COURSE OUTLINE

• The nature of contracts

• Formation of a contract
• Offer and Acceptance
• Termination of Offer

• Revocation 
• Lapse of time
• Failure of a condition subject to which an offer was made
• Contract under customary law
• Intention to create a legal relationship, domestic agreement, and commercial agreement
• Content of the contract
• Expressed terms
• Implied terms
• Terms implied by the court
• Condition and warranties
• Capacity of Parties

LAW 203 (Law of Contract) first semester note, 2023

THE NATURE AND DEFINITION OF CONTRACT

To start with, there is no generally agreed definition of contract because different textbook
writers have defined the term contract based on their different perspectives.
In simple terms, however, the word contract can be defined as an agreement between two or
more parties with the main intention that it will be enforced by law in case of a breach by either
of the parties. See EZEJIOFOR, OKORONKWO, and IKEGBULE N.B.L., p. 1.
A contract can also be defined as an agreement that is legally binding on both parties, and if
there is a breach, one can sue in court. See C.M. Schmidtoff.
According to the above definition, a prior agreement between the parties is very important.
Therefore, it is often said that there must be consensus on AD IDEM. In other words, there must
be the coming together of two minds with a common intention.
Therefore, if the agreement is vague, there would be no contract. For the purpose of validity,
there must be an intention to create a legal I (bindingness).
In this regard, the enforceability and contemplation of law to be binding are very important so
that trade and commercial activities will flourish well; otherwise, if people are left free to break
their own promises or agreements without any form of enforceability, there would be chaos in
society and trade and commerce wouldn't flourish as they ought to.
Therefore, one of the primary functions of the law of contract is to regulate the conduct and
activities of mankind with the aim of determining what a contract is, when it is enforceable or
not, when it is valid or voidable, etc.
Meanwhile, there must be two or more parties to a contract. One person makes an offer, and the
other person indicates his acceptance. So, offer and acceptance are key constituents of contact. In
addition, there must be rights and obligations to be observed under the terms of the contract.
From the above discussion, you can now look at what is known as the element of contract, the
basic requirements of contracts, or the formation of a contract, and this by way of persons is
offer, acceptance, consideration, parties, intention to create a legal relationship, and what is
distinguished between offer and invitation to treat, etc.
Importantly, not all agreements are enforceable because an unenforceable agreement may not
have been contemplated by either of the parties, for example, social or domestic agreements or
gratuitous promises that are not actionable. Another example is the failure of a father to give his
son pocket money, which isn't enforceable.
Therefore, while every contract is an agreement, not all agreements are contracts. To create or
constitute an agreement, the parties must have the intention to create a legally binding contract.
A contract could be in oral or written form, and to be enforceable, it must be supported by
consideration. If you can pause for a while, you can observe the following:
1. What is the scope of an agreement?
2. What is the nature and bindingness of the contract?
3. What remedies, if any, are affected by or are obtainable at law?
Meanwhile, it is a contract to say that a contract is based on agreement, and from agreement
come offer and acceptance. In this case, if Mr. A makes an offer and Mr. B accepts the offer,
with the two being in existence and followed by consideration and the intention to consent to
create a legal relationship, a contract is said to have existed.
CLASSIFICATION OF CONTRACT
A contract can be formal or simple. It is formal when a contract is made by deed or under seal.
Apart from this, all other contracts are simple. A formal contract must be in writing; it must also
be signed, sealed, and delivered by the party executing it to the other party.
In modern times, a seal may not be a requirement, but a signature would suffice. A simple
signature can be made orally or in written form.
EXPRESSED AND IMPLIED CONTRACT
A contract is express when the terms are clearly stated. These include the prize (consideration),
duration, etc. A contract is implied when the terms are not expressly stated but rather inferred. In
this regard, the court may determine the existence of a contract based on the conduct of the
parties as opposed to their words or correspondence.
FORMATION OF CONTRACT
OFFER AND ACCEPTANCE
The importance of these concepts can be seen in a situation where there is a conflict as to
whether there is a meeting of the minds between the parties. In this case, the court first of all
breaks down the agreement of the parties into offer and acceptance so as to know what the
parties said. Against this background, the two concepts can be defined as follows:
A. OFFER: An offer is a proposition put forward by Mr. A to Mr. B, and Mr. B accepts to be
bound by the proposition. In this regard, Mr.A is the offeror, and Mr. B is the offeree.
An offer is also regarded as a statement made by a person known as the offeror of the terms
specified by him, which, if accepted by the other party known as the offeree, creates a valid
agreement between both parties. The offer may be in writing, in spoken words, or by the conduct
of the parties. If the offer is in written form, it will be contained in clauses and subclauses, and if
it is by conduct, you can see that on a daily basis, we enter into contracts, for example. A bus
driver stooping at the bus stop
The offer may be to a person or to the world. Meanwhile, a statement before it is set to amount to
an offer must satisfy the following conditions:
1. It must be definite, certain, and unequivocal. In other words, it must be a definite promise to
be fulfilled, provided that certain specified terms are accepted.
2. Such a statement must be from a person who is liable to be bound if the terms are accepted; in
other words, the statement must be from the offeror himself or his lawful agent.
3. The statement must be made to the offeree.
An offer can be made orally over the phone, in writing, or even in person. An offer must be made
to a specific individual or to members of the general public. See the case of CALIL V.
CABOLIC SMOKE BALL COMPANY (1893) 1 QB 256. Meanwhile, an offer should be
differentiated from an invitation to treat.
An invitation to treat is a mere expression of intention that may never be contemplated as leading
to a contractual agreement. An example of this is issuing a catalog containing a description of
goods for sale at a specified amount, displaying goods in a shop with price tags, advertising the
timetable for the operation of railways, holding an auction sale, or inviting people to give
quotations for processes of goods to be supplied or for the execution of certain work.
Finally, communication of an offer must be made by the offeror to the offeree before it becomes
effective. Therefore, a person cannot accept an offer of which he has no knowledge.

OFFER AND OTHER RELATED CONCEPTS

A. INVITATION TO TREAT
An offer can be differentiated from an invitation to treat; for the purpose of this discussion, an
invitation to treat is a preliminary to an offer. Its essence is that by doing so, the supposed offeror
is merely initiating negotiations from which an agreement might or might not result.
The negotiation will only lead to an offer by the offeror, who will finally assume a definite
position of preparedness to be bound if the other party accepts.
The difference between an offer and an invitation to treat can be seen in the case of Fisher v.
Bennett (1961) 1 QB 394; in this case, the restriction of offensive weapons Act 1959 made it an
offense to offer for sale a flick knife. A shopkeeper exhibited the knife in the shop window, and
for this act he was prosecuted. It was held that the exhibition was merely an invitation to treat but
not an offer for sale. He was therefore discharged and became acquainted.
In addition, a request for information is not an offer. Therefore, if a prospective buyer makes an
inquiry as to whether a piece of an item is to be sold for X amount, then it is not an offer.
The main distinction between an offer and an invitation to treat is based on the fact that if an
offer has been truly made and the offeree accepts it, then the offer is bound by the terms of the
contract. Therefore, in a case of a tender where there are many offerees that accept the offer, the
offeror is not bound to accept the lowest or any other tender. In this case, an offer for a tender is
not a call for offers.
B. OFFERING AND DISPLAY OF GOODS FOR SALE
The display of goods on the shelves is not an offer but an invitation to treat. See the case of
Fisher v. Bennett (supra), where Lord Parker said "It is perfectly clear that according to the
ordinary law of contract, the display of an article with a price on it in a shop window is merely
an invitation to treat; it is in no sense an offer for sale, and the acceptance of it constitutes a
contract". Meanwhile, the law is still the same if there is no price tag on the article.
C. OFFER AND ADVERTISEMENT
The same rule applies, just like in the previous examples. Therefore, an advertisement is not an
offer. One example of this is an advertisement for the reward of the return of a lost item. In this
case, if a person returns a Yes item knowing of the reward, he would be entitled to such a
reward. In this situation, there is an offer and acceptance because such an advertisement cannot
be regarded as an invitation to treat. Therefore, the owner of the returned item cannot later claim
that he did not make an offer. This type of situation can be regarded as or likened to a unilateral
contract, which is a one-sided contract in the sense that the conditional promise (reward) given to
the other party gives the other party the choice to perform the condition or not. Although strictly
speaking, moat contracts are either bilateral or multilateral.
In a unilateral contract, the offeror will not know if the contract is still on until the other party
has performed his own part of the contract. See Calil v. Carbolic Smoke Ball Company (supra).
In the above case, the defendants are makers of medicine otherwise known as Carbolic Smoke
Ball (borne). The defendants made an advertisement promising to pay X amount to any person
who, after taking the medicine for a period of time in a prescribed manner, still contracted
influenza, and the amount stated had been deposited in their bags to show their level of
commitment. Having seen the advertisement for Carlil, the plaintiff bought the medicine and
took it as prescribed in the advertisement, but still caught influenza. The plaintiff sued for X
amount and succeeded. Although the defendant argued that the advertisement was not a true
offer, the court of appeal held otherwise.
TERMINATION OF AN OFFER
An offer once made remains open for acceptance until one of the following happens:
1. REVOCATION: An offer could be withdrawn at any time before it could be accepted. It
makes no difference if the offeror says that he is leaving the open offer open for a time and with
in. However, a revocation must be communicated to the offeree, but it is sufficient if the offeree
learns the revocation from a liable person.
2. REJECTION: A rejection of an offer makes the offer incapable of acceptance. For example,
Mr. A makes an offer to Mr. B, and Mr. B rejects the offer. This reply can take two forms: for
example, a direct intentional refusal of the offer or a counteroffer where the offeree attempts to
accept on new terms not contained in the offer. An illustration of this is where Mr. A makes an
offer for X amount and Mr. B accepts the offer for Y amount. This situation or illustration will
not, however, include a genuine request for information as to certain terms and conditions of the
offer. But if the offeree accepts the offer subject to conditions, it amounts to a rejection of the
offer.
3. LAPSE OF TIME: if an offer is opened for a limited time, an acceptance of the offer after the
expiration of the period is invalid. However, if there is no time limit, then it must be accepted
within a reasonable time.
4. OCCURRENCE OR NON-OCCURRENCE OF A CONDITION: If this happens, then it
ceases to exist and becomes incapable of acceptance after the condition has occurred. Example:
An offer to insure the life of a person terminates if the person ceases to exist and cannot be
accepted after the person dies. The same thing applies if it is subject to the occurrence of an act
and this act has not happened.
5. LOSS OF CONTRACTUAL CAPACITY: in this case, if either of the parties becomes insane
before the offer is accepted, the offer may lapse.
6. DEATH BEFORE ACCEPTANCE

ACCEPTANCE
Acceptance is regarded as the final expression of assent to the terms of the offer; in other words,
it's an indication of intention and willingness to be bound by the terms of the offer. It can also be
regarded as the final and unqualified expression of assent to the terms of the contract. And once
it has been accepted, it becomes a legal promise, a breach of which to seek redress in court.
However, it has to be communicated to the offeror; therefore, acceptance without communication
is ineffective.
In the case of ORIENT BANK NIG PLC v. BILANTE INTERNATIONAL LTD. (1997), 8
NWLR pt. 155 p.g. 31, acceptance was defined as follows: "An acceptance of an offer is the
reciprocal act or action of the offeree in which he indicates his agreement to the terms of the
offer as conveyed to him by the offeror. To put it in another language, acceptance is the act of
compliance on the part of the offeree with the terms of the offer.
It is the element of acceptance that underlines the bilateral nature."
Acceptance can be by way of the conduct of the parties, by words, or through documents that
have been passed between them.
Acceptance must have been made while the offer is still in force, and acceptance must be
unequivocal. Therefore, it must tally with the offer in the event that any variation or modification
of the offer while accepting the terms of the offer will be invalid in law. This is because such
additions amount to a counteroffer but not acceptance.
Acceptance must be made by the person to whom the offer was made or by his legal agents, but
if the offer is made to the general public, then any member of the general public is at liberty to
accept it.
Meanwhile, a mere intention to accept or silence cannot constitute acceptance; see ORIENT
BANK NIG PLC v. BILANTE INTERNATIONAL LTD. (supra), where the court held as
follows: The reason for the stipulation is that if acceptance is to be based on silence or mental
intent, then its ascertainment is bound to be illusory and at best, assess work, unless the judge
was a superhuman who would be bound to unfold the innermost recess of the hearth of the
parties making a mental assent is inoperative." Therefore, for it to be effective, acceptance must
be communicated.
INVALID WAY OF AN ACCEPTANCE
COUNTER OFFER: Acceptance must be equal to or greater than the offer. Therefore, any
qualification or amendment to the offer is deemed a counteroffer and so amounts to the
cancellation of the original offer. See ORIENT BANK NIG PLC v. BILANTE
INTERNATIONAL LTD. (supra), where the court held as follows: "In order to constitute an
acceptance, the assent to the offer must be absolute and unqualified. If the acceptance is
conditional or any fresh terms are introduced by the person to whom the contract is made, the
expression of assent amounts to a counteroffer, which in turn requires acceptance by the person
who made the original offer.
From the above, a valid acceptance must have the following characteristics:
1. It must be plain, unequivocal, unconditional, and not vary.
with the offer.
2. It must be communicated to the offeror without unreasonable delay.
3. A conditional assent to an offer does not constitute acceptance and is therefore invalid in law.
4: Acceptance subject to a contract and provisional acceptance are invalid under the law because
they cannot create a binding contract until the condition has been met.
5. A cross-offer, though identical, is invalid in law. The reason for this is that there must be a
meeting of the minds, which is not there.
6. Acceptance in ignorance of an offer is invalid in law because a person cannot accept an offer
that he is not aware of.
7. For acceptances to be valid, they must be communicated to the offeror; this can be done by
word, writing, or conduct. However, communication at times could be waved, especially in the
case of unilateral contracts.

CONSIDERATION
Before a person can be held bound under a contract, it must be shown that the transaction is
supported by consideration.
Consideration is something given in the past; in the case of Dunlop v. Sterling, consideration was
defined as follows: "An act or forbearance of one party, or the promise thereof, is the prize for
which the promise of the order is bought, and the promise does govern for validity and is
enforceable".
Examples of consideration are money, other property, or a promise to pay or transfer. Therefore,
if Mr. A pays a consideration, he is entitled to sue for breach of contract, and to succeed, Mr. A
must show that he had paid a prize.
However, a graduate's promises are not a good example of consideration that is capable of
clothing the contract with force and enforceability.
Meanwhile, consideration need not be adequate but must have legal value. This is because the
court cannot make a contract for one who has made bad bargaining, Inadequacy is irrelevant; it's
the duty of the parties to make their own contract; therefore, once there is no fraud, mistake, or
undue influence, the court will not invalidate a contract on the promise that it's unfavorable.
Consideration must also be valid in laws and not be illegal, immoral, or contrary to public policy.
The following are some of the characteristics that govern consideration:
1: It must move from the promisee; in this case, the plaintiff must show that he too furnished the
consideration because he will fail in his action if it's a third party that furnishes the consideration.
2 Consideration may be executed, executory, but not passed its execution. If consideration has
been paid to this effect, thereby showing that he has done this part of the bargain, Therefore, the
performance of the promise, which is the consideration in this case, was constituted and executed
in
It's executory when two parties exchange promises; for example, if A has agreed to sell an item
at a rate of $5,000 and B has agreed to buy the item at a rate of $50,000, the transaction will take
place in the future, or the concluding part of the agreement will take place in the future.
And it's past when a party to the contract makes another promise that is independent of the
transaction between the two parties.
INTENTION to create legal relationships
Apart from offer, acceptance, and consideration, the parties must have the intention of creating a
legal relationship, although it need not be stated because the test to know this is an objective one.
In other words, the test is that of whether such an anticipation is intended.
However, it’s advisable to take the following into consideration:
1 where the party expressly or impliedly excludes an intention to create a legal relationship,
example A gentlemen's agreement must not create a legal relationship or a clause in football
pools that states the sending and acceptance of coupons and everything done in connection,
which shall not give right to any legal relationship or be legally enforceable.
2: Where the agreement relates to a commercial or business transaction, the court will presume
that there is an intention to form a legal relationship until such is proved not to be the case. See
Carlil v. Carbolic CARBOLIC Ball Company (supra), Using the objection test, the court held
that a reasonable person looking at the advertisement, particularly the part stating that 1000
pounds have been deposited at a bank as a guarantee, in good faith would conclude that an
intention to create a legal relationship has been anticipated.
If the agreement relates to purely domestic, family, or social matters, the court will presume that
there is no such intention.
However, if the promise is followed with consideration, then the contract may be assumed to be
in existence.
4: Using the reasonable man test If a reasonable man would assume that there was the intention
of the parties to be bound by their promises, then there is no contract.
PARTIES
In any transaction of a legal nature, there are always two or more parties. These parties include
the buyer and seller, otherwise known as the vendor and purchaser, respectively. This person,
either in oral or written form, expresses their wishes and intentions as part of the terms and
conditions of their transaction, and if there is a breach of such terms, the aggrieved party can
seek redress by way of claiming damages in a competent court. The importance of identifying
who the parties are to a legal transaction is to determine who can sue in case there is a breach or
who is entitled to an interest or legal duties that are likely to emanate from such transactions.
This is in conformity with the concept of privity of contract, and what this means is that only
parties to a contract may sue or be bound by such a contract. In other words, strangers to a
contract cannot enforce benefits or obligations imposed on them under the contract.
CAPACITY OF PARTIES
Having discussed parties as one of the essential constituents of a contract, the next thing to look
at is their capacity.
In this case, capacity is used to refer to a contractual party's competence to enter into legal
relations.
Therefore, capacity is used to mean the ability to incur legal rights. It’s a limitation on the parties
capacity to contract or a limitation imposed on him to not enter into a contract. Meanwhile, as a
matter of fact, everybody is presumed to have the capacity to enter into a contract. Therefore, a
party who is proving incapability must prove this assertion.
However, it’s common knowledge that certain categories of people cannot enter into a contract.
For example, on account of the infertility of an infant, insanity, or peculiar nature of cooperation,
they are incapable of entering into a contract.
The essence of this is to protect the freedom of contract. Therefore, if a person lacks capacity, the
law protects him from being taken advantage of.
For example, in the case of a minor, some other contracts are enforceable against him, while
others are not, and some can be made by him but still avoided before the age of eighteen years
within a reasonable time.
In law, persons are classified into two categories: (a) natural and artificial; the former is referred
to as a human being, while the latter is referred to as cooperation. Therefore, it will be correct to
say that an infant, a person of unsound mind, a dunked person, etc. lack the legal capacity to
enter into a legal relationship; apart from all this, all other persons have contractual capacity.
CONTENTS OF A CONTRACT
The contents of a contract often include the duties and obligations of the contracting parties and
the quality of the contract. When this has been expressly stated, there will be no problem as to
the intention of the parties, but at times their intentions are truly stated, and this is where
challenges are encountered, especially if there is a breach of the terms of such a contract.
In this regard, evidence of customary use may be used in evidence, or at times statutory evidence
could be invoked. This is because ignorance of the parties may not be an excuse.
From the foregoing introduction, two important contents of a contract, namely express terms and
implied terms, would be looked into.
(A) EXPRESS TERMS: forms of express terms could be made by oral or written statements of
the parties. What this means is that a contract can be made by words of mouth or in a
documentary form. If this is by words of mouth, then oral evidence would serve in resolving the
dispute between the parties so as to determine what the terms of the contract say.
Therefore, if the content is in a documentary, then its interpretation would be within the
jurisdiction of the court or judge. In this regard, none of the parties would be allowed to give oral
evidence as to disprove what has been stated in the documents trusts (1924) 1GH 287, where the
court observes as follows: "It is firmly established as a rule of law that Karol evidence cannot be
admitted to add to, vary, or contradict a deed or oral writing instructions. Accordingly, it has
been held that "April evidence will not be admitted to prove that some particular, which had been
verbally agreed upon, has been admitted (by design) or otherwise from a written instruction
constituting a valid and operative contract between parties."
However, the exclusion to add or vary the content of a contract comes with some limitations,
which can be seen as follows:
(a) Evidence may be allowed to prove the existence of a custom or trade usage, and so add in
evidence of such terms that are not contained in the document and which may give real meaning
to the intention of the parties.
(b) Oral evidence may be allowed to show that though on its face the document purports to
record a valid contract, it later agreed upon its suspension until the occurrence of an event, and
this event has yet to take place.
(C) Oral evidence could be allowed if it is meant to show that the contract is a combination of
both oral and documentary forms.
IMPLIED TERMS: with the express statement of the parties, certain terms are implied based on
the accepted and recognized practices allowed to operate on the ground of public policy and also
for trade and commerce to flourish.
From the above evolved the following implied terms, namely:
(a) Implied Terms By custom of trade: the rule as to custom of trade governs a particular contract
if it has not been expressly or implicitly excluded by the parties, and if the custom is well known
to the parties, the assumption is that it's familiar to all.
(b) Implied Power by Statutes: in order to protect the weak ones in society, the court has
accepted and enforced certain terms into a contract (see Sections 12–15 of the Sale of Goods
Act, I.I.E., unless expressly excluded). These sections cover the titles, descriptions, suitability for
purpose, and mercantile policy.
CONDITION AS TO TITLE
It's an implied condition on the part of the seller that he has a right to sell the goods, that the
buyer shall have power to enjoy quiet or peaceful possession of the goods, and that the goods are
free from any charge or encumbrance in favor of a third party. In the case of AKOSHILE V.
OGIDAN (1950), Mr. A sold a car to Mr. B, but B later found it was a stolen car. The car was
recovered from Mr. B by the real owner, and B was sued for theft. The defendant raised the
defense of CAEAT EMPTOR (buyer being aware). The court ruled as follows: "The doctrine of
Caveat Emptor seems to me to have no application in the present case since it's... where there is
no question of the motor car being feet or suitable for the purpose of this, it was sold. The
plaintiff's claim is that the defendant sold a car that he had no right to sell and, at the same time,
had no title to convey.
Sale by description: under Section 13 of the Sale of Goods Act, if goods are sold by description,
then they must correspond with that description. And if it is by sample, goods that have been
sold on description can be seen where the buyer has not seen the goods and relies on the
description of goods that was given by the seller.
FITNESS OR SUITABILITY FOR PURPOSE: See Section 14 of the Sale of Goods Act;
however, before this section can be invoked in favor of the buyer, the buyer must have
specifically made reference to the purpose of the fitness, and this information must have been
passed to the seller. See Broest v. Last, 1903 (2 KB 148), where this principle was in favor of the
plaintiff.
However, in this case, Ijoma v. Mid Motors Company Ltd., 1936 AC 85, where the court held
otherwise, a truck was brought for the purpose of carrying passengers, but it later didn't suit the
purpose, and the plaintiff sued for breach of contract, but the case was dismissed on the ground
that there was no evidence that this information must have been known to the defendant so as to
show that it was relying on the skills and judgment of the defendant.
MERCANTILE POLITY 
Fit for the ordinary purposes for which the goods are used. Under Section 14(2) of the Sale of
Goods Act, goods brought by description from the seller whose deeds are in those goods must
have mercantile qualities. This will not apply, however, if the buyer has examined the goods and
could not detect any defect on them that an ordinary examination should have revealed.
SALE BY SAMPLE: see Section 15 of the SALE OF GOODS ACT. In a contract of sale by
sample, the following should be noted:
1. That there is an implied condition that the bulk shall correspond with the sample
2. That there is an implied condition that the buyer shall have a reasonable opportunity to
compare the bulk to the sample.
3. That there is an implied condition that the goods shall be free from any defect which will
render them merchantable and which cannot also be reasonably seen as different when examined
with the sample.
Note that in all these cases, breaches are regarded as breached varieties, and the remedy in this
case is to seek an award of damages. It's only in strict and exceptional cases that this will be
allowed. Therefore, it is important to note the difference between warranties and conditions. The
reason for this is that, unlike in warranties, if the breaches are as to conditions, the injured party
would be entitled to damages and restitution. These two concepts will be looked into in detail
later on.

TERMS IMPLIED BY THE COURT

As a general rule, the court does not have the unrestricted power to intervene in the contractual
obligations of the parties, i.e., they do not have the power to impose obligatory terms. See
SHIRLAW V. SOUTHERN FOUNDARIES LTD 1939 2 KB 206. The following terms may be
implied from the preceding case.
1. Terms that the parties probably had in mind but were not expressly stated by the parties,
whether they actually had them in mind or not, but would probably have agreed to if such terms
had been brought to their attention.
3. Terms that the parties, whether or not they had them in mind, would have agreed to if they had
foreseen difficulties.
All these are implied by the court because it wants to be fair with the parties and apply the rule of
law.
Conditions and warranties
From our previous discussion, it was agreed that the rights and obligations of the parties should
be determined by making reference to the terms of the contract itself. We have also said that the
duty of the court is to fashion out the intention of the parties, and in determining these terms, one
may realize that the final terms of a contract are preceded by a statement made by the parties that
is completely outside the contract. This statement is not binding, and it is referred to as a mere
representation. This is because it is just made to induce the other party to enter into the contract.
Besides a mere representation, the content of a contract compromises material terms, which are
known as contractual terms. There are two categories: conditions and warranties.
1. Conditions:  a term or stipulation on a contract that is essential to the existence of the contract,
a breach of which entitles the injured party to repudiate the injured party and also claim for
damage. This is because it is a material term that goes to the root of the contract. Therefore, a
party who is in breach of a condition cannot enforce the contract unless the innocent party has
affirmed it, thereby denying himself the opportunity to repudiate it. Under Section 11 (1) B of
the Sale of Goods Act, a condition is a stipulation in the contract of sale of goods, the breach of
which may give rise to the right to treat the contract as repudiated.
In the case of Wallis v. Pratt, 1910 2 KB 1012, Flecher Moulton LJ defines a condition as an
obligation that goes directly to the substance of the contract and is so essential to its very nature
that its nonperformance may fairly be considered by the other party as a substantial failure to
perform the contract at all.
Another sense in which condition has been used is a qualification that renders the operation and
the consequences of the whole contract dependent upon certain feature events. And such a
condition would either be precedent or subsequent.
It is precedent if the act must be done before an obligation is created or before the contract can
be enforced. In this case, it means the contract is subject to the approval of the third party.
It is subsequent when, based on certain circumstances, the obligation arising from such a contract
may be prematurely terminated after the transaction that is the contract has been embarked upon.
An example of this is that the contract terminates if the conditions occur.
2. WARRANTY: in an ordinary sense, warranty means a binding promise; technically, warranty
means a word of minor importance, a breach of which will not lead to repudiation of the
contract, but an action for damage for the loss could be sustained. See Section 62 of the sake of
goods act, which provides that a warranty is an agreement with reference to goods that is
collateral to the main purpose of such a contract, the breach of which gives rise to a claim of
damages but not the right to reject the goods by treating the contract as repudiated.
However, in insurance law, a warranty is an undertaking that goes to the root of the contract and
so constitutes a condition as in any other branch of law.
DIFFERENCE BETWEEN CONDITIONS AND WARRANTY
A breach of condition entitles the other party to treat the contract as discharged, but a breach of
warranty only allows the other party to claim damages, as this will not prevent him from
performing his duty.
Finally, if a party is entitle to rescind a contract for a breach of condition, he may, if he wishes,
treat the breach of condition as a breach of warranty and sue for damages, provided that the
waived condition is for his own sole benefit. See Section 11 (5) a of the Sale of Goods Act,
which provides that if a contract of sale is subject to any condition to be fulfilled by the seller or
buyer, the seller or buyer may waive the condition or may elect to treat the breach of the
condition as a breach of warranty and not as a ground for treating the contract as repudiated.
UNFORCEABLE CONTRACT 
As a general principle of law, and less specifically provided by the law, there is no specific
format as to how a contract should be made. Therefore, a mere and simple contract will not
affect the validity of the contract.
However, with the English statutes of fraud of 1677, specific formats have over the years been
specified as to how certain types of contracts should look, for example, a lease in excess of three
years must be executed under seal. See Sections 42–81 of the Property and Conveyance Law of
1959; again, the format of a deed must be in writing.
Other specifications are the money-leading agreement, bill of exchange, promissory note, etc. At
the onset, the statute of fraud was meant to check on unscrupulous elements. Therefore, the
statutes listed six types of contracts that are not enforceable unless they have been put into
writing. The contracts mentioned under the statutes include:
(a) promise by an administrator or executor of a deceased person's estate to be liable for the
estate liabilities
(b) A promise to ensure the debt, detanlt, or miscarriage of another person
(c) An agreement made upon consideration of...
(d) An agreement for the sale of land or the transfer of any interest in land
(e) An agreement that is not to be performed within one year of being made
(f) sale of goods for the price of ten pounds or more
The statute did not, however, achieve the purpose it was meant for because people still use the
absence of writing to evade their contractual obligations because of so much criticism and many
calls for its repeal by the Law Reform (Enforcement of Contract) Act of 1954. Section 4 of the
statute was repealed with the exception of the provision of contract for the debts, default, or
miscarriage of another person.
Meanwhile, as of 1925, Section 40 of the Law Property Act contained parts of the statute of
fraud that relate to the sale of an interest in land that had been repealed and re-enacted with a few
modifications.
In England, therefore, four out of the six contracts mentioned above are no longer required to be
in writing. Therefore, they can be enforced orally even without writing, but only two of them
now need to be in writing: (a) A contract to answer for the debts, default, or miscarriage of
another person; (b) A contract for the sale of land or of an interest in land
In Nigeria, the English law reform (Enforcement of Contract of 1954) is no longer applicable to
the Nigerian situation, but the reforms are the provisions introduced by the 1954 Act that are
applicable to Lagos, Osun State, and Delta, making six.
In Lagos, see Section 5 of the Law Reform Contract Act No. 64, 1961. In other states, see
Section 2 of the contract law, Cap 250 of the 1959 law of western Nigeria.
By this law, only two types of contracts now need a written format; therefore, as in the case of
England, contracts of guarantee, which involve interests in land, must be put into writing. For the
law that is applicable to the remaining states, which are twenty-eight (28), see Sections 4 and 17
of the statute, which are still fully applicable to all six types of contracts. These states can be
found in northern and eastern Nigeria.
Contracts that need writing
(1) Contract of Guarantee: In a contract of this nature, the parties involved are three (3): the
creditor, principal debtor, and promisor. Under this arrangement, the promisor agrees to pay the
indebtedness of the debtor to the creditor if the debtor fails to honor his agreement or fails to pay
his debt money, for example, in a bank loan or in a contract of employment for a guarantee of
one's status or financial standing.
(2) Contract for the sale or under disposition of any land: According to the provisions of the
statutes of fraud, an oral agreement involving an interest in land is not enforceable in a court of
law unless it has been put in writing. In this regard, such an agreement will be in writing and
signed by the party to be charged therewith. And such an agreement must make reference to the
land in question; it must contain all the essential terms and any other terms deemed important by
the parties. It must also contain the date of commencement and, in what capacity, the name of a
party that appears in the agreement; for example, is he an agent or the real party to the contract?
It must also include the consideration, and the agreement must be properly signed. Although the
name or initials of the contract may suffice for the purpose,
(3) Money Lending Agreement: The Money Lenders Act is meant to regulate the business of
money lending and to protect helpless debtors from exploitation. Therefore, in a money lending
agreement, the lender must comply with conditions such as the memorandum of contract being
in writing and the agreement being signed by the parties before the money is lent. Other
conditions are that the date on which the agreement was made, the principal amount, the interest
rate, etc. must be mentioned in the agreement.
In the case of Kasimu v. Baba Egbe, 1959 AC 539, it was found that the mortgage transaction
hadn't been recorded in a book as provided under Section 19 of the act and was therefore
unenforceable. The court held as follows: "When the governing statute enhances that no loan that
fails to satisfy any of these requirements is to be enforceable, it must be taken to mean what it
says that no court of law has recognized that the lender has a right at law to get his money back;
that is part of the penalties that the law imposes."
The provisions of Section 29 are not purposeless; they seem to assume that no loan that is not
contemporaneously recorded can be established with sufficient time certainty to be recognized at
law. See also Abesin v. Iyaegbe, 1958 WNLR 67, where it was held that "where a contract has
been declared unenforceable by the express provision of a statute, there could be equitable
jurisdiction of the court. Therefore, the case was dismissed for non-compliance with the
provision of the Act.