Commerce · Lesson 10

Contract, agency, sale of goods, consumer protection, government policy, ECOWAS and AfCFTA

JAMBWAECNECO

What the syllabus asks

JAMB: 9 Trade associations (objectives and functions of trade associations, chambers of commerce, manufacturers’ associations, etc.); 14 Legal aspects of business (meaning and validity of a simple contract; agency, sale of goods act and hire purchase act; contract of employment; government regulations: registration of business, patents, trademarks, copyright; consumer protection: pricing, quality and…

WAEC: Legal aspects of business; consumer protection and consumerism; government and business (commercialisation, privatisation, deregulation, indigenisation, nationalisation); business environment; social responsibility; regional economic integration (ECOWAS, AfCFTA); trade associations

NECO: Legal aspects of business; consumer protection and consumerism; government and business (commercialisation, privatisation, deregulation, indigenisation, nationalisation); business environment; social responsibility; regional economic integration (ECOWAS, AfCFTA); trade associations

What you will learn

Explain the elements of a valid contract and how contracts are discharged.
Explain agency: creation, types, duties and termination.
Distinguish between conditions and warranties and state the implied terms in a sale of goods.
Explain hire purchase and the rights of hirer and owner; calculate HP prices.
Explain consumer protection, consumer rights and the agencies involved.
Describe government regulation of business, including intellectual property.
Explain commercialisation, privatisation, deregulation, indigenisation and nationalisation.
Describe the business environment and the social responsibilities of business.
State the functions of trade associations and chambers of commerce.
Explain the objectives, achievements and problems of ECOWAS and the AfCFTA.

Key points

Contract elements: offer, acceptance, consideration, intention, capacity, legality, genuine consent.
Shop displays and adverts are invitations to treat, not offers.
Discharge: performance, agreement, frustration, breach; remedies: damages, specific performance, injunction, rescission.
Agency created by agreement, ratification, necessity, estoppel; agent must obey, use care, act in good faith, account.
Conditions (reject and damages) vs warranties (damages only); implied: title, description, merchantable quality, fitness, sample.
Caveat emptor, with exceptions; nemo dat: no better title than the seller has.
HP: possession now, ownership after last instalment; Hire Purchase Act s.9: after one-half (three-fifths for motor vehicles) is paid, repossession only by court action.
Consumer rights: safety, information, choice, redress, education; agencies: FCCPC (FCCPA 2018), SON, NAFDAC, sector regulators.
Regulation: CAC registration, taxes (Nigeria Tax Act 2025, NRS from 2026), licences, standards, environment, labour, competition.
Intellectual property: patent (invention), trademark (brand), copyright (creative work, Copyright Act 2022).
Commercialisation (state-owned, profit-oriented), privatisation (sale to private, by BPE), deregulation (removing controls), indigenisation (1972, 1977), nationalisation.
Business environment: internal factors and PESTLE forces.
Social responsibility to consumers, workers, owners, government, community and environment.
Trade associations and chambers: NACCIMA, MAN, NECA, NASME; lobbying, information, standards, trade fairs, certificates of origin.
ECOWAS (1975, HQ Abuja, 12 members after 2025) and AfCFTA (trading since 2021; Nigeria ratified 2020).

Start here: The law of contract

A contract is an agreement between two or more parties that is enforceable by law. Buying bread, hiring a bus, taking a job and insuring a car are all contracts. A simple contract may be oral, written or implied from conduct; a contract under seal (deed) is formal and written (e.g. a conveyance of land).

Elements of a valid contract (Figure 1)

Offer: a definite proposal showing willingness to be bound. Distinguish an offer from an invitation to treat: goods displayed in a shop window with prices, advertisements and catalogues invite customers to make offers; the customer offers at the till and the seller accepts.
Acceptance: unconditional agreement to all terms, communicated to the offeror. A counter-offer rejects the original offer. Under the postal rule, acceptance by post is complete when posted.
Consideration: each party gives something of value (money, goods, a promise). It need not be adequate but must be real.
Intention to create legal relations: presumed in business agreements, not usually in social or domestic ones.
Capacity: parties must be legally competent. Minors (under 18), persons of unsound mind and drunken persons have limited capacity; a minor is bound for necessaries.
Legality: the object must be lawful; contracts to commit crimes or smuggle are void.
Genuine consent: free from misrepresentation, mistake, duress and undue influence.
Certainty and possibility of terms.

Discharge (ending) of contracts

By performance; by agreement; by frustration (an event makes performance impossible, e.g. destruction of the subject matter); by breach; by lapse of time.

Remedies for breach

Damages (money compensation); specific performance (court order to perform, used where money is inadequate, e.g. sale of land); injunction (order to stop an act); rescission (setting aside); quantum meruit (payment for work done).

Contract of employment

An agreement between employer and employee stating job title, duties, pay, hours, leave, notice period and conditions. Under Nigeria’s Labour Act, workers must be given written terms within a set period of starting work. Duties of the employer include paying wages, providing a safe workplace and lawful instructions; the employee must work faithfully, obey lawful orders and exercise reasonable skill.

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Practice questions

1. A valid contract requires

offer, acceptance, consideration, capacity and intention
only a written document
a lawyer
a witness in all cases

Show answer

A: offer, acceptance, consideration, capacity and intention
Plus legality.

2. Consideration in a contract means

the time for thinking
the written form
the price list
something of value given in exchange

Show answer

D: something of value given in exchange
Each party gives something.

3. A minor’s contract for luxuries is generally

valid if written
valid if witnessed
not enforceable against the minor
always valid

Show answer

C: not enforceable against the minor
Minors lack full capacity.

4. The relationship in which one person acts on behalf of another is

guarantee
agency
partnership
employment only

Show answer

B: agency
Principal and agent.

5. Caveat emptor means

let the buyer beware
the seller must refund
the goods are faulty
cash on delivery

Show answer

A: let the buyer beware
Buyers should inspect goods.

Key words

Contract: An agreement between two or more parties that is enforceable by law.
Offer: A definite proposal by one party to another, showing willingness to be bound on stated terms.
Invitation to treat: An invitation to others to make offers, e.g. goods displayed in a shop or advertised.
Acceptance: Unconditional agreement to all the terms of an offer.
Consideration: Something of value given by each party in exchange for the other’s promise.
Capacity: The legal competence of a party to enter a contract.
Void contract: A contract with no legal effect from the start.
Voidable contract: A contract valid until set aside by the innocent party, e.g. one induced by misrepresentation.
Agency: A relationship in which one person (agent) is authorised to act on behalf of another (principal).
Ratification: The principal’s later approval of an act done without authority, making it binding.
Condition: A vital term of a contract; breach entitles the innocent party to reject and claim damages.
Warranty: A minor term of a contract; breach entitles the innocent party to damages only.

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