LAW REFORM (CONTRACTS) LAW

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LIST OF LAWS OF LAGOS, [ALPHABETICAL]  

LAW REFORM (CONTRACTS) LAW

ARRANGEMENT OF SECTONS

Part 1

1.       Form of contract

2.       Form of writing

3.       Form of signature

4.       Duty of good faith and fair dealing

5.       Rules Governing time of acceptance

6.       Rule of fundamental breach

Part 2 – Frustrated Contracts

1 .      Provision as to application of this part of this law

8.       Adjustment of rights and liability of parties to frustrated contracts

Part 3 – Enforcement of Contracts

9.       Enforcement of contracts for sale, etc. of land

10.     Consideration for guarantee need not appear in writing

Part 4 – Miscellaneous

I1.     Repeal

12.     Interpretation

13.     Citation and commencement

LAW REFORM (CONTRACTS)

A LAW TO REFORM SOME ASPECTS OF THE COMMON LAW OF CONTRACT, STRENGTHEN COMMON LAW CAUSES OF ACTION AND REMEDIES AND MAKE PROVISIONS FOR FRUSTRATION AND ENFORCEMENT OF CONTRACTS IN LAGOS STATE

[Commencement]                                                           [25th May, 2015]

PART 1 – General Forms and Terms of Contract

1.      Form of contract

Subject to the provisions of Part 3 of this Law and the express agreement of the parties, a contract can be made in any form including electronic or other forms of recording.

2.      Form of writing

Where a contract is required under this or any other Law to be in writing, writing will include electronic messages such as telegram., telex, facsimile, electronic data exchange, electronic mail and any other electronic messaging form which is capable of expressing its contents in a tangible form.

3.      Form of signature

Where a contract is required under this or any other Law to be signed by a party, a signature will include digital signatures comprising encryption and other processes that indicate the intent of the party to identify itself, adopt or accept the terms or verify the content of the record or any attachment.

4.      Duty of good faith and fair dealing

(I)      Parties to a contract will act in accordance with principles of good faith and fair dealings in exercising their rights and performing their obligations in the light of the nature and purpose of the contract.

(2)    In addition to any other remedies provided by law, a court may in appropriate cases award damages for non-pecuniary losses such as inconvenience, annoyance, emotional distress and any consequential losses arising from the breach of the duty to act in good faith and fair dealings in the performance and enforcement of contractual rights and obligations.

5.      Rules governing time of acceptance

(1)    Subject to the express agreement of the parties, the provisions of this section will govern the time when the acceptance of a contract is deemed to have taken effect.

(2)    Acceptance of a contract by post will not become effective until the letter of acceptance is delivered to the correct postal address of the addressee or to the addressee personally or through his agent.

(3)    Where a contract is concluded by the exchange of electronic messages, acceptance is deemed to have taken place-

(a)    when the electronic message enters into any specific system designated by the recipient; or

(b)     where no specific system has been designated, when the electronic message first enters into any of the recipients systems for the receipt of such messages.

6.      Rule on fundamental breach

A party in a consumer contract will not by reference to any contract term or standard terms of business (including exclusion clauses) be able to exclude or restrict any liability on his part with respect to a breach, where such a party is in fundamental breach of the contract.

PART 2 – Frustrated Contracts

7.      Provision as to application of this part of this law

(1)    Where a contract contains provisions governing matters covered by subsection

(2)    of this section, the court will give effect to the provisions of the contract and any provisions of subsection (2) not inconsistent with provisions of the contract.

(2)    Where it appears to the court that a part of any contract can properly be severed from the remainder of the contract, the court will treat that part performed contract of the contract as if it were a separate contract and had not been frustrated and will treat section 8 of this Law as only applicable to the remainder of that contract.

(3)    This provision of the Law will not apply to any-

(a)     charter-party, except a time charter-party or a charter-party by way of demise, or to any contract (other than a charter-party) for the carriage of goods by sea ; or

(b)     contract of insurance, save as is provided by subsection (6) of section 8 of this Law; or

(c)     contract to which section 8 of the Sale of Goods Law, (which avoids contracts for the sale of specific goods which perish before the risk has passed to the buyer) applies, or to any other contract for the sale, or for the sale and delivery, of specific goods, where the contract is frustrated by reason of the fact that the goods have perished.

8.      Adjustment of rights and liability of parties to frustrated contract

(1)     Where a contract has become frustrated and the parties have for that reason been discharged from the further performance of the contract, the following provisions of this section will, subject to the provisions of section 7 of this Law, have effect in relation to the contract.

(2)     All sums paid or payable to a party in accordance with the provision, the contract before the time when the parties were so discharged (“the time of discharge”) will, in the case of sums so paid, be recoverable by the person who paid the sum and in the case of sums payable, cease to be payable.

(3)     If the party to whom the sums were paid or payable pursuant to subsection (2) of this section incurred expenses before the time of discharge in or for the purpose of the performance of the contract, the court retain or recover the whole or part of the sums paid or payable.

(4)     Where any party to the contract has, by reason of anything done by any other party in, or for the purpose of the performance of the contract, attained a valuable benefit (other than a payment of money to which subsections (2) and, (3) of this section applies) before the time of discharge, there will be recoverable by the other party such sum (if any) not exceeding the value of the said benefit to the party obtaining it, as the court considers just, having regard to all the circumstances of the case and, in particular-

(a)     the amount of any expenses incurred before the time of discharge by the benefited party in, or for the purpose of the performance of the contract, including any sums paid or payable to any other party in pursuance of the contract and retained or recoverable by that party under subsections (2) and (3) of this section; and

(b)     the effect, in relation to the said benefit, of the circumstances giving rise to the frustration of the contract.

(5)     In estimating, for the purposes of the foregoing provisions of this section, the amount of any expenses incurred by any party to the contract, the court may, without prejudice to the generality of the said provisions, include such sums as appear to be reasonable in respect of overhead expenses and in respect of any work or services performed personally by the said party.

(6)     In considering whether any sum ought to be recovered or retained under the foregoing provisions of this section by any party to the contract, the court will not take into account any sums which have, by the reason of the circumstances giving rise to the frustration of the contract, become payable to that party under any contract of insurance unless there was an obligation to insure imposed by an express term of the frustrated contract or by or under any enactment.

(7)     Where any person has assumed obligations under the contract in consideration of the conferring of a benefit by any other party to the contract upon any other person, whether a party to the contract or not, the court may, if in all the circumstances of the case it considers it just, treat for the purposes of subsection (4) of this section any benefit so conferred as a benefit obtained by the person who has assumed the said obligations.

PART 3 – Enforcement of Contracts

9.      Enforcement of contracts for sale land and other interests in land

(1)     This section applies to-

(a)     every contract for the sale of land;

(b)     every contract to enter into any disposition of land being a disposition that is required by any enactment to be made by deed or instrument or in writing or to be Proved in writing;

(c)     every contract to enter into any mortgage or charge on land; and

(d)     every contract by any person to answer to another person for the debt, default or liability of a third person.

(2)     No contract to which this section applies will be enforceable by action unless the contract or some memorandum or note in respect of it is in writing and is signed by the party to be bound or by some other person lawfully authorised’

(3)     Nothing in this section shall-

(a)     apply to any contract for the sale or other disposition of land under customary Law;

(b)     apply to sale of land by order of any court of competent jurisdiction; and

(c)     affect the operation of the law relating to part performance.

10.    Consideration for guarantee need not appear in writing

Where in a contract, any person promises to answer to another person for the debt, default or liability of a third person, if the contract or some memorandum or note of it is-

(a)     in writing; and

(b)     signed by the party to be bound or anyone lawfully authorised by him, such will be deemed insufficient to support an action or other proceeding against the person by whom the promise was made by reason only that the consideration for the promise does not appear in writing or by necessary inference from a written document.

PART 4 – Miscellaneous

11.    Repeal

The Law Reform (Contracts) Law Cap. L63 Laws of Lagos State 2003 is repealed.

12.    Interpretation

In this Law unless the context otherwise requires:

“A consumer contract” is contract where at least one of the parties is an individual who is acquiring a product or service wholly or predominantly for personal, domestic or household use or consumption;

“Court” means, in relation to any matter, the court or arbitrator before which a cause or matter comes up for determination;

“Disposition” includes lease, assent, vesting declaration, vesting instrument, disclaimer, release and every other assurance of property by an instrument and also includes, where appropriate, a devise, bequest or appointment of property contained in a will;

“Land” includes land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or part of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments and also includes a rent and other incorporeal hereditaments and an easement, right privilege or benefit in, over, or derived from land.

13.    Citation and Commencement

This Law may be cited as the Law Reform (Contracts) Law and shall come into force on 25th May,2015.

LAWS OF LAGOS STATE

LAWS OF THE FEDERAL REPUBLIC OF NIGERIA