Contract of Sale in Nigerian Property: What It Is & What It Must Contain

A contract of sale is the legally binding agreement that kicks off a Nigerian property transaction. It sits between the negotiation stage and the final transfer of title — and it is the document that commits both buyer and seller to complete the deal. Understanding what a contract of sale is, what it must contain, and what to watch for before you sign it can save you from significant legal and financial problems.

What is a contract of sale?

A contract of sale (also referred to as a sale agreement, contract for sale of land, or sale of property agreement) is the written agreement between buyer and seller at the start of a property transaction. It is signed:

• After the parties have agreed on the price and terms
• Before the final transfer of title (the Deed of Assignment) is executed
• Typically accompanied by payment of a deposit by the buyer

Signing a contract of sale creates a legally binding obligation — both buyer and seller are committed. The contract does not itself transfer ownership: it records the promise to complete a future transaction on specific terms. The actual title transfer happens later, via the Deed of Assignment.

Contract of sale vs Deed of Assignment — the critical distinction

The contract of sale is the commitment; the Deed of Assignment is the transfer. Both are necessary in a properly documented Nigerian property transaction.

What a contract of sale must contain

A well-drafted contract of sale should include all of the following:

1. Full names and addresses of both parties — seller and buyer, including corporate registration details if either party is a company
2. Precise description of the property — full address, LGA, survey plan reference, plot number, file number or title reference, and any other identifiers
3. Purchase price — stated clearly in figures and words, including the currency
4. Deposit paid — the amount paid by the buyer at contract, and confirmation that it forms part of the purchase price
5. Payment terms for the balance — when the balance must be paid and how
6. Completion date — the date by which the transaction must be completed (the Deed of Assignment executed and title delivered)
7. Title documents to be delivered — listing the title documents the seller must hand over (original C of O, survey plan, etc.)
8. Seller's warranties — representations that the seller has good title, is entitled to sell, that the property is free from encumbrances, and that there are no court orders or caveats affecting the property
9. Vacant possession — whether the property will be delivered vacant, and by when
10. Consequences of default — what happens if the buyer or seller fails to complete (typically deposit forfeiture for a defaulting buyer; deposit return plus damages for a defaulting seller)
11. Governing law — the applicable Nigerian state law that governs the contract

Red flags to watch for before signing

Have your solicitor review the contract before you sign. Specific red flags to flag and challenge:

• Vague property description:A contract that refers to "the property at [street name]" without a survey plan reference, file number, or title reference is not adequately documenting what you are buying. Demand full title details in the contract.
• No seller warranties on title:If the contract contains no warranties by the seller about the state of the title, you are accepting the property "as is" with no recourse if title problems emerge. Push for standard title warranties.
• Short completion window with no extension right: If the contract gives an unrealistically short completion date (e.g., 7 days) with automatic forfeiture of deposit on the buyer for any delay, this is a seller-friendly term that may not be realistic in a market where bank transfers, solicitor review, and Lands Bureau processes take time.
• Asymmetric default penalties: A contract where the buyer forfeits the deposit on default but the seller has no equivalent penalty is one-sided. Ensure the seller faces consequences for defaulting too.
• Waiver of due diligence rights: Any clause purporting to prevent you from conducting a land search or title investigation should be rejected.
• Signature by an agent without authority: If the seller is signing through an agent, estate manager, or other representative, they must have a notarised Power of Attorney specifically authorising them to sell the property. Without this, the contract may not bind the actual owner.

Who drafts the contract of sale — and who pays?

In Nigerian practice, the contract of sale is typically drafted by the seller's solicitorand sent to the buyer's solicitor for review. The buyer's solicitor then negotiates any amendments. This is important because a seller's solicitor will naturally draft terms that protect the seller's interest — your solicitor's job is to ensure the contract is balanced.

The cost of drafting and reviewing the contract is typically included in the overall legal fees for the transaction. See our guide on estate agent fees and legal costs in Nigeria for typical transaction cost breakdowns.

What happens between contract and completion?

After the contract of sale is signed, the period before completion is used for:

• Your solicitor conducting a full title investigation (reviewing the title documents, conducting the Lands Bureau search)
• The seller making arrangements to discharge any registered mortgages or encumbrances
• The seller arranging vacant possession if required
• Your solicitor preparing the draft Deed of Assignment for the seller's solicitor's approval
• Arranging the balance payment funds

Completion happens when: the Deed of Assignment is executed by both parties, the full purchase price is paid, and the original title documents are handed over. Post-completion, your solicitor will then handle stamping, Governor's Consent (if required), and registration at the Lands Bureau to perfect your title. See our property registration guide for the post-completion process.

Related guides: Deed of Assignment Nigeria, Governor's Consent Nigeria, How to do a land search in Nigeria, Stamp duty on property Nigeria, Due diligence when buying property.