SECRET PRINCIPLES YOU DON'T KNOW ABOUT CONTRACT (PT. 4)📚🎲📚

SECRET PRINCIPLES YOU DON’T KNOW ABOUT CONTRACT

Capacity and Consideration as the 2 C’s of Contract:

It’s the Mini-Law-Series and we are rounding off our feature on Secret Principles You Don’t Know About Contract.

Please click on the link below, for previous discourse on this feature.

https://onlinelegalclinic.blogspot.com/2019/10/this-thing-called-contract.html

After the Offer has been made with the corresponding Acceptance, and it is apparent that parties have the intention to create legal relations, it is vital, that the parties’ capacity and/or ability to enter into a contract that is binding and enforceable in law is considered. 👉This takes us to Capacity:

Capacity as The 4th Element of A Valid Contract:

Capacity is the ability a person and/or corporate entity has, to enter into a valid contract. Generally, a person above the age of 18 years can validly contract with the exception of certain class of persons. The law, however accommodates instances where an infant i.e. a person below the age of 18 years can also validly contract. What I have said in essence is that a person below the age of 18 years can also enter into a valid contract in specific instances created by law.

Please bear in mind, that the essence of Capacity as an element of a valid contract is crucial, this is because, where the other identified elements of a Valid Contract are present, but one of the parties to the contract does not have the legal capacity to contract; in the eyes of the law, such a contract is a nullity. Capacity is thus, the father of all the elements of a valid contract!👌

We have itemized below, certain class of persons that requires specific mention:

Infant: The law exempts an infant from the burden of contracting, save for goods categorized as necessaries and for contract of service (e.g. Apprenticeship) deemed beneficial to such an infant.

Illiterate: It is difficult to proffer a definition for an illiterate. Generally speaking, an illiterate is a person who can neither read nor write. Let’s expand this definition a bit. Shall we? A person who can fluently read and write in English Language but has no knowledge of French Language becomes an illiterate when transacting in French Language. Now, does the law permit an illiterate to enter into a binding contract? Or better said, will a contract become enforceable against an illiterate? The simple answers to the posers raised are in the positive, but subject to the fulfillment of certain laid down guidelines of the law. Let’s cite an example, where an illiterate is the buyer or seller of a parcel of land, there are some prerequisites that must be satisfied before any instrument of purchase can become binding. In this wise, the Illiterate Protection Act, the Land Instruments Registration Law and so on and so forth comes to mind.

Unsound Mind: With all sense of responsibility, we state that it is the law’s innermost desire to protect persons who do not have control over their thought process, and prevent them from being at the mercy of rational thinking humans, who might want to take advantage of their disability. Ordinarily, a person who is of unsound mind does not have the legal capacity to contract, and subject to some inherent exceptions, any contract entered into by a person of unsound mind, is voidable at the instance of such a person. This means, that when a person of unsound mind becomes lucid, such person may become bound in so far as the contract is for his or her benefit. Two basic conditions have been created by statute for a person of unsound mind to escape liability of any form, they are:

i. That at the time of the contract their mental condition and/or state of unsound mind was of a nature that they could not understand what they were doing;

ii. The other party to the contract was not ignorant of the condition i.e. the state of unsound mind.

Consideration as The 5th Element of A Valid Contract:

Consideration means something of value that is exchanged and/or done by contracting parties. It is “something for something.” For, ease of understanding, let’s use an example to drive home the point. If Mr. Employer hires Mr. Employee and agrees to pay remuneration of N200,000.00 monthly while expecting Mr. Employee to work for him every day of the week. The remuneration of N200,000.00 is the consideration flowing from Mr. Employer to Mr. Employee.
For the sake of general knowledge, please find below some parameters of Consideration:

Consideration must be sufficient; it’s adequacy is not paramount: In the example above, if Mr. Employee agrees to accept a ridiculous amount of N20,000.00 as his monthly remuneration. The law sees it as good consideration and will be enforceable against Mr. Employer in the event of default and vice versa. It is irrelevant that other professionals of Mr. Employee’s standard are requesting for higher remuneration. That is where the sufficiency rule comes in.

Consideration must not be illegal, immoral or contrary to public policy: Where Mr. Employer offers Mr. Employee a job that involves stealing data or any sensitive material from a Government Institution or for defaming the character of a competitor in the market, the consideration herein is contrary to public policy and illegal, the law will not enforce such.

Consideration must not be past: it must be contemporaneous with the promise.🙏🙏


Special thanks to everyone who started this feature with us, it’s been a journey!

Oluwatosin Ajose Popoola Esq.,

https://www.linkedin.com/in/oluwatosin-ajose-24143910a

For: The Online Law Clinic


09021229241

onlinelawclinicteam@gmail.com

online_lawclinic

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