Law & Human Rights

December 15, 2011

Law report : Oral contract is enforceable between parties

Rev. (Dr.) Abel Damina

Vs
Clement Akpan

COURT OF APPEAL (CAlABAR DIVISION)
Issues:

Whether there was a valid contract between the parties.

Facts:
The respondent as plaintiff before the High Court of Akwa Ibom State sitting in Uyo instituted proceedings against the appellant, wherein he sought the sum ofN355,OOO.OO (three hundred and fifty-five thousand naira) being balance of contract fee owed it by the appellant on a completed contract and 21 % interest on the said sum till judgment is delivered; he also claimed the sum ofN500,OOO.OO (five hundred thousand naira) for breach of the said contract by the appellant which was for painting of the appellant’s residence, church offices and fence.

At the conclusion of the hearing before the court the trial Judge found forthe respondent, ordering the appellant to pay the sum ofN260,OOO.OO (two hundred and sixty thousand naira) to the respondent, being the outstanding balance of his contract fee for the said painting work carried out for the appellant.

Dissatisfied with the judgment, the appellant appealed to the Court of Appeal.
Held: (Dismissing the appeal)

Elements of a valid contract –
For a contract to come into being in law, there must be a definite offer by the offeror and a definite acceptance by the offeree and of course, a legal consideration. In other words, for a contract to exist, there must be an offer, unqualified acceptance of that offer and a legal consideration. There must be a mutuality of purpose and an intention. The two contracting parties must agree. [Dahiru v. Kamale (2001) FWLR (Pt. 62) 1853, (2005) 9 NWLR (Pt. 929) 8 at 50; Tsokwa Motors (Nig.) Ltd v. Union Bank of Nigeria Ltd (1996) 9 NWLR (Pt. 471) 129; Neka B.B.B. Manufacturing Co. Ltd v. African Continental Bank Ltd (2004) All FWLR (Pt. 198) 1175, (2004) 2 NWLR (Pt. 858) 521 referred to] [P. 1308, paras. E – G]

What an offer is –

An offer is an expression of readiness to contract on terms specified by the offeror which if accepted by the offeree will give rise to a binding contract. It is by acceptance that the offer is converted into a contract. [Sparkling Breweries Ltd v. U.B.N. Ltd (2001) FWLR (Pt. 71) 1682, (2001) 15 NWLR (Pt. 737) 539; UBN v. Sax (Nig.) Ltd (1994) 8 NWLR (Pt. 361) 150; Omega Bank (Nig.) Pic v. O.B.C Ltd (2005) All FWLR (Pt. 249) 1964, (2005) 8 NWLR (Pt. 928) 547 referred to] [P. 1308, paras. G-H]

How an oral contract is created –
An agreement can be oral or inferred from the conduct of the parties. Notwithstanding the fact that the contract is oral, it is enforceable. In the instant case, no written agreement was tendered by the parties before the trial court. That means the agreement was oral. [Trade Bank Pic v. Dele Morenikeji (Nig.) Ltd (2005) 6 NWLR (Pt. 921) 309 referred to] [P. 1309, para. A]

Effect of evidence which contradicts pleadings Evidence which is at variance with the pleadings goes to no issue and should be disregarded and/or expunged from the record by the court. In the instant case, the evidence of the appellant’s witnesses being at variance with the averments pleaded by the appellant in his statement of defence before the trial court is capable of being discountenanced for this reason. [Iloabuchie v. Iloabuchie (2005) 9 NWLR (Pt. 930) 362; Obaloja v. Efikan (1998) 6 NWLR (Pt. 553) 320; Thompson v. Arowolo (2003) FWLR (Pt. 164) 315, (2003) 7 NWLR (Pt. 818) 163; Ndoro v. Pianwii (2003)5 NWLR (Pt. 812) 137 referred to] [P. 1310, paras. A – C]

Importance of documentary evidence in a trial Documentary evidence is usually a very reliable piece of evidence because of its permanency. Documentary evidence is a veritable aid for assessing oral testimony. Where there is oral and documentary evidence, documentary evidence should be used as a hanger With which to access oral testimony. In the instant case, the trial Judge was perfectly right to use exhibit 3, the receipt tendered through the respondent under crossexamination to resolve the issue of the total contract sum and the unpaid balance. [Adeoti v. Ayorinde (2001) 6 NWLR (Pt. 709) 336; Jack v. Whyte (2001) FWLR (Pt. 43) 247, (2001) 6 NWLR (Pt. 706)266; Whyte v. Jack (1996) 2 NWLR (Pt. 431) 407; U.N.I.C v. u.c.I.c. Ltd
(1999) 3 NWLR (Pt. 593) 17; Jinadu v. Esurombi-Aro (2005) 14 NWLR (Pt. 944) 142 referred to] [P. 1310, paras. E – G]

Nature of hearsay evidence and attitude of court thereto Where the evidence of a witness is not direct but rather speculative and borders on hearsay, such evidence is inadmissible under the Evidence Act. A reasonable court of law or tribunal has the duty to avoid the admission or use of hearsay evidence as this will infringe section 91(1)(b) of the Evidence Act, Cap. 112, Laws of the Federation of Nigeria, 1990, by a situation in which a witness will testify his evidence based on second hand information by another person. Where a witness gives evidence on fact relying on information by another person, the evidence amounts to hearsay and would have no evidential value.

A second-hand information is always regarded as worthless. In the instant case, appellant’s witnesses’ before the trial court having admitted that they were not parties to the agreement and they were not present when the agreement was made, their evidence as to the terms of the contract between the appellant and the respondent must be hearsay. [Yusufv. Obasanjo (2005) 18 NWLR (Pt. 956) 96, (2006) All FWLR (Pt. 294) 387; Buhari v. Obasanjo (2005) All FWLR (Pt. 273) 1, (2005) 2 NWLR (Pt. 910) 241; Ezeazodosiako v. Okeke (2005) 16 NWLR (pt. 952) 612 referred to] [P. 1311, paras. D – G]
Who an expert witness is –

An expert is a witness who must have made a special study of the subject or acquired a special experience therein. An expert witness need not be professionally qualified. [R. v. Silverlock (1894) 2 QB 766; Donckt v. The IIusson (1849) 8 C. D. 812; Ajani v. Comptroller of Customs (1952) 14 WACA 34; Bailey v. Rhodesia Consolidated (1910) 2 Ch 90 at 102 – 103; Zaidan v. Mohessen (1973) 1 All NLR (pt. 11) 86 referred to] [P 1314, paras. A – CI

What party who suffers breach of contract may do Where a party to a contract is in breach of the said contract, then two options are open to the other party:

To terminate the contract; or
To sue the other party for the breach,
In the instant case, the appellant who alleged that the respondent breached the contract by using paint of low quality for the painting of the church offices and fence, and also that the contract was neither completed as agreed or on schedule did none of the above. Rather, it paid the respondent the sum of NI40,000.00 (one hundred and forty thousand naira). The only reasonable inference is that the respondent executed his part of the contract that is why the appellant paid him part of the contract sum. The respondent who proved his case before the trial court is therefore entitled to judgment. [Okechukwa v. Onimaba (2000) 82 LRCN 3300; (2001) FWLR (Pt. 33) 219 referred to] [P 1314, paras. E – HI

Propriety of trial court awarding less than the relief claimed before it-

A court cannot award an amount in excess of the claim, but it may very well award a lesser amount. In the instant case, the trial court was convinced that the contract sum was N400,000.OO (four hundred thousand naira), of which the appellant had paid the sum of NI40,000.00 (one hundred and forty thousand naira) to the respondent vide exhibit 3. The award ofN260,000.00 (two hundred and sixty thousand naira) being balance left unpaid on the contract to the respondent instead of the N355,000.00 (three hundred and fifty-five thousand naira) claimed by the respondent is in order. [leric Nig. Ltd v. Union Bank of Nig. Plc (2000) 82 LRCN 3259 at 3265; Ekpenyong v. Nyong (1975) 2 SC 71; Obioma vs Olomu (1978) 3 SC 1 refered to] [Pp. 1312 -1313, paras. H-A]

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