Top 5 Reasons Why You Need a Lawyer before Signing that Contract

While going through a standard documented contract agreement, you may have come across phrases like “force majeure”, “indemnification clause”, “non compete clause” or a very regular everyday word or phrase but used in an entirely different sense in the contract, like – “engagement” “invalidity of terms” and the likes. I am almost certain at this point I am beginning to bore you with these seemingly big big grammar. Well, this boredom or confusion you feel, forms the very basis of this read and highlights one of the many reasons why a lawyer’s review of that contract is quite pertinent before appending your signature on those dotted lines.

A contract is an agreement between two or more parties, which creates reciprocal legal obligations to do or not to do particular things. In simpler terms, a contract is an agreement between two parties that creates an obligation to perform (or not to perform) a particular thing.

Here, we highlight 5 reasons you need a lawyer before signing that contract.

1. To demystify technical terminologies and legal jargon contained in the contract agreement.

To understand better the entire content, import and obligations. The above forms one of the very important reasons why you need a lawyer to review the contract you are about to sign. A lawyer, through his training and wealth of experience, helps explain, in layman’s terms, the phrases that are not so self-explanatory, the difficult words, inclusive of the technical terms and legal jargon. This enables the enquiring partitions, as contained in the contract agreement.

2. To ascertain if the contract is enforceable or even acceptable by law.

There are extant laws guiding the institution of a contract in Nigeria. I will expatiate on the rudiments for the sake of this article (so you do not need yet another lawyer to explain the article’s content to you). It is a settled law in Nigerian Law of Contracts that for a contract to be valid, it must have at least the following elements present- 

• Offer- ( item (s) or service(s) being brought to the table)
• Acceptance- (the clear acceptance of this item(s) or services(s) being brought to the table)
• Consideration- (the cost to be paid by the party accepting the specified item(s) or service(s).
• Time-The specific dates whereby all obligations would be accomplished and subsequently extinguished.

These are the components of a contract that are very vital for its validity. Furthermore, contracts involving any element of illegality- be it criminal or fraudulent colouration- are not enforceable. For instance, a contract entered into to build a supermarket in a known Government Restricted Area, without the lifting of such restriction, or a contract to engage in human trafficking or prostitution would definitely not be honoured by the courts and may incur criminal liability.

A lawyer helps the enquiring party, point out any defect as contained in the agreement.

3. To reveal if the terms of the contract are in your interest or not.

Highly unfavourable contractual obligations are sometimes couched and hidden in lofty words or phrases that can take one back to the trenches if you refuse to hire a lawyer to review that contract for you.

Take, for instance, in an “Employment Contract”; the term “non compete clause” on the surface sounds like an easygoing phrase that connotes no kind of unhealthy competition is allowed within the organisation, which kind of explains the term in a sense, but that singular clause possesses deep legal and professional consequences.

This is what I mean, the presence of a “non compete clause” (which is not entirely bad in itself for the employer) binds and puts the newly employed party under an obligation not to, in any way, work for a rival company consult or share any idea with them or even start a similar trade after leaving his current employer, until the expiration of a particular time frame. This, in a way, puts employees in a stagnant place, career-wise. A lawyer points out similar obligations and enquiries if the concerned party counts such as a red flag or not.

If the concerned party finds any clause or obligation unfavourable to him, they may instruct their lawyer to further negotiate how these terms stated in the agreement can be fair and favourable to both parties.

4. To ascertain if the contract has been entered freely.

It is trite law that a contract should be entered into freely and voluntarily. A contract signed by a party, while under any kind of threat or duress or heavy compulsion, is not an enforceable contract.

For instance, a purported signature was appended on a contract because, at the point of appending the signature on the said contract, two hefty and suspicious-looking men were pointing a gun at the head of the party; such a contract would not be recognised by law if such circumstances are brought to the knowledge of the court.

5. To point out errors and/or omissions and recommend changes to be incorporated in the contract agreement.

A lawyer, asides from ensuring the obligations as contained in a contract are explained in less ambiguous words and verifies if such obligations are even in your interest or enforceable in court, lawyers also ensures that no necessary part that should be contained in the contract agreement is omitted, to better protect your interest.

We all remember the year 2020 and the following Corona Virus, which affected the entire world and culminated in a lockdown which crippled commercial activities. There was no business as usual, literally, because there was a lockdown, which restricted movement, travel and, later, a curfew, all in a bid to prevent the further spread of the Virus. So, what happened to contractual obligations which were to be accomplished within this lockdown period?

There is a contractual clause, called “force majeure”. Force majeure is a clause that is usually included in contracts to remove responsibility from both parties, for unforeseeable and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations. These clauses generally cover natural disasters, such as hurricanes, tornadoes, pandemics and earthquakes, as well as human actions, such as armed conflict and man-made diseases.

Now imagine you signed a contract during this period, and “force majeure” was, somehow, not included in your agreement, and the other party is insisting that you fulfil your obligations regardless? And you ask –Abi you dey wyn me ni? Hin no dey wyn you sir, na wetin you sign be that!

A contract would most likely not be set aside because similar clauses were not included in the agreement, so please, my dear brothers and sisters, do not be too excited or permit anyone to bobo you with lofty words. The importance of a lawyer before signing a contract is very pertinent, and please, do not hire just any lawyer, but one that is quite conversant with contracts and general civil and/or corporate law practice and knows what to be on the lookout for. I know a lot of people believe that lawyers are not so necessary and skip conducting due diligence before signing their documents.

Most times, it is because they are trying to save money, but I promise you the amount you’d be charged for a mere contract review and legal advice is meagre, compared to the amount you’d lose if you sign an insidious contract because you were trying to be economical with your funds.

Author: Rita Odafe-Ofarn – a legal associate at Citizens’ Gavel. She writes from Lagos State and can be reached at rita@gavel.ng

Edited by Taiwo Makanjuola, Communications Associate, Citizens’ Gavel. She can be reached at taiwo@gavel.ng