Zemqos Incorporated (Pvt) Ltd v City Parking (Pvt) Ltd

The plaintiff and defendant entered into a verbal contract for the installation of a parking management system in Harare's central business district. The plaintiff contended the contract was for 5000 parking bays in two phases: phase one for 555 fully automated bays and phase two for 4445 bays (initially semi-automated, later to be fully automated). The defendant paid for and received 200 handheld devices (35 for the 555 bays and 165 for other use) and paid software license fees annually up to December 2017. The defendant terminated the software agreement in January 2017, citing malfunctioning of the system. The plaintiff claimed specific performance or damages for breach of contract regarding the 4445 bays and sought payment for license fees and installation costs. The defendant argued the contract was only for 555 bays, that it had fulfilled all obligations for that phase, and that the plaintiff's claim had prescribed.

• Whether the defendant cancelled the contract in January 2017 and whether the plaintiff's claim had prescribed
• What were the terms of the verbal contract - whether it was for 555 bays or 5000 bays
• Whether the parties entered into an agreement for 4445 parking bays and the terms thereof
• Whether the plaintiff was entitled to specific performance for the allocation of 4445 bays
• Whether the plaintiff was entitled to payment for installation and license fees for the 4445 bays and ongoing license fees for 555 bays
• Whether the condition precedent regarding availability of funds for phase two had been fulfilled
• Whether the plaintiff suffered damages and the quantum thereof

The plaintiff's claim in the main and in the alternative was dismissed. The plaintiff was ordered to pay costs on the ordinary scale.

A party seeking to enforce a contract or a term thereof that is subject to a condition precedent must plead and prove that the condition precedent has been fulfilled. Where a verbal contract contains a conditional term (such as performance being dependent on availability of funds), and that condition is not fulfilled, the contract does not become perfecta in respect of that conditional term, and no claim for specific performance or damages can arise from the unfulfilled condition. Courts will not imply long-term obligations into oral contracts without clear evidence of such terms, whether through express agreement or established trade usage. Once goods are paid for and delivered under a contract, ownership passes to the purchaser, and there can be no breach regarding those goods unless other ongoing obligations are clearly established as terms of the contract.

The court made observations about the imprudence of parties entering into substantial commercial contracts verbally, noting that the defendant's characterization of the arrangement as "akin to a cash sale" was "baffling" given the scale of the project. The court commented that the increase in vehicles in Harare's CBD necessitated a parking management system, providing context for the commercial relationship. The court also observed that while oral contracts present difficulties in ascertaining actual terms due to lack of hard evidence, they are nonetheless enforceable if all essential elements are proven. The court noted that specific performance is discretionary and would not be appropriate where the defendant was no longer using the plaintiff's system.

This case is significant in Zimbabwean contract law for its treatment of verbal contracts and conditional terms. It reinforces the principle that courts will not create terms for parties in oral contracts and clarifies the distinction between conditions precedent and contractual terms. The judgment emphasizes that a party seeking to enforce a contract based on a condition precedent must plead and prove that the condition has been fulfilled. It also demonstrates the application of credibility assessment in determining the terms of oral agreements where documentary evidence is limited. The case serves as a cautionary tale about the risks of entering into substantial commercial arrangements without reducing agreements to writing, particularly regarding conditional terms and long-term obligations.