Unsigned Contract, When Binding?
The general rule is that an unsigned agreement (contract) is a worthless piece of paper which is inadmissible in evidence and of no evidential value if admitted inadvertently. Hence, it’s expected that parties set down their hands and their seals where necessary and sign the contract in order to have it binding.
Therefore, when a document is properly executed by parties, no oral evidence can be taken to vary, retract or even contradict the terms and conditions provided therein. See section 128 (1) of the Evidence Act, 2011.This position was affirmed by the Supreme Court in host of cases. Please, see Saidu H. Ahmed &Ors Vs. Central Bank of Nigeria (2013)LPELR 20744 (SC), Vincent U. Egaharevba Vs. DR. Orobo Osagie (2009) LPELR 1044 (SC).
However, there exist exceptions to the above position which are viz:
1. Where no oral evidence has been led to establish non authorization to performance, especially when the transaction has been partly performed. Particularly in a Local Purchase Order (LPO), where a supply is already made in line with an existing agreement between parties. The document would be admitted in proof of the transaction leading to the supply and non signing of same would not render it inadmissible. See Awolaja Vs. Seatrade GBV (2002) 4 NWLR (Pt.578) 520 @P532.Per Kalio JCA.
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2. Where evidence exist to prove that both parties intended the unsigned document to be binding on them. See GSD Industries Limited Vs NAFDAC (2012) 5 NWLR (PT 1294) @511.
3. And, where the contract is that of affreightment (shipping contract).Awolaja & Ors Vs. Sea Trade G.B.V (2002) LPELR 65.
Meanwhile, the court would always consider the nature of the transaction giving rise to the (unsigned) contract and conducts of parties thereto in giving effect to an unsigned document.
Howbeit, In Grant Vs. Braggs ( 2009) EWCA 1228;  1 All ER (Comm) 1166;  CLY 63, the court inferred from the circumstances surrounding an unsigned contract to hold that same was binding. In that case, the parties entered into a buy-and-sell agreement (a share agreement) to the effect that in the event of a dispute, either of the parties could buy off the other party’s shares at a set price based on a certain formular. Unfortunately, a dispute ensued and Bragg offered to buy Grant’s shares and he refused. The court considered the emails exchanged in respect of the transaction and held same to be sufficient to establish the essential elements of the contract as contained in the document, despite the fact that it was yet unsigned.
In light of the above authorities an unsigned contract can be held binding if there was partial performance or post performance, i.e., where the condition(s) stated for the existence of a right in the contract has been carried out by a party to the acknowledgment of the other party which is usually established by the exchange of e-mails, text messages and other means of communications.
Similarly, in Awolaja & Ors Vs. Sea Trade G.B.V (2002) LPELR 651, the Supreme Court per Ayoola, JSC held inter alia that “A signed document though valuable as putting it above peradventure, what terms the parties have agreed to, is not essential to the contract of affrieghtment, where the immediate parties to the contract do not deny their agreement or the existence of contract of affrieghtment and there is no doubt about their intentions that there should be bound, barring statutory positions to the contrary (and non has been cited by the Defendant) the existence of the contract cannot be impugned on the ground that the document embodying the terms they have agreed to was unsigned, unless the parties have made that a condition for their being binding. See also MTN Vs. Corporate Communication Investment Ltd. (2019) LPELR-47042(SC).
Where a document was prepared with the consent of parties to a transaction and a party consequently carries out his obligation in accordance with the terms as expressed in the document. It would be difficult for a party to escape liability relying on non signing of the contract. Especially, when evidence in form of text messages, e-mails, etc exist to point that parties intended that the document should bind the transaction.
M. O. Idam, Esq.
M.O. IDAM attorneys