Wakilii

vambeco Enterprises Ltd v vienna Academy Ltd (HCT-00-CC-CS 419 of 2005)

High Court · [2006] UGCOMMC 35 · 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 and recovery of unpaid contract sums
Decision
Judgment entered for the plaintiff with damages and costs awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the plaintiff contractor was entitled to US$22,438.56 representing unpaid certified work done before contract termination. The defendant's termination was unlawful as it failed to comply with the contractual notice provisions in Clause 25(1), which required 14 days' notice to remedy defaults before termination. The court awarded general damages of UGX 18,000,000 for breach of contract representing lost anticipated income from completing the contract.

Outcome

Judgment entered for the plaintiff with damages and costs awarded

Facts

In November 2000, Vienna Academy Ltd contracted Vambeco Enterprises Ltd to construct a multipurpose hall, covered link way, dormitory block and associated works at Kyaliwajala for US$134,982.00. The contract period was four months commencing 1 December 2000. The plaintiff was to receive 25% within two weeks but payment was delayed by two months. Five interim certificates were issued certifying work valued at US$64,306.47 (US$75,238.56 including VAT). The defendant paid only US$52,800.00. Due to delayed payments, the plaintiff slowed down work. On 27 March 2001, the project architect issued a notice citing insufficient materials, labour and activity on site. Two days later, on 29 March 2001, the defendant terminated the contract citing repeated default. The plaintiff contended US$22,405.00 remained unpaid and the termination was unlawful.

Issues

  1. Whether the plaintiff was entitled to US$22,405.00 for work done under the contract.
  2. Whether the defendant's termination of the contract constituted a breach of contract.

Orders

  • Judgment entered for the plaintiff in the sum of US$22,438.56.
  • Interest at court rate on the sum of US$22,438.56 from 7 May 2001 until payment in full.
  • General damages awarded to the plaintiff in the sum of UGX 18,000,000.
  • The decretal amount to bear interest at court rate from the date of judgment until payment in full.
  • The defendant to pay the costs of the suit to the plaintiff.

Rules and key headnotes

Contract Law — Construction Contracts — Interim Certificates — Valuation of Work Done
In construction contracts, the value of work done must be assessed as the aggregate of all interim certificates issued to date, with each subsequent certificate making deductions for sums already allowed in previous certificates but not certifying that those previous certificates have been paid.
Contract Law — Termination — Notice Requirements — Strict Compliance
Where a contract provides that the employer may terminate after giving the contractor 14 days' notice to remedy specified defaults, and only if the default continues or is repeated within that period, termination effected only two days after notice without allowing the 14-day remedy period constitutes breach of contract regardless of the merit of the complaints raised.
Contract Law — Termination — Purpose of Notice Provisions
The purpose of a contractual notice provision before termination is to give the contractor an opportunity to remedy the defects or conduct complained of and continue with contract performance; termination without allowing this opportunity breaches the agreement between the parties.
Damages & Quantum — Breach of Contract — Compensatory Principle — Loss of Anticipated Income
In a claim for damages for breach of contract, the party not guilty of the breach is to be placed financially in the position in which he would have been if the contract had not been broken and if he had been allowed to carry out his part of the contract, including compensation for loss of anticipated income from completing the contract.

Cases cited (1)

  • Woodruff v Dupont [1964] EA 404

Full judgment

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

vambeco Enterprises Ltd v vienna Academy Ltd (HCT-00-CC-CS 419 of 2005) [2006] UGCommC 35 (11 June 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.