AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
The contract governs itself: you and your Nigerian client can choose which law applies and where disputes go, and a clear clause naming one law (for example Ontario law or Nigerian law) and one forum is far better than silence. If you leave it out, a court has to work out which country the contract is most closely connected with, which is slow and costly. Pick the law and forum you could realistically use to recover money, and remember the tax and IP points that apply whatever law you pick.
Why the governing law clause matters more across borders
When you work from Toronto, Calgary or Montreal for a company in Lagos or Abuja, two legal systems could claim the contract. A governing law clause tells a judge or arbitrator which system to use when reading the contract: what counts as a breach, what damages look like, how long you have to sue. A separate jurisdiction or forum clause says where the argument happens. They are different questions, and a good contract answers both.
Without either clause, the first fight is about which court and which law, not about your unpaid invoice. On a contract worth a few thousand dollars that preliminary fight can cost more than the debt. That is the practical reason to settle it on day one, while the relationship is friendly.
Your realistic options
| Choice | What it gives you | What to weigh |
|---|---|---|
| Your province's law, courts in your province | Familiar rules; you can speak to a local lawyer | A Canadian judgment may still need separate steps before it can be enforced against assets in Nigeria |
| Nigerian law, courts in the client's state | Easier to enforce against the client where its money is | You need a Nigerian lawyer and may need to travel or appoint someone |
| Either law, plus arbitration | A private, neutral process; can be online; one award | Arbitration fees can exceed the value of a small claim |
| Either law, plus a stepped clause | Negotiation, then mediation, then court or arbitration | Add time limits to each step so it cannot stall forever |
There is no single right answer. The question to ask is: if this client stopped paying, where are its assets, and where could I afford to bring a claim? For most small freelance contracts the client's money is in a Nigerian bank account, which is why many freelancers accept Nigerian law and courts, or arbitration, in return for strong payment terms. Speak to a lawyer in the relevant jurisdiction before relying on any route to enforce a judgment.
Clauses that protect you whatever law applies
- Payment terms. Currency, due date, deposit or milestones, and who pays bank and transfer charges. Payment risk is easier to manage with money up front than with any choice of court; see deposits and milestones for foreign clients.
- Withholding tax. Nigerian companies paying non-residents for professional, consultancy, technical or management services generally deduct withholding tax, and the 2024 regulations set the non-resident rate for those fees at 10% (PwC, reviewed May 2026). Say whether your fee is gross or net of that deduction and that the client will send the withholding tax receipt.
- Intellectual property. Under Nigeria's Copyright Act 2022 an assignment of copyright, or an exclusive licence, has no effect unless it is in writing (s.30, as summarised by Esher & Makarios). If the client will own your work, put the assignment in the contract and make it take effect on full payment.
- Termination and kill fees. What is paid for work done if the project ends early.
- Notices. Email addresses that count as formal notice, so a demand letter cannot be ignored on a technicality.
- Language and entire agreement. English as the contract language, and a line saying the signed document replaces earlier WhatsApp messages.
Tax does not follow your choice of law
Choosing Ontario law does not change who taxes the income. If you are resident in Canada, your worldwide income goes on your Canadian return, while Nigeria may take withholding tax at source. Canada and Nigeria have a double taxation agreement, signed in Abuja on 4 August 1992 and in force since 16 November 1999, which is the framework for relief when both countries tax the same income; how much relief you get is a question for your return and an adviser, not for the contract. On the Nigerian side, the Nigeria Tax Act 2025 also brings services consumed in Nigeria into VAT whether rendered inside or outside the country (Mondaq summary, May 2026), so ask the client how it handles VAT on your invoice. This is information, not tax advice.
A short clause to adapt
Keep the numbers and names concrete. Vague phrases such as "a mutually agreed forum" create the very argument the clause was meant to avoid.
What to check first
- Where does the client hold its money, and could you enforce there?
- Is the fee stated gross or net of Nigerian withholding tax?
- Does the IP assignment take effect only on payment, in writing?
- Is there a dispute ladder with dates, not just "amicable settlement"?
- Has a lawyer in the chosen jurisdiction read the clause if the contract is large?
Where Pryme fits
A clear contract is easier to enforce when the payment trail is clean. A Pryme Business Account can be opened from Canada and holds NGN, USD, GBP and EUR with local account details, so a Nigerian client can pay in the currency the contract names. You can raise invoices that match the contract terms with Pryme invoicing and issue verifiable receipts through our partner VerifyDoc.ai (receipts). For the money side of unpaid work, read what to do about an unpaid invoice from a Nigerian client.
Questions people ask
Can I choose Canadian law if my client is in Nigeria?
Yes, parties to a commercial contract can generally choose the governing law. The harder question is enforcement: a Canadian judgment may need further steps before it can be used against a client's assets in Nigeria, so ask a lawyer there before relying on it.
What happens if my contract has no governing law clause?
A court has to decide which country's law the contract is most closely connected with, and which court should hear it. That preliminary argument costs time and money before anyone looks at your invoice.
Should I use arbitration for small freelance contracts?
Arbitration is neutral and can run online, but its fees can be high relative to a small claim. Many freelancers prefer negotiation then mediation, backed by deposits and milestones so less money is ever at risk.
Does choosing Ontario law stop Nigerian withholding tax?
No. Withholding tax depends on Nigerian tax rules, not the contract's governing law. State whether your fee is gross or net of the deduction and ask for the withholding tax receipt.
Sources
- Mondaq (Esher & Makarios): Assignment of intellectual property rights under the Copyright Act 2022 (24 Sep 2024) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- Publications.gc.ca: Canada–Nigeria agreement for the avoidance of double taxation (signed 4 Aug 1992, in force 16 Nov 1999, CTS 1999/48) · accessed Oct 2026
- Mondaq: Examination of the VAT provisions under the Nigeria Tax Act 2025 (28 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.