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Monday, January 30, 2023

The place and nature of agreements in property acquisition and development (2) –

Last week, I started a series of sharing papers at the Nigerian International Real Estate Federation Plenary Interactive session held at the Federal Palace Hotel in Lagos. The aim is to guide investors and key stakeholders in this key sector to avoid pitfalls that arise in transactions for land acquisition and development. Given the importance of housing to the development of our country, property acquisition and development has become a real issue to be dealt with in Nigeria. This is why the Land Use Act was enshrined in the Constitution, even though it made the process more cumbersome than it might have been intended. The governors of the states became a kind of lord in allotment and expropriation of land, to which the faint of heart dared not set foot. Outlaws now in the dishonorable profession of land grabbing are committing so much fraud, deceit and manipulation that nearly 70% of cases in the police department are land related. Every day our courts are inundated with cases involving land transactions. If done right, it shouldn’t be. Let us now continue the thesis.

agreement type

There are two general types of contracts or agreements; implied or express. An implied contract or agreement is the opposite of an express agreement.

Implied Agreement: A contract that is assumed or inferred from the actions, conduct, and circumstances of the parties. An implied agreement is an obligation between two or more parties in the absence of a written contract, based on an equitable interest implied by circumstances or conduct. An implied contract is inconsistent with an express agreement whose terms and conditions are in writing. No implied agreement or contract can exist if one party fails, refuses, or neglects to abide by the terms of the written agreement. An implied contract is generally regarded in law as a contract whose sole purpose is to provide a remedy to a party whose conduct or actions benefit the other party, in which case, in the absence of a remedy, the beneficiary party will be or services that unfairly benefit the other party. Legally, the burden is on the party asserting an implied contract to prove the other party’s unjust enrichment and the necessity of the implied contract. Things are never set in stone.

Express Agreement: This is where written or oral terms are used to implement the contract. It is usually in writing, entered into voluntarily by the parties under negotiated and agreed terms and conditions, and is often reduced to a written document. This is an oft-printed document signed by both parties involved in a transaction, known as an express agreement. The parties are the assignor and the assignee; the seller and the buyer or seller, as the case may be.

Unilateral and Bilateral Agreements: A unilateral contract involves only one party promising to take an action or provide something of value. These are also known as unilateral contracts, and a common example of this is a reward for something found: the party offering the reward is not obliged to find the lost item, but if he does find it, the provider provides the reward under the contract. Bilateral contracts, on the other hand, involve two parties agreeing to exchange an item or service of value. These are also known as bilateral contracts and are the most common type of contract. They usually involve more than one person.

Unconscionable contracts: Unconscionable contracts are contracts that are considered unfair because they are unfairly weighted to give one party an advantage over the other. Examples of elements that may render a contract unconscionable include: the limit of damages a party may recover for breach of contract, the limit of a party’s rights to seek satisfaction in court, failure to honor a bond, etc. Whether the contract was unreasonable is a question left to interpretation by the courts. They usually rule a contract unconscionable if it is considered to be one that no intelligent person would have signed, that no honest person would have provided, or that would have undermined the impartiality of the courts in enforcing the contract.

Sticky Contract: A sticky contract is a contract drafted by a party with greater bargaining power than the other, meaning that the weaker party may or may not accept the contract. Often referred to as “take it or leave it” contracts; these contracts lack a lot of negotiation, if any, because one party has very little to negotiate. Such contracts should not be confused with unconscionable contracts, since a lack of bargaining power does not necessarily mean that the terms listed are unfair. That is, if courts believe that a consensus never existed, they may still not enforce the contract of adhesion.

Random Contracts: These are agreements that will not be triggered until an external event occurs. Insurance policies are examples of this, as they are agreements involving financial protection in the face of unpredictable events. In this type of contract, both parties bear the risk; the insured thinks they are paying for a service they will never get, and the insurance company they may have to pay more than they get from the insured.

Option Contract: This contract allows one party to enter into another contract with the other party at a later date. Entering into a second contract is called exercising an option, real estate is a good example where a potential buyer will pay the seller to take the property off the market and then enter into a new contract at a later date to buy the property outright if they so choose do it.

Fixed Price Contract: A fixed price contract involves a buyer and seller agreeing to pay a fixed price for an item. Also known as lump sum contracts, these contracts pose a significant risk to the seller, as they will still only be able to pay the agreed price if the project takes longer or has a greater scope than expected.

Memorandum of Understanding: When a verbal agreement becomes a written agreement, a Memorandum of Understanding is often used as confirmation of agreed terms. It sets out the fundamental principles and guidelines by which all parties will work together to achieve their goals. It is tailored to each individual situation and may or may not be funded. It is also known as a Memorandum of Agreement.

Nondisclosure Agreement: A legally binding agreement that treats certain shared information as confidential, proprietary, or trade secret and not to disclose it to others without proper authorization. It is Mason’s policy to require Principal Investigators to sign these agreements acknowledging their responsibility to safeguard such confidential information during preliminary discussions or during any research project.

Collaborative Agreement: An agreement involving two parties who wish to combine resources to submit government contract proposals. The agreement will specify which party will be the primary awardee and, if the proposal is selected for funding, which party will be the secondary awardee. The primary award recipient is then legally obliged to award the secondary award to the secondary recipient within a reasonable time of receipt of the award.

Material Transfer Agreements: These agreements are used to document and manage the transfer of biological or other scientific materials from one party to another for research purposes. They usually concern conditions of use and possible royalties or intellectual property rights that may arise from such use.

Idiq/Master Agreement: An indefinite delivery unlimited quantity contract is issued when a sponsor determines that services are needed, but does not know exactly how or when they will be needed. The terms and conditions of this Master Agreement are negotiated and accepted by the parties, but do not contain a statement of work or any funding. When a sponsor identifies a need, it issues a task order, awards funding for specific tasks, and specifies the exact work to be done in a statement of work.

Consulting agreement: An agreement aimed at obtaining the professional services of an individual with knowledge and expertise in a particular field. Consultants are considered independent contractors, not subcontractors or employees. They are often hired by professionals to define the scope of engagement and compensation for clients.

read also nigerian tribune

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