Failure to Establish the Terms of a Contract to be Enforced

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In the Supreme Court of Nigeria Holden at Abuja On Friday, the 18th day of December, 2020

Before Their Lordships

Olabode Rhodes-Vivour

Musa Dattijo Muhammad

Kudirat Motonmori Olatokunbo Kekere-Ekun

Amina Adamu Augie

Ejembi Eko

Justices, Supreme Court

SC. 379/2007

Between

Muyiwa Eweje … … Appellant

And

O.M. Oil Industries Ltd … … Respondent

(Lead Judgement delivered by Honourable Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC)

Facts

The Appellant supplied the Respondent with palm kernel and PK seeds, in the months of May to August, 1996. A dispute arose between parties, concerning the terms of the contract. While the Appellant insisted that he supplied and delivered the goods to the Respondent in line with the terms agreed between parties, the Respondent did not deny the existence of the contract within the period alleged, but maintained that the supply was in part, and was not in line with the terms agreed to by the parties. It joined issues with the Appellant on the performance of the contract, and the quantity received.

The Appellant therefore, instituted an action against the Respondent at the High Court of Lagos State, claiming the sum of N779,910.00 (Seven hundred and seventy-nine thousand, nine hundred and ten Naira), being the sum owed to him on the supply of palm kernel and PK seeds to the Respondent. He also claimed interest at the rate of 21% per annum from August 1996 until judgement was delivered, and thereafter, at the rate of 6% until the entire debt is liquidated. In his pleadings, the Appellant pleaded the Local Purchase Order (LPO) which stipulated the terms of the supply. He also gave notice to the Respondent, to produce this document. The Respondent denied the claim, and joined issues with the Appellant. At the trial, the Appellant testified and tendered documents which were admitted as exhibits (excluding the LPOs). The Respondent called three witnesses, and tendered exhibits as well.

In a considered judgement, the trial court found that the terms of the offer of contract between the parties, which was contained in the LPO in this instance, was absent. And, in the absence of the LPO, it is impossible to ascertain the items requested for by the Respondent, the quantity, and the price. The court thereby, dismissed the claim. The appeal to the Court of Appeal was also dismissed, on the basis that the Appellant failed to establish the terms of the contract sought to be enforced. This is a further appeal to the Supreme Court.

Issue for Determination

Various issues were formulated for consideration of the court by the parties. The Supreme Court however, determined the appeal on the issue below; noting that the determination of this issue rendered the remaining issues formulated by parties, academic:

Whether the lower court was right in affirming the judgement of the trial court, to the effect that the terms of the contract between the parties were not established before the trial court.

Arguments

Arguing the lone issue, counsel for the Appellant submitted that there was a contract for the supply of palm kernel and PK seeds between the parties; and the terms of the contract were clear in respect of the items supplied, the quantity supplied, and the price at which they were supplied. Counsel argued that the trial court still found that the Appellant did not supply, and that the Respondent did not accept the PK seeds as agreed in the contract, even when the Respondent did not deny these facts in its pleading. Counsel queried the issue of part performance raised by the Respondent; he submitted that there cannot be part performance of a non-existent contract. Counsel faulted the finding of the court, that the Appellant failed to establish an enforceable contract. He submitted that none of the parties testified as to any element rendering the contract unenforceable or illegal, and that the court made out a case for the Respondent which was not supported by its pleadings – ADENIJI v ADENIJI (1972) 4 SC 10 at 17.

Responding to the submissions above, counsel for the Respondent referred the court to paragraphs of the Appellant’s pleading where it was stated that he supplied and delivered the Palm kernel and PK seeds to the Respondent in accordance with the Respondent’s Local Purchase Order (LPO), and that the Appellant would rely on waybills, invoices, vouchers, receipts and LPO. He argued that proof of the contract between parties, was to be established by the aforementioned documents. Counsel for the Appellant however, failed to produce these documents. He submitted that the Appellant had a duty to prove his assertion – ADAKE & ANOR. v AKUN (2003) 11 MJSC 99 at 108. Counsel invited the court to find that the Appellant, having pleaded the documents referred to, he cannot turn around to contend that the LPO and other pleaded documents are non-existent.

Court’s Judgement and Rationale

In its resolution of the first issue, the court emphasised on the fundamental principles governing the formation of contract – (a) An agreement; (b) An intention to create legal relations; and (c) consideration – BALIOL NIG. LTD v NAVICOM NIG. LTD (2010) 16 NWLR (Pt. 1220) 619. Looking at the pleadings filed by parties to the suit, the Respondent did not deny the existence of a contractual relationship between parties, leading to the supply of palm kernel and PK seeds during the period in question. Counsel however, joined issues on performance of the contract and amount of goods received.

It is trite principle of law that he who asserts must prove, going by the provisions of Sections 132 and 133 of the Evidence Act. A Purchase Order or LPO is a commercial source document issued by a business purchasing department, when placing an order with vendors or suppliers. It contains details of the items to be purchased, including the type, quantity and price. Waybills, invoices et al, are dependent on and referable to the existence of an LPO. The Appellant who pleaded that the goods were supplied in accordance with the LPO, bears the burden to produce the LPO which would enable the court to ascertain the details of what was agreed on. A party must be consistent in the presentation of his case; he cannot approbate and reprobate – ASABORO & ANOR. v PAN OCEANIC OIL CORPORATION (NIG.) LTD & ANOR. (2017) 7 NWLR (Pt. 1553) 43.

The Appellant did not only plead the existence of LPOs in respect of the contract, he also gave the Respondent notice to produce the originals in line with Section 91 of the Evidence Act. Failure of the Respondent to produce these documents does not necessarily indicate that the documents are non-existent, as the Appellant would not have given notice to the Respondent, if the documents are non-existent. The service of notice to produce on the adverse party, does not compel the party served to produce the document; rather, it entitles the party serving the notice to adduce secondary evidence of the document in question – NWEKE v THE STATE (2017) LPELR-42103(SC) at 8 B – E. Having failed to tender in evidence the LPO which formed the basis for his claims, there was nothing for the Claim of the Appellant to stand on.

Appeal Dismissed.

Representation

Dr. Ayodele Gatta with Anita Oteh, Esq.; Uchechi Ahuruonye, Esq,; and Amarachi Okechukwu, Esq. for the Appellant.

Luck H. Briggs, Esq. for the Respondent.

Reported by Optimum Publishers Limited , Publishers of the Nigerian Monthly Law Reports (NMLR)(An Affiliate of Babalakin & Co.)


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