BUSINESS LAW

LAW AND ITS SOURCES

What is law?
Generally speaking, the concept of law may mean different things to different
people. That is to say no single meaning of law that is universally adopted. John
Salmond defines law as being the body of principles recognized and applied by the
state in the administration of justice. Law can also be defined as a formal
mechanism of social control. This is because rules set down in the law can be
enforced through the Courts and legal system. Simply put, Law consists of a body of
rules and regulation designed to regulate human conduct in the society.
SOURCES OF LAW
Source means origin, beginning starting point etc. the sources of law are:
a) Received English law (consisting of the common law of England, Doctrines of
Equity and Statutes of General Application (SOGA).
b) Nigerian legislation
c) Customary law
d) Judicial precedents or case law
e) international law (treaties, conventions and protocols).

(a) RECEIVED ENGLISH LAW:

English law is a major source of law by virtue of the fact that Nigeria was
colonized by Britain English law was first introduced to then Lagos colony and was
later made applicable to the whole of Nigeria. The English law that applies in
Nigeria consists of the
(I) common law,
(ii) doctrine of Equity
(iii) Statutes of General Application (SOGA).
(i) Common law:
It means the law developed by the old common law courts of England, namely, the
King's Bench, the Court of common pleas and the Court of Exchequer. It can be
described as the law which was common to the whole of England as opposed to local
customs which is peculiar and limited to a particular area. Common law developed
from decided cases based on uniform/general customs. It originated during the era
of the Norman King, William the conqueror, set up the Curia Regis (the King's
Court) and appointed his own judges. Persons who had disputes were encouraged to
apply to have the King (or his judges decide the matter). In addition to the
Central Court, the Judges were sent to major towns to decide all important cases.
Gradually the judges selected the best customs and these were then applied by all
the judges throughout the country. This practice has effect that the law became
uniform or ‘common’ throughout the whole country and it is from there that the
phrase common law seems to have developed.
CHALLENGES OF COMMON LAW.
(a) It developed a rigid system which made it difficult to obtain justice from the
Courts. Only certain types of case were recognized due to the problem of inadequate
writ. Thus where there was no writ there was no remedy.
(b) The law was very technical. If there was an error in the formalities (writ) the
person making the claim would lose the case.
(c) The only remedy the common law could give was damages that is an order that the
defendant pay sum of money to the Plaintiff (now Claimant) by way of compensation
which may not be suitable in some cases e.g in a case of trespass to land where an
injunction would have been the most appropriate remedy.
(d) Unable to enforce the judgment in his favour against the noble or aristocrat.
This was because might was right.
DOCTRINE OF EQUITY
Equity is the law developed by the Old English Court of Chancery as a result of the
rigidity of the common law. Equity in a broad sense means fairness or whatever is
just and ethical. Aggrieved persons who could not obtain justice in the common law
Courts appealed directly to the King. Most of the cases were referred to King's
Chancellor who was both a lawyer and priest and who became known as the keeper of
the Kings conscience. This was because the chancellor based his decision on
principles of natural justice and fairness. He also developed new remedies which
were able to compensate Claimants more fully than the common law remedy of damages.
Where there was a conflict between a rule of equity and a rule of common law on the
same matter, the rule of Equity was to prevail. See Earl of oxford case .
MAXIMS OF EQUITY
They are legal maxims that serve as a set of general principles or rules which are
said to govern the way equity operates. 1 to twelve (12) maxims are:
1. Equity will not suffer a wrong without a remedy: it means it is justifiable, it
will provide or grant a remedy where a party has suffered injustice.
2. Equity follows the law: equity was not evolved as an alternative system of law
to replace or override the common law in all respects. Its main objective was to
full the lacuna (gap) which were existing at common law.
3. Where there is equal equity, the law shall prevail: if both interests are
equally meritorious (equal equities) the legal interest shall prevail over
equitable interest.
4. Where the equities are equal the first in time prevails: if competing interest
are of the same nature e.g legal interest or equitable interest vs equitable
interest, the interest that was created point of time shall take precedence over
the others.
5. He who seeks Equity must do Equity: a party seeking an equitable relief or
remedies must be ready and willing to do what is fair and just towards the other
party against who he is seeking, such equity will not come to his aid.
6. He who seeks equity must come with clean hands: a person who has committed
inequity shall not have equity. His past conduct in relation to the transaction has
been fair, and honest.
7. Delay defeats equity: a litigant who has unreasonable delayed or slept over his
right will not be granted an equitable relief.
8. Equality is equity: here where no provision is made either expressly or
impliedly for dividing property among those who are entitled, Equity will divide
such property equally.
9. Equity looks to the intent rather than the form: the Court of Equity is a Court
of justice and not a Court of form. Common Courts placed procedure, Equity looks to
the intent.
10. Equity looks on that as done which ought to be done: the branch of equity deals
mostly with laws like property law where a purchase for value of a specifically
enforceable contract e.g when an agreement for lease of which the Court will grant
specific performance, in such position the lease would be seen as if the lease had
actually been granted to him.
11. Equity imputes an intention to fulfill an obligation: this happens when a
person under obligation to do an act and does some other act which is capable of
being regarded as a fulfillment of that obligation.
12. Equity acts in personam: it evolved to prevent a direct conflict between the
Jurisdiction of the early Common law Courts and that of the Chancery Courts at the
outset of chancery jurisdiction. The traditional view was that equitable rights are
rights in personam enforceable against the conscience of the defendant.
EQUITABLE REMEDIES
(a) Specific performance: this is an order that a contract should be carried out as
agreed.
(b) Injunction: this is an order to one of the parties involved the case to do
something or not to do something.
(c) Rescission: this is a remedy in contract cases an it aims to return the parties
as far as possible to their pre-contractual position.
(d) Ratification: the court will order that where a mistake has accidentally been
made in a document so that it is not a true version of what the parties agreed,
that document should be altered to reflect the parties intentions.
Other remedies developed recently
I. Mareva injunction (freezing order): this is made where there is a risk that are
party in a case will move all their assets out of the jurisdiction of the court
before the case against them is tried.
II. Search order (known as Anton piller order): it allows claimant to search the
Defendant's premises and remove any document/other material which could help the
claimant to prove his case.
Note: all equitable remedies are discretionary remedies.
STATUTES OF GENERAL APPLICATION (SOGA)
These are the Laws of general application that were in force in England on or
before 1st January 1900. These laws became part of the Laws in Nigeria by virtue of
the various adaptation Laws. They remain Laws in Nigeria until repealed by a
particular Nigerian legislation on the particular subject- matter. E.g Infant
Reliefs Act 1874, The Partnership Act 1890, The sale of Goods Act 1893, Wills Act
1837. Bill of Exchange Act 1882, Conveyancing Act 1881and Statutes od Frauds 1677
etc.
Note: SOGA are not applicable when there is a local statute on the subject.
ENGLISH LAWS EXTENDING TO NIGERIA
These are Laws made specifically for Nigeria by English Parliament between 1900 and
1st October 1960. E.g Copyright Act 1911 (later repealed by the Copyright Decree
1990), the Criminal code, the Penal Code, the Independence Act.
NIGERIAN LEGISLATION
Legislation are laws passed by parliament or the Legislative arm of government that
is, the state house of Assembly or the National Assembly. They are called Acts at
the Federal level and laws at the state level. Nigeria Legislation include the
Constitution of the federal Republic of Nigeria, Acts, Decrees, Laws, Edicts and
Bye Laws.
Constitution: it is the supreme law of the land. To this effect any law that
contradicts the Constitution is null and void and of no effect to the extent of the
contradiction or inconsistency.
Characteristics of constitution.
1. Supremacy: (it has 3 aspect)
(a) Section 1 of the Constitution provides that the constitution shall be supreme
and its provision shall have binding force on all authorities and persons
throughout the federal Republic of Nigeria.
(b) No part of the FRN shall be governed except in accordance with the
constitution.
© Section 1(3) states that if any other law is inconsistent with this constitution,
the constitution shall prevail, and that other law shall to the extent of its
inconsistency be null, void and of no effect.
2. Written and Rigid
The constitution is written and the procedure for its amendment is so special that
it is not easy to amend it e.g the 1999 constitution can only be amended by 2/3
majority of the National assembly supported by at least 2/3 of the state House of
Assemblies, thus making the constitution a rigid constitution whose amendment is
cumbersome.

3. Federalism:
it is a federal constitution that divides the powers of government between the
Federal Government, and the states of the Federation. The federal Government has
powers to legislate on the matters in the Exclusive Legislative list of the
constitution. While both the Federal and the State Government may legislate on
matters on the Concurrent legislative list. Federal laws are called Acts while
States are called Laws.
Note: if a state law contradicts a Federal Act on the same subject, the Federal Act
prevails.
4. Separation of powers: the constitution separates the powers of government among
the 3 branches of government namely the Executive, Legislative, and Judiciary. None
of these branches may exercise the powers of the others. They therefore act as
checks and balances to each other.
5. Rule of law: it is the restriction of the arbitrary (of power or a ruling body).
Exercise of power by subordinating it to well-defined and established laws. The
constitution has governance according to law as one of its cardinal characteristics
and principles. This prohibits arbitrariness.
The principle of rule of laws has 2 broad aspects:
I. Nemo Judex in causa sua: Meaning A person shall not be the judge in his own
case.

ii. Audi alteram partem: Meaning A person shall not be condemned without hearing.
6. Fundamental Human rights: Chapter IV of the constitution make provision for
fundamental right which every Nigerian citizen is entitled to enjoy, they include:

a. Right to life

b. Right to dignity of human person

c. Right to personal liberty
d. Right to fair hearing.
e. Right to private and family life
f. Right to freedom of thought, conscience and religion.
g. Right to freedom of expression and press
h. Right to peaceful assembly and association.
i. Right to freedom of movement.
j. Right to freedom against discrimination.

ii Acts: these are laws passed by the National Assembly which is composed of the
Senate
and House of Representative in a democratic government.
iii Decrees: these are enactments made by the Federal Military Government during
Military regime.
iv. Laws: these are Laws enacted by the House of Assembly of a state in a
democratic
government.
v. Edicts: these are Laws made by the Military government of a state during a
military regime.

vi. Bye laws: these are laws made by the local government councils both during
democratic and military regimes.

CUSTOMARY LAW
Customary law can be described as a body of rules regarded as obligatory by members
of a particular community. It varies from one community to another.
TYPES OF CUSTOMARY LAW
i. Ethnic customary law: it is indigenous and is applicable to members of a
particular ethnic group or community.
ii. Islamic customary law: this is based on the Islamic faith and is applicable to
members of the Islamic faith.
CHARACTERISTICS OF CUSTOMARY LAW
a. It is largely unwritten with the exception of Islamic law.
b. Members of the community or group to which it relates generally consider it as
binging as such it is often described as a "mirror of acceptable usage"
c. It is established by proof through assessors or authoritative books if it has
not been so used by the Court and judicially noticed.
d. It is largely flexible. Osborne C.J observed in the case of Lewis v. Bankole
that one of
the most striking features of customary law is its flexibility. Customary law
appears to
subject itself to motive of expediency without losing its character as a custom.

VALIDITY OF CUSTOMARY
It is not automatic that all customs would be recognized by the Courts as law in
Nigeria. Before a custom becomes law and is recognized by the Courts, the customary
law must pass the validity test laid down by law. 3 validity test which every
customary law have
a. The repugnancy test
b. Incompatibility test
c. public policy test

(a) The repugnancy test: every applicable customary law must not be repugnant to
natural justice, equity and good conscience. Natural justice in a broad sense means
fair hearing, equity in a broad sense means fairness. Any customary law which is
barbaric and falls below civilized standard of behavior would be held to be invalid
as contrary to natural justice. See Edet v Essien (1932) Essien married X after
paying dowry on her, later X deserted Essien and (without refund of the dowry paid
by Essien) married Edet. Two children were born out of relationship between X and
Edet. Essien claimed those children on the basis of an existing custom that
provided that as long as the dowry paid on X has not being refunded any children
born by that woman belonged to the former husband whose dowry has not been
refunded. The Court held that such custom would not be enforced because it was
repugnant to natural justice, equity and good conscience. See also Re: Effiong
Attah: where the Court held that a custom whereby the former owner of a servant was
entitled to administer the personal property of the deceased servant would fail the
repugnant test not only because it was unfair to the biological children of the
servant but also because it sanctions the institution of slavery which is
considered barbaric and uncivilized.

(b) Incompatibility test: every applicable customary law must not be incompatible
wither directly or by implication with any law for the time being in force. That
is, a rule of customary law which conflicts with an existing law would not be
enforced. E.g Adesubokan V. Yunusa (1971); the Court refused to enforce an Islamic
rule on inheritance because in that case it conflicted with an existing law e.g the
Wills Act 1837.

(c) Public policy test: section 14(3) of Evidence Act provides that every
applicable customary law must not be contrary to public policy. See Alake v. Pratt
(1955). Cole v. Akinyele ; the Court have refused to enforce certain rules of
customary law because it would encourage promiscuity which is contrary to public
good, in particular the practice of legitimation of a child born outside wedlock by
acknowledgment of his paternity by the father.
PROOF OF CUSTOMARY LAW
Customary law is a question of fact as such it must be proved by anyone alleging
its existence. See Angu v. Atta (1916). it has to be proved in the First instance
by calling witnesses acquainted with the nature customs until the particular
customs have, by frequent proof in the Courts became so notorious that the Courts
take Judicial notice of them. The existence of customary law may be proved in any
of the following ways:
(a) Direct oral evidence: involves calling witnesses, people like chiefs, elders
etc.
(b) Documentary Evidence: tendering as evidence, books, manuscripts, or research
findings of people who are considered experts and knowledgeable in the custom
intended to be proved.
(c) Judicial notice: in trying to prove a custom by judicial notice, a person is
simply asking the court to accept the custom as existing because a higher or
coordinate Court had in previous proceedings repeatedly accepted the custom as
existing.
D. JUDICIAL PRECEDENT OR CASE LAW
It refers to the source of law where past decisions of the judges create law for
future Judges to follow. This source of law is also known as case law. Judicial
precedent is based on the latin maxim stare decisis which means "stand by what has
been decided and not unsettle the established". It is not everything said by a
Judge in the course of his judgment that a precedent. Only the pronouncement on
law in relation to the material facts before the judge constitutes a precedent. Any
other pronouncement on law made in the course of a judgment is an obiter dictum [a
statement by the way) and it does not form part of the ratio decidendi (reason for
decision)
TYPES OF PRECEDENTS
1. Original precedent
2. Binding precedent
3. Persuasive precedent
1) Original precedent: If the point of law in a case has never been decided before,
then whatever the judge decides will form a new precedent for future case to follow
e.g it is an original precedent.
2) Binding precedent: This is a precedent from an earlier case which must be
followed even if the Judge in the latter case does not agree with the legal
principle. A binding precedent is only created when the facts of the second case
are sufficiently similar to the original case and the decision was made by a Court
which is senior to the court hearing the latter case.
3) Persuasive precedent: This is a persuasive that is not binding on the Court, but
the judge may consider it and decide that it is a correct principle so that he is
persuaded that he should follow it. Persuasive precedent comes from a number of
sources e.g statement made obiter dicta, a dissenting judgment, and decision of
courts in other countries.
TERMINOLOGIES USED IN PRECEDENTS.
(a) Distinguishing: This is a method that a Judge adopts to avoid following a past
decision which he would have been bound to follow. It means that a Judge finds that
the material facts of the case he is deciding are sufficiently different form him
to draw a distinction between the present case and the previous precedent. He is
then not bound by the previous case.
(b) Overruling: This is where a Court in a latter case state that the legal rule
decided in an earlier case was wrong and will not be followed in a subsequent case.
(c) Reversing: This is where a Court higher up in the hierarchy over turns the
decision of a lower Court on appeal in the same case, e.g the Court of Appeal
disagree with the legal ruling of a High Court and come to a different view of the
law. In this situation, it reverses the decision earlier reached by the High Court.
(d) Per in curiam: This is a decision made in error or by mistake. It is one of the
reasons why a Court would overrule its previous decision.
ADVANTAGES OF JUDICIAL PRECEDENT.
(i) It brings certainly into law as it enables people to know what the law is and
how it is likely to be applied to their case.
(ii) It brings consistency and fairness into law since similar cases are decided
similarly.
(iii) It saves the time of the Court.
(iv) It brings flexibility into law as the law could change through the use of
overruling, reversing and distinguishing.
DISADVANTAGES OF JUDICIAL PRECEDENT
(i) It may lead to law becoming rigid mechanical since lower Courts must follow the
decisions of higher Courts.
(ii) It may lead to loss of initiative especially on the part of Lower Court Judges
since they are bound by the decisions of higher Courts.
(iii) The use of distinguishing to avoid past decisions can lead to illogical
distinctions.
(iv) It is not always easy to find all the relevant case law as well as to
distinguish '* the ratio of a case from an obiter dictum.
INTERNATIONAL LAW
Bilateral and multilateral treaties, conventions as well as global and regional
charters form part of the Nigerian law once the National Assembly passes an
enabling statute to the effect
see Section 12(1) of the 1999 constitution. The case of Inspector General of Police
V All peoples Party (2007), it was held that the African Charter on Human and
peoples applies in enforcement) Act 1990.
What is treaty?
A treaty is a formally concluded and ratified agreement between sovereign states.
It is an agreement under international law entered into by actors in International
Law, namely sovereign states and international organizations. It can also be known
as an international agreement, protocol, covenant, convention, pact, or exchange of
letters, among other ter