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ZESCO supplier looses money

Filed under: Special Comments |

By Dickson Jere

The supplier was awarded tender by ZESCO under simplified bidding for the supply of ladders and live line testers. When it delivered the ladders, ZESCO refused to accept them saying they were “wobbly and sagging” and therefore not suitable for use on overhead power lines. ZESCO refused to pay the supplier the K348,000 for the order.

Having failed to get his monies, he sued ZESCO in the High Court, claiming for his payment, breach of contract and damages. He averred that the Purchase Order did not contain the specifications which ZESCO was insisting on after he had procured the goods and supplied.

The High Court Judge ruled against the supplier, prompting an appeal in the Court of Appeal. Three Judges of the Court of Appeal analyzed the evidence on record and found that the supplier indeed breached the contract by supplying defective ladders.

“It was expressly disclosed to the Appellant (supplier) via the tender document the purpose for which the leaders were required and the Appellant indicated in its quotation that it would supply ladders for that purpose,” the three Judges observed.

“Therefore, by supplying defective ladders, the Appellant was in breach of section 14 of The Sale of Goods Act which provides for an implied condition that goods sold will be of merchantable quality,” the Judges ruled and threw out the appeal.

The panel observed that the Purchase Order should have been read together with the tender documents that had detailed specifications of the ladders.

“In our view, it is only logical therefore, that if the Purchase Order is silent on the specifications of the ladders, the approved quotation ought to be considered as that is what formed the basis of the award of the contract,” the Judges said.

“We, therefore, agree with the learned Judge (High Court) that the Purchase Order ought to have been read with other documents,” the Judges concluded.

This is an important case for those involved in award of tenders especially under simplified bidding procedures. Suppliers must read all the documents forming part of the agreement instead of the Purchase Order only.

Case citation – Muluchi Investments Limited v ZESCO Limited – Appeal No 85 of 2021 and Judgment delivered last week on the 26th April 2023.

Note – this is not legal advice but summary and commentary on a specific case as presented in the Court of Appeal.


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