Exim Bank Tanzania Limited vs Sai Energy & Logistics Services Limited, commercially appeal no 2 of 2022.

1. Before any court arrives at a conclusive or decisive end of the case before it, and hence rendering its judgment, it must have considered the evidence of both parties to the case, evaluated the same, and offer its reasoned judgment of it.

2. That was not enough as the court ought to have gone a further step of analysing and evaluating such evidence considering what was offered in evidence by both part of the assignment and not just evaluating one side of the evidence while leaving the other side in the dark. Neither is it sufficient to summarise the evidence without much ado that is but one part of the assignment.

3. The first appellate Court is duty-bound to evaluate the evidence and is entitled to come up with its findings.

4. Much as there is a contract that creates a bank-customer relationship when a customer opens an account with the bank, such contractual relationship is not an ordinary one.

5. A term account (also known as a fixed-term account) is a type of account that allows a depositor (customer) to agree with the bank to deposit a certain amount of money for a fixed term without having the ability to add anymore to the balance until the agreed term comes to an end. 

6. A loan facility (credit facility) is an agreement or a facility letter in which a lender, usually a bank or other financial institution, sets out the terms and conditions under which it is prepared to make a loan facility available to a borrower. It is sometimes called a loan facility agreement or a facility letter, the loan facility being either a term loan, a revolving facility, or an overdraft facility.

7. In principle, a loan facility agreement is completely different from the ordinary underlying contract that the bank may have with its customer concerning opening of bank accounts as it has its terms and conditions governing the lending-borrowing relationship.

8. The general rule is that any precontractual discussions, made during the negotiation of the contract, are in principle, inadmissible as evidence. They cannot even be relied on to assist in determining the construction of a contract that was being contemplated. 

9. If all elements of a legally enforceable contract are present, i.e., offer, acceptance, consideration, etc. then a pre-contract document may be considered legally binding.  

10. The parties in a precontractual negotiation stage, may agree to some binding obligations, say for instance on such as obligations of confidentiality, allocation of costs for negotiations, or document preparation. However, in such a scenario, the relevant document and Scott argue: must be very clear and categorical on what is and what is not intended to have a legal effect. It means, therefore, that, the context under which each case is to be determined matters a lot, since, where a party has incurred sunk costs. 

11. Courts do impose a duty to bargain in good faith on the party wishing to exit from a bargain where the other party expects her to act in good faith. 

12. Ordinarily, where a party enters or continues in negotiations while he/she does not intend to reach an agreement with the other party and does leave the other party under the justified assumption that a contract would be concluded, such a party will be acting in bad faith. And the party breaking off while she/he has signalled to the other party before or during the negotiations that the contract will be concluded must be held liable as their negotiations were at a point of “point of no return” after which the party may not simply say “no” and quit at will. This is simply because the  other party expected that the contract would be concluded, and that is, indeed, a “justified” expectation. 

13. Another possibility relied on in holding a party liable in pre-contractual agreements is the doctrine of promissory estoppel.Promissory estoppel is a doctrine originating in English law, which prevents the maker of a promise, intended to be legally binding, from denying that he or she is bound by that promise. 

14. Where an intended agreement fails to materialise in a situation where the offeror had charged such fees upfront, the nonrefundability factor cannot still stand in favor of the offeror unless the basis upon which it was premised is proved to be “a binding pre-contract agreement” for which the offeree will have assumed a duty to act in good faith by not being able to freely walk out at the expense of the offeror.

15. Where one party has taken the initiative to rely on a promise made by another to his/her detriment, that will attract not only the doctrine of promissory estoppel, as some of the cases considered here above would tell but may also invite a consideration of the duty to act in good faith.  

16. Once two parties agree to proceed to a stage where each holds a common assumption or understanding that they will end up executing a contract, but the other party suddenly backs off while his/her counterpart has done “work beneficial for their “project”, say, has embarked on preparing documentation for execution which he would not have been expected, in other circumstances, consequences. As a matter of equity,such a counter-party will be entitled to some form of compensation or restitution in case of the earlier party unilaterally decides to backpedal or back off from the “project” for other reasons that pertain only to his position, however valid, if such decision is not associated with bona fide disagreement concerning the terms of the contract to be entered into and do not relate at all to that of the other party.  

17. In principle, a claim for loss of profit amounts to a claim for specific damages and, as the law requires, claims of that nature require to be not only specifically pleaded but also strictly proved.   

18. An award of general damages would be made by a trial judge or magistrate after consideration and deliberation on the evidence on record able to justify the award. 

Credit to Clarence, S/A ✍️