ILLEGAL CONTRACTS AND THE POSITION OF THE LAW IN NIGERIA

Mr. Abdul was a known tout and nuisance in his little town of Gadawa. During a political campaign, a notable politician in the town approached him with a proposition.

The deal was simple. Abdul would receive 30 percent of the agreed payment upfront, while the balance would be paid after he completed the assignment.

His assignment was to disrupt the rallies of other political contestants and generally cause unrest within the community.

Interestingly, the agreement was properly written out and signed by both Abdul and the politician. Everything appeared to be in order, at least on paper.

After the campaign period ended, Abdul went back to the politician to collect the balance of his money. He was confident that he had fulfilled his part of the agreement. But each time he tried to reach the politician, he was turned away by his security personnel.

He called. He sent messages. He even tried reaching the politician through mutual acquaintances. Nothing worked.

It eventually became clear that the politician had no intention of paying him.

Frustrated, Abdul decided that he would take the matter to court.

He went to a lawyer and explained everything, including the written agreement, the payment he had already received and the work he had carried out.

After listening to him, the lawyer gave him an answer he did not expect.

“You cannot sue to recover this money.”

Abdul was confused.

There was an agreement. It was written down. Both parties had signed it. He had also performed his own part of the bargain.

So why could he not enforce the agreement?

The answer lies in the nature and purpose of the contract.

WHAT IS AN ILLEGAL CONTRACT?

A contract is generally an agreement between parties that creates legally enforceable obligations. However, not every agreement between two people will receive protection from the courts.

An illegal contract is an agreement whose purpose, subject matter or performance involves something prohibited by law or contrary to public policy. Where the very foundation of an agreement is unlawful, the courts will generally not assist a party in enforcing it.

This means that simply putting an agreement in writing and signing it does not automatically make it legally enforceable.

The law is concerned not only with whether the parties agreed, but also with what they agreed to do.

In Abdul’s case, the agreement was not simply a private arrangement to provide a lawful service. He was engaged to disrupt political rallies and cause unrest in the community. The very purpose of the agreement was therefore unlawful.

The fact that Abdul and the politician willingly entered into the agreement does not change its nature.

WHY WON’T THE COURT ENFORCE AN ILLEGAL CONTRACT?

The courts exist to enforce legal rights and obligations, not to provide a remedy for an unlawful transaction.

Where parties enter into an agreement for an illegal purpose, a party generally cannot turn around and ask the court to enforce that very agreement when the other party fails to honour it.

This principle is often expressed by the Latin maxim ex turpi causa non oritur actio, meaning that a person cannot found a cause of action on an illegal or immoral act.

The underlying principle is straightforward: the court will not allow its process to be used to help a person benefit from an unlawful transaction.

Therefore, the fact that Abdul performed his part of the bargain does not, by itself, give him a right to recover the outstanding payment. His claim is based on an agreement whose purpose was itself unlawful.

DOES A SIGNED CONTRACT ALWAYS HAVE TO BE HONOURED?

A common misconception about contracts is that once an agreement has been written down and signed, the parties can always go to court to enforce it.

That is not necessarily the case.

A valid and enforceable contract must satisfy the requirements of a legally binding agreement, and its terms and purpose must not be prohibited by law or contrary to public policy.

A signed document may provide strong evidence of an agreement between parties, but it does not give legal validity to an agreement that the law prohibits.

In other words, a signature cannot turn an illegal transaction into a legal one.

This is why parties should not focus only on documenting their agreements. They should also consider whether the transaction itself is lawful and capable of being enforced by a court.

WHAT HAPPENS WHEN PARTIES ENTER INTO AN ILLEGAL AGREEMENT?

The consequences depend on the nature of the illegality and the circumstances of the particular case.

Generally, where the illegality goes to the foundation of the agreement, the court will not enforce the illegal bargain. A party who willingly participated in the unlawful transaction may therefore find it difficult, or in some circumstances impossible, to obtain a remedy based on that transaction.

This can leave both parties in a difficult position.

If one party has paid money and the other party refuses to perform, the paying party may not necessarily be able to recover the money simply by pointing to the agreement. Similarly, a person who has performed an unlawful obligation may not be able to sue for the promised payment.

The court will examine the nature of the transaction and the circumstances surrounding the claim before determining what, if any, remedy is available.

THE IMPORTANCE OF LEGAL ADVICE BEFORE ENTERING INTO AN AGREEMENT

Abdul’s situation highlights an important lesson about contracts in Nigeria.

A contract should not be judged only by whether it is written, signed or witnessed. The legality of the transaction itself is equally important.

Before entering into a significant agreement, parties should consider whether the subject matter and purpose of the transaction are lawful and whether the agreement creates obligations that a Nigerian court can legally enforce.

This is particularly important where an agreement involves activities that may affect public order, regulatory requirements, criminal law, public policy or other areas regulated by legislation.

Seeking legal advice before signing an agreement can help identify these issues before they become costly disputes.

CONCLUSION

A contract is more than a piece of paper containing signatures. For an agreement to receive the protection of the law, it must be legally enforceable.

Abdul may have had a written agreement. He may have signed it with the politician. He may even have carried out what he was hired to do. But where the agreement itself is founded on an unlawful purpose, the court will generally not assist him in enforcing that bargain.

The lesson is simple: not every agreement is a contract that the law will protect.

Before signing an agreement, it is important to understand not only what you are promising to do, but also whether the law permits you to make that promise in the first place.