Based on the principle of pacta sunt servanda which means all agreements must be honoured and observed, parties to a contract are meant to timeously fulfil their obligations under the contract.
However, things may not go as planned between the parties consequently resulting in a breach of the contract. A breach of contract means that the party in breach has acted contrary to the terms of the contract either by non-performance or by performing the contract not in accordance with its terms or by a wrongful repudiation of the contract.
The question then becomes which venue can a plaintiff commence action for breach of contract? The principle of law as held in a plethora of cases is that the venue of action could be decided upon three alternatives, namely:
(a) Where the contract was made
(b) Where the contract ought to have been performed.
(c) Where the defendant resides. See University Press Ltd v. I.K. Martins (Nig.) Ltd. (2000) 4 NWLR (Pt. 654) 584 at 598-599.
As such, a plaintiff suing for breach of contract is entitled to take advantage of any of the alternatives and rely on them to choose the venue convenient to him. In Abia State Transport Corporation & Ors v Quorum Consortium LTD (2009) LPELR-SC. 121/2003, the respondent was a business consultant based in Jos. Its services were engaged by the Abia State Government in July, 1992 for the procurement of foreign aid from the Japanese Government to enable the State Government import some vehicles and spare parts for use by the 1st appellant, who was the Abia State Transport Corporation.
Upon the breach of the contract by the appellant, the respondent instituted an action at the High Court of Plateau State. On appeal, learned counsel for the appellants submitted that an issue of jurisdiction is fundamental to adjudication; that the appellants contend that the High Court of Plateau State, Jos has no jurisdiction to entertain the matter since the contract was entered at Umuahia, Abia State and ought to have been performed in Lagos and not in Jos.
In resolving the issue, the Court per Onnoghen CJN (as he then was) started by saying that jurisdiction is determined by the nature of the plaintiff’s claim before the court. And based on paragraph 5 of the supporting affidavit sworn by the plaintiff, the contract was entered into in Jos. The court then held that the trial court had the jurisdiction to hear and determine the suit.
Furthermore, inasmuch as the law permits a plaintiff to choose any of the above three alternatives, a plaintiff must be properly guarded in his choice. And this is where it gets interesting. While alternatives A and B may be straightforward, alternative C is somehow complicated for plaintiffs especially when the alleged breach relates to statutory institutions. For instance, the legal question is where does a company or higher institution reside? Its headquarters or branches or affiliate institutions?
This question formed the core issue for determination in the celebrated case of Krauss Thompson Organization v University of Calabar. (2004) LPELR-1715(SC). In that case, the contract was for the supply of books and journals. It is not in dispute that the alleged contract was said to have been made in Calabar and performed also in Calabar. Obviously the University of Calabar which is the defendant is located in Calabar but it has a liaison office in Lagos. The plaintiff relying on Alternative C which is (the Defendant residence), instituted an action at the Lagos State High Court.
The question is, would that also make Lagos the residence of the said University? In answering this question, the Court held that in respect of a corporate body, like a University, the residence is the location of its central management and control or where the parent body is located and at which the Chief Executive may reside but most certainly works. In the case of a University that will be the Vice-Chancellor’s office or the main campus. See Unit Construction Co. Ltd. v. Bullock (1960) AC 351.
Based on that, the Court held that a liaison office established by the University of Calabar in Lagos for purposes other than the management and control of the University can hardly be regarded as the residence of the said University. As such, the appeal was dismissed and no order was made for costs.
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