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Mashudu Netsianda, Senior Court Reporter
A SUPPLIER of luxury coaches is suing Foundation College for more than $1,1 million for allegedly breaching the terms of contract in a botched bus deal.
The failed deal also resulted in the Harare based company losing its contract with Xiamen Kinglong United Automobile Industry, a Chinese vehicle manufacturer which was supplying it with luxury buses.
Frontcomm Investments (Pvt) Ltd procured two buses for Foundation College at a cost of $290,000 in a deal which later went sour after the college allegedly paid only $33,000.
The company is seeking an order compelling Foundation College to pay $1,190,558 with five percent interest calculated from the date of summons to the date of full an final payment for loss of business and outstanding payments.
Frontcomm Investments (Pvt) Ltd is currently locked in a legal wrangle with Xiamen Kinglong United Automobile Industry over the failed deal.
The company said despite a written demand for payment, Foundation College has denied liability in respect of the claim and refused to pay the money.
Foundation College has not yet filed opposing papers and it has 10 working days to do.
In its application, through its lawyers Hove and Associates, the company said it incurred a $1 million loss in business following the termination of its distributorship of buses arising from Foundation College’s failure to adhere to the terms of the agreement.
According to court papers, the two parties agreed that Frontcomm Investments would supply the college with buses on a credit facility.
The terms of the agreement were that Foundation College would pay $12,000 for customs duty per bus in addition to the purchase price which was payable in full within 12 months.
“Upon signing the agreement, the defendant made payment of $33,000 and took delivery of two buses. Frontcomm Investments verbally undertook to make transfers of the vehicles into Foundation College’s name upon full and final payment, but no payments were made thereafter,” said the vehicle importer’s lawyers.
Frontcomm Investments said as a result of the college’s failure to adhere to the terms and conditions of the contract, it defaulted on payments due to its supplier for the delivered buses.
“Consequently, the distributorship of Kinglong buses was cancelled and Frontcomm Investments is facing legal action for the harm emanating from Foundation College’s conduct. The plaintiff therefore suffered damages of loss of business and the cost of defending the suit,” said the lawyers from Hove and Associates.
Online Reporter