662U.B.A. Ltd v.

Tejumola & Sons Ltd 4 July 1988

UNITED BANK FOR AFRICA LTD.

V.

TEJUMOLA & SONS LTD.

SUPREME COURT OF NIGERIA

SC.31/1987

ANDREWS OTUTU OBASEKI, J.S.C. (Presided)

AUGUSTINE NNAMANI, J.S.C.
ADOLPHUS GODWIN KARIBI-WHYTE, J.S.C.
ABDUL GANIYU OLATUNJI AGBAJE, J.S.C. (Read the Lead judgment)
PHILIP NNAEMEKA-AGU, J.S.C.
FRIDAY, 27TH MAY, 1988.

APPEAL - Findings of fact - Concurrent finding by lower Courts - When Supreme Court
will interfere.

CONTRACT- "Offer"; "Acceptance"; "Counter-offer" - What constitutes them in contract.

CONTRACT - Agreement made and expressed to be "Subject to Contract" - How construed.

CONTRACT - Note or memorandum expressing terms of contract - Need to contain all material
terms.

INTERPRETATION OF STATUTES - Law Reform (Contracts) Law of Lagos State, Section 5 -

Scope of.

LANDLORD AND TENANT - Lease - Agreement for a lease - What agreement must contain.

LANDLORD AND TENANT - Lease - Essential ingredients of.

LANDLORD AND TENANT - Lease - Lease agreements - Failure to agree

on a commencement date - Effect.

LANDLORD AND TENANT - Lease - Negotiations of lease agreement - Need to seek

legal advice and retain services of legal practitioner emphasised.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd663
LANDLORD AND TENANT - Lease agreement - When commencement date is stated subject to
the occurrence of a contingency - Whether lease enforceable before contingency occurs.

LANDLORD AND TENANT - Lease agreement - Where no note or memorandum signed formally
by parties - Principle to guide Court in finding a contract.

LAW REFORM - Section 5, Law Reform (Contracts) Law of Lagos State - Need for amendment.

WORDS AND PHRASES - "Subject to contract" - Meaning, Effect and Exception thereto.

Issue:
Whether on the pleadings and the evidence before the Court the finding that there was
an agreement that the lease shall commence on 1st May 1982 can be sustained.

Facts:
The plaintiff/respondent company sued the defendant/appellant in a Lagos High Court for
the sum of N2,000,000.00 being special and general damages for the breach of contract entered
into between them in or about April 1982 in Lagos. According to the pleadings of the plaintiff, the
defendant entered into correspondence with the former in respect of a lease of a property belonging
to the plaintiff. In it all the necessary ingredients but one for a proper lease were offered by the
defendant and the missing item was the commencement date of the lease. The plaintiff accepted
the terms as they were. With this semblance of agreement, the defendant started making demands
for alteration of the premises on the plaintiff, which it complied with. The plaintiff however in a
letter to the defendant, 'Exhibit F' proposed that the defendant should take possession of the
premises on 1st May 1982.
The defendant did not reply to this proposal, and it did not take up possession of the premises
on that date or later, but continued to make more expensive demands on the plaintiff, and which
were complied with. Finally the defendant refused to take lip the lease and hence this action.
The trial Judge at the Lagos High Court, contrary to the defence that there was no lease
because there was no commencement date found that there was a valid lease and that the
commencement date was 1st May 1982. He therefore awarded the plaintiff against the defendant
a sum of N732,200.00 as special and general damages for breach of contract.
The defendant appealed to the Court of Appeal, Lagos Division, which dismissed the appeal,
and the appellant went on to the Supreme Court sticking to its earlier ground that there was no
valid lease because the commencement date was uncertain and that the provisions of section 5 of
the Law Reform (Contracts) Law Cap. 66 Laws of Lagos State enured for its benefit section 5
provides:
"No contract to which this section applies shall be enforceable by action unless the
contract or some memorandum or note in respect thereof is in writing and is signed
by the party to be charged therewith or by some other person lawfully authorised by
him."
664Nigerian Weekly Law Reports4 July 1988
Held (Unanimously allowing the appeal):
1.For a valid agreement for a lease to exist, the parties and the property, the length of the
term, the rent and the date of commencement must be defined.
2.It is essential to the validity of a lease that it shall appear either in express terms or by
reference to some writing which would make it certain, or from the language used, on what
day the term is to commence. There must be a certain beginning and a certain ending,
otherwise it is not a perfect lease, and a contract for a lease must, in order to satisfy section
5 of the Law Reform (Contracts) Law Cap 66, Laws of Lagos State, contain those elements.
3.In an agreement for a lease where there is no note or memorandum signed formally by
the parties, the court in being asked to find a contract between them must take into
consideration the whole of the correspondences which passed between the parties in coming
to a decision on the point in question.
4.As long as a necessary term of an agreement for a lease has not been agreed to the matter
rests in negotiation and there is no concluded contract.
5.An agreement for a lease is an ordinary contract and in accordance with the general
principles of contract law it will not be binding on the parties until their minds are at one
both upon the matters which are cardinal to every agreement for a lease and also upon
matters that are part of the particular bargain.
6.Where a date for the commencement of a lease is not specified but stated by reference to
the happening of a contingency which is uncertain in time, until the contingency happens
there is no enforceable lease. This is because the time of the contingency being uncertain
there is no agreement as to time of commencement. [Shell B. P, Petroleum Development Co.
Ltd. v. Jammal Engineering Nigeria Ltd. (1974) 1 All N.L.R. (Pt.1) 542, 557, 558, 570 applied.]
7.The contract, memorandum or note admitted as expressing the terms of a contract, must
state all the material terms of the contract. The court will not regard such document as
expressing the contract when material terms are missing and cannot be determined by
interpretation or implication of law.
8.It is essential for the memorandum relied upon to have the names of the lessor and lessee,
the description of the property, and the term and its commencement with certainty. The
term of commencement must either be certain or capable of being ascertained before the
lease takes effect.
9.An acceptance is a final and unqualified expression of assent to the terms of an offer, as
made by the offer.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd665
10.Where in an attempt to accept an offer, the offeree varies the terms of the offer or, as in
the instant case, introduces an entirely new term, it is not an acceptance and cannot result
in a contract crystallizing. It is a counter-offer which is not only not an acceptance of the
offer but amounts to a rejection of the original offer, with the result that even if that
original offer is subsequently accepted, its acceptance does not result in a contract between
the parties.
11.The expression "Subject to Contract" means that until a formal contract is drawn up
and executed everything is in the negotiation stage.
12.Per NNAEMEKA-AGU, J.S.C. at Page 701
"But this general principle admits of one important exception in a
transaction such as the instant if, from the tender or other documents
exchanged by the parties, it could be said that the vendor's offer has
been accepted by the purchaser; that is that all the essentials
enumerated in Harvey v. Batt (supra) has been agreed upon. In other
words, that agreement has been reached as to parties, the property, the
 length of the term, the rent, and the date of commencement. Once an
agreement has been reached on all these, the addition of the term
"subject to contract" becomes a cosmetic surplusage But the decisive
and fatal feature in this case in view of what I have said above is that an
essential of the agreement, that is the commencement date, had not been
agreed to. This makes it impossible to apply the exception and say that
an agreement was complete."
13.In this case, the mere fact that the defendant asked for some things to be done to the
property the subject matter of the proposed lease and those things were carried out would
not mean that there is a concluded agreement for a lease in the absence of an agreed
commencement date of the term of the proposed lease which is an essential term of the
lease.
14.In the instant case, the request of the respondent that the appellant take physical
possession of the property on 1:5:82 was an offer to give physical possession on that day
which could only be accepted by the taking up of possession. However, the offer was never
accepted as actual possession was never taken up.
15.The provisions of section 5 of the Law Reform Contract Law Cap 66, Laws of Lagos
State is not meant to affect contracts in any way, but only the evidence of them. It does not
provide that a memorandum duly signed shall be contract, but only that no contract
concerning land shall be proved by any lower evidence than such a written memorandum.
16.Per OBASEKI, J.S.C. at Page 685
"This is an example of hard cases which make bad law It is well to point
out that while it is well
666Nigerian Weekly Law Reports4 July 1988
to take refuge under section 5 of the Law Reform Contracts Law Cap
66 Laws of Lagos State which is similar in terms to the Statute of Frauds
in England, the law was meant to be a shield against frauds and not to
be an instrument of frauds. It becomes necessary to amend our laws to
meet situations created by these hard cases. Banks which involve
landlords in heavy expenses to put their property to the standard
requested by the bank must not be allowed to escape liability for
damages by clever manoeuvering of the law. However, the court is not
the legislature. Its duty is to interpret the law and apply it to facts in the
administration of justice. It does not over step its bound and trespass
upon the sacred province of the legislature. It is the province of the
legislature to enact laws and amend or repeal laws. The court can only
draw attention to areas of the law where amendment is required or
desirable."
17.The Supreme Court will interfere with concurrent finding of fact by the Courts below
where there is no basis for the finding of fact and the finding is clearly not supported by the
evidence. [Lengbe v. Imale (1959) LLR. 95, Shell B. P. v. Pere Cole & Ors. (1978) 3 SC. 183
referred to.
18.In this case, there is no evidence to support the finding of the lower courts that a
commencement date for the lease had been agreed to by the parties; consequently, there
was neither a lease nor a binding agreement for a lease between the parties.
19.Per AGBAJE, J.S.C. at Page 684
 "It is unfortunate that the plaintiff in conducting negotiations in a
matter involving such a heavy sum of money as indicated by the
evidence in this case acted without the assistance of a lawyer. It will
appear that the plaintiff at all stages of the negotiations for the lease
with which we are concerned in this appeal acted for itself. It is
doubtful that it ever sought, let alone obtained, the advice of a legal
practitioner in the matter. Perhaps if it had done the latter, it would
have been warned of the risk of meeting demand after demand from
the defendant in the absence of a concluded agreement for a lease.
It turned out that the plaintiff unwittingly took this risk which
eventually materialised, as this judgment has shown, with the
plaintiff incurring losses for which the defendant cannot be made
legal liable. The stage at which the negotiations for an agreement for
a lease had reached in this case raised high hopes in the plaintiff that
a concluded agreement would finally be arrived at. That one was
not reached is not because of any default on the part of the plaintiff.
In fact it was when all of the
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd667
objections raised by the defendant had been disposed of by the
plaintiff at some considerable cost that the defendant called off the
negotiations. The law says the defendant can do so with impunity. But
I do not think it will be too much to expect if the defendant having
regard to all the circumstances of this case decide to absorb ex gratia
some of the losses which the plaintiff had undoubtedly suffered in the
transactions."
20.Per NNAMANI, J.S.C. at Page 691
"This suit has caused me anxious moments. If I had the slightest
feeling that this was one of those technicalities against which this court
has resolutely set its face, I would have dismissed this appeal. But alas
the law seems clear to me. There is no doubt that the appellant led the
respondent up a very expensive garden path only to throw it away.
But it is a path on which the respondent most unwisely jumped. If
only it had retained the services of counsel, it would have become so
clear that it was essential to have an enforceable agreement before it
embarked on the very expensive alterations it made at appellant's
request. The respondent's anxiety to let these premises probably got
the better part of even its layman's judgment. I join my learned
brother in hoping that the appellant can be persuaded to reduce the
respondent's losses to a tolerable level. Those alterations made at its
request may not suit any other tenant."
21.Per NNAEMEKA-AGU, J.S.C. at Page 702
"There is one aspect of the ultimate suggestion made in the lead
judgment on which I feel quite reluctant to go along with my learned
brother. He suggested that, in view of the enormous expenses which
the respondents ran at the request of the appellants, counsel on both
sides should put their heads together to see how justice could be done
 to them. I cannot agree to this without pointing out that the
respondents were the architects of their own misfortune. With all the
clear story which the quality and language of their correspondences
tell, they still elected to act for themselves, for a transaction which
could have been worth several millions of naira. It was only after they
had ruined their case that it dawned on them that they should brief
an experienced counsel, for the court case. This is a height of
indiscretion. Yet, it is said that the quality of mercy is not strained. It
is only on this ground that I associate myself with the suggestion that
counsel should agree on what compensation should be paid to the
respondents for the expenses they ran at the request of the appellants,
in spite of the fact that there was no binding contract between the
parties.
668Nigerian Weekly Law Reports4 July 1988
Nigerian Cases Referred to in the Judgment:
Lengbe v. Imale (1959) LLR. 95
Shell B. P. Petroleum Development Co. Ltd. v. Jammal Engineering Nigeria Ltd. (1974) 1
All NLR (Pt.1) 542
Shell B. P. v. Pere Cole (1978) 3 SC. 183

Foreign Cases Referred to in the Judgment:

Bennet v. Wood (1950)2 All E.R. 134
Bishop of Bath's Case (1605)6 Co. Rep. 346
Brilliant v. Michaels (1945) 1 All E.R. 121
Bristol, Cardiff and Swansea Aerated Bread Company v. Maggs (1890) 44 Ch.D.616
Central London Property Trust Ltd. v. High Trees House Ltd. (1947) 1 K.B. 130 at 134
Chillingworth v. Esche (1924) 1 Ch. 97 CA.
Coope v. Ridout (1921) 1 Ch. 291 CA.
Eccles v. Bryant (1948) Ch. 93
Havey v. Pratt (1965) 1 W.L.R. 1925
Hussey v. Horne-Payne (1978-79) 4 App. CAS 311
Hyde v. Wrench (1840) 3 Bear 334
Jackson v. Turquand (1869) L.R. 4 H.L. 305
Jones v. Daniel (1894) 2 Ch. 332
Kennedy v. Lee (1817)3 Mer 441
Keppel v. Wheeler (1927) 1 KB. 577 CA.
Lace v. Chandler (1944) K.B. 368
Marshall v. Berridge (1881) 19 Ch.D. 238
Mauray v. Durley Chine (Investments) Ltd. (1953)2 All E.R 458.
Nesham v. Selby (1872) 7 Ch. App. 406
Nicolene Ltd. v. Simmonds (1953) 1 All E.R. 822
Phelan & Tedcanstle (1884)31 L. J. Ch. 44
Rawlinson v. Ames (1925) Ch. 96
Richards Properties Ltd. v. Corporation (1875) 3 All E.R. 416
Rossdale v. Denny (1921) 1 Ch.57 CA.
Rossiter v. Miller (1878) 3 App. CAS. 1124
 Skelton v. Cole (1857) 1 De G. & J. 587
Stimson v. Gray (1929) 1 Ch. 629
Storer v. Manchester (1974) 3 All E.R. 824
Trollope v. Martyn (1934) 2 KB. 436 CA.
Williams v. Jordan (1877) 6 Ch. D. 517
Winn v. Bull (1877)7 Ch. D. 29

Nigerian Statute Referred to in the Judgment:

Law Reform (Contracts) Law Lagos State Cap 66 Section 5.

Foreign Statute Referred to in the Judgment:

Statute of Fraud of 1677
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd669
Appeal:
This was an appeal from the Court of Appeal, Lagos Division dismissing the appellants
appeal against an award of damages for breach of contract of lease by the High Court.
The Supreme Court allowed the appeal and reversed the decision of the lower Court.

History of the Case:

Supreme Court:
Names of Justices that sat on the Appeal: Andrews Otutu Obaseki, J.S.C. (Presided),
Augustine Nnamani, J.S.C., Adolphus Godwin Karibi-Whyte, J.S.C., Abdul Ganiyu
Olatunji Agbaje, J.S.C. (Read the Lead Judgment); Philip Nnaemeka-Agu, J.S.C.
Appeal No: SC. 31/1987
Date of Judgment: Friday, 27th May, 1988.
Names of Counsel: Chief F.R.A.Williams, SAN, (with him, Miss A. F. Ayaoku) - for
the Appellant
Mrs. P. C. Ajayi-Obe (with her, A.O. Aniagolu and Tunde Oyewole) - for the
Respondents

Court of Appeal:
Division of the Court of Appeal from which the appeal was brought: Court of Appeal,
Lagos.
Names of Justices that sat on the Appeal: Adenekan Ademola, J.C.A. (Presided and
Read the Lead Judgment), Uthman Mohammed, J.C.A., Idris Legbo Kutigi, J.C.A.
Appeal No: CA/L/234/85
Date of Judgment: Tuesday, 22nd July, 1986
Names of Counsel: Chief F.R .A. Williams, SAN (with him., Miss Ata) - for Appellant
Mr. Kehinde Sofola, SAN (With him, Miss Ogundare and Chief Oyebola) - for
Respondents

High Court:
Name of High Court: High Court, Lagos.
Name of the Judge: Ligali A. Ayorinde, J.
Suit No: LD/891/83
 Date of Judgment: Friday, 23rd November, 1984
Names of Counsel: Mr. Kehinde Sofola SAN (with him, Miss S. Ogundare, A. O.
Aniagolu, E. Obi and O. Oyewole) - for Plaintiff
Chief F.R.A. Williams SAN, (with him, Miss T. Kazeem) - for Defendant

Counsel:
Chief F.R.A. Williams SAN, (with him, Miss A. F. Ayaoku) - for the Appellant

Mrs. P. C. Ajayi-Obe, (with her, A.O. Aniagolu and Tunde Oyewole) - for the Respondents
670Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
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AGBAJE, J.S.C. (Delivering the Lead Judgment): The plaintiff Company, A Tejumola & Sons
Ltd., sued the Defendant Bank, United Bank for Africa Ltd., in a Lagos High Court claiming
against it as per the indorsement on its Writ of Summons dated 3rd August, 1983 as follows:
"The plaintiff's claim against the defendant is for the sum of N2,000,000.00 (Two
million Naira) being special and general damages for the breach of contract entered
into between the plaintiff and the defendant in or about April 1982 in Lagos, the
breach having occurred also in Lagos in or about October, 1982."
Pleadings were ordered, filed and delivered. The case proceeded to trial before Ayorinde J.
The contract alleged by the plaintiff as existing between it and the defendant Bank and in respect
of which damages were being claimed by the plaintiff from the defendant for its breach by the
latter was pleaded as follows in paragraphs 9, 10, 11 and 12 of the plaintiff's statement of claim:
"9. Thereafter, negotiations as regards the term of the proposed lease of the said property
went on between the parties until April, 1982 when the defendant by its letter dated
19th April, 1982 offered to rent the said property from the plaintiff subject otherwise
to the terms and conditions contained in the said letter for a term of 15 years, the
defendant reserving the right to break the said term at the end of the 5th and of the
10th year's of the said term.
10.The rent offered was N215 per sq. meter (or N20 per sq. ft.) per annum payable 5 years in
advance subject to a revision every 5 years.
11.The area of the property agreed to be rented by the defendant was a portion of the ground
floor (i.e. 900sq. ft.) and all the four upper floors (i.e. 1,108 sq. ft. each) comprising a total floor
area of approximately 493,036 sq. metres (5,322 sq. ft.).
12.The plaintiff by its letter dated 19th April, 1982 accepted the defendant's offer without any
reservations."
The property to which the alleged contract relates admittedly belongs to the plaintiff and it
is situate at No. 42, Idumagbo Avenue, Lagos, otherwise known as No. 3 Docemo Street, Lagos.
The plaintiff pleaded the negotiations which led up to the contract which according to it was
entered into between it and the Defendant Bank. After the contract had been concluded, as pleaded
by the plaintiff, the plaintiff pleaded in paragraph 13 of its statement of claim as follows:
"13. Thereafter, the defendant started to give directives to the plaintiff G as to how the
plaintiff should alter the said property to suit the peculiar needs of the defendant as a
banking business office."
The particulars of the alterations to the said property which the plaintiff carried out pursuant
to the directives of the defendant in this regard, according to the plaintiff, were pleaded with
adequate particularities in the plaintiff's statement of claim.
The defence of the defendant bank to the claim by the plaintiff company against it was
concise and precise and it was contained in paragraphs 5, 6 and 7 of its statement of defence which
read thus:-
 "5. The defendant admits that it entered into negotiation with the plaintiff for the grant of
a lease of the premises referred to in the
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )671
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 statement of claim herein, and that the initial rent and the length of the term had
been agreed as alleged. But the negotiations were never completed and in
particular the defendant's letter dated 19th April, 1982 pleaded in paragraph 9 of
the statement of claim was clearly written "SUBJECT TO CONTRACT"
6.The agreement referred to in the statement of claim did not fix the date of commencement of
the proposed lease with the certainty required by law.
7.The defendant will rely upon the provisions of section 5 of the Law Reform (Contracts) Law
Cap. 66 Revised Laws of Lagos State."
As I have said before, the case proceeded to trial before Ayorinde J. The plaintiff led
evidence, mainly documentary, in support of the various averments in its statement of claim. The
defendant called no evidence. In short the defendant tested its case on the evidence adduced by the
plaintiff.
The letter dated 19th April, 1982 from the defendant which the plaintiff pleaded as
constituting the offer from the defendant to the plaintiff to rent the property in question is Exh. E.
in these proceedings. The relevant portions of Exh. E for the purposes of the appeal in hand are as
follows :-

"OUR REF: PROP/PM/82 19th April, 1982.

Tejumola & Sons Limited,

15, Okoya Street,
P.O. Box 3253, LAGOS.

SUBJECT TO CONTRACT

Dear Sirs,

3, DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E.T.
Ajiboye with us concerning the above property. Subject to your showing evidence of
good title we hereby offer to take a sub-lease of your above property on the following
main terms and conditions:- PREMISES
Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108
sq. ft. each) comprising a total floor area of approximately 495.36 sq. metres (5,332
sq. ft.)
TERM
15 years from the date physical possession of the property is given to us, subject to
the Bank reserving the right to break at the end of the 5th and 10th years of the term.
RENT
N215 per sq. metre (or N20 per sq. ft.) per annum payable 5 years in advance from
the date physical possession of the property is given to us and upon our being
satisfied with the search of the Lands Registry as regards the genuineness of your
title to the property.
672Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
A

RENT REVISION
Every five years of the term subject to the usual arbitration clause.
 TENANTS COVENANTS (Not relevant) ...
LANDLORDS COVENANTS (Not relevant) .......
If the above main terms and conditions are acceptable to you, please confirm. (Italics
mine)

Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) J. A. Dosunmu
Property Manager."

The acceptance of the offer contained in Exh. E by the plaintiff, according to the latter, is by
Exh. F which reads thus:-

"15 Okoya Street, Lagos.

P.O. Box 3253,
Tel. 631687,658075
19th April, 1982
The Property Manager,
United Bank for Africa Limited,
Broad Street,
Lagos.

Dear Sir,

Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were
carefully noticed. Our Company has carefully consent and confirmed the Tenants
Covenants and Landlord's Covenants. We accepted your offer for the premises
portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. F 1,108
sq. ft. each) comprising a total floor area of approximately 495.36 square metres
(5,332 sq. ft.), and also to the subject of Terms reserved by the Bank right.
Our Company also agreed the rentage of N215 per square metre (N20.00 per square
foot) per annum payable in 5 years advance from the date physical possession at the
property. In view of our 4 (four) months wasted on this property, we request you to
take the physical possession on 1st May, 1982, and we expect your cheque for
advance payment of 5 years as soon as possible.
We shall be looking forward for your immediate comments as soon as possible.

Thank you.

Yours faithfully,
TEJUMOLA & SONS LTD.
(Sgd) ? ? ?
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )673
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B

Chairman."
(Italics mine).
 The other documents put in evidence by the plaintiff Company are exhibits G, H, K, L, M,
N, O, P, Q, R, S, T, T1, U, V, W, X, Y, Z, Z2, AA, BB, CC, CC1, DD, DD1, Exh. 1, Exh. 2, Exh.
3, Exh. 4, Exh. 5, Exh. 6, Exh. 7.
However, as regards the appeal in hand reference need only be made to the following out of
these exhibits. First: Exhibit C which says as follows:-

"UBA UNITED BANK FOR AFRICA LIMITED HEAD OFFICE: 97/105

Broad Street,
P. O. Box 2406, Lagos
18th May, 1982

OUR REF. PROP/AGMP/82

Chairman/Director,
Tejumola & Sons Limited,
15, Okoya Street,
LAGOS.

Dear Sir,

3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

There will be a site meeting on Friday, 21st May, 1982 at 10.00 a. m. to agree the
external area which should be in the exclusive possession of the Bank. Please ensure
you are present, and be prepared to endorse sketch plans which will reflect any
agreement reached on the spot.
We would also inspect and ensure that all the main services i.e. mains water, mains
electricity, plumbing system, and sewage disposal facilities are in good working
condition. The locations of our generators and strong room and other similar items
will be discussed and agreed with you.
Please confirm that you will attend the meeting.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) A. G. Sangosanya."
(Italics mine)

Second: Exh. H which says as follows:-

"HEAD OFFICE:
15 Okoya Street, Lagos.
P.O.Box 52057,
Tel. 631687, 658075
24th May, 2982.
674Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
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 Mr. A. O. Okoro,
United Bank for Africa,
(Property Department),
4th floor,
Broad Street, Lagos.

Dear Sir,

Thanks for your co-operation for the meeting we held together about housing
inspection to locate the ground floor area for Bank use. Already I have separated the
wall between Docemo and Idumagbo Avenue, and I've block the corner piece of
backyard according to the plan you draw for site.
I have demolished the small store with open space for generator plant for electrical
engineer design, and the electrical engineer come here this morning and see
everything.
I am waiting for the ground floor Drawing Sketch you drawn for signature, and our
Company authorised you to start any adjustment you need both internal and external
from ground floor to fourth floor, and request from your engineer is this I've got report
from our Electrical Contractor. I have submitted the letter and copy of collection fees.
Thank you.

Yours faithfully,
(Sgd) ? ? ?
Chairman"
(Italics mine)

Third: Exhibit J which says as follows

UBA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE:
97/105, Broad Street,
P.O. Box 2406, Lagos.
10th June, 1982.

OUR REF. PROP/ABS/1246/82

Tejumola & Sons Limited,
15, Okoya Street,
P.O.Box 3253,
Lagos.

Dear Sirs,

3, DOCEMO STREET & 42 IDUMAGBO AVENUE, LAGOS

 We have been informed that the suitability of the above property could be in doubt as
it was understood that it once collapsed during construction.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )675
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 We have therefore contacted a reputable firm of Structural Engineers who are
charging N6,000.00 (Six thousand naira only) to inspect and confirm the suitability
of the property. Attached is a photostat copy of their letter requesting for the above.
Kindly let us have your cheque in the same amount by return.
We regret that it will not be possible to progress the transaction any further until the
structural Engineers confirm that the building is structurally sound for our type of
business.
(Italics mine)

Yours faithfully,
pp: UNITED BANK FOR AFRICA LIMITED
(Sgd) A. G. Sangosanya (Sgd) A. O. Okoro
Asst. General Manager Building Surveyor"

Fourth: Exhibit L which says as follows: -

PROP/ABS/1246/82
11th June, 1982.

Mr. A. G. Sangosanya,
Assistant General Manager,
United Bank for Africa,
Lagos.

Dear Sirs,

3, DOCEMO STREET & 42, IDUMAGBO AVENUE, LAGOS Referred you to

your letter PROP/ABS/1246/82 dated 10th June 1982, which the contents were
carefully noticed.
............................................................................................................................
.............................................................................................................................
We hope that this our Engineer's reports and confirmation of the Lagos State
Development Town Planning will convince your satisfaction on the building
suitability.
Looking forward to hear more of your comments as early as possible.
Thanks for your co-operation in this regards.
Yours sincerely,
TEJUMOLA & SONS LTD.

(Sgd) ? ? ?
DIRECTOR"

Both the Engineer's report and the document from the Lagos State Development Town
Planning referred to in Exh. L confirm it that the property in
676Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
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question in this case is structurally safe for the use to which the defendant Bank wanted to make
of it. The Engineer's report is Exh. M.
 It will appear from Exhs. N, O, P, Q, R, S, T, T1, that the defendant Bank was not quite
satisfied with the Engineer's report in Exh. M and that at the request of the defendant Bank another
firm of Engineers named by the defendant Bank inspected the property in question in conjunction
with the plaintiff's Engineers with a view to assessing the suitability of the premises for the
defendant's business. The plaintiff paid for the costs of the inspection. In the end the new firm of
Engineers Messrs Ove Arup & Partners by Exh. T of 28th September, 1982 agreed with Exh. M
that the building in question was safe to carry loads peculiar to a Banking Institution. In other
words, the new Engineers agreed that the building in question was safe for the business of the
defendant Bank.
In reinforcement of the opinion in Exh. T there is Exh. T1 of 13th September, 1982 from
Folad Engineers addressed to Messrs Ove Arup & Partners endorsing the latter's opinion in Exh.
T.
After all these assurances from the plaintiffs to the defendant as to the structural soundness
of the property in question and after the plaintiffs at the request of the defendant had carried out
structural alterations to the property at some considerable cost the Defendant Bank wrote Exh. U
of 8th October, 1982 to £) the plaintiff. Exh. U reads thus:

"HEAD OFFICE:
97/105 Broad Street,
P.O. BOX 2406, Lagos.
Our Ref: PROP/PM/2124/82 8th October, 1982
Tejumola & Sons Limited,
15 Okoya Thomas Street, Lagos.

Dear Sirs,

42, IDUMAGBO AVENUE, LAGOS

This is to inform you that the members of the Management of this Bank will inspect
your above property at 2.30 p.m. on Monday 11th October, 1982.
Kindly arrange for your representative to open all the doors and windows of the
property to them on that day.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) LA. Dosumu
Property Manager"

According to the oral evidence in this case the property was inspected on the day indicated
in Exh. U. All the officers of the Bank who were present at the inspection were satisfied with what
they saw there. It was after this inspection
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )677
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that the Defendant Bank wrote Exh. V to the plaintiff calling off everything connected with the
property in question. Exh. V reads thus:

"Our Ref: PROP/PM/2275/82 28th October, 1982

 Tejumola & Sons Limited,
15, Okoya Street,
Lagos.

Dear Sir,

RE: 3 DOCEMO STREET/42IDUMAGBO AVENUE LAGOS

We refer to our previous correspondence concerning our requirements for

your above property.
After giving this matter considerable thought, we regret to inform you that
we are no longer interested in taking a lease of your above property.
We however thank you for offering the lease of the property to us and hope
to be able to do business with you in future.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) J. A. Dosumu
Property Manager."

All the documents, subsequent in point of time to Exh. U, put in evidence in this case
establish (i) allegation by the plaintiff charging the Defendant Bank with breach of contract and
claim for damages by the plaintiff from the defendant for the resultant breach; (ii) attempt by the
Defendant Bank to seek without admitting liability a negotiated settlement of the alleged breach
of contract; and (iii) losses incurred by the plaintiff as a result of the alleged breach. These
documents strictly speaking bear little or no relevance to the issue arising for consideration in this
case. So I need not say anything more about them.
The learned trial Judge Ayorinde J in his judgment dated 23/11/84 held as follows as
regards Exhs. E and F:-
".... Exhibit 'E' speaks of the date when physical possession is given but exhibit
'F' says physical possession is given from 1/5/82. It is my considered view that
the contract was to begin on 1 /5/82 which was the date fixed by the plaintiff. The
defendant did not rebut this averment. I find it is the true date of commencement
of the contract. The contention of the defendant is untenable."
Consequent upon this finding the learned trial Judge rejected the contention for the Defendant
Bank that the negotiations between the parties in this case in respect of the property in question
have not crystallized into a contract in that the date of the commencement of the proposed lease
has not been agreed. The learned trial Judge then found for the plaintiffs having rejected the other

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contentions by the defendant. Eventually judgment was entered for the plaintiff A against the
defendant for N732,200.00 as special and general damages for breach of contract, the latter being
N200,000.
The Defendant Bank appealed against this decision to the Court of Appeal Lagos Division.
In that court the Defendant Bank took the point that the negotiations between the parties in this
case had not crystallized into a contract, because the date of the commencement of the proposed
lease had not been agreed and that the trial court was wrong in holding that that was not so and
that 1st May, 1982 was the date of the commencement of the lease. This contention was again
rejected by the Court of Appeal. In the lead judgment of the court below by Ademola, J.C.A., to
which Mohammed and Kutigi JJ CA. agreed, the learned Justice of Appeal was of the opinion that
in coming to a decision on the point at issue one must not look at Exhs. E and F alone but at all the
documents C that passed between the parties including Exhs. E and F. Having examined Exhs. E,
F, G, H, K, Q, R, he made the following finding:-
"....From these series of correspondence that I have examined, I cannot see in them
where the date of 1st May is the date wherein the appellant took physical
possession as being in doubt. I am inclined to think that all these activities will be
regarded by the parties as preparatory to the signing of a formal lease pending the
payment of rent due under the agreement.
The appellant for reasons best known to him, but which is pretty obvious by his
letter of 8th September Exhibit S decided to have cold feet over an already
concluded matter and the final breach between parties in October should have been
a foregone conclusion to a discerning person."
In the end the contention for the Defendant Bank was rejected. However, the Court of Appeal
allowed the appeal of the defendant on the issue of damages, in that the award for general damages
was set aside. The Defendant Bank not being satisfied with the decision of the Court of Appeal
has now appealed from it to this court.
Briefs of Arguments were filed on both sides. Both sides are agreed that the only question for
determination in this case is as follows:
"Whether on the pleadings and the evidence before the court the finding that there
was an agreement that the lease shall commence on 1.5.82 can be sustained."
So, it is not necessary to refer again to the grounds of appeal in this case.
In this judgment the appellant will hereinafter be referred to as the defendant and the respondents
as the plaintiffs and the property the subject matter of the proposed lease as the property.
I have stated the evidence, mainly documentary, in this case and I have also referred to the
relevant portions of the statement of claim and of the statement of defence. It now behoves me to
state the law on the point at issue.
The case of Harvey v. Pratt (1965) 1 W.L.R. 1025 relied upon by counsel for the defendant,
Chief F.R.A. Williams, SAN establishes it that for a valid agreement for a lease to exist the parties
and the property, the length of the term, the rent and the date of commencement must be defined.
The case of Marshall v. Berridge 19 Ch. D. 233 at 238 - 239 and 244 - 245 again cited to us by
counsel
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )679
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for the defendant decides it that it is essential to the validity of a lease that it shall appear either in
express terms or by reference to some writing which would make it certain or by reasonable
inference from the language used on what day the term is to commence, and a contract for a lease
to satisfy the statute of fraud must contain this element.
On these two authorities it can be said that it is settled law that an essential term of an
agreement for a lease is the day of the commencement of the term to be created by the lease.
In the instant case, as I have shown above, the alleged agreement for a lease is not in one
particular note or memorandum formally signed by the panics to this case. The court has been
asked to find a contract in a series of correspondence between the parties. In a situation like this it
has been held in Hussey v Home-Payne 1978-79 4 APP. CAS 311 that the court must take into
consideration the whole of that which has passed between the panics in coming to a decision on
the point in question.
Nesham v. Selby (1872)7 Ch. App. 406 decides it that as long as a necessary term of an
agreement for a lease has not been agreed to, the matter rests in negotiation and there is no
concluded contract. The point must also not be lost sight of that an agreement for a lease is an
ordinary contract and in accordance with the general principles of contract law it will not be
binding on the parties until their minds are at one both upon matters which are cardinal to every
agreement for a lease and also upon matters that are part of the particular bargain. See for instance
Rossiter v. Miller (1878) 3 APP CAS 1124 at 1139.
On the authorities as I have just stated them, the question for determination in this case is
whether it can be said on the evidence in this case that 1st May, 1982, the day said by the plaintiff
to be the commencement of the proposed lease, which no doubt is an essential term of an agreement
for the lease, has been agreed to by the parties to this case.
The trial court held in the passage from its judgment which I have copied earlier on in this
judgment that 1.5.82 was the commencement date of the agreement for the lease because Exh. F
written by the defendant to the plaintiff said "physical possession is given from 1.5.82" and that
the defendant did not rebut this averment. It will appear that the trial court came to this decision
as to the commencement date on the consideration of exhibits E and F, in this case and there is no
indication that it considered the other correspondence between the parties on the issue of the
commencement date of the agreement for the proposed lease.
As I have shown earlier on in this judgment the Court of Appeal, the lower court, agreed with
the learned trial Judge as to 1st May 1982 being the day of the commencement of the proposed
lease. In coming to its decision the Court of Appeal considered all the relevant correspondence
that passed between the parties on the point including exhibits E and F. On the authority of Hussey
v. Home-Payne (supra) this is the correct approach to the point at issue. The lower court concluded
as I have shown above as follows:
"From these series of correspondence that I have examined, I cannot see in them
where the date of 1s! May as the date wherein the appellant took physical
possession as being in doubt."
Neither the trial court nor the lower court, the Court of Appeal, made a
680Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
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definite finding that the defendant agreed to 1.5.82 stated in Exh. F, the plaintiff's letter to the
defendant, as the commencement date of the proposed lease. The trial court said the defendant did
not rebut the averment. The Court of Appeal, the lower court for its part said that there was no
doubt that 1.5.82 was the date of the commencement of the proposed lease. It did not say positively
that the defendant agreed to this date.
I have said above that Nesham v. Helby (Supra) is authority for the proposition that the date
of the commencement of an agreement for a lease must be agreed to by the parties. It will be
illustrative in this regard to state the facts of that case which are as follows:
"The plaintiff, in a bill for specific performance of an agreement to take a lease of a
house, alleged and produced evidence of a verbal agreement which was denied by the
defendant. In order to take the case out of the Statute of Frauds, the plaintiff relied on
a letter written by the defendant, in which the defendant agreed to take the house for
seven years on certain terms, but in which the day of the commencement of the lease
was not mentioned; and on another letter from the defendant mentioning the day of
commencement, and adding terms to which the plaintiff did not agree.
In that case Sir W.M. James, L. J. held as follows:
In this case the plaintiff has filed a bill on an agreement evidenced by letters. It is
admitted that the first letter does not contain all the terms of the alleged agreement.
The omitted term is said to be evidenced by a second letter. But that letter shows
that the understanding of the defendant as to the agreement was different from that
of the plaintiff. Then the whole thing is broken off before the plaintiff has bound
himself to anything, and the plaintiff was never placed, in any difficulty by the
agreement being broken off. I think that the court has gone quite far enough in
decreeing specific performance upon letters as constituting agreements, where one
side is bound and the other not."
 The plaintiff in the case failed because there was no evidence that he agreed to the date of the
commencement of the proposed lease as suggested in the defendant's letter upon which he relied.
So what I have to do now is to find out if on the whole of-the correspondence that has passed
between the parties in this case and which are relevant to the point at issue and which I have copied
above it can be said or inferred that the defendant agreed to 1.5.82 which is the date of the
commencement of the lease as stated in Exh. F, a letter from the plaintiff to the defendant.
What the plaintiff Company said in Exh. F as to the commencement date of the proposed
lease is as follows:
"We request you to take the physical possession on 1st May, 1982."
All the correspondence which passed between the parties showed without doubt that the
defendant never at any time took possession of the property the subject matter of the proposed
lease.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )681
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At this juncture I must pause to consider the case of Brilliant v. Michaels (1945)1 All E.R.
121 at 121 to 128 where Evershed J. held as follows:
"My opinion, therefore, is that a contract for a lease is enforceable notwithstanding
that the commencement of the term may be expressed by reference to the
happening of a contingency which is at the time uncertain provided that at the time
that the contract is sought to be enforced, the event has occurred and the
contingency has happened."
Counsel for the plaintiff relied heavily on this case.
Exh. E from the defendant says the term of the proposed lease will commence from the date
physical possession is given to the appellant bank. To that extent it may be said that the
commencement of the term has been expressed by reference to the happening of a contingency
namely giving of physical possession to the defendant bank. But that event has not occurred before
the defendant called off everything. So the contingency by reference to which the day of the
commencement of the lease could have been ascertained did not happen. This being so, the case
of Brilliant v. Michael (Supra) is not in point here, in my judgment.
I will therefore continue with the consideration of the point as to whether the defendant has
agreed to 1.5.82 as the date of the commencement of the proposed lease. Exh. F of 19.4.82 from
the plaintiff requested the defendant to take possession on 1st May, 1982. By Exh. G of 18th May,
1982, subsequent no doubt to Exh. F, the defendant wrote the plaintiff saying there would be a
sight meeting on Friday 21st May, 1982 at 10a.m. to agree the external areas which should be in
the exclusive possession of the defendant. It will appear the sight inspection was carried out as
demanded in Exh. G. Then there is Exh. H from the plaintiff to the defendant, describing the
inspection as one to locate the ground floor for the defendant's use and also containing steps taken
by the plaintiff Company to prepare the floor area for that purpose. Then again there is Exh. J. of
10"' June, 1982 from the defendant to the plaintiff saying, it would not be possible to progress with
the transaction any further until the Structural Engineers confirmed that the property, the subject
matter of the proposed lease, was structurally sound for the type of business the defendant wanted
to transact in it. There is equally no doubt that by Exhs. L, M, Q, T and T1 the plaintiff produced
confirmation from the Structural Engineers to the defendant as to the structural soundness of the
property for the banking business of the defendant. To this end the plaintiff incurred considerable
expenses. The response of the defendant to all what the plaintiff Company has done was Exh. V
wherein the defendant called off everything up to that time.
The indications from the analysis I have made of the correspondence which passed between
the defendant and the plaintiff after Exh. F was written are that the defendant never at any time
expressly agreed to 1.5.82 as the date of the commencement of the proposed lease. And I have said
earlier on in this judgment that the defendant never at any time took possession of the property.
 Counsel for the plaintiff, Mrs. P.C. Ajayi-Obe made the point both in the plaintiff's brief of
argument and in oral submissions to us that the defendant is estopped from saying that there is no
concluded agreement in this case. She said in other words that the defendant was estopped from
saying that 1.5.82 was not
682Nigerian Weekly Law Reports4 July 1988(Agbaje, J.S.C. )
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the day of the commencement of the proposed lease agreed to by both sides. She said the defendant
was estopped because of the expenses incurred by the plaintiff at the instance of the defendant in
restructuring the property the subject-matter of the proposed lease in order to make it suitable for
the banking business of the defendant. As I have said there is no doubt that the plaintiff carried out
the restructuring at a considerable cost and at the instance of the defendant. But the point still
remains whether all what the plaintiff did was done at the time when negotiations were in progress
or at a stage after a concluded agreement for a lease had been reached.
Counsel for the plaintiff as I have said, submitted to us that the defendant bank was estopped
for the reasons I have just mentioned. She did not mention the species of estoppel she had in mind.
What however readily comes to mind when dealing with a matter of this nature is what Denning
J, as he then was, said, in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) 1
K.B. 130 at 134 which is as follows:-
"With regard to estoppel, the representation made in relation to reducing the rent, was
not a representation of an existing fact.
It was a representation, in effect, as to the future, namely, that payment of the rent
would not be enforced at the full rate but only at the reduced rate. Such a
representation would not give rise to an estoppel, because, as was said in Jorden v.
Money (1), a representation as to the future must be embodied as a contract or be
nothing.
But what is the position in view of developments in the law in recent years?The
law has not been standing still since Jorden v. Money (1). There has been a series of
decisions over the last fifty years which, although they are said to be cases of estoppel
are not really such. They are cases in which a promise was made which was intended
to create legal relations and which, to the knowledge of the person making the
promise, was going to be acted on by the person to whom it was made and which was
in fact so acted on. In such cases the courts have said that the promise must be
honoured. The cases to which I particularly desire to refer are: Penner v. Blake (2) In
re Wickham (3), Re William Porter &
Co. Ltd. (4) and Buttery v. Pickard (5). As I have said they are not cases of estoppel
in the strict sense. They are really promises -promises intended to be binding,
intended to be acted on, and in fact acted on."
This has come to be known as promissory estoppel.
The mere fact that the defendant asked for some things to be done to the property the subject
matter of the proposed lease and those things were carried out would not mean that there is a
concluded agreement for a lease in the absence of an agreed commencement date of the term of
the proposed lease which is an essential term of a lease.
The fact I have just referred to will only be relevant in the instant case if counsel for the
plaintiff can thereby show that the defendant has by its conduct which must be evidenced in
writing, See Marshall v. Berridge (Supra) agreed to the commencement date of 1.5.82 in the
plaintiff's letter Exh. F. Unless this can
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Agbaje, J.S.C. )683
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be done it cannot be said that the request by the defendant for the work carried out by the plaintiff
on the property the subject matter of the proposed lease made 1.5.82 the date of the commencement
of the proposed lease agreed to by both sides.
I cannot find anything in the requests made by the defendant for alterations to the property
the subject matter of the proposed lease suggesting that the defendant expressly or by reasonable
inference agreed to 1.5.82 as the date of the commencement of the proposed lease.
This is all the more so when the requests came after 1.5.82 and at a time when, at least from
the point of view of the defendant, (1) the external area of the property which would be in its
exclusive possession had not been agreed upon and (2) the structural soundness of the property for
the business of the defendant was in doubt.
I cannot therefore find any basis for the application in this case of the type of estoppel in the
High Trees Case (Supra) or for that matter any other type of estoppel in reaching a decision as to
whether the defendant agreed to 1st May 1982 as the commencement date of the proposed lease.
Both sides placed reliance on the case of Shell B .P. Petroleum Development Co. Ltd. v.
Jammal Engineering Nigeria Ltd. (1974) 1 All N.L.R. Part 1 at 542. The following passages from
the judgment of the Supreme Court in the case by Coker J.S.C. under-scored the points I have
made in this judgment that in the absence of an agreed commencement date of a lease there can be
no concluded contract for a lease. The passages are as follows:-
Page 557: "Manifestly, the letter exhibit C touched upon the important consideration of the
commencement date or dates of the lease or leases of the several houses."
Page 558: "The learned trial Judge evidently considered the various attempts to fix
commencement dates by the parties (i.e. by exhibit E dated the 18"' September,
1968, exhibit K dated the 31s1 October, 1968, exhibit L dated the 7th
November, 1968 and exhibit N dated the 29th November, 1968 and exhibit O
dated the 16th December, 1968)."
Page 558: "In the words of the learned trial Judge himself, the position was described as
follows: "That these new dates proposed by the defendants were accepted by
the plaintiffs are not in doubt."
Page 570: "The learned trial Judge took the view that at that point of time the parties were
in agreement over the granting of lease; by the defendants to the plaintiffs of a
number of houses in the Jammal Estate. We think this is clearly so."
In the instant case I cannot find any evidence of an agreed commencement date of the term
of the proposed lease. I will deal briefly with the point as to the effect of section 5 of the Law
Reform Contract Law Cap. 66 Laws of Lagos State which provide as follows namely
"No contract to which this section applies shall be enforceable by action unless the
contract or some memorandum or note in respect thereof is in writing and is signed
by the party to be charged therewith or by some other person lawfully authorised by
him."
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on the evidence adduced in this case on the point at issue, that is the commencement date of the
term of the proposed lease.
In this regard I need only to refer to the case of Bristol, Cardiff and Swansea Aerated Bread
Company v. Maggs 1890 44Ch. D 616 which deals with the provisions Statute of Frauds (which
are in pari materia with Section 5 of the Law quoted above) viz a viz the point as to whether there
is a concluded agreement for a lease. I refer to page 622 of the report where Kay J. said as follows
after reviewing the authorities on the point:-
"The real truth is that the statute was not meant to affect contracts in any way, but
only the evidence of them. It does not provide that a memorandum duly signed shall
be contract, but only that no contract concerning land shall be proved by any lower
evidence than such a written memorandum. The question whether the two letters
relied on in this case were a complete contract, or were only steps in a negotiation,
is altogether independent of the Statute of Frauds."
I have held that on the evidence in this case there is no agreement as to 1.5.82 being the date
of the commencement of the proposed lease. If there had been such evidence then there would
have been the need to find out if the evidence satisfied the requirements of section 5 of the Law
Reform Contract Law.
In sum I must hold that there is no concluded contract in this case and I must uphold the
contention of Counsel for the defendant that the transactions in the matter now before us on appeal
were only steps in negotiations between the parties to this appeal.
In conclusion I hold that both the trial court and the Court of Appeal were wrong in holding
that 1.5.82 was the agreed date of the commencement for the proposed lease. In the result, the
plaintiff's appeal is allowed. The judgment of the trial court and that of the Court of Appeal are
hereby set aside by me. In their place I enter judgment for the defendant dismissing the plaintiff's
case against it, with costs assessed at N500.00 to the defendant.
It is unfortunate that the plaintiff in conducting negotiations in a matter involving such a
heavy sum of money as indicated by the evidence in this case acted without the assistance of a
lawyer. It will appeal- that the plaintiff at all stages of the negotiations for the lease with which we
are concerned in this appeal acted for itself. It is doubtful that it ever sought, let alone obtained,
the advice of a legal practitioner in the matter. Perhaps if it had done the latter, it would have been
warned of the risk of meeting demand after demand from the defendant in the absence of a
concluded agreement for a lease. It turned out that the plaintiff unwittingly took this risk which
eventually materialised, as this judgment has shown, with the plaintiff incurring losses for which
the defendant cannot be made legally liable. The stage at which the negotiations for an agreement
for a lease had reached in this case raised high hopes in the plaintiff that a concluded agreement
would finally be arrived at. That one was not reached is not because of any default on the part of
the plaintiff. In fact it was when all of the objections raised by the defendant had been disposed of
by the plaintiff at some considerable cost that the defendant called off the negotiations.

[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Obaseki, J.S.C. )685

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The law says the defendant can do so with impunity. But I do not think it will be too much to
expect if the defendant having regard to all the circumstances of this case decided to absorb ex
gratia some of the losses which the plaintiff had undoubtedly suffered in the transactions.

OBASEKI, J.S.C: This is an example of hard cases which make bad law. The appellant offered
to take the property of the respondent on a lease for term of 15 years to commence on the date
possession is given to the appellant. This offer was made subject to contract. The respondent
suggested the 1st May, 1982 as the date physical possession would be given and requested the
respondent to be ready to take physical possession on that date. There were several amendments
to be made to the buildings to suit the business purpose of the appellant. The respondents faithfully
earned out the amendments suggested by the appellant at heavy cost to itself. These were not
concluded till well and long after the 1st of May, 1982. Indeed, representatives of both parties had
a site meeting on the 18th of May, 1982 to agree on the exclusive area to be granted in the proposed
lease and other amendments to the building to satisfy the requirements of the appellant. The
appellant finally complained about structural suitability and required confirmation that there were
no structural defects in the buildings. The respondent provided this confirmation at enormous costs
for it paid the fees of the engineers who carried out the inspection. After receiving the confirmation
required, instead of taking physical possession, the appellant called off the whole negotiation.
When the respondent claimed damages, it was met by the plea that the commencement date for
the lease not having been agreed, there was no concluded contract.
It is well to point out that while it is well to take refuge under sections 5 of the Law Reform
Contracts Law Cap. 66 Laws of Lagos State which is similar in terms to the Statute of Frauds in
England, the law was meant to be a shield against frauds and not to be an instrument of frauds.
It becomes necessary to amend our laws to meet situations created by these hard cases. Banks
which involve landlords in heavy expenses to put their property to the standard requested by the
bank must not be allowed to escape liability for damages by clever manoeuvering of the law.
However, the court is not the legislature. Its duty is to interpret the law and apply it to facts in the
administration of justice. It does not over step its bound and trespass upon the sacred province of
the legislature. It is the province of the legislature to enact laws and amend or repeal laws. The
court can only draw attention to areas of the law where amendment is required or desirable.
 I have heard my learned brother, Agbaje J.S .C. deliver his judgment in this case. I had the
advantage of reading it in draft before now. I agree with all the opinions so lucidly articulated and
I adopt them as my own.
Reluctantly, I must say I hereby allow the appeal with N500.00 costs to the appellant and
enter a judgment of dismissal of all the respondent's claims. In view of the importance of the issues
raised, I would add the following comments.
The sole question for determination was whether it can be said from the evidence before the
court in the case that the 1st day of May, 1982 was agreed upon by both parties as the day the
proposed term of the lease of 15 years was
686Nigerian Weekly Law Reports4 July 1988(Obaseki, J.S.C. )
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to commence. The facts were fully stated in the judgment of my learned brother and from the
documentary and oral evidence adduced in the case, no reasonable tribunal can come to a decision
that 1st day of May, 1982 was agreed on by the parties. The deciding factor was the taking of
physical possession by the appellant and it must not be overlooked that the letter exhibit E where
"the taking of physical possession" was proposed as the commencement date for the lease" was
made subject to contract. The request of the respondent that the appellant take possession, physical
possession on the 1st day of May, 1982 was an offer to give physical possession on that date which
could only be accepted by the taking up of possession. Unfortunately, the property was not ready
for occupation on that date.
It is settled by authorities that where a contract is subject to the happening of a contingency
that contract only becomes enforceable provided the event has occurred or the contingency has
happened. Where a date for the commencement of a lease is not specified but stated by reference
to the happening of a contingency which is uncertain in time until the contingency happens there
is no enforceable lease. See Brilliant v. Michaels (1944) 1 All E.R. 121 at 127-128. This is because
the time of the contingency being uncertain there is no agreement as to time of commencement.
See Shell BP Petroleum Development Co. Ltd. v. Jammed Engineering Nigeria Ltd. (1974)1 All
N.L.R. (Part 1)542, 557, 558 and 570 per Coker, J.S.C.
The most important aspect of the case, I think, is the fact that the offer in exhibit E written
by the appellants wherein the offer to take a lease of the property was made, was made "subject to
contract." The lower court seems to have overlooked this aspect of the correspondence between
the parties. Exhibit E, in part reads:
"Our Ref: PROP/PM/82 19th April, 1982

Tejumola & Sons Limited,

15 Okoya Street,
P.O.Box 3253,
Lagos.

Subject to Contract

Dear Sirs,

3 DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E. T.

Ajiboye with us concerning the above property, subject to your showing evidence of
good title, we hereby offer to take a sub-lease of your property on the following main
conditions:
Premises - (not relevant)
 Term 15 - years from the date physical possession of the property is given to us subject
to the bank reserving the right to break at the end of the 5th and 10th' years of the
term.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Obaseki, J.S.C. )687
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 Rent - Not relevant.
Rent Revision - Not relevant
Tenant's Covenant - (Not relevant)
Landlord's Covenant - (Not relevant)
If the above main terms and conditions are acceptable to you, please confirm.

Yours faithfully,
pp: United Bank for Africa Limited
Sgd. J. A. Dosunmu
Property Manager."

The respondent accepted the offer by letter exhibit F. The letter inter alia reads:

19th April, 1982 The Property Manager,

United Bank for Africa Ltd.,
Broad Street, Lagos.

Dear Sir,

Reference to your letter PROP/PM/82 dated 19"' April, 1982. The contents were
carefully noticed. Our company has carefully consent and confirmed the Tenants
covenants and Landlord's covenants ......

Our company also agreed the rentage of N215 per annum pay able in 5 years
advance from the date physical possession of the property. In due of our 4 (four
months wasted time on this property, we requested you to lake physical
possession on 1st May, 1982 and we expect your cheque for advance payment of
5 years as soon as possible.
We shall be looking forward to your immediate comments as soon as possible.
Thank you.

Yours faithfully,

Tejumola & Sons

Sgd ................
Chairman"
"What then does "subject to contract" mean' In my view, it means that until a formal contract is
drawn up and executed everything is in the negotiation stage. Judicial authorities support this
construction. See
Winn v. Bull (1877) 7 Ch. D. 29 per Jessel M.R. at p. 32 Rossdale v. Denny
(1921)1 Ch. 57 C. A. per Lord Stendale MR at pp. 66, 67
Chillingworth v. Esche (1924) 1 Ch. 97 C.A. per Pollock MR at
688Nigerian Weekly Law Reports4 July 1988(Obaseki, J.S.C. )
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pp. 103-105.
In Coope v. Ridout (1921) 1 Ch. 291 C. A., Warrington, L J. said at p. 297:
"What is the true construction of the words 'subject to contract' in the plaintiffs' offer?
I think the offer means that it is an offer to purchase subject to the preparation and
 execution of a formal contract If it is attempted to give that offer any other meaning,
that meaning must be either, 'subject to this offer being accepted, which is absurd, or
'subject to the parties coming to terms on certain details not yet mentioned'. In the
latter case, it would merely amount to an agreement to enter into a future agreement
which would confer no rights on any of the parties to it."
In Keppel v. Wheeler (1927) 1 KB 577 C.A. Bankes, LJ. at p. 584 had this to say on the matter:
"I pause here to state plainly what is now well established, that where a person accepts
an offer subject to contract, it means that the matter remains in negotiation until a
formal contract is settled and formal contracts are exchanged."
Finally, on this matter of the meaning of 'subject to contract', I will refer to the dictum of Maugham,
LJ. in Trollope (George) & Sons v. Martyn Brothers (1934) D 2 KB 436 CA. at 455, there the
learned Lord Justice said:
"It has been well settled that the result of an offer 'subject to contract' means that the
matter remains in negotiation until a formal contract is executed, that is if the contract
is recorded in two parts until the formal contracts are exchanged ... Taught
by experience in these courts it is every day practice for intending purchasers of
property who are making an offer to make their offer in the form of 'subject to
contract' with the result that they are not at any time bound and have a locus
poenetentiae until the formal contracts are exchanged."
There can therefore be no question of the negotiations between the parties having been concluded
before the appellant called it off.
For the above reasons and the reasons set out in the judgment of my learned brother, Agbaje,
J.S.C., I hereby allow the appeal, set aside the decisions of the Court of Appeal and the High Court
and enter a judgment dismissing the claims of the plaintiffs/respondents. The appellant shall have
cost in this appeal fixed at N500.00.

NNAMANI, J.S.C.: I had a preview of the judgment delivered by my learned brother, AGBAJE,
J.S.C. and I agree with his reasoning and conclusions.
There is no doubt that long negotiations were held between the appellant and respondent with
respect to the appellant taking a lease of the respondent's premises situate at 42 Idumagbo Avenue,
Lagos otherwise known as 3 Docemo Street, Lagos. From the printed record, it seems that the
parties agreed on all the terms of the proposed lease except the date of commencement of the lease.
The High Court and the Court of Appeal, after wading through the myriads of documentary
evidence - Exhibits A, B, C, D, E, F, G, H, J, L, V etc. - held that there was indeed agreement on
the date of commencement, and that the agreed
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Nnamani, J.S.C. )689
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date was 1/5/82. The appellant then appealed to this court.

The bone of contention in this court was, therefore, whether those two courts were right in
holding that there was any such agreement. For my purpose, the two documents that are vital for
determining this issue are exhibits E and F. There were in these terms:
"Exhibit E
United Bank for Africa Ltd.
Head Office 97/105,
Broad Street,
P. O. Box 2406,
Lagos.
 Our Ref: Prop/PM/82 19th April,1982

Tejumola & Sons Ltd.,

15, Okoya Street,
P.O. Box 3253,
Lagos.

SUBJECT TO CONTRACT

Dear Sirs,

3 DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E.T.
Ajiboye with us concerning the above property. Subject to your showing evidence of
good tide we hereby offer to take a Sub-lease of your above property on the following
main terms and conditions:-
PREMISES
Portion of the ground floor .................................................................................
........................................................................................... (5,332 sq.ft)TERM
15 years from the date physical possession of the property is given to us subject to
the Bank reserving the right to break at the end of the 5th and 10th years of the term.
RENT
N215 per sq. metre .......................................................................to the property.
RENT REVISION
Every five years of the term subject to the usual arbitration clause.
TENANTS COVENANTS ..................................................................................
LANDLORD'S COVENANTS ...........................................................................
If the above main terms and conditions are acceptable to you, please confirm.
Yours faithfully,
pp: UNITED BANK FOR AFRICA LTD.
690Nigerian Weekly Law Reports4 July 1988(Nnamani, J.S.C. )
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(Sgd.) J. A. Dosunmu
Property Manager."
(Italics mine)

In a letter dated the same 19th April ,1982, exhibit F, the respondent accepted those main
terms. I shall set down only the relevant portion dealing with taking of possession which has
relevance to when the lease was to commence. That portion read, "Read Our Company also agreed
the rentage of N215 per square metre (20.00 per square foot) per annum payable in 3 years advance
from the date physical possession at the property. In due (sic) of our 4 (four) months wasted on
this property, we requested you to take physical possession on Is' May, 1982 and we expect your
cheque for advance payment of 15 years as soon as possible (Italics mine)
 As it was, therefore, while the appellant put the date of commencement on the date physical
possession of the property is given to them, the respondent in accepting the proposed terms,
requested the appellant to take physical possession on 1/5/82. There was no express reply by the
appellant to this invitation, and it was on this that the learned trial Judge held that the date 1st May,
1982 had been agreed on by the two parties. With all respect, I prefer the approach of the Court of
Appeal which was to look at the whole documentary evidence to see whether such agreement could
be implied from the conduct of the parties.
Having done the same exercise, I cannot come to the same conclusions as they did. The
appellant never replied to the request that possession be taken on 1st May, 1982. Worse still is the
inevitable conclusion that one must draw from what happened after 19th April, 1982. The next
response to the invitation to take possession was the appellant's letter dated 18th May, exhibit G
in which the appellant requested a site meeting with respondent on 21st May, 1982 "to agree on
the external areas which should be in the exclusive possession of the Bank". It requested the
respondent to "be prepared to endorse sketch plans which will reflect any agreement reached on
the spot". The respondent attended that meeting and on 24th May, 1982, exhibit H, wrote to
confirm what actions he had taken following their agreement at the site.
After going through all the documentary evidence, I cannot hold that there had been any
agreement as to the date the term of lease was to commence, nor can I say that the appellant had
taken possession. The impression one goes away with after reading those documents, is one of
continuing negotiations and adjustments of the premises. I cannot therefore imply any agreement
on the issue of date of commencement. It is not being disputed that there can be no enforceable
contract of lease in the absence of agreement on the date of commencement of the agreed term. As
Lord Denning put it in Harvey v. Pratt (1965) 1 W.L.R.
1025 at 1027" It is settled beyond question that in order for there to be a valid agreement for a
lease, the essentials are not only for the parties to be determined, the property to be determined,
the length of the term and the rent, but also the date of commencement. This document does not
contain it. It is not sufficient to say you can supply it by an implied term as to reasonable time."
See Marshall v. Berridge (1881) 19 Ch. D. 233 C.A. and Edwards v. Jones (1921) 124 L.T. 740.
This suit has caused me anxious moments. If I had the slightest feeling that this was one of
those technicalities against which this court has resolutely
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Karibi-Whyte, J.S.C. )691
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set its face, I would have dismissed this appeal. But alas the law seems clear to me. There is no
doubt that the appellant led the respondent up a very expensive garden path only to throw it away.
But it is a path on which the most unwisely jumped. If only it had retained the services of counsel,
it would have become so clear that it was essential to have an enforceable agreement before it
embarked on the very expensive alterations it made at appellant's request. The respondent's anxiety
to let these premises probably got the better part of even its layman's judgment. I join my learned
brother in hoping that the appellant can be persuaded to reduce the respondent's losses to a tolerable
level. Those alterations made at its request may not suit any other tenant.
For these reasons, and the fuller reasons in the lead judgment, I too would allow this appeal.
The appeal is accordingly allowed. I abide by all the orders made by AGBAJE, J.S.C. including
the order for costs.

KARIBI-WHYTE, J.S.C. I have had the privilege of reading the judgment of my learned brother
A.G.O.Agbaje, J.S.C. just delivered. I agree entirely that this appeal should be dismissed. The facts
of the case have been lucidly and fully dealt with in the judgment of my learned brother Agbaje
J.S.C. I adopt the facts so stated.
 The issue for determination in this appeal has been very clearly formulated in his brief by
Chief F.R.A. Williams SAN, learned counsel for the appellant. Kehinde Sofola SAN for the
respondent agrees with the formulation. It reads thus
"Whether on the pleadings and the evidence before the court, the finding that there
was an agreement that the lease shall commence on 1.5.82 can be sustained."
Both counsel adopted their briefs of argument and made oral elaborations where necessary.
The difference of opinion between the parties arises from the consideration whether the
parties agreed that the commencement date for the lease subject matter of the negotiation was to
be on the 1.5.82. There is only one ground of appeal which I do not consider necessary to
reproduce. The issue for determination as formulated being sufficient.
Both parties relied on exhibits E letter from the appellant making an offer as to the terms on
which the lease of the property will be taken; and exhibit F, the acceptance by the respondent of
the terms in exhibit E. For ease of reference I reproduce exhibits E and F.
EXH. E.
"HEAD OFFICE:
97/105, Broad Street,
P. O. Box 2406, Lagos.
19th April, 1982
Our Ref. PROP/PM/82
Tejumola & Sons Limited,
15, Okoya Street,
P.O.Box 3253,
Lagos.
692Nigerian Weekly Law Reports4 July 1988(Karibi-Whyte, J.S.C. )
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SUBJECT TO CONTRACT
Dear Sirs,

3 DOCEMO STREET AND 42 IDUMAGBO AVENUE, LAGOS

We refer to your previous correspondence and the discussion of your Mr. E. T.

Ajiboye with us concerning the above property. Subject to your showing evidence of
good title we hereby offer to take a sub-lease of your above property on the following
main terms and condition:
PREMISES
Portion of the ground floor (i.e. 900 sq. ft.) and all the four upper floors (i.e. 1,108
sq. ft. each) comprising a total floor area of approximately 495.36 sq. metres (5,332
sq. ft.)
TERM
15 years from the date physical possession of the property is given to us subject to
the Bank reserving the right to break at the end of the 5 th and 10 th years of the
term.
RENT
N215 persq. metre (or N20 per sq. ft.) per annum payable 5 years in advance from
the date physical possession of the property is given to us and upon our being
satisfied with the search of the Lands Registry as regards the genuineness of your
title to this property.
RENT REVISION
Every five years of the term subject to the usual arbitration clause. TENANTS
COVENANTS
(a)To pay a share calculated on pro rata basis (i.e. ratio of the floor area occupied to the whole)
of all township and water rates levied now or in the future on the entire property and stated in a
separate Rate Assessment to be prepared by the " Local Government.
(b)To pay for all electricity consumed on the demised premises.
(c)To maintain the interior of the demised premises in good repair and condition (fair, wear and
tear excepted) and to decorate the interior of the demised premises at the termination or
expiration of the term of the lease.
(d)To pay the costs involved in Legal fees for the preparation, stamping and registration of the
documents in evidence of this transaction.
(e)Not to assign or sublet without the consent of the Landlord such consent not to be
unreasonably withheld in the case of a responsible Company or person.
(f)To arrange at its expense for the cleaning of the demised premises.
(g)To affix signs relating to banking business to the exterior and interior of the premises
provided they conform with the aesthetic standard of the building.
[1988] 2 NWLRU.B.A. Ltd v. Tejumola & Sons Ltd(Karibi-Whyte, J.S.C. )693
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(h)To provide all internal partitions required at its expense.

LANDLORDS COVENANTS
(i)To insure the demised premises against loss or damage by fire, tornado, windstorm and
earthquake and to pay the development charges (if any) that may be levied by the Lagos State
Government or any body duly authorised by it in respect of the premises.
(ii)To keep the demised premises structurally sound, wind and watertight and the exterior and all
drains and boundary walls and fences (if any) thereof in good and tenantable repair and condition
and the exterior in a reasonable state of decorative repair.
(iii)To arrange for a separate rating assessment of the demised premises for township and water
rate to be levied by the Local Government in charge of the area in which the property is located.
(iv)To arrange for the installation of separate electric meter to the demised premises.
(v)To allow the tenant to make reasonable structural alterations to suit the purpose (i.e. banking
business) for which the premises is demised.
(vi)To provide all essential services (i.e. water, electricity) to the demised premises.
(vii)To give the tenant peaceful and quiet enjoyment.
(viii)To ensure free and uninterrupted access to the demised premises.
(ix)To pay the ground rent and comply with the covenants reserved in the Head lease.
(x)To ensure that the portion of the ground floor not included in the demised premises is not used
or occupied for purposes inimical to the tenant, its business, staff and customers.
If the above main terms and conditions are acceptable to you, please
confirm.
Yours faithfully,

pp: UNITED BANK FOR AFRICA LTD.

(Sgd.) J. A. Dosunmu
Property Manager."

"Exhibit F - LD/891/83 - By Plaintiff

Tejumola & Sons Ltd. Vs. U.BA. Limited

TEJUMOLA & SONS LTD.

Registered in Nigeria
Importers, Exporters, General Merchants, Commission Agents
& Manufacturers Representatives.
694Nigerian Weekly Law Reports4 July 1988(Karibi-Whyte, J.S.C. )
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HEAD OFFICE
15 Okoya Street, Lagos,
P.O.Box 3253
Tel. 631687, 658075
19th April, 1982
 The Property Manager,
United Bank for Africa Limited,
Broad Street,
Lagos.
Dear Sir,

Reference to your letter PROP/PM/82 dated 19th April, 1982. The contents were
carefully noticed. Our Company has carefully consent and confirmed the Tenants
Covenants and Landlord's covenants. We accepted your offer for the premises portion
of the ground floor (i.e. 900 sq. ft) and all the four upper floors (i.e. 1,108 sq. ft. each)
comprising a total floor area of approximately 495.36 square metres (5,332 sq. ft.),
and also to the subject of Terms reserved by the Bank right.
Rent: Our Company also agreed the rentage of N215 per square metre (N20.00 per
square foot) per annum payable in 5 years advance from the date physical possession
at the property. In due of our 4 (four) months wasted on this property, we requested
you to take the physical possession on 1st May, 1982, and we expect your cheque for
advance payment of 5 years as soon as possible. We shall be looking forward for
your immediate comments as soon as possible.
Thank you.

Yours faithfully,
TEJUMOLA & SONS LTD.
(Sgd) ? ? ?
Chairman"

Whereas appellant contended that exhibit E though containing many of the terms of the lease
being negotiated, still did not provide for a commencement date. This was because it provided that
the lease shall commence on the date physical possession was given to the appellant.
Respondents contended that Exh. F, clearly stated that physical possession was given to the
appellant on the 1st May, 1982 and this has to be regarded as the date of commencement of the
lease. It was submitted that all the renovations and alterations made to the property i.e. 42
Idumagbo Avenue, Lagos, otherwise known as 3 Docemo Street, Lagos after the 1st May, 1982
were made for and on behalf of the appellant who were the lessees. It was submitted that as from
May 1, 1982 there was a concluded contract to lease the property and that appellants were bound
by the contract and consequently liable 'for the damages suffered by appellant's repudiation of the
contract.
It is pertinent to mention that appellant although filed a Statement of Defence did not call
any evidence, oral or written, at the trial. They relied on the evidence of the respondents. They
admitted that they finally repudiated the negotiation, but denied that there was, at that stage, any
concluded agreement between the parties. In support of this view and of the fact that they were
still in the process of negotiation and May 1, 1982 was never agreed as the date for commencement
of the lease. Appellants relied on Exh. G writ ten to the respondents after May 1, 1982, Exh. H
written by respondents after the site inspection. Exhibits G and H are reproduced below -
 "Exhibit G - LD/891/83 - By Plaintiff
Tejumola & Sons Ltd. vs. U.B.A. Ltd.
UBA UNITED BANK FOR AFRICA LIMITED
HEAD OFFICE: 97/105, Broad Street,
P.O. Box 2406, Lagos

18th May, 1982

OUR REF: PROP/AGMP/82

Chairman/Director,
Tejumola & Sons Limited,
15 Okoya Street,
Lagos.

Dear Sir,

3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

There will be a site meeting on Friday 21st May, 1982 at 10.00 a.m. to agree the
external areas which should be in the exclusive possession of the Bank. Please ensure
you are present, and be prepared to endorse sketch plans which will reflect any
agreement reached on the spot.
We would also inspect and ensure that all the main services i.e. mains water, mains
electricity, plumbing system, and sewage disposal facilities are in good working
condition. The locations of our generators and strong room and other similar items
will be discussed and agreed with you.
Please confirm that you will attend the meeting.

Yours faithfully,

pp: UNITED BANK FOR AFRICA LIMITED

(Sgd) A. G. Sangosanya"

"Exhibit H - LD/891/83 - By Plaintiff

Tejumola & Sons Ltd. vs. U.BA. Ltd.

TEJUMOLA & SONS LTD.

Registered in Nigeria
Importers, Exporters, General Merchants,
Commission Agents & Manufacturers Representatives.
HEAD OFFICE
15 Okoya Street, Lagos
P.O.Box 52057
Tel. 631687, 658075
24th May, 1982.
Mr. A.O. Okoro,
United Bank for Africa,
(Property Department),
4th Floor,
Broad Street,
Lagos.

Dear Sir,
Thanks for your co-operation for the meeting we held together about housing inspection to locate
the ground floor area for Bank use. Already I have separated the wall between Docemo and
Idumagbo Avenue, and I've block the comer piece of backyard according to the plan you draw for
site.
I have demolished the small store with open space for generator plant for electrical engineer
design, and the electrical engineer come here this morning and see everything. I am waiting for
the ground floor Drawing Sketch you drawn for signature, and our Company authorised you to
start any adjustment you need both internal and external from ground floor to fourth floor, and
request from your engineer is this I've got report from our Electrical Contractor. I have submitted
the letter and copy of collection fees. Thank you.

Yours faithfully,

(Sgd) ? ? ?
Chairman."
Respondents went into further expenses in trying to meet the criticisms of the Appellants by
making alterations to the building in respect of the structural soundness of the building, suitability
of the building for banking business. Nevertheless appellants on the 28th October, 1982 wrote
Exh. V, repudiating the continuance with the negotiation which reads
"Exhibit V - LD/891/83 - By Plaintiff
Tejumola & Sons Ltd. v. U.B.A. Ltd.
UBA UNITED BANK FOR AFRICA LIMITED

HEAD OFFICE.
97/105 Broad Street,
P. O. Box 2406, Lagos
28th October, 1982
Our Ref: PROP/PM/2275/82
Tejumola & Sons Limited,
15 Okoya Street,
Lagos.

Dear Sir,
 RE: 3 DOCEMO STREET/42 IDUMAGBO AVENUE, LAGOS

We refer to our previous correspondence concerning our requirements for your above
property. After giving this matter considerable thought, we regret to inform you that
we are no longer interested in taking a lease of your above property.

We, however thank you for offering the lease of the property to us and hope to be
able to do business with you in future.

Yours faithfully,
pp: UNITED BANK FOR AFRICA LTD.
(Sgd) I. A. Dosumu Property Manager."

Hence respondents action, claiming damages as per the writ of summons.

It is important to bear in mind that the facts of this case are based on a negotiation for a
Lease. The parties here have relied on Exh. E and already reproduced as containing the terms of
the negotiation. It is well settled that the contract, memorandum or note admitted as expressing the
terms of a contract, must state all the material terms of the contract. The court will not regard such
a document as expressing the contract when material terms are missing and cannot be determined
by interpretation or implication of law - See Stimson v. Gray (1929) 1 Ch. 629. It is essential for
the memorandum relied upon to have the names of the lessor and lessee - See Williams v. Jordan
(1877) 6 Ch. D. 517; Skelton v. Cole (1857)1 De G & 1.587, the description of the property-
Kennedy v. Lee (1817) 3 Mer.441, and the term and its commencement with certainty - See
Marshall v. Berridge (1881) 19 Ch. D.233; Harvey v. Pratt (1965) 1 WLR 1025. The time of
commencement must either be certain or capable of being certain before the lease takes effect. -
See Lace v. Chandler (1944) KB.368 at p. 370.
Mrs. Ajayi-Obe has submitted that Exhs. E and F constitute the contract, and when read
together the date physical possession was offered appellant being May 1, 1982 will constitute the
commencement date.
It seems to me that this is not an answer to the contention by appellants that physical
possession was not given on that day as negotiations were still in progress. This is supported by
Exh. J with respect to the site inspection after May 1, 1982 and subsequent alterations to the
property Exh. L. Mrs. Ajayi- Obe would want it to be accepted by necessary implication and
inference that appellants accepted possession as from May 1, 1982. The evidence relied upon for
the drawing of such inference was not sufficient. Mrs. Ajayi Obe's contention was that appellants
did not reject the suggestion of May, 1, 1982 in Exh. F, and are therefore to be taken to have
accepted that date. This is too simplistic a view of the contrary conduct of the appellant by fixing
a site meeting after May 1, 1982 in Exh. J which was accepted by the respondent without pointing
out the significance of that date.
It is now well settled and has been so accepted since 1881, when Lush J agreed with Jessel
MR in Marshall v. Berridge (1881) 19 Ch. D.233 and said at p p. 244-245.
"Now it is essential to the validity of a lease that it shall appear either in express terms
or by reference to some writing which would make it certain, or from the language
used, on what day the term is to commence. There must be a certain beginning and a
certain ending, otherwise it is not a perfect lease, and a contract for a lease must, in
order to satisfy the statute of Frauds, contain those elements."
This view was followed in Harvey v. Pratt (supra). The rationale of the principle is that the parties
must themselves define the subject matter of their bargain, and a term of years can only be defined
by indicating the beginning and the end. The period of 15 years is indicated as the term, not the
commencement. It is acceptable where a lease is provided to commence on the happening of a
condition, as in Brilliant v. Michael's (1945) All E.R. 121, Lace.v. Chandler (supra).
This is permissible even if oral, if at the time of enforcement it is in writing -See Rawlimon
v. Ames (1925) Ch. 96.
It is important to remember that an agreement to enter into a lease is governed by the ordinary
principles of the law of contract. A contract is only binding on the parties when they are ad idem
as to matters which are cardinal to the agreement and part of the bargain as a whole - See Rossiter
v. Miller (1878)3 App.Cas. 1124 at p.1139.
If one infers from exhibits E and F and the suggestion that the commencement date was to
be on the date physical possession is given to appellant, it is obvious that appellant called off the
negotiation before the happening of the condition, and Brilliant v. Michael's (supra) relied upon
is not of any assistance.
It has been submitted that this court should not lightly- interfere with concurrent findings of
facts by the courts below about May, 1982 as the date of commencement of the lease agreed by
the parties. I think the finding in this case falls within the well settled exceptions where there is no
basis for the finding of fact of the courts below and the finding is clearly not supported by the
evidence - See Lengbe v. Male (1959) LLR.95; Shell BP v. Pere Cole & Ors. (1978) 3 SC. 183. I
hold therefore that the courts below were in error in accepting May 1, 1982 as the date of
commencement of the proposed lease.
Since there was no commencement date in the transactions leading to the proposed
agreement for a lease the transactions did not crystallise into a contract. It is clear on the evidence
that the parties have not defined the subject matter of their bargain having not defined the
beginning and the end of the lease - See Harvey v. Pratt (supra). There is no lease capable of
satisfying the provisions of section 5, Law Reform (Contracts) Law, Cap.66 of Lagos State which
is similar to section 4 of the Statute of Frauds 1677. See also Marshall v. Berridge (supra) at p.
244-245.
I agree entirely with the submission of Chief Williams S.A.N., that the transactions relied
upon were only steps in negotiations between the parties to this appeal. There was no concluded
contract. For the reasons I have given above and for the much fuller reasons given by my learned
brother A.G.O. Agbaje J.S.C., I will allow this appeal with costs assessed at N500 to the appellant.

NNAEMEKA-AGU, J.S.C The straight issue for decision in this appeal is whether the negotiation
for the appellants to lease the premises of the respondents for purposes of their business
crystallized into an agreement for a lease. The appellants hoisted their case on the contention that
there was no agreement as to the date of commencement of the lease.
My learned brother, Agbaje, J.S.C., has fully set out the facts that led to the case as well as a
number of documents admitted in evidence which are relevant to the issue before the court. I do
not intend to repeat them here. It is enough for me to mention that the learned trial Judge, Ayorinde.
J., found from the evidence before him that the parties agreed that the lease would commence on
the 1st of May, 1982. He based that inference substantially upon the contents of Exits. E and F.
The Court of Appeal per Ademola, J.C.A., Mohammed and Kutigi, JJ.C.A., concurring, agreed
with him. The question, therefore is whether their Lordships of the Court of Appeal were right.
 Much as I do not intend, as I have stated to set out the facts in any detail, I deem it necessary
to advert to material aspects of the contents of exhibits E and F, if only to put the facts in their
correct perspective. In Exh. E, a letter dated 19th April, 1982, which was written by the appellants
themselves and marked "subject to contract" they spelt out the premises, term, rent, rent revision,
and tenants in relation to the property. There is strictly no dispute in this appeal as to any of these,
except the "Term" which read:
"15 years from the date physical possession is given to us, subject to the Bank
reserving the right to break at the end of the 5th and 10th years of the term."
The terms in Exh. F were accepted by a letter, Exh. F, dated 19th April, 1982, and signed by the
Chairman of the respondent company. The relevant portion of Exh. F runs thus:
"Our Company also agreed the rentage of N215 per square metre (N20.00 per square
foot) per annum payable in 5 years advance from the date physical possession at the
property. In due (sic) of our 4 (four) months wasted on this property, we requested
(sic) you to take physical possession on 1st May, 1982, and we expect your cheque
for advance payment of 5 years as soon as possible.
We shall be looking forward for your immediate comments as soon as possible."
(Italics mine)
I may observe that Exh. F did not just accept the portion of Exh. E quoted above which
would have left the matter as at the date the appellants took physical possession. If it did, the
contract would have crystallized upon the happening of the contingency, that is upon the appellants
taking physical possession of the premises. Where a contract document instead of naming a
specific commencement date for a contract rather hangs it upon the happening of a contingency, a
valid contract crystallizes when that nominated, even if uncertain, contingency happens. This is
the result of all the decided cases on the point, including:
Bishop of Bath's Case (1605)6 Co. Rep. 346;
Phelan & Tedcastle (1884)31 L. J. Ch. 44;
Marshall v. Berridge (1881) 19 Ch. D. 233; and
Mauray v. Durley Chine (Investments) Ltd. (1953) 2 All E.R.458.
But, for one reason, this principle is not strictly decisive of this appeal. For the respondents
had gone ahead to nominate a date for the appellants' taking physical possession. The suggestion
therefore becomes: did the parties agree on this date, id est, 1st May, 1982? As far as this particular
term of the contract went, it was more than a mere acceptance of the term offered in Exh. E, that
is a mere offer of taking physical possession on a date which was open and unspecified. An
acceptance is a final and unqualified expression of assent to the terms of an offer, as made by the
offeror. This is trite. Where in the attempt to accept an offer the offeree varies the terms of the
offeror, as in the instant case, introduces an entirely new term, it is not an acceptance and cannot
result in a contract crystallizing: See Jackson v. Turquand (1869) L.R. 4 H.L. 305; Jones v. Daniel
(1894) 2 Ch. 332. It is a counter-offer which is not only not an acceptance of the offer but amounts
to a rejection of the original offer, with the result that even if that original offer is subsequently
accepted, its acceptance does not result in a contract between the parties: See Hyde v. Wrench
(1840) 3 Beav 334. In the instant case, the moment the respondents rather than accepting that
particular term in Exh. E, as offered, went ahead to offer a date for taking physical possession, it
became a counteroffer which must be accepted before a contract based on it could be said to have
crystallized between the parties.
It is not correct that the date, 1st May, 1982, was ever accepted either expressly or by the
conduct of both parties or of the appellant as the agreed date for taking possession of the premises.
It was, in my view, a finding not based on any evidence before the court of trial or the Court of
Appeal. So this court ought not allow it to stand. The conduct of the parties on and after that date
did not lend any support to the suggestion that negotiation had been concluded before that date.
For a perusal of Exhs. G dated 18/5/82, dated 24/5/82, J. dated 10/6/82, L dated 11/6/82 and so
many other documents, shows affirmatively that after the 1st of May, 1982, such vital issues
relating to the contract such as the external areas of the premises appurtenant to the contract, the
ground floor area for the. appellants, and the structural stability and suitability of the buildings for
banking purposes, were yet to be settled. It is not the case that the commencement date had been
agreed and accepted, but that further correspondences and discussions went on between the parties.
From the state of the facts, I agree with my learned brother, Agbaje, J.S.C., that the 1st of May,
1982, was never agreed as the commencement date of the contract. The effect of this is that there
was neither a lease nor a binding agreement for a lease between the parties. Denning, L. J, in
Harvey v. Pratt (1965)2 All E.R. 786 put the position in law most succinctly where he stated at p.
788 thus:
"It is settled beyond question that, in order for there to be a valid agreement for a
lease, the essentials are that there should be determined not only the parties, the
property, the length of the term and the rent, but also the date of its commencement.
This document does not contain it. It is not sufficient to say that it can be supplied
by an implied term as to reasonable time."
All the massive documents in evidence in this case are clearly lacking in this essential. There is
therefore no enforceable contract for a lease. The learned counsel for the respondent has argued
that "subject to contract" an Exh. E is a useless surplusage since, by Exh. F., the appellant had
accepted every condition stipulated in Exh. E. Reliance was placed on Nicolene Ltd v. Simmonds
(1953) 1 All E.R. 822, and Richards Properties Ltd v. Corporation of Wardens of St. Saviours'
Parish Southwark (1975)3 All E.R. 416. This was the view of the Court of Appeal: their Lordships
held that on the authority of Harvey v. Pratt (supra) all the essentials of a contract for a lease were
present. If their Lordships were correct in this foundation of their conclusion I would readily have
agreed with them on the premises that the parties had made an immediately binding agreement,
which even would have made the words "subject to contract" a mere surplusage. For, no doubt,
the general principle is that the function of courts is to interpret the agreement between the parties,
and not to make one for them. In the exercise, the courts are ordinarily supposed to give effect to
the words in the contract documents. On this general principle "subject to contract" normally
means that the contract is incomplete and not binding until a formal contract has been settled,
approved and exchanged by the parties: See:
Eccies v. Bryant & Pollock (1948) Ch. 93;
Coope v. Ridont (1921) 1 Ch.291;
Chillingworth v. Esche (1924) 1 Ch. 97;
Bennett, Walden & Co. v. Wood (1950) 2 All E.R. 134
But this general principle admits of one important exception in a transaction such as the instant if,
from the tender or other documents exchanged by the parties, it could be said that the vendor's
offer has been accepted by the purchaser: that is that all the essentials enumerated in Harvey v.
Pratt (supra) have been agreed upon. In other words, that agreement has been reached as to the
parties, the property, the length of the term, the rent, and the date of commencement. Once an
agreement has been reached on all these, the addition of the term "subject to contract" becomes a
cosmetic surplusage. See on this:
Michael Richards Properties Ltd. v. St. Saviours (supra)
 Nicolene Ltd. v. Simmonds (supra)
Storer v. Manchester City Council (1974)3 All E.R. 824;
But the decisive and fatal feature in this case in view of what I have said above is that an essential
of the agreement, that is the commencement date, had not been agreed to. This makes it impossible
to apply the exception and say that an agreement was complete.
For this reason, I entirely agree with my learned brother, Agbaje, J.S.C., that the appeal
succeeds in that the plaintiff/respondents did not prove their case.
I therefore allow the appeal and dismiss the plaintiffs' case with the same orders as were made
in the lead judgment.
I do not see any basis for the unspecified estoppel raised by Mrs. Ajayi Obe before us. Neither
in the pleadings nor in her brief did she supply any substratum for it. I need not say more about it.
There is one aspect of the ultimate suggestion made in the lead judgment on which I feel
quite reluctant to go along with my learned brother. He suggested that, in view of the enormous
expenses which the respondents ran at the request of the appellants, counsel on both sides should
put their heads together to see how justice could be done to them. I cannot agree to this without
pointing out that the respondents were the architects of their own misfortune. With all the clear
story which the quality and language of their correspondences tell, they still elected to act for
themselves, for a transaction which could have been worth several millions of naira. It was only
after they had ruined their case that it dawned on them that they should brief an experienced
counsel, for the court case. This is a height of indiscretion. Yet, it is said that the quality of mercy
is not strained. It is only on this ground that I associate myself with the suggestion that counsel
should agree on what compensation should be paid to the respondents for the expenses they ran at
the request of the appellants, in spite of the fact that there was no binding contract between the
patties.

Appeal Allowed.