Wakilii

Hydro Engineering Services CoUganda Ltd v Thorne International Boiler services Ltd (HCT-00-CC-CS 818 of 2003)

High Court · [2008] UGCOMMC 83 · 2008 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of contract price in a construction dispute
Decision
Plaintiff awarded USD 16,213 being the withheld balance of the contract price, with interest at 8% per annum from judgment and half costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that where a contractor substantially performs a fixed price construction contract, completing over 90% of the work before being unreasonably ordered off site by the client following a request to revise contract terms, the contractor is entitled to recover the full contract price under the doctrine of substantial performance, despite not achieving complete performance.

Outcome

Plaintiff awarded USD 16,213 being the withheld balance of the contract price, with interest at 8% per annum from judgment and half costs

Facts

The plaintiff contractor was engaged by the defendant to design and build extensions at Kinyara Sugar Works under a lumpsum contract priced at USD 139,015 including VAT. During performance, the plaintiff encountered unexpected difficulties with the designs and sought a meeting to discuss revising the contract terms. At the scheduled meeting, the defendant's representative refused to negotiate, insisted on the fixed price, and ordered the plaintiff to leave the site. The defendant withheld USD 16,213 from payments made, representing their assessment of incomplete work, and engaged another contractor to complete the project. The plaintiff had received USD 127,180.37 and claimed they had completed 95% of the work when removed from site. The defendant counterclaimed USD 24,245.55 for completion costs.

Issues

  1. Whether or not this was a fixed price contract.
  2. Whether the plaintiff is entitled to the sum claimed in the plaint.
  3. Whether the plaintiff caused loss to the defendant by failing to complete the contract.

Orders

  • Special damages awarded: USD 16,213.
  • Interest on special damages at 8% per annum from the date of judgment till payment in full.
  • Half the costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Fixed Price Contracts — Lumpsum Contracts — Construction Contracts — Distinction Between Fixed Price and Adjustable Price
In a lumpsum or fixed price contract, the parties agree that the contract price is not adjustable on account of rises or falls in material costs, although this does not preclude variation for additional works separately quoted and agreed during performance.
Contract Law — Performance — Substantial Performance Doctrine — Recovery of Contract Price Despite Incomplete Performance
Under the doctrine of substantial performance, a failure to complete only an unimportant part of a contractor's obligation does not prevent recovery of the agreed price, subject to a counterclaim for damages which will go in diminution of the price.
Contract Law — Fixed Price Contracts — Unforeseen Difficulties — Contractor's Risk — No Obligation to Vary Terms
In a fixed price construction contract, where unexpected difficulties or inadequacies of design are encountered during construction, the contractor's price is presumed to include any additional work or expenditure needed to achieve completion, and no obligation exists on the client's part to vary the terms to assist the contractor in the absence of express provision or successful negotiation.
Contract Law — Breach — Wrongful Termination — Client's Unreasonable Conduct — Effect on Contractor's Rights
A client is not entitled to treat a contractor's request for revision of contract terms, without more, as terminating the contractor's obligations under the contract, and ordering the contractor off site in such circumstances constitutes an unreasonable termination that does not disentitle the contractor from recovering under the doctrine of substantial performance.
Contract Law — Damages — Completion Costs — Self-Induced Loss — Recoverability
Where a client makes further performance of a contract impossible by unreasonably ordering a contractor off site, additional costs incurred by the client in completing the contract are self-induced and unrecoverable from the contractor in the absence of evidence that the contractor failed, refused, neglected to complete, or abandoned the contract.
Civil Procedure — Interest — Award of Interest — Distinction Between Liquidated Claims and Damages to Be Assessed
Where damages have to be assessed by the court rather than being liquidated amounts, the right to those damages does not arise until they are assessed, and therefore interest runs from the date of judgment rather than from the date of filing suit.

Cases cited (2)

  • Bolton v Mahadeva [1972] 1 WLR 1009
  • Sietco v Noble Builders (U) Ltd (Supreme Court Civil Appeal No. 31 of 1995)

Full judgment

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

Hydro Engineering Services CoUganda Ltd v Thorne International Boiler services Ltd (HCT-00-CC-CS 818 of 2003) [2008] UGCommC 83 (29 September 2008)
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.