The parties chartered for delivery of molasses. The ship was not going to be ready for the intended start date and the charterer repudiated the contract in a telex alleging breach of condition. The market was falling rapidly. The sellers did nothing, but later sold the molasses at a substantial loss, and sought the difference. The arbitrator gave the award to the seller. The buyer appealed.
Held: The appeal was dismissed. A failure to perform a contract obligation may be an acceptance of an anticipatory repudiation. Phillips J asked whether an innocent party can ever demonstrate acceptance of repudiation by not performing his own contractual obligations and said: ‘It depends upon the circumstances. Failure to progress an arbitration is a good example of inertia that is likely to be equivocal. But in other types of contractual relationship where the parties are bound to perform specific acts in relation to one another, a failure to perform an act which a party is obliged to perform if the contract remains alive may be very significant. It is not difficult to envisage circumstances in which, if such conduct follows a renunciation, the obvious inference will be that the innocent party is responding to the repudiation by treating the contract as at an end. I do not have to decide whether the failure on the part of [the sellers] to tender to [the buyers] a bill of lading, or any of the subsequent unspecified failures to perform the contract which were apparent to [the buyers], gave clear indication to [the buyers] that, in the view of [the buyers] wrongful action, [the sellers] were treating the contract as at an end. That is a question of fact for the arbitrator. What I have to decide is whether, as a matter of law, mere failure to perform contractual obligations can ever constitute acceptance of an anticipatory repudiation by the other party. In my view, for the reasons that I have given, it can.’
An anticipatory breach was justified by a failure to perform the contract.
Judges:
Phillips J
Citations:
Times 20-May-1993, Gazette 25-Aug-1993, [1994] 4 All ER 109, [1994] 1 WLR 1390
Jurisdiction:
England and Wales
Cited by:
Appeal from – Vitol Sa v Norelf Ltd (‘the Santa Cara’) CA 26-May-1995
The parties agreed to buy and sell molasses to be delivered on the Santa Clara which was set to leave on a certain date. The market was falling, and when the buyer saw that the ship would not be ready in time, it sent a telex saying that this was a . .
At first instance – Vitol Sa v Norelf Ltd HL 10-Jul-1996
(The Santa Clara) The seller was to deliver propane by a ship set to leave on a certain date. The market was falling. The buyer, when it was clear that the ship would be unable to leave on the day fixed, sent a telex to say that the contract was . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 10 April 2022; Ref: scu.90184