PACTA SUNT SERVANDA; :PROMISE MUST BE KEPT

I will define what contract  because this discussion will not be complete without the definition, but will definitely not go into details as we have earlier discussed contract on this information portal, in fact it is among the first few topics treated.

Contract is a legally binding exchange of promise or agreement between parties that law will enforce. This is based on the Latin maxim pacta sunt servanda (literally ,promise must be kept) Please read our previous post for further explanation on what a valid contract must contain.

This topic is based on whether a third party can benefit from a contract which he was never a party to, A non- party to a contract cannot enforce contract irrespective of the fact that the contract was entered into for his/her benefit. In PLATEAU INVESTMENT & PROPRTIES LIMITED V. EBHOTA (2001)FWLR 

PT.64 @ 481 SC where a policy statement or guideline between the federal and state government in respect of basis for allocation of properties was held not to create or regulate contractual relationship between the plaintiff purchaser and the defendants state government agency

Privity of contracts  entitles only parties to a contract and not beneficiaries thereunder to enforce or sue it. Stranger to a deed who has an interest in a deed that is a nullity can challenge it where his interests are affected by it this was the decision in SAVANNAH BANK PLC V. IBRAHIM (2000) FWLR(PT 251)1626 @1645 CA.

The law will recognize any person who is privy to the contract or has acquired some legal interest, privity to a contract would perforce guarantee enforcement of a contract TWEEDLE V. ATKINSON.

In NEW NIGERIA BANK PLC V. DENCLAG LTD & ANOR (2004) ALL FWLR it was recognized that any person who is not a party to a contract cannot make a claim unless he is a privy thereto or he has acquired some legal interest. In this case the plaintiff won a government contract to supply a third party hospital equipment to the ministry of health and the  government undertook payment thereof. The defendant bank open a letter of credit for the plaintiff upon  an agreement with the government that wanted the contract financed. Upon default of the defendant bank remitting the foreign exchange, the plaintiff sued for damages arising there from . The privity of contract between the plaintiff and defendant was said to have arisen.

To enforce a contract where there is breach of contract, the contract must be shown by the plaintiff to be enforceable ALH. HAIDO& ANOR V. ALH USMAN (2004)ALL FWLR (PT 201) the statutory provisions of statutorily-governed contractual relationship must be complied with, there is duty on the party seeking to enforce a contract to have fulfilled or either performed.

It is trite law that contracts are not prejudicial to third persons and do not benefit from them.

Thank you.

Oyenike Alliyu-Adebiyi LLB(hons)BL