A contract is an agreement which is legally binding on the parties to it and which if broken may be enforced by action in court against the party that has broken it. A contract may be void or voidable. A void contract is that which lacks the essential ingredients or elements of valid contract and therefore of no legal effect. A voidable contract is that which is valid in the first place but may be ended at the instance of one of the parties to it. Such contracts include guarantee with a bank of money lender, hire purchase and sale or leasing of land. The legal consequences of non-compliance are that they are not enforceable at law though they are not necessarily void. However, some categories of contracts must of necessity be in writing or else they shall be void absolutely. These include transfer of shares, marine insurance and hire purchase agreements. As a general rule also, all contracts are in the nature of agreement: however, not all agreements may constitute a contract properly so called. For instance, an agreement for the sale of a parcel of land is intended to be binding and enforceable at law, whereas, an invitation to a luncheon which after all, did not hold may not be enforceable at the suit of the disappointed party.
A contract may also be under-seal or by deed and may be simple or oral. It may be express when it is written or implied when it is inferred from the conduct and acts of the parties. In addition, there can be bilateral contract between two parties or multi-lateral contract among parties depending on the nature of obligations to be performed under the agreement.
Condition and warranty are the two basic types of express terms in a contract. Whether a term is a condition or warranty depends on the intention of the parties.
A condition is a vital term which goes to the root of the contract. Breach of a condition entitles the innocent party to repudiate the contract and to claim damages.
A warranty is a term which is subsidiary to the main purpose of the contract, breach of which only entitles the innocent party to damages.
FORMATION OF A VALID CONTRACT
The main requirements of a valid contract are as follows:
1.there must be an offer;
2.there must be an acceptance;
3.there must be consideration;
4.parties must have full contractual capacity;
5.there must be an intention to create legal relations;
6.object of the contract must not be unlawful nor illegal;
7.prescribed formalities must be followed, for example, it should be in writing or by deed.
Forms of Contract
Contract supported by consideration are essentially expected to be in writing,. It is however important to note that a contract may also be oral or implied and yet be binding on the parties depending on the peculiar circumstances. The fact remains that a contract may not be taken as being invalid or unenforceable for the mere fact that it is not in a written form. Te court would normally not assist any person who was lured into an oral agreement. Writing merely facilitates the interpretation or proving of the terms of the contract barring which it may not be all that necessary. In considering commercial contracts under Nigerian legislation however, we would evaluate three of such contracts which are: ‒hire purchase;
‒sale of goods;
Agency is a relationship that exists between two persons, one of whom expressly or impliedly agrees that the other should represent him or act on his behalf. The one that is represented is called the principal while the person representing or acting on somebody’s behalf is called Agent. Agency relationship involves the consent of the agent and the principal that one should act for the other. It thus arises from a contract or agreements express or implied. Ofodile v. Chinwuba
Generally, the relationship of principal and agent may arise in three main ways: 1.By agreement ,...