Business Law Framework: Contracts, Agency, Employment and Regulatory Compliance
What the exam tests
This domain tests the legal backdrop to secretarial work: forming enforceable contracts, recognising when a company is bound through an agent, distinguishing employees from contractors, and identifying the regulators a company must satisfy.
Core rules
- A valid contract needs offer, acceptance, consideration, intention to create legal relations, capacity and legality. A display of goods or an invitation to tender is an invitation to treat, not an offer. Consideration need not be adequate but must be sufficient.
- Remedies for breach include damages, specific performance and injunction; exclusion clauses are construed strictly and cannot defeat mandatory statutory rights.
- Agency arises by express appointment, implication, ratification, estoppel or necessity. A principal is bound by acts within the agent's actual or apparent authority; apparent authority protects third parties dealing with a person the principal has held out as authorised.
- Company execution: CAMA 2020 allows documents to be executed by signature of a director and the secretary, or by two directors, without a common seal.
- Employment: the Labour Act and the contract govern terms, notice, termination and redundancy. The employee/independent contractor distinction drives tax, pension and vicarious liability outcomes.
- Regulatory registers to check: CAC filings, FIRS taxes (companies income tax, VAT, withholding tax), state revenue, PENCOM, NSITF, ITF and data protection.
Worked example
A secretary signs a supply contract without board approval, but the supplier had dealt with him on several similar contracts and the board knew. The company is bound because the supplier relied on apparent authority; the secretary may still face internal disciplinary consequences for exceeding actual authority.
Traps
Confusing an invitation to treat with an offer; assuming a job title determines employee status; thinking a secret instruction to the agent defeats a third party's claim; believing a company seal is still mandatory.