It is undoubted that contract is an agreement between two parties which creates a legal relationship between the duo, also, it should not amount to a debate whenever it is raised that; not all agreement metamorphose to a binding contract but all contract is a binding agreement. This is not an assertion, but the wordings of the law.
For a better illustration, exploration of the case of Kabo air v. Tafa will furnish a learner on the complex legal definition of contract. I must also quickly reiterate the assertion that for an agreement to become binding that is; a contract, there are ingredients, items and conditions that must be fulfilled by the contracting parties, as thus, failure to comply with these ingredients might render the contract void, voidable or unenforceable. For the ultimate purpose of this discussion, these items are provided in their order of relevance: definite and unequivocal offer, communicated acceptance, furnished consideration, undoubted intention to enter/create legal relation, and ensured legal capacity of the contracting parties. When these items are perfectly complied with, then, any agreement that arises in between is legally considered to be a binding contract.
While offer, acceptance, and consideration are essential ingredients of a simple, parole or informal contract, the position of the law is not the same in formal and standard form contracts. Thus, in a formal contract, the aforementioned ingredients are secondary, therefore, their presence or absence will not take any effect as to the validity or otherwise of the contract. Formal contracts are contracts that are specifically provided for by law for it to be written, signed, sealed and delivered by the parties executing same. For instance, land conveyance and most contract made by companies i.e Bills of exchange, Promissory notes, Hire purchase agreement, wills are formal contracts . Equally, standard form contract also shares similar characteristics with formal contract as to the irrelevancy of offer and its cohort, however, it takes a little digression on the essence that while a formal contract has to be signed, sealed and delivered by both parties, a standard form contract takes effect the moment its existence is brought to the notice of the other party.
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Most popular among standard form contract is the general clause we normally see at banks, hotels and supermarkets ; such as “vehicles parked at owner’s risk.” This simply implies that the company has exempted itself from any liability of whatsoever that may arise from any damage or loss of vehicle. The case of Justice Anyah K. O. v. Imo Concorde Hotels Limited gave the best illustration of a standard form contract. However, the exclusiveness of standard form contract is not infinite as any person, company or organization relying on it can be held liable if the other party fulfil certain conditions as established in the case of Justice Anyah K. O. v. Imo Concorde Hotels Limited.
In this case, the Supreme Court of Nigeria provides for the following conditions that must be met by a motorist who wishes to be absolved from disclaimer of cars parked a owners risk, that he must; (i) Collect the metal/ plastic disc at the gate of the hotel (ii) Park his car within the premises of the hotel (iii) Notify the security where the car is parked and (iiii) Hand over the key of the car to the security men on duty.
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Take notice that, even where these condition exist, it will only protect a customer who parked in a hotel as the definition of Inn includes a hotel but doesn’t include any other establishment. On the other hand, the hotel can be held liable under contract of bailment irrespective of whether the hotel is negligent over the guest’s property or not. See the case of Hill Station Hotel Limited v. Adeyi . An exclusion or limitation clause is incorporated by a company or proprietor of a business enterprise in order for the company or proprietor to be free or protect self from any liability that may occur in the process of making use of their products or services.
This principle is mostly inapplicable in an unsigned document, whereby the written words are not seen by the customer or not brought to the notice of the customer at the time the contract is being formulated. Basically, terms included in a non-contractual document cannot bind a person to an exclusion clause, however, in some instances an unsigned document is binding on the parties.
SIGNED AND UNSIGNED DOCUMENT, THEIR LEGAL IMPLICATIONS UNDER LAW OF CONTRACT AND WHEN RECEIPT AND TICKET BECOMES A CONTRACTUAL DOCUMENT
According to the black’s law dictionary a “document” is an instrument on which is recorded , by means of letters, figures, or marks, matters which may be evidentially used. In the plural, the deeds, agreements, tittle-papers, letters, receipts and other written instruments used to prove a fact. It is however my conviction that, any paper that shows or implies any legal relationship between persons or group of persons could be regarded as document. Furthermore, a “signature” according to the law is the act of putting down one’s name at the end of an instrument to attest its validity, declare assent, or attestation by some signs or marks. see James v. Pattern . A signature may be written by hand, printed, stamped, typewritten, engraved, photographed or cut from one instrument and attached to another… and whatever mark, symbol, or device one may chose to employ as representative of himself is sufficient. see Griffith v. Bonawitz.
Under law of contract, a document is any instrument that indicate the existence of legal relationship between the party issuing it and the party to whom it is issued. In this instance, it might be a receipt, waybill, ticket, or any other document that shows the existence of legal relationship between two parties. The argument is, will a document not signed by the receiver be bound by it?. To determine whether or not such an unsigned document will be binding depends on the nature of the document, for instance, a contract that is not required to be in writing, its formation in writing doesn’t qualify it to be Formal contract, it thus still remains a simple/parole/informal contract. However, if the terms and conditions of a simple/informal/parole contract are reduced into writing, nevertheless, those terms and conditions are binding on the parties. The conditions are binding not because they are codified but because they form essential part of the contract. In a nutshell, it is immaterial whether the terms and conditions of an informal contract is written or orally agreed upon by the parties, once it suffices that; the party making those terms and conditions sufficiently put it to the notice of the other party the existence of those terms at the time the contract is being formed, such terms are binding, and if otherwise, those conditions will lack legal enforceability. see Chapelton v. Barry U.D.C. Therefore, it seems to me that, there is an essence to determine when a document will become binding on the parties even when such is not signed by the receiving party. Payment acknowledgment receipts which are usually issued after every purchase of items in supermarkets & pharmacies, payment tickets given to motorists at a toll-gate, or any other ticket or receipt of whatsoever cannot amount to a contractual document, in the case of Thorntorn v. Shoe Lane Parking the court held that “…no reasonable person would expect the ticket to contain more than acknowledgment of the money… therefore the ticket is not a contractual document”. However, all mentioned above i.e payment receipt or ticket and any other means of payment acknowledgement will become a legal document once they include; terms and conditions, limitation and exemption clause of the contract. Albeit, any party relying on payment acknowledgement paper or slip, must do all that is reasonably sufficient to put it to the notice of the other party. The court was instructive in the case of Odeniyi v. Zard & Co. Another important aspect to take into consideration is that for an unsigned document to be binding, such must be a contractual document that is; It must be admitted by the court as containing the whole or some terms of the contract. Nevertheless, an unsigned document will be considered on the following, If it satisfies that; (i) the person receiving the ticket did not see or know that there was any writing on the ticket, he is not bound (ii) if he knew that there was writing on the ticket, and knew or believed that the writing contained conditions, then he is bound by the conditions (iii) if he knew that there was writing on the ticket, but did not know or believe that the writing contained conditions, nevertheless he would be bound if the party delivering the ticket to him had done all that was reasonable to give him that the writing contained conditions. See Parker v. South Eastern Ry. Co. Conversely, a signed document is generally binding, in the absence of misrepresentation, fraud, duress or compulsion, a signed document is binding on the party that append his signature. It is pertinent to note that, the idea of signature is not to prove that a party has read document and understood the document but rather a prove of assent. Therefore, it is immaterial whether he reads the document or otherwise once he append his signature then he is bound. The court was very instructive in the case of L’Estrange v. Graucob wherein it held that “…when a document containing contractual terms is signed, then in the absence of fraud and misrepresentation, the party signing it is bound…”. Truly, law is not one way traffic and the most interesting part is that; for every general rule there is an exception, while in some instances, we discover that even some exceptions tend to have other exceptions, this principle does has it own exception, it was held that, in the instance of receipt and ticket, even if a party append his signature to either while its contains limitation or exemption clause, he will not be bound if the party relying on it fails to notify him that the receipt or ticket contains the conditions of the contract. In essence, a party relying on a ticket or receipt must at the time of the formation of the contract notify the other party that the ticket or receipt contains the conditions of the contract, if by implication, the delivering party fails to notify the other party of the conditions until the contract is concluded, then, the receiving party is not bound. Equally, if a breach of contract is fundamental, for instance, “Mr A contracted Mr B to supply him with (Iphone) and the later supply him (Samsung)”, in this instance, the item demanded for is totally different from the one supplied, so this goes to the root of the contract, then it is a fundamental breach. As such, whatever limitation or exemption cause signed will not suffice. However, the position will be different if “Mr B supplied Iphone as agreed but the specification is different” in this instance the party relying on the limitation or exemption clause is covered. see DHL International (Nig.) Ltd. v. Mr. Udechukwu Chidi .
I would like to quickly reiterate the fact that there are documents which are impliedly believed to be contractual in nature, therefore, it is immaterial whether a party read, sign, expressly or impliedly agree to the terms contain therein, once the contract is concluded then he is bound, i.e Bill of lading, Waybill and Railway ticket. It is construed from the nature of the transaction. From the foregoing, It seems to me that the courts do not have a unified pronouncement as to the position of the law on signed and unsigned documents, the courts have always based their decisions on the peculiarities of the cases. However, they have made some positions clear that; (i) receipts and tickets are not contractual documents, (ii) receipts and tickets will amount to a contractual document when contain terms and conditions, limitation or exemption clause of the contract, (iii) to established ‘item (ii)’ the delivering party must do all that is reasonably sufficient to put the other party on notice, (iv) it is immaterial whether a party read and understand a document, once he append his signature then he is bound, (v) any condition, limitation or exemption clause brought to the notice of the other party after the conclusion of a contract will not stand, (vi) limitation or exemption clause will not avail a party from liability if the breach is fundamental. These are the positions of the law that the courts have established as regards to signed and unsigned document, and contractual implication of receipts and tickets.
By: Badmus Uthman Olayemi
Email Address: firstname.lastname@example.org