Wakilii

Ibambasi & Anor v Picfare Industries Ltd (HCT-00-CC-CS 312 of 2008)

High Court · [2012] UGCOMMC 44 · 2012 Judgment for Plaintiffs AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract — recovery of special and general damages
Decision
Judgment entered for plaintiffs — defendant liable for breach of implied condition of merchantable quality — special and general damages awarded with interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division found that the contract for supply of photocopying paper was a sale by sample and by description. The court could not determine whether the sample corresponded with the bulk because the sample was not produced for comparison or expert testing. The court found that 1,240 out of 1,334 cartons were not of merchantable quality based on customer rejection, inability to sell without price reduction, and the defendant's agreement to refund. Limited special damages in transport costs and lost profit of 25% were awarded alongside general damages.

Outcome

Judgment entered for plaintiffs — defendant liable for breach of implied condition of merchantable quality — special and general damages awarded with interest

Facts

In July 2007, the first plaintiff entered an oral contract with the defendant to purchase 1,334 cartons of photocopying paper for USD 25,064, paid in advance. The first plaintiff had previously obtained samples of various products including photocopying paper from the defendant to market in Juba, Southern Sudan. The second plaintiff company was incorporated on 4 July 2007 and adopted the contract. The defendant delivered the paper on 13 July 2007. The plaintiffs alleged the delivered paper was not plain white, was sensitive to humidity, and did not correspond to the sample shown. Customers in Juba rejected the paper, finding it dark, of poor texture, and unsuitable for lithograph printing. The defendant's export manager visited Juba but could not sell the paper. In December 2007, the defendant agreed to compensate the plaintiffs and refunded USD 23,098 for 1,240 returned cartons at factory price. Only 94 cartons (approximately 7%) were sold.

Issues

  1. Whether the contract between the plaintiffs and the defendant was a sale by sample.
  2. Whether the sample corresponded with the bulk.
  3. Whether the paper supplied by the defendant to the plaintiffs was merchantable.
  4. What remedies are available to the parties?

Orders

  • Transport costs of UGX 5,580,000 awarded to plaintiffs.
  • Lost profit of USD 5,774.50 awarded to plaintiffs.
  • General damages of USD 5,000 awarded to plaintiffs.
  • Interest at 25% per annum on special damages in Uganda shillings from December 2007 until payment in full.
  • Interest at 7% per annum on special damages in US Dollars from December 2007 until payment in full.
  • Interest at 3% per annum on general damages from date of judgment until payment in full.
  • Costs of the case awarded to the plaintiffs.

Rules and key headnotes

Sale of Goods — Sale by Sample — Requirements
A contract of sale is a sale by sample where the sample is released by the seller to the buyer for the purpose of providing a means of checking whether the goods subsequently tendered correspond with the sample, and not merely where a sample is exhibited during negotiations.
Sale of Goods — Sale by Sample and Description — Concurrent Application
A contract can be both a sale by sample and a sale by description where samples are provided to the buyer and the commercial documentation describes the goods by specific product name and specification.
Sale by Sample — Burden of Proof — Necessity of Physical Comparison
To determine whether bulk goods correspond with a sample, it is necessary to physically compare the sample with the bulk, and in the absence of the sample being produced to court or submitted for expert testing, it is impossible to determine correspondence.
Sale of Goods — Merchantable Quality — Test for Compliance
Goods are of merchantable quality if they are suitable for one or more purposes for which they are normally bought under that description, and can be commercially sold under that description without abatement of price. Goods that cannot be sold without price reduction below factory cost are not merchantable.
Damages — Special Damages — Standard of Proof
Special damages must be strictly proved and must reflect actual verifiable loss of the plaintiff. Claims for special damages not supported by clear evidence, involving ambiguous documentation, or appearing speculative will be reduced or disallowed.
Damages — Loss of Profits — Reasonableness
Where a buyer seeks damages for loss of profits, a reasonable mark-up percentage on the contract value will be awarded rather than speculative cumulative calculations of recycled profits over multiple periods.

Legislation cited (3)

  • Sale of Goods Act s.16(1)
  • Sale of Goods Act s.16(2)(a)
  • Sale of Goods Act s.16(2)(c)

Cases cited (5)

  • Hwan Sung Industries Ltd v Tajdin Hussein & 2 Others (Civil Appeal No. 08 of 2008)
  • JAMES DRUMMOND & SONS V. EH VAN INGEN & CO (1887) 12 App Cas 284
  • ASWAN ENGINEERING ESTABLISHMENT CO. V LUPDINE & ANOR [1987] 1 All ER 135
  • GRANT V AUSTRALIAN KNITTING MILLS LTD (1933) 50 CLR 387
  • ASWAN ENGINEERING ESTABLISHMENT CO V LUPDINE LTD AND ANOTHER (THURGAR BOLLE LTD, THIRD PARTY) [1987] 1 All ER 135

Full judgment

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

Ibambasi & Anor v Picfare Industries Ltd (HCT-00-CC-CS 312 of 2008) [2012] UGCommC 44 (10 May 2012)
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.