ICAN Business Law
Past Questions

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**The reasoning** In contract law, three essential elements must exist for a valid contract to form: 1. **Offer** – One party proposes terms (e.g., "I'll sell you this phone for ₦50,000") 2. **Acceptance** – The other party agrees to those exact terms ("Yes, I'll buy it") 3. **Consideration** – Something of value must be exchanged by both sides (the phone for the money) Think of it like a handshake deal: someone offers, someone accepts, and both give something valuable. Without all three, there's no legally binding contract. This principle applies whether you're in Nigeria, the UK, or elsewhere under common law. **Why the wrong options tempt you** - **A** suggests just an offer is enough – but an offer without acceptance is just a proposal hanging in the air - **C & D** focus on formalities (writing, stamping) – while *some* contracts need these (like land sales), most contracts don't require written form to be valid **Quick takeaway** Remember "**OAC**" – **O**ffer, **A**cceptance, **C**onsideration – the three non-negotiable pillars holding up every contract.

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**The reasoning** The principle that **a company is a separate legal entity** — meaning it can own property, sue, be sued, and exist independently from its owners — comes from the landmark case **Salomon v Salomon & Co Ltd (1897)**. In this case, Mr. Salomon created a company and sold his business to it. When the company failed, creditors argued he should be personally liable. The House of Lords ruled NO — the company was a completely separate "person" in law, even though Salomon owned almost all the shares. This established the **doctrine of corporate personality** and the **veil of incorporation**, protecting owners from personal liability for company debts. **Why the wrong options tempt you** - **Donoghue v Stevenson** — Famous tort case about negligence (the snail in ginger beer). Nothing to do with companies. - **Carlill v Carbolic** — Contract law case about offer and acceptance. - **Rylands v Fletcher** — Tort case about strict liability for dangerous things escaping your land. These are all major cases you'll study, so they *look* familiar and credible — but they're different areas of law entirely. **Quick takeaway** **Salomon = Separate legal entity.** When you see "corporate personality" or "veil of incorporation," think Salomon immediately.

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**The reasoning** In contract law, **consideration** is what each party gives to make the agreement binding — it's the "price" of the promise. The golden rule is: consideration must be **sufficient** (meaning it has *some* legal value, no matter how small) but **need not be adequate** (the law doesn't care if it's a "fair" deal). Think of it this way: If you agree to sell your ₦50,000 phone for ₦5,000, that's your choice. The ₦5,000 is *sufficient* consideration (it's something of value), even though it's clearly not *adequate* (not equal in worth). Courts won't interfere in bad bargains between capable adults — "freedom of contract" principle. **Why the wrong options tempt you** - **A (Adequate and past)**: "Past consideration" is actually *invalid* — you can't make a contract based on something already done. And we just learned adequacy isn't required. - **C (Always money)**: Consideration can be a promise, service, or goods — not just cash. - **D (Free)**: If it's free, there's no consideration at all, making the contract unenforceable (it becomes a gift). **Quick takeaway** "Courts care that you got *something*, not that you got a *good deal*" — sufficient beats adequate every time.

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Consideration must be sufficient but need not be adequate — court won't usually look at value.

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Void = no legal effect, treated as if it never existed.

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Voidable — valid unless and until rescinded by the party with the right to do so.

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Contracting capacity is limited for minors, persons of unsound mind, and the heavily intoxicated.

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Misrepresentation: untrue statement of fact that induces the other party to enter the contract.

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Partnerships are usually governed by state partnership laws and now by Limited Partnership provisions in CAMA 2020.

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Salomon v Salomon (1897) — landmark case establishing corporate personality.

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Companies and Allied Matters Act 2020 — primary statute for companies, business names and incorporated trustees.

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Sole proprietor and business are legally inseparable — unlimited personal liability for business debts.

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Bilateral: both parties exchange promises. Unilateral: one promise in exchange for an act.

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Agency: principal authorises agent to act on their behalf, often binding the principal to contracts with third parties.

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Pharmaceutical Society v Boots: goods on display are invitations to treat; the customer's offer is at the till.

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Adams v Lindsell — acceptance by post takes effect on posting (unless excluded by contract).

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Donoghue v Stevenson — four elements of negligence must all be proven.

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Privity rule limits enforcement to parties of the contract — subject to specific statutory exceptions.