Contract Enforcement ICBE policy BRIEF in Ugandan Business Transactions: The Case of Small and Medium Enterprises

Abstract

This study examines the extent to which small and medium sized business in Uganda use formal agreements when purchasing supplies. It also looks at the dispute resolution mechanisms the SMEs use when suppliers do not honor their contractual obligations to deliver supplies on time. The paper is based on a survey with a sample of 422 Ugandan Small Scale Businesses and 417 medium enterprises. The businesses surveyed were drawn from manufacturing, construction, hotels and restaurants, education, wholesale and retail trade sectors. Respondents were managers who deal with the purchasing function within their businesses. Data were collected using a questionnaire which was made up of both closed and open-ended questions to corroborate responses from respondents.