Attorney General v Kabuito Contractors Limited (Civil Appeal 638 of 2019) [2023] KECA 230 (KLR)
The bottom line
#Kenya's Court of Appeal threw out a contractor's Kshs 3.17 billion award because it couldn't prove an oral extension of a written government road contract.
What this practically means
#Executive summary
#Key legal issues
#Whether a valid oral extension of the written contract existed
The respondent failed to prove a valid oral extension; the trial judge erred in finding one without the entire written contract, without the evidence of the Permanent Secretary or the author of the offer letter, and despite the Central Tender Board's rejection of the extension.
The respondent produced only selected pages of Contract No PKG/5B, so the court could not ascertain whether the written contract contained a non-variation clause or permitted oral extension. The respondent also failed to call the Permanent Secretary or the author of the February 16, 1998 letter, and overlooked evidence that the Central Tender Board rejected the extension and recommended fresh tenders. Party autonomy operates only to the extent the contract allows.
Whether the Permanent Secretary could bypass the Central Tender Board and procurement regulations
No evidence established that the Permanent Secretary could unilaterally award a contract or veto the Central Tender Board; public tenders could not validly be awarded in disregard of the governing regulations.
The trial judge's reliance on the absence of the Public Procurement Act, 2005 was misplaced: the Central Tender Board existed at the material time and was mandated to consider and approve tenders, and it had expressly declined approval on the ground that the contract was not awarded per the Regulations. The court was obliged to consider whether the oral extension met these regulatory requirements.
Burden and standard of proof on a claim founded on an oral contract
The party asserting an oral agreement must prove its existence and terms on a balance of probabilities; the burden lies totally on the claimant, and oral contracts are harder to prove.
Applying the Stellenbosch Farmers' Winery approach to mutually destructive versions, the respondent had to show its version was more probable. It was required to prove a contract existed, that it was breached, and that it suffered loss. Since the claim rested on an alleged oral contract, the respondent had to adduce evidence sufficient to prove the essential elements - offer, acceptance, consideration, capacity - and terms of the oral agreement, which it failed to do.
Judgment for a sum not claimed in the pleadings
Raised by the appellant (that judgment of Kshs 3,170,908,263.25 exceeded the pleaded claim); the appeal succeeded on the proof-of-contract issue so the point did not require separate determination.
Counsel for the appellant argued, citing Daniel Otieno Migore v South Nyanza Sugar Co Ltd and Malawi Railways Ltd v Nyasulu, that parties are bound by their pleadings and a judgment for a sum larger than claimed was irregular. The court allowed the appeal on the broader ground that no valid contract was proved, rendering the damages question moot.
Legal principles established
#- Where a written contract is alleged to have been varied or extended orally, the party asserting the variation must establish the nexus between the written contract and the oral extension, including whether the written contract contained a non-variation clause or permitted oral extension.
- A party alleging an oral contract bears the burden of proving its existence and its terms, and the oral agreement must satisfy the ordinary requirements of a valid contract.
- A contract with a government entity cannot be validly awarded orally in disregard of the procurement regulations and the tender-approving body.
- To succeed on a claim for breach of contract, a plaintiff must prove (a) the contract, (b) breach, and (c) loss resulting from the breach, on a balance of probabilities.
Court orders
#- 1.Appeal of the appellant dated December 18, 2019 allowed
- 2.Judgment of the High Court in HCCC No. 284 of 2008 dated May 25, 2018 set aside
- 3.Substituted with an order dismissing the respondent's suit with no orders as to costs
- 4.The appellant shall have the costs of this appeal and the High Court
- On appeal from
- High Court of Kenya
- HCCC No. 284 of 2008
- Jurisdiction invoked
- First appellate jurisdiction over the High Court (not expressly stated in the excerpt; the appeal was heard as of right by the Court of Appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Pride Inn Limited v Thatchmaanz Limited (Civil Appeal 167 of 2019) [2026] KECA 135 (KLR)[2026] KECA 135 (KLR)30 Jan 2026followed
- Aga Khan University Hospital v Gesore (Civil Appeal 133 of 2020) [2025] KECA 1214 (KLR)[2025] KECA 1214 (KLR)4 Jul 2025applied
Cite this brief
#Cite this brief
Caselaw, "Attorney General v Kabuito Contractors Limited (Civil Appeal 638 of 2019) [2023] KECA 230 (KLR)", Case Analysis (2023). Civil Appeal arising from HCCC No. 284 of 2008; appellant's appeal dated December 18, 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/230/eng@2023-03-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.