Agriculture Bank of Zimbabwe Ltd t/a Agribank v Datanet Technology Zimbabwe

On 23 February 2005, the plaintiff ordered 30 IBM A50 desktop computers from the defendant at a total cost of $340,183,800.00 (including VAT). The plaintiff paid the full amount on 28 February 2005. The defendant delivered only 10 computers on 2 March 2005, leaving a balance of 20 computers undelivered. The defendant claimed it could not deliver the remaining computers due to failure to obtain foreign currency allocation from the Reserve Bank of Zimbabwe through the auction system to pay its foreign supplier, Tri-Continental Limited. The plaintiff contended that delivery was to be immediate upon payment and that the full amount paid represented complete payment for all 30 computers. The defendant had initially indicated it had 25 computers in stock and would obtain the remaining 5. The plaintiff needed the computers urgently for its Harare and Bulawayo offices.

• What were the terms of the agreement between the parties?
• Whether it was agreed between the parties that the defendant would supply the computers only upon receiving foreign currency allocation from the Reserve Bank of Zimbabwe
• Whether the plaintiff is entitled to the order for specific performance or damages
• Whether the defendant is liable to the plaintiff in damages
• Whether the defence of supervening impossibility is available to the defendant

1. The defendant is ordered to supply and deliver to the plaintiff twenty (20) IBM A55 (Lenovo) desktop computers forthwith. 2. In the event of failure to deliver, the defendant is ordered to pay the plaintiff damages in the sum of $9,792,245,000,000.00 forthwith. 3. The amount in paragraph 2 shall be payable with interest at the prescribed rate from the date of summons to the date of payment. 4. The defendant shall bear the costs of suit.

1. A party who represents that goods are in stock and promises immediate delivery upon payment cannot later claim supervening impossibility based on foreign currency unavailability when this was never raised as a condition of the contract. 2. The defence of supervening impossibility requires that the impossibility be absolute (not relative), must not be caused by the fault of the party relying on it, and must not have existed at the time of contract formation. 3. Where a party is in clear breach of contract, specific performance will be ordered in favor of the innocent party who has fully met its contractual obligations, and the breaching party cannot dictate the quantum of damages. 4. The principle that impossibility of performance must be absolute means that a mere likelihood that performance will prove impossible, or a party's inability to perform when performance is generally possible, is insufficient to void the contract or excuse non-performance.

The court endorsed the statement from International Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd that businessmen who wrongfully break their contracts should not expect courts to simply award damages in money whose value has fallen drastically, but should instead expect to be ordered to perform regardless of how costly this may be. The court observed that allowing a breaching party to dictate damages would encourage parties to pull out of contracts based on their capacity to pay damages. The court also noted that the payment of $1,392,000.00 through the plaintiff's legal practitioners merely confirmed a failed attempt to settle the matter out of court, and that this sum was acknowledged by the defendant's own witness as being too little to cover the cost of twenty computers.

This case is significant in Zimbabwean contract law for reinforcing the primacy of specific performance in commercial contracts and rejecting attempts by breaching parties to avoid their obligations by claiming supervening impossibility when such impossibility was not absolute or was foreseeable at the time of contracting. The judgment emphasizes that parties who wrongfully breach contracts cannot count on courts simply awarding damages that may have diminished in value due to inflation, but will instead be ordered to perform their contractual obligations regardless of cost. The case also demonstrates the strict requirements for establishing the defence of supervening impossibility, particularly that the impossibility must be absolute (not relative), must not be the fault of either party, and must not have existed at the time of contracting.