Many business transactions in Nigeria begin with a conversation rather than a formal document. For example, a trader agrees to supply goods on credit, or it could be that a contractor undertakes to complete a job for an agreed fee, or two parties settle on the terms of a transaction over the telephone. In each case, the parties may believe that their agreement is straightforward until one of them fails to perform.

Does the absence of a signed contract mean that nothing can be done? Not necessarily. Nigerian contract law recognises that an agreement does not become legally ineffective simply because it was made orally. The important questions are whether a valid contract was formed, whether the agreement is of a kind that the law permits to be made or proved orally, and whether the available evidence establishes the terms and alleged breach.

Oral Agreements and the Law

The issue often begins with a practical event: a conversation about price, quantity and delivery can become the foundation of a contract, but only if the legal requirements for an enforceable agreement are met. The legal question is rarely answered by the label one party gives the situation, it requires attention to the agreement, the facts and the law that governs the transaction.

For an ordinary contract, the court will consider whether the parties reached a sufficiently definite agreement, intended to create legal relations and satisfied the other applicable requirements of contract formation, including consideration where required. The precise terms must be ascertainable, and the agreement must not be invalidated by illegality, incapacity or another recognised legal defect.

A handshake, a telephone conversation or a promise made in person may therefore give rise to contractual obligations. However, not every promise amounts to a contract, and the fact that money has changed hands does not automatically establish that every term alleged by either party was agreed upon.

A conversation about price, quantity and delivery can become the foundation of a contract, but only if the legal requirements for an enforceable agreement are met. Therefore, always ensure to preserve messages, invoices, transfer records, delivery notes and witness details; the absence of a signed document does not itself answer the question.

Proving What Was Agreed

The practical difficulty with an oral agreement is often not whether the parties spoke to each other, but what they actually agreed upon. One party may remember a promise to pay within seven days, while the other insists that payment was due only after a further transaction. Without a reliable record, resolving that disagreement can become difficult.

Section 126 of the Evidence Act 2011 establishes the general requirement that oral evidence must be direct. The admissibility and weight of particular evidence will depend on the circumstances and the applicable rules of evidence. Messages, correspondence, invoices, bank records, delivery documents and testimony from persons who witnessed the agreement may all be relevant, subject to the applicable evidential requirements.

Where electronic communications are relied upon, their admissibility must also be considered under the Evidence Act, including section 84 where applicable. A screenshot or transfer notification should not simply be assumed to prove every aspect of the transaction, the evidence must be assessed in relation to the particular issue in dispute.

The Supreme Court’s decision in Reuben N. A. Ekwunife v Wayne (West Africa) Limited (1989) illustrates that the legal relationship between written and oral agreements requires careful attention. The Court considered the admissibility of evidence concerning a subsequent oral agreement to modify a written contract, applying the relevant provisions of the then applicable Evidence Act. The decision demonstrates why the existence of a written contract does not make every subsequent oral discussion legally irrelevant, although the admissibility and effect of such evidence depend on the circumstances and applicable law.

When Writing Is Particularly Important

Some transactions require more than an informal conversation. The law may prescribe particular formalities, and a failure to comply with them can affect whether an agreement is enforceable. This is especially important in transactions involving land, guarantees and other arrangements governed by specific statutory requirements.

A proposed sale of land, for example, should not be treated as an ordinary purchase of goods. The applicable property legislation, the nature of the interest being transferred and the circumstances of the transaction must be examined before determining whether an oral agreement can be enforced.

In Adeniran v Olagunju (2001), the Court of Appeal considered the doctrine of part performance in the context of an oral agreement concerning the sale of property. The case illustrates that, in appropriate circumstances, equity may recognise acts performed in reliance on an agreement even where the usual written memorandum is absent. However, part performance is not an automatic remedy. The party seeking enforcement must establish the applicable legal requirements, including sufficiently clear evidence of the agreement and conduct capable of supporting the relief sought.

The lesson is not that written contracts are unnecessary, but that the legal consequences of an oral agreement depend on the transaction and the governing law. Where a transaction involves land or another category subject to special formalities, obtaining proper documentation before making substantial payments or taking consequential steps is prudent.

What to Do When a Dispute Arises

If the matter has already become contentious:

1. Communicate in writing and remain specific.
2. Identify the transaction, the obligation in dispute, the amount or action requested and a reasonable response date.
3. Avoid exaggeration, public accusations and threats that go beyond the legal remedies available.

A measured record is often more useful than an angry exchange.

A written demand can help clarify the disagreement and establish what has been requested, but it does not automatically prove that the other party is liable. The terms of the original agreement, the conduct of the parties, the available evidence and any applicable statutory requirements remain relevant.

Where a party denies the agreement entirely, the evidence may need to establish not only that discussions took place, but also that the parties reached a concluded agreement on the material terms. Where the existence of the contract is admitted but its terms are disputed, the evidence must assist in identifying the obligations the parties actually accepted.

A party who has received money, supplied goods or performed services should preserve the relevant records rather than rely solely on recollection. Equally, a person accused of breaching an agreement should retain records that accurately explain the transaction and any performance, payment, variation or reason for non-performance.

Obtaining Legal Advice

Where the amount is substantial, a deadline is close or the dispute involves property, employment, a guarantee, criminal allegations or court proceedings, obtain advice based on the actual documents. General legal information can identify the questions to ask, but it cannot responsibly determine a case without the relevant facts.

The distinction matters because different legal issues may arise from what initially appears to be a simple disagreement. A failure to fulfil a contractual obligation does not, without more, establish a criminal offence. Equally, the existence of a contractual dispute does not prevent criminal liability where the facts independently disclose an offence. The appropriate legal response must be determined from the evidence and the applicable law, rather than from assumptions about the other party’s intentions.

Legal advice can help determine whether a valid contract exists, what evidence is available, whether any statutory formalities apply, what remedies may be available and whether negotiation, a formal demand or court proceedings would be appropriate.

Conclusion

The practical lesson is to address the issue early and deliberately. Preserve what happened, verify what the law requires and obtain specific advice where the stakes justify it. A lawful, well-documented response is more likely to protect your position than anger, assumption or a shortcut.

Oral agreements remain an important part of commercial and everyday dealings, but relying on memory alone can expose parties to avoidable disputes. Where possible, record the essential terms in writing, ensure that both parties understand their obligations and retain evidence of payments and performance. Where an agreement has already been made orally, the absence of a signed document should prompt a careful examination of the law and evidence, not an immediate assumption that the agreement is either enforceable or worthless.