This assignment provides summaries of two key cases concerning the legal principles of partial performance of entire contracts: the English case of Sumpter v Hedges and the Nigerian case of Adecentro (Nig) Ltd v Council of Obafemi Awolowo University. Both cases address the issue of whether a party who fails to complete their contractual obligations can claim payment for the work they have done. The general rule at common law is that performance of an entire contract must be precise and exact before the contract price can be claimed (McKendrick, 2022). These cases explore the limited exceptions to this strict rule.
Sumpter v Hedges [1898] 1 QB 673
This English Court of Appeal decision is a leading authority on the consequences of abandoning performance of an entire contract.
The claimant, a builder, entered into a contract to construct two houses and stables on the defendant's land for a lump sum price of £565. The claimant completed work valued at approximately £333 but then ran out of money and informed the defendant he could not finish the job. He therefore abandoned the contract. The defendant subsequently completed the buildings himself, using building materials that the claimant had left on the site. The claimant brought an action to recover payment for the work he had completed.
The court had to decide whether the claimant was entitled to payment for the work he had partially performed. The court held that the claimant could not recover the contract price for his partial performance. The contract was an "entire contract," meaning that the obligation to pay the lump sum was conditional upon the completion of all the work. As the claimant had abandoned the contract, he had not fulfilled this condition and was therefore not entitled to be paid under the contract.
The court also considered whether the claimant could recover on a quantum meruit basis, which would be a reasonable sum for the work done. For such a claim to succeed, the defendant must have had a genuine choice as to whether to accept or reject the benefit of the work performed. Here, the defendant had no such choice. The half-built houses were on his land, and he could not reasonably be expected to leave them in an unfinished state. His completion of the work did not amount to a voluntary acceptance of the claimant's partial performance from which a new promise to pay could be inferred. However, the court did find that the claimant was entitled to compensation for the value of the building materials left at the site which the defendant had chosen to use. This was because the defendant had a genuine choice whether to use those materials or to purchase his own.
Adecentro (Nig) Ltd v Council of Obafemi Awolowo University (2005) 7 NWLR (Pt. 925) 590
This decision of the Supreme Court of Nigeria demonstrates the application of the same common law principles in a different jurisdiction.
The appellant, Adecentro (Nig) Ltd, was a construction company contracted to build a multipurpose hall complex for the respondent university for a lump sum. The contract was terminated by the university before completion, with both parties disputing the reasons for the termination and the extent of the work completed. Adecentro brought an action seeking payment for the work it had carried out before the termination.
The central issue before the Supreme Court was whether the appellant was entitled to payment on a quantum meruit basis for the work done. The court affirmed the established common law principles governing entire contracts, citing English authorities including Sumpter v Hedges. It held that where a contractor agrees to perform work for a lump sum under an entire contract, they can only sue for payment upon full completion of that work. If the contractor abandons the contract or is prevented from completing it due to their own fault, they cannot claim payment for the part performed. A claim on a quantum meruit basis is only available where the circumstances allow an inference that a new contract has been formed, which typically requires the employer to have voluntarily accepted the benefit of the incomplete work. As in Sumpter, such acceptance cannot be inferred where the employer has no practical choice but to take the benefit of the work done on their land. The Supreme Court found that a claim on quantum meruit could not succeed on the facts presented.
In conclusion, both Sumpter v Hedges and Adecentro (Nig) Ltd v Council of Obafemi Awolowo University illustrate the strict position of the common law regarding entire contracts. They establish that a party who abandons performance cannot claim payment for their incomplete work unless the other party has voluntarily accepted the benefit, thereby creating a new obligation to pay a reasonable sum. The Adecentro case confirms the adoption and continuing relevance of these English common law principles within the Nigerian legal system.
References
Adecentro (Nig) Ltd v Council of Obafemi Awolowo University (2005) 7 NWLR (Pt. 925) 590
McKendrick, E. (2022) Contract Law. 15th edn. Palgrave Macmillan.
Sumpter v Hedges [1898] 1 QB 673
