The importance of an MOU agreement in every transaction cannot be overstated, especially when it comes to protecting agency commissions.
The recent decision of the Supreme Court of Nigeria in the case of Philip Kayode Olusegun Ojo v. SDV Nigeria Limited and another delivers a hard but necessary lesson to agents, facilitators, and intermediaries involved in business transactions.
At the heart of the judgment lies a clear and uncompromising message. Introduction alone does not create entitlement, and effort without legal structure does not create obligation.
Counsel for the first respondent highlighted a critical legal principle known as consensus ad idem, which simply means there must be a clear meeting of minds between the parties. In practical terms, both sides must understand and agree that an agency relationship exists and that commission will be paid. Without this shared understanding, the law will not impose one.
It was further emphasized that silence does not amount to acceptance. This is where many agents make costly mistakes. A person may listen to you, inspect a property you introduced, or even move forward with negotiations, yet none of these actions automatically means they have agreed to pay you a commission in the eyes of the law.
Even more crucial is the point that a commission agreement is not optional, it is fundamental. Without a clearly defined agreement on commission, there is nothing for the court to enforce. This gap is what weakens and ultimately destroys most claims brought by agents.
In its final judgment, the Supreme Court reinforced these principles with precision. The court held that an agent must prove that their role was the main and effective cause of the transaction. It is not enough to be a contributing factor or to make an initial introduction. The agent must be the decisive link that led to the completion of the deal.
The court went further to clarify that where a person merely provides information without any prior agreement, the recipient is under no legal obligation to pay for it. In essence, if you act without being formally engaged, the law treats your effort as voluntary.
This creates a dangerous reality for agents who rely on goodwill, verbal assurances, or assumptions. The law does not protect assumptions, it protects agreements.
This is exactly why a Memorandum of Understanding, commonly known as an MOU, is far more than a formality. It serves as a shield. An MOU establishes the existence of the agency relationship, defines the scope of work, outlines the commission structure, and most importantly records the consent of all parties involved.
Without such a document, an agent is left exposed. You may introduce parties, facilitate discussions, and even help close a deal, yet lose everything simply because there is no written proof that your role was recognized or that your compensation was agreed upon.
Another important lesson from the judgment is the issue of timing. The first respondent successfully argued that negotiations had already begun before the alleged introduction. This alone weakened the claim that the agent was the effective cause of the transaction. If an MOU had been signed at the outset, it would have clearly established the timeline and protected the agent’s position.
Agents must understand that the business environment is not governed by sentiments but by evidence. Courts do not reward effort, they enforce agreements.
For this reason, every agent, facilitator, or intermediary must adopt a disciplined approach. No inspection without documentation, no introduction without agreement, and no negotiation without clearly defined commission terms.
An MOU or any formal written agreement forms the foundation of this protection. It transforms a casual interaction into a legally recognized relationship. It removes ambiguity, prevents denial, and provides a solid basis for enforcement.
The lesson from this Supreme Court decision is both legal and practical. If you fail to secure your position at the beginning, you may find yourself with no position to defend at the end.
In the world of business transactions, documentation is not a sign of distrust. It is a mark of discipline.
Edited and Published by Bola Babarinde
