There are different types of contracts, and these include oral contracts, written contracts, express, and implied contracts which can be either oral or written. Total Nig. Plc v. New Cargo Handling Co. (2015) 17 NWLR (Pt. 1630) 564, Para G.
A contract created when two or more parties have no written contract but the terms of which have been agreed by spoken communication is an oral or verbal contract. The law creates an obligation in the interest of fairness based on the parties’ conduct, services rendered, or circumstances.
Remarkably, the law does not require or insist that an agreement or contract should be in any particular form, or according to any particular formalities. It is sufficient that there be a simple contract. Significantly, these contracts are legally binding agreements that consist of all the normal elements of a contract, an obligation, and have the same force as an express or written contract that is voluntarily entered into and agreed on verbally or in writing by two or more persons.
The Court of Appeal righty stated in Omega Bank Nigeria Plc v. O.B.C. Ltd (2002) 16 NWLR (Pt. 794) P.489 at 511, Paras. D that:
“An oral agreement freely entered into by parties is binding and gives rise to an enforceable contract.”
In a scenario where verbal contracts were made by A and C with an understanding that A uses his expertise to build and develop properties for C, of which performance had satisfactorily been carried out, approved and the possession of the properties taken up by C. Unfortunately, disagreements follow an allegedly breached oral agreement which involved a falling-out because there has been no consideration or payment of any of the developed properties by C.
By law, C is obligated to pay A services rendered even though there was no written agreement to that effect because otherwise, A would be unfairly enriched by the expert services rendered, and even though it is discretionary, the doctrine of specific performance may be invoked upon sufficient proof.
In Ohiwerei v. Okosun (2003) 11 NWLR (Pt. 832) 463 at 495, Paras E, the court of Appeal held that;
“Specific performance is a decree issued by the court which constrains a contracting party to do that which he has promised to do. It is a remedy for breach of contract provided by equity to meet those cases where the common law remedy of damages is inadequate.”
There is no gainsaying as with all contracts, parties to an oral contract must have complete potency and legal capacity to form a valid contract.
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