Despite the nature and primary use of an agreement, it has developed (albeit, in our view, wrongly) as a „One Size Fits All“ agreement for almost every transaction imaginable. From an experienced point of view, the agreement has probably become the most frequent „agreement“ between lawyers and the „agreement“ generally sought by the parties on the legalization of their position. Although there are legal distinctions between a final agreement (whatever it may be) and a declaration of intent, there can be no legal or practical difference if they are written in a similar language. What matters is whether the parties intend to be legally bound by the terms of the agreement and, if formulated in this way, a legally enforceable contract would have been created, whether or not it is called the Memorandum of Understanding. „a written statement detailing the provisional understanding of parties wishing to enter into a contract or other agreement; a non-binding letter before a contract.“ However, given the ambiguity that underestimates the binding and enforceable nature of an agreement, it becomes almost difficult to rationalize the widespread use of an agreement by lawyers that would better define the final agreed position of the parties. In the case of BPS Construction – Engineering Co. Ltd v. Federal Capital Development Authority (Supra), the complainant and the respondent had reached an agreement to provide infrastructure at specific sites. The agreement was conditional on the signing of a formal agreement between the parties, which was envisaged within 14 days of the implementation of the agreement. However, prior to the implementation of a formal agreement by the parties, the complainant had to face costs associated with the implementation of the project, based on the respondent`s commitments, assurances and statements that a formal agreement would be executed in accordance with the agreement. In other words, a document conditional on the subsequent implementation of an agreement is only a preliminary step in the negotiations, which may or may not lead to a formal contract. In UBA Ltd V Tejumola – Sons Ltd5, Obaseki, JSC stated: „If a contract is subject to a contingency, that contract becomes enforceable only when the event has occurred or the eventuality has occurred.“ If the text of the agreement is such that the conditions envisaged by the parties are ultimately the basis for a formal contract between them, it cannot be considered binding on the parties. This cannot be a matter on its own, especially when the actual provisions of the agreement are clear with a particular reference to language and security and the parties intend to make this agreement mandatory.
Finally, an agreement between two parties, including all the elements of the contract, is applicable by the parties, regardless of the name it is called. In light of the above, an agreement, as indicated by its name, is a document that reflects the understanding of the parties; which do not necessarily have to be the final position of the contracting parties.