What contract means
A contract is a promise the courts will stand behind.
People make agreements all day. Most of them are not contracts, because the law only enforces those with a particular set of ingredients.
There must be an offer, a definite proposal on stated terms. There must be acceptance of that offer, matching it rather than changing it, because a counter proposal is a new offer rather than an acceptance. There must be consideration, meaning something of value moving each way, since a bare promise to give somebody something is generally not enforceable. There must be an intention to create legal relations, which is presumed in commercial dealings and presumed absent in family and social arrangements. The parties must have capacity, and the purpose must be lawful.
Miss one and there is no contract, however sincere everybody was.
How it is used
Almost everything commercial is a contract, whether or not anybody wrote it down.
Buying goods, employing somebody, renting a flat, engaging a freelancer, taking a loan, appointing a distributor. A verbal agreement to supply cartons of soap for an agreed price is as much a contract as a fifty page distribution agreement.
What writing does is prove it. Nigerian contract disputes are almost never about the law. They are about what was agreed, and the party with the document wins that argument.
A contract worth signing covers the parties and their full details, exactly what is being provided, the price and payment terms, the timeline, what happens if either side fails to perform, how the contract can be ended, who owns what is produced, confidentiality where relevant, which law applies and how disputes are resolved. Everything else is commentary.
Key features
- Requires offer, acceptance, consideration, intention, capacity and legality
- Can be verbal, written or partly both, with limited exceptions
- A counter offer rejects the original offer rather than accepting it
- A deed is binding without consideration but must be executed formally
- Only the parties can generally sue on it, under the doctrine of privity
- Remedies for breach are damages, and sometimes specific performance or an injunction
How this works in Nigeria
Nigerian contract law is common law based, with statutory overlays in specific areas such as the sale of goods and consumer protection.
Some contracts must be evidenced in writing to be enforceable, and contracts concerning land are the important example. An agreement to sell land that exists only in conversation is very difficult to enforce, which is one reason Nigerian land transactions generate so much litigation.
Stamping matters too. Instruments attract stamp duty, and an unstamped instrument can face difficulty being admitted in evidence until the duty and any penalty are paid. It is cheap at the time and awkward later.
The practical Nigerian reality is that a great deal of business runs on trust and WhatsApp. That is a contract, and screenshots have been accepted as evidence, but reconstructing terms from a scrolling chat is a far worse position than opening a signed document. The cost of writing it down is an afternoon. The cost of not doing so is measured in months of dispute.
Simple contract vs deed
Two ways to make a binding commitment, and the difference matters more than most people realise.
A simple contract requires consideration. Each side must give something of value. It can be verbal or written, and the limitation period for suing on it is commonly six years under Nigerian state limitation laws.
A deed does not require consideration. A promise made by deed binds even where the other side gives nothing, which is why gifts, powers of attorney and land transfers are made by deed. It must be executed formally: signed, sealed or expressed to be a deed, witnessed and delivered. The limitation period is commonly twelve years.
So if you are promising something and receiving nothing in return, a simple written agreement may not bind you, and a deed will. That is why a deed of assignment, not a sale agreement, is what actually transfers Nigerian land.
Limits and risks
A contract binds only the parties to it. Under the doctrine of privity, somebody who benefits from a contract but did not sign it generally cannot sue on it, which surprises people who assumed a promise made about them was theirs to enforce.
Contracts also fail for reasons unrelated to fairness. An agreement for an unlawful purpose is unenforceable, a party without capacity is not bound, and terms too vague to be given meaning cannot be enforced.
Signing without reading is not a defence. Nigerian courts hold parties to what they signed, and the argument that you did not understand the document rarely succeeds between commercial parties.
And enforcement is slow. A valid contract, clearly breached, still means a court process to recover anything, which is why the dispute resolution clause deserves real thought before signing.
Worth knowing
Get the payment terms, the termination clause and the dispute resolution clause right before you worry about anything else. Those three decide what happens when the relationship goes wrong, which is the only time anybody reads the contract.
Questions people ask
What makes a contract valid in Nigeria?
An offer, an acceptance of that offer, consideration moving both ways, an intention to create legal relations, parties with capacity, and a lawful purpose. Missing any one of these means there is no enforceable contract.
Is a verbal agreement a contract in Nigeria?
Usually yes. Verbal contracts are enforceable, with limited exceptions such as contracts concerning land, which must be evidenced in writing. The difficulty is proving what was agreed, which is why writing matters.
Is a WhatsApp conversation a contract?
It can be. Messages showing an offer, an acceptance and agreed terms can amount to a contract, and screenshots have been used as evidence. Reconstructing terms from a chat is still a much weaker position than a signed document.
What is the difference between a contract and a deed?
A simple contract requires consideration from both sides. A deed binds without consideration but must be executed formally, signed, witnessed and delivered. Deeds also carry a longer limitation period, commonly twelve years rather than six.
Can I get out of a contract I signed without reading?
Very rarely. Nigerian courts hold parties to what they signed, particularly in commercial dealings. Misrepresentation, duress or a fundamental mistake may give a route out, but not simply having failed to read it.
What should every contract contain?
The parties and their details, exactly what is being provided, price and payment terms, the timeline, what happens on failure to perform, how it can be terminated, ownership of anything produced, confidentiality, governing law and dispute resolution.