Business Law – Vocabulary Flashcards (Foundation Level)
Foundation Level – Comprehensive Study Notes (Business Law)
Note: This set of notes consolidates key concepts, definitions, purposes, structures, and essential details from the ICAN Business Law Study Text (Foundation Level, 2021). Use it to replace or supplement the original text for exam preparation. Where relevant, LaTeX formatting is used for formulas and precise references.
1 The Nigerian legal system
Purpose of the chapter (1.0): define law; explain its purpose; identify Nigerian laws; outline forms of legislation; distinguish criminal vs civil; explain courts, jurisdiction, and enforcement, plus virtual evidence and Nigeria Cyber Security Act 2015; Nigerian Data Protection Regulation 2019.
Introduction (1.1): Law covers many situations; Nigeria has varied courts and methods for different cases; aims to explain law and its interpretation.
Law and its sources (1.2): sources include Received English Law (Common Law, Equity, General Applications), Nigerian legislation, Customary Law, Judicial Precedent (Case Law), International Law; secondary sources include law reports and texts.
Common law (1.4): development in England; decisions-based; distinguishing from statutes; equity addresses harshness of common law; maxims guide equity (e.g., equity will not suffer a wrong without a remedy).
Doctrines of equity (1.5): equity aims to supplement common law; equitable remedies include injunction, specific performance, rescission, rectification; Mareva (freezing) and Anton Piller orders; equity prevails over common law.
Statutes of general application (SOGA) (1.6): English laws adopted into Nigerian system (e.g., Infant Reliefs Act 1874, Partnership Act 1890, Sale of Goods Act 1893, etc.).
Nigerian legislation (1.7): Constitution; Acts; Decrees; Laws; Bye-laws. Subsections detail Constitution’s supremacy, federalism, separation of powers, rule of law, fundamental rights.
Customary law (1.8): meaning; two types (Ethnic customary law; Islamic customary law); features and validity tests (repugnancy, incompatibility, public policy); proof and methods of evidence; public policy tests for customary law; proof methods include direct oral evidence, documentary evidence, judicial notice.
Judicial precedent (1.9): stare decisis; ratio decidendi vs obiter dictum; types of precedents (original, binding, persuasive); advantages include certainty and consistency; disadvantages include rigidity and slow development; application in Nigerian courts with hierarchy of courts.
Hierarchy of courts (1.10): Supreme Court, Court of Appeal, Federal High Court, High Courts (Fed. Capital Territory and State), Sharia Court of Appeal, Customary Court of Appeal, National Industrial Court; magistrates and other inferior courts; coordinate jurisdiction vs binding authority.
Division of legislative powers (1.13): Exclusive List (federal only), Concurrent List (federal and states; conflicts favor federal Acts), Residual List (state-only).
Distinctions between criminal and civil law (1.14): offences vs rights; punishment vs compensation; standard of proof beyond reasonable doubt vs balance of probabilities; public vs private interests; party roles.
Virtual evidence (1.15): electronic/witness testimony via audio/video; COVID-19-driven developments; Nigerian Evidence Act limitations; evolving practice directions commencing from Supreme Court.
Nigerian Cybercrime Act 2015 (1.16): offences include identity theft, hacking, cyber-stalking, cyber-bullying, cybersquatting, distribution of racist materials, child pornography; penalties specified; interception on court order; critical infrastructure; penalties include imprisonment and fines.
Nigerian Data Protection Regulation, 2019 (1.17): governing principles of data processing: consent, purpose limitation, adequacy, accuracy, retention, security; duty of care for data subjects; accountability; Ongoing regulatory framework via NITDA; sections outline data subject rights and responsibilities of data controllers.
Worked examples (1.18): MCQ and open-ended questions with solutions on constitutional division of powers and precedent; example answers included for exam practice.
2 Company law: types and formation of business organisations
2.0 Purpose (chapter intro): identify forms of business organisation; explain formation of partnerships and companies; classify companies; wind up and administration; CAC functions; promoters; pre-incorp contracts; incorporation documents; veil lifting.
2.1 Introduction: three main forms of business organisation in Nigeria – sole proprietorship, partnership, company; decisions guided by CAMA 2020, Partnership Act, Lagos Partnership Law; floatation, management, and winding up governed by CAMA, Partnership Act, and local laws.
2.2 Types of business organisation: three broad types; differences summarized in 2.4 below; requirements under CAMA 2020 for company formation and operation; partnership rules under Partnership Act; governance under CAC.
2.3 Registration of business name (CAMA 2020): required where business operates under a name different from true surname/forenames; procedures include filing with CAC; effect of registration; publication requirements; tax-specific registration (summary of partnership docs for taxation).
2.4 Distinction between partnership and company: key differences include legal personality (company is a legal person; partnership generally not, except LLP), liability (general partner unlimited vs company limited by shares/guarantee), continuity (company perpetual; partnership dissolves on change in membership, except LLP), property ownership, transfer of ownership, formalities and publicity, agency relationships, transfer restrictions in private companies, capital mechanics (floating vs fixed issues), etc.
2.5 Company definition and elements: company as a body corporate, separate legal personality, perpetual succession, liability limited by shares or guarantee, common seal, capacity to sue/be sued, etc.; LLP and other forms considered later.
2.6 Corporate Affairs Commission (CAC): statutory body to register and regulate companies, business names, incorporated trustees; functions listed in Section 8 of CAMA.
2.7 Administrative Proceedings Committee (Administrative Committee): CAC’s administrative hearing committee; composition; functions include hearings, dispute resolution, penalties with simple majority; attendance requirements.
2.8 Functional classification of companies: public vs private; company types by liability (limited by shares, limited by guarantee, unlimited liability); name suffixes; capital requirements; membership thresholds; transfer restrictions.
2.9 Private company characteristics: private company suffix (Ltd, Ltd/Gte), maximum 50 members (excluding employees), restrictions on transfers, minimum issued capital, and one-person private company allowance; minimum capital; capacity limitations.
2.10 Public company characteristics: minimum issued share capital (N2,000,000); unrestricted membership; public invitation rights; must hold statutory meetings.
2.11 Small company criteria under CAMA: private company with turnover and net assets below thresholds; 51% of equity held by directors if share capital present; alien membership restrictions; etc.
2.12 Promoters: define promoters; fiduciary duties; disclosure of interest; consequences of breach; remedies (rescission, damages, etc.); pre-incorporation contracts and fiduciary duties; pre-incorporation contract ratification under CAMA Sec. 96; effect on parties prior to incorporation.
2.13 Pre-incorporation contracts: contracts entered into before incorporation; ratification provisions; post-incorporation binding effect; liability of the promoter prior to ratification.
2.14 Procedure for formation of a company: two or more persons may form a company; one person can form private company; disqualifications for forming a company (under 18, unsound mind, bankrupt, etc.); engage professionals (legal practitioner, chartered secretary, etc.);
2.15 Documents of incorporation (Sections 36-40, CAMA): required documents include memorandum and articles of association stamped; form of application; directors’ consent; registered office; initial share capital; statements of compliance; other documents per law.
2.15.1 Memorandum of association: outlines company name, registered office, objects, type (private/public), liability, share capital, subscription clause, etc.
2.15.2 Articles of association: internal governance; contract among members and company; default model articles if none provided by minister.
2.16 CAC refusal grounds: non-compliance; illegal objects; incompetent subscribers; non-compliance with other laws; name conflicts with trademarks or business names.
2.16.1 Effects of registered documents: memorandum and articles create a contract under seal between company, members, officers (directors, secretary, auditors).
2.17 Consequences of incorporation: company becomes a body corporate; corporate personality (Salomon v Salomon & Co. Ltd – classic case); limited liability, perpetual succession; property belonging to company; sue/be sued in its own name; capital maintenance; winding up.
2.17.1 Corporate personality and Salomon v. Salomon: landmark case establishing separate legal personality of the company; creditors protected; distinction between company and its members.
2.17.2 Limitation of liability: company liability law; capital maintenance; liability limited by shares or guarantee; unlimited liability exceptions; unincorporated associations and partnership liability analogies.
2.17.3 Property and ownership: company property belongs to the company; change in membership does not affect the company’s ownership; partnership assets are those of the partners.
2.17.4 Suing and being sued: company can sue/be sued in its own name; partnership actions may require representation for certain claims; LLPs can sue/be sued.
2.17.5 Perpetual succession: corporations continue despite changes in membership; importance in long-term business continuity; contrasts with partnership dissolution on membership changes; dividends and capital treatment.
2.17.6 Borrowing capability: corporations can borrow in their own name; use of floating charges; easier to secure large finance.
2.17.7 Transfer of shares: ownership transfer rules; private company restrictions; public transfers subject to law; liability of transferors; effect of transferee's rights.
2.18 Lifting the veil of incorporation (piercing the veil): circumstances include avoiding legal obligations; running business with fewer than minimum members; misdescription of company name on documents; fraudulent trading; determination of residence; holding/subsidiary relationships.
2.19 Worked examples (Foundation Level – Company formation): practice problems on corporate personality, solvency, and transfer of shares.
3 Floatation and management of a company
3.0 Purpose: cover general meeting powers; board powers; secretariat; capital maintenance; dividends; debentures; winding up; administration; and governance.
3.1 Introduction: two organs – general meeting (principal policy-making) and board of directors (management); MD/CEO handles day-to-day operations; officers and agents.
3.2 Exercise of management powers: company acts through general meeting or board; directors act within authority; board/MD may form committees.
3.3 The powers of the board of directors: manage business; act in good faith; not bound to follow member directions unless articles say so; can appoint committees; officers defined; management scope.
3.4 The powers of the general meeting: policy setting; appointing officers; can intervene in manager activities in specific situations (deadlock, disqualification, legal action in name of company, etc.).
3.5 Meetings and notices: types (AGM, EGM, statutory meeting for public companies); notice requirements (21 days); quorum rules; consequences of not holding meetings; virtual meetings permitted under CAMA 2020 for private companies (Section 240(2)); voting methods (show of hands, polls; casting vote for chair under certain conditions).
3.6 Types of meetings: statutory meetings for public companies; AGM; EGM; notice requirements; virtual meetings.
3.7 Annual returns: requirement to file annual returns with CAC; contents include balance sheet, profit and loss, auditors’ reports, directors’ reports; small company certificate; penalties for non-compliance.
3.8 Appointment, status and duties of company directors: minimum directors (two for non-small companies); casual vacancies; independence requirements for public companies; independent directors; director remuneration; tenure; director retirement obligations; board composition; tenure restrictions (MD/Chair separation for listed companies); fiduciary duties; disqualification criteria; multiple directorships; director’s duties and accountability (Foss v Harbottle internal management rule and exceptions).
3.9 Company secretarial duties: requirement to appoint a secretary; qualifications for private vs public companies; secretary’s duties under Section 335; consequences of non-compliance; separation of duties with directors.
3.10 Company capital and securities: minimum issued share capital; subscription requirements; stamp duties; definition of share capital; securities; share classes; capital increases; ownership transfer; pre-emption rights; share certificates; transfer mechanics.
3.11 Maintenance of capital; dividends and capital rules; rules against paying dividends out of capital; rules for distribution in winding up; priority of payments; preferential debts; status of debentures and charges; application to dividends and capital.
3.12 The rule against payment of dividends out of capital (Section 433 CAMA): directors liable for improper payments; remedies of shareholders; precedent cases controlling misuse of capital.
3.13 The rule on acquisition of own shares (share buy-back): conditions under CAMA (section 184); approvals by special resolution; solvency declarations; court orders; permissible buy-back categories (partners; open market; employee schemes); prohibitions on financial assistance (Section 183); anti-discount/allocation restrictions; funding from distributable profits; other limits; notice and court processes; consequences of non-compliance.
3.14 Debentures: borrowing and security; debentures under the common seal; types of debentures (perpetual, convertible, secured vs naked, fixed vs floating, redeemable); priority of fixed charges; debenture trust deeds; ranking of charges; protections for chargees.
3.15 Winding up of a company: forms include winding up by the Federal High Court; voluntary winding up; winding up subject to court supervision; priority of payments in winding up; order of payments to creditors; prioritization of secured vs preferential vs floating vs unfixed debts; distributions to shareholders; rights of creditors.
3.16 Administration of companies: appointment of an administrator by court or floating charge; administration as an engine to rescue going concerns; functions of administrators; protection against winding up; effects on existing processes; responsibilities of the administrator.
3.17 Worked examples: practice questions on AGM/EGM, board duties, and company law procedures.
4 Insolvency law
4.0 Purpose: understand insolvency and its consequences; examine formal procedures (receivership, winding-up, schemes of arrangement, netting); understand fixed vs floating charges and related concepts.
4.1 Introduction: corporate/perpetual life of company; insolvency arises when going concern is threatened; formal processes include receiverships and administration.
4.2 Meaning and types of insolvency: corporate insolvency vs personal insolvency; tests for insolvency: (a) inability to pay debts within 3 weeks after demand; (b) court process on a judgment debt; (c) court determines liabilities exceed assets; (d) liabilities exceed assets.
4.2.3 Main formal procedures: receivership; winding-up; schemes of arrangement; netting; insolvency practitioners.
4.3 Receivership: right of secured creditors to appoint a receiver; court-appointed vs instrument-appointed receivers; powers and duties of receivers; notice requirements; effect on management; fiduciary duties; duties to preserve asset value; distribution of receipts; priority of claims; agency relationships.
4.4 Schemes of arrangement, compromise and netting: definition of arrangement; special resolutions; court sanction; binding effect on creditors and members; effect of scheme on management and rights of shareholders; netting mechanics for financial contracts (section 718).
4.5 Fixed and floating charges: definitions; fixed charge attaches to specific assets; floating charge covers class of assets (present and future) that change with ordinary course; priority between fixed and floating charges; negative pledge clauses (Section 204) and protection of prior chargees; consequences for enforcement; the role of courts in appointment of receivers and managers under charges.
4.6 Worked examples: insolvency MCQs and Open-ended questions on insolvency procedures and protections.
5 Criminal law
5.0 Purpose: explain criminal law, ethics, money laundering, electronic evidence, and the accountant’s role as expert witness in fraud cases.
5.1 Introduction: criminal law in Nigeria; public law; mens rea and actus reus; ethics and codes of professional conduct.
5.2 Criminal law, ethics and ethical codes: definitions of ethics; professional codes (ICAN); purpose is to regulate professional conduct and protect clients.
5.3 Elements common to sections 98 and 116 of the Criminal Code: bribes to public officers; difference between bribes to justice vs non-justice officials; offences and penalties; ICPC enforcement.
5.4 Money laundering: Money Laundering (Prohibition) Act 2011; cash payment limits; identifiability and customer verification; reporting requirements; international transfer reporting; suspicious transaction reporting; penalties.
5.5 Electronic evidence: admissibility under the Evidence Act 2011; computer evidence; e-mails; metadata; authentication; signatures; conditions for admissibility; role of digital signatures; video/audio evidence; admissibility of website postings; GSM data; ATM video evidence; e-signatures; proof of electronic signatures; foundation requirements for admissibility.
5.6 Worked examples: MCQ and Open-ended questions on criminal law concepts, bribery, money laundering, and electronic evidence.
6 Law of contract
6.0 Purpose: cover contract formation, privity, terms, exemptions, vitiating elements, discharge, remedies, e-contracts.
6.1 Introduction: origin of contract law; practical examples; contract formed by agreement and consideration; evolution from common law; the concept of ad idem (meeting of minds).
6.2 Definition and elements of contract: agreement (offer and acceptance); consideration; intention to create legal relations; capacity to contract; subject matter must be legal; formal elements; mutuality of purpose; ad idem.
6.2.1 Offer and acceptance: requirements for a valid offer; definite terms; direct communication; distinguishes from invitation to treat; acceptance must be unequivocal and communicated; post/letter acceptance rules; consideration of the mailbox rule and exceptions; Carlill v Carbolic Smoke Ball (unilateral contract) vs Partridge v Crittenden (advertisement as invitation to treat).
6.3 Privity of contract: doctrine that only parties to a contract can sue or be sued; exceptions include insurance, trust, agency, restrictive covenants, and negotiable instruments.
6.4 Terms of contract: express vs implied terms; conditions vs warranties; innominate terms; fundamental terms; implied terms by usage; impact of misrepresentation and mistake on contract formation.
6.5 Exemption clauses: limitation clauses; enforceability; notice requirements; signature; statutory prohibitions; exceptions; public policy.
6.6 Vitiating elements: mistake (common, mutual, unilateral, non est factum), misrepresentation (fact, law, or opinion misstatement), duress and undue influence; consequences include void or voidable contracts; remedies include rescission, damages.
6.7 Discharge of contract: performance; breach; agreement; frustration; force majeure; consequences when frustrated or terminated.
6.8 Remedies for breach of contract: damages (Hadley v. Baxendale; natural vs contemplated loss), rescission, specific performance, repudiation; restitution; rectification; injunction; quantumeruit and performance-based remedies.
6.9 E-contract: click-wrap, shrink-wrap, browse-wrap; formation with offers and acceptances online; issues of jurisdiction and enforceability; electronic signatures and authentication; challenges in online contracts; role of Scott v Avery clause; online acceptance timelines; notice and consent.
6.10 Chapter review: consolidation of principles; practice in exams with examples.
6.11 Worked examples: MCQs and open-ended questions with suggested solutions.
7 Agency
7.0 Purpose: understand agency, rights and duties of agents and principals; capacity; classifications.
7.1 Introduction: agency is a consensual relationship where the agent acts for the principal; creation by agreement or ratification or necessity; agency may be created by operation of law.
7.2 Effects of agency: agency creates a contract between the principal and a third party; the agent acts on behalf of the principal; liability usually attaches to the principal; agent acts as the agent, not personally liable unless unauthorized acts.
7.3 Agency distinguished from other transactions: Trust (trustees own legal title but are not agents); Guaranty; Bailment; Master/servant relationships.
7.4 Capacity: capacity to act as principal and agent; a party lacking capacity may be represented by an agent if allowed; conditions with infants, etc.
7.5 Classes of agents: general agent; special agents (factors, brokers, auctioneers, del credere agents).
7.6 Creation of agency: express appointment; implied agency by necessity; agency by estoppel; apparent authority; agency by ratification (conditions for ratification).
7.7 Forms of authority: actual/express; implied; apparent (ostensible) authority; agent’s authority scope and principal’s liability; what happens if agent acts outside scope.
7.7.1 Rights of an agent: indemnity, commission, ratification by principal, responsibility of disclosed principal, ability to enforce contracts with third parties, lien over principal’s goods.
7.7.2 Duties of an agent: follow principal’s directions; no delegation without permission; act in good faith; due care; no secret profits; confidentiality; accounting.
7.7.3 Duties of the principal: pay agent fees; indemnify; ratify acts; joint responsibility with third party; disclose principal’s identity to third parties.
7.8 Effects of contracts made by agents: named vs unnamed vs undisclosed principal; agency relationships determine who bears risks and benefits; liability flows to the appropriate party depending on disclosure status.
7.9 Termination of agency: by express act or operation of law (death, insanity, bankruptcy, frustration, illegality, expiration, etc.);
7.10 Chapter review; 7.11 Worked examples (MCQ + Open-ended);
8 Law of torts
8.0 Purpose: understand torts, negligence, vicarious liability, product liability.
8.1 Introduction: tort is a civil wrong; remedies include damages; tort vs crime; harm is required; actionable per se torts; some torts require fault; others are strict liability.
8.2 Classification of torts: five categories: personal safety (assault, battery, false imprisonment, negligence); property (trespass, nuisance); reputation (defamation); economic interests (deceit, passing-off, detinue, conversion); interference with judicial process (malicious prosecution).
8.3 Capacity in torts: capacity to sue or be sued; sovereign immunity; judgments with infants, insane; company liability (corporate personality; vicarious liability); minors liable for own torts; married women civil status; master/servant relationships liability.
8.4 Forms of liability in torts: vicarious liability; strict liability (Rylands v Fletcher); appl. of fault-based vs non-fault; test for master/servant relationship; liability when acts within scope; product liability context later.
8.5 Negligence: duty of care; breach; damages; foreseeability; Donoghue v. Stevenson standard; breach and causation; remoteness; misc; egg-shell skull; novus actus; res ipsa loquitur; defenses and defenses in negligence.
8.6 Product liability: tort of manufacturers; Donoghue v. Stevenson origin; privity issues; liability for defective products; manufacturer’s duty of care to consumers; the role of third-party claims; limitation by privity agreements historically; modern approach.
9 Sale of goods
9.0 Purpose: define goods; identify seller/buyer duties; transfer of property; pass of risk; remedies; etc.
9.1 Introduction: main law is Sale of Goods Act 1893 (SOGA); many states adopt similar laws; contract of sale vs hire purchase vs other forms; goods defined; pass of property; goods must be legal; two parties; consideration.
9.2 Goods defined: goods = all chattels personal other than choses in action and money; also include attached-to-land items intended to be severed; classifications: existing, future, ascertained/specific, unascertained.
9.3 Sale of goods distinguished from other contracts: sale vs hire purchase; sale transfers property; hire purchase defers transfer until installments paid; sale vs pledge; sale vs bailment.
9.4 Elements of sale of goods contract: (a) contract; (b) price fixed or determinable; (c) capacity; (d) terms of sale include express/implied terms; (e) conditions vs warranties; (f) implied terms (title; description; sample; quality; fitness for purpose).
9.5 Transfer of property: property in goods passes upon contract; rules depend on whether goods are unascertained or specific; Rule 1-5 details: unconditional contract; sale with conditions; passage on delivery; sale on approval; description-based sales; etc.
9.6 Property and possession: distinction between ownership and possession; occupancy vs title; transfer independent of possession.
9.7 Reservation of right of disposal: seller may reserve ownership until conditions are satisfied; consequences of conditional sale; specific scenarios include bill of lading or bill of exchange shaping when disposal rights crystallize.
9.8 Consequences of sale: upon completion, rights and liabilities transfer to buyer; risk passes per agreement; delivery timing affects risk; delay if due to fault of either party; risk shares.
9.9 Transfer of title: title passes under rules; exceptions: market overt (winner gets title if buyer is in good faith); sale under voidable title; estoppel; sale by creditor in certain circumstances; sale by buyer in possession; mercantile agents; sale under law.
9.10 Performance of the contract: seller to deliver, buyer to accept and pay; concurrent; delivery definitions; delivery can be physical or constructive (control).
9.11 Rights of a seller: unpaid seller’s rights: lien; right to withhold delivery; stoppage in transit; rights against buyer (recover price and damages).
9.12 Rights of a buyer: remedies for non-delivery; specific performance; action in tort for detinue or conversion; repudiation; damages for breach of warranty; etc.
9.13 Chapter review; 9.14 Worked examples (MCQ + Open-ended).
10 Hire purchase
10.0 Purpose: define hire purchase; elements of hire purchase contract; passing of ownership; relevant proportion; duties and rights of owner and hirer; relation to third parties; termination and remedies.
10.1 Introduction: HP is a hire with option to purchase; it began as a common law concept; Hire Purchase Act (Cap H4) 2004 codifies elements; three reasons for HP: access to credit; third-party financing; avoidance of moneylenders law.
10.2 Nature of hire purchase: owner transfer possession; periodic payments; option to purchase at end; sometimes option is genuine; some HP arrangements may end with immediate ownership on entry of last installment; HP vs sale vs other forms.
10.3 Elements of a hire purchase contract: required by the HP Act; memorandum includes cash price, installments, signatures; Section 3 prohibits certain repossession terms; obligation to provide information; termination on last installment; ability of hirer to terminate early; if option is not genuine, not HP.
10.4 Passing of ownership: ownership passes only when exerc ise option to purchase; HP does not create title from outset.
10.5 Relevant proportion: threshold to seize goods without court order; non-completion rights for motor vehicles (three-fifths of HP price; halves for non-motor goods); termination rights; owner’s risk on premature repossession; liability for loss.
10.6 Duties and rights of parties: owner’s duties (disclose cash price; title; possession; delivery; accept installments; etc.); owner’s rights (information, re-possess, safety repossession for motor vehicles); hirer’s duties (accept goods; care; pay installments; disclose information); hirer’s rights (use goods; quiet possession; know installments; insurance); third party status; rights against third parties.
10.7 Third party in HP contracts: generally no privity; exceptions include post-purchase ownership transfer after paying all installments; court-ordered sale; market overt; mistaken reliance on owner’s authority.
10.8 Rights of owner and hirer against third party: recourse for goods in third party possession; rights for damages; negligence claims against third party.
10.9 Termination of HP: mutual agreement; performance; termination clause; supervening events; repudiation; court orders for conversion/detinue.
10.10 Remedies for breach: owner’s remedies (damages; arrears; retain goods); hirer’s remedies (repudiation; recover deposit if title defect); penalties and costs matters under HP Act.
10.11 Chapter review; 10.12 Worked examples (MCQ + Open-ended).
11 Insurance
11.0 Purpose: explain insurance contracts; insurable interest; subrogation; contribution; assignment of policies.
11.1 Introduction: insurance is a contract of indemnity (aleatory); premium-based; risk-based; formation involves proposal, acceptance, and sometimes counter-offers; policy evidence.
11.2 Insurance vs Assurance: insurance indemnifies against loss; assurance pays on certain events (e.g., death).
11.3 Marine insurance: specific statutes; marine policy must be embodied in a marine policy; utmost good faith; disclosure of material facts; proposal forms; insurable interest rules; signing requirements.
11.4 Insurable interest: requirement that insured has a stake in the insured subject matter; no insurable interest nullifies policy; examples including life insurance and property; corporate entities have separate interests; Macaura v Northern Assurance Co. Ltd (shareholders cannot insure corporate assets personally).
11.5 Subrogation: insurer steps into insured’s rights after paying a claim; cannot recover more than loss; up to the insured’s rights; statutory subrogation under Marine Insurance Act.
11.6 Indemnity: insurer indemnifies to restore to pre-loss position; pure indemnity; exceptions for life/personal accident policies.
11.7 Double insurance and contribution: multiple policies allowed; not to exceed indemnity; prorated contributions among insurers; procedures for contribution when multiple insurers cover same risk.
11.8 Assignment of insurance policy: assignment of chases in action (policy rights) possible; general rules of assignment; life-insurance notice requirements; legal vs equitable assignment; notice to insurer; endorsee’s rights; exceptions for life insurance (Section 64).
11.9 Chapter review; 11.10 Worked examples (MCQ + Open-ended).
12 Banking
12.0 Purpose; 12.1 Introduction: define banks and bankers; BOFIA and Nigerian banking system; central bank.
12.2 Bank and the banker: definition of bank; types of banks and financial institutions in Nigeria (commercial banks, merchant banks, specialized banks, other financial institutions).
12.3 Banking business: banking includes accepting deposits, paying/collecting cheques; provision of finance; other activities as designated by Governor of CBN.
12.4 Bank customer: definition; customer is the person in whose name an account is opened; contract formation: offer and acceptance.
12.4.1 Duties of bank to customer: collect cheques; honor customer’s mandates; confidentiality (with stipulated exceptions); provide notices of closing; highlight suspicious activity; statements; maintain separate accounts; not honor stopped/countermanded payments; reasonable charging; due diligence for new customers (KYC) including references for corporate customers.
12.4.2 Duties of customer to bank: draw cheques carefully; provide requested information; notify bank of suspicious activity; bear banking charges.
12.5 Rights of bank: rights to charge interest and commissions; set-off and lien rights; refuse payment on improper instruments; recall overdrafts; rights to reimbursement for expenses; statutory duties of banks under BOFIA (sections 16–23): reserve fund requirements; restrictions on dividends; disclosure of directors’ interest; employment restrictions; restrictions on banking activities; display of rates; etc.
12.6 The Central Bank of Nigeria (CBN): establishment, objects (monetary stability, currency issuance, external reserves, financial system soundness, banking supervision); powers include currency issuance; regulatory and supervisory functions; open market operations; etc.
12.7 Worked examples (MCQ + Open-ended) on banking law and regulatory framework.
13 Negotiable instruments
13.0 Purpose; 13.1 Introduction: negotiable instruments as transferable instruments; types; form and function; distinctions from other property rights; role as a substitute for money.
13.2 Types of negotiable instruments: bills of exchange; cheques; promissory notes; bearer bonds; treasury bills; dividend warrants.
13.2.1 Attributes of negotiable instruments: title passes by delivery; order vs bearer; no need for notice to pass title; good faith transfer; time of transfer; holder in due course; limitations and signatures; endorsements; restrictions; etc.
13.2.2 Definition of bill of exchange: unconditional order to pay; sections detailing requirements; example bill; elements of a valid bill (unconditional, signed, date, amount, payee, etc.).
13.2.3 Parties to a bill: drawer, drawee, payee; roles and liabilities; etc.
13.2.4 Distinctions: order vs bearer bills; acceptance requirements; cross-check with section references.
13.2.5 Acceptance of a bill: drawee’s obligation to pay; general vs qualified acceptance; forms of acceptance.
13.3 Endorsement of a bill: endorser’s signature transferring liability; requisites of valid endorsement; endorsements on allonge; restrictions on endorsements; blank vs special endorsements; restrictive endorsements.
13.4 Negotiation of a bill: transfer of ownership via endorsement and delivery; restrictions on negotiability (not transferable when prohibited); holder in due course rights.
13.5 Capacities and liabilities of parties to a bill: liability of drawer, acceptor, and endorser; conditions for liability; effect of corporate status, infant status; liability of the endorser; holder; value; time; signatures.
13.6 Signatures: who is bound; forged signatures; signature validity; effect of signing in a trade or firm name.
13.7 Holder of a bill: definition; rights of a holder; holder for value; holder in due course; protection of holder in due course from defects; requirements for holder in due course.
13.8 Discharge of a bill: payment; holder loses rights after discharge; options for discharge (payment, holder’s waiver, cancellation, material alteration, etc.).
13.9 Dishonour of a bill: non-acceptance or non-payment; notice of dishonour; protest and noting (foreign bills vs inland bills).
13.10 Chapter review; 13.11 Worked examples (MCQ + Open-ended).
14 Cheques
14.0 Purpose; 14.1 Introduction: cheque as a specific form of bill of exchange; definitions; essential features: drawn on a banker; payable on demand; signed; amount certain; issued by a current account holder with sufficient funds.
14.2 Parties to a cheque: drawer, drawee (bank), payee.
14.3 Differences between a cheque and other bills of exchange: no need for acceptance; dishonour effects; crossed cheques; payment over the counter vs into a bank; protection against forged endorsements; domestic vs international trade.
14.4 Types of cheque: bearer, order, crossed, open (uncrossed).
14.5 Types of crossing: general vs special; effect on payment; account-payee and non-negotiable markings; examples and implications; the meaning of “Not Negotiable” and “Account Payee Only”.
14.5.1 Not negotiable crossing: effect on holder’s title; remedy for theft; title limitations.
14.5.2 Account payee crossing: directs collecting banker to credit payee’s account; bank negligence if misapplies funds.
14.6 Material alteration: changes to date or amount; liability consequences; effect on crossings and endorsements.
14.7 Forged cheque: forged signatures; bank liability; good faith defense; remedies and recourse.
14.8 Promissory note: defined; differences from bill of exchange; two-party instrument.
14.9 Holder: definition and rights (to sue in own name; to sue previous signatories; holder in due course).
14.10 Countermand of payment: stop orders; validity conditions; written countermand; notification to branch; description accuracy; consequences for payees and drawers; who may countermand.
14.10.1 Who may countermand: joint accounts; company accounts; private accounts; responsibilities of counters; consequences and limitations on countermand enforcement.
14.11 Chapter review; 14.12 Worked examples (MCQ + Open-ended).
15 Employment law
15.0 Purpose: define employment vs contract for service; understand rights, duties, termination, redundancy, remedies.
15.1 Introduction: contract of employment vs contract for service; master/servant vs independent contractor; vicarious liability issues.
15.2 Meaning of employment: employment contracts; distinction between contracts of service and contracts for service; tests used to distinguish (control test, organization test, circumstances of case).
15.3 Formation of contract of employment: capacity to enter; Labour Act restrictions (min age 16 for certain work; protections for women; apprenticeship writing requirements).
15.4 Forms of contract: no formal form required; can be oral, written, or implied; written terms in the contract or letter of employment; implied terms; probationary periods; durations; termination provisions for indefinite vs fixed-term contracts.
15.5 Duties of an employee: obedience to lawful orders; exercise of skill with reasonable diligence; perform duties; personal service; confidentiality; loyalty; no secret profit; etc.; remedies for employer (discipline, indemnity, restraint of trade, dismissal procedures).
15.6 Duties of employer: provide work; pay wages; issue written terms; safe workplace; provide references; provide supervisions; compensation for expenses; paid leave; maternity leave; other statutory benefits; redundancy provisions; supervisor’s duties; protection of employees in case of insolvency; worker’s compensation.
15.7 Termination of contract: modes of termination (death, frustration, statutory winding up, mutual agreement, notice, termination with or without reasons); implied vs express terms; notice periods and compensation; for civil servants, potential reinstatement on unfair dismissal; wrongful dismissal complications; constructive dismissal (Western Excavating v. Sharp); unfair dismissal tests and remedies; consequences of dismissal on civil servants vs private sector.
15.8 Worked examples (MCQ + Open-ended): questions on unfair dismissal, duties of employers and employees, and consequences of the contract type.
16 Administration of estates and trusts
16.0 Purpose: explain administration of estates; distinguish executors and administrators; duties of executors and administrators; trusts creation and administration; rights of beneficiaries; Trustee Investment Act; common law aspects.
16.1 Introduction: death leads to estate administration; sources of law including Wills, customary law, common law on intestacy, and state administration of estates laws; purpose of administration is to avoid disputes and ensure proper distribution and debt settlement.
16.2 Wills: testamentary and revocable documents; executors; testate vs intestate; letters of administration cum testamento annexo.
16.2.1 Intestacy: rules when no Will exists; estates may be unrepresented; Administrator-General may be involved; estate tax.
16.2.2 Letters of administration: court-issued documents authorizing administrators to administer estates; alternatives to Will; role in gathering assets.
16.2.3 Need for letters: why letters are necessary; access to funds; bank accounts; insurance proceeds; shares; co-operative shares; requires court authorization.
16.2.4 Types of letters: without a Will; letters with Will annexed; customary letters of administration.
16.2.5 Administrators: persons appointed by the court to administer estates; similar to executors but for intestate estates.
16.2.6 Executors: appointed in a Will to manage estate; responsibilities differ for testate and intestate estates; personal representatives.
16.2.7 Duties and rights of personal representatives: inventory assets; apply to court; pay debts; estate tax; keep accounts; no personal profit; right of action; distribution to beneficiaries.
16.3 Trusts: equity-based arrangements where trustees hold property for beneficiaries; relying on three certainties: intention; subject matter; objects; classification into private trusts and charitable/public trusts; creation rules for land-based trusts requiring writing (Statute of Frauds cross-reference for land matters); private vs charitable trusts; duties and powers of trustees; investment powers under Trustee Investments Act; safeguards on investment; mutual duties of loyalty and impartiality; distributions to beneficiaries; effect on rights and actions; beneficiary rights (accountability, tracing, injunctions).
16.4 Chapter review; 16.5 Worked examples (MCQ + Open-ended): on wills, letters of administration, and trusts; questions on interrelationships of executors, administrators, and trustees; duties and rights of personal representatives; power to administer estates; distribution rules; appointment of trustees.
17 Alternative Dispute Resolution (ADR)
17.0 Purpose: explain ADR and its law; types; advantages; role in commercial disputes; arbitral and conciliatory proceedings.
17.1 Introduction: ADR is a collection of methods alternatives to traditional court litigation; aims to reduce time, cost, and promote settlements.
17.2 ADR: overview of techniques; negotiation, mediation, conciliation, mini-trial, case evaluation, hybrid mechanisms; neutrals; emphasis on consensual outcomes.
17.2.1 Types of ADR: detailed descriptions of Negotiation, Mediation, Mini-trial, Ombudsman, Facilitation, Fact-finding, Med-Arb, Multi-door court house.
17.3 Arbitration: definition; voluntary vs compulsory arbitration; arbitration clauses (Scott v. Avery); arbitral tribunal composition (three arbitrators; one each by parties; third appointed jointly); procedures; interim measures; awards; setting aside awards; recognition and enforcement of foreign arbitral awards under the New York Convention.
17.4 Chapter review; 17.5 Worked examples: MCQ + Open-ended; discussion of arbitration proceedings and ADR advantages.
17.5.1 Solutions; 17.5.2 Open-ended questions: advantages of ADR; panel decisions; procedures for arbitration appointment and result.
17.5.3 MCQ solutions; 17.5.4 Open-ended solutions: explanation of ADR advantages and case law on appointment of arbitrators; procedural requirements; rights of parties.
17.5.4 Continued: additional ADR guidance on conciliatory processes and multi-door court houses.
18 Application of information technology in business
18.0 Introduction: overview of e-commerce, electronic transactions, and cyber law; issues of jurisdiction; electronic forms of contracts; importance of IT in business.
18.1 Laws governing electronic transactions: challenges in online offers/acceptances; issues of online contract formation; role of Scott v Avery; online acceptance vs timing; need for clarity in acceptance in online environments.
18.2 Laws protecting e-commerce activities in Nigeria: Nigerian Cybercrime Act 2015; data privacy regulations (NITDA Act 2007 and 2019 NITDA Regulation); privacy issues; e-commerce; examples of typical breaches (identity theft, cyber-stalking, etc.).
18.3 Electronic contracts: Click-wrap and Shrink-wrap agreements: description and enforceability; potential issues with consumer bargaining power; the difference between click-wrap and shrink-wrap/browse-wrap.
18.4 Jurisdictional issues in electronic contracts: cross-border issues and jurisdictional challenges; the role of international conventions (Hague, etc.).
18.5 The place of electronic evidence in Nigeria: admissibility after the 2011 Evidence Act; the acceptance of electronic and digital forms of evidence; e-signatures; authentication; video/audio evidence.
18.6 Chapter review: recap of e-commerce laws, cybercrime, data protection, electronic contracts, and electronic evidence.
Appendices and study techniques
Appendix I: Study and examination techniques; guidance on using questions and answers; effective study habits; note-taking; memory aids; mnemonics; outlining; and revision strategies; layout of answers; charting and diagrams; time management during exams.
Appendix II: Bibliography and references by authors and statute names; comprehensive statute list (e.g., CAMA, BOFIA, ISA, Bills of Exchange Act, Taxation Acts, etc.).
The content also includes an extensive index and chapter contents listing chapters 1–18 with subtopics and page references, including a table of contents for the Foundation Level Business Law, by chapter numbers and titles.
Quick reference: Key statutes and terms to remember
Constitution of the Federal Republic of Nigeria (supreme law; Section 1; federal/state powers: Exclusive, Concurrent, Residual lists).
Companies and Allied Matters Act (CAMA, 2020): company formation, incorporation, director duties, capital maintenance, winding up, administration, company secretary, and secretarial duties; limitations and remedies.
Partnership Act (and state Partnership Laws): formation and governance of partnerships; liability of partners; dissolution rules.
Banks and Other Financial Institutions Act (BOFIA): banking regulation; licensing; bank duties and restrictions; penalties.
Nigerian SOGA (Statutes of General Application): English-origin laws adopted; e.g., infant reliefs, sale of goods, etc.
Nigerian Cybercrime Act (2015): cybercrime offences; penalties; data interception; identity theft; cyber-stalking; cyberbullying.
Nigerian Data Protection Regulation (2019): data processing principles; consent; storage; security; accountability.
Trustee Investments Act: permissible investments for trustees; limits on diversification; investment rules and prudence.
Money Laundering (Prohibition) Act (2011): cash transaction limits; reporting requirements; customer identification.
Evidence Act (2011): admissibility of electronic evidence; authenticity; signatures and electronic signatures.
Arbitration and Conciliation Act (2004): arbitral process; appointment of arbitrators; enforcement of awards; conciliation processes.
Tax and financial reporting standards references (e.g., ISA, accounting standards).