Millenium auctioneers & court Bailiffs

08/10/2020

Frustration as a ground for Revocation or non performance of Contract by either party.

LEGAL OPINION ON THE ARBITRARY SALARY CUTS THREATENED BY EMPLOYERS AFTER THE COVID19 LOCKDOWN ~ CASE STUDY; THE CHRISTINE KABASWEKE SU***DE
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In letters addressed to the staff of Vision Group, the Human Resource Manager communicated that there will be salary deductions for the months of May, June and July.

Last week, Christine Kabasweke, an accountant with Vision Group reportedly committed su***de after she received communication that her salary would be reduced by 50% following the COVID19 crisis and lockdown.
This was an unfortunate death in the most unfortunate of the circumstances. May her soul rest in eternal peace.

First things first; s.40 of the Employment Act, 2006 provides for the duty of the employers to provide work to the employee in accordance with the contract of employment. But this duty shall not apply if the contract is frustrated among other circumstances and as thus the employer shall not be liable for failure to provide work.

At common law, the rights and obligations of the employee and the employer during the period of frustration are determined by a force majeure clause in the contract. A force majeure clause is a contractual clause that alters the parties' obligations and/or liabilities under a contract when a force majeure event occurs.
A force majeure event refers to an occurrence that is outside the reasonable control of a party and which prevents a party from performing its obligation under a contract e.g the corona virus pandemic.

Whereas it's the position at common law that employment contracts ought to contain force majeure clauses, the Employment Act, 2006(of Uganda) directly incorporates the effects of the force majuere clauses in all employment contracts under s.40.

This means that during the lockdown period, the employer has no obligation to provide work to the employee and the employee has no obligation to execute his duties under the employment contract. This further means that the employer can lawfully suspend employment contracts during the lockdown period or he or she might choose to terminate the said contracts. If the employer chooses the latter option, he has to pay all terminal benefits accruing to the affected employees.

Whereas the consent of an employee must be sought before an employer can force them to go on unpaid or paid leave, the Industrial Court has held that in exceptional circumstances like the COVID19 crisis, the employers can without the employees' consent send them on forced paid or unpaid leave.

However what the employer can't lawfully do is to unilaterally effect salary cuts by any amount except in a few cases. Section 46 of the Employment Act, 2006 provides that the employees salary or wage cannot be reduced by any amount without his or her written consent. The only exceptions to the above statement of the law are tax deductions(PAYE under s.116 of the Income Tax Act(as amended), property rates, subscriptions and contributions imposed by law(eg 5% contribution to NSSF under the NSSF Act) and union dues in accordance with s.50 of the Employment Act, 2006.

Therefore, it is our considered opinion that whereas suspension of contracts by employers could have been legal, the threatened salary cuts by Vision Group among several other employees are not; except where they wilfully consent to such deductions.
All employees except those whose contracts had been suspended during the COVID19 lockdown period are entitled to their full salary unless employers obtain their wilful written consent to reduce their salaries.

If an employer reduces your salary for any reason without your written consent, you may start by seeking further clarification from your Human Resource Manager about the deductions. If his explanation is vague and unclear, you may write to him demanding that the company(or boss) refunds the amount wrongfully deducted and ask him to desist from making any such further deductions from your salary in future.

In the alternative, you may accept this as the employer's repudiatory breach and resign. Then you can claim constructive dismissal and claim compensation for the losses occasioned by your employer's acts and/or omissions.

Employment law requires that the complaint should first be lodged with a District Labour Officer but the Industrial Court has of recent entertained labour claims that have come by ways other than reference or appeal.

Let not our employers push us to committing su***de, just drop your question, contribution & criticism in the comments section.
**********(RIP Christine Kabasweke)***********

Partner ~ Gisa & Co. Law Chambers

08/10/2020

Landlord-Tenant legal gymnastics

LOCK DOWN LEGAL ALERT
(Landlords and/or landladies without written tenancy agreements should not evict tenants except with an order of court)

On 15th May, 2020, Justice Musa Ssekaana delivered a ruling in SOPHIE NAKITENDE v MABU COMMODITIES LTD HCCS No. 117 of 2016 addressing the issue of distress for rent in the absence of written tenancy agreements.

Background
The plaintiff brought the suit against the defendant for breach of tenancy agreement, special damages, general damages, recovery of valuable items(tools of trade) confiscated by the defendant as well as costs of the suit.
The plaintiff entered into a tenancy agreement in 2008 with the defendant. In 2016, the plaintiff slightly delayed to meet her rental obligations for the first quarter of the year and while she was away, the defendant without according her a hearing broke into her shop on 15th March, 2016, seized the merchandise and locked it up. The defendant contended that the plaintiff defaulted on her rent for the month ending on 15th January, 2016, closed her shop and disappeared without notifying her officers. On 15th March, 2016, the plaintiff's merchandise was in the presence of the LC1 Chairperson transferred to the storeroom for storage.

The parties in joint scheduling agreed on several issues and excerpts of some of the resolutions is as follows:-

As to whether the tenancy agreement between the plaintiff and the defendant was lawfully terminated, court observed that there was an oral contract and as such it was hard to impute fundamental terms but rather the conduct of the parties would guide court in establishing when breach would arise. Court further guided that the defendant who wanted to apply the strict rules of enforcing a contract had a duty to ensure that the contract terms are reduced in writing.

Court further observed that the oral agreement did not provide for the consequences of non payment of rent on the due date(15th of every month). The absence of any written tenancy would imply that no stringent terms could be invoked to the extent of closing the shop without some due process.

In His Lordship's dictum, the landlord should not be allowed to use all means available to recover rent arrears or obtain vacant possession for non payment of rent by a tenant. A landlord should not exercise his rights of reentry or recovery of vacant possession extra judicially and acts of hooliganism should not be encouraged and allowed by a court of justice. He further guided that parties should manage their businesses in an organised or orderly manner in order to avoid self help in the landord-tenant relationship which would turn out to be unreasonable and unfair.

Court further added that the act of a defendant seizing the property of the plaintiff was illegal since there was no agreement that if she defaults on to rent payments, the defendant would be allowed to close the shop and seize the property.

It was held that court shall not allow landlords to use extra judicial means in recovery of rent arrears or vacant possession especially where there is no written tenancy agreement. The use of of the LC 1 Chairperson to oversee the whole process of taking the plaintiff's property could not validate the illegal exercise. He further held that no landlord without a tenancy agreement should evict a tenant in an arbitrary manner or without due process.

The defendant's counterclaim for cost of storage of the property subject to his illegal distress failed.

Partner ~ Gisa & Co. Law Chambers

06/11/2019

The selected 100 bailiffs in a group photo after a training at law development center Kampala with The Honorable Judge His Lordship Duncan Gaswaga the Head of the High court Ex*****on and Bailiffs Division in Uganda.

06/11/2019

13/07/2019

Uganda Courts Go In Vacation Starting Monday 15th July 2019.

High court and Magistrates court all over the country will starting Monday July 15, go for the annual one month Court vacation which will end on August 15, 2019

Other courts like the Appellant Court /Constitutional Court will start their vacation on July 31 2019 and return on August 31st 2019.

During the court vacation both High and Magistrates court will only attend to cases of criminal nature but not civil.

The Judicial officers who are going to benefit most in this vacation are the Judges, Registrars , Magistrates and bailiffs who execute court orders.

“Hearing of new cases, application for ex*****on, bail application and long hearings will be stayed but special matters will be handled”

However during this period bailiffs and court users are reminded that other court business like filling of new cases will continue as usual.

But application for certificate of urgency can be used by bailiffs in court vacation if ex*****on are to be done.

Court Vacations are provided for under Rule 4 of Judicature Act which governs Court Vacation states that court shall not sit to discharge business other than such civil business that shall, in the opinion of the presiding judge, be of an urgent nature.

09/06/2019

@ Discharge of Contract

BAR PRE-ENTRY MOCK DRILLS ~ CONTRACT LAW
Drill 3..................................................................................

🎾1. When is a contract said to be discharged?
⚒A contract is said to be discharged when the rights and obligations agreed in it come to an end.

🎾2. Mention the ways in which a contract may be discharged.
⚒By performance
⚒By breach
⚒By agreement
⚒By frustration

🎾3. In the event of breach of a contract, what are the rights of the innocent party?
⚒A right to claim damages
⚒A right to repudiate the contract and treat himself discharged from it.

🎾4. What do you understand by the term tender of performance?
⚒This is where one party to the contract attempts to perform its obligation but the other party refuses to accept such performance.

🎾5. What is the effect of breach of a contract?
⚒It gives rise to a claim for damages.

🎾6. What right accrues to an innocent party only when there is a breach of a primary obligation in a contract?
⚒ A right to repudiate the contract

🎾7. What is meant by anticipatory breach?
⚒Anticipatory breach refers to an action that shows a party's intention to fail to perform or fulfill its contractual obligations to another party.

🎾8. What is an innominate term of the contract?
⚒This is an implied term of a contract which is neither classed as a condition or a warranty but somewhere in between.

🎾9. Does breach of a condition lead to automatic termination? Give a reason for your answer.
⚒No, because the innocent party is free to treat the contract as still subsisting and as thus he can choose to affirm or discharge the contract.

🎾10. What do you understand by the term accord and satisfaction?
⚒This is the purchase of a release from an obligation whether arising under a contract by means of any valuable consideration; not being actual performance of the obligation itself.
🎾11. When is a contract said to be frustrated?
⚒This is where something happens that is not a fault of either party that renders the performance of the contract impossible.

🎾12. What name is give to a clause in a contract where parties themselves provide for the consequences of occurrence that could lead to frustration of the contract?
⚒Force majeure clause

🎾13. State any two ways how a contract can become impossible to perform.
⚒Destruction or unavailability of something important for contract performance.
⚒Death of either party(for contracts that require personal performance)
⚒Unavailability of a party (for contracts that require personal performance)

🎾14. What is the legal effect of frustration?
⚒It renders the contract terminated and parties discharged from the obligations therein.

🎾15. Why is money paid under a frustrated contract recoverable?
⚒This is because there has been total failure of consideration.

🎾16. State the rule in the Fibrosa case.
⚒This is the common law rule that advance payments would be recoverable if there had been total failure of consideration upon frustration of a contract.

🎾17. What is the rationale for the award of nominal damages in contract law?
⚒This award is an acknowledgement by court that a legal right has been infringed but that no actual loss has been suffered.

🎾18. In Hadley v Baxandale (1854) 9 Exch 341, court laid down two rules relating to the remoteness of damages. Mention these rules.
⚒Damages are recoverable when they are such as may fairly and reasonably be considered arising naturally.
⚒Damages are recoverable when they are such as may be reasonably supposed to have been in contemplation of both parties at the time they made the contract.

🎾19. What do you understand by an in terrorem clause?
⚒This phrase is used to describe provisions in contracts meant to scare a person into complying with the terms of the agreement.

🎾20. What is meant by an order of specific performance?
⚒This is an order by which court directs the defendant to perform the contract which he has made according to its terms.

🎾21. Define res extincta in contract law.
⚒This is where there is a contract for sale of specific goods and the goods without the knowledge of the sellers have perished at the time when the contract was made.

🎾22. Define res sua.
⚒This is the case where a person makes a contract to purchase that which in fact belongs to him.

🎾23. What is a unilateral mistake?
⚒This is the case where one party is mistaken as to the nature of a contract and the other party is aware of the mistake or that circumstances are such that he may be taken to be aware of it.

🎾24. What is a mutual mistake?
⚒This is one where the parties misunderstand each other's intentions and are at cross purposes.

🎾25. Define misrepresentation in contract law.
⚒This is a false statement of fact made by one party to another whilst not being a term of the contract, induces the other party to enter the contract.

🎾26. What are contracts of uberrimae fidei?
⚒These are contracts of utmost good faith that impose a duty of disclosure of all material facts because one party is in a strong position to know the truth.

🎾27. State any two types of misrepresentation.
⚒Fraudulent misrepresentation
⚒Negligent misrepresentation
⚒Innocent misrepresentation

🎾28. When is a misrepresentation deemed fraudulent?
⚒This is when a false statement is made knowingly and without belief in its truth or reckless as to whether it be true or false.

🎾29. Define negligent misrepresentation.
⚒This is a false statement made by a person who had no reasonable grounds for believing it to be true.

🎾30. What is an innocent misrepresentation?
⚒This is where a false statement is made by a person honestly believing it to be true.
🎾31. Why is a false statement of law not an actionable misrepresentation?
⚒This is because every person is presumed to know the law.

🎾33. What is the effect of the maxim caveate emptor?
⚒The effect is that the other party has no duty to disclose problems voluntarily thus if one party is labouring under misapprehension, there is no duty on the other party to correct it.

🎾34. What is the effect of half truths the process of making a contract?
⚒A statement that doesn't present the whole truth may be regarded as a misrepresentation.

🎾35. What is the effect of an actionable misrepresentation?
⚒It renders the contract voidable at the instance of the innocent party.

🎾36. When may the innocent party to a misrepresentation lose a right to rescind?
⚒The injured party will lose a right to rescind if substantial restoration of the parties to their original position is impossible.
⚒The injured party will also lose a right to rescind if he or she affirms the contract with knowledge of a misrepresentation.
⚒The injured party will lose a right to rescind if he or she doesn't take action within a reasonable time.

🎾37. State any two remedies for misrepresentation.
⚒Recission
⚒Indemnity
⚒Damages

🎾38. Define specific performance.
⚒Specific performance is an order of court which requires a party to perform his or her obligations in a contract.

🎾39. Under what circumstances may an order for specific performance not be granted?
⚒In case would cause severe hardship to the defendant.
⚒In case the contract was unconscionable.
⚒In case the claimant has misbehaved (unclean hands)
⚒In case specific performance is impossible.
⚒In case performance consists of personal service.
⚒In case the contract is too vague to be enforced.
⚒In case the contract is terminable at will.
⚒In case the contract required constant supervision.
⚒In case mutuality was lacking in the initial contract.
⚒In case the contract was made for no consideration.

🎾40. State the equitable ground for specific performance.
⚒Equity regards as done that which ought to be done.

🎾41. State the basic rule that would prevent the decree of specific performance.
⚒Specific performance will not be decreed where a common law remedy such as damages would be adequate to put the plaintiff in the position he would have been but for the breach.

🎾42. When may a party to an illegal contract recover money transferred to the other party?
⚒If he was forced by the other party to enter into the contract.
⚒If he entered into the contract as a result of the other party's fraudulent misrepresentation.
⚒If it was paid under mistake of fact.
⚒If he repudiates the illegal purpose in time.
⚒If he can establish the right to title to it without relying on the contract.

🎾43. What do you understand by the term waiver in the law of contract?
⚒This is where one party accedes to a request by another to forebear his right to strict performance of the contract or where he represents to another party that he will not insist to strict performance of the contract.

🎾44. Define breach of a contract.
⚒This refers to the failure to perform the terms of the contract by a party to it.

🎾45. State any two types of consideration. .
⚒Executed consideration
⚒Executory consideration

🎾46. Define offer.
⚒This is an expression of willingness to contract.

🎾47. When can it be said that there was consensus ad idem at the time of contracting?
⚒This is so when each party properly understands what the other party intends.

🎾48. State the legal rule in support of peppercorn consideration.
⚒Consideration need not be adequate but sufficient

🎾49. Under what circumstances may the rule cited in 48 above not apply?
⚒In case the contract is tainted with vitiating factors, courts will look into the adequacy of the consideration.

🎾50. When is does an offer become complete?
⚒It is complete when it has been communicated to the offeree.

Managing Partner ~ Gisa & Co. Law Chambers