LEGAL PRINCIPLE: COMMERCIAL LAW – Estate Agents – Board Resolution – Limited to Specific Transaction
PRINCIPLE STATEMENT
Exhibit A, can upon any view be regarded as a mandate for a separate transaction... It is patent from a careful reading of Exhibit A that it was limited to the sale of the property for N3.5 million. It is mischievous to suggest that it was a mandate for subsequent transactions with other persons. A careful reading of Exhibit A clearly shows that the 1st appellant was there concerned with the sale of the property for the sum of N3.5 million to the person introduced by the firm of Sumbo Onitiri & Co.
RATIO DECIDENDI (SOURCE)
Per Ejiwunmi, JSC, in Incar Nigeria Plc & Anor v. Bolex Enterprises (Nig.) (2001) NLC-501996(SC) at p. 32; Paras D–E.
"Exhibit A, can upon any view be regarded as a mandate for a separate transaction... It is patent from a careful reading of Exhibit A that it was limited to the sale of the property for N3.5 million. It is mischievous to suggest that it was a mandate for subsequent transactions with other persons. A careful reading of Exhibit A clearly shows that the 1st appellant was there concerned with the sale of the property for the sum of N3.5 million to the person introduced by the firm of Sumbo Onitiri & Co."
EXPLANATION / SCOPE
A board resolution authorising sale to a specific purchaser at a specific price is limited to that transaction. It does not authorise subsequent transactions with other persons. The resolution must be read strictly. It is mischievous to suggest it applies to other purchasers or different terms. The agent’s authority is confined to the specific mandate. The principal is not bound by acts outside the mandate. The principle protects companies from unauthorised diversions of authority. Third parties dealing with agents must ascertain the scope of authority. The resolution speaks for itself—its plain language governs. Vague or ambiguous resolutions are construed against the agent.