Contract Formation

Kasifa Namusisi and Ors v Francis M.K. Ntabaazi (Civil Appeal No. 4 of 2005) [2006] UGSC 1 (17 January 2006);


Search Summary: 

This is a second appeal. It arises from the
decision of the Court of Appeal which reversed

the judgment of the High Court given in favour
of the present appellants. The background is
that the respondent owned 3 plots of land he
obtained a loan using the plots which he
subsequently sold and allegedly serviced the
loans. At trial, the issue was whether the
transaction was a sale agreement or a mortgage
and it was held that the transaction was a sale
agreement and the issue at appeal was whether
there was consideration which the appellant
court answered in the affirmative. On this
further appeal, the grounds for determination
are that the justices of Appeal misdirected
themselves on the legal nature of
consideration; and failed to subject the
evidence adduced at the trial to a fresh and
exhaustive scrutiny, thereby coming to a wrong
conclusion that the suit agreements were not
supported by any consideration and wrongly
accepted the respondent's version.

Headnote and Holding: 

The court
held that the conclusion of the learned trial
judge that the respondent's evidence whose
purpose was to contradict the terms of the
agreements was inadmissible was agreeable.
That the Court erroneously equated
"consideration" with performance. The two
doctrines mean different things in the law of
contract. That there was consideration
disclosed on the face of the transactions. Even
if no full payment had been made as claimed
by the respondent the remedy for the

respondent is not hard to find. The two
agreements provided for the course of action.


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