TABLE OF CONTENTS

Title page
Table of cases
Table of statutes
Table of abbreviation
Table of contents
ABSTRACT

CHAPTER ONE:
GENERAL INTRODUCTION
1.1Introduction (Background to the study)
1.2 Statement of research problem and research question
1.3 Aim and objectives
1.4 Scope and limitation of the study
1.5 Research methodology
1.6 Synopsis of the chapters

CHAPTER TWO:
SCOPE AND CONCEPTUAL CLARIFICATIONS
2.1Introduction
2.2 Meaning of commercial law
2.3 Meaning of Agency
2.3.1 Types of agents
2.4. Authority
2.5 Scope of agency relationship
2.6. Capacity to act as a principal
2.6.1 Capacity to be appointed as an agent
2.7 Duties, rights, and obligations of agents
2.7.1 Agent’s duties to his principal
2.7.2 Duties of the principal to the agent
2.8 Breaches of obligations and remedies available to agent and principal
2.9 Distinguishing agency from other relationships

CHAPTER THREE:
ISSUE OF UNDISCLOSED PRINCIPAL THAT MAY ARISE UNDER AGENCY
RELATIONSHIP
3.1 Introduction
3. 2 Issue of undisclosed principal
3.3 Other possible issues that may arise
3.3.1 Conflict of interests
CHAPTER FOUR:
SOLUTION TO THE PROBLEMS OF UNDISCLOSED PRINCIPAL AND OTHER
PROBLEMS
4.1 Introduction
4.2 Legal strategies to solve the agency problem
4.2.1 Regulatory strategy
4.2.3 Governance strategy
4.3 Other solutions
4.3.1 Contract design
4.3.2 Performance evaluation and compensation
4.3.2 Transparency
4.3.3 Restriction

CHAPTER FIVE:
SUMMARY AND CONCLUSION
5.1 Summary of the research
5.2 Conclusions
5.3 Recommendations
5.4 References
 ABSTRACT

In agency relationship, the relationship between the agent and the principal is referred to as the
agency. The relationship is a legal relationship that is governed by agency laws. These laws set
boundaries for both parties as to what is accepted and required. The primary purpose of the
relationship is that the agent can act on behalf of the principal without them actually being
present. For instance, if the principal needs business decisions taken care of that require him to
be physically present at work they can send their agent to make those decisions. Agency concept
explicitly appears in the statutory schemes of many business organizations. The two basic
elements for agency relationship are consent and authority, if there is mutual consent to an
arrangement involving an agent acting to further the principal’s interest and subject to the
principal’s control, then it is appropriate to make the principal liable for the agent’s actions.
However in the course of this research, the findings of the writer is that the doctrine of privities
of contract disentitles a person from acquiring any right under a contract to which he is not a
party to. Thus a contract can’t confer enforceable rights or impose obligations arising under it
on any person except parties to it. In view of this, this project will identify the issue of
undisclosed principal as an exception to the privities of contract. The objective of this research is
to identify the basic rules of agency relationship under Nigerian commercial law and most
importantly solve the problems that revolve round undisclosed principal. In this regard
therefore, the research finally concluded by recommending that the law should provide an
avenue for redress to genuinely affected persons by the strict common law principles of privities
of contract, such that even a perfect stranger can be awarded damages if infringement is proved.
The sources of information relied upon here are relevant text materials, statutes , journals,
judicial authorities , and e-materials.
 PROJECT TOPIC: AN APPRAISAL OF THE CONCEPT OF AGENCY
RELATIONSHIP AND PROBLEMS OF UNDISCLOSED PRINCIPAL IN
AGENCY UNDER NIGERIAN COMMERCIAL LAW

BY

BELLO AMINAT IBIYEMI

170412018

SUPERVISOR: MISS PRAISE OGABI

CHAPTER ONE:
GENERAL INTRODUCTION

1.1 INTRODUCTION

Generally the law of privities of contract disentitles a person from acquiring any right or to be
subjected to any obligations or duties under a contract that he is not a party to. However the law
permits a person to use the services of another person to conclude or negotiate a contract on his
behalf. Such person may lack the skill or experience of a particular market or trade or may be too
busy with other matters to conclude the contract himself, so the law meets these needs of
business through the scope of agency.
The law which governs agency relationship in Nigeria is the received English law particularly
common law and equity. The law deals primarily with the relationship which arises where one
party expressly or impliedly employs another party to perfume some tasks or duty on his behalf.
The functions of the law of agency are to allow agents to bring contractual parties into a
contractual situation in such a way as to make both parties enforceable and liable to the contract.
The concept of agency is a crucial part of commercial law in Nigeria because organizations and
companies mostly can conduct their businesses through an agent. The importance of agency
relationship cannot be over emphasized as it has existed among men before time .With the
advent of globalization the integration and interaction among people , companies and
government has greatly improved due to the advancement of technology , for instance a peasant
Nigerian farmer who resides in sokoto can transact business with a potential buyer in lagos.They
may never have met each other physically but with the aid of technology it’s possible to transact,
in a situation where the farmer lack basic technology skills it may be difficult and he may
however need someone with basic technology skills to act on his behalf as his agent. People
generally need agents skilled in specific areas to help them to help them to do businesses or
transactions in areas where they can’t act for themselves. A woman for example may need the
services of a broker to enter into an insurance contract or sales of shares in a company. On this
note agency is of great relevance in day to day business transactions.
In various parts of the world today there are person (agents) acting on behalf of another person
under different circumstances. A person may be a representative of a dealer in the products
manufactured by that other person which automatically makes him an ‘agent’. The most popular
question is, when can an agency relationship be said to be in existence? This question alongside
some other problems has made the term agency not to be subject to a particular definition.
The term agency has been defined by various scholars, statutes and books. According to black’s
law dictionary agency is defined as “a relation created either by express/implied contract or by
law, whereby one party (called the principal or constituent) delegate the transaction of some
lawful business or the authority to do some certain acts for him with more or less discretionary
power to another person (called the agent) who undertakes to manage the affair and render him
an account thereof.”.
In the oxford companion law, the term agency is defined as ‘the relationship between one
person(agent) having the authority to act ,and have been consented to act on behalf of another
person(principal) in contractual relations with a third party. It can simply be used more widely as
a person acting in the interest of another.
In the Nigerian case of Chief Godwin ukah & ors v Chief Christopher onyia & ors(2016) the
court held that an agency is a fiduciary relationship created when a principal gives authority to
and agent to act on his behalf which is accepted by the agent.
The expansion and development of commercial law activities requires a broad understanding of
the concept and scope of agency relationship under Nigerian commercial law and its
applicability to the modern Nigerian commercial law.

The question whether an agency exists or not in a given circumstance raises both factual and
legal problems. There is no doubt that the word ‘agent’ has been often misused. This project will
consider the concept and scope of agency relationship and also the issue of undisclosed principal
and other issues that may arise in an agency relationship, it will then put forward possible
solutions.

1.2 STATEMENT OF RESEARCH PROBLEM

The problem to be addressed throughout this study is the problem of undisclosed principal in an
agency relationship under the Nigerian commercial law. Common law doctrine on undisclosed
principal confers rights and imposes liability on the undisclosed principal, notwithstanding that
he is not made a party to the relevant contract. This doctrine is an exception to the privity of
contract that only a party to the contract can sue and be sued thereon.
The undisclosed principal concept often arises in the context of real estate transactions. The
purchase of the land required to build the Walt Disney world resort in orange county, Florida was
accomplished with agents working for walt Disney productions as their undisclosed principal.
Over eighteen (18) months in 1964 and 1965, agents secretly working for Disney attorneys
purchased 27,400 acres of Florida ranchland, swamp, scrub woods, and road frontage for an
average price of only R5.20 per acre ($5 million) in total. It is unlikely that Disney would have
been able to acquire the land except at very high prices of hundreds of million dollars per acre
had the sellers known the buyer’s identity, considering the prices at which nearby land was sold
after Disney completed its acquisition and publicly announced it plans.
When the rights of an undisclosed principal are in question, courts recognize that he
(undisclosed principal) was in a better position to protect himself. The rights of an undisclosed
principal are however limited by any claim the defendant third person has against the agent. But
this concern for the third party’s plight is not as evident when he is the one trying to claim rights,
because the nature of the transaction was hidden from him at the onset and he had no opportunity
to demand the obligation of both principal and agent.
Another problem occurs due to the ignorance of the importance of agency relationship among
businessmen in Nigeria as an important aspect of the emerging modern Nigerian commercial life.
RESEARCH QUESTIONS
This study research answers the questions:
 How can agency relationship be said to have come into existence?
 How can agency relationships in Nigeria be improved?
 What are the effects and consequences of undisclosed principals to agency relationship
in Nigeria?
 How can the problems that may arise in an agency be solved?

1.3 AIM AND OBJECTIVES OF THE RESEARCH

The aim of this research study is to examine the concept and scope of agency relationship
under the Nigerian commercial law so that the basis could be clearly understood.
It is also the aim of the study to appraise the issue of undisclosed principal in an agency
relationship and possible solutions to put an end to it. This study aims to create awareness of
the importance of agency relationship as an important tool in the Nigerian commercial law
field in its diversified economic structure.
1.4 SCOPE OF THE RESEARCH

The study covers the concept and scope of agency relationship as an aspect of the emerging
modern Nigerian commercial law and problems of undisclosed principal in an agency
agreement.
Thus, this study will entail the definition of agency, how the relationship can arise,
classification of agency relationship, the duties and rights of the principal and agent arising
out of the relationship, remedies available to both parties. Most importantly, this project
research will reveal the problem of undisclosed principal and how it affects the agency
relationship, it will also provide possible solutions to mitigate this problem from occurring in
subsequent agency relationship under Nigerian commercial law

1.5 RESEARCH METHODOLOGY

What is research methodology?

Research methodology is the specific procedures or techniques used to identify,select,process
and analyze information about a topic. In a research paper, the methodology section allows
the reader to critically evaluate a study’s overall validity and reliability. The methodology
section answers two main questions; How was the data collected or generated? How was it
analyzed?
There are different types of research methodology used in conducting research, according to
the research methodology professors it includes ;
a) Qualitative research methodology
b) Quantitative research methodology
c) Doctrinal approach
d) Non doctrinal approach
These are the two main types of research methodology,
A) QUALITATIVE RESEARCH METHODOLOGY
This method is subjective and descriptive irrespective of facts; the main aim of this kind
of method is to evaluate knowledge, behaviors, and opinions of people about the research
topic. The method works using grounded research, case study, disclosure analysis, etc.
this method is based on the quality of the phenomenon.
In qualitative methods, intensity or frequency of data is immaterial. it focuses on non-
rigorous examination of data, size does not matter. It understands feelings, viewpoints
and impressions.
The importance of this method is that its highly focused, flexible and provides quick
result.

B) QUANTITATIVE RESEARCH METHODOLOGY

 This method tests the importance of the hypothesis of research, it is a systematic
approach and it’s in numbers. It includes; laboratory experiments, mathematical
calculations, survey, etc.
In this method the analysis and measurements of data and relationship between
variables are essential. As the term suggests, the quantitative method is the collection
of data which can be found in numeric form.

C) DOCTRINAL RESEARCH METHODOLOGY

Doctrinal or library based research is the most common methodology employed by
anyone undertaking legal research, it is concerned with the analysis of legal doctrine
and how it was developed and applied, it is a purely theoretical research that consists
of either simple research aimed at finding a specific statement of the law or it is legal
analysis with more complex logic.
Thus , the aim of this method is to make specific enquiries in order to identify
specific pieces of information

D) NON – DOCTRINAL RESEARCH METHODOLOGY

This method is also knows as social legal research, it employs methods taken from
other branch of knowledge to generate data that answers research questions.
The non- doctrinal approach allows researcher to conduct researches that analyses the
law from the perspectives of other branches of knowledge.
There is no hierarchy between the types of legal research and they are all of equal
importance for the development and understanding of the law. The combination of
different methods of legal research can work together to achieve a better
understanding of the law.

The method of research adopted in this study is the doctrinal method which is based
on consultation of textbooks, articles and journals which are related to the subject
matter of research. Reference was also made to Nigerian statutes and judicial
decisions. The internet was also consulted for further knowledge of the research
problem.

1.6 CHAPTER ANALYSIS

The research study is divided into five main chapters. chapter one deals with the general
introduction of the topic which is ‘ appraisal of the concept of agency relationship and
problems of undisclosed principal in agency under Nigerian commercial law’ .
Here an attempt is made to introduce the general concept and scope of agency relationship,
the statement of research problem, aims and objectives of the study, the scope of the study
and the research method applied in the course of research
 Chapter two contains the conceptual clarifications in agency relationship, and how agency
relationship comes into existence, it focuses on the scope of agency relationship, capacity to
act as a principal and capacity to be appointed as an agent.
Chapter three dwells with the issue of undisclosed principal in an agency relationship and
other possible situations that may arise. It is the re-statement of the main research topic.
Chapter four provides possible solutions to the issues that may arise under agency
relationship.
Chapter five which is the final chapter is titled ‘conclusion’. The chapter contains the
summary of findings, recommendations, contribution to knowledge, suggested areas for
further studies and conclusions.