Aside from Master’s students supervising an Undergrad exam, people who act as if they have made it in life are landlords. Well, maybe they have, building a house in this country “no be beans.”But then, even though nonetheless, that doesn’t mean they should act arbitrarily toward tenants.
One of such unilateral arbitrary actions is the increment of house rent. The act is so rife in a typical Nigerian landlord and tenant relationship. Unfortunately, in most of these instances, tenants are ignorantly at the mercy of the landlords.
Today, we will pierce that veil of ignorance. The question is can a landlord, on his own, increase a tenant’s fee? Well, he can. At least, he is the owner of his house. Lol. However, whether such an increment would be effective is a legal question.
Rent is a matter of agreement between the landlord and the tenant which agreement may be expressed or implied. Being a contractual agreement, the law is that a landlord’s unilateral decision to increase the amount of rent payable under the tenancy agreement will be ineffective unless there is an agreement to that effect between the landlord and the tenant.
In Udih vs. Izedonmwen (1990) 2 NWLR (Pt. 132) 357, the landlord increased the rent from ₦50 to N500 per month. Rebuking this unlawful act, the court held that a unilateral increase of rent can, at best, be an offer or proposal, and where, as in this case, the tenant refuses to pay the landlord’s proposed rent, it is for the landlord who stands to gain where the new rent is accepted by the tenant, to take necessary steps as required by law to terminate the tenancy. This principle of law was further reiterated in Jovinco Nigeria Ltd & Anor v Ibeozimako (2014) LPELR-23599(CA).
An increment of rent is at best an offer or proposal that the tenant has a right to either accept or reject. If rejected, the landlord would then commence an action for recovery of possession. That has been treated in two of our articles. Click Here
In conclusion, unless agreed, no landlord has the legal right to increase a tenancy fee. Now that you have the law, tell others.
Premium is an amount paid periodically to the insurer by the insured for covering his risk. In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.
In Nigeria, the principal legislation governing insurance contracts is the Insurance Act 2004.Section 50(1) of the Act states that “the receipt of an insurance premium shall be a condition precedent to a valid contract of insurance and there shall be no cover in respect of an insurance risk, unless the premium is paid in advance.” From this provision, the law is settled that premium is a sine qua non foundation upon which a valid insurance contract is built. As such, no payment of premium; no valid insurance contract
Moving on, in Industrial and General Insurance Company Limited v Adogu (2010) 1 NWLR (Pt.1175), something interesting happened. The respondent in that case tried to unsettle the settled principle of law (lol). The facts of the case go thus: on 18th December 2002, the respondent entered into a contract of insurance with the appellant to cover her Mercedes Benz car against the incidence of loss of Seven Million Eight Hundred Thousand Naira (N7,800,000.) The premium was fixed at N520,000. On the same day, the respondent paid the sum of N220,000 leaving out the balance of N300,000.
Unfortunately, on 15th February 2003, the car was stolen at gunpoint in front of the respondent’s residence. A formal complaint was lodged with the police and thereafter, on the 17th of February 2003, the respondent paid the balance of N300,000 to the appellant. Thereafter, she put in her claims for indemnity against the loss of her car. The appellant agreed to pay the respondent the sum of N6,318,000 but failed to do so.
Aggrieved by the non-payment of her claims, the respondent applied to the High Court of the Federal Capital Territory, Abuja for the appointment of an arbitrator upon which Chief J.K. Gadzama, Senior Advocate of Nigeria, was appointed as the Arbitrator on 8th February 2005.
The Arbitrator, in his decision dated 20th September 2005, awarded the respondent the sum of N6,318,000 with interest. Dissatisfied with the arbitral award, the appellant filed a motion on notice at the trial court seeking to set aside the award. The application was refused by the trial court on 6th November 2006 and the arbitral award was affirmed. Still Aggrieved, the appellant appealed to the Court of Appeal.
The learned counsel for the respondent hinged his argument on two standpoints. First, the contract between the parties was completed and became enforceable on the 17th of February, 2003. i.e. the day the respondent fully paid for the balance of the premium. As such, the insurer is meant to cover the loss. The second argument was that assuming without conceding that the premium was not paid in full as at the date of constituting the contract, being on the 18th December, 2002, it is submitted that the sum of N220,000.00 effectively covered the period between the formation of the contract and the occurrence of the event insured against.
Now the question is, whether there has from the facts of this case been full compliance with provisions of section 50(1) of the Insurance Act, 2004, and if so, whether a valid contract of insurance exists between the parties. In other words, whether or not part payment of a premium is recognized under the Act to enable a valid and enforceable insurance contract.
The Counsel submitted further, when he took the Court on a mathematical voyage, that when the total premium is divided by the period covered i.e. 12 months (N520,000.00 ÷12), an approximate sum of N43, 333.33 is gotten and if the sum of N220,000.00 is divided by N43,333.33, it gives cover for a period of five months. It was his argument therefore that the sum of N220,000.00 effectively covered the period between payment and occurrence of the event and so Section 50(1) of the Insurance Act, 2004 was fully complied with. (Lawyers 🤝 thinking outside the box).
Welllll, “the overthinking no fit solve problem”. On the first standpoint of the respondent’s argument, the Court held that “the payment of premium is a condition precedent to the contract of insurance and where parties have entered into a conditional contract, the condition precedent like in the instant case, that is, the full payment of premium must happen before either party becomes bound by the contract. In the instant case, by the time the full premium was fully paid, the subject insured has ceased to exist and there is therefore no enforceable contract”
On the second standpoint, the Court was guided by the literal rule of interpretation where it held that Section 50(1) of the Insurance Act does prohibit payment of premiums in part or by installment. The court per Abba-Ajji (JCA) held that: “with respect to the learned counsel, this argument is also misconceived. If the Section intends to make payment of premium in part or by installment, it would have stated so as what is not stated, is meant to be excluded. Section 50 of the Act, therefore, does not contemplate installment payment of premium in an insurance contract.”
At the end of the Appeal, the judgment of the trial court was reversed and the Court held that the appellant can not be held responsible to cover the respondent’s loss. As such, the loss lay where it fell. This principle of law was also reaffirmed in Shoreline Lifeboats (Nig) LTD & Ors v Premium Insurance Brokers LTD & Anor (2012) LPELR-9795(CA).
In conclusion, 50(1) of the Insurance Act does not contemplate installment payment of premium. An insured must comply with the provision of the law in order to enjoy its protection in instances of an insurer’s breach.
In 2019, the Nigerian Contract jurisprudence recorded a landmark principle in the case of MTN (Nig.) Communications Ltd. v Corporate Communications Investment Ltd. (2019) LPELR-47042(SC). The fact of the case goes thus:
MTN (“the Appellant”) entered into a Trade Agreement (Exhibit A) with Corporate Communications Inv. Ltd. (“the Respondent”) who is one of MTN’s trade partners. The agreement was drafted by MTN and sent to the Respondent for its signatures. The Respondent signed but MTN did not, and kept it. There is a clause therein that the agreement took its effect from the date the Appellant appended its signature thereto.
Parties, however, transacted on the basis of the contract. MTN thereafter terminated the agreement without giving the required notice, relying on the relevant clause in the agreement. Despite the respondent’s solicitor letter challenging the termination of the agreement and requesting an amicable settlement, the appellant withdrew 27 SIM registration kits assigned to the respondent.
The respondent pleaded that in compliance with previous Trade Partner Agreements between the parties, it had incurred expenses in procuring facilities and equipment which were of no more use to it, given the purported termination of Exhibit A. It also pleaded that the abrupt cancellation of orders without a formal and valid termination of their agreement has caused it a huge financial loss.
At the end of the trial at the High Court, the court Court found for the Respondent and awarded N25 Million as damages and costs of N20,000. The same decision was also upheld by the Court of Appeal. Aggrieved by the two decisions, MTN took the matter to the Supreme Court.
The legal question becomes, can an unsigned agreement constitute a valid contract? At first, none of the parties raised this issue. It was in the course of writing the judgment that the trial judge, observed that Exhibit A was not signed by the appellant. Upon discovery, he adjourned the delivery of the judgment, and invited the parties to address him on the evidential weight to be attached to it. (An intelligent judge in my book. I stan). A court of law has the enabling power to raise a new issue and invite the parties to address that issue. Ezeudu v John (2012) 7 NWLR (Pt. 1298) 1.
MTN saw this as an opportunity to escape liability. It argued that the agreement was worthless and that it was immaterial that MTN was the one who prepared it. The appellant’s rationale is that it was one of the terms of the agreement that the agreement would take effect from the date the last person signs and that since it did not sign the document after it was signed by the respondent, the document was inadmissible and could not be relied upon as a valid contract between the parties.
This argument was rejected by the court on two grounds. First, on conduct of the parties. Second, on the equitable maxim that equity looks at the intent of the parties rather than the form of the contract. Rejecting the argument, the Court held that the appellant could not be allowed, by deliberately withholding its signature, to take advantage of its wrongdoing and use it as a weapon against the respondent. The Court further stated, relying on the case of Adedeji v. N.B.N Ltd. (1989) 1 NWLR (Pt. 96) 212 @ 226-227E-A, that it is morally despicable for a person who has benefited from an agreement to turn around and say that the agreement is null and void, or unenforceable, as contended in this case.
In addition, His Lordship, Ejembi Eko, gave an elaborate dictum thus: “though not mutually executed, Exhibit A was regarded by the parties as their binding contract. Equity acts in personam and therefore takes as done that which ought to be done, if from the conduct of the parties such inference can be drawn. In the instant case, such facts abound on which the two Courts below concurrently found that the parties intended to be bound by Exhibit A and that Exhibit A would be the basis of their mutual transaction, whether or not the document was formally executed. Again, Equity acting in personam would look at the intent of the parties and the substance and not at the form. In the instant case, insistence on compliance with all formalities of executing a written agreement will be oppressive to the Respondent. The Appellant, in the Court of Justice, will not be allowed to take advantage of the Respondent on his own iniquity by his ingenious booby trap by which he deliberately withheld his signature while at the same time it made the Respondent go with the impression that the relationship is governed or regulated by Exhibit.“
In conclusion, the principle of law is that an agreement, though not executed by one party, may be a valid contract. As such, if one party withholds execution but allowed the party who had executed to carry out any obligation under the agreement to the benefit of the party who did not execute, the agreement may still be deemed valid and enforceable notwithstanding that execution was by one party.
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