Wakilii

Katete & Anor v L.B.Narashino Auto Parts Ltd & Anor (Civil Suit No. 394 of 2014)

High Court · [2018] UGCOMMC 64 · 2018 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 and refund of purchase monies
Decision
Judgment entered for the plaintiffs against the defendants with orders for refund, general damages, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a valid contract of sale existed between the plaintiffs and the first defendant through its agent, the second defendant. The first defendant breached the contract by impounding the motor vehicle after accepting late payments and subsequently selling it to a third party. The plaintiffs were entitled to a full refund of UGX 123,000,000 and general damages of UGX 20,000,000.

Outcome

Judgment entered for the plaintiffs against the defendants with orders for refund, general damages, and costs

Facts

On 2 August 2011 the plaintiffs entered into an agreement with the defendants to purchase an Isuzu 10-tonne truck for UGX 120,000,000. After making deposits totalling UGX 29,500,000, they were informed the vehicle had been sold to a third party. The defendants offered a replacement vehicle, an Isuzu Dumper Registration No. UAQ 122Z, priced at UGX 131,500,000 less the UGX 29,500,000 already paid. A formal sale agreement was executed on 12 June 2012 requiring payment within 10 months. The plaintiffs made payments beyond the 10-month period which the defendants accepted. On 11 February 2013 the defendants impounded the vehicle and demanded further payments. The plaintiffs made additional payments totalling UGX 123,500,000 but the defendants sold the vehicle to a third party without returning it or the payments.

Issues

  1. Whether there was a contract of sale of the motor vehicle between the plaintiffs and the 1st defendant.
  2. Whether the defendants breached the contract.
  3. Whether the defendants are liable for the breach.
  4. Whether the plaintiffs are entitled to the remedies sought.

Orders

  • A refund of UGX 123,000,000 (Uganda Shillings One Hundred and Twenty Three Million).
  • General damages of UGX 20,000,000 (Uganda Shillings Twenty Million).
  • Costs of the suit.

Rules and key headnotes

Formation of Contract — Agency — Apparent Authority
Where a principal by words or conduct allows a third party to believe that an individual is his agent and the third party relies on that representation to his detriment, the principal will be estopped from denying the agent's authority to bind him.
Indoor Management Rule — Protection of Third Parties
Under the indoor management rule an innocent party doing business with a company and not in a position to know whether internal rules have been complied with is entitled to protection and may assume the person transacting has authority to bind the company.
Breach of Contract — Estoppel — Acceptance of Late Payment
Where a contract requires payment within a specified time but the creditor continues to accept payments after expiry of that period and issues receipts, the creditor is estopped from claiming breach for late payment and waives strict observance of the payment deadline.
Promissory Estoppel — Promise Intended to Be Acted Upon
A promise intended to be acted upon is binding insofar as its terms properly apply. Where a party promises to return goods upon further payment and the payment is made in reliance on that promise, the promisor cannot subsequently resile from the promise.
Breach of Contract — Sale of Subject Matter to Third Party
Where a seller accepts payment under a contract of sale and subsequently sells the subject matter to a third party without returning the purchase monies, this constitutes a repudiatory breach entitling the buyer to full refund of all monies paid.
Damages — Special Damages — Proof and Pleading
Special damages must be specifically pleaded and proved. A claim for loss arising from a transaction entered into in breach of the principal contract cannot form the basis of special damages.

Legislation cited (4)

Cases cited (5)

  • Royal British Bank v Turquand (1856) 6 E & B 327
  • Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
  • Shell (Uganda) Ltd v Achillis Mukiibi (Civil Appeal No. 69 of 2004)
  • Emmanuel Kyoyeta v Emmanuel Mutebi (Civil Suit No. 781 of 2014)
  • Bank of Uganda v Fred William Masaba and 5 Others (Supreme Court Civil Appeal No. 3 of 1998)

Full judgment

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

Katete & Anor v L.B.Narashino Auto Parts Ltd & Anor (Civil Suit No. 394 of 2014) [2018] UGCommC 64 (2 August 2018)
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.