SHELL PETROLEUM DEVELOPMENT COMPANY LIMITED v. FRONTLINE TELEVISION LIMITED
(2011)LCN/4517(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 3rd day of May, 2011
CA/PH/10/2003
RATIO
DECLARATORY RELIEF: DUTY IMPOSED ON A PARTY SEEKING DECLARATION OF A RELIEF
It is trite that declarations are only made when the court is satisfied not only as to the precise nature of the interest in respect of which the declarations are sought but if sufficient evidence further establishing the claimed interest abounds. Accordingly, it is essential for the party seeking the declaration to specifically state its interest and the facts on the basis of which it asserts that interest. The onus remains on the plaintiff, the Respondent herein, to establish its claim and the law does not allow such a claimant to rely on the weakness of or the mistake in the defendant’s case. See Kodilinye v. Odu (1935) 2 WACA 336, Melifonwu v. Egbuji (1932) 1 SC 145, Ahaji Sanusi v. Amoyegun (1992) 4 SCNJ 177 and Olohinde v. Adeyoju (2000) 6 SCNJ 470. PER MUSA DATTIJO MUHAMMAD, J.C.A.
INGREDIENTS OF CONTRACT: NECESSARY INGREDIENT OF A BINDING CONTRACT AND WHETHER THEY MUST CO-EXIST FOR A CONTRACT TO BE LEGALLY ENFORCEABLE AGREEMENT
A legally enforceable agreement which a contract is, has the following necessary ingredients: offer, acceptance, consideration; intention to create legal relationship and the capacity to contract. It has been repeatedly held that these five necessary requirements must co-exist and a contract cannot, in law, be formed in the absence of any of the five ingredients. See Amana suits Hotels Ltd v, P.D.P (200) 6 NWLR (pt.1031) 453 at 476 and Obaike v. B.C.C. Plc. (L997) 10 NWLR (pt. 525) 435. PER MUSA DATTIJO MUHAMMAD, J.C.A.
EXISTENCE OF CONTRACT: ON WHOM RESTS THE BURDEN OF PROVING THE EXISTENCE OF A CONTRACT AND WHAT THE COURT WILL EXAMINE IN DETERMINING WHETHER OR NOT, FROM THE ORAL WORDS OR WRITTEN AGREEMENT, THERE IS A VALID CONTRACT BETWEEN THE PARTIES
The law has placed on the respondent, who has asserted the existence of a contract, to prove it. The words which go to make the contract it alleged be it oral or written must be clearly stated and proved by the claimant. The lower court’s duty is to examine the evidence placed before it in the light of the pleadings and determine whether from the oral words or written agreement, there is a valid contract between the two see: S 135 of the evidence Act, Mandilas & Karaberis v. Otokiti (1963) 1 ALL NLR 22: UBA Ltd. V. Ozigi (1991) 2 NWLR (Pt.176) 677 and Orient Bank (Nig) Plc. V. Bilate International Ltd. It has failed in this regard. PER MUSA DATTIJO MUHAMMAD, J.C.A.
JUSTICES
MUSA DATTIJO MUHAMMAD Justice of The Court of Appeal of Nigeria
EJEMBI EKO Justice of The Court of Appeal of Nigeria
TUNDE OYEBANJI AWOTOYE Justice of The Court of Appeal of Nigeria
Between
SHELL PETROLEUM DEVELOPMENT CO. LTD. Appellant(s)
AND
FRONTLINE TELEVISION LTD. Respondent(s)
MUSA DATTIJO MUHAMMAD, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Rivers State delivered on 14th November 2000 wherein the defendant was found liable for the breach of the contract between it and the plaintiff. The Respondent as plaintiff had in paragraph 18 of its statement of claim claimed against the Appellant thus:
“18 wherefore, the plaintiff claims against the defendant as follow:
(a) The sum of N10,000,000.00k (ten million naira) as fees for consultance services rendered by the plaintiff to the defendant at the request of the defendant in respect of the design for the Production of educational films for the Defendant’s Driver Education Programme.
(b) A declaration that having regard to the mutual understanding between the plaintiff and the defendant and the undertaking made to the plaintiff by the defendant, the plaintiff is the only company entitled to be awarded the contract for the Production of education films for Driver Education Pragramme by the Defendant.
(c) The sum of N100,000.00 (one hundred million naira) being general damages for breach of contract or undertaking.”
Respondent’s Managing Director was its only witness at the trial. The Appellant called three witnesses to lay case bare. In a considered judgment, the trial court found the defendant liable for breach of contract or undertaking” and awarded it forty five million naira. The court however rejected plaintiff’s ten million naira claim for consultancy services allegedly rendered to the defendant.
Dissatisfied with the decision, the defendant has appealed to this court by its amended notice of appeal containing five grounds.
Parties have filed and exchanged briefs of argument which, at the hearing of the appeal, were adopted and relied upon. The three issues contained in the Appellant’s brief as having arisen for the determination of the appeal are as follows:
“i. was the learned trial judge right in holding that there existed a contract or undertaking by which the defendant agreed that plaintiff is the company entitled to be awarded the contract for the production of films for its Driver Education Programme? (Based on Grounds 1, 2 and 3).
ii. was the learned trial judge right to enter judgment against the Defendant for breach of contract when there was no valid and or binding contract between plaintiff and defendant? (Based on ground 4).
iii. was the learned trial judge right in law in awarding N45,000,000.00 as general damages in this case, when:
(i) The loss allegedly suffered by the plaintiff is quantifiable?
(ii) The said sum of N45,000,000.00 is an erroneous estimate of damages? (Based on ground 5).”
The Respondent formulated two issues it considers germane for the determination of the appeal thus:
“1. Did the parties enter into a binding contract?
2. Is the plaintiff entitled to damages awarded by the learned trial Judge for the defendant’s breach of the transaction?”
The real issue this appeal raises for determination is whether the lower court is right in its holding that a contract or undertaking exists between the parties and same has been breached justifying the N45,000,000.00k damages award against the Appellant.
Learned Appellants counsel contends that Respondents pleading and evidence does not disclose the existence of a valid contract capable of being breached thereby justifying the award of damages. A contract comes into being pursuant to a precise and verifiable offer from one party to the other in respect of the work or service the one seeks from the other as well as the value being attached to such a request. It is further argued that the other party must, very clearly too, accept to provide the service requested and for the stated value. Exhibits C, C1 and D, learned Appellant counsel submits, constitute neither such offer nor acceptance from one to the other or vice-versa. Liability for damages follows breach which in turn occurs only where there is a valid contract consequent upon the acceptance of an offer. Relying on Orient Bank of Nigeria Plc. V. Bilante international Ltd (1987) 1 NWLR (PT.515) 37 and Union Bank of Nigeria Ltd V. Sax Nigeria Ltd and Ors. (1994) 8 NWLR (Pt.361) 150, learned counsel insists that the lower court’s decision is perverse.
Further arguing the appeal, learned Appellant counsel contends that the testimony of PW1, Respondent’s sole witness, which is at variance with its pleading cannot form the basis of an enduring decision. The averment in paragraph 3 of the statement of claim, it is submitted, is for a consultancy contract while PW1’s evidence at page 81 of the record dwells on a contract for the actual production of films in the programme as well. On the authority of SPDC v. Abadi (1974) 1 at 14, the Respondent, it is submitted, cannot plead one contract and give evidence on two.
Again, what comes clearly through the pleading and evidence before the court, argues learned counsel, is the continued efforts, the negotiation between the parties, which were yet to translate into an agreement capable of being enforced. Without necessarily conceding that Respondent has established the existence of that valid contract, learned Appellant counsel further contends that the loss the Respondent incurred as pleaded in paragraph 8 of its statement of claim is clearly quantifiable. The head of damages pleaded remains the only recoverable item and the lower court’s award of N45,000,000.00k general damages, by far in excess of the N9,700,000 cost of the contract bidded by the Respondent is manifestly unlawful.
Concluding, learned Appellant’s counsel relies on Ariori v. Elemo (1993) 14 NSCC 1 and Tika Tore Press Ltd. V. Abina (1973) 8 NSCC 642 at 648 and submits that even if Appellant is liable for the breach of the undertaking of awarding the contract exclusively to the Respondent, that right has been waived by the Respondent when it participated in the pre-tender bidding inspite of Appellant’s alleged breach. Respondent, cannot, in the face of that waiver be indulged and the lower court’s finding at page 150 of the record, is erroneous. On the whole, learned counsel submits that the issues be resolved against the Respondent. He urges that the appeal be allowed.
Responding, learned Respondent counsel submits that the contract between the parties herein is a peculiarly oral one. Besides, it is a unilateral contract with an open offer while the acceptance is demonstrated by the offeree. From the pleadings of parties and available evidence, the Appellant had requested the Respondent to exclusively design and produce the documentary film for the Appellant’s Drivers Education Programme. The Respondent, argues its learned counsel, was a single source contractor and the consideration for the design and actual production of the film was to be negotiated later Appellants deliberate failure to honour its obligation explains Respondent’s instant action. The lower courts judgment that draws from exhibits D, G and L cannot be faulted. Relying interalia on Bashiys v. The State (1998) 5 NWLR (pt.550) 351 Iagbenro v. Arobadi (2006) All FWLR (pt.310) 1575; Oyinrove v. Esikin (1999) 10 NWLR (Pt 624) 540, Bature v. State (1994) 3 NWLR (Pt.320) 267 and Agwunedu v. Onwumere (1994) 1 NWLR (pt. 321) 375 learned counsel urges that the appeal be dismissed.
The appellant has approached the lower court seeking the declaratory reliefs earlier on reproduced in this judgment. It is trite that declarations are only made when the court is satisfied not only as to the precise nature of the interest in respect of which the declarations are sought but if sufficient evidence further establishing the claimed interest abounds. Accordingly, it is essential for the party seeking the declaration to specifically state its interest and the facts on the basis of which it asserts that interest. The onus remains on the plaintiff, the Respondent herein, to establish its claim and the law does not allow such a claimant to rely on the weakness of or the mistake in the defendant’s case. See Kodilinye v. Odu (1935) 2 WACA 336, Melifonwu v. Egbuji (1932) 1 SC 145, Ahaji Sanusi v. Amoyegun (1992) 4 SCNJ 177 and Olohinde v. Adeyoju (2000) 6 SCNJ 470.
The question to answer now is: what facts did the Respondent plead and establish to entitle it to the reliefs the lower court granted to it? Paragraph 3, 5, 7, 10, 11 and 12 of Respondent’s statement of claim capture the facts on the basis of which the declaratory reliefs it canvassed were granted. The paragraphs are hereunder supplied for ease of reference.
“3” Sometime in 1998 at the plaintiffs offices and studios at rumuogba, Port Harcourt within the Jurisdiction of the Honourable court, the defendant, through it officials visited the plaintiff’s offices and offered the plaintiff the contract to design a proposal for the production of Educational films for the defendant’s Driver Education Programme (DEP). The said defendant’s official explained that the contract would be in two phases – the first phase being the consultancy stage of designing the programme and the second stage being the actual production of the programme. The plaintiff accepted the defendants offer and the said officials there and then invited the plaintiff to a meeting at the defendant’s offices at Port Harcourt.
5. Thereafter the defendant constituted a committee of its officials comprising Mr. Harriman Oyofo of the defendant’s Warri Office as Chairman, Mr. Charles Obakpolor of Port Harcourt office, Mr. E. Efosa of Port Harcourt office, Mr. Joseph Mpi of Port Harcourt office and Mr. Yemi Ajijola of Lagos office. This committee visited and inspected the plaintiff’s facilities and watched some of the plaintiff’s productions.
7. After the said meeting the defendant’s officials formally orally confirmed the plaintiff company as the consultant to first of all design a proposal for the production of Educational Films for the defendant’s Driver Education Programme after which the plaintiff would perform the actual contract of producing the Educational Films. They also assured the plaintiff that the defendant would pay both the plaintiff’s consultancy fees and the actual contract fees during the performance of the contract. The plaintiff readily accepted this position as the defendant is a well known and credible multinational oil company. Indeed the defendant’s commitment to the plaintiff on the said contract was so strong that the defendant confirmed the plaintiff as the single source contractor.
10. By October, 1998 the plaintiff had concluded the consultancy state of the contract by producing the design for the project and these were handed over to the defendant and were accepted by the defendant. The plaintiff shall found on two documents namely “Estimate for the Design, Instructional Development and production of SPDC Driver Education Programme on video” and “Draft Report: Summary of Review findings”, The Defendant is given Notice to produce the originals.
11. By a presentation called “Synopsis for ESQP Submission” which was presented by the Defendant’s officials to the defendant’s management dated 9/2/99, the plaintiff was again confirmed as the only contractor to perform the actual contract. The scope of work as contained in the said “Synopsis” presentation was lifted or copied by the defendant from the plaintiffs designs pleaded in paragraph 11 hereof. The Plaintiff shall found on the said document called “Synopsis for ESQP Submission” dated 9/2/99 and the defendant is hereby given notice to produce the original.
12. Despite the consultancy work already rendered the defendant by the plaintiff and the defendant’s undertaking that only the plaintiff will perform the main contract as a “Single source contractor” the defendant on the 22/6/99 cleverly invited tenders for the contract. Among several companies, the plaintiff was also invited to bid for the contract totally contrary to the earlier undertaking of the defendant to the plaintiff. The implication of throwing the contract to open bidding or tender was that the contract could be awarded to any other company apart from the plaintiff. As it eventually turned out, the purpose was to scheme out the plaintiff after using the plaintiff’s expertise to originate and design the project. The plaintiff shall found on the Tender invitation dated the 22/6/99.”
The Appellant frontally joined issues with the Respondent in paragraph 4, 6, 8, 12, 13 and 16 of its statement of defence. These paragraph are hereunder also supplied for ease of reference:
4. Paragraph 3 of the Statement of claim is not admitted. No contract was offered the plaintiff to “design” anything. Nobody also told the plaintiff that the contract would be in two phases as averred and this is not in line with company policy on awarding contract. The defendant officials were only involved in carrying out a market survey on the proposed project and visited the plaintiff as well as numerous other film producers.
6. paragraph 5 of the statement of claim is admitted to the extent that Efosa Oyimendo and Joseph Mpi visited the plaintiff’s office and saw plaintiff facilities and equipment.
8. Paragraph 7 of the statement of claim is denied. There was no confirmation of plaintiff as a consultant who shall be entitled to consultancy fees and neither was there a confirmation that plaintiff is a single source contractor. Pursuant to paragraphs 3, 6 and 7 above, Defendant’s officers mentioned to the plaintiff that subject to Management’s approval, plaintiff shall be subsequently engaged as a single source contractor. This is because the plaintiff’s facilities and other films impressed the defendant by far more than those of some few other contractors film producers which were visited by defendant and because defendant had not exhaustively finished its market survey at the time. There is no record of the alleged meeting and defendant are unable to either admit or deny the holding of the meeting.
12. Paragraph 11 of the statement of claim is denied. At all times material to the action, the plaintiff had been told long before the date of the alleged “synopsis” dated 9/2/99 (which unsigned document is itself denied) that there would be no single source contractor and plaintiff had accepted that position unequivocally. The only “synopsis” for Management’s approval in respect of the contract subject matter of this dispute is dated 06/09/99 and it is hereby pleaded. Plaintiff is put to strict proof of all the other averments.
13. Paragraph 12 of the statement of claim is denied, save that plaintiff was invited and that it bid for the contract with about 21 other contractors’ Plaintiff is stopped from resiling from the position that if would go through competitive bidding with other contractors for the contract and abide the result thereof.
16. Paragraph 15 of the statement of claim is admitted. Defendant, is consonance with the conditions of the bid awarded the contract to the lowest bidder, Wiss Engineering Limited who bidded to perform the contract for N4,000,000.00 (Four Million Naira). Others which lost the bid like the plaintiff have since accepted their loss in good faith.
From the foregoing pleadings, parties joined issues on the existence or otherwise of a contract between them and appellant’s undertaking to have the Respondent alone execute the very contract. In proving the contract offered to it by the Appellant, Pw1, Respondent’s sole witness, testified exactly in tune with Respondent’s pleading. PW1, testified firstly at page 81 of the record thus:
“…About February 1998 the defendant through their officer visited our studios and offices at Rumuoba. They were two officials that came. One of them is a Manager in the safety department of the department (sic). When they visited they offered us a contract to do a consultancy design of Driver Education Programme and the production of the program on films.
The contract was supposed to be in two Phases. The first one was a consultancy design of the programme and the second one was the actual production of films. They the officials offered us both contracts. We accepted the offer.”
After the offer, PW1 testified further that several meetings were held between the two. At one such meeting, the Appellant confirmed the Respondent as the single source contractor for the project, comprising both the design and actual production. This confirmation was also made orally. Respondent was to be paid he told the lower court, during the actual production. Having completed the design of the project, respondent prepared Exhibits C and C1, the estimate for the design and production of the instruction programe and a draft report. Exhibit D is allegedly a copy of the internal memo, the submission made by the Appellant to its management on the alleged contract between the two. PW1 continued thus:
“Inspite of the fact that we had submitted our design for the programme and inspite of re-assurance and undertaken (sic) from the defendants that only single contractor do the main contract for the production of the films, the defendants invited for other bidding confreing to their earlier undertaking to us.
We were also invited alongside with others. We saw this as a scheme to get us out of the project and award the contract to some other contractor… consequently instituted this action on 2/11/1999”
Under cross examination PW1 stated thus:
“I filed a statement of claim in this case and all fact relating to this case are as filed in the statement of claim. The entire contract was for N34 Million. The fact that the total sum was for N34 million is not contained in the statement of claim…The consultancy fee of N10 million is not stated in the statement of claim.”
He continued thus:
“…It is true that I attended the prebidding meeting and thereafter I made a quotation. It is not correct to say that the pre-bidding meeting and subsequent quotation were preparatory to entering into a contract. N9.7 million was my total sum. I got to know that the contract was awarded to some other person for N4 million.”
At page 96 of the record, Dw1 in keeping with Appellant’s pleading testified in chief thus:
“…There is no other way by which we award contract apart from general tender and single source. No contract, general tender or single source can be awarded orally.
DW2 testified at page 97 of the record thus:
“I know the plaintiff as at when we were about assessing the technical bids submitted by all those who bid for the production of a local Driver Education Film. Plaintiff was one of those who submitted bids for assessment…plaintiff bided for N9,793,000.00k and the lowest bidder was N4 million'”
On his part, DW3 stressed at page 103 of the record thus:
“We did not confirm the plaintiff as the consultant. Many contractors sent in proposals. We did not offer to pay the plaintiff either consultancy fee or for actual production”
It is on the basis of the foregoing pleadings and evidence that the lower court implied the existence of a contract or undertaking between the parties which the Appellant intentionally breached. This appeal turns on whether or not this finding is correct. Is it? I think not.
At page 114 of the record of appeal the court held as follows:
“It is not in dispute that the Respondent approached the plaintiff because they needed a skilled expert to first design and then thereafter to Produce the Defendant’s Local Driver Education Programme which was a new concept…”
Again, the defendant invited the plaintiff to several meetings spanning several months. They even had to fly the plaintiff to Warri for some of these meetings. The evidence shows that an agreement had already been reached between the parties. In line with that agreement or undertaking the Defendant worked and completed the design. See Exhibits C – C1. This court should also hold that defendant confirmed the plaintiff as a single source contractor.”
(underlining supplied for emphasis)
The question to answer is what agreement did the respondent plead and prove from which the lower court’s foregoing finding could have arisen?
A legally enforceable agreement which a contract is, has the following necessary ingredients: offer, acceptance, consideration; intention to create legal relationship and the capacity to contract. It has been repeatedly held that these five necessary requirements must co-exist and a contract cannot, in law, be formed in the absence of any of the five ingredients. See and Obaike v. B.C.C. Plc. (L997) 10 NWLR (pt. 525) 435.
In the instant case, for the lower court’s finding that there is a valid subsisting contract between the parties to endure, it must be shown to have evolved on the basis of an identified valid offer and a valid acceptance to that offer. From Respondent’s pleading as reproduced, it has only been averred to that Appellant had offered the former a contract and subsequently affirmed the fact of its being the single source contractor. What did the offeror, the appellant, offer and what did the offeree, the Respondent in the circumstance, accept? There is absolutely nothing from either the respondent’s pleading or the evidence of PW1 thereon as to the terms of the contract between the two or Respondent’s final and unqualified assent to those terms. The fact that Appellant’s offer was orally conveyed to the Respondent by the former’s officials does not obviate the necessity of identifying the terms of the offer as well as the extent of the acceptance of what was so offered. A significant requirement of the contract, apart from what service the Appellant was requesting the Respondent to perform, is the consideration such service attracts and this, too, remains unidentified and unstated. In the absence of these three ingredients, offer, acceptance and consideration, no valid contract could be said to have come into being. See Okubule v. Oyagbola (1990) 4 NWLR (pt.14) 729 and Orient Bank (Nig) Plc. V. Bilante International Ltd (1997) 8 NWLR (Pt. 515) 37. The lower court’s finding to the contrary is therefore manifestly perverse. See Olurunfemi v. Asho (1999) 1 NWLR (pt. 585) 1, Wulgo v. Bukar (1999) 3 NWLR (Pt. 596) 539 and Amana Suits Hotels Ltd. v. P.D.P (supra).
Learned Respondent counsel seems to suggest that because the contract offered by the Appellant was a unilateral one the necessity of identifying what was offered by the one and accepted by the other had been obviated. I am not impressed by this submission. It remains the rule irrespective of whether the contract the subject matter of litigation is bilateral or unilateral for the plaintiff to plead and prove the vital ingredients of the very agreement between the two sides. The lingering question about the alleged agreement between the two sides herein is what indeed they agreed between themselves. The Appellant must have offered to pay the Respondent certain amount of money for either the design aspect of the contract or the actual production of the film on the Appellant’s Education Programme. Exhibit D, Appellant’s internal memo, does not avail the court in identifying the terms of the agreement between the two sides since it is not addressed to the Respondent. All the more so, however, because it does not contain those vital ingredients on the basis of which an enforceable contract between the two could be implied. Exhibit D had come into being after the alleged offer of the contract made to the Respondent by Appellant’s officials. The document, Exhibit D, must have a clear nexus to that oral offer for it to be the basis of the lower court’s conclusion that a contract exists. The same can be said of Exhibit C and C1. They do not constitute any of the necessary ingredients, offer or acceptance, of a binding agreement.
The law has placed on the respondent, who has asserted the existence of a contract, to prove it. The words which go to make the contract it alleged be it oral or written must be clearly stated and proved by the claimant. The lower court’s duty is to examine the evidence placed before it in the light of the pleadings and determine whether from the oral words or written agreement, there is a valid contract between the two see: S 135 of the evidence Act, Mandilas & Karaberis v. Otokiti (1963) 1 ALL NLR 22: UBA Ltd. V. Ozigi (1991) 2 NWLR (Pt.176) 677 and Orient Bank (Nig) Plc. V. Bilate International Ltd. It has failed in this regard.
Learned Appellant counsel has made a further disarming point. It is that the Respondent had, inspite of Appellant’s breach of the contract that made the Respondent a single source contractor, bidded and offered to perform the same contract for 9.7 million naira. The Respondent must be deemed, for this reason, to have waived its rights under the contract.
Learned counsel is on a very firm terrain. The Respondent being party to the two part contract having partly performed the said contract and was prevented from further performance rather than ask to be allowed to perform through a fresh contract was entitled to seek any of these three:
(a) specific performance of the existing contract
(b) damages for breach of the entire contract or
(c) seek reasonable remuneration in quantum merit for the work already done. See Olaopa v. O.A.U. Ile-Ife (1997) 7 NWLR (Pt.512) 2Ol and Innin v. Ferado A and E Ltd. (1990) 5 NWLR (Pt.152) 604 at 627.
Not exploiting any of the foregoing, it instead proceeded to make a fresh bid with others, The Respondent must in law be deemed to have voluntarily waived its right under the very contract it now belatedly seeks to enforce. In Ochia Investment Co. Ltd v. Talabi (1997) 10 NWLR (Pt. 523) 1 at 52 the Supreme Court held on the concept of waiver thus:
“Turning to the case on hand, the appellant from the various steps it took in the proceedings after service on it of the writ of summons cannot now be heard to complain of defects in the issue and service of the writ. It is too late in the day to do so. He has waived his right to complain.” (underlining supplied for emphasis)
In the case at hand, the respondent in paragraph 12 of its statement of claim Pleaded thus:
“Despite the consultancy work already rendered the defendant by the plaintiff and defendant’s undertaking that only the plaintiff will perform the main contract as a single source contractor the defendant on 22/6/99 clearly invited tender for the contract. Among several companies, the plaintiff was also invited to bid for the contract totally contrary to the earlier undertaking of the defendant to the earlier undertaking of the defendant to the plaintiff. The implication of throwing the contract to open bidding or tender was that the contract could be awarded to any other company apart from the plaintiff. As it eventually turned out, the purpose was to scheme out the plaintiff after using the plaintiffs expertise to originate and design the project. The plaintiff shall found on the tender invitation dated 22/6/99”
Paragraph 13 of the amended statement of defence appellant joined issue with the Respondent reads:
“13 paragraph 12 of the statement of claim is denied, save that the plaintiff was wherein the invited and that it bid for the contract with about 21 other contractors. Plaintiff is stopped from resiling from the position that it would go through competitive bidding with other contractors for the contract and abide the result thereof.”
As rightly submitted by learned Appellant counsel, PW1 had at page 92 of the record under cross examination stated as follows:
“….It is true that I attended the prebidding meeting and thereafter, I made a quotation.”
I completely agree with learned Appellant counsel that the dicta of Eso JSC in Aviori v. Elemo (1993) 14 NSCC 1 appositely rule the case at hand and determine Respondent’s fortunes. Therein his lordship stated:
“…There is no doubt that a man who is not under any legal disability should be the judge of his interest. If therefore, having full knowledge of the rights, interest profits or benefits conferred upon or occurring to him by and under the law but he unpin…. Decides to give up all these, or some of them, he cannot be heard to complain afterwards that he has not been permitted the exercise of his rights or that he has suffered by his not having exercised his rights. He should be held to have waived those rights. He is, to put it another way, stopped from raising the issue. A single example could be seen in a right which, has been conferred by a contract. A person, who is a beneficiary to a contract whereby the benefit is principally for him, has full competence to waive that right. ”
(underlining supplied for emphasis)
The facts of the instant case clearly provide the best opportunity for the invocation and application of the twin doctrines of waiver and estoppel in adjudication. See also TIKA-TORE PRESS LTD. V. ABINA (1973) 8 NSCC 642 at 648.
Having found that a valid contract has not been proved to exist between parties to this appeal and that if it does Respondent has waived his right of enforcing same, consideration of the issue on the quantum of damages awarded to the respondent becomes a vain academic exercise that must be avoided by this court. see Adelaja v. Alade (1999) 6 NWLR (Pt.608) 544; Nnubia v. AG, Rivers State (1999) 3 NWLR (Pt. 593) 82 Bamaiyi v. AG Federation (2001) L2 NWLR (Pt. 727) 468 and Global Trans SA v. Free Enter (Nig) Ltd. (2001) 5 NWLR (Pt. 706) 426. The issue formulated on the damages awarded to the respondent for a nonexistent enforceable contract is accordingly hereby discountenanced. The core issue in the appeal, arising from court’s finding on the existence of a valid contract between the parties is however resolved in favour of the Appellant.
The appeal resultantly succeeds and it is hereby allowed. I award N50,000 cost against the Respondent.
EJEMBI EKO, J.C.A.: The respondent was one of several out fits that the appellant invited to bid for the design of a proposal for the production of Educational films for the appellants Driver’s Education. It lost in the bidding to other competitors. After losing in the tender the respondent then sued the appellant claiming damages for breach of contract on the ground that the appellant had reneged on its “undertaking that the plaintiff (the respondent) will perform the main contracts as a “single source contractor”
The respondent, as the plaintiff, did not prove the existence of that alleged oral contract. The respondent by conduct further corroborated the non-existence of that contract by subsequently participating in the competitive bidding with other contractors. It lost in this competitive bidding and thereafter sued the appellant for breach of contract. That is, that the appellant had afore hand assured the respondent that it was going to perform the job as a “single source contractor”
I had the advantage of reading before now the judgment just delivered in this appeal by my learned brothers, M. D. Muhammad (OFR), JCA. I agree that the respondent did not prove the existence of the oral contract appointing it as a “single source contractor” to perform the job. Secondly, by participating in the competitive bidding with others for the same job the respondent was estopped from insisting that the appellant had appointed it as a “Single Source Contractor” to perform that same job it agreed to participate, on the invitation of the appellant, with others in the completive bidding. On these grounds it was erroneous on the part of the trial court to have held the appellant liable in damages to the respondent. The appeal is also allowed by me.
There is no basis for the judgment of the trial court, including the orders therein, in favour of the respondent.
The suit, no doubt, was as a fraudulent attempt to extort money from the appellant. The judgment is hereby set aside. In its place I issue an order dismissing the entire suit and that should be the order of the trial court in the suit No.PHC/107/1999 in which judgment was delivered on 14th November, 2000.
Costs assessed at N50,000.00 are hereby awarded against the respondent in favour of the appellant.
T. O. AWOTOYE, J.C.A.: I had the privilege of reading the draft of the lead judgment just delivered this morning by my learned brother M. D. MUHAMMAD (OFR) JCA.
I agree that this appeal has merit. A court cannot make contract between parties where none exists. See OMEGA BANK (NIG.) PLC v. O. B. C. LTD (2005) 8 NWLR (PT. 928) 547.
Was there a valid offer which was accepted between parties it is implicit in an offer that one person has given a clear indication to the other person to conclude a contract on the terms proposed which when accepted will create a binding legal obligation. See MAJEKODUNMI V. NATIONAL BANK OF NIGERIA (1978) 3 SC 119 at 129.
The plaintiff/respondent in paragraph 3 of its statement claim averred that sometimes in February 1998 it accepted the defendants offer to design a proposal for the production of Educational films for the defendants Drivers Education programme. Yet as can be gathered from its pleadings there were subsequent negotiations. See paragraphs 5 and 7 of the statement of claim. What is more the defendant invited tenders for the same contract and invited the plaintiff. The plaintiff participated in the bidding but the contract was not granted to it. See the evidence of PW1 under cross-examination.
It appears to me that what the plaintiff relied upon as an offer was an invitation to treat which was a stage in the negotiations between the parties to a contract. This cannot lead to a legally binding contract. See NEKA B.B.B & MANUFACTURING CO. LTD v. ACB LTD (2004) 2 NWLR (PT.958) 521.
An offer must be specific and its terms clear. The PW1 himself under cross-examination and admitted that the contract sum was not pleaded. The consultancy fee was also not pleaded.
Where there is a doubt on whether the parties have concluded a legally binding agreement the court had a responsibility to analyse the circumstances surrounding the alleged agreement and determine whether the traditional notion of offer and acceptance can be distilled from the purported agreement. See SPARKING v. UBN (2001) 34 WRN 20. Per. Cur. Achike JSC. The test of the existence of mutual assent which must be outwardly manifested in the purported agreement is objective. See NORWICH UNION FIRE INSURANCE SOCIETY V. PRICE (1943) AC. 455 at 463.
From the circumstances of the case now on appeal, viewed objectively, it is difficult to hold that there was a valid offer which was accepted, by the parties as if there was, there would then have been no need for the subsequent bidding for the contract which the plaintiff also participated in without objection.
For the above reasons and the fuller reasons adduced in the lead judgment I resolve issues (i) and (ii) formulated by the appellant and issue (i) formulated by the respondent in favour of the appellant.
This appeal is allowed. I abide by the order as to cost as assessed in the lead judgment.
Appearances
O. J. IrerhimeFor Appellant
AND
E. AdeleFor Respondent
