How Should Courts Interpret the Terms of a Written Contract?

CASE TITLE: CAT Construction Group Ltd v. UACN Property Development Co. Plc & Anor (2026) LPELR-83254(CA)

JUDGMENT DATE: 26TH FEBRUARY, 2026

PRACTICE AREA: CIVIL PROCEDURE

LEAD JUDGMENT: BIOBELE ABRAHAM GEORGEWILL, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on Civil Procedure.

FACTS:

This is an appeal against the judgment of the High Court of Lagos State, Ikeja Judicial Division, delivered on 23/3/2018.

The dispute began when the Appellant (as claimant) commenced an action on 12 March 2009 by Originating Summons against the. One Respondents. The Respondents filed their response; on 11 June 2013, the trial court ordered that the Originating Summons be converted to a Writ of Summons and directed the parties to file pleadings. The Appellant subsequently filed a Statement of Claim, while the Respondents filed a Statement of Defence and Counter-Claim. However, the Appellant later withdrew its main claim, leaving only the Respondents’ counter-claim to proceed to trial.

The Respondents’ case was that they awarded the Appellant a contract for the refurbishment of Festac Novotel Hotel through their agent, COSTEC Consultants, by a letter of award dated 11 August 2006. They paid the Appellant ₦59,978,293.37 as an advance payment for the bulk purchase of materials, secured by an Advance Payment Guarantee (APG) issued by Diamond Bank Plc. According to the Respondents, the Appellant only procured materials worth ₦16,437,231.00 and failed to supply the remaining materials, particularly gypsum suspended ceiling boards and cornices, despite repeated requests. They therefore alleged breach of contract and claimed that the outstanding balance of ₦43,541,062.33 remained with the Appellant without further work being done.

The Appellant, however, argued that the APG was intended only to guard against price fluctuation and that materials were to be supplied progressively as the project advanced, not all at once. The Appellant also blamed the delay and fluctuation on the Respondents, citing failure to provide material specifications, project suspension during a review, lack of communication after the review, and absence of storage facilities at the site.

After hearing the matter and considering the parties’ final written addresses, the trial court delivered its judgment on 23 March 2018, granting some of the Respondents’ counterclaims, which led the Appellant to file the present appeal.

ISSUES FOR DETERMINATION:

The appeal was determined on the following issues:

1. Whether the lower Court was right when it held that by Exhibit B8, all materials were to be purchased in bulk and the Respondents had provided the Appellant with the specification for the gypsum plaster boards with cornices and that the delay in storage and supply of the material had nothing to do with storage, thus the Appellant was liable for breach of contract?  And if not, was the lower Court right in the absence of any evidence to award damages and costs in favor of the Respondents?

2. Whether the Lower Court was right when it held that from the documentary evidence/letters, particularly Exhibits D4 and D, the delay in the project had nothing to do with the supply of the gypsum ceiling boards and cornices?

DECISION/HELD:

On the whole, the appeal was dismissed.

RATIOS:

• CONTRACT- TERMS OF CONTRACT: Whether parties are bound by the terms of their agreement/contract; duty of Court to respect the sanctity of such agreement/contract
• CONTRACT- TERMS OF CONTRACT: How Courts should interpret terms of a written contract
• EQUITY- PRINCIPLES OF EQUITY: Whether a party can benefit from his own wrong
• EVIDENCE- CROSS-EXAMINATION: Effect of evidence elicited during cross-examination
• EVIDENCE- ORAL/DOCUMENTARY EVIDENCE: Whether oral evidence can be used to vary the content of a written agreement/document

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