Under Nigerian Law, the principle has been long established that where there is an agreement for the sale of land and the full purchase price of the property has not been paid by the purchaser, there is no valid sale of that land . Even where the purchaser, who has not paid the full purchase price is in possession of the property, there is no valid sale of that property as such possession cannot defeat the title of the vendor . The parties to an agreement to sell a property are at liberty to decide whether the purchase price should be paid at once or by instalments. Where the parties agree to the time within which the full purchase price must be paid then the purchaser must comply with same and if no time was fixed by the parties, then the balance of the purchase price must be paid within a reasonable time. In any case, the purchase price is the consideration that flows from the purchaser to the vendor in order for the contract to be valid. The Supreme Court was faced with such a situation in the case under review and it seized the opportunity to reiterate the position of the law on the issue.

1. MAY 2015 NEWS ALERT
FAILURE TO PAY FULL PURCHASE PRICE NULLIFIES A CONTRACT FOR SALE OF
LAND:
THE CASE OF NIDOCCO LTD V GBAJABIAMILA REVIEWED
INTRODUCTION
Under Nigerian Law, the principle has been long established that where there is
an agreement for the sale of land and the full purchase price of the property has
not been paid by the purchaser, there is no valid sale of that land1
. Even where
the purchaser, who has not paid the full purchase price is in possession of the
property, there is no valid sale of that property as such possession cannot defeat
the title of the vendor2
. The parties to an agreement to sell a property are at
liberty to decide whether the purchase price should be paid at once or by
instalments. Where the parties agree to the time within which the full purchase
price must be paid then the purchaser must comply with same and if no time
was fixed by the parties, then the balance of the purchase price must be paid
within a reasonable time. In any case, the purchase price is the consideration
that flows from the purchaser to the vendor in order for the contract to be valid.
The Supreme Court was faced with such a situation in the case under review and
it seized the opportunity to reiterate the position of the law on the issue.
THE FACTS:
The Appellant, a limited liability company had three shareholders being the
Respondent, the Respondent’s former husband (‘Mr. Gbajabiamila’) and one
Mrs. Ebie. The Appellant was the registered owner of the property situate at
26, Sobo Arobiodu Street, G.R.A, Ikeja, Lagos State (“the Property”). Sometime
in 1983, the Appellant was in financial difficulties and the board of directors
passed a resolution to sell the Property. The Respondent and Mr. Gbajabiamila
1
Odusoga v Ricketts (1997) 7 NWLR (PT. 511) 1,
2
Odufoye v Jacob Fatoke (1977) 4 SC 11 and Manya v Idris (2001) 8 NWLR (PT. 716) 627

2. as directors in the Appellant offered to purchase the Property and their offer
was accepted by the Appellant. Consequently, the Appellant as the vendor and
the Respondent together with Mr. Gbajabiamila as purchasers executed a Deed
of Assignment dated 21st
June 1983 wherein the payment of the sum of
N150,000.00 (One Hundred and Fifty Thousand Naira) as consideration was
acknowledged (‘the First Deed’), although there was no evidence that the
agreed purchase price was paid. The parties did not seek to obtain the
Governors’ consent to the transaction because of the cost.
The Respondent later persuaded Mr. Gbajabiamila to transfer his share in the
Property to her and he agreed. To evade the costs of obtaining the Governor’s
consent twice, first, to the transfer of the property by the Appellant to the
Respondent and Mr. Gbajabiamila and, second, from Mr. Gbajabiamila to the
Respondent, the parties agreed to transfer the Property directly from the
Appellant to the Respondent alone notwithstanding the existence of the First
Deed transferring the Property to the Respondent and Mr. Gbajabiamila jointly.
In pursuit of this objective, the parties then executed another Deed of
Assignment dated 5th
December 1988 to transfer the Property from the
Appellant to the Respondent (‘the Second Deed’). The Second Deed could not
be tendered in evidence because Mr. Gbajabiamila gave evidence that he
destroyed it because he did not receive any consideration from the Respondent
for the transfer of his share in the Property.
The Appellant approached the High Court for a declaration that it is entitled to
the grant of a certificate of occupancy in respect of the Property and an order of
injunction restraining the Respondent from further acts of trespass to the
Property. The Respondent counterclaimed for a declaration that she is entitled
to the grant of statutory right of occupancy in respect of the Property. After trial,
the trial Court granted all the claims of the Appellant and dismissed the
Respondent’s counterclaim. The Respondent’s appeal to the Court of Appeal
was successful as the Court of Appeal set aside the judgment of the High Court
by dismissing the Appellant’s claim and ordered the Respondent’s counterclaim
to be tried afresh while joining Mr. Gbajabiamila as a defendant to the
Counterclaim. The Appellant further appealed to the Supreme Court.
DECISION OF THE SUPREME COURT
At the Supreme Court, the Appellant argued that the First Deed was superseded
by the Second Deed. The Appellant relied on the evidence of Mr. Gbajabiamila
to argue that the purchase price was not paid in respect of the Second Deed and

3. argued that the Second Deed has been discharged by breach of the
Respondent’s failure to pay the purchase price. The Appellant also contended
that the First Deed was a registrable instrument under section 15 of the Land
Registration Act of Lagos State and was not registered, hence the document was
inchoate. Further that since the consent of the Governor was not sought and
obtained in accordance with the provisions of section 26 of the Land Use Act, it
was null and void and incapable of transferring the Property. The Appellant
further argued that failure to pay the purchase price of the Property was a
fundamental breach of the contract of sale.
The Respondent also argued that the execution of the Second Deed meant that
parties no longer relied on the First Deed. The Respondent contended that both
the First Deed and Second Deed contained acknowledgment of consideration.
She emphasized the fact that the First Deed shows that the sum of N150, 000.00
(One Hundred and Fifty Thousand Naira) was collected by the Appellant as
consideration for the assignment of its interest in the Property.
The Supreme Court in a unanimous decision allowed the Appellant’s appeal. The
apex Court agreed with the Appellant and affirmed the decisions of the trial
court while setting aside the decision of the Court of Appeal. The Supreme Court
held that the Second Deed did not supersede, discredit and/ contradict the First
Deed. The reason advanced by the Supreme Court was that the Second Deed by
which Mr. Gbajabiamila purported to convey his interest in the Property to the
Respondent has been breached by the Respondent for failure to pay the agreed
purchase price. The Court found that there was indeed an uncontroverted
evidence from Mr. Gbajabiamila that the Respondent failed to pay the purchase
price of his share of the Property and he retrieved the Second Deed from the
lawyer who prepared same and destroyed it.
The Court held that had the Second Deed been in existence, same would
have conveyed the Property direct from the Appellant to the Respondent since
the First Deed was completely abandoned and discarded when parties agreed
to execute the Second Deed. It held that the Second Deed was aborted when
the Respondent breached its term by failure to pay the agreed sum to Mr.
Gbajabiamila and that failure to pay the purchase price under a contract for the
sale of land is a fundamental breach which goes to the root of the contract. It
was also held that the First Deed having been abandoned had no binding effect
on the parties. The Court then held that in view of the fact that the First Deed
having been abandoned and the Second Deed having been breached by the
Respondent and destroyed by Mr. Gbajabiamila, the parties returned to the

4. status quo before the execution of the First Deed. In effect, there was no sale of
the Property by the Appellant to the Respondent and Mr. Gbajabiamila jointly
or to the Respondent alone.
COMMENT
The decision has confirmed the position of Nigerian law on the effect of non-
payment of the full purchase price in a contract for the sale of land and that
same is a breach that goes to the root of the contract. Thus, where parties to a
contract of sale of land have agreed that the purchase price be paid by
instalment, the purchase price must be fully paid by the purchaser as at when
due if time was agreed by the parties and/or within a reasonable time if no time
limit was agreed by the parties.
However, the reasoning by the Supreme Court in holding that the Property
should revert to the Appellant company deserves further scrutiny. It could be
argued that since there was no pronouncement by the Supreme Court on the
effect of not obtaining Governor’s consent on validity of the First Deed, then the
Property should have reverted to the Respondent and Mr. Gbajabiamila jointly
when the sale evidenced by the Second Deed was held to have been breached
by the Respondent. .This is more so when the Appellant has acknowledged
receipt of the purchase price of N150, 000.00 (One Hundred and Fifty Thousand
Naira) on the First Deed. The Supreme Court appeared to have relied on the
evidence of both parties that they had agreed to execute the Second Deed and
that same should supersede the First Deed in holding that the First Deed had
been ‘abandoned’ and thus it has no binding effect. In effect, it appears that the
Supreme Court has unwittingly permitted the appellant to benefit from reneging
on the initial transaction evidenced by the First Deed for which it had received
consideration while depriving the Respondent from the joint ownership under
the First Deed without any compensation for her contribution in the
consideration of N150, 000 paid for the joint purchase of the Property from the
Appellant. An option in terms of reason for the decision which was open to the
Supreme Court and which would have accorded more with the position of the
law is to declare the First Deed void for lack of Governor’s consent. 3
3
See U.B.N. Plc v. Ayodare & Sons (Nig.) Ltd (2007) 13 NWLR (Pt.1052) 567

5. CITATION:
The case reviewed is reported as Nidocco Ltd v. Mrs. I.A Ggajabiamila (2013) 14
NWLR (Pt. 1374) 350.
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Segun accepts no responsibility for any loss or damage that may arise from
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this subject or issues concerning transactions relating to property, please contact
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Segun by email (fagbor@acas-law.com; alatilo@acas-law.com).
.
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