A public institution's internal financial limitations (like dependence on quarterly grants) are generally not a valid defense against a breach of a clear contractual payment term.

Waboga David
Dec 10, 2025
3 min read

High Court of Uganda Holds Bugwere High School Liable for Breach of Contract: Awards UGX 105M Plus Damages to Supplier

FACTS

Godrich Grain Millers Ltd (“the Plaintiff”) was contracted by Bugwere High School (“the Defendant”) to supply dry food, specifically maize flour, pursuant to Contracts Committee Minute No. BHSN/04/003/2023.

The Plaintiff supplied 36,500 kg of posho, valued at UGX 135,050,000. The Defendant only paid UGX 30,000,000, leaving an unpaid balance. Despite repeated reminders, the Defendant failed to settle the outstanding amount.

The Defendant admitted the supply but argued that some payments had allegedly been made informally to the Plaintiff’s director and that the agreement was verbal.

The parties agreed to two issues:

Whether there was a breach of contract; and
What remedies were available.

ISSUES

The High Court considered:

(a) Whether the Defendant breached the contract;

(b) What remedies the Plaintiff was entitled to.

SUBMISSIONS

Plaintiff’s Submissions

The Plaintiff argued that it duly supplied the goods in accordance with the Local Purchase Orders (LPOs) and written contract (PEX.1 & PEX.7).

Only UGX 30,000,000 was paid, leaving an outstanding balance of UGX 105,050,000.

Counsel argued that the Defendant’s non-payment resulted in economic loss and sought general, punitive, and exemplary damages.

Defendant’s Submissions

The Defendant raised a preliminary point that the plaint disclosed no cause of action.

It alleged the agreement was verbal and contended that certain payments were made to the Plaintiff’s director.

The Defendant also expressed readiness to reconcile accounts, although no supporting documents (such as LPOs) were tendered.

LEGAL REPRESENTATION

Plaintiff, Counsel Nagulu Eddie (Nangulu & Mugoda Advocates)

Defendant, Counsel Kiyaga Ivan

COURT’S FINDINGS

Justice Dr. Lubega Farouq made several key findings;

A. Existence of a Valid Contract

The Court found that documentary evidence, including PEX.1, PEX.3, PEX.7, proved that a formal contract existed and was approved by the Defendant's Contracts Committee.

“From the evidence of the Plaintiff and Defendant, it is not in dispute that the Plaintiff was contracted by the Defendant to supply dry food as per PEX.7.”

B. Accurate Amount Outstanding

The Court noted that the Plaintiff’s own demand letter dated 21 September 2023 (PEX.2) indicated that only UGX 98,050,000 was outstanding at that time. After the UGX 30,000,000 payment, the balance dropped to UGX 68,050,000; however, a new LPO for 10 tons was issued and supplied, restoring the outstanding balance to UGX 105,050,000.

C. Defendant’s Failure to Pay

The Defendant did not provide credible evidence to dispute this figure or show additional payments.

“DW1 did not tender in court the copies of the Purchase Orders to prove the alleged balance of UGX 78,000,000.”

D. Breach of Contract Established

The Court held that the Defendant was in breach:

“Having failed to pay the said balance, the Defendant breached the contract.”

E. Unsupported LPOs Disregarded

The Court disregarded certain LPOs (PEX.6) for lack of supporting evidence but relied on PEX.3 as the verified basis of supply.

HOLDING / COURT ORDERS

The Court entered judgment for the Plaintiff and ordered as follows:

Declaration, The Defendant breached the contract.
Outstanding Balance:
Defendant to pay UGX 105,050,000 during the 2nd week of first term, 2026.
General Damages:
UGX 15,000,000 awarded for economic loss.
Punitive Damages:
UGX 5,000,000 for the Defendant’s conscious disregard of contractual obligations.
Interest:
5% per annum on general and punitive damages from the date of judgment until payment in full.
Costs:
Awarded to the Plaintiff.

KEY TAKEAWAYS

1. Written Contracts Prevail

Court strongly relied on written LPOs, contract documents, and official minutes. Claims of “verbal agreements” carry little probative value without documentary support.

2. Public Institutions Must Honour Procurement Contracts

The Court emphasized that government schools must comply with contractual and procurement obligations, including payment timelines.

3. Admissions of Indebtedness Are Binding

The Defendant’s written admission in PEX.5 significantly influenced the Court’s ruling.

4. Suppliers Must Keep Accurate Records

The Plaintiff’s detailed LPOs, receipts, and bank statements proved decisive; however, inconsistencies in evidence during cross-examination nearly weakened the claim.