THE UNIVERSITY OF ZAMBIA

INSTITUTE OF DISTANCE EDUCATION

SCHOOL OF LAW

LAW OF CONTRACT (LPU 2920) - ASSIGNMENT 2

STUDENT: Mr. Mulife MULELE

ID No.: 22101625

CELL: +260 964 716 072

EMAIL: brian.mulele@gmail.com

COURSE: CONTRACT LAW

COURSE CODE: LPU 2920

YEAR OF STUDY: 2nd YEAR

LECTURER: Mr. Frank LUNGU

CELL: +260 977 833 470

EMAIL: contractlaw2920@gmail.com

TASK: ASSIGNMENT 2

DATE DUE: WEDNESDAY, 31ST APRIL 2023

DECLARATION: I hereby declare that this paper represents my work.

© 2023
LETTER OF ADVICE TO CHIMUTENGO COMPANY LIMITED ON THE PROBABLE
OUTCOME OF THEIR INTENTION TO SUE KABALISHE FARMS LIMITED FOR
TERMINATION OF THE CONTRACT TO SUPPLY FERTILISER TO THEM.

This paper presents advice for Chimutengo Company Limited on the probable outcome of their
intention to sue Kabalishe Farms Limited for terminating the contract to supply fertiliser to them.
To begin with, this paper will determine whether a legally binding contract existed between
Chimutengo Company Limited and Kabalishe Farms Limited. Secondly, the paper will advise
Chimutengo Company Limited as to whether they had breached the terms of their contract between
themselves and Kabalishe Farms Limited when they failed to deliver fertiliser to Kabalishe Farms
Limited on time. Thirdly, the paper will need to show whether there was a breach of specific terms
within the contract. Lastly, this paper will conclude its findings.

According to Ngambi and Chungu,1 contracts are written or spoken agreements, which are
enforceable by law. The four elements required in order to form a contract that is legally binding
are; offer, acceptance, consideration and intention for the parties to be legally bound.2

An offer is an expression of willingness to contract on specified terms, made with the intention
that it is to become binding as soon as it is accepted by the person to whom it is addressed.3 An
offer is the first requirement of a legally binding contract. The party that makes the offer is the
offeror, while the party that accepts the offer is the offeree.

The concept of an offer as explained in the case of Storer v Manchester City Council 4, gives the
following points:

i. It is an expression of willingness to contract on specified terms

The term Offer is also defined in the case of London Ngoma and Others v LCM5.

1
Sangwani Patrick Ng’ambi and Chanda Chungu Contract Law in Zambia (2 edn, 2021) 1
2
Ng’ambi (n 1)15
3
ibid
4
Storer v Manchester City Council [1974] 1 WLR 1403
5
London Ngoma and Others v LCM Company Ltd (Appeal 122 of 2017) [2019] ZMSC 309

1
According to Peel, acceptance is a final and unqualified expression of assent to the terms of an
offer.6 For the contract to be binding, the acceptance must match the offer exactly, and the offeree
must accept all the terms of the offer.7

The case of Routledge v Grant8 established the rule that a binding contract formed between two
parties once an offeree accepted the offer, hence signifying the end of an offer.

A contract is not created when the two parties agree, but instead, there is a need for the concerned
parties to provide consideration if they wish to sue on the contract. In other words, each party must
promise to do or give something to the other.9

According to N’gambi & Chungu,10 consideration is, “…something of value in the eyes of the law,
promised or given by one party to the contract which makes the other party’s promise enforceable
as a contract”.

The case of Currie v Misa11 defined consideration in terms of benefit and detriment:

“…some right, interest, profit or benefit accruing to one party, or some forbearance, detriment,
loss or responsibility given, suffered or undertaken by the other”.

For an agreement to be binding, the intention to create legal relations should be there, even when
supported by consideration.12 In order to determine whether the intention to create legal relations
was there in a contract, the courts apply an objective test and judge the situation by what was the
said, and done.13

The intention to create legal relations falls into two categories, namely:

i. Social and domestic agreements, and;

6
Edwin Peel, Treitel The Law of Contract (14 edn, Sweet & Maxwell 2017) 19
7
Professor Patrick Mvunga, Mumba Malila, Sangwani Patrick N’gambi, Mvunga, Malila, N’gambi on Contracts.
(1st edn, UNZA Press 2010) 3
8
Routledge v Grant (1828) 4 Bing 653
9
Mvunga (n 7)18
10
Mvunga (n 7) 54
11
Currie v Misa (1874) LR 10 Ex 153
12
Edwin Peel, Treitel The Law of Contract (14 edn, Sweet & Maxwell 2017) 187
13
Mvunga (n 7) 86
14
Mvunga (n 7) 29

2
When it comes to business agreements, it is not always the case that parties would intend to be
legally bound, as was in the case of Rose and Frank v Crompton Brothers Limited.15

Therefore, the fact that Chimutengo Company Limited had a running contract with Kabalishe
Farms Limited to transport fertiliser implies that all the elements required in the formation of a
contract that is legally binding as mentioned above were met.

The terms of a contract represent what the parties have agreed to do or give under the contract, or
their obligations to each other, and may be either express or implied.16 An express term is a term
that is negotiated, agreed to and explicitly outlined in a contract either in writing or orally. 17

A condition in a contract, according to N’gambi and Chungu, is a key term, that is vital to its main
purpose, the breach of which entitles the injured party to reject the contract altogether.18 In the
case of Rosemary Ngorima and 10 others v ZCCM, the Supreme Court held that in any contractual
relationship, the parties are bound by whatever terms and conditions they set for themselves.
Chimutengo Company Limited and Kabalishe had a running contract to transport fertiliser, and
the condition in the contract was that the fertiliser should be supplied within the next four weeks,
after four weeks it will be late to supply the fertiliser. However, Chimutengo were unable to supply
the fertiliser in the intended time due late delivery of spares by Toyota Zambia required to repair
twenty of their trucks that were involved in an accident. For this reason, Kabalishe Farms Limited
decided to terminate the contract with Chimutengo Company Limited.

According to Ng’ambi and Chanda, is said to “go to the root of a contract’, the innocent party can
treat the contract as discharged.19In the case of Power Equipment Limited v Goldtronics Limited
and Barclays Bank Zambia Plc, The High Court of Zambia held that a term would be treated as a
condition of a contract where the parties have provided for it to be treated as such.20

According to Ng’ambi and Chungu, “When a condition is unfulfilled, the claimant will not only
be able to sue for damages but will be able to repudiate his obligations, or indeed both”.21The case

15
Rose and Frank Co v JR Crompton and Bros Ltd, [1925] AC 445
16
Sangwani Patrick Ng’ambi and Chanda Chungu, Contract Law in Zambia (2 edn, 2021) 94
17
ibid
18
Ng’ambi (n 1) 109
19
ibid
20
Power Equipment v Goldtronics Limited and Barclays Bank Zambia PLC (1998/HP/1946) [2012] ZMHC 53 (2
October 2012)
21
Sangwani Patrick Ng’ambi and Chanda Chungu, Contract Law in Zambia (2 edn, 2021) 109

3
of Poussard v Spiers is an example of where the above principle was applied. In this case, the court
held that the defendant was not wrong when they refused to take back the plaintiff when she
returned to take up her position in the opera after falling ill.22

The ending of contractual obligations called discharge of contract, comes about by performance,
agreement, breach or frustration. When this happens all rights and obligations of the parties end,23
as was demonstrated in the case of the Development Bank of Zambia v Mambo.24

A contract is discharged by performance when each party fulfils completely their obligations under
the contract, with no item left on the agenda. However, this is not the case when only one party
fulfils its obligations. The general rule states that parties must perform precisely all the terms of
the contract, in order to discharge their obligations.25 This rule is applied in the Sales of Goods Act
of 1893, which states that goods must correspond with the description.26

When both parties perform their obligations under the contract, they can be discharged normally.
However, when this is not the case, and only one party to the contract performs, only they can be
discharged and have the right to proceed with action against the other party.27

In the case of Blue Financial Zambia Limited and Others v African Banking Corporation Zambia
Limited28, it was held that a party to a contract must perform exactly what they undertook to do.

Where time is of the essence failure to perform within the stated amount of time amounts to a
breach of contract.29 An example of the case where this rule was applied was that of Charles
Richards Ltd v. Oppenheim.30

The general rule states that parties must perform precisely all the terms of the contract, in order to
discharge their obligations. Where time is of the essence, failure to perform within the stated
amount of time amounted to a breach of contract.

22
Poussard v Spiers (1875) LR 1 QBD 410
23
Sangwani Patrick Ng’ambi and Chanda Chungu, Contract Law in Zambia (2 edn, 2021) 309
24
Development of Zambia v Mambo (S. C. Z Judgment 13n of 1998) [1995] ZMSC 20
25
Ng’ambi (n 23) 309
26
Sales of Goods Act of 1893.
27
Ng’ambi (n – 23)
28
Blue Financial Zambia Limited and Others v African Bank Corporation Zambia Limited (Appeal 118 of 2015)
[2016] ZMSC 249
29
Ng’ambi (n 23) 319
30
Richards (Charles) Ltd v Oppenhaim [1950] 1 KB 616, CA

4
In conclusion, considering that time was of the essence, and rules for discharge of a contract,
Chimutengo Company Limited had breached the terms of the contract by failing to transport
fertiliser on time and therefore stood no chance of winning the case should they decide to sue
Kabalishe Farm Limited.

BIBLIOGRAPHY

Statutes

Sales of Goods Act of 1893.

Cases

Blue Financial Zambia Limited and Others v African Bank Corporation Zambia Limited (Appeal
118 of 2015) [2016] ZMSC 249

Currie v Misa [1874] LR 10 Ex 153

Development of Zambia v Mambo (S. C. Z Judgment 13n of 1998) [1995] ZMSC 20

London Ngoma and Others v LCM Company Ltd (Appeal 122 of 2017) [2019] ZMSC 309

Poussard v Spiers (1875) LR 1 QBD 410

Power Equipment v Goldtronics Limited and Barclays Bank Zambia PLC (1998/HP/1946) [2012]
ZMHC 53 (2 October 2012)

Richards (Charles) Ltd v Oppenhaim [1950] 1 KB 616, CA

Rose and Frank Co v Crompton Bros Ltd, [1923] AC 445

Routledge v Grant [1828] 4 Bing 653

Rosemary Ngorima & 10 Others v Zambia Consolidated Copper Mines Limited (Mufulira
Division) (Appeal 97 of 2000) [2003] ZMSC 33 (05 June 2003)

Storer v Manchester City Council [1974] 1 WLR 1403

Books

5
Mvunga Patrick, Malila Mumba, N’gambi Patrick Sangwani, Mvunga, Malila, N’gambi on
Contracts (1st edn, UNZA Press 2010)
Peel Edwin, The Law of Contract (14 edn, Sweet & Maxwell 2017) 19
Sangwani Patrick Ng’ambi and Chungu Chanda, Contract Law in Zambia (2 edn, 2021)