Chapter 6 Interactive flashcards of key cases

Chapter 6 Interactive flashcards of key cases

A vessel carrying a shipment of dates sank during the course of the voyage and was subsequently salvaged. On arrival at the port, it was found that although the dates still retained the appearance of dates, and although they were of value for the purpose of distillation into spirit, they were so impregnated with sewage and in such a condition of fermentation as to be no longer merchantable as dates in accordance with the contract of sale.

The Court of Appeal held that the dates had perished because, for commercial purposes, they were so altered that they were no longer the same goods that were the subject of the contract.

The parties entered into an agreement to bring goods from Russia. Before the ship had been loaded, war broke out and it became illegal to trade with the enemy.

It was held that the subsequent illegality of the contract had frustrated the contract and that no claim could succeed against D for failing to load the ship.

A contract was entered into for the sale of a cargo of corn. At the time of making the contract, both seller and buyer believed that the cargo existed. However, the previous month, the ship’s captain had sold the cargo to a third party as a result of its deterioration during the early part of the voyage so as to render impossible its intended transmission to England. When the English buyer discovered the facts, he repudiated the contract. The seller brought an action against the buyer for the price.

The House of Lords held that as the contract had contemplated the existence of the corn, which unbeknown to the parties had ceased to exist because of the earlier sale, the buyer was not liable to pay for the goods because they were not in existence at the time the contract was made. The effect of the decision in Couturier v Hastie can now be seen in s 6 SGA.

H entered into a contract with the Minister of Food under which the minister purchased 33 tons of Majestic ware potatoes in a certain clamp. When the clamp was opened, the potatoes were found to be rotten. The delivery was cancelled.

Morris J held that as the potatoes had not ceased to exist and were still in a form that would permit their being called potatoes, the potatoes had not ‘perished’ within the meaning of s 7 (of the 1893 Act). This view was obiter because the judge held that as the risk in the goods had already passed to the buyer, the section had no application.

Coupland agreed to sell to Howell 200 tons of Regent potatoes to be grown on a specific piece of land. The land in question ought not to have had any problems in producing this quantity, although, due to the fault of neither party, the crop failed and only 80 tons were harvested, which Howell accepted; it then sued Coupland for non-delivery of the remaining 120 tons.

The Court of Appeal held that Coupland was not liable to Howell for non-delivery because the unforeseen potato blight made further delivery impossible, the effect of which frustrated the contract and released Coupland from his obligation to deliver any more than could reasonably have been harvested. The court implied a term into the contract to the effect that each party should be free of further performance if the crop perished. The position would, of course, have been otherwise had the contract not specified a particular crop because the seller could then have supplied Regent potatoes from another source.

A farmer entered into a contract with a corn merchant to sell 275 tons of barley which was to be grown on the farmer’s farm. Due to a poor harvest and without any fault of the farmer, the crop only came to 140 tons. As a result, the farmer acted on the basis that the contract was frustrated and he sold the available crop to a third party.

MacKenna J held that where a buyer contracts with a seller to purchase a specific portion of a crop and performance becomes impossible owing to a failure of the crop without any default on the part of the seller, then the seller is not liable to the buyer in damages, although they are obliged to deliver the actual amount that has been harvested. The judge confirmed the rule in Howell v Coupland but held that that did not affect the farmer’s obligation to deliver the quantity of barley actually produced.

Back to top