Wakilii

Jan Mohammed Enterprises Ltd v Prism Construction Ltd (Civil Suit 13 of 2017)

High Court · [2026] UGHC 749 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of debt for building materials supplied on credit
Decision
Judgment for Plaintiff with recovery of UGX 109,184,500, interest at 18% per annum from filing to decree, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that an oral contract for the supply of building materials exceeding UGX 500,000 can be enforced where the contract is evidenced by delivery notes, ledger accounts, receipts, and performance through delivery and acceptance of materials. The indoor management rule applies: a third party dealing with a company director is entitled to assume that the director has authority to bind the company. The Plaintiff proved on a balance of probabilities that it supplied materials worth UGX 127,184,500, the Defendant paid UGX 18,000,000, and the balance of UGX 109,184,500 remained due and owing.

Outcome

Judgment for Plaintiff with recovery of UGX 109,184,500, interest at 18% per annum from filing to decree, and costs

Facts

In 2014 and 2015, the Plaintiff supplied building materials worth UGX 127,184,500 to the Defendant's construction site at Moyo Hospital. The Defendant paid UGX 18,000,000, leaving UGX 109,184,500 outstanding. The Plaintiff claimed recovery of the debt. The Defendant denied liability, contending there was no written contract as required by law, that it had only authorised supply up to UGX 20,000,000 secured by a cheque, and that company officials who collected the materials lacked authority to bind it. The Plaintiff adduced ledger accounts, delivery notes, receipts, and oral evidence showing an informal contractual relationship, performance through delivery and acceptance of materials at the Defendant's site, and dealings with the Defendant's director Maurice Kertho and employees Peter Amule and Charles. The Defendant's sole witness testified based on company records and director information, confirmed Kertho was a director and Amule an employee, and admitted materials were delivered to the Moyo site.

Issues

  1. Whether the Plaintiff is entitled to recover UGX 109,184,500/- from the Defendant.
  2. What remedies are available to the parties?

Orders

  • Judgment entered for the Plaintiff.
  • The Defendant shall pay the Plaintiff UGX 109,184,500/-.
  • Interest awarded at 18% per annum on the decretal sum from the date of filing the suit to the date of decree.
  • Costs of the suit awarded to the Plaintiff.
  • General damages refused as not pleaded.

Rules and key headnotes

Contract Law — Formation of Contract — Enforceability of Oral Contracts — Section 10(5) Contracts Act
Section 10(5) of the Contracts Act requiring contracts exceeding UGX 500,000 to be in writing is directory, not mandatory. An oral contract is enforceable where the existence of a contract can be established from documentary evidence exchanged between the parties that reasonably identifies the subject matter, indicates a contract exists, and states the material terms with reasonable certainty. Performance through delivery of materials and acceptance thereof by the other party is a sufficient substitute for writing, rendering the oral contract enforceable to the extent of the materials delivered and accepted.
Contract Law — Evidence of Contract — Ledgers and Delivery Notes as Proof of Contractual Relationship
Ledger accounts and delivery notes recording supplies, in their content and character, may constitute sufficient evidence of the existence of a contractual relationship between parties where the writing requirement of Section 10(5) of the Contracts Act is satisfied by documents exchanged between the parties that reasonably identify the subject matter and indicate a contract exists.
Company Law — Authority of Directors and Agents — Indoor Management Rule — Ostensible Authority
Under the indoor management rule as modified by Section 51 of the Companies Act, a party dealing with a company is entitled to assume that the company's internal procedures have been properly followed and is not bound to inquire whether an officer has authority to bind the company. A director of a company has ostensible authority to act on the company's behalf by virtue of appointment to the board. Where a director engages a third party on behalf of the company and introduces company employees to transact with that third party, the company is estopped from denying liability arising from the director's actions where the third party relied on the representation of authority.
Company Law — Apparent Authority — Elements for Enforcement Against Company
To enforce a contract against a company entered into by an agent, four conditions must be fulfilled: (a) a representation that the agent had authority was made to the contractor; (b) such representation was made by persons with actual authority to manage the company's business; (c) the contractor relied on the representation in entering the contract; and (d) the company was not deprived of capacity to enter into such contract or to delegate such authority under its constitutional documents.
Evidence — Burden and Standard of Proof — Civil Cases
In civil cases, the burden of proof lies on the plaintiff to prove the case on a balance of probabilities. The standard requires that if the evidence is such that the tribunal can say it is more probable than not, the burden is discharged, but if the probabilities are equal, it is not.
Civil Procedure — Interest on Decretal Sum — Principles of Award — Restitutio in Integrum
The purpose of an award of interest is restitutio in integrum — to restore the plaintiff as nearly as possible to the position he would have been in had he not been deprived of his money. The court should take into account prevailing inflation, depreciation of currency, and economic value of money, awarding an interest rate that insulates the plaintiff against economic vagaries while reflecting the rate at which the plaintiff would have had to borrow money to replace that which was withheld.
Civil Procedure — Costs — General Rule
Costs follow the event unless the court finds otherwise. A successful party can only be denied costs if it is proved that, but for the party's conduct, the litigation could have been avoided. Costs follow the event where the party succeeds in the main suit.

Legislation cited (10)

Cases cited (21)

  • Yakobo Senkungu & 4 Ors v Cresensio Mukasa (Supreme Court Civil Appeal No. 17 of 2014)
  • Nsubuga Vs Kavuma (1978) HCB 307
  • Miller Versus Minister of Pensions (1947) 2 ALL ER 372
  • Nakawa Trading Co Ltd v Coffee Marketing Board (High Court Civil Suit No. 137 of 1991)
  • Greenboat Entertainment Ltd v City Council of Kampala (High Court Civil Suit No. 580 of 2003)
  • Sitenda Sebalu v Sam Njuba and another (Election Petition No. 26 of 2007)
  • Ndyowayesu Ceaser v Serubiri Timothy (Civil Appeal No. 15 of 2021)
  • Royal British Bank V Turquand (1856 E&B 327)
  • CTM Uganda Ltd and others v Alimus Properties Ltd (Supreme Court Civil Appeal No. 11 of 2022)
  • Semakula Kayinda Solomon v Auger Revival Ministries Ltd (High Court Civil Suit No. 880 of 2020)
  • Musoke Kitenda v Roko Construction Ltd (High Court Miscellaneous Application No. 1240 of 2020)
  • Musoke Peter v Merger Technical Services Uganda Ltd (High Court Civil Suit No. 426 of 2022)
  • Britain V Rossiter (1879) 11 QBD 123
  • Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd [1964] 2 ALR Comm 205
  • Royal British Bank v. Turquand (1856) 6 E & B 327
  • Freeman and Lockyer (a firm) Versus Buckhurst Park Properties (Mangal) and another [1964] 1 All ER 630
  • Lwanga vs. Centenary Bank [1999] EA 175
  • Riches v Westminster Bank Ltd [1947] 1 All ER 469 HL at page 472
  • Tate & Lyle Food and Distribution Ltd v Greater London Council and another [1981] 3 All ER 716
  • Mohanlal Kakubhai Radia v Warid Telecom Ltd (High Court Civil Suit No. 234 of 2011)
  • Uganda Development Bank versus Muganga Constructions [1981] HCB 35

Full judgment

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

Jan Mohammed Enterprises Ltd v Prism Construction Ltd (Civil Suit 13 of 2017) [2026] UGHC 749 (6 July 2026)
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.