A contract relationship is evidenced by another, acceptance of the offer and a valid legal consideration. There are different kinds of contracts, examples are; sale of goods contract, which is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a consideration called price. Contract of employment, as provided in Section 91 of the Nigerian Labour Act (2004) is … any agreement. Whether oral or written, express or implied whereby one person agrees to serve the employer as a worker.
To create a valid contract, there must be a valid offer, that is a clearly stated offer to do something. After which there must be an acceptance, which is an expression of assent to the terms of an offer. This must be made by an offeree in a manner requested or authorised by the offeror. An acceptance of valid offer can only be made if the offeree knows of the offer. The acceptance should be unequivocal and unconditioned and the acceptance is manifested according to the terms of the offer. This offer and acceptance would be for a consideration. The Supreme Court per Fabiyi J.S.C. in the case of Chabasaya Vs Awasi (2010) N.W.L.R. PL (1201 defined consideration as “the inducement to a contract, a basic necessary element for the existence of a valid contract that is legally binding on the parties”. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions.
In Carlill V Carbotic Smoke ball Company (1892) EWCA Civ 1, (1893) QB 256, the company placed advertisement in various newspapers offering the reward of £100 (pound) to any person who used the smoke ball 3 times per day as directed and contacted influenza, colds or any other disease. After seeing the advert, Carlill purchased a ball and used it as directed. Carlill contacted influenza and made a claim for the reward. Carbotic Smoke ball Company refused to pay and Carlill sued for damages arising from breach of contract. Judgement was held in favour of Carlill and Carbolic Smoke ball Company appealed. The court of appeal rejected the company’s argument. The judges agreed that the advert was a unilateral offer though restricted to those who acted upon. The terms contained in the advert. It also held that satisfying conditions for using the Smoke ball constituted acceptance of the offer, that purchasing the smole ball constituted good consideration. Also that the company’s claim that E1000 (Pounds) was deposited at the Alliance Bank showed intention to be legally bound.
A contract in order to be enforceable must be valid. It is the policy of the law to encourage the formation of contracts between competent parties for lawful objectives. As a general rule, contracts by competent persons equitably made are valid and enforceable. Parties to a contract are bound by the terms to which they have agreed, even if the contract appears to be a bad bargain. As long as it did not result from fraud, duress or undue influence, a contract once formed does not contemplate a right of a party to reject it.