SCZ
No. 1 of 2004
SCZ
Appeal No. 84 of 2002
In
the supreme court of Zambia
Galaunia Farm Limited
V
National Milling company limited and Another
Coram: Sakala, CJ.,
Chibesakunda and Chitengi JJS
Judgement of the court delivered by Sakala, CJ.
Facts
Galaunia Farm (Appellant) between March and April 1998
issued a tender to various potential clients to invite them to make offers
towards the purchase of wheat that was to be harvested that year. National
milling (Respondent) responded to the tender with an offer, however, the tender
was amended by Respondent regarding the quantity to be purchased which
was inserted as 2,000 metric tons of wheat. The Respondent signed the Amended tender and sent it to the Appellant who then accepted the new resolution
on the tender and countersigned to accept the offer. Later the Appellant arranged
and met with the Respondent subject to that meeting was the Appellant proposing
an increase in the tonnage. Which according to the Appellant was a good meeting
and after it the Appellant sent the respondent what was termed as a ‘Clean Up
Contract’ which had extra tonnage (from 2,000 of the amended tender to 2,500)
and eliminated alterations made by the respondent in the amended tender. The
Clean Up Contract was not signed by the respondent and from what the appellant
picked from their previous meeting they assumed silence from the respondent
meant the respondent had accepted the Clean Up Contract. The appellant was
further assured that the respondent had accepted after the appellant visited the respondent to examine where the wheat will be placed. And the
other assuring event was of the wheat samples sent to the respondent that were
examined. On 20th September 1998 the respondent and the defendant
held a meeting to discuss whether or not to deliver the wheat. From which the respondent's
position was that they do not dispute the contract but financial difficulties
and if the appellant delivered the wheat, they may not be paid for it. Furthermore, the respondent held that the appellant should engage someone else. In the next
meeting on the 26th September 1998, the respondent gave a letter
releasing the appellant from the contract and allowing them to sell their wheat
somewhere else. The appellant sued the respondent on the loss made to sell
the wheat to someone else due to the alleged failure of the respondent.
Issues
The issues are as follows
1. whether the lack of defense from the respondent
meant that the appellant should be given the upper handle on the issue
2. whether there was a counteroffer to the accepted amended offer
or not
3. Whether silence on the respondent side regarding the ‘Clean up Contract’ meant acceptance
4. Whether the fact that there was a contract of 2,000
metric tons of wheat the appellant was entitled to some compensations.
Held
The court held that the principle laid in the Nkhata Case although it set a test that could not apply in the case it could still
hold for the case at hand. On which they stated that the burden of proof rested
with the alleger meaning the fact that respondent had no defense does not
entitle the appellant to judgement.
The court held that the appellant sending the ‘Clean Up
Contract’, the said ‘Clean Up Contract’ amounted to a counteroffer which
terminated the original accepted offer with the authority of Hyde vs Wrench.
The court held in accordance with Chitty on Contracts, General
Principles, under Silence, which argues that an offeree who does nothing
in response to the offer is not bound by the terms of that offer and shall not
be subjected to the trouble and expense of refusing the offer.
The court with the authority of the Hyde Case held that the argument that the parties were contracted on the amended
contract of 2,000 metric tons of wheat thus they are liable for reimbursement was
rejected by the court as the counteroffer of 2,500 metric tons of wheat terminated
the original offer.
All in all,
“the court held they were no merit in the appeal and therefore dismissed with
cost to be taxed in default of agreement.”
Adapter from: Galaunia
Farms Ltd v National Milling Company Ltd (SCZ 1 of 2004, SCZ Appeal 84 of 2004)
[2004] ZMSC 106 (13 January 2004) available here
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Reference: Nyambe, E.N. (2022) Galaunia Farm Limited v National Milling company limited and Another case summary (1998), Amulufeblog. Retrieved from: https://www.amulufeblog.com/2022/04/galaunia-farm-limited-v-national.html