A ship was caught in harbour when an air raid broke out. The master took the ship to sea where it suffered damage.
Held: The shipowners were protected by a war risks clause in the charterparty agreement. As to waiver by election, Lord Goff of Chieveley said: ‘In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election. Characteristically, this state of affairs arises where the other party has repudiated the contract or has otherwise committed a breach of the contract which entitles the innocent party to bring it to an end, or has made a tender of performance which does not conform to the terms of the contract. .
In all cases, he has in the end to make his election, not as a matter of obligation, but in the sense that, if he does not do so, the time may come when the law takes the decision out of his hands, either by holding him to have elected not to exercise the right which has become available to him, or sometimes by holding him to have elected to exercise it. Instances of this phenomenon are to be found in s. 35 of the Sale of Goods Act 1979. In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him – for example, to determine a contract or alternatively to affirm it – he is held to have made his election accordingly . . perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms Moreover, it does not require consideration to support it, and so it is to be distinguished from an express or implied agreement, such as a variation of the relevant contract, which traditionally requires consideration to render it binding in English Law.’
Lord Goff of Chieveley
Times 19-Feb-1990, [1990] CLY 4077, [1990] 1 Lloyds Rep 391
Sale of Goods Act 1979 35
England and Wales
Cited by:
Cited – Oliver Ashworth (Holdings) Limited v Ballard (Kent) Limited CA 18-Mar-1999
In order for the landlord to claim double rent where a tenant held over unlawfully after the tenancy was determined, the landlord must not do anything to indicate that the lease might be continuing, for example by denying the validity of break . .
Cited – Peregrine Systems Ltd v Steria Ltd CA 14-Mar-2005
The claimant provided computer software to the defendants. The defendants appealed dismissal of their defences arguing that the system had failed.
Held: No repudiatory breach was established, and moreover Steria had elected to affirm the . .
Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
Cited – Wheatley, Smith As Executors of Henry Thomas Cadbury-Brown v King LRA 30-Nov-2011
LRA Estoppel – Exercise of options – whether defect waived – ‘The Kanchenjunga’ [1990] Lloyds Law Reports 391 – Peyman v Lanjani [1985] 1 Ch 457, HIH Casualty and General Insurance Ltd v AXA Corporate Solutions . .
Explained – Tele2 International Card Company Sa and others v Post Office Ltd CA 21-Jan-2009
Appeal against rejection of claim for novation of contract.
Held: Aikens LJ summarised the analysis by Lord Goff of the principles of affirmation by election in Kanchenjunga as follows: ‘i) If a contract gives a party a right to terminate upon . .
Cited – Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd and Others ChD 21-Mar-2012
The claimants alleged misuse by the defendants of confidential information.
Held: Arnold J said: ‘Confidential information is not property, however, even though businessmen often deal with confidential information as if it were property and . .
Lists of cited by and citing cases may be incomplete.
Insurance, Contract, Equity
Leading Case
Updated: 09 November 2021; Ref: scu.188152