The parties contracted for the sale of ship plates fob Benelux port for shipment to Canada in August-September 1956 with payment to be by confirmed irrevocable credit. The buyers failed to open the credit either by August 1st or by August 8th when the sellers called for it to be opened immediately.
Held: It was the duty of the buyers to establish the credit by August 1st at the latest and, although the sellers had waived their right to treat the contract as repudiated by reason of their failure to do so until such time had elapsed after August 8th as could be regarded as ‘immediately’, on August 14th, the sellers had been entitled to accept, as they did, the buyers’ breach was a repudiation of the contract. What was required was that by the time the shipping period started the seller should have received from the banker the assurance that if he performed his part of the contract he would receive payment.
A commercial letter of credit or banker’s credit is more than ‘a mere method of payment’ and ‘creates a direct liability upon the banker independent of the contract of sale, and is an undertaking by the banker that if the seller presents the required documents in the required time he will receive payment of the contract price’.
Judges:
Diplock J
Citations:
[1958] 2 QB 130
Jurisdiction:
England and Wales
Citing:
Binding – Pavia and Co SPA v Thurmann-Nielsen CA 1952
In cif contracts the credit must be opened at the latest at the beginning of the shipment period. The seller is entitled, before he ships the goods to be assured that when he does so, he will get paid. . .
Cited by:
Cited – Kolmar Group Ag v Traxpo Enterprises Pvt Ltd ComC 1-Feb-2010
The claimant sought damages in contract alleging economic duress. They said that at a late stage, when the defendant knew of the urgent needs of the caimant, he imposed an exorbitant change of price.
Held: The claim succeeded. The pressure . .
Lists of cited by and citing cases may be incomplete.
Contract, Banking
Updated: 05 December 2022; Ref: scu.396479