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Engineering Law 2012/2013 J.O.A. Akintayo

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TOPIC 1

SOURCES OF NIGERIAN LAW

Definition of law

According to Lloyd, “much juristic ink has flowed in an endeavour to provide a universally

acceptable definition of law but with little sign of attaining that objective.” We do not intend to

highlight these attempts in terms of the definitions of law proffered by writers and jurists. The law

of a given community may be described as the body of rules regulating human conduct regarded as

obligatory or binding by its members. (Elias, T.O. The Nature of African Customary Law,Manchester, Manchester Univ. Press, 1956)

Practice of Engineering

The practice of engineering as defined by the Engineers (Registration etc) Act, Cap. E 11, Laws ofthe Federation of Nigeria 2004 to include “any professional service or creative work requiring the

application of special knowledge of mathematics, physics and engineering in form of consultation,invention, discovery, valuation, research and teaching in recognised engineering institutions,

planning, operation, maintenance supervision of construction and installation involving

investigating, advising, operating, evaluating, measuring, planning, designing, specifying, laying and

directing, constructing, commissioning, inspecting or testing in connection with any public or privateutilities, structures, buildings, machines, equipment, processes works or projects”.

Scope of Engineering Law

Engineering Law may be described as the branch of the law relating to the practice of engineering.

The subject matter of Engineering law is very broad. A contract relating to an engineering activity or

undertaking or one that involves an engineer in his capacity as such comes within the scope of the

subject. In addition to contract, torts or civil law wrongs committed in the course of an engineering

activity is also captured by Engineering law. The relationship between an engineer and his employer

may also come within the scope of Engineering law including how the issue of invention and

intellectual property rights. The law regulating the practice of engineering in Engineering is also anintegral part of the subject.

Sources of Nigerian Law

The objective of the discussion on the Sources of Nigerian Law is to identify the sources that arerelevant to Engineering Law among the sources of Nigerian law. This discussion will also expose an

engineer in training to the different aspects of law in force in the Nigerian legal system.O.F. Robinson in his book, The Sources of Roman Law: Problems and Methods for Ancient

Historians, said:

A source of law in the lawyer’s sense is that to which someone- whether a legislator, jurist,

law agent, or private individual goes to find out what the law is. The primary source of

modern western law is statute. Indeed, a source of law is commonly both in Roman and in

modern law, something in writing, but it need not be. (London & New York, Routledge,

1997, p. 25)

By Nigerian law we mean the entire body of rules that are regarded as binding within thegeographical entity known as Nigeria. The expression “Sources of Nigeria law” is capable ofdifferent interpretations. It relates partly to the origin or place from which a legal rule forms part of

the body of rules accepted as binding in Nigeria. We will be restricted to the legal sources. Our

focus here is to highlight the principal or main sources of Nigerian law. It must however be stressed

that not all the sources of Nigerian law are particularly relevant to Engineering Law. Though the

Sources of Nigerian law are (1) the Constitution (2) Nigerian Legislation (3) Nigerian Case Law

(Judicial Precedents) (4) Customary law (5) Sharia/Islamic Law; and (6) Received English Law, the

sources of Engineering Law in Nigeria generally exclude Customary law and Sharia/Islamic law.




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1.

The Constitution

The current Nigeria Constitution is the Constitution of the Federal Republic of Nigeria 1999 which

came into force on 29 May 1999. As at February 2013, the 1999 Nigerian Constitution has been

amended on three occasions hence the addition of the phrase “as amended” in formal reference to the

1999 Nigerian Constitution.

The 1999 Nigerian Constitution, as amended, is divided into 8 chapters and schedules. It is arranged

in sections consecutively arranged running through the various chapters. The eight chapters deal

with the following matters:

Chapter 1: General Provisions; Chapter II: Fundamental Objectives and Directive Principles of State

Policy; Chapter III: Citizenship; Chapter IV: Fundamental Rights: Chapter V: The Legislature;Chapter VI: The Executive; Chapter VII: The Judicature; Chapter VIII: Federal Capital Territory,

Abuja and General Supplementary Provisions.

A constitution does not contain all the laws by which a country is administered but it regulates thestructure of government, provides authority for the exercise of legislative, executive and judicial

powers and other matters of fundamental importance.

The Nigerian Constitution is the supreme law of the land. Section.1 deals with the supremacy of theConstitution. Section 1(1) states that the Constitution is supreme and its provisions shall have

binding force on all authorities and persons throughout the Federal Republic of Nigeria. By virtue of

Section1 (3) if any other law is inconsistent with the provisions of the Constitution, the Constitution

shall prevail, and that other law shall to the extent of its inconsistency be void. The provisions of the

Constitution override inconsistent legislation and other rules of law including judicial decisions and

rules of customary and Islamic law.

Nigeria being a federation, the Constitution allocates legislative responsibility to both the Federal

and State legislative bodies. Constitutional provisions also deal with both substantive and procedural

matters and departure from these will be set aside by a competent court on a proper petition placed

before them. In the case of Attorney-General (Bendel) v. Attorney-General (Federation) and

Others [1981], the Supreme Court struck down an Act of the National Assembly purportedly enacted

without compliance with the prescribed constitutional procedure..

The relevance of the Constitution as a source of Nigerian Engineering Law cannot beoveremphasised. A cursory look at the Legislative Lists (Exclusive Legislative List and the

Concurrent Legislative List) indicates many items relevant to engineering. By virtue of the schemeof allocation of legislative powers only the National Assembly may validly regulate the engineering

profession. A law made by a House of Assembly which seeks to directly or indirectly regulate the

practice of engineering will be unconstitutional and void.

Human beings are the main focus of every engineering activity. In this regard we may highlight the

provisions on fundamental rights as relevant to engineering law. The Constitution guarantees to

every individual respect for the dignity of his person and prohibits inhuman or degrading treatment,

being held in slavery or servitude and forced or compulsory labour (S. 34). The right to personal

liberty, the right to peaceful assembly and association and right to freedom of movement are allclosely related in employment situations and these are critical issues in Engineering law.

Practice Session

What is the basis for each of the following classification of constitutions?

(a) Federal vs. Unitary Constitution

(b) Republican vs. Monarchical Constitution

(c) Rigid vs. Flexible Constitution

(d) Written vs. Unwritten Constitution




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2. Nigerian Legislation

After the Constitution, Nigerian legislation is perhaps the most important source of Nigerian law.

Nigerian legislation refers to the laws made by the law-making authorities under successive

governments in Nigeria both military and civilian. The laws made by the Imperial Parliament and

the local legislatures before the attainment of Independence are also included. Under the present

constitutional dispensation, laws made by the National Assembly are referred to as Acts of the

National Assembly while laws made by the Houses of Assembly of States are designated Laws. The

expressions Ordinances and Decrees were adopted under past colonial and military administrationsrespectively at the national/federal level while State Military Governors/Administrators made Edicts.

The above are known as primary legislation because they emanate directly from the legislativebodies established for both the Federal and State governments. In addition to these is subsidiary

legislation or delegated legislation. Delegated legislation relates to the exercise of legislative powersby persons, bodies or authorities other than the legislature. The same expression is adopted for rules,

regulations, bye-laws made by them. The courts and the legislature can control delegated legislation.Regulations made by the Council for the Regulation of Engineering in Nigeria (COREN); Minister

of Works; Minister of Science and Technology; Commissioner for Health in exercise of powers

conferred on them by Acts/Laws are examples of delegated legislation

The importance of legislation as a vital source of law can be appreciated in the sense that they can

be used to modify the content of any other source. In fact, it is by virtue of legislation that some

other sources of law can be recognised as such. In a sense the Constitution is a species of legislation.

Under the present constitutional arrangement in Nigeria, primary legislation may emanate from the

National Assembly (at the federal level) and from the Houses of Assembly of States.

The matters in respect of which only the National Assembly can make laws (known as Acts) are

listed in the Exclusive legislative list. Examples are Award of National Honours, Defence, Fiscal

Policy, Banks ad Banking, Foreign Policy, Minting of Currency, Companies and Insurance, Labour;including trade unions, industrial relations; conditions, safety and welfare of labour; industrial

disputes prescribing a national minimum wage for the Federation or any part thereof; industrialarbitration. The concurrent legislative list on the other hand contains items in respect of which both

the National Assembly and the State Houses of Assembly may legislate. In the event of theinconsistency of any Law enacted by the House of Assembly with any law validly made by the

National Assembly, the law made by the N.A. shall prevail and that other Law shall to the extent ofits inconsistency be void (S.4 (5) 1999 Constitution). Examples of such items are collection of taxes,

electric power, industrial, commercial or agricultural development; University, technological and

post primary education, exhibition of cinematograph films.

Practice Session

What are the rationales for delegated legislation?

Identify the items on the Exclusive and Concurrent Legislative Lists relevant to Engineering Law

Outline of the Procedure for Law-Making

The Legislature performs a variety of functions but the most important one is law making. It is

necessary to examine in brief the process for law making in a democratic setting. Though the

constitutional power to make law rests with the legislature, the business of law making is too serious




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to be left in the hands of the legislature alone. In reality many interest groups lobby legislators to

influence law making in one way or the other.

A Bill, that is a legislative proposal, in a bicameral legislature, like the National Assembly that

consists of the Senate and the House of Representatives may originate in either house. When the

originating house it shall be sent to the other passes it house and when the two chambers on any

amendment made it have reached agreement shall be transmitted to the President for assent

(signature). The President shall within 30 days signify that he assents or that he withholds his assent.

Where the President withholds his assent and each house by 2/3 majorities again passes the Bill it

shall become law without the President’s assent. In the case of a unicameral house as it obtains atthe level of the States the references to the second house in the above will be omitted. Also, it is the

Governor who is the assenting authority.However, in a legislative house a Bill goes through the following stages:

i. First Reading: This entails the formal reading of the Bill which discloses only the

Subject matter. In reality only the title of a Bill is read nowadays.ii. Second Reading: At this stage the main principles of the Bill are discussed. A

Bill rejected at this stage cannot progress.

iii. Committee Stage: The house may prefer the Bill to the appropriate Committee

or constitute itself into a Committee i.e. Committee of the whole house. It is at this stage that thedetails of the Bill are discussed and necessary amendments are made. The Committee may have

recourse to Public Hearings in order to obtain useful information from members of the Public. This

is a very useful though not binding procedure. Apart from direct lobbying of legislators by interest

groups the facility of public hearing presents an opportunity to persons or groups directly or

indirectly interested in the outcome of a legislative process to bring their case to the public domain

through the appropriate legislative committee.

iv.

Third Reading: The general principles of the Bill are debated and verbal amendments are

made where necessary. When a Bill has successfully gone through this stage it will be deemed to be

carried when a vote with appropriate majority is secured in favour thereof.

Separation of Powers and Interpretation of Statutes

The doctrine of separation of powers entails division of governmental powers into three namely: thelegislative, executive and judicial and the vesting of these powers in the Legislature, the Executive

and the Judiciary respectively. Laws are made by the Legislature, executed or implemented by theExecutive and interpreted by the Judiciary (i.e. the courts of law). When there is a dispute as to the

correct meaning of an enactment reference is made to the courts. The courts adopt a number ofprinciples while construing statutes. These are known as cannons of statutory interpretation.

i. The Ordinary Meaning Approach: This is also known as the literal rule of the primary rule of

construction. The courts in this instance look at the plain meaning in English Language of

the words used and give the words their ordinary dictionary meaning. Usually the courts

have recourse to the Oxford English Dictionary. Where the words of a statute are plain, clear

and unambiguous it is neither necessary nor permissible to read other meanings to them:

Nabhan v. Nabhan [1967]. This approach was adopted in Awolowo v. Shagari [1979] and Adegbenro v. Akintola, which they are used. The “conveyance” illustrates this.

ii. The Golden Rule Approach: The courts adopt this approach where the literal meaning or

ordinary meaning approach leads to a manifest absurdity or where words are capable of two

or more interpretations. The courts will give them interpretations that will avoid such

absurdity Awolowo v. Sarki [1966]. This is also known as the rule in Becke v. Smith.




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iii. The Mischief Rule: This is also known as the Rule in Heydon’s case of interpretation by

reference to the statutory purpose. Where there is ambiguity, vagueness or generally in a

statute and the court intends to resolve this problem the statute will be considered as a whole

to discover the original purpose which the legislature had in mind for raising it and interpret

the statute in a way or manner that it will lead to the achievement of the original purpose.

The court looks at the mischief the statute was intended to combat and interpret it in such a

way that it will suppress the mischief or vice and advance the legislative remedy. Savannah

Bank v. Ajilo [1989]; I.B.W.A. v. Imano (Nig.) Ltd . [1988].

iv. Progress towards a Unitary Approach: This is a combination of the above approaches.Words are read in their entire context in their grammatical and ordinary and ordinary sense

harmoniously with the scheme of the legislation, the object of the law and the intention ofParliament (the Legislature). Professor Driedger popularised this approach. See Mausell v.

Olins [1975] A.C. 393.

3.

Nigerian Case Law/Judicial PrecedentsA basic though unwritten principle of Nigerian law is that Judges should stand by their decisions and

by those of their colleagues. The doctrine of judicial precedents or stare decisis is a system by

which courts follow previous decisions when deciding cases. A precedent is a judgment cited as

authority for making a decision in a case. Judicial precedent or case law consists of law found in judicial decisions. It is the principle consists of law found in judicial decisions. It is the principle of

law on which a judicial decision is based. Within the context of Nigeria, Nigerian case law consists

of the decisions of superior courts in the Nigerian legal system. The rules, which emerge from

decisions of the courts, or rules of law made by the Judges while interpreting statutes in cases being

decided by them constitute judicial precedents.

Precedent promotes certainly in the law. Other advantages are possibility of growth, wealth of

detailed rules and practicality. Its disadvantages include rigidity bulk and complexity and slowness

of growth. This is because it depends on accident of litigation. Precedent may either be binding

(authoritative) or persuasive precedent. Binding precedents are decisions that must be followedirrespective of what the Judge applying them thinks about their wisdom and correctness. Only the

ratio decidendi (literally the reasons for the decision), that is, the underlying principle of lawestablished in a case, is binding. A persuasive precedent is one, which is considered and may be

followed when the Judge sitting over an instant case, approves of the reasoning in the case sincethere is no obligation to follow it. The obiter dicta (passing comments or remarks) of a decision

may have persuasive effect though they do not form part of the ratio. Only pronouncement of law inrelation to the material facts before a judge constitute ratio and hence a precedent.

A Judge may refuse to follow a previous decision if that decision has been given per incuriam i.e.

the court giving the omitted to consider some relevant statutory provisions or some decisions that

were binding on it. A Judge may also avoid a precedent by distinguishing the instant case from the

precedent i.e. identifying some material difference between the facts of the cases and using this

exercise as basis for departing from the controlling influence of the precedent. This is only possible

where the two cases are distinguishable.

The operation of the doctrine of judicial precedents depends on the existence of a well-structured

hierarchy of law and an up–to–date system of law reporting. For instance, the decisions of the

Supreme Court of Nigeria, the highest court in Nigeria, constitute binding precedents to all lower

courts. The decision of a High Court is binding on the Magistrates Courts. It must however be

pointed out that the decisions of courts of co-ordinate jurisdiction e.g. Federal High Court and State

High Courts or of a lower court to a higher court only constitute persuasive precedent. The decisions

of courts outside the Nigerian legal system no matter how eminent are not binding on any court in




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Nigeria. They only constitute persuasive precedent. This is became stare decisis operates only

within a legal system.

A large tract of the legal principles regulating industrial relations and other branches of the law were

developed by the judges in the course of deciding cases brought before them. As the body of judicial

decisions becomes larger the legal principles formulated therein continue to be refined and extended

to cover similar situations. Legislation has sometimes confirmed or modified these principles. This

underscores the importance of judicial law making or judge-made law. Nigerian Case Law brings to

forefronts the contribution of the Nigerian Judiciary in this task which is part of the common law

legal tradition.

4.

The Received English LawThe scope of English law received into the Nigerian legal system, that is the federal and individual

state legal systems, is not the same. The relevant provision at the federal level is found in section 32(1) of the Interpretation Act, Cap 1 23 Laws of the Federation of Nigeria 2004 and it provides:

“Subject to the provisions of this section and except in so far as other provision is made by theFederal law, the common law of England and the doctrines of equity, together with the statutes of

general application that were in force in England on the 1st day of January 1990 shall, in so far as

they relate to any matter within the legislative competence of the Federal legislature, be in force in

Nigeria”.

From the above, there are three aspects of English law received into the Nigerian legal system and

these are: (i) Common law (ii) Doctrines of Equity and (iii) Statutes of general application.

(i)

Common Law

The term ‘common law’ refers to the basic law of England developed by the judges of the old

common law courts. Originally there were systems of local customs in England and common law at

that time meant the law that was common to the whole of England as opposed to local customs.

Common law was developed in the medieval times by the royal courts as a law common to the

whole kingdom, in England through the judges who went on tour at regular interval. The rules ofcommon law are to be found in decided cases. The common law is not a static system but the ability

to modify it to suit particular circumstances inheres in judges. A significant portion of Engineeringlaw like the law of contract, law of torts is based on the common law. In a few respects statutes have

modified the common law.

(ii) EquityEquity is a case law system developed by the old English Court of Chancery to mitigate the

harshness of the common law. Whenever the rule of common law resulted in hardship or injustice

the Chancellor, acting on behalf of the King as the fountain of justice, granted relief to the aggrieved

party. Initially this was on ad hoc basis and operated on ground of conscience. When the system

became more popular more persons were appointed to administer justice and consequently it became

necessary to follow established principles in the court of equirty, the Court of Chancery. The early

Chancellors were Ecclesiastes but later lawyers were appointed as Judges the system of judicial

precedent was also introduced.The rules of common law and equity were administered in different courts until the Judicature Acts1873-1875 were passed. Since then common law and equity have been administered together in the

same courts and it is provided for that where a principle of common law is inconsistent with the

doctrine of equity, the doctrine of equity shall prevail.

At the time common law and equity were received into Nigerian law in 1863 the administration of

the two systems were fused. This was even before the Judicature Acts 1873-75 were passed in

England.




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Equity often acts like a gloss or an appendage to the common law. The only institution equity is

solely responsible for is that of trust. Equity has maxims. Some of these are “He who seeks equity

must do equity”. “He who comes to equity must come with clean hands”. “Equity aids the vigilant

and not the indolent”, “Equity acts in personam”, “Equity follows the law”, “Equity will not suffer

a wrong to be without a remedy”, “Equity is equity”, “Equity regards that done which ought to be

done”.

(iii)

Statutes of General Application

These refer to statutes made by the English Parliament before January 1, 1900. Before a statute maybe considered as a statute of general application, it must be such which all the divisions of English

Courts applied it and it must not be restricted to a particular community in operation. These must bedistinguished from English statutes extended to Nigeria by their own force, for such are considered

as part of Nigerian legislation. The repeal of a statute or modification thereof in England does notaffect the operation of such laws in Nigeria. Local legislative bodies may however modify or

abrogate imperial statutes that fall within their respective legislative competences. In the formerWestern Region of Nigeria, statutes of general application considered to be appropriate were re-

enacted as regional laws hence no English statute is in force in the States that formed part of this

region. The situation is however different with respect to the federal legislative competence. Section

32(1) of the Interpretation Act clearly indicates the application of statutes of general application. Inreality, however, the number of statutes, which come under this head, has considerably diminished

because of their replacement by local enactments.

5.

Customary Law

The term “Customary law” does not suggest that there is a single or uniform system of customary

law in force throughout Nigeria. By customary law we mean the indigenous law of the land, which

still forms part of the body of law. Before the establishment of colonial rule, this was the only

system of law recognised in most of the communities, which now form part of the modern Nigeria.

A significant portion of this law has been jettisoned while the remaining part can be enforced as part

of the Nigerian law if they pass the tests laid down by law.

Customary law has certain features or characteristics. First, it derives its validity as law from itsacceptance or recognition as obligatory by the native community whose activities it regulates. In

Owonyin v. Omotosho [1961] customary law was described as a mirror of accepted usage”.Secondly, the rules of customary law change from time to time, reflecting social and economic

conditions without losing their character as law. This was recognised in Lewis v. Bankole [1908].The dynamism of customary is illustrated by the following examples. Land was at a time an

inalienable property. Nowadays land may be transferred by sale under customary law. Also, land

was considered to belong to the family or community but never to individuals. Customary law now

recognises individual ownership of land in response to social and economic changes. Thirdly,

customary law is generally unwritten. Over the years scholars have attempted and succeeded in

reducing aspects of the customary laws they studied into writing. Also a written agreement may now

be subject to customary law even though the document means nothing in English/General Law:

Rotibi v. Savage [1944].

Customary law is treated as a question of fact hence it requires proof. This relates mainly to the

English-type courts, as there is no need to prove customary law before customary courts. Customary

courts are presided over by local chiefs or others who are generally versed in the local customs and

traditions of their people. When proof is required a party who claims the existence of a particular

custom will have to prove it by calling witnesses and experts to testify as to the existence thereof

except where courts have taken judicial notice of the rule of customary law in issue.




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Customary law operates largely as a personal law dealing mainly with matters like marriage,

succession and guardianship of children. All these come under civil law. “Customary criminal law

has been abolished because it violates the constitutional provision that an offence must be written

and the punishment therefore prescribed in a written law (S. 36 (2) 1999 Constitution) Aoko v.

Fagbemi [1961].

The rules of customary law must pass the tests of validity laid down by the general law before they

can be enforced. These tests are (i) the Repugnancy test (ii) the Incompatibility test and (iii) the

Public policy test.

(i) The Repugnancy Test: This test is found in the High Court Laws and other court enactments.

This expression is to the effect that a rule of customary law must not be repugnant to natural justice,equity and good conscience. Courts are therefore empowered to reject outright a rule found to be

repugnant to Natural Justice, Equity and Good Conscience. Let us examine a few cases.In Edet v. Essien [1932] the appellant had paid dowry in respect of a woman when she was a child.

Later the respondent paid dowry in respect of the same woman to the woman’s parents and took heras his wife. The appellant claimed custody of the children of the union on the grounds that under

customary law, he was the husband of the woman until the dowry paid by him was refunded to him

and that he was entitled to any children born by the woman until dowry was refunded to him. The

court held that the alleged rule of customary law had not been established. It then said even if suchrule had been established it was of opinion that the custom was repugnant to natural justice, equity

and good conscience.

Also in Re Effiong Okon Ata [1930] the court rejected a rule of native law and custom which would

have entitled the former owner of a slave to administer his personal property after his death on the

ground that the custom failed the repugnancy test.

In Mariyama v. Sadiku Ejo [1961] the court declined to enforce a rule of Igbira Customary law

whereby a child born 10 months after divorce belonged to the divorced husband and not the new one

on the ground that it would have taken a child away from its natural parents. In this case there was a

clear evidence that the first husband could not be the true father because the woman left him some

months before the divorced. It must be pointed out that the court did not condemn this native lawand custom in its application rather the rule was however said to be invalid with respect to the case.

However, in Dawodu v. Danmole [1958] both the Federal Supreme Court and the JudicialCommittee of the Privy Council refused to uphold the decision of Jibowu J. rejecting on ground of

repugnancy, the ‘Idi-Igi’ (per stirpes) custom of distributing intestate estate of a deceased Yorubaman by the number of wives. The deceased died leaving four (4) wives and nine (9) children. The

trial judge was of the opinion that the property should be distributed in accordance with the “Ori-ojori” (per capita) system, which to him promoted the modern idea of equality of children.

(ii) Incompatibility Test: This test is also contained in the same section of the High Court Law

and other relevant enactments as the Repugnancy test. The court will refrain from applying a rule of

customary law which is incompatible directly or by necessary implication with any law for the time

being in force. The reference to law is to written laws as discussed under Nigerian legislation. We

have cases of direct incompatibility and incompatibility by necessary implication. The former is the

case where a written law expressly abolishes a rule of customary law e.g. Abolition of Osu SystemLaw of the former Eastern Region of Nigeria; see also some sections of the Criminal Code.Incompatibility by necessary implication relates to situations when rules of customary law and

provisions of written law cannot co-exist. In Agbai v. Okogbue [1991] a case which arose from the

forceful entry of the respondent’s shop, seizure and carrying away of his sewing machine to enforce

the demand of the development levy imposed by an age group on all its members for the purpose of

building a Health Centre in their village. The Supreme Court considered whether membership of

age group association is compulsory and if so, whether the respondent, who objected to joining such

an association on religious grounds, may be compelled to do so or be deemed to be a member willy-




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nilly and whether self-help was available to the appellants in recovering levies. The Supreme Court

held that the alleged custom compelling the respondent to join the age group association was subject

to the provisions of the Constitution relating to freedom of association and of religion. The Court

said that the respondent was entitled to hold the tenets of his religion, thought and conscience, which

prohibit him from joining the age grade and that any contrary custom is unconstitutional, null and

void.

(iii) Public Policy Test: This test is contained in the Evidence Act 2011. The Act provides that a

custom shall not be enforced if it is contrary to public policy. Courts hardly make reference to this

test while rejecting a rule of customary law. Based on the public policy test however, a custom

permitting two women to get “married” to each other was denied enforcement in Meribe v. Egbu [1976]. In Cole v. Akinyele [1960] the rules of legitimation under the Legitimacy Act and

customary law were considered. The rule of customary law was rejected on the ground of beingcontrary to public policy. This decision has been severely criticised.

6. Sharia/Islamic Law

Sharia/Islamic Law is sometimes considered as part of customary law. There are however somedistinguishing factors. First, Sharia Law is not indigenous to Nigeria as it was introduced as part of

Islam. Secondly, Islamic Law is written. Islamic Law is administered as a variant of customary law

particularly in the Southern States while the Northern States it operates as a distinct system. The

sources of Islamic law include (i) the Holy Quran (ii) the Sunna – the facts of the life of the Prophetand his sayings (iii) Ijma – the consensus of ‘Islamic’ scholars; and (iv) Qujas – analogical

reasoning from the Quran and Sunna.

The version of Islamic law received into the Northern States is that of the Maliki School. Though

the Sharia is an all-embracing system of law, it is predominant in matters regulated by the personal

law like marriage, guardianship and inheritance. The Sharia is administered by Alkalis in the Area

courts, Kadis in the Sharia Court of Appeal and Justices of the Supreme Court and the Court of

Appeal and Justices of the Supreme Court and the Court of Appeal learned in Islamic Law. Islamic

law as it operates in the Northern States is provisions of the Constitution.

ConclusionIt must be realised that not all the above-mentioned sources form part of the sources of particular

area of Nigerian Law. For instance, both Customary Law and Islamic Law cannot be regarded asforming part of Engineering Law in Nigeria, because they do not have any significant contribution to

the body of contemporary legal rules in this area.

Practice Session

Identify the sources of Nigerian law relevant to Engineering law?

How relevant are trade practices and customs regulating the conduct of traditional engineering

practitioners like builders, blacksmiths, goldsmiths etc, to modern Engineering law?




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TOPIC 2

THE NIGERIAN COURT SYSTEM

The word “government” may be described as the whole machinery for carrying out the business

of a country, including the Legislature, the Executive and the Judiciary. Governmental powers

therefore mean legislative powers, executive powers and judicial powers, all combined. Judicial

powers in Nigeria are vested in the courts established, for the Federation and for the States. The

judicial powers extend to all matters between persons, or between government or authority andany person in Nigeria, and to all actions and proceedings relating thereto, for the determination

of any question as to the civil rights and obligations of that persons. The above relates mainly tothe power of courts to enforce the law. This manifests in the resolution of legal disputes

between persons, authorities, and governments. It also extends to criminal liability.

The courts in the Nigerian legal system can be categorised on the basis of whether they areestablished by the Constitution or by the provision of statutes. Other classifications include

superior courts ad inferior courts; regular/ordinary courts and specialised courts; federal courts

and state courts; courts of original jurisdiction and appellate courts; courts of limited jurisdiction

and courts of unlimited jurisdiction etc. It is not our intention to consider all theseclassifications.

Four basic aspects in respect of each court which we intend to consider will be highlighted.

These are the establishment of the court, its composition, appointment of its judicial personnel

and its jurisdiction. We shall consider the Federal Courts first.

A. The Supreme Court of Nigeria

The Supreme Court of Nigeria is established by the Constitution (S.230(1) 1999 Constitution.

It must however be remarked that the Court came into existence in 1963 following the adoptionof the 1963 Republican Constitution. It has since 1st October 1963 been the apex court in the

Nigerian judicial system. Before this day the highest court in the judicial system was the JudicialCommittee of the Privy Council (J.C.P.C.) based in England.

The Supreme Court consists of the Chief Justice of Nigeria (C.J.N.) and such number of

Justices of the Supreme Court, not exceeding 21 as may be prescribed by an Act of the NationalAssembly (S.230(2) of the 1999 Constitution). The Supreme Court Act, Cap 434, Laws of the

Federation of Nigerian, which is regarded as an Act of the National Assembly however provides

that the number of the Justices of the Supreme Court shall not exceed 15. Until this law is

amended, the Justices of the Supreme Court (JJ. S. C.) cannot exceed 15. It must be remarked

that it is not always the case that the S.C.N. has its full complement of Justices. For the purpose

of exercising any jurisdiction conferred on the S.C.N., the Court shall be duly constituted if it

consists of not less than 5 Justices of the Supreme Court. When the Court is sitting to consider

an appeal brought under S.233(2) or (c) or to exercise its original jurisdiction in accordance withS.232, it shall consist of 7 Justices (S.234; 1999 Constitution). For the purpose of delivering itsdecision the S.C.N. shall be deemed to be duly constituted if at least one member of that court

sits for the purpose (S.294 (4).).

The appointment of a person to the office of the Chief Justice of Nigeria or that of a Justice of

the Supreme Court shall be made by the President of the Federal Republic of Nigeria on the

recommendation of the National Judicial Council subject to confirmation of such appointment by

the Senate (S.231 (1) & (2) ). To be qualified for appointment as the C.J.N. or a J.S.C. the




11

person must be a legal practitioner in Nigeria and he must have been so qualified for a period of

not less than 15 years (S.231 (5).

The S.C.N. has original and appellate jurisdiction. Its original jurisdiction, which is to the

exclusion of any other court is as respects any dispute between the Federation and a State or

between States ad if and in so far as that dispute involves any question (whether of law or fact)

on which the existence of a legal right depends (S.232 (1) ). The National Assembly save with

respect to any criminal matter (S.232 (2) may confer additional original jurisdiction on the Court.

The appellate jurisdiction of the S.C.N. derives from the Constitution and statutory provisions.

The S.C.N. has exclusive jurisdiction to hear and determine appeals from the Court of Appeal.Appeals may lie is of right or with the leave of the Court of Appeal or the Supreme Court. The

S.C.N. also entertains appeals from the decision of the Legal Practitioners DisciplinaryCommittee of the Body of Benchers established under the Legal Practitioners Act, Cap 207

L.F.N. 1990. The Committee deals with disciplinary matters which involve members of the legalprofession. (Decree 21 of 1994).

B. The Court of Appeal

The Court of Appeal (C.A.) is next to the S.C.N. in the hierarchy of courts in Nigeria. The

C.A. is established by S.237 (1) of the 1999 Constitution. The Court was however firstestablished in 1976 as the Federal Court of Appeal. It was designated Court of Appeal in 1984.

The C.A. consists of a President of the Court of Appeal (P.C.A.) and such number of Justices

of the Court of Appeal (JJ .C.A.) not less than 49 of which not less than three shall be learned in

Islamic personal law, and not less than three shall be learned in Customary law, as may be

prescribed by an Act of the National Assembly (S.237 (2) ). Unlike the case of the S.C.N. where

the Constitution stipulates the maximum number of JJ .S.C., the Constitution in the case of the

C.A. specifies the minimum number of JJ .C.A. No Act of the National Assembly may specify a

number lower than the constitutional stipulation in the case of the C.A. For the purpose of

exercising any Jurisdiction conferred upon the C.A. by the Constitution or any law, it shall beduly constituted if it consists of not less than three JJ .C.A. With respect to appeals from a

Sharia Court of Appeal and a Customary law respectively (S.247). Since the Constitution hasmerely indicated the minimum number of JJ C.A. that should sit, the C.A. may by practice

empanel a higher number of Justices. Over the years the Court has evolved the practice ofhaving five JJ C.A. sit in constitutional matters.

The Court of Appeal operates in judicial divisions. These divisions are scattered throughout

the country. Notwithstanding this, the Court is only one court. The judicial divisions are for

administrative convenience. The President of the Court of Appeal may transfer a case from one

division to the other.

The President of the Federal Republic of Nigeria appoints the President of the Court of

Appeal. This appointment is made on the recommendation of the National Judicial Council and it

is subject to confirmation by the Senate. The President of FRN on the recommendation of theNational Judicial Council (N.J.C.) (S.248) appoints a Justice of the Court of Appeal. Theappointment qualification for both the P.C.A and JJCA is 12 years post-call experience.

The Court of Appeal is vested with both original and appellate jurisdiction. The C.A. has

exclusive original jurisdiction to hear ad determine whether (a) any person has been validly

elected to the office of President or Vice-President under the Constitution; or (b) the term of

office of the President or Vice-President has ceased; or (c) the office of President or V.P. has

become vacant (S.239(1) ). The jurisdiction of the C.A. is largely appellate. It has exclusive




12

appellate jurisdiction to entertain appeals from the Federal High Court of a State, Sharia Court of

Appeal (S.C.A.) of the F.C.T.; C.C.A. of a State and from decisions of a court martial or other

tribunals as may be prescribed by an Act of the National Assembly (S.240). The C.A. entertains

appeals from the decisions of the Code of Conduct Tribunals as of rights (.246 (1)). “The

decisions of the C.A. in respect of appeals arising from election petitions shall be final S.246 (3).

The power of the National Assembly to confer additional jurisdiction on the C.A. only extends to

appellate jurisdiction (S.246 (2) ).

C.

The Federal High Court

The Federal High Court (F.H.C.) is established by S.249 (1) of the 1999 Constitution. The

Court consists of a Chief Judge (CJ) of he F.H.C. and such number of Judges of the F.H.C. asmay be prescribed by an Act of the National Assembly. A Judge of the F.H.C. sits alone to

exercise the jurisdiction of the Court (S.253). The C.J. of F.H.C. is appointed by the President(F.R.N.) on the recommendation of the N.J.C. subject to confirmation of such appointment by

the Senate. The appointment of a Judge of the F.H.C. is made by the President Judges of theF.H.C. must have at least ten years post-call experience (S.250 (1) & (2)).

Section 251 (1) of the 1999 Constitution deals with the jurisdiction of the F.H.C. The

jurisdiction of the F.H.C. The jurisdiction conferred on the F.H.C. is to the exclusion of anyother court. Additional jurisdiction may be conferred by an Act of the National Assembly. The

Federal High Court has jurisdiction in civil causes and matters relating to the revenue of the

Federal Government; connected with or pertaining to the taxation of companies and other bodies

subject to Federal taxation; connected with or pertaining to customs and excise duties and export

duties; connected with or pertaining to banking, banks, other financial institutions including any

action between bank or against by bank against the CBN but not actions arising from bank-

customer transactions; arising from the operation of the Companies and Allied Matters Act; any

Federal enactment relating to copyright, patent, designs, trademarks and passing-off, standards of

goods and commodities and industrial standards; any admiralty jurisdiction including shipping

and navigation and carriage by sea. The jurisdiction of the Court extends to most items on theexclusive legislative list. All actions against the Federal Government or any of its agencies have

to be instituted in the F.H.C.

The F.H.C. has jurisdiction and powers in respect of some criminal matters. These includetreason, treasonable felony and allied offences and criminal causes related to its civil jurisdiction.

D. The High Court of the Federal Capital Territory

The High Court of the F.C.T. is established by S.255(1) of the 1999 Constitution. It

consists of a Chief Judge of the High Court of the F.C.T. Abuja and such number of Judges

of the High Court as may be prescribed by an Act of the National Assembly.

The C.J. is appointed in identical terms as the C.J. of the F.H.C. The Judges are also

appointed like the Judges of the F.H.C. and the appointment qualification is 10 years post callexperience (S.256).

Subject to the provisions of S.251 and any other provisions of the Constitution and in

addition to such other jurisdiction as may be conferred upon the High Court of the F.C.T. by law,

the Court has jurisdiction to hear and determines any civil proceedings in which the existence or

extend of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue or

to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture,

punishment or other liability in respect of an offence committed by any person (S.257(1)). The




13

High Court of the F.C.T. may exercise both original and appellate/supervisory jurisdiction. Like

the F.C.T. the Court is duly constituted if it consists of at least one Judge.

E.

The Sharia Court of Appeal of the Federal Capital Territory

The S.C.A. of the F.C.T. is established by S.260(1) of the 1999 Constitution. The consists of a

Grand Kadi of the S.C.A. and such number of Kadis of the S.C.A as may be prescribed by on

Act of the National Assembly.

The President makes the appointment of the Grand Kadi in identical terms as the ChiefJudges of the F.H.C. and the High Court of the F.C.T. The President on the recommendation of

the N.J.C. (S.261 (2) appoints the Kadis. The appointment qualifications of the Grand Kadi andKadis of the S.C.A. are provided for in S.261 (3). To be qualified one must (a) be a legal

practitioner with 10 years post-call experience and must have contained a recognisedqualification in Islamic law from an institution approved by the N.J.C. and held the qualification

for a period of not less than 12 years. A person appointed under the latter category must inaddition have considerable experience in the practice of Islamic law or be a distinguished scholar

of Islamic law.

The S.C.A. has only appellate and supervisory jurisdiction in civil proceedings involvingquestions of Islamic personal law. These include any question of Islamic personal law regarding

a marriage concluded in accordance with that law, including a question relating to the validity or

dissolution of such a marriage, family relationship and guardianship of an infant; where all the

parties to the proceedings are Moslems any question related to the above, any question of Islamic

personal law regarding a Wakf, gift, will or succession where the endower, donor, testator or

deceased person is a Moslem, any question of Islamic personal law regarding an infant, prodigal

or person of unsound mind who is a Moslem or the maintenance or the guardianship of a Moslem

who is physically or mentally infirm; or where all the parties to the proceedings, being Moslems,

have requested the court that hears the case in the first instance to determine that case in

accordance with Islamic personal law, any other question (S.262). The National Assembly mayconfer additional jurisdiction on the S.C.A of the F.C.T.. (S.262).

The Court is duly constituted if it consists of at least three Kadis of the Court.

F. The Customary Court of Appeal of the Federal Capital Territory

Section 265 (1) of the 1999 Constitution establishes the C.C.A. of the F.C.T. The Court consists

of a President of the C.C.A. and such number of Judges of the C.C.A. as may be prescribed by

an Act of the National Assembly.

The provisions on appointment of the President of the CCA and the Judges of the CCA in terms

of procedure and organs responsible therefore are identical with the provisions on the S.C.A. of

the F.C.T. highlighted above. (S.266 (1) and (2). A person shall not be qualified to hold office

of President or a Judge of the CCA of the FCT, unless – (a) he is a legal practitioner in Nigeriawith 10 years post-call experience, and in the opinion of the N.J.C. he has considerableknowledge and experience in the practice of Customary law. (S.266 (3). The National

Assembly is empowered to prescribe additional qualifications.

The C.C.A. of the FCT shall, in addition to such other jurisdiction is may be conferred upon

it by Act of the National Assembly, exercise such appellate and supervisory jurisdiction in civil

proceedings involving questions of Customary law (S.267). Three Judges of the Court are to sit

to hear and determine cases before the Court (S.268).




14

State Courts

Though the above Courts are categorised as Federal Courts by the Constitution, in the case of

the S.C.S. and C.A. they also form part of the State judicial hierarchy as the State Court system

dovetails into the Federal at the level of the Court of Appeal. This can be contrasted with the

arrangements in some other Federal States (i.e. countries), where the two sets of courts are

almost in two separate compartments with State courts having power of final determination in

respect of State matters.

The High Court of a State

The Constitution establishes for each State of the Federation a High court. This Court consists ofthe Chief Judge of the State and such number of Judges of the High Court as may be prescribed

by a Law of the House of Assembly of the State.The Chief Judge is appointed by the Governor of the State on the recommendation of the

National Judicial Council subject to confirmation of the appointment by the House of Assemblyof the State. The Governor acting on the recommendation of the National Judicial Council

appoints other Judges. The qualification for appointment as a Chief Judge or a Judge of the High

court is 10 years post-call experience.(S.271).

The jurisdiction of the High Court of a State is couched largely in the same manner similar asthat of the jurisdiction of the High Court of the F.C.T. The High Court of a State has both

original and appellate /supervisory jurisdiction. It appears that except in matters reserved for

other courts by the jurisdiction by the Constitution, the jurisdiction of the State High court is

wide and extensive. Though no express power is given to the House of assembly to confer

additional jurisdiction, be it original or appellate, on the state High Court, this is implied.

At least one Judge of the State High Court constitutes the Court for the exercise of its

jurisdiction. (S.273).

Sharia Court of Appeal of a State

The Constitution establishes a Sharia Court of Appeal for any State that requires it. (S.275(1)).The Sharia Court of appeal consists of a Grand Kadi of the Sharia Court of Appeal and such

number of Kadis of the Sharia Court of Appeal as may be prescribed by the House of Assemblyof the State.

The appointment of the Grand Kadi is in identical terms with that of the Chief Judge of theState. A Kadi is appointed by the Governor on the recommendation of the National Judicial

Council. (S. 276(1) and (2)).The appointment qualifications are as contained in the provisions on the Sharia Court of Appeal

of the Federal Capital Territory. The same thing applies to the jurisdiction of the Court.(S.277).

At least three Kadis constitute the Sharia Court of Appeal (S.279).

The Customary Court of Appeal

The Constitution establishes for any State that requires it a Customary Court of Appeal.

(S.275(1)). The Customary Court of appeal consists of a President of the Customary Court of

Appeal and such number of Judges of the Customary Court of Appeal as may be prescribed by theHouse of Assembly of the State. The judicial officers of the Customary Court of Appeal areappointed in terms similar to the appointment of the judicial personnel of the Sharia Court of

Appeal of a State. Apart from such other qualification as may be prescribed by a Law of the

House of Assembly a person shall not be qualified to hold the office of a President or a Judge of a

Customary Court of Appeal unless he satisfied the requirements spelt out in SECTION 2819309a)

and (b) of the 1999 Nigerian Constitution. The requirements are identical with those contained in

the provisions on the Customary Court of Appeal of the Federal Capital Territory.




15

A Customary Court of Appeal of a State shall exercise appellate and supervisory jurisdiction in

civil proceedings involving questions of Customary. It shall exercise such jurisdiction ad decide

such questions as may be prescribed by the House of Assembly of the State for which it is

established(S.282(1) and (2)).

The Court is duly constituted by three Judges. (S.283).

Other Courts

The Courts highlighted above are the superior courts of record established by the Constitution for

the Federation and the States. The Constitution permits the establishment of additional courts by

the National Assembly and the Houses of Assembly to exercise jurisdiction on matters withrespect to which both legislative houses may make laws respectively. These additional courts may

be courts of first instance or appellate courts. These courts however, are not superior courts ofrecord. These courts include Magistrate’s/District Courts and Customary/Area/Sharia Courts

which are necessarily inferior courts.

Magistrate/District Courts

Magistrate and District courts are established pursuant to the provisions of State laws, except in

the federal Capital Territory where they are deemed to be established by a federal law.

Magistrate Courts in the Southern part of Nigeria have both civil and criminal jurisdiction while

in the North they have only criminal jurisdiction. District Courts assume their civil jurisdiction inthe North. These courts are courts of limited jurisdiction in the sense that their powers to impose

punishment and award damages are limited to the extent prescribed in their enabling laws or laws

creating particular offences. In addition the power of a particular Magistrate to impose fine,

sentence an offender or to award damages depends on his or her cadre. Magistrates are in grades,

and the usual classification in most States is in the following order: Chief Magistrate I, Chief

Magistrate II, Senior Magistrate I, Senior Magistrate II, Magistrate I, Magistrate II, and

Magistrate III. Magistrates are legally qualified personnel except in Lay Magistrates who

perform the functions of Magistrate III in some States. An appeal from any cadre of a

Magistrate’s Court goes to the appropriate High Court. If it is a matter within the jurisdiction of

the Federal High Court, the appeal will lie to that court. In other cases the relevant High Court isthe State High Court or the High Court of the Federal Capital Territory. A single Magistrate

constitutes a Magistrate’s Court.

Customary/Area/Sharia CourtsThese are courts at the bottom of the hierarchy of courts in Nigeria. These courts are established

by statutes. Customary Courts are predominant in the South while Area and Sharia Courts are tobe found in the North. Until the adoption of the Sharia legal system by some States in the

northern part of Nigeria, Sharia Courts were not part of the judicial hierarchy in Nigeria. All

these courts are organised in grades. Customary Courts have Grade A, Grade b and Grade C. A

Customary Court Grade A is presided over by a legal practitioner but this grade of Customary

Court is not common. The predominant ones are the Grade C Customary Courts. The Presidents

and members of Grade C Customary Courts are local chiefs, retired public servants and other fit

and proper persons.

Area Courts are organised in form of Upper Area Court, Area Court Grade I, Area Court GradeII, and Area Court Grade III. Some States of the North have abolished the Area Court system andreplaced them with Sharia Courts also organised along the same manner. Unlike the Area Courts

whose jurisdiction covered all classes of persons the jurisdiction of Sharia Courts is expressed to

relate only to persons of Islamic faith. This is particularly so when a person is arraigned for

committing a sharia offence.

Customary/Area and Sharia Courts have civil and criminal jurisdiction. For Customary and Area

Courts, their criminal jurisdiction extends to simple offences. Sharia courts are however




16

empowered to try offences that attract the punishments of the death penalty and amputation

among others notwithstanding the fact that the court is a court of limited jurisdiction.

The court competent to entertain appeals from the decisions of Customary/Area/Sharia Court

depends on the judicial structure of each State or stipulations in its laws. Some of the Courts that

may entertain appeals include Magistrate’s Court, High Court or Customary Court of Appeal in

respect of Customary Courts; High Court or Sharia Court of Appeal in respect of the decisions

of Area Courts; and Sharia Court of Appeal in respect of decisions of Sharia Courts. In the

North in States that have not adopted the Sharia legal system, appeals from the Area Court on a

question of Islamic personal law lie to Sharia Court of Appeal while on other matters appeals lie

to the High Court. Decisions of these inferior courts may also be challenged by means ofapplication for judicial review made to the appropriate High Court.

THE NATIONAL INDUSTRIAL COURT

The National Industrial Court is a specialised court. It was originally established under the TradeDisputes Act, Cap 432, L.F.N. 1990 Section 19(1) of the Act stated “There shall be a NationalIndustrial Court for Nigeria…which shall have such jurisdiction and powers as areconferred on it by laws or any other Act with respect to the settlement of trade disputes,the interpretation of collective agreements and matters connected therewith.”

The Third Alteration to the 1999 Nigerian Constitution is devoted to the National IndustrialCourt which is now a superior court of record established by the Constitution.

The National Industrial Court (NIC) deals with labour, employment and industrial relations

disputes. Appeal lie from its decisions to the Court of Appeal where human rights issues are

involved. In other circumstances the decision of the court is final.

GENERAL PRINCIPLES OF LAW OF CONTRACT

(FOR ENGINEERING LAW)

Definition

Contract may be defined as an agreement between two or more parties which is intended by them to have

legal consequences. This definition is preferable to the one that defines contract as an agreement

enforceable at law. For instance where an action founded on contract is statute-barred, it does not detractfrom the fact that there is a contract even though it is unenforceable. In Obmiami Brick & Stone (Nigeria)

Ltd. v. A.C.B. Ltd. [1992] Babalakin J.S.C. said:

“A contract is a voluntary agreement whereby a person undertakes for reward (consideration) to perform

an act for another and its terms are contemplated and admitted by the parties”.

Classification of ContractContract may be classified as follows:

(a) Formal contract/simple contract or informal contract;




17

(b) Express Contract/Implied Contract

(c) Bilateral/Unilateral Contract

(d) Executed/Executory Contract

Formal Contract/Simple Contract

A formal contract is also know as a specialty contract, a contract under seal or a deed. A deed is a

document that is signed, sealed and delivered. A simple contract is any contract made otherwise than by

deed and is sometimes called a parol contract. It may be oral, in writing or by conduct of the parties.

Writing is in many cases unnecessary, and in others it is only used because it is required by some statutes

as condition precedent to proof in court.

Distinctions Between Specialty Contract and Simple Contract

A contract under seal requires no consideration or return for a promise, to support it. Hence, although agratuitous promise is not legal binding, a similar promise, if made by deed is binding upon the promisor.

A contract under seal will ‘merge’ in itself that is, swallow up or supersede, a simple contract madebetween the same parties and containing the same terms.

Statements made in a deed are absolutely conclusive against the maker of them, unless duress or fraud is

proved. No evidence is admissible to deny or explain them, unless there is what is called a “Intent

ambiguity”.A right of action arising out of a contract under seal is not barred for 12 years. The period allowed for

taking action in the case of a simple contract is six years only. The computation of the limitation period

begins from the time an actionable breach occurs. This rule contained in the Limitation Act and the

Limitation Laws of various States is to ensure that actions are not perpetually maintainable.

Note that when a deed is delivered subject to a condition, the deed is not to take effect if the condition is

not fulfilled it is called an escrow. This conditional delivery is made to a person who is a party to the deed.

Express Contract/Implied Contract

A contract is express when the terms are stated clearly in words either orally or in writing. An impliedcontract on the other hand is one in which the terms are not clearly stated. Here agreement is manifested in

conduct.

Bilateral Contract/Unilateral ConductA bilateral contract is one created by mutual promises from both parties. There is an exchange of promises.

Where there is actual performance in consequence of a promise, the contract is unilateral: See the case ofCarlill v. Carbonic Smoke Ball Company Ltd. (1893).

Executed Contract and Executory Contract

An executed contract is one in which the object of the contract is at once performed, while an executory

contract is one in which one of the parties binds himself to do, or not to do, a given thing at a future time.

Formation of Contract

For a contract to come into existence the following essentials must be present:

(1) Agreement offer and Acceptance); (2) Consideration; (3) Contractual Capacity (4) Intention toenter into legal relations (5) Compliance with the form prescribed by law if any (Formality) (6) Legality

and possibility as regards the subject matter (7) Absence of vitiating factors i.e. circumstance which mightshow that the agreement entered into was not genuine.

II AGREEMENT: (OFFER ARE ACCEPTANCE)




18

No matter how complicated the nature of an agreement may be there must be a definite offer made by one

party and an unqualified acceptance by the other before a contract is formed. An offer is a definite

statement or an undertaking made by a person called the offeror to another called the offeree stating the

terms under which the offeror is ready to enter into a contract with the offeree. It has also been defined as a

proposition made by one party called the offeree clearly and precisely indicating the terms under which the

offeror is willing to enter has been made there cannot be acceptance and by implication no contract can

come into existence: Ejinyi v. Adio (1993).

However, bearing it in mind that agreement can be manifested in conduct, it follows therefore that an offercan be made by conduct. Take for instance, the TCTC by running its vehicles offer to carry persons in a

certain direction at a fixed price. Acceptance of the offer is complete as soon as the passenger takes his/herplace in or on the omnibus. A complete contract may therefore be formed between parties by acts and

conduct as well as by words, whether spoken or written.

An offer must be clearly distinguished from an invitation to treat. In Innih v. Farado A & C Ltd. (1999)

the Court of Appeal held that an invitation to treat is a mere declaration of willingness to enter intonegotiation. It is an invitation to offer or an “offer to receive offers”. It is an invitation to asks for tender to

do certain work or to purchase certain goods, the invitation to tender has of itself no operation at all, thetender is an offer and it must be accepted before there is any binding contract. A prospectus issued by a

Company is an invitation to apply for shares, it is not itself an offer. The application is the offer and the

allotment is the acceptance. Display of goods for sale in a shop with or without a price tag as a general rule

is not an offer for sale, it is merely an invitation to treat. An offer may thereupon be made by prospective

buyer which the shop owner may accept or reject. Fisher v. Ball (1961), Pharmaceutical Society of Great

Britain v. Boots Cash Chemist (1953).

The significance of the distinction between an offer and an invitation to treat is that is that if a true offer is

made and accepted, the offeror is bound to a contract. It is only an offer that is capable of being accepted.

An invitation to treat is preliminary to an offer. If there is an advertisement tagged “Immediate Job

Opportunity on application”, it cannot be said to be a true offer as this may be preliminary to other stages

like Application, Shortlisting, Conduct of Interview, Selection, Communication of offer and Acceptance of

the offer. In unilateral contract an advertisement may constitute an offer.

Rules as to Offer

An offer may be made to definite person, to a group of people or to individuals generally i.e. to the whole

world. But there can be no contract until the offer has been accepted by a definite person. Before a personcan accept an offer, it must have been complicated to him.

In Carlill v. Carbonic Smoke Ball Company (1893) the defendant advertised that they would pay a reward

of 100 to any person who contracted influenza after using one of their “Smoke Balls” according to printeddirections supplied to all purchasers. The plaintiff did suffer from influenza although the directions in the

advertisement had been complied with. It was held that the advertisement was an offer to contract which

the plaintiff had accepted by the performance of the conditions contained therein, and that having regard to

the character of the transaction no notification of the acceptance of the offer was necessary. The contractwas a binding one and under it the defendants were bound to pay the 100. The argument of the defendants

that the advertisement was a puff was rejected.

The offeror is at liberty to prescribe any terms of acceptance he pleases and no matter how ridiculous these

may appear, a strict compliance with them is necessary in order to make a contract.

The offeror must not attempt to bind the acceptor by any such term (s) as would dispense with

communication of acceptance e.g. A wrote to “I will buy your horse for 30. If I hear no more about him I




19

shall consider the horse is mine” B never replied to the letter and sold the horse to another person. It was

held that there was contract between A and B.

When an offer consists of various terms care should be taken to bring the whole of the terms to the notice

of the other party.

Termination of an Offer

An offer after made is considered to remain open for a reasonable time or until it is terminated. What is a

reasonable time is a question of fact depending on the circumstances of each particular case. An offer maytherefore be terminated

(i) by revocation (ii) by rejection (iii) by lapse of time (iv) conditional offer and(v) by death. Let us highlight these circumstances.

(i) Revocation: If no time is prescribed and if there is no consideration for keeping an offer open, the

offeror has a perfect right to revoke the offer at any time before it has been accepted. Notice of therevocation must be brought home to the offeree in some manner or other before be accepts. It is immaterial

how the information is conveyed to him. In Pickinson v. Dodds (1876) properly was offered for sale by

A to B and a certain time left open for B to think over the matter (there being no consideration for keeping

the offer open) and before the expiration of the fixed time A sold the property in question to anotherperson. It was held that the offer was revoked by the act of sale and that if B had any knowledge of the

sale, he could not insist upon accepting the offer which had been made by A and so binding him by

contract.

Apart from revocation in the manner discussed above it may also take the form of withdrawal of an offer.

This must be communicated to the offeree before acceptance.

(ii) Rejection: Rejection may be outright rejection or making a counter-offer. A counter-offer is any

suggested variation in the terms of an offer. In law it is regarded is a rejection of the original offer. Where

the counter-offer made by an ‘offeree’ is accepted it forms the basis of the contract.

(iii)

Lapse of time: Where the time within an offer is to be accepted is prescribed, the offer will terminateafter the period fixed has expired e.g. Offer of appointment which is to be accepted by a particular date will

lapse after the date.

(iv) Conditional Offer: Where the acceptance of an offer is made subject to some conditions, theseconditions must be fulfilled before acceptance.

(v) Death: The death of the offeror before acceptance effects the revocation of an offer although the fact of

the death is unknown to the other party.

Rules as to Acceptance

The acceptance must be plain, unequivocal, unconditional and made in the manner and form prescribed in

the terms of an offer. Any suggested variation amounts to a counter-offer. What a counter-offer does is todestroy the original offer. In Hyde v. Wrench A offered to sell his property to B at 1,000 B offered to buy itat 950. After some time B sent the sum of 1,000 to A which he rejected. After some time B sent A was

entitled to reject the 1,000 since his original offer had been destroyed by B’s counter-offer. However, a

simple request for information will not amount to a counter-offer Stevenson v. Mclean (1880).

The acceptance must be made either within the time stipulated or within a reasonable time. If not, the offer

is said to have lapsed.




20

If the offer is made to a specified person, it can be accepted only by that person.

The acceptance must be communicated to the offeror either by words or by conduct. Union Bank of

Nigeria v. Ozigi (1991). In many cases it cannot be communicated except by express notice. Conduct

would be the fulfillment of conditions prescribed in an advertisement.

The acceptance (i.e. the offeree after acceptance) must be unaware of the fact that the offer had been

revoked if indeed there has been a revocation.

Acceptance concludes the contract. An acceptance, once communicated cannot be revoked.

Where X writes to Y making an offer to buy his car for =N=200,000 and Y simultaneously writes to Xoffering to sell his car to him for =N=200,000 and neither party is aware of the other offer, there cannot be

a contract. What we have is a Cross-offer and two offers do not make a contract. There must be acceptanceby either party before we can have a binding contract.

Contract by Post

It is possible for a contract to be concluded by post, fax, telephone, telex, e-mail and other

telecommunication system. An offer sent by post or any other form can be of no effect unless it reaches theother party. An offeror may prescribe the mode of communicating acceptance and where he insists that

only acceptance in that mode is binding, then acceptance in any other way even if more expeditions is not

binding on him. Where no mode is prescribed whether an acceptance is binding or not demands

u][p0oi’l3upon the nature of the offer and the circumstances in which it is made. An acceptance by letter

of an offer made by telegraph or faster communication system may be evidence of unreasonable delay on

the part of the acceptor, justifying the offeror in regarding the offer as having lapsed.

When parties to a contract make use of the post as a means of communication acceptance is deemed

complete at the moment of posting and it makes no difference if in fact the acceptance never reaches the

offeror provided that the letter was properly addressed and adequately stamped. This rule which appears tobe an exception to he rule that acceptance must be communicated to the offeror applies only when, in all

the circumstances, the post is the natural means of communicating the acceptance. It would not apply if theofferor expressly or impliedly stipulated some other mode of acceptance or if from the circumstance an

acceptance by post would not be reasonable e.g. where acceptance had to be communicated more speedilythan the post permitted.

When an offer communicated by post has reached the offeree, it is always possible for the offeror to revoke

the offer by later communication, however made so long as there has been no acceptance. Where the offer

has been acceptance before a letter of revocation such a letter is of no effect. In Henthorn v. Fraser (1892)

H received from the defendant F an offer to purchase certain property for 750. On the following day the

defendant wrote a letter between 12 and 10’clock withdrawing the offer; but the letter was not delivered at

the residence of H until 5 p.m. In the meantime at 3.50 p.m. H had written and posted a letter accepting

the offer which was not delivered to the defendant until 8.30 p.m. On these facts, it was held that there was

a binding contract as soon as H posted his letter of acceptance and that the revocation of the offer was toolate.A contract made by instantaneous communication e.g. telex, telephone, fax, e-mail is made when where the

acceptance is received. Entores Ltd. v. Miles Far East Corporation (1995).

. CONSIDERATION

Consideration is what a promisor demands and receives as the price for his promise. Thus an act,

forbearance or promise of each party to an agreement is the price for which the promise of the other is

bought and this is consideration. A simple contract must be supported by consideration for it to be binding.




21

Ordinarily a promise. The law of contract is concerned with bargains not mere promises. If A for example

promises to copy B’s lecture notes, the law will not allow any remedy if A breaks his promises. But if B

promises to give A meal ticket in return so that A’s promise may turn the arrangement into a contract. A’s

promise is said to be the consideration for B’s promise ad vice-versa. Consideration consists in interest,

benefit, profit, advantage and detriment, loss, disadvantage. Currie v. Misa (1875).

Rules as to Consideration

1. Consideration must have some value in the eyes of the law

2. Consideration need not be adequate but it must be sufficient. The law is concerned with thesufficiency of consideration and not its adequacy.

3. Consideration must be legal. A promise to commit a crime is not a real consideration.4. Consideration must move from the promisee to the promisor Price v. Easton (1833). A party who

wishes to enforce a contract must be able to show that he has furnished consideration for the promise of theother party.

5. Consideration may be executory or executed but it must not be past. Executory consideration is apromise given for a promise given for a promise e.g. Akin promises to deliver goods to Bola and Bola

promises to pay for them on delivery. There is a binding agreement though performance remains for the

future. Executed consideration on the other hand is an act of forbearance given for a promise that is the

completed performance of one side of the bargain. Past consideration is when an act is done before thepromise which is sought to be enforced is made, that is, promise is subsequent to the act and independent of

it. In Roscorla v. Thomas the plaintiff sued the defendant on a warranty as to the soundness of a horse. In

his statement of claim, he set out that the defendant had warranted the horse was sound in consideration

that he (the plaintiff) had bought it. It was held that the consideration was past and could not support the

defendant’s promise. In this case the promise that the horse was sound came after the conclusion of the

sale. The act of buying the horse could not therefore constitute the consideration of that promise.

Exceptions:

(a) Where the act is performed at the express or immplied request of the promisor and the act is such

that both parties would normally contemplate payment then the subsequent promise to pay will be regardedas merely fixing the price and part of the same transaction. The law was settled in the case of Lampleigh v.

Brathwait (1615). B had killed one Patrick Mahume and had then asked L to do all he could to get a pardonfor him from the king. L exerted himself to this end, ‘riding and journeying to and from London and

Newmarket’ at his own expense, and B afterwards promised him ₤100 for his trouble. He failed to pay itand L sued him. It was argued that the consideration furnished by L was past, but the court found for the

plaintiff on the ground that his services had been procured by the previous of the defendants.

(b) A written acknowledgement of a debt barred by statute usually revives the right of action to recover

such debt although no new consideration is given for it. S.38 Limitation Law (Lagos State).

(c) The Bill of Exchange Act, Cap. B8 L.F.N. 2004 provides that any antecedent debt or liability may be

an adequate consideration for a bill of exchange of a cheque.

As part of the rule that consideration must have some value note that a promise to perform an existingobligation is not a valuable consideration. In Stilk v. Myrick (1809) a seaman sued for wages alleged tohave been earned on a voyage from London to Baltic and back. In the course of the voyage two sailors had

deserted, and as the captain, could not find any substitutes, he promised the rest of the crew extra wages if

they would work the ship home short-handed. The action failed on the ground of absence of consideration.

The court held that the crew were already bound by their contract to meet the normal exigencies of the

voyage and were doing no more than their duty in working the ship home. Had they exceeded their duty, or

if the course of events, by making the ship unseaworthy, had relieved them from its performance, the case

would have been different. Thus in Hartley v. Ponsonby ( 1857) the shortage of labour was so great as to




22

make the further prosecution of the voyage exceptionally hazardous, and by discharging the surviving

members of the crew from their original obligation, left them free to enter into a new contract. Also,

payment of a lesser amount does not discharge a debt. The case of Foakes v. Beer (1884) illustrated this

general rule.

Mrs. Beer had obtained a judgment against Dr. Foakes for ₤2,090. Dr Foakes asked for time to pay. The

parties agreed in writing that if Dr. Foakes paid ₤500 at once and the balance in instalments, Mrs. Beer

would not take any proceedings on the judgment”. A judgment debt bears interest as from the date of the

judgment. The agreement made no reference to the question of interest. Dr. Foakes ultimately paid the

amount of the judgment debt itself, and Mrs. Beer then claimed the interest. Dr. Foakes refused to pay itand Mrs. Beer applied to be allowed to issue execution or otherwise proceed on the judgment in respect of

the interest”. Dr. Foakes pleaded the agreement and Mrs. Beer replied that it was unsupported byconsideration. The House of Lords gave judgment in favour of Mrs. Beer for the amount of the interest.

Exceptions

(a) Where at the creditor’s request the debtor pays a lesser sum earlier than when the whole debt is due.Pinnel’s Case (1602)

(b) Where the debtor at the creditor’s request pay the smaller sum accompanied by delivery of a chattel.

(c) Where the payment of a smaller sum is made at the creditor’s request at some place other than the

place at which it is due.(d) Where payment of the smaller sum is made by a third party Welosy v. Drake (125)

(e) Where there is a composition agreement. This is an agreement whereby creditors of an impecunious

debtor agree to accept individually a stated percentage of his debt in full satisfaction. The consideration for

the composition as it has been suggested is in the fact that each individual creditor agrees to forgo part of

his debt on the hypothesis that all the other creditors would do the same. No creditor will be allowed to go

behind the composition agreement to the prejudice either of the other creditors or of the debtor himself as

this would be a fraud upon all the parties concerned.

(f)

Promissory Estoppel. The principle of promissory estoppel states that where one party has by his

word or conduct made to the other a promise which is intended to be binding, is intended to be acted uponis so acted upon then the person making the promise will be bound by his promise. Central London

Property Trust Ltd. v. High Trees House Ltd. (1947). In Sept. 1939, the plaintiffs leased a block of flats tothe defendants at a ground rent of ₤2,500 per annum. In Jan. 1940, the plaintiffs agreed in writing to

reduce the rent to ₤1,250, plainly because of war conditions, which had caused many vacancies in the flats.No express time limit was set for the operation of this reduction. From 1940 to 1945 the DD paid the

reduced rent. In 1945 the flats were again full, and the receiver of the PP Company claimed the full rentboth retrospectively and for the future. He tested the claim by suing for rent at the original rate for the last

two quarters of 1945. Denning J. was of opinion that the agreement of Jan. 1940 was intended as a

temporary expedient only and had ceased to operate early in 1945. The rent originally fixed by the contract

was therefore payable, and the plaintiffs were entitled to judgment. It must be remarked that the agreement

of Jan. 1940 was not supported by consideration. This formed the basis of the principle of promissory

estoppel.

Limitation:(i) It can only be used as a shield (defence) not a sword (a cause of action)

(ii) Where legal rights waived, varied or suspended are of a continuous nature, the promisor may later

insist on his full rights again where he gives reasonable notice of his intention.

(iii) The doctrine will not operate if the agreement or promise was obtained in an inequitable manner e.g.

by force or fraud.




23

(iv) The promise will be binding only when it has been acted upon. (Ajayi v. R.T. Briscoe Nigeria Ltd.

(1964).

III.

CONTRACTUAL CAPACITY

It is one of the essentials of a valid contract that the parties must have contractual capacity. The general

principle is that any person who can express intention can enter into a contract. There are provisions of the

law, which are designed to protect infants, mentally disordered persons and drunken persons. Artificial

persons, that is, statutory corporations and companies incorporated under the Companies and Allied

Matters Act, (CAMA), Cap C.20 LFN 2004 may also make contracts for the purposes for which they were

incorporates. S.39(1) of CAMA provides that a company shall not carry on any business not authorised byits memorandum and shall not exceed the powers conferred upon it by its memorandum or this Act.

Contracts entered into in breach of this provision will be regarded as ultra vires. The law now draws adistinction between executed and executory contracts that are ultra vires. Furthermore, S.38 (1) of CAMA

provides that: “Except to the extent that the company’s memorandum or any enactment otherwise provides,every company shall, for the furtherance of its authorized business or objects have all the powers of a

natural person of full capacity”. The practice of drawing up the object clause in a very wide manner makesnearly all contracts intra vires a company.

Infants

An infant is a person below the age of 21 years according to the provisions of the Infants Relief Act,(I.R.A.) 1874, a English statute of general application in force in most States of Nigeria. The age of

maturity has been further reduced in England but amendments to the I.R.A. after 1900 do not form part of

our law in Nigeria. Contracts made by infants can be into three namely Valid/Binding Contracts, Voidable

Contract and Void Contracts.

Valid/Binding Contract

(i) Contract for the supply of necessaries: An exception to the general rule that an infant cannot make

a binding contract is that if the goods supplied to an infant are necessaries, then the contract is binding and

the infant are is bound to pay a reasonable price, and not the contract price if that is excessive. What are

‘necessaries’ are a question of fact and they must be goods suitable to the condition in life of the infant andthus, to his actual requirements both at the time of sale and delivery. The measure might thus be the living

standards of the infant concerned. But if an infant’s needs are already well provided for these goods(including foods) may cease to be necessaries and the infant will not be liable. In Nash v. Inman (1908)

where the defendant, an undergraduate and an infant was sued by the plaintiff, a tailor for ₤22.19s.6d, beingthe value of clothes supplied to him (the clothes including 11 fancy waist coats at 2 guineas each), when he

already had adequate supply of clothes suitable for his condition in life, it was held that the clothes werenot necessaries as it was not established that the clothes were suitable to the condition in life of the student

and that he was not already supplied with them at the time of delivery of the clothes. The action therefore

failed. In Peters v. Felming (1840) on the other hand, a wrist watch was held to be a necessary for an

undergraduate. Articles of pure luxury cannot be necessaries. The following have been held to be

necessaries: Military uniforms, means of transport, medical attention, legal advice, and necessaries for a

married infant’s family are in the same category as necessaries for himself.

(ii) Beneficial contracts of service and education:These are contracts under which an infant receives training or instruction for his future career. Suchcontracts if when read as a whole they appear to be beneficial to the infant are binding. (De Francesco v.

Barnum (189), Clements v. London and N.W, Ry. Co. (1894); Slande v. Metrodent Ltd. (1953). A contract

to enable an infant to gain experience as a boxer has been held to beneficial (Doyle v. White City Stadium

Ltd. (1935), but a trading contract no matter how beneficial is not binding. In Cowern v. Nield (1912) an

infant hay and straw merchant was not liable to repay the price of the goods he failed to deliver.

Voidable Contracts




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A voidable contract is one that is valid until it is avoided. Voidable contracts are those in respect of which

an infant acquires an interest in property of a permanent nature to which continuing obligations attach.

Contracts which have been held valid unless avoided by the infant include a contract for a lease (Davies v.

Beynon-Harris (1931), the purchase of share in a limited liability company Cork and Bandon Ry Co. v.

M’Michael (1850), (Steinberg v. Scala (Leeds) Ltd. (1923)), and contracts of partnership (Goode v.

Harrison (1821)). The general rule is that these contracts are binding on an infant even during infancy

unless he repudiates before or within a reasonable time after attaining the age of 21. Thus it was held in

Edwards v. Carter that an infant who was a party to a marriage settlement could no longer repudiate it at

the age of 24 i.e. 3 years after attaining majority, as it was held that it was too late to repudiate. Until the

infant avoids the contract, he is bound to fulfil the obligations under it as they fall due. In North WesternRy v. McMichael it was held that infant share-holders in companies are liable for calls on their shares. On

the other hand, in all contracts of this case, the effect of avoidance or repudiation by an infant is that heescapes from liability to perform obligations which have not accrued at the time of repudiation. Moreover,

he cannot recover any money paid or property transferred under such a contract unless there has been totalfailure of consideration. In Steinberg v. Scala (Leeds) Ltd., an infant applied for and was allotted shares in

a company and paid amounts due on the allotment and on the first call. It was held that upon subsequentrepudiating the contract during infancy she could not, recover back what she had paid for although she had

received no dividends she had received “the very consideration for which she bargained”.

The above is the position under the Infants Relief Act/Law

Void Contracts

A void is one, which is destitute of any legal effect. In fact it is a contradiction of terms to say that a

contract is void because a void contract is no contract at all. A contract may be void by statute or by

common law.

The I.R.A. section 1 declares the following contracts absolutely void: Contracts for the repayment of

money lent or to be lent; contracts for goods supplied or to be supplied, other than necessaries; all accounts

stated i.e. I.O.U. and similar admission of debts.

By this provision, a loan of money to buy necessaries cannot be recovered though equity may grant relief.

S.2 of the I.R.A. provides:

“No action shall be brought whereby to charge any person upon any promise made after full age to pay anydebt contracted during infancy, or upon any ratification made after full age of any promise or contract made

during infancy, whether there shall or shall not be or any new consideration of such promise or ratificationafter full age”.

The above section applies only to void contract. It applies to contract for non-necessaries, promises to

marry, and contracts by which no continuing interest is acquired. It means that a person cannot be made

liable after attaining majority for a debt contracted in infancy, even if a fresh promise is made, nor will

ratification render the person liable. As regards liabilities other than debt e.g. a promise to marry a

distinction must be drawn between ratification (Coxhead v. Mullis (1878)), and any entirely new promise

(Ditchman v. Worvall (1880)).

Qualification

(i) If the money lent to the infant is actually used in purchasing necessaries then the lender can recover

such part that is used for necessaries on the basis of the doctrine of subrogation (Re National Permanent

Building Society (1869)).

(ii) A minor can be made to return ill-gotten goods still in his possession. But restitution will not be

possible if the minor has parted with the goods.




25

If an infant fraudulently misrepresents his age by deceiving the other party that he is over 21 years, and if

on that basis the other party contracts with the infants, the plea of infancy and all the privileges associated

with it are still open to the dishonest infant. However, in certain cases, equity will grant relief against the

infant by compelling him to restore his ill-gotten gains or to release the deceived party from obligations in

law induced by fraud. The position is clear where the infant remains in possession of the goods but where

he has parted with the goods, the position is not so certain. If he has sold the goods obtained by fraud he

cannot be compelled through personal judgment to pay an equivalent sum out of pocket, For this would

amount to enforcing a void contract. As Lord Sumner declared in Leslie v. Sheill (1914) “restitution

stopped where repayment began”. However, in Stocks v. Wilson (1913) Lush J. took a contrary view when

he held that an infant, who had obtained goods by misrepresenting his age and had later sold them, wasaccountable for the proceeds of sale.

Note that although an infant cannot be bound by a void contract the other party may, however, be bound, if

the infant has given consideration and money and goods given by an infant are only recoverable if there hasbeen a total failure of consideration on the other side.

Persons of Unsound Mind and Drunken Persons

The contract of a person of unsound mind is voidable and not absolutely void. In order that anyone may

claim the benefits of repudiation of a contract, which he has entered while in an unsound state of mind,

show that his mental condition was known to the other party to the contract at the time of entering into it.

During a lucid interval a person of unsound mind has the same capacity of contracting as any other person,

and he may also then ratify and confirm any contract entered into while insane. As regards necessaries, he

is only bound to pay a reasonable price.

A druken person who is in such a condition as not to understand what he is doing is in the same position as

to contracts as a person of unsound mind.

IV.

INTENTION TO CREATE LEGAL RELATIONSAlthough every contracts is an agreement, there are several agreements which are not contracts.

Agreements may be classified into two broad categories: Domestic/Social Agreements and CommercialAgreements.

The general rule for domestic agreement is that legal relation is not intended. In Balfour v. Balfour (1919)

the defendant was a civil servant stationed in Ceylon. His wife alleged that, while they were both in

England on leave and when it had become clear that she could not again accompany him abroad because of

her health, he had promised to pay her ₤30 a month as maintenance during the time that they were thus

forced to live apart. She sued for breach of this agreement. The English Court of Appeal held that no legal

relations had been contemplated and that the wife’s action must fail.

There may however be exception to this general rule. In Merritt v. Merritt (1970) the husband left thematrimonial home, which was in the joint names of husband and wife and subject to a building societymortgage, to live with another woman. The H & W met and had a discussion in the H’s car during which

the H agreed to pay the wife ₤40 a month out of which she must pay the outstanding mortgage payments on

the house. The wife refused to leave the car until the H recorded the agreement in writing and the H wrote

and signed a piece of paper which state ‘in consideration of the fact that you will pay all charges in

connection with the house… until such time as the mortgage repayment has been completed I will agree to

transfer the property in to your sole ownership.’ After the wife had paid off the mortgage the H refused to




26

transfer the house to her. It was held by the English Court of Appeal that the parties had intended to affect

their legal relations and that an action for breach of contract could be sustained.

The general rule for commercial agreement is that legal relation is intended. This presumption may

however be rebutted by evidence to the contrary. Where it is stated that an agreement is “binding in honour

only” or that “it is a gentlemen’s agreement” the law takes it that there is no intention to create legal

relation (Amadi v. Pool House Group Nigeria (1966)).

In Appelson v. Littlewood Ltd. (1939) the Court held that where it is stated that an agreement is “subject to

contract” it means the parties are still in the process of negotiation and a contract strictly so called had notbeen concluded.

V. FORMALITY

The law may prescribe certain contracts to be in a particular form. Where the law so provides a contractentered into other than in the prescribed form will not be regarded as valid. These contracts are generally

unenforceable.

Contract not supported by consideration, conveyances of land, legal mortgages and certain leases which are

to last more than three years must be deed. Some contracts must be in writing. These include Bills of

Exchange, contracts of marine insurance. Some contracts must be evidenced in writing.

The Statute of Frauds 1677 a statute of general application provides in its S.4 as follows:

“No action shall be brought whereby to charge any executor or administrator on any special promise to

answer damages out of his own estate; or whereby to change the defendant upon any special promise to

answer for the debt, default or miscarriage of another person; or to charge any person upon any agreement

made upon consideration of marriage; or upon any contract or sale of lands, tenements or hereditaments or

any interest in or concerning them; or upon any agreement that is not to be performed in the space of one

year from the making thereof; unless the agreement upon which such action shall be brought, or some

memorandum or note thereof, shall be in writing and signed by the party to be charged therewith or someother person thereunto by him lawfully authorised”.

See also S.4 of the Sale of Goods Act 1893 in respect of the sale of any goods of the value of ten pounds or

upward.

From the above provisions a contract of guarantee or suretyship, contract of sale of land, sale of goodsabove 10 pounds, contract not to be performed within one year must all be evidenced in writing.

The note or memorandum in writing is required to prove the existence of the contract. It need not be made

at the time when the contract is entered into. It must however be in existence before any action can be

brought upon the contract itself. The provisions of the Statute of Frauds that state that in so far as it relates

to contracts not to be performed in one year, and section 4 of the Sale of Goods Act have been repealed by

Federal legislation applicable to Lagos only, and by the legislature of the Western Region. In other parts of

the country the position of the law is as contained in these English statutes.

A contract of guarantee must be distinguished from a contract of insurance. In UAC Ltd. v. Paul Jazzar

(1940) the Court said: “contract of suretyship is not, as is a contract of insurance, a contract uberrima fides.

A mere non-disclosure on the part of the promisee is not a ground for avoidance unless it amounts to

misrepresentation or actual fraud”. Also a contract of indemnity as the latter does not need to be evidenced

in writing. See Okoye v. John (1956).

VI.

LEGALITY AND POSSIBILITY




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No agreement is of any legal effect if it is unlawful in any of its terms, or if it contemplates the prosecution

of anything which is unlawful in its result. Under this head are agreements to commit a crime or a civil

wrong, agreements opposed to public policy and agreements expressly made void by statutes. It is not easy

to define “public policy”. It may loosely be described as public interest as declared by the judges. Trading

agreements made with aliens of a country with which this country is at war are invalid. A contract for the

payment of penalty in the event of a breach is opposed to public policy. Contracts promoting corruption in

public life, contract to defraud government of revenue, contracts which interfere with the administration of

justice are illegal contracts. Other group of contracts which may be declared void or unenforceable at

common law include contracts to oust the jurisdiction of the court, contracts prejudicial to marital status

and contract in restraint of trade.

Possibility of PerformanceAn enforceable contract must be one which is capable of being performed at the time when it is made. An

undertaking to perform an impossibility renders a contract void.There are 3 kinds of impossibility to be noticed:

(1) Absolute Impossibility: This is the case of an agreement to perform a thing which is incapable ofperformance by the laws of nature, as an undertaking to run a mile in a minute.

(2) Legal Impossibility: This is the case where an act is positively forbidden by the law of the land.

(3) Actual Impossibility: This arises where parties have contracted to a certain thing which without

their knowledge is non-existing at the time of entering into the contract Courturier v. Hastie (1852).

Contracts in Restraint of Trade

Contracts which tend to place any undue restraint upon freedom of trade are regarded with suspicion. It has

been held that a partial restraint of trade might be allowed provided there was a limit of time, and space and

that there was also some consideration for the restraint (this includes speciality contracts). Contract in

restraint of trade are enforceable if reasonable with reference to the interest of the parties concerned and

that of the public. What is reasonable depends upon the nature of the trade or profession which is affected.

A contract by a solicitor not to practise within 150 miles of London and a contract by a surgeon not to

practise within 7 miles of a certain country town in England were held to be valid while a contract by a

doctor not to practise within 100 miles of York was held to be bad. Unless the restraint imposed isconsidered in all circumstances too harsh the agreement will be held good (Nordenfelt v. Maxim

Nordenfelt).

Effect of IllegalityIllegality with reference to contracts means merely that they will not be enforced by a court of law, A

‘contract’ may be rendered illegal or void by statute as well as by common law. As soon as the Courtdiscovers that a contract is illegal it will refuse to help the plaintiff any further. Thus is a contractor has

done some work for you for which a government licence is required and no licence has been issued the

court will not order you to pay him the agreed price for his work. An illegal contract will never be enforced

by the court, but in exceptional cases the court may allow a party to recover money which he has paid on a

contract that was illegal.

(1) Where the guilt of the parties is not equal and the plaintiff is less to blame (parties are not in pari

delecto) for the illegality of the defendant.

A mistake of fact induced by the defendant would help e.g. in the above example if the householder was told

by the contractor that he had obtained the licence and the householder then be able to recover it even though

the contract was illegal because of the absence of a license. Where contract class of persons to which the

plaintiff belongs e.g. the Money Lender Act seeks to protect the class of borrowers. A money lender who

has contravened the law cannot recover but the borrower can recover any security which he has given the

money lender in return for the loan (Kasumu v. Baba-Egbe (1956); Abesin v. Iyaegbe (1958); Fashina v.

Odedina (1957).




28

(2) Where no substantial part of the illegal act has been performed a party who truly repents would be

able to recover. Repentance must be genuine and not just due to circumstances beyond his control.

VII. VITIATING FACTORS

These are recognized kinds of behaviour that could operate to take away a person’s ability to freely enter

into a contract. They are mistake, misrepresentation, duress and undue influence.

1. Mistake

Mistake is used here to describe the situation in which one or both parties to an agreement acted under anuntrue belief about the existence or non-existence of a material fact. It must be pointed out that only a

mistake of fact can avail. The position of the law with respect to mistake of law is epitomized by themaxim that says ignorantia juris non excusat: ignorance of the law is no excuse. We are therefore

concerned with mistake of fact.

There are three types of mistake of fact. They are unilateral mistake, mutual mistake and common mistake.Unilateral Mistake is when only one of the parties is mistaken and that mistake is known to the other

party. An example is mistake as to the identity of the other contracting party. This usually arises for

instance, where X contracts with Y under the impression that he is contracting with Z. The contract can be

declared and void and X freed from it if X can prove the following:-

(i) That he intended to deal with some person other than Y with whom he has apparently made the

contract;

(ii) That Y the party with whom the contract was actually made was aware or ought reasonably to have

known of X’s intention;

(iii) That the identity of Y was material in the sense that the contract would not have been entered into

had the true identity of Y been know;

(iv) That X took reasonable steps to verify the identity of Y. Where the parties dealt with each other face

to face it may be extremely difficult for the party contesting the validity of the contract to prove unilateral

mistake (Philip v. Brooks (1919)) but where the parties did not deal with each other face to face it may beeasier for the party contesting the contract to prove that the mistake was material. In Cundy v. Lindsay

(1879) a rogue called Blenkarn ordered goods by post from Londsay by pretending to be Blenkiron areputable firm. Blenkarn resold the goods to Cundy. Lindsay was able to recover because the contract with

Blenkarn was void. The courts in these circumstances apply the subjective test to determine whether thereis a genuine contract in existence (Lewis v. Averay( (1972)).

Mutual Mistake is where the parties misunderstand each other. The parties are at cross- purposes and there

is no correspondence of offer and acceptance e.g. A makes an offer to B about his Peugeot 504 car and B

‘accepts’ the offer thinking that A is referring to his Peugeot 505 car. There is no consensus ad idem i. e.

meeting of the mind. The court would apply the objective test to resolve the problem i.e. the question is not

what the parties had in their minds, but what reasonable third parties would infer from their words or

conduct. Where it is impossible to impute any definite agreement to the parties the court must of necessity

declare that no contract whatsoever has been created. In the leading case of Raffles v. Wichelhans (1864) A

agreed to buy and B agreed to sell a consignment of cotton which was to arrive “ex Peerless fromBombay”. In actual fact two ships called Peerless sailed from Bombay, one in October, the other inDecember. It was held that the buyer was not liable for refusal to accept cotton dispatched by the December

ship.

Common Mistake arises where both parties make the same mistake. The intentions of both parties are

known to each other and they have genuinely contracted in the belief that some that which lies at the root of

the contract is true, but each is mistaken as to the existence of what they are contracting about.




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Cases of Rex Extincta and Res Sua provide us with good examples.

In cases of Res Extincta, the subject-matter unknown to the parties is non-existent at the time of the

contract. Thus in Conturier v. Haste (1850) a contract entered into for the sale of corn on a ship, which

unknown to the parties had been sold by the Master of the ship because of its bad condition before the

contract was held to be void for common mistake.

Res Sua deals mistake as to title and this may arise when a person buys what he already owns. In Cooper v.

Phibbs (1867), a lease obtained by the plaintiff of a fishery which was later discovered to be his own was

held over. Also in Abraham v. Chief Oluwa (1944) the plaintiff who mistakenly bought at an auction a

piece of land that previously belonged to him was held entitled to recover his money.

But apart from cases falling within Res Extincta and Res Sua, the common law rule is that a contract is notvoid merely because the parties have made the same mistake, however fundamental the mistake may be.

This was clearly enunciated in Bell v. Lever Brothers Ltd. (1932). L. who had a controlling interest in theNiger Co. appointing B Managing Director of the latter Co. for 5 years at an annual salary of ₤8,000. After

3 years the services of Bell became redundant owing to the amalgamation of the Niger Co. with a thirdcompany, and L. agreed to pay him ₤30,000 as compensation for the loss of his employment. After they

had paid this money, they discovered for the first time that B had committed several breaches of duty

during his directorship which would have justified his dismissal without compensation. They therefore sued

for the recovery of₤30,000 on the ground inter alia of common mistake, but they failed. The House ofLords held that the circumstances of the case itself disclosed no operative mistake.

Mistake as to quality will not generally void a contract especially in the absence of fraud or any warranty.

Mistake as to the Nature of the Document Signed

Where a party signs a document which turns out to be different from what he intended to sign the signer

may be able to plead non est factum i.e. it is not my deed – and thus render the document null and void.

The signer to succeed must show:-

(i)

That he was fraudulently induced to sign;

(ii) That the document was fraudulently different from what he thought he was signing;(iii)

That he was not negligent.

The above can be said to be exception to the general rule that in the absence of fraud or misrepresentation,

a person is bound by a writing to which he has put his signature, whether he has read its contents or haschosen to leave them unread L.Estrange v. Graucoub (1934).

Effect of Mistake In Equity

Where the mistake as to the subject matter is not fundamental as to render the contract void, equity may

intervene to grant remedy of relief in the form of rescission, rectification or refuse to order specific

performance.

Rescission is the right to have the contract set aside.

The party claiming this remedy must show that he or she was not at fault in any way.

Rectification: The court may order rectification of a document where by mistake the terms of a written

document does not represent accurately what the parties orally agreed.This is at the discretion of the court.The court may refuse specific performance if one party has made a mistake which makes it unfair to

enforce the contract against him.

2. Misrepresentation

A representation is a statement made by one party to another before or at the time of the contract with

regard to some existing fact or some past event which is one of the causes that induces the contract. It is an

assertion of the truth that a fact exists or existed. It has no bearing on future events or promises. But where




30

such a statement forms part of the contract and the person making them undertakes and guarantees that it is

true and it proves to be untrue, it becomes a misrepresentation.

Misrepresentation is relevant to a contract only if it satisfies the following:

(i) The statement must have been intended to be acted upon and must actually have induced the other

party to make the agreement.

(ii) It must have been a representation of fact not law. A mere boast or expression of opinion is not

regarded as a statement of fact.

(iii)

The statement must be false and must have actually deceived the other party and induced him to make

the contract(iv) The statement must have been addressed to the party misled.

There are three types of misrepresentation. Innocent misrepresentation: This is an untrue statement of fact

which the maker believes to be true and which is neither negligently nor fraudulently made. NegligentMisrepresentation: This is a statement which is made carelessly or without reasonable grounds for

believing it to be true.Fraudulent Misrepresentation: This is an untrue statement made knowingly or without belief in its truth, or

recklessly careless whether it to be true or false. In Derry v. Peck (1889) the House of Lords held that an

absence of honest belief is essential to constitute fraud. The facts of Derry v. Peek were these:

A company, after submitting its plan to the Board of Trade, applied for a Special Act of Parliamentauthorizing it to run trams in Plymouth by steam power. The Act which was ultimately passed provided

that the trams might be moved by animal power, or if the consent of the Board of Trade were obtained, by

steam or mechanical power. The directors, believing that this consent would be given as a matter of course,

since the plans had objection, thereupon issued a prospectus saying that the company had the right to use

steam power instead horses. The respondent took shares upon the faith of this statement. The Board of

Trade refused their consent, and the company was ultimately wound up. It was held by the House of Lords,

reversing the decision of the Court of Appeal, that an action of deceit against the directors claiming

damages for fraudulent misrepresentation must fail.

Remedies for MisrepresentationWhere the misrepresentation is an innocent one the misled party may either refuse to perform the contract

or he may ask the court to rescind it (i.e. set it aside). Rescission of a contract is a remedy of equity whichused to be unknown at common law. At common law there was no remedy for innocent misrepresentation.

The purpose of rescission is to revert the parties to their original position before the contract was made. It isobvious that there can be no rescission of a contract if something has happened which makes restitution in

integrum (return to the previous position) impossible. Also where third parties have acquired interest therecan be no rescission. An action for rescission must be instituted promptly because delay defeats equity.

The House of Lords in Hedley Byrne & Co. Ltd. v. Heller and partners Ltd. (1964) held that in some

circumstances an action would lie in tort for negligent misstatement. In this case the plaintiffs entered into

advertising contracts on behalf of Easipower on terms under which they would themselves be liable if

Easipower defaulted. Wishing to check on Easipower’s credit, they asked their bank to inquire of the

defendants who were Easipower’s bankers. Relying on the replies, they continued to place order and

suffered substantial loss when Easipower went into liquidation. The House of Lords held that the plaintiffs’action failed since the defendants’ replies had been given “without responsibility”, but they also stated that,but for this disclaimer, an action for negligence could lie in such circumstances. See also Esso Petroleum

Co. Ltd. v. Mardon (1976).

In the case of fraudulent misrepresentation a person who has been misled in addition to the remedy of

rescission which has the effect to nullify the contract ab initio may also claim from the other party damages

for fraud i.e. the tort of deceit. However, it must be borne in mind that it is a fundamental principle that the

effect of a misrepresentation is to make the contract voidable and not void. This means that the contract is




31

valid unless and until it is set aside by the representee. On discovering the misrepresentation the

representee may elect to affirm or rescind the contract.

None-Disclosure

The law draws a clear distinction between misrepresentation and non-disclosure. Apart from exceptional

cases where silence amounts to assertive conduct, there is no general duty to disclose information that

would be likely to affect the other party’s decision to conclude the contract. Silence or none-disclosure

affords a ground for relief (1) where the silence distorts positive representation (2) where the contract

requires uberima fides and (3) where a fiduciary relation exists

Contracts uberima fides i.e. contracts of utmost good faith are those where one party has full knowledge of

the material facts. The law imposes a duty on that party to make full disclosure of all the material factsknown in him, otherwise the contract may be rescinded. The main examples of this kind of contract

include:

(i) Contract of insurance(ii) Contract of sale of land

(iii) Contract to subscribe for share in a company

(iv) Contract involving family arrangement

Where a person had made a representation and before the other party has entered into the contract the

representation has become untrue, the person who made it is bound to correct his earlier statement.

3. Duress

Duress at common law, or what is sometimes called legal duress, means actual violence to the person i.e.

treats calculated to produce fear of loss of life bodily harm. The majority of writers state that duress makes

the contract voidable but this has been vigorously controverted. Those who believe that a contract made

under duress is void hiage their position on the voluntary character of a contract. In this event consent is not

freely given. For duress to afford a ground of relief it must be duress of a man’s person not of his goods

Skeate v. Beale (1840).

4. Undue InfluenceEquity had concurrent jurisdiction with the courts of common law with regards to duress, but by an

application of its comprehensive doctrine of constructive fraud, it exercised a separate and wider jurisdiction over contracts made without free consent. It developed a doctrine of undue influence. This

doctrine is accurately stated by Ashburner on Equity cited by Cheshire and Fifoots Law of Contract.

In a court of equity if A obtains any benefit from B, whether under a contract or as a gift, by exerting an

influence over B which, in the opinion of the court, prevent B. from exercising an independent judgment in

the matter in question, B can set aside the contract or recover the gift. Moreover in certain cases the relation

between A and B may be such that A has peculiar opportunities of exercising influence over B.

If under such circumstances A enters into a contract with B, or receives a gift from B, a court of equity

imposes upon A the burden, if he wishes to maintain the contract or gift, of proving that in fact he exertedno influence for the purpose of obtaining it. “See Allcard v. Skinner (1887)”. A contract is voidable on theground of undue influence.

Note: Unconscionable bargains and the doctrine of economic duress.

CONTRACTUAL TERMS

In the course of forming contract various statements are made. Some of these statements may be regarded

as contractual terms while others are considered as representations. If a statement is a term of the contract,

it creates a legal obligation for whose breach an appropriate action lies in law.




32

A contractual term may generally be classified as either a condition or a warranty. A condition is at the

very center of the contract. It is a fundamental term, that is a term that goes to the root of the contract, the

breach of which entitles the innocent party to repudiate the contract (that is, to treat the contract as having

come to an end or discharged) or to claim damages or both. A warranty is of secondary importance. It is a

term collateral to the main purpose of the contract, a minor term, the breach of which entitles the innocent

party to sue for damages but not to repudiate the contract. If the innocent party wrongly believing a

condition to be breached and thereby repudiate the contract, he will be liable in breach of contract.

It is not always possible from the insertion of a term into a contract to classify it as a condition or warranty,sometimes they can only be distinguished when the consequences of breach are known. Cehave v. Bremer

(1975). Such terms are known as “Innominate terms”.

Whether in fact a term in a contract should be treated as a condition or a warranty depends on the intentionof the parties. This intention may have been openly expressed by the parties but failing that the courts will

have to deduce the parties’ intention from all the facts of the contract. The court is not bound by the parties’choice of word. They may well have used the term ‘warranty” when what they really had in mind were

conditions in the legal sense of the word.

Conditions and warranties are stipulations. They may be express stipulations or implied stipulations. Aterm may be implied by statute, by common law or by custom.

Exclusion Clauses: These are terms in a contract which seek to absolve a party completely from liability

or limit the extent of his liability e.g. NEPA exempts itself from any liability which its activities may

generate. Exclusion clauses are common in standard form contracts.

There are two situations in which the defendant may seek to rely on an exclusion clause.

(i) Where the plaintiff signed the documents, the exclusion clause will operate.

(ii)

Where the plaintiff has not signed a document containing the exclusion clause whether or not the

exclusion clause will operate depends on the circumstances of the case. The defendant cannot rely on anexclusion clause if he did not notify the other party of its existence at the time of formation of the contract.

Note

(1) The exclusion clause must be brought to the notice of the plaintiff before or at the time the contractis made. Where it is not communicated until after the contract is made it would have no effect Odebiyi v.

Zard (1972); Thornton v. Shoe Lane Parking Ltd. (1977).

(2) Where the document containing the exclusion clause is signed or has earlier been discussed the

plaintiff is bound except where there is a misrepresentation of the terms in the contract Chargoury v.

Adebayo; Curtis v. Chemical Cleaning & Dyeing Co. (1951).

(3) Where an exclusion clause sought to be relied on is ambiguous the court will interpret it against the

party using it as a defence.

(4) Third parties are not protected from liability by the exclusion clause except when expressly statedAlder v. Dickson (1954).

(5) Parties are free to agree to whatever exclusion or modification of their obligations they choose.

(6) Courts will strictly an exclusion clause: Photo Production v. Securitor Transport (1980.




33

(7) A party cannot invoke an exclusion clause where the party is guilty of fundamental breach. Ogwu v.

Leventis Motors (1963); Boshali v. Allied Commercial Exporters Ltd. (1959).

PRIVITY OF CONTRACT

In the law of contract there is a basic rule that a person who is not originally a party to a contract, cannot be

bound by its terms, nor can he receive any benefit from it. A contract thus creates rights and obligations

only between the parties to it. It is a fundamental principle that only a person who is a party to a contract

can sue on it. Tweddle v. Atkinson (1861). In consideration of an intended marriage between the plaintiff

and the daughter of William Guy, a contract was made between Guy and the plaintiff’s father, whereby

each promised to pay the plaintiff a sum of money. Guy failed to do so, and the plaintiff sued his executors.His action was dismissed because of the established rule that no stranger to the consideration can take

advantage of a contract, although made for his benefits. There are however exceptions to this rule. Theyinclude (i) Assignment

(ii) Novation (iii) Restrictive covenants on land (iv) Contract of Insurance (v) Trusts (vi) Agency (vii)Leases (viii) Ships under charter party (ix) Restrictions upon price.

DISCHARGE OF CONTRACT

Discharge of contract means the extinction of all contractual obligation and corresponding rights under a

contract.

(1) Discharge by Agreement: A contract formed by agreement may also be discharged by agreement.

Where neither party has performed his obligation under the contract a mere agreement will be the release of

the other from his promise (Executory Contracts). Where the contract on the other hand is executed i.e. one

party has performed. The other party who has not performed but wishing to be released must provide the

consideration in return for the other’s promise of release. This method of discharge by agreement is known

as “accord and satisfaction”. ‘Accord’ is the new agreement to discharge the contract and “Satisfaction” is

the consideration provided by the party seeking the release. One party may be deed unilaterally release the

other party from his obligation.

Novation is a means of replacing the original contract by a new contract either made by the same parties ormade by one of them with a third party. Where the original contract itself contains a term providing that it

should be discharged on the happening of a future event or the fulfillment or non-fulfilment of someconditions e.g. “for the duration of the ward.

(2) Discharge by Performance: A contract is discharged if both parties have performed their respective

undertakings under the contract. If one party tenders performance and this is without good reason rejectedby the other party the affect will vary according to whether goods or money had been tendered. Where

goods have been tendered in performance of a contract and they are not accepted, the party tendering will

be discharged from his obligation. A tender of money not accepted by the creditor does not discharge the

debtor and he may pay the sum into court. Chiozie v. UAC Ltd. (1956).

(3) Discharge by Lapse of Time: A contract is discharged by lapse of time only where the contract has

been entered into for a specific period of time e.g. a contract of employment for one year.

(4) Discharge by Breach: Strictly speaking a contract is not discharge by a breach, but a breach gives theinnocent party a right to treat the contract as discharged if he wishes to. Every breach entitles the innocent

party to claim damages from the guilty party. Not every breach however entitles the innocent party to treat

the contract as discharge.

(5) Discharge of a Contract by Subsequent impossibility: If a person contracts to do something which

can be done but he cannot do it the contract will be valid and he will have to accept the legal consequences




34

of his ability to perform. In certain exceptional circumstances however a contract will be discharged by

subsequent impossibility. Examples of this include:

(a) Legal impossibility

(b) Discharge of contract of personal service by death;

(c) Discharge of contract by destruction of subject matter where it expressly or implicitly rests on the

continued existence of a certain subject matter Taylor v. Caldwell (1863) (a contract for the hiring of a

theatre was held to be discharged when the theatre was accidentally burned to the ground). The usual

practice is insert a force majeure clause in a commercial contract to deal with circumstances which render

performance impossible not within the contemplation of the parties. The expression force majeure is used

in commercial contracts to describe events that might happen and that are entirely outside the control of theparties. Literally it means coercion or irresistible compulsion.

(d) Where a contract has been entered into in contemplation of a future event or state of affair which doesnot materialize the contract will be discharged. In Krell v. Henry (1903) (Coronation case) the plaintiff

agreed to let a room to the defendant for the day upon which Edward VII was to be crowned. Both partiesunderstood that the purpose of the letting was to view the coronation procession, but this did not appear in

the agreement itself. The procession was cancelled due to the illness of the king. The court held that theplaintiff could not recover the agreed rent from the defendant since it did not fall due until the last minute

of 24 June, and before this moment had arrived the abandonment of the procession had been announced.

(e) Frustration: Where its commercial purpose has been frustrated. The important feature of this ground of

discharge of a contract is that performance must have become a thing radically different from what theparties undertook in the contract. Note that a party cannot rely upon a self-induced frustration.

Statutes have intervened to modify the common law position on frustration in two ways. First, it is now

possible to recover money prepaid even though at the date of frustration there has been no total failure of

consideration. Secondly a party who has done something in performance of the contract prior to the

frustrating events is permitted to claim compensation for any benefits ha has conferred upon the other.

REMEDIES FOR BREACH OF CONTRACT

When there is a breach of contract the innocent party may sue for damages. It can be liquidation or

unliquidated. They are liquidated when the amount has been agreed upon by the parties themselves in the

contract. They are unliquidated if they are to be assessed by the court. Where a contract contains a clauseproviding for the payment of agreed damages if a breach of the contract should take place the innocent

party will be able to claim the sum agreed upon irrespective of the extent of the loss which he has suffered.A penalty clause will not be enforced by the court. Where a term is hel to be a penalty clause the plaintiff

will have to be satisfied with unliquidated damages.

Liquidated damages must represent a true and fair estimate (at the time of agreement) of the loss likely tobe suffered by the plaintiff in case of breach of contract. Courts will always hold agreed damages to be a

penalty where the obvious purpose of the amount agreed upon was to terrorize the other party into

performing the contract rather than the making of a fair estimate.

Nominal Damages are a small token amount (e.g. to naira) awarded as damages to a person whose

contractual rights have been infringed but who has not suffered any actual loss. T.J. Solomon v. J.D.

Pickering & Co. Ltd. (1926).

Special Damages are usually estimated as being the precise amount of loss actually suffered as a result ofthe breach.

Exemplary or Punitive Damages are damages which are not only awarded as a means of compensation but

to punish the party in default.




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Assessment of Damages

(1) Damages to be awarded to a plaintiff for breach of contract should cover such of his losses as may be

fairly considered to arise naturally. This is the rule in Hadley v. Baxendale (1854); S.C.O.A. v. Ogana

(1958).

(2) Where the plaintiff suffers some unusual loss he will be able to recover damages for his loss only if it

has been in the reasonable contemplation of the parties.

(3) A plaintiff must do everything in his power to minimize his loss.

Quantum Meruit

Where the plaintiff has party performed his obligation under a contract he may claim on a quantum meruitbasis a fair price as the value of what he has done. This is particularly suitable when the defendant has

repudiated a contract before the work is complete. V.O. Taiwo v. F. B. Princewill (1961); Obu v. Strauss &Co. Ltd. (1951)

EQUITABLE REMEDIES

Specific performance is a court order to the defendant to perform his obligation. Equitable remedies arediscretionary remedies. The court will not order specific performance unless it can supervise due

compliance with the order. It would not order specific performance of a contract of employment since the

parties cannot be compelled to carry it out Williams v. Smith (1948).

Injunction is court order which forbids the defendant from breaking some negative prohibition or restrain to

which he has agreed in the contract. The court will not issue an injunction if as a result the defendant is

obliged to perform a contract or give up his business activity altogether. N.K. Zard v. M.J. Satiba (1955).

Equitable remedies are given where damages would be inadequate as a remedy e.g. in contract for the

purchase of land.

TOPIC 4

CONTRACT OF EMPLOYMENT

An examination of the law governing employment relations is of vital importance because it isdifficult to conceive that a person of full age and capacity endowed with good health will not be

engaged either as a employer of employee throughout his/her life. Even self-employed persons doenter into contracts for services which though closely associated with contract of service must be

distinguished there from.

The term ‘contract of employment emphasizes that the relationship of employer and employee, ormaster and servant is a voluntary one governed by contract. Every case of employment necessarily

implies a contract or agreement, Although there may not always be a contract in writing. It has been

pointed out that a valid contract may be entered into otherwise than in writing. A contract of

employment is a contract of service. It must be distinguished from a contract for services, in which a

self-employed person or an independent contractor contracts to perform certain work for another.

Whether or not the relationship of employer and employee exists is entirely a question of fact in each

particular case. Three main tests have been developed by the common law to distinguish a contractof service from a contract for services.

(i) The Control Test:

The greater the degree of control exercised by an employer, the greater the likelihood of a contract of

service. Sir Frederick Pollock’s Law of Torts puts it as follows: “The relation of master and servant

exists only between persons of whom one the order and control of the work done by the other. A

master is one who do not only prescribes to the workman the end of his work, but directs, or any at

moment may directs, the means also, or as it has been put, retains the power of controlling the




36

work”. Sir Frederick Pollock further defines an independent contractor as “one who undertakes to

produce a given result, but so that in the actual execution of the work he is not under the order or

control of the person for whom he does it and may use his won discretion in things not specified

beforehand.

Where X employs Y a chauffeur to drive his car, Y is the servant of X but if X goes into the street

and hails a taxi and instructs the driver Z to take him to a certain place, Z is not X’s servant, but an

independent contractor.

In Performing Right Society v. Mitchell & Booker Ltd. (1924) the plaintiffs owned the copyright ofsome musical works while the defendants hired a hand and instructed them not to play any piece of

which would be an infringement of copyright. The band nevertheless played the works of theplaintiffs, thereby infringing their copyrights. The question for consideration was whether the band

were independent contractors or the servants of the defendants. The agreement with the bandprovided for seven hours’ daily service and for the services of the band to be at the exclusive

disposal of the defendants, who were given the right of immediate dismissal for the breach of anyreasonable instructions or requirements. It provided also that the band should play at any place in

London to which they were directed by the defendants, who might also detail the nature of the music

to be played. It was held in consequence that the band were the servants of the defendants, which

were thus liable for the tort which the band committed in the course of their employment.

As Justice McCardie said in the above case: “Definition has been difficult. The decisions are

numerous and not always easy to follows. Thus, whilst a labourer employed to cleanse drains at 5s

for the job was held in one case to be a servant and not a contractor, a plumber called in by a

landlord to mend a leaky cistern was held to be an independent contractor and not a servant. The

nature of the task undertaken, the freedom action given, the magnitude of the contract amount, the

manner in which it is to be paid, the powers of dismissal, and the circumstances in which payment of

the reward may be withheld – all these hear on the solution of the question. But it seems clear that a

more guiding test must be secured, and the test to be generally applied lies in the nature and degree

of detailed control over the person alleged to be a servant. This circumstance is, of course, only oneof several to be considered, but it is usually of vital importance”.

Where a transport company lets out its vehicle on hire to a businessman and provides a driver, the

driver does not become the servant of the businessman for the driver is not placed under his controlexcept that the businessman may indicate the destination to which he wishes his goods to be taken. If

the businessman actively interferes with the driving and an injury occurs to anyone, he may beliable-not as a master, but as the procurer and cause of the wrongful act complained of. The case of

Mersey Docks and Harbour Board v. Coggins & Griffiths (Liverpool) Ltd. (1947) illustrates this.

The Harbour Boards lent a mobile crane with a crane-man to a firm of stevedores for loading a ship.

The crane-man was employed and paid and liable to be dismissed by the Board, although the general

hiring conditions stipulated that he would be the servant of the hirers. In the course of operating the

crane McFarlane was injured by the negligent driving of the crane. The injured man sued the

Harbour Board and the Stevedores for damages. The question in the case was whether the crane-man

was, for the purpose of McFarlane’s claim, to be regarded as employed by the Harbour Board or byCoggins & Griffiths, the Stevedores. It was established that although the stevedores had theimmediate direction and control of the operation of picking up and moving cargo, they had no power

to direct how the crane-man should work the crane. Accordingly the relationship of master and

servant did not exist and they were not therefore liable for the crane-man’s negligence. The Harbour

Board was liable, as a negligent act was done by its servant in the course of employment.

The control test, according to H.R. Light, The Legal Aspects of Business, is difficult to apply where

the servant exercises professional skill or performs work of a highly technical character.




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(ii) The Organisational/Integration Test:

This is also known as the Business Test. This establishes that work constituting an integral part of

the business indicates a contract of service. This test has proved useful where the servant exercises

professional skill including hospital cases. In Cassidy v. Ministry of Health (1951), the plaintiff was

operated at the defendants’ hospital by one of their whole-time medical officers. As a result of

negligence in the course of the post-operational treatment the plaintiff’s hand was rendered useless

and the defendants were held liable. The English Court of Appeal held that hospital authorities are

liable for negligence in the course of their professional duties by their permanent staff,

radiographers, resident house surgeons and physicians anaesthetists, pharmacists and nurses who areemployed under a contract of service. If the patient selects and employs the doctor, the hospital is not

liable because he is not employed by them.

In Roe v. Minister of Health (1954) the English Court of Appeal held that an anaesthetist whocarried on a private practice but was also under an obligation, with another anaesthetist, to provide a

regular service for the hospital was a servant or agent of the hospital. Lord Justice Morris thoughtthat anaesthetists wre members of the “organization” of the hospital.

In Stevenson Jordan & Harrisons Ltd. v. McDonald and Evans (1952) Lord Denning took the view

that whether a person is a servant depends on whether or not a person is part and parcel of theorganization. This test takes account of the degree of integration and thus brings workers like

hospital staff, consultants and other professionals within the theory.

(iii)The Entrepreneurial Test:

Where a worker is working on his own account his contract is likely to be one for services. An

opportunity to make profit of incurs loss indicates self-employed status. See Ready Mixed Concrete

v. Minister of Pension (1968).

Vicarious Liability

The principal significance of distinguishing a contract of service or a contract of employment from acontract for services lies in fact that the master as a general rule is liable for any tort which the

servant commits in the course of his employment. The liability of a master for the torts of his servantis an example of vicarious liability in tort. This does not exonerate the servant for a person cannot

excuse himself by saying that he was acting as the agent or servant of another. A self-employedperson or an independent contractor is liable for a wrong he commits and the person taking benefit of

his work is not vicariously liable.

It has been said that a scientific reason for the vicarious liability of a master for the torts of his

servant is hard to find but that “It seems to be based on mixture of ideas – that the master can usually

pay while the servant cannot; that a master must conduct his business with due regard to the safety of

others; that the master profit from the servant’s employment, and that by employing the servants has

“set the whole thing in motion’. The rule would be an intolerable burden on the master but for thefact that he often covers his risk by insurance”.

For the master to be liable the wrong done must fall within the courses of the servant’s employment.

It is however often an extremely difficult question to decide whether conduct is or is not within the

course of employment. In Marsh v. Moores (1949). Lynskey J. said: “It is well settled law that a

master is liable even for acts which he has not authorized provided that they are so connected with

the acts which acts which he has authorized that they may rightly be regarded as modes although

improper modes, of doing them. On the other hand, if the unauthorized and wrongly act of the




38

servant is not so connected with the authorized act as to be a mode of doing it, but is an independent

act, the master is not responsible for in such a case the servant is not acting in the course of his

employment but has gone outside it. In all these cases it must be a question of fact whether an

unauthorized act by a servant is within or outside the scope of his employment”.

A wrong falls within the scope of employment if it is expressly or impliedly authorized by the master

or is an unauthorized, manner of doing something which is authorized, or is necessarily incidental to

something which the servant is employed to do. The master will not be liable merely because the

wrongful act was done during the servant’s working hours or with the master’s property. In Mitchell

v. Crassweller (1853) the defendant’s carman took the defendant’s horse and cart from stableswithout authority and used them exclusively for his own benefit, and in the course of so doing he

negligently ran down the plaintiff. It was held that the master was not liable as the carman was afrolic of his own.

However, if a servant while on his master’s business takes the opportunity to further his own

purposes the master will remain liable unless the servant ceases altogether to be on the master’sbusiness. Thus in Whatman v. Pearson (1868), the defendants forbade his drivers to leave their

horses and go home during the luncheon interval. One driver disobeyed this order and left his horse

and cart unattended whilst he went home for a meal. In consequence a third party was injured. The

master was held liable, as the driver had control of the horse and cart during the day.

In the case of willful wrongdoing by a servant, the courts have evolved the following rules: The

master will be liable where the wrongful act done may still be in the course of employment although

expressly forbidden by the master. Thus in the case of Limpus v. London General Omnibus Co.

(1862) the defendants’ driver, contrary to express instructions not to race with or obstruct other

omnibuses, had upset the plaintiff’s omnibus by pulling across the road in front of it. It was held that

the defendants were liable, for the servant was acting in the course of his employment, although he

was acting improperly. Furthermore, a master is vicariously liable for the tortions act of his servant

committed within the scope of his authority whether they are for the benefit of the masteror for the

benefit of the servant. Thus in Lloyd v. Grace, Smith & Co. (1912), the plaintiff went to thedefendants, a firm of solicitors, for the purpose of selling some property, and saw their managing

clerk, who had authority to arrange, negotiate, and carry out sales of real property and also to receivedeeds for safe custody. The clerk fraudulently induced her to execute documents which are in fact

conveyances of the property to himself. He then sold the property in his own name, and abscondedwith the proceeds. It was held by the House of Lords that the defendants were liable although the

agent/servant alone benefited by the fraud.

From the foregoing, it is apparent that it is a question of fact in each case whether the wrong was

committed in the course of the servant’s employment: Ogunmuyiwa v. Solanke (1956). The onus of

proving that a servant was not acting within the scope of his employment is on the master and he

must lead evidence in this regard. Iko v. John Holt & Sons Ltd. (1957).

Nature of a Contract of Employment

A contract of employment to be valid must fulfil the essential conditions of a contracts i.e. theingredients of a valid contract must be present. These may be summarized as follows:(i) One party must agree expressly or implicitly to perform an undertaking and the other party

must agree to accept such performance that is to say, there must be offer and acceptance.

(ii) The agreement must be supported by consideration or entered into according to certain

prescribed form.

(iii) Both parties must be persons who the law acknowledges as competent to enter contracts; they

must have contractual capacity.

(iv) Both parties must intend that the agreement shall give rise to a legally recognized obligation.




39

(v) The object of the contract must be legal.

There are so many stages which are preliminary to the formation of a contract of employment which

do not seem to have any legal significance. These include advertisement, applications, invitation for

interviews, conduct of interviews. The basis for the formation of a contract of employment can be

found in communication of offer of employment and acceptance. A candidate whose performance at

an interview makes him the most eligible person for a vacant job cannot complain if another person

is preferred. He has no remedy in law for there is no contract in existence between him and the

would-be employer. Even if he has been reliably informed he would be offered the job by officers of

the employers who have no authority to communicate offer of employment, he cannot insist that hemust be employed. The usual practice in contract of employment is for the employer to make an

offer of employment to the proposed employee which he may accept. The offer may be a conditionaloffer, for instance, subject to medical examination. The offence must accept the terms of the offer

and his acceptance must be unconditional and unqualified. Any attempt to vary the terms of the offerwould amount to a counter offer. Where a counter offer is accepted it will form the basis of a

contract of employment. In Dr. Adesegun Banjo v. University of Ibadan (1979) Dr. B. amended theterms of the offer of appointment he was given by the University of Ibadan by inserting new terms.

This amounted to a counter offer. The University went ahead with the arrangement for Dr. B. to take

up the job. This modification was later discovered by the defendant whereupon the defendant

attempted to terminate the contract of appointment and offer the proper contract. Dr. B. rejected thisand decided to contest the defendant’s action in court. It was held that since the University accepted

the counter offer, there was a valid contract in existence. However, the court finally decided that the

defendant could terminate the plaintiff’s appointment under the terms of appointment with three

months’ salaries in lieu of notice. Dr. B. was held entitled to three months’ salaries with effect from

21st March 1977 the date he was expected to sign a new contract.

Once a contract of employment is established, it is subject to the common law and relevant statutes.

The Labour Act, Cap 198 L.F.N. 1990 sets out various terms which apply to all contracts of

employment.

Contractual terms may be express or implied. Express terms relate to provisions in a contract of

employment especially agreed to by the parties. Apart from the requirements of the Labour Act,contracts of employment may be entered into orally or in writing but it is certainly wiser for them all

to be in writing.

Express Terms: Where a contract of employment is in writing the parties are bound by the expressterms and conditions so stipulated. In Olaniyan v. University of Lagos (1988) the Supreme Court of

Nigeria held that public servants in the established and pensionable cadre of the Federal Government

services do not owe their offices at the pleasure of the Federal Government their appointments are

based upon rules and regulations, statutes or memoranda of appointment.

The Labour Act provides that an employee is entitled to a written notice of certain conditions. This

must be given within three months of the commencement of employment. The conditions include:

identity of employer and employee, date that employment began, salary (amount and frequency),hours of work, entitlement to holidays, sick leave; pension and pension schemes (unless statutory)notice period for termination or expiry date, job title and rules for resolving grievances and

disciplinary measures, which include naming the person to whom the employee may appeal in the

circumstances (S.7).

If the contract is written there need not be a separate list of particulars and the list may refer to other

more detailed documents with which the employee has been provided or may consult (e.g. Staff

Handbook). The employee must be notified of any changes in the terms in writing within one month




40

of that change being made. Collective agreement may also be incorporated into a contract of

employment. For instance, a session in the offer of probationary employment in a company in the

private sector of the economy states: “Please note that while in the employment of the company,

you shall be bound by the conditions of service as contained in the Collective Agreement

relevant to your grade”.

In a written contract, it is usual to indicate the nature of the duties which an employee would be

required to perform. At times an omnibus provision which states that the employee is to perform

certain duties assigned to him by the employer or his representative (head of department) is inserted.

In this case the job title may give some indication on the nature of the duties an employee is toperform.

It will also be indicated whether the job is a full time one or not. The terms under which the

employee may engage in other gainful occupation and the conditions precedent thereto may bespecified. The employer is generally justified to impose a restraint on his employee while the latter is

till in the formers employment. This is necessary to protect the business interests of the master.Some restraints may extend beyond period of employment.

It has been remarked as follows on restraint of trade: “The doctrine of restraint of trade is a legal

device to attempt to hold the balance between two competing factors – an employee’s freedom totake employment as and when he wishes, and an employer’s interest in preserving certain aspects of

his business from disclosure or exploitation by an employee or, more usually, an ex-employee”. In

Littlewoods Organisation Ltd. v. Harris (1977, 1978) IWLR 1472 Denning M. R. adopted the test of

reasonableness. The protectable interests of an employer include trade secrets and customers’

connection. A contract that imposes an unreasonable restraint upon a person’s capacity to carry on

his trade may be held in certain circumstances to be contrary to public policy, on the grounds that it

is in the public interest that everyone should be at liberty to do whatever work he chooses and to do

it where he chooses. For a restraint to be reasonable in the interests of the parties it must afford no

more that adequate protection to the party in whose favour it is imposed. In Fitch v. Dewes (1921)

the defendant undertook to serve a Tamworth solicitor as managing clerk for three years, and agreedthat on the expiration of his service he would never practise as a solicitor or enter the service of any

other solicitor within a radius of 7 miles of Tamworth Town Hall, except in respect of a particularbusiness mentioned in the agreement. The restraint was upheld because the defendant had personal

contract with and confidential information regarding his employer’s clients. The restraint was heldnot to be too wide in regard to either place or time.

Implied Terms

Some terms are implied into a contract of employment. They may be implied either by statute,

common law or by custom. It has been said that the normal contract is not an isolated act, but an

incident in the conduct of business, and it will frequently be set against a background of usage,

familiar to all who engage in similar negotiations and which may be supposed to govern the

language of a particular agreement. At common law certain duties are imposed on employers and

employees. A common duty is that both must give reasonable notice when terminating the contract.

Common Law Duties of an Employee(i) An employee has a duty to obey his employer’s lawful and reasonable orders within the

scope of the service undertaken by him provided he is not thereby exposed to personal danger by

violence or disease such as he did not undertake to run. If he refuses to obey when asked to do

something illegal or dangerous and is subsequently dismissed, his claim for wrongful dismissal may

be upheld. In Sule v. Nigerian Cotton Board (1985), the Supreme Court per Obaseki J.S.C. said:

“when a servant grows too big to obey his master, the honourable course open to him is to resign in

order to avoid unpleasant consequences should an occasion which calls for obedience be serviced




41

with disobedience. Both common law and statute law brook no disobedience of lawful order from

any servant, high and low, big or small. Such conduct normally and usually attracts the penalty of

summary dismissal. Disobedience ranks as one of the worst form of misconduct in any

establishment”. The appellant had been retired from the respondent’s employment for refusing to

vacate the premises he occupied at Apapa (Company’s Quarters) after he had been permanently

transferred to the Company’s Head Office at Funtua.

(ii) An employee has a duty not to willfully disrupt his employer’s business. It is possible to lay

down any hard and fast rules as to what constitutes disruption of employer’s own particular

circumstances.

(iii) An employee should reasonable care in the execution of his duties. Lister v. Romford Ice &Cold Storage Co. Ltd. (1957). This duty includes taking care of the master’s property. An employee

is not an angel so only reasonable care is expected of him. However, the skill, knowledge andcompetence possessed by a employer will determine if in his own case he has exercised reasonable

care.(iii)In addition to the above, there are also certain duties of good faith, of fidelity, of

confidentiality and honesty known as fiduciary duties which an employee owes to his employer. Anemployee must not put himself in a position where his duty conflicts with his interest. He must not

make secret profit or take bribe giving and taking of bribe are offences punishable under the

Criminal Code. He must account for a deliver up to the master all property entrusted to him and all

moneys received on his master’s account. He must not disclose confidential information tounauthorized persons for he has a duty of confidentiality. These duties do not end even when

employment has ceased. See generally Boston Deep Sea Fishing & Ice Co. v. Farhham (1957).

Common Law Duties of an Employer

(i) An employee on piece work is entitled to earn a reasonable sum of money thus a reasonable

amount of work must be put his way. Wages shall be payable in legal tender and not otherwise. See

SS. 1-3 Labour Act.

(ii) The traditional view is that if an employer provides pay, there is no obligation to provide

work. The law not recognizes that the master is under a definite obligation to provide work in a few

cases. For instance, it is essential for work to be available for an employee whose remunerationdepends upon the amount of work done, or who is paid on commission basis; or in the case of one,

like an actor, whose continued employment depends upon keeping his name before the public. Thusin Hebert Clayton and Jack Waller Ltd. v. Oliver (1930) the appellants, who were theoretical

producers had engaged Oliver to play a lead in one of their productions, and he agreed not to appearelsewhere except with their consent. A part was offered which Oliver insisted was not a leading one,

and he therefore refused to appear and brought an action for breach of contract. It was held by theHouse of Lords that he was entitled to succeed.

The modern trend on the obligation of the employer to provide pay is associated with the employee’s

right to work. Where work is not provided, an employee may contend constructive dismissal if his

skills will deteriorate. Bosworth v. Angus Jowelt (1977). For the traditional view see Collier v.

Sunday Referee Publishing Co. Ltd. (1940). 2kb647

(iii) The employer has a limited obligation to pay wages during illness. The Labour Act hasconfirmed this position. A worker is entitled to be paid wages up to 12 working days in any onecalendar year during absence from work caused by temporary illness (S.15).

(iv) An employer has an inalienable duty to exercise reasonable care regarding his employee’s

safety. He has to ensure that his employees do not suffer injury in the course of their employment,

either in consequence of the master’s personal negligence or through his failure properly to

superintend and control the undertaking. This duty is inalienable because an employer cannot evade

this duty by delegating his responsibility to a safety officer, for liability is strict. In Wilsons and




42

Clyde Coal CO. v. English (1938), a miner brought an action for damages for personal injuries

against his employers, and the question arose as to whether they were liable in respect of these

injuries, as they had delegated to a competent servant the duty of taking due care in the provision of

a reasonably safe system of working in the mine. It was held that though the employers’ duty to

provide a competent staff of men, adequate materials, and a proper system and effective supervision

is not absolute for it is fulfilled by the exercise of due care and skills but it is not fulfilled by

entrusting its fulfillment to employees, even though selected with due care and skill. It was held

therefore that the miner was entitled to succeed.

The common law duty of care owed by an employer to his employees is based on the tort ofnegligence. For an action in negligence to succeed there must a duty of care, breach of that duty and

damage must have resulted from the breach. This duty extends to (a) the provision of safe premisesand appliances (plant and machinery and means of access), and their maintenance in proper repair

(b) the selection of fit and competent fellow servants and the proper instruction of inexperiencedservants and (c) a proper system and control of work.

With regard to appliances, an employer is bound at once to adopt all the latest improvements and

appliances. He is bound to exercise reasonable care both to provide safe appliances and to keep them

safe. In Davidson v. Handley Page Ltd. (1945) where a worker slipped while washing a cup, the

employer was liable for the dangerous conditions of the floor. The court held that the master’s dutyto provide safe appliances extends not merely to the performance of the acts of workmanship the

workman is engaged to do, but covers any of the acts normally and reasonably incidental to his

work, as for example going to a tap to get a drink of water.

‘System of work’ is not easy to define. It may consist of number of elements and what exactly it

must provide will depend entirely on the facts of the particular case. System includes much matters

as the physical layout of the job, the setting of the stage, so to speak – the sequence in which the

work is to carried out, the provision in proper cases of warnings and notices, and the issue of special

instructions. A system may be adequate for the whole course of the job or it may have to be modified

or improved to meet circumstances which arise. What is a safe system of work, therefore is aquestion of fact to be determined on the evidence available in each case.

In General Cleaning Contractors Ltd. v. Curtis (1953) the respondent, a window cleaner, was

employed by the appellants, a firm of contractors, to clean the windows of a club. Following thepractice usually adopted by the employees of the appellants, he stood on the sill of one of the

windows to clean the outside and was holding one sash for support when the other sash came downon his fingers, causing him to let go and fall to the ground, suffering injury. He successfully claimed

against the appellants for damages. It was held by the House of Lords that it id the duty of an

employer to give such general safety instruction as a reasonably careful employer who has

considered the problem presented by the work would give to his workmen. However, as it was

pointed out by the English Court of Appeal in Woods v. Durable Suites Ltd. (1953), an employer is

not bound, through his foreman, to stand over workmen of age and experience all the time to see that

they do what they are supposed to do.

The House of Lords likewise held in Qualcast (Wolver-Hampton) Ltd. v. Haynes (1959), that theemployers were not liable for negligence in not providing a safe system of work when an

experienced moulder, whilst pouring molten metal into a mould, accidentally poured some on his

foot and burned it because he was not wearing the protective spats provided by the employers. To

the man’s knowledge the employers had provided protective spats, which would have prevented

injury, and they were available on demand; he could not expect to be constantly reminded to take

safety precautions which were available and which his experience should tell him were essential. In




43

this case it was also emphasized that the question whether a master has provided a safe system of

working is one of fact, not law, and will depend on all the circumstances of each particular case.

An employer’s duty at common law is not only to instruct his worker but to follow up by reasonable

supervision. In W.N.T.C.v. Ajao (1965) a worker had been injured by a splinter of steel which had

escaped during an operation by a fellow workman and flew into his eye and subsequently blinded it.

The company’s defence was that plastic goggles were provided for their workers’ The court held that

the provision of goggles was not enough to discharge the master’s duty of care. “It was the

employer’s duty at common law to ensure not only that goggles were provided but also that they

were used by strict orders followed by reasonable supervision”.

Where an employee has a special disability known to the employer, the former has a higher degree ofcare. In Paris v. Stephey Bprpugh Council (1951), the plaintiff was blinded in one eye by enemy

action during the World War II. This disability was known to the defendants who were hisemployers. Whilst knocking a bolt from under a bus he struck a piece of metal from a nut which flew

and blinded his only remaining eye. The English Court of Appeal exonerated the employers on theground that they were under no obligation to provide the victim with safety devices because it was

not the practice in the trade. But the House of Lords reversed the decision and held that an employer

had a duty to individual workers which is bound to vary with particular circumstances. Knowing of

the plaintiff’s peculiar position, they were under a duty to provide him with goggles even though itwas not the practice in the trade.

An employer is liable for the wrong done by an employee to a fellow employee. The doctrine of

common employment has been abolished. In Hudson v. Ridge Manufacturing Co. Ltd. (1957) an

employee was injured by the foolish pranks of a fellow worker who had indulged for four years in

horseplay during office hours at the expense of the plaintiff and other workers. The employer knew

about the worker’s conduct and had frequently rebuked and warned the offending worker that

someone might get hurt one day. In an action by the injured employee for damages for the

company’s negligence, the employers were held liable for the breach of the common law duty to

provide competent workmen.

(v) An employer has a duty to reimburse his employee for all expenses which the latter properlyincurs within the scope of his employment, and to indemnify him against liabilities and losses

resulting from obedience to the master’s lawful orders.

(vi) An employer has a duty to treat his employee with respect.

Statutory Duties

In addition to the common law duties discussed above, the employer is under a duty to observe all

regulations imposed by statute. As Emiola puts it “In the emerging industrial society, statutes have

been used to regulate industrial activities and these statutes have had the effect of imposing

additional liability on the employer for the sake of his worker”. In WNTC v. Ajao it was declared

that a plaintiff might succeed in an action for breach of statutory duty even if he would have failed at

common law and vice versa.

The Factories Act, Ca 16 LFN 1990 highlights statutory duties of factory owners or occupiers and

makes provisions for breaches of the duties. However as Emiola said with regard to the Factories Act

1956, the predecessor of the Factories Decree No. 16 of 1987 (now Factories Act Cap 126) “The Act

is supposed to play a preventive role by way of reducing or arresting the number of accidents in

industry. The point has been put succinctly by Lord Pearson; he said of the equivalent English Act:

“The Act … should be regarded as a beneficial rather a penal statute. Its object is to secure proper

working conditions for persons employed to do manual labour in certain operations, and the




44

penalties for failure to provide such conditions are merely incidental to that object”. See Stone v.

Haygarth (1968).

The Factories Act is divided into 11 parts. Part I Registration of Factories; Part II: Health (General

Provisions); Part III: Safety (General Provisions); Part IV: Welfare (General Provisions); Part V:

Health, Safety and Welfare Special Provisions and Regulations;

Part VI: Notification and Investigation of Accident and Industrial Disease

Part VII: Special Applications, Extension and Miscellaneous Provisions,

Part VIII: General Registers Etc Part IX: Administration; Part X: Offences, Penalties Legal

Proceedings and Part XI: General.

S.85 on application states: “Except where otherwise expressly provided the provisions of this Actshall be in addition to and not in substitution for or diminution of the provisions of any other Act, or

Law: Provided that no person shall be liable to be punished under this and under another Act, or Lawin respect of the same acts or omissions”.

The provisions of the Factories Act apply only to factories as defined in the Act except there it is

otherwise provided. The Act also applies to factories belonging to or in the occupations of the

Government of the Federation or of a State.

Let us look at Part II of the Act. S.7 makes provision for cleanliness; S.8 overcrowding; S.9

ventilation; S.10 lighting, S.11 drainage of floors, S.12 sanitary conveniences.

Part III relates essentially to safety provisions. S.18 makes provision as to unfenced machinery; S.19

construction of and maintenance of fencing. In the important care of Nichols v. Austin (Leytons)

Ltd. (1946) affirmed in Close v. Steel Company of Wales Ltd. (1961), the House of Lords decided

that the duty to fence was intended to keep the workman out-not to keep the machine or product in

so that an employee injured when a piece of wood flew out of a circular saw was told that he could

not recover any damages for the resulting injury.

S.23 is on training and supervision of inexperienced workers. It states: “No person shall be employed

at any machine or in any process, being a machine or process liable to cause bodily injury, unless hehas been fully instructed as to the dangers likely to arise in connection therewith and the precautions

to be deserved and - (a) he has received a sufficient training to work at the machine or in the process;or (b) is under adequate supervision by a person who has a thorough knowledge and experience of

the machine or process”.

S.28 relates to safe means of access and safe place of employment. S.28(1) provides: All floors,

steps, stairs, passage, gangways and other parts of a structure or building used as a factory shall be of

sound construction and properly maintained and kept safe at all times and before the construction of

any factory, the building plans and such other documents as the Director of Factories may require

shall be submitted to him for approval not less than six months before the commencement of such

construction”. In other subsections there are provisions that openings in floors are to be securely

fenced except in so far as the nature of the work renders such fencing impracticable; there must besafe means of access to every place of which any person has to be or works, substantial hand railsmust be provided and maintained in respect of staircases and all ladders shall be soundly constructed

and properly maintained”.

S.30 relates to precautions with respect to explosive or inflammable dust, gas, vapour or substance.

Effective means for detecting fire must be installed, maintained and readily accessible (S.35). There

must be adequate means of escape in case of fire (S.36).




45

The Factories Act enjoins occupiers to remove all dust or fumes (S.45) provide protective clothing

and appliances (S.47) and ensure protection of eyes in certain processes which entail electric arc

welding (S.48).

In view of the foregoing registration of new factories is regulated by S.3.

The benefits of the above provisions to an employee are tremendous. The statutory provisions

obviate with the need to prove negligence WNTC v. Ajao.

The employer is however not without defences. These include remoteness of damage Latimer v.A.E.C. Ltd. (1953); contributory negligence Orekoya v. University of Ife (1972); and consent.

Contributory Negligence: It the plaintiff’s negligence was one of the causes of his injury, then the

Court will have regard to all the causes and will apportion the damages in accordance with the law.What is and what is not contributory negligence is a question of fact to be determined by the Court,

and the onus of proof is on the defendant. For example, in Cakebread v. Hopping Bros. (Whetstone)Ltd. (1947) the plaintiff, an experience wood working machinist suffered injury to one of his fingers

whilst operating a circular saw. There was evidence that the plaintiff did not adjust the saw provided

with a guard the way it should and that the saw provided was not in accordance with the Wood

Working Machinery Regulations. It was held that the employers had failed in their statutory duty tomaintain a guard in an efficient state and in position, and to supervise the work of the factory, and

these breached of duty contributed to the accident. It was held also that the workman’s duty, at

common law, was to observe for his own safety that degree of care which an ordinary prudent man

would have observed in the circumstances, and his failure to exercise this care contributed to the

accident. For these reasons the damages were apportioned equally and the workman received half of

the damages assessed.

Consent

The maxim of law is volenti non fit injuria (that to which a man consents cannot be considered an

injury). In relation to cases of employer and employee the principle was explained by Lord Herschellin Smith v. Baker & Sons (1891) as follows: “Where a person undertakes to do work which is

intrinsically dangerous, notwithstanding that reasonable care has been taken to render it as littledangerous as possible, he no doubt voluntarily subjects himself to the risks inevitably accompanying

it and cannot if he suffers, be permitted to complain that a wrong has been done to him, even thoughhe cause from which he suffers might give to others a right of action. For example, one had agreed to

take part in an operation necessitating the production of fumes injurious to health would have nocause of action in respect of bodily suffering or inconveniences resulting there from, through another

person residing near seat of these operations might well maintain an action if he sustained such

injuries from the same cause”.

Where a servant is exposed to risks which are not in any way incidental to his employment or

through incidental to his employment, is attributable to the master’s personal negligence, no consent

on the servant’s part to take the risks upon himself is to be implied from the existence of the contract

of employment. In Smith v. Baker & Sons the plaintiff had been working for some months drillingholes in the rock of cutting A crane worked by another man in the employment of the contractorswas lifting stones nearby, and form time to time these were swung over the plaintiff’s head without

warning. The plaintiff was fully aware of the danger to which he was exposed, and had in fact

complained that she practice dangerous. Subsequently a stone fell from the crane and he was injured.

It was held that the employer cannot invoke the aid of the maxim volenti non fit injuria to protect

him from liability for his wrong in such a case, The plaintiff was therefore entitled to damages for

the injuries he sustained. To rely on this doctrine, the master must show that the workman undertook

that the risk should be on him. This will be easy to establish where there is a consideration in form of




46

“danger money”. It must be shown that a servant who is asked or required to use dangerous plant is a

volunteer in the fullest sense, that knowing of the danger, he expressly or impliedly said that he

would do the job at his own risk and not at the risk of his master: Bowater v. Rowley Regis

Corporation (1944). 1944 1 All ER 465 (Borough Cumel)

Termination of Contract of Employment

The contract of employment may be lawfully determined in a number of ways which will be

considered below. When a contract of employment is for a definite time it will terminate at the end

of that period and no notice of further act is required to terminate it. The time of the expiration will

depend on the agreement between the parties. The contract may be reviewed at the expiration of thatperiod. Temporary appointments for one year which are made in the public service pending conduct

of interview and contract appointments given to retired staff or expatriates illustrate this point.

The parties to a contract of employment may decide to terminate their relationship and thus releaseeach other from obligations under the contract. There must have been no fraud or duress exerted on

the parties to the mutual termination.

A contract of employment may come to an end by frustration, This is an event or change in

circumstances so fundamental as to be regarded by the law as striking at the root of the contract as a

whole and beyond what was contemplated by the parties and such that to hold the parties to thecontract would be to bind them to terms which they would not have made had the contemplated that

event. Frustration may be due to death; illness act of state or operation of law; compulsory winding

up of the employer’s company, dissolution of the partnership in case of personal service or

compulsory conscription of the servant during war or hostilities. Letter of appointment or other

instrument of appointment may make provision for this mode of termination though its absence does

not preclude its operation.

A contract of employment may be determined by notice. The notice must be precise and reasonable

and in accordance with the terms of the contract of employment. Generally in this regard. Any notice

which does not conform with the one specified in the contract of employment is wrongful and it is ofno consequence. Lecturers in some Nigerian Universities are required to give three or six months’

notice depending on their cadre and some institutions the notice must terminate on 30th

September inthe year in which it is given. There are provisions which allow employers to accept an inadequate

notice should they decide to waive their right.

The length of notice to be given may also be regulated by the provision of the Pension Act 23 Cap346, LFN 1990or Civil Service regulations or other documents/instruments incorporated into the

contract of employment. In the public sector it is the length of service that determines whether

termination of employment by notice will amount to retirement or withdrawal of service.

In the absence of any stipulated length of notice to be given when a contract of employment is to be

terminated reasonable notice must be given. (24) Reasonable notice depends on the nature of

employment and the circumstance of each case. Notice periods are subject to section 11 of the

Labour Act which prescribes minimum periods of notice. One day where the contract has continuedfor three months or less, one week where the contract has continued for three months but less thantwo years, two weeks where the contract has continued for more than two years but less than five

years and one month where the contract has continued for five years.

It appears that payment of salary in lieu of notice especially by the employee is not automatic. This

right must be specifically conferred on an employee before he can exercise it.




47

A contract of employment may be determined by the dismissal of the employee. The difference

between dismissal and other forms of involuntary termination of appointment initiated by the

employer is that a person that is dismissed goes empty handed. The dismissal of a servant is radical

but where it precipitates removal without formalities it is described as summary dismissal. The

reason for dismissal must be concrete and convincing and under the Labour Act a dismissed

employee is entitled to a written statement of the reasons for dismissal.

Dismissal may occur as a result of a number of factors including the following:

(i) Misconduct i.e. acts of the servants which are ser incompatible with the faithful discharge ofthe servant’s duties e.g. commission of a crime by the servant, dishonesty, gross disrespect to

others or constituted authority, insubordination, secret commission, conflict of personalinterest with employer’s interest.

(ii) Wilful disobedience to lawful order. Laws v. London Chronicles (1959) IWLR 698(iii) Illness: Where there is permanent incapacity caused by illness this might justify dismissal.

(iv) Negligence: Where an employee willfully or negligently fails to carry out his duties he maybe dismissed.

(v) Drunkenness, immorality and incompetence.

A dismissal becomes wrongful if it is not in accordance with the terms of the employee’s contract.Failure to follow the procedure prescribed by statutes in contract with statutory flavour or to observe

the rules of natural justice will render a dismissal wrongful and invalid. Cases of gross misconduct

may justify summary but if the employer so act as to lead to the resignation of the employee that

may constitute constructive dismissal and wrongful dismissal.

An employee may also maintain an action for unfair dismissal. To do this he must establish that his

dismissal was unfair and that the employer acted unreasonably. The employer to avoid liability must

show that he had a good reason for the dismissal and that they acted reasonably.

In Ewarami v. African Continental Bank (1978) the Supreme Court of Nigeria held that where anemployee had been wrongfully dismissal by his employer, it would adopt the view that the dismissal

was null and void and that such had never existed. In Shitta-Bey v. Federal Public ServiceCommission (1981) the apex court held that its willingness to order reinstatement is not restricted to

employment in the private sector, and that in appropriate cases the Court will order mandamus toissue to compel a public authority to reinstate a servant who has been improperly dismissed or

removed from office.

Where the charge giving rise to a disciplinary action against an employee involves an allegation of a

criminal offence the Supreme Court has held in Sofekun v. Akinyemi (1980) that the principle of

natural justice demands that the employee should be tried and that the constitution confers on him a

right to his innocence or guilt determined by a court or tribunal.

Redundancy: Under the Labour Act a contract of employment may be determined as a result of

redundancy. Redundancy is in involuntary and permanent loss of employment caused by an excessof manpower. There is a situation of redundancy if the employer dismisses the employee because:

(a) He closes down the business in which the employee is employed; or

(b) H e closes it down at a place where the employee has been employed; or

(c) The employer has a reduced need for employees to carry out the kind of work on which the

employee was employed; and

(d) The redundancy must have resulted from excess of manpower




48

The negative impact of the present economic downturn on industries and other business

organisations is alarming. This has necessitated reduction in the work force and rationalization of

corporate structures in many organisations. The introduction of the of computer technology into the

operation of many business outfits has resulted in less demand for labour. All these make the issue of

redundancy a very important one.

Corporate policies on deciding the category of employees to lay off differ. Issues like age, efficiency,

productivity are given thoughtful consideration. Options open to organizations include the Last In

First Out which is sanctioned by S.19(1) (b) of the Labour Act.

The right to a redundancy payment is given by section 19 of the Labour Act. To qualify the claimantmust be an employee in continuous service with the employer. He must show if required that he has

been dismissed by the employer and that the dismissal was by reason of redundancy Obaleye v.Dunlop Nig. Ltd.

It appears that where a change of working methods caused by the introduction of new technology

leads to the dismissal of an employee who does not understand the operation of the new machine and

does not make attempt to do so the employee is unlikely to succeed in a claim for redundancy North

Riding Garages v. Butternick.

The Workmen’s Compensation Act Cap 470 LFN 1990

This is an Act to make provisions for the payment of compensation to workmen for injuries suffered

the course of their employment. The ambit of this legislation is wide as it covers persons or

workmen having contract of service or private/apprenticeship is by way of manual labour clerical

work or otherwise and whether the contract is expressed or implied, oral or written. Section 3

outlines employer’s liability for compensation for death or incapacity resulting from accident

occasioned by personal injury by accident arising out of and in the course of employment. In M.A.

Smith v. Elder Dempster Lines Ltd. (1944), It was held that an employees who had already left his

place of employment and was passing across a number of tugs to a boat in which he had permissionto travel but which was not the only means of transit available to him and was injured when he

attempted to jump into the tug but fell into the water could not recover because the accident did notarise in the course of his employment.

The provision of section 3 does not apply to injury which does not incapacitate the workman for a

period of at least 3 consecutive days from earning full wages at the work at which he was engaged.

The Workmen’s Compensation Act does not apply if it is proved that the injury to a workman is

attributable to the serious and willful misconduct of that workman. In this case any compensation

claimed in respect of that injury shall be disallowed.

Where injury results in death or serious and permanent incapacity the Court on a consideration of all

the circumstances may award the compensation provided by this Act or such part thereof as it shall

think fit.

Section 4 deals with compensation in fatal cases. It states:

(a) Where the workman leaves any dependant wholly dependent on his earning the amount of

compensation shall be a sum equal to 42 months’ earning but where in respect of the same

accident compensation has been paid under the provisions of sections 5, 7 or 9 of this Act

there shall be deducted from the sum payable under this paragraph any sums so paid as

compensation;




49

(b) Where the workman does not leave any dependant wholly dependent on his earnings but

leaves any dependant in part so dependent, the amount of compensation shall be such sum, in

any case not exceeding the amount payable under paragraph (a) of this section as may

determined by the Court to be reasonable and proportionate to the injury of the said

dependant;

(c) Where the workman leaves no dependant reasonable expenses commensurate with the last

position held in his employment by the deceased shall be paid by the employer”.

Section 5 deals with compensation in the case of permanent total incapacity. Where permanent total

incapacity results from the injury, the amount of compensation shall be a sum equal to 54 months’earning’

Section 6 makes provision for additional compensation. It states

“Where an injury results in permanent total incapacity of such a nature that the injured

workman must have the constant help of another person, additional compensation shall be

paid amounting to one quarter of the amount which is otherwise payable under section 5 of

the Act”.

Section 7 is on compensation in the case of permanent partial incapacity. The Second Schedule to

the Act deals with this. Medical assessors are to assist in this connection.

Section 9 deals with compensation in the case of temporary incapacity.

It must be stressed that a judgment given in favour of the plaintiff in proceeding under the

Workmen’s Compensation Act is a bar to proceedings instituted by or on behalf of the plaintiff in

respect of the same injury independently of the Act as it was held in Mrs. B. T. Segun v. Messrs

West African Airways Corporation Ltd. (1957).

CHAPTER 5THE LEGAL FRAMEWORK OF INDUSTRIAL RELATIONS IN NIGERIA

Introduction

In their book, Industrial Law, Smith and Wood (1980) had this to say about the subject of Industrial

Law,

The subject of Industrial Law may be split for convenience if not for accuracy, into three

principal areas - Industrial safety law, employment law and the law relating to industrial

relations. Each has a different legal and social background, and until recently, the level (and

type) of legal involvement was markedly different in each.The learned writers noted that Industrial safety law has a history of statutory intervention dating backto the beginning of the 19th century, with formidable volume of case law on the statutes and on the

actions, which could be brought by an injured employee. Employment law, however, was based

almost entirely upon the common law concept of the contract of employment; and it attracted little

statutory intervention and even much of the common law, though extensive in theory, was a dead

letter in practice, principally due to the inadequacies of the remedies for breach of the employment

contract by the employer. Industrial relations law was characterized by the voluntary principle and

the abstention of the law (once legislation had been used in the latter part of the 19th century and the




50

first part of the 20th to legalise the operations of purposes of trade unions and to protect them and

their members from tortuous liability for industrial action); it is true that wage negotiation in certain

industries was encouraged by Wages Councils which were the creation of statute, but even here the

law merely provided for a minimum framework and did not attempt to impose legal rights and duties

on the substance of the negotiation itself.

Our focus here will be on Industrial relations law though as the above depicts, no watertight

compartmentalisation can be noticed among the three principal areas of Industrial law highlighted

above. For instance, it is a universal phenomenon for trade unions to negotiate safety conditions with

employers of labour. The negotiation between management and labour invariably impacts on the

terms and conditions of contract of employment.

Parties to Industrial Relations and their InterestsWho are the parties to industrial relations and what are their concerns? Schregle (1981) has put it in

this way: In every country, workers, employers and governments have both common and divergent

interests, short term and long term. The divergent interests are must be accommodated and

reconciled…The way in which such interests are expressed and reconciled is the subject of

industrial relations.

From the above, we can identify the three principal parties in industrial relations. These are workers,

and employers and government. The role of workers and employers can easily be understood sincethe existence of contract of employment is a condition precedent to industrial relations. The

traditional role of government is that of an impartial arbiter and this role is performed by laying

down of guidelines, which regulate the way, and manner in which the interests of workers and

employers are expressed and reconciled. Law is perhaps the post potent tool available to government

as mangers of the legal environment of industrial relations.

The concerns of the parties to industrial relations are both common and divergent. One common

interest is productivity. Governments cannot but pay attention to productivity in view of the impact it

has on their national economies. The concern of the Government of the Federal Republic of Nigeria

for productivity prompted the establishment of the National Productivity Centre through the National

Productivity Centre Act, Cap. 272, Laws of the Federation of Nigeria 1990 (formerly Decree 7 of1987). The long title to this legislation describes the legislation, as

An Act to establish the National Productivity Centre charged with the responsibility of promoting productivity improvement and consciousness in all sectors of the economy and to

provide for all other matters ancillary thereto.

If we accept the definition of productivity as the output of goods and services of an organization

relative to its inputs (labour, capital, materials, and so on), then a business organization must beproductive, to remain in business. For a trading outfit this translates to making profit. Employees

here have no choice but to accept this as a common goal for they cannot retain their jobs in the long

run if the business can only run at a loss. Employers who have their minds on the return on their

investment cannot but be interested in productivity.

Let us now consider the issue of divergent interests. The consideration furnished by employers for

the services performed by workers is the amount is the amount they pay as salaries, wages or any

other form of remuneration. It is natural for workers to desire better conditions of service and they

look forward to their employers for the satisfaction of this aspiration. The employer is howeverconscious of the returns he gets on his investment, so the more he can keep his running cost, whichinvariably includes the amount paid as salaries, low the more profits he makes. Government comes

into the situation to balance the competing interests of the parties.

It must, however, be stressed that the involvement of government in industrial relations is not always

as an impartial arbiter and this is evident in the fact that in most developing economies governments

are the principal employers of labour. There is some sort of conflict in the separate roles of

governments as managers of the legal environment and principal employers when governments use

the machinery of the State to further their interests as employers. The tendency is therefore for




51

government to be motivated by the consideration of their role as employers and to compromise their

role as an impartial arbiter. It has been pointed out by Player (1980), when considering the whether

government employment is a ‘right’ or a privilege as follows:This does not mean that governments may not have interests as employers that justify rules

and regulations that would not be justified if applied to the population at large. What it

means that those interests of the government as an employer and as government must be

weighed pursuant to an analysis that excludes the idea that employment is a privilege that

may be denied any person.

The consolation is that government is comprised of individuals who have obligation to promote the

well being of labour and management and the extent to which the impartial role has been played isreflected by laws including delegated legislation that relate to industrial relations. The idea of a

representative government also entails that all the arms of government charged with the duties ofmaking and implementing laws consist of individuals who form a cross-section of the generality of

people including by necessary implication those sympathetic to the overall views of labour andmanagement.

We may suggest as a working definition of industrial relations law, ‘the body of rules regulating theexpression and reconciliation of the common and divergent interests of workers, employers and

governments recognised as binding within a legal system’. The subject of Industrial relations has

many aspects but since we are mainly interested in its legal framework, we shall highlight legal

provisions as contained in the Constitution, relevant legislation and the common law. We mustalways bear it in mind that the expression of the divergent interests of the parties to industrial

relations emphasizes issues like organisation of workers and employers as groups and the legal

provisions regulating them. We cannot talk about reconciliation except when there is disagreement,

dispute or conflict. This aspect relates to the legal provisions for dealing with conflict when they

arise.

Constitutional Provisions

The Constitution is the supreme law of the land and its provisions are binding on all persons and

authorities. Section 40 of the Constitution of the Federal Republic of Nigeria 1999 gives backing to

the operation of association of workers and employers. The section provides inter alia:

Every person shall be entitled to assemble freely and associate with other persons, and in

particular he may form or belong to any political party, trade union or any other association

for the protection of his interests…If the above provisions are to be construed liberally, as liberalism is the approach of the Supreme

Court when construing constitutional provisions, they afford an individual the right to associate andthe right not to associate (or to dissociate) with any person or group. Within the context of our

discussion therefore a person has the right to belong to a trade union as well as the right not tobelong to one. We shall come back to this later when we discuss membership of trade unions.

The provisions of S. 40 of the Constitution are not absolute. Subsection (1) of section 45 recognizes

circumstances when the right conferred by section 40 can be derogated from and it states as follows:

Nothing in section 37, 38, 39, 40 and 41 of this Constitution shall invalidate any law that is

reasonably justifiable in a democratic society-

(a) in the interest of defence, public safety, public order, public morality or public health; or

(b) for the purpose of protecting the rights and freedoms of other persons.

There are other provisions of the Constitution particularly in Chapter II on the FundamentalObjectives and Directive Principles of State Policy, which have bearing on the welfare of persons inemployment but the provisions of the Chapter, are not justiciable. These provisions, which are aimed

at improving the lot of Nigerians, are contained in sections 13,16 and 17(3).

From the above, it will be observed that much attention is not paid to industrial relations matters in

the 1999 Nigerian Constitution except in a tangential manner. This approach contrasts sharply with

that adopted in some other jurisdictions, notably the Federal Republic of Germany and the Republic

of South Africa to mention a few.




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Common Law

The common law of England forms part of the body of laws received into the Nigerian legal system.

This invariably includes the decisions of English courts on industrial law and practice. The rules of

common law will apply in areas where only apply in areas where local legislation has not intervened.

To have a complete view of the law received into Nigeria, let us to the provisions of section 32(1) of

the Interpretation Act, Cap.192, Laws of the Federation of Nigeria. The subsection provides:

Subject to the provisions of this section and except in so far as other provision is made by the

Federal law, the common law of England, and the doctrines of equity, together with the

statutes of general application that were in force on the 1st day of January, 1900 shall, in so

far as they relate to any matter within the legislative competence of the Federal legislature,

be in force in Nigeria.

The expression ‘common law’ in the sense used in the above provisions refers to the basic law ofEngland developed by the judges of the old common law courts, but the term may also be used to

include all the rules of law which emanate from the decisions of courts. It is in this latter sense thatwe are adopting the expression ‘common law’. These rules are to be found in decided cases. The

common law is not a static system of law as it is continuously being modified to meet new situationsnot hitherto provided for by statutes nor addressed in previously decided cases.

As pointed out earlier, the practice of industrial relations is predicated on the existence of contractual

relationships between employers and the workers and each contract of employment is the focus of

the common law. Contracts of employment are regarded as the product s of free and personalbargains between the individual worker and his employer. Hence, the terms of collective bargaining

agreements are not treated as part of such a contract unless incorporated by express words or

necessary implication. In Stratford (J.T.) & Sons Ltd. v. Lindley [1965] A.C. 307, it was held that

English law would treat a trade union, which was involved in the private issue of employment terms,

as an interloper in what was essentially a private affair of master and servant.

The fact that the development of common law principles depends on accident of litigations and the

need to use the instrumentality of legislation correct judicial decisions explain why statutes have

been largely responsible for the legal framework of industrial relations.

Statutory ProvisionsThe 1999 Nigerian Constitution divides legislative responsibility between the federal and state

legislative bodies. Under this constitutional arrangement, the National Assembly has exclusivelegislative power in respect of:

Labour; including trade unions; industrial relations; conditions, safety and welfare of labour;industrial disputes prescribing a national minimum wage for the Federation or any part

thereof; industrial arbitrations.We shall now attempt to examine the provisions of some of the laws enacted in the exercise of the

above power.

The Trade Unions Act

The Trade Unions Act, Cap. 437, L.F.N. 1990 is the principal enactment regulating trade union

matters in Nigeria. The Act makes provisions for the formation, registration and organisation of

trade unions, federation of trade unions and the Central Labour Organisation. Section 1(1) of the Act

defines a trade union to mean:Any combination of workers or employers, whether temporary or permanent, the purpose ofwhich is to regulate the terms and conditions of employment of workers, whether the

combination in question could or would not, apart from this Act, be an unlawful combination

by reason of any of its purposes being in restraint of trade, and whether its purposes do or do

not include the provision of benefits for its members.

The above definition indicates that a trade union may be a combination of workers and of employers.

However, the expression ‘trade union’ will be used in its functional sense rather than in its strict

legal sense. Trade union in its functional sense is largely confined to a combination of workers. The




53

definition also underscores the principal purpose of trade unions and this is to regulate the terms and

conditions of employment of workers. A combination does not cease to be a trade union if any of its

purposes is in restraint of trade. Contracts in restraint of trade are contracts that place undue restraint

freedom of individuals to contract. The traditional common law view is that such contracts are

contrary to public policy and therefore void. This position has, however, been modified as such

contracts are enforceable if reasonable with reference to the interests of the parties and the public.

From the statutory definition of trade unions a combination of workers does not cease to be a trade

union whether its purposes do or do not include the provision of benefits for its members.

The Registrar of Trade Unions is required by section 5(7) of the Trade Unions Act, on the coming

into effect of the section, to register the trade unions specified in Part A and Part C of the ThirdSchedule to the Act and on such registration, the said trade unions shall have all the powers and

duties of a trade union registered under the Act. Trade unions not registered pursuant to the aboveprovisions have to apply for registration. Application for registration of a trade union is to be made

to the Registrar of Trade Unions in the prescribed form, which must be signed, by at least 50members in the case of workers’ union and two members in the case of employers’ union (S.3). The

application is to be accompanied by two copies of the rules of the union (i.e., the Constitution) whichmust make provisions for the matters specified in the First Schedule to the Trade Unions Act

(T.U.A.), as amended, and a list showing the name, address, age and occupation of each of the

persons by whom the application is signed and the official title, name, address, age and occupation

of each official of the union. Section 2 of the Act prohibits the operation of an unregistered tradeunion except for the purposes connected with having the union registered.

The Registrar is obliged to refuse the registration of a trade union ‘if it appears to him that any

existing trade union is sufficiently representative of the interests of the class of persons whose

interests the union is intended, to protect’ (section 5(4)). An appeal from the decision of the

Registrar lie to the Minister of Employment, Labour and Productivity and the Minister’s decision is

final (section 6(1) – (5)). In view of the provisions of the Trade Unions (Amendment) Act No. 4 of

1996 which made provisions for a scheme of merger of 41 unions into 29 and for the jurisdictional

scope of the said unions, one may therefore argue that the Registrar’s power seems unfettered as

respects a proposed trade union whose jurisdictional scope falls within that of any of the 29

industrial unions. The Registrar may, however, register as a workers’ union or a senior staffassociation, any trade union that satisfies the requirements of the law. The phrase ‘if it appears to

him’ came up for judicial interpretation in the leading case of Adegbenro v. Akintola [1962] 1 AllN.L.R.465 which turned on the interpretation of the provisions section 33(10) of the Constitution of

the Western Nigeria which empowered the Governor to remove the Premier if ‘it appears to him thatthe Premier no longer commands the support of a majority of the House of Assembly’. The Judicial

Committee of the Privy Council held by the words ‘it appears to him’ the maker of the Constitutionintended that the judgment as to whether the Premier no longer commanded the support of a majority

of the House was to be left to the Governor’s assessment without any limitation as to the material on

which he was to base his judgment or the contacts to which he might resort for the purpose.

A certificate of registration issued by the Registrar evidences the registration of a trade union. The

registration of a trade union entails a number of things. A registered trade union may sue or be sued in

its own name; it is exempted from the Personal Income Tax Act No. 104 of 1993, as amended; upon

change of its trustees its property without further assurance vests in the new trustees. Once a trade

union is registered the employers or the workers who are formed into the union must recognise theunion. Section 24(1) of the T.U.A. provides:

Subject to this section, where there is a trade union of which persons in the employment

of an employer are members, that trade union shall, without further assurance, on

registration in accordance with the provisions of this Act, be entitled to recognition by the

employer.

Where it is necessary the Minister may make a compulsory recognition order, which urges a named

employer to recognise a trade union as representing a group of employees in an organisation. The

recognition of a trade union enables it to deal with an employer for purposes, which include




54

collective bargaining in respect of wages and salaries, hours of work, and general conditions of

service and for such other ancillary matters as are normally within the competence of a trade union.

Collective bargaining by its very nature requires the organisation of workers and it is this gap that

trade unions fill. The unequal nature of employer and an individual worker makes recourse to this

arrangement imperative.

Reviewing the period 1993-98 in early 1999, Dr. Emmanuel Udogu, the incumbent Minister of

Employment, Labour and Productivity, said dismissing the idea that Senior Staff Associations and

employers’ Association were no longer in existence:

There are 29 industrial unions, 24 Senior Staff Associations, 19 employers’ associations and

one Central Labour Organisation: the Nigeria Labour Congress in Nigeria.

Statutory Provisions on Finances of Trade UnionsA trade union is an organisation. In Frost v. Clark & Smith (1975), a consultative committee that

represented workers was held not to constitute an organisation of workers because they had no name,they had no Constitution, they had no rules, they had no meetings, they kept no minutes, they had no

offices, they had no property and no funds. There are statutory provisions in the Trade Unions Act toensure trade unions function as organisations. We intend to focus on the fund of trade unions.

The sources of trade union funds may be internal or external. A trade union may invest its fund in

shares and other securities. It may also venture into some business if permitted by its Constitution.

However, the most important internal source of income for most trade unions is the amountcontributed by its members as subscriptions and dues. The Constitution of a trade union usually

regulates how the exact amount is determined. The Constitution of a trade union constitutes a

contract between a trade union and each member. A member is thus bound to fulfil his responsibility

in terms of financial contribution for as long as he remains one.

The Check-Off

The check-off is the amount deducted from the wages or salaries of eligible members of a trade

union, representing the member’s contribution and transmitted directly to the registered office of the

trade union. There are two separate legal regimes on the check-off system in Nigeria. The basis of

dichotomy appears to be the affiliation or otherwise of a trade union to the Nigeria Labour Congress.

Let us examine the provisions of the Trade Unions Act.Section 16A was introduced by the Trade Unions (Amendment) Act No. 4 of 1996. This law was

promulgated as Decree No. 4 of 1996. This section in line with the general philosophy of the saidlaw to remove the anomalies in the pre-existing structure of trade unions caused by duplication,

amorphous structure and overlapping jurisdiction in order to eradicate the numerous intra uniondisputes and litigation and to assist trade unions to overcome the anomalies and achieve internal

cohesion, and be more viable and capable of standing on their own without recourse to internal orforeign aid, has made provisions for the check-off in respect of unions affiliated with the N.L.C.

Incorporating the amendment to the section effected by the Trade Unions (Amendment) Act No. 1 of

1999, the provisions read as follows:

Upon the registration and recognition of any of the trade unions specified in the Third

Schedule to this Act, the employer shall-

(a) make deductions from the wages of every worker who is eligible to be a member of any of

the trade unions for the purpose of paying contributions to the trade union so registered;

and(b) pay any sum so deducted directly to the registered office of the union:Provided that compliance with the provisions of this section of this Act shall be subject to

the insertion of a ‘No Strike’ clause in the relevant Collective Bargaining Agreement between

the workers and their employers.

The above provisions draw a distinction between registration and recognition of a trade union.

Registration is a matter handled by the Government and the responsible functionary of the State is

The Registrar of Trade Unions. It is after a trade union has been registered that employers are




55

obliged to recognise it. The Court of Appeal in Udoh v. Orthopaedic Hospital Management Board

[1990] 4 N.W.L.R. 52 gave recognition to this distinction.

The provisions of the above section do not apply to all trade unions, but rather, as it is expressly

stated, they relate only to the unions listed in the Third Schedule. It must be pointed out that at the

time the above amendment was introduced, only the unions affiliated to the N.L.C. were listed in the

Third Schedule. The main criterion in the above provisions is the eligibility of a person to be a

member of a trade union. In line with the philosophy of the enabling law referred to above, it does

not appear that a person eligible to be a member of an appropriate trade union can contract out of this

arrangement. Even if a person decides to terminate his membership of a trade union, he will be

obliged to pay, or to put it more correctly, his employer is obliged to deduct his contribution and payit to the appropriate trade union. The check-off system applicable to trade unions affiliated to the

N.L.C. can therefore be described as the automatic and compulsory check-off system. It isautomatic in the sense that a worker does not have to contract in before he is liable to have his

contribution to his union as check-off deducted. It is also compulsory because it does not appear aworker can contract out of this arrangement. If he attempts to do this, the employer is not

empowered to countenance his decision.With respect to the senior staff associations, the appropriate provisions on the check-off are to be

found in section 5(4) of the Labour Act, Cap 198, L.F.N. 1990. This subsection states:

No deduction shall be made from the wages and salaries of persons who are eligible members of any

of the trade unions specified in Part B of Schedule 3 to the Trade Unions Act except the personconcerned has accepted, in writing to make voluntary contributions to the trade union.

By way of a preliminary observation, we wish to remark that the reference to Part B of Schedule 3 to

the Trade Unions Act will have to be construed as Part C of the Third Schedule to the same Act. The

Trade Unions (Amendment) Act No. 1 of 1999 has restored the list containing Senior Staff

Associations, which was wrongly repealed as a result of the inelegant drafting of the Trade Unions

(Amendment) Act No. 4 of 1996. Part C of the Third Schedule is titled ‘Senior Staff and Employers’

Association’, and it contains 24 senior staff associations and 20 employers’ association. Item 45 on

the list relates to ‘Any other Unions of Senior Staff registered after 3rd

August, 1977’.

The provisions of section 5(4) of the Labour Act may be said to have prescribed a voluntary check-

off system for trade unions that are considered by law to be senior staff associations. This entails thateligible members of these trade unions must contract in before the check-off can be deducted.

Furthermore, the necessary inference, which can be drawn from this, is that such persons may freelycontract out by informing their employers to that effect.

The overall impression one could make from the above position of the law is that the combinedprovisions of the Trade Unions Act and the Labour Act are thus leaving room for enthronement of

discrimination in the treatment of trade unions. This is no doubt contrary to the noble role whichgovernments are expected to play in industrial relations. Looking at it from the angle of members of

trade unions, persons who are eligible to belong to the industrial unions affiliated to the N.L.C., are

not inferior or constitutionally endowed with lesser rights and privileges to warrant their less

prestigious treatment. However, we recommend a common basis for treating all employees’ unions.

There are a number of objections to the less enviable treatment of senior staff associations. First, it

cannot be appreciated while the law regulating the check-off for all categories of trade unions are not

contained in the same piece of legislation. The Trade Unions Act is the proper place to look for such

provisions, more so when the Act seems largely to take the form of a Code, which should provide ananswer to basic questions on trade union matters. Secondly, a fundamental problem, which the aboveprovisions of the Labour Act ignore, is the absence of selective application of benefits of industrial

struggle spearheaded by unions only to union members. This therefore gives rise to a situation, in

which non-union members are permitted to reap from where they did not sow. Thirdly, the statutory

restructuring of some trade unions along industrial lines has in some instances blurred the dichotomy

between senior staff associations and workers’ unions and in view of the fact that senior staff

members of such industrial unions are made subject to the automatic and compulsory check-off

regime, there is no reason while the same system could not be extended to trade unions comprised




56

exclusively of senior staff members. Fourthly, the existence of two check-off systems has adversely

affected participation in trade union activities. Some employers have in order to sideline many

eligible members resorted to a wide definition of their management staff to ensure only an

insignificant number would remain to constitute what may be said to be a senior staff association. It

must be remarked that there is no objective means of determining who is a senior staff in private

sector employments, unlike the case with public sector employment where any person on Grade

Level 07 and above is by the Public Service Rules as revised in 2000, prescribed to be a senior staff.

This has enabled some employers to adopt a policy that regards some employees as senior staff

though salary-wise they are junior staff and this is done with the ulterior motive of weakening trade

unionism in such organisations.Protection of Union Funds

Let us highlight statutory provisions that seek to secure the funds of trade unions. By section 15(1)of the T.U.A., a trade union is prohibited unless its rules otherwise provide, from expending its funds

directly or indirectly in furtherance of any political objectives in so far as the funds representpayments which members are required to make under its rules. Section 15(2) makes it an offence to

apply the funds of a trade union to the furtherance of political objectives. A decision of the CentralWorking Committee of a trade union to fund the electioneering campaign of a politician who has

sympathy for the union will be illegal.

Section 16(1) of the T.U.A. provides that the fund of a trade union shall not be applied whether

directly or indirectly or through any other trade union, association or body for the purpose of anylegal proceeding relating to election or appointment into any office. Section 16(2) makes

contravention of the above provisions a criminal offence and a person found guilty is liable on

conviction to a fine of N5, 000. 00.

As a preventive mechanism to avert contravention of the above provisions, section 18 of the T.U.A.

makes provisions for the grant of injunction to restrain misapplication of the funds of trade unions.

Upon the application of the Attorney-General of the Federation or the Registrar or of any 5 or more

members of a trade union an injunction may be granted by the appropriate High Court to prevent

unauthorised or unlawful application of union funds. The Court may in addition order that the whole

or any part of the funds of a trade union in respect of which application is made be paid over to the

Public Trustee to be administered or disposed of in accordance with the rules of the union. Theprovisions of section 43(1) of the T.U.A. which give trade union immunity against any tort action

subject to the tort being committed either in contemplation or in furtherance of a trade dispute areaimed at protecting trade union funds. But for these provisions damages would have been payable

from the funds of trade unions for torts committed during an industrial action. Section 43(2) howeverstates that nothing in subsection (1) shall prevent an act in contemplation or in furtherance of a trade

dispute from being actionable in tort if it is not on any of the grounds mentioned in the saidsubsection.

There are also provisions in section 39 of the T.U.A on rendering and auditing of accounts of trade

unions.

Membership of Trade Unions

Section 52 of the Trade Unions Act which is the interpretation section, defines a member of a trade

union to mean, ‘a person normally engaged in a trade or industry which the trade union represents

and a person either elected or appointed by a trade union to represent workers interest’. There are

thus three ways by which a person may be a member of a trade union. First, a person may be amember by his engagement in the trade or industry which the trade union represents; secondly, aperson may be a member by virtue of his election by a trade union to represent its interest; and

thirdly, a person may be a member by virtue of his appointment by a trade union to represent its

interest. Most members of trade unions come under the first category. The Constitution of a trade

union regulates qualifications to stand elections into union offices, and membership under the first

category is often a prerequisite. Members under the third category are in strict sense union

employees appointed to certain responsible offices. This has taken care of the role of modern day

administrators who have responsibility for the conduct of affairs of union secretariats. By providing




57

for a definition of a member of a trade union as spelt out above, the Trade Unions (Amendment) Act

No.1 of 1999 can be said to have retraced the step which the Trade Unions (Amendment) (No. 2)

Decree No. 26 of 1996 took by defining a member as a card-carrying member of a trade union. The

provisions of old section 33(8) inserted by Decree No.26 of 1996 which made it unlawful for any

person, not being a card-carrying member of a trade union to participate and assume functional role

in any of the policy or decision making organs, committees (or formulations by whatever name

called) within the union or the Central Labour Organisation except if the function was strictly limited

to administrative duties only, were repealed by Act No. 1 of 1999, thus giving union employees

unrestrained power to participate.

We have considered the implication of Section 40 of the 1999 Nigerian Constitution that guaranteesthe right of association and its general purport. It has also been shown that this constitutional

provision is not absolute. In the light of this members of the armed forces, the police and civilianpersonnel therein, fire brigade, and staff of the Central Bank of Nigeria (CBN), Security and Minting

Company, among others are prohibited from membership of trade unions. The T.U.A. excludes anyperson below the age of 16 from being a member and any person below the age of 21 from being an

officer of a trade union. Also, no staff recognised, as a projection of management within themanagement structure of any organisation shall be a member of or hold office in a trade union.

Section 3(4) states inter alia:

A person may be recognised as a projection of management within a management structure if his

status, authority, powers, duties and accountability which are reflected in his conditions ofservice are such as normally inherent in a person exercising executive authority (whether or

not delegated within the organisation concerned).

As it has been pointed out, the right to associate if liberally construed includes the right not to

associate with a group of people. Membership of a trade union is therefore voluntary. This however

does not affect the liability of a person to make contributions, to a trade union of which he is eligible

to be a member, deducted from his salaries where the automatic and compulsory check-off system

obtains. The right not to associate is recognised by the Labour Act section 9(6) of which states:

No contract shall make it a condition of employment that a worker shall or shall not join a

trade union or shall or shall not

(a) relinquish membership of a trade union; or

(b) cause the dismissal of, or otherwise prejudice a worker

(i) by reason of trade union membership; or(ii) because of trade union activities outside working hours or, with the consent of

the employer, within working hours; or

(iii) by reason of the fact that he has lost or been deprived of membership of a

trade union or has refused or been unable to become or for any other reason

is not, a member of a trade union.

Where there is disagreement as to the true meaning of the rules of a trade union, such dispute may be

referred to the Industrial Arbitration Panel or the National Industrial Court for determination. A

member who complains of a breach of a specific section or rule of the Union rules or Constitution

may institute an action on the basis of the contract between him and the Union that the Constitution

regulates. In Bonsor v. Musicians’ Union [1956] a member who was wrongfully expelled from a

registered trade union successfully maintained an action for breach of contract against the union in

its registered name.Amendment to the Constitution of a union must comply with the provisions contained therein. Suchamendment must also be registered with the Registrar of Trade Unions before they can take effect. In

Nigeria Civil Service Union v. Essien [1985] 3 N.W.L.R. 306, the Court of Appeal held that where

an alteration or amendment of a Union in accordance with their Constitution is communicated to the

Registrar in the usual manner and he having satisfied himself that the alteration or amendment does

not contravene the provisions of the T.U.A. and records or takes note of the amendment or alteration

in an official record kept for the purpose, the amendment or alteration is considered registered. The




58

Registrar cannot impose terms, which are not prescribed in the T.U.A. on registration of amendment

or alteration of a Union’s Constitution.

A registered trade union is permitted by law to carry on activities ordinarily carried on by a trade

union in furtherance of its purposes. A trade union may however cease to operate under diverse

circumstances, which include compulsory dissolution and voluntary dissolution. A trade union will

also cease to exist it, in accordance with the provisions of the Trade Unions Act, it merges with

another trade union. In such circumstances, the Registrar is to call for the certificates of registration

of the merging unions and to issue another for the merged union. The Registrar of Trade Unions is

empowered to cancel the registration of a trade union if any of the events highlighted in section 7 of

the Trade Unions Act is proved to his satisfaction but he is required to give some sort of hearing to atrade union whose licence he proposes to cancel. The events highlighted in the said section largely

indicate that a union has ceased to operate or that its activities are contrary to the provisions. Anappeal against any proposed cancellation of the registration of a trade union by the Registrar may be

made to the appropriate court

The Minister may due to overriding public interest revoke the certificate of registration of any trade

union specified in Part A of the Third Schedule to the T.U.A., that is, the industrial unions affiliatedto the N.L.C. (section 7(9)). The phrase ‘overriding public interest ‘ is not defined in the Trade

Unions Act, and one must express some dissatisfaction about the retention of this mode of

compulsory dissolution of a trade union in a democratic dispensation. The Trade Unions

(Amendment) Act No. 1 of 1999 which set its objective in its preamble as ‘ to ensure the smoothrunning and peaceful transition from guided to free and democratic trade union activities’, left the

above provisions intact notwithstanding the large scale transfer of some quasi-judicial powers of the

Minister to the appropriate court which is defined to mean ‘the Industrial Arbitration Panel and the

National Industrial Court as the case may be’.

A trade union is obliged to comply with all the requirements of the law as contained in relevant

statutes. In appropriate cases, it is possible to ‘lift the veil of registration’, to ground the liability of

officers of a trade union. A union must comply with the provisions of the Trade Disputes Act

especially in period of industrial conflict. We shall now examine highlights of the Trade Disputes

Act.

G. The Trade Disputes ActThe provisions of the Trade Disputes Act, Cap 432, L.F.N. 1990, as amended focus mainly on the

mechanism for the resolution of industrial conflicts or trade disputes. A trade dispute is defined insection 46(1) of the T.D.A. to mean ‘any dispute between employers and workers or between worker

and workers, which is connected with the employment or non-employment, or the terms ofemployment

and physical conditions of work of any person’.It must be remarked that the existence of a trade union or otherwise does not have any direct bearing

on

the possibility of a trade dispute. However, a trade dispute is one in which a worker is

involved as an individual or as a member of a group, be it a trade union or any other group of

persons. The definition of trade dispute cannot be said to be free from ambiguity and this is a

critical factor in determining the appropriate forum to seek legal intervention, but a dispute

connected with mere personal quarrels, grumbling or agitations has been held not to be a trade

dispute. Hauntley v. Thorton [1967].The mechanism for the resolution of a trade dispute in a particular case depends on whether there isan agreed means of settlement between the parties or not. In the former case, it is expected that the

existing machinery provided in the agreement would be explored. Where this attempt fails, the

parties are within 7 days required to agree on a mediator selected by them or otherwise (S. 3).

Where the mediator fails in his task, he is expected to report to the Minister within 3 days.

The Minister is also empowered to take certain steps to forestall industrial crisis. This may take the

form of appointing a Conciliator under section 7, or referring the dispute to the Industrial

Arbitration Panel (I.A.P.) under section 8 or to a board of inquiry as provided for in section 32.




59

Where a Conciliator succeeds in resolving a dispute this will be reported to the Minister

accompanied by a memorandum of the terms of settlement duly signed by the representatives of the

parties to the dispute. Where this approach is not successful then the dispute will be referred to the

I.A.P. within 24 days of the receipt of the report of the Conciliator.

The Industrial Arbitration Panel (I.A.P.) is constituted in such a way as to include 2 persons

nominated by organisation representing the interests of employers and 2 representing the interests of

workers. The Panel consists of the Chairman, the Vice-Chairman and 10 members including

representatives mentioned above. The Panel is to constitute an arbitration tribunal and this may take

the form of a sole arbitrator, a single arbitrator assisted by assessors, one or more arbitrators

nominated by or on behalf of representatives of employers and workers in equal number with theChairman or Vice-Chairman presiding. All the arbitrators are appointed from the members of the

I.A.P. The I.A.P. is expected to make an award within 21 days or any other period approved by theMinister. Failure to comply with the award as confirmed by the Minister is an offence punishable

with a fine of N200.00 or 6 months imprisonment or a fine of N2, 000.00 in the case of a corporateoffender. Continuous and subsequent breaches also attract punishments.

An appeal lies as of right from the decision of the I.A.P. to the National Industrial Court. Also, indeserving cases the Minister may refer a dispute direct to the N.I.C. The provisions of section 1(A)

of the Trade Disputes (Amendment) Act No. 42 of 1992 suggest that the N.I.C. could deal with all

trade disputes as well as inter-union and intra-union disputes to the exclusion of all other courts. It

however appears that the above arrangement is subject to the provisions of the Constitution, whichconfer jurisdiction on the Federal high Court and the High Courts of the States depending on the

parties. It has been argued elsewhere that statutory provisions cannot unless there is a provision to

that effect in the Constitution, abridge the jurisdiction of a Court established by the Constitution.

The award of the N.I.C. is expressed to be binding on the employers and workers to which it relates.

Section 20(3) of the T.D.A. states that an appeal from the decision of the N.I.C. shall lie as of right

to the Court of Appeal on questions of fundamental rights as contained in the Constitution. In other

cases, it would appear the decision of the N.I.C. is final. This is because appeal is a question of law

and a right of appeal must be conferred expressly by statute.

Section 19(2) of the T.D.A. states that the National Industrial Court shall be a superior court of

record. It is submitted that this provision is expressly repudiated by the provisions of the 1999 Nigerian Constitution, which by the combined effect of section 6(3) and (5) has foreclosed the

existence or emergence of any superior court of record outside those directly established by theConstitution.

Section 14 of the T.D.A. assigns to the I.A.P. and the N.I.C. jurisdiction to interpret awards on theapplication of the Minister or any party to a trade dispute. The N.I.C. may, either after hearing the

parties to the award or with their prior consents without hearing them, decide the matter and thedecision of the Court shall be final. There may be a direct reference to the N.I.C. where a dispute is

one to which workers employed in any essential service are a party or in the circumstances in which

reference of the dispute to an arbitration would not be appropriate. Section 20(1) relates to the

exclusive jurisdiction of the N.I.C. to make awards for the purpose of settling trade disputes and to

determine question as to the interpretation of any collective agreement, any award made by an

arbitration tribunal or by the court under Part 1 of the Act, and the terms of settlement of any trade

dispute as recoded in any memorandum under section 7 of the Act. The N.I.C. is empowered to

enforce its award and it has power to commit for contempt.The N.I.C. consists of a President, who must be legally qualified, and 4 ordinary members. TheCourt may, however, sit with all its five members or 3 members including the President (section

19(2) and (3) of the T.D.A.). The composition of the N.I.C. has not justified the heavy responsibility

placed on it and this is an indication that the exclusive jurisdiction of the Court in trade dispute

matters is an arm-twisting device. The arrangement is meant to perpetuate delay and justice delayed

is justice denied. This is particularly important in the light of the provisions off section 17, which

prohibits lockouts and strikes before the issue of award of the N.I.C. Section 42 has special

provisions with respect to payment of wages during strike and lockouts. While a worker is not




60

entitled to any remuneration for the period of a strike, the employer who locks out his workers is

under liability to pay. The Minister’s decision as to whether there has been a lockout is final. The

provisions of Nigerian law on strike can be said not to be realistic. The law overlooks the fact that on

the part of workers, strike is accepted as the ultimate sanction in the collective bargaining process.

The law may be said to have fallen short of its expected role here as it leans in favour of employers.

Ubeku (1983) remarked:

The law…plays a mediating role between those individuals or groups who wield economic

power and the interest of those likely to suffer by its exercise.

Collective Agreements

The N.I.C. and I.A.P. come across collective agreements in the course of performing their work.Section 47 of the T.D.A. defines ‘collective agreement’ to mean,

any agreement in writing for the settlement of disputes and relating to terms of employment

and physical conditions of work concluded between (a) an employer, a group of employers or

one or more organisations representative of employers on the one hand, and (b) one or more

trade unions, or organisation representing workers or the duly appointed representatives of

any body of workers, on the other hand.

The question of enforceability of collective agreement has always arisen. In Nigerian-Arab Bank

Ltd. v. Shuaibu [1994] 4 N.W.L.R. 450 at 469, Ndoma-Egba J.C.A. said collective agreements arenot generally intended to create legal relations except in the case of certain public Boards and

Corporations. They are, according to him, ‘a gentleman’s agreement, an extra-legal document totally

devoid of sanction’. He said they are binding in honour only and that their enforcement must depend

on industrial and political pressure.

In A.C.B. PLC. v. Nwodika [1996] 4 N.W.L.R. 470 it was held that for a collective agreement to be

binding it must be incorporated or embodied into conditions or contract of service. A clause in the

probationary appointment in a private company in Nigeria which states as follows: ‘Please note that

while in the employment of the company, you shall be bound by the conditions of service as

contained in the Collective Agreement relevant to your grade’, may be said to have incorporated

Collective Agreement into the contract of service of the affected employees. In Nwobosi v. A.C.B.

Ltd. [1995] 6 N.W.L.R. 653 it was said that where a party against whom a collective agreement is

sought to be enforced has pleaded and relied on it, it would be binding. The law does not allow aparty to approbate and reprobate at the same time. In Ben Chukwumah v. Shell Petroleum

Development Company of Nigeria [1993] 4 N.W.L.R. 653, the Supreme Court held that anextraneous agreement (Joint Venture Agreement) not entered into by the parties to a contract of

service cannot be made the basis of an action by an employee unless it is incorporated into thecontract of employment of such employee.

In English law a distinction is drawn between the substantive aspects of collective agreement (i.e. the

wage rates and other terms of employment), which gain effect by incorporation into individual

contract of employee covered, and those aspects that bind the employer and trade union (procedures

or length of time to elapse before negotiation) informally. In the latter case the collective bargain

itself is not legally binding: Ford Motors Co Ltd. v. A.U.E.W. [1969] 2 Q.B.303

The Trade Disputes Act makes provisions for the deposit of 3 copies of any collective agreement for

the settlement of a trade dispute by the parties thereto with the Minister who may then make an orderas to the provisions that shall be binding on the parties. Once the Minister has done this, it willappear the binding force of the agreement derives from statute and not contract.

Conclusion

An attempt has been made in this to highlight the way in which the interests of workers, employers

and governments can be expressed and reconciled. The expression of interests relates to the legal

framework on registration and recognition of trade unions and provisions meant to guarantee their

viability, both numerically and financially. The appropriate provisions of the Trade Union Act have

been discussed in this connection. The performance of Government over the years with respect to its




role in industrial relations has been conditioned by the nature of its involvements in particular trade

disputes. In circumstances where the Government is particularly affected the role of the various

machinery for settling trade disputes comes to fore as impartial arbiters. However, the same

expectation may not be forthcoming where Government as the legal and functional employer is a

party to a trade dispute. It is of utmost importance for Government to see trade unions as agents of

development in the body politic. Arthur Johnstone, ex-Director of the Commonwealth Trade Union

Council, whilst reacting to the question that trade unions are dying, in the Commonwealth bulletin,

Current , Vol. 3, 1997, said:

Trade unions influence the lives of millions of workers, members and non-members alike.

Many workers who have never been members of a trade union are the direct beneficiaries ofimprovements in wages, conditions, including health and safety, and social provisions

negotiated by trade unions. There will always be a need for trade unions to act in arepresentative manner for workers. The unequal nature of the employment contract in itself

dictates this.

Arthur Johnstone reiterated the Commonwealth Trade Union Council’s philosophy on a social

partnership approach to development, which according to him, ‘does not undermine the traditionalrole of unions but in fact enhances the contributions that unions can make to development. The

collective experience of trade unions as social partners needs to be harnessed for development.’

The above is quite apposite in developing countries including Nigeria.

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