LEGAL PRINCIPLE: CONTRACT LAW – Illegality – Illegal Contracts – Severance of Illegal Part
PRINCIPLE STATEMENT
Even if the collateral agreement could, in any sense of which I have my grave doubt amount to a valid variation agreement, surely, such variation which is brought about by an act expressly prohibited by provisions of the law must itself be illegal and unenforceable.
RATIO DECIDENDI (SOURCE)
Per Achike, JSC, in Pan Bisbilder Nigeria Ltd. v. First Bank of Nigeria Ltd. (2000) NLC-1141991(SC) at p. 7; Paras D–E.
"Even if the collateral agreement could, in any sense of which I have my grave doubt amount to a valid variation agreement, surely, such variation which is brought about by an act expressly prohibited by provisions of the law must itself be illegal and unenforceable."
EXPLANATION / SCOPE
An agreement that varies a contract by means expressly prohibited by statute is itself illegal and unenforceable. Severance of the illegal part is not permitted where the illegality goes to the substance of the variation. Courts cannot enforce a variation achieved through prohibited conduct. The illegality infects the entire variation agreement, not just the prohibited aspect. This prevents parties from circumventing statutory prohibitions by repackaging illegal conduct as a variation. The prohibition on severance applies where the illegal purpose is central to the agreement. Public policy requires courts to refuse enforcement entirely.