CONTRACTUAL VALIDITY
By
Duru, Onyekachi Wisdom Ceazar
(Email: onyekachiduru@gmail.com; Tel: +234-8037707496)
View my research on my SSRN Author page: http://ssrn.com/author=1874278.
the
minds).
Consent
may
be
rendered
unreal
by
mistake,
E. Essien, General Principles of Nigerian Law Fourth Edition (Uyo: Toplaw Publishments Ltd., 2012) at
171.
Mistake
The doctrine of mistake in law is all about circumstances in which the
law permits a party to a contract to repudiate and resile out of it, on the
grounds that had the true position of the facts been known to him, he would
never have entered into the agreement. The general rule is that the mistake of
a party does not affect the validity of a contract. In essence, the parties are
bound by the terms agreed between them and neither can escape his
obligations under the contract by claiming that the agreement was not what
was intended. Likewise, mistake of law never affects the validity of a contract
since ignorance of the law never avails a party, otherwise every party will
plead that he was mistaken as to the law.
However in some circumstances mistake of fact may affect a contract,
and if sufficiently serious may spoil the contact, render it void. These include;
mistake as to the existence or identity of the subject matter of the contract or
mistake as to the kind of contractual document signed or as to its contents. 2
Proof of mistake in any of the above cases renders the contract void ab initio
and no right can be derived therefrom. In other words, the contract is a total
nullity conferring no rights and imposing no obligations.3 But, to have any
effect at all, the mistake must be one which exists at the moment the contract
is concluded.4
Misrepresentation
Simply defined, a misrepresentation is a false statement of fact made
by a party to the contract which is one of the causes which induces the other
party to enter into the contract. A misrepresentation is a false statement of
fact relating to the past or present, made by one party to a contract to the
other, which induces the latter to enter into the contract.5 A representation is
2
an inducement only and its effect is to lead the other party merely to make the
contract. A representation must be a statement6 of some specific existing and
verifiable fact or past event. It becomes a misrepresentation,7 of course, when
it is false.8
Misrepresentation is an expression used to describe a situation in
which there is no genuineness of consent to a contract by one of the parties.
Misrepresentation may be innocent, negligent or fraudulent. The effect of
misrepresentation on a contract is less serious than that of mistake because
the contract becomes voidable and not void. This means that the party
mislead can ask the court to rescind the contract, that is to put the parties back
into the positions they held before the contract was made.
Duress
Duress will affect all contracts and gifts procured by it use. Duress is
pressure brought to bear upon one of the contracting parties to induce him to
enter into the contract. Duress, which is a common law concept, means actual
violence or threats of violence to the person of the contracting party or those
near and dear to him. The treat must be calculated to produce fear of loss of
life or bodily harm.9 Also, the threat must be illegal in the sense that it must
be a threat to commit a crime or a tort.10 Duress vitiates a contract. However,
it must be established that the threats were a reason for entering into the
contract, but, it not be shown that they were the only or even the main
reason.11
6
The Statement must have been intended to be acted upon and must have actually induced the other party to
make the contract.
7
Misrepresentation is generally not incorporated into the contract, because if it is incorporated into the
contract, it becomes a term of contract and depending on whether it is a condition or warranty determines the
type of liability that results.
8
However, a statement which is not entirely false but a half-truth may be a misrepresentation. Thus, in
Dimmock v. Hallett (1886) LR. 2 Ch. App. 21, it was held that a statement that a property was let, and
therefore producing income, was a misrepresentation because it was not revealed that the tenants had been
given notice.
9
Kaufman v. Gerson (1904) 1 KB 591.
10
Thus, to threaten an imprisonment that would be unlawful if enforced constitutes duress, but not if the
imprisonment would be lawful: Cumming v. Ince (1847) 11 QB 112.
11
See Barton v. Armstrong (1976) AC 104; (1975) 2 All ER 465.
Undue Influence
The doctrine of undue influence was developed by equity. The concept
of undue influence is designed to deal with contracts obtained without free
consent by the influence of one mind over another. Undue influence means
any improper or wrongful constraint, machination, or urgency, or persuasion
whereby the will of a person is over-powered and he is induced to do or
forebear an act which he should not do or do if left to act freely.12 It is
influence which deprives the person influenced of free agency or destroys the
freedom of his will and renders it more of the will of another person. It
connotes a misuse of a position of confidence or taking advantage of a
persons weakness, infirmity of distress, to change improperly that persons
actions or decisions. Undue influence applies where influence is acquired and
abused and confidence is reposed and betrayed.
The effect of undue influence is to allow the weaker party to rescind
the contract promptly after the withdrawal of the overbearing influence;
otherwise it will be termed as consent. It also renders a contract voidable and
not void. Accordingly, to maintain the plea of undue influence, the party
concerned must apply timeously to avoid the contract and must not be guilty
of undue delay.
Additionally, for a defendant to succeed on his claim of undue
influence, he must prove by credible evidence the existence of such by
establishing the following five mandatory requirements: (a) that the other
party to the transaction had the capacity to influence the complainant, (b) that
the influence was exercised, (c) that the exercise was undue, (d) that the
exercise brought about the transaction in question, and (e) that the transaction
was to the manifest disadvantage of the complainant.13
12
13
First Bank of Nigeria Plc. V. Akinyoseye (2005) 5 NWLR (Pt. 918) at 340.
Failure to prove any of the above stipulations would be fatal to the complainants case.
Illegality
As a general rule, the court will not enforce a contract which is illegal
or contrary to public policy. Illegal contracts are those prohibited either by
statute or at common law and the making of which will in most cases be
visited by some form of sanction other than merely declaring the contract
void and unenforceable. Illegal contracts include: a contract to commit crime,
a tort or a fraud on a third party; a contract that is sexually immoral; a
contract which is prejudicial to public safety; a contract liable to corrupt
public life and a contract to defraud public revenue. A contract which is
adjudged illegal will not be enforced. Such a contract will be absolutely void
and of no effect whatsoever.
Conclusion
It is clear from the foregoing that vitiating elements of contract such as
mistake, duress, misrepresentation, undue influence and illegality, are
determinants of the validity of a contract. They are the various factors which
can affect the validity of a contract once it has been formed. The implication
of which is that the validity of a contract is normally unquestioned when
vitiating elements are absent.