The Elements of a Valid Contract Under Nigerian Law

The Elements of a Valid Contract Under Nigerian Law

If you’re an adult, regardless of whether you've engaged in a business transaction, you’ve probably heard the word ‘contract’ before. So what is the meaning of this word that appears highly prevalent in the commercial space? We have an answer for you. 

A contract is a legally binding agreement between two or more parties. But let’s not stop there. Understanding its elements is crucial for ensuring a contract's validity under Nigerian law. The Nigerian legal system draws heavily from common law principles, but statutory provisions also play a significant role in shaping the framework for valid contracts. Therefore, before a contract can be valid, these following elements must be present:

Offer and Acceptance

The basis of any contract lies in the existence of a valid offer and an equally valid acceptance. An offer is a clear expression of willingness to be bound by specific terms, and acceptance must be unambiguous and in accordance with the terms outlined in the offer.

Intention to Create Legal Relations

A valid contract implies that the parties involved must have demonstrated an intention to create legal relations. This means that the agreement is not merely a social or domestic arrangement but one that has legal implications.

Legal Capacity

Before a party can enter into a contract, he or she or it must possess the legal capacity to do so. This includes being of sound mind, not being a minor, and not being under the influence of any incapacitating factors like fraud or undue influence that could compromise one’s ability to understand the terms and conditions of the contract.


Consideration translates to something of value given or promised by each party to the other. It is an important element as it signifies a bargained-for exchange and ensures that both parties are bound by mutual obligations. The absence of consideration may cause a contract to lack the necessary reciprocity to be legally enforceable.

Certainty and Possibility of Performance

Contracts must have clear and definite terms. There should be no ambiguity or words with multiple interpretations. The terms should be certain enough for the court to enforce them, and performance of the contract must be possible. Ambiguity may render a contract void for uncertainty.

Legality of Purpose

The object of the contract must be legal and not against public policy. Any agreement that involves an illegal act or goes against public welfare is considered void and unenforceable. This ensures that the legal system does not endorse activities in opposition to societal norms.

Formalities (where applicable)

Certain contracts in Nigeria may require specific formalities, such as writing or registration, to be considered valid. These formalities depend on the nature of the contract and the governing laws. Failing to adhere to required formalities may lead to the contract being unenforceable.

Generally, understanding the elements of a valid contract under Nigerian law is essential for individuals and businesses engaging in legal agreements. Adherence to these elements ensures that contracts are enforceable and creates a framework for fair and just interactions in the realm of legal dealings. It is best to always seek legal advice when entering into complex contractual arrangements to ensure compliance with the evolving terrain of Nigerian contract law.

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