Facts:

By a letter of intent dated 25th March 1986, the appellant bank had offered to grant a term loan of N500,000.00 (Five hundred thousand naira) to 1st Respondent in 1983, for the purpose of establishing a Liquified Petroleum Gas Bottling Plant in Ikot-Ekpene, Akwa-Ibom State. The loan was denominated in Naira to cover the foreign currency component used for the importation of machinery and accessories from the manufacturers, Kosan Crisplant in Denmark. The “letter of intent” stipulated several conditions, to be fulfilled by the 1st respondent before the actual disbursement of the loan. One stipulation was that the disbursement of the loan would be made from the appellant’s head office after parties had executed a formal agreement, and more importantly the disbursement would be effected by the appellant opening a letter of credit in favour of the overseas suppliers and the manufacturers of the required machinery.

The 1st respondent accepted the terms of the letter of intent on 14th April, 1986 and complied with the terms of the offer. However