Galaunia Farm Limited v National Milling Company Limited and Another Case Summary (1998)

Facts Galaunia Farm (Appellant) between March and April 1998 issued a tender to various potential clients to invite them to make offers towards......
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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

 

Law Student, The University of Zambia

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