Contract Validity

Setramaco International Ltd v Board of Directors/Headteacher Lubiri Secondary School & Anor (High Court Civil Suit No. 478 of 2005) ((High Court Civil Suit No. 478 of 2005)) [2009] UGCOMMC 22 (19 January 2009);

Flynote: 

Headnote and Holding: 

The plaintiff company brought a suit against the defendant school and its deputy headmaster for breach of contract stating that the defendants failed to pay for services rendered by the plaintiff. 

There were two issues before the court: whether there was a valid contract between the parties and whether the plaintiff carried out their services in accordance with local purchase orders 1941 and 1942.

The court held that there was a valid contract between the parties. It was also held that in rendering services, the plaintiff did not supply and install certain items in accordance with local purchase orders 1941 and 1942. 

Regarding the validity of the contract, the court found that the second defendant had apparent authority to sign the local purchase orders meaning the contract was valid and that there was no express provision in the legislation stating that non-compliance vitiates legality of contract. In addition, the court found that the first defendant accepted the goods when they were delivered to it and had to pay accordingly. 

The court’s judgement relied on a report by the Ugandan National Bureau of Standards which found that some of the items installed by the plaintiff were substandard. 

The court awarded the plaintiff Shs 216,000 for delivery of goods and Shs 84,000 for general damages. In addition, the court awarded the plaintiff interest on the above amounts until payment was made in full. 
 

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