Legal Tips With CIA Series 41: Contracts

A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties.

Recently, Mango sold his home to his friend and neighbor Uba whereby entering into an N100,000,000.00 written agreement for the purchase of a new home. Mango neglected to tell Uba that the house belonged to him and Amina but proceeded to carry out the sale.
Even so, Uba paid half the purchase price and promised to pay the balance within one month with another leverage for an extension of 14 days after which Mango would sell the home to another buyer and refund the proceeds.
However, Uba wasn’t able to meet up the deadline but insisted that the contract wasn’t reasonable and therefore got a court order to stop Mango from selling the house and taking back possession of the same.

Legal tips state that the law is well settled that parties to a contract are deemed to have voluntarily entered into the terms of the contract and are bound by it, and the court could not have granted that order.
Where the contract is in writing, it is the contract document that constitutes the guide for the interpretation of the contract between the parties and no extraneous terms will be allowed to be read into the contract.

In BABA V NIGERIAN CIVIL AVIATION TRAINING CENTRE ZARIA & ANOR (1991) 5 NWLR (PT 192) PG 388 @ 436 PARA H, the Supreme Court per BABALAKIN J.S.C stated eloquently thus;

“It must be understood that when parties enter into a contract, they are bound by the terms of that contract and it is unfair to read into such a contract the terms on which there has been no agreement. Any of the parties who does so violates the terms of that contract”.

The said contract is binding only to the parties to it and cannot be enforced against or by a stranger to the contract. The doctrine of privity of contract is sacrosanct. In NEW RESOURCES INT’L LTD V LOFTY INVESTMENT NIG LTD (2011) 2 NWLR (PT 1230) PG 102 @ 125 PARA G. The Court of Appeal per OKORO J.C.A (AHTW) now J.S.C stated thus;

“It is trite that a contract affects the parties to it, and cannot be enforced by or against a person who is not a party even if the contract is made for his benefit and purports to give him the right to sue or to make him liable upon it”.

In much the same vein, it is not the duty of the courts to make a contract for the parties. The courts are bound by the terms of the contract. The function of the court is to interprete and enforce the terms of the contract as agreed to by the parties. In UNION BANK OF NIGERIA LTD v OZIGI (1994) 3 NWLR (PT 333) PG 385 @ 404 PARA D, the Supreme Court per ADIO JSC (blessed memory) stated thus;

“This is because, if the conditions necessary for the formation of a contract are fulfilled by the parties thereto, they will be bound by it. It is not the function of a court to make a contract for the parties or to rewrite the one which they have made…”

The imperious fact that a contract is a commitment to be adhered to at all times cannot be exaggerated.