Wakilii

Benedikt & Another v Ssentumbwe James (Civil Suit 1092 of 2022)

High Court · [2024] UGCOMMC 125 · 2024 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract, set down for formal proof after defendant's default
Decision
Judgment for Plaintiffs with principal sum, contractual penalties, liquidated damages, and interest awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A memorandum of understanding constitutes a valid contract under the Contracts Act where one party promises to repay monies already advanced. Where the defendant fails to perform repayment obligations as stipulated, he is liable for breach of contract. Under section 62(1) of the Contracts Act, the injured party is entitled to recover reasonable compensation not exceeding the penalty stipulated, including principal sum, contractual penalties, and liquidated damages, without needing to prove actual loss.

Outcome

Judgment for Plaintiffs with principal sum, contractual penalties, liquidated damages, and interest awarded

Facts

The Plaintiffs advanced UGX 62,000,000 to the Defendant for a joint venture in billboard advertising. The Defendant did not fulfil his obligations and agreed to refund the money. He initially refunded UGX 1,000,000. On 7 September 2022, the parties signed a memorandum of understanding wherein the Defendant undertook to repay the outstanding balance of UGX 61,000,000 in monthly instalments of UGX 500,000, with an initial payment of UGX 1,000,000 by 16 September 2022. The agreement stipulated a 10% monthly default penalty and liquidated damages of UGX 10,000,000 in case of default. The Defendant paid only UGX 1,000,000 in two instalments (UGX 700,000 and UGX 300,000) in September 2022, then ceased all payments. The Defendant was served but did not file a defence.

Issues

  1. Whether the Defendant is liable for breach of contract.
  2. Whether the Plaintiffs are entitled to the remedies sought.

Orders

  • Judgment entered for the Plaintiffs against the Defendant.
  • Principal sum of UGX 60,000,000 awarded.
  • Interest of UGX 18,100,000 awarded.
  • Liquidated damages of UGX 10,000,000 awarded.
  • Interest at 15% per annum on the total sum from the date of judgment until payment in full.
  • Costs of the suit awarded to the Plaintiffs.
  • General damages declined.
  • Further contractual default penalty declined.

Rules and key headnotes

Contract Law — Formation — Memorandum of Understanding — Validity
A memorandum of understanding signed by parties constitutes a valid contract under sections 10(1) and 20(1)(b) of the Contracts Act where it contains a promise to compensate a person who has already voluntarily done something for the promisor.
Contract Law — Breach — Definition and Elements
Breach of contract occurs where a party fails to perform one or more of the obligations laid upon him by the contract without justification. Where a defendant undertakes to repay money under a memorandum of understanding but fails to do so, he is liable for breach of contract.
Damages & Quantum — Contractual Penalties and Liquidated Damages — Section 62(1) Contracts Act
Under section 62(1) of the Contracts Act, where a contract contains a penalty clause and is breached, the injured party is entitled to receive reasonable compensation not exceeding the penalty stipulated, whether or not actual damage or loss is proved to have been caused by the breach.
Damages & Quantum — General Damages — When Declined
Where a court has granted contractual interest and liquidated damages pursuant to the terms of the contract, it will decline to award general damages or any further contractual default penalties to avoid double compensation.

Legislation cited (4)

Cases cited (3)

  • William Kasozi v DFCU Bank Ltd (Civil Suit No. 326 of 2000)
  • Nakona Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Kabaco (U) Ltd v Mryahikago Boning (Civil Suit No. 074 of 2021)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Benedikt & Another v Ssentumbwe James (Civil Suit 1092 of 2022) [2024] UGCommC 125 (6 March 2024)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.