Commercial Law Index

The plaintiff applied to the court to enter judgment on admission for the plaintiff because the defendant materially admitted all the facts; and that the court should only be addressed on the issue of general damages and costs.

The court concluded that since the defendant in this case agreed to and admitted all the material facts in the plaintiff’s claim, there remained no other triable issues for the court to consider.

A ‘triable issue’ was defined as an issue that only arises when a material proposition of law or fact is affirmed by the one party and denied by the other; however the parties are bound by their pleadings and cannot be allowed to depart from them.

The court held that an admission has to be clear and unambiguous and must state precisely what is being admitted. Once an admission of facts is made, court may upon application make such order or file such judgment.

It is against this backdrop that the judgment on admission was entered.

Each of the parties accused the other of breach of contract. The plaintiff alleged breach in terms of non-payment for services conducted. The defendant counter-claimed breach in terms of failure to comply with the set completion time and providing substandard quality work.

The defendant also contended that should it be found liable, it should be indemnified by a third party as it has been negligent in doing its work.This court held that the defendant is not entitled to indemnity or any contribution from the third party.

The court found that there was no breach of contract by the plaintiff in so far as completion time is concerned. The defendant waived the right to complain about completion time and was estopped from raising the issue. The defendant was found to not be entitled to monies claimed in the counterclaim, as there was no basis for it and this court had already held that the defendant waived its rights.

The plaintiff was found to be entitled to the monies reflected on two certificates. The plaintiff was not awarded the contractual interest claimed because the court held that the the defendant was justified in not paying contractual interest for an erroneously issued certificate.

Following its non-payment for construction services rendered, the plaintiff sued the defendant for breach of contract. A counter-claim was lodged alleging that the plaintiff breached the parties’ agreement through a significant delay in performance and sub-standard discharge of its obligations. Insofar as the third party had issued unqualified certificates of completion for the plaintiff’s/counter-defendant’s alleged malperformance, the defendant/counter-claimant contended that it was negligent and therefore liable for a degree of indemnification.

The defendant/counter-claimant was found to have impliedly waived its right to liquidated damages for late performance and consequently estopped from enforcing it. The court found further that the plaintiff’s/counter-defendant’s performance, while flawed in some respects, was not materially defective. The issuing of a certificate of completion marks the close of liquidated damages liability and commences the period of defects liability, where errors in performance are identified and submitted to the contract debtor for rectification. Failure to rectify does not give a right to sue for breach but rather gives the employer the right to refuse to release retention monies.

The third party was found to have conducted its work competently, barring one erroneously issued certificate, and was under no obligation to indemnify the defendant. The defendant was therefore indebted to the plaintiff for the outstanding amounts stipulated by the lawfully issued certificates. Because the defendant had accepted and made use of the plaintiff’s performance, despite the erroneously issued certificate of completion, the court found that it was liable to compensate the latter under the law of unjustified enrichment. Judgment was entered for the plaintiff with costs.

In this case the defendant raised a preliminary objection to the suit on grounds that the suit is time barred and that the High Court of Uganda has no jurisdiction to try the suit. The court stated that it could not decide on the issue of time until it makes a determination on whether it could exercise its jurisdiction in the matter. The court relied on article 139 of the Constitution and the rule that a contract cannot oust the jurisdiction of the high court and held that a clause to submit to the exclusive jurisdiction of the foreign court is enforceable by the High Court. However, the court stated that the jurisdiction of the court in such circumstances is subject to the plaintiff justifying the filing of the action in Uganda, for instance by proving that the defendant was using the exclusive jurisdiction clause to avoid liability. The court was satisfied that the plaintiff in this case had failed to do so. Accordingly, the court enforced the terms of the contract, sustained the preliminary objection and dismissed the suit with costs.