The plaintiffs had recently acquired the ship the ‘Hong Kong Fir’ and contracted to charter it to the defendants, but being late in delivering it, the defendants cancelled the charterparty contract. The plaintiffs said the repudiation was wrongful, and that the ship was fit to charter.
Held: ‘authority over many decades and reason support the conclusion in this case that there was no breach of a condition which entitled the charterers to accept it as repudiation and to withdraw from the charter. It was not contended that the maintenance clause is so fundamental a matter as to amount to a condition of the contract. It is a warranty which sounds in damages.’ and ‘If what is done or not done in breach of the contractual obligation does not make the performance a totally different performance of the contract from that intended by the parties, it is not so fundamental as to undermine the whole contract.’ and . .
Diplock LJ set out the test for whether a breach is repudiatory: ‘Does the occurrence of the event deprive the party who has further undertakings to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?’
Upjohn LJ said: ‘the remedies open to the innocent party for breach of a stipulation which is not a condition strictly so called, depend entirely upon the nature of the breach and its foreseeable consequences. Breaches of stipulation fall, naturally, into two classes. First there is the case where the owner by his conduct indicates that he considers himself no longer bound to perform his part of the contract; in that case, of course, the charterer may accept the repudiation and treat the contract as at an end. The second class of case is, of course, the more usual one and that is where due to misfortune such as the perils of the sea, engine failures, incompetence of the crew and so on, the owner is unable to perform a particular stipulation precisely in accordance with the terms of the contract try he never so hard to remedy it. In that case the question to be answered is, does the breach of the stipulation go so much to the root of the contract that it makes further commercial performance of the contract impossible, or in other words is the whole contract frustrated? If yea, the innocent party may treat the contract as at an end. If nay, his claim sounds in damages only. This is a question of fact fit for the determination of a jury.’
The test for whether there has been a repudiatory breach of a contract was set out. Diplock LJ said: ‘The test whether an event has this effect or not has been stated in a number of metaphors all of which I think amount to the same thing: does the occurrence of the event deprive the party who has further undertakings still to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?’ Though a term (in this case a ‘seaworthiness’ term) was not a ‘condition’ in the technical sense, it might still be a term breach of which if sufficiently serious could go to the root of the contract.
Sellers, Upjohn, Diplock LJJ
[1962] 2 QB 26, [1961] EWCA Civ 7, [1962] 1 All ER 474
Bailii
England and Wales
Citing:
Approved – Universal Cargo Carriers Corporation v Citati 1957
The shipowners had cancelled a voyage charter-party because no cargo had been provided. The court asked what delay could lead to a claim for a repudiatory breach of a contract. Devlin J said: ‘This case gives rise to a difficult question. How long . .
Applied – Boone v Eyre 1777
Unless the non-performance alleged to constitute the breach of the contract goes to the whole root and consideration of it the covenant broken is not to be considered as a condition precedent but as a distinct covenant for breach of which the party . .
Cited – Ritchie v Atkinson 1808
. .
Cited – Havelock v Geddes 1809
If the obligation of seaworthiness in a charterparty contract were a condition precedent then the neglect of putting in a single nail after the ship ought to have been made tight, staunch, etc., would be a breach of the condition and a defence to . .
Cited – Bradford v Williams 1872
The ship’s captain refused to load at the place stipulated for the month of September 1871, but was willing to load at a port he was permitted to select prior to that month.
Held: The breach of the charter-party by the shipowner went to the . .
Cited – Tarrabochia v Hickie 1856
The parties had agreed that the ship would sail on a particular day, but there was no express term to state the importance of any breach.
Held: Bramwell B said: ‘No doubt it is competent for the parties, if they think fit, to declare in . .
Cited – Davidson v Gwynne 1810
The court considered a claim for a breach of a charterparty.
Held: The sailing with the first convoy was not a condition precedent, the object of the contract was the performance of the voyage and that had been performed. It was useless to go . .
Cited – Stanton v Richardson 1874
The shipowner contracted to carry wet sugar but the ship was not fit to carry it. The jury found also that it could not be made fit in time to avoid frustrating the purpose of the voyage. The molasses had drained from the wet sugar into the hold in . .
Cited – Tully v Howling 1877
The parties contracted for a charter of twelve months. The owner could make it available only for ten.
Held: The ship was not fit for the purpose for which she was chartered and could not be made fit within any time which would not have . .
Cited – Bentsen v Taylor Sons and Co 1893
The court was asked as to the test of the difference between a contractual condition and a warranty. Bowen LJ said: ‘There is no way of deciding that question except by looking at the contract in the light of the surrounding circumstances and then . .
Cited – Kish v Taylor 1912
The parties had contracted for a voyage charter.
Held: A contract of affreightment was not put an end to by a breach of the stipulation of seaworthiness. Lord Atkinson said: ‘The fact that a ship is not in a fit condition to receive her cargo . .
Cited – Freeman v Taylor 1846
The charterer claimed a deviation by the owner. The jury found the deviation of such a nature and description as to deprive the freighter of the benefit of the contract.
Held: The verdict was upheld. . .
Cited – Jackson v Union Marine Insurance Co Ltd CCP 1874
The plaintiff ship owner, contracted under a charterparty to proceed with all possible dispatch to Newport. He insured the cargo. The ship ran aground before the cargo could be collected, and was delayed. The charterers threw up the charterparty and . .
Cited by:
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 – Astea (UK) Ltd v Time Group Ltd TCC 9-Apr-2003
The question of whether a reasonable time has been exceeded in performance of a contract is ‘a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance has been . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Cited – Anglo Group Plc, Winther Brown and Co Ltd v Winter Brown and Co Ltd, BML (Office Computers) Ltd, Anglo Group Plc, BML (Office Computers) Ltd TCC 8-Mar-2000
Contract – Contract for provision of computer services – purchaser contract with finance company – duty of co-operation to be implied in computer contracts – practice – responsibilities of expert witnesses generally – whether computer company liable . .
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 – TTM v London Borough of Hackney and Others CA 14-Jan-2011
The claimant had been found to have been wrongfully detained under section 3. He appealed against rejection of his claim for judicial review and for damages. The court found that his detention was lawful until declared otherwise. He argued that the . .
Cited – Lombard North Central v Butterworth CA 31-Jul-1986
The defendant entered into a hire-purchase contract for a computer, time being stipulated to be ‘of the essence’ in relation to the payment obligations. He defendant defaulted, and the plaintiff took possession of the goods, and and sought payment . .
Cited – Mr H TV Ltd v ITV2 Ltd ComC 8-Oct-2015
The claimant had contracted with the defendant for the production of a series of reality TV shows featuring celebrities. After severe personal clashes between the people involved on the claimants side, the contract was terminated. The claim was that . .
Cited – Phones 4U Ltd v EE Ltd ComC 16-Jan-2018
The parties contracted for the marketing of contracts for the marketing of the defendant’s mobile phone contracts. On the claimant entering administration, the defendant exercised a clause in their contract to terminate the contract. The claimant . .
Lists of cited by and citing cases may be incomplete.
Contract, Transport
Leading Case
Updated: 10 November 2021; Ref: scu.223516
