Illegal Contracts in Nigeria: What You Need to Know

Contracts are an essential aspect of business dealings in Nigeria, as they form the basis of agreements between two or more parties. However, not all contracts are legal or enforceable. Illegal contracts are those that contravene the law or public policy, and as such, they are not binding in a court of law. In this article, we will explore what illegal contracts are, their implications, and ways to avoid them.

Types of Illegal Contracts

There are various types of illegal contracts that businesses and individuals in Nigeria should be aware of. Some of the most common ones include:

1. Contracts that contravene statutory provisions: These are contracts that breach Nigerian laws, such as contracts that involve illegal activities like drugs, gambling, prostitution, and so on.

2. Contracts contrary to public policy: These are contracts that violate the moral, ethical, or public interests of society. These include contracts related to slavery, human trafficking, and other such practices.

3. Contracts that are void due to lack of capacity: Contracts signed by individuals who lack the capacity to enter into them are voidable, such as contracts signed by minors, mentally incapacitated individuals, or individuals under the influence of drugs or alcohol.

4. Contracts with illegal terms: Contracts with terms that are illegal or contrary to law, such as contracts that require someone to perform an illegal act.

Implications of Illegal Contracts

The implications of entering into an illegal contract can be severe and far-reaching. Some of the most common implications include:

1. Lack of enforceability: Illegal contracts are not binding in a court of law, which means you cannot enforce them or seek legal remedies for breach of contract.

2. Criminal liability: In some cases, entering into an illegal contract can lead to criminal liability, which can result in fines or imprisonment.

3. Reputation damage: Engaging in illegal activities can damage your reputation and that of your business, which can have long-term consequences.

How to Avoid Illegal Contracts

To avoid entering into illegal contracts in Nigeria, it is essential to take the following steps:

1. Ensure compliance with statutory provisions: Ensure that your contracts are in compliance with Nigerian laws, especially those related to business activities.

2. Verify the identity and capacity of the other party: Ensure that the other party has the legal capacity to enter into the contract and that their identity can be verified.

3. Obtain legal advice: It is always advisable to seek legal advice before signing a contract, especially if it is complex or involves significant amounts of money.

4. Review contracts carefully: Take the time to review contracts carefully, paying attention to the terms and conditions, and ensure that they are legal and enforceable.

Conclusion

Illegal contracts have severe implications, and it is therefore essential to understand what they are and how to identify and avoid them. By following the steps outlined above, businesses and individuals in Nigeria can protect themselves from entering into illegal contracts and avoid the legal and reputational consequences that come with them.