Court of Appeal Affirms That Express Terms in Contracts—Especially Regarding Quantity—Are Enforceable; a Party Cannot Demand Full Payment Under a Contract When They Have Only Partially Performed.

Waboga David
Jul 31
7 min read

Introduction

In a recent decision of Outreach to Africa Limited v Atamwine Peter (Civil Appeal No. 80 of 2016) [2025] UGCA 251 (30 July 2025), the Court of Appeal reasserted fundamental principles of contract law relating to the enforceability of express terms and the consequences of partial performance.

The Court emphasized that where a contract clearly stipulates a specific quantity—such as acreage in a land sale—that term is binding and must be fulfilled as agreed. It further held that a party who has only partially performed their obligations under such a contract cannot demand full payment, as doing so would amount to unjust enrichment.

This decision reinforces the importance of honoring the precise terms of a written agreement and upholding the principle that consideration must be proportionate to performance.

Facts

The dispute arose from a sale agreement dated 27th July 2007 between the respondent (vendor) and the appellant (purchaser), in which the respondent agreed to sell land to the appellant for a total purchase price of UGX 74,000,000.

The appellant made an initial payment of UGX 30,000,000, leaving a balance of UGX 44,000,000 to be paid upon transfer of the titled part of the land.

The agreement included land to be subdivided from Block 23 Plot 28 registered in the name of the late Rwomire Nyakairu and a portion of untitled public land.

The respondent claimed he had facilitated the necessary legal processes, including procuring letters of administration and completing transfer documentation.

Upon demand for the balance, the appellant refused payment, asserting that the respondent failed to deliver the full agreed acreage (15 acres), delivering only 6.908 acres instead.

The trial magistrate ruled in favor of the appellant. On appeal, the High Court reversed the decision, granting judgment for the respondent. Dissatisfied, the appellant filed this second appeal to the Court of Appeal.

Representation

The Appellant was represented by Mr. Walusimbi Ibrahim, Mr. Kigula Mahir, and Mr. Kibirige Ismail.

The Respondent was represented by Mr. Richard Bwiruka.

Issues for Determination

Whether the acreage of the land to be delivered was a term of the contract.
Whether the respondent was entitled to the balance of the purchase price despite delivering less land than agreed.
Whether the High Court erred in awarding interest at 25% per annum.
Whether the appellate Judge failed to properly re-evaluate the evidence and arrived at an erroneous decision.

Appellant’s Submissions

Issue 1

The appellant argued that the agreement expressly provided for the delivery of 15 acres in exchange for UGX 74 million, and this was reaffirmed in an addendum dated 18th August 2007. Delivering only 6.908 acres was a clear breach.

Issue 2

The appellant submitted that payment of the remaining UGX 44 million was conditional on the full delivery of land. Failure to deliver the agreed acreage discharged the appellant’s obligations under the agreement. Enforcing payment would unjustly enrich the respondent.

Issue 3

The 25% interest rate was challenged as being excessive, arbitrary, and not reflecting the non-commercial nature of the transaction.

Issue 4

The appellate Judge allegedly failed to reevaluate the evidence as required on first appeal, instead relying on non-record matters, resulting in a wrong decision.

Respondent’s Submissions

Preliminary Objection

The respondent challenged the competency of the appeal, arguing that it raised issues of mixed fact and law, which are not permissible under a second appeal per Section 72 of the Civil Procedure Act.

Issues 1, 2, 4

The respondent argued that the land sold was not defined in acreage but was the entire land he owned. Any reference to acreage was merely an estimate, and he had performed all required steps under the agreement, including providing possession and documentation.

Issue 3

He defended the 25% interest as justified compensation for the prolonged denial of his funds, particularly since the appellant had been enjoying the land since 2007 without paying the balance.

Appellant’s Rejoinder

The appellant clarified that the dispute concerned the legal interpretation of contractual terms, specifically whether acreage was a binding term—thus qualifying the appeal as one based on a point of law under Section 72(1)(a) of the Civil Procedure Act. Citing relevant case law, the appellant reinforced that full payment could only be expected upon full delivery of 15 acres.

Holding

1. Whether the Acreage of the Land to Be Delivered by the Respondent Was a Term of the Agreement

The Court of Appeal unequivocally held that acreage was a material and express term of the agreement. It stated:

“The sale agreement and its addendum both clearly stipulated that the land being sold was 15 acres. There is no indication from the documents or conduct of the parties that this figure was merely approximate.”

The appellate court criticized the trial judge for treating the 15-acre reference as an estimate rather than a binding term:

“We find that the learned trial judge erred in holding that the mention of 15 acres was a mere approximation. This finding goes against the principle that where contractual terms are unambiguous, courts must give effect to their ordinary and natural meaning.”(See Eseza Catherine Bya’kika v NSSF, Civil Appeal No. 18 of 2014)

The Court held that the sale agreement dated 27 July 2007 explicitly referred to a total purchase of 15 acres of land for UGX 74,000,000, confirmed by an addendum dated 18 August 2007 which restated the agreed acreage.

The respondent’s argument that the reference to acreage was merely descriptive or estimated was rejected. The Court emphasized that where the parties clearly reference a specific quantity of land in a written contract, such a term is enforceable unless evidence shows it was meant otherwise. No such evidence was provided.

🡺 Key Holding: A specific acreage stated in a contract of sale is a binding term, not a mere estimate, unless clearly qualified.

2. Whether the Respondent Was Entitled to the Balance of the Purchase Price Despite Delivering Less Acreage Than Agreed

The Court found that the respondent had only delivered 6.908 acres, less than half of the 15 acres contracted for. As a result, the respondent was not entitled to claim the full balance of UGX 44 million as if full performance had been achieved.

As such, he was not entitled to the full purchase price. Citing historical common law cases, the Court reiterated:

“Where a party fails to perform their obligations in full, they cannot insist on full performance from the other party.”(Cutter v Powell (1795) 6 Term Rep 320)

“To demand full payment without full performance amounts to unjust enrichment, which the law cannot condone.”(Moses v Macfarlane (1760) 2 Burr. 1005)

The Court concluded:

“The respondent's claim to the balance of the purchase price is unsustainable given the admitted shortfall in land delivered.”

That claiming the full balance would result in unjust enrichment, particularly since the buyer never received possession or title to the remaining land.

🡺 Key Holding: A vendor who delivers less land than agreed cannot recover the full contract price. Compensation must reflect the actual land delivered.

3. Whether the Trial Judge Erred by Awarding Interest of 25% Per Annum from the Date of Filing Until Full Payment

The Court of Appeal found that the 25% interest rate awarded by the High Court was excessive and not justified, especially since the transaction was non-commercial in nature.

The Court stated:

“Interest should serve a compensatory, not punitive, purpose. In land transactions between individuals, particularly non-commercial ones, courts should not endorse interest rates that exceed prevailing reasonable thresholds.”

It relied on precedents such as BM Technical Services Ltd v Crescent Transporters Ltd & Another, Civil Appeal No. 9 of 2013 and Ecta (U) Ltd v Gerald Mahinda Karuhanga, Civil Suit No. 172 of 2011

The Court accordingly reduced the interest rate to 12% per annum, from the date of filing until the decretal amount is paid in full.

4. Whether the Trial Judge Failed to Properly Evaluate the Evidence and Reached the Wrong Conclusion

The appellate court was critical of the trial judge’s overall assessment:

“The learned judge failed to properly analyze the implications of the partial performance on the overall enforceability of the contract terms, particularly with regard to the quantum of consideration and the applicable interest.”

The Court found that by mischaracterizing the acreage clause and awarding excessive interest, the judge had misdirected herself on key issues of law and evidence, thereby arriving at erroneous conclusions.

The Court concluded that the High Court Judge on first appeal had failed in the duty to conduct a proper re-evaluation of the lower court's record, a duty that is critical at the appellate level.

Specifically:

The Judge wrongly concluded that the acreage was not a binding term.
The Judge erred in awarding full payment despite only partial land delivery.
The Judge failed to appreciate the principle that failure to deliver full acreage extinguishes any claim for the full balance.

The Court emphasized that failure to re-evaluate evidence in line with settled legal principles constitutes an error of law that is reviewable on second appeal.

🡺 Key Holding: First appellate courts have a legal duty to thoroughly re-evaluate trial evidence. A failure to do so, especially when it leads to wrong legal conclusions, justifies appellate intervention.

Recalculation of Amount Due

The Court recalculated the amount owed based on the per-acre price derived from the original contract (UGX 74,000,000 ÷ 15 acres = UGX 4,933,333.33 per acre). Since the appellant had received 6.908 acres, he was liable to pay only UGX 34,079,464, having already paid UGX 30,000,000.

Takeaways

Express terms in contracts—especially those relating to quantity or scope of performance—are binding and must be respected.
Partial performance does not entitle a party to full consideration; demanding full payment despite non-performance may constitute unjust enrichment.
Courts will not enforce excessive interest rates in non-commercial transactions; awards must be fair and compensatory.

Read the full decision