Wakilii

Nsereko v Kasigwa (Civil Suit No. 881 of 2014)

High Court · [2018] UGCOMMC 37 · 2018 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of construction contract balance and damages
Decision
Judgment for plaintiff with damages and costs; defendant's counterclaim dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held that a valid construction contract existed between the parties personally, not with any company. The defendant breached the contract by failing to pay the third instalment when due and by failing to follow the dispute resolution procedure before terminating the contract. The plaintiff substantially performed the contract despite termination before the agreed completion date and was entitled to the outstanding balance and general damages.

Outcome

Judgment for plaintiff with damages and costs; defendant's counterclaim dismissed

Facts

On 31 March 2013, the plaintiff contracted with the defendant to construct a three-storey building at UGX 950,823,100. The contract provided for payment in instalments: 40% on commencement, 25% and 30% per variations, and 5% after six months of completion. The defendant paid the first two instalments. In December 2013, the plaintiff requested the third instalment (30%). The defendant did not pay but requested continued work. On 2 March 2014, the defendant terminated the contract and evicted the plaintiff before the agreed completion date, alleging poor workmanship. The plaintiff had obtained building materials on credit in anticipation of the third payment. By termination, approximately 80% of the work was completed. KCCA had halted construction from 23 April to 30 June 2013 pending approval of drawings.

Issues

  1. Whether there is a contract between the parties
  2. Whether any party breached the contract and which party breached the contract
  3. Whether the defendant can recover any reliefs from the counter claim
  4. What remedies are available to the parties

Orders

  • Judgment entered for the plaintiff.
  • Defendant to pay plaintiff UGX 155,493,578 being the balance outstanding from work done.
  • Defendant to pay plaintiff UGX 50,000,000 being general damages.
  • Sum in (1) to attract interest of 18% per annum from date of termination of contract till payment in full.
  • Sum in (2) to attract interest of 15% per annum from date of judgment till payment in full.
  • Defendant to pay costs of the suit.

Rules and key headnotes

Contract Law — Formation — Identification of Contracting Parties — Personal Capacity versus Company Capacity
Where a contract agreement identifies the parties by their personal names and the payments are made to a personal account, the contract is between the named individuals personally, not between one party and a company that may be referenced only as an address or trading style.
Contract Law — Breach — Failure to Pay Instalments — Effect on Contractor's Performance
A failure by the employer to pay a contractually due instalment when demanded constitutes a material breach, particularly where the contractor has relied on that payment to procure materials on credit and the non-payment causes the contractor demonstrable financial loss.
Contract Law — Termination — Dispute Resolution Clauses — Requirement for Arbitration or Amicable Settlement
Where a contract provides for disputes to be settled amicably or by independent arbitration before termination, a party who terminates the contract without first pursuing these agreed procedures breaches the contract.
Contract Law — Performance — Substantial Performance — Assessment of Completion and Defects
A contractor who has completed 80% of construction work, including the structural elements and substantial finishing works, has substantially performed the contract even if minor finishing touches and rectification of defects remain, particularly where termination occurs before the agreed completion date and the employer has not paid instalments due.
Contract Law — Time for Performance — Extension of Time — Effect of Delays Beyond Contractor's Control
Where construction is delayed by factors beyond the contractor's control, including late payment by the employer and statutory suspension by a regulatory authority, the contractor is not in breach for failing to complete within the original contractually stipulated time.
Contract Law — Remedies — Assessment of Work Done — Timing and Methodology of Valuation
A valuation report prepared two years after contract termination and at a time when the building was completed and ready for occupation cannot reliably establish the state and value of work done at the date of termination, particularly where based on photographs rather than contemporaneous site measurement.
Contract Law — Damages — General Damages — Remoteness — Sale of Property Due to Breach
Loss arising from the sale of a contractor's rental property following the employer's breach of a construction contract is too remote to be recoverable as it is not a direct, natural, and probable consequence of the breach.

Legislation cited (1)

Cases cited (3)

  • Kasibante v Shell Uganda Ltd (HCCS No. 542 of 2006)
  • Bolton v Mahadeva [1972] 1 WLR 1009
  • Storms Bruks Aktie Bolay v John & Peter Hatarison [1905] AC 515

Full judgment

↓ Download PDF

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

Nsereko v Kasigwa (Civil Suit No. 881 of 2014) [2018] UGCommC 37 (14 June 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.