BPS CONSTRUCTION & ENGINEERING COMPANY LIMITED v. FEDERAL CAPITAL DEVELOPMENT AUTHORITY (2017)

In The Supreme Court of Nigeria

On Friday, the 27th day of January, 2017

SC.293/2011

Before Their Lordships

WALTER SAMUEL NKANU ONNOGHEN Justice of The Supreme Court of Nigeria
MARY UKAEGO PETER-ODILI Justice of The Supreme Court of Nigeria
KUMAI BAYANG AKA’AHS Justice of The Supreme Court of Nigeria
KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN Justice of The Supreme Court of Nigeria
AMIRU SANUSI Justice of The Supreme Court of Nigeria


Between

BPS CONSTRUCTION & ENGINEERING COMPANY LIMITED –Appellant

AND

FEDERAL CAPITAL DEVELOPMENT AUTHORITY- Respondent

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KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.S.C. (Delivering the Leading Judgment): This is an appeal against the judgment of the Court of Appeal, Abuja Division delivered on 3rd June 2011 dismissing the appellants appeal and allowing the respondents cross-appeal against the judgment of the High Court of the Federal Capital Territory (hereafter referred to as the FCT) delivered on 29th June 2010.The facts that gave rise to this appeal are as follows: The appellant, a company registered in Nigeria, carries on the business civil, mechanical and electrical engineering and construction work. The respondent is the statutory body responsible for the orderly development and administration of the FCT. The appellant approached the respondent with a proposal for the provision of infrastructural facilities at Mabushi and Katampe Districts of the FCT. At a meeting held on 6th July 2004 between the parties, the appellants proposal was approved. A memorandum of understanding (MOU) was drawn up and signed by the parties on 13th July 2004 (Exhibit P5). The MOU was subject to the signing of a formal agreement by the parties. By the agreement, the appellant, as infrastructural developer, would raise funds for the project. It would recoup its costs from the collection of development levies payable by allottees of plots and from the sale of vacant plots in the two districts. By the terms of the MOU, the respondent was to provide the appellant with the engineering design, drawings and Bill Of Quantities (BOQ) and any other documents that would enable the appellant complete its cost analysis of the project. The MOU also provided that within 14 days of its execution, the parties shall enter into a formal agreement on terms to be mutually agreed between the parties. It was also agreed that all documents, materials, discussions, etc would be treated with the utmost confidentiality and neither party to the MOU shall disclose any information to a third party.
In compliance with the MOU, the respondent submitted the required documents to the appellant. The appellant in return, submitted its Infrastructural Development Agreement to the respondent for execution, as well as evidence of its financial capacity to execute the contract. However, notwithstanding repeated reminders, the respondent refused to sign the agreement. Meanwhile, the appellant had proceeded to incur costs in terms of manpower and resources in the execution of the project based on “reliance on the promises, assurances and representations of the respondent that a formal agreement will be executed in line with the MOU As a result of the respondent’s failure to sign the formal agreement, the appellant instituted an action before the trial High Court vide a writ of summons and statement of claim dated 20/1/2009 and filed on 21/1/2009 seeking the following reliefs:
“(a) A DECLARATION that in compliance with the terms of the said MOU of 13th July, 2004 executed by the parties, the defendant is duty bound to enter into a formal agreement with the Plaintiff for the provision of infrastructural facilities in Mabushi and Katampe Districts of the Federal Capital Territory, Abuja.
(b) AN ORDER for the defendant to execute forthwith or within such a time as may be stipulated by this Honourable Court, a formal agreement with the Plaintiff in respect of the said project.
(c) AN ORDER for the Defendant to deliver and finally assign all that parcel of land lying within Mabushi and Katampe Districts of the Federal Capital Territory, Abuja to the plaintiff for the purpose of providing the said infrastructural facilities.
(d) AN ORDER for the defendant to pay the sum of N3,875,284,858.29 being the cumulative monetary value of the efforts, services and work-input which the plaintiff has already committed to the said project pursuant to the MOU, subsequent assurances and representations of the defendant from 2004 – 2008.
IN THE ALTERNATIVE to reliefs (a), (b) and (c)
(e) AN ORDER for the defendant to pay to the plaintiff the sum of N10,000,000,000,00 being loss of anticipated profit by the plaintiff in respect of the said project.”
The appellant also claimed the sum of N105,000,000.00 as legal fees and the cost of prosecuting the case.
The respondent, as defendant, filed a statement of defence dated 17th May, 2009 wherein it denied the appellant’s claims. The appellant called only one witness. The respondent filed the witness statement of one Umar Gambojibrin but he did not attend Court to adopt it nor was he available for cross-examination. At the conclusion of the trial, the learned trial Chief Judge held at page 1208 of Vol. 3 of the record as follows:
“On the whole I find that the defendant is in breach of the MOU to enter into a formal agreement with the plaintiff for the provision of infrastructural facilities in Mabushi and Katanpe Districts of the FCT. It is hereby ordered against the defendant as follows:
(1) The sum of N10,000,000 is hereby awarded against the defendant in favour of the plaintiff as damages for a breach of

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contract.
(2) An additional sum of N2,000,000 is awarded against the defendant as cost and legal expenses in this action.”
The appellant was dissatisfied with the judgment and filed an appeal against it at the Court below. The respondent was also dissatisfied with an aspect of the judgment and accordingly filed a notice of cross appeal.
In a considered judgment delivered on 3rd June, 2011, the Lower Court dismissed the main appeal and allowed the cross appeal in the following terms:
“The issues raised in the cross appeal have been laid to rest in my consideration of the appeal.
I have held that Exhibit P5 [the MOU] does not amount to a contract. The question of whether the use of the word 
shall in the document amount (sic) to a command or directory is irrelevant at this stage. Whichever way the definition of shall is given here will not revive Exhibit P5. The submission in respect of the commanding nature of shall and the award of damages cost and legal expenses are dependent on the validity of Exhibit P5. Since I have held that Exhibit 5 is not a contract capable of being enforced between the parties, all argument on issues connected with the said exhibit goes to nothing.
The two issues are resolved in favour of the respondent/cross appellant. The cross appeal is therefore allowed.
On the whole, the main appeal is dismissed, while the cross appeal is allowed. The decision of the Lower Court in which Exhibit P5 was held to amount to a contract capable of being breached is hereby set aside. I also set aside the award of N10, 000,000 and N2,000,000 respectively. I make no order as to cost.

(See page 1312 of Vol. 4 of the record).
The appellant is still dissatisfied and has further appealed to this Court vide a notice of appeal dated 1/8/2011 and filed on 2/8/11 containing 9 grounds of appeal.
The parties duly filed and exchanged briefs of argument in compliance with the rules of this Court. At the hearing of the appeal on 7/11/2016, CHIEF TOCHUKWU ONWUGBUFOR, SAN leading several learned counsel adopted and relied on the appellants brief filed on 10/10/2011 and its reply brief filed on 23/1/2012. By way of adumbration of the arguments contained in his brief, learned senior counsel relied on the additional authority of B.F.I. Group Corporation Vs B.P.E. (2012) 18 NWLR (Pt.1322) 209 @ 240  242 D – F, in support of his submissions under issues 1, 2 and 3 to the effect that the Court is bound to consider all the documents, assurances and promises connected with the contract. He contended that the Court below was wrong in considering only Exhibit P5 in reaching the conclusion that there was no enforceable contract between the parties. He urged the Court to allow the appeal.
M. A. NUNGHE ESQ., also leading a team of learned counsel, adopted and relied on the respondent’s brief filed on 28-11-2011. He referred to paragraphs 4.2.19 and 4.2.20 of his brief and submitted that the Court below did consider all the relevant facts before reaching its decision. He submitted that the gravamen of the agreement between the parties was Exhibit P5. He urged the Court to dismiss the appeal.
The appellant identified nine issues for the determination of the appeal thus:
“1. Whether the Court of Appeals definition and application of the import and meaning of “memorandum” simpliciter in determining the contractual relationship between the parties instead of the definition and the application of the import of Memorandum of Understanding, which is the case presented by the appellant is not a misapprehension or misconception of the appellants case which has occasioned a miscarriage of justice against the appellant. (Ground 1)
2. Whether the Court below was right in holding that there was no valid and enforceable contract between the appellant and the respondent pursuant to Exhibit P5, thus reversing the decision of the learned trial Chief Judge which held that there was a binding contract between the appellant and the respondent having regard to the mandatory provisions contained in Exhibit P5 the use of the words subject to contract notwithstanding.
3. Whether the Court below was right in failing to consider the promissory estoppel and estoppel by conduct arising from the promises, assurances and representations made by the respondent to the appellant which the appellant believed and acted upon to its detriment before the Court below relied solely on Exhibit P5 to come to the conclusion that there was no binding contract between the appellant and the respondent and whether the non consideration thereof has occasioned a miscarriage of

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justice. (Ground 4)
4. Whether the Court of Appeal was right in reversing the decision of the learned trial judge which held that there was a binding contract between the appellant and the respondent on the ground that the trial Chief Judge did not verify whether there is in existence a valid contract. (Ground 3)
5. Whether the Court below was right when it held that the failure of the respondent to lead evidence at the trial is irrelevant and immaterial since the appellant can only succeed on the strength of its own case and not on the weakness of the respondents case.
6. Whether the Court below was right in failing to consider the appellant’s issue No. 1 and 2 which border on the relief of specific performance which is the crux of the appellants appeal and issues Nos, 3, 4 and 5 of the appellant’s issues for determination before them, describing them as academic exercise and whether the non consideration of those issues by the Court has not occasioned a miscarriage of justice and a denial of the appellant’s right to fair hearing. (Ground 6)
7. Whether the Court of Appeal was right in holding that the appellant was not entitled to damages in respect of the expenses it incurred pursuant to the MOU and to the promises, assurances and representations made by the respondent to the appellant on the ground that the expenses incurred were based on a frolic of its own. (Ground 5)
8. Whether the appellant’s right of fair hearing was not breached when the Court below failed to consider issues raised by the appellant/cross respondent in answer to the respondent/cross appellant’s cross appeal before it came to the conclusion that there was no contract between the parties. (Ground 9)
9. Whether the Court of Appeal was right in holding that there was no basis for the award of specific performance in favour of the appellant.”
The respondent, without specifically saying so, appears to have adopted the issues identified by the appellant. Although the appellants issues are prolix and rather unwieldy, I shall adopt them in the determination of this appeal.
Issue 1
Under this issue, it is contended on behalf of the appellant that the Lower Court misunderstood its case as to the meaning and import of a memorandum of understanding and thereby occasioned a miscarriage of justice. The learned senior counsel, Tochukwu Onwugbufor, SAN, argued that the Court at Pages 1289  1315 of Vol. 4 of the record applied the definition of the word “memorandum” simpliciter in construing Exhibit P5 entered into between the parties, as opposed to applying the definition of the entire expression “memorandum of understanding. Relying on the definition of MOU as found in Black’s Law Dictionary, 8th edition at page 924, he submitted that in certain circumstances an MOU could be held to contain a commitment, which is binding and enforceable between the parties thereto, as opposed to a memorandum simpliciter, which has no element of commitment and cannot therefore effectuate a binding and enforceable contract between the parties. He submitted that the Lower Court misapprehended and misconceived the issue before it and thereby evolved a case different from the case presented by the appellant. He submitted that in the circumstances the decision based on such a flawed process is perverse and liable to be set aside. He referred to: Udengwu Vs Uzuegbu (2003) 13 NWLR (Pt.836) 136 @ 151 – 152 G – B & 157 A  C. He contended that had the Court adopted the proper definition of memorandum of understanding, it would have reached a result more favourable to the appellant and would have found that Exhibit P5 contained the required commitment having regard to the fact that there was an unequivocal offer, acceptance and consideration vide paragraphs 2 and 3 of the recital thereto. He argued further that the Court would have discovered that the subject matter of the contract was settled vide paragraph 2 of the said recital and that the details and time of the contract were fully set out in the said paragraphs 2 and 3. On what constitutes a miscarriage of justice in the circumstances of this case, he referred to: Iwok v. University of Uyo (2011) 6 WNLR (Pt.1243) 211 @ 241 D  E & 241  242 H  B per Ngwuta, JCA (as he then was).
In reply, Chief Karina Tunyan, SAN, who settled the respondent’s brief submitted that the Lower Court rightly construed the meaning of Memorandum of Understanding and that its application to the facts of this case did not occasion a miscarriage of justice. He submitted that an MOU can be called either a memorandum or a memorandum of understanding and that in either case it connotes an informal record. He referred to the definition of Memorandum of Understanding as contained in Blacks Law Dictionary, 8th edition (supra) and noted that the definition includes a Letter of Intent, where it is stated that business people typically mean not to be bound by letter of intent and Courts do not ordinarily enforce one, but occasionally find that commitment has been made. He noted that learned senior counsel for the appellant in his

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brief emphasized the phrase “…but occasionally find that commitment has been made and submitted that a finding that commitment has been made is the exception and not the norm. He submitted that the issue before this Court does not involve one of those exceptional cases. He submitted that the Lower Court was correct when it held at page 1306 lines 18 – 19 and page 1308 lines 24 – 25 of Vol. 4 of the record that the MOU, Exhibit P5 is clear and unambiguous and that there was no contract in existence between the parties. He submitted that the Lower Court was correct when it held that at best what was between the parties was an invitation to treat. He submitted that the case of Udengwu Vs Uzoegbu (supra)relied upon by learned senior counsel for the appellant does not support its case and that it rather supports the respondent’s position on the meaning of an MOU.
Learned senior counsel in his reply brief, merely reiterated the submissions already made in his main brief. The submissions are of no additional assistance to the Court in resolving this issue.
It is clear from the submissions of learned senior counsel for the appellant that it is the appellant’s contention that Exhibit P5, the MOU, represented a binding and enforceable contract between the parties. This Court in a recent decision in: Bilante International Ltd v. NDIC (2011) 15 NWLR (Pt.1270) 407 @ 423 C  F, restated the position of the law regarding what constitutes a valid and enforceable contract thus:
“Contract is defined as an agreement between two or more persons which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration parties, subject matter, a legal consideration, mutuality of agreement and mutuality of obligation. Lamoureu v. Burrillville Racing Assn 91 R. 194, 161 A.2d 213, 215.
To constitute a binding contract between parties, there must be a meeting of the mind often referred to as consensus ad iden. The mutual consent relates to offer and acceptance. An offer is the expression by a party of readiness to contract on the terms specified by him, which, if accepted by the offeree gives rise to a binding contract. The offer matures to a contract where the offeree signifies a clear and unequivocal intention to accept the offer. See: Okugule & Anor V. Oyagbola & Ors. (1990) 4 NWLR (Pt.147) 723.
It should be reiterated that in order to establish that parties have formed a contract, there 
must be evidence of consensus ad idem between them. Then if there is a stipulated mode for acceptance of the offer, the offeree has a duty to comply with same. See: Afolabi Vs Polymera Industries Ltd. (1967) 1 All NLR 144, (1967) SCNLR 256.”

The basic elements of binding contract are therefore offer, acceptance/consideration, capacity to contract and intention to create a legal relationship. See also; Dangote Gen. Textile Products Ltd. & Ors. Vs Hascon Associates Nig Ltd. & Anor. (2013) 12 SCNJ 456; Akinyemi Vs Odua Investment Co. Ltd. (2012) 1 SCNJ 127. See also: Alfotrin Ltd. Vs A.G. Federation & Ors. (1996) 9 NWLR (Pt.475) 634 @ 656 H; (1996) LPELR-414 (SC) @ 29 B – D per Iguh, JSC, to wit:
“To constitute a binding contract, there must be an agreement in that the parties must be in consensus ad idem with regard to the essential terms and conditions thereof; the parties must intend to create legal relations and the promise of each party, in a simple contract, not under seal, must be supported by consideration. There must be a concluded bargain which has settled all essential conditions that are necessary to be settled and leaves no vital term or condition unsettled.”
An invitation to treat, on the other hand, is the first step in negotiations between the parties to a contract, which may or may not lead to a definite offer being made by one of the parties to the negotiation. An invitation to treat is not an offer that can be accepted to lead to an agreement or contract. See: BFI Group Corporation Vs B.P.E. (2012) 18 NWLR (Pt.1332) 209 @ 246 G – H; Neka B.B.B. Manufacturing Co. Ltd. Vs A.C.B. Ltd.(2004) 2 NWLR (Pt.858) 521.
Exhibit P5 can be found at pages 904 – 908 of Vol.3 of the record. It provides as follows:
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is entered into this 13th day of July 2004 BETWEEN FEDERAL CAPITAL DEVELOPMENT AUTHORITY, Area 11 Garki Abuja, hereinafter referred to as “THE AUTHORITY (which expression shall where the context so admits include the representatives and assigns) of the first part,
AND
BPS ENGINEERING AND CONSTRUCTION COMPANY LIMITED RC.343541, a company incorporated in Nigeria with limited liability

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whose registered office is situated at Plot 1687 Oyin Jolayemi Street, Victoria Island, Lagos, hereinafter referred to as THE COMPANY, (which expression shall where the context so admits include the representatives and assigns) of the other part.
WHEREAS
1. THE COMPANY is a limited liability company registered in Nigeria and engaged in engineering and construction works.
2. THE COMPANY at a meeting held on the 6th day of July 2004 at the instance of the Presidency, presented a proposal for the provision of infrastructural facilities to Mabushi and Katanpe Districts of the Federal Capital Territory (hereinafter referred to as “THE PROJECT through Public Private Sector Partnership (PPP) and funding and to recover the cost of the project by the receipts of development levies and sale of plots.
3. THE AUTHORITY has expressed interest in THE COMPANY’S proposal for the development of infrastructure facilities in Mabushi and Katanpe Districts of the Federal Capital Territory.
4. THE AUTHORITY recognises that THE COMPANY shall raise funds for THE PROJECT through financial institutions wherefore the parties have entered into these presents.
NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSETH AS FOLLOWS:

1. That THE AUTHORITY shall provide to THE COMPANY Mabushi and Katampe Districts of the Federal Capital Territory for the development of infrastructural facilities.
2. That the details of the type, method of development and specification materials used for the provision of the said infrastructure shall be in accordance with specific standards of the Federal Capital Development Authority (FCDA) applicable in the Federal Capital City.
3. That the parties shall:
i. Upon the execution of this memorandum of understanding THE AUTHORITY shall immediately provide THE COMPANY engineering drawing and bill of quantities and any other documents which enable THE COMPANY complete its costs analysis on the project.
ii. Within 14 days of the execution of this memorandum of understanding the parties hereto shall enter into a formal agreement with respect to the PROJECT/Proposal on terms to be mutually agreed. 
4. That all documents, materials, discussions, etc, shall be treated with the utmost confidentiality and neither party to this memorandum of understanding shall disclose any information to a third party.
5. That this memorandum of 
understanding is subject to the signing of a formal agreement by the parties.
WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS AND SEALS THE DAY AND YEAR FIRST ABOVE WRITTEN.
SIGNED.”

(Emphasis supplied)
For the definition of “memorandum of understanding”, in Black’s Law Dictionary, 8th edition at page 1006, the reader is directed to the definition of “Letter of intent, which is found at page 924 thereof and states thus:
“Letter of intent: A written statement detailing the preliminary understanding of parties who plan to enter into a contract or some other agreement.
– A letter of intent is not meant to be binding and does not hinder the parties from bargaining with a third party. Business people typically mean not to be bound by a letter of intent and Courts ordinarily do not enforce one; but Courts occasionally find that a commitment has been made “

(Underlining mine for emphasis)
From the above definition, it is clear that a memorandum of understanding or letter of intent, merely sets down in writing what the parties intend will eventually form the basis of a formal contract between them. It speaks to the future happening of a more formal relationship between the parties and the steps each party needs to take to bring that intention to reality. From the definition given above, notwithstanding the signing of a memorandum of understanding, the parties thereto are not precluded from entering into negotiations with a third party on the same subject matter.
This probably explains why clause 4 was inserted in Exhibit P5, so that the understanding between the parties thereto remains confidential and does not prejudice possible negotiations with a third party. The Court below at page 1308 of Vol. 4 of the record, relied on the definition of “memorandum” as found at page 984 of Blacks Law Dictionary (supra), which defines it as:
An information, record, note or instrument embodying something that the parties desire to fix in memory by the aid of written evidence, or that is to serve as the basis of a future formal contract or deed.  (Emphasis mine)

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Thereafter the Court held as follows:
“By this definition therefore, a memorandum of understanding is an informal document that serves as a reminder that the parties to such a document have a date in future to enter into a contract. Since the MOU is not definite, but subject to the signing of contact, it is not an offer. For an offer to be capable of becoming binding on acceptance it must be definitely clear and final. A document which merely provides for signing of agreement in future does not amount to an offer. It is merely a preliminary move in negotiation which may lead or may not lead to a definite offer being made by one of the parties to the negotiation. At this stage when the terms and conditions of the agreement are not known and are not contained in the document so signed, it will be foolhardy for any party to claim that there is an offer and acceptance.
In the instant case, Exhibit P5, the MOU does not qualify as an offer or an acceptance, but an invitation to treat or negotiate.

I am of the view that taking into consideration the elements that constitute a valid and enforceable contract and the legal implications of a memorandum of understanding, the Lower Court, by its finding above has demonstrated a clear understanding of the import of Exhibit P5. Whichever definition is relied upon, the end result is the same. Exhibit P5 is a representation of the intention of the parties, subject to the execution of a formal agreement. The finding of the Lower Court in this regard cannot be faulted. The Court below did not misapprehend the appellant’s case and no miscarriage of justice has been shown to have been occasioned by its finding in this regard. This issue is accordingly resolved against the appellant.
Issue 2
This issue is based on the premise that the Lower Court was wrong in its interpretation of the meaning and connotation of Exhibit P5. Learned senior counsel is particularly dissatisfied with the following finding of the Court below at page 1306 of the record:
“The MOU is subject to the signing of a formal agreement by the parties. The term mutually agreed by the parties with respect to the infrastructural provision at Mabushi and Katampe are not set out in the Memorandum of Understanding. So also are the financial implications and what sanctions will follow in case of breach. There is also no evidence on the MOU that certain consideration has passed and that the parties intended to create a legal relationship through the MOU, as the MOU was made subject to signing a formal agreement between the parties.
Learned senior counsel submitted that the terms of the agreement between the parties are fully set out in Exhibit P5 and that the sanctions for any breach of the contract need not be spelt out in the MOU, as the implications of any breach is settled in law. He contended that pursuant to paragraph 3(1) of Exhibit P5, the respondent provided the appellant with Engineering Design Drawing (EDD) and other documents that would enable it complete the bill of quantities and cost analysis in respect of the project and that the appellant on its part accepted them and prepared its bill of quantities and cost analysis and forwarded same to the respondent. He submitted that these actions represent evidence of some of the consideration that passed between the parties pursuant to the MOU. He maintained that the parties intended to create a legal relationship through the MOU, as all the elements of a binding and enforceable contract are contained therein. He referred to: Metibaiye v. Naralli International Ltd. (2009) 16 NWLR (Pt.1167) 326 @ 346. He argued the parties having carried out their obligations as stated in paragraph 3 (1) of Exhibit P5 by exchanging documents and cost analysis relating to the project, they could be said to be in agreement and that the agreement constituted an enforceable and binding contract, notwithstanding the expression subject to the signing of a formal agreement contained in the MOU, which he contended was mere surplussage. He relied on: Michael Richards Properties Ltd. Vs St. Saviour’s (1975) 3 ALL ER 416; Rosslier vs Miller (1947) KB 854: Branca Vs Cobarro (1947) KB 854: U.B.A. Vs Tejumola (1986) 4 NWLR (Pt.38) 816. He submitted that the agreement need not be in any particular form, as the main consideration is that there must be evidence of consensus between the parties. He referred for A.G. Rivers State Vs Akwa Ibom (2011) 8 NWLR (Pt.1248) 31 @ 108 F – G. He submitted that the trial Court was right when it held that the use of the word “shall” throughout the MOU was indicative of the parties’ intention to create a binding obligation. He submitted that the Court below erred in disregarding this finding.

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Learned senior counsel for the respondent however contends that the Court below rightly interpreted the meaning of memorandum of understanding and considered Exhibit P5 in its entirety. He submitted that the MOU did not contain any mandatory provisions and that the Lower Court was right when it held that there was no enforceable contract between the parties. He submitted that since the MOU was understood by the parties to be subject to the signing of a formal contract, it could not be a binding contract mutually and voluntarily executed by the parties. He reiterated his argument under issue 1 that a document that provides for the signing of an agreement in the future is merely a preliminary move in negotiations, which may or may not lead to a definite offer being made. He referred to the finding of the Lower Court at pages 1306 – 1308 of the record and submitted that the Court carefully considered all relevant issues before concluding that there was no enforceable contract between the parties. He agreed with the Court that Exhibit P5 was merely an invitation to treat.
Learned counsel submitted that the appellant, as observed by the Lower Court, failed to prove at the trial Court that there was a definite offer and acceptance, which constituted a valid contract between the parties to entitled it to the reliefs sought. He submitted that having failed to so prove at the trial Court, it was improper for learned senior counsel to attempt to do so before this Court without seeking leave. He relied on: Akpene Vs Barclays Bank of Nig. Ltd. & Anor. (1977) 1 SC (Reprint) 30.He submitted that in the absence of a binding contract between the parties, the issue of consideration does not arise. He submitted that the appellant took an unnecessary risk and went on a frolic of its own by incurring expenses in respect of the project in anticipation of profit in the region of N10 Billion without first ensuring that a formal contract was executed between the parties. He submitted that the appellant must bear the consequences of its action. He referred to: Fasheun vs. Oyerinde (1997) 11 NWLR (Pt.530) 561 A.
He submitted that contrary to the contention of learned counsel for the appellant, none of the meetings held between the parties, could be inferred to constitute an offer, acceptance, consideration or intention to create a legally binding relationship. He submitted that the word “shall” in Exhibit P5 was not used in its mandatory sense. On the guiding principle in the interpretation of “shall”, he referred to: Amokeodo Vs I.G.P. (1999) 6 NWLR (Pt.607) 467 @ 481 A  B & 485  486; Ugwu v. Ararume (2007) NWLR (Pt.1040) 367 @ 412 F  G. He observed that in construing the word shall in Exhibit P5, the learned trial Chief Judge failed to consider the effect of paragraph 5 thereof, which states that the MOU is subject to the signing of a formal agreement by the parties. He argued that had His Lordship correctly construed paragraph 5 he would have arrived at a different conclusion.
On the legal implication of the words subject to he referred to: Okechukwu vs. Onuorah (2000) 15 NWLR (Pt.691) 597 @ 614  615; U.B.A. Ltd v. Tejumola & Sons Ltd. (1988) 2 NWLR (Pt.79) 662 @ 688; Tsokwa Marketing Co. Ltd. vs. B.O.N. Ltd. (2002) 11 NWLR (Pt.777) 163 @ 200; Suleiman & Bros. Vs Mehr (1957) NSCC 49 @ 51 paragraphs 15  40.
He urged the Court to construe all the paragraphs of P5 together and to interpret the word “shall” wherever it appears as being directory and not mandatory and to further hold that since the parties expressly agreed that Exhibit P5 was subject to the signing of a formal agreement within 14 days, the contract had not come into effect and was not binding on the parties.
In reaction to the contention of learned counsel for the respondent that the appellant failed to prove at the trial Court that there was a contractual relationship between the parties and that the issue was being raised as a new issue before this Court, learned senior counsel in his reply brief maintained that the appellant pleaded and proved the existence of a valid contract between the parties vide Exhibit P5, which evidence was accepted and believed by the trial Court, particularly as regards the legal effect of the word “shall” contained therein. He submitted that the case of Akpene vs. Barclays Bank Nig. Ltd. (supra) is inapplicable to the circumstances of this case.
On the contention that the appellant failed to prove that it provided consideration for the contract, he submitted that the appellant copiously pleaded and led evidence in this regard such as mobilization to the site, providing guarantees from banks as to its ability to execute

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the contract and preparing and submitting, at the request of the respondent, the design and engineering drawings. He observed that the evidence was unchallenged. He submitted that the submission of counsel, no matter how eloquent, cannot be a substitute for evidence. He submitted that there is no appeal against the finding of the trial Court on the meaning of the word “shall” as contained in Exhibit P5, and that the pronouncement of the Court as to its being mandatory stands. Relying on several cases including Sosan Vs HFP Eng. Ltd. (2004) 3 NWLR (Pt.861) 346, he submitted that even if the expression in paragraph 5 of the MOU were to render the contract unenforceable, a party is not allowed, in equity, to take undue advantage of the other party by his wrongful act and proceed to contend that the transaction was unenforceable or illegal or to use the Court to perpetrate his wrongful act. He submitted that notwithstanding its agreement to execute a formal agreement within 14 days of signing the MOU, the respondent deliberately refused to execute the draft agreement (Exhibit P6) forwarded to it by the appellant within the stipulated time, and turned around to contend that the contract is unenforceable. He argued that a Court of equity would not condone such conduct.
From the submissions of learned senior counsel for the appellant, it would appear that what is being contended under this issue is that Exhibit P5 falls within the exceptional circumstance where a Court finds that a commitment has been made between the parties notwithstanding the general nature of a memorandum of understanding. My Lords, it is necessary to reiterate here the elements of a binding and enforceable contract, which are: offer, acceptance, intention to create a legal relationship, consideration and capacity to contract. See: Bilante International Ltd. Vs N.D.I.C. (supra) and Alfotrin Ltd. Vs A.G. Federation & Ors. (supra). For ease of reference I deem it appropriate to restate the dictum of Iguh, JSC in: Alfotrin Ltd. Vs A.G. Federation & Ors. (supra) to the effect that for there to be an enforceable contract “there must be a concluded bargain which has settled all essential conditions that are necessary to be settled and leaves no vital term or condition unsettled.” As noted earlier in this judgment, it was the appellant that approached the respondent with proposals for the provision of infrastructure in the Mabushi and Katampe Districts of the Federal Capital Territory through Public Private Partnership. Exhibit P5 was drawn up and executed by the parties after a series of meetings. A careful perusal of paragraphs 1, 2, 3 and 5 in particular of the second part of Exhibit P5 (reproduced earlier), discloses the following intentions: that the respondent shall make the said districts available to the appellant for the development of the infrastructural facilities; that details of the type, method of development and specification of materials used shall be in accordance with the specific standards of the FCDA; upon execution of the MOU the respondent shall provide the appellant with the engineering design drawings and bill of quantities and other documents that would enable it complete its cost analysis of the project; and that a formal agreement would be entered into within 14 days of the signing of the MOU with respect to the project proposal on terms to be mutually agreed. For the avoidance of doubt, paragraph 5 states: “That this memorandum of understanding is subject to the signing of a formal agreement by the parties.”
Learned senior counsel for the appellant contends that the exchange of documents between the parties i.e. the engineering drawings and bill of quantities by the respondent and the cost analysis prepared by the appellant amounts to consideration for the contract. With due respect to learned senior counsel, this cannot be correct. The MOU clearly slates that a formal agreement would be entered into after compliance with Paragraph 3 (1) on terms to be mutually agreed. This suggests that compliance with Paragraph 3 (1) does not conclude the agreement between the parties. For instance, the fact that the appellant has submitted a cost analysis of the project does not mean that the respondent is bound to accept it without further ado. The terms of the formal contract are to be mutually agreed, thus implying that some terms and conditions are yet to be settled. The MOU also refers to the ‘project proposal’. In other words, it remains a proposal until a formal agreement is entered into and executed by the parties. The Lower Court, at pages 1306 – 1307 of the record, after reproducing Exhibit P5 and examining its provisions carefully, held thus:
“The Memorandum of Understanding is so clear. The parties to the MOU shall enter into a formal agreement with respect to the project/proposal on terms mutually agreed within 14 days of the execution of the MOU and that all documents, materials, discussions etc shall be treated with confidentiality and neither party to the MOU shall disclose any information to a third party. This is not all. The MOU is subject to the signing of a formal agreement by the parties. The term mutually agreed by the parties with respect to the infrastructural provision at Mabushi and Katampe are not set out in the Memorandum of Understanding. So also are the financial implications and what sanctions will follow in case of breach. There is also no evidence on the MOU that certain consideration has passed and that the parties intended to create a legal relationship through the MOU, as the MOU was made subject to signing a formal agreement between the parties.
(Underlining mine for emphasis)

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In my view, this analysis by the Court below of the legal implications of the MOU cannot be faulted. It is true that generally the word “shall” is interpreted in its mandatory sense. However, whether the word is used in its mandatory or directory sense depends on the context in which it is used. The word shall can also mean may where the context so admits. See: Fidelity Bank Plc. Vs Mony & Ors. (2012) LPELR-7819 (SC) @ 21 – 22 B – D; Amadi Vs N.N.P.C. (2000) 10 NWLR (Pt.674) 76 @ 97 – 98 H – A. Although these authorities are in respect of the applicable principles in the interpretation of statutes, the principles are just as relevant to the interpretation of documents. In the instant case, since the MOU is subject to the signing of a Formal agreement on terms to be mutually agreed by the parties, it would not be correct to say that the terms thereof are to be construed in a mandatory sense. I am of the considered view that contrary to the contention of learned senior counsel for the appellant, the terms stating that the MOU is subject to the signing of a formal agreement by the parties are fundamental and clearly express the intention of the parties. It follows also that the exchange of preliminary documents between the parties as per paragraph 3 (1) thereof cannot amount to the acceptance of an offer such as to constitute the MOU as a binding and enforceable contract between them. The Court below was indeed correct when it held that there was no valid and enforceable contract between the parties pursuant to Exhibit P5. The agreement between them was inchoate until the signing of a formal contract embodying all the agreed terms and conditions.
This issue must therefore be answered in the affirmative and it is accordingly resolved against the appellant.
Issue 3
Under this issue, it is contended that the Lower Court was wrong to rely solely on Exhibit P5 in reaching the conclusion that there was no binding agreement between the parties. It is contended that the Court ought to have considered the principles of promissory estoppel and estoppel by conduct arising from the promises, assurances and representations made by the respondent to the appellant upon which it acted to its detriment.
Learned senior counsel submitted that pursuant to decisions reached with the respondent in several meetings before and after the execution of the MOU and based on further assurances by the respondent and the then Minister of the FCT, Mallam El-Rufai, that a formal agreement embodying the terms and conditions of the project would be signed once the appellant fulfilled its obligations under the MOU, the plaintiff committed its staff to the project with the aid of other professionals, its bankers and financial institutions partnering with it on the project and prepared and submitted the Bill of Quantities for the project. He submitted that, at the request of the Minister, it provided evidence of its ability to source and raise funds for the execution of the project through meetings and correspondence with various international financial institutions. He submitted that pursuant to the MOU and the assurances received, the appellant incurred costs in respect of the following:
i. Preparation of bill of quantities.
ii. Cost analysis,
iii, Survey of the two districts.
iv. Mobilisation of personnel to the site.
v. Design and mapping of re-location scheme for the ‘natives’.
vi. Preparation of formal contract by legal firm.
vii. Mobilisation of equipment to the site.
He submitted that documents evidencing the above steps taken and the expenses thereby incurred were submitted to the respondent. That the appellant having altered its position based on those assurances, the respondent could not be permitted to revert to the previous legal position as if there were no intervening factors. He submitted that the learned trial Judge correctly evaluated the evidence in this regard and came to the right conclusion that the respondent could not resile from assurances given by the Minister, which modified the legal relations between the parties. He submitted that the Lower Court erred in failing to consider this issue, which has led to a miscarriage of justice. He referred to Section 151 of the Evidence Act and submitted that the respondent is caught by the doctrines of estoppel by conduct and promissory estoppel. He relied on; Olalekan Vs Wema Bank Plc. (2009) 13 NWLR (pt.998) 617 @ 622 – 626 H – G; Lawal Vs Union Bank Ltd. (1995) 2 SCNJ 132 @ 145; Trans Bridge Co. Ltd. Vs Survey International Ltd. (1986) 4 NWLR (pt.37) 576.
In reaction to the above submissions, learned senior counsel for the respondent disagreed with the contention that the principles of promissory

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estoppel and estoppel by conduct are applicable in the circumstances of this case. He also disagreed with the argument that it was representations, assurances and promises allegedly made to it by the respondent that caused the appellant to commit financial and manpower resources to the project without waiting for the execution of a formal agreement. He submitted that the Lower Court was right in holding that the appellant was on a frolic of its own. Learned counsel submitted that the meetings held between the parties referred to by the appellant were held at the negotiation stage. He referred to the various expenses allegedly incurred by the appellant and submitted that it took a risk by investing in the project before the signing of a formal agreement and should be bound by the consequences. He submitted that it would be wrong to say that the Lower Court did not consider the doctrine of estoppel, as the Court had held emphatically that the various meetings and discussions held prior to the signing of the MOU were part of the negotiations and amounted to an invitation to treat. He submitted that Section 151 of the Evidence Act and the authorities cited by learned senior counsel on estoppel are not applicable to the facts of this case and argued that there was no miscarriage of justice in this case.
In reply, learned senior counsel submitted that the doctrine of promissory estoppel or estoppel by conduct can arise not only in contract but also in any relationship between parties, including preliminary negotiations, provided that the elements of a contract, particularly consideration, are complete. He referred to: Temco Engineering & Co. Ltd. V. Savannah Bank Ltd. (1995) 5 NWLR (Pt.397) 607.
He submitted that the respondent did not give any evidence before the trial Court to show that the promises, assurances and representations were made in the course of negotiations and urged the Court to discountenance the submissions in that regard. Other submissions in the reply brief are merely a re-argument of the submissions in the main brief.
The general principle of law is that where a contract is made subject to the fulfillment of certain terms and conditions, the contract is inchoate and not binding until those terms and conditions are fulfilled. See: Tsokwa Marketing Co. Vs B.O.N. Ltd. (2002) 11 NWLR (Pt.777) 153 @ 196 – 197 H – A & 199  200 G  A; U.B.A. Ltd. V. Tejumola & Sons Ltd. (1998) 2 NWLR (Pt.79) 652 @ 685 C – D: Okechukwu Vs Onuorah (2000) 15 NWLR (Pt.691) 597 @ 614 – 615 H – A; Best (Nig). Ltd. Vs Blackwood Hodge (Nig.) Ltd. (2011) 5 NWLR (Pt.1239) 95 @ 126 C – D.
This Court expounded the doctrine of promissory estoppel in: Trans Bridge Co. Ltd. Vs Survey International Ltd. (1986) 4 NWLR (Pt.37) 576 @ 617 F – G and held the following to be essential requirements for its operation:
1. There must be in existence, two contracting parties, who are contractually bound, or who but for the representation could have been contractually bound.
2. There must be a representation, relied upon resulting in something different from what was agreed between the parties. It is not necessary that there should be detriment in the sense of loss or damage.
3. The representation is not necessarily supported by valuable consideration. It is sufficient merely if it is a promise which has been relied upon. If these conditions are present, the doctrine of promissory estoppel operates.
At page 618 A – B (supra), the dictum of Denning, LJ in Combe Vs Combe (1951) 2 K.B. 215 @ 220 was cited with approval to the effect that the doctrine of promissory estoppel does not create a new cause of action but only prevents a party from insisting on his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken place between the parties.
Section 151 of the Evidence Act 1990, now Section 169 of the Evidence Act 2011 provides:
When one person has either by virtue of an existing Court judgment, deed or agreement, or by his declaration, act, or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representatives in interest shall be allowed, in any proceeding between himself and such person or such persons representative in interest, to deny the truth of that thing.”
This is what is meant by estoppel by conduct. See also: Olalekan V. Wema Bank Plc. (2006) 13 NWLR (Pt.998) 617 @ 622 – 626 H  G; Lawal Vs Union Bank Ltd. (1995) 2 SCNJ 132 @ 145.

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The issue in contention here is whether there were promises, assurances and representations made by the respondent subsequent to Exhibit P5 that caused the appellant to alter its position to its detriment as found by the learned trial Chief Judge.
Now, in the process of reviewing the evidence adduced by the appellant, the learned trial Chief Judge at page 1194 of Vol. 3 of the record noted that Exhibit P5, the MOU, was entered into on 13th July 2004 after meetings had been held with the appellant, its bankers and financiers on the one hand and the respondent on the other hand, with the Minister of Works in attendance. That the meeting was also attended by the Minister of the Federal Capital Territory. That the appellant’s proposals were discussed and approved before the parties signed the MOU. In paragraphs 1, 2 and 3 of the judgment at page 1194 of the record, the following observations were made:
According to PW1 in paragraph 16 of his witness statement on oath, the total cost for the provision of the said infrastructural facilities for Mabushi is N26.14 Billion while that of Katanpe was put at N23,936 Billion and the anticipated profit from the project was put at about N10.5 Billion.
It is further PW1s testimony that in keeping with the terms of the MOU and based on assurances from the then minister that a formal agreement will be signed once the plaintiff fulfilled its obligations under the MOU and provided evidence of financial capacity to execute the project, the plaintiff committed its staff and resources to the project and in fact prepared and presented a Bill of Quantity (B.O.Q) for the project to the defendant. The plaintiff further provided evidence of its financial capacity. This evidence is captured in the annexure to Exhibit P6.
However, PW1 continues that after several meetings with the defendant the Infrastructural Development Agreement capturing the terms and conditions of the said project was agreed on and a final copy prepared by the law firm of Ajumogobia & Okeke but the defendant failed and/or refused to sign the said agreement in compliance with the terms of the MOU and no reasons were given for the refusal.”

The relevant portion of Exhibit P6, a letter dated 4th August 2004 from the appellant to the Minister of the FCT, reproduced in the judgment of the trial Court reads:
Hon. Minister, sir, in keeping with the said time line and in furtherance of the decisions reached at the said meeting of the 6th July 2004, we forward herewith, the 3rd and final draft Infrastructural Development Agreement ready for signing which is the result of several meetings and discussions between us and your relevant departments.
(Underlining mine for emphasis)
It is appropriate to reiterate here that it was the result of the decisions reached at the meeting of 6th July 2004 that culminated in Exhibit P5. The trial Court at page 1202 of the record concluded from Exhibit P6 that the parties agreed on the terms of the Infrastructural Development Agreement and that the respondent had no justification in refusing to sign the document in accordance with the terms of the MOU. It was in this context that the learned trial Chief Judge held that the respondent had, by its promises, assurances and representations, caused the appellant to alter its position to its detriment. His Lordship held that the respondent “must accept their legal relations as modified by himself, even though it is not supported in point of law by any consideration but only his words.”
The issue to be determined is whether there was evidence of any modification of the agreement between the parties as contained in the MOU. The answer must be in the negative. The MOU clearly states that it is subject to the signing of a formal agreement between the parties. Therefore even if the appellant had fulfilled its obligations under the MOU by, inter alia, preparing a bill of quantities and providing evidence of its financial ability to execute the contract, such acts cannot amount to a license to proceed to mobilize to the site and commit financial and manpower resources to the project without the formal agreement being signed. At best the assurances were to the effect that a formal agreement would be signed. Prudence dictates that for a project of this magnitude the appellant would have been patient enough to ensure that all the I’s were dotted and the t’s crossed before mobilizing to site and incurring expenses in respect thereof. I agree with the Lower Court that in the absence of any agreement authorizing the appellant to mobilize to the site, it was on a frolic of its own and must bear the consequences.
Although the Lower Court did not consider the issue of estoppel raised by the appellant, I am of the view that there has been no miscarriage of justice in this case, as it rightly concluded that there was no enforceable contract between the parties. This issue is accordingly resolved against the appellant.

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Issue 4
This issue questions whether the Court of Appeal was right in reversing the decision of the learned trial Chief Judge to the effect that there was a binding contract between the parties. Having regard to the resolution of Issues 1, 2 and 3 infra against the appellant, this issue must be answered in the affirmative. It is accordingly resolved against the appellant.
Issues 5, 6, 7, 8 and 9 have become otiose in view of the resolution of issues 1, 2, 3 and 4 against the appellant.
In conclusion, I find no merit in this appeal. It is accordingly dismissed. The parties shall bear their respective costs.
WALTER SAMUEL NKANU ONNOGHEN, J.S.C.: I have had the benefit of reading in draft the lead judgment of my learned brother KEKERE-EKUN JSC just delivered.
My learned brother has exhaustively dealt with the issues calling for determination in the appeal thereby leaving me with nothing much to do other than to agree with his reasoning and conclusion that the appeal is devoid of merit and should be dismissed.
I therefore order accordingly and abide by the consequential orders made in the said lead Judgment including the order as to costs.
Appeal dismissed.
MARY UKAEGO PETER-ODILI, J.S.C.: I am in agreement with the judgment just delivered by my learned brother, Kudirat Kekere-Ekun JSC and in support of the reasoning I shall make some remarks.
On the 3rd day of June, 2011 the Court of Appeal, Abuja Division delivered a judgment allowing the respondents cross appeal while it dismissed the appeal of the appellant against the judgment of the High Court of FCT, Abuja delivered by Gummi J. (as he then was) which had awarded Ten Million naira in favour of the plaintiff as damages and Two Million naira as costs against the defendant at the trial Court.
FACTS
The plaintiff/appellant is a construction and engineering company while the defendant/respondent is the statutory body charged with the responsibility for the development and administration of the Federal Capital Territory, Abuja. The appellant herein made a suggestion to the respondent and the then president of Nigeria, Chief Olusegun Obasanjo by letters of intention to provide infrastructural facilities at Mabushi and Katampe Districts of the Federal Capital Territory, Abuja. Consequent upon these correspondences, a Memorandum of Understanding was written and signed by the parties, subject to the signing of a formal agreement between the parties.
Inspite of Clause 5 of the MOU which expressly stated, subject to the signing of a formal agreement the appellant drew up Exhibit P6 which respondent refused to sign and the plaintiff/appellant instituted the suit asking for specific performance and damages. The High Court, FCT per Gummi CJ (as he then was) refused to grant the order of specific performance but awarded damages of Ten Million (N10,000,000.00) and N2,000,000 (two million) for costs against the defendant/respondent.
The appellant appealed to the Court of Appeal or Court below while the respondent cross-appealed. The Court below found in favour of the defendant/cross-appellant/respondent granting the cross appeal while that Court dismissed the appeal hence a recourse to the Supreme Court vide Notice of Appeal filed on 2nd day of August, 2011.
On the 7th day of November, 2016 date of hearing, Learned Chief Tochukwu Onwugbufor SAN adopted appellant’s brief of argument filed on 10th October 2011 and a reply brief of 23/1/2012. In the brief of argument, learned counsel raised nine issues for determination which are thus:
1. Whether the Court of Appeal’s definition and application of the import and meaning of memorandum simpliciter in determining the contractual relationship between the parties instead of the definition and the application of the import of Memorandum of Understanding which is the case presented by the appellant is not a misapprehension or misconception of the appellants case which has occasioned a miscarriage of justice against the appellant (ground 1 of the grounds of appeal).
2. Whether the Court below was right in holding that there was no valid and enforceable contract between the appellant and the respondent pursuant to EXH P5, thus

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reversing the decision of the learned trial Chief Judge which held that there was a binding contract between the appellant and the respondent having regard to the mandatory provisions contained in EXH P5 the use of the words “subject to contract notwithstanding.
3. Whether the Court below was right in failing to consider the promissory estoppel and estoppel by conduct arising from the promises, assurances and representations made by the respondent to the appellant which the appellant believed and acted upon to its detriment before the Court below relied solely on Exhibit P5 to come to the conclusion that there was no binding contract between the appellant and the respondent and whether the non consideration thereof has occasioned a miscarriage of justice (Ground 4 of the grounds of appeal.)
4. Whether the Court of Appeal was right in reversing the decision of the learned trial Chief Judge which held that there was a binding contract between the appellant and the respondent on the ground that the trial Chief Judge did not verify whether there is in existence a valid contract. (Ground 3 of the grounds of appeal.)
5. Whether the Court 
below was right when it held that the failure of the respondent to lead evidence at the trial is irrelevant and immaterial since the appellant can only succeed on the strength of its own case and not on the weakness of the respondent’s case. (Ground 8 of the grounds of appeal).
6. Whether the Court below was right in failing to consider the appellant’s issues No. 1 and 2 which border on the relief of specific performance which is the crux of the appellant’s appeal and issues Nos 3, 4 and 5 of the appellant’s issues for determination before them, describing them as academic exercise and whether the non consideration of those issues by the Court has not occasioned a miscarriage of justice and a denial of the appellant’s right to fair hearing. (Ground 6 of the grounds of appeal.)
7. Whether the Court of Appeal was right in holding that the appellant was not entitled to damages in respect of the expenses it incurred pursuant to the MOU and to the promises, assurance and representations made by the respondent to the appellant on the ground that the expenses were incurred or based on a frolic of its own. (Distilled from Ground 5 in the Notice of Appeal.)

8. Whether the appellants right of fair hearing was not breached when the Court below failed to consider issues raised by the appellant/cross respondent in answer to the respondent/cross appellant’s cross appeal before it came to the conclusion that there was no contract between the parties. (Ground 9 of the grounds of appeal).
9. Whether the Court of Appeal was right in holding that there was no basis for the award of specific performance in favour of the appellant.

M. A. Nunghe of counsel for the respondent adopted the brief of the respondent settled by Karina Tunyan SAN and filed on 28/11/11. He argued along the lines of the issues as raised by the appellant.
I shall utilise issues 2, 8 and 9 of the distilled issues which I see sufficient to answer the questions in the determination of this appeal.
ISSUE 2, 8 & 9
2. Whether the Court below was right in holding that there was no valid and enforceable contract between the appellant and the respondent pursuant to EXH P5, thus reversing the decision of the learned trial Chief Judge which held that there was a binding contract between the appellant and the respondent having regard to the mandatory provisions contained in EXH P5 the use of the words subject to contract” notwithstanding.
8. Whether the appellants right of fair hearing was not breached when the Court below failed to consider issues raised by the appellant/cross respondent in answer to the respondent/cross appellants cross appeal before it came to the conclusion that there was no contract between the parties.
9. Whether the Court of Appeal was right in holding that there was no basis for the award of specific performance in favour of the appellant.

Canvassing the position of the appellant, learned counsel contended that the Court below misapprehended, misconceived and misdirected itself on the issue before them which was the meaning, effect and import of the MOU, Exhibit P5 entered into by the parties. That the effect of that was the Court below evolving a case for a party different from the case presented by evolving a case for a party different from the case presented by the party which led to a flawed process and necessitating a reversal by this Court. He cited Udengwu v. Uzuegbu(2003) 13 NWLR (pt.836) 136.

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That the MOU, Exhibit P5 shows clearly that the parties intended to create a legal relationship through the MOU as all the elements of a binding and enforceable contract had crystallised. The case of Metibaiye v Narelli Intl Ltd(2009) 16 NWLR (Pt.1167) 326 at 346; Branca v Cobarro (1947) 1 KB 854; A. G. Rivers State v A. G. Akwa-Ibom State (2011) 8 NWLR (Pt.1248) 31 at 108.
Chief Onwugbufor SAN for the appellant submitted that there is in existence a contractual relationship and that all the expenses incurred by the appellant pursuant to the MOU were based on the promises, assurance and representations made to the appellant by the respondent and this failure constitutes a breach of the appellants right to fair hearing occasioning in its wake a miscarriage of justice against the appellant. He referred to S. 151 of the Evidence Act, Olalekan v Wema Bank Plc (2006) 13 NWLR (Pt.998) 617 at 622 – 626 etc.
That the trial High Court having found that there was a valid and subsisting contract which contract had been breached, the natural follow up should have been an order for specific performance as sought by the appellant. That the trial Court failing to properly exercise that discretion and the Court of Appeal also failing to rectify that perversity, it is the duty of this Court to rectify the anomaly. He relied on Echaka Cattle Ranch Ltd. v. N.A.C. Ltd. (1998) 4 NWLR (Pt. 547) 526 at 544, Frances v. Osunkwo (2000) 7 NWLR (Pt. 666) 564 at 580.
M. A. Nunghe, Esq. for the respondent submitted in reaction that the Court of Appeal was right in its judgment that the Memorandum of Understanding was not a binding contract but rather an invitation to treat. That the meetings the appellant wants the Court to infer as constituting a contract did not constitute a valid contract as they could not be taken as offer and acceptance to prove the ingredients of a subsisting contract. He cited Omega Bank Plc v. O.B.C. Ltd (2005) 8 NWLR (Pt. 928) 541 at 575; Edet v. Chagoon (2008) 2 NWLR (Pt. 1070) 85 at 101.
That since the MOU had provided a condition precedent to the coming into force of a contract without that condition being fulfilled the contract cannot come into force. He cited U.B.A. Ltd v. Tejumola & Sons Ltd (1988) 2 NWLR (Pt. 79) 662 at 688; Tsokwa Marketing Co. Ltd v. B.O.N. Ltd (2002) 11 NWLR (Pt. 777) 163 at 200; Suleiman & Bros v. Mehy (1957) NSCC 49 at 51. 
For the appellant it was further submitted that specific performance is an equitable remedy that could be used where the law imposes hardship on the plaintiff and it is not the case herein. The cases of Ezenwa v. Oko (2008) 3 NWLR (Pt. 1075) 610 at 628; Savannah Bank of Nigeria Plc v. Oladipo Opanubi (2004) 15 NWLR (Pt. 896) 437 at 453-454 etc were relied on.
That the respondent did not make any promise to the appellant that made it alter its position that would give rise to promissory estoppel. The case of Ukaegbu v. Ugoji (1991) 6 NWLR (Pt. 196) 127 at 146.
Learned counsel contended that since there was no contract between the parties, the issue of specific performance did not arise. He cited Ugwu v. Nnaji (1991) 15 NWLR (Pt. 189) 18 at 34.
The summary of what is at play before this Court is, on the part of the appellant a request that the Supreme Court allows the appeal, sets aside the judgment of the Court of Appeal and in its place enter judgment in favour of the appellant granting the relief of specific performance, N10.5 billion as damages for breach of contract and the sum of N3,875,284,858.29 being the quantum meruit which the appellant is entitled to even if there exists no enforceable contract between it and the respondent because the Court of Appeal ought to have relied on the Memorandum of Understanding with which it would have come to the conclusion that a contract existed between the parties.
On the other part, the respondent contends that the appeal should be dismissed as the Court of Appeal gave a correct definition of the Memorandum of Understanding in holding that Exhibit P5, the Memorandum of Understanding (MOU) was not a binding contract and could not form a basis for an enforceable obligation between the parties.
The respondent put across that the MOU is an informal record and cannot be equated to a binding contract between the parties to the Memorandum of Understanding and is just like a Letter of Intent.
The definition of Letter of Intent as seen at page 924 of the Black Law Dictionary 8th Edition defines Letter of Intent to

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be as follows:
“A written statement detailing a preliminary understanding of parties who plan to enter into a contract or some other agreements, a non committed writing which is not meant to be binding and does not hinder the parties from bargaining with a third party. Business people typically mean not to be bound by letter of intent and Courts ordinarily do not enforce one, but occasionally find that commitment has been made.”
The above definition was acceptable to the Court of Appeal which held thus:
“The Memorandum of Understanding is so clear. The parties to the MOU shall enter into a formal agreement with respect to the project/proposal… The MOU is subject to the signing of a formal agreement by the parties. See lines 19-21, lines 24-25 page 1306 vol. 4 of the Record of Appeal.
That Court continued as follows:
“At this stage when the terms and conditions of the agreement are not specified and not contained in the document so signed it will be fool hardy for any party to claim that there is an offer and acceptance”
“In the instant case Exhibit P5 the MOU does not qualify as an offer or acceptance but an invitation to treat or negotiate.” See lines 17-21 page 1308 vol. 4 of the Record of Appeal.
“Having found that there was no contract in existence.”

See lines 23-24 page 1308 vol. 4 of the Record of Appeal.
Relating what was before him to the document, MOU, the Court of Appeal stated at page 1308 of the Record as follow:
“In the instant case Exhibit P5, the MOU does not qualify as offer or an acceptance but an invitation to treat to negotiate.
An invitation to treat is a communication by which a party is invited to make an offer. It is distinguished from an offer primarily on the ground that it is not made with the intention that it shall become binding as soon as the person to whom it is addressed simply communicates his assent to its terms.”
The Court of Appeal concluded by stating thus:
“The law is settled that it is the duty of the plaintiff to prove the existence of a valid contract on which he relies for the reliefs sought in an action for breach of contract. In the instant case the appellant who was the plaintiff at the Lower Court failed to prove the existence of a valid contract as a basis for the reliefs sought.”
This Court has stated time without number that in order to decide whether parties have reached agreement, it is usual to inquire whether there has been a definite offer by one party and unqualified acceptance of that offer by another. An offer is a definite undertaking made with the intention that it shall become binding on the person making it as soon as it is accepted by the person to whom it is addressed. It therefore follows as a matter of course to the happening of a contingency that contract only become enforceable provided the event has occurred of the contingency has happened. In other words where the contract is made subject to the fulfillment of certain specific terms and conditions, the contract is not formed or becomes binding unless and until those terms and conditions are complied with or fulfilled.
I have relied heavily on the following judicial authorities of this Court, viz:
Omega Bank Plc v. O.B.C. Ltd (2005) 8 NWLR (Pt. 928) 541 at 575; Nwagwu v. F.B.N. (2009) 2 NWLR (Pt. 1125) 203;U.B.A. Ltd v. Tejumola & Sons Ltd (1988) 2 NWLR (Pt. 79) 662 at 688; Tsokwa Marketing Co. Ltd v. B.O.N. Ltd(2002) 11 NWLR (Pt. 777) 163 at 200.
It is necessary to weigh in the contents of the MOU within the ambit of the principles governing binding contracts with particular reference to what occurred in this case and the intendment of the parties.
I shall for a clearer view recast the Memorandum of Understanding (MOU) or Exhibit P5 to show which interpretation should be accorded the document and if it really qualified for the binding contract which the learned trial judge accorded it and which the Court of Appeal jettisoned on the ground that it fell short of a contract agreement as known to law. Hereunder is the MOU thus:
“MEMORANDUM OF UNDERSTANDING

…………………….P…………………….

This MEMORANDUM OF UNDERSTANDING is entered into this 13th day of July, 2004.
BETWEEN
Federal Capital Development Authority, Area 11 Garki Abuja, hereinafter referred to as “THE AUTHORITY” (which expression shall where the context so admit include the representatives and assigns of the first part.
AND
BPS Engineering Construction Company Limited RC. 343541, a company incorporated in Nigeria with Limited Liability whose registered office is situated at Plot 1687 Jolayemi Street, Victoria Island, Lagos, hereinafter referred to as “THE COMPANY”, (which expression shall where the context so admits include the representatives and assigns) of the other part.
WHEREAS
1. The Company is a limited liability company registered in Nigeria and engaged in Engineering and Construction works.
2. The Company at a meeting held on the 6th day of July 2004 at the instance of the Presidency, presented a proposal for the provision of infrastructural facilities to Mabushi and Katampe Districts of the Federal Capital Territory (hereinafter referred to as “THE PROJECT”) through Public Private Sector Partnership (PPP) and funding and to recover the cost of the project by the receipts of development levied and sale of plots.
3. The Authority has express interest in the Companys proposal for the development of infrastructural facilities in Mabushi and Katampe District of Federal Capital Territory, Abuja.
4. The Authority recognizes that the Company shall raise funds for the project through financial institutions wherefore the parties have entered into these presents.
Now this memorandum of understanding witnessed as follows:
1. That the Authority shall provide to the Company Mabushi and Katampe Districts of the Federal Capital Territory for the development of infrastructural facilities.
2. That the details of the method of development and specification materials used for the provision of the said infrastructure in accordance with specific standards of the Federal Capital Territory Development Authority (F.C.D.A.) applicable in the Federal Capital City.
3. That the parties shall:
(i) Upon the execution of this memorandum of understanding the Authority shall immediately provide the Company engineering design drawings and bill of quantities and any other documents, which will enable the Company complete its cost analysis in the project.
(ii) Within 14 days of the execution of this memorandum of understanding the parties hereto shall enter into a formal agreement with respect to the project/proposal on terms to be mutually agreed.
4. That all documents, material, discussions, etc shall be treated with the utmost confidentiality and neither party to this memorandum of understanding shall disclose any information to a third party.
5. That this memorandum of understanding is subject to the signing of a formal agreement by the parties.”
The gravamen of Exhibit 5 is seen at paragraph 5 thereof thus:
“(5) That this memorandum of Understanding is subject to the signing of a formal agreement by the parties.”
The understanding to be alluded to that phrase above is that the MOU, Exhibit P5 is subject to the occurrence of a future event which is the signing of a formal agreement. That means in my humble view that Exhibit P5 is not that final event or agreement but rather a preamble to the happening of the event coming after. Therefore the interpretation of the trial Court of the MOU being a binding contract was faulty, for as an agreement the MOU was inchoate or incomplete. Its completeness can only be when the “formal agreement” was signed and that was yet to happen. See Okechukwu v. Onuorah (2000) 15 NWLR (Pt, 691) 597 at 614-515; U.B.A. Ltd v. Tejumola & Sons Ltd (1988) 2 NWLR (Pt. 79) 662 at 688.
This stand is well captured in the case of Best (Nig.) Ltd v. B.H. (Nig.) Ltd (2011) 5 NWLR (Pt. 1239) 95 at 126 where this Court held as follows:

“Where a contract is made subject to the fulfillment of certain specific terms and conditions, the contract is not formed and not binding unless and until those terms and conditions are complied with or fulfilled. Tsokwa Marketing Co. Ltd. v. B.O.N. Ltd. (2002) 11 NWLR (Pt. 777) 163.”
The situation presenting as it is, that of an inchoate agreement which can be properly described as an Intent for a future reaching of an agreement, there is no basis on which specific performance can be ordered. For emphasis the MOU was just a

…………………….Q…………………….

process in the journey to a contract and so the contract had not happened and so no specific performance can be ordered and the issue of a quantum meruit of damages cannot be ordered for a non existent contract not to talk of a breach thereof. See Ezenwa v. Oko (2008) 3 NWLR (Pt. 1075) 610 at 628;Savannah Bank of Nigeria Plc v. Oladipo Opanubi (2004) 1 NWLR (Pt. 896) 437 at 453-454.
From the foregoing in the light of the fuller reasoning in the lead judgment of my learned brother, Kekere, Ekun, JSC I see no basis for upsetting the well considered judgment of the Court of Appeal. This appeal lacks merit and is hereby dismissed. I abide by the consequential orders made.
KUMAI BAYANG AKA’AHS, J.S.C.: My learned brother, Kekere Ekun, JSC made available to me in advance the judgment just delivered dismissing the appeal with which I am entirely in agreement.
The linchpin of this case Exhibit 5 which is merely a declaration of intent and does not crystallize into a binding contract until a formal agreement has been duly signed by the parties provided in paragraph 5 of the Memorandum of Understanding which states that:
“That this memorandum of understanding is subject to the signing of a formal agreement by the parties.”
For this and the more detailed reasons contained in the lead judgment of my learned brother, Kekere-Ekun JSC, the appeal lacks merit and it is accordingly dismissed. Parties to bear their respective costs.
AMIRU SANUSI, J.S.C.: I have been served before now, with the judgment prepared and delivered by my learned brother Kudirat Kekere-Ekun JSC. Having perused the said judgment, I find myself at one with her reasoning and the conclusion arrived at by her, that this appeal is devoid of merit and deserves to be dismissed. I shall however comment on some of the salient issues canvassed by the parties in this appeal in support of her leading judgment.
This appeal is against the judgment of the Court of Appeal Abuja Division, delivered on 3rd of June 2011 which partially upturned the judgment of High Court of the Federal Capital Territory.
FACTS OF THE CASE
As Plaintiff, the appellant submitted a proposal to the Respondent (defendant) for the provision of infrastructure at Mabushi and Katampe district of the FCT on the basis of building, operation, recouping and management in the spirit of Public Private Partnership (P.P.P.). Consequently, a Memorandum of Understanding (MOU) was drawn up and signed by both parties. (See page 57-6) of the record. The Respondent in compliance with the M.O.U., handed over to the Appellant, the necessary documents i.e. engineering design drawings (page 324-856 volume 2 of the record). In reliance on the promise and assurance that a formal agreement will be executed in line with the M.O.U, the Appellant committed itself and resources to the project. The Appellant expended the sum of N1,227,570,850.17 on Mabushi district and N2,647,117,008 on Katampe district between 2004 and 2008. The Respondent refused to sign the final draft of the agreement in line with M.O.U. and also refused to fulfil its obligation.
The Appellant therefore, commenced this action at the F.C.T. High Court seeking declarations and reliefs in the nature of specific performance, damages and refund of the total sum committed to the project as quantum meruit pursuant to the M.O.U. and subsequent assurances of the Respondent from 2004-2008. There was also a relief of N10,500,000 00 as loss of anticipated profit.
The trial Court found that there was indeed no any contract but also that the contract was breached by the respondent for its failure to sign exhibit “P6” but the trial Court did not order specific performance. The trial Court thereupon awarded the sum of N10,000.000 as damages and N2,000,000 as cost of litigation. The trial Court also refused to award to the Appellant, the amount expanded on the project i.e. total of N3,875,284,858. The trial Court adopted the principle of mitigation of damages suo motu, without affording the parties opportunity of being heard on the issue of mitigation of damages and its applicability in the circumstances.
The Appellant was dissatisfied with the decision of the trial Court and thereupon appealed to the Lower

…………………….R…………………….

Court for failure of the trial Court to award specific performance or in the alternative, higher damages and the claim for quantum meruit. The Respondent also cross appealed against the finding of Lower Court that there was a valid contract between the appellant and the respondent. The Court of Appeal allowed the Respondents/Cross appeal and dismissed the Appellant/cross Respondents appeal that the M.O.U. did not disclose any contractual relationship between the Appellant and the Respondent and therefore the issue of breach of contract or specific performance or damages did not arise.
The Appellant being dissatisfied with the decision of the Lower Court has now appealed to the Supreme Court. The Appellant in his Brief of Argument formulated nine issues for determination of the appeal as reproduced in the lead judgment which I will treat below:-

SUBMISSION ON ISSUES
ISSUE I relates to whether the Lower Court has misapplied the definition, import and meaning of M.O.U. simpliciter to determine contractual relationship. The learned Court to the Appellant contended that the Lower Court misconceived the case of the Appellant when it defined “memorandum” simpliciter and applied it wrongly in coming to the conclusion that there was no contract instead of considering the report of the “M.O.U.” which was the case of the Appellant in the Court below. He referred to the judgment of the lower Court at pages 1289-1315 Volume 4 of the record and Black Law dictionary, 8th Edition at page 924 which defined M.O.U. as (“a written statement dealing with the preliminary understanding of parties who plan to enter into a contract……………..)”
“Business people typically mean not be bound by a letter of intent or Court ordinarily do not enforce one but Courts occasionally find that a commitment has been made.”
He submitted that from the above definition, there are certain circumstances, as in this case, to be held to contain a commitment which are biding and enforceable as between parties. He argued further that the Lower Court ought to have found that there is a commitment which is capable of creating an enforceable obligation. He argued that the Lower Court should have found that there was an offer, acceptance and consideration via paragraphs 2 and 3 of the recital to Exhibit P5. He urged this Court to hold that there was miscarriage of justice by the Lower Court for its failure to consider the import of the M.O.U. which was the case of the parties before it.
ISSUE NO. 2:
This issue related to whether the Lower Court was right in holding that there was no contract. He referred to the Lower Courts judgment at pages 1186-1208, Vol. 3 of the record and submitted that the decision was borne out of misconception of the content of the M.O.U. and nature of business relationship between the parties. He argued that the pleadings and the evidence adduced by appellant were not denied by the respondent. He submitted that sanction for breach of contract by the holding of the Court below is to the effect that there was no terms of agreement, financial implication, consideration or sanction for breach in the M.O.U. and that it will be safe to conclude that all elements of a binding and enforceable contract crystallized. He referred to Paragraph 4 of the recital and submitted that it amounts to consideration which the Appellant was to manage the said facilities and collect levies. He submitted that the promises of the parties exemplified in the offer and acceptance gave rise to enforceable obligation as the parties had clearly intended to create a legal relationship through the M.O.U. He referred to the case of PORANCA v. COBARRO (1974) KB which has identical situation with the case of U.B.A. v. TEJUMOLA (1986) 4 NWLR (Pt. 38) page 816 where it was held thus:-
“Where however, all the terms of contract have been fully negotiated and agreed upon, the use of the expression “subject to contract” or words of similar effect will not render the contract unenforceable, rather it assumes binding effect immediately, although may later be replaced by a formal contract.”
He urged the Court to hold that the agreement or terms of the M.O.U is binding, in view of the reciprocal duty it imposed on both parties and he urged us to resolve this issue in favour of the Appellant.
ISSUE NO. 3:
This issue queries whether the Lower Court was right in failing to consider the promissory estoppel and estoppel by conduct arising from the promises and assurances and representations made by the Respondent.
The learned counsel contended that it has been the appellants

…………………….S…………………….

case that, in keeping with the terms of the M.O.U. the appellant itself started the project based on the decision reached in several meetings before and after the execution of the M.O.U. and because of further assurances by the Respondent that a formal agreement embodying the terms and agreement and conditions of the project would be signed once the Appellant fulfils its obligation under M.O.U. He submitted that from the above and the sequence of events, the legal position of the Appellant has been altered to its detriment and the Respondent cannot be allowed to revert to the previous legal position as if nothing had happened. He referred to the judgment of the trial Court at page 1202 Vol. 3 of the record and contended that notwithstanding the findings of the trial Court, the Lower Court wrongly held that whatever expenses the Appellant incurred was based on a frolic of its own. He submitted further, that the respondent is caught by the doctrine of estoppel by conduct and promissory estoppel and that by Section 151 of the Evidence Act, he cannot be heard to deny the existence of an enforceable contract between it and the appellant. He referred to the case of OLALEKAN v. WEMA BANK PLC (2006) 13 NWLR (Pt. 988) page 617 at 622-626 and LAWAL v. UNION BANK LTD (1995) 2 SCNJ 132 at 145, where it was held thus:-
“The doctrine of estoppel is that where one party has its words or conduct made to the other a promise or assurance which was intended to affect the legal relationship between them and to be acted upon accordingly, then once the party has taken him at his words and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert the previous relations as if no such promise, assurances has been mad?..”
See the case of TRANS BRIDGE CO. LTD v. SURVEY INTERNATIONAL LTD (1986) 4 NWLR 576 where the Supreme Court held thus:
“The representation need not be supported by valuable consideration, it is sufficient merely if it a promise which has been relied upon.”
He urged the Court hold that there exists a contract between the parties and to resolve this issue in favour of the Appellant.
ISSUES NOS 4 and 5
On issues 4-5, he sought the leave of the Court to be argued together. The issue relates to whether the Lower Court was right in reversing the decision of the trial Court that there is a binding contract and whether the Lower Court was right when it held that the failure of the Respondent to lead evidence at the trial is immaterial since the Appellant can only succeed on the strength of its own case and not the weakness of the Respondent’s case.
He submitted that the decision of the Lower Court is erroneous, misconceived and is not borne out of the evidence before the Court. He submitted further, that the findings of the trial Court are in harmony with a long line decided authorities handed down by the Court of Appeal and Supreme Court. He referred to the case of CONSOLIDATED RESOURCES LTD AND ANOR v. ABOFAR VENTURES (2007) 6 NWLR (Pt. 1030) where it was held thus:-
“Where a plaintiff leads evidence and the defendant does not, the onus of proof on the plaintiff to establish the facts pleaded would be discharged on a minimum scale of proof. In other words, the defendant is deemed to have accepted the pleadings and evidence of the plaintiff………. In such circumstances, the Court is left with only the function of determining the legal effect of admitted facts.”
He argued that the Court, in seeking to find out whether there is a contract or not is entitled to construe various correspondences exchanged between the parties and make its finding one way or the other. He urged this Court to resolve these issues in favour of the Appellant.
ISSUE No. 6
This issue deals with whether non consideration of this issues borders on specific performance has not occasioned a miscarriage of Justice. He submitted that failure of the Lower Court to express an opinion one way or the other on this issue was to the prejudice of the Appellant. He urged the Court to invoke its power underSection 22 of the Supreme Court Act to consider Issues no 1, 2, 3, 4 & 5 in the Court of Appeal which it refused to consider.
ISSUE No. 7
This issue relates to whether the Lower Court was right in holding that the Appellant was not entitled to damages. He submitted that the decision is manifestly wrong as the respondent admitted solemnly and in writing, that it was at the very best liable to damages. He submitted that in breach of contract cases, damages are based on restitution in integrum i.e. the amount of damages awarded are such as

…………………….T…………………….

would put the innocent party who has been wronged and aggrieved in the same position he would have been had there been no breach. He contended that the trial Court arbitrarily awarded N10 million as damages for breach of contract which is freshly and manifestly inadequate having regard to the magnitude of the contract. He referred to the evidence of the claims submitted to the Respondent as follows:-
(1) Acts done in furtherance of M.O.U. = N2,525,284,855:29.
(2) Expenses in Preparing M.O.U. = N449,757,085:00.
(3) Sourcing of financers = N168,000,000
(4) Preparation of draft agreement = N546,000,000
TOTAL = N3,689,041,943:31
He submitted that the Appellant is entitled to the above sum on the basis of promissory estoppel even where consideration has been given and there is no contract between parties. He urged the Court to set aside the Lower Court’s findings that the Appellant was on a frolic of its own in respect of expenses incurred and to hold that the Appellant is entitled to N10.5 Billion and N3,875,284,858.29 being cumulative monetary value of the services and work input or quatum meruit.

ISSUES 8 and 9
These issues relate to whether the Lower Court was right in holding that there was no basis for the award of specific performance. He argued that the trial Court having found that there exists a contract, wrongly dabbled into speculation as to whether the districts in question had been developed by the Respondent.
He argued that all the facts necessary for the determination of those issues not considered by the Court below are available in the record. He therefore urged this Court to consider the issue and grant an order of specific performance in favour of the Appellant. He finally urged the Court to allow the appeal.
RESPONDENT’S SUBMISSION:
The respondent adopted all the nine (9) issues formulated by the Appellant.
He submitted that the Lower Court was right in holding that there was no contract. He argued that the cases cited and relied on by the Appellant are not applicable. He urged this Court to hold that the meaning of Memorandum of Understanding was construed correctly by the Court of Appeal.
On issue 2 he adopted his submission under issue one that meaning of Memorandum of Understanding was not construed in isolation of understanding and submitted that exhibit P5 constitutes no enforceable contract between the parties. He argued further, that Exhibits P5 does not contain any mandatory provision that imposes any obligation on the Respondent. He submitted further, that the appellant has embarked on academic exercise to manufacture a subsisting validly bindings contract into an M.O.U. that has no contractual value. He submitted that the Appellant having found out that the M.O.U did not suffice as contractual document, is cleverly using the Supreme Court to adduce new evidence he failed to adduce at the trial Court without the leave of the Supreme Court. He argued the memorandum the Appellant wants this Court to infer as constructing a contract were held at the instance of the Appellant to propose to the Respondent its developmental intention and therefore not enough to refer to such memorandum as a binding agreement. He argued further, that the promises and representation and assurances allegedly referred to by the Appellant were claims which it failed to prove at the Lower Court and had no written evidence to back them up. He urged the Court to discountenance the claim that a contract exists between the parties. He argued that a document subjected to a particular condition, cannot come into effect without the express condition being fulfilled. He referred to the case of TSOKWA MARKETING CO. LTD v. B.O.N. LTD (2002) 11 NWLR (Pt. 777) 163 where it was held thus:-
” where a contract is made subject to the fulfillment of certain specific terms and conditions, the contract is not formed or becomes binding unless and until those terms and conditions are complied with or fulfilled.”

He urged the Court to resolve this issue in favour of the Respondent.
On issue 3, he submitted that there is no miscarriage of justice arising from the Lower Courts decision that exhibit P5 was not a binding contract. He argued that the Appellants contention that the assurances, promises and representation allegedly made caused to it cannot contain sum to the project is not true. He stated that the Appellant

…………………….U…………………….

should have waited and exercise restraint after the M.O.U. for the execution of a formal agreement. He argued that whatever meeting held between parties were done at the negotiation stage which the Appellant erroneously interpreted to be binding on the parties. He argued that the Court below had considered the issue of estoppel and held that the meeting held before signing the M.O.U. were negotiation and invitation to treat and that the Lower Court arrived at that decision after a meticulous consideration of the M.O.U. and other issues placed before it came to the conclusion that the Appellant went on a frolic. He argued further, that the respondent was not estopped by estoppel by conduct or promissory estoppel because no such estoppel bound the respondents since it made no actionable promises or assurances to the Appellant. He urged the Court to discountenance the argument of Appellant under issue 3 and uphold the decision of the Lower Court.
On the issues 4 and 5, which the appellant’s counsel argued together the respondents counsel submitted that the Lower Court was right in reversing the decision of the trial Court that there was a binding contract. He urged the Court to affirm the holding of the Lower Court. In answer to issue no.5, he argued that the Lower Court never held that the evidence of the Respondent was not material to the determination of the Respondent’s case rather than that the plaintiff has a duty to prove his case and not to rely on the weakness of the defendant’s case in accordance with Section 136(2) of the Evidence Act. He referred to the case of FEDERAL COMMISSIONER FOR WORKS AND HOUSING v. LABABEDI & 15 ORS SC 11 at 17 paragraph 17-18. He contended the trial Court misconstrued Exhibit P5, to infer terms of a contract that was still yet to be made as held by the Lower Court at page 1307 Vol.4 of the record. He urged the Court to resolve this issue in favour of the Respondent.
Issue no.6 the issue on specific performance, he argued that the Lower Court having held that there was no contract, it will be illogical to consider the issue of specific performance. He referred to issues 3-5 on quatum meruit, and submitted that for a claim of quatum meruit to succeed, there must be a breach of contract.
On issue no.7, he submitted that the Court of Appeal was right to hold that the Respondent was entitled to damages and that whatever expenses he allegedly incurred, was a frolic of its own and not as a result of any assurances or promise made to its by the Respondent.
He argued further, that whatever the position the Appellant contended as being allegedly altered would have occurred after the Appellant had signed Exhibit P5. He also argued that the quotation made by the Appellant in its brief are mere repetition of what the Appellant has been arguing right from the start of the Appellant brief of argument and the Respondent has fully answered that.
On issue No.8, the issue of specific performance, he argued that the award of specific performance is predicated on the existence of a contract, he arguing that the issue of specific performance and on who the burden of proof have been disposed off. He argued that the cases cited by the Appellant are not applicable and urged this Court to dismiss the appeal.
REPLY BRIEF FILED BY APPELLANT
The Appellant’s Reply Brief, My lords, merely contains all what has been argued in its main brief of argument. The argument in the reply is not on the issue of law but contains re-argument of what has been canvassed in its main brief of arguments. I will therefore waste no time to consider the submissions therein, for reason I have posited above.
On the first issue for determination in the appellant’s brief of argument, the appellant’s counsel’s contention is that Memorandum of Understanding otherwise abbreviated as M.O.U., which was filed and signed or endorsed by parties is binding on them and amounts to an enforceable contract. On the other hand, the respondent holds the view, that MOU is merely an informal intention towards or in preparation to a formal contract agreement to be entered into by the parties who enter or sign or endorse such Memorandum of Understanding. His view is that M.O.U. is nothing more than a “Letter of Intent”.
Now the first point I will consider presently is what is the meaning of letter of intent? At page 924 of Black Law Dictionary, 8th Edition, the phrase “Letter of Intent” is define thus:-
“A written statement detailing a preliminary understanding of parties plan to enter into contract or some other agreements a non committal writing which is not meant to be binding and does not hinder the parties from bargaining with a third party. Business people typically mean not to be bound by letter of intent and Courts ordinarily do not enforce one, but occasionally find that commitment has been made.

…………………….V…………………….

Conversely, my understanding of a ‘CONTRACT’ is that it is a formal agreement between two or more parties who by so entering into such agreement, they resolve to create obligation or commitment between them to do or not to do a particular thing. In a contract, the basic elements that forms it or makes it binding, is that there is offer, “acceptance” and consideration and these three elements of which must coexist and be properly defined in no uncertain terms.
In such agreement, if parties sign it they make themselves bound by it and thereby becoming enforceable on them depending on the terms agreed upon. See Alfotrin Ltd v. A-G Federation & Ors (1996) 9 NWLR (Pt. 475) 634.
I think it will be pertinent to reproduce here, Exhibit P5, i.e. the Memorandum of Understanding in question as contained on page 905 of Volume 3 of the Record of Appeal. It reads thus:-
“MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is entered into this 13th day of July 2004 BETWEEN FEDERAL CAPITAL DEVELOPMENT AUTHORITY. Area 11 Garki Abuja, hereinafter referred to as “THE AUTHORITY”, (which expression shall where the context so 
admits include the representatives and assigns) of the first part,
AND
BPS ENGINEERING AND CONSTRUCTION COMPANY LIMITED RC. 343541, a company incorporated in Nigeria with limited liability whose registered office is situated at Plot 1687 Oyin Jolayemi Street, Victoria Island, Lagos, hereinafter referred to as “THE COMPANY”, (which expression shall where the context so admits include the representatives and assigns) of the other part.
WHEREAS
1. THE COMPANY is a limited liability company registered in Nigeria and engaged in engineering and construction works.
2. THE COMPANY at a meeting held on the 6th day of July, 2004 at the instance of the Presidency, represented a proposal for the provision of infrastructure facilities to Mabushi and Katampe Districts of the Federal Capital Territory (hereinafter referred to as “THE PROJECT”) through Public Private Section Partnership (P.P.P.) and funding and to recover the cost of the project by the receipts of development levies and sale of plots.
3. THE AUTHORITY has expressed interest in THE COMPANYs proposal for the development of infrastructural facilities in Mabushi and Katampe Districts of the Federal Capital Territory.
4. THE AUTHORITY recognizes that THE COMPANY shall raise funds for THE PROJECT through financial institutions wherefore the parties have entered into these presents.
NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSETH AS FOLLOWS:
1. That THE AUTHORITY shall provide to THE COMPANY Mabushi and Katampe Districts of the Federal Capital Territory for the development of infrastructural facilities.
2. That the details of the type, method of development and specification materials used for the provision of the said infrastructure shall be in accordance with specific standards of the Federal Capital Development Authority (F.C.D.A.) applicable in the Federal Capital City.
3. That the parties shall:
I. Upon the execution of this memorandum of understanding THE AUTHORITY shall immediately provide THE COMPANY engineering drawings and bill of quantities and any other documents which will enable THE COMPANY complete its costs analysis on the project.
II. Within 14 days of the execution of this memorandum of understanding the parties hereto shall enter into a formal agreement with respect to THE 
PROJECT/PROPOSAL on terms to be mutually agreed.
4. That all documents, materials, discussions, etc, shall be treated with the utmost confidentiality and neither party to this memorandum of understanding shall disclose any information to a third party.
5. That this memorandum of understanding is subject to the signing of a formal agreement by the parties.
WITNESS WHEREOF THE PARTIES HAVE SET THEIR HANDS AND SEALS THE DAY AND YEAR FIRST ABOVE WRITTEN.
SIGNED.”

(Emphasis Supplied)
I have herein before given the definition of Letter of Intention which for all intent and purposes is what memorandum of understanding is all about. My understanding of M.O.U. therefore, is that, it is more or less a preliminary plan entered into in a preparation of entering a formal contract agreement. I agree with the finding of the Court below that there was no contract agreement entered by the parties in the present or instant case.
The first issue is therefore resolved against the appellants herein.

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The second issue for determination appears to me, is an off-shoot of issue No.1 discussed above, as it is the contention of the learned appellant’s counsel that Exhibit P5, the M.O.U., contains terms of the agreement between the parties even though it fell short of spelling out the sanctions especially since, according to him, the respondent had availed the appellant with Sequencing Design Drawing and other documents to prepare bill of quantities and the cost of the entire project. For those reasons, the learned appellants counsel argued that the MOU had provided all the necessary elements and condition of a binding and enforceable contract. He submitted that the trial Court was correct in holding that from the wordings of the M.O.U. (Exhibit P5), parties had contended that exhibit P5 contemplated same to represent a binding and enforceable contract.
But to the contrary, the learned respondent’s counsel was of the view that the Court below was right in its interpretation that Exh P5, the M.O.U., was short of containing any mandatory provisions of a binding contract agreement which is meant to bind the parties. He maintained that the trial Court was therefore wrong in its interpretation of Exh. P5. He added that the appellant as plaintiff at the Lower Court, failed to prove that there was a valid contractual relationship between the parties.
I think the resolution of this issue does not require any dissipation of energy. I have highlighted above, the contents and wordings of Exhibit P5, which is the Memorandum of Understanding. Similarly, I also gave an insight as to what contract agreement means and the necessary elements that must co-exist in a valid and enforceable contract. From Paragraph 3(1) it is clear that the M.O.U. is simply a document signed by the parties preparatory to the execution of a formal contract agreement in future. It is not yet contract agreement but even provides as follows:
“after compliance with paragraph 3 that formal agreement will be entered into or executed.”
As I also posited above, in contract agreement there MUST be offer, acceptance and consideration as well as some other provisions on cost of the contract, duration, sanction on parties in case of breach etc. All these provisions or conditions are not contained in Exhibit P5, the MOU. A valid and enforceable contract agreement must also incorporate all those vital information as a condition precedent which are conspicuously absent in the M.O.U. In the light of these observations, I am inclined to agree with the interpretation given to Exh. P5 by the Lower Court and reject the interpretation given to it by the trial Court which the learned counsel for the appellant shared. I am also not in support of the appellant’s contention supporting the interpretation given to Exh. P5, the MOU, by the trial Court. The interpretation of Exh. P5 by the Lower Court is in my view flawless and most acceptable. In this regard, I also resolve the second issue against the appellant and in favour of the respondent.
In the light of these few comments and for the fuller and detailed reasons contained in the lead judgment of my learned brother Kudirat Motonmori Olatokunbo Kekere-Ekun, JSC, I also adjudge this appeal unmeritorious. It is accordingly dismissed by me. I abide by the consequential orders made in the lead judgment. Appeal dismissed.

Appearances

Chief Tochukwu Onwugbufor, SAN with him, H. Okhiria (Miss) and O. Onwugbufor (Miss) –For Appellant

AND

M. A. Nunghe, Esq. with him, Sylvester Ogbelu, Esq., M.J. Numa, Esq., E.O. Agi, Esq. and M. T. Husseini Esq. –For Respondent

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