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 breach of condition, and repudiated the contract. The sellers did nothing, but later sold the cargo at a substantial loss. The buyers now appealed a decision that they were liable saying that the seller’s failure to act could not amount to an acceptance of their repudiation.
Held: The buyer’s appeal succeeded. More was needed to accept a repudiation than failure to perform the contractual obligations. A mere failure to perform must always be equivocal.
An innocent parties’ failure to complete a contract was not an acceptance of a repudiation.
Nourse, Kennedy, Hirst LJJ
Times 02-Jun-1995, Ind Summary 12-Jun-1995, [1995] 3 All ER 971, [1996] QB 108
England and Wales
Citing:
Appeal from – Vitol Sa v Norelf Ltd (the ‘Santa Clara’) QBD 30-Apr-1993
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 . .
Cited – State Trading Corporation of India Ltd v M Golodetz Ltd CA 1989
Kerr LJ said: ‘What is commonly referred to as an acceptance of a repudiation must be communicated to the party in breach or at least overtly evinced. . An unequivocal act which is inconsistent with the subsistence of the contract may be sufficient, . .
Cited by:
Appeal from – 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 . .
These lists may be incomplete.
Updated: 09 June 2021; Ref: scu.90183