Invoice Terms: E3455 of 2023 Protection Masters v Trident Insurance Company Limited

On August 16, 2023, The Small Claims Court delivered a Judgement in Nairobi SCCCOMM No. E3455 of 2023 Protection Masters -vs-Trident Insurance Company Limited in which Ong’anya Ombo Advocates LLP represented the Respondent. The Court consented to our legal argument that an Invoice needs to be compliant with the agreed terms of the transaction or contract between parties and any inclusion in the Invoice is an attempt to vary the terms of the Contract.

The Claimant filed a Statement of Claim seeking Kshs. 330,000.00 being the balance of Kshs. 580,000.00 which was mutually agreed upon by parties for services rendered by the Claimant to the Respondent. The Respondent paid a sum of Kshs. 250,000.00 leaving a balance of Kshs. 330,000.00. When the Respondent failed to settle the Balance the Claimant raised an invoice seeking the said sum and included a 10% monthly finance charge on the amount outstanding. The Respondent filed a response admitting the principal sum of Kshs. 330,000.00 and denied the interest as it was not part of the contract between the parties.

The Court emphasized the following points:

For interest to accrue it has to be contractually agreed by the parties. In this case, the parties did not agree on the finance charge of 10% and the consequences of the breach were never discussed by the parties. The Interest was unilaterally inserted by the Claimant in the invoice after terms had been settled and deposit paid hence introducing terms which constituted a variation on the terms of the agreement. To effect a variation, therefore, the parties must be ad idem (in agreement) and the agreement must be supported by consideration.

The court further stated presenting an invoice with fresh terms is making a fresh offer. For it to be effective, there had to be a meeting of minds which is an essential component for the formation of an enforceable contract.