In the Nigerian Landscape and globally, the formal execution of contracts is often seen as the last act required for the consummation of a transaction. However, statutory elements that govern conditions precedents, and subsequent needs should be factored in. A crucial yet frequently overlooked statutory requirement for the enforceability of certain contracts is the Stamping Requirement. The question of whether a contract is enforceable or valid if it has not been stamped by the requisite government is a point of legal contention.
Typically, failure to stamp a contract or document has been observed by some stakeholders as a minor default that can be rectified. Yet, the legal implications can be extensive, touching on the admissibility of the contract in court or arbitral proceedings when disputes arise.
On June 26th, 2025, the Nigerian Tax Act [NTA] 2025 was signed into law by President Bola Ahmed Tinubu, it took effect on January 1st, 2026. Section 127 of the NTA 2025 states that “any unstamped dutiable instrument shall not be admissible in evidence in any court, judicial or arbitration proceedings, and in satisfying any evidentiary requirements unless otherwise stated by this Act”. The provision has sparked discussion among legal stakeholders.
This article seeks to examine the legality and enforceability of unstamped contracts in Nigeria, and to state the relevant statutory provisions and their practical implications. In addition, it seeks to clarify whether non-compliance with stamping requirements merely affects admissibility in evidence or goes further to undermine the validity of the contract and to what extent such defects may be remedied.
Generally, stamping refers to the payment of stamp duties to the Nigeria Revenue Service or the respective State Revenue Services on certain instruments or documents to validate them for specific legal purposes. Stamp Duties can be denoted by any of the following means: tax stamps, a dye, electronic or digital tagging, electronic receipt, issuance of a certificate, or any other means as may be determined by the relevant tax authority.[i]
The primary legislation that governs stamping of instruments in Nigeria is the NTA 2025, which repealed the erstwhile Stamp Duties Act Cap s8 LFN 2004. Chapter 5 of the NTA 2025 prescribes instruments that require stamping, the applicable duties, the consequences of non-compliance, and other ancillary provisions.
Instruments that are subject to stamp duties include: any instrument executed in Nigeria or outside Nigeria and relates to any property situated or to any matter or thing done in Nigeria.[ii] These include instruments related to bills of exchange, promissory notes, Sale or purchase of options, conveyances on sale, conveyances in consideration of debts, transfer of mineral assets, leases, share capital, loan capitals, marketing security, amongst others.[iii] This is subject to the exemptions as enumerated in Section 185 of NTA 2025.[iv]
Section 110 of the Nigeria Tax Administration Act [NTAA] 2025 states that any person who fails to stamp such instruments in accordance with the NTA 2025 is liable to pay a penalty of 10% of the unpaid duty plus interest at the prevailing Central Bank of Nigeria (CBN) Monetary Policy Rate.
The validity of a contract depends exclusively on the fulfillment of its essential elements; offer, acceptance, consideration, capacity, intention to create legal relations, and consensus ad idem (meeting of the minds). The presence of these elements is both necessary and sufficient to create a binding legal obligation that endows validity to the contract.
Nonetheless, the enforceability or admissibility of unstamped contracts/instruments has been addressed in NTA 2025 and the erstwhile Stamp Duties Act. Section 127(1) NTA 2025: “Any unstamped dutiable instrument shall not be admissible in evidence in any court, judicial, or arbitration proceedings, and cannot be used to satisfy evidentiary requirements unless otherwise provided by this Act.” However, Section 127(2) allows the admission of unstamped documents as evidence in criminal proceedings. Thereby creating practical difficulties in litigation, as parties may be barred from relying on certain categories of agreements unless they regularize the stamping.
Operators of going concerns are advised that contracts and instruments that are dutiable should be paid within 30 days[i] of the contract execution by the individual required to make such payment by the NTA 2025.[ii] As a rule of thumb, the individual required to pay stamp duties in a contract is typically the party ‘taking benefit’ of the contract [for e.g. Mortgagee in mortgage transactions, Purchaser for Agreements of Sale, the Company for Capital Duty on Nominal Shares, etc].[iii]
Where there are lapses in paying stamp studies within the stipulated timeframe, it is advised that such payments should be regularised when there are disputes to enable them to be admissible in court as evidence. Proactive measures should be employed to ensure the payment of stamping duties within their timelines, and strict adherence to the law is advised. Accordingly, businesses and practitioners must treat stamping not as a mere fiscal formality but as a critical compliance requirement. This would prevent payment of hefty fines and penalties as prescribed by the NTAA 2025.
The enforceability of unstamped contracts in Nigeria sits at the intersection of substantive contract law and procedural evidentiary rules. While the essential elements of contract formation remain unaffected by stamping, the NTA 2025 has maintained the position of previous laws and illuminated that unstamped dutiable instruments cannot be admitted in evidence in civil or arbitral proceedings. The distinction underscores that stamping does not determine the validity of a contract but directly impacts its enforceability in practice and judicial proceedings.
Ultimately, stakeholders who internalize stamping as an indispensable step in contract execution will safeguard their transactions against avoidable procedural pitfalls, thereby reinforcing both the legality and enforceability of their agreements in Nigeria’s evolving legal landscape.
[i] See Section 125(1) NTA 2025.
[ii] See Section 124 NTA 2025.
[iii] The list of dutiable instruments and their respective rates are as stated in the Nineth Schedule of the NTA 2025.
[iv] Section 185 NTA 2025. The exemptions are as followings: 1. Transfer of shares in Government or legislative stocks or funds of Nigeria; 2. Any instrument for sale, transfer, or other disposition (whether absolute, by way of mortgage, or otherwise) of any ship or vessel, or any part, interest, share, or property in such ship or vessel; 3. Any instrument on which duty would be payable by the Nigerian Government or any of its ministries, departments, or agencies.; 4. Any instrument in which duty would be payable by a consular officer arising out of his official functions, provided the foreign government he represents grants similar exemption to Nigerian consular officers.; and 5. Any instrument executed by or on behalf of international organizations that Nigeria is a member of, where such exemption is consistent with international agreements.
[v] See Section 126 of the NTA 2025.
[vi] The Nineth Schedule of the NTA 2025 states the persons liable for paying stamping duties on different transactions.
[vii] See Section 126 NTA 2025.
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