Agency Agreements in Nigeria: Legal Guide 2026

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Agency Agreements in Nigeria: What Principals and Agents Must Know (2026)

An agency arrangement can let one person negotiate, sell, purchase, collect payments or represent another person or business. The danger is not limited to a dishonest agent. Disputes also arise when authority is vague, commission is misunderstood, money is not accounted for, or a principal assumes that a private termination notice automatically protects them against third parties.

Updated: October 13, 2026. Original publication date: March 3, 2026. Reading time: Allow approximately 20–30 minutes for this detailed guide.

Quick answer: what should an agency agreement settle?

A sound agency agreement should identify the principal and agent; define the assignment; specify the agent’s actual authority; list actions the agent cannot take; set commission and expense rules; explain records and money handling; manage conflicts of interest; establish confidentiality and data-handling duties; describe liability and dispute procedures; and explain how authority ends and how third parties will be notified.

There is no single universal Nigerian statute that replaces the need to examine the nature of each agency arrangement. Applicable legislation, court decisions, state rules, sector regulation and the type of transaction can all matter. A written agreement helps establish the parties’ intentions, but it does not make an unlawful transaction lawful or automatically protect a principal from every act an agent appears authorised to perform.

Who this guide is for: Nigerian business owners, company directors, sales representatives, procurement agents, property owners, brokers, distributors considering an agency model, consultants, marketing representatives and individuals appointing someone to act on their behalf.

Our approach: This guide separates legal principles supported by Nigerian court decisions and official documents from practical risk-management analysis and clearly labelled hypothetical examples. It is general information, not a substitute for advice on a particular contract or dispute.

Commercial setting: Lagos business district. Photograph by Joshua Doubek, Wikimedia Commons, CC BY-SA 4.0. Image details and licence.

1. What an agency agreement actually does

An agency agreement records the terms on which one person or organisation—the principal—authorises another—the agent—to perform specified acts on the principal’s behalf. Depending on the arrangement, those acts may affect the principal’s dealings with customers, suppliers, buyers, service providers or other third parties.

Consider a Nigerian manufacturer that appoints a representative to solicit orders from retailers in the South-South. The representative may be allowed to introduce customers and transmit purchase orders, but not to grant credit, change the manufacturer’s prices, accept returns or sign a long-term supply contract. The commercial arrangement works only if the parties know which decisions the representative may make and which remain with the manufacturer.

The same issue appears in other settings. A property owner may appoint someone to find a tenant. A company may authorise an employee or external representative to negotiate a supply contract. A person may appoint an attorney to perform a legal act. Those arrangements share the concept of acting on another’s behalf, but they are not interchangeable. Some transactions require specific formalities, licences, approvals or documents.

The principal, agent and third party

• Principal: the person or entity whose interests the agent is authorised to represent.
• Agent: the person or entity who accepts the assignment and acts within the authority granted or otherwise recognised by law.
• Third party: a customer, seller, buyer, supplier or other person dealing with the agent or principal.

The third party matters because an agency arrangement is not merely an internal promise between principal and agent. An agent’s conduct may change the principal’s legal position. If a representative is authorised to conclude contracts, the principal may become bound by contracts made within that authority. In some circumstances, the principal may face an argument that the agent appeared authorised, even if the principal privately intended to impose narrower limits. The outcome depends on the facts and applicable law.

Why the label is not enough

Calling someone an “agent” does not, by itself, answer every legal question. The real arrangement, the authority given, the parties’ conduct and the relevant legal rules matter. In Chief Godwin Ukah and Others v Chief Christopher A. Onyia and Others (Court of Appeal, 2016), the court discussed agency as a fiduciary relationship and explained that the relationship is assessed from the nature of the agreement and surrounding circumstances, not merely the terminology the parties use.

That practical lesson is important: a contract should describe the actual job, the decision-making power and the economic relationship. It should not rely on a title to do work that only clear terms and lawful conduct can accomplish.

2. The Nigerian legal framework: there is no one-size-fits-all answer

Agency law in Nigeria draws on common-law principles applied by Nigerian courts, relevant legislation and the specific rules governing the transaction. The legal analysis may also depend on whether the arrangement concerns land, corporate execution, regulated financial services, insurance, customs, public procurement, professional services or another regulated field.

This means that an agreement suitable for a sales representative may be inadequate for a person empowered to execute a deed, operate in a regulated sector or negotiate a transaction involving land. The legal question is not simply, “Do I have an agency agreement?” It is, “Does this agreement create the authority I intend, comply with the formalities applicable to this transaction and address the risks that actually arise?”

What the Supreme Court said in Vulcan Gases

In Vulcan Gases Ltd v G.F. Industries A.G. (SC 67/1995, [2001] NGSC 1), the Supreme Court discussed recognised ways in which an agency relationship may arise. These include express appointment, ratification of an act, estoppel and certain situations recognised by law. The judgment also discusses why formality matters where an agent’s authority involves executing a deed on behalf of a principal.

The significance for a business owner is not that every appointment must be made in the same form. It is that a principal should not assume that the absence of a long written agreement means no agency relationship can exist. Oral instructions and conduct may be relevant evidence. Conversely, a signed document does not automatically grant every power an agent might later claim.

A written agreement is therefore a risk-control instrument. It helps establish the scope of appointment, the limits of authority, the agreed remuneration and the process for resolving disagreement. It should be drafted for the real transaction rather than copied from a generic form that may not fit the legal requirements.

Corporate authority under CAMA 2020

The Companies and Allied Matters Act 2020 contains rules relevant to corporate acts and the execution of documents. Section 100 addresses a company empowering a person, by deed, to act as its attorney for executing deeds on its behalf within or outside Nigeria. The distinction matters because authority to negotiate or sign an ordinary commercial document is not necessarily identical to authority to execute a deed on behalf of a company.

Before a company grants authority, the drafter should check the company’s governing documents, the decision-making authority of the person approving the appointment, the relevant CAMA provisions and the formalities required for the transaction. Where a document must be executed as a deed, do not assume that an ordinary appointment letter or informal email is sufficient.

Read the official Companies and Allied Matters Act 2020 text published by the Corporate Affairs Commission. Confirm that the version used for a live transaction reflects any applicable amendments and the relevant legal advice.

Competition law and agency arrangements

The Federal Competition and Consumer Protection Act 2018 addresses agreements between undertakings that have the purpose or likely effect of preventing, restricting or distorting competition in a market. Section 59 identifies conduct that may be prohibited, including certain forms of price fixing, market allocation and collusive tendering, subject to the Act’s provisions and exceptions.

This does not mean that agency agreements are inherently unlawful. It means that the commercial terms should be examined for their competitive effect and legal context. For example, a clause governing the agent’s authorised sales price is not automatically equivalent to a prohibited cartel arrangement. The correct analysis depends on the relationship, market circumstances, parties involved and applicable competition rules.

The official Federal Competition and Consumer Protection Act 2018 and the FCCPC resources library are starting points for checking the statute and official guidance. A lawyer should review exclusivity, resale restrictions, market allocation and competitor-sensitive provisions where they may raise competition concerns.

Stamp duty and the classification of documents

Stamp-duty treatment depends on the instrument and applicable law. An agency agreement, power of attorney, land-related instrument and contract document may not necessarily receive identical treatment. The document’s title alone should not be used to guess the applicable rate or whether a particular duty applies.

The official stamp-duty service portal lists categories of instruments and points users towards the relevant payment processes. Because rates, classifications and administrative procedures can change, confirm the current treatment for the actual instrument before signing or relying on an old fee table.

Check the official stamp-duty charges page and stamp-duty services portal. This guide deliberately does not present a single fee as the universal current charge for every agency document.

Practical legal distinction: Do not treat an agency agreement, a power of attorney, a board resolution, a company signing authority and a land conveyance as interchangeable documents. They can serve different functions and may be subject to different requirements.

3. How an agency relationship may be created

The Supreme Court’s discussion in Vulcan Gases is useful because it cautions against treating the written contract as the only possible evidence of agency. The relevant routes may include the following, but the availability and consequences of each route depend on the facts and applicable law.

Express appointment

An express appointment occurs when the principal communicates an intention to authorise the agent. It may be recorded in a formal agreement, appointment letter, email or other communication, subject to any formalities required for the specific act. A clear written instrument is generally safer for ongoing commercial work because it can state the limits, remuneration, reporting duties and duration of authority.

For a small business, the key question is not whether the document looks sophisticated. It is whether a neutral reader could identify exactly what the agent may do. “Handle sales for us” is less precise than “solicit orders for products listed in Schedule A, transmit customer purchase orders to the principal for acceptance, and make no representation that a sale is final until the principal confirms acceptance in writing.”

Implied authority

Implied authority may arise from the express appointment, the role given to the agent or the circumstances in which the principal permits the agent to act. A person appointed to perform a defined task may need some incidental powers to carry it out. The existence and extent of those powers are questions of context, not an invitation to assume that an agent can do anything commercially convenient.

Principals should therefore identify which actions are routine and which require prior approval. If an agent is authorised to collect orders but not to extend credit, that restriction should be documented and reflected in the way customers are dealt with. Internal limits are much more effective when the principal’s team, the agent and relevant third parties receive consistent instructions.

Ratification

Ratification concerns a principal’s adoption of an act previously done on the principal’s behalf without sufficient prior authority, where the legal requirements for ratification are satisfied. In Vulcan Gases, the Supreme Court considered the effect of ratification in the context before it.

Businesses should not treat ratification as a routine cure for careless controls. Whether a particular act can be ratified depends on the circumstances, including the nature of the act and applicable legal rules. A principal who learns of an unauthorised commitment should obtain the relevant documents, preserve communications and seek advice before accepting performance, making payment or communicating an approval that could be relied upon.

Estoppel and apparent authority

Apparent authority is concerned with the position a principal has represented to a third party, and whether the legal requirements for reliance and the resulting consequence are met. It is not simply a power an agent can create by declaring themselves authorised. The principal’s representations, conduct and the third party’s circumstances may matter.

For example, if a company repeatedly allows a representative to negotiate and sign particular orders, gives the representative company-branded documents and allows the representative to communicate acceptance to customers, a later dispute may involve more than the private limit written in an internal instruction. That is a risk illustration, not a prediction of how a court would decide a particular dispute.

The risk-control lesson is straightforward: the authority shown to outsiders should match the authority the principal intends to grant. If the role changes, communicate the change clearly and promptly to people who reasonably need to know.

Agency by necessity or operation of law

Agency principles may also apply in particular situations recognised by law, including limited circumstances described as necessity. These doctrines are not a general licence for a person to act on another’s behalf whenever doing so seems helpful. Their requirements are fact-sensitive. A party should not rely on an exceptional doctrine as a substitute for arranging authority in advance when advance arrangements are possible.

4. Agency agreement versus other business relationships

A common source of dispute is that parties use the words “agent”, “consultant”, “broker”, “distributor” or “partner” without considering the legal and commercial differences. A relationship should be designed around what the parties actually intend to happen.

Relationship	Typical commercial function	Key question
Agent	Acts on behalf of a principal within an agreed authority.	Can the agent bind the principal, and for which acts?
Distributor or reseller	Often buys goods or services and resells them on its own account.	Who contracts with the customer and bears inventory, pricing and collection risk?
Independent contractor	Provides an agreed service or deliverable.	Is the contractor authorised to create legal relations for the client, or merely to deliver a service?
Employee	Works within an employment relationship and the employer’s lawful direction.	What employment obligations and statutory protections apply?
Broker or introducer	Introduces parties or facilitates a transaction, depending on the actual mandate.	Does the person only introduce prospects or also negotiate and conclude terms?
Attorney under a power of attorney	Exercises authority expressed in a formal instrument for specified purposes.	What formalities and legal limits govern the particular act?

These descriptions are practical distinctions, not automatic legal classifications. A relationship’s substance may matter more than the label. If the role is a hybrid, the agreement should describe the different functions separately rather than leave the parties to argue about the title after a dispute begins.

Agent versus distributor: a practical example

Hypothetical illustration: A Lagos-based supplier appoints a representative to find retailers in Benin City. Under one arrangement, the representative introduces retailers, forwards orders and earns a commission when the supplier accepts and fulfils an order. The supplier sells directly to the retailer. Under another arrangement, the representative buys inventory from the supplier and resells it to retailers at a price and on terms permitted by the distribution contract.

The two models allocate risks differently. The agent’s remuneration may depend on a commission formula, the accepted order and the contract’s rules on cancellation or returns. A distributor may have inventory, resale, customer-credit and working-capital exposure. A business that calls a reseller an “agent” without resolving who owns the goods, who contracts with the end customer and who carries the commercial risk invites avoidable confusion.

5. Defining the assignment and the scope of authority

The scope of authority is the agreement’s operational centre. It should describe the job in terms that can be checked against actual conduct. Avoid a broad clause that gives the agent “full authority to do all things necessary” unless the principal genuinely intends to grant a broad mandate and has considered the resulting exposure.

Describe the permitted acts

Depending on the role, permitted acts may include finding prospects, distributing approved marketing material, arranging meetings, submitting quotations for approval, collecting purchase orders, negotiating within a defined range, receiving payments into an authorised account or signing specified documents. Each permission should be deliberate.

Where the agent may negotiate but cannot conclude a deal, the agreement should say so clearly. It should also state how a binding offer or acceptance is communicated. If only a designated director or central company address can approve a transaction, customers should be told where final acceptance comes from.

List prohibited acts

Restrictions are more useful when they identify real risk. A principal might prohibit the agent from borrowing money in the principal’s name, granting unauthorised discounts, promising delivery dates not approved by operations, accepting cash into a personal account, appointing sub-agents, waiving claims, altering standard terms, signing guarantees or making public statements on behalf of the company.

These restrictions should not be treated as magic words. The principal must communicate them, monitor compliance and consider whether the principal’s conduct gives outsiders a different impression. An internal clause is one part of the control system, not the whole system.

Set transaction thresholds

Where an agent needs practical discretion, thresholds can be more useful than requiring approval for every minor step. For instance, an agent may be permitted to negotiate a discount up to an agreed percentage on approved products, while larger discounts, credit periods or changes to warranty terms require written approval. The threshold should be stated in the agreement or an incorporated schedule, with a method for updating it.

Hypothetical illustration: A supplier sets a maximum discretionary discount of 3% for the representative. A customer asks for 8%. The representative may explain that the higher discount requires written approval, submit the request and wait for the supplier’s decision. The representative should not imply that the request is approved simply because the customer is commercially important.

Control use of the principal’s name and brand

Specify whether the agent may use the principal’s logo, email domain, letterhead, quotation forms, business cards and online profiles. State what representations may be made about prices, product quality, warranties, delivery, regulatory status and customer support. Require the agent to use current approved materials and stop using them when authority ends.

Where customers could reasonably mistake the agent for an employee, officer or authorised signatory, the principal should make the role and approval process clear. That does not mean every interaction needs a lengthy legal disclaimer. It means the commercial process should not mislead the customer about who has the power to make a commitment.

6. Commission, fees, expenses and payment timing

Commission disputes are among the most predictable agency risks because parties often agree on a percentage but fail to define the event that earns it. “Five per cent commission” leaves important questions unanswered: five per cent of which amount, earned at what point, payable when, and subject to which deductions or reversals?

Define the commission base

The agreement should state whether commission is calculated on gross invoiced value, amounts actually collected, net sales excluding specified taxes, or another defined base. It should address discounts, refunds, returns, bad debts, credit notes, chargebacks, cancelled orders and transactions that are only partly fulfilled.

Consider a hypothetical sale with an agreed commission rate of 5%. If the contract defines the commission base as ₦2,000,000 of eligible net sales, the basic calculation is:

Commission = eligible commission base × commission rate

₦2,000,000 × 5% = ₦100,000.

This is an illustrative calculation, not a statement about any particular business’s commission practice. The agreement must define what makes the ₦2,000,000 eligible.

If the same transaction is later reduced by a refund, the agreement should specify how that adjustment is handled. A contract that says “5% commission on all sales” but says nothing about refunds may leave the parties arguing over whether the agent must repay an amount already received.

Choose the commission trigger

Possible triggers include the principal accepting an order, delivery of goods, issuance of an invoice, receipt of cleared customer funds or completion of another defined milestone. These triggers produce different results. A commission earned when an order is accepted may become payable before the customer pays. A commission based on collected funds shifts some collection timing risk to the agent. Neither approach is universally correct; the parties should choose deliberately.

If the agent is responsible only for introductions, the parties should consider whether a fee is earned on a qualified introduction, a completed transaction or a defined period of customer activity. If the agent provides continuing account management, the contract may need a recurring commission rule and a clear definition of which accounts qualify.

Set payment dates and records

Specify when commission statements will be prepared, when invoices may be submitted, how quickly the principal must pay undisputed amounts, what records support the calculation and how the agent can challenge an error. If the principal pays commission monthly, identify the cut-off date and the treatment of transactions that cross the period boundary.

A practical reconciliation should allow both parties to trace a commission line to an order, invoice, customer payment, credit note or other underlying record. It should not depend on a spreadsheet that only one party can understand.

Reimburse expenses only under a clear rule

State which expenses are reimbursable, whether prior approval is required, what supporting documents must be provided and when claims must be submitted. Define whether transport, accommodation, meals, telephone expenses, samples, marketing materials and customer entertainment are covered or excluded.

For a field representative travelling between Warri, Asaba and Benin City, a sensible expense clause might require approval for overnight travel, receipts for specified categories and a written explanation for exceptions. This is more useful than saying simply that “reasonable expenses will be reimbursed,” because reasonable can mean different things to different people.

7. Duties of the agent

The agent’s exact duties depend on the mandate and governing law. A well-drafted agreement should translate the relationship’s expectations into observable behaviour. Common duties may include acting within authority, following lawful instructions, providing accurate information, keeping records, accounting for money received, disclosing conflicts and protecting confidential information.

Act within authority

The agent should not promise what the principal has not authorised. If the agent is uncertain whether a requested discount, credit term, settlement, warranty or contract amendment is permitted, the agreement should provide an approval route. That route should be practical enough to use in the real business environment.

The principal should also make the boundaries understandable. A clause that prohibits all changes but gives no contact for urgent approvals may encourage informal exceptions. A named approver, official email address and reasonable response procedure reduce the incentive to improvise.

Follow lawful instructions and act honestly

An agent should follow lawful instructions within the scope of the appointment. The principal should not use an agency agreement to demand illegal conduct, misleading representations or actions that violate applicable regulatory obligations. A clause requiring the agent to obey every instruction “regardless of circumstances” is not a substitute for lawful conduct.

For a business relationship, the agreement can require the agent to disclose material information that affects the assignment, promptly report complaints, avoid knowingly misleading customers and escalate matters outside the agent’s authority. These requirements should be tailored to the role rather than presented as a universal checklist of statutory duties that applies identically to every agency.

Account for money and property

If the agent may receive customer payments, deposits, documents, samples, inventory or other property, the agreement should establish who owns them, where they must be kept, how they are recorded, when they must be transferred and how discrepancies are reported. Do not leave payment handling to an informal custom that changes from one transaction to the next.

Where practical, the principal should avoid having customer funds pass through the agent’s personal account. If a specific arrangement requires the agent to collect funds, obtain advice on the appropriate account structure, records, controls and legal obligations. A contract clause alone cannot remove all risks created by commingling money or keeping inadequate records.

Keep proper records

Records can include prospect lists, quotations, orders, customer approvals, invoices, receipts, expense claims, complaints, delivery confirmations and written instructions. The agreement should state what must be retained, the required format, reporting frequency, access rights and what happens to the records when the appointment ends.

Recordkeeping serves both sides. The principal can audit the work and investigate discrepancies. The agent can demonstrate which customers were introduced, what was approved and why a commission is due. If a dispute reaches a court, contemporaneous documents may be more persuasive than conflicting memories of an oral conversation.

8. Duties of the principal

Principals also have responsibilities. The agreement should not be drafted as though only the agent can create risk. A principal who fails to give accurate information, changes commission rules informally or delays payment can create disputes even where the agent has performed properly.

Provide accurate instructions and materials

The principal should supply current product details, approved prices, relevant terms, availability information, delivery procedures and the correct route for customer approvals. If the principal changes a price list, the old version should be withdrawn and the agent should receive the new one with an effective date.

Inconsistent instructions are particularly dangerous when a business has several managers. If one manager approves a discount and another later denies it, the principal should investigate the internal approval process rather than assume the agent should have guessed which instruction mattered.

Pay agreed remuneration

The principal should calculate and pay commissions and approved expenses according to the agreement. If a statement is disputed, the contract should specify how the undisputed amount will be handled while the parties examine the disputed entries, subject to the actual contractual terms and applicable law.

Changes to remuneration should be documented. A principal should not assume that an informal announcement automatically changes every commission already earned or every existing contractual entitlement. The effect of a change depends on the agreement and the applicable law.

Make approval procedures workable

If the principal requires written approval before a contract becomes binding, the process should identify the authorised approver and the approved communication channel. It should also clarify what happens when the approver is unavailable. A control that is impossible to follow in ordinary business hours may create operational pressure to bypass it.

The principal should train relevant staff and communicate with important customers where necessary. The purpose is to align actual practice with the written limits of authority.

9. Conflicts of interest, dual agency and commissions from others

An agent may have information, relationships or financial incentives that conflict with the principal’s interests. The agreement should require disclosure of material conflicts and state when the agent must obtain written consent, withdraw from a decision or refrain from acting for another party.

Conflicts are not limited to obvious fraud. A representative might receive a referral fee from a supplier while recommending that supplier to the principal. A property intermediary might seek to represent both buyer and seller. A procurement agent might have a family or financial connection to a bidder. Whether a particular arrangement is permitted and what disclosure is required depends on the circumstances, relevant professional rules and applicable law.

Dual agency in property transactions

The Nigerian Court of Appeal considered a property transaction and agency issues in Chief Godwin Ukah and Others v Chief Christopher A. Onyia and Others (2016). The case illustrates that disputes can arise over whether an agency relationship existed, whether a commission was earned and whether an intermediary’s role created a conflict. It should not be read as a universal rule that every dual-agency arrangement is lawful or unlawful in every context.

For a property transaction, the agreement should identify the party or parties represented, the services being performed, the commission arrangement, any potential conflict and the process for obtaining informed consent where legally appropriate. The parties should also check whether specific professional or regulatory rules apply to the service.

Third-party payments and undisclosed benefits

Specify whether the agent may accept a referral fee, rebate, discount, gift or other benefit from a supplier, customer or intermediary. If third-party payments are prohibited, say so and establish a reporting route. If a particular benefit is permitted, require disclosure and approval where appropriate.

Vague wording such as “the agent shall avoid all conflicts” may be insufficient for day-to-day decisions. Better drafting identifies the situations that commonly arise in the business and states what the agent must do when they occur.

10. Confidentiality, customer information and digital records

Agency work can expose the agent to customer contacts, pricing, supplier terms, product plans, internal procedures and commercially sensitive information. A confidentiality clause should define the protected information, permitted use, authorised disclosures, security expectations and what happens when the appointment ends.

The agreement should distinguish confidential information from information that is already public through lawful means, independently developed or required to be disclosed by law. It should also explain how a party should handle a valid legal demand for disclosure, including whether advance notice is permitted and appropriate.

Protect personal data

If the agent receives customer names, phone numbers, addresses, identification records, financial information or other personal data, the parties should examine the Nigeria Data Protection Act 2023 and any applicable regulations or guidance. The appropriate obligations depend on the actual processing activity and the roles the parties perform; a contract should not casually assume that one party’s label determines every legal responsibility.

At minimum, define the purpose for which information may be used, who may access it, how it is transmitted, how long it is retained, how incidents are reported and how information is returned or securely deleted when appropriate. The parties should seek advice on whether a data-processing agreement or other specific documentation is required.

Digital approvals and evidence

Many Nigerian businesses operate through email, messaging apps, online forms and electronic accounting systems. The agreement should identify the communication channels used for formal approvals and notices, and explain how records are retained. A casual message from an unknown number should not automatically be treated as an authorised variation if the parties have established a different approval procedure.

Electronic communications may become important evidence, but their legal effect depends on context and applicable law. Preserve original records, timestamps, attachments and relevant account details. Avoid relying exclusively on a screenshot if the underlying conversation or transaction record can be retained lawfully and securely.

11. Liability, indemnity, insurance and limits of responsibility

A liability clause should allocate foreseeable risks without pretending that every possible loss can be transferred or excluded. The drafting should identify which party is responsible for particular actions, what types of loss are covered, what exclusions apply and what process must be followed when a claim arises.

Identify the risk being allocated

Possible risks include unauthorised commitments, negligent handling of goods, misrepresentation, breach of confidentiality, failure to account for money, third-party claims, damage to property and breach of applicable law. Each should be considered in light of the agent’s actual role and the degree of control the parties have over the risk.

An indemnity is a contractual allocation of specified liabilities. It does not automatically establish that every loss is recoverable, that every exclusion is enforceable or that a party can avoid statutory obligations. The exact wording and circumstances matter.

Do not rely on an unlimited indemnity as the whole solution

A principal might ask the agent to indemnify the principal for all losses “of any kind, however caused.” Such language can create commercial uncertainty and may be disputed. The parties should consider whether the indemnity is limited to defined breaches, misconduct or losses attributable to a party’s actions, and whether notice, defence control, settlement approval and mitigation duties are specified.

The agent should consider whether the requested risk is proportionate to the commission and whether the agent has insurance or resources to meet it. A contractual promise is only as useful as its legal scope and the practical ability to honour it.

Consider insurance requirements

Depending on the assignment, the principal may require appropriate professional indemnity, public liability, motor, fidelity or other insurance. Do not include a generic requirement for every policy type without considering whether the role actually needs it and whether cover is available on reasonable terms.

If insurance is required, specify the type of cover, minimum limits if justified, evidence of renewal, relevant exclusions and whether subcontractors must maintain cover. A certificate should be checked against the actual policy where the risk is material.

12. Exclusivity, territory, customers and sub-agents

Commercial parties sometimes want an agent to represent only one principal, operate in a defined territory or work with an approved list of customers. Exclusivity can encourage investment in a market, but it can also create restrictions that require careful drafting and, in some circumstances, competition-law review.

Define whether the appointment is exclusive or non-exclusive. If exclusive, specify the products, territory, customer group, duration and any performance conditions. Clarify whether the principal can sell directly to customers in the territory and whether the agent earns commission on those direct sales. Without that detail, the parties may disagree about the commercial value of the appointment.

Territory should be workable

A territory may be a state, region, group of named customers or another objectively defined area. If the agent’s work includes online sales, the parties should address whether territory is determined by the customer’s location, delivery address, billing address or another method. The agreement should avoid treating the internet as a territory with obvious boundaries when the parties have not defined them.

Sub-agents and subcontractors

State whether the agent may appoint a sub-agent or delegate any part of the assignment. If permission is required, define the approval process and the information the principal needs before consent. The agreement should also specify responsibility for sub-agent conduct and the records, confidentiality and compliance obligations that must flow down.

Do not assume that the appointment of a sub-agent automatically transfers the original agent’s responsibilities. The legal consequences depend on the authority, contract and circumstances. A principal who permits delegation should understand who will be handling customers, money, data and commercial commitments.

13. Duration, renewal, suspension and termination

Every agency agreement should explain when it starts, how long it lasts and how it can end. If the contract renews automatically, state the renewal period, the notice required to prevent renewal and how notices must be delivered. If the appointment is tied to a project or sales target, define the event that completes or ends the assignment.

Termination for convenience

Where appropriate, the parties may agree that either side can terminate without alleging breach by giving a specified period of notice. The notice period should reflect the nature of the work, the time needed to transfer customer accounts, outstanding orders, stock, records and other operational matters. The legal effect of termination still depends on the agreement and applicable law.

Termination for breach

For material breaches that can be corrected, the agreement may provide a notice-and-cure process. For serious circumstances—such as fraud, unauthorised use of funds, unlawful conduct or a material security incident—the parties may want specific suspension or termination rights. These provisions must be drafted carefully so that they are proportionate, consistent and legally effective.

What must happen after termination?

• Stop the agent from entering new commitments, subject to any agreed transition procedure.
• Identify existing orders, pending negotiations, customer complaints and open claims.
• Reconcile commissions, expenses, refunds and money held on behalf of the principal.
• Return property, documents, inventory, devices, keys and access credentials.
• Stop use of the principal’s brand and confidential materials.
• Transfer records and customer information lawfully and securely.
• Notify affected customers, suppliers or other third parties where appropriate.
• Preserve records needed for accounting, legal compliance and resolving disputes.
• Identify which clauses continue after termination, such as confidentiality or recordkeeping, where legally appropriate.

Ending the contract between principal and agent is not always the same thing as ensuring that third parties know the agent’s authority has ended. The principal should consider who has dealt with the agent and what notification is needed. The appropriate steps depend on the role and the nature of the authority previously communicated.

14. What happens when an agent exceeds authority?

An unauthorised act can create several different disputes. The principal may argue that the agent lacked authority. The third party may say that the principal’s conduct created a reasonable appearance of authority. The agent may argue that the principal’s instructions were ambiguous or that the principal later approved the transaction. The outcome cannot be determined by looking only at the heading of the agency agreement.

The Supreme Court’s discussion in Vulcan Gases shows why appointment and ratification questions can become legally important. In Ataguba and Company v Gura Nigeria Limited (Supreme Court, 2005), the court also discussed the general position that a contract made by an agent within the scope of authority for a disclosed principal is ordinarily the principal’s contract, while recognising that an agent who enters a transaction in the agent’s own name may be sued in relation to that transaction.

Those principles do not mean an agent is never personally liable or that the principal is always bound. They illustrate why the contract, the agent’s authority, the way the transaction was made and the identity in which the agent acted must be examined together.

Practical response to a suspected unauthorised commitment

1. Preserve the evidence. Keep the contract, messages, quotations, order forms, invoices, payment records and relevant instructions.
2. Establish the timeline. Identify what the principal authorised, what the agent communicated, what the third party relied on and what happened afterward.
3. Do not make a careless admission. A rushed message accepting or rejecting the transaction may affect the dispute. Obtain advice where the value or risk is material.
4. Protect the business from further commitments. Clarify the agent’s current authority internally and externally where appropriate.
5. Assess performance and losses. Determine whether goods were delivered, money changed hands, services were performed or deadlines remain open.
6. Obtain transaction-specific legal advice. The appropriate remedy depends on the facts, the agreement and the applicable law.

15. A practical authority map for Nigerian businesses

Daily Reality NG recommends using an authority map as a working control document alongside the signed agreement. This is an original practical framework, not a statutory form or an official government template. Its purpose is to make the contract usable by people who approve orders, handle payments and deal with customers.

Action	Agent may do it?	Control to write into the agreement
Introduce a prospective customer	Often yes, if within the mandate	Define a qualified introduction and record how it is logged.
Send an approved quotation	Only if the quotation and process are authorised	Use current templates and identify when a quotation expires.
Accept a purchase order	Depends on the grant of authority	State whether acceptance is final or subject to principal approval.
Offer a discount	Only within the agreed limits	Set a threshold and a written escalation process.
Grant customer credit	Only if specifically authorised	Define maximum terms, credit approval and required records.
Collect customer funds	Only under a defined collection arrangement	Specify approved account, receipt, reconciliation and transfer timing.
Change standard terms	Only if the agent has that authority	List clauses that cannot be changed without approval.
Appoint a sub-agent	Only if the contract permits it	Require written consent and define responsibility for the sub-agent.
Sign a deed or formal instrument	Only with the required authority and formalities	Check the applicable statute and transaction-specific execution rules.
Settle a claim or waive a debt	Only if expressly authorised	Specify the required approval level and record of settlement.

The authority map should be consistent with the actual agreement. If the contract changes, update the map and the internal systems that enforce it. A spreadsheet that contradicts the signed contract can create another source of confusion rather than solving the problem.

16. A risk matrix: where disputes start and how to reduce them

Risk	Early warning sign	Practical control
Unclear authority	The agent says a deal is final but the principal says approval was still required.	Define permitted acts, reserved decisions and the binding acceptance process.
Commission disagreement	The parties use different figures for the same sale.	Define the base, trigger, deductions, reporting and dispute process.
Unaccounted funds	Payments are received through personal accounts or informal channels.	Use an approved collection method and transaction-level reconciliation.
Conflict of interest	The agent receives a benefit from a supplier or represents competing interests.	Require disclosure, approval where appropriate and a documented decision.
Misleading representations	The agent promises discounts, delivery or warranties not approved by the principal.	Use approved materials, training and clear consequences for unauthorised claims.
Data leakage	Customer files are copied to personal devices or uncontrolled accounts.	Limit access, set retention rules and establish incident reporting.
Termination confusion	Customers continue to deal with a former representative.	Plan notice, access revocation, customer communication and record handover.
Regulatory mismatch	The agreement assumes a licence or formality is unnecessary without checking.	Identify the sector, transaction type and current official requirements before signing.

This matrix is a planning tool, not a guarantee that disputes will be prevented. It works best when the principal assigns an owner to each control, decides how compliance will be checked and reviews the controls when the business model changes.

Traders at Idumota, Lagos. Photograph by Prowessonovo, Wikimedia Commons, CC BY-SA. View source and licence.

17. How to calculate the real commercial value of an agent

A commission percentage alone does not show whether an agency arrangement is financially worthwhile. The principal should consider the revenue generated, the margin on those sales, commission, reimbursed expenses, returns, customer-acquisition costs and the operational time spent managing the agent.

Hypothetical example: A business records ₦4,000,000 in eligible sales through an agent. Its contribution margin before commission and agent-specific expenses is 25%. The agent’s commission is 5% of eligible sales. Approved agent-specific expenses total ₦40,000.

• Eligible sales: ₦4,000,000.
• Contribution before commission and agent-specific expenses: ₦4,000,000 × 25% = ₦1,000,000.
• Commission: ₦4,000,000 × 5% = ₦200,000.
• Agent-specific expenses: ₦40,000.
• Contribution after those two costs: ₦1,000,000 − ₦200,000 − ₦40,000 = ₦760,000.

The calculation assumes that the entire ₦4,000,000 is eligible under the contract and that the 25% margin has been correctly calculated. It excludes other overheads, taxes, bad debts, refunds and indirect costs. It is not a forecast or a claim about any real company.

The lesson is that a commission rate should be considered alongside margin and the agent’s actual contribution. A higher sales figure may not be valuable if discounts, returns or credit losses consume the margin. Equally, a lower commission may not be commercially attractive if the principal must provide extensive support and the agent generates few qualified transactions.

Questions to ask before agreeing to a commission rate

• Does the agent generate new business or receive commission on customers the principal already had?
• Is commission earned on orders, deliveries, invoices, collections or another event?
• How are refunds, cancellations, partial fulfilment and bad debts treated?
• Will the agent receive commission on repeat orders, and for how long?
• Who pays for travel, demonstrations, samples, marketing and customer support?
• What evidence will establish that the agent caused or materially contributed to a sale?
• What happens to commission on transactions that remain incomplete at termination?

18. How principals should choose and supervise agents

Due diligence should be proportionate to the role and the value of the transactions. A person introducing low-value prospects may not need the same checks as someone authorised to sign contracts, handle customer funds or access sensitive personal data. The objective is to verify the matters relevant to the mandate without collecting unnecessary information.

Verify identity and business details

Confirm the identity of the proposed agent and, where the agent is a business, the relevant registration details and the person authorised to sign. Where a company is involved, verify that the person granting or accepting the appointment has the necessary authority. Do not rely solely on a logo, business card or social media profile.

Check references and relevant permissions

Where appropriate, ask for references, relevant professional credentials, licences or evidence of experience. Verify material claims with the issuing body or source where possible. A reference is not a guarantee of future performance, but it can help identify questions to ask before granting authority.

For regulated activities, identify the exact activity the agent will perform and whether a licence, registration, approval or other restriction applies. Avoid assuming that a general business registration authorises every regulated service. If the legal position is uncertain, obtain advice before the agent begins acting.

Use staged authority where appropriate

A principal may grant limited authority initially, review performance and expand the mandate later through a documented variation. This can be useful where the agent will eventually handle larger transactions or sensitive responsibilities. The approach should be transparent: do not leave the agent uncertain about the authority currently in force.

Monitor outcomes, not just activity

Reports should focus on information that helps the principal manage the assignment: qualified prospects, orders, conversions, complaints, expenses, collection status, approval exceptions and unresolved issues. A report that lists meetings but does not connect them to business outcomes may not be enough to supervise a commercial mandate.

19. How agents should protect themselves

Agents should not assume that a principal’s promise of future commission is sufficient. Before starting, the agent should obtain the agreed terms, understand what actions are authorised and retain evidence of instructions, performance, expenses and approvals.

Get the scope in writing

The agreement should identify the products, customers, territory, term and specific services. If the principal expects the agent to perform additional work, agree on whether that work falls within the existing fee or requires a variation. If the principal limits authority, ask how to obtain approval for a transaction that falls outside the limit.

Keep a transaction record

Maintain a contemporaneous record of introductions, quotations, customer meetings, purchase orders, approval messages, deliveries and invoices. This helps show what the agent did and whether a commission condition was met. Use the agreed recordkeeping system and comply with confidentiality and data-protection requirements.

Do not make promises to win a sale

An agent should not promise a discount, delivery date, refund, warranty or legal outcome merely because it might close a deal. If approval is required, obtain it. An agent who makes unauthorised commitments can face a dispute with the principal and potentially with the third party, depending on the facts and law.

Review indemnities and personal exposure

Before signing, understand the liabilities the agent is accepting, the scope of any indemnity, the exclusions, the insurance requirements and the potential financial exposure. If the indemnity is broader than the agent’s control or ability to insure, negotiate a clearer allocation. Seek legal advice where the exposure is material.

20. Drafting a clear agency agreement: clause-by-clause checklist

The following checklist is a drafting aid. It is not a complete contract template and should not be treated as one. A proper agreement needs wording that fits the actual transaction and the applicable law.

1. Parties: full legal names, relevant registration details, addresses and authorised signatories.
2. Appointment: the exact role and whether it is exclusive or non-exclusive.
3. Scope: products, services, customers, territory and activities covered.
4. Authority: permitted acts, reserved decisions, financial limits and approval channels.
5. Restrictions: prohibited commitments, unauthorised discounts, borrowing, guarantees and settlement powers.
6. Commission: rate, base, trigger, deductions, payment dates and audit or reconciliation process.
7. Expenses: eligible categories, approval, supporting documents and reimbursement deadlines.
8. Reporting: frequency, format, transaction records and access rights.
9. Customer and money handling: approved accounts, receipts, reconciliation, refunds and transfer timing.
10. Confidentiality: protected information, permitted use, disclosure exceptions and post-termination handling.
11. Personal data: purpose, access, security, retention, incidents and each party’s responsibilities.
12. Conflicts: disclosure, third-party benefits, dual agency and required approvals.
13. Sub-agents: whether delegation is permitted and who remains responsible.
14. Compliance: applicable laws, required licences, sector rules and records.
15. Liability: responsibility for breach, indemnities, exclusions, insurance and claim procedures.
16. Term and termination: duration, renewal, notice, breach procedures and suspension rights.
17. Exit: customer notification, outstanding orders, property return, access revocation and final accounting.
18. Disputes: escalation, negotiation or mediation where agreed, governing law and the appropriate forum.
19. Notices: permitted delivery methods, addresses, effective time and contact changes.
20. Variations: who may amend the agreement and how amendments become effective.
21. Entire agreement and interpretation: clauses needed to explain the relationship between the main agreement and schedules, subject to legal review.
22. Execution: signatures, authority, witnesses, deed requirements, stamping or other formalities where applicable.

21. A practical pre-signing process

Before signing, the principal and agent should test the agreement against real transactions rather than reading it only as a formal document. Use three or four likely scenarios: a routine sale, a discount request, a late payment and an unauthorised commitment. If the contract does not tell the parties who can decide and what evidence must be kept, revise it before the relationship begins.

Step 1: Map the business process

Write down how a prospect becomes a customer, who quotes the price, who approves the order, who receives payment, who delivers the goods and who handles complaints. The agreement should match that process. If the actual process differs from the paper contract, staff may follow custom rather than the written rule.

Step 2: Identify legal formalities

Determine whether the transaction involves a deed, a power of attorney, land, a regulated activity, a corporate approval or another formality. Use the relevant official law or regulator’s guidance. Do not rely on a general internet template to determine whether a particular legal formality is necessary.

Step 3: Agree the money terms

Calculate the commission on realistic scenarios, including refunds, delayed collections, partial delivery and customer cancellations. Decide which records will support the calculation and who will reconcile them. If the parties cannot explain the commission in one or two worked examples, the clause is not ready.

Step 4: Test the authority limits

Ask what the agent may say to a customer, which commitments require approval and how the customer learns that approval has been granted. Ensure the principal’s internal team follows the same process. Consider how authority will be withdrawn when the role changes or the appointment ends.

Step 5: Review the exit plan before signing

It is easier to negotiate a workable exit while the parties are on good terms. Decide how pending orders, customer files, confidential information, commission disputes and principal-owned property will be handled. Identify who must communicate with customers if the appointment ends suddenly.

22. Common mistakes that weaken agency agreements

Mistake: using a generic contract without changing the details

A template may use foreign law, refer to a regulator that does not govern the transaction, assume a different commercial model or omit Nigerian-specific formalities. A template is a starting point for questions, not proof that the resulting agreement is suitable. Check the actual transaction and the applicable law.

Mistake: giving broad authority but relying on private restrictions

If a principal’s outward conduct suggests that the agent may conclude transactions, a private instruction limiting that authority may not settle every dispute with a third party. Align the agreement, training, communications, documents and customer approval process.

Mistake: leaving commission to “mutual understanding”

People may agree on the percentage and disagree about the trigger, base or deductions. State the formula, include worked examples and decide how to resolve disputed statements.

Mistake: allowing funds to move without reconciliation

Where the agent collects money, define the approved route and the evidence needed to match a payment to a transaction. Informal collection practices can make it difficult to determine whether a discrepancy is a delay, error, refund or misuse.

Mistake: treating termination as a single email

A termination notice may end the contractual appointment according to its terms, but the principal may also need to revoke system access, recover property, reconcile accounts and notify affected third parties. Plan these steps together.

Mistake: assuming every agent is exempt from sector rules

An agency label does not necessarily remove legal requirements that apply to the underlying activity. Identify whether the role involves regulated financial services, insurance, professional practice, land transactions, customs or another regulated field and verify the applicable requirements.

23. How to resolve a dispute over commission or authority

Where a dispute arises, begin with the contract and contemporaneous records. Identify the exact clause in dispute, the relevant transaction, the instructions given and the evidence that the required event occurred. Avoid turning a narrow disagreement over one invoice into a general argument about the entire relationship before the facts are clear.

1. Collect the core documents: signed agreement, schedules, variations, orders, invoices, payment records and notices.
2. Prepare a transaction chronology: record dates, actions, approvals and outstanding obligations.
3. Reconcile the figures: show the commission base, rate, deductions and amount claimed.
4. Identify the precise disagreement: authority, performance, calculation, payment timing, termination or another issue.
5. Use the contract’s escalation process: send a clear written explanation and supporting documents.
6. Preserve evidence: do not delete relevant records or alter the original documents.
7. Obtain legal advice where needed: particularly where a third party claims to be bound, a large sum is involved or urgent relief may be necessary.

Do not assume that mediation, arbitration or court proceedings are always available in the same way. The agreement, governing law, nature of the dispute and any statutory rules may affect the proper route. If the contract includes an arbitration clause, review its wording and the applicable law rather than assuming that the clause automatically resolves every procedural question.

24. Related Daily Reality NG resources

The following articles address connected Nigerian business, legal and consumer issues. Their inclusion is intended to support a reader who needs a related explanation; each link should be checked again in Blogger before publication because inclusion in the site’s supplied URL inventory is not the same as a live-link test.

• Protecting a business from a fraudulent partner in Nigeria — relevant when authority, trust and business-control disputes overlap.
• Technology agreements in Nigeria: software developers and intellectual property — useful for businesses combining agency services with software or digital deliverables.
• Legal requirements for an online business in Nigeria — related to business structure and compliance questions.
• How to register an LLC in Nigeria — relevant when deciding which legal entity will be the principal.
• Registered address requirements for a Nigerian company — a connected corporate administration topic.
• Founder vesting schedules for Nigerian startups — useful for understanding how a startup can document rights and obligations.
• AML compliance for Nigerian SMEs — relevant where an agency arrangement touches regulated transactions or payment flows.
• Professional indemnity insurance in Nigerian fintech — a related risk-management subject.
• Loan sharks versus digital lenders: legal rights in Nigeria — related to commercial dealings and consumer protections.
• BVN data sharing and legal limits in Nigerian fintech — relevant to handling sensitive information.
• Nigerian landlord and tenant law — related where a property representative’s mandate involves letting or tenancy matters.
• How government land acquisition works in Nigeria — useful background for readers dealing with land-related transactions.
• Writing a valid will in Nigeria — a distinct legal topic that may help readers understand why formal instruments must be treated carefully.
• What to do when an online seller stops responding — relevant to sales disputes and records of transactions.
• CBN fintech fines and enforcement actions in Nigeria — connected to regulatory-risk awareness, although the applicable rules depend on the activity.

25. Frequently asked questions

1. Is an agency agreement legally required to be in writing in Nigeria?

Not every agency relationship must necessarily be created by a written agreement. In Vulcan Gases Ltd v G.F. Industries A.G. (2001), the Supreme Court discussed express appointment and other ways agency may arise. However, some transactions and powers require specific formalities. A written agreement is strongly useful for documenting authority, commission, records, liability and termination.

2. Can an agency agreement be made orally?

An oral appointment may be relevant to establishing agency in appropriate circumstances, but proving the exact terms can be difficult. Oral arrangements also may not satisfy formalities required for a particular transaction, such as an authority involving execution of a deed. For material commercial relationships, record the terms in writing and obtain advice on any formal requirements.

3. What is the difference between an agent and a distributor?

An agent generally acts on behalf of a principal within an agreed authority. A distributor often buys products or services and resells them on its own account. The actual arrangement matters more than the label. Clarify who contracts with the end customer, who owns the goods, who bears credit and inventory risk, and how the representative is paid.

4. Can an agent sign a contract on behalf of a Nigerian company?

Only if the agent has the relevant authority and any applicable legal formalities are met. Authority to negotiate is not automatically authority to sign, and authority to sign an ordinary contract is not necessarily authority to execute a deed. Companies should review CAMA 2020, the company’s approvals and the requirements of the particular transaction.

5. Does an agency agreement need a power of attorney?

Not every agency appointment requires a power of attorney. A power of attorney is a particular instrument that may be appropriate where the principal grants specified powers, especially where formal acts are involved. The need and form depend on the transaction and applicable law. Do not use the terms “agency agreement” and “power of attorney” as if they always mean the same thing.

6. Who is liable when an agent signs a contract?

The answer depends on the authority, how the agent acted, whether the principal was disclosed and the terms and circumstances of the transaction. In Ataguba and Company v Gura Nigeria Limited (2005), the Supreme Court discussed the general position concerning an authorised agent acting for a disclosed principal and the circumstances in which an agent who contracts in their own name may be sued. A specific dispute requires legal analysis.

7. Can a principal be bound by an agent who exceeds internal limits?

It depends on the actual authority, the principal’s representations and conduct, the third party’s circumstances and the applicable legal principles. An internal restriction does not automatically resolve every dispute about apparent authority. Principals should align their outward communications and approval process with the limits they intend to impose.

8. How should an agency commission be calculated?

The agreement should specify the commission base and rate. For example, if eligible sales are ₦2,000,000 and the agreed rate is 5%, the basic commission is ₦100,000. The contract should also define whether the base excludes taxes, refunds, discounts, cancellations or uncollected amounts, and when the commission becomes payable.

9. Can an agent represent both buyer and seller in a property transaction?

Potential conflicts and applicable professional or legal rules must be examined. The parties should understand whom the agent represents, how the agent is paid and what information or interests may conflict. Disclose the arrangement and obtain appropriate informed consent where legally permitted and required. Do not assume dual representation is always allowed or always prohibited.

10. Can an agent appoint a sub-agent?

That depends on the authority granted, the agreement and the applicable law. The contract should state whether delegation is allowed, whether prior written consent is required and who is responsible for the sub-agent’s conduct. A principal should also consider the effect on confidential information, customer funds and third-party commitments.

11. Does every agency agreement attract the same stamp duty?

No universal rate should be assumed for every document described as an agency agreement. Stamp-duty treatment depends on the instrument and applicable rules. Check the current official stamp-duty portal and obtain advice where the document’s classification is uncertain, especially if the arrangement concerns land, a power of attorney or another formal instrument.

12. Can a principal terminate an agency agreement immediately?

That depends on the contract, the reason for termination, any notice or cure provisions and the applicable law. Some agreements allow termination on notice; others provide specific rights for material breach or defined events. Review the termination clause and obtain advice before acting where immediate termination could affect customers, property, funds or ongoing contracts.

13. Does termination automatically notify customers that the agent has no authority?

No. Ending the principal-agent relationship internally is not necessarily the same as communicating the change to people who have dealt with the agent. Consider who needs notice, what authority had been represented previously, whether access must be revoked and how pending transactions will be handled.

14. What should an agency agreement say about customer data?

It should define the purpose for which data may be used, permitted access, security measures, retention, incident reporting and what happens when the appointment ends. The parties should assess the Nigeria Data Protection Act 2023 and any applicable requirements based on their actual roles and processing activities. Contract labels alone do not determine every data-protection obligation.

15. Should a Nigerian business have a lawyer review its agency agreement?

Legal review is particularly important where the agent can bind the business, handle money or sensitive data, sign formal instruments, operate in a regulated sector, represent multiple parties or accept substantial liability. A lawyer can assess the actual transaction, the governing law, relevant formalities and the commercial risks that a generic template may miss.

26. Primary sources and further verification

The legal discussion above is based on the following primary or official materials. Readers should open the original documents and check the provisions relevant to their own transaction. The cited court decisions are not substitutes for a full review of the facts or later legal developments.

• Vulcan Gases Ltd v G.F. Industries A.G. [2001] NGSC 1 — Supreme Court of Nigeria judgment discussing the creation of agency and ratification.
• Ataguba and Company v Gura Nigeria Limited [2005] NGSC 9 — Supreme Court judgment discussing the position of an agent and disclosed principal.
• Chief Godwin Ukah and Others v Chief Christopher A. Onyia and Others [2016] NGCA 132 — Court of Appeal decision involving agency in a property transaction and commission issues.
• Companies and Allied Matters Act 2020 — official text published by the Corporate Affairs Commission; consult section 100 and other provisions relevant to corporate authority and document execution.
• Federal Competition and Consumer Protection Act 2018 — official statutory text, including section 59 on restrictive agreements.
• Federal Competition and Consumer Protection Commission resources library — official resource portal.
• Stamp-duty charges portal — check the current classification and charges applicable to the actual instrument.
• Stamp-duty services portal — instrument categories and service information.
• Google Search Central: Creating helpful, reliable, people-first content — publisher guidance relevant to originality, usefulness and reader-first publishing.

This article is general information, not legal advice for a specific matter. The applicable rules can depend on the state, transaction, industry, contract wording and current law. Verify material requirements with the relevant official source and a qualified Nigerian legal practitioner before acting.

27. Editorial and corrections information

Samson Ese | Daily Reality NG

Samson Ese is the founder, publisher and editor-in-chief of Daily Reality NG News, an independent Nigerian digital publication based in Warri, Delta State. Daily Reality NG publishes research-led explainers on business, law, technology, finance and systems affecting Nigerians.

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Conclusion: define authority before a dispute defines it for you

An agency agreement should make a working relationship clearer, not merely give it a formal title. The principal needs to know what the agent can do, how the agent will be paid, what records must exist and how authority will be changed or withdrawn. The agent needs to understand the mandate, the approval process, the commission trigger and the risks accepted by signing.

The Nigerian court decisions discussed in this guide show why agency is a matter of authority, conduct and legal context—not just the presence of a document bearing the right heading. CAMA 2020, competition law, stamp-duty rules and sector-specific requirements may also matter depending on the transaction.

Before signing, test the agreement against a routine transaction, an exception, a payment dispute and a termination scenario. If the parties cannot explain who may decide, what evidence must be kept and how a third party will know that authority has changed, the agreement needs more work.

The practical rule is simple: define the mandate, document the limits, keep reliable records and check the legal formalities that apply to the actual transaction. Those steps cannot eliminate every dispute, but they make the relationship easier to manage and the parties’ positions easier to assess if something goes wrong.

Daily Reality NG News — researched Nigerian business and legal explainers, with source transparency and practical context.