Oral Contracts in Nigeria: What’s Their Binding Power?

Imagine this: you go to a tailor, drop your fabric, agree on a price, but write nothing down. If there’s a dispute, is that agreement valid under Nigerian law?

What is an Oral Contract?

An oral contract is a legally binding agreement made through spoken words or conduct, without a written document. They are common in everyday transactions at the market, during services, or other informal dealings.

The Legal Position in Nigeria

Oral contracts are binding in Nigeria, as long as they meet the essential elements of a valid contract:

• Offer and acceptance

• Consideration

• Intention to create legal relations

• Capacity of parties

• Legality

• Certainty of terms

In Koiki v. Magnusson (1999) 8 NWLR (Pt. 615) 492, the court confirmed that oral contracts are enforceable, provided the above elements are satisfied.

Exceptions: Contracts That Must Be in Writing

Some agreements must, by law, be documented in writing. These include:

• Sale or transfer of land (Statute of Frauds; Property & Conveyancing Laws)

• Hire purchase agreements (Hire Purchase Act)

• Bills of exchange and promissory notes (Bills of Exchange Act)

• Company incorporation documents (Companies and Allied Matters Act, CAMA)

The Challenge of Oral Contracts

While oral agreements are valid, they are often difficult to prove. Parties may remember terms differently, or there may be no credible evidence to confirm the agreement.

In Anyah v. African Newspapers of Nigeria Ltd (1992) 6 NWLR (Pt. 247) 319, the court stressed that without clear and reliable evidence, oral contracts cannot be enforced.

This is why courts generally prefer written agreements, especially in high-value or complex transactions.

Conclusion

Oral contracts may work for small, everyday transactions like paying a mechanic, buying food, or hiring transport. But for higher-value deals such as loans, employment, or property purchases, a written contract provides stronger legal protection.

At Maverick Solicitors, we help individuals and businesses reduce risk by drafting and reviewing enforceable agreements. Oral agreements may be binding, but a well-drafted written contract is your best safeguard under Nigerian law.