The respondent, C.N. Onuselogu Enterprises Ltd., was on 14th June 1977 awarded a contract for the construction of Awka-Etiti-Isieke road by the Anambra State Government represented as defendant by the appellant in this appeal. The value of the contract was N6,38,585.00 and was to be completed in seventy eight weeks. Work started in earnest but by November 1979, the Anambra State Government was falling into arrears in the payment on interim certificates of works done. The respondent none the – less remained on the site and carried on those works he could possibly execute. But by 27th November 1979 the agent of the appellant had declined signing any further interim certificates claiming he had instruction to do so; thus the interim certificate No.16 valued at N500,000.00 was not signed. There was an interim certificate No.15 signed for the sum of N77,491,80 for which no payment was made. The term of the contract stipulated payment on interim certificate with twenty-eight days of its submission. The respondent thus was placed in a very uneasy situation whereby there was delay in compensating villages with houses and crops along the road which prevented the contractor moving quick, interim certificates were not being honoured as stipulated in the contract and this led to cash flow problem for the contractor. As if the situation was not bad enough, the appellant on 17th December 1980 terminated the contract on an allegation that the respondent had abandoned the site. The respondent contractor had to sue for breach of contract and damages. Judgment was given to the respondent in sum of N2,326,395.86.

The defendant appealed to the Court of Appeal and his appeal succeeded in part. The appellant still not satisfied further appealed to the Supreme Court and the respondent cross appealed against the variation made in the damages as awarded by the trial court.