Wakilii

NIS Protection (U) Ltd v Nkumba University - (Civil Suit No. 604 of 2004)

High Court · [2006] UGCOMMC 20 · 2006 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
Decision
Judgment entered for plaintiff with general damages of UGX 12,500,000 plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A company is bound by acts of its employee acting within usual authority even when internal limitations exist. The security officer's conclusion of a guard services contract bound the university under the indoor management rule and principles of vicarious liability. The plaintiff was entitled to general damages for breach but not special damages where expenses were unproven and remote.

Outcome

Judgment entered for plaintiff with general damages of UGX 12,500,000 plus interest and costs

Facts

The plaintiff, a security services company, entered into a one-year contract with the defendant university for provision of 21 security guards at UGX 5,840,000 per month. The contract was signed by the defendant's security officer, Rogers Mutebi. The plaintiff mobilised staff for deployment. Before deployment commenced, the defendant stopped the plaintiff from deploying guards, claiming Mutebi had acted without authority. The plaintiff sued for breach of contract, claiming special damages of UGX 35,243,750 (including anticipated profits, salaries paid to recruited guards, repatriation costs, telephone expenses, and consultancy fees) plus general damages.

Issues

  1. Whether there was a valid contract between the plaintiff and the defendant for provision of security services.
  2. Whether the plaintiff is entitled to the remedies sought.

Orders

  • Judgment for the plaintiff.
  • General damages awarded to the plaintiff in the sum of UGX 12,500,000.
  • Decretal amount to attract interest at court rate per annum from the date of judgment until payment in full.
  • Plaintiff awarded 80% of the costs of the suit.

Rules and key headnotes

Company Law — Indoor Management Rule — Authority of Employees — Binding Effect on Company
Under the indoor management rule, a company is bound by acts of persons who take upon themselves to act for the company with the knowledge of directors, provided such persons act within the limits of their apparent authority, and strangers dealing in good faith with such persons have a right to assume they have been duly appointed.
Contract Law — Agency — Usual Authority — Liability of Principal for Agent's Acts
A principal, whether disclosed or not, is liable for acts of an agent acting within usual authority. Secret limitations on such authority are ineffective where the principal is sued by a third party who dealt with the agent in good faith. The principal is liable for all acts of the agent which are within the authority usually confided to an agent of that character, notwithstanding limitations as between principal and agent.
Company Law — Indoor Management Rule — Business Convenience and Justice
The indoor management rule is based on business convenience, as business could not be carried on if everyone dealing with a company had to meticulously examine its internal machinery to ensure officers had actual authority. Third parties are entitled to assume compliance with internal regulations.
Tort Law — Vicarious Liability — Acts Done in Course of Employment
An act may be done in the course of a servant's employment so as to make the master liable even though done contrary to the master's orders. If the servant is acting negligently, criminally, or for his own benefit, the master is nevertheless liable if what the servant did is merely a manner of carrying out what he was employed to do.
Contract Law — Damages — Special Damages — Pleading and Proof
Special damages must be specifically pleaded and strictly proved. Where documentary evidence is not forthcoming and no evidence is led of how figures were arrived at, who was paid and when, the claim for special damages will be disallowed. A party should be content with general damages where proof is inadequate.
Contract Law — Damages — Remoteness — Expenses Not Anticipated by Contract
Damages for recruitment, transportation, and accommodation expenses are too remote where the contract does not indicate that parties agreed the service provider would incur such expenses at the client's cost, and where the client was entitled to assume the service provider had trained manpower ready for deployment.
Contract Law — Damages — General Damages — Measure of Damages for Breach
The general rule for measure of damages in contract is that sum which will put the injured party in the same position as he would have been in if he had not suffered the wrong. In assessing general damages for wrongful termination, the court may consider the remuneration for the notice period that should have been given or paid in lieu.

Cases cited (3)

  • Bigger Staff v Rowatt's Wharf Ltd (1896) 2 Ch 102
  • Watteau v Fenwick [1891-4] All ER 897
  • Muwonge v Attorney General [1967] EA 17

Full judgment

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

NIS Protection (U) Ltd v Nkumba University - (Civil Suit No. 604 of 2004) [2006] UGCommC 20 (15 May 2006)
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.