Kuria v Kihuria

The supplementary agreement acknowledged the original sale, raised the balance to Kshs. 1,206,000 with interest and penalties, and substituted about ten monthly instalments. The appellant paid only irregular sums totalling Kshs. 636,000, never matching an agreed instalment, so the first appellate court rightly found him in breach of both agreements. But the bank loan was the respondent's independent liability, undertaken without the appellant's knowledge or consent; charging the subject matter of the sale was itself a breach even absent an express prohibition, and allowing repossession deprived the appellant of the instrument with which he was paying the instalments.

Restitution for unjust enrichment is a third category of remedy, distinct from contract and tort, preventing a person from retaining money or benefit which conscience says he should not keep. The respondent received Kshs. 1,536,000 from the appellant and Kshs. 1,400,000 from the private-treaty sale, totalling Kshs. 2,936,000 against a total contract price of Kshs. 2,106,000. The surplus of Kshs. 830,000 is a windfall at the appellant's expense and must be refunded. A full refund was refused because damages restore the innocent party rather than grant profit, and the respondent suffered genuine disruption and depreciation during the appellant's possession.

Clause 8 of the initial agreement obliged any party who breaches the agreement to pay 20% of the purchase price to the innocent party and refund all other expenses incurred. The Court found the appellant in breach of the payment terms of both agreements and the respondent in breach by charging the tractor to the bank and losing it on loan default. Neither party was innocent, so neither can invoke the clause; the trial court's award of Kshs. 307,200 as contractual damages therefore could not survive the Court's recomputation of the parties' entitlements.

Clause 5 of the sale agreement recorded a mutual covenant that the motor vehicle was in sound mechanical state, having due regard to minor requirements in normal service due to natural wear and tear, and that the purchaser had established this to be the state of the vehicle. Having contracted on that footing, the appellant could not later recover repair and improvement costs from the vendor. The claim contradicted the parties' express bargain and was a non-starter irrespective of the repairs actually effected.

PW2, an accountant, prepared his loss-of-user report solely on records supplied by the respondent, projecting earnings of Kshs. 2,443,910 for 2009 and Kshs. 2,612,920 for 2010. On cross-examination he conceded he audited nothing and simply projected figures from information given to him. Speculative, unaudited projections cannot establish lost profits or inflate restitution. The refund was instead computed from the actual sums received by the respondent measured against the total contract sum, with an allowance for the respondent's genuine business disruption and the tractor's depreciation.