Union Assurance Limited v. P. Lalith Perera – CA 891/99 F -1999

The case between P. Lalith Perera (Substituted-Plaintiff-Respondent) and Union Assurance Limited (Defendant-Appellant) addressed the issue of the defendant’s reduction of the plaintiff’s insurance commissions between June 1991 and 1994, allegedly contrary to an oral agreement providing a 15% commission. It was held that claims under an oral contract are subject to a three-year prescriptive period under Section 7 of the Prescription Ordinance, rather than six years, restricting the plaintiff’s entitlement to only those sums deducted within that period. This decision reaffirmed the principle that only strictly proven damages can be recovered, citing relevant statutes and precedents, and clarified the limitation period applicable to oral agreements in contractual disputes.

H.N.J. Perera, J.