Tendai Makarichi v Augustine Chikutu

The plaintiff and defendant grew up together in the same neighbourhood and regarded each other as brothers. The plaintiff worked as a driver for an international haulage company and frequently travelled to South Africa. He would import goods for the defendant, who would pay in Zimbabwean currency or sometimes give foreign currency in advance. In June 2006, the plaintiff delivered hydraulic pipes and fittings to the defendant, which marked a turning point in their relationship. The plaintiff alleged non-payment for the last three deliveries totaling $6,912,560 (old currency) as shown on delivery notes. The defendant acknowledged receipt but claimed he had paid in full for all deliveries. The plaintiff issued summons in April 2007 claiming $55,979,315, being the replacement value of the goods at that time. The case arose during Zimbabwe's hyperinflationary period, which significantly affected the value of the original purchase price.

• Whether the defendant had paid for the hydraulic pipes and fittings delivered by the plaintiff
• Whether the plaintiff could claim the replacement value of goods at the date of judgment execution instead of the original purchase price
• What remedies are available to a seller who has delivered goods under a contract of sale but has not been paid
• Whether the plaintiff's pleading of a 'generic contract' rather than a specific sale contract entitled him to claim replacement value

The plaintiff's claim was dismissed with each party bearing its own costs.

Where a seller has delivered goods under a contract of sale but has not received payment, the seller's remedies are limited to: (i) suing for the agreed purchase price, interest and damages, or (ii) rescinding the contract and suing for return of the goods. A seller who has parted with goods cannot claim the replacement or current market value of those goods at the date of judgment execution; the seller is limited to claiming the purchase price as agreed when the contract was concluded (when it became perfecta). The true nature of a transaction is determined by its substance, not by how it is pleaded - where parties agree on specific goods to be imported, delivery occurs, and a purchase price is fixed and accepted upon delivery, this constitutes a contract of sale regardless of whether it is pleaded as a 'generic agreement'.

The court made important observations about business practices and contractual formalities: 'While the law does not require parties to a contract to reduce their contract into a written document for its validity, in my view, it is prudent business practice to do so. A written contract is easier to prove than an oral one and lessens the chances of the court erring in defining the terms of the contract agreed to. Determining the terms of a contract on the basis of the credibility of the parties, while an acceptable manner of determining disputes in these courts, is in my view a mine field to be walked through with utmost care.' The court also observed that the hyperinflationary environment had 'caused much confusion in the remedies that are available at law for breach of a contract of sale' because 'goods are retaining their commercial value while the prices set for such goods drastically change from day to day', placing purchasers in possession in a much better position than sellers awaiting payment.

This case is significant in the context of hyperinflationary economies and illustrates the harsh consequences of inflation on contracts of sale, particularly for sellers who have parted with goods without receiving payment. It demonstrates the rigidity of common law remedies for breach of contract of sale, which do not automatically adjust for hyperinflation. The case clarifies that a seller who has delivered goods but not been paid is limited to claiming the purchase price agreed at the time of contract formation, and cannot claim the replacement or current market value at the date of judgment or execution. The judgment serves as a cautionary tale about the importance of written contracts and the risks of informal business arrangements, particularly in unstable economic environments. It also highlights the limitations of attempting to avoid the legal consequences of a sale contract through creative pleading.