has been said that the normal contract is not an isolated act, but an
incident in the conduct of business, and it will frequently be set against a background of usage,
familiar to all who engage in similar negotiations and which may be supposed to govern the
language of a particular agreement. At common law certain duties are imposed on employers and
employees. A common duty is that both must give reasonable notice when terminating the contract.
Common Law Duties of an Employee
(i)
An employee has a duty to obey his employers lawful and reasonable orders within the
scope of the service undertaken by him provided he is not thereby exposed to personal danger by
violence or disease such as he did not undertake to run. If he refuses to obey when asked to do
something illegal or dangerous and is subsequently dismissed, his claim for wrongful dismissal may
be upheld. In Sule v. Nigerian Cotton Board (1985), the Supreme Court per Obaseki J.S.C. said:
when a servant grows too big to obey his master, the honourable course open to him is to resign in
order to avoid unpleasant consequences should an occasion which calls for obedience be serviced
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with disobedience. Both common law and statute law brook no disobedience of lawful order from
any servant, high and low, big or small. Such conduct normally and usually attracts the penalty of
summary dismissal. Disobedience ranks as one of the worst form of misconduct in any
establishment. The appellant had been retired from the respondents employment for refusing to
vacate the premises he occupied at Apapa (Companys Quarters) after he had been permanently
transferred to the Companys Head Office at Funtua.
(ii)
An employee has a duty not to willfully disrupt his employers business. It is possible to lay
down any hard and fast rules as to what constitutes disruption of employers own particular
circumstances.
(iii)
An employee should reasonable care in the execution of his duties. Lister v. Romford Ice &
Cold Storage Co. Ltd. (1957). This duty includes taking care of the masters property. An employee
is not an angel so only reasonable care is expected of him. However, the skill, knowledge and
competence possessed by a employer will determine if in his own case he has exercised reasonable
care.
(iii)In addition to the above, there are also certain duties of good faith, of fidelity, of
confidentiality and honesty known as fiduciary duties which an employee owes to his employer. An
employee must not put himself in a position where his duty conflicts with his interest. He must not
make secret profit or take bribe giving and taking of bribe are offences punishable under the
Criminal Code. He must account for a deliver up to the master all property entrusted to him and all
moneys received on his masters account. He must not disclose confidential information to
unauthorized persons for he has a duty of confidentiality. These duties do not end even when
employment has ceased. See generally Boston Deep Sea Fishing & Ice Co. v. Farhham (1957).
Common Law Duties of an Employer
(i)
An employee on piece work is entitled to earn a reasonable sum of money thus a reasonable
amount of work must be put his way. Wages shall be payable in legal tender and not otherwise. See
SS. 1-3 Labour Act.
(ii)
The traditional view is that if an employer provides pay, there is no obligation to provide
work. The law not recognizes that the master is under a definite obligation to provide work in a few
cases. For instance, it is essential for work to be available for an employee whose remuneration
depends upon the amount of work done, or who is paid on commission basis; or in the case of one,
like an actor, whose continued employment depends upon keeping his name before the public. Thus
in Hebert Clayton and Jack Waller Ltd. v. Oliver (1930) the appellants, who were theoretical
producers had engaged Oliver to play a lead in one of their productions, and he agreed not to appear
elsewhere except with their consent. A part was offered which Oliver insisted was not a leading one,
and he therefore refused to appear and brought an action for breach of contract. It was held by the
House of Lords that he was entitled to succeed.
The modern trend on the obligation of the employer to provide pay is associated with the employees
right to work. Where work is not provided, an employee may contend constructive dismissal if his
skills will deteriorate. Bosworth v. Angus Jowelt (1977). For the traditional view see Collier v.
Sunday Referee Publishing Co. Ltd. (1940). 2kb647
(iii)
The employer has a limited obligation to pay wages during illness. The Labour Act has
confirmed this position. A worker is entitled to be paid wages up to 12 working days in any one
calendar year during absence from work caused by temporary illness (S.15).
(iv) An employer has an inalienable duty to exercise reasonable care regarding his employees
safety. He has to ensure that his employees do not suffer injury in the course of their employment,
either in consequence of the masters personal negligence or through his failure properly to
superintend and control the undertaking. This duty is inalienable because an employer cannot evade
this duty by delegating his responsibility to a safety officer, for liability is strict. In Wilsons and
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Clyde Coal CO. v. English (1938), a miner brought an action for damages for personal injuries
against his employers, and the question arose as to whether they were liable in respect of these
injuries, as they had delegated to a competent servant the duty of taking due care in the provision of
a reasonably safe system of working in the mine. It was held that though the employers duty to
provide a competent staff of men, adequate materials, and a proper system and effective supervision
is not absolute for it is fulfilled by the exercise of due care and skills but it is not fulfilled by
entrusting its fulfillment to employees, even though selected with due care and skill. It was held
therefore that the miner was entitled to succeed.
The common law duty of care owed by an employer to his employees is based on the tort of
negligence. For an action in negligence to succeed there must a duty of care, breach of that duty and
damage must have resulted from the breach. This duty extends to (a) the provision of safe premises
and appliances (plant and machinery and means of access), and their maintenance in proper repair
(b) the selection of fit and competent fellow servants and the proper instruction of inexperienced
servants and (c) a proper system and control of work.
With regard to appliances, an employer is bound at once to adopt all the latest improvements and
appliances. He is bound to exercise reasonable care both to provide safe appliances and to keep them
safe. In Davidson v. Handley Page Ltd. (1945) where a worker slipped while washing a cup, the
employer was liable for the dangerous conditions of the floor. The court held that the masters duty
to provide safe appliances extends not merely to the performance of the acts of workmanship the
workman is engaged to do, but covers any of the acts normally and reasonably incidental to his
work, as for example going to a tap to get a drink of water.
System of work is not easy to define. It may consist of number of elements and what exactly it
must provide will depend entirely on the facts of the particular case. System includes much matters
as the physical layout of the job, the setting of the stage, so to speak the sequence in which the
work is to carried out, the provision in proper cases of warnings and notices, and the issue of special
instructions. A system may be adequate for the whole course of the job or it may have to be modified
or improved to meet circumstances which arise. What is a safe system of work, therefore is a
question of fact to be determined on the evidence available in each case.
In General Cleaning Contractors Ltd. v. Curtis (1953) the respondent, a window cleaner, was
employed by the appellants, a firm of contractors, to clean the windows of a club. Following the
practice usually adopted by the employees of the appellants, he stood on the sill of one of the
windows to clean the outside and was holding one sash for support when the other sash came down
on his fingers, causing him to let go and fall to the ground, suffering injury. He successfully claimed
against the appellants for damages. It was held by the House of Lords that it id the duty of an
employer to give such general safety instruction as a reasonably careful employer who has
considered the problem presented by the work would give to his workmen. However, as it was
pointed out by the English Court of Appeal in Woods v. Durable Suites Ltd. (1953), an employer is
not bound, through his foreman, to stand over workmen of age and experience all the time to see that
they do what they are supposed to do.
The House of Lords likewise held in Qualcast (Wolver-Hampton) Ltd. v. Haynes (1959), that the
employers were not liable for negligence in not providing a safe system of work when an
experienced moulder, whilst pouring molten metal into a mould, accidentally poured some on his
foot and burned it because he was not wearing the protective spats provided by the employers. To
the mans knowledge the employers had provided protective spats, which would have prevented
injury, and they were available on demand; he could not expect to be constantly reminded to take
safety precautions which were available and which his experience should tell him were essential. In
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this case it was also emphasized that the question whether a master has provided a safe system of
working is one of fact, not law, and will depend on all the circumstances of each particular case.
An employers duty at common law is not only to instruct his worker but to follow up by reasonable
supervision. In W.N.T.C.v. Ajao (1965) a worker had been injured by a splinter of steel which had
escaped during an operation by a fellow workman and flew into his eye and subsequently blinded it.
The companys defence was that plastic goggles were provided for their workers The court held that
the provision of goggles was not enough to discharge the masters duty of care. It was the
employers duty at common law to ensure not only that goggles were provided but also that they
were used by strict orders followed by reasonable supervision.
Where an employee has a special disability known to the employer, the former has a higher degree of
care. In Paris v. Stephey Bprpugh Council (1951), the plaintiff was blinded in one eye by enemy
action during the World War II. This disability was known to the defendants who were his
employers. Whilst knocking a bolt from under a bus he struck a piece of metal from a nut which flew
and blinded his only remaining eye. The English Court of Appeal exonerated the employers on the
ground that they were under no obligation to provide the victim with safety devices because it was
not the practice in the trade. But the House of Lords reversed the decision and held that an employer
had a duty to individual workers which is bound to vary with particular circumstances. Knowing of
the plaintiffs peculiar position, they were under a duty to provide him with goggles even though it
was not the practice in the trade.
An employer is liable for the wrong done by an employee to a fellow employee. The doctrine of
common employment has been abolished. In Hudson v. Ridge Manufacturing Co. Ltd. (1957) an
employee was injured by the foolish pranks of a fellow worker who had indulged for four years in
horseplay during office hours at the expense of the plaintiff and other workers. The employer knew
about the workers conduct and had frequently rebuked and warned the offending worker that
someone might get hurt one day. In an action by the injured employee for damages for the
companys negligence, the employers were held liable for the breach of the common law duty to
provide competent workmen.
(v)
An employer has a duty to reimburse his employee for all expenses which the latter properly
incurs within the scope of his employment, and to indemnify him against liabilities and losses
resulting from obedience to the masters lawful orders.
(vi)

An employer has a duty to treat his employee with respect.

Statutory Duties
In addition to the common law duties discussed above, the employer is under a duty to observe all
regulations imposed by statute. As Emiola puts it In the emerging industrial society, statutes have
been used to regulate industrial activities and these statutes have had the effect of imposing
additional liability on the employer for the sake of his worker. In WNTC v. Ajao it was declared
that a plaintiff might succeed in an action for breach of statutory duty even if he would have failed at
common law and vice versa.
The Factories Act, Ca 16 LFN 1990 highlights statutory duties of factory owners or occupiers and
makes provisions for breaches of the duties. However as Emiola said with regard to the Factories Act
1956, the predecessor of the Factories Decree No. 16 of 1987 (now Factories Act Cap 126) The Act
is supposed to play a preventive role by way of reducing or arresting the number of accidents in
industry. The point has been put succinctly by Lord Pearson; he said of the equivalent English Act:
The Act should be regarded as a beneficial rather a penal statute. Its object is to secure proper
working conditions for persons employed to do manual labour in certain operations, and the
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penalties for failure to provide such conditions are merely incidental to that object. See Stone v.
Haygarth (1968).
The Factories Act is divided into 11 parts. Part I Registration of Factories; Part II: Health (General
Provisions); Part III: Safety (General Provisions); Part IV: Welfare (General Provisions); Part V:
Health, Safety and Welfare Special Provisions and Regulations;
Part VI: Notification and Investigation of Accident and Industrial Disease
Part VII: Special Applications, Extension and Miscellaneous Provisions,
Part VIII: General Registers Etc Part IX: Administration; Part X: Offences, Penalties Legal
Proceedings and Part XI: General.
S.85 on application states: Except where otherwise expressly provided the provisions of this Act
shall be in addition to and not in substitution for or diminution of the provisions of any other Act, or
Law: Provided that no person shall be liable to be punished under this and under another Act, or Law
in respect of the same acts or omissions.
The provisions of the Factories Act apply only to factories as defined in the Act except there it is
otherwise provided. The Act also applies to factories belonging to or in the occupations of the
Government of the Federation or of a State.
Let us look at Part II of the Act. S.7 makes provision for cleanliness; S.8 overcrowding; S.9
ventilation; S.10 lighting, S.11 drainage of floors, S.12 sanitary conveniences.
Part III relates essentially to safety provisions. S.18 makes provision as to unfenced machinery; S.19
construction of and maintenance of fencing. In the important care of Nichols v. Austin (Leytons)
Ltd. (1946) affirmed in Close v. Steel Company of Wales Ltd. (1961), the House of Lords decided
that the duty to fence was intended to keep the workman out-not to keep the machine or product in
so that an employee injured when a piece of wood flew out of a circular saw was told that he could
not recover any damages for the resulting injury.
S.23 is on training and supervision of inexperienced workers. It states: No person shall be employed
at any machine or in any process, being a machine or process liable to cause bodily injury, unless he
has been fully instructed as to the dangers likely to arise in connection therewith and the precautions
to be deserved and - (a) he has received a sufficient training to work at the machine or in the process;
or (b) is under adequate supervision by a person who has a thorough knowledge and experience of
the machine or process.
S.28 relates to safe means of access and safe place of employment. S.28(1) provides: All floors,
steps, stairs, passage, gangways and other parts of a structure or building used as a factory shall be of
sound construction and properly maintained and kept safe at all times and before the construction of
any factory, the building plans and such other documents as the Director of Factories may require
shall be submitted to him for approval not less than six months before the commencement of such
construction. In other subsections there are provisions that openings in floors are to be securely
fenced except in so far as the nature of the work renders such fencing impracticable; there must be
safe means of access to every place of which any person has to be or works, substantial hand rails
must be provided and maintained in respect of staircases and all ladders shall be soundly constructed
and properly maintained.
S.30 relates to precautions with respect to explosive or inflammable dust, gas, vapour or substance.
Effective means for detecting fire must be installed, maintained and readily accessible (S.35). There
must be adequate means of escape in case of fire (S.36).
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The Factories Act enjoins occupiers to remove all dust or fumes (S.45) provide protective clothing
and appliances (S.47) and ensure protection of eyes in certain processes which entail electric arc
welding (S.48).
In view of the foregoing registration of new factories is regulated by S.3.
The benefits of the above provisions to an employee are tremendous. The statutory provisions
obviate with the need to prove negligence WNTC v. Ajao.
The employer is however not without defences. These include remoteness of damage Latimer v.
A.E.C. Ltd. (1953); contributory negligence Orekoya v. University of Ife (1972); and consent.
Contributory Negligence: It the plaintiffs negligence was one of the causes of his injury, then the
Court will have regard to all the causes and will apportion the damages in accordance with the law.
What is and what is not contributory negligence is a question of fact to be determined by the Court,
and the onus of proof is on the defendant. For example, in Cakebread v. Hopping Bros. (Whetstone)
Ltd. (1947) the plaintiff, an experience wood working machinist suffered injury to one of his fingers
whilst operating a circular saw. There was evidence that the plaintiff did not adjust the saw provided
with a guard the way it should and that the saw provided was not in accordance with the Wood
Working Machinery Regulations. It was held that the employers had failed in their statutory duty to
maintain a guard in an efficient state and in position, and to supervise the work of the factory, and
these breached of duty contributed to the accident. It was held also that the workmans duty, at
common law, was to observe for his own safety that degree of care which an ordinary prudent man
would have observed in the circumstances, and his failure to exercise this care contributed to the
accident. For these reasons the damages were apportioned equally and the workman received half of
the damages assessed.
Consent
The maxim of law is volenti non fit injuria (that to which a man consents cannot be considered an
injury). In relation to cases of employer and employee the principle was explained by Lord Herschell
in Smith v. Baker & Sons (1891) as follows: Where a person undertakes to do work which is
intrinsically dangerous, notwithstanding that reasonable care has been taken to render it as little
dangerous as possible, he no doubt voluntarily subjects himself to the risks inevitably accompanying
it and cannot if he suffers, be permitted to complain that a wrong has been done to him, even though
he cause from which he suffers might give to others a right of action. For example, one had agreed to
take part in an operation necessitating the production of fumes injurious to health would have no
cause of action in respect of bodily suffering or inconveniences resulting there from, through another
person residing near seat of these operations might well maintain an action if he sustained such
injuries from the same cause.
Where a servant is exposed to risks which are not in any way incidental to his employment or
through incidental to his employment, is attributable to the masters personal negligence, no consent
on the servants part to take the risks upon himself is to be implied from the existence of the contract
of employment. In Smith v. Baker & Sons the plaintiff had been working for some months drilling
holes in the rock of cutting A crane worked by another man in the employment of the contractors
was lifting stones nearby, and form time to time these were swung over the plaintiffs head without
warning. The plaintiff was fully aware of the danger to which he was exposed, and had in fact
complained that she practice dangerous. Subsequently a stone fell from the crane and he was injured.
It was held that the employer cannot invoke the aid of the maxim volenti non fit injuria to protect
him from liability for his wrong in such a case, The plaintiff was therefore entitled to damages for
the injuries he sustained. To rely on this doctrine, the master must show that the workman undertook
that the risk should be on him. This will be easy to establish where there is a consideration in form of
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danger money. It must be shown that a servant who is asked or required to use dangerous plant is a
volunteer in the fullest sense, that knowing of the danger, he expressly or impliedly said that he
would do the job at his own risk and not at the risk of his master: Bowater v. Rowley Regis
Corporation (1944). 1944 1 All ER 465 (Borough Cumel)
Termination of Contract of Employment
The contract of employment may be lawfully determined in a number of ways which will be
considered below. When a contract of employment is for a definite time it will terminate at the end
of that period and no notice of further act is required to terminate it. The time of the expiration will
depend on the agreement between the parties. The contract may be reviewed at the expiration of that
period. Temporary appointments for one year which are made in the public service pending conduct
of interview and contract appointments given to retired staff or expatriates illustrate this point.
The parties to a contract of employment may decide to terminate their relationship and thus release
each other from obligations under the contract. There must have been no fraud or duress exerted on
the parties to the mutual termination.
A contract of employment may come to an end by frustration, This is an event or change in
circumstances so fundamental as to be regarded by the law as striking at the root of the contract as a
whole and beyond what was contemplated by the parties and such that to hold the parties to the
contract would be to bind them to terms which they would not have made had the contemplated that
event. Frustration may be due to death; illness act of state or operation of law; compulsory winding
up of the employers company, dissolution of the partnership in case of personal service or
compulsory conscription of the servant during war or hostilities. Letter of appointment or other
instrument of appointment may make provision for this mode of termination though its absence does
not preclude its operation.
A contract of employment may be determined by notice. The notice must be precise and reasonable
and in accordance with the terms of the contract of employment. Generally in this regard. Any notice
which does not conform with the one specified in the contract of employment is wrongful and it is of
no consequence. Lecturers in some Nigerian Universities are required to give three or six months
notice depending on their cadre and some institutions the notice must terminate on 30th September in
the year in which it is given. There are provisions which allow employers to accept an inadequate
notice should they decide to waive their right.
The length of notice to be given may also be regulated by the provision of the Pension Act 23 Cap
346, LFN 1990or Civil Service regulations or other documents/instruments incorporated into the
contract of employment. In the public sector it is the length of service that determines whether
termination of employment by notice will amount to retirement or withdrawal of service.
In the absence of any stipulated length of notice to be given when a contract of employment is to be
terminated reasonable notice must be given. (24)
Reasonable notice depends on the nature of
employment and the circumstance of each case. Notice periods are subject to section 11 of the
Labour Act which prescribes minimum periods of notice. One day where the contract has continued
for three months or less, one week where the contract has continued for three months but less than
two years, two weeks where the contract has continued for more than two years but less than five
years and one month where the contract has continued for five years.
It appears that payment of salary in lieu of notice especially by the employee is not automatic. This
right must be specifically conferred on an employee before he can exercise it.

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A contract of employment may be determined by the dismissal of the employee. The difference
between dismissal and other forms of involuntary termination of appointment initiated by the
employer is that a person that is dismissed goes empty handed. The dismissal of a servant is radical
but where it precipitates removal without formalities it is described as summary dismissal. The
reason for dismissal must be concrete and convincing and under the Labour Act a dismissed
employee is entitled to a written statement of the reasons for dismissal.
Dismissal may occur as a result of a number of factors including the following:
(i)

Misconduct i.e. acts of the servants which are ser incompatible with the faithful discharge of
the servants duties e.g. commission of a crime by the servant, dishonesty, gross disrespect to
others or constituted authority, insubordination, secret commission, conflict of personal
interest with employers interest.
(ii)
Wilful disobedience to lawful order. Laws v. London Chronicles (1959) IWLR 698
(iii)
Illness: Where there is permanent incapacity caused by illness this might justify dismissal.
(iv)
Negligence: Where an employee willfully or negligently fails to carry out his duties he may
be dismissed.
(v)
Drunkenness, immorality and incompetence.
A dismissal becomes wrongful if it is not in accordance with the terms of the employees contract.
Failure to follow the procedure prescribed by statutes in contract with statutory flavour or to observe
the rules of natural justice will render a dismissal wrongful and invalid. Cases of gross misconduct
may justify summary but if the employer so act as to lead to the resignation of the employee that
may constitute constructive dismissal and wrongful dismissal.
An employee may also maintain an action for unfair dismissal. To do this he must establish that his
dismissal was unfair and that the employer acted unreasonably. The employer to avoid liability must
show that he had a good reason for the dismissal and that they acted reasonably.
In Ewarami v. African Continental Bank (1978) the Supreme Court of Nigeria held that where an
employee had been wrongfully dismissal by his employer, it would adopt the view that the dismissal
was null and void and that such had never existed. In Shitta-Bey v. Federal Public Service
Commission (1981) the apex court held that its willingness to order reinstatement is not restricted to
employment in the private sector, and that in appropriate cases the Court will order mandamus to
issue to compel a public authority to reinstate a servant who has been improperly dismissed or
removed from office.
Where the charge giving rise to a disciplinary action against an employee involves an allegation of a
criminal offence the Supreme Court has held in Sofekun v. Akinyemi (1980) that the principle of
natural justice demands that the employee should be tried and that the constitution confers on him a
right to his innocence or guilt determined by a court or tribunal.
Redundancy: Under the Labour Act a contract of employment may be determined as a result of
redundancy. Redundancy is in involuntary and permanent loss of employment caused by an excess
of manpower. There is a situation of redundancy if the employer dismisses the employee because:
(a)
(b)
(c)
(d)

He closes down the business in which the employee is employed; or

H e closes it down at a place where the employee has been employed; or
The employer has a reduced need for employees to carry out the kind of work on which the
employee was employed; and
The redundancy must have resulted from excess of manpower
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The negative impact of the present economic downturn on industries and other business
organisations is alarming. This has necessitated reduction in the work force and rationalization of
corporate structures in many organisations. The introduction of the of computer technology into the
operation of many business outfits has resulted in less demand for labour. All these make the issue of
redundancy a very important one.
Corporate policies on deciding the category of employees to lay off differ. Issues like age, efficiency,
productivity are given thoughtful consideration. Options open to organizations include the Last In
First Out which is sanctioned by S.19(1) (b) of the Labour Act.
The right to a redundancy payment is given by section 19 of the Labour Act. To qualify the claimant
must be an employee in continuous service with the employer. He must show if required that he has
been dismissed by the employer and that the dismissal was by reason of redundancy Obaleye v.
Dunlop Nig. Ltd.
It appears that where a change of working methods caused by the introduction of new technology
leads to the dismissal of an employee who does not understand the operation of the new machine and
does not make attempt to do so the employee is unlikely to succeed in a claim for redundancy North
Riding Garages v. Butternick.
The Workmens Compensation Act Cap 470 LFN 1990
This is an Act to make provisions for the payment of compensation to workmen for injuries suffered
the course of their employment. The ambit of this legislation is wide as it covers persons or
workmen having contract of service or private/apprenticeship is by way of manual labour clerical
work or otherwise and whether the contract is expressed or implied, oral or written. Section 3
outlines employers liability for compensation for death or incapacity resulting from accident
occasioned by personal injury by accident arising out of and in the course of employment. In M.A.
Smith v. Elder Dempster Lines Ltd. (1944), It was held that an employees who had already left his
place of employment and was passing across a number of tugs to a boat in which he had permission
to travel but which was not the only means of transit available to him and was injured when he
attempted to jump into the tug but fell into the water could not recover because the accident did not
arise in the course of his employment.
The provision of section 3 does not apply to injury which does not incapacitate the workman for a
period of at least 3 consecutive days from earning full wages at the work at which he was engaged.
The Workmens Compensation Act does not apply if it is proved that the injury to a workman is
attributable to the serious and willful misconduct of that workman. In this case any compensation
claimed in respect of that injury shall be disallowed.
Where injury results in death or serious and permanent incapacity the Court on a consideration of all
the circumstances may award the compensation provided by this Act or such part thereof as it shall
think fit.
Section 4 deals with compensation in fatal cases. It states:
(a)

Where the workman leaves any dependant wholly dependent on his earning the amount of
compensation shall be a sum equal to 42 months earning but where in respect of the same
accident compensation has been paid under the provisions of sections 5, 7 or 9 of this Act
there shall be deducted from the sum payable under this paragraph any sums so paid as
compensation;
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(b)
Where the workman does not leave any dependant wholly dependent on his earnings but
leaves any dependant in part so dependent, the amount of compensation shall be such sum, in
any case not exceeding the amount payable under paragraph (a) of this section as may
determined by the Court to be reasonable and proportionate to the injury of the said
dependant;
(c)
Where the workman leaves no dependant reasonable expenses commensurate with the last
position held in his employment by the deceased shall be paid by the employer.
Section 5 deals with compensation in the case of permanent total incapacity. Where permanent total
incapacity results from the injury, the amount of compensation shall be a sum equal to 54 months
earning
Section 6 makes provision for additional compensation. It states
Where an injury results in permanent total incapacity of such a nature that the injured
workman must have the constant help of another person, additional compensation shall be
paid amounting to one quarter of the amount which is otherwise payable under section 5 of
the Act.
Section 7 is on compensation in the case of permanent partial incapacity. The Second Schedule to
the Act deals with this. Medical assessors are to assist in this connection.
Section 9 deals with compensation in the case of temporary incapacity.
It must be stressed that a judgment given in favour of the plaintiff in proceeding under the
Workmens Compensation Act is a bar to proceedings instituted by or on behalf of the plaintiff in
respect of the same injury independently of the Act as it was held in Mrs. B. T. Segun v. Messrs
West African Airways Corporation Ltd. (1957).

CHAPTER 5
THE LEGAL FRAMEWORK OF INDUSTRIAL RELATIONS IN NIGERIA
Introduction
In their book, Industrial Law, Smith and Wood (1980) had this to say about the subject of Industrial
Law,
The subject of Industrial Law may be split for convenience if not for accuracy, into three
principal areas - Industrial safety law, employment law and the law relating to industrial
relations. Each has a different legal and social background, and until recently, the level (and
type) of legal involvement was markedly different in each.
The learned writers noted that Industrial safety law has a history of statutory intervention dating back
to the beginning of the 19th century, with formidable volume of case law on the statutes and on the
actions, which could be brought by an injured employee. Employment law, however, was based
almost entirely upon the common law concept of the contract of employment; and it attracted little
statutory intervention and even much of the common law, though extensive in theory, was a dead
letter in practice, principally due to the inadequacies of the remedies for breach of the employment
contract by the employer. Industrial relations law was characterized by the voluntary principle and
the abstention of the law (once legislation had been used in the latter part of the 19th century and the
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first part of the 20th to legalise the operations of purposes of trade unions and to protect them and
their members from tortuous liability for industrial action); it is true that wage negotiation in certain
industries was encouraged by Wages Councils which were the creation of statute, but even here the
law merely provided for a minimum framework and did not attempt to impose legal rights and duties
on the substance of the negotiation itself.
Our focus here will be on Industrial relations law though as the above depicts, no watertight
compartmentalisation can be noticed among the three principal areas of Industrial law highlighted
above. For instance, it is a universal phenomenon for trade unions to negotiate safety conditions with
employers of labour. The negotiation between management and labour invariably impacts on the
terms and conditions of contract of employment.
Parties to Industrial Relations and their Interests
Who are the parties to industrial relations and what are their concerns? Schregle (1981) has put it in
this way:
In every country, workers, employers and governments have both common and divergent
interests, short term and long term. The divergent interests are must be accommodated and
reconciledThe way in which such interests are expressed and reconciled is the subject of
industrial relations.
From the above, we can identify the three principal parties in industrial relations. These are workers,
and employers and government. The role of workers and employers can easily be understood since
the existence of contract of employment is a condition precedent to industrial relations. The
traditional role of government is that of an impartial arbiter and this role is performed by laying
down of guidelines, which regulate the way, and manner in which the interests of workers and
employers are expressed and reconciled. Law is perhaps the post potent tool available to government
as mangers of the legal environment of industrial relations.
The concerns of the parties to industrial relations are both common and divergent. One common
interest is productivity. Governments cannot but pay attention to productivity in view of the impact it
has on their national economies. The concern of the Government of the Federal Republic of Nigeria
for productivity prompted the establishment of the National Productivity Centre through the National
Productivity Centre Act, Cap. 272, Laws of the Federation of Nigeria 1990 (formerly Decree 7 of
1987). The long title to this legislation describes the legislation, as
An Act to establish the National Productivity Centre charged with the responsibility of
promoting productivity improvement and consciousness in all sectors of the economy and to
provide for all other matters ancillary thereto.
If we accept the definition of productivity as the output of goods and services of an organization
relative to its inputs (labour, capital, materials, and so on), then a business organization must be
productive, to remain in business. For a trading outfit this translates to making profit. Employees
here have no choice but to accept this as a common goal for they cannot retain their jobs in the long
run if the business can only run at a loss. Employers who have their minds on the return on their
investment cannot but be interested in productivity.
Let us now consider the issue of divergent interests. The consideration furnished by employers for
the services performed by workers is the amount is the amount they pay as salaries, wages or any
other form of remuneration. It is natural for workers to desire better conditions of service and they
look forward to their employers for the satisfaction of this aspiration. The employer is however
conscious of the returns he gets on his investment, so the more he can keep his running cost, which
invariably includes the amount paid as salaries, low the more profits he makes. Government comes
into the situation to balance the competing interests of the parties.
It must, however, be stressed that the involvement of government in industrial relations is not always
as an impartial arbiter and this is evident in the fact that in most developing economies governments
are the principal employers of labour. There is some sort of conflict in the separate roles of
governments as managers of the legal environment and principal employers when governments use
the machinery of the State to further their interests as employers. The tendency is therefore for
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government to be motivated by the consideration of their role as employers and to compromise their
role as an impartial arbiter. It has been pointed out by Player (1980), when considering the whether
government employment is a right or a privilege as follows:
This does not mean that governments may not have interests as employers that justify rules
and regulations that would not be justified if applied to the population at large. What it
means that those interests of the government as an employer and as government must be
weighed pursuant to an analysis that excludes the idea that employment is a privilege that
may be denied any person.
The consolation is that government is comprised of individuals who have obligation to promote the
well being of labour and management and the extent to which the impartial role has been played is
reflected by laws including delegated legislation that relate to industrial relations. The idea of a
representative government also entails that all the arms of government charged with the duties of
making and implementing laws consist of individuals who form a cross-section of the generality of
people including by necessary implication those sympathetic to the overall views of labour and
management.
We may suggest as a working definition of industrial relations law, the body of rules regulating the
expression and reconciliation of the common and divergent interests of workers, employers and
governments recognised as binding within a legal system. The subject of Industrial relations has
many aspects but since we are mainly interested in its legal framework, we shall highlight legal
provisions as contained in the Constitution, relevant legislation and the common law. We must
always bear it in mind that the expression of the divergent interests of the parties to industrial
relations emphasizes issues like organisation of workers and employers as groups and the legal
provisions regulating them. We cannot talk about reconciliation except when there is disagreement,
dispute or conflict. This aspect relates to the legal provisions for dealing with conflict when they
arise.
Constitutional Provisions
The Constitution is the supreme law of the land and its provisions are binding on all persons and
authorities. Section 40 of the Constitution of the Federal Republic of Nigeria 1999 gives backing to
the operation of association of workers and employers. The section provides inter alia:
Every person shall be entitled to assemble freely and associate with other persons, and in
particular he may form or belong to any political party, trade union or any other association
for the protection of his interests
If the above provisions are to be construed liberally, as liberalism is the approach of the Supreme
Court when construing constitutional provisions, they afford an individual the right to associate and
the right not to associate (or to dissociate) with any person or group. Within the context of our
discussion therefore a person has the right to belong to a trade union as well as the right not to
belong to one. We shall come back to this later when we discuss membership of trade unions.
The provisions of S. 40 of the Constitution are not absolute. Subsection (1) of section 45 recognizes
circumstances when the right conferred by section 40 can be derogated from and it states as follows:
Nothing in section 37, 38, 39, 40 and 41 of this Constitution shall invalidate any law that is
reasonably justifiable in a democratic society(a) in the interest of defence, public safety, public order, public morality or public health; or
(b) for the purpose of protecting the rights and freedoms of other persons.
There are other provisions of the Constitution particularly in Chapter II on the Fundamental
Objectives and Directive Principles of State Policy, which have bearing on the welfare of persons in
employment but the provisions of the Chapter, are not justiciable. These provisions, which are aimed
at improving the lot of Nigerians, are contained in sections 13,16 and 17(3).
From the above, it will be observed that much attention is not paid to industrial relations matters in
the 1999 Nigerian Constitution except in a tangential manner. This approach contrasts sharply with
that adopted in some other jurisdictions, notably the Federal Republic of Germany and the Republic
of South Africa to mention a few.
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Common Law
The common law of England forms part of the body of laws received into the Nigerian legal system.
This invariably includes the decisions of English courts on industrial law and practice. The rules of
common law will apply in areas where only apply in areas where local legislation has not intervened.
To have a complete view of the law received into Nigeria, let us to the provisions of section 32(1) of
the Interpretation Act, Cap.192, Laws of the Federation of Nigeria. The subsection provides:
Subject to the provisions of this section and except in so far as other provision is made by the
Federal law, the common law of England, and the doctrines of equity, together with the
statutes of general application that were in force on the 1st day of January, 1900 shall, in so
far as they relate to any matter within the legislative competence of the Federal legislature,
be in force in Nigeria.
The expression common law in the sense used in the above provisions refers to the basic law of
England developed by the judges of the old common law courts, but the term may also be used to
include all the rules of law which emanate from the decisions of courts. It is in this latter sense that
we are adopting the expression common law. These rules are to be found in decided cases. The
common law is not a static system of law as it is continuously being modified to meet new situations
not hitherto provided for by statutes nor addressed in previously decided cases.
As pointed out earlier, the practice of industrial relations is predicated on the existence of contractual
relationships between employers and the workers and each contract of employment is the focus of
the common law. Contracts of employment are regarded as the product s of free and personal
bargains between the individual worker and his employer. Hence, the terms of collective bargaining
agreements are not treated as part of such a contract unless incorporated by express words or
necessary implication. In Stratford (J.T.) & Sons Ltd. v. Lindley [1965] A.C. 307, it was held that
English law would treat a trade union, which was involved in the private issue of employment terms,
as an interloper in what was essentially a private affair of master and servant.
The fact that the development of common law principles depends on accident of litigations and the
need to use the instrumentality of legislation correct judicial decisions explain why statutes have
been largely responsible for the legal framework of industrial relations.
Statutory Provisions
The 1999 Nigerian Constitution divides legislative responsibility between the federal and state
legislative bodies. Under this constitutional arrangement, the National Assembly has exclusive
legislative power in respect of:
Labour; including trade unions; industrial relations; conditions, safety and welfare of labour;
industrial disputes prescribing a national minimum wage for the Federation or any part
thereof; industrial arbitrations.
We shall now attempt to examine the provisions of some of the laws enacted in the exercise of the
above power.
The Trade Unions Act
The Trade Unions Act, Cap. 437, L.F.N. 1990 is the principal enactment regulating trade union
matters in Nigeria. The Act makes provisions for the formation, registration and organisation of
trade unions, federation of trade unions and the Central Labour Organisation. Section 1(1) of the Act
defines a trade union to mean:
Any combination of workers or employers, whether temporary or permanent, the purpose of
which is to regulate the terms and conditions of employment of workers, whether the
combination in question could or would not, apart from this Act, be an unlawful combination
by reason of any of its purposes being in restraint of trade, and whether its purposes do or do
not include the provision of benefits for its members.
The above definition indicates that a trade union may be a combination of workers and of employers.
However, the expression trade union will be used in its functional sense rather than in its strict
legal sense. Trade union in its functional sense is largely confined to a combination of workers. The
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definition also underscores the principal purpose of trade unions and this is to regulate the terms and
conditions of employment of workers. A combination does not cease to be a trade union if any of its
purposes is in restraint of trade. Contracts in restraint of trade are contracts that place undue restraint
freedom of individuals to contract. The traditional common law view is that such contracts are
contrary to public policy and therefore void. This position has, however, been modified as such
contracts are enforceable if reasonable with reference to the interests of the parties and the public.
From the statutory definition of trade unions a combination of workers does not cease to be a trade
union whether its purposes do or do not include the provision of benefits for its members.
The Registrar of Trade Unions is required by section 5(7) of the Trade Unions Act, on the coming
into effect of the section, to register the trade unions specified in Part A and Part C of the Third
Schedule to the Act and on such registration, the said trade unions shall have all the powers and
duties of a trade union registered under the Act. Trade unions not registered pursuant to the above
provisions have to apply for registration. Application for registration of a trade union is to be made
to the Registrar of Trade Unions in the prescribed form, which must be signed, by at least 50
members in the case of workers union and two members in the case of employers union (S.3). The
application is to be accompanied by two copies of the rules of the union (i.e., the Constitution) which
must make provisions for the matters specified in the First Schedule to the Trade Unions Act
(T.U.A.), as amended, and a list showing the name, address, age and occupation of each of the
persons by whom the application is signed and the official title, name, address, age and occupation
of each official of the union. Section 2 of the Act prohibits the operation of an unregistered trade
union except for the purposes connected with having the union registered.
The Registrar is obliged to refuse the registration of a trade union if it appears to him that any
existing trade union is sufficiently representative of the interests of the class of persons whose
interests the union is intended, to protect (section 5(4)). An appeal from the decision of the
Registrar lie to the Minister of Employment, Labour and Productivity and the Ministers decision is
final (section 6(1) (5)). In view of the provisions of the Trade Unions (Amendment) Act No. 4 of
1996 which made provisions for a scheme of merger of 41 unions into 29 and for the jurisdictional
scope of the said unions, one may therefore argue that the Registrars power seems unfettered as
respects a proposed trade union whose jurisdictional scope falls within that of any of the 29
industrial unions. The Registrar may, however, register as a workers union or a senior staff
association, any trade union that satisfies the requirements of the law. The phrase if it appears to
him came up for judicial interpretation in the leading case of Adegbenro v. Akintola [1962] 1 All
N.L.R.465 which turned on the interpretation of the provisions section 33(10) of the Constitution of
the Western Nigeria which empowered the Governor to remove the Premier if it appears to him that
the Premier no longer commands the support of a majority of the House of Assembly. The Judicial
Committee of the Privy Council held by the words it appears to him the maker of the Constitution
intended that the judgment as to whether the Premier no longer commanded the support of a majority
of the House was to be left to the Governors assessment without any limitation as to the material on
which he was to base his judgment or the contacts to which he might resort for the purpose.
A certificate of registration issued by the Registrar evidences the registration of a trade union. The
registration of a trade union entails a number of things. A registered trade union may sue or be sued in
its own name; it is exempted from the Personal Income Tax Act No. 104 of 1993, as amended; upon
change of its trustees its property without further assurance vests in the new trustees. Once a trade
union is registered the employers or the workers who are formed into the union must recognise the
union. Section 24(1) of the T.U.A. provides:
Subject to this section, where there is a trade union of which persons in the employment
of an employer are members, that trade union shall, without further assurance, on
registration in accordance with the provisions of this Act, be entitled to recognition by the
employer.
Where it is necessary the Minister may make a compulsory recognition order, which urges a named
employer to recognise a trade union as representing a group of employees in an organisation. The
recognition of a trade union enables it to deal with an employer for purposes, which include
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collective bargaining in respect of wages and salaries, hours of work, and general conditions of
service and for such other ancillary matters as are normally within the competence of a trade union.
Collective bargaining by its very nature requires the organisation of workers and it is this gap that
trade unions fill. The unequal nature of employer and an individual worker makes recourse to this
arrangement imperative.
Reviewing the period 1993-98 in early 1999, Dr. Emmanuel Udogu, the incumbent Minister of
Employment, Labour and Productivity, said dismissing the idea that Senior Staff Associations and
employers Association were no longer in existence:
There are 29 industrial unions, 24 Senior Staff Associations, 19 employers associations and
one Central Labour Organisation: the Nigeria Labour Congress in Nigeria.
Statutory Provisions on Finances of Trade Unions
A trade union is an organisation. In Frost v. Clark & Smith (1975), a consultative committee that
represented workers was held not to constitute an organisation of workers because they had no name,
they had no Constitution, they had no rules, they had no meetings, they kept no minutes, they had no
offices, they had no property and no funds. There are statutory provisions in the Trade Unions Act to
ensure trade unions function as organisations. We intend to focus on the fund of trade unions.
The sources of trade union funds may be internal or external. A trade union may invest its fund in
shares and other securities. It may also venture into some business if permitted by its Constitution.
However, the most important internal source of income for most trade unions is the amount
contributed by its members as subscriptions and dues. The Constitution of a trade union usually
regulates how the exact amount is determined. The Constitution of a trade union constitutes a
contract between a trade union and each member. A member is thus bound to fulfil his responsibility
in terms of financial contribution for as long as he remains one.
The Check-Off
The check-off is the amount deducted from the wages or salaries of eligible members of a trade
union, representing the members contribution and transmitted directly to the registered office of the
trade union. There are two separate legal regimes on the check-off system in Nigeria. The basis of
dichotomy appears to be the affiliation or otherwise of a trade union to the Nigeria Labour Congress.
Let us examine the provisions of the Trade Unions Act.
Section 16A was introduced by the Trade Unions (Amendment) Act No. 4 of 1996. This law was
promulgated as Decree No. 4 of 1996. This section in line with the general philosophy of the said
law to remove the anomalies in the pre-existing structure of trade unions caused by duplication,
amorphous structure and overlapping jurisdiction in order to eradicate the numerous intra union
disputes and litigation and to assist trade unions to overcome the anomalies and achieve internal
cohesion, and be more viable and capable of standing on their own without recourse to internal or
foreign aid, has made provisions for the check-off in respect of unions affiliated with the N.L.C.
Incorporating the amendment to the section effected by the Trade Unions (Amendment) Act No. 1 of
1999, the provisions read as follows:
Upon the registration and recognition of any of the trade unions specified in the Third
Schedule to this Act, the employer shall(a) make deductions from the wages of every worker who is eligible to be a member of any of
the trade unions for the purpose of paying contributions to the trade union so registered;
and
(b) pay any sum so deducted directly to the registered office of the union:
Provided that compliance with the provisions of this section of this Act shall be subject to
the insertion of a No Strike clause in the relevant Collective Bargaining Agreement between
the workers and their employers.
The above provisions draw a distinction between registration and recognition of a trade union.
Registration is a matter handled by the Government and the responsible functionary of the State is
The Registrar of Trade Unions. It is after a trade union has been registered that employers are
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obliged to recognise it. The Court of Appeal in Udoh v. Orthopaedic Hospital Management Board
[1990] 4 N.W.L.R. 52 gave recognition to this distinction.
The provisions of the above section do not apply to all trade unions, but rather, as it is expressly
stated, they relate only to the unions listed in the Third Schedule. It must be pointed out that at the
time the above amendment was introduced, only the unions affiliated to the N.L.C. were listed in the
Third Schedule. The main criterion in the above provisions is the eligibility of a person to be a
member of a trade union. In line with the philosophy of the enabling law referred to above, it does
not appear that a person eligible to be a member of an appropriate trade union can contract out of this
arrangement. Even if a person decides to terminate his membership of a trade union, he will be
obliged to pay, or to put it more correctly, his employer is obliged to deduct his contribution and pay
it to the appropriate trade union. The check-off system applicable to trade unions affiliated to the
N.L.C. can therefore be described as the automatic and compulsory check-off system. It is
automatic in the sense that a worker does not have to contract in before he is liable to have his
contribution to his union as check-off deducted. It is also compulsory because it does not appear a
worker can contract out of this arrangement. If he attempts to do this, the employer is not
empowered to countenance his decision.
With respect to the senior staff associations, the appropriate provisions on the check-off are to be
found in section 5(4) of the Labour Act, Cap 198, L.F.N. 1990. This subsection states:
No deduction shall be made from the wages and salaries of persons who are eligible members of any
of the trade unions specified in Part B of Schedule 3 to the Trade Unions Act except the person
concerned has accepted, in writing to make voluntary contributions to the trade union.
By way of a preliminary observation, we wish to remark that the reference to Part B of Schedule 3 to
the Trade Unions Act will have to be construed as Part C of the Third Schedule to the same Act. The
Trade Unions (Amendment) Act No. 1 of 1999 has restored the list containing Senior Staff
Associations, which was wrongly repealed as a result of the inelegant drafting of the Trade Unions
(Amendment) Act No. 4 of 1996. Part C of the Third Schedule is titled Senior Staff and Employers
Association, and it contains 24 senior staff associations and 20 employers association. Item 45 on
the list relates to Any other Unions of Senior Staff registered after 3 rd August, 1977.
The provisions of section 5(4) of the Labour Act may be said to have prescribed a voluntary checkoff system for trade unions that are considered by law to be senior staff associations. This entails that
eligible members of these trade unions must contract in before the check-off can be deducted.
Furthermore, the necessary inference, which can be drawn from this, is that such persons may freely
contract out by informing their employers to that effect.
The overall impression one could make from the above position of the law is that the combined
provisions of the Trade Unions Act and the Labour Act are thus leaving room for enthronement of
discrimination in the treatment of trade unions. This is no doubt contrary to the noble role which
governments are expected to play in industrial relations. Looking at it from the angle of members of
trade unions, persons who are eligible to belong to the industrial unions affiliated to the N.L.C., are
not inferior or constitutionally endowed with lesser rights and privileges to warrant their less
prestigious treatment. However, we recommend a common basis for treating all employees unions.
There are a number of objections to the less enviable treatment of senior staff associations. First, it
cannot be appreciated while the law regulating the check-off for all categories of trade unions are not
contained in the same piece of legislation. The Trade Unions Act is the proper place to look for such
provisions, more so when the Act seems largely to take the form of a Code, which should provide an
answer to basic questions on trade union matters. Secondly, a fundamental problem, which the above
provisions of the Labour Act ignore, is the absence of selective application of benefits of industrial
struggle spearheaded by unions only to union members. This therefore gives rise to a situation, in
which non-union members are permitted to reap from where they did not sow. Thirdly, the statutory
restructuring of some trade unions along industrial lines has in some instances blurred the dichotomy
between senior staff associations and workers unions and in view of the fact that senior staff
members of such industrial unions are made subject to the automatic and compulsory check-off
regime, there is no reason while the same system could not be extended to trade unions comprised
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exclusively of senior staff members. Fourthly, the existence of two check-off systems has adversely
affected participation in trade union activities. Some employers have in order to sideline many
eligible members resorted to a wide definition of their management staff to ensure only an
insignificant number would remain to constitute what may be said to be a senior staff association. It
must be remarked that there is no objective means of determining who is a senior staff in private
sector employments, unlike the case with public sector employment where any person on Grade
Level 07 and above is by the Public Service Rules as revised in 2000, prescribed to be a senior staff.
This has enabled some employers to adopt a policy that regards some employees as senior staff
though salary-wise they are junior staff and this is done with the ulterior motive of weakening trade
unionism in such organisations.
Protection of Union Funds
Let us highlight statutory provisions that seek to secure the funds of trade unions. By section 15(1)
of the T.U.A., a trade union is prohibited unless its rules otherwise provide, from expending its funds
directly or indirectly in furtherance of any political objectives in so far as the funds represent
payments which members are required to make under its rules. Section 15(2) makes it an offence to
apply the funds of a trade union to the furtherance of political objectives. A decision of the Central
Working Committee of a trade union to fund the electioneering campaign of a politician who has
sympathy for the union will be illegal.
Section 16(1) of the T.U.A. provides that the fund of a trade union shall not be applied whether
directly or indirectly or through any other trade union, association or body for the purpose of any
legal proceeding relating to election or appointment into any office. Section 16(2) makes
contravention of the above provisions a criminal offence and a person found guilty is liable on
conviction to a fine of N5, 000. 00.
As a preventive mechanism to avert contravention of the above provisions, section 18 of the T.U.A.
makes provisions for the grant of injunction to restrain misapplication of the funds of trade unions.
Upon the application of the Attorney-General of the Federation or the Registrar or of any 5 or more
members of a trade union an injunction may be granted by the appropriate High Court to prevent
unauthorised or unlawful application of union funds. The Court may in addition order that the whole
or any part of the funds of a trade union in respect of which application is made be paid over to the
Public Trustee to be administered or disposed of in accordance with the rules of the union. The
provisions of section 43(1) of the T.U.A. which give trade union immunity against any tort action
subject to the tort being committed either in contemplation or in furtherance of a trade dispute are
aimed at protecting trade union funds. But for these provisions damages would have been payable
from the funds of trade unions for torts committed during an industrial action. Section 43(2) however
states that nothing in subsection (1) shall prevent an act in contemplation or in furtherance of a trade
dispute from being actionable in tort if it is not on any of the grounds mentioned in the said
subsection.
There are also provisions in section 39 of the T.U.A on rendering and auditing of accounts of trade
unions.
Membership of Trade Unions
Section 52 of the Trade Unions Act which is the interpretation section, defines a member of a trade
union to mean, a person normally engaged in a trade or industry which the trade union represents
and a person either elected or appointed by a trade union to represent workers interest. There are
thus three ways by which a person may be a member of a trade union. First, a person may be a
member by his engagement in the trade or industry which the trade union represents; secondly, a
person may be a member by virtue of his election by a trade union to represent its interest; and
thirdly, a person may be a member by virtue of his appointment by a trade union to represent its
interest. Most members of trade unions come under the first category. The Constitution of a trade
union regulates qualifications to stand elections into union offices, and membership under the first
category is often a prerequisite. Members under the third category are in strict sense union
employees appointed to certain responsible offices. This has taken care of the role of modern day
administrators who have responsibility for the conduct of affairs of union secretariats. By providing
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for a definition of a member of a trade union as spelt out above, the Trade Unions (Amendment) Act
No.1 of 1999 can be said to have retraced the step which the Trade Unions (Amendment) (No. 2)
Decree No. 26 of 1996 took by defining a member as a card-carrying member of a trade union. The
provisions of old section 33(8) inserted by Decree No.26 of 1996 which made it unlawful for any
person, not being a card-carrying member of a trade union to participate and assume functional role
in any of the policy or decision making organs, committees (or formulations by whatever name
called) within the union or the Central Labour Organisation except if the function was strictly limited
to administrative duties only, were repealed by Act No. 1 of 1999, thus giving union employees
unrestrained power to participate.
We have considered the implication of Section 40 of the 1999 Nigerian Constitution that guarantees
the right of association and its general purport. It has also been shown that this constitutional
provision is not absolute. In the light of this members of the armed forces, the police and civilian
personnel therein, fire brigade, and staff of the Central Bank of Nigeria (CBN), Security and Minting
Company, among others are prohibited from membership of trade unions. The T.U.A. excludes any
person below the age of 16 from being a member and any person below the age of 21 from being an
officer of a trade union. Also, no staff recognised, as a projection of management within the
management structure of any organisation shall be a member of or hold office in a trade union.
Section 3(4) states inter alia:
A person may be recognised as a projection of management within a management structure if his
status, authority, powers, duties and accountability which are reflected in his conditions of
service are such as normally inherent in a person exercising executive authority (whether or
not delegated within the organisation concerned).
As it has been pointed out, the right to associate if liberally construed includes the right not to
associate with a group of people. Membership of a trade union is therefore voluntary. This however
does not affect the liability of a person to make contributions, to a trade union of which he is eligible
to be a member, deducted from his salaries where the automatic and compulsory check-off system
obtains. The right not to associate is recognised by the Labour Act section 9(6) of which states:
No contract shall make it a condition of employment that a worker shall or shall not join a
trade union or shall or shall not
(a)
relinquish membership of a trade union; or
(b)
cause the dismissal of, or otherwise prejudice a worker
(i)
by reason of trade union membership; or
(ii)
because of trade union activities outside working hours or, with the consent of
the employer, within working hours; or
(iii) by reason of the fact that he has lost or been deprived of membership of a
trade union or has refused or been unable to become or for any other reason
is not, a member of a trade union.
Where there is disagreement as to the true meaning of the rules of a trade union, such dispute may be
referred to the Industrial Arbitration Panel or the National Industrial Court for determination. A
member who complains of a breach of a specific section or rule of the Union rules or Constitution
may institute an action on the basis of the contract between him and the Union that the Constitution
regulates. In Bonsor v. Musicians Union [1956] a member who was wrongfully expelled from a
registered trade union successfully maintained an action for breach of contract against the union in
its registered name.
Amendment to the Constitution of a union must comply with the provisions contained therein. Such
amendment must also be registered with the Registrar of Trade Unions before they can take effect. In
Nigeria Civil Service Union v. Essien [1985] 3 N.W.L.R. 306, the Court of Appeal held that where
an alteration or amendment of a Union in accordance with their Constitution is communicated to the
Registrar in the usual manner and he having satisfied himself that the alteration or amendment does
not contravene the provisions of the T.U.A. and records or takes note of the amendment or alteration
in an official record kept for the purpose, the amendment or alteration is considered registered. The
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Registrar cannot impose terms, which are not prescribed in the T.U.A. on registration of amendment
or alteration of a Unions Constitution.
A registered trade union is permitted by law to carry on activities ordinarily carried on by a trade
union in furtherance of its purposes. A trade union may however cease to operate under diverse
circumstances, which include compulsory dissolution and voluntary dissolution. A trade union will
also cease to exist it, in accordance with the provisions of the Trade Unions Act, it merges with
another trade union. In such circumstances, the Registrar is to call for the certificates of registration
of the merging unions and to issue another for the merged union. The Registrar of Trade Unions is
empowered to cancel the registration of a trade union if any of the events highlighted in section 7 of
the Trade Unions Act is proved to his satisfaction but he is required to give some sort of hearing to a
trade union whose licence he proposes to cancel. The events highlighted in the said section largely
indicate that a union has ceased to operate or that its activities are contrary to the provisions. An
appeal against any proposed cancellation of the registration of a trade union by the Registrar may be
made to the appropriate court
The Minister may due to overriding public interest revoke the certificate of registration of any trade
union specified in Part A of the Third Schedule to the T.U.A., that is, the industrial unions affiliated
to the N.L.C. (section 7(9)). The phrase overriding public interest is not defined in the Trade
Unions Act, and one must express some dissatisfaction about the retention of this mode of
compulsory dissolution of a trade union in a democratic dispensation. The Trade Unions
(Amendment) Act No. 1 of 1999 which set its objective in its preamble as to ensure the smooth
running and peaceful transition from guided to free and democratic trade union activities, left the
above provisions intact notwithstanding the large scale transfer of some quasi-judicial powers of the
Minister to the appropriate court which is defined to mean the Industrial Arbitration Panel and the
National Industrial Court as the case may be.
A trade union is obliged to comply with all the requirements of the law as contained in relevant
statutes. In appropriate cases, it is possible to lift the veil of registration, to ground the liability of
officers of a trade union. A union must comply with the provisions of the Trade Disputes Act
especially in period of industrial conflict. We shall now examine highlights of the Trade Disputes
Act.
G.
The Trade Disputes Act
The provisions of the Trade Disputes Act, Cap 432, L.F.N. 1990, as amended focus mainly on the
mechanism for the resolution of industrial conflicts or trade disputes. A trade dispute is defined in
section 46(1) of the T.D.A. to mean any dispute between employers and workers or between worker
and workers, which is connected with the employment or non-employment, or the terms of
employment
and physical conditions of work of any person.
It must be remarked that the existence of a trade union or otherwise does not have any direct bearing
on
the possibility of a trade dispute. However, a trade dispute is one in which a worker is
involved as an individual or as a member of a group, be it a trade union or any other group of
persons. The definition of trade dispute cannot be said to be free from ambiguity and this is a
critical factor in determining the appropriate forum to seek legal intervention, but a dispute
connected with mere personal quarrels, grumbling or agitations has been held not to be a trade
dispute. Hauntley v. Thorton [1967].
The mechanism for the resolution of a trade dispute in a particular case depends on whether there is
an agreed means of settlement between the parties or not. In the former case, it is expected that the
existing machinery provided in the agreement would be explored. Where this attempt fails, the
parties are within 7 days required to agree on a mediator selected by them or otherwise (S. 3).
Where the mediator fails in his task, he is expected to report to the Minister within 3 days.
The Minister is also empowered to take certain steps to forestall industrial crisis. This may take the
form of appointing a Conciliator under section 7, or referring the dispute to the Industrial
Arbitration Panel (I.A.P.) under section 8 or to a board of inquiry as provided for in section 32.
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Where a Conciliator succeeds in resolving a dispute this will be reported to the Minister
accompanied by a memorandum of the terms of settlement duly signed by the representatives of the
parties to the dispute. Where this approach is not successful then the dispute will be referred to the
I.A.P. within 24 days of the receipt of the report of the Conciliator.
The Industrial Arbitration Panel (I.A.P.) is constituted in such a way as to include 2 persons
nominated by organisation representing the interests of employers and 2 representing the interests of
workers. The Panel consists of the Chairman, the Vice-Chairman and 10 members including
representatives mentioned above. The Panel is to constitute an arbitration tribunal and this may take
the form of a sole arbitrator, a single arbitrator assisted by assessors, one or more arbitrators
nominated by or on behalf of representatives of employers and workers in equal number with the
Chairman or Vice-Chairman presiding. All the arbitrators are appointed from the members of the
I.A.P. The I.A.P. is expected to make an award within 21 days or any other period approved by the
Minister. Failure to comply with the award as confirmed by the Minister is an offence punishable
with a fine of N200.00 or 6 months imprisonment or a fine of N2, 000.00 in the case of a corporate
offender. Continuous and subsequent breaches also attract punishments.
An appeal lies as of right from the decision of the I.A.P. to the National Industrial Court. Also, in
deserving cases the Minister may refer a dispute direct to the N.I.C. The provisions of section 1(A)
of the Trade Disputes (Amendment) Act No. 42 of 1992 suggest that the N.I.C. could deal with all
trade disputes as well as inter-union and intra-union disputes to the exclusion of all other courts. It
however appears that the above arrangement is subject to the provisions of the Constitution, which
confer jurisdiction on the Federal high Court and the High Courts of the States depending on the
parties. It has been argued elsewhere that statutory provisions cannot unless there is a provision to
that effect in the Constitution, abridge the jurisdiction of a Court established by the Constitution.
The award of the N.I.C. is expressed to be binding on the employers and workers to which it relates.
Section 20(3) of the T.D.A. states that an appeal from the decision of the N.I.C. shall lie as of right
to the Court of Appeal on questions of fundamental rights as contained in the Constitution. In other
cases, it would appear the decision of the N.I.C. is final. This is because appeal is a question of law
and a right of appeal must be conferred expressly by statute.
Section 19(2) of the T.D.A. states that the National Industrial Court shall be a superior court of
record. It is submitted that this provision is expressly repudiated by the provisions of the 1999
Nigerian Constitution, which by the combined effect of section 6(3) and (5) has foreclosed the
existence or emergence of any superior court of record outside those directly established by the
Constitution.
Section 14 of the T.D.A. assigns to the I.A.P. and the N.I.C. jurisdiction to interpret awards on the
application of the Minister or any party to a trade dispute. The N.I.C. may, either after hearing the
parties to the award or with their prior consents without hearing them, decide the matter and the
decision of the Court shall be final. There may be a direct reference to the N.I.C. where a dispute is
one to which workers employed in any essential service are a party or in the circumstances in which
reference of the dispute to an arbitration would not be appropriate. Section 20(1) relates to the
exclusive jurisdiction of the N.I.C. to make awards for the purpose of settling trade disputes and to
determine question as to the interpretation of any collective agreement, any award made by an
arbitration tribunal or by the court under Part 1 of the Act, and the terms of settlement of any trade
dispute as recoded in any memorandum under section 7 of the Act. The N.I.C. is empowered to
enforce its award and it has power to commit for contempt.
The N.I.C. consists of a President, who must be legally qualified, and 4 ordinary members. The
Court may, however, sit with all its five members or 3 members including the President (section
19(2) and (3) of the T.D.A.). The composition of the N.I.C. has not justified the heavy responsibility
placed on it and this is an indication that the exclusive jurisdiction of the Court in trade dispute
matters is an arm-twisting device. The arrangement is meant to perpetuate delay and justice delayed
is justice denied. This is particularly important in the light of the provisions off section 17, which
prohibits lockouts and strikes before the issue of award of the N.I.C. Section 42 has special
provisions with respect to payment of wages during strike and lockouts. While a worker is not
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entitled to any remuneration for the period of a strike, the employer who locks out his workers is
under liability to pay. The Ministers decision as to whether there has been a lockout is final. The
provisions of Nigerian law on strike can be said not to be realistic. The law overlooks the fact that on
the part of workers, strike is accepted as the ultimate sanction in the collective bargaining process.
The law may be said to have fallen short of its expected role here as it leans in favour of employers.
Ubeku (1983) remarked:
The lawplays a mediating role between those individuals or groups who wield economic
power and the interest of those likely to suffer by its exercise.

Collective Agreements
The N.I.C. and I.A.P. come across collective agreements in the course of performing their work.
Section 47 of the T.D.A. defines collective agreement to mean,
any agreement in writing for the settlement of disputes and relating to terms of employment
and physical conditions of work concluded between (a) an employer, a group of employers or
one or more organisations representative of employers on the one hand, and (b) one or more
trade unions, or organisation representing workers or the duly appointed representatives of
any body of workers, on the other hand.
The question of enforceability of collective agreement has always arisen. In Nigerian-Arab Bank
Ltd. v. Shuaibu [1994] 4 N.W.L.R. 450 at 469, Ndoma-Egba J.C.A. said collective agreements are
not generally intended to create legal relations except in the case of certain public Boards and
Corporations. They are, according to him, a gentlemans agreement, an extra-legal document totally
devoid of sanction. He said they are binding in honour only and that their enforcement must depend
on industrial and political pressure.
In A.C.B. PLC. v. Nwodika [1996] 4 N.W.L.R. 470 it was held that for a collective agreement to be
binding it must be incorporated or embodied into conditions or contract of service. A clause in the
probationary appointment in a private company in Nigeria which states as follows: Please note that
while in the employment of the company, you shall be bound by the conditions of service as
contained in the Collective Agreement relevant to your grade, may be said to have incorporated
Collective Agreement into the contract of service of the affected employees. In Nwobosi v. A.C.B.
Ltd. [1995] 6 N.W.L.R. 653 it was said that where a party against whom a collective agreement is
sought to be enforced has pleaded and relied on it, it would be binding. The law does not allow a
party to approbate and reprobate at the same time. In Ben Chukwumah v. Shell Petroleum
Development Company of Nigeria [1993] 4 N.W.L.R. 653, the Supreme Court held that an
extraneous agreement (Joint Venture Agreement) not entered into by the parties to a contract of
service cannot be made the basis of an action by an employee unless it is incorporated into the
contract of employment of such employee.
In English law a distinction is drawn between the substantive aspects of collective agreement (i.e. the
wage rates and other terms of employment), which gain effect by incorporation into individual
contract of employee covered, and those aspects that bind the employer and trade union (procedures
or length of time to elapse before negotiation) informally. In the latter case the collective bargain
itself is not legally binding: Ford Motors Co Ltd. v. A.U.E.W. [1969] 2 Q.B.303
The Trade Disputes Act makes provisions for the deposit of 3 copies of any collective agreement for
the settlement of a trade dispute by the parties thereto with the Minister who may then make an order
as to the provisions that shall be binding on the parties. Once the Minister has done this, it will
appear the binding force of the agreement derives from statute and not contract.
Conclusion
An attempt has been made in this to highlight the way in which the interests of workers, employers
and governments can be expressed and reconciled. The expression of interests relates to the legal
framework on registration and recognition of trade unions and provisions meant to guarantee their
viability, both numerically and financially. The appropriate provisions of the Trade Union Act have
been discussed in this connection. The performance of Government over the years with respect to its
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role in industrial relations has been conditioned by the nature of its involvements in particular trade
disputes. In circumstances where the Government is particularly affected the role of the various
machinery for settling trade disputes comes to fore as impartial arbiters. However, the same
expectation may not be forthcoming where Government as the legal and functional employer is a
party to a trade dispute. It is of utmost importance for Government to see trade unions as agents of
development in the body politic. Arthur Johnstone, ex-Director of the Commonwealth Trade Union
Council, whilst reacting to the question that trade unions are dying, in the Commonwealth bulletin,
Current, Vol. 3, 1997, said:
Trade unions influence the lives of millions of workers, members and non-members alike.
Many workers who have never been members of a trade union are the direct beneficiaries of
improvements in wages, conditions, including health and safety, and social provisions
negotiated by trade unions. There will always be a need for trade unions to act in a
representative manner for workers. The unequal nature of the employment contract in itself
dictates this.
Arthur Johnstone reiterated the Commonwealth Trade Union Councils philosophy on a social
partnership approach to development, which according to him, does not undermine the traditional
role of unions but in fact enhances the contributions that unions can make to development. The
collective experience of trade unions as social partners needs to be harnessed for development.
The above is quite apposite in developing countries including Nigeria.

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