The court was asked as to the effect of a telex sent by the buyers to the sellers, notifying them that if a notice of appropriation was not received by the following day, then the buyers would treat the sellers as being in default, under clause 26 of the GAFTA Form 100. In fact the sellers had one more day before the last day of shipment under the contract. No notice of appropriation was received, so the buyers sent a further telex in which they claimed a ‘price fixing’ by arbitration, nominated their arbitrator and invited the sellers to do likewise. It was argued that these actions of the buyers constituted a repudiation of the contract.
Held: The argument failed. On the facts overall, the buyers were not repudiating the contract. The telex giving notice of default was a ‘misapprehension as to the date of default’. He held that the actions of the buyers, taken as a whole, indicated that they were not repudiating the contract but ‘insisting on it and claiming damages under it.’
Scarman LJ pointed out that the arbitrators had not found the action of the buyers to be repudiatory of the contract. He concluded that it was not possible to infer, from the telex, that had the sellers given notice of appropriation on the following day (ie. the last day for shipment), then the buyers would have rejected it. Therefore the telex was not a repudiation.
Lord Denning MR discussed estoppel: ‘When one person has led another to believe that a particular transaction is valid and correct, he cannot thereafter be allowed to say that it is invalid and incorrect where it would be unfair or unjust to allow him to do so. It is a kind of estoppel. He cannot blow hot and cold according as it suits his book.’
The rule that a plaintiff cannot recover for a cause of action which only accrued after the writ was issued, was a rule of practice rather than a rule of law. Moreover, it was a rule of practice which could be departed from whenever the justice of the case required.
Judges:
Lord Denning MR, Orr LJ, Scarman LJ
Citations:
[1975] 2 Lloyd’s Rep 118
Jurisdiction:
England and Wales
Cited by:
Cited – Aker Oil and Gas Technology UK Plc v Sovereign Corporate Limited TCC 15-Jan-2002
The claimants sought payment of a bonus for having completed the construction of a vessel on time. They claimed that certificates estopped the defendants from admitting the bonus to be due. The defendants said the certificates had been issued in . .
Cited – Iqbal v Dean Manson Solicitors CA 15-Feb-2011
The claimant sought protection under the Act from his former employers’ behaviour in making repeated allegations against him. He appealed against the striking out of his claim.
Held: The appeal suceeded. The matter should go to trial. The . .
Lists of cited by and citing cases may be incomplete.
Estoppel, Contract
Updated: 08 May 2022; Ref: scu.183019