The unprecedented outbreak of COVID19 vis-a-vis the longest academic Strike have unavoidably frustrated and effected nearly all aspects of people activities; economical, educational and otherwise in the entire Nation. If anything such events put most of it’s weight on educational sector in Nigeria as it is undeniable fact that nearly all school has to spend one academic year on the unprecedented and unwelcomed break.
Consequently, thousands of students in tertiary institutions have already engaged in tenancy agreement with their respective landlords in the vicinity of their schools to ease their academic struggles, but due to the pendamic outbreak alongside with the ASUU strike they were not able to use the subject matter of the tenancy agreement on the purpose it was rented throughout the time of the agreement or the largest part of it.
Based on the foregoing scenario this article assesses the legal position of that contract and proposes certain recommendations to the victims with an extreme scrimp of words.
THE DOCTRINE OF FRUSTRATION
The Doctrine of frustration was first established in the case of TAYLOY V. CALDWELL (1863) 3 B. which was meant to review the rule of ‘Absolute Contract’ the doctrine was blessed with a comprehensive definition through the erudition of His lordship ADEKEYE, JSC in NWAOLISAH V. NWABUFOH (2011) 14, NWLR (PART 1268) 600 that;
“Frustration occurs wherever the law recognizes that without default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performances is called for would render it radically different from what was undertaken by the contract.”
Doctrine of frustration is one of the four ways known to law, in which a contract may be discharged. The other three ways are; by performance, by express agreement or by breach see the recent Supreme Court decision in ADEDEJI v. OBAJIMI (2018) LPELR-44360(SC).
TENANCY AGREEMENT AND DOCTRINE OF FRUSTRATION
The doctrine of frustration was not applicable to contract relating to land (i.e lease or tenancy) under English law. This could be perceived from the decision of the House of Lord’s in Cricklewood Property and Investment Trust Ltd V. Leighton Investment Trust (1945)AC 221.
However the Supreme Court Of Nigeria had in the celebrated case of EMMANUEL OSELOKA ARAKA v MONIER CONSTRUCTION COMPANY (NIGERIA) LTD. (1978) 2 LRN 60 also reported in (1978) All NLR 219 and in (1978) JELR 45243 (SC) review the decision in the Cricklewood’s case where it was held that the doctrine applies to all categories of contract.
Permit me to reproduce the wordings of the Apex Court for clarification.
“Having giving proper consideration to the matter, we are inclined to accept the views of Viscount Salmon and Lord Wright as being the correct statement of the law that the doctrine of frustration may in certain circumstances apply to a lease. WE THINK THAT IT MAY BE TANTAMOUNT TO INJUSTICE TO DENY A TENANT THE BENEFIT OF FRUSTRATION IN CASES WHERE OWING TO THE OCCURRENCE OF AN INTERVENING EVENT OR CHANGE OF CIRCUMSTANCE SO FUNDAMENTAL AS TO BE REGARDED BY THE LAW AS STRIKING AT THE ROOT OF THE AGREEMENT, it has become impossible for the tenant to enjoy the fruits of his lease and at the same time to expect him on account of the abstract estate concept to honour his obligations under the lease.” (emphasis mine). See also the Court Of Appeal decision in JACOB V. AFAHA (2012) LPELR -7854 (CA).
Moreover the Supreme Court have thereafter in the case of DIAMOND BANK LTD v UGOCHUKWU (2008) 1 NWLR (Pt. 1067) restricted the doctrine of frustration to the following circumstances;
(a) Situation where the supervening event destroys a fundamental assumption; and
(b) Where force majeure clauses are drafted into the contract. There must be an event which significantly changes the nature of contractual rights of the parties that it would be unjust to expect the parties to perform those rights.
Examples are situations where –
(1) The subject matter of the contract has been destroyed or is no longer available.
(2) Death or incapacity of a party to a contract.
(3) The contract has become illegal to perform as a result of new legislation.
(4) A contract can be frustrated on the outbreak of war.
(5) Where the commercial purpose of the contract has failed. See also PHCN & ANOR v. ATLAS PROJECTS LTD (2017) LPELR-43622(CA).
EFFECT OF FRUSTRATION ON CONTRACT
One of the legal effect of frustration is that it discharges the contract automatically effective from the time the frustrating event occurs. What parties believe is not the determining factor thus court can determine that a contract is frustrated even when the parties continue to regard the contract as subsisting after the frustrating event occurred notwithstanding the opinion of the parties. See celebrated case of Hirji Mulji v Cheong Yue Steamship Co Ltd  AC 497; 95 LJPC 121; and also in 17 Asp MLC 8; 31 Com Cas 199;  All ER Rep 51; 134 LT 737 and 42 TLR 359.
Another legal effect is that, it is trite law that a party who has paid money to another person for a consideration that has totally failed under a contract is entitled to claim the money back: NWAOLISAH v. NWABUFOH (2011) LPELR 2115 and FIRST BANK v. OZOKWERE (2006) 4 NWLR (PT 970) 422
It is note worthy that the party relying on the doctrine as a defence must plead and lead satisfactory evidence as self-induced frustration is no frustration at all but a breach of contract. See JACOB v AFAHA (supra).
It has to be noted further, that a contract is not frustrated merely on the ground that it’ execution becomes more difficult or more expensive than either party originally anticipated and has to be carried out in a manner not envisaged at the time of its negotiation. See the cases of MR. OKEREKE & ANOR v. ABA NORTH LOCAL GOVERNMENT AUTHORITY (2014) AELR 4936 (CA), DAVIS CONTRACTORS LTD. V. FAREHAM N.D.C (1956) AC 695; and TSAKINEGLON & CO. v. NOBLEE THORH G.M.B.H. (1962) AC 93.
CONCLUSION AND RECOMMENDATION
Having established that in our jurisdiction the doctrine of frustration is applicable to contracts related to land and the ground could be the failure of the commercial purpose of the contract and or unavoidable events like war outbreak. It will not be a gainsaying to say that a student who entered into a tenancy agreement for the purpose of staying near his school campus within the period of an academic session, then COVID19 outbroke to frustrate his entire purpose of engaging in the tenancy agreement. To this view such student will be allowed to enjoy the benefits of the doctrine of frustration under our jurisdiction. This will be the position when the Traditional Strike of the academic staff have gone to lead the total frustration of all the time the student has to stay in the subject matter of the agreement and that the lone purpose of the agreement was not served.
Frankly, only a court of law can validity declared such contract frustrated. Therefore this paper recommends the following;
- Engage in an amicable settlement with the respective landlords to avoid the sacrifice of money time and energy as attainable in court litigation.
- If possible, in order to avoid situation such as this in the future, enter tenancy agreements for an academic session not twelve months of calendar or such, since the purpose of the agreement is for the academic session and also most of the landlords created that business near the school for students’ patronage.
- Engage the assistance of school administration, students’ union bodies, agency associations, Traditional rulers etc to achieve the (1&2) above.
- Alternatively, include force majeure clause in their tenancy agreement
- Consult lawyer/legal expert while entering into contract to avoid further preventable losses.
ABOUT THE WRITER
ALKASIM ABUBAKAR, Is a Student In ABU Zaria, and he has may publication in his name. He could be contacted via [email protected] or 08033131653