Makerere University has been directed by the Uganda Commercial Court to compensate Team Uniform Limited after breaching a contract related to the supply of official graduation gowns. The university’s failure to honor its obligations resulted in financial losses for the company, prompting a legal battle over unpaid dues and unauthorized competition.
Team Uniform Limited had secured an exclusive contract to supply customized graduation gowns for Makerere University’s 69th and 70th graduation ceremonies. However, the company later accused the university of violating the agreement by allowing unauthorized vendors to sell counterfeit gowns, thereby undermining its market exclusivity and causing financial harm.
In response, Makerere University acknowledged the contract but argued that the supplier had not delivered the full quantity of gowns as per the agreement. The university further claimed that Team Uniform Limited failed to provide sufficient proof of delivery for all supplied gowns.
Delivering judgment, the court found Makerere University in breach of contract, stating that the institution had an obligation to ensure that Team Uniform Limited remained the sole authorized supplier. By allowing unauthorized vendors to introduce counterfeit gowns into the market, the university violated its contractual duty.
Additionally, the court ruled that Makerere University had not settled payments for all the gowns delivered. The judge emphasized that Team Uniform Limited had provided sufficient proof of supply, and the university’s failure to clear the outstanding dues warranted compensation.
The court ordered Makerere University to pay Shs 313,029,420 for unpaid gown supplies, shs 30,000,000 in general damages and interest at 19% per annum from February 17, 2020, until full payment is made.
However, the court dismissed claims for lost future earnings and special damages due to insufficient evidence. The judge ruled that such claims were speculative and lacked the necessary proof to support them.
This ruling underscores the importance of contract enforcement in Uganda, particularly regarding exclusivity clauses. It also serves as a warning to institutions that failing to regulate unauthorized competition can result in significant financial and legal consequences.