Delay in The Performance of Contractual Obligations 2nd Edition

Page 1
Preface to the Second Edition

John E Stannard
From: Delay in the Performance of Contractual Obligations (2nd Edition)

John Stannard
Content type: Book content

Product: International Commercial Law [ICML]
Published in print: 08 February 2018
ISBN: 9780198792321
Some ten years have now passed since the first edition of this book. It is a relief to the
present writer to have been asked for a second one: his work cannot have been entirely in
vain. One of the challenges in writing about delay in performance – indeed about contract in
general – is in striking a proper balance between the general and the particular. Most of the
key areas of litigation – charterparties, conveyancing, building contracts and so on – are
important disciplines in their own right, and one can find academic and practising lawyers
who spend their entire professional lives focussing on just one of these fields. However,
assuming that it still makes sense to talk about an English law of contract rather than a law
of contracts on the Roman model, the task of distilling general principles is at least worth
pursuing, and that is what the present book tries to do.
This diversity of specialities has given rise to another important phenomenon, namely the
ever-increasing use of standard form contracts for use in particular fields. Most of these
contain terms which make detailed provision for delay, and the construction of these terms,
together with the relationship between such terms and the doctrines of the common law,
has been an issue of growing importance to the courts. Indeed, it has been said that the
appellate courts, and the Supreme Court in particular, now spend as much time dealing
with issues of construction as on all other contractual topics put together. In the light of
this, one feature of this new edition is an extra chapter dealing with express contractual
provisions, which seeks to identify the ways in which some of the more common types of
standard contract deal with issues of delay, and the ways in which provisions of this sort are
enforced by the general law.
Despite this preoccupation with issues of construction, the courts have not ignored other
aspects of the law relating to delay. Within a few months of the first edition we had Sempra
Metals v Inland Revenue Commissioners in the House of Lords allowing the general
recovery of compound interest on damages, followed a year later by an attempt to recast
the law of remoteness in The Achilleas; more recently we have seen the Supreme Court stop
just short of abolishing the penalty doctrine in Cavendish Square Holdings Ltd v Makdessi.
On the legislative front perhaps the most significant development has been the enactment
From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.
Subscriber: OUP-Reference Gratis Access; date: 19 May 2019
Private Law Library
Page 2
of the Consumer Rights Act 2015; the extent to which this will drive a wedge in between
consumer law and the common law of contract – and indeed tort – remains to be seen.
(p. vi) One encouraging development, at least for the present writer, has been the way in
which the courts are beginning to clarify the status of the notice making time of the essence
as a general contractual remedy. Cases such as Dalkia Utilities Services Plc v Celtech
International Ltd and Multi Veste 226 BV v NI Summer Row Unitholder BV in the High
Court, followed by Samarenko v Dawn Hill House Ltd and Urban 1 (Blonk St) v Ayres in the
Court of Appeal, show that, despite some of the problems of analysis that still remain, this
most useful remedy for delay is no longer purely the preserve of the conveyancing lawyer.
It is now some time since Oxford University Press requested this new edition, and thanks
are due to them for their patience and forbearance. Thanks are also due to Rachel Mullally,
Alex Johnson and Vignesh Kannan for their help and co-operation. The law is stated as on
31st August 2017. It is hoped that any errors or omissions are few in number, but such as
remain are the sole responsibility of the author.
John E Stannard
Belfast
7 January 2018
Private Law Library
Page 3
Preface to the First Edition

John E Stannard

John Stannard

ISBN: 9780198792321
Delay in performance is a common difficulty in contracts of all kinds. In a contract for the
sale of goods, the seller may deliver late or the buyer may fail to pay on time. In a building
contract, the builder may be behind schedule. In a charterparty, the ship may not be ready
to load at the proper time, or may be held up in the course of the voyage by
unseaworthiness or storms. In a sale of land, there may be delay in completion or in one of
the many other steps involved in the transaction. The question of delay in performance is of
such practical importance that in some legal systems it is treated as a distinct type of
breach to which special rules apply. But what does the common law have to say about the
matter?
Textbooks and practitioners’ treatises on contract will generally contain a section on the
time of performance, which often includes a discussion of the difference between cases
where time is of the essence and cases where it is not. However, the topic of delay and the
remedies for delay in the common law of contract lack systematic exposition, and it is not
always easy to discover what the law is on any given point. The law on contractual delay is
extraordinarily difficult to state and involves many concepts that are not only hard to relate
one to another but are themselves inherently uncertain. Whereas flexibility in the law may
be a virtue, vagueness and incoherence is not, especially in an area where contract
planning is so important, and where so much can be at stake, from the small householder
who cannot get his painting finished to the shipping company with a charterparty worth
many millions of pounds at risk. Indeed, clarity in the law in this area is not a purely
domestic issue. One only has to look at the many shipping cases cited in this work to see
that in many cases their only English connection is by way of the proper law of the contract.
If England is to be able to export its law in this way, that law must be clear, coherent, and
capable of rational presentation.
There are a number of factors which contribute to the obscurity of the law. One of these is
the confusing terminology used by the courts. Delay may amount to a breach, or a defective
performance, or a failure to perform. This may be partial, or substantial, or material, or
total; it may go to the root of the contract or even to the foundation of the adventure; in an
extreme case it may frustrate the contract, though this is apparently not the same thing as
Private Law Library
Page 4
saying that the contract has been frustrated. The remedy for the delay may be to recover
damages, which may be liquidated or unliquidated; penalties may not be recovered, though
liquidated damages clauses in building contracts are frequently called ‘penalty clauses’. In
serious cases of delay the promisee may withhold performance, or (p. viii) terminate
performance, or rescind the contract, or treat it as repudiated. Then there are conditions,
warranties, innominate and intermediate terms, and fundamental terms, to say nothing of
primary and secondary obligations.
The task of exposition is not helped by the unsystematic treatment of remedies generally in
the common law tradition. To be sure, contract textbooks generally have a chapter entitled
‘Remedies’, but this is often largely devoted to damages, and this may not be the remedy
that is most relevant. One of the most important contractual remedies for delay, as we shall
see, is the right of a disappointed promisee to withhold or terminate performance, but the
treatment of this in various books has to be dug out from a variety of chapters with titles
like ‘Performance’, ‘Breach’, ‘Frustration’, ‘Discharge’, and even ‘Terms of the Contract’.
Indeed, some important remedies, such as the service of a notice making time of the
essence, are hardly mentioned at all in some of the standard texts. One of the tasks
undertaken in this book is to put the remedies for delay into a coherent and logical
framework, structured on the basis of what the promisee wants to do rather than on the
basis of the conceptual labels used by the courts.
Another problem is the relationship between law and equity in this area. As we shall see,
there is a long history of the courts of equity treating certain time stipulations as ‘of the
essence’ and others as ‘not of the essence’, the difference being that a promisor who had
failed to adhere to the time stipulation in question could get the court to enforce the
contract in the latter case but not in the former. This doctrine is mainly to be found in
connection with contracts for the sale of land. However, a question now arises as to the
relationship between this doctrine and the common law doctrine of discharge by breach. If
time is of the essence in equity, does it follow that the law will regard prompt performance
as a ‘condition’ in the Sale of Goods Act sense? Can the equitable practice of issuing a
notice making time of the essence now apply right across the board? Does it make any
sense to carry on talking about common law and equitable doctrines in this context? These
are the sort of questions that the book seeks to address.
In dealing with the topic of delay, it has been necessary to preserve a balance in several
different respects. First of all, there is the balance between the theoretical and the
practical. The origins of the book were in a PhD thesis on the topic, and given that it is a
book intended mainly for the use of practitioners it was necessary to delete a lot of material
that may have been interesting in itself, but would be of little practical significance today.
On the other hand, delay is a topic where it is impossible to understand where we are at
present without knowing how we got there in the first place. This is especially the case with
regard to such fundamental concepts as breach of condition and frustration, and the rules
relating to when time is of the essence. For this reason a lot of historical material is still to
be found, and while some of it may not appear at first sight to impact directly on the (p. ix)
present law, reading it will help in the understanding of the more obviously and immediately
relevant material found elsewhere in the book.
Another balance that has to be preserved is in relation to the focus of the book. English law
does not recognize delay as a distinct category of breach, and a lot of the principles are of
general application. One could not understand the law relating to delay in performance
merely by referring to the authorities which pertain directly to that issue, but a book setting
out all of the law which was relevant in any way to delay would be in essence a book dealing
with the whole law of contract. So once again a compromise has to be struck between these
two extremes. Some of the chapters will be found to contain a lot of material of general
application, whilst others concern the problem of delay and nothing else. Those who wish to
look into topics of more general application can always find them in the more general
Private Law Library
Page 5
works, but the aim has been to include all the significant authorities relating to delay in
particular.
A lot of the law relating to delay is of a highly specialized nature. This is particularly so in
relation to two areas where delay has a particularly significant impact, these being shipping
law and the law relating to building and construction contracts. Thus, for instance, such
relatively arcane topics as laytime, demurrage, extensions of time and architects’
certificates are already covered in great detail in the specialist works, and it is to these
works that the specialist practitioner will look for the law in the first instance. So once
again a balance has to be struck. Though topics such as those mentioned do indeed feature
in the book, as they are needed to illustrate the general principles, the main aim has been
to expound the law of contractual delay in such a way as it can be understood and applied
by the general contract lawyer.
Last but not least, there has been a need to balance the original and the derivative. Every
academic worth the name would like to write a book that is entirely original, but in an area
such as this a lot has already been said, and said very well. Some parts of the book will be
seen to have drawn heavily on the works of other writers, whilst in others it has been
possible to blaze a relatively new trail. It will be seen from the list of abbreviations, to say
nothing of the numerous works cited elsewhere in the text, that the debt owed to previous
authors is immense, but even here the reader will benefit from having the law that is
relevant to delay collected together in a single book. The main focus is on the law of
England and Wales, but it has also been necessary to refer to many of the Commonwealth
jurisdictions and to cases from the United States.
The road to publication has been a fairly long and tortuous one, and there are many people
who have helped out on the way. Though as stated earlier the book had its origins in my
PhD thesis, which was submitted in 1989, the task of rewriting it with a view to publication
began during a period of research leave in Oxford during the first part of 2004, which was
funded by the British Academy. I am (p. x) grateful to the Academy for their support in this
respect, and also to Professor Frank Rose, who gave much helpful advice with regard to the
submission of the book proposal.
The next task was to get the book written, and over the three or so years that have elapsed
since then I have had the benefit of advice from four people in particular. The first of these
is Professor Michael Furmston, who was my tutor at Lincoln College, Oxford, from 1970 to
1974 and also supervised the original PhD thesis while on the staff of Bristol University
during the 1980s. His help and advice during the preparation of the thesis was invaluable,
and when I conceived the notion of rewriting it for publication it was to him that I turned.
Once again, the material written owes a great deal to my trips to Bristol for help and
advice. From the practitioner’s point of view I received very valuable advice from Rebecca
Stubbs and from Tim Saloman QC, who was a contemporary of mine at Lincoln and who
accompanied me during those days to Contract tutorials conducted very ably by Andrew
Longmore, now Lord Justice Longmore. Given that I am not a practitioner myself, I am very
grateful both to Rebecca and to Tim for sparing the time from an extremely busy
commercial practice to read over the manuscript and let me know where I had got the
wrong end of the stick. The fourth person to advise me was Dr David Capper, who came up
to Queen’s in 1978 as one of my students but who is now a valued friend and colleague,
with experience as a practitioner and also a fine reputation as an academic in the field of
Contract. Between the four of them these mentors, all of them highly able Contract lawyers
in very different ways, have tried to keep me on the straight and narrow, and have been
responsible for eliminating many an error and misconception from earlier drafts of the
work. Alas, I must take responsibility myself for any that may remain despite their efforts.
Private Law Library
Page 6
Others have helped out too, albeit in less direct ways. A lot of the work was done in Oxford,
and I would like to thank the staff of the Bodleian Law Library for their assistance in so
many ways. I am also grateful to the College for giving me accommodation from time to
time and for allowing me the use of the college library at times when the Bodleian was
closed. Thanks also to the Law School at Queen’s for providing help towards the necessary
funding for my travels, and to the staff of our own Law Library for their help during term
time, when I had to work from Belfast.
Last but not least, I wish to thank those members of the staff of Oxford University Press
with whom I have been involved, most notably Rachel Mullaly, who was kind enough to
accept my original book proposal, together with Darcy Ahl, Angela Butterworth, Elissa
Connor, Rebecca Howes, Faye Judges, Fiona Stables, Jayne Sykes, Katarina Wihlborg and
Christopher Wogan. I do hope that I have not left anyone out inadvertently, as you have all
been most helpful and patient.
(p. xi) Up to now, there seems to have been no systematic treatment, at least in relation to
English law, of delay in the performance of contractual obligations. This book is offered to
fill the gap. Though primarily aimed at the professional market, it is intended to appeal to
academics, students and practitioners alike. The aim has been to write in a clear and
accessible style without being over-simplistic or neglectful of the demands of scholarship. I
hope that people will find this book useful.
John E Stannard
Belfast
18 January 2007(p. xii)
Private Law Library
Page 7
Contents—Summary
John E. Stannard

John Stannard

ISBN: 9780198792321
Preface to the Second Edition v
Preface to the First Edition vii
Table of Cases xxv
Table of International Legislation lxix
Table of Statutes lxxi
Table of Statutory Instruments lxxv
Table of Standard Form Clauses and Rules lxxvii
List of Abbreviations lxxix
I The Obligation to Perform On Time
1. The Proper Time for Performance 3

2. The Importance of Timely Performance 23
3. Performance Due on a Contingency 49
II Performance of the Obligation
4. The Obligation and its Performance 65

5. Excuses for Failure to Perform on Time 83
6. The Effect of Failure to Perform on Time 129
Private Law Library
Page 8
III Remedies for Delay
7. Specific Relief 151

8. Notices Making Time of the Essence 173
9. Damages for Delay 203
(p. xiv) 10. Withholding Performance 269
11. Termination 277
12. Frustrating Delay 317
13. Express Contractual Provisions 365
Index 403
Private Law Library
Page 9
Contents
John E. Stannard

John Stannard

ISBN: 9780198792321
Table of Cases xxv
Table of International Legislation lxix
Table of Statutes lxxi
Table of Statutory Instruments lxxv
Table of Standard Form Clauses and Rules lxxvii
List of Abbreviations lxxix
I The Obligation to Perform On Time
1. The Proper Time for Performance
A. Where a Time is Set by the Contract 1.04

B. Where the Contract is Silent as to Time 1.11
(1) Reasonable time at common law and by statute 1.12
(2) What constitutes a reasonable time? 1.16
(a) Factors in existence when the contract was made 1.17
(i) How long would performance normally take? 1.18
(ii) Was some delay expected? 1.19

(iii) Subject matter of the contract 1.22
(iv) Relevance of pre-contractual negotiations 1.23
(v) Relevance of trade custom 1.24
Private Law Library
Page 10
(vi) Reasonable time and reasonable diligence 1.25

(vii) The importance of knowledge 1.27
(b) Circumstances subsequent to the contract 1.29
C. Performance Due on Demand 1.30

D. Unilateral Obligations 1.31
(1) Where a time is specified 1.33
(2) Where the contract is silent as to time 1.37
2. The Importance of Timely Performance
A. Time of the Essence and its Meaning 2.03

(1) Time of the essence as a contractual obligation 2.04
(2) Time of the essence as a condition precedent 2.05
(3) Time of the essence as a promissory condition 2.06
(4) Time of the essence as a bar to specific performance 2.08
(5) Time made of the essence by notice 2.11
(p. xvi) B. Time of the Essence at Common Law and in Equity 2.13
(1) Time of the essence at common law 2.14
(a) Timely performance as a condition precedent 2.16
(b) The importance of the stipulation 2.23
(c) The condition as promise 2.27
(d) Non-performance of condition and the right to
terminate 2.29
(e) The Sale of Goods Act 1893 2.30
(f) Twentieth-century developments 2.32
(g) The modern law 2.36
(2) Time of the essence in equity 2.39

(a) The traditional approach 2.40
(b) The Judicature Acts 2.43
(c) The traditional approach redefined 2.44
(3) Common law and equity compared 2.46
C. When is Time of the Essence? 2.47

(1) Time made of the essence by express stipulation 2.48
(2) Time made of the essence by implication 2.49
3. Performance Due on a Contingency
A. The Nature of a Condition Precedent 3.02
Private Law Library
Page 11
B. Identifying a Condition Precedent 3.07

(1) Express condition precedent 3.12
(a) Timetables or schedules 3.13
(b) Other language 3.14
(2) Condition precedent by implication 3.15

(a) Condition precedent by implication of fact 3.16
(i) Condition obvious from the circumstances 3.17
(ii) Rules of construction 3.18
(b) Condition precedent by implication of law 3.19
(3) A presumption against conditions precedent? 3.20
C. Exceptions 3.23
II Performance of the Obligation
4. The Obligation and its Performance
A. The Hour of Performance 4.02

(1) Performance possible without co-operation of promisee 4.03
(2) Performance requiring co-operation of promisee 4.04
(a) Tender of performance at a reasonable hour 4.05
(b) Unavailability of promisee 4.07
(c) Performance due on demand 4.09
B. Period Specified for Performance 4.10

(1) Period inclusive 4.11
(2) Period exclusive 4.13
(3) Specifying the wrong date 4.16
(p. xvii) C. Performance within a Reasonable Time 4.18

(1) Conduct of the parties 4.20
(2) Supervening events 4.21
5. Excuses for Failure to Perform on Time
A. Exclusions and Exceptions 5.02

(1) Varieties of exclusion clause 5.03
(a) Exclusion clauses and limitation clauses 5.04
(b) Exclusion of liability and exclusion of duty 5.05
(c) Limitation clauses and liquidated damages clauses 5.06
(d) ‘Tailor-made’ clauses and ‘off the peg’ clauses 5.07
Private Law Library
Page 12
(e) Exclusion clauses and inequality of bargaining

power 5.09
(f) Force majeure clauses 5.10
(2) Incorporation of exclusion clauses into contract 5.11

(3) Rules of construction 5.12
(a) The ‘main purpose’ rule 5.13
(b) Deviation 5.14
(c) Fundamental breach 5.15
(4) Statutory controls 5.17

(a) Unfair Contract Terms Act 1977 5.18
(i) Scope of the Act 5.19
(ii) Restrictions imposed by the Act 5.22
(iii) The test of reasonableness 5.25
(iv) Excluded contracts 5.29
(b) Consumer Rights Act 2015 5.34

(i) Unfair terms 5.35
(ii) Scope of Part 2 5.36
(iii) When is a term unfair? 5.38
(iv) Effect of unfairness 5.43
(v) Schedule 2: the ‘grey list’ 5.45
(vi) Excluded terms and excluded contracts 5.46
(c) Other statutory controls 5.47
B. Consent of Promisee 5.48

(1) Discharge by agreement 5.49
(a) How is a contract discharged by agreement? 5.50
(b) The problem of consideration 5.53
(c) Effect of discharge by agreement 5.54
(2) Variation 5.55

(a) Variation provided for by the contract 5.56
(b) Variation by subsequent agreement 5.59
(c) Effect of variation 5.60
(3) Waiver 5.61

(a) Waiver by forbearance 5.62
(b) Waiver by election 5.66
Private Law Library
Page 13
(4) Equitable estoppel 5.70

(a) Requirements of equitable estoppel 5.72
(i) A pre-existing legal relationship 5.73 (p. xviii)
(ii) A promise or representation 5.74
(iii) Reliance 5.77
(b) Effect of equitable estoppel 5.79

(i) Inequitable to enforce rights 5.80
(ii) Resumption of rights by representor 5.81
C. Prevention by Promisee 5.82

D. Supervening Events 5.86
(1) Force majeure clauses 5.87
(a) Clause must cover the relevant contingency 5.88
(b) Event must be beyond the control of the promisor 5.89
(c) There must be no other mode of performance 5.90
(d) Other requirements 5.91
(2) Contract discharged by breach or frustration 5.92

(3) Excused non-performance falling short of frustration 5.93
6. The Effect of Failure to Perform on Time
A. Delay as a Breach of Contract 6.02

(1) Obligation under the contract 6.03
(2) Time for performance passed 6.04
(3) No lawful excuse for failure to perform 6.05
(4) The standard of performance 6.06
(5) The question of risk 6.08
(a) Risk allocated by express provision 6.09
(b) Risk allocated by implication 6.11
B. Delay as a Failure of Condition 6.13

C. Delay as Frustration 6.15
D. Delay as a Breach of Condition 6.20
E. Delay as a Fundamental Breach 6.22
F. Delay as Repudiation 6.25
(1) Delay as renunciation 6.26
(2) Delay as prospective impossibility 6.28
(3) The effect of repudiation 6.30
(a) The need for acceptance 6.31
Private Law Library
Page 14
(b) The right to terminate and the right to claim

damages 6.36
III Remedies for Delay
7. Specific Relief
A. Specific Performance 7.03

(1) General principles 7.04
(a) Adequacy of damages 7.05
(b) Mutuality 7.06
(i) Negative mutuality 7.07
(ii) Positive mutuality 7.09 (p. xix)
(c) Default by promisor 7.10

(d) Bars to specific performance 7.12
(i) Decree pointless 7.13
(ii) Obligation too vague 7.14
(iii) Excessive need for supervision 7.15
(iv) Conduct of promisee 7.18
(v) Hardship to promisor 7.23
(2) Specific cases 7.25

(a) Sale of land 7.26
(b) Sale of moveables 7.27
(c) Sale of shares 7.30
(d) Building contracts 7.31
(e) Charterparties 7.32
(f) Contracts for personal services 7.33
B. Action for the Price 7.34

(1) Promisor’s duty to pay 7.35
(2) Promisee’s right of action 7.36
(a) Contracts for the sale of goods 7.37
(b) Repudiation by promisor 7.38
8. Notices Making Time of the Essence
A. Genesis of Notice Procedure 8.03

(1) The equitable notice 8.04
(2) The common law notice 8.07
B. The Modern Doctrine 8.09

(1) Terminology 8.10
Private Law Library
Page 15
(2) When may a notice be served? 8.11

(a) Promisee ‘able, ready and willing’ 8.12
(b) Delay by promisor 8.17
(i) Extent of delay required 8.18
(ii) Obligation defaulted on 8.23
(3) Content of notice 8.26

(a) Reasonable time for compliance 8.27
(b) Form of notice 8.33
(4) Effect of notice 8.36
C. Scope of the Procedure 8.39

D. Consumer Rights Act 2015 8.51
9. Damages for Delay
A. Some Preliminary Distinctions 9.03

(1) Type of loss and measure of loss 9.04
(2) General and special damages 9.05
(3) Positive and negative losses 9.06
(4) Physical and financial loss 9.07
(5) Whether contract cancelled 9.08
(6) Delayed performance and total non-performance 9.09
(p. xx) B. Causation 9.10

(1) Causation in fact 9.11
(2) Causation in law 9.12
(3) Causation and the duty to mitigate 9.14
C. Remoteness of Damage 9.15

(1) The rules outlined 9.16
(a) Hadley v Baxendale 9.17
(b) The Victoria Laundry case 9.19
(c) The Heron II 9.22
(d) The Achilleas 9.24
(2) The rules explained 9.28

(a) One rule or two? 9.29
(b) Degree of likelihood required 9.31
(c) Subjective or objective? 9.35
(d) Burden of proof 9.39
(e) Fact or law? 9.41
Private Law Library
Page 16
(3) The rules illustrated 9.43

(a) Loss of value 9.44
(b) Loss of use 9.46
(c) Loss of profits 9.47
(i) Sale profits 9.48
(ii) User profits 9.55
(iii) Loss of profits in other cases 9.59
(d) Recovery of expenses 9.60

(i) Expenses arising out of the contract generally 9.61
(ii) Expenses arising out of the breach 9.62
(e) Recovery of indemnity 9.63

(f) Recovery of interest 9.67
(g) Physical injury and damage 9.68
(h) Loss of goodwill 9.71
(i) Inconvenience, anxiety and annoyance 9.72
D. Mitigation 9.75
(1) No recovery for avoidable loss 9.77
(a) Mitigation and the decision to terminate 9.78
(b) The question of reasonableness 9.79
(c) Mitigation and causation 9.80
(2) The cost of mitigation 9.81

(a) Expenses incurred in mitigation 9.82
(b) Costs of unsuccessful mitigation 9.83
(3) Avoided losses 9.84
E. Measure of Damages 9.89

(1) Expectation loss 9.90
(2) Reliance loss 9.94
(3) Nominal damages 9.100
(4) Recovery of profit to promisor 9.101
(p. xxi) F. Damages in Particular Contexts 9.105

(1) Sale of goods 9.106
(a) Contract terminated 9.107
(b) Contract not terminated 9.112
(2) Contracts of carriage 9.114

(a) Loss of market value 9.115
Private Law Library
Page 17
(b) Physical deterioration 9.116

(c) Loss of use 9.117
(d) Interest 9.118
(e) Recovery of expenses 9.119
(i) Expenses incurred 9.120
(ii) Expenses wasted 9.121
(f) Loss of profit 9.122

(i) User profits 9.123
(ii) Resale profits 9.124
(g) Recoupment of damages 9.125
(3) Hire purchase 9.126

(4) Sale of land 9.128
G. Recovery or Forfeiture of Liquidated Sum 9.131
10. Withholding Performance
A. Withholding Performance and Termination 10.03

B. The Normal Rule 10.06
C. Doctrine of Substantial Performance 10.10
D. Timely Performance as a Condition Precedent 10.13
11. Termination
A. Termination where Time is of the Essence 11.04

(1) Some preliminary points 11.05
(a) A question of construction 11.06
(b) Presumptions 11.08
(i) Common law and equity 11.09
(ii) A general presumption 11.11
(iii) Commercial contracts 11.13
(iv) Time and other stipulations 11.15
(2) Time made expressly of the essence 11.17

(a) ‘Time is of the essence’ 11.19
(b) ‘Condition’ 11.20
(c) Words indicating dependency 11.21
(d) Other formulae 11.22
(e) Expressio unius exclusio alterius 11.23
Private Law Library
Page 18

(a) Time made of the essence by implication of fact 11.26
(i) The nature of the obligation 11.27
(ii) The breadth of the obligation 11.28 (p. xxii)
(iii) Relationship with other obligations 11.29
(iv) Options 11.31
(v) Availability of other remedy 11.37
(vi) Commercial common sense 11.40
(vii) Non-commercial contracts 11.43
(viii) Executed and executory contracts 11.44
(b) Time of the essence by implication of law 11.45

(c) Consumer sales contracts 11.49
(4) Relief against forfeiture 11.50
(a) Statutory provisions 11.51
(b) General equitable jurisdiction 11.52
B. Termination where Time is not of the Essence 11.68
12. Frustrating Delay
A. Preliminary Distinctions 12.02

(1) Delays and interruptions 12.03
(2) Discharge by breach and discharge by frustration 12.04
(3) Frustration of the ‘common object’ 12.08
(4) Failure of consideration and impossibility 12.15
B. What Amounts to a Frustrating Delay? 12.19

(1) Length of the delay 12.20
(a) The relevant time for decision 12.26
(b) The deprivation/unexpiration principle 12.31
(c) ‘Anticipatory’ delay 12.36
(i) Prospective failure of consideration 12.37
(ii) Prospective impossibility 12.43
(d) Delay unexpectedly short 12.44
(2) The effect of the delay 12.45

(a) Delay causing failure of consideration 12.46
(i) Actual failure of consideration 12.47
(ii) Constructive failure of consideration 12.54
Private Law Library
Page 19
(b) Delay causing impossibility 12.58

(i) Actual impossibility 12.59
(ii) Constructive impossibility 12.60
C. The Legal Effect of Frustrating Delay 12.67

(1) Delay as a frustrating breach 12.68
(a) Actus reus of frustrating breach 12.70
(b) Mens rea of frustrating breach 12.71
(2) Delay under the doctrine of frustration 12.74

(a) ‘Risk’ factors 12.77
(i) Self-induced frustration 12.79
(ii) Delay dealt with by the contract 12.81
(iii) Delay foreseen 12.87
(iv) Delay foreseeable 12.90
(v) Type of contract involved 12.92
(vi) Implied terms 12.98 (p. xxiii)
(b) Other issues 12.101

(i) Waiver 12.102
(ii) Frustrating delay as a sword 12.106
(iii) A question of fact or a question of law? 12.108
13. Express Contractual Provisions
A. Common Types of Contract 13.05

(1) Charterparties 13.06
(a) Charterparties by demise 13.07
(b) Time charterparties 13.10
(c) Voyage charterparties 13.13
(2) Construction Contracts 13.18

(3) Conveyancing 13.21
(4) Sale of Goods 13.24
(a) C.i.f. contracts 13.25
(b) F.o.b. contracts 13.28
B. Effect of Express Provisions 13.31

(1) Specific relief 13.32
(2) Notice making time of the essence 13.33
Private Law Library
Page 20
(3) Recovery or forfeiture of liquidated sum 13.36

(a) Liquidated damages 13.37
(i) Demurrage 13.39
(ii) Liquidated damages in building contracts 13.45
(b) Penalties 13.49

(i) Penalties at common law 13.50
(ii) Statutory provisions 13.55
(c) Options 13.56

(i) Common law 13.57
(ii) Statute 13.60
(d) Deposits and part payments 13.61

(i) Deposits 13.62
(ii) Part payments of the price 13.66
(4) Withholding performance 13.73

(5) Termination 13.74
(a) Express termination rights and breach of condition 13.75
(b) Construction of termination rights 13.76
(c) Exercise of express termination rights 13.77
(d) Effect of termination under express provision 13.78
(e) Multiple termination rights 13.79
Index 403
(p. xxiv)
Private Law Library
Page 21
Part I The Obligation to Perform On Time, 1 The

Proper Time for Performance
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 3) 1 The Proper Time for Performance

A. Where a Time is Set by the Contract 1.04
B. Where the Contract is Silent as to Time 1.11
(1) Reasonable time at common law and by statute 1.12

(2) What constitutes a reasonable time? 1.16
(a) Factors in existence when the contract was made 1.17

(b) Circumstances subsequent to the contract 1.29
C. Performance Due on Demand 1.30

D. Unilateral Obligations 1.31
(1) Where a time is specified 1.33

(2) Where the contract is silent as to time 1.37
1.01 Delay can be defined in various ways,1 but a useful starting point is Cable (William)
Ltd v Trainor,2 where the New Zealand Court of Appeal had to define the word in the
context of the statute of limitations.3 In the words of Shorland J:4
The dictionary meaning of the noun ‘delay’ is ‘the putting off’ or ‘the deferring’.
These latter words, in our opinion, in their ordinary meaning connote postponement
of performance of some act or step beyond the point of time when the act or step
should have been performed.
Private Law Library
Page 22
In the contractual context this means the postponement of performance beyond the point of
time when the obligation in question should have been performed.5 So the first question is
whether the proper time for performance has passed.
(p. 4) 1.02 In many cases the time of performance is easy to determine. However this
assumes both that the contract has set a time for performance of an obligation, and that
such an obligation exists in the first place. But neither of these factors will necessarily
apply. Sometimes the contract may provide for performance but may leave the time
unspecified, in which case a reasonable time for performance will have to be implied.6 In
other cases questions of delay may arise even where there is no obligation to perform. This
may seem paradoxical, but take the case of a unilateral obligation, as where an insurance
policy gives an option for renewal provided that the premium is paid by the set date.7 Here
the insured person has no obligation to pay the premium at all; he or she may legitimately
decide to let the policy lapse. However, should the insurer refuse to renew on the grounds
that the premium has not been tendered by the due date, the issue may arise as to whether
performance has been rendered on time.8 For this reason, we must address the issue of
unilateral obligations of this sort even though they do not raise issues of timely
performance in the strict sense.9
1.03 The time for performance can be determined in a number of ways. Thus, for instance,
section 14(1) of the Supply of Goods and Services Act 1982 refers to three possibilities;
time can be fixed by the contract, or left to be fixed in a manner agreed by the contract, or
determined by the course of dealing between the parties. Often an exact time or date is set
for performance, but there are other possibilities; for instance, the contract may use
expressions like ‘as soon as possible’,10 or ‘immediately’,11 or ‘with all reasonable
dispatch’,12 or it may specify for performance by the promisor at a certain rate.13 Finally,
the contract may be (p. 5) silent as to time. There are four situations here which merit
further discussion. These are: (1) where a time is set by the contract; (2) where the contract
is silent as to time; (3) where performance is due on demand; and (4) the problem of timely
performance in unilateral contracts.
A. Where a Time is Set by the Contract

1.04 Where a time is set for performance, the promisor is bound to perform at that time,
and will be liable for breach of contract if he or she fails to do so without good excuse. It
does not matter whether or not time is ‘of the essence’ with regard to the obligation in
question.14 It was thought in the past that time stipulations were only binding when time
was of the essence, and that otherwise the promisor only had to perform either at the time
set or within a reasonable time thereafter.15 This analysis suggested that in most contracts
time stipulations did not mean what they said.16
1.05 However, it was argued that this proposition was based on a misunderstanding.17 The
common law and equity did not differ in their approach to the construction of contractual
terms.18 A time stipulation, like any other, was a term of the contract, and action could be
taken if it were broken. Where the common law and equity differed was in the matter of
remedies. The common law, or so it was thought, would generally allow the promisee to
terminate in the event of late performance by the promisor.19 Equity, however, would relieve
against the harshness of this in suitable cases by granting a decree of specific performance
to the promisor, coupled if necessary with a common injunction (p. 6) to restrain the
promisee from taking steps to have the contract set aside at law.20 To that extent, and that
extent only, was the time stipulation ignored by equity.21
1.06 The matter was finally cleared up by the House of Lords in Raineri v Miles,22 a case
involving a chain of property transactions. Because of the delay of one Wiejski in completing
the sale of his house to Miles, Miles in turn became unable to complete the sale of his own
house to Raineri, and was accordingly held liable in damages. Subsequently Miles brought
third party proceedings seeking to be indemnified by Wiejski. The contract between Miles
Private Law Library
Page 23
and Wiejski had provided for completion ‘on or before’ 12 July 1977, but it was agreed that
though Wiejski had failed to meet this date time was not of the essence and completion had
eventually taken place. So the question arose directly whether a party who failed to perform
at the set time was liable in damages in a case where time was not of the essence.
1.07 The House of Lords, by a majority of four to one,23 held that Miles had a valid claim.
Whether time was or was not of the essence did not affect the promisee’s right to damages,
and any statements to the contrary should be disregarded. In the words of Lord Edmund-
Davies:24
The former courts of equity did not rewrite contracts, nor did they hold that a man
who had broken his word had kept it. No case has been cited to your Lordships
where they denied all relief to the petitioner who proved that the respondent had
delayed in the due performance of his contract. But what they did in proper
circumstances was to ameliorate the asperities of the common law. They differed
from the common law in the granting of remedies and not in the recognition of
rights, and, so far from altering the substantive common law, they followed it and
applied it in their own courts when they thought it right to do so.
1.08 The effect of Raineri v Miles, which has been followed around the common law
world,25 was to eradicate an heretical doctrine from the law. It is now clear that, whether
time is of the essence or not, failure to perform on time by the promisor (p. 7) is a breach of
contract for which damages can be obtained. The question whether time is of the essence is
crucial in determining the remedies available to the promisee for the promisor’s delay in
performance – in particular, whether the promisee can terminate performance and treat the
contract as repudiated.26 But it does not affect the obligation of the promisor to perform on
time, or the right of the promisee to claim damages if this is not done.
1.09 Of course, the mere fact that a time is mentioned in the contract does not necessarily
mean that the promisor is bound to perform then and no later. For instance, the time in
question may be intended merely as an estimate, as where in a charterparty a ship is given
an ‘estimated time of arrival’,27 or is said to be ‘expected ready to load’ on a certain date.28
Here the promisor is not bound to have the ship ready on that very day; it is enough if he or
she honestly expects that the vessel will be ready as stated, and that this expectation is
based on reasonable grounds.29
1.10 In other cases, what may appear at first sight to be a deadline may be treated by the
courts as no more than an estimate. Thus for instance it is not uncommon for building
contractors to put forward programmes or schedules to the owner or architect showing
completion some time ahead of the official contract date.30 These may have been approved
by or on behalf of the owner, and may even be expressed so as to override the general
contract terms.31 However, such provisions have been held to constitute no more than a
target or guide,32 and it has been said that in the absence of clear words they should not be
interpreted as altering the substantive rights or obligations of the parties.33
(p. 8) B. Where the Contract is Silent as to Time

1.11 Where the contract is silent as to the time for performance, the law implies a
reasonable time. We shall now consider the scope of this obligation before going on to look
at what amounts to a reasonable time in any given case.
(1) Reasonable time at common law and by statute

1.12 The obligation to perform within a reasonable time has been implied by the common
law into contracts of all kinds:34 the sale of goods,35 charterparties,36 building contracts,37
conveyancing,38 carriage of goods by land,39 the exercise of options,40 contracts for
services,41 bailment42 and even (when these were legally enforceable) contracts to marry.43
The law is said to imply such an obligation in every case where a party to a contract
Private Law Library
Page 24
undertakes to do an act, the performance of which depends entirely on himself, and the
contract is silent as to the time of performance.44
(p. 9) 1.13 In most cases, however, the obligation to perform within a reasonable time is
imposed by statute. We must distinguish here between contracts for the sale of goods and
contracts for the supply of services, and also, in relation to the sale of goods, between
consumer contracts and other contracts.
1.14 In the ordinary run of cases, a seller’s obligation to deliver the goods and the buyer’s
obligation to accept delivery are governed by the Sale of Goods Act 1979, which codifies the
common law rule that these obligations must be performed within a reasonable time if the
contract is silent as to time.45 However, in relation to consumer contracts section 28(3) of
the Consumer Rights Act 2015 specifies that the goods must be delivered without undue
delay, and in any event, not more than 30 days after the day on which the contract is
entered into.46
1.15 Contracts for services, on the other hand, are covered by section 14(1) of the Supply
of Goods and Services Act 1982, which reads as follows:
Where, under the contract for a supply of a service by a supplier acting in the
course of a business, the time for the service to be carried out is not fixed by the
contract, left to be fixed in a manner agreed by the contract or determined by the
course of dealing between the parties, there is an implied term that the supplier will
carry out the service within a reasonable time.47
A contract for the supply of a service is simply defined as a contract under which a person
(the supplier) agrees to carry out a service.48 What is a service? The word is capable of the
widest meaning,49 but the Act itself does not give any definition except to exclude contracts
of service and apprenticeships,50 and to say that a contract is not prevented from being one
for the supply of a service by the fact that goods pass under it.51 There is a dearth of case
law on the topic, though the provision has been held to apply to a number of situations
including the provision of training for the employees of a company,52 the obligation to
submit a dispute (p. 10) to arbitration53 and the supply of a computer software package.54 It
has been said to apply to building contracts,55 but not to a contract for a tenancy.56
Definitions given in other contexts are not much help.57 However, there is nothing to
indicate that section 14(1) of the 1982 Act is confined to consumer transactions,58 and in
the end there is no reason why it should not be interpreted in a broad manner, given that it
merely codifies the common law.
(2) What constitutes a reasonable time?

1.16 Reasonable time is said to be a question of fact, both at common law and by statute.59
Thus the question whether performance had been rendered within a reasonable time was in
the past one for the jury and not the judge to decide.60 Now that the jury has virtually
disappeared from civil cases, the difference between questions of law and questions of fact
has become much less significant.61 Even so, the question of what makes for a reasonable
time is still not one which it is possible to answer with any great precision, not least
because the answer depends on the circumstances of the particular case. However, there
are a number of factors that have been considered relevant by the courts, and which it is
worth looking at more closely in this context. We must distinguish here between those
factors which were in existence at the time when the contract was made, and those which
came into existence at a later stage.
(a) Factors in existence when the contract was made
Private Law Library
Page 25
1.17 The first principle is that the courts must look at the circumstances of each case in so
far as they were within the contemplation of the parties at the time of the contract. In the
words of Alderson B in Ellis v Thompson:62
It seems to me the correct mode of ascertaining what reasonable time is in such a

case as this, is by placing the Court … in the same situation as the contracting
parties themselves were in at the time they made the contract: that is to say, … all
(p. 11) those circumstances which were known to both parties at the time when the
contract was made, and under which the contract itself took place.63
Or as McCardie J said in Pearl Mill Co Ltd v Ivy Tannery Ltd:64
Reasonable time is of course a matter which depends on the nature of the contract,
its terms, the class of goods, the practice of the trade, and the general
circumstances of the case.65
Though the specific reference in both cases here was to the seller’s duty of delivery, these
remarks are applicable in the wider context. It has been said that what amounts to a
reasonable time in this context has to be determined at the date of the contract, and must
be judged by an objective test applicable to both parties.66 The court is not interested in
what either party subjectively had in mind. Rather, the court has, as Lord Hoffmann said, to
look at what the words would convey to a reasonable person having all the background
knowledge which would reasonably have been available to the parties in the situation in
which they were at the time of the contract.67 In the words of Staughton LJ:68
… in construing a contract the court should have regard to the surrounding

circumstances prevailing at the time the contract was made, but only insofar as
they relate … to facts which would have been in the minds of both parties and which
each would know the other had in mind at the relevant time. Since the court [is]
concerned with the common intention of the parties, evidence of one party’s
intention [is] inadmissible, as [is] evidence of negotiations leading to the making of
the contract.
Bearing this in mind, we may now consider some of the most important factors affecting the
obligation to perform within a reasonable time.
(i) How long would performance normally take?
1.18 One crucial factor is the normal time it would take for the obligation to be performed.
In Nelson v Patrick69 the claimant sued the defendant for delay in taking back at the
contract price various casks in which cement had been consigned. It was said by Wilde LCJ
that the defendant had a reasonable time to perform the obligation, and that the court
should bear in mind that:70
(p. 12)
A tradesman, who has to send his goods to all parts of the country, must necessarily
require a considerable time to get back the casks from his customers.
On the other hand, where in Charnock v Liverpool Corporation71 a garage had taken eight
weeks to do repairs to the plaintiff’s car, they were held to be liable in damages for the
delay, on the grounds that the task should normally have taken only five weeks. In Jonathan
Wren & Co Ltd v Microdec plc72 the contract was one for the supply of a specialist
computer software package. It was held that the supplier was bound to supply the package
within a reasonable time, and that in deciding what this should be the court should take
into account the fact that the software was already in existence, and that it would not be too
difficult to install it and have it up and running within a relatively short space of time.
Private Law Library
Page 26
Where the obligation is an onerous one, the courts will, other things being equal, allow for
some delay in performance, whereas they will be less inclined to do so where it is simple
and straightforward.
(ii) Was some delay expected?
1.19 Where a contract provides for performance at a fixed time it is no excuse for the
promisor to say that some delay was contemplated at the time of the contract, but the
courts will take this into account when the contract merely calls for performance within a
reasonable time. This can be illustrated by Carlton SS Co Ltd v Castle Mail Packets Co
Ltd,73 where a ship was chartered to go to a certain dock and load a cargo of rails ‘always
afloat’. No time was set for the loading to be completed. The dock in question, as both
parties knew, was affected by tides, so that the ship was unable to load without grounding
except at the spring tide. Loading commenced, but had to be abandoned on the approach of
the neap tides, and could not be completed until the following month. The charterer was
held not to be liable in damages for the delay. The shipowner had chosen to insert the
‘always afloat’ term in the full knowledge that this might cause delay in loading at that
particular dock, so could not complain about that delay, given that the charterer had a
reasonable time in which to complete the loading.74
1.20 Another case illustrating this principle is US v 476 Acres of Land,75 where the
defendant offered to sell a parcel of land to the US Government. The offer was accepted,
and it was provided that the defendant could remain on the land rent free for one year from
the date of the offer. Proceedings to acquire title were not instituted by the claimants until
two years later, and the defendants argued that there had been an inordinate delay. But the
court held that the claimants had not been too tardy in the circumstances, since the
contract gave them a reasonable (p. 13) time for performance and the parties had clearly
contemplated that there would be some lapse of time before title was acquired.
1.21 However, the mere fact that the parties foresaw that there might be some delay will
not deprive the promisee of a remedy where the delay that has ensued is out of all
proportion to that expected,76 still less when it has been so protracted as to frustrate the
contract.77 What matters here is not so much the amount of the delay in itself as the ratio of
the expected delay to that which actually takes place. So in Denison v Ladd78 a purchaser of
land was held to be entitled to terminate the contract for a four-month delay in the
furnishing of an abstract of title by the vendor, the evidence having showed that this could
have been done in ten days at the most.
(iii) Subject matter of the contract
1.22 The subject matter of the contract is obviously a very important consideration. For
instance, where a seller is obliged to deliver the goods within a reasonable time, the period
will be shorter for perishable goods than for other goods, and the same will be true in a
rapidly fluctuating market. There are a number of cases which illustrate this. In Jaslow v
Waterbury Co79 a contract for the sale of rope was cancelled by the buyer six months or so
after it had been signed. Only a very small proportion of the goods ordered had been
shipped, and the sellers were hampered by their inability to obtain the necessary shipping
permit. It was held that rope being a commodity subject to rapidly fluctuating prices, it was
unreasonable to expect the buyers to remain bound for such a protracted period. Similarly,
in Nosotti v Auerbach80 four months was said to be a reasonable time for the vendor to
vacate premises where the subject matter of the contract was a lease with only eighty years
left to run. In United Dominions Trust (Commercial) v Eagle Aircraft Services Ltd81 an
aeroplane was purchased by the plaintiff finance company and then let out on hire purchase
to one of the defendant’s customers. A ‘recourse agreement’ provided that, in the event of
default by the customer leading to termination, the plaintiffs should have the right to call on
the defendants to repurchase the aeroplane. The customer having defaulted on payment of
the hire purchase instalments, the agreement was terminated; five months later, the
Private Law Library
Page 27
plaintiffs sought to activate the recourse agreement. It was held to be an implied term of
the contract that the plaintiffs had to do this within a reasonable time after termination.
Five months was far too long a delay in the case of a rapidly depreciating asset such as an
aeroplane. In the words of Lord Denning MR, it would have been absurd to suppose that
UDT could (p. 14) wait for twelve months or more, and let the aircraft go to rack and ruin,
and still call on Eagle to repurchase.82
It would have been different if the subject matter of the contract had been an item that
maintained its value; indeed, the whole point of the recourse agreement was to guard the
finance company from being left with a depreciating asset on their hands.
(iv) Relevance of pre-contractual negotiations
1.23 In general a contract has to be construed on the basis of the words used by the
parties, and for this reason evidence of pre-contract negotiations is normally not allowed.83
However, in the present context it may be relevant to ask whether the promisor knows that
the promisee needs to have a speedy performance. In Jonathan Wren & Co Ltd v Microdec
plc,84 the claimants ordered a specialist computer software package from the defendant
suppliers, and indicated to them that they wanted to have the package up and running by
the end of July 1996. The suppliers made no promise as to the date of delivery, but did not
indicate that they would be unable to meet the date suggested by the claimants. The
claimants subsequently sought to cancel the contract on the ground that the software was
unfit for purpose, but the question of the due time of delivery arose in the course of a trial
of the preliminary issues. It was held that this was a case where section 14 of the Supply of
Goods and Services Act 1982 applied, and that the obligation was to have the software
installed within a reasonable time. However, in assessing what that time was the court
should have regard to the fact that the suppliers knew that the claimants wanted the
software installed quickly, and that there was nothing to prevent the suppliers doing so. In
sum, while parol evidence is not admissible to convert a contract to perform in a reasonable
time into a contract to perform in a fixed time, such evidence may be relevant in
establishing what a reasonable time is in any given case.85
(v) Relevance of trade custom
1.24 The custom of the trade may also be relevant in this context. In FC Bradley and Sons
Ltd v Colonial & Continental Trading Ltd86 evidence was admitted to show a custom of the
Covent Garden vegetable market that potatoes sold in the market should be available for
‘immediate’ delivery, it being held in the instant case that the time allowed for delivery
should be (p. 15) seventy-two hours in all. Similarly, in Ross Brothers Ltd v Edward Shaw &
Co87 the time allowed to the seller for delivery of a consignment of yarn was assessed in the
light of a custom that on receiving orders he would be allowed sufficient time to contact his
suppliers in Belgium. In Rochester Distilling Co v Geloso88 the claimants agreed to sell to
the defendants some barrels of whisky and advertising materials. At the end of the month
the defendants sought to cancel the contract on the ground that none of the advertising
material had been delivered. But it was held that the claimants were not in default here; the
custom of the trade was that advertising material would not be issued until the buyer had
withdrawn the liquor from bond, which had not yet been done in the present case.
(vi) Reasonable time and reasonable diligence
1.25 An obligation to perform at a fixed time is a strict one, it being no defence for the
promisor to argue that all due diligence was used.89 But the obligation to perform within a
reasonable time may imply an obligation to perform with reasonable diligence.90 In Hales v
London and North Western Rly,91 the defendants agreed to deliver goods by luggage train
to a destination near Sunderland. Since the place in question was not served by rail, the
defendants, as was their normal practice, sent the goods to Newcastle, where they were
then kept for several days waiting for the carrier to convey them onwards. The court upheld
the jury’s finding that the defendants had failed to deliver the goods within a reasonable
Private Law Library
Page 28
time. The goods could have been sent by rail from Newcastle to Sunderland, and then taken
on by carrier from there, in which event they would have arrived several days earlier. The
defendants’ failure to take reasonable steps to ensure the speedy delivery of the goods led
to the conclusion that they had failed to do so within a reasonable time.
1.26 It is different where the promisor has done all that can be reasonably expected. Thus
in Taylor v Clay,92 a case concerning a charterer’s obligation to load the ship within a
reasonable time, the charterer was held not to be responsible for delays in loading caused
by the carelessness of the crew, which had led to the ship being damaged and put out of
action whilst repairs were effected. Here the charterer was not responsible for the crew,
and the delays were beyond his control. (p. 16) A similar approach is seen in Rochester
Distilling Co v Geloso,93 where the sellers agreed to deliver a quantity of advertising
material to the buyer. It was held that the buyer was not entitled to reject the goods on the
grounds of late delivery; no time for delivery having been specified, the sellers’ obligation
was to do so within a reasonable time, and they had done all that could reasonably have
been expected of them in the circumstances.
(vii) The importance of knowledge
1.27 Circumstances to be taken into account in this context must be in the contemplation
of the parties at the relevant time.94 A promisor guilty of delay cannot rely on obstacles to
performance which are not within the contemplation of the promisee. In Charnock v
Liverpool Corporation95 a garage was not allowed to plead shortage of staff and the
pressure of other work as an excuse for delay in repairing a car; it was held that though
they had a reasonable time in which to do the work, these factors were not within the
knowledge of the customer. In the same way, the fact that the promisee has special reasons
for wanting quick performance is irrelevant if these are not within the contemplation of the
promisor. Thus in Foster v Heintzmann96 the seller of a piano ordered on 1 September was
held not to be liable for failure to deliver by Christmas when he was unaware that it was
intended as a Christmas present.
1.28 It is different where the promisee is aware of the relevant factors. In Carlton SS Co
Ltd v Castle Mail Packets Co Ltd,97 the charterer was allowed to rely on the peculiarities of
the harbour as an excuse for delay in loading, since these were well known to both parties.
And in Panalpina v Densil Underwear98 it was held that a consignment of shirts had not
been delivered in a reasonable time when they did not arrive until 18 December, the sellers
being fully aware that they were needed for the Christmas market.99
(b) Circumstances subsequent to the contract
1.29 As a general rule, events occurring after the contract was made cannot be taken into
account in interpreting that contract.100 This means that subsequent events can have no
relevance in deciding the content of the obligation to perform within a reasonable time.
However, such factors may be of great relevance in deciding (p. 17) whether such an
obligation has been performed, and this is a matter to which we shall return.101
C. Performance Due on Demand

1.30 Sometimes the contract makes performance due on demand, as where a seller is
bound to make delivery when requested by the buyer. Here the promisor need not perform
unless and until the demand is made.102 However, two further questions arise. One is
whether the promisor can withdraw from the agreement before any demand is made; this
need not concern us further in the present context.103 The other is, assuming the promisor
is bound from the outset, how long he or she must remain ready and willing to perform if no
demand has been made. Here the rule seems to be that the promisor cannot be made to
wait indefinitely in this kind of case,104 but that he or she cannot withdraw without giving
the promisee one last opportunity to ask for performance. In Jones v Gibbons105 the seller
agreed to sell and the buyer to accept a certain quantity of iron, delivery to be ‘as required’.
Private Law Library
Page 29
After a long delay, the buyer called for delivery, but the seller refused to go on with the
contract on the ground that the buyer’s request had not been made within a reasonable
time. It was held that the seller was not entitled to refuse delivery in this peremptory way.
What he should have done was to inform the buyer that the iron was ready for delivery, and
give him a chance to accept it; if the buyer’s request for delivery had still not been
forthcoming, the seller could then have terminated the contract.106
D. Unilateral Obligations
1.31 A unilateral obligation arises where the promisor agrees to pay money or to perform
some other act in return for some stipulated act or forbearance by the (p. 18) promisee: ‘I
will do X if you do Y’. The obligation is called ‘unilateral’ in this case because only one of the
parties is bound; the promisor must do X if the promisee does Y, but the promisee does not
have to do Y; indeed, the promisee does not have to do anything at all. Sometimes an
obligation of this sort can be freestanding, as in the classic example where the promisor
agrees to pay £10 to anyone who can find his lost dog. In other cases it forms part of a
larger contractual matrix, as where a landlord gives the tenant an option to renew the lease
if certain conditions are met.107
1.32 Unilateral obligations of both these varieties can be made conditional on something
being done by the promisee within a certain time. Thus in the first example, the owner of
the dog may agree to pay the £10 to anyone who can find it before the end of the month. In
the second example, the landlord may give the tenant an option to renew the lease provided
that notice is given by a certain date. How is the proper time for performance to be
determined in this context? In the strict sense, there is no such time, since the promisee has
no obligation to perform at all, still less to do so by a certain date. However, all of this is of
small consolation to the promisee who is debarred by delay from claiming the promised
performance from the promisor. For this reason, it is convenient, albeit strictly improper, to
discuss this situation in terms of late performance. However, the question is not whether
delay in performance constitutes a breach of contract, for in the absence of any obligation
to perform, there can be no breach. Rather, the issue is whether performance can be
demanded even if the stipulated condition is not fulfilled on time. The dog is found after six
weeks; the notice to renew is given a day late. Can the promisee still insist on being paid
the £10, or on a new lease, as the case may be? Once again we must distinguish between a
case where a time is specified and a case where the contract is silent as to time.
(1) Where a time is specified

1.33 Where a unilateral obligation is made conditional on something being done by a
certain day, the law traditionally adopts a strict approach to delay, the reason no doubt
being the absence of any remedy in damages in such cases.108 Thus it is said that time is ‘of
the essence’ in relation to unilateral obligations,109 so that delay by the promisee bars him
or her from enforcing the relevant obligation on the part of the promisor. In Dibbins v
Dibbins110 an option for a surviving partner to purchase a deceased partner’s share had to
be exercised within three (p. 19) months of the death. The surviving partner being of
unsound mind, his solicitors purported to exercise the option on his behalf, but were told
that this could not be done without a court order. An order in lunacy having been obtained,
a fresh notice was given, but by now the three months set for the exercise of the option had
expired. It was held by Chitty J that the option could only be exercised in accordance with
its terms, and that the second notice was accordingly equally ineffective. Again, in Hare v
Nicoll111 a contract for the sale of shares gave the seller an option to repurchase by notice
given before 1 May 1963, payment to be made before 1 June. The seller purported to
exercise the option a day late, and then failed to tender the price until 7 June. It was held by
the Court of Appeal that the option had not been validly exercised, one reason given being
that such options being a species of privilege for the benefit of the party on whom they
Private Law Library
Page 30
were conferred, it was for that party to comply strictly with the conditions stipulated for the
exercise of the option.112
1.34 However, though this rule has been described as ‘settled and invariable’,113 it is
subject to some qualifications. In particular, as in the case of a promissory obligation, the
set time limit may not be intended to be absolute.114 One example of this is the practice in
insurance contracts of providing what are known as ‘days of grace’, whereby the right of
the assured person to renew the policy is not lost by failure to pay the premium on time.115
This can be done by making the future risk conditional on the payment of the premium on a
certain day or within so many days thereafter, or the contract can provide that the policy
will not lapse if the renewal premium is paid within a certain number of days after it falls
due.116 As a general rule, if the contractual context indicates that strict adherence to a time
limit is not essential in any given case a broader approach must be adopted.117
1.35 There are other cases where the courts have been forced to take a more relaxed
approach to time limits in this context. The most obvious example is in relation to rent
review clauses.118 In the typical situation, the lease contains a clause allowing the landlords
to initiate an agreed process of rent review by service of a notice on the tenants on or
before a specified day. The issue is whether the landlords’ (p. 20) failure to serve the notice
in time debars them from having the rent reviewed. On the basis of the orthodox approach
it does; the landlords not being bound to have the rent reviewed at all, the clause is in the
nature of an option which has to be exercised strictly according to its terms.119 However,
this led to an intolerable situation in the inflationary days of the 1970s and 1980s, and the
courts were not slow to find ways of avoiding the strict logic of the principle. One was to
say that the stipulated date for the service of the notice was not in the nature of an option,
but was merely a part of the machinery for the review of the rent;120 but eventually the
House of Lords got round the problem by invoking the ancient jurisdiction of equity to
relieve against the strict construction of time stipulations,121 despite the orthodox view that
this jurisdiction had no application in relation to options.122 This will be discussed more
fully later,123 but what it means is that the strict approach to time stipulations in the
present context is a general principle rather than an invariable rule.
1.36 Of course, the possibility of relief in cases of this sort does not mean that the set date
is totally without significance, any more than it is in the context of promissory
obligations.124 In particular, whilst before the set date the promisee can insist on
performance as of right, after that he or she can only do so as a concession by the court.125
Moreover, the passing of the set date in this context can give rise to other remedies for the
promisor, most notably the service of a notice making time of the essence.126 This again is a
matter to which we shall return.127
(2) Where the contract is silent as to time

1.37 If no time is specified for the exercise of a unilateral option, the courts will imply a
requirement that this be done within a reasonable time. In United Dominions Trust
(Commercial) Ltd v Eagle Aircraft Services Ltd,128 an aeroplane was sold to a finance
company and then let out on hire purchase to an airline company. The contract contained a
‘recourse agreement’ allowing the finance company to (p. 21) call upon the sellers to
repurchase the aircraft in the event of premature termination of the hire purchase
agreement with the airline company. The question was whether this option could be
exercised some five months after the termination had occurred. It was held that this was far
too late, one reason being that this was essentially a unilateral offer that could only be
accepted in accordance with its exact terms. Though no express time limit was set, it had to
be implied that the option to invoke the recourse agreement be exercised within a
reasonable time after the termination of the hire purchase agreement. In the context of a
rapidly depreciating asset like an aeroplane, five months was far too long to wait, and it was
therefore not open to the finance company to call upon the sellers to repurchase the
Private Law Library
Page 31
aeroplane at such a late stage. As in relation to promissory obligations, what is a reasonable

time in any given case is a question of fact.129(p. 22)
Footnotes:
1
In the present context we are mainly concerned with delay as a noun. However, it can
also be used as an intransitive verb (to delay in the sense of dally or procrastinate) and as a
transitive verb (to delay in the sense of to hinder or postpone): Mareva Navigation Co Ltd v
Canaria Armadora SA (The Mareva AS) [1977] 1 Lloyd’s Rep 368 at 383 (Kerr J); Nippon
Yusen Kaisha Ltd v Scindia Steam Navigation Co Ltd (The Jalagouri) [2000] 1 Lloyd’s Rep
515 at 516 (Rix J).
2
[1957] NZLR 337; Ganado, Max and Kindred, Hugh M, Marine Cargo Delays (1990),
(‘Ganado and Kindred’), p 19.
3
Limitation Act 1950, s 4(7).
4
[1957] NZLR 337 at 345; Hay, David, (ed), Words and Phrases Legally Defined (4th edn,
2007) (‘Words and Phrases’), vol 1, p 619.
5
Words and Phrases, ibid; Westminster Corporation v Jarvis & Sons Ltd [1970] 1 WLR 637
at 645 (Viscount Dilhorne).
6
See below, para 1.11
7
Birds, John, Lynch, Ben, and Milnes, Simon (eds), MacGillivray on Insurance Law (13th
edn, 2005) (‘MacGillivray’), para 7.042; Frank v Sun Life Assurance Co (1893) 20 Ont App
Rep 564 (Court of Appeals for Ontario); Figre Ltd v Mander [1999] Lloyd’s Rep IR 193.
8
If time is of the essence, then even a day’s delay will release the company from further
liability: Frank v Sun Life Assurance Co (above n 7) at 567 (Burton J); cf. United Dominions
Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 WLR 74 (CA); below, para
1.35.
9
Below, paras 1.29–1.35.
10
Hydraulic Engineering Co Ltd v McHaffie & Goslett (1878) 4 QBD 670 (CA); Wigan Coal
and Iron Co Ltd v Eckersley (1910) 103 LT 468 (HL); Words and Phrases (above n 4), vol 1
at 181–185.
11
Alexiadi v Robinson (1861) 2 F & F 679, 175 ER 1237; Re Todd & McFadden’s Contract
[1908] 1 IR 213; Words and Phrases (above n 4), vol 1 at 1132–1133.
12
Eder, Sir Bernard and others (eds), Scrutton on Charterparties (23rd edn, 2015)
(‘Scrutton’) at 7-045; Ganado and Kindred (above n 2), pp 35–38; President of India v
Hariana Overseas Corp (The Takafa) [1990] 1 Lloyd’s Rep 536; Whistler International Ltd v
Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [2001] 2 AC 638 (HL); Tidebrook Maritime
Corp v Vitol SA (The Front Commander) [2006] EWCA Civ 944, [2006] 2 Lloyd’s Rep 251.
13
Thus in a voyage charterparty the charterer may agree to load or unload the cargo at an
average rate of so many tons a day: Burnett SS Co v Danube and Black Sea Shipping
Agencies [1933] 2 KB 438 at 447 (Scrutton J); Kurt A Becher GmbH & Co KG v Roplak
Enterprises SA (The World Navigator) [1991] 2 Lloyd’s Rep 23; President of India v Jebsens
(UK) [1991] 1 Lloyd’s Rep 1 (HL). In the same way, a time charterparty may include a term
warranting the speed and fuel consumption of the ship: Scrutton (above n 12) para 7-011;
Coghlin, Terence and others (eds), Time Charters (7th edn, 2014) (‘Coghlin’), para 3.61;
Dolphin Hellas Shipping SA v Itemslot Ltd (The Aegean Dolphin) [1992] 2 Lloyd’s Rep 178;
Exmar NV v BP Shipping (The Gas Enterprise) [1993] 2 Lloyd’s Rep 352.
Private Law Library
Page 32
14
For a fuller discussion of this topic see below, chapter 2.
15
Williams, Cyprian, A Treatise on the Law of Vendor and Purchaser (1906), vol 2, para
934; Howe v Smith (1884) 27 Ch D 89 (CA) at 103 (Fry LJ); Jamshed Khodaram Irani v
Bunjorji Dhunjibai (1915) 32 TLR 156 (PC) (Lord Haldane); In re Sandwell Park Colliery Co
[1929] 1 Ch 277 at 282 (Maugham J); Williams v Greatrex [1957] 1 WLR 31 (CA) at 35
(Denning LJ); Babacomp v Rightside Properties Ltd [1975] 3 All ER 873 at 875 (Goff J).
16
It was also used to support the doctrine that a notice making time of the essence could
not be served as soon as the promisor had failed to perform on time, but only after a further
reasonable period of time had elapsed: Smith v Hamilton [1951] Ch 174. This case was
overruled by the Court of Appeal in Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1, it now
being settled that such a notice can be served as soon as the promisor is in default: see
below, para 8.20. See also Hewitt v Debus [2003] NSWSC 176, discussed below at para
13.75, n 348.
17
Emery, C T, ‘The date fixed for completion …’ [1978] Conveyancer 144.
18
Parkin v Thorold (1852) 16 Beav 59, 51 ER 698 at 701 (Lord Romilly MR); Tilley v
Thomas (1867) LR 3 Ch App 61 at 69 (Rolt LJ); Samarenko v Dawn Hill House Ltd [2011]
EWCA Civ 1445, [2013] Ch 36 at [35] (Lewison LJ).
19
But this was an over-simplification: below, para 2.42, n 110.
20
Below, para 2.41.
21
See further Thomas v Monaghan [1977] 1 NZLR 1 (New Zealand Ct of Appeal); Neeta
(Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 298–299; Winchcombe Carson Trustee Co
Ltd v Ball-Rand Pty Ltd [1974] 1 NSWLR 477 (Supreme Ct of New South Wales); O’Sullivan
v Moodie [1977] 1 NZLR 643 (Supreme Ct of NZ); Louinder v Leis (1982) 41 ALR 187 (High
Ct of Australia).
22
[1981] AC 1050.
23
Lord Edmund-Davies, Lord Fraser, Lord Russell, and Lord Keith, Viscount Dilhorne
dissenting.
24
[1981] AC 1050 at 1081. See also the remarks of Lord Fraser at 1090.
25
The case was subsequently cited with approval in various jurisdictions: see Morris v
Robert Jones Investments Ltd [1994] 2 NZLR 275 (New Zealand Ct of Appeal); Park v
Brothers [2001] NSWSC 88 (Supreme Ct of New South Wales); Tsang Cheung Kit & Ors v
Hong Kong Housing Authority [1982] 1 HKC 268 (High Ct of Hong Kong); Man Sun Finance
(International) Corp v Lee Ming Ching Stephen [1993] 1 HKC 113 (CA of Hong Kong); Lie
Kie Siang v Han Ngum Juan Marcus [1992] 1 SLR 476 (High Ct of Singapore); Lim Hoe
Heng v Poh Choon Kia [2013] 1 SLR 152 (Singapore Ct of Appeal). See however Paynter
and Paynter v Holder and Holder [1986] Bda R 10 (Bermuda Ct of Appeal).
26
Below, chapters 2 and 11.
27
Mitsui OSK Lines Ltd v Garnac Grain Co Inc (The Myrtos) [1984] 2 Lloyd’s Rep 449.
28
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos)
[1971] 1 QB 174 (CA); Greenwich Marine Inc v Federal Commerce & Navigation Co Ltd
(The Mavro Vetranic) [1985] 1 Lloyd’s Rep 581; Geogas SA v Trammo Gas Ltd (The
Baleares) [1993] 1 Lloyd’s Rep 215 (CA). Compare Aries Powerplant Ltd v ECE Systems Ltd
(1996) 45 Con LR 111 (delivery dates ‘estimated only and not guaranteed’).
29
Scrutton (above n 12), para 7-013; Cooke, Julian and others (eds), Voyage Charters (4th
edn, 2014) (‘Cooke’), para 4.5.
Private Law Library
Page 33
30
Dennys, Nicholas and Clay, Robert (eds), Hudson’s Building and Engineering Contracts
(13th edn, 2015) (‘Hudson’), para 6.054.
31
J F Finnegan Ltd v Sheffield City Council (1988) 43 BLR 130.
32
GLC v Cleveland Bridge and Engineering Ltd (1984) 34 BLR 72 (CA); J F Finnegan Ltd v
Sheffield City Council (above n 31); Glenlion Construction Ltd v The Guinness Trust (1987)
39 BLR 94; Canwest Pacific Television Inc v 147250 Canada Ltd (1987) 5 ACWS (3d) 431
(British Columbia Ct of Appeal); Gregory Projects (Halifax) Ltd v Tenpin (Halifax) Ltd [2009]
EWHC 2639 (Ch); Leander Construction Ltd v Mulalley & Co Ltd [2011] EWHC 3449 (TCC),
[2012] BLR 152; Cleveland Bridge (UK) Ltd v Severfield-Rowan Structures Ltd [2012]
EWHC 3652 (TCC). Compare Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239,
[2005] Info TLR 294 (installation of computer system).
33
Hudson (above n 30), para 6.054. Such estimates may, however, still be relevant in
assessing whether the promisor has performed within a reasonable time: see below paras
4.18–4.34.
34
Moel Tryvan Ship Co Ltd v Andrew Weir & Co [1910] 1 KB 844 (CA) at 857 (Kennedy LJ);
Ganado and Kindred (above n 2), p 33.
35
Bridge, Michael (ed), Benjamin’s Sale of Goods (9th edn, 2014) (‘Benjamin’), para 8.037;
Ellis v Thompson (1838) 3 M & W 445, 150 ER 1219; Nelson v Patrick (1846) 2 Car & Kir
641, 175 ER 269; Jones v Gibbons (1853) 8 Exch 920, 155 ER 1626; see now Sale of Goods
Act 1979, s 29(3), below.
36
In the shape of the implied undertaking of ‘reasonable dispatch’: see Scrutton (above n
12), para 7.044; Sieveking v Maas (1856) 6 E & B 670, 119 ER 1013; Ford v Cotesworth
(1870) LR 5 QB 544; Fowler v Knoop (1878) 4 QBD 299 (CA); Postlethwaite v Freeland
(1880) LR 5 App Cas 599 (HL); Castlegate SS Co v Dempsey [1892] 1 QB 854 (CA); Hick v
Raymond and Reid [1893] AC 22 (HL); Carlton SS Co v Castle Mail Packets Co [1898] AC
486 (HL); Lyle SS Co v Cardiff Corp [1900] 2 QB 638 (CA); Tradigrain SA v King Diamond
Shipping SA (The Spiros C) [1999] 2 Lloyd’s Rep 91 (CA).
37
Furst, Stephen and Ramsey, The Hon Sir Vivian, Keating on Construction Contracts
(10th edn, 2016) (‘Keating’), para 8.012; Thornhill v Neats (1860) 8 CB (NS) 831, 141 ER
1392; Roberts v Bury Commissioners (1870) LR 5 CP 310; Courtnay v Waterford Rly (1878)
4 LR Ir 11; Re Lockie and Craggs (1902) 86 LT 388; Munkenbeck & Marshall v Kensington
Hotel Ltd (Counterclaim) (2002) 78 Con LR 171; Urban 1 (Blonk St) v Ayres [2013] EWCA
Civ 816, [2014] 1 WLR 756.
38
Thompson, Mark (ed), Barnsley’s Conveyancing Law and Practice (4th edn, 1996)
(‘Barnsley’), p 421; Sansom v Rhodes (1840) 6 Bing NC 261, 133 ER 103; Stavart v
Eastwood (1843) 11 M & W 197, 152 ER 773; Simpson v Hughes (1896) 66 LJ Ch 143;
Nosotti v Auerbach (1899) 15 TLR 140 (CA); Johnson v Humphrey [1946] 1 All ER 460;
Mahase v Ramlal [2003] UKPC 12.
39
Taylor v Great Northern Rly (1866) LR 1 CP 385; Sims v Midland Rly [1913] 1 KB 103.
40
Kawasaki Kisen Kabushiki Kaisha v Belships Co Ltd (1939) 63 Ll LR 175; United
Dominions Trust v Eagle Aircraft Services Ltd [1968] 1 WLR 74 (CA).
41
Braithwaite v Crawshay (1850) 16 LTOS 81; Charnock v Liverpool Corp [1968] 1 WLR
1498 (CA); see now Supply of Goods and Services Act 1982, s 14; below, para 1.15.
42
Wigginton v Dodd (1862) 2 F & F 844, 175 ER 1313.
43
Potter v Deboos (1815) 1 Stark 81, 171 ER 408; Hall v Wright (1858) 27 LJ QB 345.
Private Law Library
Page 34
44
Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2015) (‘Chitty’), para 21.12. The
same applies when the contract uses some indefinite words such as ‘with all due dispatch’.
But where the act to be done is one in which both parties to the contract are to concur, the
implied engagement is not that the act shall be done within either a fixed or a reasonable
time or within the time usually taken, but that each shall use reasonable diligence in
performing his or her part: Ford v Cotesworth (1868) LR 4 QB 127, (1870) LR 5 QB 544;
Wing Crawford Holdings Ltd v Lion Corporation Ltd [1989] 1 NZLR 563 (High Ct of NZ) at
569 (Chilwell J).
45
Sale of Goods Act 1979, ss 29(3) and 37.
46
Benjamin (above n 35), para 6.14.
47
However, this only applies where the contract is silent as to the time of performance; it
is of no help where there is a fundamental disagreement between the parties on this issue:
see Hescorp Italia SpA v Morrison Construction Ltd (2000) 75 Con LR 51 (QBD).
48
Supply of Goods and Services Act 1982, s 12(1). Here the rule is the same for consumer
contracts: see Consumer Rights Act 2015, s 52.
49
In Port of Geelong Authority v The Ship ‘Bass Reefer’ (1992) 109 ALR 505 (Federal Ct of
Australia) at 517–18 Foster J refers to ‘domestic employment, the armed forces, state
bureaucracy, the provision of gas, water and electricity to buildings, transport in
accordance with regular timetables, legal procedures, animal procreative activity, religious
ritual and tennis’. See also the discussion in Dwyer v Hunter [1951] NZLR 177 (New
Zealand Ct of Appeal) at 189–90 (Finlay J).
50
Supply of Goods and Services Act 1982, s 12(2).
51
Ibid, s 12(3).
52
Eagle Star Life Assurance Co Ltd v Griggs and Miles [1998] 1 Lloyd’s Rep 256 (CA).
53
Redland Aggregates Ltd v Shepherd Hill Civil Engineering Ltd [1999] BLR 252 (CA).
54
Jonathan Wren & Co Ltd v Microdec plc (1999) 65 Con LR 157.
55
Hudson (above n 30), para 6.008.
56
Dunn v Bradford MDC [2002] EWCA Civ 1137.
57
See further Words and Phrases (above n 4), vol 2, pp 947–950; Greenberg, Daniel and
Greenberg, Yisroel (eds), Stroud’s Judicial Dictionary (9th edn, 2016).
58
The Secretary of State was by section 12(4) given power to exclude certain contracts
from certain provisions of the Act, but no such order was made with regard to section 14.
59
For the common law see Nelson v Patrick (1846) 2 Car & Kir 641, 175 ER 269;
Braithwaite v Crawshay (1850) 16 LTOS 81; Wigginton v Dodd (1862) 2 F & F 844, 175 ER
1313; Nosotti v Auerbach (1899) 15 TLR 140 (CA). For the statutory position see Sale of
Goods Act 1979, s 59; Supply of Goods and Services Act 1982, s 14(2); Consumer Rights Act
2015, s 52(3).
60
Alexiadi v Robinson (1861) F & F 677, 175 ER 1237; Nosotti v Auerbach (1899) 15 TLR
140; see also Tindal v Brown (1786) 1 Term Rep 167, 99 ER 1033 at 2034 (Ashhurst J).
61
The issue is still relevant in deciding when there is an appeal from the decision of an
arbitrator: below, paras 12.108–12.110.
62
(1838) 3 M & W 445, 150 ER 1219.
63
Ibid at 1224–5.
Private Law Library
Page 35
64
[1919] 1 KB 78.
65
Ibid at 83. The same principle is seen in many of the American cases: see for instance
Dennis v Stoughton 55 Vt 371 (1883); Franklin Paint Co v Flaherty 139 Me 330, 29 A 2d
651 (1943); Zone Co v Service Transport Co 137 NJL 112, 57 A 2d 651 (1948); City and
County of Honolulu v Kam 48 Haw 349, 402 P 2d 683 (1965).
66
Re Longlands Farm [1968] 3 All ER 552 at 556 (Cross J).
67
Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 at
912; Lewison, Sir Kim, The Interpretation of Contracts (6th edn, 2015) (‘Lewison’), chapter
1.
68
Scottish Power plc v Britoil (Exploration) Ltd [1998] CLY 848 (CA).
69
(1846) 2 Car & Kir 641, 175 ER 269.
70
Ibid; Morse v Bellows 7 NH 549, 28 Am Dec 372 (1835).
71
[1968] 1 WLR 1498 (CA).
72
(1999) 65 Con LR 157; Randolph v Frick 57 Mo App 401 (1894).
73
[1898] AC 486.
74
Ibid at 496 (Lord Macnaghten) and 498 (Lord Shand).
75
(USDC WD Pa) 86 F Supp 632 (1949).
76
As in Szanto v Pagel Tex Civ App, 47 SW 2d 632 (1932).
77
Ocean Tramp Tankers v V/O Sovfracht (The Eugenia) [1964] 2 QB 226 (CA).
78
54 Nev 186, 10 P 2d 637 (1932); Charnock v Liverpool Corp [1968] 1 WLR 1498 (CA).
79
CCA (2nd Circuit), 296 F 363 (1924).
80
(1899) 15 TLR 140; Mizell v Burnett 49 NC 249, 69 Am Dec 744 (1857).
81
[1968] 1 WLR 74 (CA).
82
Ibid at 81.
83
Lewison, above n 67 at 3.09.
84
(1999) 65 Con LR 157. For another aspect of this case see above, para 1.18.
85
Ellis v Thompson (1838) 3 M & W 445, 150 ER 1219. The issue of the parol evidence
rule in this context has been discussed more extensively in some of the American cases: see
Stange v Wilson 17 Mich 342 (1868); Boyd v Gunnison 14 W Va 1 (1878); Cameron Coal Co
v Universal Metal Co 26 Okl 615, 110 P 720 (1910); Berman Stores Co v Hirsch 240 NY
209, 148 NE 213 (1925); Zone Co v Service Transport Co 137 NJL 112, 57 A 2d 562 (1948);
Jay Clutter Custom Digging v English 181 Ind App 603, 393 NE 2d 230 (1979). For the parol
evidence rule generally see Lewison, above n 67 at 3.11.
86
[1964] 2 Lloyd’s Rep 52 (CA).
87
[1917] 2 IR 367 (KBD (Ireland)).
88
92 Conn 43, 101 A 500 (1917); Mizell v Burnett 49 NC 249, 69 Am Dec 744 (1857).
89
Engell v Fitch (1869) LR 4 QB 659; In re Daniel [1917] 2 Ch 405 at 410 (Sargant J);
Raineri v Miles [1981] AC 1050 (HL) at 1086–7 (Lord Edmund-Davies).
90
This is particularly the case when performance of the obligation in question requires the
co-operation of both parties; here, it is said, ‘the implied engagement is not that the act
shall be done within either a fixed or a reasonable time, or within the time usually taken,
but that each shall use due diligence in performing his part’: Wing Crawford Holdings Ltd v
Lion Corporation Ltd [1989] 1 NZLR 563 (High Ct of New Zealand) at 569 (Chilwell J). In
some cases the contract imposes an express obligation on the promisor to use his or her
Private Law Library
Page 36
best endeavours to perform within a reasonable time: see Hartwells of Oxford Ltd v British
Motor Trade Association [1951] Ch 50 (CA); Monkland v Jack Barclay Ltd [1951] 2 KB 252
(CA).
91
(1863) 4 B & S 66, 122 ER 384.
92
(1846) 9 QB 713, 115 ER 1448.
93
92 Conn 43, 101 A 500 (1917); see also Read v Bonham (1821) 3 Brod & Bing 147, 129
ER 1238; Alexiadi v Robinson (1861) 2 F & F 677, 175 ER 1237.
94
The rule is similar to that for remoteness of damage: below, paras 9.15–9.74.
95
[1968] 1 WLR 1498 (CA).
96
[1923] 4 DLR 166 (Supreme Ct of Ontario).
97
[1898] AC 486 (HL); above, para 1.19.
98
[1981] 1 Lloyd’s Rep 187; Lukens Iron and Steel Co v Hartmann-Greiling Co 169 Wis
350, 172 NW 894 (1919).
99
For a case which illustrates both aspects of the rule see Dennis v Stoughton 55 Vt 371
(1883).
100
Union Assurance Society of Canton Ltd v George Wills & Co [1916] AC 281 (HL) at 288
(Lord Parmoor); James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd
[1970] AC 583 (HL) at 603 (Lord Reid); Sattar v Sattar [2009] EWHC 289 (Ch) at [36] (Sales
J). For possible exceptions to this rule see Lewison, above at n 67, para 3.19.
101
Below, chapter 3.
102
Bowdell v Parsons (1808) 10 East 359, 103 ER 811; Great Northern Rly v Harrison
(1852) 12 CB 576, 138 ER 1032.
103
The basic distinction is between a promisor who agrees to perform if demanded and
one who agrees to perform when demanded. It is for the court to decide by construing the
contract on which side of the line any given case falls; though the distinction is basically a
simple one, the line is not always an easy one to draw. For an analysis of the relevant
principles see Percival Ltd v London County Council Asylums and Mental Deficiency
Committee (1918) 87 LJKB 677 at 678–679 (Atkin J). See further Great Northern Rly v
Witham (1873) LR 9 CP 16; Leeson v North British Oil and Candle Co (1874) IR 8 CL 309;
Moon v Mayor, Aldermen and Councillors of the Borough of Camberwell (1903) 89 LT 595;
Wingold v William Looser & Co Ltd [1951] 1 DLR 429 (CA of Ontario); Miller v FA Sadd &
Son Ltd [1981] 3 All ER 265 (DC).
104
Ross Bros Ltd v Edward Shaw & Co [1917] 2 IR 367 (KBD (Ireland)).
105
(1853) 8 Exch 920, 155 ER 1626.
106
In essence, what the promisor must do here is to serve a notice making time of the
essence: see below, chapter 8.
107
108
Where another remedy is available, the law can afford to be more lenient: below, paras
11.37–11.39.
109
Below, para 11.31.
110
[1896] 2 Ch 348. Compare Siemens Hearing Instruments Ltd v Friends Life Ltd [2014]
EWCA Civ 382, [2014] 2 P & CR 5 (defective exercise of break clause).
111
[1966] 2 QB 130 (CA).
Private Law Library
Page 37
112
Ibid at 141 (Willmer LJ) and 148 (Winn LJ). In such cases compliance with the
stipulated condition is ‘an external condition upon which the existence of the obligation
depends’: see Zhilka v Turney [1959] SCR 578 (Supreme Ct of Canada) at 583 (Judson J);
Hobart Investment Corp v Walker (1976) 68 DLR 3d 348; Carlson, Carlson, and Hettrick v
Big Bud Tractor of Canada Ltd (1981) 7 Sask R 337 (CA of Saskatchewan).
113
Di Luca v Juraise (Springs) Ltd (2000) 79 P & CR 193 (CA) at 197 (Nourse LJ); Millers
Wharf Partnership v Corinthian Column (1990) 61 P & CR 461.
114
Above, paras 1.09–1.10.
115
MacGillivray, above n 7 at paras 7-047–7-052.
116
Ibid.
117
United Scientific Holdings Ltd v Burnley BC [1978] AC 904 (HL); below, paras 2.44–
2.45.
118
119
Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1296 (CA); Richards and
Son Ltd v Karenita Ltd (1971) 221 EG 25.
120
Kenilworth Industrial Sites Ltd v Little & Co [1975] 1 WLR 143 (CA).
121
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL).
122
Aberfoyle Plantations v Cheng [1960] AC 115 (HL) at 124–125 (Lord Jenkins). This case
and others like it were distinguished by the House of Lords in the United Scientific
Holdings case on the grounds that rent review provisions were not options in the true
sense: see below, para 11.34.
123
124
125
No doubt, as in relation to equitable relief generally, this distinction becomes of less
significance as the law evolves. However, the application of equitable doctrines in this area,
as we shall see, is still relatively undeveloped; below, paras 11.52–11.68.
126
As in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL).
127
Below, para 11.36. For notices making time of the essence in general, see chapter 8.
128
[1968] 1 WLR 74 (CA); above, para 1.20.
129
Above, para 1.16.
Private Law Library
Page 38
Part I The Obligation to Perform On Time, 2 The

Importance of Timely Performance
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 23) 2 The Importance of Timely Performance

A. Time of the Essence and its Meaning 2.03
(1) Time of the essence as a contractual obligation 2.04

(2) Time of the essence as a condition precedent 2.05
(3) Time of the essence as a promissory condition 2.06
(4) Time of the essence as a bar to specific performance 2.08
B. Time of the Essence at Common Law and in Equity 2.13
(1) Time of the essence at common law 2.14
(a) Timely performance as a condition precedent 2.16

(b) The importance of the stipulation 2.23
(c) The condition as promise 2.27
(d) Non-performance of condition and the right to terminate 2.29
(e) The Sale of Goods Act 1893 2.30
(f) Twentieth-century developments 2.32
(g) The modern law 2.36
Private Law Library
Page 39
(2) Time of the essence in equity 2.39
(a) The traditional approach 2.40

(b) The Judicature Acts 2.43
(c) The traditional approach redefined 2.44
(3) Common law and equity compared 2.46
C. When is Time of the Essence? 2.47
(1) Time made of the essence by express stipulation 2.48

2.01 One of the most frequently litigated questions with regard to timely performance
relates to its importance within the contract as a whole. This is generally expressed by
asking whether time is or is not ‘of the essence’. This concept has been used in a number of
different senses,1 but what it boils down to is this. Where time is of the essence, the
promisee2 can terminate performance, or treat the contract as repudiated, in the event of
any delay in performance by the promisor, be it long or short. But where time is not of the
essence, the promisee can only terminate performance if the delay is a ‘frustrating’ one –
that is to say, one sufficiently protracted as to go to the root of the contract by depriving the
promisee of (p. 24) substantially the whole benefit of the contract.3 Though the question of
whether time is of the essence is basically about remedies,4 it is of sufficient importance to
be dealt with, at least in outline, at this stage of the book.
2.02 The question whether time is of the essence is a complex one, and depends on a
number of different considerations. However, the topic is rendered especially difficult by
two factors. The first is that the courts have not always been entirely consistent in what
they mean by saying that time is of the essence. The second is that it is impossible to
understand the topic without some grasp of its historical development: in particular, the
interplay between the doctrines of common law and equity.
A. Time of the Essence and its Meaning

2.03 The courts have used the words ‘time is of the essence’ in no less than five different,
albeit closely related, senses.5 They have used them to mean: (1) that timely performance is
an obligation under the contract; (2) that timely performance by a promisee is a ‘condition
precedent’ to the obligation of the promisor to perform; (3) that timely performance by the
promisor is a fundamental term, or ‘condition’, of the contract; (4) that the court will refuse
a decree of specific performance to a promisee who has not performed on time; and (5) that
a promisee who has been the victim of undue delay by the promisor, and who has
subsequently served the promisor with a notice giving a final deadline for performance, can
now terminate performance if that deadline is not met.
(1) Time of the essence as a contractual obligation

2.04 Prior to 1981 there was authority for saying that time stipulations were only binding
where time was of the essence, and that where time was not of the essence, damages could
not be obtained for failure to perform on the stated day.6 In this context, to say that time
was of the essence meant no more than that timely performance was an obligation under
the contract. However, the House of Lords in Raineri v Miles7 eventually rejected the
proposition just stated, and affirmed that (p. 25) time stipulations were contractually
binding whether time was of the essence or not. There is now therefore a clear distinction
between the question whether a time stipulation is binding and the question whether time
is of the essence. There is now no excuse for confusing these two questions, though the fact
Private Law Library
Page 40
that they have been confused in the past may still be relevant in understanding some of the
decisions prior to Raineri v Miles.8 Whatever it may mean to say that time is of the essence,
it is now clear that the question is one relating to the remedies available for breach of time
stipulations, rather than to whether such stipulations are binding in the first place.
(2) Time of the essence as a condition precedent

2.05 The second sense in which time can be said to be of the essence is as a ‘condition
precedent’ to the duty of the promisor to perform some obligation under the contract. The
word ‘condition’ can be used in many different ways,9 but the essence of a condition
precedent in this connection is that the promisor is not obliged to perform unless and until
the condition in question is satisfied. So time is of the essence in this sense when the
promisor is not obliged to perform unless the relevant condition, which is normally
something to be done by the promisee, is fulfilled on time. This analysis is most commonly
used in the context of unilateral obligations; thus in United Dominions Trust (Commercial) v
Eagle Aircraft Services Ltd10 the original sellers of an aeroplane were not obliged to buy it
back from a finance company under a ‘recourse agreement’ unless they were given
reasonably prompt notification of the hirer’s default. The option under the recourse
agreement could only be exercised according to its terms. Where time is of the essence in
bilateral or ‘synallagmatic’ contracts the courts do not use this analysis; rather, they now
prefer to analyse timely performance as a ‘condition’ in the sense used in the Sale of Goods
Act 1979.11 However, the older analysis of timely performance as a ‘condition precedent’ is
still important in understanding what it means to say that time is of the essence at common
law.12
(3) Time of the essence as a promissory condition
2.06 The third sense in which time can be of the essence is where timely performance is a
‘condition’, in the sense of a fundamental term, of the contract. This draws on the
traditional classification of contractual terms into ‘conditions’ and ‘warranties’ as found in
the Sale of Goods Act 1979; if a condition is broken, the (p. 26) promisee can not only claim
damages but also terminate performance and treat the contract as repudiated, but if a
warranty is broken he or she is generally confined to a claim for damages.13 So time is of
the essence here when the obligation of the promisor to perform on time is a condition; the
promisee can terminate the contract if timely performance is not forthcoming.14
2.07 Though this analysis is similar to the one discussed above in terms of ‘condition
precedent’, there are several crucial differences.15 In particular: (1) the ‘condition’ in
question denotes a term of the contract rather than the occurrence of some event; (2) the
condition is ‘broken’ rather than, as in the previous analysis, simply failing to occur; (3)
such breach does not merely relieve the other party from the obligation to perform a
particular term of the contract, but gives rise to the right to treat the contract as
repudiated in its entirety; (4) as well as terminating the contract, the promisee can recover
damages on the footing of total repudiation. We shall discuss these points in more detail
later.16
(4) Time of the essence as a bar to specific performance

2.08 The fourth sense in which time is said to be of the essence is in relation to the
equitable remedy of specific performance. To understand this it is necessary to have regard
to the practice of the old courts of Chancery concerning time stipulations prior to the
Judicature Act 1873.17 Even where time was of the essence at common law, equity would in
some cases allow the promisor to enforce the contract despite his or her failure to perform
on time.18 This was done by granting a decree of specific performance, coupled if necessary
with a ‘common injunction’ to prevent the promisee taking proceedings at common law to
Private Law Library
Page 41
have the contract terminated on account of the delay. In such cases time was said to be of
the essence at common law but not in equity.
2.09 However, in some cases the courts of equity, no less than the courts of common law,
would apply the time stipulation strictly, either because this was indicated in the contract or
because the circumstances were such that timely performance was clearly crucial.19 In such
cases equity would refuse the usual relief, and the (p. 27) promisee would be allowed to
enforce his or her remedies at common law. In these cases time was said to be of the
essence both at common law and in equity.
2.10 One of the purposes of the Judicature Act 1873 was to streamline the equitable
jurisdiction by abolishing the separate courts of equity and common law, and by allowing
equitable remedies to be applied in all courts. It was also enacted that stipulations in
contracts, as to time or otherwise, which would not prior to the Act have been deemed to be
or to have become of the essence, should henceforth receive the same construction and
effect that they would have had in equity.20 However, this provision was given a very limited
construction by the courts, it being held that the crucial question was still whether prior to
the Act specific performance would have been granted.21 In the landmark decision of the
House of Lords in United Scientific Holdings v Burnley Borough Council22 in 1978, an
attempt was made by Lord Simon to simplify the law by restating the equitable rules as to
time within the framework of common law doctrine,23 but there may still be cases where it
can be said that time is of the essence at common law but not in equity.24
(5) Time made of the essence by notice

2.11 The fifth and final way in which time is said to be of the essence is where it has been
made so by notice. This is the procedure, most commonly found in the conveyancing
context, whereby in cases of undue delay the promisee serves a notice on the promisor
setting a deadline for performance. Provided that the notice has been validly served, time is
sometimes then said to be of the essence with regard to the date specified,25 and the
promisee can then terminate performance if the deadline is not met.26
2.12 A case where time is made of the essence by notice is very different from one where it
is of the essence in the first place. Whether time is of the essence to start with, whether at
common law or in equity, is essentially a matter of construction; time is of the essence if it
was the intention of the parties that this should be so.27 But this cannot apply to the
situation where time is made of the essence by notice, because the status of a contractual
term cannot be varied unilaterally by one of the parties to the contract.28 Rather, as we
shall see, the question is one akin to (p. 28) repudiation; where the promisor has still failed
to perform despite having been given one last chance to do so, this can be taken as
evidence that performance will not be forthcoming at all.29
B. Time of the Essence at Common Law and in Equity

2.13 As in other contexts, it is useful to have some knowledge of the historical background.
In particular, we have already touched upon the conflicting approaches of common law and
equity to time stipulations.30 In the pages which follow we shall consider how the legal
position evolved both at common law and in equity, before asking to what extent it is now
possible to enunciate a common set of principles taking both into account.
(1) Time of the essence at common law

2.14 The common law doctrine is stated in these terms by Chitty: where time is made of
the essence by agreement (as opposed to subsequent notice) the effect is to elevate the
term in question to the status of a ‘condition’, with the consequences that a failure to
perform by the stipulated time will entitle the innocent party: (1) to terminate performance
of the contract and thereby put an end to all the primary obligations of both parties
remaining unperformed; and (2) to claim damages from the contract breaker on the basis
Private Law Library
Page 42
that he or she has committed a fundamental breach (a breach going to the root of the
contract) depriving the innocent party of the benefit of the contract (damages for the loss of
the whole transaction).31
2.15 Statements can be found in contract textbooks32 and in the law reports33 to the effect
that time was generally of the essence at common law, so that if the promisor failed to
perform on time the promisee was entitled to terminate performance. However, this is an
over-simplification; time stipulations sometimes were and sometimes were not regarded as
essential in this sense.34 We have already touched upon two closely related situations in
which time can be said to be of the essence. One of (p. 29) these is where the timely
performance of some act by the promisee is a ‘condition precedent’ to the promisor’s duty
to perform an obligation under the contract; this situation is generally found in the context
of unilateral contracts.35 The other situation is where timely performance by the promisor is
a ‘condition’, in the sense of a fundamental term, of the contract.36 The relationship
between these rules is the key to understanding the nature of an essential time stipulation
at common law.
(a) Timely performance as a condition precedent
2.16 Though the contractual doctrine of discharge by breach or non-performance exists in
a variety of guises, it all depends ultimately on the notion of a conditional promise.37 The
promise ‘I will do X if Y happens’ is very different from the promise ‘I will do X’; in the
former case, the promisor is not obliged to do X if Y does not happen. The event (‘Y’), on
which the obligation to perform depends, can be of various types. First of all, it can be an
external event;38 in an insurance contract, for instance, the obligation of the insurer to pay
up on the policy depends on the occurrence of the contingency insured against. Secondly, it
can be something to be done by the promisee without the promisee being under any
obligation to do it, as in the classic unilateral contract situation where A promises to pay B
a sum of money B finds a lost dog, or walks to York, or whatever. Finally, the event in
question can be a counter-promise in the contract, as where a seller promises to deliver
goods on a certain date and the buyer promises to accept and pay for them provided that
they are delivered in time.
2.17 Time is of the essence in the present context where the promisor’s obligation to
perform depends on something being done by the promisee within a certain time scale – I
will do X if you do Y by time Z. In this situation, if the promisee does not do Y by time Z the
promisor’s obligation to perform is discharged; indeed, it would be more accurate to say
that it never arises.39 To ask for performance when the promisee is guilty of delay is to ask
the promisor to do something that he or she never agreed to do in the first place.
2.18 A convenient starting point for the doctrine of conditional promises in the common
law is the great case of Kingston v Preston decided in 1773.40 Here the (p. 30) defendant
had agreed to convey his business to the plaintiff, the plaintiff agreeing in his turn to
provide good security. The question was whether the defendant was bound to convey the
business if the plaintiff had not given the security. According to Lord Mansfield, the answer
to this depended on the mutual relationship of the promises or ‘covenants’ in the contract.
These could be of three kinds.41 First of all, covenants could be ‘mutual and independant
[sic]’; here either could be sued on without proof of performance of the other. Secondly,
they could be ‘conditions and dependant [sic]’; here the obligation to perform one depended
on prior performance of the other. Thirdly, they could be ‘concurrent’, or ‘mutual conditions
to be performed at the same time’; here one party could not sue without being ready and
willing to perform his or her own side of the agreement. Since in the present case it was
inconceivable that the defendant would have been willing to hand over his business without
Private Law Library
Page 43
good security first being forthcoming, the promises were to be construed as dependent, and
accordingly the plaintiff’s action failed.
2.19 Though Kingston v Preston was mainly concerned with the order of performance,42
the doctrine of dependency of promises could also lead to discharge in a case where the
obligation in question depended on performance of another promise which the party in
question was no longer able or willing to perform. This is exactly what happened in the
famous case of Cutter v Powell,43 where a seaman agreed with the defendant to serve as
second mate on the defendant’s ship the Governor Parry, the defendant agreeing in his turn
to pay a lump sum of thirty guineas to the seaman on completion of the voyage ‘provided he
proceeds, continues and does his duty as second mate in the said ship from hence to the
Port of Liverpool’. The seaman having died before the ship arrived at her destination, it was
held that his widow and executrix could recover nothing; the agreement was to pay on
condition that the voyage was completed, and this had not happened. As Ashhurst J put it,
the defendant’s promise to pay depended on a condition (p. 31) precedent to be performed
by the other party, which had to be performed before the plaintiff was entitled to receive
anything under the contract.44
2.20 Though neither Kingston v Preston nor Cutter v Powell involved a time stipulation,
the doctrine of dependent promises was used to make time of the essence by saying that
one party’s obligation was dependent on prompt performance by the other side. This line of
reasoning can be seen in a trio of cases decided in the first half of the nineteenth century.
The first of these is Busk v Spence,45 where a contract for the sale of flax to be shipped
from St Petersburg contained a stipulation obliging the seller to notify the buyer of the
name of the vessel as soon as it was known. The seller having failed to make timely
notification, it was held that the buyer was entitled to reject the goods whether or not he
had been prejudiced by the delay; timely notification of the vessel, it was held, was a
condition precedent to the buyer’s obligation to accept and pay for the goods. Similarly, in
Alewyn v Pryor,46 where a contract for the sale of oil provided for delivery no later than a
certain day, it was held that the buyer was entitled to reject the oil when it was delivered
late, the court accepting that timely delivery was a condition precedent to the sale. In
Maryon v Carter47 the defendant agreed to purchase a house from a builder at a certain
price, and to pay an extra bonus of £80 provided that the work was completed by a certain
day. The builder was held not to be entitled to claim the £80 where he had failed because of
bad weather to complete the job on time, the court agreeing with the defendant that timely
completion of the work was a condition precedent to the builder’s right to recover the
bonus.
2.21 The analysis used in these cases was strict but logical; timely performance by the
promisee being a condition precedent to the obligation of the promisor to perform in return,
the promisor need not perform if timely performance is not rendered by the promisee. In
none of the three cases just mentioned did this cause any great problem; in Busk v Spence
and in Alewyn v Pryor the defaulting seller was free to sell the goods elsewhere, whilst in
Maryon v Carter all that was at stake was the extra bonus payment, the obligation of the
purchaser to pay the main contract price being unaffected. However, as Cutter v Powell
shows us, the doctrine of dependent promises was capable of working hardship where the
contract was substantially executed on one side, and as other cases show, where releasing
the innocent party from the obligation to perform was out of all proportion to any loss
caused by the party in default.48 In bilateral or synallagmatic contracts delays and other
breaches of contract can be compensated for by damages, and (p. 32) the courts were
therefore reluctant to construe performance of an obligation as a condition precedent
unless it was of crucial importance or ‘went to the whole consideration’.49 We are not really
concerned in the present context with cases where time was not of the essence, but even
where it was, the emphasis shifted – at least after the middle of the nineteenth century – to
the modern concept of ‘breach of condition’ rather than failure of condition precedent in
Private Law Library
Page 44
the older sense. It is only in relation to unilateral contracts, where of course there can be no
question of damages for delay by the promisee, that the older analysis still survives.50
2.22 The foregoing analysis in terms of dependency of promises and conditions precedent
has the merit of clarity and logic, but is rather crude in its effects and proved unsuitable for
dealing with complicated contracts with their multitude of overlapping representations,
warranties, covenants and conditions.51 For this reason, it became superseded in most
cases by the more modern analysis in terms of conditions, warranties and innominate
terms. The journey from ‘condition precedent’ to ‘condition’ was long and convoluted, but
the main landmarks on the way are worth highlighting, as they provide a useful key to the
understanding of the modern law.
(b) The importance of the stipulation
2.23 The first landmark is the famous plantation case of Boone v Eyre.52 Though once
again this did not itself involve a time stipulation, its consequences for the construction of
such stipulations were profound, in that what had been hitherto solely a question of
construction was now made to depend, at least in part, on the importance of the stipulation
within the context of the contract as a whole. In Boone v Eyre the claimant covenanted by
deed to convey the equity of redemption in a West Indies plantation, together with the
slaves on it, in consideration of the payment of £500 and an annuity of £160 for life. When
sued for failure to pay the annuity, the defendant pleaded that the claimant was not lawfully
possessed (p. 33) of all the slaves, and so had no proper title to convey. Lord Mansfield
rejected this plea on the grounds that the covenant in question was of insufficient
importance, saying:53
The distinction is very clear; where mutual covenants go to the whole of the
consideration on both sides, they are mutual conditions, the one precedent to the
other: but where they go only to a part, where a breach may be paid for in damages,
there the defendant has a remedy on his covenant, and shall not plead it as a
condition precedent.
2.24 The importance of this development cannot be overstated, as it introduces a

completely new factor into the equation. As Reynolds points out, the common law uses two
techniques for determining the question of contractual discharge, failure of condition and
failure of consideration.54 Failure of condition is simply a matter of applying what the
parties intended; the promisor only agrees to do X if Y happens, and Y has not happened.
This is the basis of the old concept of condition precedent, as we have seen,55 and it looks
forward from the time of the contract – did the parties intend that the obligation of the
promisor to perform should depend on due performance by the promisee?
2.25 What Lord Mansfield was alluding to in Boone v Eyre, however, was not failure of
condition at all, but failure of consideration. This is a doctrine imposed by the courts, where
a promisor is excused from performing in circumstances where he or she gets no benefit
from doing so.56 In saying that the defendant was not bound to perform if the plaintiff had
failed to keep a covenant going to the whole consideration, Lord Mansfield was applying
this very doctrine; in such a case, the defendant would, ex hypothesi, have been deprived of
the expected benefit of the contract. Failure of consideration thus looks backwards from the
consequences of the breach – should the promisor be excused from performance on the
ground that he or she has not received the expected benefit in return?
2.26 The fundamental problem with Boone v Eyre is that it confuses what are two entirely
different rationales for contractual discharge. Whilst it may make sense to use the likely
result of the breach (failure of consideration) as a guide to (p. 34) deciding what the parties
Private Law Library
Page 45
intended at the outset (failure of condition), it must not be forgotten that the two tests are
ultimately different, and do not necessarily yield the same answer.
(c) The condition as promise
2.27 Our next significant case is Glaholm v Hays,57 decided in 1841. Here a charterparty
provided that the ship should sail for the loading port on or before a certain date. The ship
sailed late due to contrary winds, and when it finally turned up the charterer refused to
provide a cargo. The court decided that in these circumstances the charterer was not
bound, Tindal CJ observing as follows:58
Whether a particular clause in a charter-party shall be held to be a condition, upon

the non-performance of which by the other party, the other is at liberty to abandon
the contract, and consider it at an end; or whether it amounts to an agreement only,
the breach whereof is to be recompensed by an action for damages, must depend on
the intention of the parties to be collected, in each particular case, from the terms
of the agreement itself, and from the subject matter to which it relates.
He went on to hold that the relevant provision in the present case was a condition, both
because the language of the contract suggested it,59 and also because in charterparties ‘the
whole success of a mercantile adventure does, in ordinary cases, depend on the
commencement of the voyage by a given time’.60
2.28 This case is important for a number of reasons. As we see, it applies the reasoning in
Boone v Eyre61 in the context of delay; in particular, there is the same amalgam of failure of
condition (the language of the contract) and failure of consideration (the importance of the
stipulation to the contract as a whole). However, what is particularly noteworthy about
Glaholm v Hays is a subtle but very significant change of terminology.62 Under the older
analysis the question would have been whether performance of the shipowner’s obligation,
namely sailing on time, was intended to be a condition precedent to that of the charterer,
namely the obligation to provide a cargo. If that condition did not materialise, the charterer
would be released from his obligation. However, the terminology used by Tindal CJ differs
from this in several respects. First of all, what he is looking at is not performance of the
obligation but at the obligation itself, as can be seen by his reference to ‘a particular clause
in a charterparty’. Secondly, he does not say ‘condition precedent’ but ‘condition’, so
reflecting the modern usage. Thirdly, the (p. 35) non-performance of such a ‘condition’ does
not merely affect a particular obligation of the charterer, but gives him the liberty to
‘abandon the contract’ and ‘consider it at an end’. Finally, a ‘condition’ in this sense is
contrasted with ‘an agreement only, the breach whereof is to be recompensed by an action
for damages’; here we have in essence the condition/warranty distinction as later codified
in the Sale of Goods Act 1893.
(d) Non-performance of condition and the right to terminate
2.29 In Glaholm v Hays the court referred to the non-performance of a condition as giving
rise to a right to ‘abandon the contract’. This right of termination follows on logically from
Lord Mansfield’s analysis in Boone v Eyre,63 for if the promisor has failed to perform a
covenant or promise that goes to the whole consideration, the promisee will ex hypothesi
have received no benefit from the contract and will be entitled to act accordingly. In Behn v
Burness,64 the next landmark case, the Court of Exchequer Chamber had to consider the
status of a term in a charterparty which stipulated that the ship was currently in the port of
Amsterdam. The approach was set out by Williams J in terms that do not correspond
entirely with current usage, but which make it clear that he saw the issue as one of
termination rather than simply withholding performance of a particular obligation:65
Private Law Library
Page 46
But with respect to statements in a contract descriptive of the subject-matter of it,

or of some material incident thereof, the true doctrine, established by principle as
well as authority, appears to be, generally speaking, that if such descriptive
statement was intended to be a substantive part of the contract, it is to be regarded
as a warranty, that is to say a condition on the failure or non-performance of which
the other party may, if he is so minded, repudiate the contract in toto, and so be
excused from performing his part of it, provided it has not been partially executed
in his favour.
Saying that the innocent party may ‘repudiate the contract in toto’ is very different from
saying that he or she is not bound to perform a particular obligation in that contract. The
problem with the orthodox concept of breach of condition, whether in relation to time or
any other kind of stipulation, is that this crucial distinction is often obscured.66
(p. 36) (e) The Sale of Goods Act 1893
2.30 The Sale of Goods Act 1893, as its long title makes clear at the very outset, was an
Act for codifying the law relating to the sale of goods.67 For this reason the analysis of
contractual discharge adopted in the Act was essentially predicated on the previous case
law, and it continued to influence the whole law of contract and not just that relating to the
sale of goods.
2.31 The Act had little to say about time stipulations as such.68 Far more important was
the distinction drawn between a ‘condition’ and a ‘warranty’. By section 11(1)(b) of the Act:
Whether a stipulation in a contract of sale is a condition, the breach of which may

give rise to a right to treat the contract as repudiated, or a warranty, the breach of
which may give rise to a claim for damages, but not to a right to reject the goods
and treat the contract as repudiated, depends in each case on the construction of
the contract.
According to Sir Mackenzie Chalmers, the drafter of the Act, this condition/warranty
analysis was supposed to reflect the old distinction between dependent and independent
covenants.69 However, despite its emphasis on the construction of the contract, the scheme
of section 11(1)(b) owes much more to Boone v Eyre, Glaholm v Hays and Behn v Burness
than it does to Kingston v Preston and Cutter v Powell. In particular: (1) the ‘condition’
referred to is not an event, but a term of the contract; and (2) if the condition is broken, the
result is not to excuse the other party from performing a particular stipulation, but to give
him or her the right to ‘treat the contract as repudiated’. Or, in the words of Fletcher
Moulton LJ in his famous dissenting judgment in Wallis, Son and Wells v Pratt and
Haynes,70 ‘conditions’ are terms of the contract ‘so essential to its very nature that their
non-performance may fairly be considered by the other party as a substantial failure to
perform the contract at all’, so that the innocent party can treat the contract as being
‘completely broken’, and can sue the other party for ‘total failure to perform the contract’.71
(f) Twentieth-century developments
2.32 The current common law analysis of essential time stipulations is, for most purposes,
the one based on the Sale of Goods Act 1893 and on Wallis, Son and Wells (p. 37) v Pratt
and Haynes; in the words of Chitty quoted above,72 where time is made of the essence by
agreement (as opposed to subsequent notice) the effect is to elevate the term in question to
the status of a condition, with the consequences that a failure to perform by the stipulated
time will entitle the innocent party to terminate performance of the contract and thereby
put an end to all the primary obligations of both parties remaining unperformed. This
Private Law Library
Page 47
analysis has been followed from that day to this,73 but there are three key twentieth century
cases which have further marked the development of the law in this area.
2.33 The first of these is the seminal decision of the Court of Appeal in The Hongkong Fir74
in 1962.75 The question in the case was a simple one: when could a charterer terminate the
contract for delays caused by the vessel being unseaworthy? The Court of Appeal held
unanimously that the seaworthiness stipulation in the charterparty was not a ‘condition’,
but that this did not of itself rule out a right to terminate performance. The issue of
discharge for breach was not to be determined simply by asking whether the term broken
was a ‘condition’ or a ‘warranty’; for even where there had been no breach of condition, the
promisee could still terminate performance for breaches which had a drastic effect or
otherwise went ‘to the root of the contract’.76 Following The Hongkong Fir, there was a
tendency in some quarters77 to relegate the traditional condition/warranty analysis to the
sidelines, and to say that it now had little relevance outside the sale of goods.
2.34 However, the traditional doctrine was reaffirmed by our next significant case, which
is the decision of the House of Lords in Bunge Corporation v Tradax Export SA78 in 1981. A
contract for the sale of soya bean meal contained a term obliging the buyer to provide a
vessel and to give fifteen days’ notice of readiness to load. The buyer having given notice
four days late, the question was whether the sellers could treat the contract as repudiated
and recover damages on that basis. It was argued by the sellers that the term in question
was a condition, but the buyers argued on the basis of The Hongkong Fir and other cases79
(p. 38) that the court should be slow to construe terms as conditions, that the breach did
not go to the root of the contract, and that the only remedy was damages. In the
Commercial Court Parker J found for the buyers,80 but his decision was reversed by the
Court of Appeal on the ground that time was still of the essence with regard to a provision
of this nature.81 The House of Lords held unanimously that time was indeed of the essence
here. While not disapproving of the approach in The Hongkong Fir – indeed, Lord
Wilberforce described the judgment of Diplock LJ in that case as ‘seminal’,82 while Lord
Roskill described it as ‘a landmark’83 – their Lordships were anxious to put that approach
into its proper context. Just as it was a fallacy to assume that the question of contractual
discharge could be decided solely by construing the relevant term as a condition or a
warranty, it was equally wrong to ignore the question of construction altogether and
determine the matter purely on the basis of the effect of the breach in the given case. All in
all, a two-stage approach is indicated. First one must construe the contract to see whether
the term is a condition. If it is, breach of that term gives the promisee a right of termination
whatever the effect of the breach may have been. If not, the promisee can only terminate if
the breach goes to the root of the contract.
2.35 Finally, we have Lombard North Central plc v Butterworth,84 decided in 1987. As we
have seen, a breach of condition is said, in the words of the Sale of Goods Act,85 to give rise
to the right to ‘treat the contract as repudiated’. It has been said that this is no more than
statutory shorthand for the right to terminate,86 but this is far from being so, as Lombard
North Central plc v Butterworth clearly demonstrates. Here it was decided by the Court of
Appeal that breach of an essential time stipulation, and indeed any other breach of
condition, did not just give the promisee the right to terminate performance. Rather, it also
gave rise to a right to recover damages on the footing that the contract had been totally
repudiated. Though the decision can be justified on the basis of the need for certainty in
commercial transactions,87 it was reached with some reluctance,88 and is one capable of
causing substantial hardship in practice.89
(p. 39) (g) The modern law
Private Law Library
Page 48
2.36 It will be apparent from the previous discussion that the modern analysis of the law in
this area draws a clear line between promissory and non-promissory time stipulations.
Where the time stipulation is promissory in nature, time will be of the essence if the term in
question is a ‘condition’. In such a case, as with any breach of condition, delay will give the
promisee the right to terminate performance and to recover damages on the footing that
the contract has been repudiated. As well as this, time will generally be of the essence
where the time stipulation is not promissory, as in a unilateral contract or option.90 Here
the rationale is rather different; in such cases, timely occurrence of a particular event,
which may or may not be something to be done by the promisee, is a ‘condition precedent’
to the promisor’s obligation to perform. It should also be noted that in the case of a
promissory time stipulation the word ‘condition’ is used to refer to a promise, whereas in
the case of a unilateral contract the word is used to refer to an action or event.
2.37 This analysis, at least in so far as it relates to promissory stipulations, can be
criticised as unsatisfactory on two grounds. First of all, it obscures the crucial distinction
drawn by Corbin between a condition and a promise.91 The function of a condition in the
law of contract, according to Corbin, essentially relates to the question of discharge; one
who makes a conditional promise to perform is not bound to do so if the condition does not
occur. The function of a promise, however, relates to the question of damages; one who
promises to do something must compensate the other party if the promise is not kept.
Though a condition can also function as a promise92 – as it does in a case where a
promissory time stipulation is of the essence – it does not aid clarity, according to Corbin, to
confuse the two functions. Secondly, the orthodox analysis obscures the equally crucial
distinction drawn by Reynolds between discharge for failure of condition and discharge for
failure of consideration.93 In the former case,94 the question is ultimately one of intention;
was the promise intended to be conditional, and if so has the condition occurred? In the
latter case the question is whether the promisor has received the benefit of his or her
promise. The question of whether a term is a condition or not is said to be one of
construction, but in so far as this question of construction is decided on the basis of the
importance of the term in question, failure of condition and failure of consideration are
inextricably confused.
(p. 40) 2.38 The source of the complexity lies not in principle but in history. Where the
time stipulation – or any other kind of stipulation for that matter – is promissory in nature,
delay will amount to a breach of contract, and here we are imprisoned in the traditional
condition/warranty analysis which goes back through Wallis, Son and Wells v Pratt and
Haynes95 and the Sale of Goods Act 189396 to Behn v Burness97 and Boone v Eyre, with its
emphasis on the importance of the stipulation in question, or rather, whether it is one
‘going to the whole consideration’.98 But where delay does not amount to a breach, all these
developments are bypassed and we can simply ask whether the promisor’s duty to perform
whatever he or she promised to do was predicated upon timely occurrence of the event in
question.99 In many ways it might be more satisfactory for the courts to return to this older
analysis,100 but the traditional analysis of promissory stipulations as conditions and
warranties has now lasted for well over a century, and it would take a radical revolution in
legal thought to displace it.
(2) Time of the essence in equity

2.39 We must now consider the equitable approach. This was based on the practice of the
Court of Chancery whereby a decree of specific performance could be granted to a
promisor despite his or her own failure to perform on time.101 Time may have been of the
essence at common law,102 but equity took a different view. Once again this is a doctrine
that cannot be understood except in the light of history.
Private Law Library
Page 49
(a) The traditional approach

2.40 A good starting point is the 1802 case of Lennon v Napper,103 where Lord Redesdale
commented on the jurisdiction of equity to relieve against the strict enforcement of time
stipulations in the following words:104
(p. 41)
Courts of equity … have enforced contracts specifically, where no action for

damages could be maintained, for at law, the party plaintiff must have strictly
performed his part, and the inconvenience of insisting upon that in all cases, was
sufficient to require the interference of courts of equity. They dispense with that
which would make compliance with what the law requires oppressive: and in
various cases of such contracts, they are in the constant habit of relieving the man
who has acted fairly, though negligently. Thus in the case of an estate sold by
auction, there is a condition to forfeit the deposit, if the purchase be not completed
within a certain time; yet the Court is in the constant habit of relieving against the
lapse of time: and so in the case of mortgages, and, in many instances, relief is
given against mere lapse of time, where lapse of time is not essential to the
substance of the contract.
2.41 This difference of approach was sometimes summarised by saying that time was
generally of the essence at common law but not in equity.105 However, it did not involve
interpreting time stipulations in a different way from that which was used by the common
law.106 Rather, it sought to relieve the promisor in default by restricting the remedies
available to the promisee. This it did in two ways. First of all, whatever the position may
have been at common law, the courts of equity were prepared to grant a decree of specific
performance to a promisor who was ready to proceed to completion even though he or she
had failed to observe the set completion date.107 Secondly, a ‘common injunction’ could be
granted to prevent the promisee party bringing an action at law on the basis that the
contract had been lawfully terminated.108
2.42 However, though the attitude of equity was traditionally109 less strict than that of the
common law, relief would not be granted where the intention of the parties110 or the
surrounding circumstances111 showed that timely performance was (p. 42) important. In
these cases time was said to be of the essence in equity as well as at common law. In such
cases equity would refuse to intervene, the parties being left to their position at common
law. This meant that while time might often be of the essence at common law but not in
equity, the converse could never be the case. Equity proceeded by granting relief against
the harshness of the common law, so if time was not of the essence at common law to begin
with, there was nothing for equity to relieve against.
(b) The Judicature Acts
2.43 Up to 1873 law and equity were administered in separate courts, but following the
Judicature Act of that year a unified Supreme Court of Judicature (not, of course, to be
confused with the current Supreme Court) was set up with full jurisdiction over both areas.
At the same time it was provided by section 25(7) of the Act, and later by section 41 of the
Law of Property Act 1925, that stipulations in contracts, as to time or otherwise, which
would not prior to the passing of the Act have been deemed to be or to have become of the
essence should henceforth receive in all courts the same construction and effect that they
would have had in equity. The precise effect of this provision was unclear,112 but it was said
by the House of Lords in Stickney v Keeble113 that the crucial question was still whether the
Private Law Library
Page 50
party in default would have been given a decree of specific performance. In the words of
Lord Parker:114
If since the Judicature Acts the court is asked to disregard a stipulation as to time in
an action for common law relief, and it be established that equity would not under
the then existing circumstances have prior to the Act granted specific performance
or restrained the action, the section can, in my opinion, have no application,
otherwise the stipulation in question would not, as provided in the section, receive
the same effect as it would prior to the Act have received in equity.
(c) The traditional approach redefined

2.44 The effect of Stickney v Keeble was to isolate the equitable rules as to time in a
bubble of their own. However, in 1978 the House of Lords attempted, in United Scientific
Holdings v Burnley Borough Council,115 to analyse how these rules fitted into the overall
scheme of contract law. The issue in the case, which involved two consolidated appeals, was
whether failure to keep strictly to the timetable laid down in a rent review clause deprived
the landlords of their right to have the rent reviewed, and consequently of their right to
charge an increased rent during the (p. 43) period up to the next review date.116 The
landlords sought to rely on section 41 of the Law of Property Act 1925,117 but it was argued
by the tenants,118 and accepted by the Court of Appeal,119 that the clauses in question were
in the nature of a unilateral option,120 that this was a case in which the equitable doctrines
as to time had no application, and that time was accordingly of the essence. On appeal to
the House of Lords, it was held that the clauses were not true options,121 that section 41
was not to be unduly restricted in its application,122 and that the observations of Lord
Parker in Stickney v Keeble were to be read as applying only to the facts of that particular
case.123 What is of special interest in the present context is Lord Simon’s attempt to analyse
the equitable rules relating to time stipulations within the framework of common law
doctrine. Pointing out that the aim of the Judicature Act of 1873 was to reconcile the
differences between common law and equity so that the two systems could form a single
coherent code,124 Lord Simon went on to say:125
The law may well come to inquire whether a contractual stipulation as to time is (a)
so fundamental to the efficacy of the contract that any breach discharges the other
party from his contractual obligations (‘essence’), or (b) such that a serious breach
discharges the other party, a less serious breach giving rise to damages (if any) (or
interest), or (c) such that no breach does more than give a right to damages (if any)
(or interest) (‘non-essential’). If this sort of analysis falls to be made, I see no reason
why any type of contract should, because of its nature, be excluded.
2.45 On Lord Simon’s analysis, there was no longer any need to distinguish between the
common law and equity in their approach to time stipulations. After all, whether timely
performance is, in Lord Simon’s words, ‘so fundamental to the efficacy of the contract that
any breach discharges the other party from his contractual obligations’ is, at common law
no less than in equity, ultimately a question of what the parties intended.126 If the intention
was to make one party’s obligations contingent on timely performance by the other, and
that contingency has not materialised, it is logically hard to see any room for a decree of
specific performance: in effect, the court would be saying that the party in question was not
bound to perform whilst at the same time granting a decree of specific (p. 44) performance
to compel him or her to do just that. For this reason since United Scientific Holdings v
Burnley Borough Council the English courts at any rate have been wary of granting
equitable relief to a party in breach of an essential time stipulation.127 Elsewhere the courts
have sometimes taken a more relaxed view, and have continued to grant such relief in
exceptional cases on the basis that courts of equity will not allow a contracting party to
exercise his or her legal rights in an oppressive and unconscionable way.128 We shall be
Private Law Library
Page 51
looking at this question in more detail later;129 but in such cases it may still make sense to
say that time is of the essence at common law but not in equity.
(3) Common law and equity compared

2.46 Of course, this does not mean that the common law and equitable remedies for delay
are now identical in all cases. In particular, the mere fact that time is not of the essence at
common law does not automatically give the defaulting party the right to a decree of
specific performance, as there may be other reasons why that remedy is not available in the
given case. Rather, the issue should be approached in two stages. The first question is one
of construction: was time intended to be of the essence (in the sense that untimely
performance amounted to a breach of condition)? If so, the innocent party is discharged
from his or her primary obligations under the contract, and there can be no question of a
decree of specific performance. If time was not intended to be of the essence in this sense,
the innocent party is not discharged, and we must pass on to the second question, which
concerns the remedies available to the party in default. Whether these remedies include a
decree of specific performance will obviously depend on the circumstances of each
individual case.130
C. When is Time of the Essence?

2.47 It follows that deciding whether time is of the essence depends on what one means by
the question. The question may be whether the promisor is contractually bound to perform
on time, or whether he or she is entitled to have a decree of specific performance despite
having failed to do so, or whether the promisee is entitled to (p. 45) terminate performance
for the delay, and so on. Ultimately the question whether time is of the essence is a question
about remedies, and the answer may be different depending on which remedy is sought. For
this reason detailed examination of the topic will be postponed to the third part of the book.
However, the traditional approach is to say that time can be made of the essence in three
cases: (1) by express stipulation; (2) by implication; and (3) by notice.131
(1) Time made of the essence by express stipulation

2.48 The first case where time is of the essence is where ‘the parties expressly stipulate
that conditions as to time must be strictly complied with’.132 Though no set form of words
need be used,133 the most obvious way of doing this is to say in so many words that time is,
or shall be, of the essence. Where these words are used, delay by the promisor can give rise
to catastrophic consequences; the promisee will have the right to terminate performance
and to claim damages on the footing that the contract has been totally repudiated.134
Alternatively, the contract may simply give the promisee an express right of termination for
delay; in such a case, time is of the essence in the sense that the promisee can terminate
performance, but there is no automatic right to repudiatory damages.135 The distinction
between these cases is not a satisfactory one and may be due to a historical
misunderstanding of the authorities.136 A draftsman who wishes to make time of the
essence in the full sense would be best advised to specify not only that time is of the
essence, but also to spell out the consequences that will follow in the event of untimely
performance; in that way, there can be no ambiguity.137
(2) Time made of the essence by implication

2.49 Though the contract may not specifically indicate that time is to be of the essence, it
may be made so by implication. Such implication, as with any other kind of contractual
term, can be by fact or by law.138 Time is of the essence by implication (p. 46) of fact where
it is necessary to give business efficacy to the contract, or139 where the term is one which
the parties must obviously have intended.140 This covers cases where ‘the nature of the
subject-matter of the contract or the surrounding circumstances show that time should be
considered as of the essence’;141 for instance, the sale of a house for immediate
Private Law Library
Page 52
occupation,142 or the sale of property of a wasting nature,143 or in other cases where it is

clear that the parties contemplated speedy performance.144 Alternatively, time can be of the
essence by implication of law; this will be the case where time is always of the essence with
regard to obligations of a certain kind, such as the time of delivery in a contract for the sale
of goods,145 or the time of sailing in a charterparty.146 All of these cases will be examined in
more detail when we come to discuss the remedy of termination for delay.147
(3) Time made of the essence by notice

2.50 Even where time was not of the essence to start with,148 it may be made so by
notice.149 This is the procedure, most familiar in the conveyancing context,150(p. 47)
whereby a promisor who is guilty of undue delay may be served with a notice giving him or
her a deadline for performance of the obligation in question. If this deadline is not met, the
promisee may be able to terminate performance.
2.51 Making time of the essence by notice is an important contractual remedy in its own
right, and the technical requirements of the procedure will be discussed at length in a later
chapter.151 However, it is worth repeating in the present context what has already been
said:152 making time of the essence by notice is a very different matter from making it so
from the start. Where time is made of the essence expressly or by implication, the question
is essentially one of construction: is the promisor’s obligation to perform on time a
‘condition’, in the sense of a fundamental term, of the contract?153 But this kind of analysis
can have no application to the process whereby time is made of the essence by notice, for
the simple reason that it is not open to one of the parties to a contract to alter the status of
one of its terms by unilateral diktat.154 Rather, the situation is akin to repudiation: the fact
that the promisor has failed to perform despite having been specifically put on notice to do
so is evidence that he or she is unable or unwilling to perform the obligation in question.155
2.52 The distinction between making time of the essence to start with and making time of
the essence by notice reflects the distinction between discharge by failure of condition and
discharge by failure of consideration.156 Where time is of the essence to start with, the
contract is discharged on the grounds of failure of condition; the promisee has agreed to
render his or her counter-performance only if the promisor performs on time. Where time
has been made of the essence by notice, the contract is discharged on the grounds of failure
of consideration; the promisee is entitled to conclude that the expected benefit of the
contract is unlikely to materialise. We shall be considering this point at greater length at a
later stage.157(p. 48)
Footnotes:
1
2
Or the promisor in the case of a unilateral obligation: see above, paras 1.31–1.37.
3
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc [1979] AC 757 at 779 (HL)
(Lord Wilberforce); Nitrate Corp of Chile Ltd v Pansuiza Compania de Navegacion SA (The
Hermosa) [1980] 1 Lloyd’s Rep 638 at 649 (Mustill J) (aff’d [1982] 1 Lloyd’s Rep 570 (CA)).
This applies both to cases of repudiatory breach and to the doctrine of frustration in the
strict sense: below, chapter 12.
4
See below, chapters 8 and 10.
5 Stannard, John E, ‘So what if time is of the essence?’ [2005] Singapore Journal of Legal
Studies 114.
6 See further above, paras 1.04–1.05.
Private Law Library
Page 53
7
[1981] AC 1051; above, paras 1.06–1.08.
8
For instance, the doctrine (now also discredited) that a notice making time of the essence
could not be served as soon as the promisor had failed to perform on time, but only after a
further period had elapsed: see below, para 8.20.
9
Stoljar, Samuel, ‘The contractual concept of condition’ (1953) 69 LQR 485.
10
[1968] 1 WLR 74 (CA); see above, para 1.22.
11
Below, para 2.36.
12
Not least because the newer analysis had its roots in the older one: see below, paras
2.14–2.38.
13
Furmston, Michael P, Cheshire, Fifoot and Furmston’s Law of Contract (17th edn, 2017)
(‘Cheshire, Fifoot and Furmston’), p 207.
14
United Scientific Holdings v Burnley B C [1978] AC 904 (HL); Bunge Corporation v
Tradax Export SA [1981] 1 WLR 711 (HL).
15
Treitel, G H, ‘ “Conditions” and “conditions precedent” ’; (1990) 106 LQR 185.
16
17
See further below, paras 2.39–2.46.
18
Seton v Slade (1784) 7 Ves J 265, 32 ER 108; Lennon v Napper (1802) Sch & Lef 682
(High Ct of Chancery in Ireland); Brunyate, John (ed), Equity: A Course of Lectures by F W
Maitland (2nd rev edn, 1947) (‘Maitland’), p 307.
19
Newman v Rogers (1793) 4 Bro CC 391, 29 ER 350; Reynolds v Nelson (1821) 6 Madd
18, 56 ER 995; Withy v Cottle (1823) Turn & R 78, 37 ER 1024; Hipwell v Knight (1835) 1 Y
& C Ex 400, 160 ER 163; Hudson v Temple (1860) 30 LJ Ch 251.
20
Section 25(7) of the Act.
21
Stickney v Keeble [1915] AC 386 (HL).
22
[1978] AC 904.
23
Ibid at p 945.
24
Below, para 2.45.
25
However, this terminology has been said to be incorrect; see below, para 8.10.
26
See further below, chapter 8.
27
United Scientific Holdings v Burnley B C [1978] AC 904 (HL); Bunge Corporation v
Tradax Export SA [1981] 1 WLR 711 (HL).
28
Green v Sevin (1879) 13 Ch D 589 at 599 (Fry J); Raineri v Miles [1981] AC 1050 at
1085–1086 (HL) (Lord Edmund-Davies); Behzadi v Shaftesbury Hotels [1992] Ch 1 (CA) at
12 (Nourse LJ) and 24 (Purchas LJ); Re Olympia and York Canary Wharf (No 2) [1993] BCC
159 at 171–173 (Morritt J).
29
United Scientific Holdings v Burnley B C [1978] AC 904 (HL) at 906 (Lord Simon);
below, para 8.46.
30
Above, para 2.08.
31
Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2015) (‘Chitty’), para 21.015.
Private Law Library
Page 54
32
Chitty (above n 31), para 21.011; Peel, Edwin (ed), Treitel: The Law of Contract (14th
edn, 2015) (‘Treitel (Contract)’), para 18.100; Beatson, J, Burrows, A and Cartwright, J
(eds), Anson’s Law of Contract (30th edn, 2016) (‘Anson’), p 466.
33
For instance, Lennon v Napper (1802) Sch & Lef 682 (High Court of Chancery in
Ireland) at 684–685 (Lord Redesdale); Parkin v Thorold (1852) 16 Beav 59, 51 ER 698 at
701 (Sir John Romilly MR).
34
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 36 at [30]–[31]
(Lewison LJ).
35
Above, para 2.05.
36
Above, para 2.06.
37
Reynolds, F M B, ‘Discharge of contract by breach’ (1981) 97 LQR 541.
38
In the words of Judson J in Zhilka v Turney [1959] SCR 578 (Supreme Ct of Canada) at
583, ‘an external condition upon which the existence of the obligation depends’; Carlson,
Carlson and Hettrick v Big Bud Tractor of Canada Ltd (1981) 7 Sask R 337 (CA of
Saskatchewan). This is its normal meaning in the civilian context: Burchell, E M,
‘ “Condition” and “warranty” ’ (1954) 71 South African LJ 333.
39
Though see Shea, A M, ‘Discharge of performance of contracts by failure of
condition’ (1979) 42 MLR 623.
40
(1773) Lofft 194, cited in Jones v Barkley (1781) 2 Dougl 684, 99 ER 434 at 437; Stoljar,
Samuel, ‘Dependent and independent promises’ (1957) 2 Sydney LR 217.
41
(1781) 2 Dougl 684, 99 ER 434 at 437. The question generally arose in the context of the
pleadings, the crucial issue being whether one party could sue for the other’s failure or
refusal to perform without averring proper performance on his or her own part: Stoljar, n
40 above. See further the same author in A History of Contract at Common Law (1975) at
pp 147–163; Carter, J W and Hodgekiss, C, ‘Conditions and warranties: forebears and
descendants’ (1976) 8 Sydney LR 31; Treitel, G H, ‘ “ Conditions” and “conditions
precedent” ’ (1990) 106 LQR 185; Black, Oliver, ‘ Independent promises and the rescission
of contracts’ [2003] Legal Studies 555.
42
This is evident from the comment of Lord Mansfield that the dependence or
independence of the covenants was to be collected from the evident sense and meaning of
the parties, and that ‘however transposed they might be in the deed, their precedency must
depend on the order of time in which the intent of the transaction requires their
performance’ (1781) 2 Dougl 684, 99 ER 434 at 438. The rules for the order of performance
were difficult and complex: see the famous commentary of Serjeant Williams on Pordage v
Cole (1669) 1 Wms Saund 319, 85 ER 449.
43
(1795) 6 TR 320, 101 ER 573; Stoljar, Samuel, ‘The great case of Cutter v Powell’ (1956)
34 Canadian Bar Review 288; Dockray, M, ‘Cutter v Powell: a trip outside the text’ (2001)
117 LQR 668.
44
101 ER 573 at 576. On the facts of the case, there may have been no injustice done, as
the contract provided for a higher scale of pay than was the norm; this seems to have been
in exchange for the seaman agreeing to take the risk of failure to complete the voyage:
Stoljar, above n 43.
45
(1815) 4 Camp 329, 171 ER 105.
46
(1826) Ry & M 406, 171 ER 1065.
47
(1830) 4 C & P 295, 172 ER 711.
Private Law Library
Page 55
48
Stoljar, above n 43.
49
Boone v Eyre (1777) 1 Hy Bl 273n, 126 ER 260. For this reason the courts tended to shy
away from construing time as being of the essence in such cases: Constable v Cloberie
(1627) Palmer 397, 81 ER 1141; Havelock v Geddes (1809) 10 East 555, 103 ER 886;
Davidson v Gwynne (1810) 12 East 381, 104 ER 149; Lang v Gale (1813) 1 M & S 111, 105
ER 42.
50
Above, para 2.05.
51
A helpful discussion of the relationship between the older dependency analysis and the
more modern condition/warranty analysis was given by the Alberta Court of Appeal in
Herron v Hunting Chase Inc (2003) 124 ACWS (3d) 487; see also First City Trust Co v
Triple Five Trust Corporation Ltd (1989) 57 DLR (4th) 554 (Supreme Ct of Canada) at 562–
566 (Stratton JA); Tricontinental Corporation v HDFI Ltd (1990) 21 NSWLR 689 (CA of New
South Wales) at 703 (Samuels JA); African Minerals Ltd v Pan Palladium Ltd [2003] NSWSC
268 (Supreme Ct of New South Wales); Colliers McClocklin Real Estate Corporation v
Lloyd’s Underwriters [2003] SKQB 383 (High Ct of Saskatchewan) (reversed on other
grounds at [2004] 11 WWR (CA of Saskatchewan)).
52
(1777) 1 Hy Bl 273n, 126 ER 160; 2 Bl W 1313n, 96 ER 267.
53
126 ER 160.
54
Reynolds, F M B, ‘Warranty, condition and fundamental term’ (1963) 79 LQR 534,
‘Discharge of contract by breach’ (1981) 97 LQR 541; Bridge, Michael G, ‘Discharge for
breach of the contract of sale of goods’ (1983) 28 McGill LJ 867.
55
Above, para 2.16.
56
Reynolds, (1981) 97 LQR 541, above n 54. We are not concerned here with ‘failure of
consideration’ in the context of the law of restitution, where a contracting party is allowed
to recover money paid out under the contract if no part of the performance bargained for
has been rendered (Fibrosa Spolka Akynja v Fairbairn Lawson Combe Barbour [1943] AC
32 (HL)). When Reynolds uses the concept he is thinking of termination. As we shall see,
the main applications of failure of consideration in this sense are the doctrine of frustration,
on the one hand, and that of breach going to the root of the contract on the other: below,
chapter 12.
57
(1841) 2 M & G 257, 133 ER 743.
58
Ibid at 746.
59
Ibid at 747.
60
Ibid.
61
Above, para 2.23.
62
The importance of this case in the development of the law was highlighted by Lord
Denning MR in Wickman Machine Tool Sales Ltd v Schuler AG [1971] 1 WLR 840 (CA) at
851; see also Carter and Hodgekiss, above n 41.
63
Above, para 2.23.
64
(1863) 3 B & S 751, 122 ER 281.
65
Ibid at 283.
66
Thus where the seller in a contract for the sale of goods by instalments fails to deliver an
instalment on time the buyer will generally be entitled to withhold the price for that
instalment, but will not be entitled to terminate the contract as a whole unless the seller’s
conduct amounts to total repudiation: Freeth v Burr (1874) LR 9 CP 208; Sale of Goods Act
1979, s 31(2); compare Borrowman, Phillips and Co v Free and Hollis (1878) 4 QBD 500
Private Law Library
Page 56
(CA); Beale, Hugh G, Remedies for Breach of Contract (1976), p 2; Apps, A, ‘The right to
cure defective performance’ [1994] LMCLQ 525; below, chapter 10.
67
Compare Chalmers, Sir Mackenzie, The Sale of Goods (1890) with The Sale of Goods Act
1893 (1894).
68
Section 10(1) of the Act provided that, unless a different intention appeared from the
terms of the contract, stipulations as to the time of payment were not to be regarded as of
the essence of the contract of sale: Martindale v Smith (1841) 1 QB 389, 113 ER 1181.
Whether any other stipulation as to time is of the essence was to depend on the terms of the
contract: see below, para 2.48.
69
Chalmers, Sir Mackenzie, The Sale of Goods Act 1893 (1894), p 165. Carter and
Hodgekiss argue that Chalmers misunderstood the previous law in this respect: above, n
41.
70
[1910] 2 KB 1003 (CA). The decision of the Court of Appeal was reversed, and the
dissenting judgment of Fletcher Moulton LJ affirmed, by the House of Lords at [1911] AC
394.
71
[1910] 2 KB 1003 at 1012–1013.
72
Above, para 2.14.
73
Hartley v Hymans [1920] 3 KB 397; Maredelanto Compania Naviera SA v Bergbau-
Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164 (CA); Bunge Corporation v Tradax
Export SA [1981] 1 WLR 711 (HL).
74
Hongkong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (CA). As we
shall see, the main relevance of this case as far as delay is concerned is to the situation
where time is not of the essence: below, chapter 12.
75
See further below, para 6.24.
76
[1962] 2 QB 26 at 64 (Upjohn LJ) and 66 (Diplock LJ).
77
See for instance Greig, D W, ‘Condition – or warranty?’ (1973) 89 LQR 93, also the
comments of Lord Wilberforce in Reardon Smith Lines v Hansen Tangen (The Diana
Prosperity) [1976] 1 WLR 989 at 998.
78
[1981] 1 WLR 711.
79
Cehave NV v Bremer Handelsgesellschaft (The Hansa Nord) [1976] QB 44 (CA);
Reardon Smith Lines v Hansen Tangen (The Diana Prosperity) [1976] 1 WLR 989 (HL).
80
[1979] 2 Lloyd’s Rep 477.
81
[1980] 1 Lloyd’s Rep 295.
82
[1981] 1 WLR 711 at 714.
83
Ibid at 725.
84
[1987] 1 QB 527 (CA).
85
Section 11(1).
86
Bridge, Michael G, ‘Discharge for breach of the contract for the sale of goods’ (1983) 28
McGill LJ 867 at 869–870.
87
The contract was outside the scope of the Consumer Credit Act 1974.
88
[1987] 1 QB 527 at 546 (Nicholls LJ).
Private Law Library
Page 57
89
Stannard, John, ‘Delay, damages and the doctrine of constructive repudiation’ (2013) 30
J Contract Law 178.
90
To complicate matters further, there are some time stipulations which are neither
promissory in nature nor true options, such as the rent review clause in United Scientific
Holdings Ltd v Burnley B C [1978] AC 904 (HL); see above, para 1.35 and below, paras
11.34–11.36.
91
Corbin, Arthur, ‘Conditions in the law of contract’ (1918) 28 Yale LJ 739; Ferson, Merton
G, ‘Conditions in the law of contracts’ (1955) 8 Vanderbilt LR 537.
92
Willis, Hugh E, ‘Promissory and non-promissory conditions’ (1941) 16 Indiana LJ 349.
93
Reynolds, F M B, ‘Warranty, condition and fundamental term’ (1963) 79 LQR 541,
‘Discharge of contracts by breach’ (1981) 97 LQR 541; Bridge, Michael G, ‘Discharge for
breach of the contract of sale of goods’ (1983) 28 McGill LJ 867.
94
Above, para 2.24.
95
Above, para 2.31.
96
Above, para 2.30.
97
Above, para 2.29.
98
Above, para 2.23.
99
Above, para 2.17.
100
Stannard, n 5 above.
101
Gibson v Patterson (1737) 1 Atk 12, 26 ER 8; Pincke v Curteis (1793) 4 Bro CC 329, 29
ER 918; Fordyce v Ford (1794) 4 Bro CC 497, 29 ER 1107; Seton v Slade (1802) 7 Ves J 265,
32 ER 108; see generally Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013]
Ch 36 at [29]–[34] (Lewison LJ).
102
The point here is not that time was always of the essence at common law: cases such as
Constable v Cloberie (1627) Palmer 397, 81 ER 1141, Hall v Cazenove (1804) 4 East 476,
102 ER 913 and Havelock v Geddes (1809) 10 East 555, 103 ER 886 show that it was not.
Rather, the point is that the courts of equity proceeded on the assumption that it was, at
least in relation to the sort of contracts with which they were normally concerned; see
Stickney v Keeble [1915] AC 338 (HL) at 415 (Lord Parker).
103
(1802) Sch & Lef 682 (High Ct of Chancery in Ireland).
104
Ibid at 684–685.
105
See further Maitland (above n 18), p 307.
106
Parkin v Thorold (1852) 16 Beav 59, 51 ER 698 at 701 (Lord Romilly MR).
107
Seton v Slade (1784) 7 Ves J 265, 32 ER 108.
108
As in Hearne v Tenant (1807) 13 Ves 287, 33 ER 301 (action for ejection); Levy v Lindo
(1817) 3 Mer 84, 36 ER 32 (action for return of deposit).
109
Whether it actually was less strict in practice is a moot point. Even in the field of
conveyancing, cases such as Lang v Gale (1813) 1 M & S 111, 105 ER 42, Stowell v
Robinson (1837) 3 Bing NC 928, 132 ER 668 and Sansom v Rhodes (1840) 6 Bing NC 261,
133 ER 103 indicate that time was not always of the essence at common law. In the same
way, cases like Mackreth v Marlar (1786) 1 Cox 259, 29 ER 1156, Newman v Rogers (1793)
4 Bro CC 391, 29 ER 350 and Lloyd v Collett (1793) 4 Bro CC 469, 29 ER 992 demonstrate
a fairly strict approach to time by the courts of equity. The crucial point is not that the
common law was invariably stricter than equity in this context, but that it was assumed to
be so by the Chancery lawyers: see Maitland (above n 18), p 307. In these cases equity
always proceeded on the basis that time was of the essence at common law; indeed, in
Private Law Library
Page 58
cases such as Seton v Slade (1784) 7 Ves J 265, 32 ER 108 and Radcliffe v Warrington
(1806) 12 Ves J 326, 33 ER 124 specific performance was granted despite the other party
having previously sued successfully at law on the basis that the contract had been validly
terminated.
110
Reynolds v Nelson (1821) 6 Madd 18, 56 ER 995; Hipwell v Knight (1835) 1 Y & C Ex
400, 160 ER 163; Hudson v Temple (1860) 30 LJ Ch 251; see further below, para 2.48.
111
This might be the case where the property sold was of a wasting nature, or subject to
fluctuations in value: see Newman v Rogers (1793) 4 Bro CC 391, 29 ER 350 (reversion);
Withy v Cottle (1823) Turn & R 78, 37 ER 1024 (annuity); Doloret v Rothschild (1824) 1 Sim
& St 590, 57 ER 233 (government stock); Coslake v Till (1826) 1 Russ 376, 38 ER 146
(public house); Carter v Dean and Chapter of Ely (1835) 7 Sim 211, 58 ER 817 (lease);
below, para 2.49.
112
See Lindgren, Kevin E, Time in the Performance of Contracts (2nd edn, 1982), pp 16 et
seq.
113
[1915] AC 386 (HL).
114
Ibid at 417.
115
[1978] AC 904 (HL).
116
Ibid at 923.
117
Ibid at 908 and 911.
118
Ibid at 916–921.
119
Ibid at 923–924.
120
See above, para 1.31.
121
[1978] AC 904 at 930–934 (Lord Diplock), 937–940 (Viscount Dilhorne), 944 (Lord
Simon), 951 (Lord Salmon) and 959 (Lord Fraser).
122
Ibid at 925–927 (Lord Diplock), 937 (Viscount Dilhorne), 944 (Lord Simon) and 957
(Lord Fraser).
123
Ibid at 926 (Lord Diplock), 937 (Viscount Dilhorne), 944 (Lord Simon) and 957 (Lord
Fraser).
124
Ibid at 943; see also at 924–925 (Lord Diplock), 949 (Lord Salmon) and 957 (Lord
Fraser).
125
Ibid at 945.
126
Above, paras 2.27, 2.29 and 2.31.
127
The Scaptrade [1983] 2 AC 694 (HL); cf. Union Eagle Ltd v Golden Achievement Ltd
[1997] AC 514 (PC). In particular, there can be no question of granting specific performance
in such cases, though the court does have a limited jurisdiction to grant relief against
forfeiture: below, paras 11.52–11.68.
128
Legione v Hateley (1983) 152 CLR 406 (High Ct of Australia); Stern v McArthur (1988)
165 CLR 489 (High Ct of Australia); Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR
315 (High Ct of Australia); Romanos v Pentagold Investments Pty Ltd (2003) 217 CLR 367
(High Ct of Australia).
129
130
Amherst v James Walker Goldsmith and Silversmith Ltd [1983] Ch 305 (CA) at 315
(Oliver LJ).
Private Law Library
Page 59
131
Chitty, above n 31, paras 21.013–21.014; United Scientific Holdings v Burnley Borough
Council [1978] AC 904 (HL) at 944 (Lord Simon).
132
Chitty, above n 31, paras 21.013–21.014.
133
Bunge Corporation v Tradax Export SA [1981] 1 WLR 711 (HL) at 716 (Lord
Wilberforce).
134
Lombard North Central plc v Butterworth [1987] 1 QB 527 (CA); above, para 2.35.
135
Financings Ltd v Baldock [1963] 2 QB 104 (CA); Spar Shipping AS v Grand China
Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982, [2016] 2 Lloyd’s Rep 447.
136
Stannard, n 89 above.
137
In particular, ‘blanket’ clauses stating that time is of the essence generally will carry
less weight than a clause specifying that time is of the essence with regard to the
performance of a particular obligation: see Fitzpatrick v Sarcon (No 177) Ltd [2012] NICA
58, [2014] NI 35; Mims, J W, ‘Time is of the essence – condition or covenant’ (1975) 27
Baylor LR 817. See further below, para 13.76.
138
Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (CA) at 1196–1197 (Denning
MR); Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015]
UKSC 72, [2016] AC 742 at [15] (Lord Neuberger).
139
Marcan Shipping (London) Ltd v Polish Steamship Co (The Manifest Lipkowy) [1989] 2
Lloyd’s Rep 138 (CA) at 143 (Bingham LJ); Attorney-General for Belize v Belize Telecom
[2009] UKPC 10, [2009] 1 WLR 1988 at [27] (Lord Hoffmann); Marks and Spencer plc v
BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 472 at
[21].
140
The Manifest Lipkowy (n 139 above). According to Lord Hoffmann in A-G for Belize v
Belize Telecom (above n 139 at [21]), the process of implication is ultimately a matter of
construction. However, though the traditional rules are not determinative of the issue, these
may be a good guide to the question of interpretation in the individual case (ibid at [27]).
Moreover, it has been argued by Yihan Goh that there is still a crucial distinction in this
context between terms implied as a matter of ‘interpretation’ and those applied as a matter
of ‘extension’: see ‘New distinctions within terms implied in fact’ (2016) 33 J Contract Law
183. For this reason, it is suggested that the traditional analysis adopted above is still useful
in the present context. As Lord Neuberger has said, the question ‘is not strictly concerned
with the hypothetical answer of the actual parties, but with that of notional reasonable
people in the position of the parties at the time at which they were contracting’: Marks and
Spencer plc v BNP Paribas (above) at [21]. See further McLauchlan, David, ‘Construction
and implication: in defence of Belize Telecom’ [2014] LMCLQ 203 and Carter, J W and
Courtney, Wayne, ‘Belize Telecom: a reply to Professor McLauchlan’ [2015] LMCLQ 245.
141
Above, para 2.42.
142
Tilley v Thomas (1867) LR 3 Ch App 61.
143
As in Newman v Rogers (1793) 4 Bro CC 391, 29 ER 350 (reversion); Withy v Cottle
(1823) Turn & R 78, 37 ER 1024 (annuity); Doloret v Rothschild (1824) 1 Sim & St 590, 57
ER 233 (government stock).
144
Bernard v Williams (1929) 139 LT 22 (DC).
145
Alewyn v Pryor (1826) Ry & M 406, 171 ER 1065; Plevins v Downing (1876) 1 CPD 220;
Hartley v Hymans [1920] 3 KB 475.
Private Law Library
Page 60
146
Glaholm v Hays (n 57 above); Ollive v Booker (1847) 1 Ex 416, 154 ER 177; Oliver v
Fielden (1849) 4 Ex 135, 154 ER 1155; Behn v Burness (n 64 above); Bentsen v Taylor
[1893] 2 QB 274 (CA).
147
Below, chapter 11.
148
Time can also be made of the essence by notice where time was of the essence
originally but the right to terminate performance has been lost by waiver: see Charles
Rickards Ltd v Oppenhaim [1950] 1 KB 616 (CA); below, para 8.08.
149
Chitty, above n 31, para 21-014.
150
But by no means confined to that context: see below, paras 8.39–8.50.
151
Below, chapter 8.
152
Above, para 2.11.
153
United Scientific Holdings Ltd v Burnley B C [1978] AC 904 (HL) at 945 (Lord Simon);
Bunge Corporation v Tradax Export SA [1981] 1 WLR 711 (HL); above, paras 2.44 and 2.34.
154
Green v Sevin (1879) 13 Ch D 589 at 599 (Fry J); Raineri v Miles [1981] AC 1050 at
1085–1086 (Lord Edmund-Davies); Behzadi v Shaftesbury Hotels [1992] Ch 1 (CA) at 12
(Nourse LJ) and 24 (Purchas LJ).
155
United Scientific Holdings Ltd v Burnley B C [1978] AC 904 (HL) at 946 (Lord Simon);
Re Olympia & York Canary Wharf Ltd (No. 2) [1993] BCC 159; Ocular Sciences Ltd v Aspect
Vision Care Ltd [1997] RPC 289.
156
Above, para 2.24.
157
Private Law Library
Page 61
Part I The Obligation to Perform On Time, 3

Performance Due on a Contingency
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 49) 3 Performance Due on a Contingency

A. The Nature of a Condition Precedent 3.02
B. Identifying a Condition Precedent 3.07
(1) Express condition precedent 3.12
(a) Timetables or schedules 3.13

(b) Other language 3.14
(2) Condition precedent by implication 3.15
(a) Condition precedent by implication of fact 3.16

(b) Condition precedent by implication of law 3.19
(3) A presumption against conditions precedent? 3.20
C. Exceptions 3.23
3.01 In many cases the time of performance is set by reference to the occurrence of a
particular contingency. This contingency can be one of three kinds. First, it can be an
external event, as where in an insurance contract the insurer promises to pay up on the
occurrence of the event insured against. Another example is where the promisor’s duty to
perform is subject to something being done by a third party, such as ‘subject to guarantee
being given’,1 ‘subject to approval by architect’,2 ‘subject to planning permission’,3 ‘subject
to approval by court’,4 and so on. Secondly, it can be something to be done by the promisee
without the promisee being under any obligation to do it, as in the classic unilateral
contract situation where A promises to pay B a sum of money if B finds a lost dog, or walks
to York, or whatever.5 Finally, the event in question can be a counter-promise in the
Private Law Library
Page 62
contract, as where a charterer agrees to load the ship once the shipowner has given notice
of readiness,6 or a customer agrees to pay the builder once the work is done.7 These
situations often raise questions as to the due order of performance. In all (p. 50) three
cases, however, the general rule is the same; performance is due when the contingency
occurs, and not before. Or, to put it another way, the contingency is said to be a ‘condition
precedent’ to the promisor’s obligation to perform. Since this concept is not without its
difficulties,8 the ensuing discussion is divided into three sections. In the first section we
shall define what is meant by a condition precedent in this context. Then we shall examine
the rules for determining when an event is a condition precedent. Finally, we shall touch on
cases where the promisor may be obliged to perform notwithstanding the non-occurrence of
a condition precedent.
A. The Nature of a Condition Precedent

3.02 The word ‘condition’ is one that can be used in many different ways; it is, in the words
of Sir John Donaldson MR, ‘a chameleon-like word which takes on its meaning from its
surroundings’.9 A distinction is sometimes drawn in the present context between
‘contingent’ and ‘promissory’ conditions, the former being the occurrence of an event upon
which the contractual obligations of both parties depend, the latter being an obligation
under the contract.10 However, this is not a very helpful definition. For one thing, conditions
can be contingent without affecting the existence of the contract as a whole; in an
insurance policy, the obligation of the insurer to pay up is contingent on the occurrence of
the event insured against, but nobody would say that no contract exists until that event
occurs. Secondly, a condition is no less ‘contingent’ for being promissory; after all, in a sale
of goods where the buyer promises to pay the price when the goods are delivered, the seller
is under an obligation to deliver the goods, but such delivery is also the contingency on
which the buyer’s obligation to pay the price depends.
3.03 In fact, there are two distinctions here. The first can be characterised by the question
‘precedent to what?’ In some cases the happening of the contingency in question is a
condition precedent to the very existence of contractual relations between the parties; that
is to say, unless and until the contingency occurs, no contract exists at all. The classic
example of this is Pym v Campbell,11 where the parties agreed that a contract involving a
certain invention was not to come into force until the invention was approved by a third
party. Such approval not being forthcoming, the court held that no contract had come into
existence. This sort of condition is not very common.12 In other cases a contract exists, but
the (p. 51) contingency in question is a condition precedent to the duty of one or other of
the parties to perform an obligation under that contract; it is this sort of condition
precedent with which we are presently concerned.
3.04 Conditions of this second type can be both promissory and non-promissory; indeed,
sometimes the distinction is made between a condition and a promise. We have become so
accustomed to talking about ‘breach of condition’ that we sometimes forget that a
condition, strictly speaking, cannot be ‘broken’ at all; it either occurs or does not occur. As
Corbin puts it, a condition in this sense is an operative fact subsequent to acceptance and
prior to discharge, upon which certain rights and duties may depend.13 This fact may or
may not be the performance of one of the terms of the contract. Thus we can have a
condition without a promise, as when an insurance company agrees to pay money if the
house burns down. In the same way, we can have a promise without a condition; thus in the
ancient case of Constable v Cloberie,14 where a shipowner promised to sail with the first
fair wind, it was held that his failure to do so did not excuse the charterer from paying
freight. The third possibility is that something may be both a condition and a promise; thus
in a sale of goods, delivery in accordance with the contract description is both something
the seller promises to do and something which must occur before the buyer is bound to
accept and pay for the goods.15 But even here it is important to keep these two aspects
Private Law Library
Page 63
separate: as Corbin says, the remedy for breach of promise is damages, whereas the
remedy for failure of condition is release from the obligation to perform.16 When we are
considering the time when performance is due – that is to say, the performance of a
promisor whose obligation is to arise on the occurrence of a certain event – we are
interested not in the performance of promises but in the fulfilment of conditions.
3.05 One problem is that conditions precedent can fulfil three distinct functions. The first
is to set the time of performance; it is this function with which we are presently concerned.
The second is as a trigger to the right to withhold performance: where an obligation is due
for performance on the occurrence of a condition precedent, the promisor need not perform
until the condition in question is fulfilled. The third is to trigger a right of termination;
where a relevant condition precedent can no longer be fulfilled, the promisor may be
discharged from his (p. 52) or her obligations under the contract.17 The second and third of
these will be discussed later on;18 our focus here is on the first function, namely to set the
time for performance.
3.06 In sum, when the time of performance is set by reference to the occurrence of a
condition precedent, the condition in question is the occurrence of some event, which may
or may not be the performance of a counter-obligation under the contract, upon which the
promisor’s obligation depends. In the words of the American Restatement:19
A condition is an event, not certain to occur, which must occur, unless its non-
occurrence is excused, before performance of the contract becomes due.
In such cases the proper time for performance is as soon as the condition has occurred.20
B. Identifying a Condition Precedent

3.07 So how do we know whether the performance of an obligation is subject to a
condition precedent? Though a condition precedent need not necessarily involve anything
to be done by the promisee, many of the authorities deal with this situation in the context of
disputes as to the proper order of performance. Prior to the nineteenth century this issue
was discussed in the context of the pleadings in the case; the promisee having claimed
damages for the promisor’s failure to perform a particular ‘covenant’, the question would
arise whether he or she could succeed without ‘averring’ performance of some other
‘covenant’ on his or her own part.21 In some cases the covenants on either side stood by
themselves and were taken as independent, so that failure to perform on one side did not
excuse failure by the other. Thus in the early case of Pole v Tochesser22 the plaintiff agreed
to serve the defendant with three esquires in the French wars, and the defendant for his
part covenanted, inter alia, to pay twenty marks on a certain day. The court held that
whether the services had been rendered was irrelevant to the question of whether payment
of the money (p. 53) was due. Again, in the famous case of Pordage v Cole23 a covenant to
pay money on a certain day was held to be unaffected by the other party’s failure to aver
that he had conveyed or tendered a conveyance of land, even though the one was clearly
supposed to be in exchange for the other. However, in some instances the language of the
agreement made it clear that performance by one side was intended to be dependent on
due performance by the other. So in Clarke v Gurnell24 an agreement by a charterer to pay
money ‘for fraight [sic] of all the premises’ was held not to be due for performance in the
absence of an averment by the shipowner that his own covenants had been duly performed,
and in Thorpe v Thorpe25 where the plaintiff agreed to release an equity of redemption ‘in
consideratione cujus’ the defendant agreed to pay £7, no payment was due without the act
being performed. In other cases the order of performance might be clear without any
particular language being used. Thus in Copley v Hepworth26 the defendant agreed to pay
rent and to do repairs. The plaintiff sued on the covenant averring entry by the defendant
but not a lease, but it was held that the averment was sufficient since covenant and entry
were equivalent to a lease. Commenting on the order of performance, Holt CJ said that in a
Private Law Library
Page 64
case of mutual covenants where the performance of one depended on due performance of
the other, the latter had to be performed first.
3.08 The advantage of construing covenants as independent was that the courts were able
to determine the time for each party to perform without worrying about failures of
performance by the other side. However, this simplicity was gained at the price of distorting
the intentions of the parties in the context of bilateral contracts, where the promises of the
parties are intended to relate to and be given in exchange for each other. Construing
covenants as independent also led to an unnecessary multiplicity of actions.27 On the other
hand, construing covenants as dependent also had its disadvantages; in particular, the party
who had to perform first was left in a very exposed position. Considerations of this sort led
to the great case of Kingston v Preston,28 in which, as we have seen, Lord Mansfield posited
not two but three situations: covenants might be ‘mutual and independant [sic]’, ‘conditions
and dependant [sic]’, or ‘mutual conditions to be performed at the same time’.29 In the first
case performance was due irrespective of what the other party had or had not done; in the
second case performance by one party was dependent on the other having performed first;
and in the third it was (p. 54) dependent not on actual performance but on the other’s
readiness and willingness to perform.
3.09 Though the old pleading rules upon which it was posited have long since gone,
Kingston v Preston is still of importance for two reasons. First of all, the principles stated
therein serve to secure as far as possible the expectation of an exchange of promises
between the parties to a contract. The courts do not like to construe promises as
independent; as the comment to the American Restatement puts it, parties ordinarily
bargain for performance rather than a lawsuit, and the fairest and most practical remedy
for breach is to allow the promisee to withhold or terminate his or her own performance
rather than having to sue the promisor.30 As well as this, the effect of holding promises to
be independent is to expose each party to the risk of having to perform without any security
for the performance of the other.31 On the other hand, the risk of holding performance by
one party to be a condition precedent is to expose that party to the same risk; in effect, he
or she will be compelled to extend credit to the other.32 Lord Mansfield’s third category,
that of concurrent conditions, avoids these problems, and for that reason the courts often
prefer to classify promises in this way if at all possible.33
3.10 Kingston v Preston is also of significance in its stress on the intention of the parties as
the deciding factor. According to Lord Mansfield, how a particular covenant is to be
classified depends not so much on the language used as on the ‘evident sense and meaning
of the parties’. According to one report of the case:34
His Lordship then proceeded to say, that the dependance [sic], or independance
[sic] of covenants, was to be collected from the evident sense and meaning of the
parties and, that, however they might be transposed in the deed, their precedency
must depend on the order of time in which the intent of the parties requires their
performance.
3.11 So deciding whether the performance of one party, or any other event for that matter,
is a condition precedent to the obligations of the other is a matter of construction. In the
words of Lord Wilberforce, this will depend on the form of the clause itself, the relation of
the clause to the contract as a whole, and general considerations of law.35 In particular, like
any other term of the contract, a condition precedent to performance may be established
either expressly or by implication. We shall now examine each of these possibilities in turn,
before considering to (p. 55) what extent the law leans against construing an event as a
condition precedent, especially where that event is something to be done by the promisee.
Private Law Library
Page 65
(1) Express condition precedent

3.12 First of all, it may be evident from the language of the contract that an obligation is
subject to a condition precedent. In some cases the contract may set out a timetable or
schedule, while in others the language used may simply indicate that one obligation is to be
performed before or after another.
(a) Timetables or schedules
3.13 Contracts, especially those made on standard terms, commonly contain timetables or
schedules for the performance of particular obligations by the parties. Take the following
clause found in a standard form charterparty:36
That the said Vessel being tight, staunch and strong, and in every way fit for the
voyage, shall, with all convenient speed, proceed to …, and there load, always
afloat, and in the customary manner from the Charterers, in such safe berth as they
shall direct, a full and complete cargo … and being so loaded, shall therefrom
proceed, with all convenient speed, to … or so near thereunto as she can safely get,
and there deliver her cargo, as ordered by the Charterers, where she can safely
deliver it, always afloat, on having been paid freight at the rate of … per ton on bill
of lading quantity.
This gives us the following prescribed sequence of obligations: (1) the ship sails to the
loading port; (2) the charterer nominates a safe berth; (3) the charterer provides a cargo;
(4) the shipowner loads the cargo; (5) the ship sails to its prescribed destination; (6) the
charterer nominates a safe place for delivery; (7) the charterer pays the freight; and (8) the
shipowner delivers the cargo. Similarly, in the conveyancing context, a standard set of
conditions lays down the following timetable for the investigation of title: (1) the seller
provides proof of title immediately after the contract is signed; (2) the buyer may then raise
written requisitions within six working days; (3) the seller must then reply to these in
writing within four working days; and (4) the buyer then has three working days to make
observations on the seller’s replies.37 Similar provisions can be found in the context of
building contracts,38 publishing agreements,39 and indeed right across the contractual
spectrum. Where a contract involves a network of interdependent obligations, the use of
such schedules helps to avoid (p. 56) commercial confusion, and for this reason the courts
tend to insist on strict compliance in such cases.40
(b) Other language
3.14 The courts have from the very earliest days looked to the language of the contract to
determine whether the performance of one promise in a contract was intended to be
dependent on that of another. In some cases the contract will make the matter clear by
stating in so many words that some act by the promisee is a condition precedent.41 In
others the same intention is indicated in other words, as we have seen in the cases of
Clarke v Gurnell42 and in Thorpe v Thorpe.43 Similarly, in Grey v Friar,44 the words ‘all the
covenants … having been duly performed’ in a mining lease were held to make the due
performance of the covenants in question a condition precedent to the tenant’s power of
renewal. Again, in Roberts v Smith,45 which involved an agreement to pay a company
secretary a salary of £300 per annum ‘if the company be completely registered and put into
operation’, with a proviso added that the agreement should be void if the company were not
formed, the agreement to pay the salary was held clearly to be conditional on the formation
of the company. Other formulae that have been held to indicate a condition precedent are
‘provided that’,46 ‘subject to’,47 ‘in consideration of’,48 ‘if’,49 and ‘on condition that’.50
Where such words are not used, the courts will be less ready to say that there is a condition
precedent. Thus in Chipperfield v Carter51 the words ‘such lease to be approved in the
customary manner by my solicitor’ were held not to have the force of a condition precedent,
which they would have done if the classic formula ‘subject to’ had been used. Similarly, in
Private Law Library
Page 66
two cases where the provision of an accountant’s certificate was specifically said to be
‘without prejudice’ to the right of the landlord to (p. 57) demand payment of service
charges, the former was held not to be a condition precedent to the latter.52
(2) Condition precedent by implication

3.15 As well as being expressly stated in the contract, conditions precedent can exist by
implication. As with any other kind of implied term, such implication can be of two kinds, in
fact or in law.53 A condition precedent is implied in fact where the court decides this in
relation to a particular stipulation in a particular contract. It is implied in law when
commonly occurring provisions in contracts of a certain type54 are held to be conditions
precedent whenever they arise.
(a) Condition precedent by implication of fact
3.16 A condition precedent can be implied in fact when it ‘goes without saying’,55 or56 is
necessary to the business efficacy of the contract.57 There are a number of ways in which
the court may reach the conclusion that a particular stipulation in a particular contract is
subject to a condition precedent. In some cases this may be obvious from the
circumstances; in others, certain rules of construction can be resorted to to determine the
question.
(i) Condition obvious from the circumstances
3.17 Sometimes it is obvious that one promise must be performed before another. As Holt
CJ said in the early case of Copley v Hepworth:
In mutual covenants, where the one depends on the other, the precedent covenant
must be performed first.58
Thus where the contract was to give such a release as a third person should approve, it was
a condition precedent that the promisor tender a release to that person for his
approbation.59 Where a tenant agreed to do certain repairs, ‘the lessor allowing and
assigning timber for the repairs’, it was held that the assignment of the timber was a
condition precedent to the tenant’s obligation to do (p. 58) the repairs, as the latter could
not be done without the former.60 Where under a charterparty the ship was to sail ‘to a safe
port near Cape Town’, nomination of a safe port by the charterer was a condition precedent
to the owner’s obligation to sail.61 In the same way, the giving of notice of readiness is a
condition precedent to the charterer’s obligation to load the ship,62 and in an insurance
contract the insurer cannot be expected to pay up in the absence of notification by the
assured.63 And in Williams v Brisco,64 where it was agreed that a new lease should be
granted to a nominee of the tenant, the tenant was bound to make the nomination as a
condition precedent to the granting of the lease. Conversely, in some situations a condition
precedent cannot be found, as where one of the covenants is a negative one,65 or where it is
quite impossible to say which of two mutual promises must be performed first,66 or where
the non-fulfilment of the alleged condition would have little or no effect on the ability of the
promisor to perform the obligation in question.67
(ii) Rules of construction
3.18 Even where it is not obvious from the circumstances whether a particular stipulation
is subject to a condition precedent, there are certain rules of construction that a court can
follow. In particular, it may be significant that a time is set for the performance of the
stipulation concerned. The question then arises whether the time set takes priority over the
condition or vice versa. This problem normally arises in connection with the obligation to
pay the contract price; where a date is set for the payment, does the promisor have to pay
on that date or can he or she wait till the work is done? The problem was addressed at the
beginning of the eighteenth century by Holt CJ in Thorpe v Thorpe,68 and later elaborated
on by Serjeant Williams in his famous notes to Pordage v Cole.69 Though the law appears
Private Law Library
Page 67
complex, the basic position set out by Holt and by Williams is a simple one. If the day set for
the payment occurs (p. 59) before the time when the work is due to be done, the doing of
the work cannot be a condition precedent to the obligation to pay.70 But when the day set
for payment occurs after the time when the work is to be done, then the presumption is that
payment is not due until the work is completed. These rules provide a convenient starting
point for deciding the correct order of performance when a time is set in relation to one of
them. Thus in Staunton v Wood71 the plaintiff agreed to deliver some iron bars ‘forthwith’,
and the defendant agreed to pay for them within fourteen days. It was held that payment
was not due till delivery had been made, since the day set for payment fell after the time set
for delivery. Conversely, in Société Générale de Paris v Milders72 it was held that a borrower
was not discharged from his duty to repay by the lender’s failure to renew the loan, since
the repayment fell due on 30 December and the renewal was not due until three days later.
(b) Condition precedent by implication of law
3.19 Sometimes a stipulation in a contract of a certain type occurs so often that it becomes
settled by authority whether or not it is a condition precedent to one or more of the other
party’s obligations. Some conditions precedent are laid down by statute: thus, to give an
obvious example, we see from the Sale of Goods Act 1979 that the buyer’s duty to accept
and pay for the goods only arises if those goods correspond with their description and are
of satisfactory quality and fit for their purpose.73 On the other hand, the seller’s duty to
deliver the goods and the buyer’s duty to pay the price are, unless otherwise agreed,
concurrent conditions; thus the seller must be ready and willing to give possession of the
goods to the buyer in exchange for the price, and the buyer must be ready and willing to
pay the price in exchange for the goods.74 Similar provisions are set out in the Hague Rules
relating to the carriage of goods by sea:75 the carrier’s obligation to make the ship
seaworthy arises ‘before and at the beginning of the voyage’,76 but he is only bound to issue
the bill of lading once the goods have been received into his charge and the shipper has
asked for it to be supplied.77 In other cases the order of performance is set out by case law,
the most obvious example of this being the rule that in contracts of employment the
employee has to do the work before any (p. 60) wages are due.78 Similarly, in an f.o.b.
contract nomination of the vessel by the buyer is a condition precedent to the seller’s
obligation to load the goods;79 in a contract to carry goods by sea to an agreed destination
no freight is recoverable until the goods are delivered to that destination;80 and where a
contract of sale requires payment by letter of credit, the opening of the credit is a condition
precedent to the obligation of the seller to supply the goods.81 The essence of cases
discussed under this heading is that the stipulation in question is construed as a condition
precedent, not just in the case at hand, but in all cases where that stipulation crops up.
(3) A presumption against conditions precedent?

3.20 According to the American Restatement, performances are to be exchanged under an
exchange of promises if each promise is at least part of the consideration for the other and
the performance of each promise is to be exchanged at least in part for the performance of
the other.82 Given the vital role of exchange in economically advanced societies,83 one
would expect to see the law of contract adopt rules which as far as possible are designed to
secure this expectation of exchange,84 and as a general rule this is best achieved by
treating the counter-promises in a contract as interdependent but concurrent, so that
neither party is obliged to perform unless the other is ready and willing to do the same.85
This analysis also saves one party from having to give credit to the other,86 and so gives
both parties the maximum security against having their expectations disappointed.87
Private Law Library
Page 68
3.21 In view of all this, it has been said that the law adopts a presumption against
conditions precedent. Though this bias is more marked in United States jurisdictions,88 it
can also be found in some of the English cases. Thus even before the end of the eighteenth
century it was held in Morton v Lamb89 that as a (p. 61) general rule a seller of goods was
not bound to deliver to the buyer without the buyer being ready and willing to pay the price
and vice versa, the court adding that promises in a contract should be construed as
concurrent conditions in the absence of clear indication to the contrary. In Seeger v
Duthie90 a charterparty provided that a certain proportion of the freight should be payable
in advance. The charterer refused to pay this, alleging various failures in performance by
the owner, including a refusal to load some of the cargo and the failure of the captain to be
present to sign bills of lading. The ship having already sailed, it was held that none of these
stipulations were conditions precedent, Byles J observing that the court should not construe
performance of a given undertaking as a condition precedent unless it was unambiguously
expressed to be such. Again, in Simpson v Crippin91 the plaintiff agreed to accept 6,000 to
8,000 tons of coal from the defendant in ‘about equal monthly quantities’. In the first month
he took only a small amount of coal, and the defendant duly refused to go on with the
contract. However, it was held that the provision about equal monthly quantities was not a
condition precedent in the absence of words indicating this to be the case. The result of this
is to prevent one party to a contract being, at least as a general rule, entitled to demand
performance from the other without being at least ready and willing to perform his or her
own side of the bargain. In the same way, it is sometimes said that conditions precedent
which have the effect of excluding what would otherwise be perfectly valid claims or
entitlements are to be construed strictly, and that clear words must be used to exclude
rights of set off or other such common law or equitable rights.92 That said, it has also been
stressed more recently that there is no special rule of interpretation at work here, and that
the basic rules of construction apply to all contractual terms.93
3.22 In this connection we must go back to the words of Lord Mansfield in Kingston v
Preston, where he said that questions of this sort depended on the ‘evident sense and
meaning of the parties’.94 Issues relating to conditions precedent cannot be addressed
outside the broader context of contract interpretation, something which has greatly
preoccupied the courts over the last two decades,95 not (p. 62) only in England and Wales,96
but in other jurisdictions too.97 In theory, as Lord Mansfield says, this involves discerning
the common intention of the parties, but in practice there will be no such common
intention, at least with regard to the point at issue in the given case, otherwise the dispute
would not have arisen in the first place. So all the courts have to go on is the wording of the
contract itself and the surrounding circumstances, the basic issue being the comparative
weight being given to each of these factors, and the extent to which the court is allowed to
depart from the literal meaning of the contract in order to achieve a just result.98 Following
on from the seminal decision of the House of Lords in Investors Compensation Scheme v
West Bromwich Building Society, there was a definite swing towards the contextual
approach, but in more recent years the pendulum seems to have swung back towards
letting the words of the contract govern, come what may.99 All of this will apply in relation
to conditions precedent no less than in other spheres of interpretation, the bias or
presumption discussed in the previous two paragraphs being more likely to be invoked by a
court which adopts a broader and more contextual approach to contract interpretation
generally than by one which does not.
C. Exceptions
3.23 There are a number of cases where the promisor’s performance will be due despite
the failure or non-occurrence of a condition precedent. In particular, the need for fulfilment
of a condition precedent may be overruled by impossibility and under the so-called ‘doctrine
of substantial performance’. These situations raise problems concerning the promisor’s
Private Law Library
Page 69
right to withhold performance rather than the time of performance as such, and for this
reason they will be dealt with more fully in a later chapter.100
Footnotes:
1
Re Mallam, ex parte Wheeler (1817) Buck 25.
2
Clark v Gees (1877) 4 LTOS 98.
3
Dacon Construction Ltd v Karkoulis (1964) 44 DLR 2d 403 (High Ct of Ontario).
4
Barber v Crickett [1958] NZLR 1057 (Supreme Ct of New Zealand).
5
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (CA); Errington v Errington and Woods
[1952] 1 KB 290 (CA).
6
Fairbridge v Pace (1844) 1 C & K 317, 174 ER 828; Stanton v Austin (1874) LR 7 CP 651.
7
Sumpter v Hedges [1898] 1 QB 673 (CA); Bolton v Mahadeva [1972] 1 WLR 1009 (CA).
8
9
Skips A/S Nordheim v Syrian Petroleum Co Ltd (The Varenna) [1984] QB 599 (CA) at 618.
10
Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297 (CA) at 304 (Denning LJ).
11
(1856) 6 E & B 370, 119 ER 903; Scott v Rania [1966] NZLR 656 (CA of New Zealand).
12
One reason for this is that prior to the condition being fulfilled either party can
repudiate the agreement at will; another is that the condition cannot be waived even by the
party for whose benefit it was inserted. It is more likely in cases like this that the parties
are bound, but that their primary obligations need not be performed until the condition
materialises: see Davis, B H, ‘Subject to finance: a New Zealand view’ [1977] Cambrian LR
45; Davies, Gwilym J, ‘Conditional contracts for the sale of land in Canada’ (1977) 55
Canadian Bar Review 289; McMorland, D W, ‘A new approach to precedent and subsequent
conditions’ (1980) 4 Otago LR 468.
13
Corbin, Arthur, ‘Conditions in the law of contract’ (1918) 28 Yale LJ 738; Burchell, E M,
‘ “Condition” and “warranty” ’ (1954) 71 South African LJ 333.
14
(1627) Palmer 397, 81 ER 1141.
15
Sale of Goods Act 1979, s 13; Arcos v Ronaasen & Son [1933] AC 470 (HL); Bowes v
Shand (1877) 2 App Cas 455 (HL).
16
Above, n 14.
17
A good example of this is Cutter v Powell (1795) 6 TR 310, 101 ER 573, where the death
of the claimant’s husband effectively terminated the defendant’s obligation to pay his
wages: above, para 2.19.
18
Below, chapters 10 and 11.
19
Restatement (Second) of Contracts (‘Restatement 2d’), § 224.
20
Gurski v Doscher 112 App Div 345, 98 NYS 588 (1906) (New York); General State
Authority v Loffredo 16 Pa Comm 237, 328 A 2d 886 (1974) (Pennsylvania); 31171 Owners v
New York City Dept of Housing 190 AD 2d 441, 599 NYS 2d 19 (1993) (New York); Green
Construction Co v Department of Transportation 164 Pa Comm 566, 643 A 2d 1129 (1994)
(Pennsylvania).
21
For a full discussion of the background to this see Stoljar, Samuel, ‘Dependent and
independent promises’ (1957) 2 Sydney LR 217.
Private Law Library
Page 70
22
(1374) YB 48 Edw 3 fo 2 p 16.
23
(1680) 1 Wms Saund 319, 85 ER 449; Trench v Trewin (1696) 1 Ld Raym 124, 91 ER
980; Shower v Cudmore (1682) T Jo 216, 84 ER 1224.
24
(1611) 1 Bulst 167, 80 ER 858.
25
(1701) 1 Ld Raym 662, 91 ER 1341.
26
(1690) 12 Mod 1, 88 ER 1124.
27
Thomas v Cadwallader (1744) Willes 496, 125 ER 1286 (Willes LCJ); Black, Oliver,
‘Independent promises and the rescission of contracts’ [2003] Legal Studies 555.
28
(1773) Lofft 194, cited in Jones v Barkley (1781) 2 Dougl 684, 99 ER 434.
29
Above, para 2.18.
30
Restatement 2d, above n 19, Introductory Note to Chapter 10, p 194.
31
Peel, Edwin (ed), Treitel: The Law of Contract (14th edn, 2015) (‘Treitel (Contract)’),
para 17-021.
32
Ibid.
33
Below, para 3.21.
34
(1781) 2 Dougl at 681, 99 ER 434 at 438.
35
Bremer Handelsgesellschaft Schaft v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep
109 (HL) at 113.
36
This is taken from the AMWELSH Charter 93: see <http://www.fleetle.com/a/d/pdf/
amwelsh_93.pdf > (accessed 24 April 2017); see further below at 13.17.
37
Standard Conditions of Sale (5th edn), clause 4.3.1: <https://www.google.co.uk/search?
q=standard+conditions+of+sale+5th+edition> (accessed 24 April 2017); see further below
at 13.23.
38
JCT Agreement for Minor Building Works (2016), clause 4.4 (payment on issue of interim
certificate); see further below at 13.20
39
Owen, Lynette (ed), Clark’s Publishing Agreements: A Book of Precedents (9th edn,
2013), Precedent 1 clause 3.1.
40
Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegam PVBA [1978] 2 Lloyd’s Rep
109 at 113; HHR Pascal BV v W2005 Puppet II BV [2009] EWHC 2771 (Comm); Spar
Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ 982, [2016]
2 Lloyd’s Rep 447 at para [54].
41
Such clauses are often found in insurance contracts, as in Milton Furniture Ltd v Brit
Insurance Ltd [2015] EWCA Civ 671, [2016] 1 Lloyd’s Rep IR 192.
42
(1611) 1 Bulst 167, 80 ER 858: above, para 3.07.
43
(1701) 1 Ld Raym 662, 91 ER 1341: above, para 3.07.
44
(1854) 4 HLC 565, 10 ER 583.
45
(1859) 4 H & N 315, 157 ER 861.
46
Kennedy v Jenkins (1909) 28 NZLR 1073 (Supreme Ct of New Zealand); Steria Ltd v
Sigma Wireless Communications Ltd [2008] BLR 79 (QBD (TCC)); WW Gear Construction
Ltd v McGee Group Ltd [2010] EWHC 1460 (TCC), (2010) 131 Con LR 63.
47
Caney v Leith [1937] 2 All ER 532.
Private Law Library
Page 71
48
Tidey v Mollett (1864) 16 CB(NS) 298, 143 ER 1143.
49
Schwarz-Jordan Inc v Delisle Construction Co, 569 SW 2d 878 (1978) (Texas).
50
Criswell v European Crossroads Shopping Center Ltd, 792 SW 2d 945 (1990) (Texas).
51
(1895) 72 LT 487; Malcolmson v Morton (1847) 11 ILR 230.
52
Clacy v Sanchez [2015] UKUT 387; Elysian Fields Management Co v Nixon [2016] L &
TR 4.
53
Shell (UK) Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (CA).
54
Clarion Ltd v National Provident Association [2000] 1 WLR 1888; Treitel (Contract),
above n 31 at para 6-044.
55
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 (CA).
56
On the question whether these criteria are alternative or cumulative see above, para
2.49.
57
The Moorcock (1889) 14 PD 64 (CA); Marcan Shipping (London) Ltd v Polish Steamship
Co (The Manifest Lipkowy) [1989] 2 Lloyd’s Rep 138 (CA); Attorney-General for Belize v
Belize Telecom [2009] UKPC 10, [2009] 1 WLR 1988; Marks and Spencer plc v BNP Paribas
Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72, [2016] AC 472. On the precise
application of these tests in the current law see above, chapter 2 at n 140.
58
(1690) 12 Mod 1, 88 ER 1124; Neale v Ratcliff (1850) 15 QB 916, 117 ER 704; Elson v
Jones 42 Idaho 349, 245 P 95 (1926) (Idaho); Otuo v Brierley [2015] EWHC 1938 (Ch).
59
Lamb v Brownwent (1599) Cro Eliz 716, 78 ER 950.
60
Thomas v Cadwallader (1744) Willes 496, 125 ER 1286; Mecham v Nelson 92 Idaho 783,
451 P 2d 529 (1969) (Idaho).
61
Rae v Hackett (1844) 12 M & W 724, 152 ER 1390.
62
Scandinavian Trading Co A/B v Zodiac Petroleum SA (The Al Hofuf) [1981] 1 Lloyd’s Rep
81; Tradax Export SA v Italgrani di Francesco Ambrosio [1986] 1 Lloyd’s Rep 112 (CA);
Warde v Feedex International [1985] 2 Lloyd’s Rep 290.
63
Maccaferri v Zurich Insurance plc [2016] EWCA Civ 1302, [2017] 1 Lloyd’s Rep IR 200.
Similarly, it has been held that the observance of a claims co-operation clause is a condition
precedent to the liability of the insurer to pay up on the policy, as the policy could not work
otherwise: Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) plc [2017] EWHC
391 (Comm).
64
(1882) 22 Ch D 441 (CA); Kingdom v Cox (1848) 5 CB 522, 136 ER 982.
65
Hunlocke v Blacklowe (1670) 2 Wms Saund 156, 85 ER 893.
66
Trench v Trewin (1696) 1 Ld Raym 124, 91 ER 980.
67
T & L Sugars Ltd v Tate & Lyle Industries Ltd [2015] EWHC 3107 (Comm) at para [157]
(Simon J) (‘lacks commercial reality’); Mur Joint Ventures BV v Compagnie Monagasque de
Banque [2016] EWHC 3107 (Comm) (sending of notification by registered post).
68
(1701) 1 Ld Raym 662, 91 ER 1341; Shower v Cudmore (1682) T Jo 216, 84 ER 1224.
69
(1680) Wms Saund 319, 85 ER 449; Stoljar, Samuel, ‘Dependent and independent
promises’ (1957) 2 Sydney LR 217.
70
Pole v Tochesser (1374) YB 48 Edw 3 fo 2 p 16.
Private Law Library
Page 72
71
(1851) 16 QB 639, 117 ER 1025; Madera Canal and Irrigation Co v Arakelian Inc 103 Cal
App 592, 284 P 271 (1930) (California).
72
(1883) 49 LT 55; Consolidated Irrigation District v Crawshaw 130 Cal App 455, 20 P 2d
119 (1933) (California); Fresno Canal and Irrigation Co v Perrin 170 Cal 411, 149 P 805
(1915) (California); Kennelly v Shapiro 222 AD 488, 226 NYS 692 (1928) (New York).
73
Sale of Goods Act 1979, ss 13 and 14.
74
Ibid, s 28.
75
As amended by the Brussels Protocol 1968; see the Schedule to the Carriage of Goods
by Sea Act 1971.
76
Article III(1)(a).
77
Article III(3).
78
Morton v Lamb (1797) 7 TR 125, 101 ER 890; Cresswell v Board of Inland Revenue
[1984] ICR 508; Miles v Wakefield Metropolitan District Council [1987] AC 539 (HL).
79
Sutherland v Allhusen (1866) 14 LT 666; Cunningham Ltd v Monro & Co Ltd (1922) 28
Com Cas 42 (HL): see below paras 13.28–13.30.
80
Vlierboom v Chapman (1844) 13 M & W 230, 153 ER 96; The Kathleen (1874) LR 4 A &
E 269; St Enoch Shipping Co Ltd v Phosphate Mining Co Ltd [1916] 2 KB 624.
81
Kronos Worldwide Ltd v Sempra Oil Trading SARL [2004] EWCA Civ 3.
82
Restatement 2d, § 231.
83
Kronman, Anthony T, and Posner, Richard S, Economics of Contract Law (1971).
84
Restatement 2d, comment to § 231.
85
Ibid, comment to para 234.
86
Treitel (Contract), above n 31, para 17-021.
87
Ibid.
88
Minthorne v Seeburg Corp 397 F 2d 237 (1968) (US CA); Yamanishi v Bleily and
Collishaw Inc 29 Calif A 3d 457 (1972) (California); Cheyenne Dodge Inc v Reynolds and
Reynolds Co 613 P 2d 1234 (1980) (Wyoming); Criswell v European Crossroads Shopping
Center Ltd (Tex, 1990) 792 SW 2d 945 (1990) (Texas); DEW Inc v Depco Forms Inc (Tex
App, 1992) 827 SW 2d 379 (1992) (Texas); PDQ Lube Center Inc v Huber (Utah App, 1997)
949 P 2d 792 (1997) (Utah).
89
(1797) 7 TR 125, 101 ER 890; Sale of Goods Act 1979, s 28.
90
(1860) 8 CB(NS) 45, 141 ER 1081; Dimech v Corlett (1858) 12 Moo PC 199, 14 ER 887;
Stavers v Curling (1838) 3 Bing NC 355, 132 ER 447.
91
(1872) LR 8 QB 14. Contrast Hoare v Rennie (1859) 5 H & N 19, 157 ER 1083 and
Honck v Muller (1881) 7 QBD 12 (CA), where the presumption was rebutted.
92
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 (HL) at
716 (Lord Diplock).
93
WW Gear Construction Ltd v McGee Group Ltd [2010] EWHC 1460 (TCC), (2010) 131
Con LR 63 at [13] (Akenhead J).
94
(1773) Lofft 194, cited in Jones v Barkley (1781) 2 Dougl 684, 99 ER 434; above, para
3.08.
Private Law Library
Page 73
95
Indeed, it has been said that contract interpretation disputes now take up more time
than all the other areas of the law put together: McLauchlan, David, ‘The lingering
confusion and uncertainty in the law of contractual interpretation’ [2015] LMCLQ 406.
96
See for instance Investors Compensation Scheme Ltd v West Bromwich Building Society
[1998] 1 WLR 896 (HL); Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1
AC 1101; Re Sigma Finance Corp [2009] UKSC 2, [2010] BCC 40; Rainy Sky SA v Kookmin
Bank [2011] UKSC 50, [2011] 1 WLR 2900; Arnold v Britton [2015] UKSC 36, [2015] AC
1619; Wood v Sureterm Direct Ltd [2017] UKSC 24, [2017] 2 WLR 1095.
97
See Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA
5, (2002) 240 CLR 45; Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd
[2007] NSWCA 235; Byrnes v Kendle [2011] HCA 26, (2011) 243 CLR 253; Firm PI Ltd v
Zurich Australian Insurance Ltd [2014] NZSC 147.
98
The academic commentary on the issue is voluminous, but for a good overview see
Carter, J W, ‘Context and literalism in construction’ (2014) 31 Journal of Contract Law 100.
99
McLauchlan, above n 95; see, however, Wood v Sureterm Direct Ltd [2017] UKSC 24,
[2017] 2 WLR 1095.
100
Below, chapter 10.
Private Law Library
Page 74
Part II Performance of the Obligation, 4 The

Obligation and its Performance
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 65) 4 The Obligation and its Performance

A. The Hour of Performance 4.02
(1) Performance possible without co-operation of promisee 4.03

(2) Performance requiring co-operation of promisee 4.04
(a) Tender of performance at a reasonable hour 4.05

(b) Unavailability of promisee 4.07
(c) Performance due on demand 4.09
B. Period Specified for Performance 4.10
(1) Period inclusive 4.11

(2) Period exclusive 4.13
(3) Specifying the wrong date 4.16
C. Performance within a Reasonable Time 4.18
(1) Conduct of the parties 4.20

(2) Supervening events 4.21
4.01 Though the distinction between the content of an obligation and its performance is
one that is often notoriously difficult to draw in the contractual context,1 there are some
factors which clearly relate more naturally to the performance of an obligation rather than
to its content. In particular, performance may be affected by factors which arise after the
contract is made. The present section of the book is divided into three chapters. In this
chapter we shall be considering the computation of time, the hour of performance, and
Private Law Library
Page 75
performance in the context of an obligation to perform within a reasonable time. In Chapter

5 we shall consider excuses for failure to perform in time. Then in Chapter 6 we shall
summarise the legal consequences of untimely performance, before turning in the next
section to the question of remedies for delay.
A. The Hour of Performance

4.02 In some cases it is necessary to consider not only the day on which performance is
due but the hour when it is due. The rules here differ depending on whether or (p. 66) not
the promisor can perform without the co-operation of the promisee. Where performance is
entirely under the control of the promisor, the general rule is that he or she has up to
midnight to perform, but where the promisee has to be involved the legal position is rather
more complicated.
(1) Performance possible without co-operation of promisee

4.03 Where performance is possible without the co-operation of the other party, the basic
rule is that in the absence of any stipulation to the contrary2 the promisor has up to
midnight to perform. As Patteson J put it in Startup v Macdonald:3
I apprehend the general rule of law to be, that when a thing is to be done on a
certain day, it may be done at any time before twelve o’clock at night, unless there
be any particular usage …
This rule is well illustrated by a series of three cases concerning a term in a charterparty
allowing a shipowner to issue notice of withdrawal where hire was ‘due and not received’.
In all three cases it was held that a notice issued before midnight on the last day for
payment of hire was premature. It did not matter that the notice was issued after the close
of business hours, or at a time when it was clear that the hire would not be forthcoming.
The notice could only be issued when hire was both (a) due and (b) not received, and this
did not become the case until after midnight had passed.4 Similarly, in The Mathraki5 it was
held that, in the absence of any trade custom or practice to the contrary, a seller was
entitled to nominate a cargo at any time up to midnight on the last day specified in the
contract.
(2) Performance requiring co-operation of promisee
4.04 It is different where performance requires the co-operation of the promisee. Where
the promisor can perform independently, there is no reason for the law to prevent this being
done at any hour of the day or night, as the promisor is the only person affected. But in the
majority of cases both parties are involved in performance. The delivery of goods, for
instance, requires one to deliver and (p. 67) another to accept, and even the payment of
money may require the presence of the recipient, at least where cash is involved.6 In cases
of this sort the promisor cannot simply perform at his or her own convenience, and the
rules concerning the hour of performance are accordingly more strict.
(a) Tender of performance at a reasonable hour
4.05 Where a tender of performance is required, this must be at a reasonable hour, and the
promisee must have a fair opportunity to decide whether or not to accept the promisor’s
tender. So in a contract for the sale of goods it is provided by statute that tender and
demand of delivery must both be made at a reasonable hour.7 Once more we must turn to
Startup v Macdonald,8 where the following observations were made by Rolfe B:9
Private Law Library
Page 76
Now, it may be observed, that in every contract by which a party binds himself to
deliver goods, or pay money, to another, he in fact engages to do an act which he
cannot completely perform without the concurrence of the party to whom the
delivery or the payment is to be made. Without acceptance on the part of him who is
to receive, the act of him who is to deliver or to pay, can amount only to a tender.
But the law considers a party who has entered into a contract to deliver goods or
pay money to another, as having, substantially, performed it, if he has tendered the
goods or money to the party to whom the delivery or the payment was to be made,
provided that the tender has been made under such circumstances that the party to
whom it has been made, has had a reasonable opportunity of examining the goods,
or the money, tendered in order to ascertain that the thing tendered really was what
it purported to be. Indeed, without such an opportunity an offer to deliver or to pay
does not amount to a tender.
4.06 In the same way, a tender of performance must be at an hour which will give the
promisee sufficient time to assess whether the tender is satisfactory. Thus section 34 of the
Sale of Goods Act 1979 provides that in the absence of agreement to the contrary10 a buyer
should be given the chance to inspect the goods on delivery so as to decide whether or not
to accept them.11 In the same way, where the obligation is to pay cash the money has to be
tendered at such a time as to allow the payee to count it out.12 Where the tender is too late
for the promisee to be able to decide (p. 68) whether or not to accept it before the deadline
specified for performance by the promisor, the promisor will have broken the contract.
However, a tender can be at an unreasonable hour even though there is still plenty of time
for performance. Take, for instance, a case where a seller of goods is bound to make
delivery within two weeks after the contract is made. If the goods are tendered at an
unreasonable hour on the last day for performance, the tender is bad, but it is equally bad if
made at such an hour on the very day the contract is signed. The only difference is that in
the latter case there is no breach of contract, since it is still open to the promisor to make a
good tender at a later stage.13 Indeed, it can be said that as a general rule in cases such as
this it is not the bad tender that amounts to the breach, but the failure to make a good one
within the stipulated time.14
(b) Unavailability of promisee
4.07 A tender of performance may also fail because the promisee is not available to receive
it. The crucial question here is whether or not the contract specifies a place for
performance. Where no place of performance is specified, it is the duty of the promisor to
seek out the promisee wherever he or she may be,15 and the absence of the latter can be no
excuse.16 However, in most cases the contract will specify a place for performance,17 and
the question then arises as to the time of day when the promisee is expected to be there.
4.08 Where the contract specifies a place of performance, and the promisor has not been
able to contact the promisee, it is sufficient to show that performance was tendered at the
last convenient hour of the day at the place specified. Thus it has been held that (p. 69) a
demand for rent will put a tenant in default if made at the last convenient hour of the day
upon which it is due,18 and that a tender of stock must be at the last part of the day that it
can be accepted.19 A similar problem may arise where one party to the contract has to
exercise an option by a certain deadline. In Nissho Iwai Petroleum Co v Cargill International
SA20 the seller under an f.o.b. contract had until 5 p.m. on a certain day to declare the
cargo to the buyer’s office, and the buyer was obliged to use all reasonable efforts to ensure
that personnel were available at the office to deal with such declarations. The seller tried to
make a declaration in the last thirty seconds prior to the deadline, but was unable to
contact anyone as the office had shut down for the day. The buyers were found to be in
breach; given that declarations in such cases might pass through a chain of up to fifty
parties right up to the last moment of the last day, it was not unreasonable to expect that
Private Law Library
Page 77
someone would be on hand to receive the declaration when it was made. The upshot was
that by closing the office half a minute early the buyers had rendered themselves liable for
over $1 million in damages.
(c) Performance due on demand
4.09 Sometimes performance is due on demand, and then the question arises as to what
time of the day such demand can be made. Clearly performance cannot be demanded at any
hour of the day or night, save in exceptional cases.21 Normally performance must be
demanded at a reasonable hour. Most of the cases on this point relate to bills of exchange,
which have to be presented at a reasonable hour on a business day.22 Thus a bill payable at
a bank has to be presented within banking hours;23 a bill payable at some other place of
business, or at a private house, has to be presented at a time when it would be reasonable
to expect someone to be available on the premises to transact business.24 The same
principles apply outside the law of negotiable instruments, as is seen by two American
cases. The (p. 70) first is Berry v Nall and Duxberry,25 where the plaintiff agreed to take
and the defendant to deliver a quantity of cotton when ready for market. The cotton was
promised for a certain day, the plaintiff to come and ask for the cotton. He did so on the due
day, but half an hour after sunset. The defendant was unable to deliver the consignment,
and argued that the demand had been made at an unreasonable hour. The court held that
the plaintiff was entitled to come and ask for the cotton at that hour, provided that he gave
the defendant time to complete the delivery before midnight. In the circumstances it was
found as a fact that it was quite customary to use lamps in gin-houses, and that if he had
had the cotton available it would have been perfectly possible for him to weigh it out in the
time. In contrast we have Manners v Hirschenhorn,26 where a contract for the sale of hog
bristles provided for payment within ten days on presentation of shipping documents. The
sellers tendered the documents after the close of banking hours on the tenth day and
demanded cash, and when this was not forthcoming they refused to accept an offer of
payment in cash the next banking day.27 It was held that the sellers could not maintain an
action for breach of contract. The demand for payment, it was said, had to be made at a
reasonable hour, what was reasonable being a question for the jury.
B. Period Specified for Performance

4.10 The contract may provide for something to be done within a certain period, or
alternatively that a certain period must elapse before something may be done. The question
then arises as to how that period is to be computed; in particular, when does it begin and
when does it end? In Carapanayoti & Co Ltd v Comptoir Commercial Andre et Cie SA28 Lord
Denning MR drew a distinction in this context depending on whether the period was
intended to be inclusive or exclusive, the difference being that in the former case the last
day of the period was to be included in the computation, whereas in the latter it was not.
We shall now look more closely at this distinction.
(1) Period inclusive

4.11 The first situation is where, in the words of Lord Denning, ‘the instrument prescribes
a period within which a person must act or take the consequences … [as] … for (p. 71)
instance, where a man must give notice or do some other thing within a certain number of
days from or after some date or event.’29 Here the general rule is that the date on which the
event occurs is not counted. This rule has a long pedigree, going back to the case of Lester
v Garland in 1808.30 There a will provided a bequest to the children of A on condition that
she gave security not to marry B within six calendar months of the testator’s death. The
testator died on the evening of 12 January 1805, and A gave the required security on the
evening of 12 July of the same year. It was held that this was within the time specified in the
will, it being said that A should be allowed six full months to make up her mind on the
matter. The same rule applies in the contractual context. In Webb v Fairmaner,31 for
Private Law Library
Page 78
instance, goods were sold on 5 October 1837, ‘to be paid for in two months’. It was held
that the seller was not entitled to sue for the price on 5 December, since the contract
allowed two whole months for payment. Again, in Goldsmith’s Company v West
Metropolitan Railway32 the defendant company was given a statutory power of compulsory
purchase which was set to cease ‘after the expiration of three years’ from the passing of the
relevant Act.33 Royal Assent having been given on 9 August 1899, it was held that the
company was entitled to exercise the power on 9 August 1902, the day on which the Act
came into force having been excluded. In the words of Mathew LJ, ‘the rule is now well
established, that where a particular time is given, from a certain date, within which an act
has to be done, the day of the date is to be excluded’.34 The rule is often justified by
postulating a situation in which something has to be done within one day of a given event;35
if the day of the event itself is not excluded from the computation, there might be only a
very short time available for the act to be done. This can be illustrated by Radcliffe v
Bartholomew,36 where section 14 of the Prevention of Cruelty to Animals Act 1849 provided
that a complaint had to be lodged ‘within one calendar month after the cause of such
complaint shall arise’. On 30 June 1891 a complaint was lodged against the applicant
alleging that he had ill-treated certain sheep on 30 May of that year. It was held that the
complaint was in time. Say the period specified had been one day rather than one month,
and that the acts complained of had occurred late in the evening. If the first day were
included, the complaint would have had to be lodged before midnight on that very day,
which would have been absurd.37
(p. 72) 4.12 However, this principle may give way when a contrary construction is
indicated. Thus where a lease or licence is stated to commence on a certain day, that day is
included in the term,38 and under the Interpretation Act 188939 a statute comes into force,
unless there is express provision to the contrary, at midnight on the day preceding that on
which it receives the Royal Assent. In Hare v Gocher40 the court had to consider the
interpretation of section 14 of the Caravan Sites and Control of Development Act 1960,
whereby a licence had to be applied for ‘within the period of two months beginning with the
commencement of this Act’. The Act received Royal Assent on 29 July 1960 and came into
force on 28 August. It was held that an application for a licence made on 29 October was
out of time, the court having held that the wording used was clearly intended to exclude the
general rule whereby the first day was excluded. A similar result was reached in Trow v Ind
Coope (West Midlands) Ltd,41 concerning the construction of the rule of court requiring a
writ to be served within a period of 12 months ‘beginning with’ the date of its issue.42 The
writ having been issued on 10 September 1965, it was held that it could not be validly
served on 10 September 1966; the wording of the rule, it was said, clearly indicated that
time should begin to run on the first day. Though neither of these two cases concern the
construction of a contract, they do indicate that the general rule excluding the first day
from computation can be excluded by the use of an appropriate form of words.
(2) Period exclusive

4.13 In other situations the prescribed period may be exclusive. These are cases where, in
the words of Lord Denning, ‘the instrument prescribes that a certain time must elapse
between some event and another, such as between the doing of a thing and some other date
or event’.43 Here the general rule is that the day on which the act is to be done and the day
of the date or event in question are both excluded, so as to give the other party the benefit
of so many clear days. In Young v Higgon44 it was provided by statute that no writ could be
served on a justice of the peace for anything done in the execution of his office ‘until notice
in writing shall have been delivered to him … at least one calendar month before the suing
out or serving the same’. Notice was served on 26 March 1838 and the writ was sued out on
26 April. It was held that insufficient notice had been given, (p. 73) since the days of service
and of suing out were both to be excluded; the intention of the statute was to ensure that
the defendant had a full month’s warning of the action. The same line of reasoning was
Private Law Library
Page 79
applied in Rightside Properties v Gray,45 where a contract for the sale of land allowed in the
event of default for the service of a notice of ‘at least 21 days’ requiring the default to be
remedied. The purchaser having failed to complete, the vendor put a notice in the post
requiring completion ‘within 21 days of the date hereof’. The notice was held to be
improper; even if it had arrived the very next day, it only gave the purchaser 20 days to act,
whereas the contract said that he should have had 21. In Carapanayoti & Co Ltd v Comptoir
Commercial Andre & Cie itself,46 a contract for the sale of goods provided for shipment in
‘February/March 1968’, the buyer being obliged to nominate a port ‘not less than 21 days
before the commencement of the shipment period’. It was held that a nomination made on
11 January was out of time, since this was within 21 days of the first shipping day. As Lord
Denning MR pointed out, this was a clause inserted for the benefit of the seller, who was to
have the benefit of the full 21 days in order to make the necessary arrangements for having
the cargo ready.47
4.14 Once again, this rule is subject to exception. Thus Lord Denning MR himself refers to
cases where a periodic tenancy is determinable by notice; here it is always sufficient to give
a notice to quit expiring on the periodic day.48 Similarly, where a notice to quit is required
to be of a certain number of months’ duration, it is generally sufficient to give the tenant
until the corresponding date of the month in question. In Hogg Bullimore & Co v Co-
operative Insurance Society49 a tenancy was subject to section 25(1) of the Landlord and
Tenant Act 1954, under which notice to quit was ineffective if given ‘less than six months
before the date of termination specified therein’. The landlord served a notice on 2 April
1984 specifying the date of termination as 2 October 1984, and this was held to be valid on
the basis of the ‘corresponding date’ principle. In Riley Investments Ltd v Eurostile
Holdings Ltd50 the court had to consider the effect of section 29(3) of the same Act, which
specified that applications for a new tenancy under the Act had to be made ‘not less than
two nor more than four months’ after the service of a notice to quit. Notice having been
given on 23 March 1983, the question arose whether the tenant was entitled to apply for a
new tenancy on 23 May. It was held that the application was within the limits specified by
the section. The landlords had argued that since 23 May was not more than two months
after 23 March it (p. 74) had to be less, but as Fox LJ pointed out this argument was
misconceived. Some dates were less than two months after 23 March and some were more,
but 23 May was neither less nor more; it was exactly two months after.51 A similar course of
reasoning was employed in Freeman v Reid,52 where Cockburn CJ set out the following
principle:53
In a case like the present where the months are broken, the day on which the notice
was given being excluded, the calendar month or other period of time is complete
when, starting from a given day in the first month, you come to the corresponding
day in the succeeding month whatever be the length of either.
4.15 This principle is well illustrated by Dodds v Walker,54 another case involving section
29(3). Here the notice to quit was served on 30 September 1978, and the tenant sought to
apply for a new tenancy on 31 January 1979, arguing that he was entitled to four full
months under the section – that is to say, October, November, December and January. But
this argument was dismissed by the court as a fallacy, depending as it did on the irrelevant
fact that 30 September happened to be the last day of the month. If the notice had been
served on 30 August, it would have been quite clear that the last day for the application
would have been 30 December. In the same way, the last day on which the application could
have been made in the present case was the date corresponding to that on which the notice
was served, that is to say, 30 January 1979.
Private Law Library
Page 80
(3) Specifying the wrong date

4.16 A related but distinct problem appears from the decision of the House of Lords in
Mannai Ltd v Eagle Star Assurance Co Ltd.55 In this case leases commencing on 13 January
1992 contained a break clause providing the tenants with an option to determine by serving
not less than six months’ notice in writing on the landlord or his solicitors, such notice to
expire ‘on the third anniversary of the term commencement date’. On 24 June 1994 the
tenant served a notice in the following terms: ‘Pursuant to … the lease we as tenant hereby
give notice to you to determine the lease on 12 January 1995.’ This was of course a mistake:
the date should have been 13 January. The courts now had to decide whether the notice was
valid to determine the lease. At first instance the notice was held to be valid by Judge Rich
QC, on the grounds that since 12 and 13 January were contiguous dates there was a
moment of time at which they coincided.56 However, this reasoning was rejected by the
Court of Appeal on the basis that where the contract imposed a requirement that a notice
take effect on one day, (p. 75) that requirement could not be satisfied by a notice expressed
to take effect on a different day.57 The tenants then appealed to the House of Lords, where
Lords Goff and Jauncey accepted the reasoning of the Court of Appeal;58 though it was clear
what the tenants were trying to achieve, they had failed to use the right key which alone
was capable of turning the lock.59 However, Lords Steyn, Hoffmann and Clyde voted to
allow the appeal,60 saying that notices of this sort were to be approached objectively, and
that the question was how a reasonable recipient would have understood them.61 In the
present case a reasonable recipient with knowledge of the lease and of its terms would have
been left in no doubt, despite the mistake as to the date, that the tenants were purporting
to exercise the break option according to its terms.
4.17 How does this case affect the principles we have just been discussing? To some
extent, it does not affect them at all, since the issue in the case was one of form rather than
of substance. The notice had clearly been served within the stipulated time; the only
problem was that it referred to the wrong date. The principle here is basically one of
interpretation, as set out by Lord Hoffmann in Investors Compensation Scheme Ltd v West
Bromwich Building Society,62 the principle being that in some cases it is ‘open to the court
to conclude that the parties must, for whatever reason, have used the wrong words or
syntax’.63 Thus in Carradine Properties Ltd v Aslam,64 where a lease could be determined
by 12 months’ notice, the court upheld the validity of a notice served by a lessor in
September 1974 purporting to determine the lease in ‘September 1973’, it being obvious
that what was meant was ‘September 1975’. A similar approach can be seen in Garston v
Scottish Widows Fund and Life Assurance Society,65 where the lease provided for
determination by notice at the expiry of the tenth year of the term. The court upheld the
validity of a notice served by the tenants despite the fact that it specified determination on
9 July 1995, the anniversary of the lease, when it should have been 23 June 1995, the
anniversary of its commencement. However, the point in these cases is that the intended
meaning of the notice would have been clear to any reasonable recipient. It is different
where the notice is ambiguous on its face,66 (p. 76) or where it is clearly not in accordance
with the contract.67 It has also been said that the approach in Mannai has no application to
unilateral contracts or options, where strict compliance is of the essence.68
C. Performance within a Reasonable Time

4.18 We have already seen how, where the contract is silent as to time, performance must
take place within a reasonable time, and we have considered the factors that go to make up
a reasonable time in any given case.69 However, the law also provides a related but distinct
set of principles to be applied in deciding whether such performance has taken place. In
Private Law Library
Page 81
particular, the court may excuse the promisor for delays in performance caused by events
outside his or her control.
4.19 As a general rule events occurring after the contract was made cannot be taken into
account in calculating a reasonable time for performance, and no doubt this is so if we
restrict our inquiry to the content of the obligation to perform within a reasonable time.70
However, such factors may be of great relevance in deciding whether such an obligation has
been performed, and this is generally the issue before the court in any given case. In
Peregrine Systems Ltd v Steria Ltd71 the Court of Appeal rejected the proposition that the
exercise was merely one of looking forward from the date of the contract to a completion
date contemplated by the parties at the relevant time, and said that the consideration of
whether there had been a breach of the relevant obligation was not limited to what the
parties contemplated or ought to have foreseen at the time of the contract.72 At the same
time, the court approved a dictum of His Honour Judge Seymour QC, which deserves to be
cited at length in the present context. According to Judge Seymour,73 the question whether
a reasonable time had been exceeded in any given case was
(p. 77)
… a broad consideration, with the benefit of hindsight, and viewed from the time at
which one party contends that a reasonable time for performance had been
exceeded, of what would, in all the circumstances which are by then known to have
happened, have been a reasonable time for performance. That broad consideration
is likely to include any estimate given by the performing party of how long it would
take him to perform; whether that estimate has been exceeded, and if so, in what
circumstances; whether the party for whose benefit the relevant obligation was to
be performed needed to participate in the performance, actively, in the sense of
collaborating in what was needed to be done, or passively, in the sense of being in a
position to receive performance, or not at all; whether it was necessary for third
parties to collaborate with the performing party in order to enable it to perform;
and what exactly was the cause, or were the causes, of the delay to performance.
The list is not intended to be exhaustive.
Two matters are of particular significance in this context, one being the conduct of the
parties subsequent to the contract, and the other the effect of unforeseen supervening
events.
(1) Conduct of the parties

4.20 The conduct of the parties, and in particular their attitude to the contract, may be of
great importance in deciding whether performance has taken place within a reasonable
time. Both the attitude of the promisor and that of the promisee can be relevant here. Thus
a promisee who has constantly been pressing for performance is more likely to be able to
convince the court that the promisor has not performed within a reasonable time than one
who has not shown any concern about the matter. In Wigginton v Dodd74 a sum of £200 was
delivered to the defendant to be applied for the purchase of a public house. Three months
later the plaintiff sued for the return of the money on the ground that the defendant had not
taken any steps to carry out the proposed transaction. The question of whether a
reasonable time had elapsed for the return of the money was left to the jury, who were
instructed to bear especially in mind that there had been no request by the plaintiff prior to
the action. On the other hand, in McDonald v McKenna75 the claimant seller sought specific
performance of a contract for the sale of a house to the defendant, the understanding being
that the defendant would then resell it himself on the market. No date for completion was
specified, but it was held that the defendant had failed to complete within a reasonable
time, one reason being that the claimant had been pressing for completion while he himself
had been dilatory, having rejected several reasonable offers from potential sub-
Private Law Library
Page 82
purchasers.76 A similar result was reached in Anglo-Irish Bank Corporation Ltd v John
Patrick Conway,77 which involved an agreement made in June 2009 between the (p. 78)
guarantor of a debt and one of the creditors for waiver of the guarantee, provided that the
guarantor could obtain similar waivers from the other creditors. No such waivers having
been obtained by November 2011, it was held that the creditor in question was entitled to
sue the guarantor on the basis of the debt. No deadline having been set for the obtaining of
the necessary waivers, a reasonable time would be implied, and this had clearly lapsed by
the relevant time. It would have been different if the guarantor had kept in touch with the
creditor and given some explanation of the delay.78
(2) Supervening events
4.21 One matter of particular significance in this context is the effect of unforeseen
supervening events which hinder the promisor from performing. When the obligation is to
perform on a certain day, such events do not provide any defence, as we shall see, unless
they are severe enough to frustrate the contract, but where the obligation is merely to
perform within a reasonable time, a wider latitude is allowed.
4.22 It is clear that while an obligation to perform within a reasonable time is more than
just an obligation to do one’s best, the promisor will sometimes be excused where
performance has been hindered by matters for which he or she is not responsible. Thus in
Ardan SS Co v Weir79 a charterer was held liable in damages for failure to load the cargo
within a reasonable time despite the fact that he had loaded as fast as he could. It was
decided that since the delay resulted from his failure to provide a cargo, an obligation
which was absolute, he was to be held responsible. However, it was added that a charterer
in performing this obligation was not bound to be prepared for contingencies or fortuitous
circumstances not contemplated by the parties.80
4.23 The crucial question, therefore, as with the doctrine of frustration,81 is whether the
supervening event is something for which the promisor should shoulder the risk. If not, no
liability arises. Thus it has been held that where the cargo was to be provided from a
particular place, and the charter had been made in view of circumstances by which, as both
parties knew, the procuring of a cargo from that place might be delayed, the charterer was
excused from liability.82 Again, a charterer is not liable for delay in unloading the ship if the
charterparty incorporates a reference to the custom of a particular port, and unloading
according to that custom is rendered temporarily impossible. In Ford v Cotesworth83 an
obligation (p. 79) to unload at Lima ‘in the usual and customary manner’ was held not to
have been broken when the port authorities refused to allow cargo to be landed because of
the threat of bombardment from the Spanish Navy; in Postlethwaite v Freeland84 an
obligation to unload ‘with all dispatch according to the custom of the port’ was held to have
been fulfilled despite a delay of six weeks caused by a shortage of lighters; and in
Castlegate SS Co Ltd v Dempsey,85 where the obligation was to unload ‘with all dispatch as
customary’ at Garston, the charterer was not liable for delay caused by a strike of the
dockers, who normally by the custom of the port did all the unloading.
4.24 The cases just mentioned could be said to turn on the custom of the port, but a wider
principle was set out in Hick v Raymond and Reid.86 This case involved a bill of lading
under which the consignees were obliged to unload the goods from the ship. Nothing was
said about time. The unloading was interrupted for several weeks by a dock strike, and the
question arose whether the consignees were answerable in damages for the delay. It was
held by the House of Lords that they were not. Since the contract was silent as to time, a
reasonable time had to be implied, and this was to be assessed according to all the
circumstances, including supervening events. The only proviso was that a promisor could
not rely on these as an excuse in so far as he or she had caused them or contributed to
Private Law Library
Page 83
them. This rule was not a special one confined to charterparties or bills of lading, but a
general principle of contract. As Lord Watson said:87
The rule is not confined to contracts for the carriage of goods by sea. In the case of
other contracts the condition of reasonable time has been frequently interpreted;
and has invariably been held to mean that the party on whom it is incumbent duly
fulfils his obligation, notwithstanding protracted delay, so long as such delay is
attributable to causes beyond his control, and he has neither acted negligently nor
unreasonably.
Thus in Taylor v Great Northern Railway88 the defendants were held not to be liable for
delays in delivery caused by an accident involving the train of another company which had
running powers over their line. Their duty was to deliver the goods in a reasonable time,
and this was to be assessed by looking at all the circumstances, including those which
existed at the time of performance. In Hall v Wright89 it was said that a man who promised
to marry would be excused by a supervening deadly disease just as he would by a
dangerous wound; assuming (p. 80) that his obligation had to be performed within a
reasonable time, all the relevant circumstances had to be considered. In the words of Erle
J:90
The test lies, not in number of days, but in the reasons that produced the delay
originally, and the alteration in the situation of the parties when the time is
supposed to have arrived.
Similarly, in Carver & Co v Sassoon & Co,91 where a cargo of cottonseed was held up
because the ship had gone aground, it was said that the sellers would have been liable for
the delay if the grounding had been shown to be due to negligent navigation, as this risk
was assumed by them on the proper construction of the contract; in the absence of proof of
negligence, no liability arose.
4.25 How does the principle just discussed relate to the doctrine of frustration? On the
surface the two look remarkably similar. Both involve the question of when an unexpected
turn of events can excuse a failure of performance. Both of them have been justified by
reference to what the parties must have contemplated. In both cases the promisor is saying
in effect that to ask for performance in the circumstances which have arisen would be to
demand something which he or she did not promise to do.92 Again, both the doctrine of
frustration and the principle in Hick v Raymond and Reid contain the qualification that the
circumstances which excuse performance must not have been brought about by the
promisor. So it is a well-known rule that the law does not allow self-induced frustration.93
And in Hick v Raymond and Reid itself, Lord Watson said, as we have seen, that the
promisor was relieved of liability for the delay only so long as such delay was ‘attributable
to causes beyond his control’, and ‘he has acted neither negligently nor unreasonably’.94
However, though the two doctrines clearly have much in common, there are a number of
important differences between them. In particular:
• The Hick v Raymond and Reid doctrine does no more than provide the promisor
with an excuse for delay in performance. The doctrine of frustration is said to
discharge the contract altogether. 95
• The Hick v Raymond and Reid doctrine only applies where no time of performance
is specified. 96 The doctrine of frustration is not so limited.
(p. 81) • The Hick v Raymond and Reid doctrine only applies to impossibility of
performance, that is to say where prompt performance is hindered by a supervening
event. The doctrine of frustration can also be used in cases of failure of consideration
– that is to say, where performance is perfectly possible, but where the promisor has
Private Law Library
Page 84
been deprived by subsequent events of the agreed exchange for his or her
performance. 97
• The Hick v Raymond and Reid doctrine is satisfied in any case where a promisor
who is bound to perform in a reasonable time is delayed by events beyond his or her
control. The doctrine of frustration only applies where the supervening event renders
performance something ‘radically different’ from what was contemplated by the
contract. 98
• The Hick v Raymond and Reid doctrine only affects one party. The doctrine of
frustration affects both. 99
• The Hick v Raymond and Reid doctrine acts by way of a defence available to the
promisor at his or her option. The doctrine of frustration is said to be automatic and
to operate whether the promisor wishes to rely on it or not. 100
We shall be discussing the doctrine of frustration in the context of delay more fully in a later
chapter.101 Suffice it to say at the present juncture that the Hick v Raymond and Reid
doctrine, though similar to the doctrine of frustration, operates independently of it. This is
not an unreasonable conclusion to draw; as we shall see, there are other examples in the
law of contract of excused non-performance falling short of frustration.102(p. 82)
Footnotes:
1
The doctrine of frustration, for instance, was once thought to rest on the basis of an
implied term in the contract itself: Taylor v Caldwell (1863) 3 B & S 826 at 833, 122 ER 309
at 312 (Blackburn J); Tamplin SS Co v Anglo-Mexican Petroleum Products Co Ltd [1916] 2
AC 397 (HL) at 404 (Lord Loreburn); below, paras 12.98–12.100.
2
As in Miceli v Dierberg Mo App E D 1989, 773 SW 2d 154 (1989) (Missouri) (10 a.m.);
Nissho Iwai Petroleum Co v Cargill International SA [1993] 1 Lloyd’s Rep 80 (5 p.m.); Union
Eagle Ltd v Golden Achievement Ltd [1997] AC 514 (PC) (5 p.m.).
3
(1843) 6 M & G 593, 134 ER 1029 at 1040.
4
Tradax Export SA v Dorada Compania Naviera SA (The Lutetian) [1982] 2 Lloyd’s Rep
140; Afovos Shipping Co SA v R Pagnan and Fratelli (The Afovos) [1983] 1 Lloyd’s Rep 335
(HL); Schelde Delta Shipping BV v Astarte Shipping Ltd (The Pamela) [1995] 2 Lloyd’s Rep
249. In cases where the promisor is ‘totally and finally disabled’ from performing, the
promisee may be able to terminate the contract on the grounds of anticipatory breach, but
such breach is anticipatory, not actual: Universal Cargo Carriers Corp v Citati [1957] 2 QB
621.
5
Vitoil SA v Phibro Energy AG [1990] 2 Lloyd’s Rep 84; Fox-Bourne v Vernon (1894) 10
TLR 649; Reardon-Smith Line Ltd v Ministry of Agriculture [1963] AC 691 (HL).
6
Thus in Oakdown Ltd v Bernstein & Co (1985) 49 P & CR 282 the court dismissed as
‘ridiculous’ the argument that a purchaser of land might pay the price on Good Friday by
posting cash through the letterbox of the vendor’s solicitor.
7
Sale of Goods Act 1979, s 29(4); Uniform Commercial Code para 2-503; Uniform Sales
Act para 43(4).
8
(1843) 6 M & G 593, 134 ER 1029: above, para 4.03.
9
Ibid at 1036.
Private Law Library
Page 85
10
As in the case of c.i.f. contracts, where payment is made against the shipping
documents: Clemens Horst & Co v Biddell Bros [1912] AC 18 (HL); see further below, paras
13.25–13.27.
11
Bridge M (ed), Benjamin’s Sale of Goods (9th edn, 2014) (‘Benjamin’), para 12.041;
‘Delivery of goods’ (2005) 27(3) The Buyer, pp 4–5.
12
Wade’s Case (1601) 5 Co Rep 114A, 77 ER 232; Tinckler v Prentice (1812) 4 Taunt 549,
128 ER 445.
13
In the same way that a seller whose goods are rejected may still be able to make a
proper tender in accordance with the contract at a later stage: Borrowman Phillips and Co v
Free and Hollis (1878) 4 QBD 500 (CA); Libau Wood Co v H Smith and Sons (1930) 37 Ll LR
296; Apps, A, ‘The right to cure defective performance’ [1994] LMCLQ 525.
14
A bad tender made within the time allowed for performance will only break the contract
if it is so bad as to evince an intention not to be bound by the contract, in which case the
promisee can terminate performance on the basis that the contract has been repudiated:
Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 (CA).
15
Cranley v Hillary (1813) 2 M & S 120, 105 ER 327; Walton v Mascall (1844) 13 M & W
452, 153 ER 188; Davis v Burrell (1851) 10 CB 821, 138 ER 325; Robey and Co v Snaefell
Mining Co Ltd (1887) 20 QBD 152; Fowler v Midland Electric Corp for Power Distribution
Ltd [1917] 1 Ch 656 (CA); Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2015)
(‘Chitty’), para 21-005. Though this rule generally relates to the payment of money, it also
applies to other obligations where no place for performance is specified, as in Rippinghall v
Lloyd (1833) 5 B & Ad 742, 110 ER 964 (covenant to deduce good title).
16
The debtor’s duty in these cases is sometimes said to be to seek out the creditor
wherever he may be within the four seas (inter quatuor maria), but where the contract was
made outside the jurisdiction the debtor may be under a duty to go outside the jurisdiction
to pay the creditor, as in Fessard v Mugnier (1865) 18 CB (NS) 286, 144 ER 453. But where
the creditor has left the jurisdiction after the contract was made, the debtor is not bound to
go after him.
17
Even where a particular place is not expressly named for performance, the court may
very well construe the obligation as being one to perform at the promisee’s place of
residence or business: Rein v Stein [1892] 1 QB 753 (CA); Thompson v Palmer [1893] 2 QB
80 (CA); Charles Duval & Co Ltd v Gans [1904] 2 KB 685 (CA).
18
Doe d. Wheeldon v Paul (1829) 3 C & P 613, 172 ER 568; Lancashire v Killingworth
(1701) 12 Mod 530, 88 ER 1498.
19
Duke of Rutland v Batty (1740) 2 Str 777, 93 ER 842; Hammond v Ouden (1700) 12 Mod
421, 88 ER 1424.
20
[1993] 1 Lloyd’s Rep 80.
21
The holder of a railway or bus ticket can no doubt use it (subject to limitations on the
ticket) at any time when services are running, and an ATM card can be used at a cash
dispenser at any hour of the day or night.
22
Bills of Exchange Act 1882, s 45(3).
23
Wilkins v Jadis (1831) 2 B & Ad 188, 109 ER 1113; Bank of US v Carneal 2 Pet 543, 27
US 343 (1829) (US Supreme Court); McFarland v Pico 8 Cal 626 (1857) (California). But
presentment outside banking hours is good if there is an officer of the bank present to
Private Law Library
Page 86
answer to the demand: Reed v Wilson (1879) NJLR 29 (New Jersey); Bank of Syracuse v
Hollister 17 NY 46 (1858) (New York).
24
Thus it was held in Wilkins v Jadis (above n 23) that presentment at a merchant’s
address at 8 p.m. was not unreasonable, though presentment at midnight would have been.
In Morgan v Davison (1815) 1 Stark 114, 171 ER 418 a presentment at 6 p.m. was held
good, despite there only being a young girl in charge of the premises. See also Barclay v
Bailey (1810) 2 Camp 527, 170 ER 1240; Triggs v Newnham (1825) 1 C & P 631, 171 ER
1346.
25
54 Ala 446 (1875) (Alabama).
26
116 NYS 2d 532 (1952) (New York).
27
According to a note in (1953) 39 Virginia LR 230 the sellers were trying to put the
buyers in default here by deliberately demanding cash payment at a time after the banks
were closed, and when it would not have been reasonable to expect them to keep sufficient
cash in hand to meet the sellers’ demand.
28
[1972] 1 Lloyd’s Rep 139 (CA).
29
Ibid at 142–143.
30
(1808) 15 Ves J 248, 33 ER 748.
31
(1838) 3 M & W 473, 150 ER 1231.
32
[1904] 1 KB 1 (CA).
33
West Metropolitan Railway Act 1899.
34
[1904] 1 KB 1 at 7; South Staffordshire Tramways Co Ltd v Sickness and Accident
Assurance Association Ltd [1891] 1 QB 402 (CA); Re North [1895] 2 QB 264 (CA); Marren v
Dawson Bentley & Co Ltd [1961] 2 QB 135; Cartwright v MacCormack [1963] 1 WLR 18
(CA).
35
Pellew v Inhabitants of Wonford (1829) 9 B & C 134 at 144, 109 ER 50 at 54 (Lord
Tenterden).
36
[1891] 1 QB 161 (DC).
37
Ibid at 163–164 (Wills J); Stewart v Chapman [1951] 2 KB 792 (DC).
38
Pugh v Duke of Leeds (1777) Cowp 714, 89 ER 1323; Russell v Ledsam (1845) 14 M & W
574, 153 ER 604; Sidebotham v Holland [1895] 1 QB 378 (CA); English v Cliff [1914] 2 Ch
376.
39
S 36(2).
40
[1962] 2 QB 641 (DC).
41
[1967] 2 QB 899 (CA).
42
RSC Ord 6 r 8(1).
43
Carapanayoti & Co Ltd v Comptoir Commercial Andre & Cie (above, n 28) at 143.
44
(1840) 6 M & W 50, 151 ER 317; Re Railway Sleepers Supply Co (1885) 29 Ch D 204.
45
[1972] Ch 72.
46
Above, para 4.10.
47
[1972] 1 Lloyds’ Rep 139 (CA) at 143.
48
Schnabel v Allard [1967] 1 QB 627 (CA).
Private Law Library
Page 87
49
(1985) 50 P & CR 105; Manorlike Ltd v De Vitas Travel Agency and Consultancy
Services Ltd [1986] 1 All ER 573 (CA).
50
[1985] 1 WLR 1139 (CA).
51
Ibid at 1141.
52
(1863) 4 B & S 174, 122 ER 425.
53
Ibid at 429.
54
[1981] 1 WLR 1027 (HL).
55
[1997] AC 749 (HL).
56
Ibid at 752–753; Sidebotham v Holland [1895] 1 QB 378 (CA).
57
[1995] 1 WLR 1508; Cadby v Martinez (1840) 11 A & E 720, 113 ER 587; Hankey v
Clavering [1942] 2 KB 326 (CA); Transgrain Shipping BV v Global Transporte Oceanico SA
(The Mexico I) [1990] 1 Lloyd’s Rep 507 (CA).
58
[1997] AC 749 at 761 (Lord Goff) and 766 (Lord Jauncey).
59
Ibid at 754 (Lord Goff).
60
Ibid at 773 (Lord Steyn); 780 (Lord Hoffmann); 783 (Lord Clyde); Delta Vale Properties v
Mills [1990] 1 WLR 445 (CA) at 454 (Slade LJ).
61
[1997] AC 749 at 767–768 (Lord Steyn); 774–775 (Lord Hoffmann); 782 (Lord Clyde).
62
[1998] 1 WLR 892 (HL).
63
Ibid at 912.
64
[1976] 1 WLR 442 (CA).
65
[1998] 1 WLR 1583 (CA); Peer Freeholds Ltd v Clean Wash International Ltd [2005]
EWHC 179 (Ch), [2005] P & CR DG6.
66
Awal Bank BSC (in Administration) v Al-Sanea [2011] EWHC 1354 (Comm).
67
Lord Hoffmann gives the example here of a notice served on pink paper when it should
have been served on blue paper: Mannai v Eagle Star (above, n 58) at 776. See also
McDonald v Fernandez [2003] EWCA Civ 1219, [2004] 1 WLR 1027 (strict compliance
necessary for statutory notice under Housing Act 1988).
68
Siemens Hearing Instruments v Friends Life Ltd [2014] EWCA Civ 382, [2014] P & CR 5.
69
70
Normally events occurring after a written contract has been drawn up, such as the
subsequent conduct of the parties, cannot be taken into account in assessing its meaning:
see Union Assurance Society of Canton Ltd v George Wills & Co [1916] AC 281 (HL) at 288
(Lord Parmoor); James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd
[1970] AC 583 (HL) at 603 (Lord Reid). However, such evidence may be taken into account
where the contract is partly written and partly oral: Wilson v Maynard Shipbuilding
Consultants AB [1978] QB 665 (CA); Maggs v Marsh [2006] EWCA Civ 1058.
71
[2005] EWCA Civ 239, [2005] Info TLR 294; Ostfriesische Volksbank v Fortis Bank
[2010] EWHC 361 (Comm).
72
[2005] EWCA Civ 239, [2005] Info TLR 294 at [15].
73
Astea UK Ltd v Time Group Ltd [2003] EWHC 725, [2003] All ER (D) 212.
74
(1862) 2 F & F 844, 175 ER 1313.
Private Law Library
Page 88
75
[2014] NIQB 65.
76
Ibid at para [41] (Coghlin LJ).
77
[2014] NI Ch 24.
78
Ibid at para [21] (Weatherup J).
79
[1905] AC 501 (HL).
80
Ibid at 512 (Lord Davey); Little v Stevenson [1896] AC 108 (HL).
81
As we shall see, the doctrine under discussion is closely related to the doctrine of
frustration, but differs from that doctrine in several key respects: below, para 4.25.
82
Harris v Dreesman (1854) 23 LJ Ex 210.
83
(1870) LR 5 QB 544.
84
(1880) 5 App Cas 599 (HL).
85
[1892] 1 QB 854 (CA).
86
[1893] AC 22 (HL); Hope and Sons v Canada Foundry Co (1917) 39 DLR 308 (Supreme
Ct of Ontario).
87
[1893] AC 22 (HL) at 32.
88
(1866) LR 1 CP 385.
89
(1858) 27 LJQB 345.
90
Ibid at 352.
91
(1911) 17 Com Cas 597 (DC); SHV Gas Supply & Trading SAS v Naftomar Shipping &
Trading Co Ltd Inc (The Azur Gaz) [2005] EWHC 2528 (Comm), [2006] 1 Lloyd’s Rep 206.
92
Compare the comments of Lord Selborne in Postlethwaite v Freeland (1880) 5 App Cas
599 (HL) at 608 with those of Lord Radcliffe in Davis Contractors Ltd v Fareham Urban
District Council [1956] AC 696 (HL) at 729.
93
Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524 (HL).
94
Above at para 4.24.
95
Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (HL); Thomas Borthwick (Glasgow) Ltd v
Bunge & Co Ltd [1969] 1 Lloyd’s Rep 17; BP Exploration Co (Libya) v Hunt (No 2) [1981] 2
All ER 925 at 945 (Robert Goff J).
96
Ford v Cotesworth (1870) LR 5 QB 544.
97
Thus an obligation to pay money can be frustrated, as in Jackson v Union Marine
Insurance Co Ltd (1874) 10 CP 125 and the Coronation cases.
98
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL) at 729
(Lord Radcliffe).
99
Taylor v Caldwell (1863) 3 B & S 826, 122 ER 309; Tsakiroglou v Noblee Thorl GmbH
[1962] AC 93 (HL) at 118 (Lord Reid).
100
Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (HL); Denny, Mott and Dickson v James B
Fraser [1944] AC 265 (HL).
101
See below, chapter 12.
102
Below, para 5.93; Poussard v Spiers & Pond (1876) 1 QBD 410.
Private Law Library
Page 89
Part II Performance of the Obligation, 5 Excuses for

Failure to Perform on Time
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 83) 5 Excuses for Failure to Perform on Time

A. Exclusions and Exceptions 5.02
(1) Varieties of exclusion clause 5.03
(a) Exclusion clauses and limitation clauses 5.04

(b) Exclusion of liability and exclusion of duty 5.05
(c) Limitation clauses and liquidated damages clauses 5.06
(d) ‘Tailor-made’ clauses and ‘off the peg’ clauses 5.07
(e) Exclusion clauses and inequality of bargaining power 5.09
(f) Force majeure clauses 5.10
(2) Incorporation of exclusion clauses into contract 5.11

(3) Rules of construction 5.12
(a) The ‘main purpose’ rule 5.13

(b) Deviation 5.14
(c) Fundamental breach 5.15
(4) Statutory controls 5.17
(a) Unfair Contract Terms Act 1977 5.18

(b) Consumer Rights Act 2015 5.34
Private Law Library
Page 90
(c) Other statutory controls 5.47
B. Consent of Promisee 5.48
(1) Discharge by agreement 5.49
(a) How is a contract discharged by agreement? 5.50

(b) The problem of consideration 5.53
(c) Effect of discharge by agreement 5.54
(2) Variation 5.55
(a) Variation provided for by the contract 5.56

(b) Variation by subsequent agreement 5.59
(c) Effect of variation 5.60
(3) Waiver 5.61
(a) Waiver by forbearance 5.62

(b) Waiver by election 5.66
(4) Equitable estoppel 5.70
(a) Requirements of equitable estoppel 5.72

(b) Effect of equitable estoppel 5.79
C. Prevention by Promisee 5.82

D. Supervening Events 5.86
(1) Force majeure clauses 5.87
(a) Clause must cover the relevant contingency 5.88

(b) Event must be beyond the control of the promisor 5.89
(c) There must be no other mode of performance 5.90
(d) Other requirements 5.91
(2) Contract discharged by breach or frustration 5.92

(3) Excused non-performance falling short of frustration 5.93
5.01 Excuses for failure to perform may be of various kinds, but in the present context we
shall consider them under four headings: (1) exclusions and exceptions; (2) discharge by
agreement, variation, waiver and estoppel; (3) prevention by the promisee; and (4) other
supervening events.
(p. 84) A. Exclusions and Exceptions

5.02 A promisor may seek to negative or limit liability by reference to exclusions and
exceptions contained in the contract. On the face of it this is a simple matter of
construction, but the law has traditionally been suspicious of such clauses, and they
therefore merit special attention in the present context. In the pages which follow we shall
look at some common varieties of exclusion clause and at the ways in which such clauses
may be incorporated into the contract, before turning to the ways in which the law limits
Private Law Library
Page 91
their application. The principles involved are of course of general application,1 but we shall
be concentrating on how they apply to questions of delay.
(1) Varieties of exclusion clause

5.03 Exclusion clauses can exist in several guises. Since these may raise different legal
issues, it is worth looking more closely at some of the distinctions that have been drawn in
this context.
(a) Exclusion clauses and limitation clauses
5.04 One distinction is between clauses which seek to exclude the liability of the promisor
altogether and those which merely limit it. Thus for instance clause 9.4 of the standard set
of conditions issued by the Freight Transport Association2 completely excludes the carrier’s
liability for delay arising from specified causes, including act of God, seizure or forfeiture
under legal process, strikes and so on, while clause 10 limits liability for consequential loss
to the claimant’s bona fide loss or to the carriage charges, whichever shall be the less. In
the past it has been said that the law takes a more relaxed attitude to limitation clauses
than to those which seek to exclude liability altogether,3 and that the principles of strict
construction used in relation to the latter will not apply with the same rigour to the former.4
In recent years, as we shall see, the courts have tended to move away (p. 85) from these
principles, and in the light of this the distinction may now be less important than once it
was.5
(b) Exclusion of liability and exclusion of duty
5.05 Another relevant distinction is between clauses which exclude or limit the promisor’s
liability for breach of a relevant legal duty and those which prevent that duty arising in the
first place.6 An example of the first type of clause would be where a building contract
excludes liability for loss arising from delay, or limits such recovery to a set sum. An
example of the second would be where the contractors tell the employer that they will do
their best, but cannot guarantee to have the work done by any particular time. Though the
two may often boil down to the same thing in practice, they can raise different issues of
analysis.7 However the traditional approach of English law is to ignore this logical
distinction and to treat all three types of clause as exclusion clauses pure and simple.8
(c) Limitation clauses and liquidated damages clauses
5.06 The law draws a distinction between limitation clauses, the purpose of which is to
limit the liability of the promisor to pay damages, and liquidated damages clauses, the
purpose of which is to provide for an agreed scale of compensation to be paid in any event.9
The distinction can be illustrated by reference to Suisse Atlantique Societe d’Armement
Maritime SA v Rotterdamsche Kolen Centrale,10 which involved a demurrage clause in a
charterparty whereby the charterer agreed to pay a fixed daily rate of damages for delays
in loading and unloading. The owners of the ship sought to claim damages at large, arguing
that the charterer’s breaches were so serious as to disentitle them from relying on the
demurrage clause. But the House of Lords held that this argument was misconceived.
Whatever the status of the principle contended for by the owners, it could have no
application to a demurrage clause, which was not an exceptions clause at all, but merely a
clause providing for liquidated damages for a certain kind of breach. Though as a general
rule sums recoverable as demurrage would be less than what (p. 86) would be recovered
had damages been left at large,11 the point was that the shipowner was entitled to recover
for delay at the agreed rate whatever the loss might be: no more and no less.12
(d) ‘Tailor-made’ clauses and ‘off the peg’ clauses
Private Law Library
Page 92
5.07 Exclusion clauses are often found in standard form contracts that are then adopted en
bloc by the parties. Problems can then arise when the standard terms appear to contradict
specific terms agreed on by the parties for the particular contract in question. The general
approach of the law is to try as far as possible to construe the contract so as to avoid
conflict, but to give priority to the ‘tailor-made’ term in the last resort.13 In Marifortuna
Naviera SA v Government of Ceylon14 the provisions of a voyage charterparty made the
owners liable for the failure of the vessel to be ready to load in accordance with notice of
readiness, but the charter also contained a ‘clause paramount’ incorporating the Hague
Rules. When sued for delay under the clause in question, the shipowner sought to rely on
the exceptions contained in the Hague Rules. It was held that the express clause should
prevail over the standard form exception, firstly on the basis of the principle generaliter
specialibus non derogant, and secondly on the ground that if the clause paramount were
allowed to prevail the express clause would be rendered virtually nugatory.
5.08 In this case no reconciliation between the two provisions was possible, but in The
Leonidas15 a speed warranty in a charterparty providing that the vessel should proceed ‘at
11 knots weather and safe navigation permitting’ was held to be subject to a similar clause
paramount incorporating the Hague Rules. In this case, unlike the one mentioned in the
previous paragraph, it was possible to read the clause subject to the exceptions in the Rules
without depriving it of meaning. The court added that whilst as a general rule a tailor-made
clause would prevail over one in standard form, this only applied where the two were in
conflict. The court would seek to construe the contract as a whole, and if a reasonable
commercial construction of the whole could reconcile two seemingly contradictory
provisions, whether typed or printed,16 then such construction would be adopted.17
(p. 87) (e) Exclusion clauses and inequality of bargaining power
5.09 As we shall see, exclusion clauses can be incorporated into the contract in a variety of
ways,18 but in most cases this will involve the parties agreeing to adopt a standard set of
printed terms. As has often been pointed out, this can be a perfectly legitimate way of
allocating contractual risks and saving transaction costs, but a less defensible aspect of
such terms has been the exploitation or abuse of superior bargaining power, in which the
stronger party has been in a position to dictate terms to the weaker.19 Though the courts
have by no means turned a blind eye to this aspect of the matter,20 it is of particular
importance in relation to statutory controls on exclusion clauses, which draw a clear
distinction between cases where the terms are agreed by parties of equal bargaining power
and where they are not.21
(f) Force majeure clauses
5.10 A force majeure clause has been defined as a term by virtue of which the promisor is
entitled to cancel the contract, or is excused from performance, in whole or in part, or is
entitled to suspend performance or to claim an extension of time for performance, upon the
happening of a specified event or events beyond his or her control.22 Such clauses have
been said not to be exception clauses in the proper sense,23 but they are subject to similar
restrictions. Thus, for instance, the burden of proof is on the party relying on such a clause
to show that it covers the event in question, that the non-performance was due to
circumstances beyond his or her control and that there were no reasonable steps that could
have been taken to mitigate the event or its consequences.24 In the same way, clauses of
this type may fall foul of the statutory controls discussed below.25
(2) Incorporation of exclusion clauses into contract
Private Law Library
Page 93
5.11 Before any exclusion clause can be relied on, it must be shown that it has contractual
effect in the first place.26 The usual ways of incorporating an exclusion clause into a
contract are by signature, by notice and by course of dealing;27(p. 88) since these principles
are of general application and of no particular relevance to cases of delay, there is no need
to repeat them here. However, it is worth noting in this context that exclusion clauses may
also be incorporated into the contract by implication of law, as with the conventions relating
to international contracts of carriage,28 such as the CMR Convention,29 the COTIF
Convention,30 the Hague-Visby Rules31 and the Warsaw Convention.32 These conventions,
which govern the international carriage of goods by road, rail, sea and air respectively, all
contain provisions which limit the liability of the carrier for loss, damage or delay.33 The
difference between these terms and those we have just been considering is that they apply
as a matter of law,34 without the carrier having to demonstrate that they have been
incorporated into the contract or drawn to the attention of the other party.35
(3) Rules of construction

5.12 The courts have traditionally been suspicious of exclusion clauses, and have in the
past sought to limit their effect by using techniques of construction.36 In particular, it has
been said that such clauses must be construed strictly according to their terms,37 and that
any ambiguity should be read contra proferentem, that is to say, against the party who
seeks to rely on the clause.38 However, these techniques are (p. 89) not as important as
once they were for two reasons, one being the introduction of statutory controls,39 and the
other the general tendency of courts in recent years to adopt a common sense approach to
matters of construction rather than using what has been called ‘the old intellectual baggage
of legal interpretation’.40 Nevertheless, the principle that clauses of this type should be
clear and unambiguous still remains,41 and to that extent at least one can still talk in terms
of strict construction in the present context. The relevant principles are well known and are
of general application, and there is no need to discuss them at length here.42 However,
there are three rules of construction that are of particular relevance to delay, namely: (1)
the ‘main purpose’ rule; (2) deviation; and (3) the so-called doctrine of fundamental breach.
(a) The ‘main purpose’ rule
5.13 Courts are generally reluctant to construe an exclusion clause in such a way as to
defeat the main object of the contract.43 To put it another way, exclusion clauses drafted in
general terms will not be allowed to defeat the specific requirements of the contract; as is
sometimes said, the back of the contract will not be allowed to prevail over the front.44 Thus
in Leduc v Ward45 goods were shipped on a vessel bound from Fiume to Dunkirk for
delivery at Dunkirk, the contract giving the shipowner liberty to call ‘at any ports in any
order’. It was held that the shipowner was not covered when the vessel was sunk in the
Firth of Clyde during the course of a deviation to Glasgow. Again, in Connolly Shaw Ltd v A/
S Det Nordenfjeldske D/S46 a clause drafted in similar terms was held to cover a shipowner
who had deviated to Hull en route from Palermo to London with a cargo of lemons, but it
was said that the clause would not have covered a deviation round Cape Horn,47 as this
would have frustrated the contract. As a general rule the courts will do all they can to
interpret exclusion clauses in a way that is consistent with the main (p. 90) object of the
contract,48 but in extreme cases they will not hesitate to disregard particular words or even
entire provisions where to do otherwise would render the contract nugatory.49
(b) Deviation
5.14 There is a long-standing rule relating to contracts of carriage by sea whereby a
carrier who deviates from the agreed route cannot rely on exclusion clauses in the
contract.50 This applies even where the loss incurred seems to have nothing to do with the
deviation. Thus in Joseph Thorley v Orchis SS Co51 a cargo of locust beans was damaged
during the course of unloading due to the negligence of the stevedores. It was held that the
shipowners were disbarred from relying on an exclusion clause due to the fact that the ship
Private Law Library
Page 94
had deviated en route. The rationale seems to be that in such cases the exclusions are only
intended to apply to the contract voyage and not to a totally different voyage,52 and this
reasoning has been extended to contracts for the carriage of goods by land53 and also to
cases where a bailee of goods stores them in a place other than the one agreed.54 Indeed, it
has been said that as a general rule exclusion clauses should not be construed as applying
to loss or damage caused outside the ‘four corners’ of the contract.55 As we shall see, there
is no longer any rule of law preventing a party from relying on an exclusion clause in cases
of serious breach,56 and it has been (p. 91) suggested that the deviation cases need to be
reinterpreted in the light of this.57 However, it has also been said that they should be
regarded as sui generis,58 and if this is so, a carrier who deviates may still be barred as a
matter of substantive law from relying on exclusion clauses, at any rate in cases where the
owner of the goods chooses to terminate the contract.59
(c) Fundamental breach
5.15 The cases cited above were used to support a broader principle whereby exclusion
clauses were said not to protect a party who had committed a fundamental breach of the
contract.60 Thus it was said that exclusion clauses would not protect one who sought to
render a contractual performance totally different from that which was contemplated by the
parties, as where a seller delivered peas instead of beans,61 or wheat instead of barley,62 or
a horse instead of a tractor.63 In the same way an exclusion clause was said not to apply in a
case where the promisor deliberately repudiated his or her basic obligations under the
contract; say, for instance, a carrier of goods threw them into the sea or gave them away to
a passerby,64 or say the captain of a tug threw off the tow, allowing the ship to drift onto the
rocks.65 A similar principle was said to apply where the breach had a catastrophic effect. In
Bontex Knitting Works Ltd v St John’s Garage66 the claimants hired a van and driver from
the defendants to deliver some goods. It was agreed that the delivery would take about two
and a half hours, and that the driver should be paid by the hour. The driver collected the
goods and then left the van unattended for an hour while he had a meal. During this time
the goods were stolen and never recovered. It was held that the defendants could not rely
on an exclusion clause protecting them from liability for loss of the goods, on the grounds
that the driver had committed a serious breach of the contract. The defendants were under
a duty to deliver the goods forthwith, and whilst a break of five minutes to go to the
lavatory might have been excusable in the circumstances, a break of a whole hour was
totally excessive.67
(p. 92) 5.16 Some of the cases prior to 1980 suggested that the doctrine of fundamental
breach was a rule of law barring reliance on exclusion clauses,68 but it is now clear that it is
a rule of construction only,69 and that a properly worded exclusion clause can apply even to
the most serious breaches. In the light of this it has been suggested that there is no longer
even a presumption that exclusion clauses do not extend to cases of fundamental breach,70
but this must be read subject to two qualifications. First of all, clauses which purport to
exclude liability for breach altogether, or which give the promisor complete discretion
whether or how to perform the contract, must still be construed in line with the main object
of the contract, if only because to do otherwise would often make the contract
meaningless.71 Secondly, even where the clause merely limits liability, the more serious the
breach, the clearer it must be that the clause was intended to cover it.72 To this extent it
still makes sense to talk of a doctrine of fundamental breach.
(4) Statutory controls

5.17 In recent years there have been an increasing number of statutory controls put in
place with regard to exclusion clauses, the most important of which are for present
purposes the Unfair Contract Terms Act 1977 and the Consumer Rights Act 2015. We shall
examine each of these in outline before touching on some other relevant statutory controls.
Private Law Library
Page 95
All of these provisions are of general application, but we shall concentrate on those parts of
them that are relevant to delay in performance.
(a) Unfair Contract Terms Act 1977
5.18 The focus of the Unfair Contract Terms Act 1977 is on the application of exclusion
clauses in English law in the business context.73 The provisions of the Act are wide-ranging
and complex, but for the purposes of the present discussion we shall look at four matters:
(1) the scope of the Act; (2) the restrictions imposed by the Act, in so far as they are
relevant to the problem of delay in performance; (3) the test of reasonableness used in the
Act; and (4) contracts excluded from the scope of the Act.
(p. 93) (i) Scope of the Act
5.19 The Unfair Contract Terms Act 1977 is both narrower and wider in scope than its
short title suggests. It is narrower since, as we shall see, it is not concerned with unfair
contract terms generally but only, as its long title makes clear, with exclusion clauses. It is
wider insofar as it covers non-contractual exclusions, such as notices which purport to
exclude liability in tort.74 However, it is with contractual exclusions that we are primarily
concerned in the present context.
5.20 Section 1(3) of the Act makes it clear that, with one exception which does not concern
us here,75 the relevant controls only apply in relation to business liability, that is to say with
liability for breach of obligations arising from things done or to be done by a person in the
course of a business or from the occupation of premises used for business purposes of the
occupier.76 However, given that private individuals rarely if ever seek to restrict their
contractual liability by means of exclusion clauses, this limitation is of little relevance in the
present context.77
5.21 As stated above, the Act is generally confined to the control of exclusion clauses,
which as we have seen can be of many varieties.78 As Lord Donaldson MR once said, ‘it is a
trite fact (as contrasted with being trite law) that there are more ways than one of killing a
cat’,79 and the drafters of the Act were therefore well prepared for the various techniques
by which a promisor might seek to wriggle out of his or her liabilities. Thus, to the extent
that the relevant provisions of the Act prevent the exclusion or limitation of liability, they
also prevent: (1) making the liability or its enforcement subject to restrictive or onerous
conditions;80 (2) excluding or restricting any right or remedy in respect of the liability, or
subjecting a person to any prejudice in consequence of his pursuing any such right or
remedy;81 or (p. 94) (3) excluding or restricting rules of evidence or procedure.82 The same
restrictions apply equally to terms and notices which exclude or restrict the relevant
obligation or duty.83 The Act also controls the use of clauses by reference to which the
promisor claims to be entitled to render a contractual performance ‘substantially different
from that which was reasonably expected of him’.84 These provisions do not, however, apply
to arbitration clauses,85 nor it would seem to agreed liquidated damages clauses.86 It has
been said that whether a particular clause is one which purports to exclude or restrict
liability under the Act is a question of substance and not of form.87
(ii) Restrictions imposed by the Act
5.22 The Unfair Contract Terms Act 1977 contains several key provisions restricting the
use of exclusion clauses, but the most relevant ones in the present context are sections 2(2)
and 3. Section 2(2) says that in the case of loss or damage other than death or personal
injury a person cannot exclude or restrict his liability for negligence except in so far as the
term or notice satisfies the requirement of reasonableness.88 ‘Negligence’ is defined in this
context as including the breach of any obligation arising from the express or implied terms
of a contract to take reasonable care or to exercise reasonable skill in the performance of
the contract,89 so this might very well apply to a case of delay, say where a carrier of goods
Private Law Library
Page 96
failed to deliver on time because the goods had been lost on the way or sent to the wrong
destination.90
5.23 Of more relevance to delay is section 3, which applies as between contracting parties
other than consumers91 when one of them deals on the other’s written standard terms of
business.92 In this context ‘deals’ refers to the making of the deal, irrespective of any prior
negotiations.93 Section 3 will clearly not apply where the terms in question are ‘boilerplate’
clauses used by parties of equal bargaining (p. 95) power in a particular trade,94 and it
clearly will apply where the standard form in question has been imposed on the weaker
party on a ‘take-it-or-leave-it’ basis,95 but difficult questions may arise when one party’s
standard terms have been modified to a greater or lesser extent to meet the needs of the
other.96 Whether a party deals on the other’s written standard terms of business in any
given case is a question of fact,97 and the burden of proof is on the party who argues that
this applies to show that this is the case.98
5.24 Assuming that section 3 does apply, three types of clause are targeted. The first of
these is clauses which exclude or restrict the promisor’s liability for breach of contract.99
This is of course the most common type of exclusion clause. Next, there are clauses by
reference to which the promisor claims ‘to be entitled to render a contractual performance
substantially different from that which was reasonably expected of him’.100 A classic
example of this in the context of delay would be a clause allowing a carrier of goods undue
liberty to deviate from the agreed route, as if a contract for the carriage of goods from
London to Southampton allowed the carrier to deviate by way of Glasgow or Aberdeen.101
Finally, there are clauses by reference to which the promisor claims ‘to be entitled, in
respect of the whole or any part of his contractual performance, to render no performance
at all’.102 This would cover an unreasonable force majeure clause,103 or a clause allowing
the promisor to terminate the contract at will.104 Section 3 states that the promisor may not
rely on any of these types of clause except in so far as the term in question satisfies the test
of reasonableness. It is to this test that we must now turn.
(iii) The test of reasonableness
5.25 The Unfair Contract Terms Act 1977 controls clauses in two ways. One is the outright
ban, by which clauses are deprived of legal effect.105 The other is by subjecting them to a
test of reasonableness.106 It (p. 96) is the latter test that is of most importance in relation to
delay, as this is the test relevant to both section 2(2) and section 3, both of which provide
that the term in question will only be valid in so far as it satisfies the test of reasonableness.
What this means in relation to contract terms is explained in section 11(1); the question is
whether the term was a fair and reasonable one to be included having regard to the
circumstances which were, or ought reasonably to have been, known to or in the
contemplation of the parties when the contract was made. This means that an unreasonable
exclusion clause may be struck out even if in the circumstances applying at the breach or at
the time of the action it would be perfectly reasonable for the promisor to rely on it; it is the
term itself which must be considered as a whole.107 It is for those claiming that a contract
term or notice satisfies the test of reasonableness to show that it does.108
5.26 Reasonableness is a question of fact,109 and the question of whether a term is
reasonable in a given case is one which very much depends on the particular circumstances
of that case. For this reason it has been said that reported decisions on the point can have
only limited value as precedents.110 Much depends on the approach of the trial judge, and it
has been said that though the decision cannot strictly speaking be characterised as an
exercise of discretion, an appellate court will be slow to interfere with a decision unless
satisfied that it proceeded on some erroneous principle or was plainly and obviously
Private Law Library
Page 97
wrong.111 Subject to that there are a number of guidelines provided in the Act and
elsewhere for deciding whether a term is reasonable or not.
5.27 First of all we have Schedule 2 of the Act,112 which refers to five criteria to which
regard is to be had in particular in deciding whether a term satisfies the test of
reasonableness.113 The first is the strength of the bargaining positions of the parties
relative to each other, taking into account (amongst other things) alternative means by
which the customer’s requirements could have been met.114 (p. 97) Did the customer have
any real choice in the matter, or was it a case of either agreeing to the clause in question or
doing without the service required? The second is whether the customer received an
inducement to agree to the term, or in accepting it had an opportunity of entering into a
similar contract with other persons but without having to accept a similar term.115 A term is
more likely to be reasonable if the customer received some consideration for agreeing to it,
such as a lower price. The third is whether the customer knew or ought reasonably to have
known of the existence and extent of the term having regard, amongst other things, to any
custom of the trade and any previous course of dealings between the parties.116 Was the
clause one with which the customer was or should have been familiar, or was it something
unusual or unexpected? The fourth refers to cases where the term excludes or restricts
liability if some condition is not complied with, and asks whether it was reasonable at the
time of the contract to expect that compliance with that condition would be practicable.117
A promisor who makes his or her liability subject to unreasonable or capricious conditions
may as well exclude it altogether. The final test relates to the supply of goods, and to
whether the goods in question were supplied, processed or adapted to the special order of
the customer.118 This last criterion is of less relevance in cases of delay, but the thinking
behind it seems to be that a customer to whom the criterion applies should be in a better
negotiating position than one to whom it does not.
5.28 Section 11(4) of the Act makes special provision for clauses which purport to restrict
liability to a specified sum of money.119 Here regard is to be had in particular to two factors:
(1) the resources which the promisor could expect to be available to him for the purpose of
meeting the liability should it arise; and (2) how far it was open to him to cover himself by
insurance. As has been pointed out, this provision was clearly designed to protect small
businesses and professional people from being exposed to liabilities which it was beyond
their ability to cover.120 In relation to such clauses it may be relevant to look at other
standard form contracts (p. 98) in the trade to see if they restrict liability to a similar
degree.121 In many cases either party may have been able to obtain insurance, and the
court will then have to ask which of the two was in the best position to do so at a reasonable
cost.122 The question addressed by section 11(4) relates to the availability of insurance;
whether it was actually taken up is neither here nor there.123
(iv) Excluded contracts
5.29 A number of contracts are specifically excluded from the scope of all or part of the
Unfair Contract Terms Act 1977, and some of these exclusions are of particular importance
in relation to delay; indeed, their overall effect would seem to be to exclude from the ambit
of the Act most of the reported cases on the topic.
5.30 First of all we have international contracts of sale or supply.124 It was generally
thought to be undesirable for the law to control the use of exclusion clauses in this context
for a number of reasons; in particular, it was thought that for the law to interfere in these
cases would place English exporters under an unfair disadvantage without any discernible
benefit, given that such contracts usually involved large transactions between business
organisations who were well able to protect their own interests in this regard.125 For this
reason section 26 of the Act specifically provides that international supply contracts are not
subject to any requirement of reasonableness under section 3.126 For section 26 to apply
there are two tests that must be met. First of all, the contract in question must be one for
the sale of goods or one under or in pursuance of which the possession or ownership of
Private Law Library
Page 98
goods passes, and it must be made by parties whose places of business (or, if they have
none, habitual residences) are in the territories of different states.127 Secondly, one of three
further requirements must be satisfied: either (1) the goods in question are, at the time of
the conclusion of the contract, in the course of carriage, or will be carried, from the
territory of one state to the territory of another;128 or (2) the acts constituting the offer and
acceptance have been done in the territory of different states;129 or (3) the contract
provides for the goods to (p. 99) be delivered to the territory of a state other than that
within whose territory the acts were done.130
5.31 As well as this, section 27 of the Act excludes any situation where the law applicable
to the contract is the law of some part of the United Kingdom only by choice of the parties,
and apart from that choice would be the law of some country outside the United
Kingdom.131 The only exception to this is where the term appears to have been imposed
wholly or mainly for the purpose of enabling the party imposing it to evade the operation of
the Act.132
5.32 By section 29(1) of the Act nothing removes or restricts the effect of, or prevents
reliance on, any contractual provision which either: (1) is authorised or required by the
express terms or necessary implication of an enactment;133 or (2) being made with a view to
compliance with an international agreement to which the United Kingdom is a party, does
not operate more restrictively than is contemplated by the agreement.134 The effect of this,
among other things, is to remove from the ambit of the Act provisions such as the Hague-
Visby Rules and other international conventions such as those relating to the carriage of
goods by road, rail and air.135
5.33 Finally, there is Schedule 1 of the Act, which restricts the scope of the Act in relation
to various classes of contract136 including contracts of insurance,137 contracts relating to
the creation, transfer or termination of an interest in land,138 contracts relating to the
creation, transfer or termination of patents or other intellectual property interests,139
contracts relating to the formation or dissolution of companies,140 contracts relating to the
creation or transfer of securities or any right or interest in securities,141 contracts of marine
salvage or towage,142 marine charterparties143 and contracts for the carriage of goods by
ship or hovercraft.144 As well as this, it is stated that section 2 of the Act does not apply to a
contract of employment except in favour of the employee.145
(p. 100) (b) Consumer Rights Act 2015
5.34 The Consumer Rights Act has its origin in an EC Directive adopted in 1993 which
sought to lay down minimum standards for the protection of consumers against unfair
terms in the Member States.146 At the time there were already legislative provisions in the
UK directed towards this end, most notably the Unfair Contract Terms Act 1977, but this
was not enough to meet the requirements of the Directive; in particular, the Act as we have
seen deals only with exclusion clauses,147 whereas the Directive is concerned with unfair
terms generally.148 With a view to complying with the obligations of the UK under the
Directive, the Unfair Terms in Consumer Contracts Regulations 1994 were enacted, coming
into force the following year.149 Five years later, with a view to complying more closely with
the requirements of the Directive, these were repealed and replaced by the Unfair Terms in
Consumer Contracts Regulations 1999.150 However, following the recommendations of the
Law Commission,151 the decision was made some fifteen years later to implement a unified
legislative regime for consumer contracts, and this was duly done in the Consumer Rights
Act 2015. As part of this project the 1999 Regulations were repealed and incorporated, with
some amendments, into Part 2 of the Act, to which we shall now turn.
(i) Unfair terms
Private Law Library
Page 99
5.35 Part 2 of the Act is headed ‘Unfair Terms’, and the basic provisions at its heart are
section 62(1), which states that an unfair term in a consumer contract is not binding on the
consumer, and section 62(2), which makes similar provision for consumer notices. Obviously
it is section 62(1) with which we are most concerned.
(ii) Scope of Part 2
5.36 The scope of Part 2 is set out by section 61(1), which states that it applies to contracts
concluded between a trader and a consumer. A ‘trader’ is ‘a person acting (personally or
through an agent) for purposes relating to that person’s trade, business, craft or
profession’.152 Thus an individual person can be covered as well as a company, so long as he
or she is not contracting for purposes unrelated to the relevant ‘trade, business, craft or
profession’. A ‘consumer’ is ‘an individual acting for purposes that are wholly or mainly
outside that individual’s trade, business, craft or profession’. Whether this is so is clearly a
matter of degree; thus, for instance, a painter who goes out and buys a tin of paint and a
packet of cigarettes may be a consumer in relation to the second but not the first.153
(p. 101) 5.37 Two other preliminary points need to be made. First of all, despite the
heading to Part 2 it makes provision in relation to contract terms generally, not just those
specifically defined as ‘unfair’.154 Secondly, the provisions of Part 2 are both wider and
narrower in scope than the Unfair Contract Terms Act 1977. They are wider in that they
apply not just to exemption clauses but to unfair terms of all kinds. They are narrower in
that they only apply to consumer contracts; in particular no provision is made, as in the
Unfair Contract Terms Act, for the non-consumer contract where one party deals on the
other’s written standard terms of business.155
(iii) When is a term unfair?
5.38 According to the Act,156 a contractual term shall be regarded as unfair if, contrary to
the requirement of good faith, it causes a significant imbalance in the parties’ rights and
obligations arising under the contract, to the detriment of the consumer.157 This gives rise
to three issues, namely: (1) what is meant by ‘the requirement of good faith’; (2) what is
meant by ‘a significant imbalance’; and (3) what is the rule that excludes the core terms of
the contract from scrutiny on the grounds of unfairness.
5.39 The requirement of good faith in the contractual context is one familiar to civil
lawyers, but causes difficulties of interpretation when transplanted into the common law
context. The principle has been described in the House of Lords as one of ‘fair and open
dealing’,158 one which ‘looks to good standards of commercial morality and practice’.159
According to the terms of the Directive upon which these provisions are based, the factors
relevant to good faith include ‘the strength of the bargaining positions of the parties,
whether the consumer had an inducement to agree to the term and whether the goods or
services were supplied to the special order of the consumer’.160 As we have seen, these very
tests are used in the Unfair Contract Terms Act 1977 to define whether a term satisfies the
test of reasonableness,161 and to this extent the concepts of good faith and of
reasonableness can be seen to overlap, even if they are not identical in scope.162
5.40 The Act does not expressly define what is meant by a ‘significant imbalance’.163
However, the Directive states that the assessment, according to the general criteria chosen,
of the unfairness of the terms, in particular in sale or supply activities (p. 102) of a public
nature providing collective services which take account of solidarity among users, must be
supplemented by a means of making an overall evaluation of the different interests
involved,164 and this has been said to indicate that the test of significant imbalance is not to
be applied in a rigid and mechanical fashion.165 According to Lord Bingham, the
requirement as to significant imbalance is met if the term in question is ‘so weighted in
favour of the supplier as to tilt the parties’ rights and obligations under the contract
significantly in his favour’.166 This may be done by the granting of a beneficial option or
Private Law Library
Page 100
discretion or power, or by the imposing on the consumer of a disadvantageous burden or

risk or duty.167
5.41 The Act also makes it clear that the unfairness of a contractual term has to be
assessed taking into account the nature of the goods and services for which the contract
was concluded, and by referring, at the time when the contract was concluded, to all the
circumstances attending the conclusion of the contract and to all the other terms of the
contract or of another contract on which it was dependent.168 As well as this, Schedule 2
gives a useful list of terms which may be regarded as unfair and which may therefore be
presumed to have that effect; these will be discussed more fully below.169
5.42 The Act is concerned with unfair terms in consumer contracts rather than with unfair
contracts as such, and section 64(1) provides that, in so far as it is transparent170 and
prominent,171 the assessment of the fairness of a term shall not relate to the definition of
the main subject matter of the contract,172 or to the adequacy of the price or remuneration,
as against the goods or services supplied in exchange.173 The first part of this provision may
cause difficulties with the kind of exception clause that works by delimiting the extent of
the promisor’s duty,174 for instance a clause giving a carrier liberty to deviate from the
direct route,175 or a clause which states that a key date in the contract is only intended to
(p. 103) be approximate,176 or a clause in an insurance contract which purports to define
the insurer’s liability in restrictive terms.177 However, these difficulties should not be
overstated. In particular, section 64(1) only applies where the term is in ‘plain intelligible
language’, so it would not apply where the term in question was ambiguous or obscurely
worded.178 The courts have also made it clear that they are fully aware of these problems,
and that they will not interpret these exceptions in such a way as to frustrate the object of
the Act as a whole.179
(iv) Effect of unfairness
5.43 The rules for defining when a term is unfair for the purposes of the 2015 Act are
complex, but once a term is found to satisfy that criterion the consequences are simple: the
term in question is not binding on the consumer,180 but the contract shall continue, so far as
practicable, to have effect in every other respect.181 This causes no difficulty where the
term is ancillary to the main part of the contract, but difficult questions may arise where a
term is so essential that the effect of its not being binding on the consumer is to render the
contract totally unworkable.182 In that sort of situation the implication is that the contract
shall not continue to bind the parties, and if this is so the unfairness of the term may result
in the contract being effectively rescinded in toto.
5.44 So far we have been considering the effect of the unfair term on the parties to the
contract. The 2015 Act also contains provisions designed to combat unfair terms on a
broader front.183 In particular, powers are given to the Competition and Markets
Authority184 and to other consumer protection bodies185 to consider complaints about
standard form contracts, and where it appears that any term in such a contract is unfair an
injunction may be issued against those responsible186 and undertakings sought as to their
future conduct.187
(p. 104) (v) Schedule 2: the ‘grey list’
5.45 Schedule 2 Part 1 of the Act sets out an ‘indicative and non-exhaustive list of terms
which may be regarded as unfair’.188 The crucial word here is ‘may’; it is nowhere stated
that terms included on the list are deemed to be unfair, but inclusion of a term on the list
raises a strong inference that in most circumstances a clause of this kind should be treated
as unfair.189 Schedule 2 has therefore been aptly described as not so much a black list as a
grey list.190 Many of the items on the list are not exclusion clauses at all,191 but it includes
terms which purport to exclude liability for death or personal injury,192 or for loss caused by
breach of contract generally,193 or which enable the seller or supplier to alter unilaterally
Private Law Library
Page 101
without a valid reason any characteristics of the product or service to be provided,194 or

which exclude or restrict the remedies of the consumer in the event of default.195
(vi) Excluded terms and excluded contracts
5.46 Just as various categories of contract are excluded from the ambit of the Unfair
Contract Terms Act 1977,196 Part 2 of the 2015 Act also contains exclusions of a similar
kind, though these are much narrower in scope. These include contracts of employment or
apprenticeship,197 mandatory statutory or regulatory provisions,198 and the provisions or
principles of international conventions to which the Member States or the EU are party.199
The third of these is of particular importance, as it excludes from the ambit of Part 2 the
provisions of the conventions for the international carriage of goods by road, rail, sea or air,
at least in so far as these apply to a consumer contract.200
(c) Other statutory controls
5.47 It is also important to take note of the conventions governing the international
carriage of goods, many of which contain detailed provisions for the liability of the carrier
for loss or damage, including loss caused by delay.201 Up to now we have been looking at
these in so far as they provide for circumstances in which that liability is excluded or
limited,202 and we have seen that these exclusions or limitations are not subject to the
general legislative control applied to (p. 105) such clauses generally.203 However, the
corollary of this is that any contract terms which purport to exclude the carrier’s liability
under the relevant convention are invalidated. Thus for instance Article III of the Hague-
Visby Rules204 lays various duties on the carrier, including the duty to exercise due
diligence to make the ship seaworthy,205 and the duty to take due care in the loading and
discharge of the cargo.206 It then goes on to state that any ‘clause, covenant or agreement’
which purports to exclude or limit the carrier’s liability as prescribed by the Article ‘shall be
null and void and of no effect’.207 Similar provisions can be seen in the CMR Convention208
and in the Warsaw Convention.209 The upshot of this to ensure that the carrier’s liability in
contracts to which these conventions apply is as prescribed by the convention in question,
no more and no less.
B. Consent of Promisee
5.48 A promisor who has failed to perform on time may argue that the promisee consented
to the delay. Such consent can operate in a number of ways, depending on whether it was
backed by consideration, or by reliance, or by neither of these factors. In the pages which
follow we shall examine four doctrines which are of relevance in the present context, these
being discharge by agreement, variation, waiver and estoppel.
(1) Discharge by agreement

5.49 A contract may be discharged by mutual agreement.210 Where this has taken place
following a delay, the promisor is no longer bound to perform on time, and the promisee
relinquishes any remedies that he or she may have for any delay that has already occurred.
We shall now examine when this occurs, and consider its legal implications.
(a) How is a contract discharged by agreement?
5.50 Discharge by agreement may be in express terms,211 but it is also open to a court to
infer that the parties have agreed to abandon the contract where it is followed by a
prolonged period of delay or inactivity on both sides.212 So in Pearl Mill Co Ltd v (p. 106)
Ivy Tannery Ltd213 the defendants agreed to sell to the plaintiffs a quantity of skins ‘delivery
as required’. After a few deliveries the plaintiffs made no more orders, their manager
having forgotten about the contract. Over the next three years the plaintiffs placed orders
elsewhere, and then finding themselves in difficulties sought to hold the defendants to the
original contract. But the court held that the contract had been effectively rescinded, on the
ground that it was reasonable after such a long lapse of time to conclude that the contract
Private Law Library
Page 102
had been abandoned, and the plaintiffs had led the defendants by their conduct to believe
that this was so.
5.51 This same reasoning was used in a line of cases in the 1980s dealing with arbitration
contracts. In these cases a claim was made and then submitted to arbitration, but was then
allowed to lie dormant, the claimant being unwilling to pursue it but disinclined to withdraw
it either. The question then arose whether it was open to the claimant to revive the claim
after a protracted interval. This would have been very inconvenient for the respondent,
since records might have been thrown away, or essential witnesses might be no longer
available. In these circumstances it would obviously be unjust to allow the claimant to
pursue such a stale claim, but at the time the courts had no inherent power to strike out an
arbitration claim,214 as opposed to an ordinary civil claim,215 for want of prosecution.216
One way round the problem was to say that the contract had been terminated; the claimant
had led the other to believe that the claim had been abandoned and the other had relied on
the belief in some way,217 and this approach was adopted by the Court of Appeal in The
Splendid Sun218 and by the House of Lords in The Hannah Blumenthal.219
5.52 The difficulty with applying this analysis to cases of delay was highlighted by the
Court of Appeal in The Leonidas D.220 Since there would have been no express agreement
to rescind, one would have to be inferred from the conduct of the parties. However, mere
inactivity on either side could not constitute the necessary conduct,221 it would be difficult
to find consensual abandonment in the absence of proof of an intent to abandon,222 and
mere silence would often be equivocal, (p. 107) being equally consistent with the claimant
having forgotten the arbitration as with a decision to abandon it.223 Notwithstanding these
technical difficulties, there were some bold decisions on the subject,224 but the problem was
eventually solved in another way by giving the court a statutory power to strike out
arbitration proceedings in such cases.225
(b) The problem of consideration
5.53 One of the main problems in this area is that the common law insists on the existence
of consideration for the discharge of a contract no less than for its creation.226 So a mere
agreement by the promisee to release the promisor from his or her contractual obligations
is not binding in the absence of consideration to support it.227 There is no problem here
where both parties still have obligations outstanding under the contract, for in that case
each party’s agreement provides the consideration for that of the other: the agreement to
rescind is said to ‘generate its own consideration’.228 But what if the contract is fully
executed on one side? Here the party who has not yet performed may provide consideration
by returning any benefit provided by the one who has – for instance, a buyer of goods
already delivered may agree to return them to the seller229 – but otherwise separate
consideration has to be provided; as it is said, there must be both ‘accord’ and
‘satisfaction’.230 Like any other consideration, such satisfaction can be either executed or
executory,231 but some consideration there must be, otherwise the agreement to release the
promisor will be unenforceable, as a purely gratuitous undertaking.232
(c) Effect of discharge by agreement
5.54 Where discharge by agreement takes place, the contract is abandoned in toto. It
cannot be revived;233 all the parties can do is to make a completely fresh contract (p. 108)
relating to the same subject-matter.234 This means that a promisor who seeks to argue on
these lines in a case of delay is not saying merely that he or she does not have to perform
on time, or is no longer liable for having failed to do so; rather, the argument involves
saying that the contract is at an end, and that neither party is bound by it any more. For this
Private Law Library
Page 103
reason discharge by agreement is a very crude argument to rely on, and together with the
problem of showing consideration this makes it of limited value as an excuse for delay.
(2) Variation
5.55 Variation occurs when the terms of the contract are validly modified in some way. The
contract is amended and not abandoned in toto. Variation can take place in two ways: it may
be permitted by the terms of the contract itself, or may be brought about by the subsequent
agreement of the parties.
(a) Variation provided for by the contract
5.56 A contract may contain provisions allowing for its terms to be amended if certain
conditions are met. The most obvious example of this is where a construction contract
contains a clause giving power to the architect to order ‘variations’.235 Under such clauses
the architect can instruct the contractor either to do extra work or indeed to omit work,
though the work cannot be taken away from the contractor and given to someone else.236 In
such cases the contractor will generally want to claim extra payment. However, it has been
held that this cannot be demanded unless the contractor can prove an express or implied
contract to that effect.237 This can be done either by showing that the work was properly
ordered under a term in the original contract providing for extra payment,238 or that there
is a fresh contract to pay for the work in question.239
5.57 Another situation which is of particular significance in the present context is where a
construction contract allows for extensions of time.240 As we shall see later, such contracts
generally provide for the payment of liquidated damages by (p. 109) the contractor who
fails to complete the work on time,241 but these are not payable where the delay was due to
extra works ordered by the employer.242 For this reason, as well as for the protection of the
contractor, such contracts often contain a provision allowing for extensions of time to be
granted by the architect,243 and where this is done liquidated damages are then payable as
from the substituted date.244
5.58 In this sort of situation the power to vary the terms of the contract is given to a third
party, but it is perfectly possible for a contract to provide for its terms to be varied by one of
the parties to it, as where a creditor is allowed to vary the rate of interest payable by the
debtor.245 However, such terms are regarded with suspicion by the courts, and will not be
interpreted in such a way as to give the party in question complete carte blanche to alter
the terms of the contract at will.246 As well as this, they may very well fall foul of statutory
controls, at any rate in the consumer context.247
(b) Variation by subsequent agreement
5.59 In other cases the parties may agree to vary the terms of a contract after it has been
concluded. As in the case of discharge, this can only be done by mutual agreement; a mere
unilateral notification will not suffice in this context.248 Even where the parties are in
agreement, however, the variation may fail to be effective for want of consideration.249
When the proposed variation is capable of benefiting both parties, there is no problem; once
again the variation is said to ‘generate its own consideration’.250 But where it is purely for
the benefit of one party, the variation (p. 110) is unenforceable unless some extra
consideration is provided to support it.251 The fact that the party benefiting from the
variation may still have obligations to perform under the contract is neither here nor there,
since an agreement to do so is no more than an agreement to do what the party in question
was already bound to do anyway.252 However, the well-known case of Williams v Roffey Bros
& Nicholls (Contractors) Ltd253 shows that the courts are ready in such cases to find
consideration if the variation is in practical terms beneficial to both parties and not
extracted by undue pressure.254 In that case a contractor’s promise to pay a subcontractor
extra money for completing the work on time was held to be binding and supported by good
consideration; the subcontractor was in financial difficulties at the time, and if he had failed
Private Law Library
Page 104
to finish the work the main contractor would have been placed in default and would then
have had to pay heavy sums by way of liquidated damages under the head contract. The
same reasoning might very well be used in relation to an agreement to extend the time of
performance, especially where the choice was between late performance and no
performance at all.
(c) Effect of variation
5.60 The effect of a valid variation is that the contract continues in force subject to the
amendments in its terms made by the variation. It is therefore far less crude in its effects
than rescission, and is to that extent more suited to dealing with the situation where the
promisee agrees to let the promisor perform late. However, its main disadvantage is the
need to show good consideration, and this makes it a less attractive argument for the
promisor in this kind of situation.255
(3) Waiver
5.61 Waiver is a rather amorphous concept in the law of contract covering a number of
situations with no obvious common rationale. The term ‘waiver’256 is used in a number of
different ways,257 but as Lord Goff explained in The (p. 111) Kanchenjunga,258 it covers two
situations, one being ‘a forbearance from exercising a right’ and the other ‘an abandonment
of a right’.259 The first of these arises where a promisee allows the promisor to perform in a
manner other than that specified in the contract; this is sometimes called ‘waiver by
forbearance’.260 The second covers the situation where the promisee with a choice of
remedies opts for one rather than another; this is sometimes called ‘waiver by election’.
(a) Waiver by forbearance
5.62 Waiver by forbearance occurs when the promisee agrees to accept a substituted
performance, as where a buyer of goods agrees to extend the date for delivery, or to allow
the seller to deliver the goods at some place other than that specified in the contract. In
some cases this will be done for the benefit of the promisee, and here it is clear that the
promisee cannot then turn round and seek to enforce the contract according to its terms.
This is what happened in Levey & Co v Goldberg,261 where a buyer of goods requested the
seller to withhold delivery of the goods, and then sought to reject them on the ground that
they had not been delivered on time. Not surprisingly, the court rejected the argument that
the waiver was unenforceable for want of form, and held that in the circumstances the
buyer was bound to accept the goods. Here the delay in delivery was at the promisee’s
request, but more often it is the promisor who tells the promisee that he or she will not be
able to perform on the date set, and requests further time. If the promisee agrees to this, is
it binding? The problem here is that there is no consideration for the promisee’s agreement.
The promisor is doing nothing more than he or she is already bound to do; indeed, by
performing late he or she is in some sense doing less.262
5.63 Despite these problems, the common law did give some effect to the forbearance, as
is demonstrated by the case of Tyers v Rosedale and Ferryhill Iron Co.263 In this case the
sellers contracted to deliver a quantity of iron to the buyers over the year 1871 in twelve
monthly instalments. After the first delivery, the buyers asked the sellers to suspend
deliveries for a period, and this was duly done. Then in December 1871 they called on the
sellers to deliver the entire balance of the iron. The sellers refused to deliver more than the
normal monthly quantity, and the (p. 112) question then arose as to the effect of the buyers’
previous request. It was held that the sellers were still bound to deliver the balance of the
iron, though not necessarily all in one batch. The sellers having acquiesced in the
suspension, they were not entitled to insist on the contract being performed strictly
according to its terms. All they were entitled to was to be given a reasonable time to deliver
the balance of the goods.264 In this case it was the date of performance that was postponed,
but the same principle was applied to a seller who acquiesced in payment under a non-
Private Law Library
Page 105
conforming letter of credit,265 and to a buyer who allowed the goods to be delivered to a
destination other than the one named in the contract.266
5.64 The principle was further considered in Hartley v Hymans,267 in which the sellers
agreed to deliver a quantity of cotton, delivery to begin in September 1918 and to continue
at a specified rate thereafter. The buyers were entitled to cancel the contract if the goods
were not all delivered on time. The sellers fell behind in their deliveries, but the buyers
continued to press for performance both before and after deliveries should have been
completed in November 1918. Eventually they purported to cancel the contract in March
1919. It was held by McCardie J that though time was of the essence here, the buyers had
waived their rights. The buyers had led the sellers to believe that they were not insisting on
prompt performance of the contract; the sellers having acted on that basis at great expense
to themselves, the buyers could not be allowed to turn round and enforce the contract
according to its terms.268 A similar line of reasoning was used in The Petrofina,269 where
shipowners had been accustomed to accept payment of monthly instalments of charter hire
by cheque, despite the express provision of the charterparty that hire had to be paid by
cash in advance. It was held that the owners could not terminate the charterparty on the
ground of late payment without giving the charterers a proper opportunity to put matters
right; the owners had plainly manifested their willingness to accept a substituted method of
performance, and could not, when payment was made in the accepted manner, take
advantage of some provision in the contract which gave them a remedy in default of
payment.270
5.65 Waiver by forbearance differs from discharge by agreement and from variation in that
it does not irrevocably alter the rights of the parties under the original contract. (p. 113) In
particular, it seems that the promisee will be entitled to withdraw the waiver and insist once
again on performance in accordance with the contract, provided that proper notice is given
to the promisor.271 It has also been said that waiver by forbearance does not exist as a
separate doctrine, and that the cases can all be explained as cases of equitable estoppel.272
This may very well be so, and certainly there is a considerable overlap between the two
doctrines,273 but there are two reasons for treating them as separate in the present context.
First of all, the doctrines have a distinct pedigree, and though some of the later cases do
cite Hughes v Metropolitan Railway274 and other authorities based on equitable estoppel,
by no means all of them do.275 Secondly, the emphasis of the two doctrines is different; the
essence of equitable estoppel, as we shall see, is on the conduct of the party for whose
benefit the forbearance is made, whereas in waiver by forbearance the main emphasis is on
the conduct of the party who makes the forbearance.276
(b) Waiver by election
5.66 The essence of waiver by election, as Lord Goff explains in The Kanchenjunga,277 is
that a party with inconsistent rights or remedies chooses to exercise one rather than
another.278 In this situation he or she cannot blow hot and cold; ‘a party to a contract may
not both approbate and reprobate’.279 The most obvious example of this is where the
promisor has committed a serious breach amounting to repudiation: either a breach of
‘condition’280 or some other breach going to the root of the contract.281 In this situation the
promisee has a choice; he or she can either terminate the contract or affirm it.282 If the
promisee chooses to terminate, or as (p. 114) is sometimes said ‘accept the repudiation’,
the right to insist on further performance is lost; the primary obligation of the promisor to
perform lapses, and is replaced by a secondary obligation to pay damages.283 But if the
promisee chooses to affirm, the contract remains fully binding on both sides,284 and the
promisee cannot turn round later and terminate without giving the promisor another
opportunity to perform.285 This is obviously of great relevance to a case of delay. Take a
case where the promisor has agreed to deliver goods at a certain date, time being of the
essence of the contract. If the goods are delivered late, the promisee can reject them and
terminate the contract, but if he or she decides to affirm, say by continuing to press for
Private Law Library
Page 106
delivery, then the right to terminate is lost.286 The promisor must be given another
chance.287
5.67 In order for waiver by election to take place in this situation the promisee must be
aware of the facts giving rise to the right to terminate.288 The waiver can be communicated
to the other party by words or conduct, but such communication must be in ‘clear and
unequivocal terms’.289 In some cases it will be obvious that the promisee has chosen to
terminate; for instance he or she may give the promisor express notice to that effect,290 or
may refuse to perform the contract further,291 or may make another contract inconsistent
with the previous one.292 In other situations the promisee’s conduct will be consistent only
with affirmation, (p. 115) as where he or she continues to press for performance,293 or does
some other act indicating that the contract is still on foot.294 What if the promisee does
nothing to give any indication one way or another? Obviously he or she must be given a
reasonable amount of time to decide how to react to the breach,295 and in some cases a
period of inactivity may be enough to indicate to the promisor that the promisee no longer
intends to be bound by the contract,296 but some indication there must be, otherwise the
promisor will be entitled to assume that the contract is still in force.297
5.68 The effect of waiver by election in this situation is that the right in question is lost and
cannot be revived without the promisor being given another chance to perform. This is well
illustrated by the facts of Charles Rickards Ltd v Oppenhaim,298 where a firm of car dealers
agreed to deliver a Rolls-Royce chassis, which was to be fitted out and delivered to the
customer by 20 March 1948. The car was not delivered on time, but the customer continued
to press for delivery. On 29 June the customer told the dealers that if the car was not
delivered in four weeks he would not accept it. In fact it was not ready until October, by
which time the customer had had enough, and refused to take it. The Court of Appeal held
that the customer was entitled to reject the car. Time was originally of the essence, and the
customer could have terminated at once for failure to deliver on the agreed date. This right
had been lost by waiver, and could not be revived without giving the dealers another chance
to perform. However, when they still failed to deliver, the customer was entitled to serve a
notice making time of the essence (p. 116) once more;299 when this fresh deadline was still
not met, the contract could then be terminated.
5.69 Like waiver by forbearance, waiver by election has often been compared to equitable
estoppel. However, as Lord Goff points out in The Kanchenjunga, there are important
differences as well.300 In particular, waiver by election does not require proof of any degree
of reliance; rather, the principle is, as we have seen, that the party in question is not
allowed to blow hot and cold, but must decide as to which of two inconsistent rights to
pursue.301 As well as this, though both waiver by election and equitable estoppel are based
on the notion of an express or implied representation, the representation in the two cases is
different in character. In the case of an election, the party concerned is making a
representation as to the present – that is to say, as to his or her choice whether or not to
exercise a right that already exists. In the case of equitable estoppel, the representation is
as to the future; that is to say, the party concerned is representing that he or she will not
enforce certain rights.302 Indeed, that is why it is sometimes called ‘promissory’ estoppel.
(4) Equitable estoppel

5.70 The essence of equitable estoppel was set out by Lord Goff in The Kanchenjunga as
follows:303
Equitable estoppel occurs where a person, having legal rights against another,
unequivocally represents (by words or conduct) that he does not intend to enforce
those legal rights; if in such circumstances the other party acts, or desists from
acting, in reliance upon that representation, with the effect that it would be
Private Law Library
Page 107
inequitable for the representor to enforce his legal rights inconsistently with his
representation, he will to that extent be precluded from doing so.
5.71 The fons et origo of equitable estoppel is seen in the case of Hughes v Metropolitan
Railway,304 decided in 1877. In this case a lease contained a provision for forfeiture if
repairs were not done. The landlord served a notice requiring such repairs to be done
within six months, but then entered into negotiations with the tenant for the purchase of
the lease. When the negotiations broke down, he sought to forfeit the lease on the ground
that the six-month period had now expired and the tenant had not done the repairs. But the
claim was rejected. In the words of Lord Cairns:305
It is the first principle upon which all courts of equity proceed, that if parties who
have entered into definite and distinct terms involving certain legal results – certain
penalties or legal forfeiture – afterwards by their own conduct enter on a course of
(p. 117) negotiation which has the effect of leading one of the parties to suppose
that the strict rights under the contract will not be enforced, or will be kept in
suspense, or held in abeyance, the person who otherwise might have enforced those
rights will not be allowed to enforce them where it would be inequitable having
regard to the dealings which have thus taken place between the parties.
In the same way in Central London Property Trust v High Trees House Ltd,306 Denning J, as
he then was, referred to promises which were intended to create legal relations, and which,
to the knowledge of the person making the promise, were going to be acted on by the
person to whom they were made, and which were in fact so acted on, saying that in such
cases the promise should be honoured.307 Though he denied that these were really cases of
estoppel, the title ‘equitable estoppel’ or ‘promissory estoppel’ is now commonly used for
situations of this sort. The doctrine is frequently relied on where a promisee under a
contract308 indicates that he or she will not insist on strict performance, and the promisor
acts in reliance on the promise. To what extent will the promise be enforced? In this
situation we need to consider both the requirements of equitable estoppel and its effect.
(a) Requirements of equitable estoppel
5.72 According to Robert Goff J as he then was, in BP Exploration Ltd v Hunt,309 the
principle of equitable estoppel presupposes three things: (1) a legal relationship between
the parties; (2) a representation, express or implied, by one party that he will not enforce
his strict rights against the other; and (3) reliance by the representee (whether by action or
by omission to act) on the representation, which renders it inequitable, in all the
circumstances, for the representor to enforce his strict rights, or at least to do so until the
representee is restored to his former position.
(i) A pre-existing legal relationship
5.73 The first requirement mentioned by Robert Goff J is that there must be some legal
relationship between the parties.310 In most cases this will be a contractual relationship,
but this need not necessarily be so.311 Where there is no such relationship, the doctrine
cannot operate; still less can it be used to create such a relationship where none existed
before.312
(p. 118) (ii) A promise or representation
5.74 Next, there has to be a promise or representation that the contract will not be
enforced according to its terms. In some cases this will be in express terms, but in some
cases, as in Hughes v Metropolitan Railway itself, it will be sufficient that a reasonable
person in the shoes of the representee would have inferred that the representor did not
intend to insist on strict compliance with the contract.313 However, the facts must point to a
promise or representation of some sort.314 Thus in The Scaptrade315 the fact that
shipowners had acquiesced in the late payment of hire on past occasions was held not to
Private Law Library
Page 108
debar them from withdrawing the ship on that ground, since they had never expressly or
impliedly represented that they would not insist on punctual payment. In the same way, in
The Laconia,316 another charterparty case, the fact that the shipowners’ bank had accepted
a late payment of hire was held to be insufficient, since the bank had no authority to make
any kind of promise or representation so as to bind the owners.
5.75 As in the case of waiver, the promise or representation has to be clear and
unequivocal.317 Thus in Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing
Co Ltd318 an attempt by buyers to argue that the sellers had agreed to allow payment in
sterling rather than in the currency specified in the contract was held not to give rise to an
equitable estoppel, since it was not clear whether the agreement related to the currency of
account or merely the currency of payment. In the same way it was held in The Post
Chaser319 that the buyers under a c.i.f. contract had not waived their rights simply by
failing to object to a late declaration of the vessel by the sellers; this was not enough, it was
said, to amount to the necessary unequivocal declaration by the buyers that they did not
intend to enforce their strict rights.
5.76 One of the purposes of this requirement that the promise or representation be clear
and unequivocal is said to be to prevent a party from losing his or her legal rights under a
contract merely by failure to insist on strict performance of the contract at all times, or by
granting some other indulgence. To what extent will a promisee who accepts late
performance be deemed to have represented that they (p. 119) do not intend to enforce the
contract according to its strict terms? Sometimes the cases are not easy to reconcile. Thus
in The Petrofina320 it was held that shipowners who had allowed the charterers to pay the
monthly instalments of hire by cheque rather than by cash in advance as stipulated by the
contract could not withdraw the ship on this ground without giving the charterers proper
notice that they intended to insist on their strict contractual rights from now on; in effect,
the accepted method of payment under the charterparty had been modified. In The
Scaptrade,321 by contrast, it was held by Lloyd J at first instance that the mere fact that the
shipowners had accepted late payments of hire in the past did not imply any representation
to the charterers that they did not intend to enforce the contract according to its terms. In
Hazel v Akthar322 the defendant applied for a new tenancy under Part II of the Landlord and
Tenant Act 1954, but the application was opposed by the landlords on the ground that the
tenant had been guilty of persistent delay in paying the rent when due. It was held that the
landlord was estopped from relying on this ground, as the delays were not serious in
nature, and had been perfectly acceptable to the previous landlords. It was therefore not
open to the present landlords to penalise the tenant on this ground when they had not given
him sufficient notice of their intention to insist on prompt payment from now on. Three
factors seem to be relevant in the present context. First of all, there is the question of
consistency. A mere acceptance of late performance will not give rise to equitable estoppel
unless it is sufficiently systematic to indicate a change in the way the contract is performed.
Secondly, there is the relative strength of the parties. The courts will be more inclined to
make allowances for a private individual dealing with a business than in a case where two
businesses are dealing at arm’s length. Thirdly, there is the nature of the contract. In
commercial contracts, where time is often of the essence, equitable estoppel will be harder
to establish than in the property context, where prompt performance is of less significance.
(iii) Reliance
5.77 The key element of equitable estoppel, and the one which distinguishes it from waiver
in the strict sense, is the requirement of reliance; the representation or promise must, in
the words of Denning J, have been ‘acted on’. We have seen how in Hughes v Metropolitan
Railway323 this requirement was satisfied when the tenants allowed the deadline for the
repairs to pass while they negotiated with the landlords for the sale of the lease. Similarly,
in Hartley v Hymans,324 sellers of cotton yarn were held to have acted in reliance on the
buyers’ indication that they would accept late delivery by continuing to place orders with
Private Law Library
Page 109
their suppliers, since the yarn in question was of a special kind and not suitable for sale on
the general (p. 120) market. But where no such reliance can be shown, the doctrine of
equitable estoppel will not operate. Thus in Avimex SA v Dewulf & Cie325 a buyer of goods
was held not to have waived his rights by acceptance of a defective force majeure notice in
the absence of any indication that the seller had acted on the faith of this acceptance, say
by appropriating goods to the contract. In the same way, the charterers in The Scaptrade326
were held not to have demonstrated any degree of reliance in failing to pay instalments of
hire on time, despite the fact that this was done without any objection from the owner. No
doubt they would have paid promptly if they had been warned that the owners were about
to withdraw the vessel, but this was not enough.327
5.78 Some of the cases seem to suggest that mere reliance will not be enough unless it is
accompanied by some degree of ‘detriment’. In The Post Chaser328 the sellers under a c.i.f
contract failed to declare a vessel on time as required by the contract. The buyers, however,
made no protest about this, and later requested the sellers to present the shipping
documents. It was held that this request did not amount to an unequivocal declaration by
the buyers that they did not intend to rely on their rights,329 and that even if it did, the
sellers had not shown the necessary reliance. They had indeed relied on the buyers’ request
to the extent that they had conducted their affairs in accordance with it, but they had
suffered no detriment by doing so and it was therefore not inequitable for the buyers to
resile from their promise.330 The requirement of detriment has been stated in other cases
as well,331 but it was denied by Lord Denning MR,332 and is said to be based on a
misleading analogy.333 The point is not of great importance at the end of the day. In cases
where no detriment has been suffered by the party concerned, it will generally not be
inequitable for the other to go back on the promise or representation in question; and if it
would be so inequitable, the courts are not going to hold the doctrine inapplicable for lack
of detriment.334
(p. 121) (b) Effect of equitable estoppel
5.79 The doctrine of equitable estoppel creates no new causes of action where none
existed before;335 in that sense, it is said to be a shield and not a sword.336 Rather, the
effect is, in the words of Lord Cairns, that a person who otherwise might have enforced his
or her rights will not be allowed to enforce them where it would be inequitable having
regard to the dealings which have thus taken place between the parties.337 Such a person
may be deprived of a cause of action,338 or of a defence that he or she would otherwise have
had,339 but there is no independent right to enforce the promise.340 This limitation is of no
significance in the present context, but there are two other aspects of the matter that need
to be considered. First of all, when is it inequitable to allow someone to enforce his or her
rights in this situation? Secondly, to what extent can the party concerned resume these
rights for the future?
(i) Inequitable to enforce rights
5.80 Normally it would be inequitable to allow someone to go back on a promise or
representation he or she has made, especially where that promise or representation has
been acted on by someone else. However, there are cases where this will not apply. For
instance, the promise may have been procured by threats or undue pressure, as in D & C
Builders v Rees,341 where the debtors of a small business, knowing that the business was in
financial difficulties, prevailed on them to accept part payment on the basis that otherwise
they would get nothing at all. Again, a promisee who agrees to allow the promisor to
perform late may be justified by subsequent events in resiling from that undertaking. In
Williams v Stern342 the plaintiff gave the defendant a bill of sale as security for a loan,
under which certain furniture could be seized if the loan was not paid on time. The plaintiff
asked for extra time to pay, and the defendant agreed to this, but then, hearing that the
plaintiff’s landlord intended to distrain on the property, he went ahead and seized the
furniture. It was held that in the circumstances it was not inequitable for the defendant to
Private Law Library
Page 110
act as he did. In the present context it is also relevant, as we have seen, to ask to what
extent the representee under the contract has changed position in reliance on the
representor’s undertaking not to enforce his or her contractual rights. Where the
representee has incurred some degree of detriment it will generally not be equitable to
allow the representor to (p. 122) resile from that undertaking, but this may not be so where
the representee has not been prejudiced in any way by relying on it. This is what happened
in The Post Chaser,343 where the buyers under a c.i.f. contract called on the sellers to
present the shipping documents despite the fact that the vessel had not been nominated in
time as required by the contract. Shortly afterwards the contract was terminated by the
buyers on the ground of the delay, but it was held that though the buyers’ request may have
led the sellers to believe that the buyers had decided to overlook the late nomination, they
had not been prejudiced as a result.344
(ii) Resumption of rights by representor
5.81 Where a contract is discharged by agreement or altered by variation, the effect is
permanent: the promisee can no longer insist on the promisor performing according to its
terms.345 But where the alteration is by way of waiver or equitable estoppel, the cases
establish that the representor can generally resume his or her position by giving due notice
to the representee.346 Thus, a buyer who agrees to accept late delivery can give the seller a
new deadline,347 and where the contract calls for performance by instalments the
representor can insist that from now on the contract must be performed strictly in
accordance with its terms.348 However, in cases where it is impossible or impracticable to
restore the representee to his or her original position the doctrine may serve to extinguish
the representor’s rights altogether.349 The reason for the general rule is said to be the
discretionary nature of the equitable jurisdiction; the court is allowed to give such relief as
is just and equitable in all the circumstances, and in most cases of this sort it would be
neither just nor equitable to treat the representor’s rights as being totally extinguished.350
C. Prevention by Promisee
5.82 The promisor will obviously have a good excuse for the delay when timely
performance was prevented by the act of the promisee.351 To adapt the words of (p. 123)
Tindal CJ, where the promisee himself has occasioned the breach of contract, that is a good
answer to any complaint founded on that breach, in so far as the act complained of is the
act of the promisee rather than the promisor: the promisor may say, ‘This is your own act,
and therefore you are not damnified.’352 In Jones v Barkley353 the plaintiff covenanted with
the defendant to execute a release; he duly offered to do so, and tendered a draft for the
defendant’s perusal, but the defendant refused to look at it and said that he would have no
more to do with it. It was held that the plaintiff was discharged from his duty to perform.
The same reasoning was said to apply to a case where A covenants with B to build a house
on his land, and B refuses to allow him onto the land to do the work.354 In all these cases
the promisor is excused in so far as his or her performance is prevented by the act of the
promisee.
5.83 This principle has often been relied on in relation to construction contracts. In the
words of Coulson J, the essence of the prevention principle in this context is that the
employer cannot hold the contractor to a specified completion date if the employer has, by
his own act or omission, prevented the contractor from completing by that date.355 The
effect of this is said to be that time is now ‘at large’; the completion date no longer applies,
with the result that the contractor need only complete within a reasonable time.356
Needless to say, this rule could have catastrophic consequences for a construction project,
and for this reason most contracts in this field include provision for extensions of time to be
granted in this sort of situation.357 In relation to this, three general principles were laid
down by the Technology and Construction Court in Multiplex Constructions Ltd v Honeywell
Control Systems Ltd,358 a case involving delays to a subcontractor involved in the
Private Law Library
Page 111
construction of the new Wembley Stadium. According to Jackson J, three propositions were
derived from a review of authority:359 (1) actions by an employer which were perfectly
legitimate under a construction contract might still be characterised as prevention if those
actions caused delay beyond the contractual completion date; (2) acts of prevention by an
employer did not set time at (p. 124) large if the contract provided for extension of time in
respect of those events; and (3) in so far as an extension of time clause was ambiguous, it
should be construed in favour of the contractor. Since, however, it was held that the
variations ordered by the claimant fell within the ambit of the clauses in question, it was
held that the claimant was entitled to a declaration to that effect.
5.84 These principles were applied to a shipbuilding contract in Adyard Abu Dhabi LLC v
SD Marine Services,360 where the buyer of a ship sought to terminate the contract following
lengthy delays by the shipbuilders. The shipbuilders sought to shelter behind the prevention
principle, saying that the delays were due to variations ordered by the buyer. However, this
defence was rejected by the court, on the ground that the contract provided for extensions
of time in this situation,361 and that the only reason why an extension had not been granted
was that the shipbuilders had not applied for one as specified by the contract.362 Moreover,
for the prevention principle to apply a causal link had to be shown between the variations
and the delay; in this case the project was already in irretrievable critical delay well before
the relevant date.363
5.85 Though most of the cases involve building contracts, the same reasoning was applied
to a voyage charterparty in The Mass Glory,364 where it was held that the shipowner was
not liable for delay where the ship had been prevented by the charterer’s breach from
getting to the point where notice of readiness to load could be given. In all these cases the
promisor is not responsible for the delay; indeed, the conduct of the promisee in hindering
or preventing performance may itself give rise to a claim in damages, or even amount to a
repudiation of the entire contract.365
D. Supervening Events
5.86 Our final topic is the extent to which timely performance may be excused by
supervening events. There are four situations in which this may happen: (1) under the
terms of a force majeure clause; (2) where the contract is discharged by breach or
frustration; (3) in other cases of impossibility falling short of frustration; and (4) under the
rule in Hick v Raymond & Reid, where a party who is bound to (p. 125) perform within a
reasonable time is hindered by circumstances beyond his or her control. We have already
dealt with the last of these at some length,366 but the other three need further elaboration.
(1) Force majeure clauses
5.87 Contracts frequently contain terms by which a promisor is excused from performance
altogether, or allowed to delay or interrupt performance, on the happening of certain events
beyond his or her control. Such terms are known as force majeure clauses, and their effect
is to give the promisor an excuse for failure to perform when this might not be allowed
under the general law.367 A party relying on such a clause has to prove three things: (1) that
it covers the event in question; (2) that the non-performance was due to circumstances
beyond his or her control; and (3) that there were no reasonable steps that could have been
taken to mitigate the event or its consequences. As well as this, the contract may impose
further conditions on a promisor who wishes to invoke the protection of such a clause.
(a) Clause must cover the relevant contingency
5.88 Whether a force majeure clause covers the contingency in question obviously depends
on how it is worded. For instance, a clause relieving the promisor from liability if he or she
is ‘prevented’ from performance will not cover a situation where performance was merely
rendered more difficult or onerous.368 A clause using the word ‘hindered’ may be given a
wider scope,369 though a mere change in economic or market circumstances, affecting the
Private Law Library
Page 112
profitability of a contract or the ease with which the parties’ obligations could be
performed, will not be regarded as being a force majeure event.370 Quite often the clause in
question will refer to some particular contingency, such as ‘Act of God’, or ‘restraint of
princes’, or ‘perils of the sea’.371 In such cases it will be necessary to see how the words in
question have been interpreted in other cases on the topic, always bearing in (p. 126) mind
that expressions used in relation to one type of contract may not be appropriate in the
context of another.372
(b) Event must be beyond the control of the promisor
5.89 The promisor will not be able to rely on a force majeure clause if he or she was
responsible for the occurrence of the event in question.373 However, difficulties arise where
the promisor was not directly responsible for the event, but should have realised that it was
likely to occur.374 In The Angelia375 the clause in question referred to ‘unavoidable
hindrances’, and it was said that the promisor could not rely on the clause if the existence
of facts showing that it was bound to operate should reasonably have been known to the
promisor prior to the conclusion of the contract, and would have been expected by the
promisee to be so known.376 However, in a later case this was doubted, on the grounds that
there was no principle of law that prevented a party from relying on the terms of a contract
just because he or she was improvident in entering into it.377 Obviously a lot depends on the
wording of the clause in question, but it has been pointed out that the parties are unlikely
to have intended to allow the promisor to be excused from performance in this sort of
case.378
(c) There must be no other mode of performance
5.90 As a general rule, a force majeure clause expressed in general terms will not apply
where the promisor is allowed to perform in a number of different ways, only some of which
are covered by the clause.379 Thus for instance, where a seller of goods is prevented from
shipping from a particular port, he cannot shelter behind the clause if there are other ports
available to which the restraint does not apply.380 In the same way a seller who is prevented
from acquiring goods from the normal supplier may be able to acquire them from another
source, albeit at a higher price.381 However, this principle is said to be no more than a rule
of (p. 127) construction, and one which may be displaced by the terms of the clause or by
some other term of the contract.382
(d) Other requirements
5.91 A promisor who wishes to rely on a force majeure clause may be required to fulfil
certain preconditions before being allowed to do so; in particular, the contract may contain
a provision requiring due notice to be given to the other party by a certain time and in a
certain form.383 Where this is the case, the promisor will not be able to rely on the clause
where he has failed to give any notice at all, but problems may arise where the notice given
does not comply with the terms of the contract. In many cases the notice is given out of
time, and here the courts have to consider whether time was intended to be of the essence;
if it was, a late notice will be totally ineffective, whereas in other cases the delay will sound
in damages only.384 Problems will also arise when the other party purports to accept a
notice which is out of time, or which for some other reason does not comply with the
contract;385 in this situation the courts will have to apply the principles stated above in
relation to waiver and the doctrine of equitable estoppel.386
(2) Contract discharged by breach or frustration

5.92 The promisor will obviously have a good excuse for failing to perform on time if the
contract has been validly discharged by breach or frustration; indeed, where this is the case
there is no obligation to perform at all. Discharge by breach, as we shall see, occurs when
one party to the contract commits a breach of condition,387 or some other breach going to
the root of the contract.388 In this situation the other party can opt to terminate the
Private Law Library
Page 113
contract, and where this is done both parties are then released from having to perform their
primary obligations under the contract.389 Discharge by frustration occurs when a
contractual obligation becomes incapable of performance, either through impossibility or
illegality, or because the circumstances in which performance is called for would render it a
thing radically different from that which was contemplated by the contract.390 In this case
the contract comes to an end automatically and both parties are (p. 128) discharged.391
These doctrines need no further elaboration in the present context, as they will be dealt
with at length in Part III below.392
(3) Excused non-performance falling short of frustration

5.93 A promisor may be excused from performance by subsequent events even where
those events are insufficient to amount to frustration.393 Thus for instance an employee will
not be in breach of contract if he or she fails to turn up to work due to sickness, even
though the illness is not of such a duration as to frustrate the contract,394 and it has been
held that a tenant was not in breach of his covenant to redevelop the land by a certain date
when a building on the site was listed.395 In the same way it is suggested that a builder or
plumber might not be liable for failure to complete the work on time where this was due to
some extraneous event beyond their control, such as a flood or power failure or a heavy
snowstorm. The contract would not be frustrated in these cases, but the promisor would
still have a valid excuse for the delay.
Footnotes:
1
Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2016) (‘Chitty’), chapter 15; Lawson,
Richard, Exclusion Clauses and Unfair Contract Terms (11th edn, 2014) (‘Lawson’);
Macdonald, Elizabeth, Exemption Clauses and Unfair Terms (2nd edn, 2006) (‘Macdonald’).
2
FTA Model Conditions of Carriage 2002 <http://www.fta.co.uk/export/sites/fta/_galleries/
downloads/conditions-for-carriage-of-goods.pdf> (accessed 19 May 2017).
3
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR 964
(HL(Sc)) at 966 (Lord Wilberforce) and 970 (Lord Fraser); Parsons Corp v CV
Scheepvaartonderneming ‘Happy Ranger’ (The Happy Ranger) [2002] EWCA Civ 694;
[2002] 2 Lloyd’s Rep 357 at 364 (Rix LJ); Frans Maas (UK) Ltd v Samsung Electronics (UK)
Ltd [2004] EWHC 1502 (Comm), [2004] 2 Lloyd’s Rep 251.
4
Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche Kolen Centrale
[1967] 1 AC 361 (HL); Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The
Strathallan) [1983] 1 WLR 964 (HL(Sc)); George Mitchell (Chesterhall) Ltd v Finney Lock
Seeds Ltd [1983] 2 AC 803 (HL).
5
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 (High Court of
Australia); HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL
6, [2003] 1 CLC 358 at [63] (Lord Hoffmann); Macdonald, above n 1 at p 49.
6
Unfair Contract Terms Act 1977 (‘UCTA’) s 13(1); Chitty, above n 1, para 15-003. As Lord
Wilberforce said, ‘An act which, apart from the exceptions clause, might be a breach
sufficiently serious to justify refusal of further performance may be reduced in effect, or
made not a breach at all, by the terms of the clause’: Suisse Atlantique Societe d’Armement
Maritime SA v Rotterdamsche Kolen Centrale [1967] 1 AC 361 (HL) at 431.
7
Coote, Brian, Exception Clauses (1964), chapter 1; Macdonald, Elizabeth, ‘Exception
clauses: exclusionary or definitional? It depends!’ (2012) 28 J Contract Law 47.
Private Law Library
Page 114
8
Chitty, above n 1, para 15-003; Rutter v Palmer [1922] 2 KB 87 (CA) at 92 (Scrutton LJ);
Coote, Brian, ‘The Unfair Contract Terms Act’ (1978) 41 MLR 312. Contrast the approach of
the House of Lords in GH Renton & Co Ltd v Palmyra Trading Corp of Panama [1957] AC
149.
9
Below, paras 13.35–13.72; Chitty, above n 1, para 15-004.
10
[1967] 1 AC 361 (HL).
11
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 at 249 (Devlin J).
12
For further discussion of demurrage see below, paras 13.39–13.44.
13
The principle being that in the last resort the front of the contract will prevail over the
back: below, para 5.13.
14
[1970] 1 Lloyd’s Rep 247.
15
Bayoil SA v Seawind Tankers Corp [2001] 1 Lloyd’s Rep 533; Seven Seas Transportation
Ltd v Pacifico Union Marina Corp (The Satya Kailash) [1984] 1 Lloyd’s Rep 588.
16
Of course, since the advent of word processors it is now often impossible to tell the
difference between the two kinds of clause in question.
17
[2001] 1 Lloyd’s Rep 533 at 536 (Langley J); Cobelfret Bulk Carriers NV v Swissmarine
Services SA (The Lowlands Orchid) [2009] EWHC 2883 (Comm), [2010] 1 Lloyd’s Rep 317
(Beatson J).
18
Below, para 5.11.
19
Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 (HL) at 1316 (Lord
Diplock).
20
Thus the attitude of the courts will be more favourable to a clause applying equally to
both parties than to one foisted on one party by the other: Transocean Drilling UK Ltd v
Providence Resources plc (The Arctic III) [2016] EWCA Civ 372.
21
Below, paras 5.27 (Unfair Contract Terms Act 1977) and 5.34 (Consumer Rights Act
2015).
22
Chitty, above n 1, para 15-152; below, paras 5.87–5.91.
23
Fairclough, Dodd & Jones v J H Vantol Ltd [1957] 1 WLR 136 (HL) at 143 (Lord Tucker).
24
Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323; B & S Contracts
and Design Ltd v Victor Green Publications Ltd [1984] ICR 419; Mamidoil-Jetoil Greek
Petroleum Co SA v Okta Crude Oil Refinery AD (No 3) (CA) [2003] 2 Lloyd’s Rep 635.
25
26
Lawson, above n 1, chapter 1.
27
Macdonald, above n 1, p 5.
28
Glass, David, and Cashmore, Chris, Introduction to the Law of Carriage of Goods (1989)
(Glass and Cashmore).
29
Convention on the Contract for the International Carriage of Goods by Road (1956)
(CMR) (Geneva, 19 May 1956): (Treaty Series 090/1967: Cmnd 3455).
30
Convention Concerning International Carriage by Rail (1980) (Berne, 9 May 1980)
(Treaty Series No 52 (1993): Cm 2312), as modified by the Vilnius Protocol of 1999
(Miscellaneous Series 021/2000: Cm 4873).
Private Law Library
Page 115
31
Hague Rules (Brussels, 25 August 1924) (Treaty Series 017/31: Cmd 3806), as amended
by the Protocols of 1968 (Hague-Visby Rules) (Brussels, 23 February 1968) (Treaty Series
083/1977: Cmnd 6944) and of 1979 (Brussels, 21 December 1979) (Treaty Series 028/1984:
Cmnd 9197).
32
Convention for the Unification of Certain Rules relating to International Carriage by Air
(1929) (Warsaw, 12 October 1929) (Treaty Series 011/1933: Cmd 4824), as amended by the
Montreal Convention of 1999 (Treaty Series 044/2004: Cm 6369).
33
See for instance CMR Convention, Art 17.4; COTIF, Art 26(2); Hague-Visby Rules, Art IV.
2; Montreal Convention, Art 22.
34
The usual principle applies whereby it is up to each contracting state to incorporate the
relevant conventions into its domestic law: for the UK see the Carriage of Goods by Road
Act 1965, the Railways (Convention on International Carriage by Rail) Regulations 2005,
the Carriage of Goods by Sea Act 1971 and the Carriage by Air Act 1961.
35
Of course, there is nothing to stop the parties from agreeing to incorporate conventions
of this sort into the contract, either in whole or in part, in situations where it would not
otherwise apply; see Dunavant Enterprises Inc v Olympia Spinning and Weaving Mills Ltd
[2011] EWHC 2028 (Comm), [2011] 2 Lloyd’s Rep 619 (Burton J) (incorporation of bylaws
and rules of International Cotton Association).
36
37
Alison & Co v Wallsend Slipway & Engineering Co Ltd (1927) 43 TLR 323 (CA) at 324
(Scrutton LJ); McGee Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC), [2017]
CILL 393 at para [25] (Coulson J).
38
39
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR 964
(HL(Sc)) at 966 (Lord Wilberforce); George Mitchell (Chesterhall) Ltd v Finney Lock Seeds
Ltd [1983] 2 AC 803 (HL) at 810 (Lord Diplock).
40
Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 at
912 (Lord Hoffmann); Macdonald, above n 1 at 34. Of particular relevance in this
connection is the recent insistence by the courts in cases such as Arnold v Britton [2015]
UKSC 36, [2015] AC 1619 that the starting point for contractual interpretation must always
be the words used by the parties, and that these should be given their natural meaning
wherever possible.
41
Hut Group Ltd v Nobahar-Cookson [2016] EWCA Civ 128, [2016] 1 CLC 573; McGee
Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC), [2017] CILL 393 at para [25]
(Coulson J); Lawson, above n 1, para 2.05.
42
Lawson, above n 1, chapter 2; Chitty, above n 1, paras 15-007–15-022.
43
Glynn v Margetson & Co [1893] AC 351 (HL); Motis Exports Ltd v Dampskibsselskabet
AF 1912 Aktieseskab [2000] 1 Lloyd’s Rep 211 (CA).
44
Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715; Jindal
Iron & Steel Co Ltd v Islamic Solidarity Shipping Co Jordan Inc (The Jordan II) [2005] 1
WLR 1363.
45
(1888) 20 QBD 475 (CA).
46
(1934) 49 Ll LR 183; Hadji Ali Akbar v Anglo-Arabian SS Co (1906) 11 Com Cas 219.
47
(1934) 49 Ll LR 183 at 190 (Branson J).
Private Law Library
Page 116
48
Bayoil SA v Seawind Tankers Corp (The Leonidas) [2001] 1 Lloyd’s Rep 533; Mitsubishi
Corp v Eastwind Transportation Ltd (The Irbenskiy Proliv) [2005] 1 Lloyd’s Rep 383.
49
Marifortuna Naviera SA v Government of Ceylon [1970] 1 Lloyd’s Rep 247; Seven Seas
Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash) [1988] 1 Lloyd’s Rep
588 (CA).
50
Davis v Garrett (1830) 6 Bing 716, 130 ER 1456; Chitty, above n 1, para 15-032;
Cashmore, C, ‘The legal nature of the doctrine of deviation’ [1989] J Bus L 492; Baughen, S,
‘Does deviation still matter?’ [1991] LMCLQ 70; Dockray, M, ‘Deviation: a doctrine all at
sea’ [2000] LMCLQ 76. It has recently been suggested that the whole doctrine is based on a
misunderstanding: Dempster, Hannah, ‘The confusion of incidents of common carriage with
incidents of deviation’ [2016] LMCLQ 275.
51
[1907] 1 KB 660 (CA).
52
Hain SS Co v Tate and Lyle (1936) 41 Com Cas 350 (HL) at 354–355 (Lord Atkin). Lord
Atkin also explains that the cargo owners may not be covered by insurance where the ship
deviates from the contract voyage.
53
Mallett v Great Eastern Rly [1899] 1 QB 309; London and North Western Rly v Neilson
[1922] 2 AC 263 (HL); Garnham, Harris & Elton Ltd v Alfred W Ellis (Transport) Ltd [1967]
1 WLR 940.
54
Lilley v Doubleday (1881) 7 QBD 510; Gibaud v Great Eastern Rly [1921] 2 KB 426 (CA).
Such cases have been termed cases of ‘quasi-deviation’.
55
The phrase is that of Lord Greene MR: see Alderslade v Hendon Laundry Ltd [1945] KB
189 at 192 and Davies v Collins [1945] 1 All ER 247. Or, as Scrutton LJ put it in Gibaud v
Great Eastern Rly (n 53 above), ‘if you undertake to do a thing in a certain way, or to keep a
thing in a certain place, with certain conditions protecting it, and have broken the contract
by not doing the thing contracted for in the way contracted for, or by not keeping the article
in the place in which you have contracted to keep it, you cannot rely on the conditions
which were only intended to protect you if you had carried out the contract in the way in
which you contracted to do it’: [1921] 2 KB 426 at 435.
56
Below, para 5.16.
57
This was the view of Lloyd LJ in Kenya Railways v Antares Pte Ltd [1987] 1 Lloyd’s Rep
424 (CA) at 430 and State Trading Corp of India v Golodetz Ltd [1989] 2 Lloyd’s Rep 277
(CA) at 289.
58
Baughen, above n 50; Dockray, above n 50; Chitty, above n 1, para 15-032.
59
Hain SS Co v Tate and Lyle (1936) 41 Com Cas 350 (HL) at 354–355 (Lord Atkin); Photo
Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL) at 845 (Lord Wilberforce).
60
61
Chanter v Hopkins (1838) 4 M & W 399 at 404, 150 ER 1484 at 1487 (Lord Abinger).
62
NV Bunge v Compagnie Noga d’Importation et d’Exportation SA (The Bow Cedar) [1980]
2 Lloyd’s Rep 602 at 604 (Lloyd J).
63
Hence the comment in by Birkett LJ in Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936
(CA) at 942 that what was delivered was ‘not a car at all’.
64
Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 (PC) at 587 (Lord
Denning).
Private Law Library
Page 117
65
The Cap Palos [1921] P 458; Whistler International Ltd v Kawasaki Kisen Kaisha Ltd
(The Hill Harmony) [2001] 2 AC 638 (HL) (exclusion clause held not to cover deliberate
disregard by shipowner of charterer’s orders).
66
[1943] 2 All ER 690 (Lewis J), [1944] 1 All ER 381 (CA).
67
[1943] 2 All ER 690 at 694 (Lewis J).
68
Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 969 (CA); Harbutt’s ‘Plasticine’ Ltd v
Wayne Tank and Pump Co [1970] 1 QB 447 (CA).
69
Suisse Atlantique Societe d’Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1
AC 361 (HL); Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL).
70
71
Above, para 5.13; Kudos Catering Ltd v Manchester Central Convention Complex Ltd
[2013] EWCA Civ 38, [2013] 2 Lloyd’s Rep. 270.
72
China Shipbuilding Corp v Nippon Yusen Kabushiki Kaisha (The Seta Maru) [2000] 1
Lloyd’s Rep 367 at 376 (Thomas J) (delivery of ship known to be unseaworthy).
73
Thompson, Peter K J, Unfair Contract Terms Act 1977 (1978) (‘Thompson’); Lawson,
above n 1, chapters 7–9. Consumer contracts are now dealt with by the Consumer Rights
Act 2015: see below, para 5.34.
74
Unfair Contract Terms Act 1977 (UCTA), s 2; Ashdown v Samuel Williams & Sons [1957]
1 QB 409 (CA).
75
UCTA, s 6(4) (terms implied under the Sale of Goods Act 1979).
76
UCTA, s 1(3)(a) and (b). But liability of an occupier of premises for breach of an
obligation or duty towards a person obtaining access to the premises for recreational or
educational purposes, being liability for loss or damage suffered by reason of the dangerous
state of the premises, is not a business liability of the occupier unless granting that person
such access for the purposes concerned falls within the business purposes of the occupier:
see further Occupiers Liability Act 1984, s 2.
77
Attempts to exclude liability in tort are a different matter: see White v Blackmore [1972]
2 QB 651 (CA).
78
79
Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA) at 605.
80
UCTA, s 13(1)(a). For instance, the clause may impose an unduly short time limit for
bringing a claim: BHP Petroleum v British Steel plc and Dalmine SpA [1999] 2 Lloyd’s Rep
586; Granville Oil & Chemicals v Davis Turner & Co Ltd [2003] EWCA Civ 570, [2003] 2
Lloyd’s Rep 356. See also Kaye v Nu Skin UK Ltd [2012] EWHC 958 (QB), [2012] CTLC 69
(contract providing for arbitration in Utah).
81
UCTA, s 13(1)(b): Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA); AXA
Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2 Lloyd’s Rep 1
(exclusion of set-off).
82
UCTA, s 13(1)(c): as where a term states that the acceptance of goods or services shall
be conclusive evidence that they are in conformity with the contract.
83
UCTA, s 13; above, para 5.05.
84
UCTA, s 3(2)(b)(i); below, para 5.24.
85
UCTA, s 13(2).
Private Law Library
Page 118
86
Chitty, above n 1, para 15-004; above, para 5.06.
87
Phillips Products Ltd v Hyland [1987] 1 WLR 659 (CA) at 666 (Slade LJ); Johnstone v
Bloomsbury Health Authority [1992] QB 333 (CA) at 346 (Stuart-Smith LJ).
88
For what this means see below, paras 5.25–5.28.
89
UCTA, s 1(1)(a); Flamar Interocean Ltd v Denmac Ltd (The Flamar Pride) [1990] 1
Lloyd’s Rep 434 (negligent inspection of vessels by surveyor).
90
Mallett v Great Eastern Rly [1899] 1 QB 309; London and North Western Rly v Neilson
[1922] 2 AC 263 (HL); Garnham, Harris & Elton Ltd v Alfred W Ellis (Transport) Ltd [1967]
1 WLR 940.
91
Section 3 used also to apply where one party dealt ‘as consumer’, but since the
Consumer Rights Act 2015 the UCTA regime has been restricted to contracts between
businesses, and section 3(3) now specifically excludes consumer contracts from the ambit of
the section.
92
UCTA, s 3(1); Jacobs, E J, ‘Written standard terms of business’ [1983] J Bus Law 226.
93
St Albans City & District Council v International Computers Ltd [1996] 4 All ER 481
(CA) at 491 (Nourse LJ); Hadley Design Associates Limited v The Lord Mayor and Citizens
of the City of Westminster [2003] EWHC 1617 (TCC) at [83] (Richard Seymour QC).
94
Transocean Drilling UK Ltd v Providence Resources plc (The Arctic III) [2016] EWCA Civ
372; African Export-Import Bank v Shebah Exploration and Production Co Ltd [2016] EWHC
311 (Comm), [2016] 1 CLC 292.
95
Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 (HL) at 1316 (Lord
Diplock).
96
The Flamar Pride [1990] 1 Lloyd’s Rep 434 at 438 (Potter J); Salvage Association v CAP
Financial Services [1995] FSR 654.
97
St Albans City & District Council v International Computers Ltd [1996] 4 All ER 481
(CA) at 491 (Nourse LJ).
98
British Fermentation Products Ltd v Compair Reavell Ltd (1999) 66 Const LR 1; Chitty,
above n 1, para 15-084.
99
UCTA, s 3(2)(a).
100
UCTA, s 3(2)(b)(i).
101
Above, para 5.18. Note, however, that most deviation cases will not be covered by
section 3, as it does not extend to contracts for the carriage of goods by sea: UCTA, s 1(2)
and Schedule 1 para 2(c): below, para 5.33.
102
UCTA, s 3(2)(b)(ii).
103
Chitty, above n 1, para 15-167; below, paras 5.87–5.91.
104
Timeload Ltd v British Telecommunications plc [1995] EHLR 459 (CA).
105
Thompson, above n 73, para 5.
106
107
Thompson, above n 73, para 55; Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB
600 (CA); AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2
Lloyd’s Rep 1.
108
UCTA, s 11(5).
Private Law Library
Page 119
109
Edmund Murray v BSP International Foundations (1994) 33 Const LR 1 (CA).
110
111
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL) at 810
(Lord Bridge); Overseas Medical Supplies Ltd v Orient Transport Services Ltd [1999] 1
Lloyd’s Rep 273 (CA) at 277 (Potter LJ); Chitty, above n 1, para 15-115; Adams, John and
Brownsword, Roger, ‘The Unfair Contract Terms Act: a decade of discretion’ (1988) 104
LQR 94.
112
This applies on its terms only to contracts for the supply of goods covered by sections 6
and 7, but the guidelines have frequently been used on a general basis by the courts: Singer
Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164; The Flamar
Pride [1990] 1 Lloyd’s Rep 434; Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600
(CA); Schenkers Ltd v Overland Shoes Ltd [1998] 1 Lloyd’s Rep 498; Granville Oil and
Chemicals Ltd v Davis Turner and Co Ltd [2003] EWCA Civ 570, [2003] 2 Lloyd’s Rep 356.
113
Lawson, above n 1, para 9.002.
114
UCTA, Schedule 2(a): George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd
[1983] 2 AC 803 (HL); Stag Line Ltd v Tyne Shiprepair Group Ltd (The Zinnia) [1984] 2
Lloyd’s Rep 211; Schenkers Ltd v Overland Shoes Ltd (above n 112); Thames Tideway
Properties Ltd v Serfaty Partners [1999] 2 Lloyd’s Rep 110; Regus (UK) Ltd v Epcot
Solutions Ltd [2008] EWCA Civ 361.
115
UCTA, Schedule 2(b): Green Ltd v Cade Bros Farms [1978] 1 Lloyd’s Rep 602; George
Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (above n 114); Singer Co (UK) Ltd v
Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164; Granville Oil & Chemicals Ltd
v Davis Turner & Co Ltd (above n 112).
116
UCTA, Schedule 2(c): George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd
(above n 114); Charlotte Thirty Ltd v Croker Ltd (1990) 24 Const LR 46; Watford
Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317, [2001] Build LR 143; Britvic
Soft Drinks Ltd v Messer UK Ltd [2002] EWCA Civ 548, [2002] 2 Lloyd’s Rep 376.
117
UCTA, Schedule 2(d): The Zinnia [1984] 2 Lloyd’s Rep 211; Rees-Hough v Redland
Reinforced Plastics Ltd (1985) 2 Const LR 109; Granville Oil & Chemicals Ltd v Davis
Turner & Co Ltd (above n 112).
118
UCTA, Schedule 2(e).
119
Lawson, above n 1, paras 9-004–9-008.
120
121
Overseas Medical Supplies Ltd v Orient Transport Services Ltd [1999] 1 Lloyd’s Rep
273 (CA) at 277 (Potter LJ).
122
Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164.
123
Ibid at 169 (Steyn J); Monarch Airlines Ltd v London Luton Airport [1998] 1 Lloyd’s Rep
403 at 413 (Clarke J).
124
125
Thompson, above n 73, para 96; Law Commission, First Report on Exemption Clauses
(1969) Law Com no 24; Granville Oil & Chemicals Ltd v Davis Turner & Co Ltd [2003]
EWCA Civ 570, [2003] 2 Lloyd’s Rep 356 at [31] (Tuckey LJ).
126
UCTA, s 26(1) and (2).
Private Law Library
Page 120
127
UCTA, s 26(3). For the purposes of this section the Channel Islands and the Isle of Man
count as separate states.
128
UCTA, s 26(4)(a).
129
UCTA, s 26(4)(b).
130
UCTA, s 26(4)(c). Apparently this does not include a situation where a contract is made
in another state for goods to be delivered within, rather than to, the UK: Amiri Flight
Authority v BAE Systems plc [2003] EWCA Civ 1447, [2003] 2 Lloyd’s Rep 767.
131
UCTA, s 27(1).
132
UCTA, s 27(2)(a).
133
UCTA, s 29(1)(a).
134
UCTA, s 29(1)(b).
135
Chitty, above n 1, para 15-123; above, para 5.11.
136
UCTA, Schedule 1 para 1; Chitty, above n 1, para 15-117.
137
Para 1(a).
138
Para 1(b).
139
Para 1(c).
140
Para 1(d).
141
Para 1(e).
142
Para 2(a).
143
Para 2(b).
144
Para 2(c).
145
Para 4.
146
Council Directive (EC) 93/13 on Unfair Terms in Consumer Contracts [1993] OJ L95/29;
147
Above, para 5.19.
148
Below, para 5.35.
149
SI 1994/3159.
150
SI 1999/2083.
151
Law Commission Report, Unfair Terms in Contracts, Law Com No 292 (Cm 6464,
2005).
152
and a packet of cigarettes may be a consumer in relation to the second but not the first
(‘CRA’), s 2(2); Lawson, above n 1, para 10-002.
153
Overy v Paypal (Europe) Ltd [2012] EWHC 2659 (QB), [2013] Bus LR D1.
154
See below, para 5.38.
155
UCTA, s 3; above, para 5.24.
156
Consumer Rights Act 2015 (‘CRA’), s 62(4).
157
Lawson, above n 1, para 10-020.
158
Director-General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1
AC 481 at [17] (Lord Bingham).
Private Law Library
Page 121
159
Ibid.
160
Council Directive 93/13, Recital 16.
161
UCTA, Sch 2(a), (b) and (e); above, para 5.27.
162
163
For a general discussion of this issue see Lawson, above n 1, para 10-025.
164
Council Directive 93/13, Recital 16; Chitty, above n 1, para 38-245.
165
Chitty, ibid.
166
Director General of Fair Trading v First National Bank plc [2001] UKHL 52, [2002] 1
AC 481 at [17] (Lord Bingham).
167
Ibid.
168
CRA, s 62(5).
169
Below, para 5.45.
170
CRA, s 64(2). By s 64(3) a term is ‘transparent’ for the purposes of Part 2 if it is
expressed in plain and intelligible language and (in the case of a written term) is legible.
171
CRA, s 64(2). By s 64(4) a term is ‘prominent’ if it is brought to the consumer’s
attention in such a way that an average consumer would be aware of the term: compare the
rules for incorporation of an exclusion clause: Lawson, above n 1, chapter 1.
172
CRA, s 64(1)(a); see Office of Fair Trading v Abbey National plc [2009] UKSC 6, [2010]
1 AC 696.
173
CRA, s 64(1)(b).
174
Above, para 5.05.
175
As in Leduc v Ward (1888) 20 QBD 475 (CA); Glynn v Margetson & Co [1893] AC 351
(CA); Connolly Shaw Ltd v A/S Det Nordfjeldske D/S (1934) 49 Ll L Rep 183; Ganado, Max
and Kindred, Hugh M, Marine Cargo Delays (1990), pp 103–109. None of these cases would
be covered by the Act, as they did not involve a consumer, but they serve to illustrate the
type of clause that gives rise to the problem.
176
As in Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd (The Lipa) [2001]
2 Lloyd’s Rep 17 (‘all details “about” – all details given in good faith but without
guarantee’).
177
Council Directive 93/13, Recital 19. Note that insurance contracts are not excluded
from the 2015 Act as they are from UCTA: above, para 5.33.
178
Section 69(1) of the Act provides that where a term in a consumer contract, or a
consumer notice, could have different meanings, the meaning that is most favourable to the
consumer is to prevail.
179
AC 481 at [12] (Lord Bingham) (dealing with the equivalent provision in the 1999
Regulations).
180
CRA, s 62(1).
181
CRA, s 67.
182
para 7-120. (The discussion relates to the position under the old 1999 Regulations, but the
2015 Act is the same in this respect.)
Private Law Library
Page 122
183
184
CRA, s 70(1).
185
CRA, s 70(2) and Schedule 5.
186
Schedule 5, para 3.
187
Ibid, para 6.
188
CRA, s 63(1); Lawson, above n 1, para 10-026.
189
Furmston, M P (ed), Cheshire, Fifoot and Furmston’s Law of Contract (17th edn, 2017)
190
Ibid.
191
See for instance paras 4 (forfeiture of deposit) and 6 (penalty for breach).
192
Schedule 2 para 1.
193
Schedule 2 para 2.
194
Schedule 2 para 11.
195
Schedule 2 para 20.
196
197
CRA, s 61(2).
198
CRA, s 73(1)(a).
199
CRA, s 73(1)(b).
200
201
Ibid.
202
Ibid.
203
Above, paras 5.32 (UCTA 1977) and 5.46 (CRA 2015).
204
Above, n 32.
205
Article III.1.
206
Article III.2.
207
Article III.8.
208
Above n 30, Article 41(1).
209
Above n 31, Article 23.
210
Chitty, above n 1, chapter 22.
211
Davis v Street (1823) 1 C & P 18, 171 ER 1084; Foster v Dawber (1851) 6 Exch 839,
155 ER 785; Morris v Baron & Co [1918] AC 1 (HL); Chitty, above n 1, para 22-025.
212
213
[1919] 1 KB 78; Fisher v Eastwoods Ltd [1936] 1 All ER 421.
214
Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] AC
901 (HL).
215
Atkinson v Sir Alfred McAlpine & Sons [1968] 2 QB 229 (CA); Birkett v James [1978]
AC 297 (HL).
216
See now Arbitration Act 1996, s 41; below, n 225.
Private Law Library
Page 123
217
Furmston, M P and Tolhurst, G J, Contract Formation (2nd edn, 2016), paras 4.65–4.82.
218
André et Compagnie SA v Marine Transocean Ltd [1981] QB 694 (CA); Furmston and
Tolhurst, above n 217, pp 43–44.
219
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 (HL);
Idealview v Bello [2010] EWCA Civ 721; Furmston and Tolhurst, above n 217, paras 4.66–
4.74.
220
Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA [1985] 2 Lloyd’s Rep 18
(CA); Furmston and Tolhurst, above n 217, para 4.75.
221
Compagnie Francaise D’Importation et de Distribution SA v Deutsche Continental
Handelsgesellschaft [1985] 2 Lloyd’s Rep 592.
222
Tracomin SA v Anton C Nielsen A/S [1984] 2 Lloyd’s Rep 195.
223
Food Corp of India v Antclizo Shipping Corp (The Antclizo) [1988] 1 WLR 603 (HL);
Blindley Heath Investments Ltd v Bass [2014] EWHC 1366 (Ch).
224
Gebr van Weelde Scheepvaartkantor BV v Compania Naviera Sea Orient SA (The
Agrabele) [1985] 2 Lloyd’s Rep 496 (CA); Excomm Ltd v Guan Guan Shipping (Pte) Ltd (The
Golden Bear) [1987] 1 Lloyd’s Rep 330; Tankrederei Ahrenkeil GmbH v Frahuil SA (The
Multitank Holsatia) [1988] 2 Lloyd’s Rep 486.
225
To allow for this, a new section 13A was inserted into the Arbitration Act 1950 by
section 102 of the Courts and Legal Services Act 1990. See now Arbitration Act 1996, s 41;
Huyton SA v Jakil SpA [1999] 2 Lloyd’s Rep 83 (CA).
226
According to Sir Frederick Pollock, there was no need for this rule at all: see Principles
of Contract (13th edn, 1950), p 150; Chitty, above n 1, para 22-001.
227
228
229
Ibid.
230
Ibid, para 3-059.
231
British Russian Gazette Ltd v Associated Newspapers Ltd [1933] 2 KB 616 (CA) at 643–
645 (Scrutton LJ).
232
Collin v Duke of Westminster [1985] QB 581 (CA) at 598 (Oliver LJ).
233
R v Inhabitants of Gresham (1786) 1 TR 101, 99 ER 996; Chitty, above n 1, para 22-026.
234
As in Morris v Baron & Co [1918] AC 1 (HL).
235
Furst, Stephen and Ramsey, Vivian (eds), Keating on Construction Contracts (10th edn,
2016) (‘Keating’), chapter 4.
236
Carr v JA Berriman Pty Ltd (1953) 27 ALJR 273 (High Ct of Australia); Commr for Main
Roads v Reed & Stuart Pty Ltd (1974) 12 BLR 55 (High Ct of Australia).
237
Keating, above n 235, para 4-065; Tharsis Sulphur and Copper Co v McElroy & Sons
(1878) 3 App Cas 1040 (HL(Sc)).
238
Russell v Sa da Bandeira (1862) 13 CB (NS) 149, 143 ER 59; Taverner & Co Ltd v
Glamorgan County Council (1941) 57 TLR 243; Keating, above n 235, para 4-065.
239
Taverner & Co Ltd v Glamorgan County Council (1941) 57 TLR 243 at 245 (Humphreys
J); Keating, above n 235, para 4-065.
Private Law Library
Page 124
240
Keating, above n 235, para 8-044; Lane, Patrick, ‘Disruption and delay: fair entitlement
and the regulation of risk’ (2006) 22 Construction LJ 92.
241
242
Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Dodd v Churton [1897] 1 QB 562
(CA); Wells v Army & Navy Co-operative Society (1902) 86 LT 764; Peak Construction
(Liverpool) Ltd v McKinney (1970) 1 BLR 111 (CA); Astilleros Canarios SA v Cape Hatteras
Shipping Co Inc [1982] 1 Lloyd’s Rep 518; Group Five Building Ltd v Minister of Community
Development 1993 (3) SA 629(A) at 650 C; Lane, above n 240; below, para 5.82.
243
Keating, above n 235, para 8-016. No extensions of time can be granted in the absence
of express provision to that effect in the contract: Dodd v Churton, above n 242.
244
Keating, above n 235, para 8-016; Adyard Abu Dhabi v SD Marine Services [2011]
EWHC 848 (Comm), (2011) 136 Con LR 190 at [243]. In deciding whether to grant such
extensions, the architect must act in a ‘quasi-arbitral’ manner, and must not act arbitrarily
or capriciously: Northern Regional Health Authority v Derek Crouch Construction Co Ltd
[1984] QB 644 (CA); John Barker Construction Ltd v London Portman Hotel Ltd (1996) 50
Con LR 43; Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003] EWCA Civ 1715, [2004]
1 Lloyd’s Rep 55.
245
246
Nash and Staunton v Paragon Finance plc [2001] EWCA Civ 1466, [2002] 1 WLR 685;
Mallone v BPB Industries plc [2002] EWCA Civ 126, [2002] ICR 1045.
247
See Consumer Rights Act 2015, Schedule 2 paras 13–16; above, para 5.45.
248
Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s Rep 45 (Mayor’s and City of London
Court).
249
One way round this problem is to make the variation by deed: see PM Project Services
Ltd v Dairy Crest [2016] EWHC 1235 (TCC), [2016] 4 Costs LR 735.
250
Treitel (Contract), above n 182, para 3-063. The question is whether the variation was
capable of benefiting both parties at the time it was made; the fact that in the end it
benefited only one party is neither here nor there: Alan (WJ) & Co v El Nasr Export &
Import Co [1972] 2 QB 189 (CA).
251
Such as the ‘horse, hawk or robe’ in Pinnel’s Case (1602) 5 Co Rep 117a, 77 ER 237.
252
Stilk v Myrick (1802) Camp 317, 170 ER 1168.
253
[1991] 1 QB 1 (CA), and see now MWB Business Exchange Centres Ltd v Rock
Advertising Ltd [2016] EWCA Civ 553, [2017] QB 604 (currently under appeal).
254
North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705; Pao On v
Lau Yiu Long [1980] AC 614 (PC).
255
Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day) [2002] EWCA Civ 1068,
[2002] 2 Lloyd’s Rep 487 at [61] (Potter LJ).
256
In Banning v Wright Lord Hailsham quotes the observation of Lord Simon that the word
derives from the same root as the word ‘waif’, used to denote an abandoned thing or
person: [1972] 1 WLR 972 (HL) at 978–979.
257
Thus the term has been used to denote discharge by agreement (Price v Dyer (1810) 17
Ves 356 at 364, 34 ER 137 at 140 (Sir William Grant MR)) and variation (Brikom
Investments v Carr [1979] QB 467 (CA) at 488 (Roskill LJ)): Treitel (Contract), above n 182,
para 3-066. According to Lord Wright in Ross T Smyth & Co Ltd v T D Bailey, Son & Co
(1940) 164 LT 102 (HL) at 106, Stroud’s Judicial Dictionary listed at least thirteen different
Private Law Library
Page 125
senses of the term. See also the analysis of Potter LJ in The Happy Day, above n 255 at [64–
68].
258
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India [1990] 1 Lloyd’s Rep
391.
259
Ibid at 397.
260
261
[1922] 1 KB 688.
262
263
(1875) LR 10 Ex 195; Besseler Waechter Glover & Co v South Derwent Coal Co Ltd
[1934] 1 KB 408.
264
(1875) LR 10 Ex 195 at 199 (Blackburn J).
265
Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA).
266
Leather-Cloth Co v Hieronimus (1875) LR 10 QB 140.
267
[1920] 3 KB 475.
268
Ibid at 495ff.
269
Tankexpress A/S v Compagnie Financière Belge des Petroles SA [1949] AC 76 (HL);
Plastimoda Societa per Azioni v Davidson’s (Manchester) Ltd [1952] 1 Lloyd’s Rep 527 (CA);
Enrico Furst & Co v W E Fischer [1960] 2 Lloyd’s Rep 340; Westbrook Resources v Globe
Metallurgical Inc [2009] EWCA Civ 310, [2009] 2 Lloyd’s Rep 224.
270
[1949] AC 76 at 103 (Lord du Parcq).
271
Tyers v Rosedale and Ferryhill Iron Co (1875) LR 10 Ex 195 at 199 (Blackburn J);
Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA) at 477–478 (Viscount
Reading CJ); Hartley v Hymans [1920] 3 KB 475 at 495.
272
Chitty, above n 1, para 24-007; Prosper Homes v Hambro’s Bank Executor and Trustee
Co (1979) 39 P & CR 395 at 401 (Browne-Wilkinson J).
273
Hartley v Hymans [1920] 3 KB 475 at 495 (McCardie J).
274
(1877) 2 App Cas 439 (HL); below, para 5.71.
275
A passing reference to Hughes v Metropolitan Railway can be seen in Hartley v
Hymans (above, para 5.64), but prior to that the two doctrines seem to have existed in
isolation.
276
The Happy Day, above n 255 at [64] (Potter LJ).
277
[1990] 1 Lloyd’s Rep 391 (HL) at 398.
278
The Happy Day, above n 255 at [65]; Scarf v Jardine (1882) 7 App Cas 345 (HL) at 360–
361 (Lord Blackburn); Kammins Ballrooms Co v Zenith Investments (Torquay) Ltd [1971]
AC 650 (HL).
279
Craine v Colonial Mutual Fire Insurance Co Ltd (1920) CLR 305 (High Ct of Australia)
at 327 (Isaacs J).
280
Wallis, Son & Wells v Pratt & Haynes [1910] 2 KB 1003 (CA) at 1012–1013 (Fletcher
Moulton LJ). The decision of the Court of Appeal was reversed, and the dissenting judgment
of Fletcher Moulton LJ affirmed, by the House of Lords at [1911] AC 394.
281
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1962]
2 QB 26 (CA).
Private Law Library
Page 126
282
Chitty, above n 1, para 24-002; Avery v Bowden (1855) 5 E & B 714, 119 ER 647;
Tredegar Iron & Coal Co Ltd v Hawthorn Bros & Co (1902) 18 TLR 716 (CA); Vitoil SA v
Norelf Ltd [1996] AC 800 (HL).
283
Moschi v Lep Air Services [1973] AC 331 (HL) at 350 (Lord Diplock).
284
Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003] EWCA Civ 1715, [2004] 1
Lloyd’s Rep 55.
285
Davenport v R (1877) 3 App Cas 115 (PC); Bentsen v Taylor, Sons & Co [1893] 2 QB
274 (CA); The Brimnes [1975] QB 929 (CA); The Kanchenjunga [1990] 1 Lloyd’s Rep 391
(HL).
286
Charles Rickards Ltd v Oppenhaim [1950] 1 KB 616 (CA).
287
If, having been given such a chance, the promisor still fails to perform, then a fresh
right to terminate may arise, as was the case in Charles Rickards v Oppenhaim (above n
287).
288
Chitty, above n 1, para 24-003; UGS Finance Ltd v National Mortgage Bank of Greece
[1964] 1 Lloyd’s Rep 446 (CA) at 450 (Lord Denning MR); Panchaud Frères SA v
Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53 (CA) at 57 (Lord Denning MR);
Metropolitan Properties v Cordery (1979) 251 EG 567 (CA); Parbulk II A/S v Heritage
Maritime SA (The Mahakam) [2011] EWHC 2917 (Comm), [2012] 1 Lloyd’s Rep 87 at [94]
(Eder J). In some cases it may be necessary to go further and show that the promisee was
aware of the existence of the right: Peyman v Lanjani [1985] Ch 457 (CA).
289
Scarf v Jardine (1882) 7 App Cas 345 (HL) at 361 (Lord Blackburn); China National
Foreign Trade Transportation Corp v Evlogia Shipping Co SA of Panama (The Mihailios
Xilas) [1979] 1 WLR 1018 (HL) at 1024 (Lord Diplock); The Kanchenjunga, [1990] 1 Lloyd’s
Rep 391 (HL) at 398 (Lord Goff); Aktieselskabet Dampskibsselskabet Svendborg v Mobil
North Sea [2001] 2 Lloyd’s Rep 127 at 131 (Steel J); MSAS Global Logistics Ltd v Power
Packaging Ltd [2003] EWHC 1393 (Davis J); Peregrine Systems Ltd v Steria Ltd [2005]
EWCA Civ 239 at [18] (Maurice Kay LJ); The Mahakam [2011] EWHC 2917 (Comm), [2012]
1 Lloyd’s Rep 87 at [94] (Eder J); White Rosebay Shipping SA v Hong Kong Chain Glory
Shipping Ltd (The Fortune Plum) [2013] 1355 (Comm), [2013] 2 CLC 884.
290
Lakshmijit v Sherani [1974] AC 605 (PC).
291
Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd [2013] EWCA
Civ 780, [2013] RPC 36 at [35]–[45].
292
Gunton v Richmond-on-Thames LBC [1981] Ch 448 (CA) at 468 (Buckley LJ).
293
As in Charles Rickards v Oppenhaim [1950] 1 KB 616 (CA).
294
For instance a landlord may lose the right to forfeit the lease if he or she accepts rent
from the tenant after becoming aware of the tenant’s breach of covenant: Segal Securities
Ltd v Thoseby [1963] 1 QB 887; Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1
WLR 1048 (CA). However, the scope of this principle is open to question: The Mahakam
[2011] EWHC 2917 (Comm), [2012] 1 Lloyd’s Rep 87 at [22] (Eder J).
295
Fisher, Reeves & Co Ltd v Armour & Co Ltd [1920] 3 KB 614 (CA) at 624 (Scrutton LJ);
Stoczia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889, [2002] 2 Lloyd’s
Rep 436 at [87] (Rix LJ); Red River v UK Ltd v Sheikh [2010] EWHC 961 (Ch); Ampurius Nu
Homes Holdings Ltd v Telford Homes (Creekside) Ltd [2013] EWCA Civ 577, [2013] BLR
400 at [63].
Private Law Library
Page 127
296
As in Vitoil SA v Norelf Ltd [1996] AC 800 (HL). The question whether the option to
terminate has been exercised in any given case is said to be one of fact: Sotiros Shipping
Inc v Sameiet Solholt (The Solholt) [1981] 2 Lloyd’s Rep 574 (CA).
297
Holland v Wiltshire (1954) 90 CLR 409 (High Ct of Australia); Heyman v Darwins
[1942] AC 356 (HL) at 361 (Viscount Simon LC); Maredelanto Compania Naviera SA v
Bergbau-Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164 (CA) at 204 (Megaw LJ); The
Leonidas D [1985] 2 Lloyd’s Rep 18 (CA) at 24–26 (Robert Goff LJ); State Trading Corp of
India v M Golodetz Ltd [1989] 2 Lloyd’s Rep 277 (CA) at 286 (Kerr LJ); Glencore Grain
Rotterdam BV v LORICO [1997] 2 Lloyd’s Rep 386 (CA) at 394 (Evans LJ). Compare the
rules relating to ‘acceptance’ in section 35 of the Sale of Goods Act 1979: Clegg v Anderson
(T/A Nordic Marine) [2003] EWCA Civ 320, [2003] 2 Lloyd’s Rep 32; Jones v Gallagher (T/A
Gallery Kitchens and Bathrooms) [2004] EWCA Civ 10, [2005] 1 Lloyd’s Rep 377; Dubai
Islamic Bank PJSC v PSI Energy Holding Co BSC [2013] EWHC 3781 (Comm).
298
[1950] 1 KB 616 (CA); More OG Romsdal Fylkesbatar AS v The Demise Charterers of
the Ship ‘Jotunheim’ [2004] EWHC 671 (Comm), [2005] 1 Lloyd’s Rep 181.
299
Below, Chapter 8.
300
[1990] 1 Lloyd’s Rep 391 (HL) at 399.
301
Ibid.
302
Ibid.
303
Ibid.
304
(1877) 2 App Cas 439 (HL).
305
Ibid at 448.
306
[1947] KB 130.
307
Ibid at 134.
308
As we shall see below (para 5.73), there has to be some pre-existing legal relationship
between the parties, though not necessarily one based on contract. However, in the present
context we are primarily concerned with promissory estoppel as it affects the rights of
parties to a contract.
309
[1979] 1 WLR 783 at 810; Marseille Fret SA v D Oltman Schiffahrts GmbH & Co KG
(The Trado) [1982] 2 Lloyd’s Rep 157 at 160–161 (Parker J).
310
[1979] 1 WLR 783 at 810; Baird Textile Holdings Ltd v Marks & Spencer plc [2001]
EWCA Civ 274, [2001] CLC 999; SmithKline Beecham plc v Apotex Europe Ltd [2006]
EWCA Civ 658, [2007] Ch 71 at [109]–[112].
311
Chitty, above n 1, para 4-088; Durham Fancy Goods Ltd v Michael Jackson (Fancy
Goods) Ltd [1968] 2 QB 839; Maharaj v Jai Chand [1986] AC 898 (PC).
312
SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71 at
[109]–[112].
313
Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep
109 (HL) at 126 (Lord Salmon); Bremer Handelsgesellschaft mbH v Westzucker GmbH
[1981] 1 Lloyd’s Rep 207 at 213 (Robert Goff J).
314
Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 4.
315
Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana [1981] 2 Lloyd’s Rep
425 (Lloyd J); [1983] 1 Lloyd’s Rep 146 (CA); [1983] 2 AC 694 (HL).
Private Law Library
Page 128
316
Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] AC 850.
317
The Kanchenjunga [1990] 1 Lloyd’s Rep 391 (HL) at 399 (Lord Goff); Western Bulk
Carriers K/S v Li Hai Maritime Inc (The Li Hai) [2005] EWHC 735, [2005] 2 Lloyd’s Rep
389.
318
[1972] AC 741 (HL); Finagrain SA Geneva v P Kruse Hamburg [1976] 2 Lloyd’s Rep 508
(CA); Bremer Handelsgesellschaft mbH v Deutsche Conti-Handelsgesellschaft mbH [1983] 1
Lloyd’s Rep 689; Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 4.
319
Société Italo-Belge pour le Commerce et l’Industrie v Palm and Vegetable Oils
(Malaysia) Sdn Bhd [1981] 2 Lloyd’s Rep 695.
320
[1949] AC 76 (HL).
321
[1981] 2 Lloyd’s Rep 425: above, n 315; Bird v Hildage [1948] 1 KB 91 (CA).
322
[2002] 2 P & CR 17 (CA).
323
(1877) 2 App Cas 439; above, para 5.74.
324
[1920] 3 KB 475.
325
[1979] 2 Lloyd’s Rep 57 at 67–68 (Robert Goff J); Cook Industries Inc v Meunerie
Liegeois SA [1981] 1 Lloyd’s Rep 359 at 368 (Mustill J).
326
[1981] 2 Lloyd’s Rep 425.
327
Ibid at 430–431 (Lloyd J).
328
[1981] 2 Lloyd’s Rep 695.
329
Ibid at 700 (Robert Goff J); P v P [1957] NZLR 854 (Supreme Ct of New Zealand).
330
Ibid at 701–702.
331
As in Morrow v Carty [1957] NI 174 (High Ct of N Ireland).
332
WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 (CA) at 213.
333
Treitel (Contract), above n 182, para 3-084. The analogy in question is that of estoppel
by representation, which clearly does require proof of detriment; Carr v London and North
Western Rly (1875) LR 10 CP 310 at 317 (Brett J).
334
Virulite LLC v Virulite Distribution Ltd [2014] EWHC 366 (QB) at [121] (Stuart-Smith
J); MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553,
[2017] QB 604 at [61] (Kitchin LJ).
335
Combe v Combe [1951] 2 KB 215 (CA).
336
Ibid at 224 (Birkett LJ).
337
Hughes v Metropolitan Railway (1877) 2 App Cas 439 (HL) at 448; above, para 5.74.
338
Such as the action to forfeit the lease in Hughes v Metropolitan Railway (above, n 337).
339
Thus in Hazel v Akthar (above, para 5.76) the landlord lost his right to object to the
application for a new tenancy.
340
Contrast the position in Australia and in the United States, where promissory estoppel
can create new rights of action: Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
(High Ct of Australia); Restatement (Second) of Contracts, § 90.
341
[1966] 2 QB 167 (CA).
342
(1879) 5 QBD 409 (CA).
343
[1981] 2 Lloyd’s Rep 695.
Private Law Library
Page 129
344
Ibid at 701–702 (Robert Goff J).
345
Above, paras 5.54 (discharge by agreement) and 5.60 (variation).
346
Tyers v Rosedale and Ferryhill Iron Co (1875) LR 10 Ex 195 at 199 (Blackburn J);
Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA) at 477–478 (Viscount
Reading CJ); Hartley v Hymans [1920] 3 KB 475 at 495 (McCardie J); Tool Metal
Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 561 (HL); Ajayi v R T
Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 (PC) at 1330 (Lord Hodson); Dunbar Assets plc v
Butler [2015] EWHC 2546 (Ch).
347
As in Charles Rickards v Oppenhaim [1950] 1 KB 616 (CA); above, para 5.68.
348
As in Central London Property Trust v High Trees House Ltd [1947] KB 130.
349
Birmingham & District Land Co v London and North Western Rly (1888) 40 Ch D 268
(CA); Ogilvy v Hope-Davies [1976] 1 All ER 683; Nippon Yusen Kaisha v Pacifica Navegacion
SA (The Ion) [1980] 2 Lloyd’s Rep 245; Virulite LLC v Virulite Distribution Ltd [2014] EWHC
366 (QB).
350
351
This principle is of particular significance in construction contracts: Keating, above n
235, para 8-014; below, para 5.83.
352
West v Blakeway (1841) 2 M & G 729 at 751, 133 ER 940 at 949; Keep, Perceval and
Gordon, William (eds), Addison’s Law of Contracts (10th edn, 1903).
353
(1781) 2 Dougl 694, 99 ER 434.
354
1 Roll Abr 453, Com Dig Condition N pl 6.
355
Jerram Falkus Construction Ltd v Fenice Investments Inc (No 4) [2011] EWHC 1935
(TCC) at [47]: see Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Thornhill v Neats
(1860) 8 CB (NS) 831, 141 ER 1392; Courtnay v Waterford Railway (1878) 4 LR Ir 11; Peak
Construction (Liverpool Ltd) v McKinney Foundations Ltd (1970) 1 BLR 111 (CA); Gaymark
Investments Pty Ltd v Walter Construction Group Ltd (2005) 21 Const LJ 71 (Supreme Ct of
Northern Territories); Shawton Engineering Ltd v DGP International Ltd [2005] EWCA Civ
1359, [2006] BLR 1; City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190, [2008]
BLR 269.
356
Multiplex Constructions Ltd v Honeywell Control Systems Ltd [2007] EWHC 447 (TCC),
[2007] BLR 195 at [47] (Jackson J).
357
358
[2007] EWHC 447 (TCC), [2007] BLR 195.
359
Ibid at [56].
360
[2011] EWHC 848 (Comm) (Hamblen J).
361
Ibid at [255].
362
Ibid at [298].
363
Ibid at [234].
364
Glencore Grain Ltd v Goldbeam Shipping Ltd [2002] EWHC 27 (Comm), [2002] 2
Lloyd’s Rep 244; Ocean Marine Navigation Ltd v Koch Carbon Inc (The Dynamic) [2003]
EWHC 1936 (Comm), [2003] 2 Lloyd’s Rep 693; Ocean Pride Maritime Ltd Partnership v
Qingdao Ocean Shipping Co (The Northgate) [2007] EWHC 2796 (Comm), [2008] 1 Lloyd’s
Rep 511.
Private Law Library
Page 130
365
As in Planché v Colburn (1831) 8 Bing 14, 131 ER 305.
366
367
Chitty, above n 1, para 15-155; Treitel, G H, Frustration and Force Majeure (3rd edn,
2014) (‘Treitel (FFM)’), chapter 12; Allen, David, ‘Force majeure’ (2003) 147 SJ 1416;
‘Force majeure clauses’ (2005) 27(2) The Buyer 6–8; Robertson, David, ‘Force majeure
clauses’ (2009) 25 J Contract Law 62.
368
Chitty, above n 1, para 15-156; Blythe & Co v Richards Turpin & Co (1916) 114 LT 753;
Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL); Huilerie l’Abeille v Société des
Huileries du Niger [1978] 2 Lloyd’s Rep 203; Thames Valley Power Ltd v Total Gas & Power
Ltd [2005] EWHC 2208, [2006] 1 Lloyd’s Rep 1.
369
Chitty, above n 1, para 15-158; Tennants (Lancashire) Ltd v C S Wilson & Co Ltd [1917]
AC 495 (HL) at 510 (Lord Loreburn); Peter Dixon & Sons Ltd v Henderson Craig & Co
[1919] 2 KB 778 (CA); Reardon Smith Line Ltd v Ministry of Agriculture [1962] 1 QB 42
(CA) (aff’d in part) [1963] AC 691 (HL).
370
Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm), [2010] 2
Lloyd’s Rep 668.
371
372
Ibid.
373
Coastal Bermuda Petroleum v VTT Vulcan Petroleum SA (The Marine Star) [1993] 1
Lloyd’s Rep 329 (CA); Mamidoil-Jetoil Greek Petroleum SA v Otka Crude Oil Refinery AD
(No 2) [2003] EWCA Civ 1031, [2003] 2 Lloyd’s Rep 635; Mamidoil-Jetoil Greek Petroleum
SA v Otka Crude Oil Refinery AD (No 3) [2003] EWCA Civ 617, [2003] 2 Lloyd’s Rep 645;
Great Elephant Corp v Trafigura Beheer BV (The Crudesky) [2013] EWCA Civ 905, [2013] 2
All ER (Comm) 992, [2014] 1 Lloyd’s Rep 1; McKendrick, Ewan, ‘The construction of force
majeure clauses and self-induced frustration’ [1990] LMCLQ 153.
374
375
Trade and Transport Inc v Iino Kaiun Kaisha Ltd [1973] 1 WLR 210.
376
Ibid at 224–227 (Kerr J).
377
Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 (CA) at 328
(Parker LJ).
378
379
Treitel (FFM), above n 367, para 12.038.
380
Warinco AG v Fritz Mauthner [1978] 1 Lloyd’s Rep 151 (CA).
381
Exportelisa SA v Rocco Giuseppe Figli Soc Coll [1978] 1 Lloyd’s Rep 433 (CA).
382
383
384
Bremer Handelsgesellschaft Schaft v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s
Rep 109 (HL).
385
Bremer Handelsgesellschaft Schaft v Vanden Avenne-Izegem PVBA (above n 384);
Avimex SA v Dewulf & Cie [1979] 2 Lloyd’s Rep 57 (HL); Cook Industries Inc v Tradax
Export SA [1985] 2 Lloyd’s Rep 454 (CA).
386
Above, paras 5.61–5.69 (waiver) and 5.70–5.81 (equitable estoppel).
Private Law Library
Page 131
387
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL).
388
The Hongkong Fir [1962] 2 QB 26 (CA).
389
Moschi v Lep Air Services [1973] AC 331 (HL) at 350 (Lord Diplock).
390
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL).
391
Hirji Mulji v Cheong Yue SS Co Ltd [1926] AC 497 (HL).
392
Chapters 10, 11, and 12.
393
394
Jackson v Union Marine Insurance Co Ltd (1874) LR 10 CP 125 at 145 (Bramwell B);
Poussard v Spiers & Pond (1876) 1 QBD 410 at 414 (Blackburn J). Whether the promisor
can recover the agreed consideration in these cases is a different matter: Sim v Rotherham
MBC [1987] Ch 216; Wiluszynski v Tower Hamlets LBC [1989] IRLR 259 (CA).
395
John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77.
Private Law Library
Page 132
Part II Performance of the Obligation, 6 The Effect

of Failure to Perform on Time
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 129) 6 The Effect of Failure to Perform on Time

A. Delay as a Breach of Contract 6.02
(1) Obligation under the contract 6.03

(2) Time for performance passed 6.04
(3) No lawful excuse for failure to perform 6.05
(4) The standard of performance 6.06
(5) The question of risk 6.08
(a) Risk allocated by express provision 6.09

(b) Risk allocated by implication 6.11
B. Delay as a Failure of Condition 6.13

C. Delay as Frustration 6.15
D. Delay as a Breach of Condition 6.20
E. Delay as a Fundamental Breach 6.22
F. Delay as Repudiation 6.25
(1) Delay as renunciation 6.26

(2) Delay as prospective impossibility 6.28
Private Law Library
Page 133
(3) The effect of repudiation 6.30
(a) The need for acceptance 6.31

(b) The right to terminate and the right to claim damages 6.36
6.01 Where there has been a delay in performance, the promisee will generally want to
know what can be done about it. There are many different remedies for delay, and these will
be considered in more detail in the third part of the book, but the availability of any
particular remedy will depend on how the delay is categorised in legal terms. Thus for
instance, where delay amounts to a breach of contract, the promisee will always be able to
recover damages, but there will be no right to terminate performance unless the breach is a
sufficiently serious one. Conversely, if the delay gives rise to a failure of condition precedent
in the context of a unilateral contract or option, the other party will be able to refuse to
perform, but will have no right to damages. But if the delay amounts to a breach of
condition or some other breach going to the root of the contract, the promisee can both
terminate performance and claim damages. One of the difficulties in this branch of the law
is that delay may be categorised in many different ways, all of which give rise to different
remedies. In the present chapter we shall consider no less than seven such categories.
Some of these are elemental, in the sense that they stand alone, whilst others involve a
combination of two or more of the elemental categories. The significance of this will
become apparent in the ensuing discussion.
(p. 130) A. Delay as a Breach of Contract

6.02 First of all, delay may amount to a breach of contract. Where this is the case, the
promisee will be able to claim damages;1 a breach of contract may sometimes also give rise
to the right to claim specific performance or bring an action for the price,2 or to issue a
notice making time of the essence,3 or to terminate performance.4 For delay to amount to a
breach of contract, five requirements must be met: the delay must be in the performance of
an obligation under the contract; the time for performance must have passed; the promisor
must have no lawful excuse for his or her failure to perform; he or she must have failed to
come up to the requisite standard of performance; and the risk of the delay must be on the
promisor and not the other party.
(1) Obligation under the contract
6.03 Not all provisions under a contract for which a time is set will be obligations under
that contract. Thus in a unilateral contract the promisor may agree to do a certain act if the
promisee fulfils a certain contingency, such as walking to York, but the promisee is not
obliged to fulfil that contingency.5 If there is no promise to fulfil the contingency in the first
place, there can be no obligation to fulfil it at any particular time, and the failure to do so
cannot amount to a breach. It follows that those remedies which depend on the existence of
a breach, most notably damages, are not available in cases such as these.6 There are other
remedies, however, which do not require proof of a breach, and these may be available;
thus the other party may have the right to refuse to perform7 or to serve a notice making
time of the essence.8
(2) Time for performance passed

6.04 Damages are not available for breach (as opposed to anticipatory repudiation9) unless
the time for performance of the obligation has passed and the obligation has still not been
performed.10 But where this is the case, the promisee can (p. 131) recover damages if the
promisor fails to perform at the time specified.11 This applies whether or not time is of the
essence, so long as the time set in the contract was intended to be binding on the
promisor.12 We have also seen that where no time is set for performance, the promisor is
Private Law Library
Page 134
bound to perform within a reasonable time.13 In either case, failure to perform on time is a
breach of contract for which damages can be claimed.
(3) No lawful excuse for failure to perform

6.05 Even where the promisor has failed to perform on time, there may still be no breach if
there is a lawful excuse for that failure. Thus, for instance, the promisor may be protected
by an exemption or exclusion clause,14 or he or she may be able to rely on a variation of the
contract, or some waiver or estoppel by the promisee.15 Another possibility is that the
obligation in question may have been validly discharged by breach or frustration.16 These
matters have been fully discussed in the previous chapter.17
(4) The standard of performance

6.06 A related question is whether the promisor is automatically liable for failure to
perform at the due date, or whether it is enough to do the best one can. Much depends on
the way the obligation is drafted,18 but in the present context liability is generally strict,
and the promisor cannot use ‘best endeavours’ as an excuse. Thus a seller of goods is liable
for late delivery even where the delay is due to causes beyond his or her control, such as a
breakdown in supplies19 or the lack of availability of shipping space.20 In the same way, the
obligation of a charterer to provide a cargo is said to be absolute,21 and a builder cannot
rely on a failure in the supply of bricks as an excuse for delay in carrying out the work.22
6.07 The picture is somewhat different where no time is set for performance. Here
performance must be rendered within a reasonable time, and the promisor will not be liable
for delays caused by supervening events beyond his or her control.23(p. 132) However, this
reasoning cannot be pushed too far; just because the time of performance is determined by
reasonableness does not mean that the standard of performance is necessarily one of
reasonable care only. This can only be determined by the proper construction of the
obligation in question.24
(5) The question of risk

6.08 Sometimes when a delay occurs it is not at all clear who should bear the
responsibility for it. This issue is often classified as a question of ‘risk’. Take a charterparty
where the ship is held up because of delays in loading the cargo; is this delay the
responsibility of the charterer or the shipowner? Or take a conveyance where the
completion date is not met because the necessary searches have not been done with due
diligence; is this the responsibility of the vendor or of the purchaser? Or say that in a
building contract one subcontractor is unable to start work because another subcontractor
is not off the site in time; who must bear the responsibility as between the first
subcontractor and the main contractor? The question of risk has to be determined by a
close analysis of the contract and of the relevant legal rules which govern it. In particular, a
promisor may be made legally responsible for delay either expressly or by implication. The
responsibility is express when the parties have inserted a term in the contract to that effect;
it is implied where such term exists by implication either of fact or of law.
(a) Risk allocated by express provision
6.09 The contract may allocate responsibility for delay in a number of different ways. The
first and most obvious is where the promisor agrees to do something by a certain date;
needless to say, this sort of thing is extremely common,25 and provision is made for it in
many standard form contracts.26 Secondly, the promisor may agree to perform at a certain
specified rate; thus in a charterparty the shipowner may agree to sail at a certain speed,27
or the charterer may agree to load or unload the cargo at so many tons28 or so many
hatches (p. 133) per day.29 Thirdly, the speed of performance may be set by a standard of
due diligence, as where a shipowner agrees to sail ‘with all convenient speed’,30 or a
charterer to discharge the cargo ‘with all despatch as customary’.31 Finally, the promisor
Private Law Library
Page 135
may agree to do something without any reference being made to time at all; here the law
implies an obligation to perform within a reasonable time.32 All four cases have this in
common, namely that if delay results from any failure in the performance of the relevant
obligation, the promisor will in the absence of good excuse be held liable for that delay.
6.10 Sometimes the question of risk can involve the court in some very nice questions of
construction. In The Mediolanum33 a charterer ordered the ship to a certain port for
bunkering. Because of congestion in the port, the refinery authorities sent the ship
elsewhere, where she ran aground. At first instance it was held that the charterers were
responsible for the delay, as they were in breach of their ‘safe port’ warranty; having
delegated the choice of bunkering berth to the refinery authorities, they had to bear the
responsibility for their decisions.34 But on appeal it was held that the owners had to bear
the loss, since the refinery authorities were not to be regarded as agents of the
charterers.35 Again, in The Laura Prima36 the obligation of a charterer to nominate a berth
‘reachable on arrival’ was coupled with an exemption clause to the effect that delays caused
to the vessel getting in to the berth for any reason outside the charterer’s control were not
to count against laytime. Notice of readiness to load was given by the shipowners despite
the fact that the ship was unable to reach the berth because of congestion. The question
then arose whether laytime had commenced, and who should bear the risk of congestion in
the port. At first instance it was held that the charterers should bear the risk, since they
had failed to nominate a berth reachable on arrival.37 The Court of Appeal then reversed
this on the ground that the charterers were covered by the exemption clause.38 Finally, the
House of Lords reaffirmed the liability of the (p. 134) charterers on the ground that the
clause in question only applied in the event of delays occurring beyond their control
subsequent to a proper nomination being made.39 All in all, these cases show that the
question of risk can sometimes only be decided by a detailed construction of the contract,
bearing in mind both the factual matrix and the expectations of the parties in contracts of
that sort.40
(b) Risk allocated by implication
6.11 Even where the contract does not expressly provide who bears the responsibility for
delay, it may do so by implication. Such implication, as is the case generally, can be by fact
or by law.41 In some cases it will be obvious who is responsible for the delay; thus if a delay
in completion in a conveyancing contract is found to be due to the default of one of the
parties, that party will be held liable in damages.42 Again, in a c.i.f. contract for the sale of
goods the seller will generally be liable for delays in delivery, but if the delay is due to the
buyer’s failure to nominate a port of discharge in sufficient time to enable the vessel to sail
there, it will be the buyer who will have to pay damages to the seller.43 In the same way, an
obligation as to time imposed on one party may imply a similar obligation on the part of the
other, so that where a buyer of goods under a c.i.f. contract was bound to pay against
shipping documents not later than twenty days after the date of the bill of lading, the seller
was held bound to tender the documents in such a time as to enable him to do so.44
6.12 Other cases involve terms implied by law in certain classes of contract. In some cases
the implication is by statute; thus for instance, to take an obvious example, the Sale of
Goods Act makes the seller liable for delays in delivering the goods and the buyer liable for
delays in accepting the goods and paying for them.45 In the same way a carrier is made
liable for delay in delivery in contracts governed by the international conventions for the
carriage of goods by road46 and by air.47(p. 135) In other cases the responsibility for delay
is allocated by reference to the decisions of the courts. Thus in a charterparty the charterer
is generally responsible for delays caused by failure to furnish a proper cargo,48 while the
shipowner is responsible for delays in sailing49 and delays caused by the unseaworthiness
of the ship.50 In the same way, in the context of an f.o.b. contract for the sale of goods, it is
the seller’s responsibility to ship the goods at the time specified, but the buyer is
responsible for specifying when and where they should be shipped.51 Again, in a port
Private Law Library
Page 136
charter the risk of delay is on the charterer once the ship arrives in port, but in a berth
charter the laytime does not begin to run until the ship is at the berth.52 In such cases as
these the allocation of risk is determined as much by the general law as by the terms of the
contract in question.
B. Delay as a Failure of Condition

6.13 The next important way in which delay in performance may function is as a failure of
condition.53 Where this occurs, the other party is excused from performance of one or more
obligations under the contract. This is something we have already looked at in a previous
chapter;54 to repeat what was said there, a promise to do X if Y happens is very different
from a promise to do X without any condition attached.55 In this case X stands for the
obligation and Y stands for the condition. If Y does not occur, then the promisor need not do
X. Any kind of event can constitute a condition of this sort, but when the event in question is
the timely performance of some counter-obligation by the promisee we say that time is ‘of
the essence’. The same analysis applies to unilateral contracts and options; if for instance a
tenant is given the option of renewing the lease if notice is given to the landlord by a
certain date, there is no obligation to give such notice, but if it is not given in time the
tenant will not be able to exercise the option to renew. Once again we say that time is ‘of
the essence’ in relation to the option in question.
(p. 136) 6.14 Time can be made of the essence by express words or by implication; it can
also be made of the essence by notice.56 It is with the first two of these cases that we are
concerned here.57 Broadly speaking, the question whether the contract expressly makes
time of the essence is one of construction; the contract says that time is of the essence in so
many words, or indicates in some other way that one party need not perform in the absence
of timely performance by the other.58 Time can be made of the essence by implication
where the subject matter of the contract or the surrounding circumstances indicate that the
parties must have intended this to be the case, or where certain commonly occurring terms
in contracts of a certain type are deemed to be conditions by virtue of previous common law
authority or statutory provision.59 We shall examine all of this more closely when we come
to look at the remedy of termination for delay.60
C. Delay as Frustration
6.15 A frustrating delay is one which is so prolonged as to ‘go to the root of the contract’ –
that is to say, one which has the effect of substantially depriving the other party of the
benefit of the contract. This is merely one aspect of what Reynolds describes as ‘failure of
consideration’.61 The test for this is as set out by Diplock LJ, as he then was, in The
Hongkong Fir: does the occurrence of the event in question 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?62 Though as we shall see this doctrine
now manifests itself in different guises, it is an essential key to understanding the law in
this area.
6.16 A frustrating delay in performance, as we shall see, may discharge the promisee
whether or not it involves any breach by the promisor or any default on his or her (p. 137)
part. However, since the end of the nineteenth century the doctrine of frustrating delay has
split into a number of distinct branches.63 In particular, where the delay in question
involves a breach of contract by the promisor, it is classified as a ‘fundamental breach’ in
the sense of a ‘breach going to the root of the contract’ under the doctrine set out in The
Hongkong Fir,64 or as a repudiation of the contract if the delay was wholly prospective.65
We shall be looking at these situations separately later on in the chapter.66 But where there
Private Law Library
Page 137
is no breach of contract involved, the contract is discharged under the doctrine of

frustration.
6.17 According to the classic statement of the doctrine of frustration by Lord Radcliffe in
Davis Contractors Ltd v Fareham Urban District Council:67
… Frustration occurs whenever the law recognises that without default of either
party a contractual obligation has become incapable of being performed because
the circumstances in which performance is called for would render it a thing
radically different from that which was undertaken by the contract. Non haec in
foedera veni. It was not this I promised to do.
The doctrine of frustration, whatever else it may do, can clearly be relied upon as a defence
for failure to perform by a party prejudiced by delay; indeed, the doctrine has been used not
just once but over and over again in cases of delay.68 In such a case, it has been said that a
party claiming frustration must show that the delay in question has been or is likely to be so
protracted that69
… by it the fulfilment of the contract in the only way in which fulfilment is

contemplated and practicable is so inordinately postponed that its fulfilment when
the delay is over will not accomplish the only object or objects which both parties to
the contract must have known that each one of them had in view at the time they
made the contract and for the accomplishment of which object or objects the
contract was made.
6.18 The test for computing when a delay is a frustrating one is substantially the same
whether the case is one of frustrating breach or one falling under the doctrine of frustration
proper. This is made clear by the judgment of Mustill J in The Hermosa,70 where one of the
issues was the legal effect of a delay caused partly by unseaworthiness and partly by an
excepted peril. Here Mustill J commented (p. 138) that though frustration and repudiation
differed in the consequences attending the discharge of the contract, they were clearly
aspects of the same general principle.71 He added that though there was an obvious
difference between frustration and repudiation, nevertheless the test for deciding whether
any failure or inability to perform by one party was sufficient to discharge the other was the
same whichever doctrine was being invoked.72 We shall return to this point later.73
6.19 Having said that, the effect of the two doctrines is still very different. In particular,
where what might be termed ‘frustrating breach’ by the promisor gives the promisee an
option whether to terminate performance or not,74 ‘frustration proper’ automatically brings
the entire contract to an end.75 Moreover, whereas a frustrating breach operates as a
defence for one party,76 frustration proper discharges both.77 We shall be looking at these
distinctions more closely, and at the ways in which frustrating delay operates in the modern
law, in a later chapter.78
D. Delay as a Breach of Condition

6.20 Where delay amounts to a breach of contract on the part of the promisor, the
promisee can claim damages.79 Where it amounts to a failure of condition, the other party
can refuse to perform one or more of the relevant obligations under the contract.80
Sometimes, however, delay can be both a breach and a failure of condition.81 In this
situation the delay is classified as a ‘breach of condition’; once again, time is ‘of the
essence’,82 but the promisee can also claim damages. Where delay is a breach of condition
the promisee is said to be entitled to ‘treat the contract as repudiated’.83 This means that
the promisee has a choice of remedies. The effect of this is as set out by Lord Diplock in
Moschi v Lep Air Services Ltd.84 On the one hand, the promisee may choose to ‘terminate
performance’, (p. 139) or, as is sometimes said, ‘cancel the contract’. Where this is done,
Private Law Library
Page 138
both promisor and promisee are excused from carrying out their primary obligations under
the contract in so far as they remain unperformed;85 in the case of the promisor, this is
replaced by a secondary obligation to pay damages. Moreover, since the promisor’s breach
is deemed to be equivalent to a repudiation of the contract, damages will have to be paid on
that footing.86 On the other hand, the promisee may decide to ‘affirm the contract’. Where
this is done, both parties remain liable to perform their primary obligations as before,87 but
the promisor will still have the secondary obligation to pay damages. However, these will
not be on the footing of total repudiation, but only in respect of the breach that has actually
occurred.
6.21 The classic definition of breach of condition and its effects is as set out by Fletcher
Moulton LJ in his famous dissenting judgment in Wallis, Son and Wells v Pratt and
Haynes:88 ‘conditions’ are terms of the contract ‘so essential to its very nature that their
non-performance may fairly be considered by the other party as a substantial failure to
perform the contract at all’; In this situation the innocent party can treat the contract as
being ‘completely broken’, and can sue the other party for ‘total failure to perform the
contract’.89
E. Delay as a Fundamental Breach

6.22 We have already seen how one of the effects of a ‘frustrating’ delay is to provide an
excuse for failure or refusal to perform.90 Where such delay occurs without the fault of
either party, the case is one of frustration in the full sense: no damages are payable, but
both parties are discharged from further performance.91 But where a breach has this effect,
the legal consequences are rather different in that the breach itself does not bring about
the discharge of the contract; rather, the promisee has a choice whether to terminate or to
affirm the contract. Such a breach can be described in a number of ways,92 but for the
purposes of the present discussion (p. 140) we shall term it ‘fundamental’ in the sense of a
breach going to the root of the contract.93 In the case of such a breach by the promisor, the
promisee can terminate performance and claim damages just as in the case of breach of
condition.94
6.23 The right of a promisee to terminate performance for fundamental breaches of this
sort is well illustrated by Vigers v Cook,95 where an undertaker who had constructed the
coffin so negligently that it could not be taken into church for the funeral was denied
recovery of the contract price; the catastrophic effect of the breach absolved the defendant
from having to perform his part of the contract. Again, in Aerial Advertising Co v Batchelors
Peas (Manchester) Ltd96 the defendants hired the plaintiffs to advertise their wares by
towing a banner across the sky marked ‘Eat Batchelors Peas’. The plaintiffs made the
mistake of towing the banner over the middle of Salford on Armistice Day where there was
a large crowd assembled to observe the two-minute silence. The effect of this blunder on
the sales of Batchelors Peas in the area was held to entitle the defendants to dispense with
the plaintiffs’ services without further ado. In neither case could the promisee point to
breach of condition by the promisor; rather, it was the effect of the breach as a whole that
gave rise to the right to terminate performance. A similar result was reached in Rubicon
Computer Systems v United Paints Ltd,97 where the suppliers of a computer system
installed a ‘time lock’ on the system following a dispute with a customer, as a result of
which the system became inoperable. It was held that this was a breach going to the root of
the contract and that as a consequence the customer was entitled to bring the contract to
an end.
6.24 It is not necessary to look far to see how this principle has been applied to cases of
delay. The main authority in this area is The Hongkong Fir,98 a case in which a charterer
sought to terminate performance on the basis of protracted delays due to the
unseaworthiness of the ship. It was argued by the owners that their obligation in relation to
seaworthiness was not a ‘condition’ of the contract, and that the breach therefore sounded
Private Law Library
Page 139
in damages only. However, the Court of Appeal held that the right to terminate performance
could not be settled merely by asking (p. 141) whether the term broken was a condition.
Rather, there were some cases, of which this was one, where the right to terminate
depended on the nature of the breach and its consequences. The question to be asked in
such cases was whether the effect of the breach was, in the words of Diplock LJ, to deprive
the party who had 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.99 As indicated above, the test for
deciding whether delay has this effect is the same as in relation to the doctrine of
frustration, though the legal effects are markedly different.100
F. Delay as Repudiation
6.25 Even if the time for performance is not yet due, the promisee can still terminate and
sue for damages if the promisor has repudiated the contract. Though the word ‘repudiation’
is used in a number of different senses,101 it is here used to describe two closely related
situations.102 The first is where the promisor indicates, either by words or conduct, an
unwillingness or inability to carry out his or her outstanding obligations under the contract;
this is sometimes called ‘renunciation’.103 The second is where it can be shown that at the
relevant time the promisor was not going to be able to carry out those obligations; this can
be called ‘prospective impossibility’. Delay in performance can come under either of these
categories; indeed, both of them involve the concept of a ‘frustrating’ delay as described
above, in that the promisee is excused from performance on the ground that he or she is not
going to receive the exchange bargained for.104 In the discussion which follows we shall
consider how delay works in this connection before looking at the legal effects of
repudiation generally.
(1) Delay as renunciation

6.26 It has been said that dissolution of a contract on the basis of renunciation is a drastic
conclusion which should only be held to arise in clear cases of a refusal (p. 142) to perform
contractual obligations in a respect or respects going to the root of the contract.105
Whether a delay in performance can satisfy this test depends on how it reflects on the
promisor’s willingness or ability to perform the contract in future. This can be illustrated
most readily by reference to instalment contracts, where default early on in the contract
may entitle the promisee to terminate performance and claim damages, not only for the
particular default in question but for the repudiation of the contract as a whole.106 In the
case of Decro-Wall International SA v Practitioners in Marketing Ltd107 the question arose
whether the repeated paying of bills over three weeks late by the defendants justified the
plaintiffs in calling off the contract. In the circumstances it was decided that it did not, but
it was said that the decision would have gone the other way if the delay had caused the
plaintiffs to doubt the defendants’ solvency or ability to pay. The same principle can be seen
at work in other areas; thus it was said in Chandler Bros v Boswell108 that slow
performance by a building contractor could amount to repudiation if it evinced an intention
not to be bound by the contract, and in Ditchburn Equipment v Crich109 the hirer of a faulty
juke box was allowed to terminate the hire because of the owner’s delay in sending out a
man to do repairs – once again, the court said that this evinced a clear intention on his part
not to be bound by the contract in the future. In the same way, it has been said that if a
buyer of goods fails to pay for one delivery in such circumstances as to lead to the inference
that he will not be able to pay for subsequent deliveries, or if a seller delivers goods
differing from the requirements of the contract and does so in such circumstances as to
lead to the inference that he cannot, or will not, deliver any other kind of goods in the
Private Law Library
Page 140
future, the other contracting party will be under no obligation to wait and see what may
happen; he can at once cancel the contract and rid himself of the difficulty.110
6.27 In all of the cases so far mentioned the conduct on the part of the promisor involved
an actual breach, but this should not obscure the fact that the breach and the renunciation
are separate issues. Thus if a buyer of goods by instalments is late in paying the last
instalment damages are recoverable just as they would be for delay in paying the first one;
but whereas the latter might well amount to (p. 143) a renunciation of the contract, the
former would certainly not have that effect.111 The distinction can perhaps best be summed
up by saying that whereas breach is concerned with what the promisor has already failed to
do, renunciation is concerned with what he or she may fail to do in the future.
(2) Delay as prospective impossibility

6.28 In a case of renunciation it is only necessary to show that the promisor’s conduct was
such as to lead a reasonable person to believe that he or she did not intend, or was not able,
to perform.112 In some cases, however, the promisee will not be able to rely on
renunciation, and will have to fall back on prospective impossibility.113 The test for this is as
laid down by Devlin J in Universal Cargo Carriers Corporation v Citati:114 the promisee
must prove that at the relevant time the promisor was ‘wholly and finally disabled’ from
performing. This was a case involving a voyage charterparty for the carriage of a cargo of
iron. When the ship arrived at the loading port no cargo was ready, nor was there any
reasonable prospect of one being made available in the foreseeable future. So the
shipowners threw up the charter and claimed damages from the charterers, arguing that
their conduct amounted to a repudiation of the charterparty. The arbitrator found in favour
of the shipowners on the grounds both of renunciation and of prospective impossibility, but
the former finding had to be quashed on the grounds of error of law.115 This left the
question of impossibility. In this connection it was held by Devlin J that a party could not
purchase indefinite delay by paying damages, and that a charterer could not keep a ship
indefinitely on demurrage; in the present case, the shipowners were entitled to throw up
the charter once it became clear that the charterers were wholly and finally disabled from
loading a cargo within such a time as would not frustrate the contract. The case was
remitted to the arbitrators, but it was subsequently found by the Court of Appeal that this
was indeed the case, and that the shipowners were entitled to act as they had done.116
6.29 Though at the end of the day the shipowners in Universal Cargo Carriers Corporation
v Citati were able to succeed on the ground of prospective impossibility, it has been argued
that the test of total and final disability propounded by Devlin J in that case puts too heavy a
burden on the promisee.117 Say it had (p. 144) been shown in the Citati case that at the
relevant time the owners were entitled to assume that no cargo was likely to be
forthcoming, but that on the facts they were wrong in that assumption.118 As we shall see, if
neither party had been responsible for the delay in such a case, the contract would clearly
have been frustrated on the basis of the principle laid down by Scrutton J in Embiricos v
Sydney Reid & Co:119 commercial men must not be asked to wait until the end of a long
delay to find out from what in fact happens whether they are bound by a contract or not,
but are entitled to act on reasonable commercial probabilities at the time when they are
called upon to make up their minds.120 It was clearly stated by Devlin J in Universal Cargo
Carriers Corporation v Citati that the principle in Embiricos v Sydney Reid & Co did not
apply to questions of discharge by breach,121 but it has been pointed out that in many cases
it may not be clear whether the promisor’s inability to perform is the result of a frustrating
event or a breach of contract,122 and that in such a situation it seems unreasonable to treat
the promisee’s termination as wrongful, if the event does not occur, when a reasonable man
would have drawn the inference drawn by the promisee.123 Given, however, that most cases
of prospective inability to perform can be construed in terms of renunciation,124 which does
Private Law Library
Page 141
not require such a strict test,125 the point is perhaps of less practical importance than at
first seems to be the case.
(3) The effect of repudiation

6.30 Where delay in performance amounts to a repudiation on the part of the promisor, the
promisee has a choice.126 The promisee may ‘accept’ the repudiation, terminate
performance and sue for damages on that basis. Alternatively he or she may affirm the
contract, in which case both parties are still bound; in this case damages may or may not be
available depending on whether the repudiation is based on an actual breach or one that is
purely anticipatory. Two points call for further consideration, the first being the need for
‘acceptance’ and the (p. 145) second the relationship between the right to terminate and
the right to claim damages.
(a) The need for acceptance
6.31 The orthodox view of repudiation in English law is that for any remedy to exist in
respect of a repudiation there must be ‘acceptance’ by the promisee; in the words of
Asquith LJ, an unaccepted repudiation is a thing ‘writ in water’ and of no effect.127 This
means that until the repudiation is accepted the promisee is entitled neither to terminate
performance nor to sue for damages on that basis. However, both of these propositions have
been questioned, and need to be examined more closely.
6.32 It is clear that as a general rule repudiation does not of itself bring a contract to an
end: it is up to the promisee to decide whether or not to exercise the remedy of
termination.128 This must then be communicated to the promisor, though this need not be
done in words; a communication by conduct will suffice provided that it unequivocally
conveys to the promisor that the promisee has elected to accept the repudiation.129 If this is
not done, the contract remains on foot, and both parties are still bound. In The Simona130 a
voyage charterparty contained a clause giving the charterers the right to cancel if the ship
was not ready to load on or before 9 July 1982. On 2 July the charterers, fearing that the
owners would not be able to load, gave a notice purporting to cancel the charterparty there
and then. The owners, however, continued to treat the charterparty as on foot, and gave
notice that the ship would commence loading on 8 July. Notice of readiness was given on
that day, but in the event the ship was not ready to load on the day stated, and the
charterers sent a further cancellation notice. It was conceded by the parties that the notice
of cancellation given on 2 July was premature and amounted to a repudiation of the
contract, and it was argued by the owners131 that this relieved them from the obligation to
have the ship ready to load on the day stated unless or until the charterers gave reasonable
notice that they were once again ready and willing to perform. However, this proposition
was rejected by the House of Lords, who held that in the absence of any acceptance of the
repudiation the charterparty survived intact with the right of cancellation unaffected. Since
at the end of the day the ship was not ready to load at the stipulated (p. 146) time, the
charterers were entitled to and did give an effective notice of cancellation.132 The relevant
law was summarised as follows by Lord Ackner:133
When A wrongfully repudiates his contractual obligations in anticipation of the time

of their performance, he presents the innocent party B with two choices. He may
either affirm the contract by treating it as still in force or he may treat it as finally
and conclusively discharged. There is no third choice, as a sort of via media, to
affirm the contract and yet to be absolved from tendering further performance
unless and until A gives reasonable notice that he is once again able and willing to
perform. Such a choice would negate the contract being kept alive for the benefit of
both parties and would deny the party who unsuccessfully sought to rescind, the
Private Law Library
Page 142
right to take advantage of any supervening circumstance which would justify him in
declining to complete.
6.33 This does not mean that an unaccepted repudiation can have no legal effect
whatsoever. As Lord Ackner pointed out, if on the facts the owners had been able to
establish that the charterers had represented that they no longer required the vessel to
arrive on time, and in reliance on that representation the owners had given notice of
readiness only after the cancellation date, then the charterers would have been estopped
from contending that they were entitled to cancel the charterparty.134 However, in the
present case there was no finding of any such representation, still less that the owners had
been induced thereby not to make the vessel ready to load on the stated day. On the
contrary, the owners ignored the notice of cancellation and continued to insist that the ship
would be ready on time. The fact that in the event she was not so ready was not due to any
representation by the charterers, but to the owners’ decision to load other cargo first.
6.34 It was suggested in the past that there was an exception to the rule requiring
acceptance in relation to employment contracts where an employee is unfairly dismissed.135
It is clear that in this situation the employee cannot affirm the contract in the sense that he
or she may carry on working as if nothing had happened and then claim wages. However,
the mere fact that the employment relationship is at an end does not mean that the contract
is also at an end;136 conversely, the fact that the dismissed employee is entitled to affirm the
contract generally does not mean that he or she can necessarily exercise any particular
remedy in consequence of that affirmation.137 For these reasons, it has now been affirmed
by the Supreme (p. 147) Court that employment contracts are subject to the general rule
whereby breach does not give rise to automatic termination, but only at the option of the
innocent party.138
6.35 Just as an unaccepted repudiation gives no right to terminate performance, the
orthodox view is that it gives no right to damages on that basis,139 though of course the
promisee may sue for damages in respect of any breaches that have occurred. Thus in
Johnstone v Milling140 a tenant was held not to be entitled to sue for damages for a
repudiation of the landlord’s covenant to rebuild when he had by giving notice under the
lease indicated that he was affirming the contract. Clearly a repudiation unaccompanied
either by an actual breach or by acceptance will have caused no loss, so even if damages
were recoverable in theory it would not be worth suing for them. However, it is not clear
why the law does not allow even a claim for nominal damages in this case. One possible
rationale is the theory that in cases of this sort no breach takes place until performance is
due, and that all the doctrine of repudiation does is to allow the promisee, by accepting the
repudiation, to order his or her affairs on the assumption that it is going to take place in the
future.141 Others, however, have argued that it is better to regard repudiation by
anticipatory breach as a present breach of the obligation to be ready and willing to
perform,142 and on this basis there is no reason why repudiation should not give rise to a
right, in theory at least, to claim nominal damages even where it is not accepted. However,
given the clear opinion of Lord Ackner in The Simona that an unaccepted repudiation can
give rise to no cause of action whatever,143 such a claim would seem to have little chance of
success.
(b) The right to terminate and the right to claim damages
6.36 It is clear from the cases as they currently stand that in relation to repudiation the
remedies of termination and damages go hand in hand: conduct on the part of the promisor
which gives rise to a right to terminate also gives rise to a right to claim damages, and
there is no suggestion that the promisee might be able to claim one remedy and not the
other. However, while this gives rise to no (p. 148) difficulties in cases of renunciation, it
causes problems where the promisee is claiming repudiation on the grounds of prospective
impossibility, where the case of Universal Cargo Carriers Corporation v Citati144 requires
Private Law Library
Page 143
proof that at the relevant time the promisor was ‘wholly and finally disabled’ from
performing.145 This rule seems to be too harsh on the promisee in relation to termination
and too harsh on the promisor in relation to damages. As far as termination is concerned,
there is a lot to be said for adopting the approach in Embiricos v Sydney Reid & Co,146
which applies in the context of frustration, to cases of anticipatory breach; this would allow
the promisee to terminate performance on the basis of reasonable commercial probabilities
rather than having to prove total and final disablement. On the other hand, to allow the
promisee to claim damages in cases of prospective impossibility seems to be excessively
harsh; after all, even in cases where total and final disablement can be proved in advance,
there is always an outside possibility that the promisor may be able to perform after all at
the end of the day. However, the present law is that the test in Universal Cargo Carriers
Corporation v Citati147 applies both to the right to terminate and the right to recover
damages, and there is no authority for using a different test for the two remedies in this
context.
Footnotes:
1
Below, Chapter 9.
2
Below, Chapter 7.
3
Below, Chapter 8.
4
Below, Chapters 10 and 11.
5
Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2016) (‘Chitty’), para 1-107.
6
Below, para 9.01.
7
United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 WLR 74
(CA); see below, Chapter 10.
8
United Scientific Holdings Ltd v Burnley B C [1978] AC 904 (HL); see below, Chapter 8.
9
10
This includes the case where there has been a purported performance on the due date,
but that performance is seriously defective and requires remedy: Jarvis v Westminster Corp
[1969] 1 WLR 1448 (CA).
11
Raineri v Miles [1981] AC 1050; above, paras 1.04–1.08.
12
Hubbard v Glover (1812) 3 Camp 313; above, paras 1.09–1.10.
13
14
15
16
Above, para 5.92.
17
Above, Chapter 5.
18
Carter, J W, Carter’s Breach of Contract (Hart edition, 2010) (‘Carter’), para 2-06.
19
Intertradex SA v Lesieur-Tourteaux SARL [1978] 2 Lloyd’s Rep 509 (CA); CTI Group v
Transclear SA (The Mary Nour) [2008] EWCA Civ 856, [2008] 2 CLC 112.
20
Lewis Emanuel and Son Ltd v Sammut [1959] 2 Lloyd’s Rep 629.
21
Kawasaki Steel Corp v Sardoil SpA (The Zuiho Maru) [1977] 2 Lloyd’s Rep 552.
22
Kirk and Kirk v Croydon Corporation [1956] JPL 585.
Private Law Library
Page 144
23
24
Carter, above n 18, para 2-07.
25
M’Andrew v Adams (1834) 1 Bing NC 29, 131 ER 1028 (date of arrival of ship); Glaholm
v Hays (1854) 9 Ex 416, 133 ER 743 (time of sailing); Bunge & Co Ltd v Tradax England Ltd
[1972] 2 Lloyd’s Rep 235 (delivery of goods); Holme v Guppy (1838) 3 M & W 387, 150 ER
1195 (building contract); Raineri v Miles [1981] AC 1050 (HL) (conveyancing).
26
JCT Standard Form of Building Contract 2011 Edition, Art 1 and Contract Particulars;
JCT 2005 Edition Agreement for Minor Building Works, section 2; Standard Conditions of
Sale (5th edn), clause 6.1.1.
27
Lorentzen v White Shipping Co (1943) 74 Ll LR 161; Cosmos Bulk Transport Inc v China
National Foreign Trade Transportation Corp (The Apollonius) [1978] 1 Lloyd’s Rep 53;
Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (The Pamphilos) [2002] EWHC 2292
(Comm), [2002] 2 Lloyd’s Rep 681; Imperator I Maritime Co v Bunge SA (The Coral Seas)
[2016] EWHC 1506 (Comm), [2016] 2 Lloyd’s Rep 293.
28
Yeoman v R [1904] 2 KB 429 (CA); Houlder v Weir [1905] 2 KB 267; Hain SS Co v
Minister of Food [1949] 1 KB 492 (CA); Eder, Sir Bernard and ors (eds), Scrutton on
Charterparties (23rd edn, 2015) (‘Scrutton’), para 15-021.
29
The Sandgate [1930] P 30 (CA); Compania de Navigacion Zita SA v Louis Dreyfus & Cie
[1953] 2 Lloyd’s Rep 472; Lodza Compania de Navigacione SA v Govt of Ceylon (The
Theraios) [1971] 1 Lloyd’s Rep 209 (CA); Scrutton, above n 28, para 15-022.
30
Freeman v Taylor (1831) 8 Bing 124, 131 ER 348; M’Andrew v Chapple (1866) LR 1 CP
643; President of India v Hariana Overseas Corp (The Tafaka) [1990] 1 Lloyd’s Rep 536;
CHS Inc Iberica SL v Far East Marine SA Devon [2012] EWHC 3747 (Comm); Scrutton,
above n 28, para 7-004.
31
Castlegate SS Co v Dempsey [1892] 1 QB 854; Tharsis Sulphur & Copper Co Ltd v Morel
Bros & Co [1891] 2 QB 647; Scrutton, above n 28, para 15-049.
32
33
Mediolanum Shipping Co v Japan Lines Ltd [1984] 1 Lloyd’s Rep 136 (CA).
34
[1982] 1 Lloyd’s Rep 47 (Robert Goff J).
35
[1984] 1 Lloyd’s Rep 136 (CA).
36
Nereide SpA di Navigazione v Bulk Oil International Ltd [1982] 1 Lloyd’s Rep 1 (HL);
Palm Shipping Inc v Kuwait Petroleum Corp (The Sea Queen) [1988] 1 Lloyd’s Rep 500;
Rashtriya Chemicals and Fertilizers Ltd v Huddart Parker Industries Ltd (The Boral Gas)
[1988] 1 Lloyd’s Rep 342.
37
[1980] 1 Lloyd’s Rep 466 (Mocatta J).
38
[1981] 2 Lloyd’s Rep 24.
39
[1982] 1 Lloyd’s Rep 1.
40
P & O Oil Trading Ltd v Scanoil AB (The Orient Prince) [1985] 1 Lloyd’s Rep 389;
Glencore Grain Ltd v Goldbeam Shipping Inc (The Mass Glory) [2002] EWHC 27, [2002] 2
Lloyd’s Rep 244; Carboex SA v Louis Dreyfus Commodities Suisse SA [2012] EWCA Civ 838,
[2013] QB 789; Ganado, Max and Kindred, Hugh M, Marine Cargo Delays (1990) (‘Ganado
and Kindred’), chapter 6.
Private Law Library
Page 145
41
Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (CA) at 1196–1197 (Denning
MR); Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015]
UKSC 72, [2016] AC 742 at [15] (Lord Neuberger); see above, para 2.49.
42
Jones v Gardiner [1902] 1 Ch 191.
43
Gatoil International Inc v Tradax Petroleum Ltd (The Rio Sun) [1985] 1 Lloyd’s Rep 350.
44
Toepfer v Lenersan-Poortman BV [1980] 1 Lloyd’s Rep 143 (CA); Mitsui OSK Lines Ltd v
Garnac Grain Co Inc (The Myrtos) [1984] 2 Lloyd’s Rep 449.
45
Sale of Goods Act 1979, s 27.
46
Convention on the Contract for the International Carriage of Goods by Road (1956)
(CMR) (Geneva, 19 May 1956): (Treaty Series 090/1967: Cmnd 3455), Art 17.1.
47
Convention for the Unification of Certain Rules relating to International Carriage by Air
(1929) (Warsaw, 12 October 1929) (Treaty Series 011/1933: Cmd 4824), as amended by the
Montreal Convention of 1999 (Treaty Series 044/2004: Cm 6369), Art 19.
48
Scrutton, above n 28, para 9-098; Grant & Co v Coverdale, Todd & Co (1884) 9 App Cas
470 (HL); Ardan SS Co v Weir [1905] AC 501 (HL(Sc)).
49
Scrutton, above n 28, para 7-044; Freeman v Taylor (1831) 8 Bing 124, 131 ER 348;
Tully v Howling (1877) 2 QBD 182 (CA); Associated Portland Cement Mfrs Co v Houlder
Bros & Co (1917) 22 Com Cas 279.
50
Scrutton, above n 28, para 7-019; Cohn v Davidson (1877) 2 QBD 455; Steel v State Line
SS Co (1877) 3 App Cas 72 (HL(Sc)); The Marathon (1879) 40 LT 163; Hongkong Fir
Shipping Co v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1962] 2 QB 26.
51
Miserocchi and C SpA v Agricultores Federados Argentinos SCL (The Sotir and Angelic
Grace) [1982] 1 Lloyd’s Rep 202; Bridge, Michael (ed), Benjamin’s Sale of Goods, (9th edn,
2014) (‘Benjamin’), paras 20-032 (seller) and 20-046 (buyer).
52
Cosmar Compania Naviera SA v Total Transport Corp (The Isabelle) [1982] 2 Lloyd’s
Rep 81 (CA).
53
Reynolds, F M B, ‘Discharge of contract by breach’ (1981) 97 LQR 541.
54
55
Above, para 2.16.
56
57
Where time is made of the essence by notice, the situation is analysed in terms of
repudiation rather than failure of condition: below, paras 8.44–8.49.
58
Above, para 2.20.
59
Above, para 2.49.
60
Below, Chapter 11.
61
Reynolds, above n 53; Bridge, Michael, ‘Discharge for breach of the contract of sale of
goods’ (1983) 28 McGill LJ 867; McElroy, R G, ‘Frustration and force majeure: the common
law and the Common Market’ [1963] NZLJ 185. The concept of ‘failure of consideration’ is
also used in the law of restitution to denote a situation where the promisee is entitled to
recovery of money paid on the ground that no part of the performance which he or she
bargained for has been rendered: Stocznia Gdanska SA v Latvian Shipping Co [1998] 1
WLR 574 (HL) at 587 (Lord Goff) and 600 (Lord Lloyd). However, Reynolds uses it in the
present context to denote a ground for discharge.
Private Law Library
Page 146
62
[1962] 2 QB 26 (CA) at 66; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd
[2007] HCA 61, (2007) 233 CLR 115; RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007]
SGCA 39, [2007] 4 SLR 413.
63
For the historical development of the doctrine see Stannard, ‘Frustrating delay’ (1983)
46 MLR 738.
64
[1962] 2 QB 26.
65
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401.
66
Below, paras 6.22–6.24 (fundamental breach) and 6.25–6.40) (repudiation).
67
[1956] AC 696 (HL) at 726.
68
So much so that it has been argued that frustration by delay is a distinct legal concept:
Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL) at 100; McElroy, R G, and Williams, G,
Impossibility of Performance (1941), Part III.
69
Admiral Shipping Co v Weidner Hopkins Ltd [1916] 1 KB 429 at 436–437 (Bailhache J).
70
Nitrate Corp of Chile Ltd v Pansuiza Compania de Navegacion SA [1980] 1 Lloyd’s Rep
638 (aff’d [1982] 1 Lloyd’s Rep 570 (CA)).
71
[1980] 1 Lloyd’s Rep 638 at 648; Jackson v Union Marine Insurance Co (1874) LR 10 CP
125; The Hongkong Fir [1962] 2 QB 26 (CA) at 69 (Diplock LJ); Universal Cargo Carriers
Corp v Citati [1957] 1 QB 401 at 434 (Devlin J).
72
[1980] 1 Lloyd’s Rep 638 at 648; MSC Mediterranean Shipping Co SA v Cottonex Anstalt
[2016] EWCA Civ 789 at [25].
73
Below, para 12.07.
74
The Hongkong Fir (above, n 71).
75
Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (HL).
76
The Hongkong Fir (above, n 71).
77
Taylor v Caldwell (1863) 3 B & S 826, 122 ER 309.
78
Below, Chapter 12.
79
Above, para 6.02.
80
Above, para 6.13.
81
We have already sketched out how ‘breach of condition’ evolved from the older concept
of ‘failure of condition’: above, paras 2.14–2.35.
82
Above, para 2.36.
83
Sale of Goods Act 1979, s 11(3).
84
[1973] AC 331 (HL) at 349–350
85
But termination for breach does not affect accrued rights: Hyundai Heavy Industries Co
Ltd v Papadopoulos (HL) [1980] 1 WLR 1129; Brown v Langwoods Photo Stores [1991] 1
NZLR 173 (CA of New Zealand).
86
Lombard North Central plc v Butterworth [1987] 1 QB 527 (CA): above, para 2.35.
87
BMBF (No 12) Ltd v Harland and Wolff Shipbuilding & Heavy Industries Ltd [2001]
EWCA Civ 862, [2001] 2 Lloyd’s Rep 227; Triton Navigation Ltd v Vitoil SA (The Nikmary)
[2003] EWCA Civ 1715, [2004] 1 Lloyd’s Rep 55.
Private Law Library
Page 147
88
[1910] 2 KB 1003 (CA): above, para 2.31. The decision of the Court of Appeal was
reversed, and the dissenting judgment of Fletcher Moulton LJ affirmed, by the House of
Lords at [1911] AC 394.
89
[1910] 2 KB 1003 at 1012–1013.
90
91
Above, para 6.19.
92
In particular, the word ‘repudiatory’ is often used to describe breaches of this sort, as by
Mustill J in The Hermosa [1990] 1 Lloyd’s Rep 638 (discussed above at para 6.18). However,
in the present context we shall avoid using the word to describe cases where the breach is
wholly past, and does not reflect on the willingness or ability of the promisor to perform in
the future.
93
As Lord Wilberforce points out, the term ‘fundamental breach’ can be used in two
senses, namely: (1) a performance totally different from that which the contract
contemplates; and (2) a breach of contract more serious than one which would entitle the
other party merely to damages and which (at least) would entitle him to refuse performance
or further performance under the contract: Suisse Atlantique Societe d’Armement Maritime
SA v Rotterdamsche Kolen Centrale [1967] 1 AC 361 (HL) at 431. It is with this second
sense of fundamental breach that we are now concerned.
94
2 QB 26.
95
[1919] 2 KB 475 (CA).
96
[1938] 2 All ER 261.
97
(2000) 2 TCLR 453 (CA).
98
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26; above, para
2.33.
99
The Hongkong Fir, above n 98 at 66.
100
Above, para 6.18.
101
102
Chilean Nitrate Sales Corp v Marine Transportation Co Ltd (The Hermosa) [1982] 1
Lloyd’s Rep 570 (CA) at 573 (Donaldson LJ).
103
Freeth v Burr (1874) LR 9 CP 208 at 213 (Coleridge J); Ross T Smyth & Co Ltd v TD
Bailey, Son & Co [1940] 3 All ER 60; Woodar Investment Development Ltd v Wimpey
Construction UK Ltd [1980] 1 WLR 277; Federal Commerce & Navigation Co Ltd v Molena
Alpha Inc (The Nanfri) [1979] AC 757 (HL); Eminence Property Developments Ltd v Heaney
[2010] EWCA Civ 1168, [2011] 2 All ER (Comm) 223. In The Hermosa (above, n 102) the
term is used by Donaldson LJ to describe repudiation by anticipatory breach in general.
104
105
Lloyd’s Rep 570 (CA) at 572 (Donaldson LJ); Woodar Investment Ltd v Wimpey Construction
UK Ltd [1980] 1 WLR 277 (HL). It has even been said that the breach must be such as to
render it purposeless for the promisee to proceed further with the performance of the
contract: Thompson v Corroon [1993] NPC 54 (PC).
Private Law Library
Page 148
106
Withers v Reynolds (1831) 2 B & Ad 882, 109 ER 1370; Hoare v Rennie (1859) 5 H & N
19, 157 ER 1083; Honck v Muller (1881) 7 QBD 92 (CA); Maple Flock Co Ltd v Universal
Furniture Products (Wembley) Ltd [1934] 1 KB 148 (CA); Sale of Goods Act 1979, s 31(2).
107
[1971] 1 WLR 361 (CA).
108
[1936] 3 All ER 179 (CA).
109
(1966) 110 SJ 266 (CA).
110
Millar’s Karri and Jarrah Co (1902) v Weddel Turner & Co (1908) 14 Com Cas 25 at 29
(Bigham J); Carter, above n 18, para 8-37.
111
Cornwall v Henson [1900] 2 Ch 298 (CA).
112
113
Ibid. See for instance Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 at
441 (arbitrator’s finding on renunciation quashed); Trade and Transport Inc v Iino Kaiun
Kaisha Ltd (The Angelia) [1973] 1 WLR 210 at 219 (renunciation not argued by counsel).
114
[1957] 2 QB 401; South West Water Services Ltd v International Computers Ltd [1999]
BLR 420.
115
[1957] 2 QB 401 at 441.
116
Universal Cargo Carriers Corporation v Citati (No 2) [1958] 2 QB 254 (CA).
117
Carter, above n 18, para 9-27; Carter, J W, ‘The Embiricos principle and the law of
anticipatory breach’ (1984) 47 MLR 422.
118
As in Sanko SS Co Ltd v Eacom Timber Sales Ltd (The Sanko Iris) [1987] 1 Lloyd’s Rep
487.
119
[1914] 3 KB 45: below, para 12.38.
120
[1914] 3 KB 45 at 54.
121
[1957] 2 QB 401 at 449.
122
For instance, it may not be clear whether the promisor’s delay is covered by a clause
excluding liability for breach of contract: Jackson v Union Marine Insurance Co Ltd (1874)
LR 10 CP 125.
123
124
This point is made by Devlin J in Universal Cargo Carriers Corporation v Citati itself:
[1957] 2 QB 401 at 437 and 448.
125
126
Chitty, above n 5, para 24-002; Fercometal SARL v Mediterranean Shipping Co SA (The
Simona) [1989] 1 AC 789 (HL) at 799 (Lord Ackner). There is no ‘middle way’ as such, but
the promisee is allowed a reasonable time in which to decide how to react to the breach:
Fisher, Reeves & Co Ltd v Armour & Co Ltd [1920] 3 KB 614 (CA) at 624 (Scrutton LJ);
Stoczia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889, [2002] 2 Lloyd’s
Rep 436 at [87] (Rix LJ); Red River UK Ltd v Sheikh [2010] EWHC 961 (Ch); Ampurius Nu
Homes Holdings Ltd v Telford Homes (Creekside) Ltd [2013] EWCA Civ 577, [2013] BLR
400 at [63].
127
Howard v Pickford Tool Co Ltd [1951] 1 KB 417 (CA) at 421. As has frequently been
pointed out, this colourful metaphor, though helpful as far as it goes, cannot be pushed too
far: Carter, J W, ‘ “Acceptance” of a repudiation’ (1994) 7 J Contract Law 156; ‘Failure to
perform as “acceptance” of a repudiation’ (1997) 11 J Contract Law 255; Chetwin, Maree,
Private Law Library
Page 149
‘The unaccepted repudiation and legal rights’ (2012) 29 J Contract Law 231; and see
Ingram and Knee & Kip Investments Ltd v Patrcroft Properties Ltd [2011] 3 NZLR 433.
128
Heyman v Darwins Ltd [1942] AC 356 (HL) at 361 (Lord Porter).
129
Vitoil SA v Norelf Ltd [1996] AC 800 (HL).
130
Fercometal SARL v MSC Mediterranean Shipping Co SA [1989] AC 788 (HL).
131
On the basis of Braithwaite v Foreign Hardwood Co [1905] 1 KB 543 (CA).
132
[1989] AC 788 at 801.
133
Ibid.
134
Cf. Austral Standard Cables Pty v Walker Nominees Pty [1992] ALMD 5513 (CA of New
South Wales).
135
Thomson, J M, ‘The effect of a repudiatory breach’ (1978) 41 MLR 137.
136
para 18-006.
137
Thus as a general rule the promisee is not entitled to ignore the repudiation, continue
performing, and then claim the contract price unless: (1) performance is possible without
the co-operation of the other party; and (2) the promisee has a ‘legitimate interest’ in taking
this course of action: White & Carter (Councils) Ltd v McGregor [1962] AC 413 (HL(Sc)) at
430–431 (Lord Reid); below, paras 7.38–7.40.
138
Geys v Societe Generale [2012] UKSC 63, [2013] 1 AC 523.
139
That is to say, damages for ‘loss of bargain’; Lombard North Central plc v Butterworth
[1987] QB 527 (CA); see below para 9.126.
140
(1886) 16 QBD 460 (CA).
141
Frost v Knight (1872) LR 7 Ex 111 at 114 (Cockburn CJ); Tabachnik, E, ‘Anticipatory
breach of contract’ [1972] CLP 149.
142
Carter, above n 18, paras 7-24–7-28; ‘Acceptance of a repudiation’ (1994) 7 J Contract
Law 156; Liu, Q L, ‘Claiming damages on an anticipatory breach: why should an acceptance
be necessary?’ (2005) 25 Legal Studies 4; Tiplady, D, ‘A Comparative Analysis of the
Discharge of Contracts by Anticipatory Breach and Actual Breach’ (D Phil Thesis, University
of Oxford, 1973), chapters 1 and 2; Restatement (Second) of Contracts, § 253(1).
143
[1989] AC 788 (HL) at 800.
144
[1957] 2 QB 401.
145
Above, para 6.28.
146
[1914] 3 KB 45: above, para 6.29.
147
[1957] 2 QB 401.
Private Law Library
Page 150
Part III Remedies for Delay, 7 Specific Relief

John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 151) 7 Specific Relief

A. Specific Performance 7.03
(1) General principles 7.04
(a) Adequacy of damages 7.05

(b) Mutuality 7.06
(c) Default by promisor 7.10
(d) Bars to specific performance 7.12
(2) Specific cases 7.25
(a) Sale of land 7.26

(b) Sale of moveables 7.27
(c) Sale of shares 7.30
(d) Building contracts 7.31
(e) Charterparties 7.32
(f) Contracts for personal services 7.33
B. Action for the Price 7.34
(1) Promisor’s duty to pay 7.35

(2) Promisee’s right of action 7.36
(a) Contracts for the sale of goods 7.37
Private Law Library
Page 151
(b) Repudiation by promisor 7.38
7.01 Until now we have generally been considering the legal diagnosis of delay – that is to
say, establishing that the promisor has failed without lawful excuse to perform his or her
contractual obligations on time. For the rest of the book we shall be looking at the legal
remedies for delay. As Hugh Beale has pointed out,1 certain legal rights that the promisee
may have – such as the right to withhold or terminate performance – are essentially
remedies even though not traditionally classified as such. In the chapters which follow we
shall be considering a variety of remedies in this sense, but broadly speaking there are
three things that the promisee may wish to do in response to a delay in performance. First
of all, the promisee may wish to compel or at least induce performance on the part of the
promisor. Secondly, the promisee may wish to recover monetary compensation for the delay.
Thirdly, the promisee may wish to withhold performance of his or her own obligations under
the contract, or even to terminate performance altogether – or as is sometimes said, ‘cancel
the contract’. It is with the first of these that the present chapter is concerned.
7.02 If the promisee wishes to compel performance by the promisor,2 this will normally be
done by asking for the equitable remedy of specific performance. (p. 152) However, the
common law also provides for specific relief in the shape of an action for the contract price.
It is with these two remedies that the present chapter is concerned.
A. Specific Performance
7.03 Specific performance is an equitable remedy whereby the promisor is ordered by the
court to perform his or her contractual obligations on pain of being found guilty of contempt
of court if he or she fails to do so.3 It is therefore a very powerful and effective remedy in
the armoury of the courts for delay or other failures in performance. However, the remedy
is a drastic one, and in some cases requires the court to supervise compliance with its
decree. Because of this, the courts have adopted the attitude, at least in common law
jurisdictions,4 that specific relief should be subject to restrictions.5 All of this will become
evident in the discussion which follows, in which we shall look at the general principles
governing the award of specific performance before seeing how these apply to delay in
particular types of contract.
(1) General principles
7.04 There are four general principles that require discussion in this context: (1) the
doctrine that specific performance will not be granted in any case where damages are an
adequate remedy; (2) the requirement of ‘mutuality’; (3) the requirement of default by the
promisor; and (4) the various ‘bars’ to specific performance. Each of these will now be
considered in turn.
(a) Adequacy of damages
7.05 It was traditionally said that specific performance would not be granted where
damages would be an adequate remedy.6 This had its roots in a broader principle restricting
the discretionary jurisdiction of equity to cases where the remedies available at common
law were insufficient.7 Thus for instance specific performance will not be granted in
contracts for the sale of commodities which are (p. 153) readily available on the market,8 or
where the promisee can easily obtain what he or she contracted for from another source.9 It
is different where the subject-matter of the contract is unique,10 or where for some other
reason damages would be inappropriate11 or hard to quantify.12 There may be other reasons
why damages would not be appropriate, as where the promisor’s default threatens the
existence of the promisee’s business. As was said by Sir Robert Megarry V-C in a similar
context, damages would be a poor consolation if a failure of supplies forced a trader to lay
off staff and disappoint his customers the loss of whose goodwill might ultimately propel
him into insolvency.13 From all this it will be evident that the question of the adequacy of
Private Law Library
Page 152
damages in this context is viewed by the courts in a broad perspective, and that the test
might better be formulated, as Sir Robert Megarry suggested, in terms of whether specific
performance would do ‘more perfect and complete justice’ than an award of damages.14
(b) Mutuality
7.06 One of the key principles relating to the grant of specific performance is that of
‘mutuality of remedy’, the principle being that the remedy should be available to both
parties to a contract or to neither.15 This principle, which is no more than the legal
application of the proverb ‘sauce for the goose, sauce for the gander’, has two aspects to
it.16 The first of these, which has been termed ‘negative mutuality’, is that specific
performance will not be granted against a promisor who could not have obtained it in the
event of default by the promisee. The second is that of ‘positive mutuality’: specific
performance may be granted to a promisee on the ground that he or she would have been
subject to it at the suit of the promisor.
(i) Negative mutuality
7.07 The principle of negative mutuality is that, in the words of Buckley LJ, the court will
not compel a defendant to perform his obligations (p. 154) specifically if it cannot ensure
that at the same time any unperformed obligations of the plaintiff will be specifically
performed, except where damages would be an adequate remedy for any default on the
plaintiff’s part.17 This can be illustrated by the situation where the promisor (A) delays in
doing something in consideration for the performance of personal services by the promisee
(B). Since specific performance is not generally available to compel personal services,18 A
cannot obtain specific performance against B. The doctrine of negative mutuality means
that in such a case as this B cannot obtain specific performance against A either.19 In the
same way, a minor cannot sue for specific performance, since specific performance cannot
be granted against such a person.20
7.08 It should be noted that the crucial time here is the time of the action, not the time of
the contract.21 Let us return to the example where A agrees to do something for B in
consideration for the performance of personal services by B. As a general rule, as we have
seen, B cannot obtain specific performance against A, since A could not have obtained
specific performance against B. But once B has performed all the services required by the
contract, the remedy is now available. In the same way, where A agrees to grant a lease of
land to B and B agrees to build on it, B cannot as a general rule obtain specific performance
of A’s obligation to grant the lease since A could not have obtained specific performance of
B’s obligation to build. But if B has already done the work, specific performance is available
to compel A to grant the lease.22
(ii) Positive mutuality
7.09 In a bilateral or synallagmatic contract, in which both parties are subject to
obligations, it would not be fair for the court to allow one party to maintain an action for
specific performance without being prepared at least in principle to grant the same remedy
to the other. This is the principle of ‘positive’ mutuality, the best illustration of which is in
the context of contracts for the sale of land, in which specific performance can be granted
to the vendor no less than to the purchaser. It might be objected that damages would be an
adequate remedy here, since the purchaser is only required to pay a sum of money.23
However, where the vendor refuses to convey the land he or she can, more or less as a
matter of course, be compelled to do so by an action for specific performance.24 It would
not be fair, in the eyes of the law, to allow this remedy to the purchaser while denying it to
the vendor.25
(p. 155) (c) Default by promisor
Private Law Library
Page 153
7.10 Before a promisee can sue for specific performance, there must be circumstances
that would justify the intervention of equity. Generally speaking, this means that the
promisor must already have refused or failed to perform the obligation in question. In the
context of delay, this means that the time for performance will normally have passed, but in
exceptional cases a decree of specific performance can be obtained even before
performance of the obligation in question is due.26 In Hasham v Zenab27 the defendant
signed a contract for the sale of land, completion being due some six months later, but then
tore it up at once. An action for specific performance was then brought by the plaintiff, but
the defendant argued that this was premature: the date for completion had not yet arrived,
and therefore no cause of action had accrued. The Privy Council, however, rejected this
argument and held, following Canadian authorities,28 that the right to sue for specific
performance did not depend on the existence of a cause of action at common law. It was
open to the court in the present case to grant an order that would, prior to the date of
completion, be wholly declaratory in effect, but which after that date would compel the
defendant to perform without any fresh writ having to be issued. The order would not, of
course, compel the defendant to perform before the due date, and it would be open to the
court to grant relief if supervening events changed the position of the parties in the
interim.29
7.11 This of course does not mean that the promisee can sue for specific performance on a
whim, or simply in order to strengthen his or her position vis-à-vis the other party. As stated
above, there must be circumstances that would justify the intervention of equity.30 In
Hasham v Zenab itself the defendant had effectively repudiated the contract, but a decree
of specific performance may also be obtained in cases where the promisor claims to be
ready and willing to perform but is unable to do so before the time set.31 The criteria for
what might be called an ‘anticipatory’ decree of specific performance are broadly similar to
the criteria for an anticipatory breach at common law,32 but there are differences. Thus, for
instance, as we have seen, there can be no action for anticipatory breach in the absence of
‘acceptance’ by the promisee,33 whereas a claim for specific performance necessarily
presupposes that the contract has been affirmed. Nor is there any reason why the
availability of specific performance in cases of this sort should depend on proof (p. 156) of
renunciation or total disability.34 Rather it should be sufficient for the promisee to show that
he or she has reasonable grounds to believe, and does believe, that the promisor will not be
able or willing to perform at the set time.35
(d) Bars to specific performance
7.12 Specific performance is a discretionary remedy,36 and there are numerous instances
where it will not be granted by the courts. Some of these relate to the nature of the
obligation which is to be enforced, while others relate to the conduct of the promisee, or the
effect which a decree of specific performance would have on the promisor.
(i) Decree pointless
7.13 Equity does nothing in vain, and therefore a decree of specific performance will not
be issued where it would be pointless to grant it.37 Thus in Hercy v Birch38 it was held that
there could be no specific performance of an agreement to enter into a partnership where it
was open to either party to dissolve the partnership at will. Specific performance will
equally be pointless where the obligation in question is impossible to perform.39 In Forrer v
Nash40 it was said that specific performance would not lie to compel the grant of a lease
where the would-be lessor did not possess the necessary title and was not entitled in any
event to grant the term without the consent of a third party, such consent not being
forthcoming at the relevant time. Even where the obligation in question is perfectly capable
of being performed, specific performance will not be granted where the decree would be
impossible to enforce, as in The Sea Hawk,41 where a mandatory injunction was refused on
Private Law Library
Page 154
the ground that there was nobody within the jurisdiction who could be called to account in
the event of default.
(ii) Obligation too vague
7.14 Another ground on which specific performance may be refused is that the obligation
in question is too vague.42 This will obviously be the case where the contract is so uncertain
as to be completely void,43 but even where a contract is not so vague as to fail completely it
may not be sufficiently (p. 157) precise to be enforced by means of a decree of specific
performance. The reason for this is that failure to comply with the order is a contempt of
court, so its terms have to be sufficiently clear for the defendant to know what has to be
done in order to comply with it.44 In Joseph v National Magazine Co Ltd45 the plaintiff
agreed to write an article for the defendants, who agreed in turn to publish it in their
magazine. The parties could not agree on the wording of the article, and a decree of
specific performance was sought by the plaintiff. This was refused on the ground that it was
not clear what the defendants would have to do, there being no agreed subject-matter for
publication.46 It would have been different if the contract had been to publish a particular
article by the plaintiff that had already been written and was already in existence.47
(iii) Excessive need for supervision
7.15 As a general rule, the courts will be exceedingly reluctant to order specific
performance of an obligation where this would require an unacceptable degree of
supervision by the court.48 So in Rayner v Stone49 the court refused to order specific
performance of a tenant’s covenant to keep hedges and fences in good repair, the question
being asked how a Master could conceivably be a judge of repairs in husbandry.50 Again, in
Powell Duffryn Steam Coal Co v Taff Vale Railway Co51 the plaintiffs sought an injunction to
prevent the defendants from obstructing them in the exercise of their statutory powers to
run trains on the defendants’ line. The remedy was refused on the ground that such powers
could not be exercised without the co-operation of the defendants’ signalmen, and that this
would be impossible to enforce on a day to day basis.52 And in Ryan v Mutual Tontine
Westminster Chambers Association,53 a case involving a block of flats, the court refused to
grant specific performance of a landlord’s covenant to have a resident porter ‘constantly in
attendance’. It was pointed out by Lord Esher MR that the contract required these services
to be performed during the whole term of the tenancy. It was a long continuing contract, to
be performed from day to day, and under which the circumstances of non-performance
might vary from day to day. Its enforcement would therefore require that constant
superintendence by the court which the court in such cases had always declined to give.54
(p. 158) 7.16 The rule, however, is not an absolute one, and where damages would clearly
not be an adequate remedy the courts will not be deterred from granting specific
performance merely on the grounds that some degree of supervision is required.55 This will
particularly be the case where the order is designed to achieve a result rather than to carry
on an activity on an ongoing basis, for in this case the court simply has to decide whether
the result has been achieved or not.56 In Wolverhampton Corporation v Emmons57 the court
ordered specific performance of a purchaser’s covenant to build houses on the land in
accordance with plans to be approved by the vendor; though some degree of supervision
was involved, this was outweighed by the consideration that damages for breach of the
covenant would be virtually impossible to quantify.58 In the same way, a landlord’s covenant
to repair was specifically enforced in Jeune v Queen’s Cross Properties Ltd,59 it being said
that though the jurisdiction would be exercised sparingly, specific performance would be
granted where the breach of covenant was plain and it was clear what the landlord had to
do.60 Indeed, in Posner v Scott-Lewis,61 a case very similar to that of Ryan v Mutual Tontine
Westminster Chambers Association,62 the court ordered specific performance of a covenant
to employ a resident porter for a block of flats, since it was clear from the lease what tasks
the porter was to perform. According to Mervyn Davies J, there were three considerations
that the court should bear in mind in this sort of case: (1) whether there is a sufficient
Private Law Library
Page 155
definition of what has to be done in order to comply with the order of the court; (2) whether
enforcing compliance with the order would involve superintendence by the court to an
unacceptable degree; and (3) what would be the respective prejudices or hardships suffered
by the parties if the order were made or not made.63
7.17 All of these factors are well illustrated by the decision of the House of Lords in Co-
operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd.64 The defendants, owners of
the ‘Safeway’ supermarket chain, were granted a thrity-five-year lease as ‘anchor’ tenants
of a shopping mall, and covenanted to keep their store ‘open for retail trade during the
usual hours of business’. The store made a loss, and after a few years the defendants
decided to pull out. A decree of specific performance (p. 159) was refused by the trial judge,
but the Court of Appeal by a majority allowed an appeal by the claimants.65 However, the
decision of the Court of Appeal was reversed by a unanimous House of Lords, which held
that this was not an appropriate case for the grant of the remedy. As Lord Hoffmann said,
the obligation in question was capable of many interpretations, and was insufficiently
precise to be capable of specific relief.66 The lease still had nineteen years to run, and the
question whether the covenant was being kept might require reference to the court on a
frequent basis.67 As well as this, the loss the defendants might suffer from having to run an
unprofitable store could very well exceed any loss caused to the plaintiffs by the
defendants’ breach.68 Though the precise ratio of the case is not entirely obvious,69 it is
clear that the question of whether to grant specific performance in cases of this sort
involves a balancing exercise on the part of the court. The more supervision required, the
less likely it is that the court will be ready to grant the relief sought, but where the
circumstances demand a decree of specific performance the mere fact that supervision is
needed will not be a bar to the grant of the remedy.
(iv) Conduct of promisee
7.18 The conduct of the promisee may be a very relevant factor in the court’s decision
whether to grant or refuse specific performance. In particular, a promisee may be barred
from obtaining specific performance by his or her conduct at a number of different stages.
First of all, the promisee may be guilty of misconduct in the formation of the contract.
Secondly, the promisee may have defaulted in the performance of the contract. Thirdly, the
promisee may be guilty of ‘laches’ or undue delay in claiming the remedy.
(aa) Formation of the contract
7.19 Those who come to equity must come with clean hands, and a court may refuse
specific performance to someone who has been guilty of fraud or sharp practice in the
formation of the contract.70 This factor is very prominent in some of the older cases, where
it was stressed that equity could refuse specific performance even in the absence of such
behaviour as would entitle the promisor to have the contract set aside at common law.71
Some of these cases involve inequality of bargaining power, where the promisee has preyed
upon the (p. 160) promisor’s weakness, inexperience or infirmity.72 In other cases the
promisee has been guilty of misrepresentation73 or non-disclosure,74 or has taken
advantage of a mistake by the promisor.75 There is no need in the present context to
analyse these cases in detail.76 However, it should be noted that most of them involve
situations which would now provide good grounds for the contract being rescinded in toto,
and it is a moot point whether there are still cases where it would be appropriate for the
courts to refuse specific performance on this sort of ground whilst still allowing the
promisee a remedy in damages. In Jacobs v Bills77 the Supreme Court of New Zealand
refused to order specific performance of a contract for the sale of land at an undervalue on
the grounds that the purchaser had taken undue advantage of the vendor’s depression and
ill-health, but allowed the purchaser to recover his expenses by way of damages under the
rule in Bain v Fothergill.78 However, this is an exceptional case, and it has been pointed out
that in most cases a judge who refuses specific performance on these grounds will be
Private Law Library
Page 156
equally reluctant to award damages, which in many cases may cause as much hardship to
the promisor as if specific performance had been awarded in the first place.79
(bb) Performance of the contract
7.20 Specific performance may equally be refused on the grounds that the promisee has
seriously defaulted in the performance of his or her own contractual obligations. In
Measures Bros Ltd v Measures80 the plaintiff company agreed to employ the defendant as
director for seven years. He in his turn agreed not to compete with the plaintiffs during his
term of office and for seven years thereafter. The company was subsequently wound up and
the defendant dismissed. The liquidator was held not to be entitled to equitable relief to
prevent the defendant from going into business on his own account, since the company was
itself in breach of its obligations under its contract with the defendant. There are two
explanations for this, one equitable in nature and one based on the common law. The
equitable explanation is that he who comes to equity must do equity, and that having
repudiated their own obligations under the contract it was not open to the plaintiffs to seek
to enforce it against the defendant.81 The common law explanation is that the plaintiff’s
obligation to employ the defendant (p. 161) and the defendant’s obligation not to compete
were concurrent conditions, and that accordingly the plaintiffs were not entitled to demand
performance of the latter without showing that they were ready and willing to perform the
former.82 Whichever way it is put, this principle is of crucial importance in relation to delay,
as it means that a party who is in breach of an essential time stipulation, or who is
otherwise guilty of inordinate delay in performance,83 cannot obtain specific performance.84
Conversely, minor defaults on the part of the promisee, such as trivial misdescriptions in a
contract for the sale of land,85 will not bar a claim for specific performance; no more will a
failure to observe non-essential time stipulations.86 In order to provide a bar to specific
performance, the promisee’s breach must be, in the words of Jessel MR, sufficiently
material and substantial to enable the court to say that his conduct has been such that it
ought not to intervene on his behalf at all.87
7.21 The principle that a person who claims specific performance must demonstrate that
he or she is willing to carry out his or her own obligations under the contract is well
illustrated by the case of Chappell v Times Newspapers,88 where members of a trade union
which was currently engaged in industrial action were held not to be entitled to equitable
relief against a threatened dismissal in the absence of an assurance that they would work
normally. In the words of Lord Denning MR:89
It has long been settled both at common law and in equity that in a contract where
each has to do his part concurrently with the other, then if one party seeks relief, he
must be ready and willing to do his part in it. … In this case, it seems to be
impossible for any of the plaintiffs to say that he is ready and willing to perform his
part of the contract. … Not being ready and willing to do their part, they cannot call
on the employers to continue to employ them. They are seeking equity when they
are not willing to do it themselves.
The same principle applies to delay; a party will not necessarily be barred from obtaining
specific performance by his or her failure to perform on time in the past,90 but must show
that he or she is ready and willing to perform in the future.91
(p. 162) (cc) Laches
7.22 Even where there has been no delay in performance, a promisee may be barred from
obtaining equitable relief on the ground of his or her ‘laches’, that is to say, undue delay in
applying for the remedy.92 This is a principle applicable to all equitable remedies,93 but is of
particular importance in relation to specific performance, where it has been said that delay
will amount to laches if it indicates to the promisor that the promisee is no longer
interested in enforcing the contract, or if it is coupled with some other factor which makes
Private Law Library
Page 157
it unjust to the promisor to order specific performance.94 A promisee cannot seek to revive
long-dormant contractual obligations in order to make a financial windfall,95 nor can he or
she seek to blow hot and cold, for an unacceptably long delay in applying for relief may well
lead the promisor to believe that the contract has been abandoned.96 Thus it has been said
that where a party to a contract for the sale of land indicates that he or she will not
perform, and the other party does not within a reasonable time take steps to enforce the
contract, equity will consider the other party to have acquiesced in the abandonment of the
contract, and will leave the parties to their remedies at law.97 The same is true where as a
result of the delay the promisor has altered his or her position, as in Reimers v Druce98
where during the period of delay crucial evidence which could have been useful to the
promisor’s case was lost or destroyed.
(v) Hardship to promisor
7.23 Specific performance may also be refused on the grounds that it would cause undue
hardship to the promisor.99 It does not matter that the promisee is not responsible in any
way for that hardship.100 Many of the cases on this point involve contracts to purchase land
or an interest in land:101 in one case specific performance was refused where the purchaser
discovered that he would have no right of access to the land in question;102 in another case
he found out that the premises he had agreed to purchase were being used as a brothel;103
in a third case the reason for refusing specific performance was that enforcement of the
contract would involve the purchaser in extensive (p. 163) litigation.104 The personal
circumstances of the promisor may also be relevant; thus in Wroth v Tyler105 one of the
reasons given for refusing specific performance was that it would risk breaking up the
defendant’s family,106 and in Patel v Ali107 a decree of specific performance was refused on
the ground that the vendor had become severely disabled and was heavily dependent on her
neighbours for her daily needs. All in all, it could well be said that the categories of
hardship, like those of negligence,108 are never closed.
7.24 Be that as it may, the courts will not generally take cognisance in this context of mere
financial hardship,109 and the mere fact that the contract will be difficult and expensive to
perform will be no bar to a claim for specific performance.110 In Haywood v Cope111 the
defendant agreed to take out the lease of a mine, but later found out that it was worthless.
Specific performance was granted to the plaintiff, it being said by Romilly MR that though
the court had a discretion in these matters it had to be exercised on fixed and settled
lines,112 and that the remedy would not be refused merely on grounds of inadequacy of
consideration.113 An even more striking case is Mortimer v Capper,114 where a significant
part of the consideration consisted of an annuity for the life of the vendor, who was already
dead at the time of the action. In Mountford v Scott115 the defendant granted the plaintiff a
six-month option to purchase his house for £10,000 in consideration of the sum of £1. He
then purported to withdraw the option a month later. The defendant’s argument that the
plaintiff should be confined to his remedy in damages was rejected by Brightman J and by
the Court of Appeal. Though the price paid for the option was only a token price, it was
perfectly good consideration in law,116 and the vendor having entered into the contract with
his eyes open could not be heard to argue that the proceeds of the sale were not enough for
him to buy another house.117 Generally it has been said that hardship arising merely from
the inadequacy of the consideration is no defence to an action for specific performance in
the absence of unfair conduct or oppression by the other party.118 In the words of another
famous maxim, equity mends no man’s bargain.
(p. 164) (2) Specific cases
Private Law Library
Page 158
7.25 We shall now consider these principles as they relate to certain categories of
contract. In some of these, specific performance, as a general rule, is always available. In
some it is never, or hardly ever, available. In others it is sometimes available.
(a) Sale of land
7.26 As far as English law is concerned,119 land is regarded as unique, and therefore as a
general rule specific performance is available as a matter of course for any contract
involving the transfer of land120 or an interest in land.121 A number of reasons have been
given for this.122 For instance, it has been said that damages will not be adequate, as there
may be difficulty in finding another purchaser;123 again, the vendor may be anxious to get
rid of burdens attaching to the land.124 However, specific performance has been granted
even in a case where these reasons do not apply. Thus, for instance, it does not seem to
matter that the land has been subjected to a compulsory purchase order in the interval
between contract and completion,125 or that it has been bought purely as an investment or
with a view to a quick resale.126 All in all, the better view would seem to be that land is sui
generis in this respect.
(b) Sale of moveables
7.27 Here there is no presumption of uniqueness, and therefore it is a question of the
particular chattel involved. The rarer the object in question, the more likely it is that
specific performance will be granted for a contract in relation to it. Thus a contract to sell
the Mona Lisa would certainly be specifically enforceable, whereas a contract to sell a
cheap commonplace print would not. The courts of equity would always award specific
performance in relation to highly rare chattels such as the ancient horn in Pusey v Pusey,127
or the old silver altarpiece in Duke of Somerset v Cookson.128 On the other hand, it was
held in Cohen v Roche129 that (p. 165) a set of Hepplewhite chairs were ordinary articles of
commerce and of no special value or interest, and specific performance was therefore
refused to the buyer. This seems to be a very strict application of the principle under
discussion, and contrasts with the more generous view of uniqueness seen in some of the
United States jurisdictions.130 Specific performance may be ordered in a contract for the
sale of a ship,131 but the rule is not as invariable as in the case of land, and the remedy will
be refused when it appears that any ship of the same kind would do as well.132
7.28 Section 52 of the Sale of Goods Act 1979 provides that the court may order specific
performance where a buyer sues for the breach of a contract to sell specific or ascertained
goods.133 The term ‘specific goods’ is defined as ‘goods identified and agreed on at the time
a contract of sale is made and includes an undivided share, specified as a fraction or
percentage, of goods identified and agreed on as aforesaid’.134 ‘Ascertained goods’ mean
goods originally unascertained which become identified in accordance with the agreement
after the contract is concluded.135 Thus it would seem that ‘my horse Dobbin’ would be
covered, whereas a contract to sell ‘half a pound of sugar’ would not. In other cases it is a
question of degree: thus for instance it seems that a distinction must be drawn between
‘half the cotton shipped on board the Peerless’, which would be covered, and ‘1,000 bales
from the cotton shipped on board the Peerless’, which would not.136 The distinction may not
be crucial for our present purposes, given that as we shall now see the remedy may
sometimes be available even in cases falling outside the words of section 52.
7.29 What about unascertained goods? It has been argued by some that the Sale of Goods
Act was intended to be a complete code, and that the remedies set out (p. 166) therein were
intended to be exhaustive.137 This argument, together with the principle expressio unius
exclusio alterius, would suggest that specific performance could not be granted for a
contract for the sale of unascertained goods. However, in the case of Sky Petroleum v VIP
Petroleum138 the court granted a mandatory interlocutory injunction to prevent an oil
company cutting off supplies to a garage at a time when no alternative supplies were
available, while in Howard E Perry Ltd v British Railways Board139 a manufacturer obtained
Private Law Library
Page 159
an order for specific delivery of a quantity of steel which the defendants were unwilling to
move for fear of industrial action. Though neither of these cases involve specific
performance as such, they do suggest that where exceptional circumstances exist making it
impossible for the buyer to obtain the goods elsewhere, the remedy may be granted. But as
a general rule specific performance will not be available in this sort of case, since the buyer
can easily go into the market and obtain a substitute supply.140
(c) Sale of shares
7.30 Specific performance may be granted in principle for a contract for the sale of
shares,141 but whether it will be granted in any given case depends on the factors stated
above. Thus where the shares are freely available on the market specific performance will
be refused,142 but it will be different if they are unquoted,143 or in a new company,144 or for
a controlling interest,145 or if for some other reason these particular shares are hard to
obtain.146 These cases can all be seen as reflecting the broad principle that specific
performance will not be granted where damages would be an adequate or more appropriate
remedy.
(d) Building contracts
7.31 Some cases deny that specific performance can ever be granted in relation to a
building contract,147 and though this is not an absolute bar the general rule clearly (p. 167)
excludes contracts of this sort.148 This is not so much because of the adequacy of damages
as because the performance of such contracts would often require close supervision by the
courts.149 However, in exceptional cases the courts will order specific performance of a
building contract. The circumstances in which this will be allowed were set out in
Wolverhampton Corporation v Emmons:150 damages must be an inadequate remedy, the
works to be done must be clearly identified by the contract, and the defendant must have
obtained by the contract possession of the land upon which the works are to be done.
(e) Charterparties
7.32 Charterparties by demise, being equivalent to leases, may be specifically enforced.151
Other kinds of charterparty have been said not to be open to specific performance, on the
grounds that they are no more than contracts for services.152 However, this view has been
criticised as unduly narrow,153 and given that even contracts for services may be
specifically enforced in exceptional cases,154 there seems to be no reason why the same
should not apply to charterparties.
(f) Contracts for personal services
7.33 There is a long-standing principle of equity that the courts will not order specific
performance of a contract for personal services.155 There are three main reasons for this.
First of all, it is said that it would be inappropriate to compel the performance of such
contracts since they require complete confidence between the parties.156 Secondly,
contracts of this sort would be impossible to enforce,157 or could not be enforced without
undue supervision by the court.158 Last but not least, (p. 168) there is the fear of allowing
equity to be used as an engine of slavery.159 Though the principle applies mainly in the field
of employment,160 it is not confined to such contracts: thus, for instance, the courts have
refused on these grounds to grant specific performance of a contract to enter into a
partnership,161 and of a contract to share a house.162 In the same way, the courts are
reluctant to grant specific relief to an employee who seeks to enforce the contract against
the employer, though this may be done in exceptional cases.163 Since these cases tend to
involve dismissal rather than delay, they are beyond the scope of the present work, but
details can be found in the specialist works on the subject.
Private Law Library
Page 160
B. Action for the Price

7.34 Whereas the courts of equity had a wide discretion with regard to the specific
enforcement of a contract, whether by specific performance or otherwise, there was only
one form of specific relief at common law, namely an action for the price, or as it is
sometimes called, an action for an agreed sum.164 An action for the price is very different
from an action for damages, the one having its origin in the old action for debt and the
other in assumpsit.165 To succeed in an action for the price, the promisee must show firstly
that the sum claimed is due and secondly that the action is available to recover it. The
difference between these criteria will become more readily apparent below.
(1) Promisor’s duty to pay

7.35 An action for the price, unlike specific performance,166 can never be maintained
before the obligation to pay the price arises. Whether the obligation in question has arisen
in any given case will depend on the factors discussed above with regard to the time of
performance: where a day is set for the payment of the price, it will be payable on that
day;167 where no time is set, it will be payable within a (p. 169) reasonable time;168 and
when it is payable on the occurrence of a certain contingency, that contingency will have to
occur before payment is due.169 All of this has already been discussed at length, and there
is no need to repeat that discussion in the present context.
(2) Promisee’s right of action

7.36 However, the mere fact that the price has become due for payment does not
necessarily mean that the promisor can be sued for that price.170 This distinction is of
particular significance in relation to contracts for the sale of goods and in situations where
the promisor has purported to repudiate the contract.
(a) Contracts for the sale of goods
7.37 The distinction between the promisor’s duty to pay the price and the promisee’s right
to bring an action for that price is well illustrated by the Sale of Goods Act 1979. Section 28
of the Act provides that, unless otherwise agreed, delivery of the goods and payment of the
price are concurrent conditions; that is to say, the seller must be ready and willing to give
possession of the goods to the buyer in exchange for the price and the buyer must be ready
and willing to pay the price in exchange for possession of the goods. This means that unless
the contract stipulates otherwise, the buyer’s duty to pay the price arises as soon as the
seller is ready and willing to deliver the goods.171 However, whether the seller can bring an
action for the price depends on the criteria set out in section 49 of the Act: either the
property in the goods must have passed to the buyer,172 or the price must be payable on a
day certain irrespective of delivery.173 This means that the seller may not be able to sue for
the price even if he is ready and willing to deliver the goods.174 For instance, the buyer’s
refusal to accept the goods may prevent the (p. 170) property from passing, in which case
all the seller can do is to sue for damages.175 Conversely, the contract may provide for
payment to be made on a set day, in which case the seller can sue for the price irrespective
of whether the goods have been delivered.176 Indeed, a seller who has partly performed the
contract177 may be able to sue even in a case where he or she has no intention of ever
delivering the goods, as where the contract has been validly terminated after the date set
for the payment of the price.178
(b) Repudiation by promisor
7.38 Problems may also arise where the promisee seeks to sue for the contract price after
a previous repudiation of the contract by the promisor. This was what happened in White &
Carter (Councils) Ltd v McGregor,179 where the defendants made an advertising contract
with the plaintiffs and then repudiated it the very next day. The plaintiffs ignored the
repudiation and went ahead and displayed the advertisements as agreed. It was held by the
Private Law Library
Page 161
House of Lords that the plaintiffs were entitled to sue for the contract price in this
situation; in the absence of acceptance by the plaintiffs the defendants’ repudiation was a
thing ‘writ in water’ and of no effect,180 and there was nothing to prevent the plaintiffs
carrying on regardless.181 However, there are two cases where the promisor’s repudiation
will prevent the promisee going ahead and suing for the price.
7.39 The first of these is where performance cannot be completed without the co-operation
of the promisor.182 Say, for instance, the promisor makes an appointment with the dentist to
have a tooth extracted for a certain sum, but then decides not to go ahead with the
appointment because he is too cowardly. Here there can be no question of the dentist
seizing the promisor by force, dragging him to the surgery, tying him to the chair and
extracting the tooth, as this would be the tort of trespass to the person. The same reasoning
applies to the case where the (p. 171) promisee has to do work on the promisor’s land: once
again, performance cannot be completed in the face of a repudiation by the promisor, as
this would involve the promisee committing the tort of trespass to land.183 In these cases
the promisor can in effect prevent the duty to pay the price from arising.
7.40 The second situation is where the promisee has no legitimate interest in refusing to
accept the repudiation; here the duty to pay the price may arise, but the promisee is
prevented from suing for it on policy grounds.184 An example of this was given by counsel in
White and Carter (Councils) Ltd v McGregor itself.185 The promisor agrees to engage the
promisee to go abroad and prepare an elaborate report, and then repudiates the contract
almost immediately. The law can hardly allow the promisee to ignore the repudiation, carry
on performing, prepare the report at hideous expense, and then sue for the contract price;
if this were so, the promisee would be able to extort a settlement giving him far more than
reasonable compensation.186 In this sort of case the promisee is said to have no ‘substantial
or legitimate interest’ in completing performance: the only remedy is in damages.187 In The
Alaskan Trader (No 2)188 a ship was chartered to the defendants for 24 months. After a year
the vessel required extensive repair, and was withdrawn for that purpose. The charterers
then repudiated the contract, but the owners ignored the repudiation, went ahead and did
the repairs, put the ship back at the charterers’ disposal and then sued for the hire. It was
held by the arbitrator that the owners had no legitimate interest in continuing performance
here, and this was upheld by Lloyd J, who ruled that the owners should be confined to their
remedy in damages.189
7.41 However, in The Odenfeld190 the owners of a time chartered ship were held to have a
legitimate interest in refusing to accept a repudiation by the charterers and continuing to
sue for hire: it was not reasonable to expect them to find other work for the ship at a
moment’s notice, besides which, having assigned the hire to a third party, they were legally
bound to keep the contract in existence.191 The cases do not make it clear when a promisee
in this situation will have a legitimate (p. 172) interest in performing the contract despite a
prior repudiation by the promisor,192 but it has been held that the burden in these cases is
on the contract breaker to show that the innocent party has no legitimate interest in
electing to keep the contract alive.193 This burden is not discharged merely by showing that
the benefit to the innocent party is small in comparison to the loss to the contract
breaker;194 rather, it must be shown that the decision to continue performance is wholly
unreasonable195 or even perverse.196
Footnotes:
1
Beale, Hugh G, Remedies for Breach of Contract (1980), chapter 1.
Private Law Library
Page 162
2
But not always; there may be cases in which the promisor is ready and willing to perform
at once, but the promisee wants to use the delay as an excuse for getting out of a bad
bargain. Cases where time is of the essence often fall into this category: see below, Chapter
11.
3
Jones, Gareth and Goodhart, William, Specific Performance (2nd edn, 1996) (‘Jones and
Goodhart’), p 1.
4
The position is different in civilian systems: Jones and Goodhart, above n 3, p 2.
5
Peel, Edwin (ed), Treitel: The Law of Contract (14th edn, 2015) (‘Treitel (Contract)’), para
21-016.
6
7
American Cyanamid v Ethicon Ltd [1975] AC 396 (HL) at 408 (Lord Diplock); Co-
operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL) at 11 (Lord
Hoffmann). This principle had become settled as orthodox doctrine by the beginning of the
nineteenth century: see Harnett v Yeilding (1805) 2 Sch & Lef 549 (High Ct of Chancery in
Ireland) at 553 (Lord Redesdale); Jones and Goodhart, above n 3, p 18.
8
Cud v Rutter (1719) 1 P Wms 570, 24 ER 521 (shares); Cohen v Roche [1927] 1 KB 169
(Hepplewhite chairs).
9
Rogers v Challis (1859) 27 Beav 175, 54 ER 68 (contract to lend money). Contrast Sky
Petroleum Ltd v VIP Petroleum Ltd [1974] 1 WLR 576 (injunction granted to prevent refusal
to deliver petrol during shortage).
10
Pusey v Pusey (1684) 1 Vern 273, 23 ER 465 (antique hunting horn); Duke of Somerset v
Cookson (1753) 3 P Wms 390, 24 ER 1114 (ancient pagan altarpiece); Lowther v Lowther
(Lord) (1806) 13 Ves 95, 33 ER 230 (picture); Eximenco Handels AG v Partrederiet Oro
Chief (The Oro Chief) [1983] 2 Lloyd’s Rep 509 (ship). As we shall see (below, para 7.26),
land is regarded as unique in this context.
11
As where the contract is for the benefit of a third party: Beswick v Beswick [1968] AC 58
(HL).
12
Treitel (Contract), above n 5, para 21-020; Ashton v Corrigan (1871) LR 13 Eq 76
(contract to execute mortgage); Gaetano Ltd v Obertor Ltd [2009] EWHC 2653 (Ch) (shares
in unquoted company).
13
Howard Perry & Co Ltd v British Railways Board [1980] 1 WLR 1375 at 1383.
14
Tito v Waddell (No 2) [1977] Ch 106 at 322.
15
Jones and Goodhart, above n 3 at p 38.
16
Furmston, M P (ed), Cheshire, Fifoot and Furmston’s Law of Contract (17th edn, 2017)
17
Price v Strange [1978] Ch 337 (CA) at 367–368; Treitel (Contract), above n 5, para
21-047.
18
Below, para 7.33.
19
Ogden v Fossick (1862) D F & J 426, 45 ER 1249; Blackett v Bates (1865) LR 1 Ch App
117; Stocker v Wedderburn (1857) 3 K & J 393, 69 ER 1162.
20
Flight v Bolland (1828) 4 Russ 298, 38 ER 817; Lumley v Ravenscroft [1895] 1 QB 683
(CA).
21
Private Law Library
Page 163
22
Wilkinson v Clements (1872) LR 8 Ch App 96; Price v Strange [1978] Ch 337 (CA).
23
Above, para 7.05.
24
Below, para 7.26.
25
Cheshire, Fifoot and Furmston, above n 16 at p 798.
26
Jones and Goodhart, above n 3, p 236.
27
[1960] AC 316 (PC); Oakacre Ltd v Claire Cleaners (Holdings) Ltd [1982] Ch 197.
28
Roberto v Bumb [1943] 2 DLR 613 (CA of Ontario); Roy v Kloepfer Wholesale Hardware
and Automotive Co Ltd [1951] 3 DLR 122 (Supreme Ct of Canada).
29
Compare Avery v Bowden (1855) 3 E & B 714, 119 ER 647.
30
Hasham v Zenab [1960] AC 316 (PC) at 329 (Lord Tucker); Turner v Bladin (1951) 82
CLR 463 (High Ct of Australia) at 472 (Williams, Fullagar and Kitto JJ).
31
Marks v Lilley [1959] 1 WLR 749.
32
Above, para 6.25.
33
34
Above, para 6.25.
35
Compare the test in Embiricos v Sydney Reid & Co [1914] 3 KB 45: above, para 6.29.
36
Treitel (Contract), above n 5, para 21-029. This discretion cannot be fettered by any
term in the contract: Quadrant Visual Communications v Hutchinson Telephone UK [1993]
BCLC 442 (CA).
37
38
(1804) 9 Ves 357, 32 ER 640; Scott v Rayment (1868) LR 7 Eq 112; Jones and Goodhart,
above n 3, p 54.
39
40
(1865) 35 Beav 167, 55 ER 858; Wilmott v Barber (1880) 15 Ch D 96; Warmington v
Miller [1973] QB 877 (CA).
41
Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657 (CA).
42
43
Ibid, para 2-079.
44
McGhee, John, QC (ed), Snell’s Equity (33rd edn, 2015), para 17-022.
45
[1959] 1 Ch 14.
46
Ibid at 19.
47
Ibid; Barrow v Chappell & Co Ltd [1976] RPC 355.
48
Treitel (Contract), above n 5, para 21-039; Jones and Goodhart, above n 3, p 44.
49
(1762) 2 Eden 128, 28 ER 845; Phipps v Jackson (1887) 56 LJ Ch 530.
50
(1762) 2 Eden 128 at 132 (Henley LK).
51
(1874) 9 Ch App 331; Johnson v Shrewsbury and Birmingham Rly Co (1853) 22 LJ Ch
921.
52
(1874) 9 Ch App 331 at 334 (Mellish LJ): Ryan v Mutual Tontine Westminster Chambers
Association [1893] 1 Ch 116 (CA).
Private Law Library
Page 164
53
[1893] 1 Ch 116 (CA).
54
Ibid at 123; see however Posner v Scott-Lewis [1987] Ch 25; below, para 7.16.
55
Shiloh Spinners Ltd v Harding [1973] AC 691 (HL) at 724 (Lord Wilberforce).
56
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL) at
13 (Lord Hoffmann).
57
[1901] 1 KB 515 (CA).
58
Ibid at 523 (A L Smith MR).
59
[1974] Ch 97.
60
Ibid at 101 (Pennycuick V-C); Giles (CH) & Co Ltd v Morris [1972] 1 WLR 307 at 318
(Megarry V-C).
61
[1987] Ch 25.
62
[1893] 1 Ch 116 (CA).
63
[1987] 1 Ch 25 at 36.
64
[1998] AC 1 (HL); Flogas v Warrington (t/a Robin Sutton Gases & Calor Gas Ltd) [2007]
EWHC 1303 (QB).
65
[1996] Ch 286.
66
Ibid at 16.
67
68
[1998] AC 1 (HL) at 18.
69
In particular, it is not clear whether and to what extent there is still scope for a grant of
specific relief to enforce obligations of this sort: Tettenborn, A, ‘Absolving the undeserving:
shopping centres, specific performance and the law of contract’ [1998] Conveyancer 23;
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR
643 (High Ct of Australia) at [79] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ) and
[192] (Callinan J).
70
71
Savage v Taylor (1736) Cas temp Talb 234 at 236, 25 ER 753 at 754 (Lord Talbot LC);
Mortlock v Buller (1804) 10 Ves 292 at 308, 32 ER 857 at 863 (Lord Eldon LC).
72
Gartside v Isherwood (1783) 1 Bro CC 558, 28 ER 1297 (mental weakness); Cooke v
Clayworth (1811) 18 Ves 12, 34 ER 222 (drunkenness); Dewar v Elliott (1824) 2 LJOS 178
(threat to prosecute); Stanley v Robinson (1830) 1 Russ & M 527, 39 ER 203 (lack of
independent advice).
73
Cadman v Horner (1810) 18 Ves 10, 34 ER 221.
74
Phillips v Homfray (1871) 6 Ch App 770.
75
Denny v Hancock (1870) 6 Ch App 1.
76
For a full analysis see Jones and Goodhart, above n 3, pp 112–123.
77
[1967] NZLR 249; Heath v Heath [2009] EWHC 1908, [2010] 1 FLR 610 (common
mistake).
78
(1874) LR 7 HL 158; see now Law of Property (Miscellaneous Provisions) Act 1979, s 3:
below, para 9.130.
79
Private Law Library
Page 165
80
[1910] 2 Ch 248 (CA).
81
Chappell v Times Newspapers [1975] 1 WLR 482 (Megarry J and CA).
82
Kingston v Preston (1773) Lofft 194, cited in Jones v Barkley (1781) 2 Dougl 681, 99 ER
434 at 437; Bastin v Bidwell (1881) 18 Ch D 238.
83
Harrington v Wheeler (1799) 4 Ves 686, 31 ER 354. It is different where the party
claiming specific performance has a good excuse for the delay: see Hillingdon Estates Co v
Stonefield Estate Ltd [1952] Ch 627 (ten-year delay in completion due to Second World
War).
84
Guest v Homfray (1801) 5 Ves J 818, 31 ER 875; Hanslip v Padwick (1850) 5 Exch 615,
155 ER 269; above, para 2.42.
85
Rutherford v Acton-Adams [1915] AC 866 (PC); Jones and Goodhart, above n 3, pp 61–
62.
86
Gregson v Riddle (1783), cited in Seton v Slade (1802) 7 Ves J 265 at 268, 32 ER 108 at
109; Gibson v Patterson (1837) 1 Atk 12, 26 ER 8; Boehm v Wood (1820) 1 Jac & W 419, 37
ER 435.
87
Besant v Wood (1879) 12 Ch D 605 at 628; Jones and Goodhart, above n 3, p 85.
88
[1975] 1 WLR 482 (Megarry J and CA).
89
Ibid at 502.
90
Marquis of Hertford v Boore (1801) 5 Ves J 619, 31 ER 823; Hearne v Tenant (1807) 13
Ves J 287, 33 ER 301.
91
Alley v Deschamps (1806) 13 Ves J 225, 33 ER 278.
92
93
See Allcard v Skinner (1887) LR 36 Ch D 145 (CA).
94
Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 239–240 (Sir Barnes Peacock);
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 (HL(Sc)) at 1279 (Lord
Blackburn); Nwakobi v Nzekwu [1964] 1 WLR 1019 (PC) at 1025 (Viscount Radcliffe); Jones
and Goodhart, above n 3, p 109.
95
Alley v Deschamps (1806) 13 Ves J 225, 33 ER 278; Harrington v Wheeler (1799) 4 Ves
686, 31 ER 354.
96
97
Parkin v Thorold (1852) 16 Beav 59 at 73, 51 ER 698 at 703–704 (Lord Romilly MR).
98
(1857) 23 Beav 145, 53 ER 57; Jones and Goodhart, above n 3, p 112.
99
100
101
Ibid, pp 117–118.
102
Denne v Light (1857) De G M & G 230, 44 ER 588.
103
Hope v Walter [1900] 1 Ch 257 (CA).
104
Pegler v White (1864) 33 Beav 394, 55 ER 423.
105
[1974] Ch 30.
106
Ibid at 52–53 (Megarry J).
107
[1984] Ch 283.
Private Law Library
Page 166
108
Donoghue v Stevenson [1932] AC 562 (HL(Sc)) at 619 (Lord Macmillan).
109
110
Storer v Great Western Rly Co (1842) 2 Y & C CC 48 at 52, 61 ER 21 at 23 (Knight-
Bruce V-C).
111
(1858) 25 Beav 140, 53 ER 589.
112
(1858) 25 Beav 140 at 151, 53 ER 589 at 594.
113
(1858) 25 Beav 140 at 153, 53 ER 589 at 594–595.
114
(1782) 1 Bro CC 567, 28 ER 1051.
115
[1975] Ch 258 (CA).
116
Thomas v Thomas (1842) 2 QB 851, 114 ER 330.
117
[1975] Ch 258 (CA) at 264 (Russell LJ).
118
119
For a different view see Centex Homes Corporation v Boag 128 NJ Super 385, 320 A 2d
194 (1974) (New Jersey) (specific performance of contract to purchase house refused on the
ground that the house was indistinguishable from others of its type).
120
Hall v Warren (1804) 9 Ves 605, 32 ER 738; Adderley v Dixon (1824) 1 Sim & St 607, 57
ER 239; Jones and Goodhart, above n 3, p 128.
121
It seems that even a mere licence will do (Verrall v Great Yarmouth B C [1981] QB 202
(Watkins J and CA) though the case may be explicable on other grounds: Jones and
Goodhart, above n 3, p 129.
122
123
Ibid; Lewis v Lord Lechmere (1722) 10 Mod 503, 88 ER 828.
124
Walker v Eastern Counties Rly (1848) 6 Hare 594, 67 ER 1300.
125
Hillingdon Estate Co v Stonefield Estate Ltd [1952] Ch 627.
126
Pianta v National Finance and Trustee Co Ltd (1964) 180 CLR 146 (High Ct of
Australia).
127
(1684) 1 Vern 273, 23 ER 465.
128
(1735) 3 P Wms 390, 24 ER 1114; Phillips v Lamdin [1949] 2 KB 33; Thorn v Public
Works Commissioners (1863) 32 Beav 490, 55 ER 192; Jones and Goodhart, above n 3, p
147.
129
[1927] 1 KB 169.
130
Jones and Goodhart, above n 3, p 145. In some cases even sentimental value has been
taken into account: Morris v Sparrow 225 Ark 1019, 287 SW 2d 583 (1956) (Arkansas).
131
The Oro Chief [1983] 2 Lloyd’s Rep 509; Allseas International Management Ltd v
Panroy Bulk Transport Ltd (The Star Gazer) [1985] 1 Lloyd’s Rep 370. In The Oro Chief a
further problem arose in that the defendants were contractually bound to sell the same ship
to two different parties. Specific performance was held to be available on the ground that
the ship was one of a specialised type not readily available on the market, but the court had
then to decide in its discretion which obligation to enforce: [1983] 2 Lloyd’s Rep 509 at 521
(Staughton J).
132
CN Marine Inc v Stena Line A/B (The Stena Nautica) (No 2) [1982] 2 Lloyd’s Rep 336 at
348 (May LJ); Jones and Goodhart, above n 3, p 146.
Private Law Library
Page 167
133
134
Sale of Goods Act 1979, s 61(1) as amended by section 2(d) of the Sale of Goods
Amendment Act 1995; Bridge, Michael (ed), Benjamin’s Sale of Goods, (9th edn, 2014)
(‘Benjamin’), para 5-022.
135
Re Wait [1927] 1 Ch 606 (CA) at 630 (Atkin LJ); Benjamin, above n 134, para 1.117.
Thus where a cargo is covered by two bills of lading, one held by A and the other by B, B’s
share becomes ascertained when A’s share is offloaded: Karlshamns Olje Fabriker v
Eastport Navigation Corp (The Elafi) [1981] 2 Lloyd’s Rep 679. The ascertainment of the
goods in such cases used to be of crucial importance with regard to the passing of property,
but see now Sale of Goods Act 1979, s 20A, inserted by s 1(3) of the Sale of Goods
Amendment Act 1995.
136
137
Re Wait [1927] 1 Ch 606 (CA) at 635–636 (Atkin LJ); Leigh and Sillavan Ltd v Aliakmon
Shipping Co Ltd (The Aliakmon) [1986] AC 785 at 812 (Lord Brandon).
138
[1974] 1 WLR 576.
139
[1980] 1 WLR 1375; Redler Grain Silos Ltd v BICC Ltd [1982] 1 Lloyd’s Rep 435 (CA).
140
141
Duncuft v Albrecht (1841) 12 Sim 189, 59 ER 1104.
142
Cud v Rutter (1719) 1 P Wms 570, 24 ER 521; Jones and Goodhart, above n 3, p 162;
143
Eansor v Eansor [1946] 2 DLR 781 (Supreme Ct of Canada); Gaetano Ltd v Obertor Ltd
[2009] EWHC 2653 (Ch).
144
New Brunswick and Canada Railway and Land Co v Muggeridge (1859) 4 Drew 686, 62
ER 263.
145
Dobell v Cowichan Copper Co (1968) 65 DLR (2d) 440 (Supreme Ct of British
Columbia); Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207
(HL); Jones and Goodhart, above n 3, p 162.
146
Langen & Wind Ltd v Bell [1972] Ch 685; Jobson v Johnson [1989] 1 WLR 1026 (CA);
Grant v Cigman [1996] 2 BCLC 24; Treitel (Contract), above n 5, para 21-018.
147
Lucas v Comerford (1790) Bro CC 166, 29 ER 469; Cubitt v Smith (1864) 11 LT 198;
Merchants Trading Co v Banner (1871) LR 12 Eq 18; Wilkinson v Clements (1872) 8 Ch App
96.
148
Treitel (Contract), above n 5, para 21-043. A different principle applies to repairing
covenants in a lease, for which specific performance is always available provided that the
covenant is sufficiently certain: City of London v Nash (1747) 3 Atk 512, 26 ER 1095; Jones
and Goodhart, above n 3, p 188.
149
Jones and Goodhart, above n 3, pp 185–186; above, paras 7.15–7.27.
150
[1901] 1 KB 515 (CA).
151
The Stena Nautica (No 2) [1982] 2 Lloyd’s Rep 336 (Parker J and CA).
152
Scandinavian Trading Tanker Co AB v Flota Petrolera Ecuatoriana (The Scaptrade)
[1983] 2 AC 694 (HL) at 700–701 (Lord Diplock).
153
154
Below, para 7.33.
Private Law Library
Page 168
155
156
Pickering v Bishop of Ely (1843) 2 Y & C CC 249, 63 ER 109; Johnson v Shrewsbury and
Birmingham Rly Co (1853) De G M & G 914, 43 ER 358; Chaplin v North Western Rly Co
(1862) 5 LT 601.
157
‘The reasons why the court is reluctant to decree specific performance of a contract for
personal services (and I would regard it as a strong reluctance rather than a rule) are …
firmly bottomed on human nature. If a singer sang flat, or sharp, or too fast, or too slowly,
or too loudly, or too quietly, or resorted to a dozen of the manifestations of temperament
traditionally associated with some singers, the threat of committal would reveal itself as a
most unsatisfactory weapon: for who could say whether the imperfections of performance
were natural or self-induced?’ Giles (CH) & Co Ltd v Morris [1972] 2 WLR 307 at 318
(Megarry J).
158
Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116 (CA):
above, paras 7.15–7.17.
159
De Francesco v Barnum (1890) 45 Ch D 430; Lumley v Wagner (1852) 1 De G M & G
604, 42 ER 687; Ehrman v Bartholomew [1898] 1 Ch 671; Warner Bros Pictures Inc v
Nelson [1937] 1 KB 209; Page One Records v Britton [1968] 1 WLR 157; Evening Standard
Co v Henderson [1987] IRLR 64 (CA); Trade Union and Labour Relations (Consolidation)
Act 1996, s 236.
160
Honeyball, Simon, Honeyball and Bowers’ Textbook on Employment Law (14th edn,
2016), pp 90–93.
161
England v Curling (1844) 8 Beav 129, 50 ER 51.
162
Burrows v Sharp (1991) 23 HLR 82 (CA).
163
Hill v Parsons & Co Ltd [1972] Ch 305 (CA); Irani v Southampton Health Authority
[1985] IRLR 203 (CA); Powell v Brent LBC [1987] IRLR 466 (CA); Hughes v Southwark LBC
[1988] IRLR 55 Wadcock v Brent LBC [1990] IRLR 223; Gryf-Lowczowski v Hinchingbrooke
Healthcare NHS Trust [2005] EWHC 2407, [2006] IRLR 100.
164
Treitel (Contract), above n 5, paras 21-001–21-008.
165
Jervis v Harris [1996] Ch 195 (CA).
166
Above, para 7.10.
167
168
169
Above, Chapter 3.
170
171
Kingston v Preston (1773) Lofft 194, cited in Jones v Barkley (1781) 2 Dougl 681, 99 ER
434 at 437: above, para 2.18.
172
Sale of Goods Act 1979, s 49(1). Clearly this provision can have no application where,
as is often the case, the contract provides that property shall only pass on payment of the
price.
173
Ibid, s 49(2). The meaning of ‘a day certain’ in this context is not defined by the Act,
but it has been said that a day can be certain only if it is fixed in advance by the contract in
such a way that it can be determined independently of the action of either party or of any
third person: Benjamin, above n 134, para 16.024; Dunlop v Grote (1845) 2 Car & Kir 153,
175 ER 64; Shell-Mex Ltd v Elton Cop Dyeing Co Ltd (1928) 34 Com Cas 39; Stein Forbes v
County Tailoring Co (1916) 86 LJKB 448; Muller, Maclean & Co v Leslie and Anderson
(1921) 8 Ll L R 328. In Workman, Clark & Co Ltd v Lloyd Brasileno [1908] 1 KB 968 (CA),
which involved a contract for the construction of a ship, it was held that s 49(2) could also
Private Law Library
Page 169
apply to claims for instalments of the price due on different dates as well as to a claim for
the full price of the goods: Benjamin, above n 134, para 16-005.
174
Stein Forbes & Co Ltd v County Tailoring Co Ltd (1916) 86 LJKB 448.
175
176
Workman Clark & Co Ltd v Lloyd Brasileno [1908] 1 KB 568 (CA).
177
Say, for instance, the contract is one for the sale of a ship, and the seller has done work
on the construction of the ship: Stocznia Gdanska SA v Latvian Shipping Co [1998] 1 WLR
574 (HL).
178
This cannot be done if there has been a total failure of consideration, but the test for
this is not whether the promisee has received anything under the contract, but whether the
promisor has performed any of the work: Hyundai Heavy Industries Co Ltd v Papadopoulos
[1980] 1 WLR 1129 (HL).
179
[1962] AC 413 (HL(Sc)).
180
Howard v Pickford Tool Co Ltd [1951] 1 KB 417 (CA) at 421 (Asquith LJ); see above,
para 6.31.
181
The doctrine of mitigation (see below, paras 9.75–9.87) is sometimes cited in this
context, but the orthodox view is that this only applies in the context of a claim for
damages, not a claim for the contract price; as is sometimes said, there is no duty to
mitigate in advance of the breach: see Winterton, David, ‘Reconsidering White & Carter v
McGregor’ [2013] LMCLQ 5; Morgan, Jonathan, ‘Smuggling mitigation into White & Carter
v McGregor: Time to come clean?’ [2015] LMCLQ 575.
182
183
Hounslow L B C v Twickenham Garden Developments Ltd [1971] Ch 233.
184
185
[1962] AC 413 (HL(Sc)) at 422.
186
Ibid.
187
[1962] AC 413 at 431 (Lord Reid).
188
Clea Shipping Corp v Bulk Oil International Ltd (No 2) [1983] 2 Lloyd’s Rep 645; Attica
Sea Carriers Corp v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto Buitrago) [1976]
1 Lloyd’s Rep 250 (CA).
189
[1983] 2 Lloyd’s Rep 645 at 651; MSC Mediterranean Shipping Co SA v Cottonex
Anstalt [2016] EWCA Civ 789, [2016] 2 Lloyd’s Rep 494 at [42–43] (commercial purpose of
adventure frustrated).
190
Gator Shipping Corp v Trans-Asiatic Oil Co Ltd SA [1978] 2 Lloyd’s Rep 357; Isabella
Shipowner SA v Shagang Shipping Co Ltd (The Aquafaith) [2012] EWHC 1077 (Comm),
[2012] 2 Lloyd’s Rep 61.
191
See also George Barker Transport Ltd v Eynon [1974] 1 WLR 462 (CA) (acquiring of
security in subject matter by promisee held to be a legitimate interest in this context).
192
According to Staughton J in Stocznia Gdanska SA v Latvian Shipping Co [1996] 2
Lloyd’s Rep 132 at 139, the innocent party ‘must have reasonable grounds for keeping the
contract open, bearing in mind also the interests of the wrongdoer’.
193
Ocean Marine Navigation Ltd v Koch Carbon Ltd (The Dynamic) [2003] EWHC 1936,
[2003] 2 Lloyd’s Rep 693.
Private Law Library
Page 170
194
Ibid.
195
Treitel (Contract), above n 5, para 21-012; Reichman v Beveridge [2006] EWCA Civ
1659, [2007] 1 P & CR 20 at [41] (landlord entitled to sue for rent even though tenant had
abandoned property).
196
The Aquafaith (above n 190) at [44].
Private Law Library
Page 171
8 Notices Making Time of The Essence

John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 173) 8 Notices Making Time of The Essence*

A. Genesis of Notice Procedure 8.03
(1) The equitable notice 8.04

(2) The common law notice 8.07
B. The Modern Doctrine 8.09
(1) Terminology 8.10

(2) When may a notice be served? 8.11
(a) Promisee ‘able, ready and willing’ 8.12

(b) Delay by promisor 8.17
(3) Content of notice 8.26
(a) Reasonable time for compliance 8.27

(b) Form of notice 8.33
(4) Effect of notice 8.36
C. Scope of the Procedure 8.39

D. Consumer Rights Act 2015 8.51
8.01 Even where specific relief is not available in a case of delay, there are other ways in
which the promisor may be induced to mend matters. The most obvious way of doing this is
to threaten to cancel the contract if defaults are not remedied by a certain deadline. In
effect, the promisor is put in the ‘last chance saloon’. Such a procedure is often provided for
by the express terms of the contract,1 and there are certain statutory contexts in which it is
Private Law Library
Page 172
an essential prelude to termination,2 but as we shall see it is still a moot point whether and
to what extent it forms part of the general law of contract, as it does in certain civil law
systems.3
8.02 The nearest English law comes to having a general remedy of this sort is in the shape
of a notice making time of the essence.4 This is a procedure that is generally (p. 174) more
familiar to conveyancers than it is to contract lawyers generally, and it is not covered in any
great depth by the standard contract textbooks.5 In this chapter we shall trace the
historical development of the procedure in its different guises, before examining the
different ways in which it operates in the present law. We shall then discuss the extent to
which it can be regarded as a general contractual remedy, before turning to the notice
procedure set out under the Consumer Rights Act 2015. Though the main focus as stated
will be on English law, we shall not hesitate to draw on the law of other common law
jurisdictions where necessary.
A. Genesis of Notice Procedure

8.03 One of the problems in this area of the law is that a notice making time of the essence
can be served in two different situations. The first is what may be called the ‘equitable’
notice, generally seen in the conveyancing context. This can be served on a promisor who is
guilty of delay in performing an obligation of which time is not of the essence to begin with,
normally the obligation to complete. The second may be termed the ‘common law’ notice;
this is served in a situation where time was originally of the essence, but where the right to
terminate has been waived by the promisee; here the service of the notice has the effect of
restoring the original position by setting a new deadline for performance. Though these two
procedures are largely identical in their effect, they are conceptually distinct.
(1) The equitable notice

8.04 The roots of the equitable notice in English law are to be found in the early years of
the nineteenth century. At that time, as we have seen,6 it was the practice of the courts of
equity not to refuse the promisor a decree of specific performance merely on the ground
that he or she had failed to perform on time.7 Time may have been ‘of the essence’ at
common law,8 but equity took (p. 175) a different view. The matter was thus summarised by
Maitland in his famousEquity: A Course of Lectures:
As a general rule a man cannot sue upon a contract at law if he himself has broken
that contract, though of course, as you know, there are many exceptions to this
statement. Now in contracts for the sale of land it very frequently happens that a
breach of the terms of the contract has been committed by the person who wishes
to enforce it. Such a contract will be full of stipulations that certain acts are to be
done within certain times. … Well you know that equity held as a general rule these
stipulations as to time were not of the essence of the contract – that for example a
purchaser might sue for specific performance although he had not in all respects
kept the days assigned to him by the contract of sale for his various acts. This was
the general rule – these stipulations as to time were not essential unless the parties
declared them to be so.9
As Lord Eldon said in Seton v Slade,10 the leading case on the subject, ‘To say, time is
regarded in this Court, as at law, is quite impossible.’11 For this reason a grant of specific
performance would often be accompanied by a ‘common injunction’ to prevent the promisee
from taking steps to have the contract set aside at law, say by recovery or forfeiture of a
Private Law Library
Page 173
deposit.12 This, as we shall see,13 is not without significance when it comes to the analysis
of the present law.
8.05 This, however, did not mean that equity took no cognisance of time at all. As Lord
Parker said in Stickney v Keeble,14 there might be cases where a stipulation as to time
could not be disregarded without injustice to the parties – when, for example, they had
stipulated that the time fixed should be regarded as essential, or where there was
something in the nature of the property or the surrounding circumstances which would
render it inequitable to treat it as a non-essential term of the contract.15 Even where time
was not of the essence to start with, a party who was guilty of inordinate delay, laches or
‘gross negligence’ would not be given specific performance; in particular, the remedy would
not be granted to one who had ‘abandoned the contract’. Thus in Lloyd v Collett16 a
contract for the sale of certain ground rents was signed on 2 May 1792, and provided (p.
176) for completion the following March. An action by the vendor for specific performance
after that date was refused, it having been shown that at that date he had not even got
round to furnishing a proper abstract of title; in the words of the report,17 the Chancellor
considered the conduct of the vendor as ‘evidence of an abandonment of the contract’. In
the same way, a purchaser who allowed a full six years to elapse without taking any steps
towards completion was held in Harrington v Wheeler18 to have forfeited any claim to
specific performance. Mere delay in completion was no bar, but as Lord Erskine said in
Radcliffe v Warrington,19 there might be ‘such a refusal to perform an agreement, as would
amount to a complete abandonment; so that the contract would be gone in Equity as well as
at law.’20
8.06 This was all very well as far as it went, but how could one tell whether the delay in
any given case was enough to amount to abandonment? No doubt it was this problem that
led to the practice of serving a notice on the defaulting promisor saying that if performance
was not forthcoming within a stated time the contract would be considered as at an end.21
In Reynolds v Nelson22 in 1821 Sir John Leach V-C left open the question whether time
could properly be made essential by subsequent notice in this way, but by 1839, in Taylor v
Brown, Lord Langdale MR was able to affirm the validity of the process in the following
words:
Now as I have before stated, where the contract and the circumstances are such
that time is not in this Court considered to be the essence of the contract – in such
case, if any unnecessary delay is created by one party the other has a right to limit a
reasonable time in which the contract shall be perfected by the other. It has been
repeatedly so considered in this Court; and where the time has been thus fairly
limited, by a notice stating that within such a period that which is required must be
done or otherwise the contract will be treated as at an end, this Court has very
frequently supported that proceeding; and bills having been afterwards filed for the
specific performance of the contract, this Court has dismissed them with costs.23
(p. 177) (2) The common law notice

8.07 A similar result was reached using common law principles in the context of waiver by
election. We have seen that where time is of the essence in relation to a particular
obligation, delay in performance gives the promisee the choice whether to terminate or
affirm.24 If the latter option is chosen, then the right to terminate is lost, but it is still open
to the promisor to revive that right by setting a further deadline. This procedure seems to
have had its origin in the context of the sale of goods, where it was held, in the words of
Bailhache J, that it ‘is quite open to a buyer to say when deliveries are late and he has been
extending the time that he will not take further deliveries unless they are made within some
reasonable time which he is entitled to designate’.25 Thus in Hartley v Hymans26 a contract
for the sale of cotton stipulated for delivery in instalments by 15 November 1918. Despite
Private Law Library
Page 174
this, the buyer accepted a number of deliveries after this date, and continued to press for
performance up to the beginning of March 1919. Finally, on 13 March 1919, he refused to
accept any more deliveries. It was held by McCardie J that time was originally of the
essence here, but that the buyer’s conduct amounted to a waiver. This being so, it was not
open to him to terminate performance in such a peremptory manner.27 It would have been
different if he had given the seller proper notice of his intentions. ‘I do not doubt’, said the
judge, ‘that the defendant would have been entitled in March, 1919, to give a notice fixing a
reasonable time within which the plaintiff was required to supply the undelivered balance of
the contract goods’.28 Though the words ‘notice making time of the essence’ were not used,
it is clear from the context that the buyer would have been entitled to cancel the contract if
the seller had failed to deliver the goods by the stipulated date.
8.08 This principle was further applied in the context of work and materials by the Court
of Appeal in Charles Rickards Ltd v Oppenhaim.29 Here the plaintiff had agreed to construct
and deliver a car for the defendant within ‘six, or at the most seven months’, a provision
which was held to have made time of the essence. Once again the defendant waived his
right to cancel the contract by continuing to press for performance after the delivery date
had passed. However, on 28 June 1948 he told the plaintiffs that the car would have to be
ready by 25 July at the latest, as he was going abroad soon afterwards and would need the
car for his trip. When on that day delivery was still not forthcoming, he cancelled the
contract. It was argued by the plaintiffs that this was a contract for work and materials, and
(p. 178) that the remarks of McCardie J in Hartley v Hymans relating to notices making
time of the essence did not apply outside the sale of goods.30 However, this argument was
roundly rejected by the Court of Appeal. There Bucknill and Singleton LJJ agreed with the
following words of Denning LJ, as he then was:
[I]n my view it is unnecessary to determine whether it was a contract for the sale of
goods or a contract for work and labour, because, whatever it was, the defendant
was entitled to give a notice bringing matters to a head. It would be most
unreasonable if the defendant, having been lenient and waived the initial expressed
time, should, by so doing, have prevented himself from ever thereafter insisting on
reasonably quick delivery. In my judgement he was entitled to give a reasonable
notice making time of the essence of the matter.31
In none of these cases was there any mention of the right to specific performance or of the
doctrines of equity in general; rather, they were decided purely on common law principles.
B. The Modern Doctrine

8.09 The law in relation to notices of this sort, whether of the equitable or common law
variety, is summed up thus by Halsbury:
In cases where time is not originally of the essence of the contract, or where a
stipulation making time of the essence has been waived, time may be made of the
essence, where there is unreasonable delay, by a notice from the party who is not in
default fixing a reasonable time for performance and stating that, in the event of
non-performance within the time so fixed, he intends to treat the contract as
terminated.32
We must now consider this in more detail. Four matters require examination: (1) how this
process should be described; (2) when a notice may be served; (3) the contents of the
notice; and (4) the effect of the notice.
Private Law Library
Page 175
(1) Terminology
8.10 Notices of this sort are traditionally referred to as ‘notices making time of the
essence’, but as has recently been pointed out, this is not strictly correct.33 Saying that time
is of the essence in relation to a term of the contract suggests that timely performance is a
‘condition’, in the sense of a fundamental term of the contract breach of which entitles the
promisee to treat the contract as repudiated,34(p. 179) so to say that a notice makes time of
the essence suggests that a term that was not a condition to start with has been converted
into one by virtue of the notice. But as we shall see the cases make it clear that it is not
open to a party to alter the status of a term by unilateral fiat in this way.35 No doubt the
label made sense in the context of the old equity jurisdiction, whereby the issue of the
notice deprived the promisor of the right to claim specific performance, so restoring the
promisee to his or her supposed rights in law,36 but it does not fit well into the modern
analysis of the doctrine, in which terms are construed alike both at common law and in
equity,37 and where failure to act on a notice is regarded at best as evidence of
repudiation.38 That said, it has never been suggested that the promisee may not terminate
performance where the promisor has failed to comply with a valid notice of this kind, and
though the traditional label is undoubtedly misleading in several respects, it is probably
now too well established to be abandoned.
(2) When may a notice be served?

8.11 A promisee who wishes to serve a notice making time of the essence must show: (1)
that he or she is able, ready and willing to perform his or her own obligations under the
contract; and (2) that the other party is guilty of ‘undue delay’. If these conditions are not
met, the notice will be ineffective to make time of the essence.39
(a) Promisee ‘able, ready and willing’
8.12 He who comes to equity must do equity, and a notice making time of the essence
cannot be served by those who are not themselves in any position to perform.40 Thus it has
been held that a vendor of land was not entitled to serve a notice when he had not obtained
the necessary licence to assign,41 or was unable to make good title,42 or had failed to satisfy
a requisition about a third party’s claim to possession,43 or, having contracted to give
vacant possession, had failed to remove squatters from the property.44 The validity of a
notice must be judged as at the (p. 180) day it is served,45 and by reference to those facts
known or taken to be known to the recipient when the notice is received.46 It is irrelevant
that events may have turned out differently by the time the notice expires. Thus in Cole v
Rose47 a vendor’s notice to complete was invalidated by the refusal of his solicitors to give
to the purchaser an undertaking to pay off a land charge, even though in the event the
charge was indeed duly paid off. The reason for this rule is obvious; it is on receipt of the
notice that the recipient must decide whether or not to comply with it, and it would be
intolerable if he or she were expected not only to know the existing position but also to
foretell the future.48
8.13 One matter of some controversy is as to the degree of readiness required by the giver
of the notice. Must he or she be in a position to perform there and then, or will some lesser
degree of readiness be enough? Most of the cases on the point involve vendors of land,49
and the main principle is set out by Hutley JA in the New South Wales Court of Appeal in
McNally v Waitzer;50 a vendor who is in default in respect of things which up till then
should have been done cannot give a notice to complete, but can give notice to complete
prior to performing all those other things which still have to be performed in order to
complete the contract. The basic distinction then is between obligations which the server of
Private Law Library
Page 176
the notice should have performed in the past and those which are still due to be performed
in the future.
8.14 As a general rule, a notice may not be served by a party who has defaulted on his or
her own obligations, at any rate where the default is still outstanding at the relevant time.51
Thus a vendor of land who has failed to disclose the true state of the title, as in Wood v
Berkeley Homes (Sussex) Ltd,52 or has been guilty of major misrepresentations with regard
to the property, as in Pagebar Properties Ltd v Derby Investments (Holdings) Ltd,53 will not
be allowed to serve a notice making time of the essence. However, a de minimis principle
applies here; a purchaser will not be (p. 181) entitled to defeat a notice by pointing to trivial
defaults by the vendor which in no way provide an obstacle to completion. In Beckett v
Karklins,54 for instance, it was held to be no objection to the giving of a notice that a land
mortgage which had been paid off several years before had not been formally discharged,
or that money was still owing for the purchase of a water heater. Again, in Van Reesema v
Giameos (No 2)55 it was no answer that the vendor had in breach of contract not yet
completed the work to the concrete edging round a car park, the cost of the work not done
being a mere $213.56 A similar principle can be seen in Prosper Homes Ltd v Hambros Bank
Executor and Trustee Co Ltd,57 where the purchaser alleged that the vendor had failed to
do anything about a breach of a covenant against assignment by one of a number of tenants
on the property. This was held by Browne-Wilkinson J, as he then was, to be a matter
sounding in damages only. On the other hand, in Freeman v Jacobs58 an unresolved dispute
between the parties concerning the removal of a lavatory from the downstairs bathroom
was held to negate the vendor’s readiness to complete at the time the notice was given.59
Whether an objection of this sort by the recipient of the notice is, in this sense, de minimis
will obviously be a question of fact depending on the circumstances of each case,60 the
general rule being that past defaults which would not bar a decree of specific performance
will not prevent the service of a notice making time of the essence.61
8.15 What about obligations that are still due for performance? As we have seen,62 the rule
that the party serving the notice must be ‘ready, able and willing’ does not imply that he or
she must be able to perform in full at the very instant the notice is given.63 This is no more
than common sense. Performance of contracts, and the completion of a conveyance in
particular, can be a complicated business, and may require the co-operation of both parties
and even of outsiders to the contract.64 Thus, for instance, it may be the purchaser’s duty to
prepare the conveyance and tender it to the vendor for execution. If the purchaser has
failed to do this, he or (p. 182) she can hardly be allowed to defeat a notice by the vendor
on the ground that the latter is not in a position to execute that conveyance.65 The cases
indicate that the promisee will be entitled to serve a notice in spite of not having performed
some of the necessary steps towards completion, so long as at the time of the notice he or
she is able and willing to perform those steps as and when they become due for
performance. Thus a vendor need not discharge all the mortgages on the property before
serving a notice; it is enough if he or she can give a good assurance that they will be
discharged before completion.66 Similarly, the presence of a tenant on the property will not
bar the serving of a notice even where the vendor has contracted to give vacant possession,
as long as the vendor knows that the tenant will be out by the due date.67 The same
principle applies to the purchaser, who can serve a notice to complete without having the
price ready then and there; it is enough that he or she has access to funds and will be able
to produce the price when required.68 In McNally v Waitzer69 a sale of land was subject to a
statutory charge payable on the issue of an assessment. The vendor issued a notice to
complete at a time after the assessment had been issued but before the tax had been paid.
The court rejected the purchaser’s contention that the vendor was not entitled to serve the
notice without paying the tax.70 Pointing out that the rule was that the giver of the notice
should at the relevant time be able, ready and willing to proceed to completion, not able
ready and willing to complete,71 the court held that he did not have to pay the tax before
Private Law Library
Page 177
giving the notice, so long as he was ready to pay it within the time stipulated by the
authorities.72
(p. 183) 8.16 Taken as a whole, the test of whether a promisee is ready, able and willing to
proceed to completion has been said to be whether the evidence shows a readiness in due
time to provide such performance as will entitle the promisee to a decree of specific
performance.73 Thus a notice making time of the essence may not be served by a promisee
who acts or has acted in such a manner as to entitle the promisor to refuse to perform –
that is to say, where the promisee has committed a serious breach of the contract, or has
repudiated it by his or her own inability or unwillingness to perform.74
(b) Delay by promisor
8.17 Even if the promisee is fully ready and willing to perform, he or she cannot serve a
notice making time of the essence, any more than he or she can obtain a decree of specific
performance,75 on a whim, or in order to terrorise the other party into performing. There
must be some conduct by the promisor which warrants the service of a notice, in particular
some unreasonable delay on his or her part.76 The application of this rule is a matter of
some controversy, and the cases are often hard to distinguish.77 Two factors must be
considered, the first being the extent of the delay and the second the obligation in the
performance of which the promisor has defaulted.
(i) Extent of delay required
8.18 Various descriptions of the delay required can be found in the cases: it must have
been ‘gross, vexatious, unreasonable or unnecessary’;78 ‘great and improper delay’;79
‘unnecessary delay’;80 ‘improper delay’;81 delay so unreasonable that it would have been a
good defence to an action for specific performance.82 All this would seem to add up to very
bad delay indeed. Yet, as we shall see, it is equally clear that the injured party is entitled to
withdraw from the contract without a notice for any undue delay where time is of the
essence,83 and for a ‘frustrating’ delay (i.e. delay going to the root of the contract) in other
(p. 184) cases.84 Now, since there is no need to issue a notice at all when time is already of
the essence, service of a notice is only necessary where it is not;85 and if in the latter case
the injured party can terminate without notice for frustrating delay, the amount of delay
required for the service of a notice must be something less. So how does a party know when
sufficient delay has elapsed? A number of different situations must be distinguished here.
8.19 The first situation is where the contract has specified no time for performance. Here
the rule is, as we have seen,86 that the promisor has a reasonable time in which to
perform.87 Since there is not even a breach of contract before such a time has elapsed,
there can normally be no question of any notice being served at this stage.88 However, once
the reasonable time for performance has passed, the promisee, assuming that the promisor
is responsible for the delay,89 can claim damages for breach of contract, and since it would
be the height of pedantry to argue that the reasonable time for performance is different
from the reasonable time that must elapse before the notice is served, it would seem that
the promisee can also serve a notice making time of the essence.90
8.20 The second situation is where the contract has specified a time for performance
which is not of the essence,91 and that time has passed. Here, a notice can be served
provided that the promisor is in breach.92 In Behzadi v Shaftesbury Hotels93 the Court of
Appeal, overruling previous authority to the contrary,94 held that a vendor’s failure to
deduce title by the set day entitled the purchaser to issue a (p. 185) notice making time of
the essence, despite it being provided in the contract that time was not of the essence with
regard to the stipulation in question.95 In the course of his judgment Nourse LJ drew a
distinction between ‘open’ contracts and those where a time was specified for
performance.96 In the former case, no notice could be served before a reasonable time had
elapsed, because there was no breach of contract until then. In the latter case, however,
failure to perform on time was already a breach,97 and there was therefore no sense in
Private Law Library
Page 178
postponing the innocent party’s right to serve a notice any further. It therefore seems that
what triggers the right to serve the notice is not so much the lapse of a reasonable time as
such, as the other party’s breach in failing to perform on time.
8.21 Sometimes, as in the case of a claim for specific performance,98 it may even be
possible to serve a notice before the time for performance has arrived. The main authority
here is the difficult decision of the Court of Appeal in British and Commonwealth Holdings
plc v Quadrex Holdings Inc,99 a case involving an agreement to transfer shares in a private
company. A date had been agreed for the transfer, but the vendors were unable to complete
on time. A notice making time of the essence was then served, and a month later the
purchasers claimed that the contract had been repudiated. The question now arose whether
the purchasers were entitled to serve the notice when they did. Browne-Wilkinson V-C, who
gave the judgment of the court, said that it was unnecessary to decide whether the
completion date was binding,100 since in the event the vendors’ subsequent conduct
amounted to waiver.101 He therefore approached the case on the basis that there was no set
completion date. It was held none the less that the purchasers were entitled to serve the
notice when they did. Since the agreement was one for the sale of shares in a private
company, a notoriously volatile section of the market and one subject to rapidly fluctuating
prices,102 it was one where time would have been of the essence of any completion date set
in the agreement. Accordingly, no such date having been set, it was open to the purchasers
to serve a notice as soon (p. 186) as completion became possible, assuming of course that
they were themselves ready and willing to proceed to completion at the relevant time.103
The effect of all this seems to be that in cases where no time is set for performance, but
where such time would have been of the essence had it been set, the promisee may set a
date for performance by issuing a notice as soon as performance becomes possible. Since
the promisee can withdraw from the contract at once if the date is not met, it is not
unreasonable to allow him or her to give notice of that fact.
8.22 There may be a further situation in which a notice can be served before the time for
performance has arrived, and this is where the promisor has indicated that he or she is
unwilling or will be unable to perform his or her obligations when the time comes. Where
such conduct amounts to a repudiation of the contract, the promisee may withdraw without
further ado,104 so it would be highly illogical to forbid him or her to take the less drastic
step of issuing a notice making time of the essence. What if it can be shown that the
promisor is unlikely to perform when the time comes, but not that performance is
impossible or that he is unwilling to do so? The cases establish that there is no repudiation
here105 so the promisee cannot withdraw from the contract at once. Can the promisee serve
a notice making time of the essence? It would not be unreasonable to allow this to be done,
though it must be admitted that there are dicta to the contrary.106
(ii) Obligation defaulted on
8.23 Most of the cases we have been considering involve delay in completion, that is to say
delay in performing what is, in the conveyancing context, probably the most fundamental
obligation of all. Can a notice be issued where the promisor’s default relates to some lesser
term under the contract? It is here that the courts have got into difficulties. Since these are
not cases where the promisee could have sought a decree of specific performance, failure
by the promisor to comply with the notice can only justify termination on the basis that the
promisor has repudiated the contract,107 but is this necessarily so? The problem was
considered by Lewison J in Multi Veste 226 BV v NI Summer Row Unitholder BV,108 where
he concluded that though failure to comply with a notice (p. 187) in these circumstances
cannot automatically amount to a repudiatory breach, the effect of the notice was to convert
the question from whether delay amounts to a repudiation to the question whether failure
to perform the obligation at all amounts to a repudiation.109 However, later the same year,
in Samarenko v Dawn Hill House Ltd,110 Lewison LJ (as he now was) said that his comments
in the Multi Veste case had perhaps been too prescriptive, and that in the case of a truly
Private Law Library
Page 179
innominate term, that is to say a term that can be broken in many different ways, some
serious and others not, then it might be wrong to equate delay in performance (even after
notice) with total refusal to perform.111 This approach was subsequently confirmed by the
Court of Appeal in Urban 1 (Blonk St) v Ayres,112 where Sir Terence Etherton said that the
general principles of law applied to this situation, which meant that even after service of a
notice termination could only be justified if either the delay had by then reached a point
where it went to the root of the contract, or the promisor’s failure to comply with the notice
could be construed as a renunciation of his or her obligations thereunder.113 But if this is
so, then it gives rise to another problem, which is this: if the ability of the promisee to
terminate depends on these ordinary principles of law, what is the point of serving the
notice in the first place?114
8.24 The key to this conundrum, it is suggested, lies in the distinction that has been drawn
between notices to complete and notices to perform.115 As has been said, a failure to
complete is tantamount to a failure to perform the contract at all,116 so where the promisor
has defaulted on the completion of the contract, or an equivalent obligation, the appropriate
notice is a notice to complete, and this may be served as soon as the default takes place, if
not earlier.117 There is no problem here.
8.25 Where the default relates to some lesser obligation, the appropriate notice is a notice
to perform, the effect of which, it has been said, is not only to fix a further time for the
performance of that obligation, but to make it an essential obligation, in the sense that the
failure to perform it by the new time is a ground for termination of the contract for
breach.118 However, this cannot (p. 188) be accurate as it stands; the status of a contractual
term cannot be altered unilaterally in this way.119 Rather, it is necessary here to make
further distinctions based on the status of the term in question. If time was originally of the
essence in relation to that term, then as we have seen the effect of a notice is to restore
matters to their original position,120 but what if it was not? Here the termination, as we
shall see, can only be on the ground that the promisor’s failure to observe the notice
amounts to a repudiation of the contract.121 This means that the promisor’s failure to
perform must be one which, if still persisted in on the expiry of the notice, would amount to
a repudiation of the contract.122 Where the term in question is a ‘condition’, then that will
follow as a matter of course.123 In other cases, a repudiation will have to be established on
the facts, but the failure of the promisor to comply with the notice, though not proof of
repudiation in itself, may (other things being equal) be good evidence of such
repudiation.124
(3) Content of notice

8.26 Even if the notice is served at the proper time, it may still fail if it is defective in itself.
Two requirements for a valid notice were set out by Jordan CJ in the Supreme Court of New
South Wales in O’Brien v Dawson.125 First of all, the time prescribed by the notice must be
reasonable. Secondly, the notice must state with reasonable explicitness: (1) what it is that
is being required to be done; and (2) that if it is not done within the time prescribed, the
party who has given the notice will treat the contract as at an end, or will treat himself as
entitled to put an end to it. Both of these matters merit further discussion.
(a) Reasonable time for compliance
8.27 A notice making time of the essence must allow the recipient a reasonable time to
perform. The question of what is a reasonable time in this context has been held by the
Privy Council to be one of fact,126 the burden being on the giver of the (p. 189) notice to
show that the time allowed is reasonable rather than on the recipient to show that it is
not.127 There are a number of issues involved here.128
Private Law Library
Page 180
8.28 The principal factor is what needs to be done under the notice. In Green v Sevin129 it
was held that three weeks was a totally inadequate time for the tenant of a factory to raise
£5,000 and complete under an option for purchase which he had purported to exercise;
indeed, it was said that the time was too short even to expect him to raise the money alone.
Again, in Crawford v Toogood130 a five-week notice was held to be wholly insufficient to
allow the recipient to complete: the abstract of title was not a simple one; requisitions
would have to be made; answers would have to be made to the requisitions and rejoinders
to the answers; the draft of the conveyance would have to be prepared and approved; the
conveyance would have to be engrossed; only then could the conveyance be executed. On
the other hand where, in Compton v Bagley,131 all that was required was the delivery of an
abstract, fourteen days’ notice was held to be quite sufficient. Similarly, a short period of
notice was held to be adequate in Thornton v Bassett,132 where all that was needed was the
payment of a single instalment of the purchase price. In this connection due allowance must
be made for special circumstances known to the giver of the notice which might hinder the
recipient in carrying out the acts required; thus in Re Barr’s Contract133 a 28-day period
was held to be insufficient when the giver of the notice knew that the recipient could only
raise the price from a proposed subsale, and in Barrett v Beckwith134 it was held that the
vendor should have given the purchaser time to find finance. But such special
circumstances will be disregarded if the giver of the notice did not know about them at the
relevant time.135
8.29 The cases indicate one important exception to this principle. Where the recipient of
the notice has been guilty of delay that has not only been unreasonable but utterly
inordinate, it is said that the notice need not give sufficient time to perform. Thus in
MacBryde v Weekes136 a very short period of notice was held to be (p. 190) justified on the
ground of the recipient’s having totally failed to take any steps to advance the transaction.
Again, in Stickney v Keeble137 Lord Parker said that the recipient’s own past delay could
not entitle him to a longer period of notice than he would otherwise have had, and that he
could not complain if as a consequence he was served with a notice which did not give him
enough time to do the acts specified in it.138 A similar result was reached in Strada Estates
Pty Ltd v Harcla Hotels Pty Ltd,139 where the recipient had deliberately delayed
performance for his own ends, and in Ajit v Sammy,140 where it was quite obvious that the
recipient was never going to perform. According to the New South Wales Court of Appeal in
Michael Realty Pty Ltd v Carr,141 the recipient’s delay has to be looked at as a whole, the
question being whether the notice fixes a time beyond which equity would refuse a decree
of specific performance.
8.30 The service of a notice telling the recipient to do something which there is no chance
of him or her doing in the time specified seems to be a particularly pointless exercise. If the
promisor has been guilty of such inordinate delay as to entitle the promisee to serve an
impossible notice, one might as well allow him or her to resile from the contract there and
then, without going through the empty charade of serving the notice.142 Perhaps the
decisions under discussion can be explained on the ground that the promisee could have
terminated at once, but thought that this could not be done without first serving a notice.143
Certainly there is a lot to be said for the view that the proper purpose of a notice making
time of the essence is, as we have suggested above,144 to give the promisor one last chance
to fulfil his or her obligations.145 There is no point in using the device once that chance has
gone.
8.31 The conduct of the promisee may also be relevant to the length of the notice. Even
where the promisee is not debarred altogether from serving the notice by unreadiness,146
he or she will not be entitled to insist on a fast performance by the promisor where his or
her own performance has been slow,147 or where (p. 191) he or she has previously
acquiesced in the delay.148 Still less will the promisee be entitled to speedy performance
when he or she has been guilty of serious default and only wishes to serve the notice as a
Private Law Library
Page 181
device for wriggling out of an unprofitable bargain.149 Conversely, a promisee was allowed
to insist on very prompt performance indeed where there had been repeated delays, time
had originally been of the essence, and he had been constantly pressing for performance.150
8.32 What is the position where the contract itself provides for a fixed period of notice?
One would have thought that in this situation that period of notice would prevail. However,
past cases indicate a reluctance on the part of the courts to allow this; though they have
been prepared to take the specified period of notice into consideration,151 they have been
quite ready to ignore it altogether where it does not correspond to the period that would
have been set under the general law.152 The matter will be discussed further below,153 but
generally the approach in these cases can best be understood in the light of the traditional
flexibility of equity in relation to time stipulations.154 Given the attempts made in recent
years to integrate these old principles into the general law of contract, it is submitted that
this issue is ripe for reconsideration.
(b) Form of notice
8.33 As well as allowing a reasonable time for performance, the notice must tell the
recipient: (1) what has to be done; and (2) what the consequences will be if it is not done.
Thus the notice must set out exactly what needs to be done – no more, no less.155 Thus
where, in Neeta (Epping) Pty v Phillips,156 a notice was served demanding payment of the
purchase price with interest, it was held to be bad, as the demand for interest was
unwarranted by the contract. Conversely, a notice which does not specify what the recipient
has to do is equally bad; the notice must be unambiguous.157 The best way of making a
notice foolproof in this (p. 192) respect is to recite the relevant provisions of the contract,
specify the default, and order the recipient to remedy it within the period specified.158
8.34 The requirement that the notice set out the consequences of default is more
problematic. Some cases seem to suggest that the notice must tell the recipient in clear
words that if he or she fails to comply with it the contract will be terminated.159 However,
this cannot be taken literally as it stands. In the normal case of discharge for breach the
innocent party has a right of election – that is, either to terminate or affirm – and there is no
good reason why this should not apply equally to a case where the breach consists of failure
to comply with a notice making time of the essence.160 Because of this, other cases suggest
that it is enough for the giver of the notice to reserve his or her rights, so long as it is made
clear to the recipient that the contract may be terminated if the notice is not complied
with.161 But a notice which merely threatens proceedings to ‘enforce the contract’,162 or
that in default of compliance the giver will consider the recipient as refusing to perform and
will ‘act accordingly’,163 will not do. Nor will it be enough for the promisee to indicate that
he or she will ‘rely on his rights under the contract’,164 unless it is clear from the context
that this includes the right to terminate.165
8.35 What if the notice threatens to do more than terminate? In Pearce v Kelly166 a notice
threatening to terminate the contract and to forfeit previous instalments of the price was
said to be bad, in that it threatened too much; the contract did not provide for forfeiture of
instalments. However, subsequent cases indicate that ‘excrescences’ of this sort will not
necessarily invalidate a notice making time of the essence, provided that it draws the
recipient’s attention to the possibility of (p. 193) termination for non-compliance.167 To be
on the safe side, the notice should say in so many words that time is now of the essence,
and that if it is not complied with the promisee reserves the right to terminate the
contract.168
(4) Effect of notice
Private Law Library
Page 182
8.36 Describing such notices as ‘notices making time of the essence’ might lead one to
think that the effect of the notice is to convert the relevant obligation into a ‘condition’ of
the contract, in the sense of a fundamental obligation breach of which will give rise to an
automatic right of termination. However, though it is not unknown for judges to describe
the effect of a notice in such terms,169 the orthodox view is that the law does not allow the
status of a term to be altered unilaterally in this way.170 Despite this, it is clear that where
the promisor fails to comply with such a notice the promisee is normally released from the
obligation to perform the contract.171 Thus a vendor of land can call off the sale and find
another purchaser;172 a purchaser can refuse to proceed with the sale and can recover the
deposit;173 a buyer of goods need no longer accept them if tendered;174 and so on. Damages
may also be recovered in appropriate cases on the basis that the recipient’s failure to
comply with the notice constitutes a repudiation of the contract.175 However, the giver of
the notice is not bound to terminate performance – he or she may decide to affirm instead,
and may even serve extra notices later on, setting a further deadline.176
(p. 194) 8.37 There may, however, be exceptional cases in which a promisee is not entitled
to terminate performance in this situation. This is demonstrated by the difficult case of
Legione v Hateley,177 in which the High Court of Australia granted specific performance to
the promisors despite their clear failure to comply with a valid notice. This case involved a
sale of land in which the purchasers had gone into possession pending completion and had
indeed erected a house on the property. However, when it came to the crunch, they failed to
pay the outstanding balance of the price by the date specified, and were unable to remedy
the default in time despite being given proper notice to do so.178 Nevertheless, a decree of
specific performance was granted due to the exceptional circumstances of the case. A
number of factors seem to have influenced the court here. First of all, the purchasers had
tendered the outstanding sum within a few days after the expiry of the notice, and were
currently fully ready and willing to complete the transaction. Secondly, the purchasers had
been led to believe by the vendors’ solicitor that a few days grace might be given, and
though at the end of the day the majority did not feel that this was sufficient to bring the
case within the bounds of promissory estoppel,179 it was clearly a factor relevant to the
court’s discretion to relieve against a forfeiture. Last but not least, as we have seen, the
purchasers had built a house on the land, so that the vendors stood to gain an unjustified
windfall if the decree was refused. Legione v Hateley has been criticised as unsound,180 but
the decision is fully in line with the original cases on notices making time of the essence.
Here, it will be remembered, the significance of a promisor’s failure to observe a notice was
in demonstrating an abandonment of the contract.181 Whatever might be said of the
promisors in Legione v Hateley, they had clearly (p. 195) shown no intention to abandon the
contract; on the contrary, they had done everything in their power to perform it. We shall
return to this matter later when we come to discuss the modern formulation of the doctrine
under discussion.182
8.38 A notice making time of the essence is a two-edged sword, and may operate to the
detriment of the giver in two ways. First of all, service of such a notice constitutes
affirmation of the contract, so the giver cannot turn round and terminate performance
without giving the recipient a chance to comply with the notice.183 Secondly, once given the
notice binds both parties, so that if the giver subsequently refuses to perform without good
reason or fails to do so the recipient may in turn be discharged from his or her own
obligations under the contract.184
C. Scope of the Procedure
Private Law Library
Page 183
8.39 Most of the cases involving notices making time of the essence are in the context of
conveyancing. The reason for this is historical. As we have seen, the result of a party’s
failure to comply with a valid notice making time of the essence was that equity would
refuse to grant him a decree of specific performance, on the ground that such default
demonstrated an ‘abandonment’ of the contract on his part.185 In other contexts, where
there was no question of a decree of specific performance in the first place, there would
have been no point in serving a notice; hence the procedure was largely unknown in the
commercial context, where the courts of equity had no jurisdiction. However, this did not
mean that equity was more strict as to time than the common law. On the contrary, the
premise upon which the courts of equity operated was that time was generally of the
essence at common law;186 indeed, a decree of specific performance would often be
accompanied by a ‘common injunction’ to prevent the defendant taking steps to have the
contract terminated at law.187 So when a notice making time of the essence was issued, it
was not with a view to invoking some especially draconian equitable jurisdiction. On the
contrary, the effect of failure to comply with the notice was simply to return the parties to
their position at common law.188
(p. 196) 8.40 However, this analysis soon became unrealistic for two reasons. First of all,
the effect of the Judicature Acts was to allow equitable remedies to be applied in all
courts;189 there was therefore no longer any area where equity had no jurisdiction.
Secondly, whatever the courts of equity may traditionally have supposed, time was never
necessarily of the essence in the commercial context.190 The paradoxical result of this was
to reverse the traditional position. In those contracts to which specific performance applied,
a party prejudiced by delay could always bring matters to a head by issuing a notice making
time of the essence. But in other contexts where time was not of the essence there was
traditionally nothing that he could do unless the delay involved was so protracted as to go
to the root of the contract.191 In effect, in cases where time was not already of the essence,
the common law became more relaxed than equity in relation to matters of delay.
8.41 The obvious solution to this paradox is to allow a notice making time of the essence to
be served in all types of contract, and not just those where specific performance is granted.
As we have seen, the common law allowed for the service of a notice following waiver of an
essential time stipulation,192 but what if time had never been of the essence? Could a notice
be served here as well? In Charles Rickards Ltd v Oppenhaim,193 the facts of which have
been discussed earlier, Singleton LJ approved a passage from the then current edition of
Halsbury,194 which is in similar terms to that quoted earlier.195 Under the heading ‘Building
Contracts, Engineers and Architects’, the following words appeared:
In cases where time has not been made of the essence of the contract, or where,
although time originally was of the essence of the contract, the time so fixed for
performance has ceased to be applicable by reason of waiver or otherwise, the
employer has still a right by notice to fix a reasonable time for the completion of the
work, and in case the contractor does not complete by that time, to dismiss the
contractor just as a vendor would be entitled to rescind the contract in case of a
contract for sale of land.196
The other members of the court, however, did not go so far; indeed, a note was appended to
the report suggesting that the passage in question was of doubtful (p. 197) authority.197 So
it remained a moot point whether a notice making time of the essence could be served in a
commercial context where time had not been of the essence originally.
8.42 Further observations on the matter were made in the House of Lords a quarter of a
century later, in United Scientific Holdings Ltd v Burnley Borough Council,198 by Lord
Simon, who sought to reinterpret the equitable rules as to time in the modern terms of
condition, warranty, frustration, and so on.199 Thus where a contract makes time of the
essence from the beginning, the effect is to make timely performance a ‘condition’, so that
Private Law Library
Page 184
the other party is discharged from the obligation to perform if the condition is not
fulfilled.200 If time is not of the essence, the term in question is a mere ‘warranty’ or
‘innominate term’, so there is no discharge unless the delay is so long as to ‘go to the root’
of the contract, or deprive the injured party of the benefit of it.201
8.43 At first sight, there seem to be insuperable difficulties in fitting the notice making
time of the essence into this picture. On Lord Simon’s analysis, such a notice seems to have
the effect of converting the obligation to perform on time from a warranty or innominate
term (not of the essence) into a condition (of the essence). The promisee seems to be
altering the status of a contractual term by unilateral diktat – something which, as we have
seen, the law does not allow.202
8.44 The solution to this conundrum lies in the grey area of law lying between the
doctrines of repudiation and discharge by breach. In particular, as we shall see, a contract
may be terminated in some cases where breach of an existing obligation gives rise to
uncertainty as to future performance.203 One example of this is in relation to
unseaworthiness.204 According to Sellers LJ in The Hongkong Fir,205 where a ship is
unseaworthy, the charterer may terminate performance where the delay in remedying any
breach is so long in fact, or is likely to be so long in reasonable anticipation, that the
commercial purpose of the contract would be frustrated.206 Note that this does not depend
on breach of condition; one of the (p. 198) main issues decided by The Hongkong Fir is that
the obligation to supply a seaworthy ship is not a condition. Rather, what matters is the
effect of the breach; and here the court may look not only at what has already happened but
at what is likely to happen in the future.207
8.45 It will be evident that the principle under discussion involves two factors, which can
be termed a past breach and a prospective failure of performance. If the breach is purely
anticipatory, it is not enough for the promisee to show that future performance by the
promisor is unlikely; there must be proof that the promisor is refusing to perform, or is
totally and finally disabled from doing so.208 Conversely, in the absence of breach of
condition, a breach unaccompanied by any fundamental failure of performance will of
course sound in damages only. But where there is both a past breach and a prospective
failure in performance on the part of the promisor, the promisee has a right to terminate
performance.
8.46 This is precisely the situation that exists where the promisor has failed to comply with
a notice making time of the essence. Breach of a time stipulation is, as we have seen,
generally required before the notice can be served in the first place.209 And the fact that the
promisor is still unable or unwilling to perform despite having been given a reasonable
opportunity to rectify matters serves to indicate that performance is very unlikely to be
forthcoming in the future. This is more or less exactly what Lord Simon said in the United
Scientific Holdings case, where he analysed the notice procedure in these terms:
The notice operates as evidence that the promisee considers that a reasonable time
for performance has elapsed by the date of the notice and as evidence of the date by
which the promisee now considers it reasonable for the contractual obligation to be
performed. The promisor is put on notice of these matters. It is only in this sense
that time is made of the essence of a contract in which it was previously non-
essential. The promisee is really saying, ‘Unless you perform by such-and-such a
date, I shall treat your failure as a repudiation of the contract.’210
8.47 Lord Simon was saying nothing new here. As we have seen, the function of the notice
procedure in early days was to demonstrate that the promisor had ‘abandoned the
contract’.211 It will be remembered that a promisor whose own failure to perform amounted
to an abandonment of the contract could not obtain a decree of specific performance
against the promisee; failure to comply with a (p. 199) notice making time of the essence
Private Law Library
Page 185
was clear evidence of such abandonment. This is more or less exactly what Lord Simon says
in the passage under consideration. In a sense, the wheel has turned full circle.
8.48 Lord Simon goes on to stress that failure to comply with the notice is only evidence of
repudiation.212 This explains a number of factors in the cases. First, it explains why the
promisor’s failure to comply with a premature notice,213 or one that gives insufficient time
for performance,214 will not entitle the promisee to terminate. Second, it also tallies with
cases like Legione v Hateley,215 in which a defaulting promisor is awarded a decree of
specific performance despite failing to comply with a valid notice. Though a promisor in this
situation can normally be presumed to have repudiated the contract, there may be cases
where, as in Legione v Hateley itself, this presumption is clearly rebutted on the facts of the
case.216 Finally, it gives the answer to the conundrum discussed above, where a notice is
served in relation to the non-performance of a lesser term of the contract.217 Even here the
promisor’s failure to comply with the notice may sometimes constitute good evidence of
repudiation, but whether it does so in any given case can only be determined in the light of
the facts of that case. The less important the term in question, the less likely it is that the
notice will be effective.
8.49 This point is well illustrated by Eshun v Moorgate Mercantile Credit Co,218 a case
involving a hire-purchase agreement for a car. The hirer defaulted on the first two
instalments, and the owners accordingly served a notice stating that if payment was not
forthcoming within nine days of receipt they would assume that the hirer was repudiating
the contract and would act accordingly.219 The Court of Appeal held that the notice was
invalid under the Hire Purchase Act 1965, one reason (p. 200) being that the reference to
repudiation was misconceived. In the words of Lord Denning MR:
The owner says in effect to the hirer: ‘If you do not pay we shall assume that you
are terminating by repudiation and will enforce our rights accordingly.’ The owners
had no right to make any such assumption. The mere non-payment of one or two
instalments does not amount to repudiation … [The notice] … seeks to put upon the
hirer a repudiation when he had never repudiated … It is inaccurate and
misleading. It is defective and insufficient. It is not a good notice of default.220
Thus, as we have seen,221 the service of a notice making time of the essence will generally
not be appropriate where the promisor has merely failed to perform a minor stipulation in
the contract. Most of the cases on the subject involve a failure to complete or some other
major default, and it is submitted that the obligation in question must be one which, if left
unperformed indefinitely, would largely deprive the promisee of the benefit of the
contract.222
8.50 In sum, there are three ways in which a party’s failure to comply with a notice making
time of the essence may operate: as a defence to an action for specific performance, to
negative an argument based on waiver, and as evidence of repudiation by the party in
default. The first of these can only by the nature of things apply within the field of equity,
since it is only within that field that specific performance is granted in the first place, but
this argument does not apply to the other two cases. There seems, therefore, no good
reason why this very useful remedy should be limited to its traditional stamping grounds,
and there are English and Commonwealth dicta suggesting that it is available in contracts
of all types.223 If the issue were to arise in the future, it is submitted that a modern (p. 201)
English court would not rule out such a useful remedy as this merely on the grounds of a
historical distinction, the significance of which was already beginning to become blurred
the century before last.224
Private Law Library
Page 186
D. Consumer Rights Act 2015

8.51 Given the comments above about the utility of the notice procedure as a general
contractual remedy, it is interesting to note that something very similar is now to be found
in s 28 of the Consumer Rights Act 2015. This provides that a trader under a sales
contract225 is obliged to deliver the goods at the time or within the period agreed;226 where
no time has been agreed, the goods must be delivered without undue delay, and in any
event no more than thirty days after the contract.227 The consumer is then provided with a
right of termination228 for failure to deliver on time229 in three cases. The first is where the
trader has refused to deliver the goods;230 this corresponds to repudiation. The second is
where the delivery of the goods at the agreed time or within the agreed period was
essential taking into account all the relevant circumstances at the time the contract was
entered into, or where the consumer told the trader before the contract was entered into
that delivery at the agreed time or within the agreed period, was essential;231 this
corresponds to time being of the essence. The third is where the consumer, following a
failure by the trader to deliver on time, specifies a period that is appropriate in the
circumstances and requires the trader to deliver the goods before the end of that period,232
and the trader fails to deliver the goods within that period;233 this corresponds to time
being made of the essence by (p. 202) notice. It should be noted however that this remedy
only applies in relation to sales contracts;234 where the contract is one for services the
obligation is merely to perform them within a reasonable time235 and nothing is said about
notices. However, there would seem to be no good reason why such a procedure should not
be available to the consumer in this case as well, albeit one provided by the general law
rather than under the Act itself.
Footnotes:
* This material is based on an article first published by Sweet & Maxwell Limited in the
Law Quarterly Review 2004, and is reproduced by permission of the publishers.
1
See clauses 6.8 and 7.5 of the Standard Conditions of Sale (5th edn) (National Conditions
of Sale (25th edn); Law Society’s Conditions of Sale 2011 < https://www.lawsociety.org.uk/
Support…/Standard-conditions-of-sale-5th-edition> (accessed 2 July 2017). For the
relationship between contractual rights of this sort and the right to serve a notice under the
general law, see below, paras 13.33–13.34.
2
See for instance Law of Property Act 1925, s 146; Consumer Credit Act 1974, ss 87 and
88; Sale of Goods Act 1979, s 48(3); Consumer Rights Act 2015, s 28(7) and (8).
3
Compare the Nachfrist in German Civil Law: BGB, para 326; Treitel, G H, Remedies for
Breach of Contract (1988), para 245; Zweigert, Konrad and Kötz, Hein, An Introduction to
Comparative Law (3rd edn, translated by Tony Weir, 1998), pp 492–493.
4
Strictly speaking, as Sir Terence Etherton points out, this is a misleading way of putting
it, as it is contrary to principle for one party to be able to alter the status of a contractual
term by unilateral fiat: Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 1445, [2013] Ch 36 at
[44]; and see further below at para 8.10.
5
See for instance Peel, Edwin (ed), Treitel: The Law of Contract (14th edn, 2015) (‘Treitel
(Contract)’), para 18-107; Furmston, Michael P (ed), Cheshire, Fifoot and Furmston’s Law
of Contract (17th edn, 2017) (‘Cheshire, Fifoot and Furmston’), p 692; Beatson, Jack,
Burrows, Andrew, and Cartwright, John (eds), Anson’s Law of Contract (30th edn, 2016)
(‘Anson’), p 467.
6 Above, para 2.40.
Private Law Library
Page 187
7
Gibson v Patterson (1737) 1 Atk 12, 26 ER 8; Pincke v Curteis (1793) 4 Bro CC 329, 29
ER 918; Fordyce v Ford (1794) 4 Bro CC 497, 29 ER 1007; Seton v Slade (1802) 7 Ves J 265,
32 ER 108.
8
The point here is not that time was always of the essence at common law: cases such as
Constable v Cloberie (1627) Palmer 397, 81 ER 1141, Hall v Cazenove (1804) 4 East 476,
102 ER 913 and Havelock v Geddes (1809) 10 East 555, 103 ER 886 show that it was not.
Rather, the point is that the courts of equity proceeded on the assumption that it was, at
least in relation to the sort of contracts with which they were normally concerned; see
Stickney v Keeble [1915] AC 338 (HL) at 415 (Lord Parker); Samarenko v Dawn Hill House
Ltd [2011] EWCA Civ 1445, [2013] Ch 36 at [31] (Lewison LJ).
9
2nd edn, revised by John Brunyate (1947), p 307.
10
(1802) 7 Ves J 265, 32 ER 108.
11
(1802) 7 Ves J 265 at 273, 32 ER 108 at 111; see also Lennon v Napper (1802) 2 Sch &
Lef 682 (High Ct of Chancery in Ireland) at 684–685 (Lord Redesdale).
12
Lloyd v Collett (1793) 4 Bro CC 469, 29 ER 992; Fordyce v Ford (1794) 4 Bro CC 497, 29
ER 1007; Radcliffe v Warrington (1806) 12 Ves J 326, 33 ER 124.
13
14
[1915] AC 386 (HL).
15
Ibid at 416.
16
(1793) 4 Bro CC 469, 29 ER 992.
17
(1793) 4 Bro CC 469 at 472, 29 ER 992 at 993.
18
(1799) 4 Ves J 685, 31 ER 354.
19
(1806) 12 Ves J 326 at 332, 33 ER 124 at 126.
20
An intention to abandon would normally be indicated, as in Lloyd v Collett, Harrington v
Wheeler, and Radcliffe v Warrington, by a failure to perform. But it might also be indicated
by laches, or by failure to pursue a remedy: see Spurrier v Hancock (1799) 4 Ves J 667, 31
ER 344; Heaphy v Hill (1824) 2 Sim & St 29, 57 ER 255. In either case the underlying
rationale seems to be a sort of estoppel; the promisee cannot demand performance from the
promisor after leading him reasonably to believe that the contract is no longer on foot; see
above, para 5.70.
21
See Reynolds v Nelson (1821) 6 Madd 18, 56 ER 995; Heaphy v Hill (1824) 2 Sim & St
29, 57 ER 255; Watson v Reid (1830) 1 Russ & My 236, 39 ER 91; Taylor v Brown (1839) 2
Beav 180, 48 ER 1145. The first edition of Fry on Specific Performance in 1856 describes
the doctrine (at p 318) as being one ‘of somewhat recent introduction’, but affirms that it is
now ‘well-established’.
22
(1821) 6 Madd 18 at 26, 56 ER 995 at 998–999.
23
(1839) 2 Beav 180 at 183, 48 ER 1149 at 1150.
24
Above, para 5.66.
25
Dudley, Hall & Clarke v Cooper, Ewing & Co (Unreported), cited in Hartley v Hymans
[1920] 3 KB 475 at 495 (McCardie J).
26
[1920] 3 KB 937.
27
See also Lord Energy Ltd v Chen Paul and another [1997] 3 HKC 270 (High Ct of Hong
Kong).
Private Law Library
Page 188
28
[1920] 3 KB 937 at 945.
29
[1950] 1 KB 616; compare Kennedy v Chaplin (1991) 26 ACWS (3d) 1365.
30
[1950] 1 KB at 620.
31
Ibid at 624.
32
Halsbury’s Laws of England (5th edn, 2012), vol 22, para 506.
33
Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 1445, [2013] Ch 36 at [44] (Sir Terence
Etherton C).
34
Above, para 6.20.
35
Below, para 8.36.
36
37
Tilley v Thomas (1867) LR 3 Ch App 61.
38
Below, para 8.48.
39
But the service of an ineffective notice will not necessarily be a breach of contract:
Concord Trust v Law Debenture Trust Corp plc [2004] EWCA Civ 1001, [2005] 1 Lloyd’s
Rep 113.
40
Re Barr’s Contract: Moorwell Buildings Ltd v Barr [1956] Ch 551 at 556 (Danckwerts J);
Neeta (Epping) Pty v Phillips (1974) 131 CLR 286 (High Ct of Australia) at 299 (Barwick CJ
and Jacobs J); Mahase and others v Ramlal [2003] UKPC 12.
41
Jneid v Mirza and ors (1981) 131 NLJ 712.
42
Re Stirrup’s Contract [1961] 1 WLR 449; Pips (Leisure Productions) Ltd v Walton [1981]
2 EGLR 172; Wilkinson, H W, ‘Ready, able and willing – sort of’ (2001) 151 NLJ 533.
43
Horton v Kurzke [1971] 1 WLR 769.
44
Eagleview Ltd v Worthgate Ltd [1998] EWCA Civ 1232.
45
Thus the mere fact that the recipient of the notice was entitled to rescind the contract
does not make the notice invalid if he or she has not actually rescinded it at the relevant
time: McGrath v Shah (1989) 57 P & CR 452.
46
Lambeth LBC v Vincent and ors [2000] 19 EG 145; Wilkinson, above n 42.
47
[1978] 3 All ER 1121; compare Chung v Pericleous [1981] CLY 2277 and Pagebar
Properties Ltd v Derby Investments (Holdings) Ltd [1972] 1 WLR 1500.
48
Wilkinson, above n 42.
49
See Lindgren, Kevin, Time in the Performance of Contracts (2nd edn, 1982) (‘Lindgren’),
pp 77–88; Butt, Peter, ‘Notices to complete: “ready, able and willing” ’[1982] Conveyancer
62; Wilkinson, above n 42.
50
[1981] 1 NSWLR 294.
51
It is different if the default has been cured, and no longer provides an excuse for the
other party’s lack of performance: Bazzana v McNamara (1981) 2 BPR 9396 (Supreme Ct of
New South Wales; Lindgren, above n 49, p 85. Compare Robinson v Thames Mead Park
Estate Ltd [1947] 1 Ch 334.
52
(1992) 64 P & CR 311 (CA); Wilkinson, above n 42.
53
[1972] 1 WLR 1500. It is different if the misdescriptions are minor ones which sound in
damages only: Bechal v Kitsford Holdings Ltd [1989] 1 WLR 105.
Private Law Library
Page 189
54
(1975) 50 DLR (3d) 21 (High Ct of Justice, Ontario).
55
(1978) 17 SASR 353 (Supreme Ct of South Australia).
56
See also Adamson v Barton [1981] 2 NZLR 690 (High Ct of New Zealand) (rubbish left in
garage by vendor and table and chairs not removed); Crnokrak v Avifed Pty Ltd (Supreme
Ct of New South Wales, 3 November 1990)(broken windows); Gogard Pty Ltd v Satnaq Pty
Ltd [1999] NSWSC 1283 (minor encroachments onto adjoining land).
57
(1980) 39 P & CR 395.
58
(1980) 1 BPR 9273 (Supreme Ct of New South Wales).
59
Compare Johns v Deacon [1985] CLY 65 (CA) (dismountable stable block removed by
vendor); Wilkinson, above n 42.
60
Hanson v South West Electricity Board [2001] EWCA Civ 1377, [2002] 1 P & CR 35.
61
Below, para 8.16.
62
Above, para 8.13.
63
Caleo Bros Pty Ltd v Lyons Bros (Aust) Pty Ltd (1980) 1 BPR 9496.
64
Problems can arise when the party who wishes to serve a notice cannot perform without
the co-operation of a third party – for instance, where the vendor of a lease requires the
landlord’s consent to the assignment: see 29 Equities v Bank Leumi (UK) Ltd [1986] 1 WLR
1490 (CA).
65
Compare Poole v Hill (1840) 6 M & W 835, 151 ER 651.
66
Rands Developments Pty Ltd v Davis (1975) 133 CLR 26 (High Ct of Australia).
67
Adamson v Barton [1981] 2 NZLR 690 (High Ct of Justice, New Zealand). It may be
different if the tenant has not been given notice to quit: see Halkidis v Bugeia [1974] 1
NSWLR 423 (Supreme Ct of New South Wales).
68
Bank v Koutoulis (Supreme Court of New South Wales, 1975), cited in Lindgren, above n
49, p 77.
69
[1981] 1 NSWLR 294 (New South Wales Ct of Appeal).
70
Overruling Maxsujur Pty Ltd v Asimus [1980] 2 NSWLR 96 (Supreme Ct of New South
Wales).
71
[1981] 1 NSWLR at 303–304 (Reynolds JA).
72
In Cole v Rose [1978] 3 All ER 1121 Mervyn Davies QC sitting as a deputy judge of the
High Court sought to distinguish in this context between unperformed ‘matters of
substance’ and unperformed ‘necessary administrative arrangements’, saying that the
former would bar the giving of a notice but not the latter. The approach in Cole v Rose was
followed in Aero Properties Ltd v Citycrest Properties Ltd [2002] 2 P & CR 21, but it has
been challenged on the ground that what matters is not the importance of the outstanding
obligation but whether the giver of the notice is in a position to perform it when the time
comes: see Butt, above n 49. Thus an outstanding mortgage on the land is a matter of
substance if anything is, yet as we have seen it does not have to be settled at the time of the
notice so long as the vendor knows he will be able to do so before completion. Conversely,
in Cole v Rose itself, where the matter concerned an outstanding charge, the vendor served
a notice on the purchaser but refused to give any assurance that the charge would be paid
off. The fact that it was ultimately paid off without difficulty was neither here nor there.
However, the distinction drawn by Mervyn Davies QC may be relevant in deciding whether
the promisee’s default is de minimis: above, para 8.14.
Private Law Library
Page 190
73
Lindgren, above n 49, p 82; McNally v Waitzer [1981] NSWLR 294 (New South Wales Ct
of Appeal) at 303 (Hutley JA); above, para 7.20.
74
Above, paras 6.20 (breach of condition), 6.22 (fundamental breach), and 6.25
(repudiation).
75
Above, para 7.11.
76
Green v Sevin (1879) 13 Ch D 589; Re Barr’s Contract [1956] Ch 551; Mahase and ors v
Ramlal [2003] UKPC 12, [2004] P & CR 1 at [27]; Shawton Engineering Ltd v DGP
International Ltd [2005] EWCA Civ 1359, [2006] BLR 1; PP, ‘Time’ (1964) 108 Sol J 724 and
741; Bicknell, B A, ‘Failure to complete on due date’ (1967) 117 NLJ 7.
77
Compare for instance MacBryde v Weekes (1856) 22 Beav 533, 52 ER 1214 with Wells v
Maxwell (1863) 33 LJ Ch 44.
78
Mathuen v Andrews (1936) 3 Sol 200.
79
King v Wilson (1843) 6 Beav 124, 49 ER 772.
80
Taylor v Brown (1839) 2 Beav 180, 48 ER 1149.
81
Pegg v Wisden (1852) 16 Beav 239, 51 ER 770.
82
Re Bayley and Shoesmith’s Contract (1918) 87 LJ Ch 626; Lindgren, above n 49, pp 62–
63.
83
Stickney v Keeble [1915] AC 386 (HL); Bunge Corporation (New York) v Tradax Export
SA [1981] 1 WLR 711 (HL); below, Chapter 11.
84
Farrant v Olver [1922] WN 47; Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha
Ltd (The Hongkong Fir) [1962] QB 26 (CA); below, Chapter 12.
85
In Legione v Hateley (1983) 152 CLR 406 (High Ct of Australia) the terms of the
contract specified that time was of the essence in all respects, but that the exercise of any
remedies was subject to the service of a notice by the promisee giving the promisor a
chance to remedy the default in question. If this was the case, it is hard to see how time was
already of the essence in any real sense. A notice will of course also be necessary where
time was originally of the essence, but there has been a waiver, as in Charles Rickards Ltd v
Oppenhaim [1950] 1 KB 616 (CA).
86
Above, para 1.11.
87
Hick v Raymond and Reid [1893] AC 22 (HL); Sansom v Rhodes (1840) 6 Bing NC 261,
133 ER 103; Stavart v Eastwood (1843) 11 M & W 197, 152 ER 773; Simpson v Hughes
(1897) 66 LJ Ch 143; Nosotti v Auerbach (1899) 15 TLR 140 (CA).
88
Mahase and ors v Ramlal [2003] UKPC 12, [2004] P & CR 1. See however British and
Commonwealth Holdings plc v Quadrex Holdings Inc [1989] QB 842 (CA); below, para 8.21.
89
Above, para 6.08.
90
Barclays Bank plc v Saville Estates Ltd [2002] EWCA Civ 589, [2003] P & CR 28.
91
Where time is of the essence, the contract can of course be terminated without any
notice at all.
92
If there is no breach by the promisor – for instance, if he or she is not in any way
responsible for the delay – there can be no question of a notice being served by the
promisee: Amann Aviation Pty Ltd v Commonwealth of Australia (1990) 92 ALR 601
(Federal Ct of Australia); Castle Hill Tyres Pty Ltd v Luxspice Pty Ltd (1996) 7 BPR 14959
(Supreme Ct of New South Wales).
Private Law Library
Page 191
93
[1992] Ch 1 (CA).
94
Smith v Hamilton [1951] Ch 174; Emery, C T, ‘The date fixed for completion …’ [1978]
Conveyancer 133.
95
Condition 9(1) of the National Conditions of Sale (20th edn).
96
[1992] Ch 1 at 12–13.
97
As we have seen (above, paras 1.04–1.08) this point was not settled till Raineri v Miles
[1981] AC 1050 (HL); prior to then it was thought by many conveyancers that failure to
observe time stipulations was not a breach at all unless time was of the essence.
98
Above, para 7.10.
99
[1989] QB 842 (CA).
100
Ibid at 858. Even if it had been binding, this would not have helped the purchasers,
since it was thought at the time that a party’s failure to observe time stipulations did not of
itself create a right on the part of the other party to serve a notice making time of the
essence: above, n 94.
101
Ibid. If there had been a waiver of a previously binding time stipulation that was of the
essence, the case created no new problem; it is well established that such waivers can be
withdrawn by notice: Charles Rickards Ltd v Oppenhaim [1950] 1 KB 616 (CA); below, para
8.37. On the question of waiver generally, see above, paras 5.61–5.69.
102
Newman v Rogers (1793) 4 Bro CC 391, 29 ER 950; Doloret v Rothschild (1824) 1 Sim
& S 590, 57 ER 233; Coslake v Till (1826) 1 Russ 376, 38 ER 146; Day v Luhke (1868) LR 5
Eq 336; Cowles v Gale (1871) LR 7 Ch App 12.
103
Above, paras 8.12–8.16. Since there was an arguable case that the purchasers were
themselves in default by failing to use all reasonable endeavours to complete on time, the
court refused to grant an order for summary judgment: [1989] Ch 842 at 860–863.
104
Hochster v de la Tour (1853) 2 E & B 678, 118 ER 922; Frost v Knight (1872) LR 7 Ex
111; Farrant v Olver [1922] WN 47.
105
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401; Trade and Transport Inc v Iino
Kaiun Kaisha Ltd (The Angelia) [1973] 1 WLR 210; above, para 6.33.
106
See the remarks of Morritt J in Re Olympia and York Canary Wharf Ltd [1993] BCC 159
at 173. If the promisor is not to blame for the prospective failure in performance, it is a case
of frustration, and the contract is automatically discharged: see Embiricos v Sydney Reid &
Co [1914] 3 KB 45. So if the promisor is to blame, should the promisee not at least be
allowed to serve a notice making time of the essence?
107
108
[2011] EWHC 2026 (Ch), 139 Con LR 23.
109
Ibid at [201].
110
[2011] EWCA Civ 1445, [2013] Ch 36.
111
Ibid at [42].
112
[2013] EWCA Civ 816, [2014] 1 WLR 756.
113
Ibid at [44].
114
Multi Veste 226 BV v NI Summer Row Unitholder BV, above n 108 at [201] (Lewison J);
Treitel (Contract), above n 5, para 18-107. Treitel suggests two answers to this, one being
that the notice can still serve as an incentive to performance (compare the argument above
Private Law Library
Page 192
at 8.01), and the other that it can help to clarify whether the promisor is still willing to
perform: Treitel (Contract), above n 5, para 18-107.
115
Gustin v Taajamba Pty Ltd (1988) 4 BPR 9373 (New South Wales Ct of Appeal) at 9376
(Mahoney JA).
116
Re Olympia and York Canary Wharf Ltd (No 2) [1993] BCC 159 at 172 (Morritt J).
117
118
Gustin v Taajamba Pty Ltd, above n 115 at 9376.
119
Below, para 8.36.
120
121
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) at 946–
947 (Lord Simon).
122
Below, para 8.46.
123
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 36 at [42]
(Lewison LJ). One objection to this is that if the relevant term is a condition, the promisee
should be able to terminate at once without serving a notice: Treitel (Contract), above n 5,
para 18-107. However, though the obligation itself may be a condition, timely performance
of that obligation may not.
124
Re Olympia & York Canary Wharf Ltd (No 2) [1993] BCC 159 at 173 (Morritt J); Dalkia
Utilities Services plc v Celtech International Ltd [2006] EWHC 63 (Comm), [2006] 1 Lloyd’s
Rep 599 at [31] (Christopher Clarke J); BNP Paribas v Wockhardt EU Operations (Swiss) AG
[2009] EWHC 3116 (Comm) at [40]; Multi Veste 226 BV v NI Summer Unitholder BV [2011]
EWHC 2026 (Ch) at [195] (Lewison J); see further below at para 8.48.
125
(1941) 41 SR (NSW) 295 at 304.
126
Ajit v Sammy [1957] 1 AC 255 (PC).
127
Fileman v Liddle (1974) 2 BPR 9192 (Supreme Ct of New South Wales); Laurinda Pty
Ltd and ors v Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 (High Ct of
Australia).
128
See further Lindgren, above n 49, pp 88–98; Michael Realty Pty Ltd v Carr [1977] 1
NSWLR 553 (New South Wales Ct of Appeal) at 566 (Glass JA).
129
(1879) 13 Ch D 589.
130
(1879) 13 Ch D 153; McMurray v Spicer (1868) LR 5 Eq 527; Wells v Maxwell (1863) 33
LJ Ch 44; North Eastern Properties Ltd v Coleman [2010] EWCA Civ 277, [2011] 1 P & CR
3.
131
[1892] 1 Ch 313.
132
[1975] VR 407 (Supreme Ct of Victoria); Barclays Bank plc v Saville Estates Ltd [2002]
EWCA Civ 589.
133
[1956] Ch 551.
134
(1974) 1 BPR 9731; Lindgren, above n 49, p 95.
135
Barrett v Beckwith, above n 134; Abraham v Mallon (1975) 1 BPR 9157 (Supreme Ct of
New South Wales); Bazzana v McNamara (1981) 2 BPR 9396 (Supreme Ct of New South
Wales); Lindgren, above n 49, p 95.
136
(1856) 22 Beav 533, 52 ER 1214.
Private Law Library
Page 193
137
[1915] AC 386 (HL).
138
Fiske v Sterling Investment Co Pty Ltd (1977) 3 ACLR 158.
139
(1980) 25 SASR 284 (Supreme Ct of South Australia).
140
[1967] 1 AC 255 (PC).
141
[1977] 1 NSWLR 553 (New South Wales Ct of Appeal); Lindgren, above n 49, p 91 et
seq.
142
If the result of the promisor’s default is that he can no longer avoid repudiating the
contract however hard he may try, it has surely been repudiated already: Admiral Shipping
Co v Weidner, Hopkins & Co Ltd [1916] 1 KB 429; Court Line v Dant & Russell Inc (1939)
44 Com Cas 345.
143
Sydenham, Angela, ‘Unreasonable delay’ [1980] Conveyancer 19.
144
Above, para 8.01.
145
Gustin v Taajamba Pty Ltd (1988) 4 BPR 9373 (New South Wales Ct of Appeal) at 9376
(Mahoney JA).
146
147
Freeman v Jacobs (1980) 1 BPR 9273 (Supreme Ct of New South Wales); Fiske v
Sterling Investment Co Pty Ltd (1977) 3 ACLR 158; Lindgren, above n 49, p 98.
148
Adams v Quasar Management Services Pty Ltd [2002] QSC 223 (Supreme Ct of
Queensland); North Eastern Properties Ltd v Coleman [2010] EWCA Civ 277, [2011] 1 P &
CR 3 at [75].
149
Green v Sevin (1879) 13 Ch D 589.
150
151
Cumberland Court (Brighton) Ltd v Taylor [1964] Ch 29.
152
Re Barr’s Contract [1956] 1 Ch 551 (specified period too short); Caleo Bros Pty Ltd v
Lyons Bros (Aust) Pty Ltd (1980) 1 BPR 9496 (specified period too long); Bicknell, B A,
‘Making time of the essence’ (1967) 117 NLJ 450; MMW, ‘Sale of land’ (1956) 106 LJ 675.
153
154
Above, para 8.04.
155
Babacomp v Rightside Properties Ltd [1975] 3 All ER 873 (CA); Fox, P M, ‘Time shall be
of the essence’ (1951) 25 Australian LJ 106.
156
(1974) 131 CLR 286 (High Ct of Australia).
157
Hanson v Cameron [1949] 1 DLR 16 (Supreme Ct of Canada); Charles Investments Pty
Ltd v Karakis [2002] NSWSC 1213; Jet2.com Ltd v SC Compania Nationala de Transporturi
Aeriene Romane Tarom SA [2012] EWHC 622 (QB) at [32] (HH Judge Mackie QC).
158
Lindgren, above n 49, p 98.
159
See the review of the authorities by Gibbs J in Balog v Crestani (1975) 132 CLR 289
(High Ct of Australia) at 296, and compare the remarks of May LJ in Shawton Engineering
Ltd v DGP International Ltd [2005] EWCA Civ 1359, [2006] BLR 1 at [74].
160
Charles Rickards Ltd v Oppenhaim [1950] 1 KB 616 (CA), discussed below, para 8.36.
In Laurinda Pty Ltd and ors v Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR 623
(High Ct of Australia) at 653–654, Deane and Dawson JJ advance a number of reasons in
support of this analysis. First of all, an effective notice, as we shall see (below, para 8.38)
binds both the giver and the recipient. If the giver fails to complete at the time nominated
by the notice, the recipient is then entitled either to terminate the contract or to bring
proceedings for specific performance, and the giver must surely enjoy the same rights.
Private Law Library
Page 194
Secondly, it would be odd if equity were to require an election to terminate rather than to
affirm in advance of the events which would otherwise allow the giver to elect between
remedies. Thirdly, if the notice states an intention to terminate but is otherwise invalid, the
giving of the notice would itself amount to an unlawful repudiation.
161
Balog v Crestani (1975) 132 CLR 289 (High Ct of Australia); Laurinda Pty Ltd and ors v
Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 (High Ct of Australia); Morris v
Robert Jones Investments Ltd [1994] 2 NZLR 275 (New Zealand Ct of Appeal); Wilde v
Anstee [1999] NSWSC 612.
162
Lenneberg v McGirr (1919) 19 SR (NSW) 83 (Supreme Ct of New South Wales).
163
Reynolds v Nelson (1821) 6 Madd 18, 56 ER 995.
164
Smith v Hamilton [1951] Ch 174.
165
Balog v Crestani (1975) 132 CLR 289 (High Ct of Australia).
166
(1919) 20 SR (NSW) 88 (Supreme Ct of New South Wales).
167
Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 (Supreme Ct of New South
Wales); Collingridge v Sontor Pty Ltd (No 2) (1997) 141 FLR 440 (Supreme Ct of New South
Wales).
168
Lindgren, above n 49, p 102. Merely to say that time is now of the essence without
specifically mentioning the possibility of termination may not be enough, as the recipient
may not know what ‘time is of the essence’ means. However, the actual word ‘terminate’
need not be used; the words ‘rescind’ or ‘end’ will do just as well: Vandyke v Vandyke
(1976) 12 ALR 621 (New South Wales Ct of Appeal) at 633 (Hutley JA).
169
As in Clarke Investments Ltd v Pacific Technologies Ltd [2013] EWCA Civ 750, [2013] 2
P & CR 20 at [33] (Floyd LJ).
170
Green v Sevin (1879) 13 Ch D 589 at 599 (Fry J); Raineri v Miles [1981] AC 1050 (HL)
at 1085–1086 (Lord Edmund-Davies); Behzadi v Shaftesbury Hotels [1992] Ch 1 (CA) at 12
(Nourse LJ) and 24 (Purchas LJ); Re Olympia & York Canary Wharf Ltd (No 2) [1993] BCC
159 at 171–173 (Morritt J); Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445,
[2013] Ch 36 at [65] (Rix LJ); Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 1445, [2013] Ch
36 at [44] (Sir Terence Etherton C).
171
That is to say, the obligation is terminated. The contract is not rescinded ab initio, even
though the notice may use the word ‘rescind’: Buckland v Farmar and Moody [1979] 1 WLR
221 (CA); Howard-Jones v Tate [2011] EWCA Civ 1330, [2012] 1 P & CR 11; Albery,
Michael, ‘Mr Cyprian Williams’ great heresy’ (1975) 90 LQR 337. The theoretical basis for
such termination is discussed below at paras 8.44–8.49.
172
Harold Wood Brick Co v Ferris [1935] 2 KB 198 (CA).
173
Whitbread and Co Ltd v Watt [1902] 1 Ch 835 (CA).
174
175
Below, para 8.46.
176
Charles Rickards Ltd v Oppenhaim, above n 174; Afford v Till [1990] 35 EG 56 (CA);
Electcoms Sdn Bhd v Internet Technology Asia Ventures Sdn Bhd [2002] 481 MLJU 1.
According to Young CJ in Malouf v Sterling Estates Development Corporation Pty Ltd [2002]
NSWSC 920, it is unusual to see a promisee trying to extend a notice to complete after it
has expired. Where this is done, the effect is probably to keep the right to terminate alive
whilst giving the promisor a further opportunity to complete: Tropical Traders Ltd v Goonan
(1964) 111 CLR 41 (High Ct of Australia); Spencer v Cali [1986] 2 Qd R 456 (Supreme Ct of
Queensland). However, for time to be of the essence in this situation a new deadline must
Private Law Library
Page 195
be set; time does not remain essential for all purposes: Hakimzay v Swailes [2015] EWHC
B14 (Ch) (HH Judge Keyser QC).
177
(1983) 152 CLR 406 (High Ct of Australia). For further discussion of this case see
below, paras 11.60–11.67.
178
This was not a notice making time of the essence in the normal sense; the contract
provided that time was already of the essence, but that the enforcement of rights and
remedies by the promisee was subject to the service of a notice on the promisor giving him
the chance to rectify the relevant default: see (1983) 152 CLR 406 at 407–408, and compare
Consumer Credit Act 1974, ss 87 and 88.
179
Mason, Deane, and Brennan JJ, Gibbs CJ and Murphy J dissenting on the point. For
promissory estoppel generally see above, paras 5.70–5.81.
180
Nicholson, K G, ‘Breach of an essential time stipulation and relief against
forfeiture’ (1983) 57 Australian LJ 632. On the question as to whether the equitable
jurisdiction to relieve against forfeiture can be used so as to override an essential time
stipulation in the absence of a waiver see below, paras 11.60–11.67. It could be argued that
given the requirement of a default notice in Legione v Hateley, the provision that time was
of the essence did not really mean what it said.
181
Above, para 8.07.
182
183
Luck v White (1973) 26 P & CR 89 (Ch D).
184
Upperton v Nickolson (1871) LR 6 Ch App 436; Finkielkraut v Monahan [1949] 2 All ER
234; Quadrangle Development and Construction Co v Jenner [1974] 1 WLR 68 (CA); Fekala
Pty Ltd v Castle Constructions Pty Ltd [2002] NSWCA 297; Clarke Investments Ltd v Pacific
Technologies Ltd [2013] EWCA Civ 750, [2013] 2 P & CR 20.
185
Above, para 8.07.
186
See the comments of Maitland cited above at para 8.04.
187
As in Lloyd v Collett (1793) 4 Bro CC 469, 29 ER 992; Fordyce v Ford (1794) 4 Bro CC
494, 29 ER 1107; Seton v Slade (1802) 7 Ves J 265, 32 ER 108 and Radcliffe v Warrington
(1806) 12 Ves J 326, 33 ER 124.
188
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 36 at [34]; Urban
1 (Blonk St) v Ayres [2013] EWCA Civ 816, [2014] 1 WLR 756 at [44].
189
Supreme Court of Judicature Act 1873, Part II.
190
There can be no contract more ‘commercial’ than a sale of goods, but in such contracts
the time of payment was never of the essence: Martindale v Smith (1841) 1 QB 389, 113 ER
1181. Nor was the time of collection: Woolfe v Horne (1877) 2 QBD 355. See generally
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) at 924 (Lord
Diplock) and 938 (Viscount Dilhorne): below, paras 11.13–11.14.
191
For the problems this can cause see Universal Cargo Carriers Corporation v Citati
[1957] 2 QB 401; above, paras 6.32–6.33.
192
Above, para 8.07.
193
[1950] KB 616.
194
2nd edn, vol 3, para 380.
195
Above, para 8.09.
Private Law Library
Page 196
196
[1950] 1 KB 616 at 628.
197
Ibid at 628–629n. The authority cited by Halsbury for the proposition was Taylor v
Brown (1839) 9 LJ Ch 14 (above, para 8.06), a case which, as the reporter pointed out,
involved a contract for the sale of land. The reporter was here expressing the orthodox view
that notices making time of the essence could not be served in the sort of case where equity
would not grant a decree of specific performance.
198
[1978] AC 904 (HL).
199
Ibid at 944–945.
200
Bunge Corp Ltd v Tradax Export SA [1981] 1 WLR 711 (HL).
201
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha (The Hongkong Fir) [1962] 2
QB 26 (CA).
202
Above, para 8.36.
203
Below, para 12.22.
204
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 715 (Lord Wilberforce);
Foley, R K, ‘A survey of the maritime doctrine of unseaworthiness’ (1967) 46 Oregon LR
369.
205
[1962] 2 QB 26 (CA) at 57.
206
Snia Societa di Navigatione Industriale et Commercio v Suzuki & Co (1924) 29 Com
Cas 284 (CA).
207
In the same way, breaches in the early stages of an instalment contract are more likely
to give rise to a right to terminate than those later on: see Hoare v Rennie (1859) 5 H & N
19, 157 ER 1083, Simpson v Crippin (1872) LR 8 QB 14, Honck v Muller (1881) 7 QBD 92
(CA).
208
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401; Trade and Transport
Inc v Iino Kaiun Kaisha Ltd (The Angelia) [1973] 1 WLR 210.
209
See above, paras 8.17–8.22.
210
[1978] AC 904 (HL) at 906.
211
212
Ibid; Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 (High Ct of Australia); Taylor v
Raglan Developments Pty Ltd [1981] 2 NSWLR 117 (Supreme Ct of New South Wales) at
131 (Powell J); Louinder v Leis (1982) 149 CLR 509 (High Ct of Australia); Ocular Sciences
Ltd v Aspect Vision Care Ltd [1997] RPC 289 at 432–433 (Laddie J); Astea (UK) Ltd v Time
Group Ltd [2003] EWHC 725 (Technology and Construction Ct, 9 April 2003); Sentinel
International Ltd v Cordes [2008] UKPC 60 at [41].
213
Above, para 8.17.
214
Above, para 8.27.
215
(1983) 152 CLR 406 (High Ct of Australia); above, para 8.37.
216
In Legione v Hateley the promisors were now ready and willing to complete the
transaction; it was the promisees who were anxious to get out of the contract in order to
gain an unexpected windfall.
217
Above, para 8.23.
218
[1971] 1 WLR 722 (CA).
Private Law Library
Page 197
219
In fact the owners could have terminated under the express provisions of the
agreement without having to prove repudiation. No doubt, as Lord Denning MR said (at
726), this form of notice was used to get round the decision in Financings Ltd v Baldock
[1963] 2 QB 104 (CA), under which termination by express provision attracted a much
lower measure of damages than termination in response to a repudiation; compare Morris v
Robert Jones Investments Ltd [1994] 2 NZLR 275 (New Zealand Ct of Appeal), and see
below, para 9.127.
220
[1971] 1 WLR 722 (CA) at 726.
221
222
Re Olympia & York Canary Wharf Ltd (No 2) [1993] BCC 159 at 173 (Morritt J); Dalkia
Utilities Services plc v Celtech International Ltd [2006] EWHC 63 (Comm), [2006] 1 Lloyd’s
Rep 599 at [31] (Christopher Clarke J); BNP Paribas v Wockhardt EU Operations (Swiss) AG
[2009] EWHC 3116 (Comm) at [40]; Multi Veste 226 BV v NI Summer Unitholder BV [2011]
EWHC 2026 (Ch) at [195] (Lewison J); Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 816,
[2014] 1 WLR 756 at [44] (Sir Terence Etherton C). This does not mean that a major default
in performance must already have occurred before the promisee is entitled to serve the
notice. As we have seen (above, para 8.20), a notice can be served as soon as the promisor
has failed to perform on time. Many of the cases involving notices making time of the
essence involve failure to complete in contracts for the sale of land. In such contracts a
single day’s delay in completion may be a trivial matter; the point is that the obligation to
complete itself is not.
223
Thus the passage from Halsbury (4th edn, 1975, para 481) expressing the law in
general terms was approved by three members of the House of Lords in United Scientific
Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) at 937 (Viscount Dilhorne),
941 and 944 (Lord Simon), and 958 (Lord Fraser), while Lord Salmon also (at 950) stated
the law in the same terms. See also Michael Warde v Feedex International Inc [1985] 2
Lloyd’s Rep 289 at 297 (Bingham J); Factory Holdings Group Ltd v Leboff International Ltd
[1987] EGLR 135 at 136 (Warner J); Morris v Robert Jones Investments Ltd [1994] 2 NZLR
275 (New Zealand Ct of Appeal) at 280 (Hardie Boys J); Dalkia Utilities Services plc v
Celtech International Ltd [2006] EWHC 63 (Comm), [2006] 1 Lloyd’s Rep 599 at [31]
(Christopher Clarke J). Other examples include Johnson v Dunn (1905) 11 BCR 372
(Supreme Ct of British Columbia) (contract to cut and remove timber); Burn v HH Thakur
Sahib AIR 1924 Calcutta 427 (contract to construct wagons); Hind Construction
Contractors v State of Maharashtra AIR 1979 SC 721 (building contract); Colorado
Women’s College v Bradford-Robinson Printing Co 114 Colo 237, 157 P 2d 612 (1945)
(Colorado) (subscription agreement); Glen Cove Marina Inc v Vessel Little Jennie 269 F
Supp 877 (1967) (USDC) (contract to build yacht); Anglia Commercial Properties Ltd v
North East Essex Building Co Ltd (1982) 265 EG 608 (building contract); MacIndoe v
Mainzeal Group Ltd [1991] 3 NZLR 273 (payment of instalments of price).
224
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) at 925
(Lord Diplock); Amherst v James Walker Goldsmith and Silversmith Ltd (1984) 47 P & CR
85 (CA) at 94–95 (Oliver LJ); Burrows, Andrew, ‘We do this at common law but that in
equity’ (2002) 22 OJLS 1.
225
Consumer Rights Act 2015, s 28(1).
226
Ibid, s 28(4).
227
Ibid, s 28(3).
228
In the words of the Act, the consumer may ‘treat the contract as at an end’: s 28(6).
Private Law Library
Page 198
229
230
Ibid, s 28(6)(a).
231
Ibid, s 28(6)(b) and (c).
232
Ibid, s 28(7).
233
Ibid, s 28(8).
234
Ibid, s 28(1).
235
Ibid, s 52.
Private Law Library
Page 199
9 Damages For Delay

John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 203) 9 Damages For Delay

A. Some Preliminary Distinctions 9.03
(1) Type of loss and measure of loss 9.04

(2) General and special damages 9.05
(3) Positive and negative losses 9.06
(4) Physical and financial loss 9.07
(5) Whether contract cancelled 9.08
(6) Delayed performance and total non-performance 9.09
B. Causation 9.10
(1) Causation in fact 9.11

(2) Causation in law 9.12
(3) Causation and the duty to mitigate 9.14
C. Remoteness of Damage 9.15
(1) The rules outlined 9.16
(a) Hadley v Baxendale 9.17

(b) The Victoria Laundry case 9.19
(c) The Heron II 9.22
(d) The Achilleas 9.24
Private Law Library
Page 200
(2) The rules explained 9.28
(a) One rule or two? 9.29

(b) Degree of likelihood required 9.31
(c) Subjective or objective? 9.35
(d) Burden of proof 9.39
(e) Fact or law? 9.41
(3) The rules illustrated 9.43
(a) Loss of value 9.44

(b) Loss of use 9.46
(c) Loss of profits 9.47
(d) Recovery of expenses 9.60
(e) Recovery of indemnity 9.63
(f) Recovery of interest 9.67
(g) Physical injury and damage 9.68
(h) Loss of goodwill 9.71
(i) Inconvenience, anxiety and annoyance 9.72
D. Mitigation 9.75
(1) No recovery for avoidable loss 9.77
(a) Mitigation and the decision to terminate 9.78

(b) The question of reasonableness 9.79
(c) Mitigation and causation 9.80
(2) The cost of mitigation 9.81
(a) Expenses incurred in mitigation 9.82

(b) Costs of unsuccessful mitigation 9.83
(3) Avoided losses 9.84
E. Measure of Damages 9.89
(1) Expectation loss 9.90

(2) Reliance loss 9.94
(3) Nominal damages 9.100
(4) Recovery of profit to promisor 9.101
F. Damages in Particular Contexts 9.105
(1) Sale of goods 9.106
(a) Contract terminated 9.107
Private Law Library
Page 201
(b) Contract not terminated 9.112
(2) Contracts of carriage 9.114
(a) Loss of market value 9.115

(b) Physical deterioration 9.116
(c) Loss of use 9.117
(d) Interest 9.118
(e) Recovery of expenses 9.119
(f) Loss of profit 9.122
(g) Recoupment of damages 9.125
(3) Hire purchase 9.126

(4) Sale of land 9.128
G. Recovery or Forfeiture of Liquidated Sum 9.131
9.01 In many cases the promisee may wish, either instead of or in addition to the exercise
of other remedies, to secure compensation of some sort for the delay. This can be done
either by suing for the recovery of damages at common law, or by relying on a provision for
compensation in the contract itself. In this chapter we (p. 204) shall consider damages for
delay at common law. The situation where the contract itself provides for the payment of
compensation by way of liquidated damages, penalties or deposits will be dealt with in
Chapter 13.
9.02 The general purpose of an award of damages for breach of contract was described as
follows by Viscount Haldane:1
I think that there are certain broad principles which are quite well settled. The first
is that, as far as possible, he who has proved a breach of a bargain to supply what
he contracted to get is to be placed, as far as money can do it, in as good a situation
as if the contract had been performed.
Thus the basic principle, for delay as for any other kind of breach, is that the promisee
should be compensated for what is called ‘loss of expectation’. However, this principle
requires considerable qualification. First of all, as we shall see, damages for breach of
contract can be awarded on a totally different basis: thus the promisee may be able to
recover expenses incurred in reliance on the contract,2 or even in some cases what are
called ‘restitutionary’ damages based in the profit made by the promisor.3 Secondly, loss of
expectation itself can be computed in many different ways. All this can be illustrated by a
simple example. Say, for instance, that the promisor agrees to sell the promisee a
consignment of goods for £A, and to deliver them on a certain day. The market price of the
goods on the day when the goods should have been delivered was £B. The goods arrive a
week late, by which time the market price has fallen to £C. In the meantime, the promisee
has agreed to resell the goods to a third party for £D. As the cases will show, there are at
least four possibilities here. One is that the promisee will get back the price paid for the
goods, that is to say £A.4 Another is that he or she will get the difference between the
market price on the day when the goods should have been delivered and the day when they
actually were delivered, that is to say £B minus £C.5 A third possibility is that the promisee
will be awarded the loss of profit on the subsale, that is to say £D minus £C.6 A fourth
possibility is that the loss of profit will be taken into account by giving the promisee the
difference between the contract price and the market price on the set day of delivery, that
(p. 205) is to say £B minus £A.7 The first of these cases involves the recovery of reliance
Private Law Library
Page 202
loss, but the other three are all different ways of compensating the promisee for loss of his
or her expectation. The difference between these types of recovery will be further examined
below,8 but they serve to illustrate the complexity of the law in this area, and the care with
which the relevant authorities need to be analysed.
A. Some Preliminary Distinctions

9.03 However, before we embark on any further analysis, it is worth briefly bearing in
mind certain preliminary distinctions. Some of these are given prominence in the cases, and
others are not, but all of them are helpful to the understanding of the law in this area.
(1) Type of loss and measure of loss

9.04 The first distinction that we must bear in mind is that between the type or heads of
loss for which the promisee may recover damages, and the way in which those damages are
calculated. As we shall see,9 the types of loss for which a promisor is liable are limited by
the doctrines of causation, remoteness and mitigation, and it is only when these have been
considered that one can go on to calculate the measure of damages to which the promisee
is entitled. The former question, which basically concerns the scope of protection offered by
the contract,10 is one of law,11 but the latter is one of fact.12
(2) General and special damages
9.05 Another key distinction in the present context is that between ‘general’ and ‘special’
damages. Though these terms are used in a number of different ways,13 in the context of
damages for breach of contract general damages are the losses that would arise from the
promisor’s breach in the ordinary course of events, while special damages are the other
losses which happen to be in the contemplation of the parties in the individual case.14
Though the helpfulness of this distinction has (p. 206) been criticised,15 there are a number
of situations in which it has to be drawn; in particular, special damages need to be proved
and pleaded in each case, whereas general damages are subject to no such restriction.16
(3) Positive and negative losses
9.06 Special damages may be further divided into positive losses, that is to say extra
expense that the promisee has to incur as a result of the breach, and negative losses, that is
to say failure to earn the benefits that were expected to accrue from the promisor’s
performance.17 This can be illustrated by the example of a buyer of goods who sells them on
to a third party. If the seller then fails to deliver on time, the buyer may lose the subsale. If
the buyer then claims his or her loss of profits, we have an example of negative loss.18 But if
the buyer seeks to recoup from the seller damages paid to the sub-buyer for his or her own
breach, we have an example of positive loss.19 The distinction does not appear in many of
the cases,20 but is one of respectable antiquity.21 Its usefulness lies in the fact that positive
losses, having already been incurred at the time of the action, are generally easy to
quantify, whereas negative losses tend to be more speculative in nature.
(4) Physical and financial loss

9.07 In the normal course of events the loss caused by delay in performance will be purely
financial or economic, but occasionally delay can cause physical loss.22 Thus, for instance,
delay by a carrier may lead to the goods being delivered in a deteriorated state;23 delay by
a charterer in loading a ship may lead to its being grounded by the tide;24 delay by a
landlord in doing repairs may cause (p. 207) illness to the tenant.25 The distinction is
significant because there is authority for saying that the rules relating to remoteness of
damage differ depending on whether the loss is physical or economic. Thus it will be no
defence for the promisor in a case of physical damage to argue that the extent of the loss
caused was unforeseeable if it can be shown that some loss of that kind was foreseeable,26
Private Law Library
Page 203
but this sort of argument may succeed in the case of economic loss.27 Once again we shall
return to this topic under the heading of remoteness of damage.28
(5) Whether contract cancelled

9.08 Where the promisor’s breach of contract is a serious one, the promisee may not only
claim damages but may also terminate performance or, as is sometimes said ‘cancel the
contract’. In particular, the promisee may do this in cases of delay where time is of the
essence29 or where the delay is such as to go to the root of the contract.30 But where the
breach, whether by delay or otherwise, is a minor one, the promisee’s claim sounds in
damages only.31 Now, though damages can be obtained whether the contract is terminated
or not, the question of termination is crucial to the measure of damages obtained. In the
absence of termination, the promisee has the benefit of the delayed performance, and this
must be taken into account in calculating the damages to which he or she is entitled. But
where the contract is terminated, the damages are calculated as in a case of non-
performance by the promisor;32 indeed, damages may even be recovered on the footing that
the promisor has repudiated the contract in its entirety.33 We shall return to this point later
on.34
(6) Delayed performance and total non-performance

9.09 The theme of this chapter, as stated above, is the extent to which a promisee can
recover compensation for delay in performance by the promisor. However, a lot of the cases
we shall be considering do not involve delay in performance as such but rather a total
failure to perform. These cases are relevant for two reasons. First of all, there is a clear
overlap between the two types of breach, in that they both have the consequence of
depriving the promisee of the benefit of the promised (p. 208) performance at the time of
the breach: indeed, it could be said that the essence of delayed performance is not so much
that the promisor does perform late as that he or she does not perform at the time agreed.
Secondly, as stated in the previous paragraph, where the delay is sufficiently serious the
promisee may terminate the contract, and in that situation the damages are assessed on the
footing of total non-performance by the promisor.35
B. Causation
9.10 Before the promisee can recover damages for the loss, it must be shown that that loss
was caused by the promisor’s breach. Problems of causation do not feature so strongly in
contract as they do in tort, and cases involving delay are few and far between, but the basic
rules are much the same as they are in other branches of the law. In particular, the
promisee must show, in order to recover for the loss, that the breach caused that loss both
in fact and in law.
(1) Causation in fact

9.11 Causation in fact involves showing that the loss would not have occurred but for the
breach. This is well illustrated by C & P Haulage v Middleton,36 in which the plaintiffs gave
the defendant a licence to use their premises for his vehicle repair business. The defendant
spent a considerable sum of money in equipping the premises, but was then summarily
evicted by the plaintiffs in breach of the terms of the licence. The defendant then moved his
business to his own garage, and in the course of litigation between the parties sued the
plaintiffs to recover his wasted expenses. But the action failed on the ground that the
breach had not been shown to be the cause of the loss. Even if the plaintiffs had given the
defendant a proper period of notice, he would still have had to quit the premises within a
relatively short period. Though the money spent on the premises had certainly been wasted,
the reality of the matter was that the waste had resulted from what was on the defendant’s
side a very unsatisfactory and dangerous bargain.37 Though not a case of delay, C & P
Private Law Library
Page 204
Haulage v Middleton shows that a promisor can escape liability in cases where the loss
would have occurred in the same way even if the delay had not taken place.
(p. 209) (2) Causation in law

9.12 In some cases the promisee will be unable to prove causation even though the loss
would not have occurred but for the promisor’s breach. In Associated Portland Cement
Manufacturers (1900) Ltd v Houlder Bros & Co Ltd38 the defendants agreed to carry a
cargo of cement for the plaintiffs and to have the ship ready for loading on a certain date.
The ship was delayed by unseaworthiness, and was not at the loading port on the date
specified. The following day the ship was torpedoed by a German submarine and sent to the
bottom of the sea. It was held by Atkin J that the plaintiffs could recover for one day’s delay
and no more. Strictly speaking, the sinking of the ship would not have occurred but for the
delay; if the ship had not been unseaworthy she would have already been in the loading
port when the submarine came by. But even so the sinking of the ship was, in a sense,
purely fortuitous, and the defendants could not be made liable for the loss caused thereby.
9.13 It is sometimes said in this sort of case that the delay or other breach must be the
‘effective’ cause of the loss as opposed to being an event which merely gives the
opportunity for the plaintiff to sustain the loss.39 What this means is that the loss must be a
reasonably foreseeable result of the breach, in the sense that it was the sort of thing that
was rendered more likely to occur. In Wilson v Newport Dock Co40 it was agreed by the
defendants that the plaintiff’s ship would be admitted to their dock at a certain time, but
when the ship arrived at the time specified the gates could not be opened and she had to
wait outside. Because of the stormy conditions the captain decided that it would be best to
drop anchor and stay put, but the ship was grounded on a sandbar by the falling tide and
was severely damaged. It was held by the Court of Exchequer Chamber that there should be
a new trial on the issue of whether the damage was a reasonably foreseeable result of the
breach, it being said that the captain’s decision to remain put would not break the chain of
causation if, having been placed on the horns of a dilemma, he had acted in a reasonably
competent manner.41 The principle of reasonable foreseeability in the context of causation42
is also illustrated in Monarch SS Co Ltd v Karlshamns (p. 210) Oljefabriker A/B,43 where a
British ship en route to a port in Sweden was delayed due to unseaworthiness in the days
leading up to the Second World War. On the outbreak of war she was diverted by order of
the Admiralty and ordered to unload in Glasgow, as a result of which the cargo had to be
transhipped and sent on in neutral vessels. The owners of the ship argued that they could
not be held responsible for this loss, but it was held by the House of Lords that the costs of
transhipment were a direct and natural consequence of the owners’ delay; given the
current political situation it was entirely foreseeable that war might break out at any
time.44 These cases can be contrasted with that of Associated Portland Cement
Manufacturers (1900) Ltd v Houlder Bros & Co Ltd discussed above:45 the delay in Wilson v
Newport Dock Co made it more likely that the ship would suffer damage by grounding
outside the dock, and the delay in Monarch SS Co Ltd v Karlshamns Oljefabriker A/B made
it more likely that the ship would be diverted, but the delay in Associated Portland Cement
Manufacturers (1900) Ltd v Houlder Bros & Co Ltd did not make it any more likely that the
ship would be torpedoed; she could have been torpedoed just as well at any other time.
(3) Causation and the duty to mitigate

9.14 Where a breach of contract has caused loss, whether by delay or otherwise, the
promisee as we shall see is said to be under a duty to ‘mitigate’ that loss by doing whatever
can reasonably be done to minimise its effects; where this is not done, the promisee will not
be able to recover for the full loss incurred.46 This is sometimes said to be an aspect of the
causation requirement, in that in these cases the effective cause of the loss is not the
promisor’s breach, but the promisee’s own failure to mitigate.47 However, though there is
nothing to stop judges and commentators putting the matter in this way, the analysis is not
Private Law Library
Page 205
thought to be particularly helpful in practice. What the court has to decide in relation to
mitigation is whether the promisee has acted reasonably in response to the breach, and this
is a question which can only be decided in the light of the facts of each individual case.
Adding causation into the mix, as has been said, gives no assistance,48 and for this reason
we shall follow the usual practice of discussing mitigation as a requirement separate from
the general requirements of causation.49
(p. 211) C. Remoteness of Damage

9.15 Even where the loss in question has clearly been caused by the promisor’s breach,
the promisee may still be debarred from recovery on the ground that the damage was ‘too
remote’. The doctrine of remoteness of damage in tort is designed to limit the promisee’s
recovery to that which was in the contemplation of the parties at the time when the
contract was made. Remoteness of damage in contract serves a similar function, though the
role of foresight in this context is, as we shall see, more problematical. A lot of the cases
involve delay in performance, so this doctrine is of crucial significance to the present study.
In the pages which follow we shall set out the general rules and explain them before seeing
how they are applied in relation to certain kinds of loss.
(1) The rules outlined

9.16 The rules governing remoteness of damage in contract are set out in four major
cases: the decision of the Court of Exchequer Chamber in Hadley v Baxendale,50 the
decision of the Court of Appeal in Victoria Laundry (Windsor) Ltd v Newman Industries
Ltd51 and the decisions of the House of Lords in The Heron II52 and The Achilleas.53 Since
the relevant breach in all four cases involved delay in performance, it is worth spending
some time discussing them in depth before examining some of the issues to which they give
rise.
(a) Hadley v Baxendale
9.17 The case of Hadley v Baxendale54 arose out of a mishap at the plaintiffs’ mill in
Gloucester involving the breakage of the main engine shaft, as a result of which the mill
was put out of action. The plaintiffs duly ordered a replacement shaft from a firm in
Greenwich, and engaged the defendants to carry the broken shaft to Greenwich to serve as
a pattern for the new shaft. The shaft was delivered late, and as a result the plaintiffs’ mill
was out of action for several days. The plaintiffs now claimed to recover damages from the
defendants for loss of profits during the time when the mill was out of action. At first
instance the claim was left generally to the jury, who found for the plaintiffs,55 but the
defendants then appealed on the ground that the damage was too remote. It was held that a
new trial should be granted, the general rules being stated as follows by Alderson B in a
celebrated passage:56
(p. 212)
We think the proper rule in such a case as the present is this: where two parties
have made a contract which one of them has broken, the damages which the other
party ought to receive in respect of such breach of contract should be such as may
fairly and reasonably be considered either arising naturally, i.e. according to the
usual course of things, from such breach of contract itself, or such as may
reasonably be supposed to have been in the contemplation of both parties, at the
time they made the contract, as the probable result of the breach of it.
9.18 Since then it has become customary to divide the rule into two parts, which are
described as the first and second ‘branches’, or ‘limbs’, or ‘legs’ of the rule in Hadley v
Baxendale. Under the first branch of the rule the claimant is allowed to recover damages
‘arising naturally, … according to the usual course of things’. Then, on top of that, he or she
can recover for extra losses in so far as they might ‘reasonably be supposed to have been in
Private Law Library
Page 206
the contemplation of both parties, at the time they made the contract, as the probable
result of the breach of it’. Applying the test to the facts of the case, the court held that the
defendants could not have reasonably been expected to know that delay in the delivery of
the shaft would result in the mill being out of action and consequent loss of profit to the
claimants. The loss did not fall within the first branch of the rule, as millowners in such a
situation might very well have been expected to have a spare shaft.57 Nor could the
claimants bring the situation within the second branch of the rule, since it was not evident
that the defendants knew any more than that the article to be carried was a broken mill
shaft, and that the claimants were the millers of that mill.58
(b) The Victoria Laundry case
9.19 Our next significant case is Victoria Laundry (Windsor) Ltd v Newman Industries
Ltd.59 The claimants contracted to purchase a second hand boiler from the defendants, it
being agreed that the boiler would be delivered on a certain day. The boiler was damaged
while being dismantled, and in the event was delivered over five months late. The claimants
sued for loss of profits incurred while waiting for the boiler to be delivered, these being
broken down into two categories, namely: (1) £16 per week for loss of business generally;
and (2) £262 per week that the claimants had hoped to earn on the basis of lucrative dyeing
contracts entered into with the Ministry of Supply. It was held by the Court of Appeal that
on the basis of Hadley v Baxendale the claimants could not recover for loss of the lucrative
dyeing contracts, as the defendants knew nothing of these. However, they could have been
expected to realise that some loss of profit would be incurred, (p. 213) and the matter was
remitted to the Official Referee for damages to be assessed on this basis.
9.20 However, what is of particular interest in this case is the way in which Asquith LJ
sought to reformulate the classic test of remoteness laid down by Alderson B in Hadley v
Baxendale. This was explained and clarified by Asquith LJ in the following words:60
In cases of breach of contract, the aggrieved party is only entitled to recover such
part of the loss actually resulting as was at the time of the contract reasonably
foreseeable as liable to result from the breach.
What was at the time reasonably so foreseeable depends on the knowledge then
possessed by the parties, or, at all events, by the party who later commits the
breach.
For this purpose, knowledge ‘possessed’ is of two kinds; one imputed, the other
actual. Everyone, as a reasonable person, is taken to know the ‘ordinary course of
things’, and consequently what loss is liable to result from a breach of contract in
that ordinary course. This is the subject-matter of the ‘first rule’ in Hadley v
Baxendale. But to this knowledge, which a contract-breaker is assumed to possess
whether he actually possesses it or not, there may have to be added in a particular
case knowledge which he actually possesses of special circumstances outside the
‘ordinary course of things’, of such a kind that a breach in those special
circumstances would be liable to cause more loss. Such a case attracts the
operation of the ‘second rule’ so as to make additional loss also recoverable.
9.21 Whilst in no way differing in substance from Alderson B in his statement of the
relevant law, Asquith LJ sought to reformulate that law in three respects. First of all, he
considered that the two so-called ‘branches’ of the rule in Hadley v Baxendale were really
but two aspects of one single rule, which allowed a claimant to recover for whatever loss
was reasonably foreseeable as liable to result at the time of the breach. Secondly, in
deciding what was reasonably foreseeable, he directed our attention in particular at the
defendant’s state of knowledge at the relevant time. Thirdly, he then proceeded to highlight
the difference between the two branches of the rule in relation to the state of knowledge
Private Law Library
Page 207
required, the first being imputed and the second actual. We shall return to these matters
further shortly.61
(c) The Heron II
9.22 The formulation of the law adopted by Asquith LJ in the Victoria Laundry case was
further commented on by the House of Lords in The Heron II.62 This case involved a
contract for the carriage of a cargo of sugar to Basrah. The sugar was delivered late, and
the claimants, who were sugar merchants, sought damages based on the difference
between the market value of the sugar at the date when (p. 214) it should have been
delivered and its market value at the date when it was delivered. The following facts were
found: (1) the defendants knew that the claimant was a sugar merchant; (2) the defendants
knew that there was a market for sugar at Basrah; but (3) the defendants did not know
precisely what the claimants intended to do with the sugar. The defendants argued on the
basis of long-standing authority63 that in a contract for the carriage of goods by sea
damages based on diminution of market value were not allowable in the absence of proof
that such loss was certain to occur; in the normal run of cases the claimant was restricted
to interest on the value of the goods and damages for physical deterioration. But the House
of Lords rejected this limitation as unsound, and held that the claimants could recover the
damages sought on the basis of the first branch of the rule in Hadley v Baxendale, for
though the defendants had no knowledge of any special circumstances, they could, and
should at the very least, have contemplated that if the ship arrived late some financial loss
would be incurred.64
9.23 In the course of the case the House of Lords considered Asquith LJ’s reformulation of
the law in the Victoria Laundry case. By and large, his exposition managed to survive the
scrutiny unscathed.65 However, the House of Lords did not approve of his use of the words
‘on the cards’, ‘reasonably foreseeable’, or ‘liable to result’, at least in so far as these
tended to suggest that the test for remoteness in contract was the same as that for tort.66
As Lord Reid pointed out, Hadley v Baxendale made it clear that the parties were not
expected to contemplate as grounds for recovery any type of loss or damage which on the
knowledge available to the defendants would appear to them as only likely to occur in a
small minority of cases.67 Rather, the test was whether the loss in question was:68
… of a kind which the defendant, when he made the contract, ought to have realised
was not unlikely to result from the breach … the words ‘not unlikely’ … denoting a
degree of probability considerably less than an even chance but nevertheless not
very unusual and easily foreseeable.
The result of the decision in The Heron II was to affirm that whatever the test for
remoteness in contract might be, a higher degree of probability had to be (p. 215)
established than in cases of tort.69 To put it another way, if the test for tort requires proof of
‘reasonable foreseeability’, the test for contract requires proof of ‘reasonable foreseeability
plus’.
(d) The Achilleas
9.24 An entirely novel approach to the issue was taken by Lord Hoffmann and other
members of the House of Lords in another shipping case, The Achilleas.70 The breach in
this case involved late redelivery in a time charterparty. This was due to delays in the
course of the final voyage under the charter, to which the owners had not objected, but
which turned out to be a lot longer than anticipated by either party. In the meantime the
owners had entered into a profitable new charter on the basis that the ship would be
available on time; this then had to be renegotiated at a much lower rate, the market having
dropped substantially in the interim. The question for the court was whether the owners
could now recover from the charterers the difference between the rates under the old
charter and the new charter, or whether they were restricted to the difference between the
Private Law Library
Page 208
contract rate and the market rate up to the time of redelivery. The House of Lords,
reversing both the arbitrators and the judges in the courts below,71 held that the losses
claimed were too remote, but what is of significance here is the reasoning by which this
decision was reached.
9.25 Though the House of Lords was unanimous in its decision, two distinct approaches
can be seen. Lord Rodger and Lady Hale decided the case on the basis of the traditional
rules, saying that the owners had failed to show that the loss in question was a likely result
of the breach.72 Lord Hoffmann, however, drawing on the approach of one of the
arbitrators,73 took an entirely different line, asking whether it could be said that the owners
had ‘assumed responsibility’ for the loss.74 As will be argued below, there is a certain logic
to this approach in the light of contract theory,75 but as Lady Hale was quick to point out, it
was anything but orthodox.76 Lord Hope agreed with the approach of Lord Hoffmann,77
whilst (p. 216) Lord Walker was content to agree with both approaches,78 so the ratio
decidendi of the case was anything but clear.
9.26 In the nine or so years since the case was decided, it has now become clear that while
Lord Hoffmann’s test may still make a difference in exceptional cases, the traditional rules
are still paramount where remoteness of damage is in issue. In The Amer Energy,79 decided
the year after The Achilleas, Flaux J refused to reopen an appeal on an arbitration award
made on the basis of the traditional tests, saying that these had not been significantly
affected by that decision,80 and that approach has been confirmed in subsequent cases.81 In
so far as Lord Hoffmann’s approach still has relevance, it can only be as an exception to the
normal rule,82 either preventing the recovery of damages in cases where they would
normally be available,83 or allowing it in cases where they would not.84
9.27 As stated above, the approach of Lord Hoffmann in The Achilleas has a lot to
commend it from a theoretical point of view. A test based on foreseeability makes sense in
relation to tort, where liability is imposed by the general law, but in contract the relevant
liabilities are undertaken by the parties themselves.85 In this context a test based on
assumption seems entirely appropriate; indeed, has not contract itself been defined as a
promise or undertaking in respect of which legal obligations have been assumed by means
which the law recognises as effective for that purpose?86 If, therefore, the law were starting
with a clean slate, a test on the lines of that proposed by Lord Hoffmann might very well be
suitable. In the context of such a test, the traditional approaches would still have an
important part to play; in particular, the extent to which the relevant losses were (p. 217) in
the contemplation of the parties at the relevant time would be a crucial factor in
determining the extent to which one or other of them had assumed the risk of liability for
such losses. Be that as it may, the traditional approach will clearly still be the first port of
call for the courts in cases of this type,87 and this is the assumption on which the remainder
of this discussion is based.
(2) The rules explained

9.28 The general rules relating to remoteness of damage can be found in the compass of
the four cases we have just been discussing. However, there are a number of points that
require further elaboration.
(a) One rule or two?
9.29 It has now become customary to divide the rule in Hadley v Baxendale into two
‘branches’ or ‘limbs’, the first relating to that loss which might be expected to occur in the
ordinary course of things and the second to other losses that happen to be in the
contemplation of the parties at the time when the contract was made.88 However, this usage
is not by any means fixed in stone. In the early days commentators would often speak of
three rules,89 whilst at the other end of the scale there have always been those who insist
that there is only one rule, albeit one with different facets. Thus Asquith LJ in the Victoria
Private Law Library
Page 209
Laundry case saw the two branches of the traditional rule as applications of a broader
principle limiting recovery to ‘such part of the loss actually resulting as was at the time
reasonably foreseeable as liable to result from the breach’.90 Likewise, in Kpohraror v
Woolwich Building Society91 Evans LJ commented that it was not always necessary or
helpful to impose a rigid distinction between the two branches of the rule in Hadley v
Baxendale, given that the starting point in both cases was the ‘shared knowledge of both
parties when the contract was made’.92
9.30 Be that as it may, the distinction between the two branches of the rule still has
significance in certain contexts. This applies in particular with regard to issues of pleading
and proof; thus ‘special’ damage falling under the second branch of the rule has to be
pleaded and proved in the individual case,93 whereas general (p. 218) damage does not.94
For this reason it is still helpful, at least for purposes of exposition, to retain the distinction
between the two branches of the rule, as long as one realises that the distinction is neither
rigid nor watertight.
(b) Degree of likelihood required
9.31 According to Asquith LJ in the Victoria Laundry case the common thread linking the
two branches of the rule in Hadley v Baxendale is the principle that the promisee can only
recover such loss as was at the time ‘reasonably foreseeable as liable to result’ from the
breach in question.95 One knotty problem that has constantly recurred in the cases is as to
the degree of likelihood that must be satisfied in this context; need the loss be certain to
occur, or probable, or a real risk, or an outside possibility, or what? Many different epithets
have been suggested in this connection: the loss must be a ‘serious possibility’,96 a ‘real
danger’,97 ‘not unlikely to result’,98 ‘reasonably contemplated’,99 ‘on the cards’,100 and so
on. However, none of these really help us to predict which way the courts will decide in any
given case.
9.32 A more helpful approach is to establish the limits within which the rule operates.
Thus on the one hand it is quite clear that the loss in question does not have to be a
probable consequence of the breach in the sense that its occurrence is more likely than not.
In Hall v Pim101 the defendants sold a cargo of wheat to the claimants, who then sold it on
to a third party. The defendants failed to deliver the wheat, and the claimants sought to
recover for their loss of profit on the subsale. It was decided by the arbitrators that it was
not in the contemplation of the parties that the cargo would be resold in advance of
delivery, it being found that the chances of its being resold and of its being taken delivery of
by the claimants were ‘about equal’.102 The decision of the arbitrators was overruled by the
House of Lords on the ground that they had applied the wrong test. It did not have to be
shown that the loss in question was more likely than not to occur; rather, it was sufficient
that it was a not unlikely possibility.103 The sellers knew that the buyers might well resell
the cargo, and so must have been taken to have consented to this state of things and
thereby to have made themselves liable to pay damages on this basis.104
(p. 219) 9.33 However, the cases also suggest that a mere outside possibility of the loss
occurring will not suffice, and that in this respect the test for remoteness of damage in
contract is harder to satisfy than that for tort. Thus the House of Lords in The Heron II
disapproved of the formulation of the rule in terms of ‘reasonable foreseeability’ by Asquith
LJ in the Victoria Laundry case,105 and they were equally unhappy with his use of the
expression ‘on the cards’.106 The difference between the tests for contract and tort in this
respect was stated most clearly in this context by Lord Reid.107 In a case of tort108
… the defendant will be liable for any type of damage which is reasonably
foreseeable as likely to happen even in the most unusual case, unless the risk is so
Private Law Library
Page 210
small that a reasonable man would in the whole circumstances feel justified in
neglecting it …
In a case of contract, however109
… a type of damage which was plainly foreseeable as a real possibility but which
would only occur in a small minority of cases cannot be regarded as arising in the
usual course of things or be supposed to have been in the contemplation of the
parties: the parties are not supposed to contemplate as grounds for the recovery of
damage any type of loss or damage which on the knowledge available to the
defendant would appear to him as only likely to occur in a small minority of cases.
9.34 There is, however, a possible exception to this rule where the breach causes physical
damage as opposed to pure financial loss, and though this does not happen all that often in
cases of delay,110 it is worth noting at this point. In Parsons (Livestock) Ltd v Uttley Ingham
& Co Ltd111 the defendants supplied a container to the claimants for the storage of pig feed.
The container was defective through lack of proper ventilation, as a result of which the pig
feed became mouldy. When the pigs ate the feed, many of them fell ill and died.112 The
claimants recovered damages at first instance for breach of the implied terms under the
Sale of Goods Act 1893, but the judge at first instance also found as a fact that the parties
could not have contemplated as a serious possibility that this sort of thing would happen as
a result of the breach.113 The defendants then having appealed, one of the questions for the
Court of Appeal was whether the findings of the trial judge were (p. 220) such as to bar the
claim for the loss incurred. The problem was that if the claimants had sued the defendants
in tort this would have been no bar to recovery, and in a case like this it made no sense for
the test for remoteness of damage to differ depending on how the action was framed.114 At
the end of the day the Court of Appeal held that the damage was not too remote. Scarman
LJ and Orr LJ reached this conclusion on the ground that, while the extent of the loss was
not within the contemplation of the parties, some loss of that type could have been
anticipated, in that it was not unlikely that the pigs would have suffered some degree of
gastric upset.115 Denning LJ was more bold in his approach. Pointing out that Hadley v
Baxendale, the Victoria Laundry case and The Heron II were all cases of loss of profit, he
held that in cases of physical damage the test was the same whether the action was framed
in contract or in tort.116 This approach avoids the anomaly of applying a different test to
what is essentially the same claim depending on how it is framed, but it lacks judicial
support.117 The approach adopted by Scarman LJ and Orr J is less heterodox, but it puts a
lot of weight on the distinction between the type and the extent of the foreseeable loss.118
Moreover, whereas this distinction is well-grounded in the law of tort,119 its application to
contract cases is less clear.120
(c) Subjective or objective?
9.35 Both branches of the rule in Hadley v Baxendale are said to be predicated on the
knowledge of the parties,121 that is to say the ‘shared knowledge of both parties when the
contract was made’.122 It is worth looking for a moment on the nature of the knowledge
required, and at whether the test is a subjective or objective one. That is to say, is actual
knowledge required, or is it enough to show that the parties, and the defendant in
particular, should have known of the relevant facts? The approach of the courts seems to
differ here depending on whether the claim is for general damages under the first branch of
the rule in Hadley v Baxendale or for special damages under the second.
9.36 Where the claim is for general damages, that is to say the loss arising naturally and in
the ordinary course of things, the courts apply a test of imputed knowledge. As Asquith LJ
said in the Victoria Laundry case, everyone, as a reasonable (p. 221) person, is taken to
know the ordinary course of things, and consequently what loss is liable to result from a
breach of contract in that ordinary course.123 Thus the test here is an objective one, and
Private Law Library
Page 211
there is no need to prove actual knowledge on the part of the defendant or of anyone else.
The only case where actual knowledge comes into the picture in this context is where the
loss actually suffered by the claimant is less than that which would arise in the ordinary
course of events, and the parties knew that this would be the case.124 In this situation the
second branch of the rule in Hadley v Baxendale acts so as to limit the damages recoverable
under the first branch. In this context Devlin J gave the example of a subsale by the
claimant, saying that if such a subsale was within the contemplation of the parties the
damages had to be assessed by reference to it, even where this would operate to the
disadvantage of the claimant. It was not open to the claimant in such cases to disregard the
subsale and claim the loss of market value as general damages.125
9.37 Where, however, the claim is for special damages, the actual knowledge of the
parties, and of the defendant in particular, is crucial. Indeed, some of the older authorities
seemed to suggest that the defendant could not be liable for losses occurring outside the
normal run of events in the absence of a contractual term to that effect.126 It is now clear
that the law does not go this far,127 but at the very least it must be shown that at the time of
the contract the defendant was aware of something that made the ordinary measure of
damages inadequate.128 The test for this was well expressed by Robert Goff J, as he then
was, in The Pegase:129
[H]ave the facts in question come to the defendant’s knowledge in such

circumstances that a reasonable person in the shoes of the defendant would, if he
had considered the matter at the time of making the contract, have contemplated
that in the event of a breach by him, such facts were to be taken into account when
considering his responsibility for loss suffered by the plaintiff as a result of such
breach?
9.38 It can also be argued that the more unusual the prospective loss may be, the more it
is incumbent on the promisee to put the promisor fully in the picture. This is well illustrated
by the decision in Horne v Midland Railway Co,130 where (p. 222) the claimant, a
shoemaker by trade, signed a contract with the French army to deliver a consignment of
shoes in London by a certain date. At the time when the contract was signed, the shoes
were required urgently for supply to the troops fighting in the Franco-Prussian War, and the
contract price was accordingly set at an exceedingly high level. On the day when the shoes
were due to be delivered, the claimant sent them off by the defendants’ line, telling the
defendants’ booking clerk that he was under a contract to deliver the shoes that very day,
and that if they were not delivered on time they would be left on his hands. The shoes were
delayed in transit, and the consignee refused to accept them. The claimant sought to
recover his loss of profit from the defendants, but the claim was dismissed by the court as
too remote. In the normal run of events it might have been enough to alert the defendants
to the existence of the contract and to the necessity for urgent delivery,131 but in the
present case the facts were exceptional, and the notice was not enough to fix the
defendants with liability for such an extraordinary sum.
(d) Burden of proof
9.39 Our next question concerns the burden of proof. Where a dispute arises as to
remoteness, is it for the claimant to prove that the damage is not too remote, or for the
defendant to prove that it is?132 There are conflicting dicta here,133 but the case generally
cited in this connection is The Guildford,134 a case involving a collision at sea between two
vessels, the Guildford and the Temple Bar, in which both ships were damaged. Following
the collision the captain of the Temple Bar offered to tow the Guildford to a place of safety,
but the captain of the Guildford refused the offer, saying that he had already ordered a tug
and preferred to wait until it arrived. After being taken under tow by the tug, the Guildford
sank. In a subsequent action it was decided that the Guildford should bear responsibility for
three quarters of the total loss suffered and the Temple Bar for one quarter. The question
Private Law Library
Page 212
then arose as to whether this should include the sinking of the Guildford. Having reviewed
the authorities, Merriman P said that it was up to the plaintiff in any case to prove each and
every item of loss for which damages were sought.135 In the present context, this meant
that it was for the owners of the Guildford to prove that the action of the captain in refusing
the tow was reasonable rather than for the owners of the Temple Bar to prove that it was
not.136 Though this (p. 223) is a case of tort rather than contract, and concerns causation as
much as it does remoteness, it has been submitted that the principle requiring a claimant to
prove all heads of loss is of general application in this context.137
9.40 The rule requiring the claimant to prove each item of loss applies whether the claim
in question is for general damages under the first branch of the rule in Hadley v Baxendale
or for special damages under the second. However, it should be noted that where the claim
is under the second head, the damages must be specifically pleaded and proved. This was
explained by Evans LJ in Kpohraror v Woolwich Building Society,138 a case involving the
dishonour of the claimant’s cheque:139
Both parties accept that the claim is governed by the general law, that is to say the
plaintiff may recover general damages under the first head of the rule in Hadley v
Baxendale … and special damages under the second head of the rule where the
necessary facts are proved. This is not the only sense in which the terms ‘general’
and ‘special’ damages are used nor the only context in which a distinction is made
between them. One such distinction is that special damages must be expressly
claimed and pleaded, whereas general damages need not …
This does not mean, of course, that the burden of proof is higher for special damages than it
is for general damages. Rather, it means that the claimant has more to prove, in that he or
she must prove the existence of the extra facts on which the claim for special damages
depends. In other words, the distinction is one of quantity of proof rather than quality of
proof.
(e) Fact or law?
9.41 Assessing the quantum of damages in any given case is a question of fact,140 but the
principles upon which those damages are to be assessed is a question of law, as can be seen
from Hadley v Baxendale itself.141 There, it will be remembered, the judge at first instance
left the case generally to the jury,142 but on appeal a new trial was granted so that the case
could be decided on the basis of the proper test.143 In general, where there is an appeal on
an issue of remoteness, the court has to ask itself two questions, the first being whether the
tribunal of fact applied the correct test, and the second whether there was evidence upon
which it could properly come to the conclusion that it did.144
(p. 224) 9.42 The division between issues of fact and issues of law in cases involving
remoteness is well illustrated by The Pegase,145 in which sellers chartered a ship from the
defendant shipowners for the delivery of a cargo of special sand at a port in Italy for the
claimant buyers, who were given a bill of lading incorporating the provisions of the
charterparty. The ship deviated and arrived late, and the buyers, who were sand merchants,
had no sand of that type in stock to supply their customers, and were unable to obtain any
on the market in the usual way. So in the end the buyers had to buy sand from their
competitors at a highly inflated price, and duly sought to recover their loss of profit from
the owners. The arbitrator found for the owners, but stated his award in the form of a
special case, asking whether on the facts found the owners were liable to the buyers for
their loss of resale profits.146 Giving the judgement of the Commercial Court, Robert Goff J
held that while there was no rule of policy preventing recovery of such losses from a carrier,
the facts found were insufficient to substantiate such a claim in the present case. It was
clear that the owners knew that the sand might be needed for resale and that there might
not be an available market at the port of discharge, but it was not evident on the facts that
Private Law Library
Page 213
they knew what the buyers’ business was, or of their lack of stock, or that the sand was
needed for resale as soon as it arrived as opposed to some later date.147 So the case was
remitted to the arbitrators for further findings of fact on this point.148 All this illustrates
that in cases involving remoteness the questions that have to be asked are questions of law,
but the answers to those questions are questions of fact.
(3) The rules illustrated

9.43 In this section we shall consider how the rules on remoteness apply in particular
contexts. Delay can cause losses of various different kinds, both pecuniary and non-
pecuniary. The categories are by no means watertight, and they overlap to a certain extent,
but they serve to illuminate the different ways in which delay can operate in the context of a
claim for damages.
(a) Loss of value
9.44 Where the promisor’s breach consists of delay in the transfer of property, the basic
loss for which the promisee can recover – assuming that the contract has not been
cancelled – is the value of the property at the date of due delivery less its value at the date
of actual delivery.149 Similarly, where it consists of delay in the rendering of services, the
basic measure of loss is – again assuming that the services have been accepted – the value
of the services to the promisee at the date of (p. 225) when the services were due less their
value at the date when they were eventually rendered.150 This head of loss can be called
‘loss of value’ or ‘loss of market’, and can typically be seen in cases of delayed delivery in
contracts for the sale or carriage of goods.151 This was the basis of recovery used in The
Heron II,152 where the market fell between the date set for the delivery of the sugar and the
date when it eventually arrived. As Morison J said in Addax Ltd v Arcadia Petroleum Ltd,153
a case involving the late delivery of oil on the crude market, the normal measure of
damages in this sort of case is the difference between the price received by the promisee
when the oil was resold and the price that would have been received if the contract had
been performed on time.154
9.45 In some cases, however, loss of value will not be an appropriate test to apply. For
instance, where a builder orders materials for use on the site and they are delivered late, a
fall in the market price between the date when they should have been delivered and the
date when they were actually delivered will be of no relevance.155 The same may apply in a
case where the goods are needed for resale and there is no available market. This is what
happened in Contigroup Companies Inc v Glencore AG,156 a case involving the sale of liquid
petroleum gas (LPG). The sellers agreed to deliver the gas to the buyers, who then made a
subsale to a third party. The gas was delivered late, and there was no available market. The
sub-buyers needed all the LPG they could get, and they sued the buyers for damages. This
action was eventually settled, and the buyers then sought to recover the costs of the
settlement from the sellers. The court dismissed a claim by the sellers that in the absence of
an available market the damages should be based on the fall in the value of the goods,
saying that this was entirely artificial in the present case; the loss suffered by the sub-
buyers and passed on to the buyers resulted not from any fall in the value of the cargo but
from it not being available when needed.157
(b) Loss of use
9.46 Where the promisor has agreed to supply goods to the promisee for his or her own
use, and fails to do so on time, one obvious corollary is that the promisee (p. 226) will not
have the use of the goods during the period of the delay. In Sunley v Cunard White Star158
the defendants agreed to collect a tractor from the claimants’ premises in England and
transport it to Jersey for use in a construction project in which the claimants were involved.
The defendants failed to collect the tractor on time, as a result of which it was left idle for a
whole week in England when it should have been on the site. The claimants were unable to
Private Law Library
Page 214
show that any particular loss had arisen from the delay,159 but nevertheless they were held
to be entitled to recover damages to cover depreciation of the tractor and interest on the
money invested, which was going to waste while the tractor was out of use.160 This is an
exceptional case in so far as there was no claim for consequential loss, for cases of loss of
use generally involve questions of loss of profit or expenses incurred as a result of the
delay; these are dealt with below.161
(c) Loss of profits
9.47 One of the most common consequences of delay in the commercial context is loss of
profit to the promisee – what the Romans called lucrum cessans, and which we have called
‘negative’ consequential loss162 – and the reports are full of cases in which this has been
claimed. Generally speaking, these cases fall into two categories. In the first of these, a
seller or carrier fails to deliver goods on time, and as a result the customer is unable to sell
those goods to a third party: these are cases of ‘sale profits’.163 In the second class of case
there has been delay in the delivery of a profit-earning chattel, either by a seller or a
carrier, and as a result the customer has been unable to use the chattel in his or her
business: these are cases of ‘user profits’.164 However, there are also other losses which can
be categorised under this head.165
(i) Sale profits
9.48 Whether a promisee can recover for loss of sale profits depends, broadly speaking, on
whether such profits were within the contemplation of the parties at the time when the
contract was made, but there are a number of particular factors that need to be considered
in this connection.
9.49 The first question that has to be asked is whether the promisor knew that the goods
in question were likely to be sold at all. This is illustrated by a line of cases in which goods
have been delivered late by a carrier, as a result of which (p. 227) the consignee has been
unable to sell them for the expected profit. Some of the older cases seemed to suggest that
such damages could not be recovered from a carrier in the absence of an express
agreement to that effect.166 One reason for this is that a carrier might not even know what
the goods were, still less what the consignee intended to do with them.167 Another reason
was the duty of a common carrier to accept goods for carriage from all and sundry; this
being so, it was thought unfair to expect such a carrier to bear the risk of exceptional losses
in the absence of a clear agreement to that effect.168 However, the normal rules of
remoteness are now applied to such cases.169 In cases where damages for the loss of sale
profits are found to be too remote, the promisee is restricted to recovering damages for loss
of value,170 or for loss of user profits if this was what was within the contemplation of the
promisor.171
9.50 The mere fact that a sale was within the contemplation of the parties does not
necessarily mean that the promisee can recover for his or her full loss of profit. This is
because the promisor is entitled to assume, in the absence of any indication to the contrary,
that if the goods have not arrived on time the promisee will be able to go out into the
market and obtain other goods for the purpose. This means that the normal measure of
damages when goods are not delivered to a merchant will not be loss of profit but the
difference between the contract price and the market price.172 In Thol v Henderson173 the
defendant agreed to sell to the claimant a quantity of shellac, which the claimant then
agreed to sell on to a third party. In a claim for damages for loss of profits the claimant
argued that the terms of the subsale contract prevented him from going into the market to
acquire substitute goods. It was held nevertheless that the claimant was restricted to the
Private Law Library
Page 215
usual measure of damages; the defendant may have been aware that the goods were
intended for resale, but knew nothing of the terms on which this had been done.
(p. 228) 9.51 There may, however, be cases where the promisor knows that the promisee
intends to sell the goods, and also that there will be no market on which the promisee can
get a substitute if the goods are not delivered on time. For instance, the promisor may be
the sole supplier of the goods in question,174 or the market in question may be one in which
goods are bought and sold as a particular cargo,175 or the goods may have been
manufactured by the promisor to the order of a promisee with a particular contract in
mind.176 In such cases loss of sale profits can be recovered on the basis of the usual rules of
remoteness.177 In Hydraulic Engineering Co Ltd v McHaffie, Goslett & Co178 a building
contractor ordered a piledriver from the claimants for delivery on a certain date. The
claimants then contacted the defendants and asked them to manufacture one of the
components of the piledriver, which was to be delivered as soon as possible. The defendants
were unable to get the work done in time, and delivery of the component in question was
badly delayed. When the piledriver was finally tendered to the claimants’ customers, they
refused to accept it. The machine proved to be unsaleable, and it was held that the
claimants could recover their loss of profit from the defendants. The court rejected the
defendants’ contention that such profits could not be recovered in the absence of a contract
to that effect, and held that it was enough if the defendants were shown to be aware of the
relevant circumstances at the time of the contract. In the words of Fry LJ, the question to be
addressed in such cases is what the court reasonably supposes to have been in the
contemplation of the parties as a probable result of the breach which actually occurred, in
the circumstances in which it occurred, assuming them to have applied their minds to the
contingency of such a breach.179
9.52 Even where loss of profits are held to be within the contemplation of the parties
generally, there may still be a question as to their extent. In the context of tort the rule is
that if physical loss or damage of a certain type is foreseeable it is no defence to show that
the extent of the loss was not foreseeable, but it is a moot point whether this principle has
any place in the context of contractual claims for loss of profit.180 In the Victoria Laundry(p.
229) case181 the court allowed the claimants to recover for their ordinary loss of profit but
not for the loss of profit sustained in relation to the exceptionally lucrative dyeing contracts,
which would seem to indicate that the tort principle mentioned above has no application in
this context. However, in Wroth v Tyler182 the buyers of a house were allowed to recover
damages for failure to complete based on the difference between the contract price and the
market price for a house of that sort, notwithstanding that there had been a huge rise in
house prices over the relevant period.
9.53 The two cases can only be reconciled by saying that in Wroth v Tyler the loss
contemplated and the loss suffered were of the same type whereas in the Victoria Laundry
case they were not. As Stuart-Smith LJ said in Brown v KMR Services:183
I do not see any difficulty in holding that loss of ordinary business profits are
different in kind from those flowing from a particular contract which gives rise to
very high profits, the existence of which is unknown to the other party and who
therefore does not accept the risk of such loss occurring.
Similarly, in The Achilleas, Lord Hoffmann stated:184
It is generally accepted that a contracting party will be liable for damages for losses
which are unforeseeably large, if loss of that type or kind fell within one or other of
the rules in Hadley v Baxendale … That is generally an inclusive principle: if losses
of that type are foreseeable, damages will include compensation for those losses,
however large. But … it may also be an exclusive principle and … a party may not
Private Law Library
Page 216
be liable for foreseeable losses because they are not of the type or kind for which he
can be treated as having assumed responsibility.
9.54 These principles can be illustrated by Coastal International Trading Ltd v Maroil
AG,185 where the defendants agreed to supply oil to the claimants but then failed to do so.
The defendants were aware that the claimants had resold the oil to a third party, and that
there was no available market for goods of the contract description. However, the subsale
contract contained an unusual term which had the effect of inflating the claimants’ loss of
profits to a considerable degree. Giving the judgement of the Commercial Court, Leggatt J
found that the provision was both ‘unusual in itself and extravagant in its result’.186 He then
proceeded to award the claimants damages for their loss of sale profits, but amended the
calculations so as to remove from the equation any loss resulting from the operation of the
disputed term, adding:
(p. 230)
These emendations result in a net profit lost by the plaintiffs under their
subcontract … or, as I should express it more accurately, under their subcontract so
doctored as to eliminate the untoward effect of the unusual provision which I have
earlier identified.187
Thus a claimant will in principle be allowed to recover loss of sale profits under
subcontracts of this sort, but unless the defendant is aware of the terms of such contracts,
they will be presumed to be ‘contracts in accordance with the market, not extravagant and
unusual bargains’.188
(ii) User profits
9.55 In other cases the promisee may claim compensation for loss of what are called ‘user
profits’. Thus, for instance, the promisor’s delay may deprive the promisee of the use of a
profit-earning chattel. Hadley v Baxendale itself is a classic example of this; because the
mill shaft was not delivered on time, the claimant’s mill was put out of action.189 Here the
claim for loss of user profits was dismissed in that case in the absence of evidence that the
defendant knew of the relevant circumstances: that is to say that the mill was out of action
and that the claimant needed the new shaft urgently.190 In Hales v London and North
Western Railway Co191 the claimant sent goods by the defendant’s railway to a destination
in County Durham with a view to hiring them out for use in a carnival procession that was
due to take place on a certain day. The goods were unreasonably delayed in transit, and as a
result they were not available for hiring on the day in question. It was held that the
claimant was not entitled to claim for loss of hire profits in the absence of evidence that the
defendants knew of his purpose in sending the goods and why they were needed. Another
possibility that has to be considered in this context is that the promisee may be able to go
out into the market and get a replacement, and where this is so damages will be limited to
the difference between the contract price and the market price at the relevant time.192
9.56 Many cases in this context concern delay in the delivery of a ship under a
charterparty. In such cases the charterer may often have entered into a subcharter on the
basis that the ship will be available on the day specified. What then happens if the ship is
not available? The normal approach of the courts is to allow the charterer to recover loss of
profits, on the basis that this is the kind of loss that is likely to arise in the ordinary course
of events.193 However, this approach does not apply (p. 231) in all cases involving late
delivery, in particular where it is the owners claiming damages from the charterers. In The
Achilleas194 the issue was whether the owners could recover damages for the loss of a
lucrative follow-on charter fixture that had been made with a third party in anticipation of
the ship being available on the due date. Both the arbitrators and the judges in the lower
courts held for the owners on the ground that this was the kind of loss that might be
expected to occur in the ordinary course of events. But the House of Lords held the loss to
Private Law Library
Page 217
be too remote, saying that while the loss of such a fixture was certainly something which
the parties would have had in their contemplation, this would not have normally been
expected to involve anything more than the difference between the charter rate and the
market rate. The losses sustained by the owner were totally beyond the control of the
charterers, and any excess loss in the present case was to be attributed to exceptionally
volatile market conditions which would not have been in the contemplation of the parties at
the relevant time.195 However, the normal rule was reaffirmed by Hamblen J, in Sylvia
Shipping Co Ltd v Progress Bulk Carriers Ltd,196 who distinguished The Achilleas on two
grounds. First of all, he said, the present case involved no finding of a general market
understanding or expectation that damages for delay during the currency of a time
charterparty were limited to the difference between charter and market rates during the
period of delay.197 Secondly, this was not a case in which it could be said that the resulting
liability was likely to be unquantifiable, unpredictable, uncontrollable or
disproportionate.198 Unlike a follow on-fixture the sub-charter in the present case could
never have been for a longer period than the time charter itself.199 All in all, these cases
illustrate that deciding whether a particular kind of loss is too remote in this context will
depend very much on the nature of the contract and on the general market understanding
of those engaged in contracts of that nature.
9.57 In some cases the relevant circumstances will be obvious to the defendant, and here
there is no difficulty in recovering user profits in an appropriate case. In Re Trent and
Humber Co ex parte Cambrian Steam Packet Co200 the defendants agreed to repair the
claimants’ ship but took longer than expected, with the result that the ship was redelivered
to the claimants late. It was held that the claimant (p. 232) was entitled to recover for loss
of the net profit that he would have earned by chartering the vessel over the relevant
period. In the words of Lord Cairns:201
If a profit would arise from a chattel, and it is left with a tradesman for repair, and
detained by him beyond the stipulated time, the measure of damages is prima facie
the sum which would have been earned in the ordinary course of employment of the
chattel in the time.
Another obvious example that can be cited in this connection is the Victoria Laundry
case.202 The defendants failed to deliver the boiler on time, as a result of which the
claimants were unable to use it in the expansion of their business. They were allowed to
recover for loss of user profits on the footing of what they would have been expected to
earn in the normal course of things, but not for the especially lucrative dyeing contracts,
since there was no evidence that the defendants knew anything about these.203
9.58 Where loss of user profits is within the general contemplation of the defendant, the
claimant may be able to recover on this basis even though the actual loss is of a very
different type. In Cory v Thames Ironworks Co204 the defendants agreed to deliver the hull
of a floating ‘boom derrick’ to the claimants, who were coal merchants. The claimants’
intention was to use this for a new and very unusual method of transhipping coal from
colliers to barges, but this was unknown to the defendants; as far as they were concerned,
it would be used to store coal as was the normal practice for this sort of vessel. The boom
derrick was delivered six months late, and the claimants sued for loss of profit. Obviously
the claimants could not sue for their actual loss, as this was totally outside the defendants’
contemplation, but could they sue for what the normal loss of profits would have been
expected to be? The defendants argued that this would be to allow the claimants to recover
for a loss which they had neither contemplated nor suffered, but the claim was upheld on
the basis that otherwise the contract could be broken with impunity in this sort of case.
Though the logic of the decision is suspect, one can see why the court came to the
Private Law Library
Page 218
conclusion that it did, but it is a moot point how far, if at all, the reasoning of the case can
be extended to claims not involving a loss of profit.205
(p. 233) (iii) Loss of profits in other cases
9.59 There are other cases where the claimant’s loss of profit does not involve either sale
or loss of use. One example of this is Pearson v Sanders Witherspoon,206 where the claimant
engaged the defendant solicitors to pursue a claim against a limited company on his behalf.
The defendants failed to pursue the claim with due diligence and speed, as a result of which
the company had gone into liquidation by the time that judgement was obtained in the
action. The claimant sought to recover the relevant sum by way of damages from the
defendants, but the claim was struck out in the absence of evidence that the defendants
were aware of the likelihood of this happening. The decision would no doubt have been
different if they had known that the company was in difficulties at the relevant time.
(d) Recovery of expenses
9.60 So far we have been considering the question of negative losses – lucrum cessans – in
which the delay has the effect of depriving the promisee of the expected benefits of the
contract.207 But a promisee may equally seek to recover his or her expenses as damages for
the breach. These expenses can be of two kinds, one being expenses arising out of the
contract generally and the other expenses arising out of the promisor’s breach.
(i) Expenses arising out of the contract generally
9.61 In the first category of cases the relevant expenses arise out of the contract as a
whole, the claimant’s argument being that, as a result of the defendant’s breach, those
expenses have been wasted. Expenses thrown away can undoubtedly be recovered under
the general law,208 but whether they can be recovered in any given case depends on the
usual rules of remoteness. In Wilson v Lancashire and Yorkshire Railway Co209 the
defendants agreed to deliver cloth to the claimant, who intended to use it for the purpose of
making caps. The cloth was delivered late, and by the time it arrived the season for making
caps was over. The claimant sought damages under a number of heads, including the
wasted expenses of salesmen who had gone on journeys now rendered fruitless by reason of
their inability to execute their orders. It was held that the claimant could recover on the
basis that the cloth was now worth less than it would have been if it had been delivered on
time, but the claim for wasted expenditure was disallowed on the ground that this was not
within the contemplation of both parties at the time when the contract was made. In
contrast we have Hydraulic Engineering Co Ltd v McHaffie, Goslett & Co,210 where the (p.
234) manufacturers of a piledriver were allowed to claim wasted expenditure from the
defendant engineers, from whom they had ordered an essential component. The component
was delivered late, and as a result the claimant’s customer had rejected the piledriver,
which was now no longer saleable. In this case the defendants knew full well why the
component was needed and were under orders to deliver it as soon as possible. We shall be
looking at this sort of case again when we come to consider the recovery of damages by
way of reliance loss.211
(ii) Expenses arising out of the breach
9.62 In the other kind of case the promisee incurs extra expense as a consequence of the
breach. This is a case of positive consequential loss – damnum emergens – the classic
example given by the Roman jurists being where the owner of a wrongfully injured slave
incurs medical expenses as a result of the injury.212 A number of illustrations of this
principle can be given in the context of delay. In John M Henderson & Co Ltd v Montague
Meyer Ltd,213 for instance, cranes were delivered late to a building contractor, as a result of
which extra labour costs were incurred on the project; these were recovered in damages.
The same occurred in SS Ardennes (Cargo Owners) v SS Ardennes (Owners),214 when a
cargo of oranges was delivered late, and the consignee had to pay a higher rate of import
duty. In Monarch SS Co Ltd v Karlshamns Oljefabriker A/B,215 a case occurring just before
Private Law Library
Page 219
the Second World War, the claimants purchased a cargo of soya beans, which were to be
delivered on a British ship to a port in Sweden. The ship was delayed because of
unseaworthiness, and before she could get to Sweden she was diverted by orders of the
Admiralty to Glasgow. The cargo then had to be transhipped into neutral vessels before it
could be taken on to Sweden. We have already discussed this case from the perspective of
causation, but what is of interest in the present context is that the claimants were allowed
to recover the costs of transhipment as damages from the shipowners. The damage was
held not to be too remote, it being said that the costs of transhipment were the direct and
natural consequence of the owners’ failure to deliver the cargo to the specified
destination.216 It is different if the circumstances are outside the contemplation of the
parties at the relevant time. In Woodger v Great Western Railway Co217 the claimant, who
was a commercial traveller, sent a parcel of samples from Oxford to Liverpool on the
defendants’ line. The parcel was delivered late, as a result of which the claimant (p. 235)
was unable to transact his business, and was kept waiting in Liverpool for it to arrive. A
claim for hotel expenses was rejected by the court as too remote; the claimant had not told
the defendants what was in the parcel, and no doubt if they had known that speedy delivery
was essential they would have charged a higher price for the carriage of the goods.
(e) Recovery of indemnity
9.63 One particular case of expenses which has often given rise to problems is where the
promisee seeks to recover from the promisor an indemnity in respect of damages paid
under a subcontract in respect of the same subject matter. Say, for instance, the promisor
agrees to deliver goods to the promisee by a certain date, and the promisee then agrees to
deliver the same goods to X. The promisor fails to deliver on time, as a result of which the
promisee is unable to fulfil his or her contract with X. Can the promisee recover from the
promisor any damages paid out for breach of the contract with X?
9.64 The usual principles of remoteness apply here,218 which means that if the promisor is
totally unaware of the promisee’s contract with the third party, no indemnity can be
recovered. In Portman v Middleton219 the claimant was employed by a third party to repair
a steam threshing machine, which he said was needed for harvest time. The claimant then
ordered a new firebox from the defendant, and was told by the defendant that it would take
a fortnight to make. In fact the firebox took several months to make, and when it was finally
delivered it was found to be totally useless. As a result of this the claimant had to get one
from another source, and was unable to complete the repairs until late in the autumn. An
action for damages by the third party was settled for £20, and the claimant now sought to
recover this by way of an indemnity from the defendant. However, the claim failed for lack
of evidence that the defendant knew anything about the contract with the third party.
9.65 Knowledge by the defendant of the existence of the relevant subcontract is therefore
a necessary condition of recovery in cases of this sort, but it is by no means a sufficient one.
A claim for recoupment of damages by way of indemnity is harder to establish than one for
simple loss of profit,220 for it has to be shown that the defendant had knowledge not only of
the existence of the contract with the third party but also of its terms. In the words of Brett
MR:221
Where a plaintiff … is seeking to recover from some liability which he has incurred
under a contract with a third person, he must shew that the defendant, at the time
(p. 236) he made his contract with the plaintiff, knew of that contract, and
contracted on the terms of being liable if he forced the plaintiff to a breach of that
contract.
Private Law Library
Page 220
Though it is probably no longer correct to say that the defendant’s liability in cases such as
these must be specifically contracted for, the defendant must at least know full well that if
he or she does not fulfil his or her own contract the claimant will be at risk of being liable
for damages to the third party. In Elbinger Aktien-Gesellschaft v Armstrong222 the
defendants agreed to supply the claimants with wheels and axles for wagons to be made by
the claimants for a Russian railway company. The defendants knew of the existence of this
contract, but were unaware of its precise terms. The items in question were delivered late,
as a result of which the claimants had to pay liquidated damages to their customers. It was
held that these could not be recovered from the defendants in the absence of proof that
they knew of the existence of the liquidated damages clause, or at any rate had it within
their contemplation.
9.66 What about the situation where the proceedings between the claimant and the third
party do not result in an award of damages as such? Can the claimant sue for costs of other
kinds? In Agius v Great Western Colliery Co223 the claimant, who was a coal merchant,
entered into a contract to supply a steamship company with bunker coal for their steamers.
He then made an agreement with the defendants for the supply of coal for the fulfilment of
that contract. The coal was delivered late by the defendants, and as a result one of the
steamship company’s ships was delayed in port. The steamship company then sued the
claimant for damages for five days’ delay, amounting to some £150. The claimant passed the
claim on to the defendants, who dismissed it as ‘preposterous’ and refused to become
involved with the proceedings in any way. In the end the claimant defended the action
himself, paid £20 into court and won on this basis. It was held that the claimant could
recover from the defendants his reasonable costs of defending the action against the third
party, as this was clearly within the contemplation of the parties that this might have to be
done. Similar problems arise when the action with the third party is settled out of court.
This is what happened in Biggin & Co Ltd v Permanite Ltd,224 a case involving the supply of
a special adhesive compound for use in conjunction with roofing felt to be used by the
Dutch Government in repairing war damage. The compound turned out to be unsuitable for
its purpose, and as a result the claimants were sued by the Dutch Government. The action
was settled for some £43,000, and the question now arose whether the claimants could
recover this sum from the suppliers. It was held by the Court of (p. 237) Appeal, overruling
Devlin J,225 that the amount of the settlement was reasonable in the circumstances, and that
the claimants could therefore recover it from the suppliers. Now that settlements are, in the
words of McGregor, ‘practically the order of the day’,226 this kind of recovery has become
commonplace, though it is still up to the claimant to show that the fact and the amount of
the settlement are reasonable in all the circumstances.227
(f) Recovery of interest
9.67 The position with regard to the recovery of interest has a curious history. Prior to
1830 the courts, influenced no doubt by the historic suspicion of usury,228 would not allow
the recovery of interest at all, but in 1833 Lord Tenterden’s Act229 allowed for simple
interest to be recovered in claims for ‘debt or sums certain’ payable to the promisee.
However, the limitations of that Act were made apparent by the decision of the House of
Lords in London, Chatham and Dover Railway Co v South Eastern Railway Co,230 a case
involving a joint traffic agreement between the two companies involved, which provided for
periodic sums to be paid on account by a certain date. The defendant company failed to pay
on time, and the claimants sought to recover the sums payable with interest. However, the
claim for interest was dismissed on the ground that the common law did not allow for
interest on the payment of damages, and the case did not fall within Lord Tenterden’s Act
either, since this was not an action for debt or for a ‘sum certain’. The position was
eventually remedied by section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934,
which gave the courts a general discretion to award simple interest in actions for debt or
for damages.231 This had the effect of consigning London, Chatham and Dover Railway Co v
Private Law Library
Page 221
South Eastern Railway Co to the dustbin of history as far as simple interest was concerned,
but with regard to compound interest the position was more complicated, the accepted
position being that it could be recovered as special damage under the second rule in Hadley
v Baxendale but not as general damage under the first.232(p. 238) However, in Sempra
Metals Ltd v Inland Revenue Commissioners233 the House of Lords decided that this
distinction could no longer be sustained in the present context, and that the courts had a
common law jurisdiction to award both simple and compound interest as damages not only
on claims for non-payment of debts but also on other claims for breach of contract or tort.
The upshot of all this is that there is no longer any restriction on the recovery of compound
interest in cases where it can be proved as part of the claimant’s loss.234
(g) Physical injury and damage
9.68 So far we have been considering cases of financial loss. However, delay can
sometimes cause damage to property or even personal injury. For instance, such injury may
arise where a doctor fails to treat his or her patient promptly, and there are other examples
too. In Griffin v Pillet235 the tenant of a house reported to the landlord that the steps up to
the front door were in need of attention. A builder was sent to inspect the steps, and he
duly reported that they were in a dangerous condition. However, the repairs were not done
for over a week, and in the meantime the steps collapsed under the tenant, causing him to
fall into the cellar and sustain serious injury. It was held that the landlord had broken his
repairing covenant by failing to do the work with reasonable dispatch,236 and damages
were awarded to the tenant for the injuries sustained in the fall. It has been said that in
such cases the damages would include a sum for pain and suffering and loss of amenity in
the usual way.237
9.69 Delay can also lead to damage to property, one obvious example being where delay in
the delivery of perishable goods causes those goods to deteriorate in transit. This is an
obvious head of damages, at any rate where the promisor is aware of the nature of the
goods, and for this reason the matter has never really been litigated in the courts.238
Damage may also be caused to other property; thus in Smeed v Ford,239 where the
defendant failed to deliver a threshing machine in time for the harvest, the claimant was
able to recover for damage to the corn caused by bad weather. In such cases the crucial
question as always will be whether the defendant knew that damage of this kind was likely
to occur in the event of the contract being broken.
(p. 239) 9.70 As we have seen, there is authority for saying that in cases where physical
injury or damage results from a breach of contract the rules of remoteness are more
generous to the claimant; provided that some loss of this type was within the contemplation
of the parties, it does not matter that its extent was greater than could have been
anticipated.240 In Great Lakes SS Co v Maple Leaf Milling Co241 the defendants chartered
the claimants’ ship for a voyage, but were tardy in unloading the cargo. Whilst this was
being done, the water fell and the ship grounded on an old anchor. The defendants argued
that they were unaware of the presence of the anchor, but this was held to be irrelevant by
the Privy Council. It was obvious to the parties that the ship would be liable to suffer some
grounding damage in the event of undue delay in loading, and this being so it was irrelevant
whether or not the extent of the damage was also within their range of contemplation.242
Though this extension of tort principles to the realm of contract has been queried, the
distinction between physical and financial loss is still a relevant one in this context.243
(h) Loss of goodwill
9.71 The promisor who fails to perform on time may have to compensate the promisee for
losses suffered on contracts with a third party where these were within the contemplation
of the parties at the relevant time.244 But in some cases the breach may have a more drastic
effect on the promisee’s business in general. In Foaminol Laboratories Ltd v British Artid
Plastics Ltd245 the claimants decided to market a summer cream for ladies, which was to be
Private Law Library
Page 222
sold in special containers. The containers were ordered from the defendants, and an
advertising campaign was launched in the pages of the leading ladies’ magazines, including
a special offer for purchase of tubs of the cream at half price. The defendants failed to
deliver the containers, and as a result the advertising campaign collapsed. It was held that
the claimants could recover, in addition to their loss of profits, for expenses incurred in
dealing with unsatisfied customers, but not for damage to the claimants’ relationship with
the magazines, as this was too remote. However, in some cases such loss will be an obvious
risk. This is illustrated by GKN Centrax Gears Ltd v Matbro Ltd,246 where over a period of
years the defendants supplied axle components to the claimants for use in the manufacture
of fork lift trucks. These were known by the defendants to be unfit for the purpose, and as a
result of this (p. 240) the claimants’ trucks frequently broke down, causing great customer
dissatisfaction and a catastrophic loss of goodwill. It was held that in the circumstances the
claimants could recover damages for loss of repeat orders from their customers, as this was
clearly within the contemplation of the parties as liable to result. GKN Centrax Gears Ltd v
Matbro Ltd involves defective performance rather than delayed performance, but one can
equally envisage similar consequences arising in a case of delay; for instance, a restaurant
where supplies are delivered late on a regular basis will very soon lose custom. If such
cases were to arise, the same principles would surely apply.
(i) Inconvenience, anxiety and annoyance
9.72 The first branch of the rule in Hadley v Baxendale refers to damage arising
‘naturally’, and ‘according to the usual course of things’.247 There is nothing more natural
and usual than for delay to cause inconvenience, anxiety and annoyance, but the law is still
very chary of awarding damages for this sort of thing. Generally speaking, a distinction is
drawn in this context between damages for inconvenience and discomfort and damages for
mental distress. In Bailey v Bullock248 the claimant let out his house to a tenant but then
required the house for his own occupation. So he instructed the defendant solicitor to
regain possession. However, the defendant dallied and failed to press the matter forward,
and in the interim the claimant and his wife and family had to live in cramped conditions
with his parents-in-law. In a claim for damages against the defendant the claimant sought
compensation under three heads: (1) storage charges for his furniture; (2) inconvenience
and discomfort; and (3) annoyance, mental distress and loss of social prestige arising from
the fact that he did not have a home of his own. The court allowed the first head of damages
as a matter of course, and held that they were entitled on principle to allow damages for
inconvenience and discomfort in this kind of case.249 However, the claimant was debarred
from recovering under the third head on the authority of Addis v Gramophone Company,250
where it was held by the House of Lords that an employee could not recover damages for
hurt feelings and humiliation in an action for unfair dismissal.
9.73 Why the law should have difficulty in awarding damages for this kind of loss is not
entirely clear.251 In Wales v Wales and anor252 the claimant, who had been injured in a car
crash with her husband, sought to recover damages from her (p. 241) husband and the
other driver involved. To this end she engaged the defendant solicitors to bring legal
proceedings, but such was their delay and incompetence that the action took over ten years
to come to court. During this time the claimant’s health deteriorated as the delay was
preying on her mind. When the action finally came on, the court assessed the general
damages due to the claimant at £3,000, with an extra £600 added for her deterioration of
health since the accident, which the solicitors agreed to pay. The trial judge said that he
was not sure that matters that preyed on the mind were not more difficult to face than the
mere physical loss of a limb,253 but it is doubtful whether the solicitors would have been
legally liable for the loss. Thus in Watts v Morrow254 it was held by the Court of Appeal in
Private Law Library
Page 223
relation to breach of a surveyor’s contract that damages could be recovered for physical
discomfort and inconvenience but not for mere mental distress.255
9.74 There is an exception to this principle where the contract involves the provision of
pleasure, peace of mind and general freedom from anxiety and distress. The most obvious
example of this is in relation to contracts to provide a holiday, where damages for
disappointment are available as a matter of course,256 but the exception is not confined to
such cases. Thus in Heywood v Wellers (a firm)257 damages were recovered on this basis
from a solicitor who had been dilatory in taking out a non-molestation order, with the result
that the claimant suffered harassment from her partner, and in Reed v Madon258 such
damages were recovered from a cemetery for breach of a contract to grant exclusive burial
rights. In the past it was thought that this only applied where the provision of peace of mind
and other intangible interests were the main object of the contract,259 but this limitation
was rejected by the House of Lords in Farley v Skinner.260 Here the claimant decided to buy
a house for his retirement, and hired a surveyor to inspect the premises, saying that he was
particularly concerned about the problem of aircraft noise. The surveyor came back with a
report to the effect that it was unlikely that the property would be greatly affected by this.
The claimant then bought (p. 242) the house, which turned out to be directly in the line of
flights waiting to land at Gatwick airport, and while the price paid was found to be in line
with the general market value of the house, the claimant, though not a man of abnormal
susceptibilities, found the noise a ‘confounded nuisance’. It was argued by the defendants
that damages for this could not be recovered on the ground that the provision of peace and
tranquillity was only part of the contract and not its main object, but this argument was
rejected by the House of Lords. As Lord Steyn pointed out, there was no reason in principle
why the scope of the exception should depend on the object of the contract as ascertained
from all its constituent parts. It was sufficient if a major or important object of the contract
was to give pleasure, relaxation and peace of mind.261 The defendant knew that the
claimant wanted the house for a retirement home, and the claimant had been careful to
draw to his attention his concerns about the noise. This was enough to bring the case within
the general exception.
D. Mitigation
9.75 It is a fundamental principle of the law, in tort as in contract, that when assessing the
damages due to a claimant in any given case the court will not allow recovery in respect of
losses which he or she could reasonably have avoided.262 Thus where a seller fails to deliver
goods, the buyer will be expected to find equivalent goods elsewhere; where a buyer fails to
accept goods, the seller will be expected to find another buyer; where an employee is
unfairly dismissed, he or she will be expected to find another job, and so on. These
principles are of general application, and there is no need to discuss them in detail in the
present context. However, we shall note the main ways in which they impact on the
assessment of damages for delay. One often hears talk of a ‘duty to mitigate’ in this context,
but it is not a duty in the sense that the claimant can be sued for failure to do so.263 On the
contrary, he or she has a free hand in this matter. What it does mean is that failure to
mitigate will reduce the damages awarded in any given case.
9.76 The doctrine of mitigation is said to involve three general principles.264 The first
principle is that a claimant cannot recover for avoidable loss. The second is that the
claimant can recover for losses incurred in a reasonable attempt to avoid loss. The third is
that the claimant cannot recover for avoided loss. We shall now look at each of these in
turn.
(p. 243) (1) No recovery for avoidable loss
Private Law Library
Page 224
9.77 If the claimant could have reasonably avoided the loss suffered, he or she will not be
able to recover from the defendant in respect of that loss.265 This applies as much to delay
as it does to any other kind of breach. Thus in Ansett v Marshall266 the claimant bought a
ticket to Australia on the defendant’s ship, but was then wrongfully turned off the ship,
which sailed away without him. When the defendant discovered the mistake, he offered the
claimant a passage on another ship leaving some days later, with £5 compensation. The
claimant refused the offer, and pursued the matter to trial. It was held that the claimant
could recover the costs of trial, but it was said that he could not have recovered expenses
for more than a few days’ delay, as he could reasonably have been expected to accept the
offer of a place on the later ship.267 The same principle is illustrated by The Solholt,268
where the defendants agreed to deliver a ship to the claimants on a certain date at a price
of $5 million. The ship was delivered a day late, and time being of the essence, the
claimants cancelled the contract. By now the market had gone up, and the ship was worth
$5½ million. The claimants then offered to buy the ship from the defendants for $4¾
million, but this offer was refused. It was held by the court that this was not a reasonable
offer, and that in assessing the damages due to the claimants allowance should be made for
the fact that they could reasonably have been expected to take the ship at the original price
less an allowance for the delay – an offer that the defendants would most certainly have
accepted. As stated above, these principles are of general application, but there are a
number of points that are worth highlighting in the present context.
(a) Mitigation and the decision to terminate
9.78 It has been stressed by the courts on several occasions that where the defendant has
committed a serious breach of contract the claimant has a completely free choice whether
to terminate or affirm, and that questions of mitigation only come into play when it comes
to deciding the damages to which he or she is entitled. Thus it might have been said that it
was totally unreasonable for the claimant in The Solholt to terminate on a rising market,
but questions of mitigation were held be irrelevant in this context.269 Conversely we may
take the case of White & Carter (Councils) v McGregor,270 where the defendants repudiated
an advertising contract the day after it was made, but the claimants refused to (p. 244)
accept the repudiation, went ahead and completed performance of the contract, and then
sued for the contract price. No doubt it might have been thought highly unreasonable and
wasteful for the claimants not to accept the repudiation in this situation, but the doctrine of
mitigation had no application since the claim was not a claim for damages but a claim for
the contract price.271 In this connection it is sometimes said that a claimant cannot be
expected to mitigate in advance of the breach,272 but the principle is wider than that; the
defendant had already broken the contract in The Solholt, but the doctrine of mitigation did
not prevent the claimant from terminating performance in respect of the breach.
(b) The question of reasonableness
9.79 Though a claimant who suffers loss as a result of the defendant’s breach is expected
to mitigate that loss as best he or she can, this is subject to the overriding criterion of
reasonableness.273 Thus in CHS Inc Iberica SL v Far East Marine,274 a cargo of corn arrived
in a deteriorated state due to delays caused by the unseaworthiness of the ship. The owners
of the ship sought to argue that the cargo owners had suffered no loss, since they could
have mixed the corn with sound corn and sold it at the same price. However, this was held
not to be a practical proposition; mixing the corn would have been an expensive and time-
consuming process, and the resulting mix would have been of poor quality, and would have
had to be sold as substandard.275 Again, the claimant need not take action that would
involve undue financial risk,276 or would lead to expensive and uncertain litigation,277 or
Private Law Library
Page 225
would ruin his or her business reputation.278 The standard of reasonableness in this context
is not an exacting one; in the words of Lord Macmillan:279
Where the sufferer from a breach of contract finds himself in consequence of that
breach placed in a position of embarrassment the measures which he may be driven
to adopt in order to extricate himself ought not to be weighed in nice scales at the
instance of the party whose breach of contract has occasioned the difficulty.280
(p. 245) What is reasonable in this context is a question of fact,281 the onus of proof being
on the defendant to show that the claimant could have reasonably been expected to do
something to mitigate his or her loss.282
(c) Mitigation and causation
9.80 A number of judges have sought to subsume questions of mitigation under the
general umbrella of causation,283 it being said that where the claimant fails to take
reasonable steps to mitigate his or her loss the effective cause of the loss is not the
defendant’s breach but the claimant’s own failure to mitigate.284 No doubt the matter could
well be analysed in this way, on the basis that it is not reasonably foreseeable that the
claimant will fail to mitigate where this is possible.285 However, it has been said that such
an analysis does not really take us any further forward in our understanding of the law,286
and we shall therefore say no more about it in the present context.
(2) The cost of mitigation
9.81 The second principle of mitigation is that the claimant can recover for losses incurred
in a reasonable attempt to avoid loss. Such losses can be of two kinds, the first being
expenses incurred in the course of mitigation, and the second being losses arising out an
unsuccessful attempt to mitigate. Both can be seen as examples of positive consequential
losses arising out of the breach – damnum emergens287 – and can be recovered on the basis
of the principles discussed earlier.
(a) Expenses incurred in mitigation
9.82 An award of damages for expenses arising out of the breach can include expenses
incurred in an attempt to mitigate the loss. Thus in Hales v London and North Western
Railway Co,288 where goods were not delivered on time, the claimant was able to recover
expenses incurred in trying to locate them; in Monarch SS Co Ltd v Karlshamns
Oljefabriker,289 where delay due to unseaworthiness led to a ship being diverted, the
consignees of the cargo were able to recover the costs of (p. 246) transhipment to the
agreed destination; in Calabar Properties v Stitcher,290 where the landlord failed to carry
out his repairing covenant, the tenant was able to recover the costs of alternative
accommodation. Such recovery is commonplace, but tends not to be thought of as an aspect
of mitigation.291 Nevertheless, it is said to be an obvious corollary of the rule barring the
claimant from the recovery of loss which could reasonably have been avoided.292
(b) Costs of unsuccessful mitigation
9.83 Sometimes the claimant’s attempts to mitigate only make things worse, and the
question then is whether the loss can be claimed from the defendant. The answer is that it
can, provided the loss was incurred in a reasonable effort to mitigate.293 Some of the
relevant cases involve tort rather than contract; thus in Jones v Watney, Combe, Reid &
Co294 the claimant recovered in full for an injury to his foot despite the defendant’s
argument that he had made the injury worse by walking on it too soon after the accident.
An example of the same principle in the context of contract is given by Gebroder
Metellmann GmbH & Co v NBR (London) Ltd,295 where buyers of goods repudiated the
contract before the date of delivery, after which the sellers sold the goods to a third party in
an attempt to mitigate their loss. As it turned out, the market rose between the date of the
sale to the third party and the date of acceptance set by the original contract, which meant
Private Law Library
Page 226
that the sellers’ loss had been increased at the end of the day. Nevertheless it was held that
the buyers were entitled to be compensated for the additional damage flowing from their
attempt to mitigate.296 As Winn LJ said in The World Beauty,297 it is implicit in the doctrine
of mitigation that if mitigating steps are reasonably taken, and additional loss or damage
results notwithstanding the reasonable decision to take those steps, then that will be in
addition to the recoverable damage and not a set-off against the amount of it.298
(3) Avoided losses

9.84 At the other end of the scale, we have cases where the claimant’s attempts to
mitigate are so successful that he or she ends up better off than if the breach had (p. 247)
never happened in the first place. The basic rule here is that a claimant cannot recover for
losses that have been avoided,299 but the cases raise some tricky issues of principle as we
shall now see.
9.85 The leading authority here is British Westinghouse Electric and Manufacturing Co Ltd
v Underground Electric Railways of London Ltd.300 The claimants ordered steam turbines
from the defendants, which they used for a number of years. The turbines were not in
accordance with the contract owing to excessive coal consumption, and eventually the
claimants got rid of the turbines and installed new ones. These new turbines, being of a
more advanced design, used very little coal, the result being that over the expected lifespan
of the old turbines the claimant used less coal than he would have done had they been in
accordance with the contract. The question then arose whether the arbitrator was right to
make an allowance for this when setting the damages. It was held that he was; the turbines
had been replaced in an effort to mitigate the loss, and the arbitrator was entitled to look at
the full picture of what happened in his task of assessing the damages due. This case has
been criticised on the ground that it ignores the true loss suffered by the claimants. The old
turbines had in effect become obsolete by the time that they were replaced, so as
reasonable businessmen the claimants would have been expected to replace them
anyway.301 This means that if the old turbines had been up to scratch, the claimants would
have had the benefit of their performance as warranted by the contract, followed by a
further period in which they had the full benefit of the new turbines. Presumably the
assumption was that, had the old turbines not been unsatisfactory, the claimants would not
have gone to the fuss and bother of replacing them, but would have used them until they
were worn out.
9.86 A similar case, and one involving delay, is the decision of the Privy Council in
Wertheim v Chicoutimi Pulp Co.302 This involved late delivery in a contract for the sale of
wood pulp. The buyers claimed damages on the basis of loss of market value; that is to say
the difference between the market price of the goods on the date set for delivery (70/- a
ton) and the price obtaining on the date the goods actually were delivered (42/6 a ton). This
is the normal measure of damages in a case of delayed delivery,303 but the present case was
complicated by the fact that the buyers had been able to resell the goods at a price
considerably in excess of the market price (65/- a ton). It was held that the damages had to
be adjusted to make allowance for this, the result being that the buyers were awarded only
5/- a ton (p. 248) rather than the 27/6 they would normally have been entitled to. The
explanation given for this was that the normal measure of damages in this sort of case was
only a presumption, and that the presumption had been rebutted on the present facts;304 it
was also said that to allow the claimant to recover damages on the normal basis would
enable him to make a profit from the breach.305 It has been argued that this is
misconceived, on the ground that the profit would not have arisen from the breach, but
from the advantageous subsale.306 Moreover, if the goods had been delivered promptly, the
buyer would have had been able to resell them to somebody else at the market price
obtaining at the time, and then could have gone into the market later on to satisfy his sub-
buyer.307 As well as this, there is an inconsistency here with the rules relating to
remoteness of damage. If the buyers had lost their subsale altogether in consequence of the
Private Law Library
Page 227
delay, they would not have been able to claim their full loss of profit; even if the sellers had
known that they intended to resell the goods, the assumption would have been that they
would be able to satisfy their sub-buyers by going out into the market.308 If they would not
have been allowed to use the subsale to their advantage in the one case, why should they be
prejudiced by it in the other?
9.87 The general approach to this question was addressed in The Fanis,309 where the
charterers under a time charterparty had to engage a substitute vessel following a breach
by the owners. On redelivery of the substitute vessel the charterers made a profit from the
sale of bunkers, and the question arose whether this should be deducted from the damages.
The arbitrator made an award in favour of the charterers, and this was upheld by Mance J,
who said that it was not necessary in this context to embark on a two stage process by
asking whether the substitute fixture was a consequence of the breach and then whether
the profit arose out of the substitute fixture. Rather, the question is simply whether any
profit or loss arose out of, or was sufficiently closely connected with, the breach to require
it to be brought into account in assessing damages. In order to form a common sense
judgement of the sufficiency of the causal nexus between the breach and the profit it is
necessary to take into account all the circumstances, including the nature and effects of the
breach, the nature of the profit, the manner in which (p. 249) it occurred and any
intervening or collateral factors which played a part in its occurrence.310
9.88 At the end of the day the burden of proof is on the promisor to establish that the
promisee has profited from the breach under these principles.311 Just as it is not necessary
to show a causal connection between the breach and the mitigating step, and between the
mitigating step and the profit, so it is not sufficient. This can be seen from the recent
decision of the Supreme Court in The New Flamenco,312 where the owners of a time
chartered ship sold it for a high price following early redelivery by the charterers. Had the
ship been delivered on the proper day, the price would have been a lot less, due to a
subsequent fall in the market. The court held that the necessary causal nexus between the
breach and the benefit had not been demonstrated. There was nothing about the premature
termination of the charterparty which made it necessary to sell the vessel, either at all or at
any particular time. Indeed, it could have been sold during the term of the charterparty. If
the owners decided to sell the vessel, whether before or after termination of the
charterparty, they were making a commercial decision at their own risk about the disposal
of an interest in the vessel which was no part of the subject matter of the charterparty and
had nothing to do with the charterers.313
E. Measure of Damages
9.89 The effect of the rules we have been discussing so far is to eliminate from the
equation losses for which the promisee is not entitled to recover at all. Once this has been
done, the next task of the court is to decide how the recoverable loss is to be assessed.
There are various different modes of assessment used in this context, though not all of them
are of equal relevance to delay.
(1) Expectation loss

9.90 The normal approach in relation to breach of contract is to award damages for ‘loss of
expectation’ or ‘loss of bargain’, the aim being to put the promisee in the position he or she
would have been in if the contract had been performed.314 However, this can be done in a
number of different ways. This can best be explained by reference to the example given at
the beginning of the chapter.315 Here, it will be remembered, the promisor agrees to sell
the promisee a consignment of goods (p. 250) for £A, and to deliver them on a certain day.
The market price of the goods on the day when the goods should have been delivered was
£B. The goods arrive a week late, by which time the market price has fallen to £C. In the
Private Law Library
Page 228
meantime, the promisee has agreed to resell the goods to a third party for £D. As we have
seen, there are several possibilities here.316
9.91 First of all, damages can be awarded for loss of value. In the example given, this is
done by looking at the difference between the market price on the day the goods should
have been delivered (£B) and the price on the day they were delivered (£C). The point is
that if the contract had been performed, the promisee would have had goods worth £B; as it
is, the goods are only worth £C. Of course, if the market has gone up rather than down, £C
will be more than £B; in this case the breach will cause no loss to the promisee, and
damages will only be nominal.317 Loss of value is the basic measure of damages in cases of
delayed performance; it is the loss arising in the normal course of events.318 The only
situation where a promisee will not be allowed to recover for loss of value is where it is
clear that the parties never contemplated such a loss as a realistic possibility. This was the
situation in Croudace Construction Co v Cawoods Concrete Products,319 a case involving
the late delivery of masonry blocks to a contractor on a building site. In this case, it was
clear that the contractor needed the blocks for use in the building, and it was a matter of
supreme indifference to him whether the market had gone up or down while he was waiting
for them to be delivered.320
9.92 Another possibility is that damages will be awarded on the difference between the
contract price and the market price at the date set for delivery. To go back to the example
given above, say that the promisee particularly needs the goods on the day and no later. If
the goods have not been delivered on time, he or she will have to get the goods
elsewhere.321 The upshot of this is that instead of getting the goods from the promisor at a
cost of £A, the promisee will have had to get them on the market at a cost of £B.322 If £A is
less than £B, the promisee can recover (p. 251) damages on this basis, but if it is more then
once again the damages will only be nominal.323
9.93 The third possibility is that the promisee will be awarded damages for loss of profit.
In the example given above, the promisee may claim that because the goods were not
delivered on time he or she was unable to fulfil the contract with the third party. If the
contract had been performed, the promisee would have pocketed the difference between
the contract price (£A) and the resale price (£D). As it is, there are two possibilities. One is
that the contract with the promisor has been terminated, in which case the damages will be
£D minus £A.324 Alternatively, the promisee will still have the goods, in which case the
computation will be on a different basis: the essence of the loss is that instead of being able
to sell the goods to the third party for £D the promisee will have had to sell them elsewhere;
here the damages will be the difference between the intended resale price and the actual
resale price.325 Loss of profit is often too remote in these cases, either because the
promisor knew nothing at all about the subsale326 or because the promisee might
reasonably have been expected to perform it by going into the market and obtaining
substitute goods.327 But where there is no market for the goods, and the promisor is aware
of that fact, damages for loss of profit can be awarded.328
(2) Reliance loss

9.94 In some cases the promisee may seek to recover his or her financial outlay on the
contract either as an alternative, or even in addition, to damages calculated on the
principles discussed in the previous paragraphs. An obvious example of this is where a
buyer pays in advance for goods to be delivered by the seller on a certain date, and then
cancels the contract when they do not turn up on time. The buyer may recover the price,
and the same principle applies where the promisee has incurred other expenses in the
performance of the contract.329
Private Law Library
Page 229
9.95 This is sometimes known as ‘reliance’ loss, which has traditionally been viewed as a
separate mode of recovery, it being said that whereas damages for loss of (p. 252)
expectation are intended to put the promisee into the position he or she would have been in
if the contract had been performed, reliance damages are predicated on the hypothesis that
the contract was never entered into in the first place. However, the basis of this distinction
was queried in The Mamola Challenger,330 where it was said by Teare J that the award of
damages in these cases was based on the expectation principle no less than where damages
were calculated in the usual way.331 The reason for this was that the expenditure which was
sought to be recovered was incurred in expectation that the contract would be performed;
hence it was always necessary to ask what position the claimant would have been in had
that been the case.332 As we shall see, the cases to be discussed are consistent with this
analysis, most notably in cases where the promisee seeks to recover damages on this basis
to avoid the consequences of a bad bargain.
9.96 As a general rule, recovery of reliance loss is most appropriate where the expected
gains from the contract are wholly speculative. A striking example of this is provided by
McRae v Commonwealth Disposals Commission,333 where the defendants invited tenders
for the purchase of a wrecked oil tanker and its contents said to be lying on the ‘Jourmand
Reef’. The claimants paid a nominal sum for the tanker, and then equipped an expedition to
recover the oil. But when they got there they found that no such tanker existed; indeed,
there was no such place as the Jourmand Reef. In an action against the defendants the
claimants sought to recover an immense sum as the anticipated profits of the venture, but
this was held to be palpably absurd by the court;334 instead, the claimants were allowed to
recover the price they had paid for the tanker together with the expenses of their fruitless
salvage expedition.335
9.97 A converse situation arises where the contract would not have been a profitable one
even if it had been performed properly. Here the claimant will obviously not be entitled to
recover substantial damages for loss of expectation, but can he or she get round this by
claiming reliance loss instead? The general answer to this question is that this is not
allowed. In C & P Haulage v Middleton336 the defendant gave the claimant a licence to use
his premises for the claimant’s vehicle repair business. The claimant then spent a large sum
of money on the (p. 253) premises, even though the licence provided that any fixtures
installed by the claimant should remain. Shortly afterwards he was summarily ejected by
the defendants, and sought to claim for his wasted expenditure. However, he was held to be
entitled to no more than nominal damages. It was pointed out that the licence could have
been lawfully terminated within a short time anyway, and that the waste of expenditure
resulted not from the defendant’s breach but from the claimant’s own folly in entering into
a very unsatisfactory and dangerous bargain.337 Similarly, in The Mamola Challenger338 the
owners of a ship signed a charterparty under which they were required to make
modifications to the ship, including the installation of a crane. The charterparty was then
repudiated by the charterers, the result being that all this expenditure was wasted.
However, by this time the market rate had risen to a level higher than the charter rate, the
result being that the owners suffered no loss and could only have recovered nominal
damages under the normal expectation principle. The owner’s claim for recovery of wasted
expenditure was rejected by Teare J, who pointed out that if there were an independent
principle pursuant to which expenditure incurred in expectation of the performance of a
contract was recoverable without regard to what the position would have been had the
contract been performed, the defendant would in effect underwrite the claimant’s decision
to enter the contract. If the contract was unwise from his point of view, because his
expenses were likely to exceed any gross profit, it was difficult to understand why the
defendant should pay damages in an amount equal to that expenditure. His breach had not
Private Law Library
Page 230
caused that loss. The claimant’s expenditure should therefore only be recoverable where
the likely gross profit would at least cover that expenditure.339
9.98 In cases of this sort the burden of proof is on the defendant to show that the contract
would have been an unprofitable one. In Commonwealth of Australia v Amann Aviation Pty
Ltd340 the claimants entered into a contract with the defendants to do a survey of the north
coast of Australia over a three-year period, and then spent a large sum of money in
equipping aircraft for this purpose. The contract was then prematurely terminated by the
defendants. When the claimants sought to recover their reliance expenditure, it was argued
by the defendants that the contract would have been unprofitable to the claimants even if it
had been allowed to run its course. But this argument was rejected on the ground that the
contract could have been renewed, and that the claimants, having invested (p. 254) money
and expertise in the interim, would have been well placed to secure a renewal. It has been
said that as a general principle the claimant has an unfettered choice whether to claim for
loss of profits or for wasted expenditure, and though a claim for wasted expenditure can
only succeed if the expenditure would have been recovered had the contract been properly
performed, the claimant cannot be expected to demonstrate this in a case where the
defendant’s breach has prevented the matter from being put to the test.341 Rather, the
claimant can recover on this basis unless the defendant succeeds in showing that the
expenditure would have been wasted in any event.342
9.99 So far we have been assuming that the claimant will either sue for expectation loss or
for reliance loss, but can he or she recover both? Some of the older cases seem to allow
this,343 but allowing recovery under both heads is open to the criticism that the expected
benefits would not have been earned unless the reliance expenditure had been laid out.344
In Cullinane v British ‘Rema’ Manufacturing Co Ltd345 the defendants agreed to supply the
claimants with a clay pulverising machine, and warranted that it would process clay at a
certain rate. In fact it failed to do so, and the claimants sought to recover damages for the
recovery of the price less the value of the machine, and a further sum for the expected
profit less an allowance for depreciation. However, it was held that expectation and reliance
losses could not be combined in this way, since a claim for loss of profits could only be
founded on the footing that the capital expenditure had been incurred.346 However, such a
claim need not presuppose that such expenditure will have been extinguished by the profits
made. This can be illustrated by two examples. In the first example a cow is sold with a
warranty that she will produce a certain amount of milk over her useful life, but then
produces none at all. Here we have a case where it would clearly be inappropriate to allow
recovery under both heads; if the contract had been performed, the buyer would have
ended up with the profits but the cow would no longer be capable of producing milk.
However, what if a garage is sold with a warranty that it will sell a certain amount of petrol
over a given period?347 If it then sells none at all, it seems to be unfair to make the buyer
choose between loss of profit and recovery of expenses, given that if the contract had been
performed he or (p. 255) she would have ended up with the profits in the bag and a useful
capital asset to boot.348
(3) Nominal damages
9.100 What if the delay causes the promisee no loss at all? It has been said that every
injury imports a damage, even though it does not cost the party one farthing,349 and this
means that a promisee is entitled to nominal damages where the contract has been broken
without having to show any loss.350 In the words of Lord Halsbury LC:351
‘Nominal damages’ is a technical phrase which means that you have negatived
anything like real damage, but that you are affirming by your nominal damages that
there is an infraction of a legal right which, though it gives you no right to any real
Private Law Library
Page 231
damages at all, yet gives you a right to the verdict or judgment because your legal
right has been infringed.
Take, for instance, a case where the promisor agrees to deliver goods to the promisee on a
certain date. If the goods are delivered late on a falling market, the promisee can recover
the difference between the value of the goods on the day they should have been delivered
and their value on the day when they were actually delivered.352 But what if the market has
risen, and the goods are now worth more? Clearly the promisee has suffered no loss in this
situation, but he or she would still be entitled to nominal damages. Whether such damages
would be worth suing for is a different matter. Traditionally an award of nominal damages
has had two practical functions, the first being in order to establish a legal right on the part
of the claimant353 and the second being as ‘a peg on which to hang costs’.354 But there are
other more direct means of establishing the existence of a legal right, such as a declaration
or injunction, and as far as costs are concerned these are now at the discretion of the court
in any event, so a party who gets nominal damages may have to bear the costs of the whole
proceedings.355 It (p. 256) has therefore been argued that an award of nominal damages is
now a pointless exercise.356
(4) Recovery of profit to promisor

9.101 The normal function of damages is to compensate the claimant for his or her loss.
But in some cases the defendant may make a profit from the breach without causing any
loss to the claimant, and the question then arises whether the claimant can recover these
profits by way of damages.357 The general answer to this question is no. In Surrey County
Council v Bredero Homes Ltd358 the claimants sold land to the defendants for building
purposes, the defendants covenanting to build houses according to the council’s plan. Later
on the defendant built extra houses on the land in contravention of the agreement, so
making a vast profit. This caused no financial loss to the claimants, but they sought to strip
the defendants of their profit by way of a claim for damages. It was held, however, by the
Court of Appeal that the claimants were limited to the recovery of their losses, and so could
only have nominal damages. In the same way, where a shipowner repudiates a charterparty
by withdrawing the ship from service, damages are based on the charterer’s loss, not on the
profit the owner may make from chartering the ship to someone else.359
9.102 However, there have always been exceptions to this principle. Thus, for instance,
where a contract is made for the sale of land, the vendor becomes a trustee for the
purchaser in the time between contract and conveyance; this means that he or she must
account to the purchaser for any profits made during that time, and that there will be no
advantage to be gained by delay in completion.360 Again, where a breach of contract also
involves a breach of a fiduciary obligation, the defendant will be liable in equity to account
for any profits made thereby.361 In Wrotham Park Estate Co v Parkside Homes Ltd,362 a case
not dissimilar in its facts to Surrey County Council v Bredero Homes Ltd,363 the defendant
developers built houses on the land in breach of a restrictive covenant made for the benefit
of adjoining land owned by the claimants. The claimants sought a mandatory injunction to
(p. 257) make the defendants take the houses down, but this was refused by the court on
the ground that this would be unnecessarily wasteful. However, the court were not willing
to let the defendants off entirely, and so granted damages in lieu of an injunction, based on
what it would have cost them to be released from the covenant.364 And in One Step
(Support) Ltd v Morris-Garner365 it was held by the Court of Appeal that damages on this
basis could be awarded wherever required to meet the justice of the case; in particular, it
was not necessary to show that the claimant had suffered no financial loss from the breach.
Private Law Library
Page 232
9.103 The extent to which cases of this sort represent a broader principle was discussed
by the House of Lords in Attorney-General v Blake.366 The defendant was a well-known spy
who had been convicted of espionage, and who had then escaped from prison and gone to
live in the Soviet Union. He later signed a contract with an English publisher to bring out
his memoirs, which amounted to an offence under the Official Secrets Act 1911 and also
involved a breach of his contract of employment with the Crown. Given that the defendant
was now outside the jurisdiction, a criminal prosecution would have been pointless, but
could the Crown take action to deprive the defendant of the profits of his wrongdoing? The
relevant information was no longer confidential, but the House of Lords held that where
compensatory damages are not a sufficient remedy,367 and where the claimant has a
legitimate interest in preventing the defendant’s profit-making activity,368 the court can in
exceptional cases grant the discretionary remedy of requiring the defendant to account for
the benefits derived from the breach of contract.369
9.104 Attorney-General v Blake is a very exceptional case, and though it recognises that
the court has a discretion to award damages of this sort, such discretion will be exercised
very sparingly. It is not enough to show merely that the defendant has profited from the
breach. In White Arrow Express Ltd v Lamey’s Distribution Ltd370 the claimants, who ran a
mail order business, contracted (p. 258) with the defendants for a special enhanced delivery
service, paying a much higher price than the usual. It subsequently transpired that the
defendants had only been using the ordinary service for the claimants’ deliveries, but no
substantial loss could be proved. It was held that in the absence of such evidence the
claimants were only entitled to nominal damages. In The Sine Nomine371 the claimant
charterers claimed an account of profits from the owners after the ship had been wrongfully
withdrawn, but this claim was rejected. Though the discretion in Attorney-General v Blake
was recognised, it was held that it should only be exercised in rare cases, and that claims of
this sort should not be allowed where the parties were dealing with commodities for which
a substitute could easily be found in the market place.372 All in all, damages of this sort are
very unlikely to be granted in cases of delay, and no more will be said about them in this
context.
F. Damages in Particular Contexts

9.105 Before we leave the subject of unliquidated damages for delay, it is worth seeing
how the principles discussed above apply to delay in particular types of contract. Obviously
the assessment of damages in these situations will depend on different factors in each case,
and it will be necessary to go to specialist works for a full explanation of the topic. However,
even a brief exposition will serve to illuminate how the general principles operate in
particular contexts.
(1) Sale of goods

9.106 A contract for the sale of goods is defined in section 2(1) of the Sale of Goods Act
1979 as a contract by which the seller transfers or agrees to transfer the property in goods
to the buyer for a money consideration, called the price. The seller’s remedies under the
Act are an action for the price373 and damages for non-acceptance;374 the buyer’s remedies
are damages for non-delivery,375 an action for specific performance376 and damages for
breach of warranty.377 Most of the relevant cases concern delay in delivery, and it is upon
this that we shall be concentrating. As we shall now see, the measure of damages in any
given case differs depending on whether the buyer has terminated the contract or not.
(p. 259) (a) Contract terminated
Private Law Library
Page 233
9.107 If the buyer has elected to cancel the contract, as may be done if time was of the
essence,378 the goods are rejected and the buyer is no longer obliged to pay the price. This
means that the damages are assessed on the basis that the seller has failed to deliver at
all.379 In this situation section 51(1) of the Sale of Goods Act applies, and the buyer may
maintain an action for non-delivery. Under section 51(2), the measure of damages in such
cases is the estimated loss directly and naturally resulting, in the ordinary course of events,
from the seller’s breach of contract. This encapsulates the first branch of the rule in Hadley
v Baxendale,380 but the second branch of the rule is taken care of by section 54 of the Act,
which allows claims for special damages and for interest in appropriate cases.
9.108 Where there is an available market for the goods in question, the prima facie
measure of damages is set by section 51(3) of the Sale of Goods Act 1979 as the difference
between the contract price and the market price at the time and place set for delivery, or if
no time was fixed, at the time of the seller’s refusal to deliver. The fact that the buyer may
have resold the goods, either at a higher or a lower price, is neither here nor there, as the
expectation is that he or she will go out and buy in the market to satisfy the sub-buyer.381 It
has been said that the term ‘an available market’ has both a temporal and a geographical
meaning: the buyers or sellers should be immediately accessible and within a reasonable
distance of the place where the breach of contract occurs.382 It will be seen that section
51(3) only imposes a prima facie rule, and the cases establish that this will be displaced
where a measure of damages based on the market price would clearly be inappropriate.383
9.109 Different considerations apply where there is no available market for the goods in
question, as where specific goods are sold384 or where they are manufactured to the order
of the buyer.385 In this case the buyer cannot be expected to go out into the market to buy a
substitute, as no such market exists.386 So the damages will have to be calculated in a
different way.387 This can be done by reference to (p. 260) a resale,388 or to the cost of
acquiring the nearest substitute,389 or to the buyer’s anticipated user profits.390 In the
normal run of cases, such matters as this have to be proved as special damages under the
second branch of the rule in Hadley v Baxendale,391 but in this situation they are used
rather as evidence of the value of the goods.392 Thus, for instance, a resale price can be
taken into account in this context whether or not the seller knew anything about the resale
in question.393
9.110 The buyer in this situation may also seek to recover for loss of resale profits. In the
normal run of cases these will have to be pleaded and proved as special damages under the
second branch of the rule in Hadley v Baxendale,394 and the burden will not be easy to
satisfy. In particular, it will not be enough for the buyer to show that a subsale was within
the seller’s contemplation, as even if it was, the seller would normally be entitled to assume
that if the goods were not delivered, the buyer would be able to go out into the market and
obtain others in their place.395 The only situation where damages can be recovered for loss
of resale profits in this situation is where the goods were obviously unique,396 or where the
seller knew that the buyer was likely to sell on such terms that going into the market was
not a possibility in the event of breach.397
9.111 Finally, the buyer may seek to recover for other consequential losses arising from
the non-delivery, such as extra expenses incurred in mitigation, or loss of user profits, or
the damages payable to a sub-buyer.398 All these are subject to the ordinary rules for
remoteness stated above; they will have to be pleaded and proved as special damages under
the second branch of the rule in Hadley v Baxendale, and if they are not found to have been
within the contemplation of the parties at the relevant time, they will be disallowed.
(b) Contract not terminated
Private Law Library
Page 234
9.112 The position is very different where the contract is affirmed, or where no right of
termination arises in the first place. Here the buyer will have got the goods and will be
liable to pay the price; the essence of the buyer’s loss is that the goods did not arrive when
they should have done. The Sale of Goods Act 1979 makes no reference to the measure of
damages for late delivery, but the cases suggest that the buyer can recover the difference
between the market price at the time when (p. 261) the goods should have been delivered
and the price at the time when they actually were delivered.399 Where there is an available
market in the goods in question this will not be difficult to assess, but where there is none
the courts will have to do the best they can using other data.400 Once again the fact that the
buyer may have resold the goods is neither here nor there,401 though presumably as in the
case of non-delivery a resale price can be used as evidence of the value of the goods on the
date in question.402
9.113 Just as where the contract has been terminated, the buyer may seek to recover
other losses arising from the delay.403 Thus, for instance, the buyer may recover for extra
expense caused by the delay,404 or for loss of user profits,405 or for the damages payable to
a sub-buyer,406 provided these were within the contemplation of the parties at the relevant
time. Where damages are awarded for loss of resale profits, the measure in cases of this
sort is different from the one used where the contract has been terminated; instead of
getting the difference between the contract price and the resale price, the buyer will get
the difference between the expected resale price and the price obtained for the goods when
they were eventually resold.407
(2) Contracts of carriage

9.114 A great many of the cases we have been considering arise out of delayed delivery in
contracts of carriage.408 In early days the courts were very generous in allowing a customer
to recover for losses caused by delay in this context,409 but after Hadley v Baxendale,410
itself a case involving a contract of carriage, a reaction set in and the courts began to set
limits to the extent to which this could be done. The reasons for this are obvious: many of
the cases involve common carriers, who (p. 262) would accept goods for carriage from all
and sundry, often without even knowing what the goods were.411 There are many types of
loss that may be relevant in this context, and we shall now proceed to examine the most
important of these, beginning with those that are easy to recover and then proceeding to
those which will generally be considered too remote.
(a) Loss of market value
9.115 The normal measure of damages for delay in delivery is the difference between the
market price on the day when the goods should have been delivered and the price on the
day when they were delivered.412 This applies whether the goods were carried by land,413
or by sea,414 or by air,415 though obviously as in the case of the sale of goods there may be
special circumstances in which this measure of damages is inappropriate.416
(b) Physical deterioration
9.116 Where the goods in question are perishable, and the carrier is aware of that fact, the
customer will be able to recover for physical damage and deterioration caused by the delay.
This is said to be so solidly established that the cases do not even trouble to argue the
point,417 but several instances can be cited where this kind of loss has been allowed.418
(c) Loss of use
9.117 Even where no special loss can be proved by way of loss of profit or extra expenses,
an award can be made for loss of use generally. Thus in Sunley v Cunard White Star,419 a
case involving the late delivery of a tractor, the customer was granted damages based on
Private Law Library
Page 235
depreciation and loss of interest on the capital invested.420(p. 263) However, most cases on
loss of use involve a claim for special damages, and these will be considered below.421
(d) Interest
9.118 Interest can be awarded in some cases to compensate for late performance. In
Heskell v Continental Express Ltd422 the claimant, who had sold goods to a foreign buyer,
ordered the defendant carriers to convey goods to the docks for shipment; the goods were
not sent on time, as a result of which the claimants were unable to deliver them to the
buyer and had to pay damages. The claimants were not permitted to recover on this
basis,423 but they were allowed to recover for diminution of the market value of the goods,
together with interest on that sum. Similarly, in Earl’s Terrace Properties v Nilsson Design
Ltd,424 a case involving delay to a building contract, a developer was allowed to recover
interest on the money tied up in the project.
(e) Recovery of expenses
9.119 Late delivery of goods by a carrier frequently involves the customer in extra
expense. The cases on this point fall into two categories. First of all, there are cases where
the claim is for reliance loss in relation to expenses incurred as a result of the delay. Then
there are cases where the claim is for expense wasted as a result of the delay.
(i) Expenses incurred
9.120 Where goods are delivered late, one obvious consequence is that the customer is
going to have to spend time and money trying to track them down.425 Claims have been
allowed for a number of items in this regard, including telegrams,426 hotel expenses,427 and
the hire of taxis;428 these can be explained as reasonable attempts by the customer to
mitigate the loss caused by the delay.429 If the goods are needed urgently, the customer may
also have to go out into the market and obtain them elsewhere.430 Extra expense may be
incurred in other ways too; thus for instance in one case where the delay in delivery led to
the customer having to pay an increased rate of import duty, he was allowed to recover
from the carrier in respect of this.431
(p. 264) (ii) Expenses wasted
9.121 Claims for wasted expenditure have been less successful in this context, no doubt
because they tend to involve factors more specific to the customer’s business. Thus in Le
Peintur v South Eastern Railway432 the customer was unable to recover damages for wasted
wages when his workshop was left idle for lack of the necessary raw materials. Again, in
Wilson v Lancashire and Yorkshire Railway433 delay by the defendant carrier in delivering
cloth to the claimant’s factory prevented the production of headwear for the market. It was
held that the claimant could recover for diminution in the value of the cloth, but not for loss
of profits, or for the expenses of salesmen sent out on journeys rendered fruitless by reason
of their inability to execute their orders. These cases have been explained on the ground
that a claim for wasted expenditure will not be allowed where a claim for loss of profit
would have been too remote.434 Thus in Simpson v London and North Western Railway,435
where it was expressly stated on the consignment note that the goods were needed at their
destination on a certain day, the customer was able to recover both for loss of profit and for
wasted expenses incurred while he was waiting for the goods to arrive.
(f) Loss of profit
9.122 Delay in the carriage of goods can result in loss of profit to the customer. As in other
contexts, the profits in question can be either user profits or resale profits. In both cases
this sort of claim will have to be proved by way of special damage, though as a general rule
it will be easier to do this in the former case than in the latter.
Private Law Library
Page 236
(i) User profits

9.123 Hadley v Baxendale436 itself is a case where a customer sought to recover damages
from a carrier in respect of loss of user profits. The claim failed in that case in the absence
of sufficient evidence that such loss was within the contemplation of the parties at the
relevant time; granted, the carriers knew that they were dealing with a broken mill shaft,
and that the customers were the millers of that mill,437 but there was nothing to indicate
that the mill was likely to be out of action in the interim; after all, the customers might have
had a spare shaft.438 In Gee v Lancashire and Yorkshire Railway,439 a case on very similar
facts, the owners of a cotton mill in Oldham had a consignment of cotton sent by the
defendant’s line to the mill.440 The cotton was delivered late, and the mill (p. 265) was
stopped in the interim. The owner claimed for loss of profits and for wasted wages, but this
was held to be too remote; the defendants were not to know that the owner did not have a
reserve supply of cotton, and could not be held liable for the loss in the absence of proof
that they were aware of the situation at the mill. However, it is different where the carrier
knows what the goods are and why they are needed. In Monte Video Gas and Dry Dock Co
Ltd v Clan Line Steamers Ltd441 the carriers agreed to deliver a quantity of gas coal to the
claimants, knowing that they intended to use it in the manufacture of gas. By error they
delivered steam coal instead, which was not nearly as efficient. The claimants were granted
damages based on their loss of profit, no market being available in which they could have
acquired substitute coal. Though not a case on delay, this does indicate that damages for
loss of user profits can be obtained from a carrier in appropriate cases, and it has been said
that this would not be contrary to principle.442
(ii) Resale profits
9.124 Resale profits are a more tricky matter in this context. Again, there is no rule of law
preventing recovery from a carrier on this basis,443 but the courts have traditionally been
reluctant to allow this sort of claim.444 At the very least, there must be evidence of
knowledge by the carrier that the goods were needed urgently and why.445 Even where the
carrier knows that the goods are intended for resale and that they have to be delivered at a
certain time, this may not be enough to fix the carrier with liability where the subsale is on
particularly unusual terms. In Horne v Midland Railway446 the claimants entered into a
contract with the French Army for the supply of shoes at a very high price. The shoes had to
be delivered in London on a certain day, and the defendants agreed to deliver them on that
day. The defendants knew that the claimant was under a contractual obligation to deliver
the shoes that day, and that time was of the essence, but did not know that there was
anything particularly unusual about the contract. The shoes were delayed in transit, as a
result of which they were rejected by the buyers. The claimants, who had eventually resold
the shoes at the normal market price, sought to recover the difference in damages, but this
was disallowed by the court. In the absence of proof that the defendants knew anything (p.
266) about the terms of the sales contract, it could not be said that damages of such
magnitude were in the contemplation of the parties at the relevant time.
(g) Recoupment of damages
9.125 Finally, we have cases where it is sought to make the carrier reimburse the
customer for damages paid out in respect of a contract of sale made in respect of the goods.
This is no easy matter, as it will require proof that the carrier was aware not only of the
existence of the contract but of its terms. In Heskell v Continental Express Ltd447 the
claimant, who had agreed to sell goods to a Persian buyer, ordered the defendant carriers to
dispatch the goods to the docks for shipment. The defendants did not dispatch the goods
and did not inform the claimant that they had not done so. A bill of lading was issued, but
the goods never reached the buyer, with the result that the claimants had to pay damages
for non-delivery. The goods were eventually delivered to the claimants themselves, who
sought to recover an indemnity from the defendants in relation to the damages paid to the
buyers. But the loss was held by Devlin J to be too remote, it being said that mere
Private Law Library
Page 237
knowledge of the subsale was not enough. To make the carrier liable, according to Devlin J,
the customer had to show that the carrier had knowledge, actual or imputed, of something
that made the ordinary measure of damages inadequate.448 He added that this would be
easier to show with regard to a seller than with regard to a carrier, given that a seller is
more likely than a carrier to have some idea what the customer is likely to want to do with
the goods.449
(3) Hire purchase

9.126 A contract of hire purchase is in many ways similar to one for the sale of goods; the
two are dealt with together in some statutory contexts,450 and in the days when contracts of
hire purchase were more common than they are now one often used to hear about goods
being ‘bought on hire purchase’. However, in the context of the sale of goods, most of the
relevant authorities deal with delay in delivery, whereas in the context of hire purchase, the
main focus is on delay in payment.
9.127 The main issue in this area is as to the measure of damages payable in cases where
the owner has terminated the agreement for default by the hirer, which often consists of a
failure to pay instalments on time. As we shall see, the law distinguishes (p. 267) here
between termination at common law for a repudiatory breach and termination under an
express provision in the contract.451 In the former case, damages are available for loss of
bargain,452 whereas in the latter the owner may only recover for breaches up to the date of
termination.453 Late payment of instalments where time is of the essence is classified in this
connection as a repudiatory breach,454 which means that a provision stating that time is of
the essence is regarded by the law as fundamentally different from one giving a contractual
right to terminate for delay when it comes to the assessment of damages. It has been
argued by the present author that this is a distinction without a difference,455 but it is
nevertheless a crucial distinction as the law now stands.
(4) Sale of land

9.128 Damages for delay in the sale of land are assessed on the same principles as in
relation to other contracts, but the authorities are rather more thin on the ground. There
are a number of reasons for this. First of all, under the doctrine of ‘merger’, any rights of
action the parties may have with regard to the contract are lost once the conveyance has
gone through,456 unless the contract provides to the contrary.457 Secondly, an action for
specific performance is generally available both to the vendor and the purchaser in cases of
delay, and this will generally be a much more suitable remedy.458 Thirdly, most contracts for
the sale of land provide for the payment of a deposit by the purchaser, which can be
forfeited by the vendor in the event of default.459 Last but not least, the standard forms
used in many contracts for the sale of land often make express provision for the payment of
damages, which means that the courts do not often have to consider the position at common
law.460
9.129 Most of the cases in this connection involve delay in completion by the vendor.
Damages can be recovered for delay in completion whether or not time is of the essence,
suggestions to the contrary being disposed of by the House of Lords in (p. 268) Raineri v
Miles.461 The normal measure of damages here is based on the rental value of the land for
the period between the day set for completion and the day when completion actually took
place,462 but where appropriate damages may also be recovered for consequential losses
such as loss of rent,463 loss of earnings,464 interest on bridging loans465 and the recovery of
damages paid to a third party.466
Private Law Library
Page 238
9.130 In the past, the recovery of damages for the sale of land was subject to the famous
rule in Bain v Fothergill,467 under which a purchaser who suffered loss by reason of the
vendor’s failure to make good title was restricted to the recovery of expenses incurred in
investigating that title. This rule applied to damages for delay just as much as to other kinds
of loss,468 but was subject to much criticism,469 and was eventually abolished by section 3
of the Law of Property (Miscellaneous Provisions) Act 1989. Though the parties can still
agree to limit their loss in this respect by express stipulation,470 the normal measure of
damages will apply in all other cases.
G. Recovery or Forfeiture of Liquidated Sum

9.131 Where damages for delay are claimed at common law, it is up to the court to assess
what those damages should be. But sometimes damages are set by a provision in the
contract, and the question then arises to what extent the promisee can recover under that
provision. Alternatively, the contract may provide for a deposit or other advance payment
which the promisee may seek to forfeit in consequence of the delay. There are a number of
possibilities here, which will be considered in the final chapter.471
Footnotes:
1
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Rlys of
London Ltd [1912] AC 673 (HL) at 689; Robinson v Harman (1848) 1 Ex 850 at 855, 154 ER
363 at 365 (Parke B); Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 (HL(Sc)) at 39
(Lord Blackburn).
2
Waters v Towers (1853) 8 Ex 401, 155 ER 1404; Steam Herring Fleet Ltd v Richards & Co
Ltd (1901) 17 TLR 731; Saint Line Ltd v Richardsons, Westgarth & Co Ltd [1940] 2 KB 99.
However, it has been said that this too is really an aspect of expectation loss: see Omak
Maritime Ltd v Mamola Challenger Shipping Co (The Mamola Challenger) [2010] EWHC
2026 (Comm), [2011] BLR 212, discussed further below at paras 9.60–9.62 and 9.94–9.98.
3
Attorney-General v Blake [2001] 1 AC 268 (HL) (not a case of delay, but see White Arrow
Express Ltd v Lamey’s Distribution Ltd (1995) 145 NLJ 1504 (CA)); Adras Ltd v Harlow and
Jones GmbH (Israeli Supreme Court, noted (1988) 104 LQR 385); below, paras 9.101–9.104.
4
The Arpad [1934] P 189 (CA) at 192 (Bateson J).
5
C Czarnikow Ltd v Koufos (The Heron II) (HL) [1969] 1 AC 350.
6
Hydraulic Engineering Co v McHaffie, Goslett & Co (1878) 4 QBD 670 (CA).
7 Sale of Goods Act 1979, s 51(3); Blackgold Trading Ltd of Monrovia v Almare SpA di
Navigazione of Genoa (The Almare Seconda) [1981] 2 Lloyd’s Rep 433.
8 Below, paras 9.89–9.103.
9
Below, paras 9.10–9.14 (causation); 9.15–9.74 (remoteness); 9.75–9.88 (mitigation).
10
McGregor, Harvey, McGregor on Damages (19th edn, 2014) (‘McGregor’), para 6.002.
11
Hall v Pim (1928) 33 Com Cas 324 (HL) at 329–330 (Viscount Dunedin).
12 British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Rlys of
London Ltd [1912] AC 673 (HL) at 688 (Viscount Haldane LC).
13 McGregor, above n 10, paras 3-001–3-006.
14
Ibid, para 3.002; Hadley v Baxendale (1854) 9 Ex 341 at 354, 156 ER 145 at 150–151
(Alderson B); Ströms Bruks Aktie Bolag v Hutchison [1905] AC 515 (HL(Sc)) at 526 (Lord
Private Law Library
Page 239
Macnaghten); Monarch SS Co v Karlshamns Oljefabriker [1949] AC 196 (HL(Sc)) at 221

(Lord Wright); British Sugar plc v Nei Power Products Ltd [1997] CLC 622.
15
Kpohraror v Woolwich Building Society [1996] 4 All ER 119 (CA) at 127–128 (Evans LJ).
The distinction also now has to be viewed in the light of the decision of the House of Lords
in Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48, [2009]
1 AC 61, discussed further below at paras 9.24–9.27.
16
Kpohraror v Woolwich Building Society [1996] 4 All ER 119 (CA) at 122 (Evans LJ);
Prehn v Royal Bank of Liverpool (1870) LR 5 Ex 92; McGregor, above n 10, para 3-003;
below, paras 9.39–9.40.
17
McGregor, above n 10, para 3-008.
18
Below, para 9.48.
19
Agius v Great Western Colliery Co [1899] 1 QB 413 (CA); Kpohraror v Woolwich Building
Society [1996] 4 All ER 119 (CA); Watson v Gray (1900) 16 TLR 308; SS Ardennes (Cargo
Owners) v SS Ardennes (Owners) [1951] 1 KB 55.
20
Though see Chandris v Union of India [1956] 1 WLR 147 (CA), cited in McGregor, above
n 10, para 3-008.
21
Justinian, Digest 9.2.22 (damnum emergens) and 23 (lucrum cessans); Lawson, F H,
Negligence in the Civil Law (1950), pp 59–60.
22
23
Le Peintur v South Eastern Rly Co (1860) 2 LT 170.
24
Great Lakes SS Co v Maple Leaf Milling Co (1924) 41 TLR 21 (PC).
25
Griffin v Pillet [1926] 1 KB 17.
26
Parsons (Livestock) v Uttley Ingham & Co [1978] QB 791 (CA) at 813 (Scarman LJ).
27
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA).
28
Below, para 9.52.
29
Above, para 6.20.
30
Above, para 6.22.
31
Above, para 6.02.
32
Blackgold Trading Ltd of Monrovia v Almare SpA di Navigazione of Genoa (The Almare
Seconda) [1981] 2 Lloyd’s Rep 433.
33
Lombard North Central plc v Butterworth [1987] QB 527 (CA).
34
Below, paras 9.106 (sale) and 9.127 (hire purchase).
35
Above, para 9.08.
36
[1983] 1 WLR 1461 (CA); Albert & Son v Armstrong Rubber Co 178 F 2d 182 (1949) (US
Ct of Appeals); Bowlay Logging v Domtar Ltd [1978] 4 WWR 105 (Supreme Ct of British
Columbia) at 115 (Berger J); Fuller, L L and Perdue, W R, ‘The reliance interest in contract
damages’ (1936) 46 Yale LJ 52 at 79.
37
[1983] 1 WLR 1461 (CA) at 1468–1469 (Fox LJ).
38
(1917) 86 LJKB 1495.
39
Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360 (CA); Young v Purdy [1997] 2
PNLR 130 (CA).
Private Law Library
Page 240
40
(1866) LR 1 Ex 177.
41
Jones v Boyce (1816) 1 Stark 493, 171 ER 340; Compania Naviera Maropan v Bowaters
[1955] 2 QB 68 (Devlin J and CA).
42
Reasonable foreseeability may also play a part in the test for remoteness (see below,
paras 9.19–9.23), but it is a stricter test; damages may be too remote even though the loss
was clearly caused by the breach on the principles we have been discussing: Peel, Edwin
(ed), Treitel: The Law of Contract (14th edn, 2015) (‘Treitel (Contract)’), para 20-098; Bates
v Robert Barrow Ltd [1995] 1 Lloyd’s Rep 680.
43
[1949] AC 196 (HL(Sc)); The Wilhelm (1866) 14 LT 636.
44
Contrast The Malcolm Baxter (1928) 31 Ll L R 200 (US Supreme Ct) at 202 (Stone J),
where on similar facts the delay was found not to be the cause of losses sustained by a
blockade in the absence of any finding that the blockade could reasonably have been
foreseen.
45
Above, para 9.12.
46
47
Koch Marine Inc v D’Amica Societa di Navigazione ARL (The Elena D’Amico) [1980] 1
Lloyd’s Rep 75 at 88 (Robert Goff J); Sotiros Shipping Inc v Sameiet Solholt (The Solholt)
[1983] 1 Lloyd’s Rep 605 (CA) at 608 (Sir John Donaldson MR); McGregor, above n 10, para
9.018.
48
McGregor, above n 10, para 9.018.
49
50
(1854) 9 Exch 341, 156 ER 145.
51
[1949] 2 KB 528 (CA).
52
C Czarnikow Ltd v Koufos [1969] 1 AC 350 (HL).
53
Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48, [2009] 1 AC 61.
54
(1854) 9 Exch 341, 156 ER 145.
55
(1854) 9 Exch 341 at 344–345, 156 ER 145 at 147.
56
(1854) 9 Exch 341 at 354, 156 ER 145 at 147.
57
(1854) 9 Exch 355, 156 ER 151.
58
Ibid. The summary of the evidence given in the report suggests otherwise, as does the
headnote to the report, but the case was decided on the basis of the facts given here.
59
[1949] 2 KB 528 (CA).
60
[1949] 2 KB 528 at 539.
61
Below, para 9.23.
62
[1969] 1 AC 350 (HL).
63
The Parana (1877) 2 PD 118.
64
Furmston, Michael P (ed), Cheshire, Fifoot and Furmston’s Law of Contract (17th edn,
2017) (‘Cheshire, Fifoot and Furmston’), p 759.
65
66
[1969] 1 AC 350 at 385 (Lord Reid), 411 (Lord Hodson) and 425 (Lord Upjohn). Of
course, as has been pointed out, when the test was originally formulated by Asquith LJ
there was no room for confusion, as at that time the test for remoteness in tort was not
based on reasonable foreseeability at all but on directness: In re Polemis and Furness Withy
Co [1921] 3 KB 560 (CA). It was not until Overseas Tankship UK Ltd v Morts Dock &
Private Law Library
Page 241
Engineering Co Ltd (The Wagon Mound) [1961] AC 338 (PC) that a similar test came to be
applied to cases of tort.
67
[1969] 1 AC 350 at 382 (Lord Reid).
68
Ibid at 382–383.
69
Treitel (Contract), above n 42, para 20-101. The essential difference of policy underlying
this distinction is said to be that, whereas in contract the scope of the defendant’s liability is
fixed by reference to the scope of the risk he or she undertook at the time when the
contract was made, in tort it is fixed by reference to his or her culpability: Cartwright, John,
‘Remoteness of damage in contract and tort: a reconsideration’ [1996] CLJ 488 at 514.
70
Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48, [2009] 1 AC 61;
McGregor, above n 10, paras 8.165–8.178; McLauchlan, David, ‘Remoteness re-
invented?’ (2009) OUCLJ 109.
71
[2006] EWHC 3030 (Comm), [2007] 1 Lloyd's Rep 19 (Christopher Clarke J); [2007]
EWCA Civ 901, [2007] 2 Lloyd’s Rep 555 (Ward, Tuckey and Rix LJJ).
72
[2008] UKHL 48, [2009] 1 AC 61 at [52] (Lord Rodger) and [93] (Lady Hale). On this
aspect of the matter see further below, para 9.56.
73
Ibid at [92] (Lady Hale).
74
Ibid at [21].
75
Below, para 9.27.
76
[2008] UKHL 48, [2009] 1 AC 61 at [93].
77
Ibid at [32].
78
Ibid at [87].
79
ASM Shipping Ltd of India v TTMI Ltd of England [2009] 1 Lloyd’s Rep 93.
80
Ibid at [17–19].
81
Mayhaven Healthcare Ltd v Bothma (T/A DAB Builders) [2009] EWHC 2634 (TCC),
[2010] BLR 154 at [46–47] (Ramsey J); Classic Maritime v Lion Diversified Holdings [2009]
EWHC 1142 (Comm), [2010] 1 Lloyd’s Rep 59 at [71] (Cooke J); Sylvia Shipping Co Ltd v
Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm), [2010] 2 Lloyd’s Rep 81 at [30–51]
(Hamblen J); Pindell Ltd v AirAsia Bhd [2010] EWHC 2516 (Comm), [2012] 2 CLC 1 at [84]
(Tomlinson J); Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2014]
EWHC 3978 (Comm), [2015] Lloyd’s Rep 315 at [26] (Cooke J).
82
Lord Hoffmann admitted from the start that his approach would only apply in unusual
circumstances: Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008]
UKHL 48, [2009] 1 AC 61 at [11].
83
This would have been Lord Hoffmann’s understanding of the decision in The Achilleas
itself, and see also the arguments of the defence in John Grimes Partnership Ltd v Gubbins
[2013] EWCA Civ 37, [2013] BLR 126.
84
As in Siemens Building Technologies FE Ltd v Supershield Ltd [2010] EWCA Civ 7,
[2010] 1 Lloyd’s Rep 349.
85
See Tettenborn, Andrew, ‘Hadley v Baxendale foreseeability: a principle beyond its sell-
by date?’ (2007) 23 J Contract Law 120.
Private Law Library
Page 242
86
See Coote, Brian, ‘Contract as assumption and remoteness of damage’ (2010) 26 J
Contract Law 211; Phang, Andrew, ‘Contract as assumption – the scholarship and influence
of Professor Brian Coote’ (2011) 27 J Contract Law 247.
87
The approach in The Achilleas has been rejected in Singapore: see Out of the Box Pte
Ltd v Wanin Industries Pte [2013] SGCA 15, [2013] 2 SLR 363; Goh, Yihan, ‘Contractual
remoteness in England and Singapore compared: orthodoxy preferable’ (2013) 30 J
Contract Law 233. Whether the case has made a significant impact on the practice of the
courts even in England has been doubted: see Hunter, Howard, ‘Has The Achilleas
sunk?’ (2014) 31 J Contract Law 120.
88
Above, para 9.18.
89
90
[1949] 2 KB 528 at 539; above, para 9.21.
91
[1996] 4 All ER 119 (CA).
92
Ibid at 127–128; Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 at 436 (Devlin J).
93
Kpohraror v Woolwich Building Society [1996] 4 All ER 119 (CA) at 122 (Evans LJ);
Prehn v Royal Bank of Liverpool (1870) LR 5 Ex 92; McGregor, above n 10, para 3.003.
94
95
[1949] 2 KB 528 (CA) at 539.
96
Monarch SS Co v Karlshamns Oljefabriker [1949] AC 196 (HL(Sc)) at 233 (Lord du
Parcq).
97
Ibid at 234 (Lord du Parcq).
98
The Heron II [1969] 1 AC 350 (HL) at 382–383 (Lord Reid).
99
Parsons (Livestock) Ltd v Uttley Ingham & Co [1978] QB 791 (CA) at 807 (Scarman LJ).
100
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA) at 540
(Asquith LJ).
101
(1928) 33 Com Cas 324 (HL); The Heron II [1969] 1 AC 350 (HL) at 388.
102
(1928) 33 Com Cas 324 at 329.
103
Ibid at 329–330 (Viscount Dunedin) and at 333 (Lord Shaw).
104
Ibid at 337 (Lord Phillimore).
105
Above, para 9.23.
106
[1969] 1 AC 350 at 390 (Lord Reid), 399 (Lord Morris), 415 (Lord Pearce), 425 (Lord
Upjohn).
107
108
[1969] 1 AC 350 at 385–386.
109
Ibid.
110
Though see below, paras 9.68–9.70.
111
[1978] QB 791 (CA).
112
According to Lord Denning MR at p 799, the claimants saw that some of the feed was
mouldy, but decided that it would not harm the pigs and proceeded to give it to them
anyway. It is not clear why this was not argued as a defence.
113
[1978] QB 791 at 799 (Swanwick J).
Private Law Library
Page 243
114
Ibid at 806.
115
Ibid at 804–805 (Orr LJ) and 813 (Scarman LJ).
116
Ibid at 804.
117
Cheshire, Fifoot and Furmston, above n 64, p 756.
118
Ibid.
119
Smith v Leech Brain & Co Ltd [1962] 2 QB 405; Hughes v Lord Advocate [1963] AC 837
(HL(Sc)); Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971] 1 QB 88.
120
See below, paras 9.52–9.54.
121
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA) at 539
(Asquith LJ).
122
Kpohraror v Woolwich Building Society [1996] 4 All ER 119 (CA) at 127–128 (Evans LJ).
123
[1949] 2 KB 528 at 539.
124
McGregor, above n 10, paras 8.192–8.193.
125
Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 at 436; Duncan Investments Ltd v
Underwood [1998] PNLR 754 (CA); Louis Dreyfus Trading Ltd v Reliance Trading Ltd
[2004] 2 Lloyd’s Rep 243.
126
British Columbia Saw Mill Co Ltd v Nettleship (1868) LR 3 CP 499 at 505 (Bovill CJ);
Elbinger Aktien-Gesellschaft v Armstrong (1874) LR 9 QB 473 at 478 (Blackburn J). This of
course is very similar to the approach of Lord Hoffmann in The Achilleas [2008] UKHL 48,
[2009] 1 AC 61: above, para 9.25.
127
The Heron II [1969] 1 AC 350 (HL) at 421–422 (Lord Upjohn).
128
Heskell v Continental Express Ltd [1950] 1 All ER 1033 at 1049 (Devlin J).
129
Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA [1981] 1 Lloyd’s Rep
175 at 183.
130
(1873) LR 8 CP 131.
131
132
133
SS Singleton Abbey v SS Paludina [1927] AC 16 (HL) at 25–26 (Lord Sumner)
(claimant); The Metagama (1927) 29 Ll L R 253 (HL) at 254 (Lord Haldane) and 256 (Lord
Dunedin) (defendant); The Oropesa [1943] P 32 (CA) at 40 (Lord Wright) (claimant); Philco
Radio v Spurling [1949] 2 All ER 882 (CA) at 886 (Singleton LJ) (defendant).
134
[1956] P 364.
135
Ibid at 370.
136
Ibid.
137
138
[1996] 4 All ER 119 (CA).
139
Ibid at 122.
140
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Rlys
of London Ltd [1912] AC 673 (HL) at 688 (Lord Haldane LC).
141
(1854) 9 Exch 341, 156 ER 145.
Private Law Library
Page 244
142
(1854) 9 Exch 341 at 344–345, 156 ER 145 at 147.
143
9 Exch 356, 156 ER 152.
144
Jameson v Midland Rly Co (1884) 50 LT 426.
145
[1981] 1 Lloyd’s Rep 175.
146
Ibid at 176.
147
Ibid at 186.
148
Ibid.
149
150
Ibid, para 4.010.
151
Collard v South Eastern Rly Co (1861) 7 H & N 79, 158 ER 400; Wilson v Lancashire
and Yorkshire Rly Co (1861) 9 CB (NS) 632, 142 ER 248; Great Western Rly Co v Redmayne
(1866) LR 1 CP 329; The Arpad [1934] P 189 (CA); SS Ardennes (Cargo Owners) v SS
Ardennes (Owners) [1951] 1 KB 55.
152
[1969] 1 AC 350 (HL); above, para 9.22.
153
[2000] 1 Lloyd’s Rep 493.
154
Ibid at 496.
155
Croudace Construction v Cawoods Concrete Products [1978] 2 Lloyd’s Rep 55 (Parker J
and CA); McGregor, above n 10, para 23.040.
156
157
Ibid at 250.
158
[1940] 1 KB 740 (CA); McGregor, above n 10, para 30.034.
159
Ibid at 747.
160
Ibid at 748.
161
Below, paras 9.55–9.58 (loss of profit); 9.60–9.62 (expenses).
162
Above, para 9.06.
163
McGregor, above n 10, paras 30.036–30.045. Loss of profits may also be claimed for
delay in performance of a contract for the sale of land: Diamond v Campbell-Jones [1961]
Ch 22; below, paras 9.127–9.129.
164
165
Below, para 9.59.
166
Le Peintur v South Eastern Rly Co (1860) 2 LT 170; Wilson v Lancashire and Yorkshire
Rly Co (1861) 9 CB (NS) 632, 142 ER 248; Simmons v South Eastern Rly Co (1861) 7 Jur
(NS) 849; Great Western Rly Co v Redmayne (1866) LR 1 CP 329; British Columbia Saw Mill
Co Ltd v Nettleship (1868) LR 3 CP 499; Horne v Midland Rly Co (1873) LR 8 CP 131. For
cases in which such an agreement was found to exist see Simpson v London and North
Western Rly Co (1876) 1 QBD 274; Jameson v Midland Rly Co (1884) 50 LT 426.
167
British Columbia Saw Mill Co Ltd v Nettleship (1868) LR 3 CP 499 at 505 (Bovill CJ).
168
Horne v Midland Rly Co (1873) LR 8 CP 131 at 136 (Kelly CB).
169
Monte Video Gas and Dry Dock Co Ltd v Clan Line Steamers Ltd (1921) 37 TLR 866
(CA); The Pegase [1981] 1 Lloyd’s Rep 175; Panalpina International Transport Ltd v Densil
Underwear Ltd [1981] 1 Lloyd’s Rep 187.
Private Law Library
Page 245
170
Wilson v Lancashire and Yorkshire Rly Co (1861) 9 CB (NS) 632, 142 ER 248; Great
Western Rly Co v Redmayne (1866) LR 1 CP 329; above, paras 9.44–9.45.
171
Elbinger Aktien-Gesellschaft v Armstrong (1874) LR 9 QB 473; below, paras 9.55–9.58.
172
Williams v Reynolds (1865) 6 B & S 495, 122 ER 1278; Kwei Tek Chao v British Traders
& Shippers Ltd [1954] 2 QB 459 at 489 (Devlin J); Sale of Goods Act 1979, s 51(3).
173
(1881) 8 QBD 457.
174
Mott & Co Ltd v Muller & Co Ltd (1922) 13 Ll L Rep 492.
175
Lyon & Co Ltd v Fuchs (1920) 2 Ll L Rep 333 (egg yolks sold ‘now afloat’).
176
Grébert-Borgnis v Nugent (1885) 15 QBD 85 (CA).
177
For an exceptional case where this factor was used to reduce rather than inflate the
damages see Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] EWHC 525, [2004] 2
Lloyd’s Rep 243; Lawson, Richard, ‘Damages and sub sales – not so sugar sweet’ (2004) 154
NLJ 1188.
178
(1878) 4 QBD 670 (CA).
179
Hammond v Bussey (1888) 20 QBD 79 (CA) at 100; Patrick v Russo-British Grain Export
Co Ltd [1927] 2 KB 535; Hall v Pim (1928) 33 Com Cas 324 (HL).
180
For the principle in other contractual contexts see Parsons (Livestock) v Uttley Ingham
[1978] QB 571 (CA); Uni-Ocean Lines PTE Ltd v C-Trade SA (The Lucille) [1984] 1 Lloyd’s
Rep 244 (CA); Islamic Republic of Iran Shipping Lines v Ierax Shipping Co of Panama (The
Forum Craftsman) [1991] 1 Lloyd’s Rep 81; The Sivand [1998] 2 Lloyd’s Rep 97 (CA); Jolley
v Sutton L B C [2000] 1 WLR 1082 (HL); above, para 9.34.
181
Above, paras 9.19–9.21, and compare Horne v Midland Rly Co (1873) LR 8 CP 131
(above, para 9.38).
182
[1974] Ch 30.
183
[1995] 2 Lloyd’s Rep 513 (CA) at 542.
184
[2008] UKHL 48, [2009] 1 AC 61 at [21]; see also paras [60] (Lord Rodger) and [92]
(Lady Hale).
185
[1988] 1 Lloyd’s Rep 92; Household Machines Ltd v Cosmos Exporters Ltd [1947] 1 KB
217.
186
[1988] 1 Lloyd’s Rep 92 at 96.
187
Ibid.
188
Hall v Pim (1928) 33 Com Cas 324 (HL) at 330 (Lord Dunedin).
189
(1854) 9 Exch 341, 156 ER 145; above, paras 9.17–9.18.
190
Ibid.
191
(1863) 4 B & S 66, 122 ER 384.
192
As in De Beers UK Ltd v ATOS Origin IT Services UK Ltd [2010] EWHC 3276 (TCC),
[2011] BLR 274 (installation of computer system).
193
The Derby [1984] 1 Lloyd’s Rep 637; Coghlin, Terence (ed), Time Charters (6th edn,
2008) (‘Coghlin’), para 4-87.
194
Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48, [2009] 1 AC 61.
Private Law Library
Page 246
195
Ibid at [23] (Lord Hoffmann); [36] (Lord Hope); [60] (Lord Rodger); [86] (Lord Walker);
[93] Lady Hale (dubitante).
196
[2010] EWHC 542 (Comm); [2010] 2 Lloyd’s Rep 81.
197
Ibid at [72].
198
Ibid at [73].
199
Ibid.
200
(1868) LR 3 Ch App 112; Steam Herring Fleet Ltd v Richards & Co Ltd (1901) 17 TLR
731; Saint Line Ltd v Richardsons, Westgarth & Co Ltd [1940] 2 KB 99 at 104 (Atkinson J);
McGregor, above n 10, para 20.041. See also Great Eastern Hotel Co Ltd v John Laing
Construction Ltd [2005] EWHC 181, 99 Con LR 45 (loss of hotel bookings due to delay in
refurbishment contract).
201
(1868) LR 3 Ch App 112 at 117.
202
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA); above,
paras 9.19–9.21.
203
Above, para 9.19.
204
(1868) LR 3 QB 181.
205
In this connection Treitel gives the example of a farmer who buys mouldy cattle feed. If
he feeds it to his cows, he can obviously recover if they fall ill and die as a result: see
Parsons (Livestock) v Uttley Ingham & Co [1978] QB 791 (CA). But what if he decides
instead to eat it himself, and he dies? The executor cannot recover for the farmer’s death,
as this is obviously too remote a consequence of the breach, but can he recover for the
death of a cow? See Treitel (Contract), above n 42, para 20-104.
206
[2000] PNLR 110 (CA); Malyon v Lawrence Messer & Co (1968) 112 SJ 623.
207
Above, para 9.06.
208
Saint Line Ltd v Richardsons, Westgarth & Co Ltd [1940] 2 KB 99 at 105 (Atkinson J);
Waters v Towers (1853) 8 Ex 401, 155 ER 1404; Le Peintur v South Eastern Rly Co (1860) 2
LT 170; Foaminol v British Artid Plastics Ltd [1941] 2 All ER 393; Odfjfell Seachem A/S v
Continentales des Petroles [2004] EWHC 2929 (Comm), [2005] 1 Lloyd’s Rep 275.
209
(1861) 9 CB (NS) 632, 142 ER 248.
210
(1878) 4 QBD 670 (CA).
211
212
Justinian, Digest 9.2.27.17.
213
(1941) 46 Com Cas 209.
214
[1951] 1 KB 55; Borries v Hutchinson (1865) 18 CB (NS) 445, 144 ER 518; Watson v
Gray (1900) 16 TLR 308; Heskell v Continental Express Ltd [1950] 1 All ER 1033 at 1046
(Devlin J).
215
[1949] AC 196 (HL(Sc)); Eridania SpA v Rudolf A Oetker (The Fjord Wind) [2000] 2
Lloyd’s Rep 191 (CA).
216
[1949] AC 196 at 216 (Lord Porter), 220 (Lord Wright), 231 (Lord Uthwatt), 234 (Lord
du Parcq) and 235 (Lord Morton).
217
(1867) LR 2 CP 318; Candy v Midland Rly Co (1878) 38 LT 226.
218
Private Law Library
Page 247
219
(1858) 4 CB (NS) 322, 140 ER 1108; Seven Seas Properties v Al-Essa (No 2) [1993] 1
WLR 1083; contrast Alison & Co Ltd v Wallsend Slipway & Engineering Co Ltd (1927) 43
TLR 323.
220
Heskell v Continental Express Ltd [1950] 1 All ER 1033 at 1049 (Devlin J).
221
Grébert-Borgnis v Nugent (1885) 15 QBD 85 (CA) at 89.
222
(1874) LR 9 QB 473; Borries v Hutchinson (1865) 18 CB (NS) 445, 144 ER 518. The
same principles apply to an arbitration award: Stargas SpA v Petredec Ltd (The Sargasso)
[1994] 1 Lloyd’s Rep 412.
223
[1899] 1 QB 413 (CA).
224
[1951] 2 KB 314 (CA).
225
[1951] 1 KB 422.
226
227
Newcastle Protection and Indemnity Association v Assurance Foreningen Gard
Gjendsidig (The Labrador) [1998] 2 Lloyd’s Rep 387; General Feeds Inc Panama v Slobodna
Plovidba Yugoslavia (The Krapan J) [1999] 1 Lloyd’s Rep 688; P & O Developments v Guy’s
and St Thomas’ National Health Service Trust [1999] BLR 3; Royal Brompton Hospital v
Hammond & Lerche [1999] BLR 162; Ascon Contracting Ltd v Alfred McAlpine
Construction (Isle of Man) Ltd (2001) 16 Con LJ 316; Contigroup Companies Inc v Glencore
AG [2004] EWHC 2750 (Comm), [2005] 1 Lloyd’s Rep 241; Siemens Building Technologies
FE Ltd v Supershield Ltd [2010] EWCA Civ 7, [2010] 1 Lloyd’s Rep 349.
228
229
3 & 4 Wm 4 c 42 s 28.
230
[1893] AC 429 (HL).
231
See now Senior Courts Act 1981, s 35A (High Court); County Courts Act 1982, s 69
(County Court).
232
Wadsworth v Lydall [1981] 1 WLR 598 (CA) (special damage); President of India v La
Pintada Compania Navigacion [1985] AC 104 (HL) (general damage).
233
[2007] UKHL 34, [2008] 1 AC 561.
234
235
[1926] 1 KB 17; Porter v Jones (1943) 112 LJKB 173 (CA); Calabar Properties v Stitcher
[1984] 1 WLR 287 (CA).
236
[1926] 1 KB 17 at 22 (Wright J).
237
238
Ibid, para 30.026; see Le Peintur v South Eastern Rly Co (1860) 2 LT 170 (skins);
Hawes v South Eastern Rly Co (1884) 54 LJQB 174 (fish); Glynn v Margetson Ltd [1893] AC
351 (HL) (oranges); CHS Inc Iberica SL v Far East Marine [2012] EWHC 3747 (corn).
239
(1859) 28 LJQB 179; Bisley v Thompson [1982] 2 NZLR 696 (New Zealand Ct of
Appeal).
240
Parsons (Livestock) v Uttley Ingham & Co [1978] QB 791 (CA); above, para 9.30.
241
(1924) 41 TLR 21 (PC).
242
Ibid at 23 (Lord Carson).
243
Above, para 9.52.
Private Law Library
Page 248
244
Above, para 9.51.
245
[1941] 2 All ER 393.
246
[1976] 2 Lloyd’s Rep 555 (CA); Cointat v Myham & Son [1913] 2 KB 220; Aerial
Advertising Co Ltd v Batchelors Peas Ltd (Manchester) [1938] 2 All ER 788; Jackson v Royal
Bank of Scotland [2005] UKHL 3, [2005] 1 WLR 377.
247
Above, para 9.17.
248
[1950] 2 All ER 1167.
249
Burton v Pinkerton (1867) LR 2 Exch 340; Hobbs v London and South Western Rly Co
(1875) LR 10 QB 11; Elmcroft Developments Ltd v Tankersley-Sawyer (1984) 15 HLR 63
(CA).
250
[1909] AC 488.
251
Enonchong, Nelson, ‘Breach of contract and damages for mental distress’ (1996) 16
OJLS 617; Capper, David, ‘Damages for distress and disappointment – the limits of Watts v
Morrow’ (2000) 116 LQR 556.
252
(1967) 111 SJ 946.
253
Ibid at 947 (Phillimore J).
254
[1991] 1 WLR 1421.
255
Bliss v South East Thames Regional Health Authority [1987] ICR 700 (CA) at 718
(Dillon LJ); Hayes v James and Charles Dodd (a firm) [1990] 2 All ER 815 (CA) at 826
(Purchas LJ); Branchett v Beaney, Coster and Swale B C (1992) 24 HLR 348 (CA); Pavlovic v
Commonwealth Bank of Australia (1992) 56 SASR 587 (Supreme Ct of South Australia).
256
Jarvis v Swan’s Tours Ltd [1973] QB 233 (CA); Jackson v Horizon Holidays Ltd [1975] 1
WLR 1468 (CA); Baltic Shipping Co v Dillon (1993) 176 CLR 344 (High Ct of Australia). This
means that a client who has his or her holiday ruined by being made to wait hours on end at
the airport may in principle be able to recover on this basis.
257
[1976] QB 446 (CA); Dickinson v Jones Alexander & Co [1993] 2 FLR 521.
258
[1989] Ch 408.
259
Knott v Bolton (1995) 11 Const LJ 375 (CA).
260
[2001] 1 UKHL 49, [2002] 2 AC 732; Hartshorne, John, ‘Damages for contractual
mental distress after Farley v Skinner’ (2006) 22 J Contract Law 118.
261
Farley v Skinner [2001] 1 UKHL 49, [2002] 2 AC 732 at [24]; Capper, above n 254.
262
McGregor, above n 10, chapter 9.
263
Ibid, para 9.017; Wallems Rederij A/S v Muller & Co [1927] 2 KB 99 at 104–105
(Mackinnon J); Darbishire v Warran [1963] 1 WLR 1067 (CA) at 1075 (Pearson LJ); The
Solholt [1983] 1 Lloyd’s Rep 605 (CA) at 608 (Sir John Donaldson MR).
264
265
Payzu v Saunders [1919] 2 KB 581 (McCardie J and CA); Greenwich Marine Inc v
Federal Commerce & Navigation Co Ltd (The Mavro Vetranic) [1985] 1 Lloyd’s Rep 580.
266
(1853) 22 LJQB 118.
267
Ibid at 119 (Crompton J).
268
Sotiros Shipping Inc v Sameiet Solholt [1983] 1 Lloyd’s Rep 605 (CA).
Private Law Library
Page 249
269
Ibid at 608 (Sir John Donaldson MR).
270
[1962] AC 413 (HL(Sc)): see above, paras 7.38–7.40.
271
Anglo-African Shipping Co of New York Inc v Mortner & Co [1962] 1 Lloyd’s Rep 610
(CA).
272
273
Ibid, paras 9.074–9.095.
274
[2012] EWHC 3747 (Comm) (Cooke J).
275
Ibid at [84–89].
276
McGregor, above n 10, para 9.082; Lesters Leather and Skin Co Ltd v Home and
Overseas Brokers Ltd (1948) 64 TLR 569 (CA); Jewelowski v Propp [1944] KB 510.
277
McGregor, above n 10, para 9.085–9.086; Pilkington v Wood [1953] Ch 770 at 777
(Harman J); Horsfall and anor v Haywards (a firm) [1999] Lloyd’s Rep PN 332 (CA); Dean v
Allin & Watts (a firm) [2000] Lloyd’s Rep PN 469; Olafsson v Foreign and Commonwealth
Office [2009] EWHC (QB).
278
McGregor, above n 10, para 9.091; James Finlay & Co Ltd v Kwik Hoo Tong Handel
Maatschappij [1929] 1 KB 400 (CA); Yamashita Shinnihon SS Co Ltd v Elios SpA (The Lily
Prima) [1976] 2 Lloyd’s Rep 487 (CA); HL Motorworks (Willesden) Ltd v Alwahbi [1977]
RTR 276 (CA).
279
Banco de Portugal v Waterlow [1932] AC 452 (HL).
280
Ibid at 506.
281
Payzu v Saunders [1919] 2 KB 581 (CA) at 588 (Bankes LJ) and 589 (Scrutton LJ); The
Solholt [1983] 1 Lloyd’s Rep 605 (CA) at 608 (Sir John Donaldson MR).
282
Roper v Johnson (1873) LR 8 CP 167; Garnac Grain Co Inc v Faure & Fairclough Ltd
[1968] AC 1130 (HL) at 1140 (Lord Pearson); McGregor, above n 10, para 9.019.
283
284
Payzu Ltd v Saunders [1919] 2 KB 581 (CA) at 589 (Scrutton LJ); The Elena D’Amico
[1980] 1 Lloyd’s Rep 75 at 88 (Robert Goff J); The Solholt [1983] 1 Lloyd’s Rep 605 (CA) at
608 (Sir John Donaldson MR); above, para 9.14.
285
Above, para 9.14.
286
287
Above, para 9.06.
288
(1863) 4 B & S 66, 122 ER 384; British Columbia Saw Mill Co Ltd v Nettleship (1868)
LR 3 CP 499.
289
[1949] AC 196 (HL(Sc)); The Fjord Wind [2000] 2 Lloyd’s Rep 191 (CA).
290
[1984] 1 WLR 287 (CA). See also Great Eastern Hotel Co Ltd v John Laing Construction
Ltd [2005] EWHC 181, 99 Con LR 45 (payment to contractors to speed up work on hotel).
291
McGregor, above n 10, para 9.096; Compania Financiera ‘Soleada’ SA v Hamoor
Tanker Corp Inc (The Borag) [1981] 1 WLR 247 (CA).
292
McGregor, above n 10.
293
Ibid, paras 9.098–9.102; Wilson v United Counties Bank [1920] AC 102 (HL) at 125
(Lord Atkinson).
Private Law Library
Page 250
294
(1912) 28 TLR 399 at 400 (Lush J).
295
[1984] 1 Lloyd’s Rep 614 (CA).
296
[1984] 1 Lloyd’s Rep 614 at 634 (Browne-Wilkinson LJ).
297
Andros Springs (Owners) v World Beauty (Owners) [1970] P 144 (CA).
298
[1970] P 144 at 156; The Sivand [1998] 2 Lloyd’s Rep 97 (CA); Nigerian National
Shipping Lines Ltd v Mutual Ltd (The Windfall) [1998] 2 Lloyd’s Rep 664; Vinmar
International v Theresa Navigation SA [2001] 2 Lloyd’s Rep 1.
299
McGregor, above n 10, paras 9.103–9.177
300
[1912] AC 673 (HL).
301
Ibid at 691.
302
[1911] AC 301; SIB International SRL v Metalsgesellschaft Corp (The Noel Bay) [1989]
1 Lloyd’s Rep 361 (CA).
303
Below, para 9.115.
304
[1911] AC 301 at 307–308 (Lord Atkinson).
305
Ibid at 308.
306
Treitel (Contract), above n 42, para 20-049; Joyner v Weeks [1891] 2 QB 31 (CA) at 33–
34 (Wright J); Fyffes Group Ltd v Reefer Express Lines Pty Ltd (The Kriti Rex) [1996] 2
Lloyd’s Rep 171 at 204 (Moore-Bick J).
307
308
Above, para 9.50; Williams Bros v ET Agius Ltd [1914] AC 510 (HL); Kwei Tek Chao v
British Traders and Shippers Ltd [1954] 2 QB 459. The only case where the buyer would
have been entitled to his full loss of profit would be where the seller knew that he was likely
to sell that particular cargo to the sub-buyer, for in that case there would have been no
market on which the buyer could have acquired substitute goods: Lyon & Co Ltd v Fuchs
(1920) 2 Ll L R 333; above, para 9.51.
309
Famosa Shipping Co Ltd v Armada Bulk Carriers Ltd [1994] 1 Lloyd’s Rep 633.
310
Ibid at 636–637.
311
Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC
1250 (Comm) at [144] (Leggatt J).
312
Globalia Business Travel SAU of Spain v Fulton Shipping Inc of Panama [2017] UKSC
43.
313
Ibid at [32].
314
Robinson v Harman (1848) 1 Exch 850, 154 ER 263.
315
Above, para 9.02.
316
Ibid.
317
Below, para 9.100.
318
SS Ardennes (Cargo Owners) v SS Ardennes (Owners) [1951] 1 KB 55; The Heron II
[1969] 1 AC 350 (HL); Addax Ltd v Arcadia Petroleum Ltd [2000] 1 Lloyd’s Rep 493; above,
paras 9.44–9.45.
319
[1978] 2 Lloyd’s Rep 55 (Parker J and CA); Contigroup Companies Ltd v Glencore AG
Private Law Library
Page 251
320
[1978] 2 Lloyd’s Rep 55 at 58 (Parker J).
321
What about the original goods? In these circumstances time will generally be of the
essence, which means that the promisee can cancel the contract with the promisor. The
promisee can then reject the goods, and will not be liable to pay the price.
322
Sale of Goods Act 1979, s 51(3); Williams Bros v ET Agius Ltd [1914] AC 510 (HL).
Similar principles apply in relation to other types of contract: see Koch Marine Inc v
d’Amica Societa di Navigazione arl (The Elena D’Amico) [1980] 1 Lloyd’s Rep 75
(charterparty); Murray v Lloyd [1989] 1 WLR 1060 (lease); Oxus Gold plc v Templeton
Insurance Ltd [2007] EWHC 770 (Comm) (sale of shares).
323
Below, para 9.100.
324
Where a contract is terminated on the ground of late delivery, the damages are
computed in the same way as for total non-delivery: Blackgold Trading of Monrovia v
Almare SpA Navigazione of Genoa (The Almare Seconda and The Almare Quinta) [1981] 2
Lloyd’s Rep 433.
325
Panalpina International Transport Ltd v Densil Underwear Ltd [1981] 1 Lloyd’s Rep
187.
326
Elbinger Aktien-Gesellschaft v Armstrong (1874) LR 9 QB 473.
327
Williams v Reynolds (1865) 6 B & S 495, 122 ER 1278; Thol v Henderson (1881) 8 QBD
457; Kwei Tek Chao v British Traders & Shippers Ltd [1954] 2 QB 459.
328
Lyon & Co Ltd v Fuchs (1920) 2 Ll L R 333; Mott & Co Ltd v Muller & Co (London) Ltd
(1922) 13 Ll L R 492; Patrick v Russo-British Grain Export Co Ltd [1927] 2 KB 535; The
Pegase [1981] 1 Lloyd’s Rep 175.
329
Saint Line Ltd v Richardsons, Westgarth & Co Ltd [1940] 2 KB 99 at 105 (Atkinson J).
These can even include expenses incurred before the contract was signed: Anglia Television
Ltd v Reed [1972] 1 QB 60 (CA).
330
Omak Maritime Ltd v Mamola Challenger Shipping Co (The Mamola Challenger) [2010]
EWHC 2026 (Comm), [2011] BLR 212 at [47] and [57]; Campbell, David and Halson, Roger,
‘Expectation and reliance: one principle or two?’ (2015) 32 J Contract Law 231.
331
The Mamola Challenger above n 330 at [47] and [57].
332
Ibid.
333
(1951) 84 CLR 377 (High Ct of Australia).
334
Ibid at 411.
335
336
[1983] 1 WLR 1461 (CA); Albert & Son v Armstrong Rubber Co 178 F 2d 182 (1949)
(USCA); Bowlay Logging v Domtar Ltd [1978] 4 WWR 105 (Supreme Ct of British Columbia)
at 115 (Berger J); Fuller, L L and Perdue, W R, ‘The reliance interest in contract
damages’ (1936) 46 Yale LJ 52, 79.
337
[1983] 1 WLR 1461 at 1468–1469 (Fox LJ).
338
Omak Maritime Ltd v Mamola Challenger Shipping Co (The Mamola Challenger) [2010]
EWHC 2026 (Comm), [2011] BLR 212.
339
Ibid at [45].
Private Law Library
Page 252
340
(1991) 174 CLR 64 (High Ct of Australia); Yam Seng Pte Ltd v International Trade Corp
Ltd [2013] EWHC 111 (QB), [2013] 1 CLC 662 at [187] (Leggatt J); Ng, Gerald, ‘The onus of
proof in a claim for reliance damages for breach of contract’ (2006) 22 J Contract Law 139.
341
CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] 1 QB 16.
342
Ibid; Grange v Quinn [2013] EWCA Civ 24, [2013] 1 P & CR 18.
343
Waters v Towers (1853) 8 Exch 401, 155 ER 1404; Hydraulic Engineering Co Ltd v
McHaffie, Goslett & Co (1878) 4 QBD 670 (CA); Foaminol Laboratories Ltd v British Artid
Plastics Ltd [1941] 2 All ER 393.
344
Peninsula and Orient Steam Navigation Co v Youell and ors [1997] 2 Lloyd’s Rep 136
(CA) at 141 (Potter LJ); Treitel (Contract), above n 42, para 20-035.
345
[1954] 1 QB 292 (CA); Salvage Association v CAP Financial Services (1995) 22 FSR
654; André Cayman Islands Trading Co v Stolt Nielson B/V (The Sun Sapphire) [2000] CLC
156.
346
[1954] 1 QB 292 at 302 (Evershed MR).
347
Compare the facts of Esso Petroleum Co Ltd v Mardon [1976] QB 801 (CA).
348
Millar’s Machinery Co Ltd v David Way & Son (1935) 40 Com Cas 204 (Branson J and
CA); TC Industrial Plant Pty Ltd v Roberts (Queensland) Pty Ltd [1964] ALR 1083 (High Ct
of Australia); McGregor, above n 10, para 4.047.
349
Ashby v White (1703) 2 Ld Raym 938 at 955, 92 ER 126 at 137 (Holt CJ).
350
Marzetti v Williams (1830) 1 B & Ad 415, 109 ER 842; Halifax Building Society v
Urquhart-Dykes and Lord [1997] RPC 55; North Sea Energy Holdings NV v Petroleum
Authority of Thailand [1999] 1 Lloyd’s Rep 483 (CA).
351
The Mediana [1900] AC 113 (HL) at 116.
352
SS Ardennes (Cargo Owners) v SS Ardennes (Owners) [1951] 1 KB 55; The Heron II
[1969] 1 AC 350 (HL); Addax Ltd v Arcadia Petroleum Ltd [2000] 1 Lloyd’s Rep 493; above,
para 9.91.
353
Bower v Hill (1835) 1 Bing NC 549, 131 ER 1229; Hanfstaengl v WH Smith [1905] 1 Ch
519; Constantine v Imperial Hotels [1944] KB 693; McGregor, above n 10, para 12.009.
354
Beaumont v Greathead (1846) 2 CB 494 at 499, 135 ER 1039 at 1041 (Maule J);
355
Senior Courts Act 1981, s 51; Civil Procedure Rules 1998, r 44; McGregor, above n 10,
para 12.011.
356
357
See Goodhart, William, ‘Restitutionary damages for breach of contract’ [1995]
Restitution LR 3; Cunnington, Ralph, ‘Equitable damages: a model for restitutionary
damages’ (2001) 17 J Contract Law 212; Phang, Andrew, ‘Rationalising restitutionary
damages in contract law – an elusive or an illusory quest? (2001) 17 J Contract Law 240;
Edelman, James, ‘Profits and gains from breach of contract’ [2001] LMCLQ 9; Graham,
Martin, Restitutionary damages: the anvil struck’ (2004) 120 LQR 26.
358
[1993] 1 WLR 1361 (CA).
359
Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Siboen and the Sibotre)
[1976] 1 Lloyd’s Rep 293 at 337 (Kerr J).
360
Lake v Bayliss [1974] 1 WLR 1073; Treitel (Contract), above n 42, para 20-010.
Private Law Library
Page 253
361
Mathew v TM Sutton Ltd [1994] 1 WLR 1455; Tang Man Sit v Capacious Investments
Ltd [1996] AC 514 (PC); Treitel (Contract), above n 42, para 20-010.
362
[1974] 1 WLR 798.
363
Above, para 9.101.
364
The court awarded the claimants five per cent of the profit on the basis that this is what
could reasonably have been demanded by the claimants in consideration of releasing the
covenant: [1974] 1 WLR 798 at 815 (Brightman J); McGregor, above n 10, paras 14.022–
14.023.
365
[2016] EWCA Civ 180, [2017] QB 1.
366
[2001] 1 AC 268 (HL); McGregor, above n 10, paras 14.024–14.025; Jaffey, Peter,
‘Disgorgement and “licence fee” damages in contract’ (2014) 20 J Contract Law 57.
367
[2001] 1 AC 268 at 285 (Lord Nicholls). Normally this will involve situations where the
claimant cannot prove any financial loss arising from the breach: Experience Hendrix LLC v
PPX Enterprises Ltd [2003] EWCA Civ 323, [2003] 1 All ER (Comm) 830.
368
[2001] 1 AC 268 at 285.
369
Ibid at 284–285 (Lord Nicholls). It has, however, been said that these cases are really
examples of compensatory damages, and that they do not establish any new principle: see
WWF World Wide Fund for Nature v World Wrestling Federation Entertainment Inc [2007]
EWCA Civ 286; [2008] 1 WLR 445 (Chadwick J). For the implications of this analysis, which
are somewhat beyond the scope of the present work, see McGregor, above n 10, paras
14.029–14.030.
370
(1995) 145 NLJ 1504 (CA).
371
AB Corp v CD Co [2002] 1 Lloyd’s Rep 805.
372
Ibid at para 10 (Staughton LJ). For a contrary approach see the decision of the Israeli
Supreme Court in Adras Ltd v Harlow & Jones GmbH, noted at (1988) 104 LQR 385.
373
Sale of Goods Act 1979 (‘SOGA’), s 49; above, para 7.37.
374
SOGA, s 50.
375
Ibid, s 51.
376
Ibid, s 52; above, paras 7.27–7.29.
377
SOGA, s 53.
378
Above, Chapter 2; below, Chapter 11.
379
Blackgold Trading Ltd of Monrovia v Almare SpA di Navigacione of Genoa (The Almare
Seconda) [1981] 2 Lloyd’s Rep 433.
380
(1854) 9 Exch 341; above, paras 9.17–9.18.
381
Williams Bros v ET Agius Ltd [1914] AC 510 (HL); above, para 9.50.
382
Bridge, M (ed), Benjamin’s Sale of Goods (9th edn, 2014) (‘Benjamin’), para 16.066.
383
Pagnan (R) & Fratelli v Corbisa Industrial Agropacuaria Limitada [1970] 1 WLR 1306
(CA); Benjamin, above n 382, para 17.007.
384
Lyon & Co Ltd v Fuchs (1920) 2 Ll L R 333; Mott & Co Ltd v Muller & Co (London) Ltd
(1922) 13 Ll L R 492.
385
Hydraulic Engineering Co Ltd v McHaffie, Goslett & Co (1878) 4 QBD 670 (CA).
Private Law Library
Page 254
386
Benjamin, above n 382, para 17.021. But if the buyer does go out and acquire a
reasonable substitute, it seems that the cost of this can be recouped in damages: Hinde v
Liddell (1875) LR 20 QB 265; Benjamin, above n 382, para 17.023.
387
Benjamin, above n 382, para 17.021.
388
The Arpad [1934] P 189 (CA).
389
Hinde v Liddell (1875) LR 20 QB 265.
390
Leavey & Co Ltd v George H Hirst & Co Ltd [1944] KB 24 (CA).
391
392
Grébert-Borgnis v Nugent (1885) 15 QBD 85 (CA) at 89–90 (Brett MR).
393
The Arpad [1934] P 189 (CA).
394
Above, 9.51.
395
Williams Bros v ET Agius Ltd [1914] AC 510 (HL).
396
Mott & Co Ltd v Muller & Co (London) Ltd (1922) 13 Ll L R 492.
397
Hall v Pim (1928) 33 Com Cas 324 (HL).
398
399
400
Ibid; Fletcher v Tayleur (1855) 17 CB 21, 139 ER 973; Borries v Hutchinson (1865) 18
CB (NS) 445, 144 ER 518.
401
Benjamin, above n 382, para 17.039. But if the buyer actually manages to resell the
goods at a profit, it seems that this must be taken into account: Wertheim v Chicoutimi Pulp
Co [1911] AC 301; above, para 9.86.
402
Above, para 9.109.
403
Benjamin, above n 382, paras 17.040–17.046.
404
Smeed v Foord (1859) 1 E & E 602, 120 ER 1035; Hydraulic Engineering Co Ltd v
McHaffie, Goslett & Co (1878) 4 QBD 670 (CA); Watson v Gray (1900) 16 TLR 308; John M
Henderson & Co v Montague Meyer Ltd (1941) 46 Com Cas 209; Benjamin, above n 382,
para 17.046.
405
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA);
406
Elbinger Aktien-Gesellschaft v Armstrong (1874) LR 9 QB 473; Benjamin, above n 382,
para 17.045; above, para 9.65.
407
Panalpina International Transport Ltd v Densil Underwear Ltd [1981] 1 Lloyd’s Rep 187
(a case involving a contract of carriage, but it is suggested that the same principles would
apply).
408
409
Cranston v Marshall (1850) 5 Exch 395, 155 ER 172; Hamlin v Great Northern Rly Co
(1856) 1 H & N 408, 156 ER 1261; Adams v Midland Rly Co (1862) 31 LJ Ex 35.
410
(1854) 9 Exch 341, 156 ER 145.
411
Horne v Midland Rly Co (1873) LR 5 CP 131 at 136 (Kelly CB).
412
The Heron II [1969] 1 AC 350.
Private Law Library
Page 255
413
Collard v South Eastern Rly Co (1861) 7 H & N 79, 158 ER 400; Wilson v Lancashire
and Yorkshire Rly Co (1861) 9 CBNS 632, 142 ER 248; Great Western Rly Co v Redmayne
(1866) LR 1 CP 329; Schulze v Great Eastern Rly Co (1887) 19 QBD 30 (CA); Heskell v
Continental Express Ltd [1950] 1 All ER 1033; McGregor, above n 10, paras 30.027–30.028.
414
The Heron II (above n 412). The decision of the Court of Appeal in The Parana (1877) 2
PD 118 suggested that in the case of carriage by sea this sort of loss could not be recovered
unless the carrier knew that the goods would be sold immediately on arrival and not before,
but in so far as it purported to lay down a general principle The Parana was disapproved of
in The Heron II; McGregor, above n 10, paras 30.029–30.031.
415
187.
416
The Heron II [1969] 1 AC 350 (HL) at 428 (Lord Pearce).
417
418
Le Peintur v South Eastern Rly Co (1860) 2 LT 170 (skins); Collard v South Eastern Rly
Co (1861) 7 H & N 79, 158 ER 400 (hops); Hawes v South Eastern Rly Co (1884) 54 LJQB
174 (fish); Glynn v Margetson Ltd [1893] AC 351 (HL) (oranges).
419
[1940] 1 KB 740 (CA); McGregor, above n 10, para 30.034.
420
[1940] 1 KB 740 at 748; above para 9.46.
421
Below, para 9.123.
422
[1950] 1 All ER 1033.
423
Below, para 9.124.
424
[2004] EWHC 136, [2004] BLR 273.
425
McGregor, above n 10, para 30.035; Hales v London and North Western Rly Co (1863)
4 B & S 66, 122 ER 384; Heskell v Continental Express Ltd [1950] 1 All ER 1033.
426
Gianchetti v Speeding, Marshall & Co (1899) 15 TLR 401.
427
Woodger v Great Western Rly Co (1867) LR 2 CP 318.
428
Ibid.
429
Above, para 9.82; see also Monarch SS Co Ltd v Karlshamns Oljefabriker A/B [1949] AC
196 (HL(Sc)) (costs of transhipment); The Subro Valour [1995] 1 Lloyd’s Rep 509
(Admiralty) (salvage costs).
430
Millen v Brasch & Co [1940] 1 KB 740 (CA).
431
SS Ardennes (Cargo Owners) v SS Ardennes (Owners) [1951] 1 KB 55.
432
(1860) 2 LT 170; Gee v Lancashire and Yorkshire Rly Co (1860) 6 H & N 211, 158 ER
87.
433
(1861) 9 CB (NS) 632, 142 ER 248.
434
435
(1876) 1 QBD 274.
436
(1854) 9 Exch 341; above, paras 9.17–9.18.
437
(1854) 9 Exch 341 at 355, 156 ER 145 at 151.
438
Ibid.
439
(1860) 1 H & N 211, 158 ER 87.
Private Law Library
Page 256
440
Ibid.
441
(1927) 37 TLR 866 (CA).
442
The Pegase [1981] 1 Lloyd’s Rep 175 at 184 (Robert Goff J).
443
Ibid at 185 (Robert Goff J).
444
Simmons v South Eastern Rly Co (1861) 7 Jur (NS) 849; Great Western Rly Co v
Redmayne (1866) LR 1 CP 329.
445
Simpson v London and North Western Rly Co (1876) 1 QBD 274; Jameson v Midland Rly
Co (1884) 50 LT 426; Panalpina International Transport Ltd v Densil Underwear Ltd [1981]
1 Lloyd’s Rep 187. The first two of these cases suggest that loss of profits cannot be
recovered in this sort of case in the absence of a special contract to that effect, but this was
doubted by Lord Upjohn in The Heron II [1969] 1 AC 350 (HL) at 421–422.
446
(1873) LR 8 CP 131; compare the lucrative dyeing contracts in the Victoria Laundry
case (above, para 9.19).
447
[1950] 1 All ER 1033.
448
Ibid at 1049.
449
Danzig, Richard, ‘Hadley v Baxendale: a study of the industrialization of the law’ (1975)
4 JLS 249. But this does not apply to the same extent where both customer and carrier are
in a specialised trade; Geogas SA v Trammo Gas Ltd (The Baleares) [1993] 1 Lloyd’s Rep
215 (HL); Fyffes Group v Reefer Express Lines Pty Ltd (The Kriti Rex) [1996] 1 Lloyd’s Rep
171.
450
Cf. Unfair Contract Terms Act 1977, s 6.
451
Below, para 13.78.
452
Overstone v Shipway [1962] 1 WLR 117 (CA).
453
Logistics Holding (Group) Co Ltd [2015] EWHC 718 (Comm), [2015] 2 Lloyd’s Rep 407
(aff’d [2016] EWCA Civ 982, [2016] 2 Lloyd’s Rep 447).
454
Lombard North Central plc v Butterworth [1987] 2 QB 527 (CA).
455
Stannard, John, ‘Delay, damages and the doctrine of constructive repudiation’ (2013) 30
J Contract Law 178.
456
Knight Sugar Co v Alberta Rly and Irrigation Co [1938] 1 All ER 266 (PC); Barclays
Bank v Beck [1952] 2 QB 47 (CA); Farrand, J T (ed), Emmet on Title, (19th edn, 2016), paras
8.037–8.038.
457
As in the Standard Conditions of Sale, condition 7.4.
458
Above, para 7.26.
459
460
See, for instance, Standard Conditions of Sale, condition 7.2.
461
[1981] AC 1050 (HL); above, paras 1.04–1.10.
462
Royal Bristol Permanent Building Society v Bomash (1887) 35 Ch D 390; McGregor,
above n 10, para 25.012.
463
Jones v Gardiner [1902] 1 Ch 191.
464
Phillips v Lamdin [1949] 2 KB 33.
Private Law Library
Page 257
465
Wadsworth v Lydall [1981] 1 WLR 598 (CA).
466
Raineri v Miles [1981] AC 1050 (HL); above, paras 1.04–1.10.
467
(1874) LR 7 HL 158.
468
Rowe v School Board for London (1887) 36 Ch D 619; Jones v Gardiner [1902] 1 Ch
191.
469
Day v Singleton [1899] 2 Ch 320 (CA) at 329 (Lindley MR and Rigby J).
470
Ibid.
471
Private Law Library
Page 258
10 Withholding Performance
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 269) 10 Withholding Performance

A. Withholding Performance and Termination 10.03
B. The Normal Rule 10.06
C. Doctrine of Substantial Performance 10.10
D. Timely Performance as a Condition Precedent 10.13
10.01 Very often a contract provides that one of the parties shall not be liable to perform
unless or until some event occurs. Where this is so, the occurrence of the event in question
is, as we have seen,1 a ‘condition precedent’ to the duty to perform in the sense used by
Corbin,2 namely ‘some operative fact subsequent to acceptance and prior to discharge, a
fact upon which the rights and duties of the parties depend’.3 Where the condition
precedent in question is something to be done by the promisor, we have an inbuilt remedy
for delay, namely the right of the promisee to withhold his or her own performance until the
act in question is done. Thus a building contract may provide for part of the price to be
withheld until the work is completed.4 In such a case it is not in the interest of the promisor
to perform in a tardy manner, for this only puts off the time when he or she can obtain the
balance of the price.5 Again, in a charterparty the charterer is not obliged to load the ship
so long as it remains in an unseaworthy state.6 This provides an incentive for the owner to
correct any defects that there might be as soon as possible. From this it can be seen that
the right to withhold performance is similar to the right to (p. 270) sue for liquidated
damages for the delay; both can act as an incentive to prompt performance, the former
being the carrot and the latter the stick.
10.02 The situation presently under discussion involves the same factors as those involved
in setting the order of performance; there, too, it is necessary to ask whether the
performance of one party’s obligation was intended to constitute a condition precedent to
that of the other.7 However, whereas in that context we were looking at the situation from
the point of view of the promisor, we are now looking from that of the promisee. In that
context we were concerned with the time of performance and the order of performance; but
Private Law Library
Page 259
here we consider the matter from a different angle: assuming that the promisor has failed
to perform on time, can the promisee in turn withhold his or her performance? This
depends on a number of factors.
A. Withholding Performance and Termination

10.03 The right of a promisee to withhold performance bears many similarities to the right
to terminate performance, but they are by no means the same.8 For instance, most
contracts of employment provide for the payment of wages a week or a month in arrear;9
this means that the employer is entitled to withhold performance until the end of the week
or the month, as the case may be, but dismissing the employee is a different matter
altogether. Again, if prior to the time set for delivery a seller tenders goods to the buyer
that are not in conformity with the contract, the buyer may withhold performance by
refusing to accept the goods, but this does not mean that the buyer may terminate the
contract altogether; the seller may still have time to make a proper tender before the due
date for delivery is past.10 A charterer need not load the goods if the ship is in an
unseaworthy state,11 but this does not mean that he or she can throw up the charter
altogether; indeed, as we shall see, a charterer is not entitled to terminate for
unseaworthiness unless its effects are severe enough to frustrate the contract.12 So a
promisee who is entitled to withhold performance in response to a delay by the promisor
may (p. 271) not necessarily be entitled to cancel the contract altogether without giving the
promisor a reasonable chance to perform. Conversely, there may be cases where the
promisee may terminate performance altogether without necessarily being entitled to
withhold performance.13
10.04 That said, the right to withhold performance and the right to terminate performance
are closely related, for a number of reasons. First of all, there is a clear historical
connection between the two; the rule whereby a promisee can terminate performance for
breach of condition has its roots in the older doctrines concerning conditions precedent and
the order of performance.14 Secondly, where the promisor is no longer ready or willing to
perform the obligation on which the promisee’s own obligation depends, the promisee’s
right to withhold performance becomes a right to terminate performance.15 Thirdly, where
timely performance of an obligation by the promisor, as opposed to performance simpliciter,
constitutes a condition precedent to performance by the promisee, the promisee will again
have the right to terminate performance rather than just withholding it; this is because by
its very nature a failure to perform on time is not capable of remedy.16
10.05 The relationship between the right to withhold performance and the right to
terminate performance can give rise to some tricky problems of analysis. In The Aktion,17 a
contract for the sale of a ship provided for the price to be paid on delivery and no later than
three days from notice of delivery, and that the ship was to be delivered in the same
condition as when inspected. The seller gave notice of delivery and the buyer then
inspected the ship, but refused to accept it on account of various defects. The seller, while
denying that the defects affected the contractual deliverability of the ship, promised to
repair the defects. This was done, but it was then discovered that one of the defects in
question, a fault in the ship’s anti-corrosion system, required dry docking, and the seller
was not willing to go to the expense of this without an assurance from the buyer that the
ship would be accepted when the work was done. At this point the buyer threw up the
contract, arguing that it was a condition precedent to his obligation to accept and pay for
the ship that she be in good condition when the notice of delivery was given. However, this
argument was rejected by the court, which accepted the contention of the seller that it was
not likely that the parties could have intended (p. 272) that the whole contract could be
thrown over for a slight defect in the ship. This result may have been right at the end of the
day, but all the parties involved seem to have thought that the choice lay between
compelling the buyer to take a ship that was not up to scratch and allowing him to cancel
Private Law Library
Page 260
the contract for any defect. But there was another possibility, namely that the buyer had the
right to reject the ship but was obliged to give the seller a reasonable time to remedy the
defects before finally terminating the contract.18
B. The Normal Rule

10.06 In general terms, the question whether the promisee can withhold his or her own
performance in response to delayed performance by the promisor depends on the agreed
order of performance set out in the contract.19 There are three possibilities here. The first
is that the obligations in question are ‘independent’; thus, for instance, it has been held that
a tenant’s obligation to pay rent is totally independent of the landlord’s covenant to
repair.20 Here neither party can withhold performance on the basis of the other’s failure to
perform. In the second case the obligations are said to be ‘concurrent’, as in a sale of
goods, where it is provided by statute that unless otherwise agreed payment and delivery
are ‘concurrent conditions’;21 here the buyer cannot demand delivery of the goods without
being ready and willing to pay the price, and the seller cannot demand payment of the price
without being ready and willing to deliver the goods.22 Finally, one party’s obligation to
perform may be dependent on performance by the other party; thus in a contract of
employment wages are generally not due until work has been done.23 It is in the last of
these cases that the right to withhold performance arises.
10.07 If the promisee’s obligation to perform is dependent on prior performance by the
promisor, the promisee can withhold performance until the promisor’s performance is
complete, and if the promisor has not completed performance, the promisee’s obligation to
perform does not arise. It is not for the court to rewrite the contract made by the parties,
who may decide to make the literal fulfilment of some requirement a condition precedent
even though it might appear to be of little importance.24 The same is true where the
condition is imposed by statute. Thus in Arcos Ltd v Ronaasen & Son25 buyers of wood
staves used for making (p. 273) barrels were held to be entitled to reject the staves on the
ground that they were not of the exact thickness specified in the contract.26 There was no
suggestion that the staves tendered were any less fit for the purpose, and the real reason
for rejection was probably that the market had fallen,27 but all of this was neither here nor
there; the crucial point was that the buyer had promised to accept and pay for goods of a
certain description, and these goods were not of that description.28
10.08 This is all very well as far as the right to withhold performance is concerned, but
this approach can cause problems in cases where the relevant condition precedent is no
longer capable of fulfilment. In Cutter v Powell29 a seaman agreed with the defendant to
serve as second mate on the defendant’s ship, the defendant agreeing in his turn to pay a
lump sum of 30 guineas to the seaman on completion of the voyage ‘provided he proceeds,
continues and does his duty as second mate in the said ship from hence to the Port of
Liverpool’. The seaman having died before the ship reached its final destination, it was held
that his widow could recover nothing; the wages were payable on completion of the voyage,
and the voyage had not been completed.30 In Sumpter v Hedges31 a building contract
provided for payment in a lump sum on completion of the work. The builder abandoned the
work when it was half done, after which the owner of the land finished it off using materials
left behind by the builder. It was held that the builder could recover for the materials but
not for the work; payment was due on completion, and the work had not been completed.
Both these cases are clearly right in so far as the order of performance is concerned; in
both of them the work was due before the payment. But the result may be unfair; since
payment is due only on completion, and the work will never be completed, that work which
is done is done for nothing.
Private Law Library
Page 261
10.09 The courts have not been unaware of these problems, and have devised various
means of avoiding an unfair result in this sort of case. One is by construing the obligation as
severable, so that payment becomes due in stages rather than in a lump sum for the entire
work.32 Another is to allow recovery in (p. 274) equity.33 A third approach is to make use of
the law of restitution, so that recovery is due on a quantum meruit basis in cases where the
promisee has a choice whether or not to accept the benefits of the incomplete
performance.34 However, all of these approaches have their limitations; not all obligations
can be severed in this way; the equitable jurisdiction in these cases is obsolete and
uncertain in scope; recovery on a quantum meruit is not allowed where this would
contradict the express provisions of the contract.35 The courts have therefore developed a
more radical approach to the problem in the shape of the doctrine of ‘substantial
performance’.
C. Doctrine of Substantial Performance

10.10 Under the doctrine of substantial performance, the promisor may demand
performance from the promisee notwithstanding his or her own failure to perform as
agreed. The leading case here is Hoenig v Isaacs,36 where the claimant agreed to do some
decorating work on the defendant’s house, the price to be paid ‘net cash as the work
proceeds, balance payable on completion’. The defendant refused to pay the final balance
because of a number of defects in the work, but the claimant was held to be entitled to
recover this, less the cost of making good the defects.
10.11 How does the result reached in this case square with the rules relating to conditions
precedent and the intended order of performance? One way out is to say that there is no
conflict: in a case where the doctrine of substantial performance applies, the condition
precedent to the promisor’s right to demand performance from the promisee being not the
complete carrying out of the relevant contractual obligation by the promisor, but only the
substantial carrying out of it.37 This resolves the logical dilemma, but at the cost of other
difficulties. For one thing, it makes it difficult to say when the time for the promisee’s
performance has arrived, for it will not be clear when the promisor’s performance becomes
‘substantial’. More importantly, it does violence to the intention of the parties, since the
promisee will generally have agreed to pay for the whole work, not for (p. 275) part of it.
For this reason other commentators prefer to cut the Gordian knot by admitting the
illogicality but saying that the order of performance is one matter and the question of
recovery for a defective performance another.38
10.12 Much of the difficulty in this context arises because the doctrine of substantial
performance fails to distinguish between those defects that are still capable of remedy and
those that are not. Where the promisor can still remedy the defect, it is not reasonable to
allow him or her to insist on payment of the contract price since this deprives the promisee
of one of the best weapons in his or her armoury: the right to withhold performance until
the work is completed properly.39 But where the promisor is no longer able or willing to put
matters right, or where the promisee does not wish the promisor to do so, the issue is
effectively no longer one of withholding performance but of termination.40 In this situation
allowing the promisor to recover the price less the cost of remedying the defects is a not
unreasonable way of doing justice between the parties.
D. Timely Performance as a Condition Precedent

10.13 Problems arise in connection with the right to withhold performance when a time is
set for the performance of the promisor. Say that the promisor agrees to paint the
promisee’s house on a certain day for a certain price. Is the promisor’s performance a
condition precedent to his or her right to recover the price, or is it not? At first glance it
would seem that there were only two possible results here. If the promisor’s performance is
a condition precedent, the case would seem to be effectively one of termination, since the
Private Law Library
Page 262
promisee need pay nothing if performance is not rendered on time. If it is not, the promisor
can claim the price without having finished the work. In neither case would the right to
withhold performance come into play.
(p. 276) 10.14 However, it is a fallacy to suppose that there are only two possible results.
In fact there are three. The first is that performance by the promisor is not a condition
precedent at all. In that case, as we have seen, the promisor can recover the price without
finishing the work on time —indeed, without finishing it at all. The second is that timely
performance by the promisor is a condition precedent. If that is so, the promisor cannot
recover the price until the work is done, and if it is not finished on time the promisor can
recover nothing. The third possibility involves severing the obligation to perform generally
from the obligation to perform on time. In this case the promisor cannot recover the price
until the work is done, but does not lose the right to be paid simply because he or she fails
to meet the agreed deadline. Which of these three situations apply to any given case is of
course a question of construction. To insist on timely performance as a condition precedent
is to convert what would be a right to withhold performance into a right to terminate
performance; in effect, time is of the essence. This may lead the court to ‘sever’ the
obligation in the way described above,41 but this will not be done where it is obvious that
timely performance by the promisor was intended as a precondition to his or her right to
demand the agreed counter-performance by the promisee.42
Footnotes:
1
Above, para 3.01.
2
Corbin, Arthur, ‘Conditions in the law of contract’ (1918) 28 Yale LJ 739.
3
Ibid at 743. The event in question may also be a promise under the contract, but need not
necessarily be so: Vold, L, ‘Express conditions in contracts’ (1925) 4 Nebraska Law Bulletin
213; Willis, H E, ‘Promissory and non-promissory conditions’ (1941) 16 Indiana LJ 349;
Patterson, Edwin W, ‘Constructive conditions in contracts’ (1942) 42 Columbia LR 903;
Burchell, E M, ‘ “Condition” and “warranty” ’ (1954) 71 South African LJ 333; Ferson,
Merton G, ‘Conditions in the law of contracts’ (1955) 8 Vanderbilt LR 537.
4
As in Hoenig v Isaacs [1952] 1 TLR 1360 (CA) at 1361 (‘net cash, as the work proceeds;
and balance on completion’).
5
Beale, Hugh, Remedies for Breach of Contract (1980) (‘Beale’), pp 18–19.
6
The Europa [1908] P 84 (DC); Kish v Taylor [1912] AC 604 (HL).
7
8
Beale, above n 5, pp 20–1.
9
Ibid, p 29.
10
Borrowman, Phillips & Co v Free & Hollis (1878) 4 QBD 500 (CA); Tetley v Shand (1871)
25 LT 658; Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The
Kanchenjunga) [1990] 1 Lloyd’s Rep 391 at 399 (Lord Goff); Hyundai Merchant Marine Co
Ltd v Karander Maritime Inc (The Niizuru) [1996] 2 Lloyd’s Rep 66. In this sort of case the
buyer can only refuse to accept a fresh tender if the defective tender was such as to amount
to a repudiation of the contract: Apps, A, ‘The right to cure defective performance’ [1994]
LMCLQ 525.
11
Above, para 10.01.
Private Law Library
Page 263
12
Stanton v Richardson (1872) LR 7 CP 421; Hongkong Fir Shipping Co Ltd v Kawasaki
Kisen Kaisha Ltd (The Hongkong Fir) [1962] 2 QB 26 (CA).
13
As in Steelwood Carriers Inc of Monrovia v Evimeria Compania Naviera SA of Panama
(The Agios Giorgis) [1976] 2 Lloyd’s Rep 192, where it was said that in a time charterparty
the owner’s right to withdraw the ship for late payment of hire did not necessarily carry
with it the right to refuse to load until the hire was paid.
14
15
As in Cutter v Powell (1795) 6 TR 320, 101 ER 373 and in Sumpter v Hedges [1898] 1
QB 673 (CA).
16
17
Aktion Maritime Corp of Liberia v S Kasmas & Bros Ltd [1987] 1 Lloyd’s Rep 283.
18
As in Kish v Taylor [1912] AC 604 (HL).
19
20
Taylor v Webb [1937] 2 KB 283 (CA).
21
Sale of Goods Act 1979, s 28.
22
Beale, above n 5, p 29.
23
Above, para 10.03.
24
Bettini v Gye (1876) 1 QBD 183 at 187 (Blackburn J); Beale, above n 5, p 21.
25
[1933] AC 470 (HL).
26
But the right of rejection in cases such as this is now limited by s 15A of the Sale of
Goods Act 1979.
27
Beale, above n 5, pp 36–7.
28
Sale of Goods Act 1979, s 13; see now s 15A of the Act, as inserted by the Sale and
Supply of Goods Act 1994, s 4(2).
29
(1795) 6 TR 320, 101 ER 373; above, para 2.19.
30
On the facts this may have been justified on the ground that the defendants had agreed
to a higher rate of pay in return for an undertaking to work the entire voyage: Stoljar,
Samuel, ‘The great case of Cutter v Powell’ (1956) 34 Canadian Bar Review 288.
31
[1898] 1 QB 673 (CA); Ellis v Hamlen (1810) 3 Taunt 52, 128 ER 21; Sinclair v Bowles
(1829) 9 B & C 92, 109 ER 35; Rolt v Cozens (1856) 18 CB 673, 139 ER 1534; Munro v Butt
(1858) 8 E & B 739, 120 ER 275; Appleby v Myers (1865) 2 CP 651; Boston Deep Sea
Fishing and Ice Co v Ansell (1888) 39 Ch D 339 (CA); Small & Sons v Middlesex Real
Estates Ltd [1921] WN 245; Bolton v Mahadeva [1972] 1 WLR 1009 (CA).
32
Roberts v Havelock (1832) 3 B & Ad 404, 110 ER 145; Taylor v Laird (1856) 1 H & N
266, 156 ER 1203; Regent ohG Aisestadt & Barig v Francesco of Jermyn Street Ltd [1981] 3
All ER 327; Apportionment Act 1870, s 2; Beale, above n 5, pp 31–2.
33
Westland v Robinson (1667) Eq Cas Abr 376, 21 ER 1113; Edwin and Stafford v East
India Co (1690) 2 Vern 210, 23 ER 738; Wiggins v Ingleton (1705) 2 Ld Raym 1211, 92 ER
300; Edwards v Child (1716) 2 Vern 727, 23 ER 1077.
34
Farnsworth v Garrard (1807) 1 Camp 38, 170 ER 867; Dakin & Co Ltd v Lee [1916] 1 KB
566.
Private Law Library
Page 264
35
Cutter v Powell (1795) 6 TR 320, 101 ER 373; Sumpter v Hedges [1898] 1 QB 673 (CA);
Appleby v Myers (1865) 2 CP 651.
36
[1952] 1 TLR 1360 (CA); Ritchie v Atkinson (1808) 10 East 295, 103 ER 787; Cutler v
Close (1832) 5 C & P 337, 172 ER 1001; Lucas v Godwin (1837) 3 Bing NC 738, 132 ER
595; Bettini v Gye (1876) 1 QBD 183.
37
Cowans, Daniel R, ‘Contracts: Is it possible to contract for an exact
performance?’ (1949) 37 California LR 498.
38
Beck, Anthony, ‘The doctrine of substantial performance’ (1975) 38 MLR 413; Fischer, J
W, ‘Rights of recovery by a building contractor on contracts partially or substantially
performed’ (1937) 11 University of Cincinnati LR 379; Childres, R, ‘Conditions in the law of
contracts’ (1970) 45 New York University LR 33.
39
Law Commission Report No 121, Pecuniary Restitution for Breach of Contract (1983),
Note of Dissent by Brian Davenport QC. ‘Entire’ obligations are less common in commercial
construction contracts: Smales v Lea [2011] EWCA Civ 1325, [2012] PNLR 8 at [43].
40
Above, para 10.04. Thus there is a suggestion in some of the American authorities that
where a condition precedent becomes impossible of fulfilment it can be dispensed with and
the relevant party called on to perform in cases where otherwise there would be an unjust
forfeiture: Goldfarb v Cohen 92 Conn 277, 102 A 649 (1917) (Connecticut); Kram v Losito
105 NJL 588, 147 A 465 (1929) (New Jersey); Lippincott v Content 123 NJL 277, 8 A 2d 362
(1939) (New Jersey); Harris v Pacific Mutual Life Insurance Co 137 F 2d 272 (1943)
(USCC); Richard v Falleti 13 NJ Super 534, 81 A 2d 17 (1951) (New Jersey).
41
This is akin to the result reached in the rent review cases concerning the interpretation
of a provision that the landlord’s power to set the machinery in motion is contingent on the
service of a ‘trigger notice’ by a certain date. The courts have interpreted the serving of the
notice in itself as a condition precedent, in the sense that the machinery cannot be set in
motion until it is served, while not necessarily insisting that it be served by the stipulated
date: United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL); below,
paras 11.34–11.37. See also Alfred McAlpine plc v BAI (Run-off) Ltd [2000] 1 Lloyd’s Rep
437 (CA).
42
Busk v Spence (1815) 4 Camp 329, 171 ER 105; Maryon v Carter (1830) 4 C & P 295,
172 ER 711; Rae v Hackett (1844) 12 M & W 724, 152 ER 1390; Graves v Legg (1854) 9 Ex
709, 156 ER 304; Scandinavian Trading Co A/B v Zodiac Petroleum SA (The Al Hofuf)
[1981] 1 Lloyd’s Rep 81.
Private Law Library
Page 265
11 Termination
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 277) 11 Termination

A. Termination where Time is of the Essence 11.04
(1) Some preliminary points 11.05
(a) A question of construction 11.06

(b) Presumptions 11.08
(2) Time made expressly of the essence 11.17
(a) ‘Time is of the essence’ 11.19

(b) ‘Condition’ 11.20
(c) Words indicating dependency 11.21
(d) Other formulae 11.22
(e) Expressio unius exclusio alterius 11.23
(a) Time made of the essence by implication of fact 11.26

(b) Time of the essence by implication of law 11.45
(c) Consumer sales contracts 11.49
(4) Relief against forfeiture 11.50
(a) Statutory provisions 11.51
Private Law Library
Page 266
(b) General equitable jurisdiction 11.52
B. Termination where Time is not of the Essence 11.68
11.01 Where the delay has been sufficiently serious, the promisee may seek, in broad
terms, to ‘terminate the contract’ or to treat it as at an end. This situation is categorised in
different ways depending on whether the promisor was legally responsible for the delay. If
the delay was the fault of the promisor, it is a case of discharge by breach.1 If not, it is a
case of discharge by frustration.2 Of course, frustration is not, strictly speaking, a remedy
at all; unlike discharge by breach and the other remedies we have been considering, it does
not involve any choice by the promisee, but takes place automatically by operation of law.3
However, as a matter of practice, a promisee who has been prejudiced by a long delay in
performance may very well seek to avoid his or her obligations by arguing that the contract
has been frustrated. As well as this, in the context of delay discharge by frustration and
discharge by breach tend to merge into one another. In the chapters which follow we shall
therefore be considering both discharge by breach and discharge by frustration, the
present chapter dealing mainly with breach and the next chapter with frustration.
(p. 278) 11.02 As has often been pointed out, the concept of ‘discharge by breach’ is a
misleading one, as in these cases it is not the breach that discharges the contract.4 Rather,
the promisee has a choice whether to terminate or affirm. If the promisee decides to
terminate, the position is as described by Lord Diplock in Moschi v Lep Air Services Ltd;5
both parties are released from their primary obligations under the contract, in so far as
they remain unperformed, but in the case of the promisor these primary obligations are
replaced by a secondary obligation to pay damages, such damages being calculated on the
basis that the contract has been repudiated in its entirety.6 If on the other hand the
promisee decides to affirm, both parties remain bound to perform their primary obligations,
with the promisor being liable in addition to a secondary obligation to pay damages in
relation to any breach that has taken place.
11.03 The question whether a promisee is entitled to terminate for delay in the present
context differs, depending on whether time is of the essence or not. If time is of the
essence, then any failure to perform at the stipulated time will without more entitle the
promisee to terminate the contract and to treat the breach as a repudiation of it by the
promisor.7 If time is not of the essence, termination can only take place where the breach
goes to the root of the contract, so as to deprive the promisee of a sufficiently substantial
part8 of the benefit to which he or she was entitled under the terms of the contract.
A. Termination where Time is of the Essence

11.04 Time may be of the essence to start with or it may subsequently be made of the
essence by notice.9 We have already considered the latter situation,10 so we can now
concentrate on the former. The general rule for when time is of the essence to start with is
as stated by Lord Simon:11
Time will not be considered to be of the essence unless: (1) the parties expressly
stipulate that conditions as to time must be strictly complied with; or (2) the nature
of the subject matter of the contract or the surrounding circumstances show that
time should be considered to be of the essence …
(p. 279) Thus time can be made of the essence expressly or by implication.12 In the pages
which follow we shall be examining both of these situations in detail. We shall also consider
whether in a case where time is held to be of the essence there is still scope for equitable
relief. First of all, however, there are a number of preliminary points that need to be borne
Private Law Library
Page 267
in mind concerning the way in which the court approaches the question of whether time is
of the essence in any given case.
(1) Some preliminary points

11.05 In this section we shall look at time of the essence as a question of construction
before asking whether there is any presumption as to whether time is of the essence or not.
(a) A question of construction
11.06 Time is said to be of the essence where the obligation to perform on time is a
‘condition’ in the sense used by the Sale of Goods Act 1979,13 that is to say, an essential
term of the contract breach of which entitles the promisee to treat the contract as
repudiated.14 Whether timely performance or any other obligation is a condition is a
question of construction. In the words of Bowen LJ:15
There is no way of deciding that question except by looking at the contract in the
light of the surrounding circumstances, and then making up one’s mind whether the
intention of the parties, as gathered from the instrument itself, will best be carried
out by treating the promise as a warranty sounding only in damages, or as a
condition precedent by the failure to perform which the other party is relieved of his
liability.
11.07 Deciding the intention of the parties in the present context is not a purely subjective
matter, but as in relation to the formation of contract generally, depends on the
interpretation of the words used, a matter which is said to be of ‘paramount’ importance.16
As Lord Hoffmann put it:17
(p. 280)
Interpretation is the ascertainment of the meaning which the document would

convey to a reasonable person having all the background knowledge which would
reasonably have been available to the parties in the situation in which they were at
the time of the contract.
The application of this principle has been a matter of contention in recent years, in
particular with regard to the appropriate balance between the words used and the context
in which they are used.18 However, it has also been said that whether the issue is one of
legal effect or linguistic meaning, the task of the court is the same, namely to determine
and give effect to the intention of the parties by reaching a commercially sensible
construction.19 This applies to the question of whether time is of the essence no less than to
any other question of interpretation.
(b) Presumptions
11.08 Much of the law concerning the question whether time is of the essence is expressed
in terms of presumptions.20 The traditional approach is to say that time is presumed to be of
the essence at common law but not in equity, but the picture is rather more complicated
than that.
(i) Common law and equity
11.09 The traditional approach was clearly set out by Barwick CJ in the High Court of
Australia:21
If a party to a contract repudiates it the effect of that repudiation, both at law and
in equity, is that the other party may elect to rescind and on doing so the contract is
at an end. A difference which arose between common law and equity was in the
manner in which each regarded breaches of stipulations as to the time of
performance of certain contracts. At law a failure to carry out the contract on the
Private Law Library
Page 268
day stipulated, if the failure was not due to any default on the part of the other
party in performance of his obligations, was a breach of the contract in one of its
essential terms. In other words, time was of the essence of the contract …
Equity took a different view of the construction and effect of a stipulation as to time.
A stipulation as to time for performance was not in proceedings in equity regarded
as an essential term unless the contract expressly or by implication made it so …
(p. 281) 11.10 We have already examined this concept of the differing presumptions of law
and equity in this respect, which lies at the heart of the old equitable jurisdiction to grant
specific performance to a promisee despite his or her own failure to perform on time.22 The
maxim that time is of the essence at common law but not in equity can be seen in several
old cases23 and commentaries,24 and may even, as we shall see, have a very limited
application in the present law. However, it can no longer be taken at face value, for two
important reasons. First of all, whilst it is undoubtedly true to say that equity traditionally
acted on the view that time was generally of the essence at common law,25 this was by no
means necessarily the case,26 even in relation to contracts for the sale of land.27 Secondly,
since the Judicature Acts, as we have seen, the rules of equity have prevailed in relation to
the construction and effect of time stipulations.28 This means that rather than there being
conflicting presumptions with regard to such stipulations depending on whether the case
was decided at common law or in equity, the same presumptions now apply generally.
(ii) A general presumption
11.11 In construing a contract in a modern case the courts will begin from the
presumption that time is not of the essence. From an historical perspective, as we have
seen, this is based on the requirement in section 25(7) of the Judicature Act 1873 that the
equitable approach to time stipulations is to be applied across the board,29 and is clearly set
out by the House of Lords in United Scientific Holdings Ltd v Burnley Borough Council30
where, as we have seen, Lord Simon gave his approval to a passage from Halsbury
beginning with the words ‘time will not be considered to be of the essence unless …’.
(p. 282) 11.12 This principle has to be seen against the background of the doctrine of
frustrating delay, discussed in the next chapter.31 Given that the promisee may generally
terminate performance for breaches that have a serious effect,32 the main function of
holding time to be of the essence is to allow termination for breaches that do not, and whilst
it may make sound commercial sense to allow cases where the promisee can terminate for
any breach of a given term, be it never so trivial,33 it is not unreasonable to assume that
these will be the exception rather than the rule.34 In other words, given that there is a
general right to terminate performance in cases of frustrating delay, it makes sense for the
courts not to allow termination for lesser delays without good grounds being shown for
doing so.
(iii) Commercial contracts
11.13 A contrary presumption is said to apply to ‘commercial’ or ‘mercantile’ contracts;
here, it is said, time is presumed to be of the essence.35 Thus in the context of one such
contract, a mercantile contract for the shipment of goods, it was said by Lord Wilberforce to
be:36
… clearly essential that both buyer and seller (who may change roles in the next
series of contracts, or even in the same chain of contracts) should know precisely
what their obligations are, most especially because the ability of the seller to fulfil
his obligation may be totally dependent on punctual performance by the buyer.
Private Law Library
Page 269
However, it is not to be thought that only such contracts fall under this heading. As Waller
LJ said in International Asset Control Ltd (t/a IAC Films) v Films Sans Frontieres SARL,37 a
case where the issue was whether time was of the essence in a film distribution
agreement:38
This is not my understanding of the word ‘Mercantile’ and nor would I think it to be
the understanding of those who named the Business Courts the ‘Mercantile Lists’.
‘Mercantile’ is simply another word for Commercial Trading or Business, and a
contract relating to the distribution of films is as ‘Mercantile’ as any other business
contract.
Thus the reasoning has been applied to a voyage charterparty in this connection,39 and the
reasoning of Waller LJ is equally applicable to other contracts of a similar nature.
(p. 283) 11.14 That said, it would obviously be too crude an approach to label a contract as
‘commercial’ or ‘mercantile’ in this context and then draw the conclusion that all terms
relating to time contained therein were presumed to be of the essence.40 One has to look at
the obligation in question.41 After all, nothing could be more ‘commercial’ or ‘mercantile’
than a business contract for the sale of goods, but though the time of delivery in such a
contract is generally of the essence,42 the time for payment is not.43 Moreover, in some
commercial fields there is less need for certainty and more need for flexibility; thus in the
context of redelivery under a time charterparty it was said by the Court of Appeal that the
courts should be reluctant to treat time as of the essence, given that the law had always
regarded such terms as prima facie flexible and subject to a margin of tolerance having
regard to the exigencies of maritime commerce.44 Perhaps the presumption boils down to
no more than this: essential time stipulations are more likely to be found in a commercial
contract than they are elsewhere.
(iv) Time and other stipulations
11.15 It has also been said that time is more likely to be of the essence than other
stipulations in the contract. There are two reasons for this. The first is that, as has been
pointed out, the remedy of damages is not entirely appropriate to a case of delay.45 Where
the promisor agrees to deliver a sound watch and then delivers a faulty one there is a
proportional failure of performance which can adequately be compensated for in damages,
namely either the difference in value between a sound watch and a faulty watch, or the cost
of putting the unsound watch into good order. But where the promisor agrees to deliver a
watch on Monday and then delivers it on Wednesday, different considerations apply.
Damages cannot be assessed in the same way. The cost of cure basis is utterly
inappropriate, as delay is by its very nature incurable. Even the difference in value basis is
not always appropriate; though in some cases as we have seen there will be an
ascertainable loss,46 in others the breach will be (p. 284) purely technical.47 Because of
this, it is not unlikely that the parties will have intended that some other remedy should be
available, and the most obvious one is termination.48
11.16 The other reason for time being more commonly of the essence than other
stipulations is that a time stipulation can only be broken in one way, and that is to be late.49
As we shall see, the greater the variety of possible breaches of a stipulation, the less likely
it is that the parties will have intended to allow for termination for any and every breach.
This can be well illustrated by comparing the owner’s obligation under a charterparty to
have the ship ready for loading by a certain date with the obligation to provide a seaworthy
ship. The former is a condition,50 but not the latter.51 Why the difference? Not because
having the ship ready on time is intrinsically more important than providing one that is
Private Law Library
Page 270
seaworthy, but because seaworthiness is an obligation that can be broken in such a large
variety of ways.52 A time stipulation can only be broken in one way.
(2) Time made expressly of the essence

11.17 Despite some expressions of doubt in the early equity cases,53 there can now be no
doubt that the parties to a contract may, if they so wish, expressly stipulate that time shall
be of the essence. However, there are two possibilities here, one being that timely
performance is made a condition in the full sense, and the other that the promisee simply
has a contractual right to terminate for late performance.54 Though the two may boil down
to the same thing when it comes to the issue of termination, they are by no means identical
in their effect, especially when it comes to the measure of damages available for the
breach.55 We shall therefore confine our discussion in the present context to cases where
time is of the essence in the full sense, and deal with express rights of termination at a later
stage.56
(p. 285) 11.18 To say that time is of the essence in its full sense means that timely
performance by the promisor is a condition of the contract,57 and no precise form of words
is necessary to constitute a condition; rather, whether a particular stipulation in a contract
is a condition depends entirely on the proper construction to be placed on the words in
which it is expressed.58 We shall shortly be examining a number of words and formulae that
have been held to make time of the essence.59 However, four preliminary points must be
borne in mind. First of all it has been said that a court may well be reluctant to make the
question whether time is of the essence or not depend on an excessively pernickety analysis
of the words used in the contract.60 Secondly, it may be unsafe to rely too heavily on an
interpretation of a particular word or phrase given in a very old case, especially one that
was given at a time when the courts had a different attitude to time from that now
prevailing.61 Thirdly, even if time is of the essence, it may not follow that the promisor is
barred from all relief; there may have been a waiver by the promisee,62 or some default on
his or her part such as to prevent strict enforcement of the time stipulation according to its
terms,63 and relief of a more general nature may be available.64
(a) ‘Time is of the essence’
11.19 The best way of making time of the essence is to stipulate in so many words that this
is to be the case.65 However, for a contract merely to say in general terms that time is of the
essence is not enough, if no particular obligation is specified to which the proviso shall
attach. In Fitzpatrick v Sarcon (No 177) Ltd66 a building contract provided that time was to
be of the essence in relation to all time limits specified in the agreement, but it was also
provided that in the event of failure to complete on the due date the developer might serve
on the employer a notice making time of the essence. In the light of this, it was held by the
Northern Ireland Court of Appeal that the clause making time of the essence could not have
been intended to apply (p. 286) in its literal sense.67 In general, while there is no reason to
disregard a statement that the time of performance of a particular stipulation is to be of the
essence, it is not likely that the parties would have intended that there should be a right to
terminate in the event of any delay in performance of any obligation whatsoever.68
(b) ‘Condition’
11.20 Though as we have seen the modern tendency is to define situations where time is of
the essence in terms of the concept of a condition, this does not mean that use of the word
‘condition’ is either necessary or sufficient for this purpose. Thus in Bunge Corporation v
Tradax Export SA69 Lord Wilberforce indicated that time could be made of the essence
without it being expressly stated in so many words that timely performance was a condition
of the contract. Nor will the use of the word be sufficient to achieve that result, as is made
clear by Schuler AG v Wickman Machine Tool Sales Ltd,70 which, while not a case involving
delay, is of great relevance in the present context. In a sole agency contract for the sale of
Private Law Library
Page 271
the claimants’ products, it was expressly stated to be a condition that the agent should visit
certain firms at least once a week to solicit orders.71 Another clause gave the claimants the
right to determine the contract on notice in the event of any ‘material breach’ which the
agent failed to remedy. It was held that the mere fact that the agent had failed to make the
full number of visits as specified did not, without more, entitle the claimants to terminate.
Despite the use of the word ‘condition’, it could not have been the intention of the parties
that the contract could be terminated for failure to make a single visit. Rather, the context
showed that ‘condition’ was used to mean ‘material breach’ under the termination clause.
Though the decision on the particular point has been criticised,72 its main thrust is not
surprising given the many possible meanings of the word ‘condition’ in the law of
contract,73 and it indicates that it will not necessarily be enough for a draftsman who
wishes to make time of the essence simply to use the word ‘condition’ in connection with
the timely performance of the obligation in question.74
(p. 287) (c) Words indicating dependency
11.21 One factor that may make time of the essence is where the promisee’s obligation to
perform is expressly stated to be dependent on timely performance by the promisor. This
can be illustrated by a pair of seventeenth-century charterparty cases. In the first case,
Clarke v Gurnell,75 performance of a promise to sail by the first fair wind was held to be a
condition precedent to the recovery of freight where the money had been promised ‘for
fraight of all the premises’, whereas in the second case, Constable v Cloberie,76 a promise
to sail by the first fair wind without any qualification to the counter-promise was held not to
be a condition precedent. The difference is that in the former case there was something to
link the two counter-promises and in the latter there was not. Again, in Tidey v Mollett77 it
was decided that where the defendant had agreed to take a house ‘in consideration of’ the
claimant completing work on it by a certain day, he was not obliged to take the house where
the work had not been completed promptly. Thus for the contract simply to demand a
speedy performance by the promisor does not necessarily make time of the essence, in the
absence of something to indicate that the promisee’s own obligation is dependent on such
speedy performance being rendered. In Leeds and Hanley Theatre of Varieties v
Broadbent78 a mortgage deed contained an agreement that the principal would not be
payable until the expiry of three years ‘if in the meantime every half-yearly payment of
interest shall be punctually made’. It was held that the principal could be called in when
payment of interest was made nine days late, the use of the word ‘if’ being the key factor in
this context.79 The same would be the case if the promisee’s obligation were said to be
‘subject to’ prompt performance by the promisor,80 or if the words ‘provided that’81 or ‘on
condition that’82 were used.
(p. 288) (d) Other formulae
11.22 The courts have often had to consider the question whether other words or formulae
make time of the essence. As a general rule, it will not be enough merely to indicate that
prompt performance is expected; thus, for instance, such words and phrases as
‘immediately’,83 ‘forthwith’,84 ‘as soon as possible’,85 or ‘delivery dates are material’86 have
generally been held to add no more to the normal obligation to perform within a reasonable
time. It is different if the contract indicates not only that timely performance is important,
but that untimely performance is not acceptable. Thus in Gill v Duffus SA v Société pour
L’Exportation des Sucres SA,87 where a seller of sugar was under an obligation to nominate
a port by a certain date ‘at latest’, the court overruled the arbitrator’s finding that time was
not of the essence on the basis that delays were common in the sugar trade. In the words of
Leggatt J, ‘there are no words in the English language by which a deadline can be
appointed more concisely, more precisely and with more finality than the words ‘at latest’,
and I hold that they mean what they say’.88 Similarly, in First Property Growth Partnership
LP v Sun Alliance Property Services89 time was held to be of the essence of a rent review
clause providing that notice was to be given by the landlord ‘at any time not more than the
Private Law Library
Page 272
expiration of each or any of the following years of the said term that is to say every fifth
year thereof but not at any other time’; though time was not usually of the essence in such
cases, the expression ‘but not at any other time’ firmly indicated the intention of the parties
to fix both a start date and an end date for the giving of the notice.
(e) Expressio unius exclusio alterius
11.23 In deciding the construction of any particular stipulation, the court must look at the
contract as a whole, and the fact that the parties have made some other provision for
termination may indicate that time was not intended to be of the (p. 289) essence. In
Schuler AG v Wickman Machine Tool Sales Ltd,90 as we have seen, one of the clauses in a
distribution agreement provided that it was a ‘condition’ that the defendants’
representative visit firms on a weekly basis to solicit orders. One of the reasons why the
House of Lords decided not to construe this term as a condition in the full sense was that
another clause in the contract gave the claimants the right to terminate the contract if the
defendants failed to remedy a material breach, having been given due notice to do so. This
being so, it could not have been the intention of the parties that the claimants should be
entitled to terminate without notice for failure to make a single visit.91 Again, in Fitzpatrick
v Sarcon (No 177) Ltd it was held that a general provision making time of the essence in
relation to all time limits specified in the agreement had to be read in the light of other
provisions, including a specific provision for the service of a notice making time of the
essence in the event of delay in completion.92 Where a contract specifically makes time of
the essence in relation to certain provisions, this may indicate that time is not of the
essence in relation to other provisions in the same contract.93 In Bovis Homes v Oakcliff
Investment Corporation94 a contract for the sale of land contained a lengthy clause
covering over six pages and containing a number of stipulations, one of which specified a
completion date for certain works to be done on the land. It was held that time was not of
the essence in respect of this date, one of the reasons being that it was specifically stated to
be of the essence in respect of other obligations contained in the clause. In the words of
Harman J:
There is no general Clause in this Contract that time shall be of the essence of all
obligations and Clause 9 itself does not express a general agreement that time shall
be of the essence of the many obligations set out in its sub-clauses. Clause 9.09
expressly provides that time shall be of the essence for obligations set out in certain
specific sub-clauses. On the principle of expressio unius exclusio alterius that points
to time not being of the essence in the other sub-clauses of Clause 9.
11.24 In some cases, however, the fact that time has been made of the essence of other
stipulations but not of the stipulation in question may indicate no more than that the parties
failed to deal with the matter. In The Seaflower95 the defendant owners chartered an oil
tanker to the claimant charterers. The charterparty contained a ‘majors approval’ clause in
the following terms:
Vessel is presently MOBIL … CONOCO … BP … and SHELL acceptable. Owners

guarantee to obtain within 60 (sixty) days EXXON approval in addition (p. 290) to
present approvals … If for any reason, Owners would lose even one of such
acceptances they must advise Charterers at once and they must reinstate same
within 30 (thirty) days from such occurrence failing which Charterers will be at
liberty to cancel charter party.
The owners failed to get the Exxon approval within the time specified, and the question was
whether this also gave the charterers the right to cancel. It was argued that the express
provision that time was to be of the essence in the second part of the clause militated
against it being of the essence in the first part, but this was rejected by the court. Though
time had not been specifically made of the essence of the obligation to obtain Exxon
Private Law Library
Page 273
approval by the given deadline, the clause as a whole, in particular the use of the words
‘guarantee’, and ‘even one’, indicated the crucial importance of the term within the context
of the charterparty, and that timely performance was therefore essential.96
(3) Time made of the essence by implication

11.25 Even where time has not been made of the essence by the express words of the
contract, it may be held to be of the essence by implication. As stated earlier, such
implication can be in fact or by law.97 Time is made of the essence by implication of fact
where it ‘goes without saying’,98 or99 where it is necessary for the business efficacy of the
contract.100 It is made of the essence by law where timely performance of a particular kind
of term in a particular class of contract is always regarded as essential.101 Special mention
must also be made in this connection of the termination rights given in the context of
consumer sales by the Consumer Rights Act 2015.
(a) Time made of the essence by implication of fact
11.26 Time is of the essence, as we have seen, where the nature of the subject matter of
the contract or the surrounding circumstances show that it should be considered to be so.
What this boils down to is that time is construed as being of the essence where it is clear
that the parties, despite not having said so in so many words, (p. 291) would have regarded
timely performance as essential. This can be indicated by a number of different factors.
(i) The nature of the obligation
11.27 Even though time may not be expressly made of the essence, there may be
something in the obligation such as obviously to demand performance on the day stipulated
and no later, and where this is so, time will be of the essence by implication. Thus, though
as we have seen, time is not normally of the essence with regard to the completion of a
conveyance, this presumption is displaced where there is something in the nature of the
property or the surrounding circumstances which would render it inequitable to treat it as a
non-essential term of the contract.102 Thus time will be of the essence when the vendor
knows that the purchaser wants the property for immediate use, as where it is needed for a
private residence,103 or where the purchaser intends to carry on a business on the land.104
The same applies where the obligation is to transfer property of a wasting or rapidly
fluctuating value, such as a reversion,105 or an annuity,106 or a short lease,107 or stocks and
shares.108 It has been argued that the same reasoning underlies the presumption that time
is of the essence in a commercial or mercantile contract;109 where property is sold to be
used in commerce or business rather than for private consumption or use, it is likely that
the buyer will have arranged his or her affairs, and in particular made other contracts, on
the assumption that the property would be delivered on the date specified.110 Of course, as
we have seen, the mere fact that a contract can be labelled as ‘commercial’ does not
necessarily mean that time is of the essence with regard to all its obligations;111 rather, one
must look at each obligation individually and ask whether it is one of a kind where timely
performance is clearly necessary.
(p. 292) (ii) The breadth of the obligation
11.28 We have already noted that the courts tend to look with suspicion on express
termination clauses drafted in wide terms; while it is not unlikely that the parties intended
to make time of the essence in respect of one or more key obligations under the contract, it
is less likely that they intended to allow the contract to be determined for delay in relation
to any stipulation whatever.112 The same reasoning applies with regard to the question
whether time is of the essence by implication; this is less likely to be the case when the
obligation in question is drafted in wide terms. In Bovis Homes Inc v Oakcliff Investment
Corporation113 the question arose whether time was of the essence of the completion date
of a contract whereby the defendants agreed to purchase a plot of land and construct
Private Law Library
Page 274
buildings on it. One of the reasons for holding that time was not of the essence was that the
clause in question was one of very wide ambit. In the words of Harman J:
In considering whether time is of the essence of a term in a contract the Court must
bear in mind the nature of the obligation imposed by the term. If the term requires
a single act to be done it is easier to conclude that the time for doing the required
act may be of the essence of the term.
In the present case, however, the clause in question provided not only for completion of the
development works within three years, but also that the works should be done in a
substantial and workmanlike manner, with materials of good quality, and in conformity with
the relevant planning approvals and byelaws. This meant that breaches of the clause could
occur in a number of different ways wholly unrelated to time. As was said in Etzin v
Reece,114 where a contractual provision embraces a wide variety of matters, ranging from
the critically important to the relatively trivial, it is difficult, if not impossible, to impute to
the parties a common intention that any failure to carry out any of the obligations diligently
and promptly, however insignificant the breach and however trivial the consequences, is to
be treated without more as a repudiatory breach of an essential term.115
(iii) Relationship with other obligations
11.29 When timely performance by one party to the contract is necessary to ensure timely
performance by the other, the courts will be more ready to construe the former as essential.
Thus in Toepfer v Lenersan-Poortman BV116 a c.i.f. contract for the sale of rapeseed
provided for payment of ‘net cash against documents and/or delivery order on arrival of the
vessel at port of discharge but not later than 20 days after date of Bill of Lading’. The bill of
lading was issued on 11 December but delivery orders were not tendered to the buyer until
the following February. It was held that the buyer was entitled (p. 293) to reject the
documents; the clause bound both seller and buyer and time was of the essence, the buyer’s
obligation to pay being dependent on a prompt tender by the seller. For this reason terms
requiring prompt nomination or notification are often construed as conditions,117 as the
obligations of the other party cannot be carried out until the nomination is made. In the
same way it has been held that time is more likely to be of the essence of a rent review
clause where the provisions contain a ‘break clause’ giving the tenant the right to surrender
the lease by a certain date if he or she is unwilling to pay the revised rent.118 Obviously, it
would defeat the purpose of such a clause if the landlord was allowed to have the rent
reviewed when it was too late for the tenant to exercise the option to surrender. In the same
way, where a shipbuilding contract gave the buyer an option to purchase an extra vessel,
and provided for the simultaneous payment of a commitment fee, time was held to be of the
essence of the payment no less than of the option.119
11.30 Just as untimely performance by the promisor may affect the promisee’s ability to
perform properly under the same contract, so it may affect his or her obligations under a
different contract. This can best be illustrated by commercial contracts for the sale of
goods; here as we have seen time tends to be of the essence, as it is likely that the goods
will be resold by the buyer.120 In the same way, where the contract is one in a long ‘string’,
in which the seller is buyer and the buyer seller under other contracts, the courts will
generally insist on timely performance on the ground that to do otherwise would disrupt the
entire string.121 Conversely, time will not generally be of the essence where the contract is
for the sale of a specific article which is to be used by the buyer for his or her own
purposes.122 In (p. 294) the same way the time of payment is not normally of the essence, as
there is not going to be another contract involving the identical money.123
(iv) Options
Private Law Library
Page 275
11.31 Prior to the 1970s there was a clear rule about time limits in unilateral contracts
and options. Whatever the rule may have been with regard to bilateral or ‘synallagmatic’
contracts, time was always of the essence for the exercise of an option or unilateral
contract. Thus, if A promised B that he would pay B £500 on a certain date in return for a
certain consideration, time may not have been of the essence, but if A promised B that he
would pay B £500 if he walked to York by a certain date, time was always of the essence. If
B arrived a day late, A would not have to pay B anything. This strict rule was justified on the
ground that since B had no obligation to walk to York, A’s only remedy for the delay was to
refuse performance.124 Thus in Hare v Nicoll,125 where a contract for the sale of shares
gave the seller an option to repurchase by notice given before 1 May 1963, a single day’s
delay was held to debar him from exercising the option, it being said that such options
being a species of privilege for the benefit of the party on whom they were conferred, it was
for that party to comply strictly with the conditions stipulated for their exercise.126 Again, in
United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd,127 a contract
involving the hire purchase of an aeroplane, a finance company was debarred by delay from
invoking a ‘recourse agreement’ whereby they could call upon the sellers to repurchase the
aeroplane in the event of premature termination of the hire purchase agreement with the
airline company. It was held by the court that it was now far too late for the option to be
exercised, one of the reasons given being that it was in the nature of a unilateral offer that
could only be accepted in accordance with its exact terms. In the same way, Lord Jenkins in
the Privy Council case of Aberfoyle Plantations v Cheng128 was careful to stress that where
a conditional sale fixed a date for the completion of the sale, the condition had to be fulfilled
on that date, and the time allowed was not to be extended by reference to equitable
principles.129 Time might not normally be of the essence, but as far as options were
concerned a miss was as good as a mile.130
(p. 295) 11.32 While this still holds good as a general principle, the waters have been
muddied to some extent by a long line of rent review cases. All of these have concerned
provisions in a lease giving machinery whereby the rent can be adjusted. Typically these
involve the service by the landlord of a ‘trigger notice’ indicating what the landlord wants
the new rent to be. After this, the tenant can serve a counter-notice suggesting a lower
figure. If the parties cannot then agree on the new rent, there is often provision for
arbitration, and also in some cases a ‘break clause’ giving the tenant the power to
surrender the lease if he or she cannot afford the new rent. The question the courts had to
answer was whether time limits set for the giving of the relevant notices in such provisions
were of the essence or not.
11.33 Initially the courts took the orthodox view that since neither the landlord nor the
tenant had any obligation to serve a notice, the right to do so was in the nature of an option
for which time was of the essence. Thus in Samuel Properties (Developments) Ltd v
Hayek,131 which involved the service of a landlord’s trigger notice a month and more out of
time, the Court of Appeal decided that since the landlord had no obligation to raise the rent
he could not exercise the option to do so by service of the notice, save by strict adherence
to the timetable set out in the contract. However, there was a departure from this view in
Bailey v Memorial Enterprises Ltd,132 where the contract simply provided for the fixing of a
‘market rental value’ on a certain date but made no provision for the rent otherwise. It was
held that the landlords had not lost their right to increase the rent simply because it had
not been fixed on the day specified.133 Accordingly, the time limit was not of the essence.
The same decision was reached in Kenilworth Industrial Sites v EC Little & Co Ltd,134
where the contract expressly provided that failure to serve the trigger notice on time would
not render void the right of the landlord to require the determination of a new rent.
Commenting on these cases in Mount Charlotte Investments v Leek and Westbourne
Building Society,135 Templeman J considered a possible distinction between clauses which
constituted an option to the landlord to obtain a higher rent, where time was of the essence,
Private Law Library
Page 276
and those where the clause created an obligation on the landlord (and possibly on the
tenant as well) to take the steps necessary to determine what the new rent was going to be,
where time was not of the essence. However, he went on to criticise this analysis as
constituting a triumph of theory over realism. In reality, he said, it was nonsense to talk of
(p. 296) the tenant granting the landlord an option, since it would have been the landlord
who insisted on the clause going in in the first place.136
11.34 The matter was finally resolved by the House of Lords in United Scientific Holdings
Ltd v Burnley Borough Council137 where a different distinction was drawn. On the one
hand, there are true options, which involve the creation of a new contract between the
parties, or the extinction of an old one – for instance, options to renew a lease, or to
purchase the reversion; here time is of the essence. On the other hand, there are cases
where the so-called option merely involves the variation of the obligations under an existing
contract; here the general presumption applies whereby time is not of the essence. Since
rent review provisions of the type presently under discussion merely regulate the
obligations under a lease which already exists, time is not generally of the essence.138 In
the years which followed, the rent review clause proved to be a fertile mother of actions,
and there was a veritable torrent of litigation in the area,139 which has only been stemmed
by the recent slowdown in inflation. However, the general principles laid down by the
House of Lords in United Scientific Holdings Ltd v Burnley Borough Council have not been
departed from. In particular, it is now settled that time is presumed not to be of the essence
with regard to rent review clauses, though the presumption (p. 297) can be rebutted by: (1)
any contra-indications in the express words of the lease; (2) any contra-indications in the
inter-relation of the rent review clause and other clauses in the lease; and (3) the
surrounding circumstances.140
11.35 It is by no means easy to distinguish in this context between the creation of a new
contract and the continuation of an old one. One can see why an option to purchase the
reversion might be regarded as a new contract, as a lease becomes a sale, but what about
the renewal of a lease? The word ‘renewal’ suggests something new, but as in the case of
rent review clauses there is no different contractual relationship; the parties continue as
landlord and tenant.141 And would the position be any different if the option was expressed
as being one not for the renewal of the lease, but for its extension? Does a yearly tenancy
involve the creation of a new contract each year, or the continuation of an old one? To make
the obligations of the parties depend on such niceties does no credit to the law. Nor is it
convincing to distinguish rent review provisions from true options on the ground that they
benefit the tenant as well as the landlord, it being said that the tenant would have been
given a shorter lease or charged a higher rent if there was no machinery for review in
place.142 This proves too much; after all, no businessman inserts a term into a contract
purely for the benefit of the other, and even the most obvious options must be seen as part
of the agreed bargain between the parties, and therefore to that extent for the benefit of
both sides.
11.36 A more satisfactory ground for the decision in United Scientific Holdings Ltd v
Burnley Borough Council would be that in both of the appeals under consideration in that
case the tenant had a remedy other than to refuse to have the rent reviewed altogether. In
United Scientific Holdings Ltd v Burnley Borough Council itself, where the landlord’s delay
was in applying for an arbitration, the tenant too could have applied.143 Similarly in
Cheapside Development Ltd v Messels, the second appeal, where the delay was in serving a
trigger notice, it was held that the tenant could have served a notice making time of the
essence.144 The point is that there is less need to make time of the essence where some less
drastic remedy is available, and this is a matter to which we must now turn.
Private Law Library
Page 277
(v) Availability of other remedy

11.37 The courts will be more likely to hold that time is of the essence where there is no
other remedy available for the delay, and thus the injured party can only protect his or her
interests by refusing (p. 298) performance. Thus in the early case of Lock v Wright,145 the
defendant covenanted by deed poll to pay a sum of money on a certain day when the
claimant should have transferred some stock to him. There was no counter-promise to
transfer the stock, and accordingly it was held that the claimant could not sue on the
promise without averring tender or delivery of the stock. Since the defendant could not sue
for delivery, his sole remedy was to refuse payment. This, as we have seen, is the reasoning
behind the traditional attitude of the courts whereby time is generally of the essence of an
option; since the holder of the option is under no obligation for which he or she can be held
liable, the only way the courts can protect the other party is to insist that the option can
only be exercised according to its terms.146 In the same way, it can be argued that one of
the reasons why the remedy is so often discussed in relation to time stipulations is that
delay frequently causes no economic loss, so that the courts are faced with the choice
between ignoring the stipulation altogether and allowing the injured party to terminate.147
11.38 It is different where the contract provides some other remedy for the delay. In
Lamprell v Billericay Union148 the provision of liquidated damages for the delay was one
reason why the courts refused to make time of the essence for the date of completion, and
in Inman SS Co v Bischoff 149 the House of Lords held that the efficiency and seaworthiness
of the ship was not a condition precedent to the owner’s right to recover freight under the
charter, since the contract already provided for deductions of freight in this event. Again, in
Aktielskabet Reidar v Arcos Ltd150 it was said by Sargant LJ that one of the functions of a
demurrage clause in a charterparty was to indicate that unpunctuality in loading was not of
the essence so as to entitle the owners to withdraw the ship.151 The point is that there is no
need to invoke the drastic remedy of termination where some lesser remedy will suffice.
11.39 It is therefore significant in this context that the courts have taken a much less rigid
line with regard to time stipulations in rent review cases since deciding that other remedies
are available to a party aggrieved by delay in this connection.152 Originally, as we have
seen, such provisions were construed as options in the strict sense, the reasoning being
that since neither party was under any obligation to have the rent reviewed, the only
safeguard against undue delay was to insist on strict (p. 299) compliance with the time
limits set out in the contract.153 However, the courts have taken a more relaxed attitude
since deciding that other remedies are available to the aggrieved party; thus, for instance,
in some cases the party in question can initiate the review on his or her own account,154
whilst in other cases a notice can be served making time of the essence.155 Where delay can
be dealt with in this way, there is less need to apply the strict rules relating to the exercise
of options.
(vi) Commercial common sense
11.40 In some of the cases the courts invoke the canons of ‘commercial common sense’,
asking whether it can possibly have been the intention of the parties that the promisee
should be entitled to call off the contract for a trivial delay in performance by the promisor.
This sort of reasoning has a long pedigree; as long ago as Boone v Eyre156 Lord Mansfield
refused to allow the seller’s lack of title to the slaves to prevent him recovering his annuity
despite the words of the contract that seemed to suggest complete performance as a
condition precedent,157 saying that if the purchaser’s plea were allowed lack of title to a
single slave would be a bar to the action. In the same way we see the majority of the House
of Lords in Schuler AG v Wickman Machine Tool Sales Ltd158 arguing that it could not have
been the intention of the parties that the customer should be able to cancel the contract
just because the distributor’s agent failed to make a single one of the prescribed calls.159 In
Universal Bulk Carriers Ltd v Andre et Cie160 the question was whether a term in a voyage
charterparty whereby the charterers were to give a notice narrowing the laycan spread
Private Law Library
Page 278
thirty-two days prior to the first layday was a condition breach of which entitled the owners
to cancel the charterparty. The Court of Appeal held that, given that the charterparty could
be performed in accordance with its terms whether or not the notice was given, it was
unlikely that the clause was intended as a condition; it made no commercial sense to hold
that the parties intended that the owners should be able to treat the whole contract as at an
end if the notice was served two days late.161 As Lord Diplock stated in another context, ‘if
detailed and syntactical analysis of words in a commercial contract is going to lead to a
conclusion that flouts business common-sense, it must be made to yield to business
common-sense’.162
(p. 300) 11.41 This factor may explain some very lax decisions of the courts with regard to
untimely performance. Thus in Mecca Leisure Ltd v Renown Investments (Holdings) Ltd,163
a tenant was allowed to serve a counter-notice disputing the rent set by the landlord despite
the time limit for service of such notice having passed, and despite a clear provision in the
contract that in the event of the tenant’s failure to serve a timely counter-notice the rent
was deemed to be that set by the landlord.164 The Court of Appeal held that the
presumption that time was not of the essence had not been rebutted, May LJ remarking that
even though such a finding substantially altered the contractual obligations of the parties,
the potential detriment to the tenant in allowing the ‘deeming’ clause to operate strictly far
outweighed any disadvantage to the landlord in allowing room for flexibility.165 In
Metrolands Investments Ltd v JH Dewhurst Ltd,166 rent review provisions provided for the
landlord to serve a ‘trigger notice’ and for the matter to go to arbitration if necessary,
coupled with a ‘break’ clause giving the tenant power to determine the lease by a certain
date if he was not prepared to pay the revised rent. Normally, as we have noted,167 the
presence of such a clause would have made time of the essence, and indeed this was what
was decided at first instance.168 But the Court of Appeal held that time was not of the
essence here; once again, this result was reached after applying the balance of
disadvantage between the landlord and the tenant in the case in question.
11.42 However, there is a danger in the courts looking too closely at the balance of benefit
and detriment in individual contracts, for if pressed too far it would lead to the total
abandonment of essential time stipulations, and indeed of the notion of a contractual
condition in general. After all, in any case where delay is so protracted as to deprive the
promisee of the benefit of the contract, performance can already be terminated either for
frustrating breach or under the doctrine of frustration proper.169 The only situation where
time has to be construed as essential is where the delay has caused only minor loss to the
promisee, or indeed no loss at all. In such a case, making time of the essence has to be
justified by other factors. For this reason it has been said that judges (p. 301) should be
slow to invoke their own ideas of commercial common sense in relation to contracts, if only
because different aspects of commercial common sense point in different directions.170
Commercial common sense might suggest that a party should not lose all of his or her
rights under a contract merely as a result of doing something outside the time stipulated,
but contracts frequently do so provide, no doubt because of the desire for certainty. In such
cases there is no room for the party in default to invoke business common sense as a reason
for extending time.171
(vii) Non-commercial contracts
11.43 A broad approach to the matter of time stipulations may also be possible in a non-
commercial context. In White v Riverside Housing Association Ltd172 a tenancy agreement
gave the association the right to increase the rent by giving four weeks’ notice, and went on
to say that in the event of such an increase the rent would be increased annually with effect
from the first Monday in June. The normal practice was for the rent increase to be triggered
in the spring of each year, but in 2000 this was not done for policy reasons. However, in
February 2001 the association decided to increase the rent after all, and served a notice
purporting to trigger a rent increase as from the beginning of April. Similar notices were
Private Law Library
Page 279
then served in 2002, 2003, and 2004. In subsequent possession proceedings for arrears of
rent the question arose whether these notices were valid, it being argued that they were all
out of time. It was held by the County Court judge that time was not of the essence here,
but Lord Neuberger, giving the judgment of the Supreme Court, held that this question did
not really arise until the meaning of the contract had been discerned.173 The concept of a
moveable rent review date would certainly have been odd in the commercial context, but
this was not a case involving a commercial rent review clause, but one involving a social
landlord with relatively poor tenants.174 In the end it was decided that the most sensible
interpretation of the contract was to say that the landlord had one chance to increase the
rent each year beginning on the first Monday in June, provided that due notice was
given.175
(viii) Executed and executory contracts
11.44 It has been pointed out that ever since Boone v Eyre176 termination has been more
readily allowed where the contract is purely executory than where it is executed.177 This
result arises naturally from (p. 302) the test adopted in that case; a covenant, whether
relating to time or otherwise, is less likely to be held to ‘go to the entire consideration’
where despite its breach the promisee has received some, if not all, of the benefit of the
contract.178 This consideration may well explain why the courts have traditionally taken a
much stricter approach to time stipulations in ‘commercial’ or ‘mercantile’ contracts than in
building contracts or conveyances, where there is a greater risk of unjust enrichment or
forfeiture.179 However, this kind of analysis must be used with caution; the question
whether time is of the essence or not, as we have seen, is one of construction, and this
cannot vary depending on whether benefit has or has not been received.180 However,
‘execution analysis’ can be relevant in other ways. Thus, as we have seen, a party who
voluntarily accepts the benefit of a delayed performance may be held to have waived the
right to terminate for the delay or to have elected to affirm the contract.181 As well as this,
a promisee who has received no benefit at all as a result of the delay may be able to argue
that the promisor has committed a breach going to the root of the contract, or alternatively
that the contract has been frustrated. We shall be considering this in more detail in the next
chapter.182
(b) Time of the essence by implication of law
11.45 It has often happened that commonly recurring contractual terms of a certain kind
have, as the result of a series of decisions, crystallised into conditions. Indeed, this is
exactly what happened in relation to the best-known examples of conditions, that is to say
the implied conditions as to title, correspondence with description, and quality now found in
the Sale of Goods Act 1979.183 The same process can be seen in relation to certain time
stipulations. Thus in 1841, in the case of Glaholm v Hays,184 it was held that a provision in a
charterparty that the ship should sail for the loading port on a certain day was to be
construed as a condition precedent, the grounds being that the language of the contract
suggested it and that the whole success of the adventure depended on the timely sailing of
the ship. Six years later, in Ollive v Booker,185 a similar term was held again to be a
condition, both on the merits and on the authority of Glaholm v Hays. When the issue came
up a third time two years after that, in Oliver v Fielden,186 there was no need to discuss the
construction of that particular term in the individual contract; (p. 303) the matter it was
now settled by Glaholm v Hays and Ollive v Booker. After that, despite some doubts on the
subject,187 it became settled that terms of this sort were invariably conditions,188 and so it
remains.189
11.46 The same process can be seen at work in relation to time stipulations of other kinds.
Thus it is now settled that a statement in a charterparty that the ship is ‘expected ready to
load’ on a certain day is a condition of the contract,190 as is the time of nomination of a
vessel in an f.o.b. contract.191 In the same way, where it is specified that goods have been or
are to be shipped at a certain time goods which are shipped at another time do not
Private Law Library
Page 280
correspond with the contract description and can be rejected by the buyer.192 Again, it is
now settled that in a sale of goods the time set for the delivery of the goods is generally of
the essence in the commercial context,193 though the time of payment is not.194 No doubt
the essentiality of time in such cases can normally also be (p. 304) justified on the merits,
but with each succeeding decision this becomes less and less important, and the weight of
previous authority more and more important. Where time was previously construed as of
the essence by implication of fact, it is now construed as of the essence by implication of
law.
11.47 This designation of certain types of term as being invariably conditions without any
reference to the particular contract in which they occur can be criticized on the ground that
it enables the promisee to terminate performance on the ground of delays or other defaults
in performance which have caused no prejudice whatsoever, and merely provide an excuse
for getting out of what has become an unprofitable bargain.195 In The Diana Prosperity196
the charterers of a new oil tanker refused to take delivery on the ground that the tanker
had not been constructed at the shipyard specified in the contract, and therefore did not
comply with the contract description. There was no suggestion that this discrepancy made
any practical difference to the charterers, but the market had collapsed since the contract
was made and they were anxious to escape from what had become a very bad deal.197
However, it was held by the House of Lords that the words in the contract regarding the
place of construction were not and had never been intended to be part of the contract
description; rather, they were a mere label or means of identification.198 At the same time
Lord Wilberforce indicated that the time might have come to reconsider some of the older
cases on the point, which he described as excessively technical in their approach.199
Though this was not a case involving a time stipulation, it has been suggested that the same
strictures apply to some of the early cases decided in this context,200 and that the
classification of such stipulations as conditions on the basis of previous authority can no
longer be taken for granted.201
11.48 One of the main justifications for allowing a party to terminate for breach of
condition is that performance should not be due when he or she promised to do so only in
the event of a condition being fulfilled, and that condition has not been fulfilled. This
argument of course has less weight when the condition is designated as such, not on the
grounds that the parties to the individual contract intended this to be so, but because
previous authority indicates that such terms are always conditions.202 As against this there
must be set the need for certainty (p. 305) and predictability in such standard mercantile
contracts as charterparties and the sale of goods.203 Cases which establish that a particular
kind of term in a particular kind of contract is a condition, whether this term relates to time
or otherwise, are covered by the doctrine of precedent as much as any other case, and to
this extent time will often still be of the essence by implication of law.
(c) Consumer sales contracts
11.49 Special provisions for termination in the context of sales contracts are now largely
to be found in section 28 of the Consumer Rights Act 2015, which applies generally to
contracts between a consumer and a trader for the supply of goods, digital content, and
services.204 Where a time is agreed for the delivery of the goods, then the goods must be
delivered at that time; in other cases, the goods must be delivered without undue delay, and
in any event no more than thirty days after the date the contract was entered into.205 If
these obligations are not met, the consumer has a right to terminate or ‘treat the contract
as at an end’ in three cases,206 one being where the trader has refused to deliver the goods
at all,207 one being where delivery of the goods at the agreed time or within the agreed
period is essential taking into account all the relevant circumstances at the time the
contract was entered into,208 and one being where the consumer told the trader before the
contract was entered into that timely delivery was essential.209 In other cases the consumer
may specify a period that is appropriate in the circumstances and require the trader to
Private Law Library
Page 281
deliver the goods before the end of that period, and if the goods are not delivered within
that period, then the consumer may treat the contract as at an end.210 This is to all intents
and purposes a statutory notice making time of the essence.211
(4) Relief against forfeiture

11.50 One of the objections to the law allowing time to be made of the essence regardless
of the consequences of the breach is that it allows the promisee to terminate performance
for reasons unrelated to any prejudice he or she may have suffered by reason of the delay;
rather, it is often merely an excuse for escaping from an unprofitable bargain.212 It is
therefore not surprising that in some cases the law provides relief in cases of this sort. We
must distinguish in this context between (p. 306) statutory provisions of this sort in the
context of landlord and tenant on the one hand, and the general jurisdiction of equity on the
other.
(a) Statutory provisions
11.51 One of the most common situations where strict enforcement of time stipulations
may work harshly is as between landlord and tenant, and for this reason the power of the
landlord to forfeit the lease in the event of breach has long been restricted by statute.
Where the breach consists of the non-payment of rent, a measure of relief is given by the
Common Law Procedure Act 1852. This provides that in any case where rent is six months
or more in arrear, and the landlord brings an action for ejectment, the tenant may have the
proceedings discontinued at any time up to the trial of the action on payment of the arrears
and costs.213 In relation to other breaches of covenant in a lease, the Law of Property Act
1925 provides that a right of re-entry or forfeiture shall not be enforceable by the landlord
without service of a notice on the tenant: (1) specifying the particular breach complained
of; (2) requiring the tenant to remedy the breach where this is possible; and (3) requiring
the tenant to pay compensation for the breach.214 A full explanation of these provisions can
be found in the specialised textbooks.215
(b) General equitable jurisdiction
11.52 Quite apart from these statutory provisions, it has long been recognised that equity
has a general jurisdiction to relieve against forfeiture for breach in cases where the
promisee could be adequately compensated in some other way.216 The history of this
jurisdiction is complex,217 but following the case of Hill v Barclay218 in 1811 it was thought
to be limited to two specific cases, the first being where the right of forfeiture was inserted
by way of security for payment of a specific sum of money, and the second where the breach
was occasioned by fraud, accident, mistake, or surprise.219 In particular, no relief was
possible where the breach was wilful and deliberate,220 and it was not relevant for the
promisor to show merely that (p. 307) the forfeiture would involve unjust enrichment by the
promisee, as for instance where the promisor had done work on the land prior to
forfeiture.221
11.53 However, in 1973 a broader principle was enunciated by the House of Lords in
Shiloh Spinners Ltd v Harding.222 In this case the claimants were the tenants of a mill, who
had assigned part of their interest in the adjoining buildings to a company.223 The assignees
covenanted, among other things, to keep part of the premises in good repair so as to
provide support and protection for the buildings retained by the claimants. Later on,
however, the assignees transferred their interest to the defendant, who then proceeded to
carry out demolition works in defiance of the terms of the covenant. The claimants now
sought to exercise their powers of re-entry for breach of covenant, whilst the defendant
argued that this would involve an unjust forfeiture of his interest. Considering the
principles to be applied to the case, the House of Lords refused to confine the jurisdiction of
Private Law Library
Page 282
equity with regard to relief against forfeiture within the narrow bounds set by Lord Eldon in
Hill v Barclay.224 In the words of Lord Wilberforce:225
… it remains true today that equity expects men to carry out their bargains and will
not let them buy their way out by uncovenanted payment. But it is consistent with
these principles that we should reaffirm the right of courts of equity in appropriate
and limited cases to relieve against forfeiture for breach of covenant or condition
where the primary object of the bargain is to secure a stated result which can
effectively be attained when the matter comes before the court, and where the
forfeiture provision is added by way of security for the production of that result. The
word ‘appropriate’ involves consideration of the conduct of the applicant for relief,
in particular whether his default was wilful, of the gravity of the breaches, and of
the disparity between the value of the property of which the forfeiture is claimed as
compared with the damage caused by the breach.
In his turn Lord Simon stated an even broader principle, saying:226
… equity has an unlimited and unfettered jurisdiction to relieve against contractual

forfeitures and penalties. What have sometimes been regarded as fetters to the
jurisdiction are, in my view, more properly to be seen as considerations which the
court will weigh in deciding how to exercise an unfettered jurisdiction.
11.54 In the end, however, it was held that on the merits the defendant was not entitled to
the relief sought given that: (1) there had been clear and wilful breaches of covenant which,
whilst individually not serious, were certainly substantial; (2) the defendant had
demonstrated a continuing disregard of the claimants’ rights over (p. 308) a period of time;
(3) there was no evidence that the defendant was able and willing speedily and adequately
to make good the consequences of his default; and (4) the defendant had failed to show any
such disproportion between the expenditure required and the value of the interest involved
as to amount to a case of hardship sufficient to justify the granting of the relief sought.227
11.55 To what extent does this apply to termination for breach of an essential time
stipulation? There were dicta suggesting that equity might be able to relieve against
forfeiture in such cases,228 but the matter came before the House of Lords in The
Scaptrade,229 where the owners of a time chartered ship sought to exercise a contractual
right of withdrawal for failure to pay hire on time. Rejecting the charterer’s contention that
equity might grant relief in this situation, Lord Diplock described the broad remarks of Lord
Simon in Shiloh Spinners Ltd v Harding230 as a ‘beguiling heresy’,231 and said that the
statements of Lord Wilberforce in that case had not been intended to apply to contracts not
involving the transfer of proprietary or possessory rights.232 The facts of the present case
involved an ordinary time charter, which gave the charterer no interest in or right of
possession to the vessel but was merely a contract for services.233 Lord Diplock added that
to grant the relief sought would be equivalent to allowing specific performance for a
contract of service, something which the courts had always been reluctant to do.234
11.56 Another factor that militates against the availability of relief in this type of case is
the need for certainty in commercial transactions. This was well expressed in The
Scaptrade by Robert Goff LJ in the Court of Appeal. His words deserve to be cited at length
in this connection.235
Indeed, when we come to consider the nature of a contract such as a time charter,
and the circumstances in which it is likely to be made, we see the most formidable
arguments against the proposed extension of the equitable jurisdiction. In the first
place, a time charter is a commercial transaction in the sense that it is generally
entered into for the purposes of trade, between commercial organisations acting at
arm’s length. It is for the parties to bargain about the terms of the contract. They
Private Law Library
Page 283
can bargain not only about the form of charter to be used; they can also bargain
about any amendments to the standard form, and about the rate of hire to be paid
having regard to the other terms of the contract agreed between them. Parties to
such contracts should be capable of looking after themselves: at the very least, they
are capable of taking advice, and the services of brokers are available, and (p. 309)
are frequently used, when negotiating terms. The possibility that shipowners may
snatch at the possibility to withdraw ships from the services of time charterers for
non-payment of hire must be very well known in the world of shipping; it must also
be very well known that anti-technicality clauses are available which are effective to
prevent any such occurrence. If a prospective time charterer wishes to have any
such clause included in the charter, he can bargain for it: if he finds it necessary or
desirable to agree to a charter which contains no such clause, he can warn the
relevant section of his office, and his bank, of the importance of securing timeous
payment.
11.57 It is now clear that the jurisdiction of equity in the present context is limited, as is
stated by Lord Diplock, to contracts involving the transfer of proprietary or possessory
rights.236 Mostly these will involve the transfer of an interest in land, but this need not
necessarily be so;237 thus it has been held that relief can be granted in the context of a
charterparty by demise,238 and it may equally be available in contracts for the lease or hire
of other chattels.239
11.58 A more tricky question concerns the extent to which the equitable jurisdiction is
engaged generally by the strict enforcement of time stipulations in contracts for the sale of
land. The law in this area is highly complex and difficult, and even a broad brush review
requires a fairly thorough analysis of the authorities. The traditional view is that equity has
no jurisdiction to grant relief where the parties have made time of the essence,240 but this
can lead to unfair results, especially in cases where the purchaser has done work on the
land prior to termination. In Re Dagenham (Thames) Dock Co, ex parte Hulse241 a company
agreed in a contract signed in 1865 to purchase land for the construction of a dock, and
were let into possession to undertake the works. The contract provided for the payment of
the purchase price in two instalments, half in advance and the other half on completion.
Time was stated to be of the essence, and the vendors were given the power in the event of
default by the purchasers to re-enter and take possession of the land and of any works done
thereon, and also to forfeit any instalments of the purchase price that may have been paid.
The completion date was ultimately (p. 310) extended to November 1869, but the company
failed to complete the works and was eventually wound up without the final instalment of
the price ever having been paid. The vendors sought to exercise their power of re-entry, but
this was disallowed by the court on the grounds that this would amount to the enforcement
of a penalty. The decision is somewhat unorthodox, but is not surprising on the facts. For
one thing, if the court had not granted relief the vendors would have been able: (1) to
terminate the contract; (2) to recover the land with all the work done on it; and (3) to forfeit
half of the purchase price! As well as this, the vendors had rejected a suggestion made by
the Master of the Rolls at first instance that the land be sold and payment made out of the
proceeds. In essence, they were seeking to make a windfall out of the breach.
11.59 The Dagenham Dock case was followed by the Privy Council in Kilmer v British
Columbia Orchard Lands Ltd,242 a case involving the sale of a plot of land by instalments.243
Time was made expressly of the essence, and the contract provided that in the event of
default by the purchaser the vendor should be entitled to terminate and forfeit any
instalments paid. The purchaser paid the deposit and went into possession, but was then
unable to pay the next instalment on time. An extension of time was granted, but when this
was not met the vendor sought to cancel the contract and to invoke the forfeiture clause.
The purchaser then paid the late instalment into court and counterclaimed for a decree of
specific performance. In their arguments the parties concentrated on the issue whether the
Private Law Library
Page 284
provision making time of the essence had been properly waived by the vendor,244 but the
Privy Council, whilst upholding the decision of the trial judge to grant specific performance,
decided for the purchaser on the ground that the clause allowing for forfeiture of
instalments was equivalent to a penalty.245 The fact that waiver was not referred to by the
Board in its opinion has since been taken as an indication that it was not seen as
important,246 but in the later decisions in Steedman v Drinkle247 and in Brickles v Snell248
the Kilmer case was explained and distinguished on this very ground. The point is an
important one, because if the case was not decided on the basis of waiver Kilmer v British
Columbia Orchard Lands Ltd is authority for the proposition that equity will sometimes
grant specific performance even to a party in breach of an essential time stipulation.249
(p. 311) 11.60 Further support for this proposition can be found in the controversial
decision of the High Court of Australia in Legione v Hateley.250 A contract for the sale of
land signed in July 1978 provided for completion on 1 July 1979. Time was stated to be of
the essence, and the vendor was given the right to rescind the contract and forfeit the
deposit in the event of the purchaser’s default in this matter. However, the contract also
specified that neither of the parties could enforce their rights thereunder without serving a
notice of default giving the other party fourteen days to remedy the matter. The purchaser
paid a deposit, was allowed into possession, and proceeded to construct a house on the
property. Unfortunately he then got into financial difficulties and failed to complete on time.
The vendor served a notice as required by the contract on 26 July 1979. On 9 August, the
last day for completion, the purchaser contacted the vendor’s solicitor by telephone and
was put in touch with the clerk who was handling the matter. He told the clerk that he was
ready to settle on 17 August, to which the clerk gave a non-committal reply. On 14 August
the vendor sought to rescind the contract and forfeit the deposit; a tender by the purchaser
of the balance of the price some days later was rejected. It was contended that the vendor
was estopped from rescinding the contract by virtue of what the clerk had said on 9 August,
but this was held to be insufficiently clear and unambiguous to amount to an estoppel.251
However, it was held that relief could be granted on the grounds that to allow rescission
would involve the forfeiture of the purchaser’s equitable interest under the contract of
sale.252 The reasoning of the court in this case involves a number of problems.253 First of
all, there is a clear element of circularity here; in so far as the purchaser’s equitable
interest depends on the availability of specific performance, failure to observe an essential
time stipulation may deprive the purchaser of the very remedy needed to support that
equitable interest.254 Secondly, given that the contract forbade exercise of the right of
rescission without notice, it is hard to see how it made time of the essence in any real sense
anyway.255 Rather, it looks far more like a case where time was made of the essence by
notice.256 In that case, as we have seen, the purchaser’s failure to complete on time was no
more than evidence of repudiation on his part,257 and given his clear readiness and
willingness to complete (p. 312) the transaction at the relevant time, there was more than
enough to rebut that evidence. The real problem in Legione v Hateley was one of unjust
enrichment, in that allowing the vendor to rescind would have involved him getting the
benefit of the house built on the land by the purchaser, but that problem could have been
dealt with in another way, in particular by allowing for restitutionary relief.
11.61 This issue became crucial five years later in Stern v McArthur,258 another case
before the High Court of Australia. The facts here were not dissimilar to those in Legione v
Hateley, in that the vendors sought to terminate for the purchasers’ failure to complete on
the due day. Once again the purchasers had gone into possession and built on the property
before completion; indeed, by the time the contract was terminated they had been there for
over nine years. However, in this case there was no question of the vendors gaining a
windfall, as they had agreed to compensate the purchasers for the value of their
improvements. By a bare majority the court agreed to grant relief to the purchasers, but
there were clear differences of opinion on the part of the judges. Two of the judges in the
Private Law Library
Page 285
majority, Deane and Dawson JJ, were prepared to grant relief on the ground that the
transaction was analogous to the case of a mortgage where a forfeiture clause was inserted
to secure the payment of money; it would be unconscionable, they said, for the vendor to
take advantage of this by defeating the expectations of the purchasers, who were entitled to
assume after such a long time that they would benefit from any rise in the value of the
land.259 Mason and Brennan JJ dissented, saying that though they were happy to accept the
existence of the equitable jurisdiction asserted in Legione v Hateley, the present case was
not one which called for its exercise. In particular, the failure of the purchasers to complete
on time was not due to anything said or done by the vendors, and there was no question of
an unjustified windfall.260 The remaining member of the court, Gaudron J, was not prepared
to accept the reasoning of Deane and Dawson JJ with regard to the mortgage analogy, but
decided for the purchasers on the ground that the conduct of the vendors in insisting on
their rights after such a long time was sufficiently unconscionable to justify the granting of
relief.261 In the end the purchasers got their relief, but it is hard to disagree with the
opinion of Mason J that to extend relief against forfeiture to instances in which no
exceptional circumstances are established is to eviscerate unconscionability of all its
meaning.262
11.62 A very different view of the matter was taken by the Privy Council in Union Eagle
Ltd v Golden Achievement Ltd,263 a case taken on appeal from the Court of (p. 313) Appeal
of Hong Kong. A contract for the sale of a flat provided for completion no later than 5 p.m.
on a certain day. Time was stated to be of the essence, and the vendor was given the right
to rescind and forfeit the deposit in the event of default. The purchaser turned up with the
price ten minutes late, and the vendor sought to exercise his right of rescission. It was held
that the equitable jurisdiction to relieve against forfeiture had no application in a case of
this sort. Giving the advice of the Board, Lord Hoffmann rejected any suggested distinction
in this connection between ‘commercial’ contracts and contracts for the sale of land, saying
that even in the latter context there was still a need for commercial certainty.264 In the
words of Lord Hoffmann:265
The principle that equity will restrain the enforcement of legal rights when it would
be unconscionable to insist upon them has an attractive breadth. But the reasons
why the courts have rejected such generalisations are founded not merely on
authority … but also upon practical considerations of business. These are, in
summary, that in many forms of transaction it is of great importance that if
something happens for which the contract has made express provision, the parties
should know with certainty that the terms of the contract will be enforced. The
existence of an undefined discretion to refuse to enforce the contract on the ground
that this would be ‘unconscionable’ is sufficient to create uncertainty. Even if it is
most unlikely that a discretion to grant relief will be exercised, its mere existence
enables litigation to be employed as a negotiating tactic. The realities of commercial
life are that this may cause injustice which cannot be fully compensated by the
ultimate decision in the case.
11.63 Turning to the reasoning in Legione v Hateley,266 Lord Hoffmann cast doubt on the
proposition in that case that the very fact of termination in a contract for the sale of land
involved a forfeiture of the purchaser’s equitable interest.267
When a vendor exercises his right to rescind, he terminates the contract. The
purchaser’s loss of the right to specific performance may be said to amount to a
forfeiture of the equitable interest which the contract gave him in the land. But this
forfeiture is different in its nature from, for example, the vendor’s right to retain a
deposit or part payments of the purchase price. So far as these retentions exceed a
genuine pre-estimate of damage or a reasonable deposit they will constitute a
penalty which can be said to be essentially to provide security for payment of the
Private Law Library
Page 286
full price. No objectionable uncertainty is created by the existence of a

restitutionary form of relief against forfeiture, which gives the court a discretion to
order repayment of all or part of the retained money. But the right to rescind the
contract, though it involves termination of the purchaser’s equitable interest, stands
upon a rather different footing. Its purpose is, upon breach of an essential term, to
restore to the vendor his freedom to deal with the land as he pleases. In a rising
market, such a right may be valuable but volatile. Their Lordships think that in such
circumstances a vendor should be able to know with reasonable certainty whether
he may resell the land or not.
(p. 314) 11.64 Finally, looking at the facts of Legione v Hateley, Lord Hoffmann said that
the problems of unjust enrichment raised by that case and by cases such as Re Dagenham
(Thames) Dock Co, ex parte Hulse268 might better be dealt with by the law of restitution
than by allowing the purchaser to keep the benefit of the bargain in spite of being in breach
of an essential term.269
11.65 Since then the High Court of Australia, whilst not denying the existence of the
equitable jurisdiction stated in Legione v Hateley, have certainly modified their position to a
certain degree. In Tanwar Enterprises Pty Ltd v Cauchi270 the purchasers of land
commenced proceedings for relief against forfeiture and for a decree of specific
performance after the vendor had terminated the contract for failure to complete on time.
The purchaser’s default in this respect was because the necessary funding did not become
available until the day after completion was due. On the facts there seems to have been
nothing to justify the claim for relief apart from the vendors’ insistence on exercising their
contractual rights, and it is not surprising that the trial judge, the Court of Appeal and all
seven members of the High Court were unanimous in rejecting that claim. In cases such as
this, it was said, equity would only intervene in cases where the vendors had by their
conduct caused or contributed to circumstances rendering it unconscionable for them to
insist on their legal rights.271
11.66 Of more general significance are the remarks of the court in relation to the
protection of the purchaser’s equitable interest in the land. As we have seen, one of the
pillars of Legione v Hateley is the doctrine that by granting specific performance equity
prevents the forfeiture of the purchaser’s beneficial interest under the contract of sale.
Referring to the judgment of Gaudron J in Stern v McArthur,272 the majority in the Tanwar
case expressed their doubts about this doctrine in these words:273
In Stern Gaudron J points out, consistently with authority in this court, that the
‘interest’ of the purchaser is commensurate with the availability of specific
performance. That availability is the very question in issue where there has been a
termination by the vendor for failure to complete as required by the essential
stipulation. Reliance on the ‘interest’ therefore does not assist; it is bedevilled by
circularity.
11.67 In the last few pages we have been considering cases on the law of Canada,
Australia, and Hong Kong, but it is curiously difficult to say what the law is in England. On
the basis of Shiloh Spinners v Harding274 there can be no doubt of (p. 315) the existence of
the equitable jurisdiction to grant relief against forfeiture, at least in so far as it affects
contracts for the sale of land or other contracts involving the transfer or proprietary or
possessory rights,275 but its precise ambit is still unclear.276 However, the cases do seem to
establish two points. The first is that for equity to intervene it must be shown that there is
something that would make it unconscionable for the other party to insist on his or her legal
rights. The other is that while equity may protect a promisor in breach of an essential time
stipulation from being summarily deprived of a proprietary interest that he or she already
Private Law Library
Page 287
has, it will not go so far as to insist on the promisor in such a situation being allowed to
acquire a proprietary interest that he or she does not yet have.
B. Termination where Time is not of the Essence

11.68 Where time is not of the essence, the promisee cannot terminate the contract merely
on the ground that the promisor has performed late. Rather, it must be shown that the
breach was sufficiently serious to go to the root of the contract. Such a breach has been
described as one which deprives the promisee of substantially the whole benefit which it
was intended he or she should obtain from the contract,277 or as one which frustrates the
commercial purpose of the venture.278 Since the measure of delay sufficient to have this
result is the same for termination by breach and for termination under the doctrine of
frustration,279 it is appropriate that we should consider both of these doctrines together in
the chapter which follows.(p. 316)
Footnotes:
1
Above, paras 6.20 and 6.22.
2
Above, para 6.15.
3 Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (PC); Denny, Mott & Dickson v James B
Fraser & Co Ltd [1944] AC 265 (HL(Sc)). In the words of Bingham LJ, it operates to ‘kill the
contract’: J Lauritzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd’s Rep 1
(CA) at 8.
4
Heyman v Darwins [1942] AC 356 (HL) at 361 (Lord Porter). It used to be thought that
employment contracts formed an exception to this rule, but see now Geys v Société
Générale [2012] UKSC 63, [2013] 1 AC 523.
5
[1973] AC 331 (HL) at 349–350.
6
7
Etzin v Reece [2002] All ER (D) 405 at [88] (Launcelot Henderson QC).
8 How substantial is a matter of dispute: see below, paras 12.19–12.66.
9
Above, para 2.47.
10
Above, Chapter 8.
11
Passage from Halsbury’s Laws of England (4th edn, 1973), vol 9, para 481, approved by
Lord Simon in United Scientific Holdings v Burnley Borough Council [1978] AC 904 (HL) at
944.
12
13
(Lord Simon): above, para 2.44.
14
Sale of Goods Act 1979, ss 11(3) and 61(1).
15 Bentsen v Taylor Sons & Co [1893] 2 QB 274 (CA) at 281; Re Comptoir Commercial
Anversois and Power, Son & Co [1920] 1 KB 868 (CA) at 899 (Scrutton LJ); Hongkong Fir
Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1962] 2 QB 26 (CA) at
60 (Sellers LJ); Astley Industrial Trust v Grimley [1963] 1 WLR 584 (CA) at 590 (Pearson
LJ); Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 725 (Lord Roskill); Torvald
Klaveness A/S v Arni Maritime Corp (The Gregos) [1994] 1 WLR 1465 (HL) at 1475–1476
(Lord Mustill); Etzin v Reece [2002] All ER (D) 405 at [77] (Launcelot Henderson QC).
Private Law Library
Page 288
16
Basingstoke and Deane B C v Host Group Ltd [1988] 1 WLR 348 (CA) at 353 (Nicholls
LJ); Visionhire Ltd v Britel Fund Trustees Ltd [1992] 1 EGLR 128 (Ct of Session);
Melanesian Mission Trust Board v Australian Mutual Provident Society [1997] 2 EGLR 128
(PC) at 129 (Lord Hope); Tennaro Ltd v Majorarch Ltd [2003] EWHC 2601 Ch at [29]
(Neuberger J).
17
BCCI v Ali [2001] UKHL 8, [2001] 2 WLR 735 at [8]; Etzin v Reece [2002] All ER (D) 405
at [77] (Launcelot Henderson QC).
18
Mannai Investment Co Ltd v Eagle Star Assurance Co Ltd [1997] AC 749 (HL); Investors
Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896 (HL);
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101; Attorney-
General of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988; Rainy Sky Ltd
v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900; Arnold v Britton [2015] UKSC 36,
[2015] 2 WLR 1593; Wood v Capita Insurance Services Ltd [2017] UKSC 24; and see
Lewison, Sir Kim, The Interpretation of Contracts (6th edn, 2015), chapter 1.
19
Carter, J W, ‘Commercial construction and contract doctrine’ (2009) 25 J Contract Law
83.
20
It has been said, however, that such presumptions can equally be seen as rules of
construction which take their place along with various other rules in order to ascertain the
intention of the parties: Visionhire Ltd v Britel Fund Trustees Ltd [1992] 1 EGLR 128 (Ct of
Session) at 131 (Lord Hope).
21
Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 (High Ct of Australia) at 297–298.
22
23
See for instance Radcliffe v Warrington (1806) 12 Ves J 326 at 333, 33 ER 124 at 126
(Lord Erskine LC); Wilde v Fort (1812) 4 Taunt 334 at 362, 128 ER 359 at 363 (Lord
Mansfield CJ); Parkin v Thorold (1852) 16 Beav 59 at 65, 51 ER 698 at 701 (Romilly MR);
Roberts v Berry (1853) 3 De G M & G 284 at 290, 43 ER 112 at 114 (Knight Bruce LJ);
Noble v Edwardes (1877) 5 Ch D 378.
24
See for example Sugden, E B, The Law of Vendors and Purchasers (3rd edn, 1813),
chapter VIII; Atkinson, Solomon, The Theory and Practice of Conveyancing (2nd edn, 1841),
p 639; Dart, J Henry, A Compendium of the Law and Practice of Vendors and Purchasers of
Real Estate (1851), p 208; Anson, Sir William, Principles of the English Law of Contract
(2nd edn, 1882), p 249; Northcote, G R (ed), Fry on Specific Performance (6th edn, 1921), p
500.
25
See for instance Equity: A Course of Lectures by F W Maitland (2nd edn, revised by John
Brunyate, 1947), p 307 (discussed above, para 8.04), and the comments of Lewison LJ in
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 36 at [30]–[31].
26
Constable v Cloberie (1627) Palmer 397, 81 ER 1141; Shower v Cudmore (1682) T Jo
216, 84 ER 1224; Bornmann v Tooke (1808) 1 Camp 376, 170 ER 991; Stowell v Robinson
(1837) 3 Bing NC 928, 132 ER 668; Sansom v Rhodes (1840) 6 Bing NC 261, 133 ER 103;
Martindale v Smith (1841) 1 QB 389, 113 ER 1181; Lamprell v Billericay Union (1849) 3 Ex
283, 154 ER 850.
27
Seaward v Willock (1804) 5 East 198, 102 ER 1046; Lang v Gale (1813) 1 M & S 111,
105 ER 42.
28
Judicature Act 1873, s 25(7); Law of Property Act 1925, s 41; above, para 2.43.
29
Above, para 11.04; Beale, Hugh (ed), Chitty on Contracts (32nd edn, 2015) (‘Chitty’),
para 20-012.
Private Law Library
Page 289
30
[1978] AC 904 (HL); Fitzpatrick v Sarcon (No 177) Ltd [2012] NICA 58, [2014] NI 35 at
[19].
31
Below, Chapter 12.
32
The Hongkong Fir [1962] 2 QB 26 (CA).
33
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 715–716 (Lord Wilberforce).
34
Carter, J W, Breach of Contract (1984), para 503.
35
Chitty, above n 29, para 21.103; Compagnie Commerciale Sucres et Denrées v C
Czarnikow Ltd (The Naxos) [1990] 1 WLR 1337 at 1346–1347 (Lord Ackner); Fitzpatrick v
Sarcon (No 177) Ltd [2012] NICA 58, [2014] NI 35 at [20].
36
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 716; Re Simoco Digital UK
Ltd [2004] EWHC 209 (Ch), [2004] 1 BCLC 541 at [14] (Patten J).
37
[1999] EMLR 268 (CA).
38
Ibid at 273.
39
Greenwich Marine Inc v Federal Commerce & Navigation Co Ltd (The Mavro Vetranic)
[1985] 1 Lloyd’s Rep 850.
40
(Lord Diplock) and 938 (Viscount Dilhorne); Peregrine Systems Ltd v Steria Ltd [2005]
EWCA Civ 239 at [15] (Maurice Kay LJ).
41
Below, para 11.27.
42
Bowes v Shand (1877) 2 App Cas 455 (HL); Reuter, Hufeland & Co v Sala Ltd (1879) 4
CPD 239 (CA); Sharp v Christmas (1892) 8 TLR 687 (CA); Hartley v Hymans [1920] 3 KB
475.
43
Sale of Goods Act 1979, s 10; Martindale v Smith (1841) 1 QB 389, 113 ER 1181. The
same is true in other contexts: Valilas v Janujaz [2014] EWCA Civ 436, [2015] 1 All ER
(Comm) 1047 at [29] (chair rental by dentist); Spar Shipping AS v Grand China Logistics
Holding (Group) Co Ltd [2016] EWCA Civ 982, [2016] 2 Lloyd’s Rep 447 (payment of
charterparty hire). However, time is generally of the essence with regard to the payment of
a deposit: Myton Ltd v Schwab-Morris [1974] 1 WLR 331 at 337 (Goulding LJ); Samarenko v
Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 6 at [14] (Lewison LJ).
44
The Gregos [1993] 2 Lloyd’s Rep 335 (CA) at 344 (Russell LJ), 346 (Hirst LJ), and 347
(Simon Brown LJ). The case was reversed on appeal to the House of Lords, but on another
ground, there being no dissent from the proposition that time was not of the essence with
regard to the redelivery of the ship: [1994] 1 WLR 1465 at 1476 (Lord Mustill).
45
Stoljar, Samuel, ‘Untimely performance in contract’ (1955) 71 LQR 527.
46
Above, para 9.91.
47
Stoljar, above n 45, p 528.
48
But not the only one. As Stoljar points out, the difficulty of quantifying the loss in cases
of delay is one reason why liquidated damages are more common in this context; Stoljar,
above n 45, p 528, fn 9, and see below, paras 13.37–13.60.
49
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 715 (Lord Wilberforce).
50
Glaholm v Hays (1841) 2 M & G 257, 133 ER 743; Ollive v Booker (1847) 1 Ex 416, 154
ER 177; Oliver v Fielden (1849) 4 Ex 135, 154 ER 1155; Behn v Burness (1863) 3 B & S
751, 122 ER 751; Bentsen v Taylor, Sons & Co [1893] 1 QB 274 (CA); Maredelanto
Private Law Library
Page 290
Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos) [1971] 1 QB 164

(CA).
51
Havelock v Geddes (1809) 10 East 55, 103 ER 886; Tarrabochia v Hickie (1856) 1 H & N
183, 156 ER 1168; Stanton v Richardson (1874) LR 9 CP 390; The Hongkong Fir [1962] 2
QB 26 (CA).
52
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL) at 715 (Lord Wilberforce); Foley,
R K, ‘A survey of the maritime doctrine of unseaworthiness’ (1967) 46 Oregon LR 369.
53
Gregson v Riddle (1783) (cited at (1802) 7 Ves 268, 32 ER 109); Seton v Slade (1802) 7
Ves 265 at 273, 32 ER 108 at 111 (Lord Eldon LC); Bythewood and Jarman’s Conveyancing
(3rd edn, 1841) at 456.
54
Below, para 13.75.
55
Above, para 9.126.
56
57
United Scientific Holdings v Burnley Borough Council [1978] AC 904 (HL) at 945 (Lord
Simon); above, para 2.44.
58
Canadian Terminal System Ltd v Kingston [1935] 4 DLR 713 (Supreme Ct of Canada) at
714 (Davis J); above, para 11.06.
59
60
Touche Ross & Co v Secretary of State for the Environment (1983) 46 P & CR 187 (CA)
at 193 (Dillon LJ).
61
See Hearne v Tenant (1807) 13 Ves 287, 33 ER 301 (‘on condition’).
62
63
Upperton v Nickolson (1871) LR 6 Ch App 436.
64
Legione v Hateley (1983) 152 CLR 406 (High Ct of Australia); below, paras 11.49–11.77.
65
Steedman v Drinkle [1916] 1 AC 275 (PC); Brickles v Snell [1916] 2 AC 599 (PC); Tote
Bookmakers Ltd v Development Property Holding Co Ltd (1985) 49 P & CR 232; Lombard
North Central plc v Butterworth [1987] 1 QB 527 (CA); State Securities plc v Initial Industry
Ltd [2004] All ER (D) 317; cf. Doctorman v Schroeder 92 NJ Eq 376, 114 A 810 (1921) (New
Jersey); Dunton v Stemme 117 Colo 327, 187 P 2d 593 (1947) (Colorado).
66
[2012] NICA 58, [2014] NI 35; see further Mims, J W, ‘Time is of the essence – condition
or covenant?’ (1975) 27 Baylor LR 817.
67
A similar problem can arise in relation to express termination provisions, as in Dominion
Corporate Trustees Ltd v Debenhams Properties Ltd [2010] EWHC 1193 (Ch): see further
below, para 13.76.
68
Cf. Boone v Eyre (1777) 1 Hy Bl 273n, 126 ER 160; 2 Bl W 1313n, 96 ER 267; Grey v
Friar (1854) 4 HLC 565, 10 ER 583.
69
[1981] 1 WLR 711 (HL) at 716.
70
[1974] AC 235 (HL).
71
The exact wording of the clause in question was ‘it shall be condition of this agreement
that …’, no indefinite article being used: [1984] AC 235 at 253.
72
Apparently the clause had been drafted so as to achieve this very result: Baker, J H,
‘Contract: construction of “condition” ’ [1973] CLJ 196; Brownsword, Roger, ‘Schuler AG v
Private Law Library
Page 291
Wickman Machine Tool Sales Ltd: a tale of two principles’ (1974) 37 MLR 104; and see the
dissenting opinion of Lord Wilberforce at [1974] AC 260–263.
73
Stoljar, Samuel, ‘The contractual concept of condition’ (1953) 69 LQR 527.
74
It is better for the contract to say that time is of the essence in so many words, as in
Lombard North Central plc v Butterworth [1987] QB 527 (CA).
75
(1611) 1 Bulst 167, 80 ER 858; Peeters v Opie (1671) 2 Wms Saund 350, 85 ER 1144
(‘for his work’); Thorpe v Thorpe (1701) 1 Ld Raym 662, 91 ER 1341 (‘in consideratione
cujus’).
76
(1627) Palmer 397, 81 ER 1141.
77
(1864) 16 CB (NS) 298, 143 ER 1143.
78
[1898] 1 Ch 343 (CA); Maclaine v Gatty [1921] 1 AC 376 (HL(Sc)).
79
Roberts v Smith (1859) 4 H & N 351, 157 ER 861; Colbath v Stebbins Lumber Co 127
Me 406,144 A 1 (1929) (Maine); Brauer v Freccia 159 Conn 289, 268 A 2d 645 (1970)
(Connecticut); Landscape Design v Harold Thomas Excavating Co Tex Civ App, 604 SW 2d
374 (1980) (Texas).
80
Caney v Leith [1937] 2 All ER 532; Koedding v Slaughter 634 F 2d 1095 (1980) (USCA).
81
Kennedy v Jenkins (1909) 28 NZLR 1073.
82
Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance
Association [1998] 2 EGLR 175 (CA). In North Hertfordshire District Council v Hitchin
Industrial Estate Ltd [1992] 2 EGLR 121 it was held by Evans-Lombe QC sitting as a deputy
judge of the Chancery Division that a rent review clause providing that the giving of twelve
months’ written notice was a ‘condition precedent’ to the right to activate the review did
not displace the general presumption that time was not of the essence in these cases, but in
Chelsea Building Society v R & A Millett (Shops) Ltd (1994) 67 P & CR 319, Rattee J
refused to follow this decision, saying that the use of the phrase ‘condition precedent’
evinced the ‘clearest possible intention’ on the part of the parties to the lease that the
lessor should not have a right to have the rent reviewed at any given review date without
giving notice in the manner and at the time prescribed. The approach of Rattee J on this
point is to be preferred.
83
Leech v Lamb (1855) 11 Ex 437, 156 ER 902; Alexiadi v Robinson (1861) 2 F & F 677,
175 ER 1237; though see R v Berkshire Justices (1878) 4 QBD 469 at 471 (Cockburn CJ)
(‘prompt, vigorous action, without any delay’); In re Todd and McFadden’s Contract [1908]
1 IR 213.
84
Simpson v Henderson (1829) Mood & M 300, 173 ER 1363; Staunton v Wood (1851) 16
QB 638, 117 ER 1025; Roberts v Brett (1865) 11 HLC 337, 11 ER 1363; King v Chamberlain
(1871) 40 LJCP 273; Hudson v Hill (1874) 43 LJCP 273; Owens v Upham (1909) 39 NBR 198
(Supreme Ct of New Brunswick); R v Cuthbertson [1949] 4 DLR 369 (Exchequer Ct of
Canada).
85
Attwood v Emery (1856) 1 CB NS 110, 140 ER 45; Hydraulic Engineering Co Ltd v
McHaffie, Goslett & Co (1878) 4 QBD 670 (CA); Wigan Coal & Iron Co v Eckersley (1910)
103 LT 468 (HL); King’s Old Country Ltd v Liquid Carbonic Canadian Corporation [1942] 2
WWR 603 (KB, Manitoba); Vines v Djordjevitch (1955) 91 CLR 512 (High Ct of Australia).
86
Aries Powerplant Ltd v ECE Systems Ltd (1996) 45 Con LR 111.
87
[1985] 1 Lloyd’s Rep 621 (aff’d [1986] 1 Lloyd’s Rep 322 (CA)).
Private Law Library
Page 292
88
[1985] 1 Lloyd’s Rep 621 at 625; Warde v Feedex International Inc [1985] 2 Lloyd’s Rep
290; MSAS Global Logistics Ltd v Power Packaging Inc [2003] EWC 1393 (Ch) (The Times,
25 June 2003) (‘no later than’).
89
[2002] EWCA Civ 1687, [2003] 2 P & CR 292.
90
[1974] AC 235 (HL); above, para 11.20.
91
Ibid at 249 (Lord Reid), 249–250 (Lord Morris), and 271 (Lord Kilbrandon).
92
[2012] NICA 58, [2014] NI 35: above, para 11.19.
93
In London and Manchester Assurance Co Ltd v GA Dunn & Co [1983] 1 EGLR 111 (CA)
Lawton LJ (at 112) thought this was not a particularly significant matter, whereas Slade LJ
(at 116) thought that it was. The view of Slade LJ was preferred by Neuberger LJ in
Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40 at [20].
94
HC (Ch D), 30 March 1994.
95
BS & N Ltd (BVI) v Micado Shipping Ltd (Malta) (‘The Seaflower’) (No 2) [2000] 2
Lloyd’s Rep 37, aff’d [2001] 1 Lloyd’s Rep 341 (CA).
96
The Seaflower [2001] 1 Lloyd’s Rep 341 (CA) at 349–350 (Waller LJ), 353 (Rix LJ), and
356 (Jonathan Parker LJ).
97
Above, para 2.49; Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (CA) at 1196–
1197 (Lord Denning MR); Scally v Southern Health and Social Services Board [1992] 1 AC
294 (HL(NI)) at 307 (Lord Bridge); Ali Shipping Corp v Shipyard Trogir [1999] 1 WLR 314
(CA) at 3257 (Potter LJ); Equitable Life Assurance Society v Hyman [2002] 1 AC 408 (HL) at
459 (Lord Steyn).
98
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 (CA) at 227 (MacKinnon LJ)
(aff’d [1940] AC 701 (HL)); Gardner v Coutts & Co [1968] 1 WLR 173.
99
As to whether the two tests are cumulative or alternative see above, para 2.49.
100
The Moorcock (1889) 14 PD 64 (CA) at 68 (Bowen LJ); Reigate v Union Manufacturing
Co (Ramsbottom) Ltd [1918] 1 KB 592 (CA) at 605 (Scrutton LJ); Luxor (Eastbourne) Ltd v
Cooper [1941] AC 108 (HL) at 137 (Lord Wright); Trollope & Colls Ltd v North West
Metropolitan Regional Hospital Board [1973] 1 WLR 601 (HL) at 609 (Lord Pearson);
2017) (‘Cheshire, Fifoot and Furmston’), p 197.
101
Peden, E, ‘Policy concerns behind implication of terms in law’ (2001) 117 LQR 459.
102
Stickney v Keeble [1915] AC 386 (HL) at 416 (Lord Parker).
103
Boehm v Wood (1820) 1 Jac & W 419, 87 ER 435; Gedye v Duke of Montrose (1858) 26
Beav 456, 53 ER 813; Tilley v Thomas (1867) LR 3 Ch App 61.
104
Wright v Howard (1823) 1 Sim & St 190, 57 ER 76; Bernard v Williams (1928) 139 LT
22; SES, (1930) 8 Can BR 61.
105
Newman v Rogers (1793) 4 Bro CC 391, 29 ER 950; Spurrier v Hancock (1799) 4 Ves J
667, 31 ER 344; Levy v Stogdon [1898] 1 Ch 478. Thus time is generally of the essence
where a public house is sold as a going concern: Coslake v Till (1826) 1 Russ 376, 38 ER
146; Walker v Jeffreys (1841) 1 Hare 348, 66 ER 1064; Day v Luhke (1868) LR 5 Eq 336;
Cowles v Gale (1871) LR 7 Ch App 12; Gray v Smith (1889) 43 Ch D 214 (CA); Powell v
Marshall, Parkes & Co [1899] 1 QB 710 (CA); Lock v Bell [1931] 1 Ch 35.
106
Withy v Cottle (1823) Turn & R 78, 37 ER 1024.
Private Law Library
Page 293
107
Carter v Dean and Chapter of Ely (1835) 7 Sim 211, 58 ER 817; Southcomb v Bishop of
Exeter (1847) 16 LJ Ch 378; Firth v Greenwood (1855) 25 LTOS 51; Hudson v Temple
(1860) 30 LJ Ch 251.
108
Doloret v Rothschild (1824) 1 Sim & St 590, 57 ER 233; British and Commonwealth
Holdings plc v Quadrex Holdings Inc [1989] 1 QB 842 (CA); Grant v Cigman [1996] BCC
410.
109
Lindgren, Kevin, Time in the Performance of Contracts (2nd edn, 1982) (‘Lindgren’), pp
49–50; above, para 11.13.
110
111
(Lord Salmon); above, para 11.14.
112
Above, para 11.19.
113
Ch D, 30 March 1994; Banks v Geddis [2012] NIQB 57 at [20] (Weatherup J).
114
[2002] All ER (D) 405.
115
Ibid at [91] (Launcelot Henderson QC).
116
[1980] 1 Lloyd’s Rep 143 (CA).
117
Busk v Spence (1815) 4 Camp 329, 171 ER 105; Scandinavian Trading Co A/B v Zodiac
Petroleum SA (The Al Hofuf) [1981] 1 Lloyd’s Rep 81; Gill and Duffus SA v Société pour
l’Exportation des Sucres SA [1986] 1 Lloyd’s Rep 322 (CA); Warde v Feedex International
Inc [1985] 2 Lloyd’s Rep 290; cf. Tennaro Ltd v Majorarch Ltd [2003] EWHC 2601, [2003]
47 EGCS 154 at [50] (Neuberger J). Contrast Kidston v Monceau Ironworks (1902) 77 Com
Cas 82, where timely nomination of a port was held not to be of the essence since in the
circumstances it would not prejudice the seller’s ability to ship the goods on time.
118
Richards & Son v Karenita (1971) 221 EG 25; Al Saloom v Shirley James Travel Service
Ltd (1981) 42 P & CR 181 (CA); Coventry City Council v J Hepworth & Son Ltd (1983) 46 P
& CR 170 (CA); Legal and General Assurance (Pension Management) Ltd v Cheshire C C
(1983) 46 P & CR 160; Central Estates Ltd v Secretary of State for the Environment (1992)
72 P & CR 482 (CA). Contrast Metrolands Investments Ltd v JH Dewhurst Ltd [1986] 3 All
ER 659 (CA), and see Touche Ross & Co v Secretary of State for the Environment (1983) 46
P & CR 187, where there was no break clause.
119
Haugland Tankers AS v RMK Marine [2005] EWHC 321 (Comm), [2005] 1 All ER
(Comm) 679.
120
Alewyn v Pryor (1828) Ry & M 406, 171 ER 1065; Plevins v Downing (1876) 1 CPD 220;
Bowes v Shand (1877) 2 App Cas 455 (HL); Reuter, Hufeland & Co v Sala Ltd (1879) 4 CPD
239 (CA); Hartley v Hymans [1920] 3 KB 937; Bunge Corp v Tradax Export SA [1981] 1
WLR 711 (HL) at 716 (Lord Wilberforce).
121
Bremer Handelsgesellschaft mbh v Mackprang [1981] 1 Lloyd’s Rep 292 (CA).
122
Paton v Payne (1897) 35 SLR 112; Re Simoco Digital UK Ltd [2004] EWHC 209 (Ch),
[2004] 1 BCLC 541 at [14] (Patten J).
123
Martindale v Smith (1841) 1 QB 389, 113 ER 1181; Sale of Goods Act 1979, s 10.
124
Lock v Wright (1723) 1 Stra 569, 93 ER 706; Weston v Collins (1865) 34 LJ Ch 353;
Finch v Underwood (1876) 2 Ch D 310 (CA).
125
[1966] 2 QB 130 (CA).
Private Law Library
Page 294
126
Ibid at 141 (Willmer LJ) and 148 (Winn LJ). In such cases compliance with the
stipulated condition is ‘an external condition upon which the existence of the obligation
depends’: see Zhilka v Turney [1959] SCR 578 (Supreme Ct of Canada) at 583 (Judson J);
Carlson, Carlson and Hettrick v Big Bud Tractor of Canada Ltd (1981) 7 Sask R 337
(Saskatchewan Ct of Appeal).
127
[1968] 1 WLR 74 (CA); above, para 1.33.
128
[1960] AC 115 (PC).
129
Ibid at 124–125.
130
Millers Wharf Partnership Ltd v Corinthian Column Ltd (1991) 61 P & CR 461; Di Luca
v Juraise (Springs) Ltd (1998) 79 P & CR 193 (CA); Valentines Properties Ltd v Huntco
Corporation Ltd [2001] UKPC 14, 2001 WL 272915 at [20]; Credit Lyonnais SA v Russell
Jones & Walker [2002] EWHC 1310 (Ch), [2002] 33 EG 99; Haugland Tankers AS v RMK
Marine [2005] EWHC 321 (Comm), [2005] 1 Lloyd’s Rep 573; Get Nominees Ltd v Trinity
Welsh Homes Ltd [2014] EWHC 4737 (Ch) (HH Judge Purle QC).
131
[1972] 1 WLR 1064.
132
[1974] 1 WLR 728 (CA).
133
On a strict interpretation of the contract, the rental value would have had to be set on
the exact date specified, which happened to be a Sunday.
134
[1975] 1 WLR 143 (CA).
135
[1976] 1 All ER 890; Glencore International AG v Ryan (The Beursgracht) [2001] 2
Lloyd’s Rep 602 (CA).
136
Mount Charlotte Investments v Leek and Westbourne Building Society [1976] 1 All ER
890 at 894.
137
[1978] AC 904 (HL).
138
Ibid at 928–930 (Lord Diplock), 945–946 (Lord Simon), 951 (Lord Salmon), and 961–
962 (Lord Fraser).
139
See Lewis v Barnett (1981) 246 EG 1079; London & Manchester Assurance Co v G A
Dunn & Co (1982) 265 EG 39 (CA); Touche Ross & Co v Secretary of State for the
Environment (1983) 46 P & CR 187 (CA); Million Pigs Ltd v Parry (1983) 46 P & CR 333;
Trustees of Henry Smith’s Charity v AWADA Trading and Promotion Services (1983) 47 P &
CR 607 (CA); Amherst v James Walker Goldsmith and Silversmith Ltd (1984) 47 P & CR 85
(CA); Mecca Leisure Ltd v Renown Investments (Holdings) Ltd (1984) 49 P & CR 12 (CA);
Metrolands Investments Ltd v Dewhurst Ltd [1986] 3 All ER 659 (CA); Chancery Lane
Developments Ltd v Wade’s Departmental Stores Ltd (1987) 53 P & CR 306 (CA); Mammoth
Greeting Cards Ltd v Agra Ltd [1990] 29 EG 45; Pembroke St Georges Ltd v Cromwell
Developments Ltd [1991] 2 EGLR 129; Visionhire Ltd v Britel Fund Trustees Ltd [1992] 1
EGLR 128 (Ct of Session); North Hertfordshire District Council v Hitchin Industrial Estate
Ltd [1992] 2 EGLR 121; Chelsea Building Society v R & A Millett (Shops) Ltd (1994) 67 P &
CR 319; Bickenhall Engineering Co Ltd v Grandmet Restaurants Ltd [1995] 1 EGLR 110;
Banks v Kokkinos [1999] 3 EGLR 133; McDonald’s Property Co Ltd v HSBC Bank plc [2001]
36 EG 181; Starmark Enterprises Ltd v CPL Distribution Ltd [2001] EWCA Civ 1252, [2002]
Ch 306; Iceland Foods plc v Dangoor [2002] EWHC 107 (Ch), [2002] 21 EG 146; Turner &
Son v Confederation Life Insurance Co (UK) Ltd [2002] EWHC 2949 (Ch), [2003] 31 EG
192; Barclay’s Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2003] P & CR 374; First
Property Growth Partnership LP v Royal & Sun Alliance Property Services Ltd [2002] EWCA
Civ 1687, [2003] 2 P & CR 292; Arundel Corp v Khokker [2003] EWCA Civ 1784; Northern
and Midland Holdings Ltd v Magnet Ltd [2004] EWHC 120, [2004] All ER (D) 179;
Hemingway Realty Ltd v Clothworkers of the City of London [2005] EWHC 299 (Ch), [2005]
Private Law Library
Page 295
2 EGLR 36; Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40; Wilderbrook
Ltd v Oluwu [2005] EWCA Civ 1361; White v Riverside Housing Association Ltd [2007]
UKHL 20, [2008] 1 P & CR 13; Secretary of State for Communities and Local Government v
Standard Securities Ltd [2007] EWHC 1808 (Ch), [2008] 1 P & CR 23; Idealview v Bello
[2009] EWHC 2808 (QB), [2010] 1 EGLR 39; Prow v Argyll and Bute Council [2012] CSOH
77.
140
Bickenhall Engineering Co Ltd v Grandmet Restaurants Ltd [1995] 1 EGLR 110 (CA) at
113 (Neill LJ); Ross, Commercial Leases (Issue 37, May 2017), Division G, para E [82].
141
(Lord Simon).
142
Ibid at 930 (Lord Diplock), 938 (Viscount Dilhorne), 946 (Lord Simon), 948 (Lord
Salmon), and 958–959 (Lord Fraser).
143
Touche Ross & Co v Secretary of State for the Environment (1983) 46 P & CR 187 (CA);
Metrolands Investments Ltd v Dewhurst Ltd [1986] 3 All ER 659 (CA).
144
London v Manchester Assurance Co v Dunn (1982) 265 EG 39 (CA); Amherst v James
Walker Goldsmith and Silversmith Ltd (1984) 47 P & CR 85 (CA).
145
(1723) 1 Stra 569, 93 ER 706.
146
Aberfoyle Plantations Ltd v Cheng [1960] AC 115 (PC) at 124–125 (Lord Jenkins); Hare
v Nicoll [1966] QB 130 (CA); United Dominions Trust Ltd v Eagle Aircraft Services Ltd
[1968] 1 WLR 74 (CA); above, para 11.31.
147
Stoljar, Samuel, ‘Untimely performance in contract’ (1955) 71 LQR 527 at 528–530.
148
(1849) 3 Ex 283, 154 ER 850; Platt v Parker (1886) 2 TLR 786 (CA).
149
(1881) 7 App Cas 670 (HL).
150
[1927] 1 KB 352 (CA).
151
Ibid at 366.
152
Above, para 11.36.
153
Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1064 (CA); above, para
11.34.
154
Metrolands Investments Ltd v Dewhurst Ltd [1986] 3 All ER 659 (CA); Chancery Lane
Developments Ltd v Wade’s Departmental Stores Ltd (1987) 53 P & CR 306 (CA).
155
Amherst v James Walker Goldsmith and Silversmith Ltd (1984) 47 P & CR 85 (CA);
Barclays Bank plc v Savile Estates Ltd [2002] EWCA Civ 589, [2003] P & CR 374;
Lancecrest v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40.
156
(1777) 1 Hy Bl 273n, 126 ER 160; 2 Bl W 1313n, 96 ER 267; above, para 2.23.
157
Ibid: ‘well and truly performing … everything …’.
158
[1974] AC 235 (HL); above, para 11.20.
159
Ibid at 249 (Lord Reid), 249–250 (Lord Morris) and 271 (Lord Kilbrandon).
160
[2001] 2 Lloyd’s Rep 65 (CA).
161
Ibid at 72.
162
Antaios Compania Naviera SA v Salen Rederierna AB (The Antaios) [1985] AC 191 (HL)
at 201; Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101 at [16]–
[26]. Though it has been stressed that this factor cannot be allowed to override the express
language used by the parties, it is still a relevant matter, especially in cases of ambiguity:
Arnold v Britton [2015] UKSC 36, [2015] 2 WLR 1593 at [20] (Lord Neuberger); Wood v
Private Law Library
Page 296
Capita Insurance Services Ltd [2017] UKSC 24 at [12] (Lord Hodge); Liontrust Investment
Partners LLP v Eoghan Flanagan [2017] EWCA Civ 985 at [39].
163
(1985) 49 P & CR 12 (CA). The Court of Appeal in Starmark Enterprises Ltd v CPL
Distribution Ltd [2001] EWCA Civ 1252, [2002] Ch 306 refused to follow this case, but
though it has been distinguished on several occasions it has never been overruled.
164
See now above, para 11.34.
165
(1985) 49 P & CR 12 at 22.
166
[1986] 3 All ER 659 (CA).
167
Above, para 11.29.
168
(1985) 49 P & CR 334 (Peter Gibson J).
169
Below, Chapter 12.
170
Tennaro Ltd v Majorarch Ltd [2003] EWHC 2601, [2004] 1 P & CR DG 13 at [30]
(Neuberger J).
171
Ibid.
172
[2007] UKHL 20, [2008] 1 P & CR 13.
173
Ibid at [23].
174
Ibid at [28].
175
Ibid at [35].
176
(1777) 1 Hy Bl 273n, 126 ER 160; 2 Bl W 1313n, 96 ER 267; above, para 2.23.
177
Bridge, Michael G, ‘Discharge for breach of the contract of sale of goods’ (1983) 28
McGill LJ 867.
178
Hall v Cazenove (1804) 4 East 476, 102 ER 913; Ellen v Topp (1851) 6 Ex 424, 155 ER
609; Graves v Legg (1854) 9 Ex 709, 156 ER 304; Inman SS Co v Bischoff (1881) 7 App Cas
670 (HL).
179
Above, para 11.13.
180
181
182
Below, Chapter 12.
183
Sale of Goods Act 1979, ss 12–15; Chalmers, Sir Mackenzie, The Sale of Goods (1890).
184
(1841) 2 M & G 257, 133 ER 743.
185
(1847) 1 Ex 416, 154 ER 177.
186
(1849) 4 Ex 135, 154 ER 1155.
187
Clipsham v Vertue (1843) 5 QB 265, 114 ER 1249; Dimech v Corlett (1858) 12 Moo PC
199, 14 ER 887; Associated Portland Cement Mfrs (1900) Ltd v Houlder Bros (1917) 22
Com Cas 279.
188
Behn v Burness (1863) 3 B & S 751, 122 ER 281; Smith v Dart & Son (1884) 14 QBD
105; Bentsen v Taylor, Sons & Co [1893] 2 QB 274 (CA); Engman v Palgrave (1898) 4 Com
Cas 75.
189
Eder, Sir Bernard and ors (eds), Scrutton on Charterparties and Bills of Lading (23rd
edn, 2015) (‘Scrutton’), article 67 and commentary.
Private Law Library
Page 297
190
Corkling v Massey (1873) 8 CP 395; Sanday v Keighley Maxsted & Co Ltd (1922) 27
Com Cas 296 (CA); Re Empire Shipping Co and Hall Bryan Ltd [1940] 1 DLR 695 (Supreme
Ct of British Columbia); The Mihalis Angelos [1971] 1 QB 164 (CA); The Mavro Vetranic
[1985] 1 Lloyd’s Rep 581; Geogas SA v Trammo Gas Ltd (The Baleares) [1993] 1 Lloyd’s
Rep 215 (CA); Scrutton, above n 189, para 7-013.
191
Bunge Corp v Tradax Export SA [1981] 1 WLR 711 (HL); Goode, Sir Roy, Commercial
Law (3rd edn, 2004) (‘Goode’), p 931.
192
Bowes v Shand (1877) 2 App Cas 455 (HL); Reuter, Hufeland & Co v Sala Ltd (1879) 4
CPD 239 (CA); Montague L Meyer Ltd v Travaru A/B H Cornelius of Gamleby (1930) 46 TLR
553; Cobec Brazilian Trading Co Ltd v Toepfer [1982] 1 Lloyd’s Rep 528; Bergerco USA v
Vegoil Ltd [1984] 1 Lloyd’s Rep 440; Esteve Trading Corp v Agropec International (The
Golden Rio) [1990] 2 Lloyd’s Rep 273; Lorenzon, Filippo and Baatz, Yvonne (eds), Sassoon:
C.I.F. and F.O.B. Contracts (6th edn, 2017), para 4-047. Section 15A of the Sale of Goods Act
1979, inserted by section 4(2) of the Sale and Supply of Goods Act 1994, restricts the right
of a buyer to reject for trivial failures to correspond with the contractual description, but
this is not thought to affect the rule in Bowes v Shand: see Brown, Ian, Commercial Law
(2001), p 455.
193
Alewyn v Pryor (1826) Ry & M 406, 171 ER 1065; Wimshurst v Deeley (1845) 2 CB 253,
135 ER 912; Plevins v Downing (1876) 1 CPD 220; Harrington v Brown (1917) 23 CLR 297;
Hartley v Hymans [1920] 3 KB 475; Aron & Co Inc v Comptoir Wegimont [1921] 3 KB 435;
Berg & Sons v Landauer (1925) 42 TLR 142; Finagrain SA Geneva v P Kruse Hamburg
[1976] 2 Lloyd’s Rep 508 (CA); Cerealmangimi SpA v Toepfer (The Eurometal) [1981] 1
Lloyd’s Rep 337; Compagnie Commericale Sucres et Denrées v C Czarnikow Ltd (The
Naxos) [1990] 1 WLR 1337 (HL); Phibro Energy AG v Nissho Iwai Corp (The Honam Jade)
[1991]1 Lloyd’s Rep 38 (CA); Bridge, Michael (ed), Benjamin’s Sale of Goods (9th edn,
2014), para 8.025; Goode, above n 191, p 270. Similarly, terms relating to the time of
performance by sellers of their obligations under c.i.f. contracts are generally conditions:
The Mihalis Angelos [1971] 1 QB 164 (CA); Bremer Handelsgesellschaft mbh v Vanden-
Avenne Izegem PVBA [1978] 2 Lloyd’s Rep 109 (HL); Toepfer v Lenersan-Poortman BV
[1980] 1 Lloyd’s Rep 143 (CA).
194
Sale of Goods Act 1979, s 10(1); Martindale v Smith (1841) 1 QB 389, 113 ER 1181.
The position may be different in relation to the payment of a deposit: Portaria Shipping Co
Ltd v Gulf Pacific Navigation Co Ltd (The Selene G) [1981] 2 Lloyd’s Rep 180.
195
Law Commission, Sale and Supply of Goods (Law Com no 160) (Cmnd 137, 1987).
196
Reardon Smith Line Ltd v Hansen-Tangen [1976] 2 Lloyd’s Rep 621 (HL).
197
[1976] 2 Lloyd’s Rep 60 at 69 (Lord Denning MR).
198
[1976] 2 Lloyd’s Rep 621 at 627–628.
199
Ibid at 626; Behn v Burness (1863) 3 B & S 751, 122 ER 751; Re Moore & Co v
Landauer & Co [1921] 2 KB 519 (CA); Arcos Ltd v Ronaassen & Son [1933] AC 470 (HL).
200
For instance, it has been suggested that representations in the charterparty as to the
location of the ship and her time of sailing would now be regarded merely as innominate
terms: Bennett, Howard (ed), Carver on Charterparties (2017), para 3-022; above, para
11.45.
201
Coghlin, Terence and ors (eds), Time Charters (6th edn, 2008), para 3.24.
202
Though the parties may of course be aware of the legal status of the term in question
when they make the contract, this need not necessarily be the case.
Private Law Library
Page 298
203
204
205
Ibid, s 28(3) and (4).
206
Ibid, s 28(6).
207
Ibid, s 28(6)(a).
208
Ibid, s 28(6)(b).
209
Ibid, s 28(6)(c).
210
Ibid, s 28(7).
211
Above, para 8.51.
212
Above, para 11.47.
213
Common Law Procedure Act 1852, ss 210–212. These provisions apply only to actions
in the High Court, but similar provision is made for the County Court by sections 138–140
of the County Courts Act 1984. In cases where the rent is less than six months in arrear, the
High Court has a general power to relieve against forfeiture under section 38 of the
Supreme Court Act 1981.
214
Law of Property Act 1925, s 146(1).
215
See for instance Pawlowski, Mark, The Forfeiture of Leases (1993), chapters 9 and 10;
Garner, S and Frith, A, A Practical Approach to Landlord and Tenant (7th edn, 2013),
chapter 11.
216
Re Lord de Clifford’s Estate [1900] 2 Ch 707 at 712 (Farwell J); Pawlowski, above n
215, p 173.
217
Pawlowski, above n 215, pp 174–193.
218
(1811) 18 Ves J 56, 34 ER 238.
219
Pawlowski, above n 215, p 192; Harries v Bryant (1827) 4 Russ 89, 38 ER 738; Elliott v
Turner (1843) 13 Sim 477, 60 ER 185; Hughes v Metropolitan Railway (1877) 2 App Cas
439 (HL); Barrow v Isaacs & Son [1891] 1 QB 417 (CA); Eastern Telegraph Co Ltd v Dent
[1899] 1 QB 835 (CA); Ellis v Allen [1914] 1 Ch 904; Atkin v Rose [1923] 1 Ch 522.
220
Bracebridge v Buckley (1816) 2 Pri 200, 146 ER 68; White v Warner (1817) 2 Mer 459,
35 ER 1016.
221
Hill v Barclay (1811) 18 Ves J 56, 34 ER 238; Rolfe v Harris (1811) 2 Pri 202n, 146 ER
71n.
222
[1973] AC 691 (HL).
223
The nature of this assignment was such as to take it out of the ambit of section 146(1)
of the Law of Property Act 1925 (above, para 11.51). This meant that the claimants had to
fall back on the general jurisdiction of equity.
224
Above, para 11.52.
225
[1973] AC 691 at 723–724.
226
Ibid at 726–727.
227
Ibid at 725–726 (Lord Wilberforce).
228
The Petrofina [1949] AC 76 at 100 (Lord Uthwatt); The Laconia [1977] AC 850 (HL) at
854 (Lord Simon).
Private Law Library
Page 299
229
[1983] AC 694 (HL).
230
Above, para 11.53.
231
[1983] AC 694 (HL) at 700.
232
Ibid at 702.
233
Ibid at 700–701.
234
Ibid.
235
[1983] 1 Lloyd’s Rep 146 (CA) at 153; aff’d [1983] AC 694 (HL).
236
But a bare possessory right will not do: Celestial Aviation Trading 71 Ltd v Paramount
Airways Pte Ltd [2010] EWHC 185 (Comm), [2011] 1 Lloyd’s Rep 9 (aircraft lease).
237
BICC plc v Burndy Corp [1985] Ch 232 (CA); Cukurova Finance International Ltd v Alfa
Telecom Turkey Ltd [2013] UKPC 2, [2016] AC 923; Pawlowski, above n 215, pp 234–238.
238
More Og Romsdal Fylkesbatar AS v Demise Charterers of the Ship ‘Jotunheim’ [2004]
EWHC 671 (Comm), [2005] 1 Lloyd’s Rep 181.
239
Barton Thompson & Co Ltd v Stapling Machines Co [1966] Ch 499; Galbraith v
Mitchenall Estates [1965] 2 QB 473 at 482–484 (Sachs J); Bristol Airport plc v Powdrill
[1990] Ch 744 (CA) at 759 (Browne-Wilkinson V-C). In Lombard North Central plc v
Butterworth [1987] 2 QB 527 (CA) (above, para 9.127) the issue was not raised, perhaps
because there was no evidence of the hirer being able or willing to remedy the default.
240
Steedman v Drinkle [1916] 1 AC 275 (PC) at 279 (Viscount Haldane); Brickles v Snell
[1916] 2 AC 599 (PC).
241
(1873) LR 8 Ch App 1022; Kilmer v British Columbia Orchard Lands Ltd [1913] AC 319
(PC).
242
[1913] AC 319 (PC).
243
This was a common form of contract in Canada: see Hoggett, B M, ‘Houses on the
never-never’ (1975) 39 Conveyancer 343.
244
[1913] AC 319 (PC) at 320–321.
245
Ibid at 325.
246
Harpum, Charles, ‘Relief against forfeiture and the purchaser of land’ [1974] CLJ 134
at 150.
247
[1916] 1 AC 275 (PC).
248
[1916] 2 AC 599 (PC).
249
Abedian, Hossein and Furmston, Michael P, ‘Relief against forfeiture for breach of an
essential time stipulation in the light of Union Eagle Ltd v Golden Achievements Ltd’ (1997–
98) 12 J Contract Law 189 at 202.
250
(1983) 152 CLR 406 (High Ct of Australia); Nicholson, K G, ‘Breach of an essential time
stipulation and relief against forfeiture’ (1983) 57 Australian LJ 632.
251
Above, para 5.83.
252
(1983) 152 CLR 406 (High Ct of Australia) at 423 (Gibbs CJ and Murphy J) and 445
(Mason and Deane JJ).
253
Nicholson, K G, ‘Relief against forfeiture in Australia’ (1997–98) 12 J Contract Law 189.
Private Law Library
Page 300
254
Brown v Heffer (1967) 116 CLR 344 (High Ct of Australia); Stern v McArthur (1988)
165 CLR 489 (High Ct of Australia) at 537 (Gaudron J); Sparkes, Peter, ‘Forfeiture of
equitable leases’ (1987) 16 Anglo-American LR 160; Carter, J W, ‘Problems in
enforcement’ (1993) 6 J Contract Law 1.
255
Above, para 11.03.
256
Above, Chapter 8.
257
Above, para 8.37.
258
Stern v McArthur (1988) 165 CLR 489 (High Ct of Australia).
259
Ibid at 528–529.
260
Ibid at 503–504.
261
Ibid at 540–541.
262
Ibid at 503.
263
[1997] AC 514 (PC).
264
Ibid at 519.
265
Ibid.
266
Above, para 11.60.
267
[1997] AC 514 at 520.
268
Above, para 11.58.
269
[1997] AC 514 at 522–523.
270
(2003) 201 ALR 359 (High Ct of Australia); Romanos v Pentagold Investments Pty
(2003) 201 ALR 399 (High Ct of Australia).
271
(2003) 201 ALR 359 at [59] and [60] (Gleeson, McHugh, Gummow, Hayne, and Heydon
JJ).
272
(1988) 165 CLR 489 (High Ct of Australia) at 537.
273
(2003) 201 ALR 359 at [53].
274
[1973] AC 694; above, para 11.52.
275
In Hedworth v Jenwise Ltd [1994] EGCS 133 the Court of Appeal stated that in general
equity would not grant relief against forfeiture and/or specific performance to a purchaser
who was in breach of an essential time stipulation, but the existence of such a jurisdiction
in exceptional cases was assumed for the purposes of the appeal.
276
Abedian and Furmston, above n 249 at, fn 254.
277
The Hongkong Fir [1962] 2 QB 26 (CA) at 72 (Diplock LJ).
278
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 at 403.
279
Below, para 12.07.
Private Law Library
Page 301
12 Frustrating Delay
John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 317) 12 Frustrating Delay

A. Preliminary Distinctions 12.02
(1) Delays and interruptions 12.03

(2) Discharge by breach and discharge by frustration 12.04
(3) Frustration of the ‘common object’ 12.08
(4) Failure of consideration and impossibility 12.15
B. What Amounts to a Frustrating Delay? 12.19
(1) Length of the delay 12.20
(a) The relevant time for decision 12.26

(b) The deprivation/unexpiration principle 12.31
(c) ‘Anticipatory’ delay 12.36
(d) Delay unexpectedly short 12.44
(2) The effect of the delay 12.45
(a) Delay causing failure of consideration 12.46

(b) Delay causing impossibility 12.58
Private Law Library
Page 302
C. The Legal Effect of Frustrating Delay 12.67
(1) Delay as a frustrating breach 12.68
(a) Actus reus of frustrating breach 12.70

(b) Mens rea of frustrating breach 12.71
(2) Delay under the doctrine of frustration 12.74
(a) ‘Risk’ factors 12.77

(b) Other issues 12.101
12.01 Where time is not of the essence, there can be no question of the contract being
terminated merely because there has been some delay in performance by the promisor. For
this to be the case, the delay must be a ‘frustrating’ one. Various terms have been used to
describe a delay of this nature; it must ‘go to the root of the matter’;1 it must be sufficient
to ‘put an end to the commercial speculation’;2 it must be ‘so long as to frustrate the
mercantile adventure’.3 In the words of Asquith LJ, we are not talking here about ‘normal,
moderate delay’, but delay ‘so differing in degree and magnitude from anything which could
have been contemplated as to differ from it in kind’.4 In the pages which follow we shall be
examining the nature of a frustrating delay and its legal effect, but before we do this there
are some preliminary distinctions that need to be clarified.
(p. 318) A. Preliminary Distinctions

12.02 The preliminary distinctions that need to be examined before we consider
frustrating delay in detail are four in number: (1) the distinction between cases of delay and
cases of interruption; (2) the distinction between discharge by breach and discharge under
the doctrine of frustration; (3) the distinction between a delay which frustrates the
‘common object’ of the parties and one which only frustrates the object of the promisee;
and (4) the distinction between failure of consideration and impossibility.
(1) Delays and interruptions

12.03 Strictly speaking, many of the cases we shall be dealing with in the present context
are not cases of delay, but of interruption. For instance, we shall be considering cases
where a contract of employment is frustrated by illness, and cases where a time
charterparty is frustrated by the detention of the ship. In a sense, these are not cases of
delay at all; when an employee fails to turn up for work one does not talk of delayed
performance but of non-performance, albeit of a temporary nature, and a similar objection
can be made in the case of the time charterparty. But the line between delays and
interruptions is a very fine one; for instance, where a ship is out of service during a time
charterparty the case is one of interruption, but in a voyage charterparty it is one of delay
in the full sense. Again, in a building contract where the contractor’s employees go on
strike, from the point of view of the contractor it will be a case of interruption, but from the
point of view of the owner it will be one of delay. Since cases of delay and cases of
interruption raise much the same issues in the present context, it is not proposed to
distinguish between them in the discussion which follows.
(2) Discharge by breach and discharge by frustration

12.04 The legal effect of frustrating delay differs depending on whether that delay is the
result of a breach of contract by the promisor. Where the promisor’s breach results in
frustrating delay, the breach is a ‘fundamental’ one in the sense of ‘a breach of contract
more serious than one which would entitle the other party merely to damages and which (at
least) would entitle him to refuse performance or further performance under the contract’.5
The effect of such a breach is ‘to deprive the party not in default of substantially the whole
Private Law Library
Page 303
benefit which it was intended that he should obtain from the contract’.6 In this situation, as
with any (p. 319) breach of a sufficiently serious nature, the promisee has the option, as
well as claiming damages, to terminate performance or treat the contract as repudiated.7
12.05 It is different if the delay results not from a breach but from an ‘outside event or
extraneous change of situation’.8 In this situation, the doctrine of frustration comes into
play. This differs from termination for breach in a number of important ways. The first is
that, whereas termination for breach takes place only at the option of the promisee,
termination under the doctrine of frustration is said to be automatic.9 Secondly, whereas
termination for breach only discharges the promisee in the full sense,10 termination under
the doctrine of frustration discharges both parties.11 Thirdly, whereas termination for
breach as we have just seen involves the promisor in the liability to pay damages,
termination under the doctrine of frustration does not involve either party in the payment of
damages, though statute allows for some degree of restitutionary relief.12
12.06 Despite this, the relationship between delay amounting to a frustrating breach on
the one hand and delay giving rise to the doctrine of frustration on the other is so close that
it is often difficult to separate the two.13 First of all, both doctrines have a common root in
the concept of ‘frustration of the adventure’.14 Secondly, there are cases where the
boundary between the two doctrines is a fine one, as in Jackson v Union Marine Insurance
Co,15 where what would have clearly been a frustrating breach fell under the umbrella of an
exceptions clause, and The Hermosa,16 where a time charterparty was interrupted by
delays caused partly by unseaworthiness and partly by an excepted peril. Thirdly, though
the doctrine of frustration, unlike that of frustrating breach, is not supposed to act as a
defence in the technical sense, it is often used in this way, as where an employer argues in
the context of a claim for unfair dismissal that the contract has been frustrated by the
illness of the employee.17
(p. 320) 12.07 It is also clear that the measure of frustrating delay is the same both for
frustrating breach and under the doctrine of frustration proper.18 This is demonstrated by
The Hermosa,19 where Mustill J was confronted with a case where the delay had been
caused partly by unseaworthiness and partly by an excepted peril. In so far as the first
cause was responsible, it was a case of frustrating breach; in so far as the second cause was
responsible it was a case falling under the doctrine of frustration proper. Whilst admitting
that in some cases the recognition of a right to add together delays from different sources
might cause problems in practice,20 the court was content to cut the Gordian knot in the
present case by looking at the delay as a whole. It was the consequences of the events and
not their origins which mattered. In the words of Mustill J:21
… [T]he notion that frustration and repudiation are aspects of the same general
principle, differentiated only by the consequences which attend the discharge of the
contract, and the identity of the party who is entitled to assert the discharge, has
not been challenged …
For these reasons it makes sense in the present context to discuss frustrating delay as a
single concept, albeit one which operates in two distinct ways.
(3) Frustration of the ‘common object’

12.08 Another problem that needs further discussion in this context is the requirement
that delay frustrate the ‘common object’ of the parties to the contract. One of the classic
definitions of frustrating delay is that given by Bailhache J in Admiral Shipping Co v
Weidner Hopkins & Co:22
Private Law Library
Page 304
The commercial frustration of an adventure by delay means … the happening of

some unforeseen delay without the fault of either party to a contract of such a
character as that by it the fulfilment of the contract in the only way in which
fulfilment is contemplated and practicable is so inordinately postponed that its
fulfilment when the delay is over will not accomplish the only object or objects that
both parties to the contract must have known that each of them had in view at the
time (p. 321) they made the contract and for the accomplishment of which object or
objects the contract was made.
12.09 Though Bailhache J was speaking of the doctrine of frustration in this context, his
remarks could equally be applied to frustrating delay in the context of breach, where the
effect was to frustrate the common object of the parties. An obvious illustration of this is
the voyage charterparty, where the courts have considered the question whether the delay
was such as to frustrate the object of the voyage in question.23 In Stanton v Richardson24 a
ship was chartered to carry wet or dry sugar at the option of the charterer. Wet sugar was
provided for loading, but the ship’s pumps could not handle it. The charterer then refused
to load, threw up the charter, and sent the sugar by another ship. It was held that he was
justified in doing so. The ship was in effect unseaworthy,25 and could not have been
rendered fit to carry the cargo within such time as would not have frustrated the object of
the contract, namely to have the cargo carried to its destination. Again, in Lloyd Royal
Belge Société Anonyme v Stathatos26 a ship was chartered for a voyage from Gibraltar to
the United States and then back to France. Before she could sail, she was detained by the
Government and not released until over two months had elapsed. Atkin J quoted the
definition of frustrating delay given by Bailhache J,27 and decided on that basis that the
charterers were justified in throwing up the charter ten days after the detention. In MSC
Mediterranean Shipping Co SA v Cottonex Anstalt28 a cargo of cotton was shipped to its
destination, but the consignee then refused to take delivery of it. As a result of this, the
shippers were unable to return the containers to the carriers as required by the contract.
When it became clear that the cargo would not be collected at any time in the foreseeable
future if at all, the carriers offered to sell the containers to the shipper in an attempt to
break the deadlock. Though the shippers were clearly in breach here, the court held that
the test was the same as for frustration, and that on this test the commercial purpose of the
adventure had clearly been frustrated.29
12.10 In other cases, however, the courts have had difficulty in applying the notion of
frustrating delay on the grounds that there is no common object to frustrate. Thus for
instance the courts have sometimes found difficulty for this reason in applying the notion of
a frustrating delay to time charters. One of the problems for Atkin J in Lloyd Royal Belge
Société Anonyme v Stathatos,30 which we have just (p. 322) been discussing, was that the
charterparty had been written out on a form for time charters, and provided for the
payment of hire at a monthly rate. Referring to this problem, Atkin J said:31
The doctrine … [of frustrating delay] … is part of the law of contract, and in that
sense applies to all contracts, including time charters. One of the questions that
arises where the doctrine is involved is … [c]an you find a common object which is
frustrated?
In the end Atkin J got round the problem on the basis that the case was one of a voyage
charter, but it was said that in a time charter the shipowner’s interest was only in being
paid the hire, and that therefore there was no common object that could be rendered
incapable of fulfilment.32 Indeed, for this reason it was thought prior to the case of Bank
Private Law Library
Page 305
Line Ltd v Arthur Capel & Co33 in 1919 that the doctrine of frustrating delay could not
apply to a time charter at all.34
12.11 This problem of finding a common object does not just apply to time charters, but
throughout the whole law of contract. While it is true to say that for some contracts, for
instance a contract of partnership or a contract to publish a book, a common object can be
discerned, this is certainly not true for all. Thus where the contract involves a simple
exchange, such as a sale of goods for cash in a shop, the common object is reduced to
vanishing point. Indeed, it has been pointed out that in any contract there must be a
diversity of wants, otherwise there would be no incentive to make the contract in the first
place.35 And even if we assume that the common object of the contract has been frustrated,
the question then arises as to why the parties did not simply agree to discharge by
abandonment, as they were perfectly entitled to do.36
12.12 In most cases it will be seen that it is the object of only one party that has been
frustrated by the delay. This is true for cases of frustration proper as it is for cases of
frustrating breach, and is evidenced by the very fact that the case is being litigated in the
first place. One party wishes to have the arbitration called off; the other wishes it to
proceed. The employee wishes to return to work; the employer says that the contract has
been frustrated by illness. One of the parties to a charterparty wants to throw up the
charter; the other claims that it is still on foot. As has been aptly said:37
(p. 323)
In the vast majority of cases … delay frustrates the object of one party only, and it
seems difficult to understand how a court can ever find frustration of a common
object when it is clear from the very fact that the parties are before the court that
the commercial object of one party has not been ‘frustrated’, or he would not be
there to insist on performance.
12.13 One possible way out of this problem lies in the definition of frustrating delay given
by Bailhache J at the start of the present discussion.38 As we have seen, he refers to a delay
postponing the fulfilment of the contract to such a degree that39
… its fulfilment when the delay is over will not accomplish the only object or objects
which both parties to the contract must have known that each of them had in view
at the time they made the contract …
This recognises that in some if not most contracts the parties will have different objects in
view. If this is so, the question should surely be whether the purpose of the party who is
arguing for termination (whether on the footing of frustration proper or of breach) has been
frustrated, and if so whether that purpose was within the contemplation of the other
party.40
12.14 On this test, there is no difficulty with the frustration of time charters, or indeed
with any kind of contract. The object of the charterer is to have the use of the ship, so the
question should be whether the charterer has been deprived of it to a sufficiently
substantial degree as to justify termination of the contract.41 In the same way, in an
employment contract the object of the employer is to receive services, so the question
should be whether the absence of the employee, be it through illness or otherwise, deprives
the employer of those services to such an extent as to justify termination of the contract.
The test would be whether the promisee has been deprived by the delay to a substantial
Private Law Library
Page 306
degree of the benefit which the promisor knew he or she expected to derive from the
contract.
(p. 324) (4) Failure of consideration and impossibility

12.15 The issue of frustrating delay, whether under the doctrine of frustration proper or in
the context of discharge by breach, can be raised either by the promisee or by the promisor.
Where it is raised by the promisee, the argument will be that a delay in performance by the
promisor has been such as to deprive the promisee of the benefit of the contract. Where it
is raised by the promisor, the argument will be that the result of the delay has been such as
to render his or her own performance impossible, or at any rate more onerous to an
unacceptable degree. Cases of the former sort can be classified as cases of failure of
consideration: cases of the latter sort can be classified as cases of impossibility.42
12.16 The principle in the failure of consideration cases is that a promisee should not be
expected to perform when the promisor has completely failed to perform or refuses to do
so.43 The principle has been extended from the paradigm case of total non-performance by
the promisor to other defects in performance which the court regards as sufficiently
substantial to excuse the promisee from his or her obligation to perform in return, and
beyond that to cases where there is no defect in performance by the promisor as such but
for some other reason the promisee is deprived of the expected benefit of the contract.44 It
should be noted that the question of breach of contract is strictly irrelevant to this analysis;
the point is not that the promisor is at fault, but that the promisee has not received what he
or she bargained for. The principle of failure of consideration is as relevant to cases of
discharge under the doctrine of frustration as it is to cases of discharge by breach. In cases
of delay this means asking whether the delay was sufficient to go to the root of the contract
as depriving the promisee of substantially the whole benefit of the contract.45
12.17 The principle in the impossibility cases is that a promisor is excused from
performance where he or she can no longer do so. One obvious example of this is death in
the context of a contract to perform personal services, but it also applies to cases of
illegality. This has been extended beyond total impossibility and illegality to cases where the
promisor’s performance has become more onerous to (p. 325) an unacceptable degree, or
where the promisor is being called on to perform in radically different circumstances to
those which were originally contemplated.46 In the words of Lord Radcliffe:47
… [F]rustration occurs whenever the law recognises that without default of either
foedera veni. It was not this that I promised to do.
As this quotation suggests, most cases of impossibility arise under the doctrine of
frustration rather than that of discharge by breach, the issue being whether the delay
created such a change in the significance of the obligation that the thing undertaken would,
if performed, be a thing different from that contracted for.48
12.18 The distinction between these two different bases of discharge can well be
illustrated by the frustration of a time charterparty. In Tatem v Gamboa,49 for example, a
ship was chartered on this basis during the Spanish Civil War for the carriage of refugees.
The ship was then seized by the Spanish Government, and the defendant refused to pay
further hire. It was held by Goddard J that the seizure of the ship had frustrated the charter,
but in a sense the parties were being discharged for different reasons. The owners would
have been discharged on the basis of impossibility; the ship having been seized, it could no
longer be put at the disposal of the charterers. In the case of the charterers, performance of
their obligation, namely to pay hire, was still perfectly possible, but would have meant that
Private Law Library
Page 307
they would have been paying something for nothing. The consideration for the promised
payment had totally failed.
B. What Amounts to a Frustrating Delay?

12.19 Our next question is how we can tell whether a delay is sufficient to be a frustrating
one in the first place. There are two issues involved here, one being the length of the delay
and the other the effect of the delay.
(1) Length of the delay

12.20 The main factor in frustrating delay is its length. In some cases the promisee seeks
to be released from the obligation to perform by a protracted delay or interruption (p. 326)
in performance which is now at an end. A good example of this is where an employee is
absent through sickness for a protracted period, and then wants to return to work; can the
employer argue that the contract has been frustrated?50 Again, we have a number of cases
in which it was claimed that an agreement to go to arbitration was frustrated through lapse
of time.51 In these cases the spur for the claim was the fact that the other party was keen
for the arbitration to proceed, so the focus was entirely on the delay that had already
occurred. Eventually, of course, it was decided by the House of Lords that frustration could
not apply in these circumstances,52 but the cases in question are still of interest as
illustrating the quantum of delay required for frustration.
12.21 It goes without saying that the longer the delay has been, the more likely it is to be a
frustrating one. However, it is quite possible to have a frustrating delay without a long
delay, even in relation to the expected duration of the contract. In Poussard v Spiers,53 for
example, the delay was only for a few days. The defendant hired the claimant to sing in his
opera; she fell ill just before the first night, and, though she was recovered soon afterwards,
the defendant was held to be entitled to dispense with her services. Again, a delay of only
three months was held to have frustrated a twelve-month time charter in Bank Line Ltd v
Arthur Capel & Co54 and in Court Line v Dant & Russell.55 Both of these cases involved the
detention of the ship, in the former case by a government requisition and in the latter by a
blockade. In both cases it was held that the promisee – the owners in the first case and the
charterers in the second – was no longer bound to perform. So the mere length of the delay
that has already transpired is not always by any means crucial.
12.22 The point is this: it is not just a question of the delay that has occurred in the past.
Equally important is the likelihood of protracted delay occurring in the future. This is seen
in a number of cases. In Metropolitan Water Board v Dick Kerr & Co56 the defendant
contractors were held to be released from the obligation to construct a reservoir and other
works for the claimants after their plant had been requisitioned and the work suspended by
order of the Government at the outbreak of the First World War, the crucial point being that
the delay might last (p. 327) indefinitely, and that conditions after the war might be entirely
changed.57 In the words of Lord Atkinson:58
The Executive Government, acting no doubt legally and within its powers, has for
objects of State made it illegal and impossible for the respondents to do what they
promised to do. No one can tell how long it may continue to be invaded. In my
opinion they are entitled to be absolved from the further performance of that
promise.
Again, in Marshall v Harland & Wolff Ltd59 Sir John Donaldson, dealing with the frustration
of a contract of employment by illness, said60
Private Law Library
Page 308
The greater the degree of incapacity and the longer the period over which it has
persisted and is likely to persist, the more likely it is that the relationship has been
destroyed.
12.23 A case on the other side of the line is Tamplin SS Co v Anglo-Mexican Petroleum
Co,61 where a ship on a five-year charter was requisitioned. The owners claimed that they
were no longer bound by the charter. This argument was rejected on the ground that the
interruption was not likely to deprive the parties of the ship for a frustrating time. The ship
might be free for many months. In the words of Lord Loreburn:62
Taking into account … all that has happened,63 I cannot infer that the interruption
either has been or will be in this case such as to make it unreasonable to require
the parties to go on. There may be many months during which the ship will be
available for commercial purposes before the five years have expired.
12.24 Another good illustration of this principle is seen in The Hermosa,64 where a two-
year time charterparty was bedevilled by delays. Soon after the ship came on hire, time was
spent discharging a contaminated cargo, after which the ship had to go into dry dock for
repairs. These were duly completed, but the ship then had to be sent back to Chile in ballast
as there was no cargo available. Then, in the course of the ballast voyage, the ship was
badly damaged by a collision and had to put in for further repairs. By now the charterers
had had enough, and suspecting that the owners were being dilatory in putting the vessel
into proper order, decided to throw up the charter. However, it was held that these delays,
annoying though they had been, were not sufficient to frustrate the charter. The charterers
had (p. 328) sought to terminate at a time when there was a good prospect of the
charterparty being substantially carried out according to its terms. In the words of Mustill
J:65
The repairs could have been carried out in a matter of weeks, and if properly done
(as in fact they were) would leave the vessel in a satisfactory condition to complete
the remaining … months … of the charter period. [The charterers’] enjoyment of the
sub-charter had been substantially curtailed by a very exasperating course of
events, but not to such an extent as to make it possible to say that they had lost
substantially the whole benefit of the contract.
12.25 So the likely length of the delay in the future is just as important as the length of the
delay that has already occurred. But the notion of prospective delay raises some tricky
problems of its own, which we shall now discuss.
(a) The relevant time for decision
12.26 In most cases the court will have the benefit of hindsight as it looks at the events
which have occurred, often several years later. But the court cannot take such hindsight
into account. Thus in Bank Line Ltd v Arthur Capel & Co66 the House of Lords held that a
charterparty was frustrated when the ship was requisitioned for an indefinite period, even
though as things transpired the ship was released quite soon. The question of frustrating
delay will not be decided on the basis of the court’s knowledge when the matter comes to
trial. So what is the relevant time for decision?
12.27 Where there has been a breach,67 the crucial question is whether the promisee was
entitled to terminate performance because of the delay, or ‘treat the contract as
repudiated’. So here we have to look at the time when the promisee made his or her
decision to terminate the contract. In Ampurius Nu Homes Holdings v Telford Homes
(Creekside) Ltd68 the defendant developers agreed to grant to the claimants 999-year
leases on the bottom floors of four blocks currently under construction. In breach of
contract, they then decided to shelve work on two of the blocks and to concentrate on the
Private Law Library
Page 309
other two. Following unsuccessful negotiations on the matter, the claimants sought to
cancel the contract on the ground of protracted delay. At first instance, this was held to be
justified, but this decision was reversed by the Court of Appeal, one ground being that at
the crucial date work on the disputed blocks had now recommenced. In the words of
Lewison LJ
In our case Ampurius did not purport to terminate the contract until 22 October
2009. But by that time work on blocks A and B had been restarted, and had been (p.
329) in progress for two and a half weeks. Thus it could no longer be said, as the
judge said … that ‘the cessation of work … was indeterminate and prolonged’. The
date for completion of the works might well have been indeterminate …, but that is
a feature of every building programme … But since work had already been
restarted, the cessation of work had itself ceased.69
12.28 But where the delay is not a breach, the doctrine of frustration comes into play. This
is more than just an excuse for non-performance as we have seen; rather, it automatically
brings the contract to an end by operation of law.70 When there is a definite ‘frustrating
event’ such as the requisitioning of a ship, or the outbreak of a war, or the closure of the
Suez canal, we look at the event and ask how long the delay could have been reasonably
expected to last. In Anglo-Northern Trading Co Ltd v Emlyn Jones, a case involving the
detention of a ship, the question was put by Bailhache J in these words:71
The question will … be what estimate would a reasonable man of business take of
the probable length of the withdrawal of the vessel from service … and it will be
immaterial whether his anticipation is justified or falsified by the event.
12.29 In other cases there will be no clear frustrating event, and the promisee will simply
claim that the contract has been frustrated on account of a protracted delay in itself. Here
the difficulties of the traditional analysis become acute.72 The sensible thing to ask would
be whether the promisee was acting reasonably in claiming no longer to be bound, which is
the real issue in many of the cases.73 But this would be unorthodox, and in theory at least
the matter will have to be looked at from the point of view of both parties, and not just the
one claiming frustration.74 Again, it should not be possible in theory to wait and see what
happens, for either the contract is frustrated or it is not. But this is what the promisee will
do in practice, and the courts have had to recognise this. As Lord Roskill said in The
Nema:75
… [I]n some cases where it is claimed that frustration has occurred by reason of the
happening of a particular event, it is possible to determine at once whether or not
the doctrine can legitimately be invoked. But in others, where the effect of that
event is to cause delay in the performance of contractual obligations, it is often (p.
330) necessary to wait on events in order to see whether the delay already suffered
and the prospects of further delay from that cause will make any ultimate
performance of the relevant contractual obligations ‘radically different’.
12.30 ‘Wait and see’ in this context does not mean waiting to see what actually transpires;
it means waiting long enough to make a sensible prognosis of the commercial
probabilities.76 Who is it that must wait and see? In theory, both parties. But in practice,
since there is always one party insisting that the contract has been frustrated and one that
it has not, it is the party who is unwilling to go on with the contract who has decided that
there has been a frustrating delay. This means that, whatever the strict theory may say, the
issue in cases such as these is likely to boil down to the same question as in cases involving
Private Law Library
Page 310
breach – namely, whether the party in question was right in claiming to be excused on
account of the delay at the time when he or she refused or failed to perform further.
(b) The deprivation/unexpiration principle
12.31 The next factor to consider is what has been called the ‘deprivation/unexpiration
principle’. This is a most ungainly and inelegant phrase, but it describes a simple rule.
Whether a delay is a frustrating one will depend not only on its length but also on the ratio
of the delay to the expected time for performance. Thus a delay of a month might frustrate
a charterparty of six weeks where it would not frustrate one of six years. Though this idea
was implicit in some of the early cases77 it was first spelt out in Tamplin SS Co v Anglo-
Mexican Petroleum Co.78 Here it was held that an interruption of a few months was
insufficient to frustrate a five-year time charter. As Lord Loreburn said:79
… [B]oth [parties] would have been considerably surprised to be told that

interruption for a few weeks was to release them both from a charter that was to
last for five years. On the other hand, if the interruption can be pronounced, in the
language of Lord Blackburn … ‘so great and long as to make it unreasonable for the
parties to go on with the adventure’, then it would be different.
12.32 Thus in Cricklewood Property and Investment Trust v Leighton’s Investment Trust
Ltd80 wartime restrictions on building were held not to have frustrated a building (p. 331)
lease of 99 years, one of the reasons being that the interruption was hardly likely to last for
a sufficiently substantial proportion of the lease.81 Again, in The Hongkong Fir82 a
charterer was held not to be justified in throwing up a two-year charter after four months’
delay caused by the unseaworthiness of the ship. The charter, after all, still had eighteen
months to run when the charterer refused to go on with it, and the deficiencies in the ship
did not take long to put right.83 In contrast to this we have The Penelope,84 where a twelve-
month time charter for the carriage of coal was interrupted by a national coal strike which
lasted for eight months; though the charterparty made provision for strikes, it was held that
an interruption of this magnitude was sufficient to frustrate it in its entirety. Again, in Bank
Line Ltd v Arthur Capel & Co85 it was held that a twelve-month time charter was frustrated
by the requisitioning of the ship, the reasoning being that at the relevant time there was no
knowing how long the ship was going to be unavailable.
12.33 That said, the principle is not necessarily decisive, or even the main consideration,
in cases of this sort. In The Sea Angel86 a tanker was chartered for twenty days to assist in
an oil salvage operation. After the necessary work was completed the tanker was unlawfully
detained for over three months by the port authorities, which prevented its redelivery. The
charterers claimed frustration, submitting that the key factor here was the deprivation/
unexpiration principle as set out in the Bank Line case, but this was rejected by the Court of
Appeal. In the words of Rix LJ:87
It may be an important consideration, but it is, on our facts, only the starting point.
In the first place, the development of the law shows that such a single-factored
approach is too blunt an instrument. As stated above, a finding of frustration of a
charter of no longer than a year, based on requisition during the First World War …
was in any event close to inevitable. Secondly, requisition … could not be rectified;
whereas in our case, the consequences of the detention by the port authorities
remained very much a matter for enquiry, negotiation, diplomacy, and, whatever the
ordering of the tactics, legal pressure. Thirdly, where, as in our case, the
supervening event comes at the very end of a charter, with redelivery as essentially
the only remaining obligation, the effect of the detention on the performance (p.
332) of the charter is purely a question of the financial consequences of the delay,
which will fall on one party or the other, depending on whether the charter binds or
does not bind. It is not like the different situation where the supervening event
Private Law Library
Page 311
either postpones or, which may be even worse, interrupts the heart of the adventure
itself … In our case, the purpose for which the Sea Angel had been chartered,
namely the lightening of the casualty, had been performed.
12.34 Further criticism was levelled at the deprivation/unexpiration principle in The

Wenjiang.88 In this case a ship on a twelve-month time charter was trapped in harbour in
the Persian Gulf by the outbreak of a war between Iran and Iraq. The detention took place
towards the end of September 1980. By 7 October it became obvious that the war was
probably going to last for some time, and by 24 November it was clear that foreign vessels
were not going to be released. The question then arose whether the contract had been
frustrated, and if so when. The arbitrator indicated that he would have chosen 7 October as
the date for frustration had it not been for the deprivation/unexpiration principle; as it was,
the contract was not frustrated until 24 November. This was criticised adversely by the
Court of Appeal, who granted leave to appeal. Commenting on the arbitrator’s use of the
deprivation/unexpiration principle, Dunn LJ said:89
The principle was first stated by Lord Loreburn in 1916, when the doctrine of
frustration was in its infancy, and has occasionally been referred to in subsequent
cases. Whether it now forms any and if so what part of the developed doctrine of
frustration is I think a matter on which the courts should have an opportunity of
pronouncing.
12.35 It is hard to see why the arbitrator applied the principle in the way that he did, or
why the principle itself came in for such criticism. Perhaps the arbitrator thought that there
could not be any frustration until a delay that was sufficiently long in proportion to the total
time had already elapsed. This seems implicit in his insistence that 7 October was too early
to decide. If this is so, he was clearly in error. As we have seen, it is not just the delay that
has already lapsed in the past, but the delay that will probably elapse in the future, that has
to be taken into account.90 If this delay, looked at in proportion to the total time, is enough
to frustrate, then frustration takes place as from the time when this becomes apparent. In
the appeal it was subsequently reaffirmed that in cases of this sort a comparison between
the period of deprivation and the unexpired proportion of the charterparty was a relevant
factor, though by no means the only or even the principal factor, for the court to take into
account in deciding whether the contract had been frustrated.91
(p. 333) (c) ‘Anticipatory’ delay
12.36 It may happen that frustration is claimed to have arisen before the time for
performance arrives at all. Such claims can encompass both cases of failure of
consideration and cases of impossibility.92 In the former, the promisee argues that he or she
should not be expected to be ready and willing to perform when there is little prospect of
any benefit being gained thereby. Say, for instance, the promisee hires the promisor to sing
in a concert. Three days before the concert the promisor falls ill or disappears. Can the
promisee, who has good grounds for believing that the promisor is not likely to turn up on
the day, treat the engagement as at an end? And if so, what happens if the promisor is ready
to perform on time after all? In the latter case, the promisor argues that the prospect of
delay has made his or her own obligation substantially more onerous. Say, for instance, that
the promisor agrees to carry goods for the promisee from India to Italy for a fixed sum.
Before the time arrives for performance, the Suez Canal is closed for an indefinite period.
Can the promisor treat the engagement as at an end? And if so, what happens if the canal
reopens before the time for performance arrives? The former case can be classed as one of
prospective failure of consideration, and the latter as one of prospective impossibility.
Private Law Library
Page 312
(i) Prospective failure of consideration

12.37 The law here is in an unsatisfactory state. The difficulty is that the doctrine of
frustration allows the promisee to act on the basis of reasonable probabilities, whereas the
doctrine of anticipatory breach insists on clear proof that the promisor is unable or
unwilling to perform. This can be seen by two contrasting cases, one being Embiricos v
Sydney Reid & Co93 and the other Universal Cargo Carriers Corporation v Citati.94
12.38 In Embiricos v Sydney Reid & Co95 a ship was chartered to go to the Black Sea and
there load a perishable cargo for carriage to a British port. The contract contained an
exception for ‘restraint of princes’. The ship arrived in the Black Sea port and duly
commenced loading. Then war broke out between Greece and Turkey, and the Dardanelles
were closed to shipping. Upon hearing of this the charterer immediately stopped loading
and suggested that the charterparty be cancelled, but the owner sued for unlawful
repudiation. The court held that there was no ground for holding the charterer still bound
to load when there was no reasonable probability of the cargo being carried to its
destination. As Scrutton J said:96
Commercial men must not be asked to wait till the end of a long delay to find out
from what in fact happens whether they are bound by a contract or not; they must
(p. 334) be entitled to act on reasonable commercial probabilities at the time when
they are called to make up their minds.
Presumably the same reasoning would apply to any other case where it could be shown that
the promisor was unlikely to perform for reasons beyond his or her control, assuming that
no breach was involved in the failure to do so.
12.39 However, where the prospective delay would constitute a breach by the promisor, it
would appear that a stricter test must be applied, as can be seen from the decision of Devlin
J in Universal Cargo Carriers Corporation v Citati.97 This was a case involving a voyage
charterparty for the carriage of a cargo of scrap iron from Basrah to Buenos Aires. When
the ship arrived at the loading port no cargo was ready, nor was there any reasonable
prospect of one being made available in the foreseeable future. The owners waited for six
days, but there was still no cargo forthcoming, and the lay days allowed for loading were
shortly due to expire. So the shipowners threw up the charter and claimed damages from
the charterers, arguing that their conduct amounted to a repudiation of the charterparty.
The arbitrator found in favour of the shipowners on the grounds both of renunciation and of
prospective impossibility, but the former finding had to be quashed on the grounds of error
of law.98 This left the question of impossibility. In this connection it was held by Devlin J that
a party could not purchase indefinite delay by paying damages, and that a charterer could
not keep a ship indefinitely on demurrage;99 the contract could be terminated if it could be
shown that there was going to be such a delay as would frustrate the commercial purpose
of the adventure.100 However, the crucial question was as to the standard to which this
would have to be proved. Was it enough, as in the Embiricos case, to show that a
‘reasonable and well-informed’ person101 would have come to the conclusion that a cargo
was unlikely to be found and loaded before the expiry of a frustrating time, or was some
higher standard to be applied? In the end it was decided by Devlin J that before termination
could be justified, the shipowners would have to show that the charterers were ‘wholly and
finally disabled’102 from loading a cargo within such a time as would not frustrate the
contract; questions of breach of contract, he said, were not to be determined on the
principle of Embiricos v Sydney Reid & Co.103
Private Law Library
Page 313
12.40 This means that in cases of this sort the promisee has a much heavier burden to
bear when the prospective delay would amount to a breach by the promisor (p. 335) than in
cases when it would not. In the former case there must be – in the absence of renunciation –
proof of total and final disability, whereas in the latter the promisee can act on the basis of
reasonable commercial probabilities. The rationale for this is hard to see, as it means that a
promisor who is probably going to break the contract is better off than one who is not. Say,
for instance, the delay to the cargo in the Citati case had been covered by an exceptions
clause. In that case the owners would have been able to rely on the Embiricos principle
rather than having to surmount the more onerous hurdle of proof prescribed by Devlin J.
12.41 Although Universal Cargo Carriers Corporation v Citati is no more than a decision at
first instance, its application has given rise to much difficulty. In The Sanko Iris104 the
Supreme Court of British Columbia had to consider the rights of the defendants after the
claimants, with whom they had a long term contract to carry timber, announced their
intention to apply for bankruptcy. This led to the immediate seizure of many of the
claimants’ ships, and a refusal by many ports to handle them. The defendants, acting on the
basis of what they saw as reasonable commercial probabilities, threw up the contract, but
in the end it transpired that the claimants would have had no difficulty in carrying out their
obligations thereunder. This put the defendants in a difficult position; they could hardly
show that the claimants were wholly and finally disabled from performing at the relevant
time when this had been disproved by events. In the end the court avoided having to find
the defendants liable in damages for unlawful repudiation, but only by dint of construing
the claimant’s expressed intention to apply for bankruptcy as a renunciation of the
contract,105 or alternatively as a breach of an implied term of reliability of service.106
12.42 Given the unsatisfactory nature of the distinction in the present context between
discharge under the doctrine of frustration and discharge for anticipatory breach, it has
been argued that the Embiricos principle should apply across the board, whether or not the
prospective delay would amount to a breach by the promisor.107 This would mean that the
question for the court in all cases involving termination108 would be whether in view of the
delay the promisee was entitled to conclude on the basis of reasonable commercial
probabilities that performance was unlikely to be forthcoming from the promisor. However,
(p. 336) as long as Universal Cargo Carriers Corporation v Citati remains good law, the
distinction between cases of breach and cases of frustration will still have to be drawn in
this context.
(ii) Prospective impossibility
12.43 When the promisor claims frustration on account of a prospective delay in carrying
out his or her own obligations, the law is more straightforward. If the promisor is
responsible for the delay, it is a case of self-induced frustration, which can never be a
defence in any situation.109 Otherwise the promisor is entitled to act on the basis of
reasonable commercial probabilities. Certainly the promisor is not obliged to commence a
performance which he or she will probably not be able to complete. In Geipel v Smith110 the
defendant, a shipowner, chartered his ship for the carriage of coal to Hamburg. Before the
commencement of the voyage, war broke out between France and Prussia, and the port of
Hamburg was blockaded. So the defendant threw up the charter and refused to load. He
would have been entitled to wait until the blockade was lifted, since he was protected by a
‘restraint of princes’ clause, but could he treat the contract as no longer on foot? The court
held that he could, since it would be monstrous to expect him to wait indefinitely outside
Hamburg while his ship rotted away.111 So the promisor is not obliged to commence a
performance that he or she will be unlikely, on the basis of reasonable commercial
probabilities, to complete within such a time as would not frustrate the adventure. In this
context the delay must be such as would be likely to render the performance of the
Private Law Library
Page 314
obligation something totally different from that which was originally contemplated by the
contract.112
(d) Delay unexpectedly short
12.44 What happens if a delay or interruption which was likely to be protracted turns out
to be short? Once again we must distinguish cases of frustrating breach from cases under
the doctrine of frustration proper. Where the case is one of breach, the test as we have seen
is whether the promisee can show that the promisor was at the relevant time wholly and
finally disabled from performance,113 and this can hardly be done where at the end of the
day he or she turned out to be able to perform after all.114 However, in other cases the
courts allow for a party to act on the basis of reasonable commercial probabilities. Thus the
courts have (p. 337) not been prevented from finding frustrating delay even though the
delay has come to an unexpected end soon after one of the parties has thrown up the
contract.115 In The Nema116 a charterparty for seven voyages between Canada and Europe
was interrupted by a strike at the port of loading. The owners then threw up the
charterparty, arguing that it had been frustrated. The matter went to arbitration shortly
afterwards, and the arbitrator agreed that frustration had taken place, on the ground that
the strike was unlikely to come to a speedy end. In fact, however, the strike ended a week
after the arbitrator came to his decision. The matter went to appeal, but it was decided by
the Court of Appeal that there was no good ground for interfering with the decision of the
arbitrator.117 Indeed, the hindsight of the court, so far from giving it a right to interfere
with the decision, was a reason for disqualifying it from doing so. In the words of
Templeman LJ:118
In the present case there is one circumstance which in my judgement disqualifies

the court from insisting that … [it] would have reached a conclusion different from
that of the arbitrator. That circumstance is that the court inevitably considers the
matter with hindsight, that is to say with knowledge that the strike ended on 5th
October. On 26th September the arbitrator was driven by both parties to make a
decision without knowing whether or when the strike would end.
So any use of hindsight is out. And this is understandable, given that the party claiming
frustrating delay is entitled, other than in cases of anticipatory breach, to act on the basis of
the reasonable commercial probabilities at the time. As Lord Denning said, albeit in a
different context, we do not credit such a party with the foresight of a prophet, nor should
we expect it.119
(2) The effect of the delay

12.45 Though the length of the delay is an important factor to be considered, it cannot
provide an answer to all the questions. Just as important is the effect of the delay. In this
context we must once again reiterate the distinction made earlier on between failure of
consideration and impossibility.120 In the first case, it is the promisee who is arguing that
the effect of the delay is to deprive him or her of the expected benefit of the contract. In the
second case it is the promisor who is arguing that the effect of the delay is to make his or
her own performance impossible, or at any rate something totally different from what was
contemplated by the contract.
(p. 338) (a) Delay causing failure of consideration
12.46 The principle here is that a delay will be a frustrating one if its effect is to deprive
the promisee of substantially the entire benefit of the contract. We must here distinguish
between cases of actual and constructive failure of consideration.
Private Law Library
Page 315
(i) Actual failure of consideration

12.47 In this type of case the promisee can truly say that if the plea of frustration is not
allowed, he or she will be paying something for nothing. This might happen in a
charterparty where the effect of the delay is to render the ship totally unavailable for use,
or in a contract of employment when the employee is totally unavailable for work. Facts
such as these are unlikely to give rise to litigation, and even if they did they would probably
not be discussed under the heading of delay.121
12.48 Far more likely is the case where performance is interrupted in a contract which
provides for periodic payments. Say, for instance, that a contract of employment provides
for the payment of wages by the week, and the employee is absent for two weeks. Need the
employer pay wages for those two weeks? Or say that a ship is time chartered for the
payment of hire by the month. Is the owner entitled to demand hire in respect of months
during which the ship is not available for use?
12.49 There is no one rule for cases of this kind, and the position varies depending on the
type of contract involved and on its terms. In some cases the law is that the promisee is not
bound to render performance in respect of the period of interruption. Thus in a contract for
the sale of goods by instalments, the buyer need not pay for any instalments that the seller
fails to deliver.122 Again, in a contract of employment the normal position at common law
was that, in the absence of contractual provision to the contrary, the employer did not have
to pay wages in respect of any period during which the employee is absent through sickness
or for any other reason.123 In these cases one could say that the relevant contractual
obligation was interrupted or suspended.124
12.50 However, in other cases the law does not allow for suspension in this sort of case,
but imposes an ‘all or nothing’ approach. Thus in a time charterparty, unless the contract
provides otherwise,125 the owner is entitled to claim hire even though the ship is not
available to the charterer for a particular period.126 This means that the charterer must
either pay the hire in full or claim that the entire contract (p. 339) is frustrated. Likewise, a
tenant is bound to pay rent even though he or she is unable to make use of the demised
premises for the period for which the rent is payable.127
12.51 The absence of a general power to allow suspension in this sort of case may explain
some of the decisions on frustration; being unable to say that the promisee’s obligation to
pay for the service in question was suspended, the court could do justice only by saying that
it was extinguished altogether. In Admiral Shipping Co v Weidner Hopkins & Co128 a ship
was time chartered for ‘two Baltic rounds’. The ship then sailed for the Baltic, where she
was detained on the outbreak of war. The owner then brought the crew home, but the issue
arose as to whether the charterer was still liable to pay hire in respect of the time after the
ship had been detained. The court held that hire was no longer payable as the contract had
been totally frustrated, but the same result would have been reached if the court had been
able to say that hire was not payable in respect of any period for which the ship was not
available to the charterers. Again, in Countess of Warwick SS Co v Le Nickel SA129 a
steamer was chartered for one year from a fixed date with a provision that hire was to
continue until redelivery ‘unless lost’. Seven months after the commencement of the
charterparty the ship was requisitioned. The court held that hire was no longer payable on
the grounds of frustration: at the time of the requisition the ship was unlikely to be returned
during the currency of the charterparty. Once again this was not an unreasonable result,
but arguably it goes further than is necessary, since the same result could have been
reached by saying that hire was not payable while the ship was unavailable for use. On the
other hand, in National Carriers Ltd v Panalpina (Northern) Ltd130 the only options open to
the House of Lords in a case where the tenant was unable to make use of the demised
property for between a year and eighteen months of a ten-year lease were either to hold the
contract totally frustrated, which the House of Lords was unwilling to do, or to hold the
Private Law Library
Page 316
tenant liable to pay rent for the period in question. The option of suspending the obligation
during that time was not available.
12.52 The possibility of allowing for suspension in this sort of case was considered in
French Marine v Compagnie Napolitaine,131 where a ship was time chartered for four
months for a particular voyage. Hire was payable in advance, and there was a provision for
the extension of hire at the charter rate to enable the ship to complete the voyage. Just
after the four months was up and before the ship could be redelivered, she was
requisitioned by the Government. The owners claimed (p. 340) the extra month’s hire in
full. The charterers argued that the contract had been frustrated, but Viscount Finlay
doubted that this was a case of frustration at all, saying:132
A good deal of confusion has been introduced into this case by the argument … that
it is a case of ‘frustration’, and that it is to be governed by the rules laid down in
some cases where there has been ‘frustration of the adventure’ owing to some
unexpected event … All that has happened here is that as the British Government
took the vessel out of the hands of the owner he could not go on giving the
charterers the use of it. As he could not give the use of the vessel … the freight
ceased to be payable.
But this reasoning found no favour with the majority of the House of Lords in the case, who
held that the contract had indeed been frustrated, but that since the hire fell due before the
date of frustration it remained payable.133 So the charterer ended up having to pay
something for nothing.
12.53 There would be a lot to be said for allowing the courts to suspend obligations in
situations of this sort, so reserving the heavy guns of total frustration to cases where most if
not all the benefit of the contract has been lost.134 As it is, cases which involve an actual
failure of consideration over a limited period of time have to be argued as cases of
constructive failure of consideration in respect of the entire contract, which puts an
unnecessary strain on the law.
(ii) Constructive failure of consideration
12.54 In cases of constructive failure of consideration, the promisee is not being made to
pay something for nothing at all. Rather, the promisee is getting something, but that
something is so worthless in proportion to the expected benefit that the court decides that
the promisee should not be expected to pay for it. There are two types of case here. One is
where the delay or interruption has a catastrophic effect in itself, as where a key employee
is absent from his or her post, or where a delay in a voyage charterparty prevents the
voyage from being carried out. In other cases the delay does not have a catastrophic effect
in itself, and the court can only proceed by comparing what the promisee is getting from the
contract from what he or she could reasonably have expected to get from it. It is cases of
this sort that tend to invoke the ‘deprivation/unexpiration’ principle that we have already
encountered.135 Thus in an ordinary contract of employment, the employee not being one in
a key post, the employer is simply concerned with obtaining the services of the employee
for a certain time. Likewise in a time charterparty the object of the charterer is to have (p.
341) the use of the ship. If we ask how we decide whether the promisee in this sort of
contract has been substantially deprived of the benefit of it, the answer is that all we can do
is to see how long the deprivation has been in proportion to the total time the promisee
expected to benefit.
12.55 This principle can be seen in relation to contracts of various kinds. Thus in time
charters the principle has been stated in the following terms:136
Private Law Library
Page 317
… [F]or the charter to be frustrated the interruption must be, or be likely to be, of
very substantial duration, particularly in relation to the unexpired balance of the
charter period at the time of the alleged frustration. If at that time it is likely that
any substantial period of the charter will remain after the interruption has ceased
then the courts will be unlikely to hold that the contract has been frustrated.
And in contracts of employment the question is said to be:137
Was the employee’s incapacity, looked at before the purported dismissal, of such a
nature, or did it appear likely to continue for such a period, that further
performance of his obligations in the future would either be impossible or would be
a thing radically different from that undertaken by him and accepted by the
employer under the agreed terms of his employment?
In answering this question the court has to take into account the likely duration of the
employment, for it is said that:138
… the relationship is less likely to survive if the employment was inherently

temporary in nature or for the duration of a particular job than if it was expected to
be long term or life long.
Again, we are told that:139
… the greater the degree of incapacity and the longer the period over which it has
persisted and is likely to persist, the more likely it is that the relationship has been
destroyed.
And that:140
… a relationship which is of long standing is not so easily destroyed as one which

has but a short history.
It is not hard to conclude that the deprivation/unexpiration principle is of far more

importance than it would have been if the promisee had a specific object in view which
might or might not have been frustrated by the delay or interruption.
12.56 So, how do we decide whether the effect of delay or interruption is to cause a failure
of consideration sufficiently substantial as to amount to a frustration? The (p. 342) first
thing to look at is to see: (1) what benefit the promisee sought to gain from the contract
(the ‘consideration’ in this context); and (2) whether this was within the contemplation of
the promisor. If there was a specific object in view, such as a particular voyage under a
voyage charterparty, the question is whether the effect of the delay was such as to or likely
to prevent that object being attained. In Urban 1 (Blonk St) v Ayres141 the claimant
developer agreed to grant the defendant a 125-year lease on a new flat in a development
currently under construction. No fixed date was set for completion, but it was envisaged
that this should take place in December 2008. This date became crucial for the purchasers,
since their mortgage offer lapsed after this time, and when the key date was not met, they
purported to withdraw from the contract. However, it was held by the Court of Appeal that
this amounted to an unlawful repudiation on their part. Time was not of the essence here,
and no notice to complete had been served. Moreover, though the purchasers had been
seriously prejudiced by the delay, the expiry of their mortgage offer had already occurred
before completion was due. Similarly in Valilas v Januzaj,142 the refusal of a dentist to make
monthly payments of chair rental as provided by his contract with the practice was held not
Private Law Library
Page 318
to amount to a repudiatory breach in the absence of evidence that payments would not be
forthcoming in due course. In the words of Arden LJ:143
Where the victim knows that he is not likely to be deprived of substantially the
whole of the benefit of the contract, that will without more lend substantial weight
to the conclusion that the victim was not justified in terminating the contract on the
grounds that he had been or would be deprived of substantially the whole of the
benefit of the contract.
12.57 In other cases the court has to look at the length of the delay or interruption in
proportion to the total duration of the contract. If it is not possible to hold the promisor’s
obligation to be suspended, or where this would not be sufficient to do justice to the
promisee, the court must consider frustration. This involves comparing the benefit received,
or likely to be received in the future, with the benefit the promisee expected to receive. If
the former is sufficiently negligible in comparison to the latter, the promisee can claim that
frustration has occurred.
(b) Delay causing impossibility
12.58 The cases now to be discussed are, as it were, the mirror image of those which we
have just been considering. These are cases where we look at the effect of the delay on the
promisor. In the ‘failure of consideration’ cases the claim is that because of the delay the
promisee is not receiving the expected benefit; in the impossibility cases the claim is that
because of the delay the promisor cannot carry out the (p. 343) expected performance.
Once more we must draw a distinction between actual impossibility and constructive
impossibility.
(i) Actual impossibility
12.59 In cases of the first category it is argued that the effect of the delay is to make the
promisor’s performance totally impossible. In Carapanayoti & Co Ltd v E T Green Ltd144 the
claimant agreed to ship some cottonseed cake on c.i.f. terms from Port Sudan to Belfast
during October/November 1956. The seller failed to ship, and pleaded as a defence that a
closure of the Suez Canal, which had occurred before the due date of shipment, had made it
impossible for him to ship the goods by the usual and customary route as he was bound to
do.145 Again, in Nicholl & Knight v Ashton, Edridge & Co146 a seller was held to be excused
from performance when an embargo rendered him unable to ship the goods during the
month contracted for. The essence of these cases is that the promisor has agreed to carry
out a particular obligation and is then rendered unable to do so by supervening
circumstances beyond his or her control.
(ii) Constructive impossibility
12.60 Far more common, however, are cases of constructive impossibility. Here the
promisor’s performance has not been rendered totally impossible, but it is argued that to
demand performance in the circumstances that have arisen would be to demand something
totally different from what was originally agreed. Many of these cases involve temporary
impossibility, where the promisor’s obligations are suspended for a period and it is then
argued that he or she should be totally released from them. Whether such an argument will
succeed depends on a number of factors, including the length of the suspension and the
effect of the delay on the obligation undertaken.
12.61 In looking at the length of the suspension, we apply tests similar to those used in the
context of failure of consideration. Thus, as we have seen, it is relevant to ask not only how
long the interruption has lasted but how long it is likely to last.147 However, the rules are
not identical. For instance, the ‘deprivation/unexpiration’ principle will not operate in the
same way, since a promisor who is called on to render a curtailed or delayed performance
will not be interested in the extent to which it will benefit the promisee; the crucial question
will be whether it imposes an extra burden on the promisor.148 In Metropolitan Water Board
Private Law Library
Page 319
v Dick Kerr & Co149 the defendants agreed to construct a reservoir over a (p. 344) period of
six years for the claimants. Soon after the outbreak of the First World War, the Government
signed a decree suspending the project and ordering the plant to be sold. The question was
whether the defendants were discharged, or whether they were bound to go ahead with the
project once the embargo was lifted. It was held by the House of Lords that the indefinite
embargo imposed by the Government was such as to discharge the contract in its entirety. A
crucial factor here was that of certainty; the courts do not like to have an obligation to
perform hanging over the head of the promisor for an indefinite period.150 Thus in Bank
Line Ltd v Arthur Capel & Co,151 another case of this kind, Lord Shaw said:152
There may be many cases in which it would be greatly to the advantage of one party
that he should have an indefinite, and it may be a prolonged, hold over the other till
performance shall become possible. In my opinion it would be contrary to all sound
principle to overlay the effect of the suspense … by the necessity of having a
consent on both sides to cancellation. No such consent appears to me to be
required.
12.62 Quite apart from the question of time as such, we have to consider the effect of the
postponement on the nature of the obligation undertaken. It may very well be that such a
postponement will render the obligation something considerably more onerous than that
which was originally bargained for by the promisor. This is the ‘change of obligation’
concept seen in the classic definition of frustration given by Lord Radcliffe in Davis
Contractors Ltd v Fareham Urban District Council:153
… [F]rustration occurs whenever the law recognises that without default of either
foedera veni. It was not this that I promised to do.
12.63 The same point was made by Lord Simon in National Carriers Ltd v Panalpina
(Northern) Ltd.154 In the words of Lord Simon:155
Frustration of a contract takes place when there supervenes an event (without

default of either party and for which the contract makes no sufficient provision)
which so significantly changes the nature (not merely the expense or onerousness)
(p. 345) of the outstanding contractual rights and/or obligations from what the
parties could reasonably have contemplated at the time of its execution that it
would be unjust to hold them to the literal sense of its stipulations in the new
circumstances.
12.64 Thus in the Metropolitan Water Board case, the facts of which are discussed
above,156 one of the reasons for holding the contractor to be discharged by frustration was
that there was no way of telling what conditions would be for the building trade after the
war.157 In Woodfield SS Co v Thompson158 the claimants ordered two ships to be
constructed by the defendants. A few months later, the Government ordered the defendants
to cease their existing work and divert all their resources to the war effort. At the end of the
war, the question arose as to whether the defendants were still bound by the contract. It
was held that they were not. In the words of Sterndale MR in the Court of Appeal:159
Of course the result in this case of putting the parties into this different position,
namely, that they could not begin their series of vessels until November, 1918,
instead of somewhere towards the latter end of 1916, has been that construction is
Private Law Library
Page 320
now carried out under different conditions of labour and at a much greater cost
than it was before.
12.65 So in a case of this sort the court will look at the effect of the postponement of the
obligation, to see whether it has been rendered more onerous to a sufficient degree. The
same is true of cases which involve prospective delay without any actual postponement of
the starting time for performance, as where a builder claims frustration because of labour
costs or bad weather,160 or the cases where shipowners claimed that charterparties and
other contracts of affreightment were frustrated by the closure of the Suez Canal.161 In all
of these cases the essence of the problem is that the promisor’s performance has been
rendered far more onerous than had originally been contemplated.
12.66 How much more onerous must performance be before frustration can be invoked? It
is often said that a contract will not be frustrated by mere hardship or inconvenience, or
just because performance has become more expensive or burdensome for one of the
parties.162 In the same way, a distinction is sometimes drawn in this context between
situations where performance has merely become (p. 346) ‘more onerous’ and situations
where it has been rendered ‘radically different’.163 However, this distinction is easier to
state than it is to explain, and extra expense cannot be a totally irrelevant factor: were it so,
there could hardly be frustration at all, given that in the commercial world contracts are
generally made for profit.164 For this reason, though frustration is not easy to establish by
any means, the difference between delay which is sufficient to frustrate the obligation and
that which merely makes it more onerous must be one of degree rather than one of kind.165
C. The Legal Effect of Frustrating Delay

12.67 A party to a contract cannot claim to be excused from performance merely because
he or she has been prejudiced by delay, even where that delay is a frustrating one. Rather, it
has to be shown either that the delay amounts to a repudiatory breach on the part of the
other party or that the doctrine of frustration has come into play. We shall now look at each
of these situations separately.
(1) Delay as a frustrating breach

12.68 The concept of a frustrating breach goes back several centuries,166 but it is
manifested in the modern law in the shape of the doctrine laid down in The Hongkong
Fir,167 whereby a party can terminate even in the absence of breach of condition if the
effect of the breach is, in the words of Diplock LJ, ‘to deprive the party not in default of
substantially the whole benefit which it was intended that he should obtain from the
contract’.168 This doctrine has been adopted elsewhere in the common law world,169 and
though there is still some controversy over matters of detail, the doctrine itself is now well
established.
12.69 Whether a breach has this effect in any given case depends on two aspects, which
can usefully be explained by reference to the criminal law concepts of actus reus (conduct)
and mens rea (fault). The conduct element is the factual circumstances of the breach; the
fault element is the attitude of the promisor.
(p. 347) (a) Actus reus of frustrating breach
12.70 The actus reus of frustrating breach is traditionally explained in terms of a breach
which deprives the party not in default of substantially the whole benefit of the contract. As
has been pointed out, there is an internal contradiction here between two ideas, one being
that of substantial deprivation and the other that of a total deprivation.170 Though both of
these tests have support in the cases,171 the difference is clearly one of degree rather than
kind,172 the essence of the question being whether something akin to frustration is required
or whether a less exacting test applies in cases of repudiatory breach. Given the clear
authority in the present context that the test for computing frustrating delay is the same
Private Law Library
Page 321
both for cases of frustrating breach and frustration proper,173 we need say no more about
this aspect of the matter.
(b) Mens rea of frustrating breach
12.71 As noted above, the question of whether a frustrating delay has occurred in any
given case involves considering not only the delay that has already elapsed, but that which
is likely to occur in the future. Where the delay involves a breach, the attitude of the
defaulting party can be crucial in this context, as though breach of contract does not
generally require proof of fault in the criminal sense, the presence or absence of fault may
be a good indication of how likely it is that performance will be forthcoming in the future.
12.72 One significant factor in this context is said to be whether or not the breach is
deliberate. As Lord Wilberforce pointed out, though not all deliberate breaches are
necessarily repudiatory, such a breach may give rise to a right for the innocent party to
refuse further performance because it indicates the other party’s attitude towards future
performance. Such a case was The Pro Victor,174 which (p. 348) involved a voyage
charterparty for the carriage of petroleum products from Karachi. Difficulties having arisen
with regard to the sale of the cargo, the charterers put forward a number of proposals to
the owners for the amendment of the charter; at the same time they instructed the captain
of the ship to reduce speed, and to defer tendering notice of readiness on arrival. All of this
was held by Flaux J to amount to clear evidence of repudiation; at the relevant time the
charterers had both by their words and by their conduct evinced an intention not to
perform the charterparty, in a manner which a reasonable person in the position of the
owners would have regarded as clear, equivocal, and absolute. Similarly, in Eribo v
Odinaiya,175 a customer was held to be entitled to terminate a contract for building work
following protracted delays by the builder; the builder knew full well of the customer’s need
to have the work done quickly, had been guilty of shoddy work, and had repeatedly failed to
meet promised target dates.176
12.73 That said, not every deliberate breach will necessarily amount to a repudiation in
this context. In Mersey Iron and Steel v Naylor, Benzon & Co177 the defendants refused to
pay for a quantity of steel delivered by the claimants. Normally this would have amounted
to a clear repudiation, but in this case the defendants had a good reason for their refusal;
proceedings had been instituted for the winding up of the claimant company, and they had
been advised not to make any payments in the meantime without a court order. The crucial
factor here seems to have been the lack of any suggestion that the money would not be paid
eventually. Similarly, in Decro-Wall International SA v Practitioners in Marketing178
repeated delays in payment by the buyers under a sole agency agreement were held not to
have justified termination by the sellers; no doubt the delays in payment were a source of
irritation to the sellers, but payment had always been forthcoming at the end of the day.179
Though the motives and attitude of the defaulting party may be a relevant factor in deciding
whether he or she is guilty of repudiatory breach, it is not the only or even the key factor;
as stated by the High Court of Australia,180 deciding whether a breach goes to the root of
the contract in any given case involves a number of considerations, including the nature of
the contract and the relationship it creates, the nature of the term, the kind and degree of
the breach, and the consequences of the breach for the other party. Such an exercise
cannot be other than highly fact-sensitive.
(p. 349) (2) Delay under the doctrine of frustration

12.74 Even where the delay does not involve a breach of any kind, the injured party can
still claim to be discharged from the duty to perform on the ground that the contract has
been frustrated. The modern approach to the doctrine of frustration is as set out by the
Court of Appeal in The Sea Angel,181 the facts of which have already been discussed.182
There, it will be remembered, it was held that the charterparty was not frustrated by the
detention of the vessel, despite the fact that the length of the detention ended up being
Private Law Library
Page 322
considerably longer than the charter itself. Referring to the deprivation/unexpiration

principle discussed above, Rix LJ said that this was no more than one factor that the court
had to take into account. Rather, a ‘multifactorial’ approach was necessary in cases of this
kind. In the words of Rix LJ, which deserve to be quoted at length:183
In my judgment, the application of the doctrine of frustration requires a multi-

factorial approach. Among the factors that have to be considered are the terms of
the contract itself, its matrix or context, the parties’ knowledge, expectations,
assumptions and contemplations, in particular as to risk, as at the time of contract,
at any rate so far as these can be ascribed mutually and objectively, and then the
nature of the supervening event, and the parties’ reasonable and objectively
ascertainable calculations as to the possibilities of future performance in the new
circumstances … In such circumstances, the test of ‘radically different’ is important:
it tells us that the doctrine is not to be lightly invoked; that mere incidence of
expense or delay or onerousness is not sufficient; and that there has to be as it were
a break in identity between the contract as provided for and contemplated and its
performance in the new circumstances.
12.75 One key factor here was the demands of justice in the individual case. As Rix LJ
went on to say:184
What the ‘radically different’ test, however, does not in itself tell us is that the
doctrine is one of justice, as has been repeatedly affirmed on the highest authority.
Ultimately the application of the test cannot safely be performed without the
consequences of the decision, one way or the other, being measured against the
demands of justice.
12.76 What it all means is that in cases of this sort the court will be influenced by a
multitude of factors; indeed, the reference by Rix LJ to ‘the demands of justice in the
individual case’ indicates that the decision of the court will have to be highly fact-sensitive,
and that in a sense the list of relevant factors for deciding whether (p. 350) the doctrine of
frustration comes into play can never be entirely closed. However, some of these factors are
of regular occurrence, and we shall discuss these in the pages which follow. For the
purposes of exposition these can be divided into ‘risk’ factors and other factors.
(a) ‘Risk’ factors
12.77 Even where the delay is long enough to be a frustrating one in principle, it does not
follow that a party to the contract can claim to be discharged on that account, since that
party may have to bear the loss. The question who has to bear the loss in a case of
frustrating delay must not be confused with the question whether such a delay has occurred
in the first place; the former can be termed a question of risk, whereas the latter can be
termed one of quantum. Thus it has been said that there can be no frustration if the delay in
question is ‘within the commercial risks undertaken by the parties’.185 As Rix LJ said in The
Sea Angel:186
Since the subject matter of the doctrine of frustration is contract, and contracts are
about the allocation of risk, and since the allocation and assumption of risk is not
simply a matter of express or implied provision but may also depend on less easily
defined matters such as ‘the contemplation of the parties’, the application of the
doctrine can often be a difficult one.
Private Law Library
Page 323
12.78 Obviously asking whether a particular party should bear the risk of frustrating delay
does not answer the question; it merely restates it in different terms. However, the notion of
‘risk’ provides a useful peg on which to hang a number of issues that are related in this
context.
(i) Self-induced frustration
12.79 A party cannot claim frustration in respect of a delay for which he or she is
responsible. Thus a promisor whose actions render performance of his or her own
obligations impossible cannot claim frustration187 and may even be held to have repudiated
the contract.188 An example of this in the context of delay is Mertens v Home Freeholds,189
where a builder deliberately dallied in the performance of a contract to construct a house,
knowing that a Government embargo was about to be imposed and hoping to find a good
excuse for escaping from his contractual obligations. The embargo was then imposed, and
there was a long delay before the house could be completed, a task which was by then
considerably more expensive. It was held that the builder could not claim frustration;
indeed, he had to bear the extra costs of completion, since the delay (p. 351) arose by
reason of his own deliberate act. Again, in The Andra190 a charterparty for the carriage of
chicken legs from the USA to St Petersburg was held not to be frustrated by an order from
the Russian veterinary authorities prohibiting further discharge of the cargo. The
charterers were arguing frustration as a defence to the payment of demurrage, and it was
held that though the direct cause of the delay was the order in question, the persistence of
that order was in no small way due to the failure of the charterers themselves to perform
their non-delegable duty to discharge the cargo.191
12.80 The same principle applies to cases of failure of consideration. In The Eugenia192 a
charterer ordered the ship to sail into the Suez Canal, in breach of a term in the
charterparty that he would not send the ship into any war zone. The ship was then trapped
in the canal for a considerable period, and the charterer claimed frustration. But it was held
by the Court of Appeal that this was a case of self-induced frustration, as the trapping of the
ship was entirely due to his own act.193 Again, it was held in Brown v Turner, Brightman &
Co194 that a charterer who sent the ship to load in a port in the knowledge that a strike was
in progress was not excused from paying hire on the grounds of frustration; the frustration
had been induced by his own unwise decision.
(ii) Delay dealt with by the contract
12.81 Frustration will not be invoked by the courts in defiance of the express words of the
agreement, for if the parties have chosen to allocate the risk of delay in a certain way there
will be no reason to go against their wishes.195 Thus in one of the famous Coronation cases,
Victoria Seats Agency v Paget,196 a contract for the hire of premises overlooking the route
of the Coronation procession of King Edward VII was held not to be frustrated by the
cancellation of the procession due to the illness of the King, since the contract already
made provision for this event. A similar result was reached in The Safeer,197 where a
charterparty provided for the carriage of a cargo of rice to Kuwait. The charterparty
contained a clause giving the vessel liberty to comply with any directions as to discharge
given by any government. Soon after the vessel arrived at Kuwait the country was invaded
by Iraq. The Iraqi authorities then ordered the cargo to be discharged, and confiscated it. It
was held that the charterparty was not frustrated by this, as the contract had made express
provision for this very event.
(p. 352) 12.82 One of the attractions of this sort of term is that it provides a more
sophisticated allocation of losses than is available under the doctrine of frustration.198 In
Total Gas Marketing Co Ltd v Arco British Ltd199 a contract for the sale of natural gas
signed in early 1995 included a term stating that it was conditional on the sellers becoming
party to an allocation agreement at the onshore gas terminal. By the end of 1996 the sellers
had still not become party to the agreement, and, the price of gas having gone down in the
Private Law Library
Page 324
interim, the buyers claimed that they were discharged on the basis of the condition having
failed. The sellers, however, argued that the clause in question did not have this effect, and
that there could be no discharge in the absence of frustration. But the House of Lords were
reluctant to invoke the possibility of frustration in a contract of this sort, where commercial
certainty was of the essence. In the words of Lord Steyn:200
It is a matter of speculation how long a prospective delay would be regarded as

sufficient to bring the contract to an end by operation of law. The Judge would have
to make a value judgment. The result would be uncertainty and unpredictability. Yet
the buyer, as a purchaser for resale in the domestic market, would have wished to
know with certainty by a fixed date whether its agreement with the seller is
effective, or whether its supplies would have to be sought elsewhere. The seller
would have been aware of this fact. The primary argument of the seller is therefore
contrary to the reasonable expectations, which the parties must have shared. And
the parties chose language which is apt to shut out the spectre of prolonged
uncertainty. It shows that the parties wanted to know where they stood, and would
not have wanted to await the uncertain outcome of a dispute as to frustration.
12.83 The principle currently under discussion is easy to state but difficult to apply, for
how can one tell whether the event is catered for by the contract? Indeed, at one extreme it
might be argued that the doctrine of frustration should be excluded from commercial
contracts altogether, on the basis that if the parties had intended there to be any excepting
events they would have provided for them in the contract. On this view, the frustrating
events are always covered in the contract, on the grounds that the words can always be
interpreted so as to place the risk one way or the other.201
12.84 Obviously the courts do not go to this extreme, but it is often very hard to say
whether a particular contract has as a matter of construction provided for a particular
contingency. What if, for instance, the contract contains a force majeure or cancellation
clause? Sometimes it has been held that this excludes recourse to frustration. In Bremer
Handelsgesellschaft mbh v Vanden-Avenne Izegem202 the (p. 353) court had to consider the
effect of an embargo imposed by the United States Government on a c.i.f. contract for the
sale of soya beans. The contract, which was on the GAFTA 100 form, contained an extensive
force majeure clause, but it was argued that even if the clause did not cover the sellers they
could still rely on frustration in the alternative. But this contention was rejected by Mocatta
J203 on the ground that the clause in question was intended to be exhaustive.
12.85 In other cases, however, the court may allow frustration to operate over and above
the express provisions in the contract, on the grounds that they cannot have been intended
to deal with such an inordinate delay as has in fact occurred. Thus the insertion of a clause
allowing for suspension of performance will not necessarily exclude the operation of
frustration. In Court Line v Dant & Russell204 a time-chartered steamer was detained in the
Yangtze River by a Chinese blockade, and the question arose whether the charterer was still
liable to pay the hire. It was held that while the events that had occurred did not fall within
the ambit of the ‘off-hire’ clause in the charterparty, the charterer was nevertheless excused
on the ground of frustration. Again, in The Florida205 the provision of a ‘liberties clause’ in a
voyage charterparty allowing the owner or master to dispose of the cargo on the
occurrence of certain eventualities did not exclude frustration in a case where due to an
embargo it proved impossible to designate a cargo at all. In a similar way we have seen that
‘excepted perils’ clauses and the like, while they may cover a party in respect of his or her
liability for damages, do not necessarily exclude the operation of frustration.206
Private Law Library
Page 325
12.86 So the mere presence in the contract of terms which seem to cover the events in
question does not necessarily exclude frustration, since the court will still have to decide
whether the language in question was intended to have this effect. This is often an unreal
question, since the parties may often have used a standard printed form and will not have
directed their minds to the question at all;207 alternatively they may have thought about it,
and failed to come to any agreement about the matter.208 All that can be said is that
whether the terms of a particular contract exclude the operation of frustration is a matter
of construction, and that the more specific the contract is in dealing with the matter, the
less likely it is that the court will be willing to invoke the doctrine. Conversely, the more
catastrophic the event, the less likely it is that a clause will be held to cover it, unless
particularly clear words are used.209
(p. 354) (iii) Delay foreseen
12.87 It is often said, or at least implied, that events that have been foreseen by the
parties in advance of the contract cannot give rise to frustration.210 Thus, for instance, it
has been said that the frustrating event must be of such a character that it ‘cannot
reasonably be supposed to have been within the contemplation of the parties’;211 that it
must be ‘entirely beyond what was contemplated by the parties when they entered into the
agreement’;212 that it must be ‘some outside event or extraneous change of situation not
foreseen or provided for by the parties at the time of contracting’.213 The reasoning behind
this is no doubt that where delay, or any other event for that matter, is foreseen by the
parties, and no provision is made for it in the contract, the parties must have intended the
loss to lie where it fell.
12.88 However, there is equally authority for saying that mere foresight is not enough to
exclude the operation of frustration, so long as it does not contradict the express words of
the contract. In The Eugenia214 the question for the Court of Appeal was whether a time
charterparty had been frustrated by the detention of the ship in the Suez Canal. During the
course of the negotiations the possible closure of the canal was considered, but the parties
were unable to reach any agreement on the matter and decided that if it happened they
would let the lawyers sort it out.215 It was argued by the owners that this was enough to
exclude the operation of frustration, but this contention was rejected. In the words of Lord
Denning MR:216
It has frequently been said that the doctrine of frustration only applies when the
new situation is ‘unforeseen’ or ‘unexpected’ or ‘uncontemplated’, as if this were an
essential feature. But this is not so. The only thing that is essential is that the
parties should have made no provision for it in the contract.
12.89 So the failure of the parties to make provision for an event which they have foreseen
as a possibility is not enough of itself to exclude frustration.217 All that can be said is that
events that are unusual or unexpected are more likely to give rise to frustration than those
that are not. We shall consider this further below.218
(iv) Delay foreseeable
12.90 Even where the delay is neither dealt with in the contract nor expressly foreseen by
the parties, it is less likely to frustrate the contract (p. 355) where it arises out of some
commonplace or foreseeable event. Thus, in the context of maritime delays in relation to a
time charterparty, Lord Sumner had this to say:219
Delay even of considerable length and of wholly uncertain duration is an incident of

maritime adventure, which is clearly within the contemplation of the parties … so
much so as to be often the subject of express provision. Delays such as these may
seriously affect the commercial object of the adventure, for the ship’s expenses and
over-head charges are running on … None the less this is not frustration; the delay
Private Law Library
Page 326
is ordinary in character, and in most cases the charterer is getting the use of the
chartered ship, even though it is unprofitable to him …
In Intertradex SA v Lesieur Tourteaux SARL,220 sellers of groundnuts sought to argue that

the contract was frustrated by interruptions in their source of supply. This contention was
upheld by the arbitrator, but was rejected by the Court of Appeal. In the words of Lord
Denning MR:221
The events were not sufficient to warrant any finding of frustration. There was the
breakdown of machinery in the factory. There was the difficulty in getting raw
material down by rail. Such events are commonplace in the world of affairs. If a
party desires to avoid such consequences, he must insert a stipulation to excuse
him. He cannot avoid them by a plea of frustration.
12.91 Once again, however, we are talking in terms of a presumption rather than a rigid
exclusionary rule.222 We have already seen that frustration is not excluded merely because
the event in question was actually foreseen;223 a fortiori, it cannot be excluded merely
because it was foreseeable. Were it otherwise, there would hardly be room for frustration at
all, for such events as wars, strikes, or embargoes have never been totally unforeseeable.224
What is possible is that a foreseeable or commonplace event may occur so often that by
long commercial usage the risk of it becomes the burden of one of the parties. Thus, in the
normal run of events, a seller must take the risk of his or her source of supply drying up;225
a (p. 356) charterer takes the risk of being unable to obtain a cargo;226 a builder takes the
risk of labour shortages.227 That apart, foreseeability does not exclude frustration, though
the more abnormal the occurrence, the more likely it is to give rise to the operation of that
doctrine.
(v) Type of contract involved
12.92 Frustrating delay is a principle that applies across the contractual spectrum, but it
is clear from the cases that, as has been said, they have a ‘definite maritime flavour’.228
Most of them, the older cases especially, are concerned with the sea and with the exigencies
of maritime commerce. This suggests that arguments based on frustrating delay are more
likely to succeed in this context than they are elsewhere. There are several reasons why this
may be so.
12.93 First of all, cases involving the sea and international trade are more likely to be
affected by the wars, embargoes, blockades, and canal closures that make up the majority
of the causes of frustrating delay. To put it another way, the unexpected is more likely to
happen in a maritime context than in, say, a building contract or a contract for the sale of
land. So the court will be more ready to shift the risk from what is provided for by the strict
words of the contract.
12.94 Secondly, there is often a large amount of money at stake in a case with a maritime
element. This means that it is more likely to be worth raising a plea based on frustration,
which is a risky plea at the best of times.
12.95 Thirdly, a contract with a maritime element has, traditionally at any rate, involved
performance out of the reach of the other party. When one party can, as it were, supervise
the performance of the other, delay is likely to be noticed and the problem dealt with before
it can reach the frustrating stage. This may serve to explain the maritime genesis of the
principle. Of course, this factor has had less force since the advent of radio communication.
Even so, the customer of a builder can always visit the site, the buyer of goods from a
manufacturer can always visit the factory to see what is going on, and so on. This has not
Private Law Library
Page 327
traditionally been the case in respect of maritime contracts. Where a ship is embargoed or
detained in a distant port, the parties have had to wait on events.
12.96 Fourthly, there is the natural tendency of lawyers to specialise and to put different
fields of law in different compartments. Thus, for instance, equity is still very much
regarded as a separate field of law by those who are expert in it,229 despite the efforts made
in the Judicature Acts to amalgamate the common law and equitable (p. 357) jurisdictions
under the same umbrella. So it is in the case of frustrating delay. Since most of the early
cases in the field had a maritime element, it was in that context that the authorities were
closest to hand. As well as this, there seems to be a greater willingness in the maritime
world to accept the inherent uncertainty of the frustration principle. It might be thought
that businessmen everywhere would prefer the certainty of the strict allocation of risks
according to the literal meaning of the contract, and would abhor the concept of frustrating
delay, which is inherently unpredictable in its operation and must make contract planning
more difficult than it would otherwise be. Yet in The Nema, one of the leading cases on
frustrating delay, the arbitrator had this to say in the course of his award:230
There are some in the City of London, and other maritime centres, who think that
commercial justice is sometimes sacrificed on the altar of certainty, and that a
slightly more liberal approach, in the application of frustration principles, to
supervening events, would be more appropriate to the pace of modern commercial
life.
This is borne out by a subsequent line of cases where ships were detained in the Shatt-el-
Arab waterway by the war between Iran and Iraq. In four arbitrations on the issue the
parties all agreed that the contracts had been frustrated, the only dispute being as to the
date of frustration.231
12.97 So, whatever the reason may be, it can be surmised that a plea of frustration will be
more likely to succeed in the maritime context. In contrast, there are some types of contract
where frustration is rarely to be encountered. Thus there can hardly ever be frustration of a
lease,232 still less of a contract for the sale of land;233 since these give rise to estates in the
land, issues of impossibility or of failure of consideration are likely to have less relevance,
quite apart from the fact that so far as delay is concerned parties are more likely to resort
to equitable remedies such as making time of the essence by notice than to argue
frustration. This matter of remedies may also explain why frustration of a building contract
is rare;234 it is more likely that liquidated damages will be recovered or time made of the
essence.235 Frustration also has a very narrow scope in an ordinary domestic contract for
the sale of goods.236
(p. 358) (vi) Implied terms
12.98 It was once thought that the whole doctrine of frustration was based on an implied
term.237 Though that approach has now long been discredited,238 there may still be cases
where it will be clear that, had the officious bystander asked the parties whether
performance would still have been due in a given contingency, they would have replied with
a testy ‘of course not!’239 In such a case frustration will no doubt occur. But the converse is
clearly not the case; frustration does not depend on the assumed agreement of both parties,
for in the vast majority of cases there would be no agreement. Indeed, the very fact that the
case is being litigated in the first place indicates that such agreement would be unlikely to
have occurred.240
12.99 However, the notion of an implied term can still be useful in this context where the
term is one implied in law. In particular, it is recognised that contracts of particular kinds
impose risks on one or other party, and where this is the case, it will not be open to the
party in question to argue frustration in relation to the risk in question. Thus, for instance,
it is well settled that in a contract of sale the sellers must take the risk of a failure in their
Private Law Library
Page 328
source of supply.241 In The Mary Nour242 the sellers, who were attempting to break into the
Mexican cement cartel, agreed to ship a cargo of cement in from Indonesia. However, they
were unable to obtain cement from any of the suppliers due to pressure from the cartel. It
was held by the Court of Appeal that the contract had not been frustrated. Though in
principle there was nothing to stop the doctrine of frustration from applying to a sale of
unspecified goods, there was no evidence here that the cargo was physically unavailable for
shipment, or that shipment was unlawful. Rather, the key factor here was the decision of
the suppliers to succumb to pressure from the cartel, something for which the sellers bore
the risk.243
12.100 The implied term theory is still given an occasional airing. Thus in his judgment at
first instance in The Hannah Blumenthal,244 Staughton J held an arbitration agreement to
have been frustrated by delay, saying:245
If McKinnon LJ’s officious bystander had asked the parties when they concluded the
arbitration agreement whether it was to be taken as providing for a fair trial, or (p.
359) also for circumstances in which a fair trial had become impossible, I have no
doubt what they would both have said: there is to be no arbitration if it cannot be a
fair arbitration.
However, we should not forget the words of Lord Wright in this context:246
The parties did not anticipate fully and completely, if at all, or provide for what
actually happened. It is not possible, to my mind, to say that, if they had thought of
it, they would have said: ‘Well, if that happens, it is all over between us.’ On the
contrary, they would have almost certainly on the one side or the other have sought
to introduce reservations or qualifications or exceptions.
The upshot of all this would seem to be that finding an implied term in the present context
is a sufficient but not a necessary condition for the operation of frustration. If the court can
find such a term, all well and good. But its absence will not exclude the operation of the
doctrine.
(b) Other issues
12.101 The cases on frustration reveal other issues which, while they do not necessarily
constitute formal factors in the decision whether frustration has occurred, may nevertheless
help in predicting that decision.
(i) Waiver
12.102 Where a breach of contract by the promisor gives rise to a frustrating delay, the
contract is not necessarily brought to an end; rather, as we have seen, the promisee has a
choice whether to terminate performance or to affirm the contract and carry on with it.247
But where there is no breach, the doctrine of frustration applies, and this is automatic and
occurs by operation of law. In this sort of case there can be no question of waiver.248 In
Sharp & Co Ltd v McMillan249 the claimant suffered an injury and was unable to return to
work. However, the defendants agreed to keep him on the books in order to safeguard his
pension. A year later it was clear that the claimant was not going to be able to return, and
his services were dispensed with. In an action for unfair dismissal brought by the claimant
it was held that the contract of employment had been frustrated, and that the conduct of
the defendants could not amount to waiver since the frustration had occurred by operation
of law rather than at the option of the defendants. One can see why the conduct of the
defendants did not amount to waiver in the present case, but the rule that frustration
proper can never be waived in any circumstances can give rise to difficulties. Say, for
instance, an employee fails to turn up to work for a protracted period simply through
laziness, but the employer decides not to terminate the engagement but to keep the
employee on. Since this would be classified as frustrating breach rather than frustration in
Private Law Library
Page 329
the (p. 360) strict sense, this would amount to affirmation, and the employer could not then
simply turn round and dismiss the employee without having further grounds for doing so.250
But this is not the case where the absence is due to sickness. Thus the lazy employee is
better protected than the one who is ill, which hardly makes much sense.251
12.103 There are not going to be many cases in which a party seeks to waive a frustrating
delay, but one example is Tamplin SS Co Ltd v Anglo-Mexican Petroleum Co Ltd,252 where a
ship under time charter was requisitioned by the Government for an indefinite period.
Normally one might have expected the charterers to argue for frustration here, but they did
not do so; rather, they decided to carry on paying the hire, believing that this would entitle
them to the very generous rate of compensation provided for by the Government for
requisitioned ships. The owners, however, argued that the contract was frustrated, despite
the fact that they were not being asked to do anything more than they had agreed to do,
and that they were receiving exactly what they had bargained for, namely hire at the agreed
rate. In the end the House of Lords dodged the problem of waiver by holding that the delay
was not sufficient in the present case to frustrate the charter, but Lord Parker was clearly
aware of the difficulty. As he remarked:253
The owners are not concerned in the charterers doing any specific thing beyond the
payment of freight [sic] as it becomes due. They are only concerned that the
charterers should pay the freight [sic] and shall not use the ship contrary to the
provisions of the charterparty.
12.104 This case can be contrasted with Metropolitan Water Board v Dick Kerr & Co,254
decided two years later. Here the question was whether a contract to construct a reservoir
was frustrated by the seizure of the contractors’ equipment and plant. The length of the
delay involved was more or less the same as in the Tamplin case, but here it was the
contractors who were seeking to be released from their obligations. Commenting on this
factor, Lord Dunedin said:255
I return to Tamplin’s Case to shew that the views of the majority … were based on
circumstances which find no proper analogy in the circumstances here. In the first
place the person who wanted the contract declared at an end was the owner. The
charterer, notwithstanding what had happened, was content to go on paying the
hire, and to refrain … from demanding any services from the owners … No one was
hurt by the continuance of the charter … But suppose the facts to be slightly (p.
361) different. Suppose the Government had taken the ship, and had said that they
would pay nothing … and then suppose that the owner had sued the charterer for
the hire during the period while the Government kept the ship. What then?
Lord Dunedin went on to suggest that in that case the decision would have gone the other
way.
12.105 Both of these cases were, of course, decided before it was finally settled that the
doctrine of frustration was automatic in its operation,256 and as the law stands any claim of
waiver on such facts would be bound to fail. However, on principle there is little to be said
for allowing one party to claim discharge where it is the other party who has been most
affected by the delay, but who is nevertheless happy to go ahead with the contract, and for
this reason the courts will probably be reluctant to say that frustration has occurred at all
in this sort of case.257
(ii) Frustrating delay as a sword
Private Law Library
Page 330
12.106 Frustrating delay is normally used as a shield, but very occasionally one of the
parties seeks to use it as a sword. In all the cases we have been discussing so far,
frustrating delay has been used as a defence; the party arguing frustration is using it as an
excuse for failing to perform his or her obligations under the contract. But it has sometimes
been argued that frustration creates obligations as well as extinguishing them. These are
cases where a promisor, whose performance has been rendered substantially more onerous
than might have been expected, does not throw up the contract, but carries on and
completes the task. The promisor then argues for extra payment on the ground that the
original contract has been frustrated, so that he or she can now claim remuneration on a
restitutionary basis in excess of the contract rate. The best known case of this type is Davis
Contractors Ltd v Fareham Urban District Council,258 where builders argued that they were
entitled to extra payment on this basis, the original contract having been frustrated by
delays arising from labour shortages and bad weather.
12.107 Even where there has been some definite frustrating event, this doctrine is hard to
swallow, as the party claiming extra remuneration is in one breath arguing: (1) that the
supervening circumstances rendered the obligation so much more onerous that he or she
could not reasonably have been expected to perform it; and (2) that it has in fact been
performed. Where there has been no clear frustrating event, as in Davis Contractors Ltd v
Fareham Urban District Council itself, it is even more difficult to accept, since here there
will be difficulty in pinpointing the time when the contract rate ceased to be payable. It has
never been said that English law does not allow (p. 362) such a claim,259 but it has only
rarely succeeded and the cases where it has have been subsequently discredited.260
(iii) A question of fact or a question of law?
12.108 We must conclude by asking who decides questions of frustrating delay, and in
particular the extent to which the courts are bound by the findings of an arbitrator. There
are two conflicting policies at work here. In the one hand, the courts have in the past been
reluctant to be bound by arbitrators, however eminent, especially having regard to the
possibility that different arbitrators might come to different decisions on indistinguishable
sets of facts.261 On the other hand, an expert arbitrator is more likely to be familiar with the
relevant commercial considerations in any given case. In the past, the crucial issue has
been framed in terms of whether frustration is a matter of fact or a matter of law, and
though this factor is now less significant than it was,262 it is still an important one.263
12.109 The cases seem to give no clear guide. Some cases make frustrating delay a
question of fact. Thus in Jackson v Union Marine Insurance Co the finding of a jury that the
delay had lasted so long as to frustrate the adventure was held to be ‘all-important’ by the
court.264 On the other hand, in Re Comptoir Commercial Anversois and John Power, Son &
Co it was said that the question whether the doctrine of frustration applied was a question
of law.265 Thus in Tsakiroglou v Noblee Thorl GmbH,266 a case involving a c.i.f. contract
which provided for the shipment (p. 363) of nuts from Port Sudan to Hamburg, the House of
Lords held unanimously that it would have been prepared to overturn a decision of an
arbitrator that sailing round the tip of Africa was not ‘commercially or fundamentally
different’ from sailing through the Suez Canal. The finding was in the end not dissented
from, but it was insisted that the final decision was one for the court. In the words of Lord
Reid:267
The commercial importance of the various differences involved … is fact on which

specific findings by arbitrators are entirely appropriate. But the inference to be
drawn on a consideration of all the relevant factors must, in my view, be a matter of
law - was there or was there not frustration.
Private Law Library
Page 331
12.110 This passage seems to indicate that frustration involves both questions of law and
questions of fact. Thus for Devlin J in Universal Cargo Carriers Corporation v Citati the
application of the doctrine of frustration itself was a matter of law, while the assessment of
the period of delay sufficient to constitute frustration was a question of fact.268 This reflects
the distinction between the questions whether a frustrating delay has occurred in the first
place and who should bear the risk of that delay. It is entirely appropriate for an arbitrator
to decide whether a delay in a particular case is sufficient to frustrate the adventure in a
practical sense, either by depriving the promisee to a substantial extent of that which he or
she bargained to receive or by making the promisor’s performance more onerous to an
unacceptable degree. Whether a frustrating delay has occurred is a matter which is bound
to depend on the individual circumstances of each contract, and it is therefore an entirely
appropriate question for an expert commercial arbitrator. But no arbitrator could decide,
for instance, that a party was entitled to rely on self-induced frustration. Again, the
construction of a contract is a matter of law, and it must therefore be for the court to decide
the extent to which the risk of a frustrating delay is assumed by one or other of the parties
to that contract. On questions of this sort the courts must have the final say, so as to ensure
consistency of approach and to assist contract planning.(p. 364)
Footnotes:
1
M’Andrew v Chapple (1866) 1 CP 643 at 648 (Willes J); Nitrate Corporation of Chile v
Pansuiza Compania de Navegacion SA (The Hermosa) [1980] 1 Lloyd’s Rep 638 at 649
(Mustill J).
2
Jackson v Union Marine Insurance Co (1874) 10 CP 125 at 141 (Bramwell B).
3
Hudson v Hill (1874) 43 LJCP 275 at 279 (Brett J).
4
Sir Lindsay Parkinson & Co Ltd v Commissioners of Works [1949] 2 KB 632 (CA) at 665.
5
Suisse Atlantique Societe d’Armement Maritime SA v Rotterdamsche Kolen Centrale
[1967] 1 AC 361 (HL) at 431 (Lord Wilberforce).
6
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir) [1962] 2
QB 26 (CA) at 70 (Diplock LJ).
7
Above, para 6.25.
8
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (The Hannah Blumenthal)
[1983] 1 AC 854 (HL) at 910 (Lord Brandon).
9
Hirji Mulji v Cheong Yue SS Co Ltd [1926] AC 497 (PC); Denny, Mott & Dickson v James B
Fraser & Co Ltd [1944] AC 265 (HL(Sc)); J Lauritzen AS v Wijsmuller BV (The Super
Servant Two) [1990] 1 Lloyd’s Rep 1 (CA) at 8 (Bingham LJ).
10
If the promisee opts to terminate the contract, the promisor is no longer bound to
perform his primary obligations, but is still bound by a secondary obligation, viz to pay
damages: Moschi v Lep Air Services [1973] AC 331 (HL) at 349–350 (Lord Diplock).
11
National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 (HL) at 700 (Lord
Simon).
12
Law Reform (Frustrated Contracts) Act 1943.
13
For a general criticism of the distinction and the manner in which it has evolved in
English law see the remarks of the present author in ‘Frustrating delay’ (1983) 46 MLR
738.
14
Above, paras 6.15–6.16; Stannard, John, ‘Frustrating delay’ (1983) 46 MLR 738.
Private Law Library
Page 332
15
(1874) 10 CP 125.
16
[1980] 1 Lloyd’s Rep 638 (aff’d [1982] Lloyd’s Rep 570 (CA)).
17
Marshall v Harland and Wolff Ltd [1972] ICR 101 (NIRC); Hebden v Forsey & Son [1973]
ICR 607 (NIRC); Egg Stores (Stamford Hill) Ltd v Leibovici [1977] ICR 260 (EAT); Hart v A
R Marshall & Sons (Bulwell) Ltd [1977] ICR 539 (EAT); Sharp & Co Ltd v McMillan [1998]
IRLR 632 (EAT); Williams v Watson’s Luxury Coaches Ltd [1990] 1 IRLR 164 (EAT); Four
Seasons Healthcare Ltd v Maughan [2005] IRLR 324 (EAT); Gryf-Lowczowski v
Hinchingbrooke Healthcare NHS Trust [2005] EWHC 2407, [2006] IRLR 100; Warner v
Armfield Retail & Leisure Ltd [2014] ICR 239 (EAT); Smith, Ian, Baker, Aaron, and Warnock,
Owen (eds), Smith and Wood’s Employment Law (13th edn, 2015) (‘Smith and Wood’), pp
433–440. The reason for this is that at the outset of the illness it is generally not known how
long it is likely to last.
18
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 at 434 (Devlin J); The Hongkong
Fir [1962] 2 QB 26 (CA) at 68 (Diplock LJ); MSC Mediterranean Shipping Co SA v Cottonex
Anstalt [2016] EWCA Civ 789, [2016] 2 Lloyd’s Rep 494 at [25] (Moore-Bick LJ).
19
[1980] 1 Lloyd’s Rep 638 (Mustill J) (aff’d [1982] 1 Lloyd’s Rep 570 (CA)).
20
[1980] 1 Lloyd’s Rep 638 at 649.
21
Ibid at 648.
22
[1916] 1 KB 429 at 436–437. The decision was reversed on appeal, but the definition of
frustrating delay was approved: [1917] 1 KB 222 (CA) at 242.
23
Cooke, Julian and ors, Voyage Charters (4th edn, 2014) (‘Cooke’), chapter 22.
24
(1874) 9 CP 390.
25
26
(1916) 33 TLR 390 (aff’d (1917) 34 TLR 70 (CA)).
27
Above, para 12.08.
28
29
Ibid at [28].
30
Above, para 12.09.
31
(1916) 33 TLR 390 at 391.
32
Tamplin SS Co v Anglo-Mexican Petroleum Co [1916] 2 AC 397 (HL) at 454 (Lord
Parker).
33
[1919] AC 435 (HL).
34
For frustration of time charters generally see Coghlin, Terence and ors (eds), Time
Charters (6th edn, 2008) (‘Coghlin’), chapter 26.
35
Patterson, Edwin W, ‘Constructive conditions in contracts’ (1942) 42 Columbia LR 903 at
951 et seq; Kronman, A T and Posner, R, Economics of Contract Law (1979), pp 1–4.
36
Above, para 5.49–5.54.
37
McElroy, G R and Williams, G, Impossibility of Performance (1943)
(‘McElroyandWilliams’), p 143.
38
Above, para 12.08.
39
[1916] 1 KB 429 at 437 (emphasis supplied).
Private Law Library
Page 333
40
Compare the rule for remoteness of damage in Hadley v Baxendale (1854) 9 Exch 314,
156 ER 145: above, paras 9.17–9.18. It will obviously be fair to allow a party to argue
‘failure of consideration’ in this context only where that ‘consideration’ was known to the
other party. This is the reason why it is easier to argue frustration by failure of performance
than it is to argue frustration by failure of purpose, as in the Coronation cases. The
promisor will inevitably know that a failure of performance on his or her part will involve a
failure of the object for which the promisee made the contract, as in the very nature of
things one party enters into a contract in order to receive the benefit of the other party’s
performance. But the promisor may not know or be expected to take responsibility for other
purposes for which the promisee entered into the contract: see Burton & Son v W H
Bowater Ltd (1921) 9 Ll LR 336 (CA); Cricklewood Property Trust v Leighton’s Investment
Trust [1945] AC 221 (HL); Amalgamated Investment & Property Co Ltd v John Walker &
Son Ltd [1977] 1 WLR 164 (CA).
41
There is of course no reason why the owner should not also raise the issue of frustration,
but normally this is not necessary as time charters generally contain a clause allowing the
owner to withdraw the ship if the hire is not promptly paid: Eder, Sir Bernard and ors (eds),
Scrutton on Charterparties (23rd edn, 2015) (‘Scrutton’), Article 192 and commentary;
Coghlin, above n 34, chapter 16.
42
McElroy and Williams, above n 37, Parts I and II; Stannard John, ‘Frustrating
delay’ (1983) 46 MLR 738. To avoid confusion, it should be stressed that in this context we
are not concerned with ‘failure of consideration’ as in the law of restitution, where a
contracting party is allowed to recover money paid out under the contract if no part of the
performance bargained for has been rendered (Fibrosa Spolka Akynja v Fairbairn Lawson
Combe Barbour [1943] AC 32 (HL)). Rather, we are concerned with it as a factor justifying
termination: see above, para 2.24.
43
Reynolds, F M B, ‘Warranty, condition and fundamental term’ (1963) 79 LQR 534;
Reynolds, F M B, ‘Discharge of contract by breach’ (1981) 97 LQR 541; Bridge, Michael G,
‘Discharge for breach of the contract of sale of goods’ (1983) 28 McGill LJ 867.
44
45
The Hermosa [1980] 1 Lloyd’s Rep 638 at 649 (Mustill J) (aff’d [1982] 1 Lloyd’s Rep 570
(CA)); Federal Commerce & Navigation Co v Molena Alpha Inc [1979] AC 757 (HL) at 779
(Lord Wilberforce).
46
47
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (CA) at 729;
National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 (HL) at 700 (Lord Simon).
48
The Hermosa [1980] 1 Lloyd’s Rep 638 at 649 (Mustill J) (aff’d [1982] 1 Lloyd’s Rep 570
(CA)).
49
[1939] 1 KB 132.
50
As in Egg Stores (Stamford Hill) Ltd v Leibovici [1977] ICR 260 (EAT) and Hart v AR
Marshall [1977] ICR 539 (EAT).
51
André et Compagnie SA v Marine Transocean Ltd (The Splendid Sun) [1980] 1 Lloyd’s
Rep 333; Gulf Shipping Lines Ltd v Jadranska Slobodna Plovidba (The Matija Gubec) [1981]
1 Lloyd’s Rep 31; MSC Mediterranean Shipping Co SA v Alianca Bay Shipping Co Ltd (The
Argonaut) [1982] 2 Lloyd’s Rep 214 (CA); Japan Line Ltd v Himoff Maritime Enterprises Ltd
(The Kehrea) [1983] 1 Lloyd’s Rep 29; Stockport MBC v O’Reilly [1983] 2 Lloyd’s Rep 70.
52
The Hannah Blumenthal [1983] 1 AC 854 (HL).
Private Law Library
Page 334
53
(1876) 1 QBD 410.
54
[1919] AC 435 (HL).
55
(1939) 44 Com Cas 345.
56
[1918] AC 119 (HL).
57
Ibid at 136 (Lord Atkinson).
58
Ibid (italics supplied).
59
[1972] ICR 101 (NIRC).
60
Ibid at 105 (italics supplied).
61
[1916] 2 AC 397 (HL).
62
Ibid at 405 (italics supplied).
63
Of course, the House of Lords certainly did not take into account all that had happened,
as in the event the requisitioning of the ship lasted for several years. For the relevance of
hindsight in this context, see below, para 12.44.
64
[1980] 1 Lloyd’s Rep 638 (aff’d [1982] Lloyd’s Rep 570 (CA)).
65
[1980] 1 Lloyd’s Rep 638 at 649.
66
[1919] AC 435 (HL).
67
Cases of anticipatory breach are different; here the termination will only be allowed if
the delay shows either that the promisor does not intend to perform (renunciation), or that
he or she is totally and finally disabled from performance (impossibility): Universal Cargo
Carriers Corp v Citati [1957] 2 QB 401; Trade and Transport Inc v Iino Kaiun Kaisha Ltd
(The Angelia) [1973] 1 WLR 210.
68
[2013] EWCA Civ 577, [2013] BLR 400.
69
Ibid at [65].
70
Above, para 12.05.
71
[1917] 2 KB 78 at 85; McElroy and Williams, above n 37, pp 173 et seq.
72
For the problems in applying the traditional analysis to contracts of employment see Egg
Stores (Stamford Hill) Ltd v Leibovici [1977] ICR 260 (EAT).
73
In some cases a party is sued for damages for failing or refusing to perform, and raises
frustration as a defence. In others he or she may take the initiative by seeking a
declaration, or may agree to submit to arbitration. But the issue at the end of the day will
be the same: was the party in question still bound to perform or not? The only cases where
a different issue arises is where extra payment is sought on a restitutionary basis on the
ground that the original contract has been frustrated and therefore no longer applies, as in
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL). But these are
very much the exception: see below, paras 12.106–12.107.
74
Bank Line Ltd v Arthur Capel & Co [1919] AC 435 (HL) at 454–455 (Lord Sumner).
75
Pioneer Shipping Ltd v BTP Tioxide Ltd [1982] AC 724 (HL) at 752; Chakki v United
Yeast Co [1982] ICR 140 (EAT).
76
Kodros Shipping Corp v Empresa Cubana de Fletes (The Evia) (No 2) [1981] 2 Lloyd’s
Rep 613 at 619 (Robert Goff J). This judgment was reversed by the Court of Appeal on a
different ground at [1982] 1 Lloyd’s Rep 334, and the judgment of the Court of Appeal
affirmed by the House of Lords at [1983] 1 AC 736. See also International Sea Tankers Inc v
Hemisphere Shipping Co Ltd (The Wenjiang) (No 2) [1983] 1 Lloyd’s Rep 400. In Gryf-
Lowczowski v Hinchingbrooke Healthcare NHS Trust [2005] EWHC 2407, [2006] IRLR 100,
a case involving the frustration of a contract of employment, it was said that where the
Private Law Library
Page 335
employment was one of a specialised nature, and where termination would have a
catastrophic effect on the employee, it would be reasonable to expect the employer to wait
a little longer than would normally be expected before invoking frustration.
77
As in Tully v Howling (1877) 2 QBD 182 (CA).
78
[1916] 2 AC 397 (HL); The Penelope [1928] P 180.
79
[1916] 2 AC at 404–405.
80
[1945] AC 221 (HL).
81
Ibid at 231–232 (Viscount Simon LC).
82
[1962] 2 QB 26 (CA); compare Wuhan Ocean Economic & Technical Co-operation Co Ltd
v Schiffahrts-Gesellschaft ‘Hansa Murcia’ mbH & Co KG [2012] EWHC 3104 (Comm),
[2013] 1 Lloyd’s Rep 273 (delay in procuring renewal of refund guarantee).
83
Ibid at 60 (Sellers LJ), 65 (Diplock LJ), and 73 (Upjohn LJ). Salmon J at first instance said
that it would have been different if the charterer had had to put up with delay for a whole
year: [1962] 2 QB 26 at 39; see also Anglo Northern Trading Co Ltd v Emlyn Jones [1917] 2
KB 78 at 84 (Bailhache J).
84
[1928] P 180.
85
[1919] AC 435 (HL).
86
Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage) Ltd
87
Ibid at [118].
88
[1982] 1 Lloyd’s Rep 128 (CA).
89
Ibid at 133.
90
91
The Wenjiang (No 2) [1983] 1 Lloyd’s Rep 400 at 408.
92
93
[1914] 3 KB 45.
94
[1957] 2 QB 401.
95
[1914] 3 KB 45.
96
Ibid at 59.
97
[1957] 2 QB 401.
98
Ibid at 441.
99
Ibid at 430.
100
Ibid at 434.
101
Ibid at 449.
102
Ibid at 446; British and Beningtons Ltd v NW Cachar Tea Co Ltd [1923] AC 48 (HL) at
72 (Lord Sumner).
103
[1957] 2 QB 401 at 449; The Angelia [1973] 1 WLR 210 at 219 (Kerr J).
104
Sanko SS Co v Eacom Timber Sales Ltd [1987] 1 Lloyd’s Rep 487 (Supreme Ct of
British Columbia).
Private Law Library
Page 336
105
Ibid at 493. Normally insolvency does not amount to repudiation: Ex parte Chalmers
(1873) LR 8 Ch 289.
106
[1987] 1 Lloyd’s Rep 487 at 493.
107
Tiplady, David, (1973) 89 LQR 465; Carter, J W, ‘The Embiricos principle and the law of
anticipatory breach’ (1984) 47 MLR 422; Dawson, Francis, ‘Waiver of conditions precedent
on a repudiation’ (1980) 96 LQR 339; Dawson, Francis, ‘Metaphors and anticipatory breach
of contract’ [1981] 40 CLJ 83.
108
The question of damages is, or should be, an entirely separate issue: above, para 6.36.
109
110
(1872) LR 7 QB 404.
111
Ibid at 410 (Cockburn CJ).
112
(Lord Radcliffe). Of course, a lot depends in this context on whether there has been a
clearly defined frustrating event. Where there has not, as we have seen, the parties are
expected to ‘wait and see’ before claiming frustration, and in such a case a promisor cannot
claim discharge on the basis of a delay which is purely prospective: above, paras 12.29–
12.30.
113
Above, para 6.28.
114
The Sanko Iris [1987] 1 Lloyd’s Rep 487 (Supreme Ct of British Columbia); above, para
12.41.
115
Bank Line Ltd v Arthur Capel & Co [1919] AC 435 (HL); Court Line v Dant and Russell
(1939) 44 Com Cas 345.
116
[1982] AC 724 (HL).
117
[1980] QB 547 (CA).
118
Ibid at 573.
119
British Movietonews v London and District Cinemas [1951] 1 KB 190 (CA) at 202; The
Discipline of Law (1979), p 42.
120
121
Though see Comptoir d’Achat et de Vente du Boerenbond Belge SA v Luis de Ridder
Ltda (The Julia) [1949] AC 293.
122
123
Hancock v BSA Tools Ltd [1939] 4 All ER 538; Petrie v MacFisheries Ltd [1940] 1 KB
258 (CA); Mears v Safecar Security Ltd [1982] ICR 626 (CA); Denning, Alfred, ‘Wages
during sickness’ (1942) 55 LQR 353. A statutory right to sick pay is now provided in Part IX
of the Social Security and Housing Benefits Act 1992; see Smith and Wood, above n 17, pp
224–228.
124
Libyan Arab Foreign Bank v Banker’s Trust Co [1988] 1 Lloyd’s Rep 259.
125
By means of an ‘off hire’ clause: see Scrutton, above n 41, Art 193 and commentary.
126
Scrutton, above n 41, Art 191 and commentary.
127
Paradine v Jane (1647) Aleyn 26, 82 ER 897; National Carriers Ltd v Panalpina
(Northern) Ltd [1981] AC 675.
128
[1917] 1 KB 222 (CA).
Private Law Library
Page 337
129
[1918] 1 KB 372 (CA).
130
[1981] 1 AC 675 (HL).
131
[1921] 2 AC 495 (HL).
132
Ibid at 506–507.
133
Chandler v Webster [1904] 1 KB 493 (CA). Frustration of time charterparties now falls
under the umbrella of the Law Reform (Frustrated Contracts) Act 1943.
134
Treitel, G H, Frustration and Force Majeure (3rd edn, 2014) (‘Treitel (FFM)’), para
5.006. On the issue of partial termination see generally Friends Provident Life & Pensions
Ltd v Sirius International Insurance [2005] 2 Lloyd’s Rep 517 (CA); Carter, J W, ‘Partial
termination of contracts (2008) 24 J Contract Law 1.
135
136
Coghlin, above n 34, para 26.26.
137
Marshall v Harland & Wolff Ltd [1972] ICR 101 (NIRC) at 105 (Sir John Donaldson).
138
Ibid.
139
Ibid.
140
Ibid.
141
[2013] EWCA Civ 816, [2014] 1 WLR 756.
142
[2014] EWCA Civ 436 (Floyd and Arden LJJ, Underhill LJ dissenting).
143
Ibid at [64].
144
[1959] 1 QB 131.
145
The seller’s plea was successful, but the case was later overruled in Tsakiroglou v
Noblee Thorl GmbH [1962] AC 93.
146
[1901] 2 KB 126.
147
Geipel v Smith (1874) 9 CP 390; Metropolitan Water Board v Dick Kerr & Co [1918] AC
119 (HL); Tamplin SS Co v Anglo-Mexican Petroleum Co [1916] 2 AC 397 (HL).
148
It has been suggested, however, that there may be cases where frustration will be
allowed on the ground that partial performance would itself impose extra burdens on the
promisor: Sommer, Robert, ‘Commercial impracticability: an overview’ (1975) 13 Duquesne
LR 521.
149
[1918] AC 119 (HL).
150
The question has been asked how much uncertainty the promisor must suffer before it
is ascertained whether the impossibility is going to be temporary or permanent: Patterson,
Edwin W, ‘Temporary impossibility of performance of contract’ (1961) 47 Virginia LR 798.
Where the contract is an inherently speculative one, such uncertainty will not matter to the
same degree: Larrinaga & Co Ltd v Société Franco-Americaine des Phosphates (1923) 39
TLR 316 (HL).
151
[1919] AC 435 (HL).
152
Ibid at 450.
153
[1956] AC 696 at 729.
154
[1981] AC 675 (HL).
155
Ibid at 700.
Private Law Library
Page 338
156
At para 12.61.
157
[1918] AC 119 (HL).
158
(1919) 1 Ll L R 126 (CA).
159
Ibid at 129.
160
As in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL).
161
Société Franco-Tunisienne D’Armement v Sidermar SpA (The Massalia) [1960] 3 WLR
701; Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL); The Captain George K [1970] 2
Lloyd’s Rep 21.
162
(Viscount Simonds); Thames Valley Power Ltd v Total Gas and Power Ltd [2005] EWHC
2208 (Comm), [2006] 1 Lloyd’s Rep 441; Gold Group Properties Ltd v Bow Trading Ltd
[2010] EWHC 323 (TCC), [2010] BLR 235.
163
National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 (HL) at 700 (Lord
Simon).
164
Schlegel, J H, ‘Of nuts, and ships, and sealing wax, Suez and frustrating things’ (1969)
23 Rutgers LR 419.
165
Beatson, J, Burrows, A, and Cartwright, J (eds), Anson’s Law of Contract (30th edn,
2016) (‘Anson’), p 514; National Carriers Ltd v Panalpina (Northern) Ltd [1981 AC 675 (HL)
at 688 (Lord Hailsham); The Nema [1982] AC 724 (HL) at 744 (Lord Diplock).
166
Stannard, above n 14.
167
2 QB 26 (CA).
168
Ibid at 70 (Diplock LJ).
169
See Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61,
(2007) 241 ALR 88; RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] SCA 39, [2007] 4
SLR 413.
170
Federal Commerce and Navigation Co Ltd v Molena Alpha Inc (The Nanfri) [1979] AC
757 at 778–779 (Lord Wilberforce); Ampurius Nu Home Holdings Ltd v Telford Homes
(Creekside) Ltd [2013] EWCA Civ 577, [2013] BLR 400 at [49] (Lewison LJ).
171
The balance seems to be in favour of the narrower approach: see Jackson v Union
Marine Insurance Co (1874) LR 10 CP 125; Universal Cargo Carriers Corporation v Citati
[1957] 2 QB 401 at 427 (Devlin J); Shawton Engineering v DGP International Ltd (T/A
Design Group Partnership) [2005] EWCA Civ 1359, [2006] BLR 1 at [32] (May LJ); Urban 1
(Blonk St) Ltd v Ayres [2013] EWCA Civ 816, [2014] 1 WLR 756 at [44] (Sir Terence
Etherton C). A less exacting test, that is to say whether the effect of the breach was to
deprive the injured party of a ‘substantial part’ of the benefit, was applied by Buckley LJ in
Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 380, but
it was held that on the facts even that test was not satisfied; see below, para 12.73.
172
As Lewison LJ points out in the Ampurius case (above n 170 at [50]) the trouble with
expressing important propositions of law in metaphorical terms is that it is difficult to be
sure what they mean. Were juries still used in contract cases, no doubt the use of correct
form of words would be crucial, but given that they are not the approach of the court is
bound to be highly fact sensitive.
173
Above, para 12.07.
Private Law Library
Page 339
174
SK Shipping (S) Pte Ltd v Petroexport Ltd [2009] EWHC 2974 (Comm), [2010] 2 Lloyd’s
Rep 158.
175
[2010] EWHC 301 (TCC).
176
Ibid at [67] (Jonathan Acton Davis QC).
177
(1882) 9 QBD 648 (CA).
178
[1971] 1 WLR 361.
179
Compare Valilas v Januzaj [2014] EWCA Civ 436, [2014] 1 WLR 756, discussed above at
para 12.56.
180
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61, (2007)
241 ALR 88 at [54].
181
Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage)
Ltd [2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517; Islamic Republic of Iran Shipping
Lines v Steamship Mutual Underwriting Association (Bermuda) Ltd [2010] EWHC 2661
(Comm), [2011] 1 Lloyd’s Rep 195; ACG Acquisition LLC v Olympic Airlines SA (in
Liquidation) [2012] EWHC 1070 (Comm), [2012] 2 CLC 48.
182
Above at para 12.33.
183
[2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517 at [111].
184
Ibid at [112].
185
Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2015) (‘Chitty’), para 23.035;
Chandler, P A, ‘Self-induced frustration, foreseeability and risk’ (1990) 41 NILQ 362.
186
Ltd [2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517 at [111].
187
Maritime National Fish Ltd v Ocean Trawlers Ltd [1938] AC 524 (PC); The Super
Servant Two [1990] 1 Lloyd’s Rep 1 (CA).
188
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401; above, para 6.32.
189
[1921] 2 KB 526; Eridania SpA v Rudolf A Oetker (The Fjord Wind) [2000] 2 Lloyd’s
Rep 191 (CA).
190
DGM Commodities Corporation v Sea Metropolitan SA [2012] EWHC 1984 (Comm),
[2012] 2 Lloyd’s Rep 587.
191
Ibid at [20]–[21].
192
Ocean Tramp Tankers Corp v V/O Sovfracht [1964] 2 QB 226 (CA).
193
Ibid at 236 (Lord Denning MR and Danckwerts LJ) and 242 (Donovan LJ).
194
[1912] AC 12 (HL); The Evia (No 2) [1982] 2 Lloyd’s Rep 307 (HL); Uni-Ocean Lines
PTE v C-Trade SA (The Lucille) [1984] 1 Lloyd’s Rep 244 (CA).
195
Joseph Constantine SS Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154 (HL) at
163 (Lord Simon); Treitel (FFM), above n 134, chapter 12.
196
(1902) 19 TLR 16.
197
Kuwait Supply Co v Oyster Marine Management Inc [1994] 1 Lloyd’s Rep 637.
198
199
[1998] 2 Lloyd’s Rep 209 (HL).
200
Ibid at 222.
Private Law Library
Page 340
201
Berman, Harold J, ‘Excuse for non-performance in the light of contract practices in
international trade’ (1963) 63 Columbia LR 1413.
202
[1977] 1 Lloyd’s Rep 133 (reversed on other grounds [1977] 2 Lloyds Rep 329 (CA);
decision of Court of Appeal upheld in part [1978] 1 Lloyd’s Rep 340 (HL)).
203
[1977] 1 Lloyd’s Rep 133 at 163.
204
(1939) 44 Com Cas 345.
205
Select Commodities Ltd v Valdo SA [2006] EWHC 1137 (Comm), [2007] 1 Lloyd’s Rep
1.
206
Jackson v Union Marine Insurance Co (1874) 10 CP 125; above, para 12.70.
207
Swenson, J R, ‘Impossibility of performance’ (1948) 46 Michigan LR 401.
208
As in The Eugenia, where the possibility of the closure of the Suez Canal was raised in
negotiations, but the parties failed to reach any agreement, and decided that if it occurred
they would just have to ‘let the lawyers sort it out’: [1964] 2 QB 226 (CA) at 234.
209
Chitty, above n 185, para 23.058.
210
Ibid, para 23.059.
211
Baily v de Crespigny (1869) LR 4 QB 180 at 185 (Hannen J).
212
Cricklewood Investment Trust Ltd v Leighton’s Investment Trust Ltd [1945] AC 221
(HL) at 228 (Lord Simon).
213
The Hannah Blumenthal [1983] 1 AC 854 (HL) at 909 (Lord Brandon).
214
[1964] 2 QB 226 (CA).
215
Ibid at 234.
216
Ibid.
217
‘Should the promisor be conclusively presumed to have assumed the risk of his
unconditional promise?’: Swenson, above n 207, p 303.
218
Below, para 12.90–12.91.
219
Bank Line Ltd v Arthur Capel & Co [1919] AC 439 (CA) at 458–459; Edwinton
Commercial Corporation v Tsavliris Russ (Worldwide Salvage and Towage) Ltd (The Sea
Angel) [2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517 at [131] (Rix LJ).
220
[1978] 2 Lloyd’s Rep 509 (CA).
221
Ibid at 514.
222
The Nile Co for the Export of Agricultural Crops v H & J M Bennett (Commodities) Ltd
[1986] 1 Lloyd’s Rep 555 at 582 (Evans J); cf. Duesenberg, Richard J, ‘Contract
impracticability’ (1977) 32 Business Lawyer 1089.
223
224
Thus it was agreed that charterparties were frustrated by the detention of ships in the
Shatt-el-Arab waterway as the result of the war between Iran and Iraq in the early 1980s,
despite the fact that wars in the area are hardly unforeseeable: The Wenjiang [1982] 1
Lloyd’s Rep 128 (CA). For frustration by strikes see The Penelope [1928] P 180; Reardon
Smith Line Ltd v Minister of Agriculture [1962] 1 QB 42 (CA); The Nema [1982] AC 724.
225
Intertradex SA v Lesieur Tourteaux SARL [1978] 2 Lloyd’s Rep 509 (CA); Atisa SA v
Aztec AG [1983] 2 Lloyd’s Rep 579; CTI Group v Transclear SA (The Mary Nour) [2008]
EWCA Civ 856, [2008] 2 Lloyd’s Rep 526.
Private Law Library
Page 341
226
The Angelia [1973] 1 WLR 210.
227
Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696.
228
McNair, Lord and Watts, A D, The Legal Effects of War (4th edn, 1966), p 165.
229
Hence the extremely hostile reaction of some equity commentators to the suggestion
that the Judicature Act 1873 had effected a ‘fusion’ of common law and equity: see
Meagher, R P, Gummow, W M C, and Lehane J R F, Equity: Doctrines and Remedies (4th
edn, 2002), p xv; GR Mailman and Associates Pty Ltd v Wormald (Australia) Pty Ltd (1991)
24 NSWLR 80 (New South Wales Ct of Appeal) at 99 (Meagher JA).
230
[1980] QB 547 (CA) at 568 (Lord Denning MR). The decision of the Court of Appeal was
affirmed by the House of Lords in [1982] AC 724.
231
The Wenjiang [1982] 1 Lloyd’s Rep 128 (CA).
232
Matthey v Curling [1922] 2 AC 180 (HL); Cricklewood Property and Investment Trust
Ltd v Leighton’s Investment Trust Ltd [1945] AC 221 (HL); National Carriers Ltd v
Panalpina (Northern) Ltd [1981] AC 675 (HL).
233
West Yorkshire MCC v Trinette (28 January 1986) (Leonard J).
234
(13th edn, 2015) (‘Hudson’), para 1.073; Furst, Stephen and Ramsey, Vivian (eds), Keating
on Building Contracts (10th edn, 2016), para 6.052. See however Wong Lai Ying v
Chinachem (1979) 13 BLR 86 (PC); Chugach Electrical Association v Northern Corp 562 P
2d 1053 (1977) (Alaska); Holchim (Singapore) Pte Ltd v Kwon Yong Construction Pte Ltd
[2008] SGHC 231, [2009] SLR (R) 193; Alliance Concrete Singapore Pte Ltd v Sato Kogyo
(S) Pte Ltd [2014] SGCA 35, [2014] 3 SLR 857; Hudson, above, fn 353.
235
Felton v Wharrie (1906) HBC (4th edn), vol 2, p 398 (CA).
236
Blackburn Bobbin Co v T W Allen & Sons [1918] 1 KB 540 at 550 (McCardie J).
237
Treitel FFM, above n 134, para 16-008.
238
Ibid; and see Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696
(HL), especially the opinions of Lord Reid and of Lord Radcliffe.
239
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 (CA) at 227 (MacKinnon LJ)
(affirmed [1940] AC 701 (HL)); Gardner v Coutts & Co [1968] 1 WLR 173.
240
Above, para 12.12.
241
Lewis Emanuel & Son v Sammut [1959] 2 Lloyd’s Rep 629; Intertradex v Lesieur-
Tourteaux SARL [1978] 2 Lloyd’s Rep 509 (CA).
242
CTI Group v Transclear SA [2008] EWCA Civ 856, [2008] 2 Lloyd’s Rep 526.
243
Ibid at [27].
244
[1983] AC 854 (HL); cf. Bremer Handelsgesellschaft mbH v Vanden-Avenne Izegem
[1977] 1 Lloyd’s Rep 133 at 163 (Mocatta J).
245
[1983] AC 854 at 867–868. At the end of the day it was decided by the House of Lords
that the frustration could not be relied upon as it was self-induced.
246
Denny, Mott & Dickson v James B Fraser [1944] AC 265 (HL(Sc)) at 275.
247
Above, para 6.22.
248
Morgan v Manser [1948] 1 KB 184.
249
[1998] IRLR 632 (EAT).
Private Law Library
Page 342
250
Cf. Charles Rickards & Co v Oppenhaim [1950] 1 KB 616 (CA).
251
Matters become even more complicated if we follow Treitel in saying that in some
cases of this sort, such as Poussard v Spiers & Pond (1876) 1 QB 410, the employer has the
option of termination rather than the contract being frustrated in toto: above n 134, para
5-059.
252
[1916] 2 AC 397 (HL).
253
Ibid at 426.
254
[1918] AC 119 (HL).
255
Ibid at 129.
256
Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (PC).
257
Thus the fact that the parties continued to treat the contract as subsisting may be a
relevant factor in deciding whether frustration has occurred in the first place: The Wenjiang
(No 2) [1983] 1 Lloyd’s Rep 400 at 408 (Bingham LJ).
258
[1956] AC 696 (HL); Chaucer Estates v Fairclough Homes Ltd [1991] EGCS 65 (CA);
McAlpine Humberoak v McDermott International Inc (1993) 58 BLR 61 (CA).
259
Such a claim was disallowed on the merits in Davis Contractors v Fareham Urban
District Council itself and in The Captain George K [1970] 2 Lloyd’s Rep 21.
260
The Massalia [1960] 3 WLR 701 (overruled in The Eugenia [1964] 2 QB 226 (CA)); Bush
v Whitehaven Town Trustees (1888) HBC (4th edn), p 122 (disapproved in Davis
Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL), and overruled in
McAlpine Humberoak v McDermott International (1993) 58 BLR 61 (CA)). A plea of this sort
succeeded in the California District Court in Transbay Construction Co v City and County of
San Francisco, 35 F Supp 433 (1940), but the decision was reversed on the ground that a
contract could not be said to be at an end when it had been fully performed: 134 F 2d 468
(1943) (US CCA); Price, Ira M, (1947) 46 Michigan LR 224. It has been argued that this sort
of case is far more common than might be expected, and that it would be more reasonable
for a promisor to be allowed to recover the extra costs of a more onerous performance than
to allow him or her to refuse to perform at all: Rapsomanikis, Michael G, ‘Frustration of
contract in international trade law and comparative law’ (1979) 18 Duquesne LR 551.
However, it could also be argued that in such cases the promisee should at least have the
option of termination before being compelled to pay the extra sum.
261
The Wenjiang [1982] 1 Lloyd’s Rep 128 at 133–134 (Dunn LJ).
262
In particular, there is now no appeal from an arbitrator even on a point of law unless
either the parties consent or the court gives leave: Arbitration Act 1996, s 69(2). The extent
of the court’s power to grant leave to appeal in such cases is restricted by section 69(3) of
the Act; in particular, leave will generally not be given unless there are grounds for
supposing that the arbitrator has misdirected himself or come to a decision no reasonable
arbitrator could reach: The Nema [1982] AC 724 at 742 (Lord Diplock).
263
Treitel FFM, above n 134, paras 16.001–16.004.
264
(1874) LR 10 CP 125 at 141 (Bramwell B); Hudson v Hill (1874) 43 LJCP 273.
265
[1920] 1 KB 868; Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 at 119 (Lord Reid)
and 134 (Lord Guest).
266
[1962] AC 93 (HL).
267
Ibid at 119 (Lord Reid).
Private Law Library
Page 343
268
[1957] 2 QB 401 at 435; Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 at 123 (Lord
Radcliffe) and 129 (Lord Hodson).
Private Law Library
Page 344
13 Express Contractual Provisions

John E. Stannard

John Stannard

ISBN: 9780198792321
(p. 365) 13 Express Contractual Provisions

A. Common Types of Contract 13.05
(1) Charterparties 13.06
(a) Charterparties by demise 13.07

(b) Time charterparties 13.10
(c) Voyage charterparties 13.13
(2) Construction Contracts 13.18

(3) Conveyancing 13.21
(4) Sale of Goods 13.24
(a) C.i.f. contracts 13.25

(b) F.o.b. contracts 13.28
B. Effect of Express Provisions 13.31
(1) Specific relief 13.32

(2) Notice making time of the essence 13.33
(3) Recovery or forfeiture of liquidated sum 13.36
(a) Liquidated damages 13.37

(b) Penalties 13.49
(c) Options 13.56
Private Law Library
Page 345
(d) Deposits and part payments 13.61
(4) Withholding performance 13.73

(5) Termination 13.74
(a) Express termination rights and breach of condition 13.75

(b) Construction of termination rights 13.76
(c) Exercise of express termination rights 13.77
(d) Effect of termination under express provision 13.78
(e) Multiple termination rights 13.79
13.01 Though we have now spent twelve chapters discussing aspects of the common law of
contract in so far as it relates to delay, it must now be admitted that that law is not so
important in this context as one might expect. There are three reasons for this. The first is
that there are large areas where the common law no longer applies at all, most notably in
relation to consumer contracts, where it has largely been superseded by the Consumer
Rights Act 2015. The second is the increasing recognition that for many businessmen the
law of contract only has a very marginal role to play in the conduct of their day-to-day
affairs; even where disputes arise, recourse to the law of contract is very much a matter of
last resort.1 Last but not least, many issues relating to delay in commercial contracts are
primarily governed not by the common law, but (p. 366) by express terms in the contract. It
is with these express terms that this chapter is concerned.
13.02 Many of these express terms relating to delay are highly specialised in nature, and
vary depending on the type of contract involved. Many of them are therefore of little
relevance outside the particular field in which they are employed, and can only be
understood by expert practitioners in that field. However, other terms of this sort are of
wider relevance, and indeed frequently crop up in the general cases. As well as this,
express terms of any kind raise an important issue of principle, which is the extent to which
the remedies they provide can be allowed to supplant those given by the general law. It is
therefore worth discussing them at least in outline in the present context.
13.03 Of course, the difference between contracts governed by the general law and
contracts governed by express terms is a matter of degree rather than kind. At one end of
the scale it would be hard to imagine any contract without express terms of some kind,
whereas at the other even the most sophisticated and specialised contract cannot be
expected to cover all eventualities that may arise. It follows that most if not all contracts
will be somewhere in between, being governed by a mixture of express terms and principles
derived from the general law. It also follows therefore that there is bound to be some
overlap between the subject matter of this chapter and the principles discussed in those
that have gone before.
13.04 In the pages which follow we shall look at two topics. First of all, we shall sketch out
a selection of commonly occurring types of contract and see how they provide for delay.
Then we shall look at how some of these commonly occurring terms relate to equivalent
provisions under the general law.
A. Common Types of Contract

13.05 Just as there is no limit to the number of different contexts in which the law of
contract can be applied, so there is no limit to the number of different specialities in which
express contractual terms relating to delay may be found. However, we shall concentrate on
four areas, these being the areas in which many if not most of the cases seem to fall. In
Private Law Library
Page 346
each case we shall briefly describe the nature of the relevant contract and the obligations
arising under it before going on to indicate common types of provision relating to delay.
(1) Charterparties
13.06 Broadly speaking, a charterparty involves the hire of a ship. Charterparties can take
different forms, but the most important ones are the charterparty by demise, the time
charterparty, and the voyage charterparty.
(p. 367) (a) Charterparties by demise
13.07 A charterparty by demise, or ‘bareboat’ charter as it is sometimes called,2 can be
compared to the hire of a self-drive car.3 In such a charterparty the charterer obtains a
possessory interest in the ship,4 which will be at his or her disposal throughout the agreed
period, and will normally make the necessary arrangements for the provision of a captain
and crew.5 Though charters of this sort are not as common as once they were,6 they are still
found in cases where the charterer wants to have use of a ship for a period of time, and also
as a method of financing the purchase of new ships.7
13.08 The basic obligation of the owner under a bareboat charter is to deliver the ship at
the agreed time and location in a seaworthy state.8 The basic obligation of the charterer is
to keep the ship in good order, to pay the hire when due, and to redeliver the ship at the
end of the charter in proper condition.9
13.09 A common bareboat charter is that provided on the Bimco Barecon 2001 form.10
This provides for delay in a number of ways:
• Time of delivery. 11 The owner is obliged to deliver the ship at the agreed time,
though some leeway is given. As well as this, the owner must give proper notice of the
expected time for delivery.
• Cancellation clause. 12 This gives the charterer the option of cancellation if the ship
is not delivered by the due date.
• Seaworthiness. 13 As we have seen, this is a common cause of delay, and the owner
will normally be obliged, both before and at the time of delivery, to exercise due
diligence to make the ship seaworthy and fit for service.
• Payment of hire. 14 The charterer will be obliged to pay hire at the due time, 15
and
the owner is given the right to withdraw the ship if this is not done. 16
(p. 368) • Time of redelivery. 17 The charterer will be obliged to redeliver at the end
of the charter period, and to pay liquidated damages in the event of failure to do so. 18
(b) Time charterparties

13.10 As with a charterparty by demise, a time charterparty puts the ship at the disposal
of the charterer for the period specified.19 However, a time charterparty does not give the
charterer any possessory rights in the ship,20 but merely the right to exploit her earning
capacity.21 If a charterparty by demise is equivalent to the hire of a self-drive car, a time
charterparty is more like the hire of a taxi for a set period.22 Though the charterer will be
permitted and indeed expected to give orders to the captain and crew,23 the owner remains
responsible for supplying and paying them.24 Where a charterparty by demise is equivalent
to a lease, a time charterparty is essentially a contract for services.25
13.11 The basic obligations of the owner under a time charterparty are to supply the ship
in a seaworthy state,26 to deliver her to the charterer at the specified time27 and place,28 to
pay wages,29 maintenance30 and insurance,31 and generally to place the ship at the
charterer’s disposal for the time specified in the charter.32 The basic obligations of the
charterer are to pay hire33 and certain other expenses,34 not to (p. 369) use the ship in a
way inconsistent with the terms of the charter,35 to indemnify the owners against any
Private Law Library
Page 347
consequences of their orders,36 and to redeliver her on time,37 at the proper place,38 and in
proper condition.39
13.12 A common time charter is that provided on the NYPE (New York Produce Exchange)
form (NYPE 92).40 This provides for delay in a number of ways:
41
• Date of delivery. This is the date the ship will be put at the disposal of the
charterers.
42
• Cancellation clause. This allows the charterer to cancel if the ship is not
delivered on time.
43
• Speed warranty. The charterers will need to know this so they can plan their
voyages.
• Seaworthiness. 44 The vessel must be ‘tight, staunch and strong and in every way
fitted for ordinary cargo service’; as indicated above, delays caused by
unseaworthiness will give rise to a right to damages, and may even entitle the
charterers to cancel the contract. 45
• Payment of hire. 46 The charterer will be obliged to pay hire at the due time, and
the owner is given the right to withdraw the ship if this is not done. 47
• Off-hire clause. 48 This provides for suspension of hire in certain situations, most
notably breakdowns in machinery and repairs occasioned by accidents to the ship.
49
• Time of redelivery. The charterer will be obliged to redeliver at the end of the
charter period.
(c) Voyage charterparties

13.13 A voyage charterparty is a very different animal. If a charterparty by demise is
equivalent to the hire of a self-drive car, and the time charterparty equivalent to (p. 370) the
hire of a taxi for a specified period, then a voyage charterparty is equivalent to the hire of a
taxi for a journey, or the hire of a removal van. A voyage charterparty has been described as
a contract whereby the owner undertakes to provide the services of a vessel and crew for
the accomplishment of a stipulated adventure involving the carriage of specified goods
between designated places of loading and discharge, in return for which the charterer
agrees to pay an agreed consideration known as ‘freight’.50 Like a time charterparty, a
voyage charterparty is a contract for services, but for services of a very different sort. In
the words of Lord Hobhouse:51
Under a voyage charter the owner or disponent owner is using the vessel to trade
for his own account. He decides and controls how he will exploit the earning
capacity of the vessel, what trades he will compete in, what cargoes he will carry.
He bears the full commercial risk and expense and enjoys the full benefit of the
earnings of the vessel.
13.14 The structure of a charterparty by demise and of a time charterparty is relatively

simple: (1) the owner delivers the vessel to the charterer at the beginning of the specified
period; (2) the charterer makes use of it during the specified period; and (3) the charterer
then redelivers it at the end of the specified period. But a voyage charterparty is a much
more complex affair, which is said to involve four basic stages.52 The first is when the ship
sails to the loading port, where the owner gives notice of readiness to load.53 The second is
when the charterer loads the ship; normally the charterparty allows a certain number of
days for this, which are known as ‘laytime’ or the ‘lay days’. The third is when the ship sails
Private Law Library
Page 348
with the cargo to the discharging port. Finally we have the fourth stage, where the
charterer unloads the cargo. After this the ship is free to sail away on another engagement.
13.15 Within this framework, a number of basic obligations arise. For the owner these
include: (1) the obligation to provide a seaworthy ship, and to ensure that it remains
seaworthy at all relevant times;54 (2) to sail to the loading port with all due dispatch;55 (3)
on arrival, to give notice of readiness to load,56 ensuring that the ship is indeed ready to
take the cargo on board;57 (4) to perform all specified duties with regard to the loading of
the cargo;58 (5) to perform the (p. 371) charter voyage with all due dispatch and without
undue deviation;59 and (6) to perform all specified duties with regard to the discharge of
the cargo.60 For the charterer they include: (1) the obligation to nominate ports, berths, and
times of loading and discharge in so far as these are not already provided for in the
contract;61 (2) to provide the cargo;62 (3) to perform all specified duties with regard to
loading and unloading within the time specified;63 and (4) to pay the required freight.64
13.16 It will be obvious from all of this that delays may arise at any stage of the enterprise.
The law generally makes provision for this in two ways. The first is by using the notion of
conditions precedent;65 a voyage charterparty is a highly choreographed affair, in which
prompt performance of a particular step by one party will inevitably depend on prompt
performance of the previous step by the other.66 The second is by specific provisions in the
contract itself. Some of these will be considered in more detail below, but broadly speaking
the responsibility for delay will normally depend on whether the ship is out at sea or in
port.67 In the former case, the risk of delay will generally be on the owner, but once the ship
has arrived in port the risk will transfer to the charterer, who will have to pay liquidated
damages by way of ‘demurrage’ if the ship is not loaded or unloaded within the time
specified.68
13.17 One standard form of charter is the AMWELSH 93 coal charter,69 which makes the
following provision for delay:
• Seaworthiness. 70 The vessel must be ‘tight, staunch and strong, and in every way
fit for the voyage’.
• Speed warranty. 71 The vessel must sail ‘with all convenient speed’, both on the
approach and on the charter voyages.
72
• Notice of expected readiness (to be given by the ship’s Master).
73
(p. 372) • Cancellation clause. This can be exercised by the charterers if the notice
has not been given by close of business on the named date.
74
• Commencement of laytime.
75
• Rate of loading and unloading warranty (so many tons per day).
76
• End of laytime.
• Exceptions (including express provisions for riots, earthquakes, acts of God, strikes,
etc). 77
78
• Demurrage clause (to be paid at set rate if laytime exceeded).
• Deviation clause (allows the Master to make reasonable deviations from the direct
route in cases of emergency). 79
(2) Construction Contracts

13.18 The law on construction contracts covers not only building projects of a traditional
kind but also such matters as the provision of hardware and software systems and offshore
oil and gas installations.80 Dealing with delay in the context of such contracts is a
particularly difficult challenge. This is due to a number of factors: the length of time that
the project may take, the complexity of the work to be undertaken, the large numbers of
Private Law Library
Page 349
parties who may be involved, and not least the principle of accessio, whereby buildings and
other structures attached to land become the property of the owner of the land.81 All this
makes it very difficult for the parties to a construction contract to pull out. There is more
chance of delay in a contract of this nature, and when delay does occur it can be harder to
remedy.82 The law in this area is a vast topic in its own right, and is mainly the province of
specialists, but given that some of the cases on the topic crop up in a more general context
it is worth at least touching on it in a work of this sort.
13.19 The obligations of the parties to a construction contract may be set out in immense
detail,83 but the basic elements of those obligations are relatively simple. The duties (p.
373) of the contractors are to complete the work without undue delay,84 to use materials
which are of satisfactory quality and fit for their purpose,85 and to do the work undertaken
with all due care and skill.86 The duties of the employer are to allow the contractors on to
the site,87 to co-operate with the contractors in the performance of their duties,88 to give all
necessary instructions as to the carrying out of the work,89 and to pay for the work at the
time and in the manner specified by the contract.90
13.20 Given the factors mentioned above, it is not surprising that many if not most
construction contracts will contain express provisions relating to delay. Where the project in
question is a major one, these will almost certainly be individually negotiated, but even the
standard form contracts used in the field can run into many pages and contain a multitude
of terms. One example that is relatively accessible to the non-specialist is the JCT 2005
Edition Intermediate Building Contract, which includes the following provisions relating to
delay:
• Contract particulars. 91 These are annexed to the contract, and contain the dates of
commencement and of completion, together with a schedule of the work to be done
and (if relevant) the sections in which it is to be divided.
• Reckoning periods of days. 92 This deals with the situation where an act is required
to be done within a specified period of days after or from a specified date, 93 the
default rule being that the period shall begin immediately after that date and shall
exclude public holidays.
• Extension of time clause. 94 This allows the architect or contract administrator to
grant extensions of time when the progress of the work has been disrupted by one or
more ‘relevant events’, 95 including variations, exceptionally adverse weather
conditions, strikes and lockouts, and other force majeure events beyond the control of
the contractors. 96
(p. 374) • Certificates. 97 These are issued by the architect or contract administrator,
and are of particular importance in contracts of this sort. Such certificates fall into
two broad classes: certificates of completion, 98 and certificates of non-completion. 99
A certificate of completion certifies that the work, or the relevant portion of it, 100 has
now been done, and acts as a condition precedent 101 to the right of the contractors to
claim payment, either of sums on account (Section Completion Certificates) 102 or the
final balance (Practical Completion Certificates). 103 A certificate of non-completion is
issued when the work has fallen behind, 104 and entitles the employer to start
claiming liquidated damages, 105 which will then continue until the work, or the
relevant portion of it, has been finished.
• Suspension clause. 106 This gives the contractors the power (after due warning to
the employer) to suspend work on the site in the event of payments falling into arrear.
Private Law Library
Page 350
• Termination clauses. There are three of these in the contract. One allows the
employer in certain eventualities to serve a notice of default on the contractor and to
terminate performance if this is not complied with. 107 Another makes the same
provision for the contractor. 108 The third clause gives to either party an option to
terminate on the occurrence of certain frustrating events, such as fire, lightning,
flood, riot or the exercise of statutory powers by the Government such as to affect the
exercise of the works. 109
(3) Conveyancing
13.21 Conveyancing has been described as the process by which legal title to property is
transferred,110 most notably real property. Like charterparties and construction contracts, it
is a very specialised area of law in its own right, requiring as it does not only an
understanding of contract law but also of the law of property and (p. 375) of equity.111 The
principles of equity have had a particular impact in the area of delay, and as we have seen
the courts are still having difficulty in integrating those principles into the general law even
today.112
13.22 A very useful timeline of a conveyancing contract is given by Robert Abbey and
Mark Richards.113 It goes as follows:
1. Taking instructions and advising client

2. Drawing up of draft contract
3. Pre-contract searches, enquiries, and planning
4. Proof of title
5. Mortgage (where relevant)
6. Exchange of contracts
7. Drawing up of purchase deed
8. Pre-completion searches and requisitions
9. Financial statements
10. Completion
11. Stamp duty and registration
12. Delays and remedies.
Delays may occur at any stage of this process, but the ones which are of most concern in
the present context occur between stages 6 and 10. The basic duty of the vendor is to
convey a good title to the purchaser114 no later than the date specified for completion.115
The basic duty of the purchaser is to pay the agreed purchase price.116 As well as this, the
purchaser will acquire an equitable title in the property as soon as the contract is signed,117
the vendor being a trustee for the purchaser from then until completion.
13.23 It is perfectly possible to have an ‘open’ conveyancing contract – that is to say, one
that is governed purely by the common law118 – but generally one of the standard forms is
used, such as the Standard Conditions of Sale,119 which makes the following provision for
delay:
Private Law Library
Page 351
(p. 376)
• Date of formation. 120 This provides that, subject to express provision to the
contrary, on exchange of contracts the contract comes into force when the last copy is
posted or deposited at the document exchange.
• Payment of deposit. 121 This is of particular importance, as delay in completion may
entitle the vendor to terminate the contract and forfeit the deposit 122 (see below).
• Time limit on buyer’s requisitions (normally within six days of the matter coming to
the buyer’s attention). 123
• Timetable for investigation and deduction of title (assuming that this has not
already been done before the contract was made). 124
125
• Timetable for preparation of transfer prior to completion.
• Completion. 126 This is to take place on the day specified, or otherwise within
twenty working days after the date of the contract.
127
• Payment of price. This is due no later than 2 p.m. on the date of completion.
• Notice making time of the essence. Time is not to be of the essence of the contract
unless a notice to complete has been served. 128 Such a notice can be served by either
party at any time following the time set for completion, provided that the party
concerned is able, ready and willing to complete. 129 Completion under the notice
must take place within ten working days. 130 If a purchaser fails to complete in
accordance with the notice, the vendor may rescind the contract, forfeit the deposit
and claim damages. 131 If it is the vendor who fails to complete, the purchaser may
rescind, reclaim the deposit with interest and sue for damages. 132
• Liquidated damages. 133 In the event of default compensation may be claimed to be
calculated on an amount equal to the purchase price less (where the purchaser is the
paying party) any deposit paid, for the period by which the paying party’s default
exceeds that of the receiving party, or, if shorter, the date between the completion
date and actual completion. 134
(p. 377) (4) Sale of Goods

13.24 Section 2(1) of the Sale of Goods Act 1979 defines a contract for the sale of goods in
terms of a contract by which the seller transfers or agrees to transfer the property in goods
to the buyer for a money consideration, called the price. Most contracts of this sort are
governed purely by the Act, or by the equivalent provisions in the Consumer Rights Act
2015, but in the context of international trade specialised terms are far more common.
There are two types of contract that are of particular importance in this context, these
being the ‘c.i.f.’ contract and the ‘f.o.b.’ contract.135
(a) C.i.f. contracts
13.25 The initials ‘c.i.f.’ stand for ‘cost, insurance, and freight’, these being the elements
included in the price, namely the cost of the goods, their insurance during transit and the
freight payable for their carriage.136 This has been described as the most important
instrument in overseas trade.137 The essence of this type of contract is that the seller of the
goods puts them on a ship bound for the specified destination, having taken out insurance
for the voyage. The seller then delivers the ‘shipping documents’138 to the buyer, who then
pays the price and takes delivery of the goods on arrival. From this it will be seen that there
are at least three contracts involved in this situation:139 (1) the main contract between the
seller and the buyer; (2) the contract between the seller and the insurer; and (3) the
Private Law Library
Page 352
contract of carriage made by the seller.140 However, it is with the first of these that we are
presently concerned.
13.26 The duties of a seller under a c.i.f. contract have been set out as follows:141 (1) to
make out an invoice in relation to the goods sold; (2) to ship at the port of shipment142
goods of the description contained in the contract; (3) to procure a contract of
affreightment under which the goods will be delivered to the agreed destination; (4) to
insure the goods for the benefit of the buyer; (5) to send the shipping documents to the
buyer.143 As well as this, it is the duty of the seller to comply with any (p. 378) necessary
export formalities.144 From this it will be seen that there are essentially two ways in which
the seller may default on the contract, one being in relation to the goods and the other in
relation to the documents.145 The duties of the buyer are to pay the price146 on receipt of
the documents147 and to comply with any import formalities;148 the buyer may also be
required under the contract to nominate a destination port if this has not already been
done.149
13.27 One commonly used set of contract terms in this form are those provided by the
Grain and Feed Trade Association (GAFTA).150 These provide for delay as follows:
151
• Period of Shipment. This can be defined either as a single day or a range of
days.
• Extension of Shipment. 152 This gives the sellers the right to claim an extension,
and provides for the price to be discounted in that event.
• Appropriation Clause. 153 This provides for the situation where the goods have
already been shipped at the time of the contract. Notices of appropriation must be
served on the buyers within ten consecutive days of the bill or bills of lading. 154
• Payment. 155 This can be either in exchange for and on presentation of shipping
documents, or in exchange for shipping documents on or before arrival of the vessel,
at the option of the buyers. Alternatively the sellers may call upon the buyers to take
up and pay for the documents on or after an agreed number of consecutive days from
that of the bill or bills of lading.
156
• Interest on late payment.
• Prevention of shipment. 157 This allows the seller, on due notice to the buyer, to
suspend performance where hindered by various force majeure events, including
prohibitions on export, blockades, war, strikes, riots, fires, Acts of God and other
unforeseeable and unavoidable occurrences. Should the interruption continue for
twenty-one days following the end of the shipment period, the buyer is given an
option to cancel. If that option is not exercised, then the contract (p. 379) continues in
force for another fourteen days, after which automatic cancellation takes place.
• Default clause. 158 This allows the innocent party, after service of due notice of
default, to sell or buy against the defaulter, such sale or purchase to establish the
default price. 159 Damages will then be payable, subject to arbitration in the case of
disputes, 160 based on the difference between the contract price and the default price.
161
(b) F.o.b. contracts

13.28 The letters ‘f.o.b.’ stand for ‘free on board’.162 This form of contract has a long
pedigree, and may be traced back to the practice of merchants going round various ports
with a ship and buying goods from local traders; these would then be delivered to the ship
and paid for at once.163 Nowadays of course the buyer will not generally go out to the
loading port in person, but will nominate a ship164 to go and collect the goods on his or her
Private Law Library
Page 353
behalf, but the basic principle remains the same, the obligations of the seller being fulfilled
as soon as the goods are put on board the ship, after which the buyer will bear the risk.165
13.29 F.o.b. contracts can take various forms,166 but the duties of the seller under such a
contract can be summarised under two heads, one being the loading of the goods on the
ship and the other the provision of the necessary documentation to the buyer.167 As far as
the loading is concerned, the seller is under a duty to load the specified goods168 onto the
specified ship169 at the specified place170 and at the specified time.171 As far as the
documents are concerned, these are not strictly speaking an essential part of a contract of
this nature, but are nevertheless necessary to confirm to the buyer that the obligations of
the seller have been duly carried out.172 The duties of the buyer are basically to nominate a
ship on which the goods are to be loaded,173 and to pay the price once that loading has
taken place.174 After that (p. 380) the seller drops out of the picture, and it is up to the
buyer to make any arrangements necessary to get the goods delivered to their ultimate
destination.175
13.30 Once again we may take as an example of this form the standard terms provided by
the Grain and Feed Trade Association (GAFTA).176 These provide for delay as follows:
177
• Period of delivery (at buyer’s call).
• Notice of nomination (to be given no less than the agreed number of days in
advance of loading period). 178
179
• Expected readiness date.
• Extension of delivery clause. 180 This allows the buyer to claim an extension of up to
ten days, but during the extension period the goods will be held by the sellers at the
buyer’s account, with the buyer being liable for any expenses incurred.
181
• Payment (by cash against the documents specified in the contract).
182
• Interest on late payment.
• Prevention of delivery for force majeure events. 183 This is in similar terms to the
one in the equivalent c.i.f. contract, 184 but whereas the latter relates to prevention of
shipment this relates to prevention of delivery, so reflecting the different obligations
of a seller under a contract of this sort.
185
• Default clause. Again, this is in similar terms to the one in the equivalent c.i.f.
contract. 186
B. Effect of Express Provisions

13.31 Having considered some examples of express terms relating to delay, we shall now
look at how they operate in the context of the general law. In doing so, we shall adopt the
analysis seen in earlier chapters – that is to say, in terms of the remedies provided by terms
of this sort.
(p. 381) (1) Specific relief

13.32 Given that in English law the provision of specific relief is at the discretion of the
court, there would seem to be no point in inserting a contract term providing for its
availability. However, this has not prevented parties from trying to do so. In Warner Bros Inc
v Nelson187 the defendant, a well-known film actress, agreed during the term of the
contract to work solely and exclusively for the claimant studio. The contract contained a
clause in which the defendant formally admitted that the loss of her services could not be
adequately compensated for in damages, and agreeing to the availability of an injunction in
the event of a breach. Similarly, in Tritav Holdings v National Bank of Canada188 the terms
of a lease for a unit in a shopping centre provided for various remedies on the tenant’s
default, including specific performance and a mandatory injunction to compel the tenant to
Private Law Library
Page 354
keep the business open or to resume trading as the case may be; this was accompanied by
an express clause setting out the tenant’s consent to these remedies being granted.189
Commenting on these cases,190 Robyn Carroll suggests that though the courts will clearly
not allow their discretion in this regard to be overridden by express provisions of this
sort,191 the presence of such provisions, if appropriately drafted, may be a relevant factor in
the way in which that discretion will be exercised in any given case.192
(2) Notice making time of the essence

13.33 We have already commented on the utility of the procedure whereby a promisor who
has failed to perform can be served with a notice making time of the essence; if the
promisor is still able and willing to perform, the notice can serve as an incentive to do so,
and if not, failure to comply with the notice can be good evidence that performance is not
likely to be forthcoming. It is therefore not surprising that contracts, especially in the field
of conveyancing, often provide for notices of this sort.193 Since their enforcement does not
require the intervention of (p. 382) the court, such provisions do not cause problems in
principle; rather, the question is how they relate to the promisee’s ability to serve a notice
under the general law.
13.34 In the past the courts have been curiously reluctant to enforce such clauses
according to their terms. Thus in Smith v Hamilton194 the purchaser of a house was allowed
to reclaim her deposit despite having failed to complete either on the due date or following
service of a notice to complete. The contract provided for termination and forfeiture of the
deposit, either with or without notice, in the event of failure to complete on time.195
However, it was held by Harman J that time not being of the essence originally, it was not
open to the vendor to make it so in this way.196 Similarly in Re Barr’s Contract,197 a term
allowing the vendor to serve a notice requiring the purchaser to complete ‘within such
period (not being less than 28 days) as the notice shall prescribe’198 was held not to entitle
the vendor to rely on a notice of that length since it did not give the purchaser sufficient
time to raise the price.199 And in Cumberland Court (Brighton) Ltd v Taylor, a similar
notice200 was upheld, but partly on the ground that the period allowed would have been
reasonable in any event under the general law.201
13.35 In the absence of any good reason to the contrary, there would seem to be no good
ground for allowing the court to second guess express provisions of the contract in cases of
this type.202 It is not without significance that all of the three cases mentioned above (all of
which were only cases at first instance) were decided before it was finally settled that
failure to adhere to time stipulations in a conveyancing contract was a breach of contract in
the first place.203 One of them has now been overruled,204 and another has been
doubted.205 Now that the law on this matter has been clarified, the law in this area might
well be reconsidered at a higher level.
(p. 383) (3) Recovery or forfeiture of liquidated sum

13.36 Where damages for delay are claimed at common law, it is up to the court to assess
what those damages should be. But sometimes damages are set by a provision in the
contract, and the question then arises to what extent the promisee can recover under that
provision. Alternatively, the contract may provide for a deposit or other advance payment
which the promisee may seek to forfeit in consequence of the delay. There are a number of
possibilities here.
(a) Liquidated damages
13.37 Where a contract contains a valid liquidated damages clause covering the breach,
the promisee can recover the sum specified in the clause, no more and no less.206 Questions
of mitigation are irrelevant.207 Nor can the promisor seek to argue that the loss would have
been sustained in any event. In Clydebank Engineering and Shipbuilding Co Ltd v Don Jose
Ramos Yzquierdo y Castaneda208 the appellants agreed to construct a number of torpedo
Private Law Library
Page 355
boats for the Spanish Navy, with £500 a week being payable for late delivery. The boats
were not delivered on time, but in the meanwhile the respondents were involved in a
disastrous sea battle in which most of their fleet was sunk. But this was held by the House
of Lords not to be a bar to a claim for liquidated damages, the whole point of which were to
save the court from having to inquire into the claimant’s actual loss.
13.38 The rule that the claimant cannot recover more than the sum specified in the
liquidated damages clause means that such a clause can function rather like a limitation
clause.209 The claimant cannot ignore the clause altogether and sue for unliquidated
damages,210 nor can he or she seek to recover such damages in addition to the sum
specified in the clause.211 However, the extent to which a liquidated damages clause bars a
claim for unliquidated damages on the same facts depends on the construction of the clause
in question. In Aktieselskabet Reidar v Arcos Ltd212 a charterparty provided that the
charterers should load the cargo at an agreed rate, and that a fixed rate of demurrage
should be paid for detention of the ship beyond the agreed time. The charterers were so
slow in loading that by the time the ship was ready to sail the winter season had arrived,
which meant that she could carry less cargo. It was held (p. 384) that the shipowners were
entitled to claim both ‘demurrage’ for the detention of the ship213 and damages for ‘dead
freight’ to compensate them for their inability to carry a full cargo. Liquidated damages
clauses can be found in many different types of contract, but such provisions are of
particular importance in two situations involving delay, one being the ‘demurrage’ payable
by a charterer for detention of a ship, and the other the liquidated damages payable by a
contractor for delay in construction contracts.
(i) Demurrage
13.39 ‘Demurrage’ is the technical name given to the liquidated damages payable,
typically in the context of a voyage charter,214 for delay in loading or unloading.215 What
normally happens is that the charterer is allowed a fixed period of time – the so-called ‘lay
days’ – for the completion of the task, during which the ship is at the disposal of the
charterer. If the charterer fails to have the loading or unloading completed in time, this is a
breach of contract216 for which the owner of the ship can claim damages for detention, or, if
the contract so provides, demurrage at a given rate.217 The law regarding laytime and
demurrage is complex and technical,218 and we can do no more than highlight its main
features in the present context.
(aa) Nature of demurrage
13.40 It has been said that a provision as to demurrage is for the benefit of the charterer
as well as the shipowner, in that the charterer, at the price of paying the agreed demurrage,
is entitled to keep the ship for the agreed time, or if no time has been agreed, for such a
time as will not frustrate the commercial object of the adventure.219 However, a charterer
who detains the ship beyond the span of the lay days commits a breach of contract,220 and
therefore demurrage is properly classified as a species of liquidated damages rather than as
a species of option.221
(bb) Types of demurrage
13.41 Demurrage can be classified as either ‘exhaustive’ or ‘partial’.222 It is classified as
‘exhaustive’ when it covers all delay in loading (p. 385) or unloading; it is classified as
‘partial’ where it only covers a specified period. Where there is a provision for exhaustive
demurrage, it excludes any claim for unliquidated damages in respect of the detention of
the ship, but in the case of partial demurrage such a claim can arise at the expiry of the set
period. This can be illustrated by a charterparty that provides for ‘ten days to load, ten days
on demurrage at £X per day’. Say the charterer takes thirty days to load the ship. Nothing
will be payable in respect of the first ten days, which constitute the lay days allowable
under the charter. In respect of the second ten days, the charterer will have to pay the
Private Law Library
Page 356
agreed demurrage. Then in respect of the third ten days, the owners can claim unliquidated
damages for detention in the normal way.
(cc) When does demurrage have to be paid?
13.42 Liability for demurrage normally begins to run as soon as the lay days have expired,
and continues to accrue until the cargo is fully loaded or unloaded and the ship sent on its
way.223 However, there are exceptions to this. Thus, for instance, the express terms of the
charterparty224 or the custom of the port may provide that certain days, such as Sundays or
public holidays, are not to count.225 Again, if the owner for his or her own purposes
removes the vessel from the disposal of the charterer – say, for the purpose of taking on fuel
– the charterer will not have to pay demurrage in respect of the period in question.226 On
the other hand, the contract may provide for payment of demurrage or other such sums at
an earlier stage, as where the charterparty provides that time spent waiting for a berth is to
count as loading or discharging time.227 In these situations demurrage will have to be paid
even though the ship is not technically at the disposal of the charterer.
(dd) Who must pay the demurrage?
13.43 Normally it is the charterer who is liable to pay the demurrage.228 However, there
are cases where other parties may have to pay it either instead or as well. In particular, a
charterer who is loading cargo for the benefit of others, for instance the consignors and
consignees under a contract (p. 386) for the sale of goods, may very well issue bills of
lading incorporating the terms of the relevant charterparty.229 Where this happens,
demurrage may become payable by others, including the consignors230 and also by anyone
else who may demand delivery on the bill of lading.231
(ee) The effect of demurrage
13.44 Where a contract provides for the payment of demurrage, the effect is the same as
for any other kind of liquidated damages clause. Thus in the event of the ship being
detained beyond the agreed lay days, the owner may claim the set rate of demurrage, no
less and no more.232 It does not matter that the owner may have suffered loss in excess of
that amount,233 nor that the charterer’s breach was a deliberate one, designed to cut down
the number of voyages that could be performed under the charter.234 However, the owner
will be able to recover for extra losses incurred which are not within the scope of the
demurrage clause.235
(ii) Liquidated damages in building contracts
13.45 Another context in which liquidated damages provisions are often found is in
building and construction contracts, where the contractor agrees to pay compensation for
delay at a certain rate.236 Such provisions have a number of advantages.237 First of all, they
can be operated with reasonable clarity and certainty. Next, they save the court from having
to conduct an expensive and complicated enquiry into the amount of loss suffered by the
employer as a result of the delay. Last but not least, they can act as a valuable incentive to
contractors to keep up to schedule. Liquidated damages provisions of this sort are
enforceable in principle, but their application can give rise to a number of technical
difficulties which we can do no more than outline in the present context.
(aa) When are liquidated damages payable?
13.46 Obviously the situations for which liquidated damages may be payable will vary from
contract to contract, but clauses of this type often provide that if the contractor fails to
complete by the date stipulated in the contract, or by such date as varied by an extension of
time, the employer may sue for or deduct liquidated damages at the rate of so many pounds
for any day or week during which the works remain incomplete.238 This means that the
liquidated damages are payable as from the date set either by the original contract or by a
Private Law Library
Page 357
proper (p. 387) extension.239 They then remain payable until the date of practical
completion,240 unless the contract is terminated before that time.241
(bb) Prevention by employer
13.47 There is, however, an important exception to this, in that an employer cannot claim
liquidated damages in respect of a delay for which he or she is wholly or partly
responsible.242 This can happen in two cases, the first being where delay is caused by the
employer’s own breach of contract,243 and the second where delay is caused by extra works
ordered by the employer.244 In neither case can the employer claim liquidated damages, the
principle being that he or she cannot insist on timely completion when it is his or her own
fault that this was not done.245 It does not matter that the contractor also may have
contributed to the delay.246 The effect of this rule is to render the liquidated damages
provision inoperable, since there is now no set date from which those damages can
accrue.247 Rather, time is said to be ‘at large’,248 the contractor now being under an
obligation to complete the works within a reasonable time.249
(cc) Extensions of time
13.48 The solution for the problem just stated is for the contractor to be given an
extension of time, whereby a later date is set for completion.250 Such extensions are
generally given by the architect, and may be subject to review by the arbitrator.251 They can
of course be for the benefit of the contractor, in that there is now more time allowed for
completion, but they can also work to the benefit of the employer by providing a fresh date
from which liquidated (p. 388) damages can begin to run.252 For this reason the courts have
traditionally regarded extension of time clauses with grave suspicion, and have subjected
them to very strict canons of construction.253 Thus, for instance, it has been held that
extensions of time can only be granted if the contract so provides,254 that they must be
granted strictly in accordance with the contract255 and that in the absence of clear words
they will not be allowed to apply to acts of prevention or breaches of contract by the
employer.256
(b) Penalties
13.49 The legitimate function of a liquidated damages clause is to save time and effort by
allowing the parties to make a genuine pre-estimate of the loss likely to be caused by the
breach. However, such clauses can also be used for a more sinister purpose, in terrorem of
the party in breach,257 that is to say in order to terrorise the promisor into performing the
contract. Such provisions are categorised as penalties, and will not be enforced by the
court. Where a clause is construed as a penalty, it is completely disregarded, and the
promisee will have to claim for unliquidated damages in the usual way.258 The courts are
frequently confronted with the question whether a liquidated damages clause can be struck
out as a penalty. This is not an easy question to decide, since the terminology used to
describe the clause in the contract is not conclusive.259 Rather, such clauses can be struck
down in two ways, by common law and by statute.
(i) Penalties at common law
13.50 Whether a clause is construed as a penalty at common law depends on its
construction and on the surrounding circumstances at the time of the breach.260 The mere
fact that the clause yields a figure greater than the loss actually suffered is not enough to
make it a penalty; something more must (p. 389) be shown.261 Until recently the key
guideline case on penalties was the decision of the House of Lords in Dunlop Pneumatic
Tyre Co v New Garage and Motor Co,262 where Lord Dunedin laid down a number of
principles for the guidance of the courts. However, these must now be used with caution in
the light of the decision of the Supreme Court in Cavendish Square Holding BV v
Makdessi,263 where it was pointed out that these principles formed no part of the ratio of
the case.264 Rather, the court should apply a two-stage test.265 The first question to ask was
whether the stipulation in question was a secondary stipulation engaged on breach of a
Private Law Library
Page 358
primary obligation under the contract.266 If so, the court had then to identify the extent and
nature of the legitimate interest of the promisee in having that primary obligation
performed, and then determine whether, having regard to that legitimate interest, the
secondary obligation was exorbitant or unconscionable in amount or effect.267 What this
means is that the four rules cannot be read as if they were a statute; rather, they are no
more than a guide, and must be read against the overriding test set out by the Supreme
Court.
(aa) Sum extravagant and unconscionable
13.51 First of all, Lord Dunedin says that a clause will be held to be a penalty if the sum
stipulated for is extravagant and unconscionable in amount in comparison to the greatest
loss that could conceivably be proved to have followed from the breach.268 It has been said
that a provision in a minor building contract for the payment of £1 million liquidated
damages for failure to complete the work on time would clearly be a penalty on this test.269
This example has been described as rather far-fetched,270 but a more realistic illustration is
provided by Jeancharm (T/A Beaver International) v Barnet Football Club Ltd271 where a
clause in a contract provided for 5 per cent interest a week in the event of late payment for
goods supplied. Pointing out that this amounted to a rate of 260 per cent a year, the Court
of Appeal had no hesitation (p. 390) in striking the provision down as a penalty. Such a
provision would seem to fall well within the scope of the test set out in the Makdessi case.
(bb) Delay in paying a sum of money
13.52 Lord Dunedin’s second principle is that it will be held to be a penalty if the breach
consists only in paying a sum of money, and the sum stipulated is a sum greater than the
sum which ought to have been paid.272 Given that this rule is capable of striking down
provisions that on their merits are perfectly fair, it must now be regarded as suspect in the
light of Makdessi. Indeed, the courts have always been reluctant to apply the penalty
doctrine in the absence of evidence of oppression.273 Thus, for instance, it does not apply to
an acceleration clause in a contract for payment by instalments, where the whole sum
becomes due on default of a single payment.274 Nor does it apply to clauses increasing the
rate of interest payable by a borrower in default,275 it being said that there is a good
commercial reason for the increase, and that therefore the provision is not penal in
character so long as the increase is not an extravagant one.276
(cc) Lump sum payable for variety of breaches
13.53 There is a presumption, though no more than a presumption, that a clause is penal
when a single lump sum is payable on the occurrence of one or more of several events,
some of which may occasion serious and others but trifling damage.277 In the past, the
courts have used this rule to strike out a clause providing for the payment of a flat sum for
failure to complete on time.278 In Public Works Commissioner v Hills279 the defendant
agreed to construct a railway line for the claimants, it being provided that £10,000
liquidated damages should be paid if the works were not finished within the specified time.
It was held that the claimants were not entitled to recover this sum; given that the same
sum applied whether the delay was long or short, it could not be a genuine pre-estimate of
the loss suffered. However, this rule, unlike the first two, is no more than a presumption,
and it has been said that a clause of this nature should not be struck down merely because
it might be possible to conceive of hypothetical circumstances in which the stipulated sum
might greatly exceed the (p. 391) claimant’s loss.280 All in all, this presumption, to the
extent that it is still part of the law in the light of Makdessi, is not by any means a strong
one.
(dd) Precise pre-estimate of damage impossible
Private Law Library
Page 359
13.54 The fourth rule adds a qualification to the other three, it being no obstacle to the
sum stipulated being a genuine pre-estimate of damage that the consequences of breach
are such as to make precise pre-estimation an impossibility.281 On the contrary, this is the
whole point of having liquidated damages in the first place.282 Delay is exactly the sort of
breach for which it may be difficult or impossible to estimate the loss in advance, and there
is therefore nothing wrong with having liquidated damages for delay provided they are not
extravagant and that they are in proportion to the delay.283 Thus in Re Newman284 the court
upheld a provision in a building contract providing for the payment of £10 per week
liquidated damages for delay.285 A similar approach can be seen in Parking Eye Ltd v
Beavis, a case decided in the Supreme Court along with Makdessi.286 There the court
upheld a charge for £85 levied on the defendant for leaving his car in a supermarket car
park for longer than the two hours specified. The charge was clearly indicated on a number
of signs around the car park, and though it could not be shown that the claimants had
suffered loss of that amount, that was not enough to make the charge penal. The charge
was neither unconscionable nor extravagant, and the claimants had a legitimate interest in
imposing the charge which went beyond the recovery of any loss sustained.287
(ii) Statutory provisions
13.55 As well as being invalid as a penalty under the common law rules, an unfair
liquidated damages clause may also fall foul of Part 2 of the Consumer Rights Act 2015,
which limits the effectiveness of unfair terms in contracts concluded between a seller or
supplier and a consumer.288 A term is defined as unfair if, contrary to the requirement of
good faith, it causes a significant imbalance in the parties’ rights and obligations under the
contract, to the (p. 392) detriment of the consumer.289 Such terms do not bind the
consumer,290 though the rest of the contract remains binding if it is capable of continuing in
existence without the disputed term.291 The Act gives a list of examples of terms which may
be considered unfair,292 one of these being a term requiring ‘any consumer who fails to
fulfil his obligation to pay a disproportionately high sum in compensation’.293 Given that
such terms would generally fall foul of the common law test as well, and that the scope of
the Act is narrower than that of the common law test in a number of respects,294 the Act
would not seem to add very much protection in this respect.295
(c) Options
13.56 Sometimes the contract provides for a sum of money to be paid for delay, not by way
of liquidated damages, but as payment for the exercise of an option. One homely example of
this is money paid to a taxi driver for waiting time. Another example is a provision in a
contract for the sale of goods giving the buyer the right to take late delivery in return for
the payment of ‘carrying charges’.296 Though provisions of this sort cause no problems in
the majority of cases, they can be very oppressive in their effect,297 and the question
therefore arises whether these too can be struck down by the court. The general answer is
that they cannot, but we need to look once again at the position at common law and by
statute.
(i) Common law
13.57 As Cavendish Square Holding BV v Makdessi itself affirms,298 the jurisdiction of the
courts to strike down penalty clauses only applies where the sum in question is payable on a
breach. This means that where the sum is payable for the exercise of an option, the law of
penalties can have no application. In Associated Distributors Ltd v Hall299 the defendant
signed a hire-purchase agreement for a bicycle. The agreement provided for the payment of
a deposit (p. 393) and fifty-three weekly instalments. The hirer was given the right to
terminate the agreement, but in that event was bound by a ‘minimum payment’ clause
which obliged him to pay all sums outstanding under the agreement, and also a further sum
‘by way of compensation for depreciation’ so as to bring the total sum paid up to half the
total hire-purchase price. The defendant terminated the agreement at a very early stage,
Private Law Library
Page 360
and sought to argue that the minimum payment clause was unenforceable as a penalty. This
argument was accepted by the County Court judge, but the Court of Appeal held that the
claimants could recover the full sum due under the clause. Though the clause in question
was subjected to unfavourable comment by members of the court,300 it was pointed out that
the agreement had been terminated by the hirer and not the owner, so the issue whether
the minimum payment clause was a penalty did not arise.
13.58 The paradox with Associated Distributors Ltd v Hall is that if it had been the owner
who had terminated for breach, the clause would have been struck down. In Bridge v
Campbell Discount Co,301 which involved a contract term very similar to the one in
Associated Distributors Ltd v Hall, the hirer of a Dormobile van found that he could not
keep up the payments and wrote to the owners in very apologetic terms saying that he
would have to return it. The question then arose whether the owners were entitled to claim
under the minimum payment clause. Lords Devlin and Denning held for the hirer on the
broad ground that Associated Distributors Ltd v Hall was wrongly decided, but the other
members of the House of Lords were unable to concur in this conclusion. However, it was
held that the minimum payment clause was still caught by the rules as to penalties, on the
ground that this was a case of breach rather than of the exercise of an option. Two reasons
were given for this conclusion, the one being the lack of any reference to the option in the
hirer’s letter to the owners, and the other the apologetic terms in which it was written.302
Whatever the merits of this decision, it left the law in an unsatisfactory state. In the graphic
words of Lord Denning:303
Let no one mistake the injustice of this. It means that equity commits itself to this
absurd paradox: it will give relief to a man who breaks his contract but will penalise
the man who keeps it.
13.59 Not all courts have been happy to accept this paradox. In particular, in Andrews v
ANZ Banking Group the High Court of Australia,304 drawing on the ancient equitable
origins of the penalty doctrine, decided that it should not be confined to sums payable on
breach. In England and Wales, to some extent, the matter (p. 394) has been remedied by
statute,305 but despite the strictures of Lord Denning the difference drawn in this context
between breaches and exercises of an option to terminate still holds good in the law today.
(ii) Statute
13.60 To what extent can statute help out the defendant in this kind of case? In a case of
hire purchase, the hirer now has a statutory right to terminate the agreement under the
Consumer Credit Act.306 As well as this, as we have seen, a term requiring any consumer
who fails to fulfil his obligation to pay a disproportionately high sum in compensation can
be struck down under the Consumer Rights Act 2015.307 Strictly speaking, it is hard to say
that a person who exercises an option of this sort can be said to have failed to fulfil an
obligation under the contract, but it may be that the Act can cover this sort of case. In
Bairstow Eves London Central Ltd v Smith308 a clause in an estate agency agreement
provided for payment of commission at a ‘discounted’ rate of 1.5 per cent if paid within ten
days, and at a ‘standard’ rate of 3 per cent thereafter. Looking at the substance of the
agreement rather than the form, the High Court struck the provision down as unfair under
the equivalent provision in the old Unfair Terms in Consumer Contracts Regulations
1999,309 which have now been superseded by the 2015 Act. Doubtless the court was
anxious to avoid extending to the 1999 Regulations the paradox in Bridge v Campbell
Discount Co Ltd, whereby the person who breaks the contract is better off than the one who
keeps it.310
Private Law Library
Page 361
(d) Deposits and part payments

13.61 So far we have been looking at the situation where the contract provides for a fixed
sum to be paid by the promisor after and in consequence of the breach. However, contracts
may also provide for a deposit or for some other sum to be paid in advance. The question
then arises whether, in a situation where the contract has been terminated on account of
the promisor’s breach, the promisee can forfeit the sum in question, and whether he or she
can sue for it if it has not yet been paid. The answer to this depends on a number of factors,
and in particular: (1) whether the sum in question is a deposit or a part payment of the
price; (2) whether the contract provides for forfeiture or not; (3) whether the promisor is
still ready and willing to perform; and (4) whether forfeiture would involve a total failure of
consideration.
(i) Deposits
13.62 A deposit by its very nature is intended as an earnest for the performance of the
contract,311 and can therefore not as a general rule be recovered (p. 395) by a defaulting
promisor in the event of termination.312 Indeed, since termination of the contract for breach
does not affect accrued rights, there is nothing in principle to prevent the promisee both
exercising the right to terminate and suing for an unpaid deposit.313 However, these
general rules are subject to exceptions both at common law and by statute.
(aa) Common law
13.63 Given that a deposit was payable in advance of the contract, it used to be thought
that the jurisdiction of the courts to relieve against penalties had no application in this
context. However, relief of this sort was granted by the Privy Council in the case of
Worker’s Trust and Merchant Bank Ltd v Dojap Investments Ltd.314 The facts here involved
a contract for the sale of land which provided for a deposit of 25 per cent and for payment
of the purchase price within 14 days of the date of the auction. The price was not paid on
time, and the vendors sought to terminate the contract and forfeit the deposit. However, it
was held that a deposit could only be forfeited by the vendors in this sort of situation where
it was reasonable in its scale; given that the normal deposit in a sale of land was 10 per
cent, a deposit of 25 per cent was to be regarded as penal unless the vendors could show
good reason for setting it at such a high level. In the event, the purchasers were allowed to
recover their deposit in full.
(bb) Statutory provisions
13.64 Where the contract is one for the sale of land, a limited degree of statutory
protection against the unjust forfeiture of a deposit is given by section 49(2) of the Law of
Property Act 1925, which gives the courts a general discretion to order the return of the
deposit where it thinks fit. The way in which the courts have used this provision has varied
considerably over the years.315 At first it was said that the section only applied where there
had been unconscionable conduct or where special circumstances arose making it unfair
that the deposit should be forfeited.316 In later years, the courts adopted a wider view,
saying that it should be applied where necessary to do justice between vendor and
purchaser.317 However, in more recent years it has been said that, given that the courts now
have the power to order the return of the deposit anyway where it is thought to be penal in
its effects, section 49(2) should be used only in exceptional cases,318 and this seems to be
the current position.319
(p. 396) 13.65 On a more general note we have Part 2 of the Consumer Rights Act 2015,
which allows the courts to strike out unfair terms in consumer contracts.320 One example
given of a term which will generally be regarded as unfair is one which permits the seller or
supplier to retain sums paid by the consumer where the latter decides not to perform the
contract, without providing for the consumer to receive compensation of an equivalent
amount from the seller or supplier where the latter is the party cancelling the contract.321
Given that there is nothing to prevent these provisions from applying to contracts for the
Private Law Library
Page 362
sale of land,322 this provision would probably cover the forfeiture of a deposit. However, the
Act as we have seen only applies to consumer contracts.323 As well as this, the provision in
question only applies where the right to forfeit is conferred by the contract, and while this
may apply to some cases of deposits it does not apply where the forfeiture is governed by
the general law rather than by any specific term of the contract.324
(ii) Part payments of the price
13.66 An analogous problem arises when the contract provides for payment of the price in
advance or for payment in instalments, and the promisee terminates the contract for breach
by the promisor. Such breach may often consist of failure to pay instalments on time. Can
the promisee forfeit the instalments that have been paid, and can he or she recover in
respect of arrears outstanding at the date of termination? Once again the answer depends
on a number of different factors, the principal one being whether or not the contract
expressly provides for forfeiture in these cases.
(aa) Contractual provision for forfeiture
13.67 Sometimes the contract will provide in so many words that in the event of
termination the promisee may retain or recover, as the case may be, instalments of the
price which fell due before termination. Where this is the case, the promisor cannot as a
general rule recover any past instalments and can be sued for any that remain
outstanding,325 subject to three possible restrictions.
13.68 Extra time to pay. First of all, equity will relieve a purchaser against forfeiture in
such cases to the extent of giving him or her extra time to pay, provided that he or she is
able and willing to do so.326
(p. 397) 13.69 Relief against forfeiture generally. Even where the promisor is no longer
able or willing to perform, there is authority for a broader degree of equitable relief against
forfeiture in this sort of case. The leading case here is Stockloser v Johnson,327 a case
involving the sale of machinery for a price payable in instalments. The contract provided
that in the event of termination the seller could retain any instalments paid. In the event,
the seller was held to be entitled to do this by the Court of Appeal, but it was said by Romer
LJ that it would have been different if the seller had been guilty of fraud, sharp practice or
other unconscionable conduct.328 The other two judges, Sellers and Denning LJJ, went even
further, saying that equity could relieve against forfeiture in any case where it would be
unconscionable to allow the money to be kept.329 Whether one adopts the wider or the
narrower view of its scope and extent, the existence of an equitable jurisdiction to grant
relief in this sort of case would not seem to be in doubt.330
13.70 Consumer Rights Act 2015. Finally, we have once again the ‘grey list’ from the
Consumer Rights Act 2015.331 One example of a term which will generally be regarded as
unfair under the Act is one which permits the seller or supplier to retain sums paid by the
consumer where the latter decides not to perform the contract, without providing for the
consumer to receive compensation of an equivalent amount from the seller or supplier
where the latter is the party cancelling the contract.332 In principle this would certainly
apply to a term allowing a seller to forfeit instalments of the purchase price, but the Act
does not apply except to consumer contracts.333
(bb) No contractual provision for forfeiture
13.71 Where there is no contractual provision for forfeiture in cases of this sort, the
approach of the law differs depending on whether the promisee can be restored to his or
her original position. In Dies v British and International Mining and Finance Corporation
Ltd334 the buyers of a consignment of rifles paid some £100,000 in advance, but
subsequently refused to take delivery (p. 398) of the rifles or to pay the balance of the
purchase price. The sellers elected to accept the repudiation, and the question then arose
whether they were entitled to retain the advance payment. It was held that the money
Private Law Library
Page 363
should be returned, on the ground that it would be clearly unfair to allow the sellers to
retain both the goods and part of the price, quite irrespective of the loss caused; rather,
they should be confined to their remedy in damages. Though this case seems to go contrary
to the general doctrine that accrued rights survive termination, three points are worth
noting: (1) the £100,000 was not intended as a deposit, but as an advance on the purchase
price; (2) the contract made no express provision for forfeiture; and (3) by allowing the
sellers to terminate the contract and the buyers to recover their advance payment, the
parties were put (subject to any claim for damages the sellers might have) back into their
original position.
13.72 The position is different where the promisor has already incurred a benefit from the
performance of the contract prior to termination. In Hyundai Heavy Industries Co Ltd v
Papadopoulos335 a shipbuilding contract provided for a number of ‘stage payments’ to be
made during the work. The shipbuilders eventually terminated the contract, and the
question arose whether they could recover from the buyers in respect of arrears. It was
argued that the shipbuilders should be confined to their remedy in damages, but it was held
that this would be no substitute for that which they already had, namely a vested and
indubitable right to prompt payment on a specified date of a specified sum.336 This case
differs from Dies v British and International Mining and Finance Corporation Ltd in that
merely terminating the contract and allowing the buyers their money back would not have
restored the parties to their original positions, the buyers having had the benefit of the
work done by the builders prior to termination.337 In the same way, instalments due under a
hire purchase agreement can be recovered even after the agreement has been terminated,
since these relate to the hire of the goods, of which the hirer has already had the benefit.338
(4) Withholding performance
13.73 We have seen that the right to withhold performance has an important function in
dealing with delay, most especially in contracts which call for some degree of co-operation
between the parties in carrying out their respective obligations,339 such as voyage
charterparties340 and construction contracts.341 Given that whether (p. 399) that right
exists in any given case is essentially a matter of construction,342 all terms providing for the
order of performance might in some sense be categorised as express terms relating to
delay. However, the law does not, as it does in relation to the recovery of compensation,
make special provision for this. Instead, the right to withhold performance is governed by
the general principles discussed above,343 the question being decided largely by the
intended order of performance in the contract,344 subject to the doctrine of substantial
performance345 and other devices to prevent unjust enrichment.
(5) Termination
13.74 Last but not least, we have express contractual provisions for termination. Once
again, these play an important role in the law.346 Such provisions have often come before
the courts in recent years. The relevant legal principles are of general application, and have
been covered in detail by the present author in another context,347 but five basic issues
arise for consideration: (1) the relationship between express provisions for termination and
the general law relating to breach of condition; (2) the construction of express termination
rights; (3) the rules relating to the exercise of such rights; (4) the legal consequences of
such exercise; and (5) the problem of multiple termination rights.
(a) Express termination rights and breach of condition
13.75 Saying that time is of the essence is, as noted above, equivalent to saying that timely
performance is a condition of the contract.348 Given that the essence of a condition is that
the promisee may terminate in the event of breach, it is difficult to see how allowing a
contractual right of termination in this context differs from making timely performance a
condition, but some distinction there must be, since as we shall see the two types of
Private Law Library
Page 364
provision differ in their legal effect.349 The issue has not been much considered in the
courts, no doubt because in most cases both types of term boil down to the same thing, but
it has been suggested that for a term to be a condition it is not enough to spell out the
consequences of breach; (p. 400) rather, there must be something essential about the term
itself.350 However, though this description can be applied to some conditions, it clearly
cannot be applied to all; in particular, it has no application to cases where a term is
classified as a condition, not on the ground of its intrinsic importance, but for
considerations of commercial certainty.351 All in all, though the question is potentially an
important one, the law at present provides no satisfactory answer to it.
(b) Construction of termination rights
13.76 Contracts occasionally contain provisions allowing termination for any and every
breach,352 but the courts for obvious reasons tend not to take such provisions at their face
value. In The Athos353 the Court of Appeal was confronted with a standard form clause in a
time charterparty allowing the owner to terminate for late payment of hire ‘or on any
breach of this charterparty’, but held that the clause could not be applied as it stood; in the
words of Stephenson LJ, such a mode of construction would be ‘arbitrary, capricious or
fantastic’.354 The words in question were subsequently interpreted by the House of Lords in
The Antaios355 as referring only to repudiatory breaches, this being the occasion of Lord
Diplock’s famous aphorism that if detailed semantic and syntactical analysis of words was
going to lead to a conclusion that flouts business common sense, it must be made to yield to
business common sense.356 In practice most such clauses either restrict their application to
serious breaches,357 or provide for a procedure whereby the party in default can be warned
of the breach and given an opportunity to remedy it.358
(c) Exercise of express termination rights
13.77 As a general rule, express termination rights of this sort must be exercised strictly
according to their terms. One consequence of this is that the notion of anticipatory breach
has no application in this context; an express termination right cannot be exercised in
advance, no matter how obvious it may be that the requirements for that exercise are going
to be met.359 In The Mihalis Angelos360 the charterers of a ship wrongly purported to invoke
a cancellation clause in the charterparty on the grounds of force majeure, claiming that
there was no cargo available. This was then (p. 401) accepted as a repudiation by the
owners, who terminated the contract. It was subsequently found by the arbitrators that at
the relevant time there was no prospect of the ship being ready to load at the agreed date,
and that if there had been no premature repudiation the charterers would inevitably have
exercised their rights under the cancellation clause.361 However, it was held by the Court of
Appeal that this made no difference to the legal position; at the relevant time, the right of
the charterers to invoke the clause had not yet arisen, and their decision to do so was
premature.362 In the same way, where a clause of this nature provides, as it often does, for
the defaulting party to be served with a notice giving the opportunity to remedy the breach,
such notice must meet the requirements specified in the contract, otherwise it will be
ineffective.363
(d) Effect of termination under express provision
13.78 The consequences of termination under an express provision of this sort are not the
same as those which arise under the normal rule of termination for breach. There, in the
classic words of Lord Diplock, both parties are released from their primary obligations
under the contract, in so far as they remain unperformed, but in the case of the promisor
these primary obligations are replaced by a secondary obligation to pay damages, such
damages being calculated on the basis that the contract has been repudiated in its
entirety.364 However, in the case of termination under an express provision this secondary
obligation does not arise, at least in relation to the primary obligation in question; if the
defaulting promisor has any liability in damages at all, it is merely in respect of any
Private Law Library
Page 365
breaches that have occurred up to the time of termination.365 In most cases this will not
matter, as the promisee will be content with the bare termination, but where there is a lot
of money at stake, it is better for the promisee to terminate for breach of condition under
the general law, as this will afford damages on the footing that the contract has been totally
repudiated – that is to say, damages for ‘loss of bargain’.366
(e) Multiple termination rights
13.79 To what extent do express rights of this sort displace the right to terminate at
common law? It has been said that while in principle there is nothing to stop the parties to a
contract providing their own complete code for termination, there is (p. 402) a presumption
that neither party intends to abandon any remedies for its breach arising by operation of
law, and that clear words will be needed to rebut that presumption.367 Indeed, in Dalkia
Utilities Services plc v Celtech International Ltd it was held that the claimants were entitled
to terminate the contract for repudiation at common law, despite a clause in the contract
which appeared to state in clear words that the rights of termination provided in the
contract should be exhaustive.368 This would seem to suggest that in most cases of this sort
the termination rights provided by the contract will exist alongside those provided by the
general law.369
13.80 This, however, gives rise to an even more tricky question: to what extent can the
exercise of one set of rights exclude another? In this connection it has been said that a lot
depends on the nature of the rights concerned, and on how they relate to one another; for
instance: (1) the rights may arise against the same promisor, or against different promisors;
(2) they may arise in relation to the same event, or in relation to different events; (3) they
may exist at the same time, or at different times; (4) they may be exercised in the same way,
or in different ways; and (5) such exercise may give rise to the same consequences, or to
different consequences.370 Clearly the exploration of all of these possibilities is beyond the
scope of the present work, but three principles seem to emerge. The first is that a party will
clearly not be allowed to exercise multiple rights of termination where that would lead to
multiple compensation for the same loss; so where a contractual right of termination is
accompanied by a right to claim liquidated damages, the promisor cannot exercise that
right and also claim ‘loss of bargain’ damages at common law.371 The second is the
corollary that in a case of this sort, where the two rights lead to different consequences,
exercise of the one will necessarily exclude the other.372 The third is that where the
consequences are not inconsistent, the courts will normally be willing to allow a certain
amount of latitude to the promisee, provided that at the end of the day the compensation
recovered does not exceed the loss incurred as a result of the breach.373
Footnotes:
1
This insight goes back over fifty years, to Stewart Macaulay’s seminal article ‘Non-
contractual relations in business’ (1963) 28 American Sociological Review 45. For a critical
review of the relevant field and its literature see Gava, John, ‘Taking Stewart Macaulay and
Hugh Collins seriously’ (2016) 33 J Contract Law 108.
2
Davis, Mark, Bareboat Charters (2nd edn, 2005) (‘Davis’).
3 Sea and Land Securities v William Dickinson (1942) 72 Lloyd’s Rep 159 at 163
(MacKinnon LJ) (‘hiring a boat in which to row yourself around’); Davis, above n 2, para 1.4.
4 Davis, above n 2, para 1.9; More OG Romsdal Fylkesbatar AS v The Demise Charterers of
the Ship ‘Jotunheim’ [2005] 1 Lloyd’s Rep 181.
Private Law Library
Page 366
5
Davis, above n 2, para 1.2; The Giuseppe di Vittorio [1998] 1 Lloyd’s Rep 136 (CA) at 156
(Evans LJ).
6
Sea and Land Securities v William Dickinson (above n 3) at 69 (MacKinnon LJ); Davis,
above n 2, para 1.6.
7
Davis, above n 2, para 1.6.
8
Bennett, Howard (ed), Carver on Charterparties (2017) (‘Carver’), para 6-034.
9
Ibid, para 6-035.
10
Bimco Barecon 2001 Form (Davis, above n 2, Appendix A).
11
Ibid, clause 4.
12
Ibid, clause 5.
13
Ibid, clause 3.
14
Ibid, clause 11.
15
Clause 11(a) makes time of the essence here.
16
Clause 28(a)(i). However, where this is due to an oversight, the owner is obliged to serve
a notice giving the charterer an opportunity to remedy matters – what is known as an ‘anti-
technicality’ clause. For the relationship between this express right of withdrawal and the
common law right to terminate arising under clause 11(a), see below, paras 13.79–13.80.
17
Clause 15.
18
As well as this, the charterers warrant that they will not allow the ship to commence a
final voyage which cannot reasonably be expected to be completed in time for the ship to be
redelivered as required by the charter.
19
Normally this is for a fixed period of time, but it is possible to have a ‘trip charter’ where
the period is specified by reference to a certain voyage. Such charters are, however, still
classified as time charters: see Carver, above n 8, para 7-002.
20
Ibid, para 1-013; Scandinavian Tanker Trading Co AB v Flota Petrolera Ecuatoriana (The
Scaptrade) [1983] 2 AC 694 at 700 (Lord Diplock).
21
Carver, above n 8, para 1-011.
22
Sea and Land Securities v William Dickinson (1942) 72 Lloyd’s Rep 159 at 163
(MacKinnon LJ) (‘contracting with a man on the beach that he will take you for a row’).
23
24
Ibid, para 1-011.
25
Ibid, para 1-013.
26
Ibid, para 7-129.
27
Ibid, paras 7-105–7.108. However, the owner may also be given a range of possible
dates; this is known as ‘laycan’.
28
Ibid, paras 7-109–7-124. Again, this may be at a fixed place or at a place to be selected
by the charterer or the owner.
29
Ibid, para 7-023.
30
Ibid, para 7-014.
31
Ibid, para 7-031.
32
Ibid, para 7-169.
Private Law Library
Page 367
33
Ibid, para 7-417.
34
Ibid, para 7-056. These will generally include bunkers and fuel, and other expenses such
as port dues.
35
Ibid, paras 7-197–7-221. Examples of this would include loading a dangerous cargo or
some other cargo not permitted by the charter, or ordering the captain to sail into a war
zone or some other place outside the agreed range of ports.
36
Ibid, para 7-226.
37
Ibid, paras 7-342–7-392. Once again this can be at a fixed time or subject to a ‘laycan’
spread of dates.
38
Ibid, para 7-405. Again, a range of options may be specified in the charter.
39
Ibid, paras 7-407–7-416.
40
See Coghlin, Terence and ors (eds), Time Charters (6th edn, 2008), Appendix F2.
41
NYPE 92, clause 2.
42
Ibid, clause 16.
43
Ibid, Description of Vessel.
44
Ibid, clause 2.
45
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha (The Hongkong Fir) [1962] 2
QB 26 (CA); above, para 6.24.
46
NYPE 92, clause 11.
47
Clause 11(a). Once again, this is subject to an anti-technicality clause (clause 11(b))
providing for situations where the late payment is due to an oversight; see above, n 16.
48
Clause 17.
49
Clause 10.
50
51
Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [2001] 1 AC
638 at 652; Carver, above n 8, para 1-024.
52
Oldendorff (EL) & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1974] AC
479 at 556 (Lord Diplock); Carver, above n 8, para 1-028.
53
At this point the ship counts as an ‘arrived ship’, and the laytime clock now begins to
run: Carboex SA v Louis Dreyfus Commodities Suisse SA [2012] EWCA Civ 838, [2013] QB
789 at [13].
54
55
Ibid, para 8-023.
56
Ibid, para 8-035.
57
Ibid, para 8-031.
58
In a charterparty of this sort both parties will generally have duties to perform with
regard to loading and unloading. Traditionally the ship’s rail provided the dividing line in
respect of these, but nowadays most voyage charters make specific provision for the
matter: Carver, above n 8, para 8-042.
59
Ibid, para 8-045. For deviation see above, para 5.14.
60
See above, n 58.
Private Law Library
Page 368
61
62
Ibid, para 8-036.
63
See above, n 58.
64
65
Above, Chapter 3.
66
Thus where the contract requires the charterer to nominate a loading port, the owner
cannot sail to the port until the nomination has been made; similarly, the charterer cannot
be expected to commence loading until the owner has provided proper notice of readiness:
see above, para 3.13.
67
68
That is to say, within the specified laytime or ‘lay days’; Ibid, paras 8-051 and 8-052.
69
Cooke, J H S, Voyage Charters (14th edn, 2014), Appendix 5.1.
70
AMWELSH 93, Clause 1.
71
Clause 1.
72
Clause 3.
73
Clause 5.
74
Clause 5.
75
Clause 7(a).
76
Clause 7(b).
77
Clauses 8 and 9.
78
Clause 10.
79
Clause 20.
80
(13th edn, 2015) (‘Hudson’), para 1-001.
81
Ibid.
82
Particular problems arise where there are many concurrent causes of delay: see Castle
Inns (Stirling) Ltd v Clark Contracts Ltd [2009] CSOH 174; Walter Lilly & Co Ltd v Mackay
[2012] EWHC 1773 (TCC), [2012] BLR 503.
83
See for instance Lidl UK GmbH v RG Carter (Colchester) Ltd [2012] EWHC 3138 (TCC),
146 Con LR 133; R & C Electrical Engineers v Shaylor Construction Ltd [2012] EWHC 1254
(TCC), [2012] BLR 373; Bluewater Energy Services BV v Mercon Steel Structures BV [2014]
EWHC 2132 (TCC).
84
That is to say, to complete the work by the set day if a time is set for performance, and in
other cases to complete it within a reasonable time: above, para 1.02; Hudson, above n 80,
paras 3-064, 6-006 and 6-008.
85
Ibid, para 3-083.
86
Ibid, para 3-084.
87
Ibid, para 3-132.
88
Ibid, para 3-127. This at least extends to the obligation not to hinder the contractors in
the carrying out of the works (the so-called ‘prevention principle’ (see above, para 5.85) and
may extend further than that: see Mackay v Dick (1881) 6 AC 251 at 263 (Lord Blackburn);
Private Law Library
Page 369
Mona Oil Equipment & Supply Co Ltd v Rhodesia Railways Ltd [1949] 2 All ER 1014 at
1018 (Devlin J).
89
Hudson, above n 80, para 3-145.
90
Ibid, para 3-132.
91
JCT 2005 Intermediate Building Contract (‘JCT 2005 IBC’), section 1.1.
92
Ibid, section 1.5.
93
94
JCT 2005 IBC, section 1.19.
95
Ibid, section 2.20.
96
This clause protects the contractor against a claim for liquidated damages, and also
protects the employer against the possibility of time being set ‘at large’ by the operation of
the prevention principle: see above, para 5.85.
97
JCT 2005 IBC, sections 2.21–2.23.
98
Ibid, section 2.21.
99
Ibid, section 2.22.
100
Construction contracts may often provide for ‘stage’ payments, where payment is due
after completing a specified portion of the work: see Sea Cargo Skips AS v State Bank of
India [2013] EWHC 177 (Comm), [2013] 2 Lloyd’s Rep 477; RWE NPower Renewables Ltd v
JN Bentley Ltd [2014] EWCA Civ 150, [2014] CILL 3488.
101
Above, para 3.01.
102
JCT 2005 IBC, section 2.21.2.
103
Ibid, section 2.21.1.
104
Ibid, section 2.22.
105
Ibid, section 2.23.
106
Ibid, section 4.11.
107
108
109
110
Abbey, Robert and Richards, Mark, A Practical Approach to Conveyancing (17th edn,
2015) (‘Abbey and Richards’), para 1.04.
111
Ibid.
112
Ibid, paras 2.40, 8.04, and 8.42.
113
Ibid, Fig 1.1.
114
This includes a duty to disclose all latent defects in the title: Faruqi v English Real
Estates Ltd [1979] 1 WLR 963; Abbey and Richards, above n 110, para 3.27.
115
Abbey and Richards, above n 110, para 3.71. If no date is set, the rule is that
completion must take place within a reasonable time; see Johnson v Humphrey [1946] 1 All
ER 460; Abbey and Richards, above n 110, para 371; above, para 1.11.
Private Law Library
Page 370
116
Thompson, Mark, Barnsley’s Law of Conveyancing (4th edn, 1996), pp 434–441. Until
the price is paid in full, the vendor retains a lien over the property as security: Abbey and
Richards, above n 110, para 9.128.
117
Lysaght v Edwards (1876) 2 Ch D 499; Abbey and Richards, above n 110, para 6.61.
118
Abbey and Richards, above n 110, para 3.27.
119
Standard Conditions of Sale (5th edition) (National Conditions of Sale, 25th edition,
Law Society’s Conditions of Sale 2011), reproduced in Abbey and Richards, above n 110,
Appendix 4.
120
Standard Conditions of Sale, clause 2.1.
121
Clause 2.2.
122
Clause 7.4.2(a)(i).
123
Clause 4.2.2.
124
Clause 4.3.1.
125
Clause 4.3.2.
126
Clause 6.1.1.
127
Clause 6.1.2.
128
Clause 6.1.1.
129
Clause 6.8.1.
130
Clause 6.8.2.
131
Clause 7.4.
132
Clause 7.5.
133
Clause 7.2.1.
134
Clause 7.2.2.
135
See generally Lorenzon, Filippo and Baatz, Yvonne, Sassoon: CIF and FOB Contracts
(6th edn, 2017) (‘Sassoon’).
136
Ibid, para 3-001.
137
Ibid.
138
These will generally include the bill of lading or delivery order, the relevant insurance
certificate and an invoice for the price: Sassoon, above n 135, para 3-001.
139
Ibid.
140
In this context the other party may be the owner of the ship, or a time charterer. The
contract itself may be a voyage charterparty, or a simple contract of carriage.
141
Sassoon, above n 135, para 3-008; Johnson v Taylor Bros [1920] AC 144 (HL) at 155–
156 (Lord Atkinson).
142
Alternatively the seller may acquire the goods after shipment: Ross T Smyth & Co v TD
Bailey, Son & Co [1940] 3 All ER 60 (HL) at 67–68 (Lord Wright); Sassoon, above n 135,
para 3-009.
143
If no place for tender is named in the contract, they must be tendered at the residence
or place of business of the buyer: Johnson v Taylor Bros [1920] AC 144 (HL) at 156 (Lord
Atkinson).
Private Law Library
Page 371
144
Sassoon, above n 135, para 7-021.
145
Kwei Tek Chao v British Traders and Shippers Ltd [1954] 2 QB 459 at 480–481 (Devlin
J); Sassoon, above n 135, para 3-010.
146
This is often done through a letter of credit; Sassoon, above n 135, para 8-023.
147
Ibid, para 8-004. Since the price is payable against the documents rather than the
goods, this can cause problems if the goods then turn out to be not in conformity with the
contract, or indeed if they do not arrive at all.
148
Ibid, para 8-039.
149
Ibid, para 8-031.
150
Grain and Feed Trade Association, Contract No 100: Contract for Shipment of Feeding
Stuffs in Bulk (‘GAFTA 100’): see Sassoon, above n 135, Appendix XIII.
151
GAFTA 100, Clause 6. This is a condition of the contract under the rule in Bowes v
Shand (1877) 2 App Cas 455 (HL).
152
GAFTA 100, Clause 10.
153
Clause 11.
154
Clause 11(b).
155
Clause 12(a).
156
Clause 12(i).
157
Clause 19.
158
Clause 23.
159
Clause 23(a).
160
Clause 23(b).
161
Clause 23(c).
162
Sassoon, above n 135, para 9-002.
163
Ibid.
164
However, the use of f.o.b. terms is not unknown in relation to other contracts of
carriage: see Sassoon, above n 135, para 9-002 at n 2.
165
Ibid, para 11-001.
166
Ibid, paras 9-018–9-029.
167
Ibid, para 10-001.
168
Ibid, para 10-021.
169
Ibid, para 10-002.
170
Ibid, para 10-026.
171
Ibid, para 10-011.
172
Ibid, para 10-040.
173
Ibid, para 11-002.
174
Ibid, para 11-042.
175
This will include any necessary paperwork, including the obtaining of export and
import licences: Sassoon, above n 135, paras 11-033–11-035.
Private Law Library
Page 372
176
Grain and Feed Trade Association, Contract No 64: General Contract for Grain in Bulk:
FOB Terms (‘GAFTA 64’): see Sassoon, above n 135, Appendix XIII.
177
GAFTA 64, clause 6.
178
Ibid. Late nomination is a breach of condition: Bunge Corp v Tradax Export SA [1981] 1
WLR 711 (HL).
179
GAFTA 64, clause 6.
180
Clause 8.
181
Clause 10(a).
182
Clause 10(d).
183
Clause 19.
184
See above at n 157.
185
GAFTA 64, clause 23.
186
See above at n 158.
187
[1937] 1 KB 209 (Branson J).
188
(1996) 47 CPC (3d) 91 (Ontario General Division).
189
In the end the court refused the injunction on the grounds that the parties could not
contract out of the court’s discretion in this way, and said that in the event damages were
an adequate remedy for the landlord. It might have been different if the lease had involved
an ‘anchor’ tenant in the centre: Carroll, Robyn, ‘Agreements to specifically perform
contractual obligations’ (2012) 29 J Contract Law 155 at 169.
190
Carroll, Robyn, ‘Agreements to specifically perform contractual obligations’ (2012) 29 J
Contract Law 155.
191
Quadrant Visual Communications Ltd v Hutchinson Telephone UK Ltd [1993] BCLC 442
(CA).
192
As indeed was admitted by Branson J in the Warner Bros case: see [1937] 1 KB 209 at
219–220. In the end the injunction was granted, on the grounds that it would not be
tantamount to compelling the defendant to perform the contract; after all the defendant,
being a person of no mean talent, could easily earn her living in some other way, though her
salary might not be as generous!
193
See above at nn 107 (construction contract) and 128 (conveyance).
194
[1951] Ch 174.
195
In accordance with clause 21 of the National Conditions of Sale (15th edn).
196
[1951] Ch 174 at 181.
197
[1956] Ch 551.
198
In accordance with clause 23(1) of the National Conditions of Sale (16th edn).
199
[1956] Ch 551 at 558 (Danckwerts J). On the other hand, it was held in Caleo Bros Pty
Ltd v Lyons Bros (Aust) Pty Ltd (1980) 1 BPR 9496 that the period of time stipulated for in
the contract was merely a maximum, and that a shorter period of notice was warranted by
the circumstances of the case.
200
In accordance with clause 22 of the National Conditions of Sale (17th edn).
201
[1964] Ch 29 at 38 (Ungoed-Thomas J).
Private Law Library
Page 373
202
The extent to which the courts should generally be bound by the express words of the
contract as opposed to the context in which they are used is of course a much bigger
question: see above, para 3.22. The argument here is merely that the ordinary principles of
contract construction should apply to clauses of this sort.
203
Raineri v Miles [1981] AC 1050; above, paras 1.04–1.08.
204
Smith v Hamilton (above n 194) (overruled in Behzadi v Shaftesbury Hotels Ltd [1992]
Ch 1(CA)).
205
Re Barr’s Contract (above n 197) (disapproved of in British and Commonwealth
Holdings plc v Quadrex Holdings Inc [1989] QB 842 (CA)).
206
McGregor on Damages (19th edn, 2014) (‘McGregor’), para 15-022.
207
Abrahams v Performing Right Society [1995] ICR 1028 (CA).
208
[1905] AC 6 (HL(Sc)); compare Associated Portland Cement Manufacturers (1900) Ltd
v Houlder Bros & Co Ltd (1917) 86 LJKB 1495: above, para 9.12.
209
Cellulose Acetate Silk Co Ltd v Widnes Foundry (1925) Ltd [1933] AC 20 (HL).
However, it has been held that a liquidated damages clause is not an exceptions clause in
the strict sense: Suisse Atlantique Societe d’Armement SA v NV Rotterdamsche Kolen
Centrale [1967] 1 AC 361 (HL): above, para 5.06.
210
Diestal v Stevenson [1906] 2 KB 345; McGregor, above n 206, para 15-023.
211
Talley v Wosley-Neech (1978) 38 P & CR 45 (CA); McGregor, above n 206, para 15-023.
212
[1927] 1 KB 352; Total Transport Corp v Amoco Trading Co (The Altus) [1985] 1 Lloyd’s
Rep 423; McGregor, above n 206, para 15-024.
213
214
Above, n 78. In some circumstances other parties too may be liable to pay demurrage:
below, para 13.43.
215
Eder, Sir Bernard and ors (eds), Scrutton on Charterparties (23rd edn, 2015)
(‘Scrutton’), chapter 15.
216
Aktieselskabet Reidar v Arcos Ltd [1927] 1 KB 352 (CA) at 359 (Atkin LJ); President of
India v Lips Maritime Corp [1988] AC 395 (HL) at 422 (Lord Brandon).
217
The scale of the demurrage can be set at a certain amount per day, or as a proportion
of the value of the cargo: The Altus [1985] 1 Lloyd’s Rep 423.
218
See more generally Schofield, John A, Laytime and Demurrage (6th edn, 2011); Tiberg,
Hugo, Law of Demurrage (5th edn, 2013); Baughen, Simon (ed), Summerskill on Laytime
(5th edn, 2013).
219
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401.
220
Above, para 13.39.
221
McGregor, above n 206, para 15-073; Gay, Robert, ‘Damages in addition to
demurrage’ [2004] LMCLQ 27. For options see below, paras 13.56–13.60.
222
Scrutton, above n 215, Article 170, para 15-003.
223
Ibid, Article 171, para 15-008; Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003]
EWCA Civ 1715, [2004] 1 Lloyd’s Rep 55. In the absence of clear words in the contract,
there is no obligation to pay demurrage if the ship is still waiting for a berth:
Établissements Soules et Cie v Intertradex SA [1991] 1 Lloyd’s Rep 378 (CA).
Private Law Library
Page 374
224
Portolana Cia Naviera Ltd v Vitoil SA Inc (The Afrapearl) [2004] EWCA Civ 864, [2004]
2 Lloyd’s Rep 305 (demurrage payable at half rate in case of breakdown of machinery).
225
Ibid; Neilsen v Wait, James & Co (1885) 16 QBD 67 (CA).
226
Re Ropner Shipping Co Ltd & Cleeves Western Valleys Anthracite Collieries Ltd [1927]
1 KB 879 (CA); Stolt Tankers Inc v Landmark Chemicals SA [2002] 1 Lloyd’s Rep 786.
227
Scrutton, above n 215, Article 93, para 9-088. In the same way liability for demurrage
may be extended by the custom of the port: Dickinson v Martini (1874) 1 Rettie 1185 (Ct of
Session).
228
Scrutton, above n 215, Article 175, para 15-050. But the charterer may escape liability
if there is a ‘cesser clause’ in the charterparty and liability has been transferred under the
bill of lading: Hick v Rodocanachi and ors [1891] 2 QB 626 (CA); Gullischen v Stewart Bros
(1884) 13 QBD 317 (CA).
229
230
Scrutton, above n 215, Article 176, para 15-055; Cawthron v Trickett (1864) 15 CB
(NS) 754, 143 ER 981.
231
232
Ibid, para 15-006.
233
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 (Devlin J and CA).
234
Suisse Atlantique Societe d’Armement SA v NV Rotterdamsche Kolen Centrale [1967] 1
AC 361 (HL). Such conduct may, however, justify the owner in cancelling the charter.
235
Aktieselskabet Reidar v Arcos Ltd [1927] 1 KB 352 (CA); The Altus [1985] 1 Lloyd’s Rep
423.
236
Furst, Stephen and Ramsey, Vivian (eds), Keating on Building Contracts (10th edn,
2016) (‘Keating’), chapter 10; Hudson, above n 80, chapter 6.
237
Hudson, above n 80, para 6-022.
238
Keating, above n 236, para 10-001.
239
Below, para 13.48.
240
Normally this is marked by the issue of a certificate by the architect: see above at n 98.
241
Hudson, above n 80, para 6-040; Re Yeadon Waterworks Co and Binns and Wright
(1875) 72 LT 538 at 540 (Kennedy J).
242
243
Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Russell v Sa da Bandiera (1862) 13
CB (NS) 149, 143 ER 59; Felton v Wharrie (1906) HBC (4th edn), vol 2 p 398 (CA); Rapid
Building Housing Group Ltd v Ealing Family Housing Assn Ltd (1984) 29 BLR 5 (CA).
244
Westwood and anor v Secretary of State for India (1863) 1 New Rep 262; Dodd v
Churton [1897] 1 QB 562 (CA); Wells v Army and Navy Co-operative Society (1902) 86 LT
764; Astilleros Canarios SA v Cape Hatteras Shipping Co SA (The Cape Hatteras) [1982] 1
Lloyd’s Rep 518; Percy Bilton Ltd v Greater London Council (1982) 20 Build LR 1 (HL). It is
different if the contract specifically provides that completion should take place on the due
day notwithstanding the extra works: Jones v St John’s College, Oxford (1870) LR 5 CP 310.
245
Amalgamated Building Contractors Ltd v Waltham Holy Cross UDC [1952] 2 All ER 452
(CA) at 455 (Denning LJ); Roberts v Bury Improvement Commrs (1870) LR 5 CP 310.
Private Law Library
Page 375
246
Holme v Guppy (1838) 3 M & W 387, 150 ER 1195; Thornhill v Neats (1860) 8 CB (NS)
831, 141 ER 1392; Courtnay v Waterford Railway (1878) 4 LR Ir 11; SMK Cabinets v Hili
Modern Electrics [1984] VR 391 (Supreme Ct of Victoria).
247
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 (CA).
248
Shawton Engineering Ltd v DGP International Ltd [2005] EWCA Civ 1359, [2006] BLR
1; Gaymark Investments Pty Ltd v Walter Construction Group Ltd (2005) 21 Const LJ 71
(Supreme Ct of Northern Territories).
249
250
Keating, above n 236, para 8-017; above, para 5.83.
251
Hudson, above n 80, paras 6-050–6-052.
252
Ibid.
253
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 (CA)
at 121–122 (Salmon LJ); Multiplex Constructions Ltd v Honeywell Control Systems Ltd
[2007] EWHC 447 (TCC), [2007] BLR 195; above, para 5.83.
254
Dodd v Churton [1897] 1 QB 562 (CA).
255
Thus, for instance, where the contract provides that extensions of time must be given in
writing, an oral extension will not be valid: Murdoch v Luckie (1897) 15 NZLR 296
(Supreme Ct of New Zealand); Meyer v Gilmer (1899) 18 NZLR 129 (Supreme Ct of New
Zealand).
256
Roberts v Bury Improvement Commrs (1870) LR 5 CP 310 at 327 (Kelly CB); Miller v
London County Council (1934) 50 TLR 479 (du Parcq J); Peak Construction (Liverpool) Ltd v
McKinney Foundations Ltd (1970) 1 BLR 111 (CA) at 121 (Salmon LJ).
257
Dunlop Pneumatic Tyre Co v New Garage and Motor Co [1915] AC 79 (HL) at 86 (Lord
Dunedin).
258
Jobson v Johnson [1989] 1 WLR 1026 (CA). If in the event the promisee’s loss is greater
than the penalty, it seems that the promisee is entitled to disregard the penalty and sue for
the full amount: Wall v Rederiaktiebolaget Luggude [1915] 3 KB 66; Watts, Watts & Co Ltd v
Mitsui & Co Ltd [1917] AC 227 (HL).
259
Kemble v Farren (1829) 6 Bing 141, 130 ER 1234; Elphinstone v Monkland Iron & Coal
Co Ltd (1886) 11 App Cas 332 (HL(Sc)).
260
Wallis v Smith (1882) 21 Ch D 245 (Fry J and CA); Philips Hong Kong Ltd v Attorney-
General of Hong Kong (1993) 61 Build LR 41 (PC).
261
Turner & Sons Ltd v Mathind Ltd (1989) 5 Const LJ 273 (CA).
262
[1915] AC 79 (HL).
263
[2015] UKSC 67, [2016] AC 1172. Though the effect of this case was to narrow the
scope of the penalty doctrine to a considerable degree, the Supreme Court declined,
contrary to the arguments of the claimants, to abolish it in its entirety: see Lord Hope, ‘The
law on penalties – a wasted opportunity?’ (2016) 33 J Contract Law 93; Summers, Andrew,
‘Unresolved issues in the law on penalties’ [2017] LMCLQ 95.
264
[2015] UKSC 67, [2016] AC 1172 at [22] (Lord Neuberger PSC).
265
Vivienne Westwood Ltd v Conduit Street Development Ltd [2017] EWHC 350 (Ch),
[2017] L & TR 23.
266
[2015] UKSC 67, [2016] AC 1172 at [12] (Lord Neuberger PSC).
Private Law Library
Page 376
267
Ibid at [23]. In this Lord Neuberger drew on the reasoning of other members of the
House of Lords in the Dunlop case, most notably Lord Atkinson: see [1915] AC 79 (HL) at
92–93.
268
[1915] AC 79 (HL) at 87.
269
Clydebank Engineering Co Ltd v Don Jose Ramos Yzquierdo y Castaneda [1905] AC 6
(HL(Sc)) at 10 (Lord Halsbury LC).
270
Peel, Edwin (ed), Treitel: Law of Contract (14th edn, 2015) (‘Treitel (Contract)’), para
20-031.
271
[2003] EWCA Civ 58, 92 Con LR 26; Vivienne Westwood Ltd v Conduit Street
Development Ltd [2017] EWHC 350 (Ch), [2017] L & TR 23.
272
[1915] AC 79 (HL) at 87.
273
Robophone Facilities Ltd v Blank [1966] 1 WLR 1428 at 1447 (Diplock LJ); Philips Hong
Kong Ltd v Attorney-General of Hong Kong (1993) 61 BLR 49 at 58 (Lord Woolf).
274
Protector Endowment Loan Co v Grice (1880) 5 QBD 121; Wallingford v Mutual Society
(1880) 5 App Cas 685 (HL); Oresundvarvet Aktiebolag v Marcos Diamantis Lemos (The
Angelic Star) [1988] 1 Lloyd’s Rep 122 (CA).
275
Lordsvale Finance plc v Bank of Zambia [1996] QB 752.
276
[1996] QB 752 at 767 (Colman J).
277
[1915] AC 79 (HL) at 87.
278
Kemble v Farren (1829) 6 Bing 141, 130 ER 1234; Harrison v Wright (1811) 13 East
343, 104 ER 402; Godard v Gray (1870) LR 6 QB 139; Ströms Bruks Aktie Bolag v
Hutchinson [1905] AC 515 (HL(Sc)); contrast Law v Local Board of Redditch [1892] 1 QB
127 (CA) (£100 plus £5 per week for failure to complete on time).
279
[1906] AC 368 (PC).
280
Philips Hong Kong Ltd v Attorney-General of Hong Kong (1993) 61 Build LR 41 (PC).
281
[1915] AC 79 (HL) at 87–88.
282
[1915] AC 79 (HL) at 88.
283
Fletcher v Dyche (1727) 2 TR 32, 100 ER 8; Crux v Aldred (1866) 14 WR 656; Re White
and Arthur (1901) 17 TLR 461; Alfred McAlpine Capital Projects Ltd v Tilebox Ltd [2005] 1
BLR 271. Such provisions are likely to be considered penal if there is no mechanism in the
contract for grading the damages in proportion to the delay: Arnhold & Co v Attorney-
General of Hong Kong (1989) 5 Const LJ 263 (High Ct of Hong Kong). But where a statute
provides for the payment of liquidated damages at a certain rate for delay, there can be no
question of striking it down as penal: Golden Bay Realty Pte Ltd v Orchard Twelve
Investments Pte Ltd [1991] 1 WLR 981 (PC).
284
(1876) 4 Ch D 724 (CA).
285
However, a provision for a further £1,000 to be payable if in any respect the contract
was not duly performed was struck down, as it covered any and every possible breach,
whether great or small.
286
[2015] UKSC 67, [2016] AC 1172.
287
Ibid at [99] (Lords Neuberger, Sumption and Carnwath), [199] (Lord Mance) and [288]
(Lord Hodge).
288
Private Law Library
Page 377
289
Consumer Rights Act 2015 (‘CRA’), s 62(4); above, para 5.38.
290
Ibid, s 62(1); above, para 5.43.
291
Ibid, s 67.
292
Ibid, Schedule 2 Part 1; above, para 5.43.
293
Ibid, Schedule 2 Part 1, para 5.
294
Thus, for instance, the Act only applies to consumer contracts, and certain types of
contract and certain types of term are excluded from its scope: above, paras 5.42 and 5.46.
295
See, however, the opinion of Lord Toulson in Parking Eye v Beavis [2015] UKSC 67,
[2016] AC 1172 at [315].
296
Fratelli Moretti SpA v Nidera Handelscompagnie BV [1980] 1 Lloyd’s Rep 534;
Gonzalez Corp v Waring (International)(Pty) Ltd [1980] 2 Lloyd’s Rep 160 (CA); Lusograin
Comercio Internacional de Cereas Ltda v Bunge AG [1986] 2 Lloyd’s Rep 654; Richco
International Ltd v Alfred C Toepfer International GmbH (The Bonde) [1991] 1 Lloyd’s Rep
136; Kurt A Becher GmbH & Co v Voest Alpine Intertrading GmbH (The Rio Apa) [1992] 2
Lloyd’s Rep 586.
297
See Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] QB 433 (CA).
298
[2015] UKSC 67, [2016] AC 1172; above, para 13.50.
299
[1938] 2 KB 83 (CA); Re Apex Supply Co Ltd [1942] Ch 108; Export Credits Guarantee
Department v Universal Oil Products Co [1983] 1 WLR 399 (HL); Edgeworth Capital
(Luxembourg) Sarl v Ramblas Investments BV [2016] EWCA Civ 412, [2017] 1 All ER
(Comm) 577.
300
[1938] 2 KB 83 at 88 (Slesser LJ) and 89 (Clawson LJ).
301
Bridge v Campbell Discount Co Ltd [1962] AC 600 (HL).
302
Ibid at 615 (Lord Morton), 621 (Lord Radcliffe) and 632 (Lord Devlin).
303
Ibid at 629.
304
[2012] HCA 30, (2012) 290 CLR 595; Carter, J W and ors, ‘Contractual penalties:
resurrecting the equitable jurisdiction’ (2013) 30 J Contract Law 99.
305
306
Consumer Credit Act 1974, s 100.
307
Above, para 13.55.
308
[2004] EWHC 263, [2004] 2 EGLR 25.
309
Reg 5(1).
310
Above, para 13.57.
311
Howe v Smith (1884) 27 Ch D 89 (CA).
312
Ibid.
313
Hinton v Sparkes (1868) LR 3 CP 161; Dewar v Mintoft [1912] 2 KB 373; Damon Cia
Naviera SA v Hapag-Lloyd International SA (The Blankenstein) [1985] 1 WLR 435 (CA).
314
[1993] AC 573 (PC).
315
316
Hunt (Charles) Ltd v Palmer [1931] 2 Ch 287; James Macara Ltd v Barclay [1944] 1 All
ER 31; Cole v Rose [1978] 3 All ER 1121.
Private Law Library
Page 378
317
Schindler v Pigault (1975) 30 P & CR 328; Universal Corporation v Five Ways
Properties Ltd [1979] 1 All ER 552 (CA).
318
Omar v El-Wakil [2001] EWCA Civ 1090, [2002] 2 P & CR 3.
319
Midill (97PL) Ltd v Park Lane Estates Ltd [2008] EWCA Civ 1227, [2009] 1 WLR 2460.
320
Treitel (Contract), above n 270, para 20-155; above, paras 5.35–5.46.
321
Consumer Rights Act 2015, Schedule 2 Part 1, para 4.
322
R (Khatun) v Newham LBC [2004] EWCA Civ 55, [2005] QB 37. This was a case
involving the Unfair Terms in Consumer Contracts Regulations 1999, but the same
reasoning certainly applies to the 2015 Act.
323
Consumer Rights Act 2015, s 61(1); above, para 5.36.
324
325
Mussen v Van Diemen’s Land Co [1938] Ch 253.
326
Re Dagenham (Thames) Dock Co ex p Hulse (1873) 8 Ch App 1022; Kilmer v British
Columbia Orchard Lands Ltd [1913] AC 319 (PC); Steedman v Drinkle [1916] 1 AC 275
(PC); Starside Properties Ltd v Mustapha [1974] 1 WLR 816 (CA); BICC plc v Burndy Corp
[1985] Ch 232 (CA).
327
[1954] 1 QB 476 (CA).
328
Ibid at 501; Galbraith v Mitchenall Estates Ltd [1965] 2 QB 473.
329
[1954] 1 QB 476 at 483, 485 and 489–490. In Barton Thompson & Co Ltd v Stapling
Machines Co [1966] Ch 499 at 509 Pennycuick J at least regarded the point as arguable.
330
But it only applies to the protection of proprietary or possessory rights: Sport
Internationaal Bussum BV v Inter-Footwear Ltd [1984] 1 WLR 776 (CA and HL); BICC plc v
Burndy Corp [1985] Ch 232. Thus it applies to a charterparty by demise but not to a time
charterparty, since the latter is no more than a contract for services: compare Scandinavian
Trading Tanker Co A/B v Flota Petrolera Ecuatoriana (The Scaptrade) [1983] 2 AC 694 (HL)
with More Og Romsdal Fylkesbatar AS v Demise Charterers of the Ship ‘Jotunheim’ [2004]
EWHC 671 (Comm), [2005] 1 Lloyd’s Rep 181. For a fuller discussion of the equitable
jurisdiction to relieve against forfeiture see above, paras 11.52–11.67.
331
Above, para 5.45.
332
Consumer Rights Act 2015, Schedule 2 Part 1, para 4.
333
Ibid, s 61(1).
334
[1939] 1 KB 724; Rover International Ltd v Cannon Film Sales Ltd [1989] 1 WLR 912
(CA); Treitel (Contract), above n 270, para 20-147.
335
[1980] 1 WLR 1129 (HL); Stocznia Gdanska SA v Latvian Shipping Co [1998] 1 WLR
574 (HL).
336
[1980] 1 WLR 1129 at 1141 (Lord Edmund-Davies).
337
338
Brooks v Beirnstein [1909] 1 KB 98; Chatterton v Maclean [1951] 1 All ER 761.
339
Above, para 3.13.
340
Above, para 13.16.
341
Above, para 13.20.
Private Law Library
Page 379
342
Above, para 3.11.
343
Above, Chapter 10.
344
Above, para 10.06.
345
346
Indeed, as will be seen, all of the contracts dealt with in the first part of this chapter
contain express termination provisions of some sort.
347
Stannard, John and Capper, David, Termination for Breach of Contract (2013), chapter
8.
348
Above, para 11.06. Indeed, it was held by Palmer J in the Supreme Court of New South
Wales in Hewitt v Debus [2004] NSWSC 54 that a clause of this sort could not be enforced
unless time was already of the essence. However, this was said to be based on a
misunderstanding of the equitable principles involved, and the decision was reversed on
appeal: see Stone, ‘Hewitt v Debus – untangling law and equity’s view of the right to
terminate’ (2004) 20 J Contract Law 255; [2004] NSWCA 54.
349
Below, para 13.78.
350
Legione v Hateley (1983) 152 CLR 406 (HCA) at 445 (Mason and Deane JJ).
351
As in Bunge Corp v Tradax Export SA [1981] 1 WLR 711.
352
See Rice (T/A The Garden Guardian) v Great Yarmouth Borough Council [2003] TCLR 1
and Dominion Corporate Trustees Ltd v Debenhams Properties Ltd [2010] EWHC 1193
(Ch).
353
Telfair Shipping Corp v Athos Shipping Co SA [1983] 1 Lloyd’s Rep 127 (CA).
354
Ibid at 145.
355
Antaios Compania Naviera SA v Salen Rederiana AB [1985] AC 191 (HL).
356
Ibid at 201.
357
As in Shuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 (HL) (‘material’
breach).
358
As in the standard ‘anti-technicality’ clause used in time charterparties: see above at n
16.
359
Cheikh Boutros Selim El-Khoury v Ceylon Shipping Lines (The Madeleine) [1967] 2
Lloyd’s Rep 224 (QBD).
360
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH [1971] 1 QB 164.
361
Ibid at 171.
362
However, termination was held to be justified on an alternative ground, namely that the
owners were in breach of the ‘expected ready to load’ clause in the charterparty: see above,
para 11.46.
363
Schelde Delta Shipping BV v Astarte Shipping BV (The Pamela) [1995] CLC 1011;
Afovos Shipping Co v R Pagnan & Flli [1982] 1 Lloyd’s Rep 562 (CA); Western Bulk Carriers
K/S v Li Hai Maritime Inc (The Li Hai) [2005] EWHC 735 (Comm), [2005] 1 CLC 704.
364
Moschi v Lep Air Services Ltd [1973] AC 331 (HL) at 349-350; above, para 11.02.
365
Logistics Holding (Group) Co Ltd [2015] EWHC 718 (Comm), [2015] 2 Lloyd’s Rep 407
(aff’d [2016] EWCA Civ 982, [2016] 2 Lloyd’s Rep 447).
Private Law Library
Page 380
366
367
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC (HL) at 717
(Lord Diplock).
368
369
As in Newland Shipping and Forwarding Ltd v Toba Trading FZC [2014] EWHC 661
(Comm).
370
Carter, J W and Goh, Y, ‘Concurrent and independent rights to terminate for breach of
contract’ (2010) 26 J Contract Law 103; Stannard and Capper, above n 347, paras 8-17–
8-26.
371
Stannard and Capper, above n 347, para 8-24.
372
So if in the example given above the promisor claims liquidated damages and is paid
them, then it will be too late to turn round and claim loss of bargain damages instead.
However, it is by no means clear in cases of this sort when the promisor can be said to have
passed the point of no return: Stannard and Capper, above n 347, para 8-24.
373
See Stocznia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889, [2002] 2
Lloyd’s Rep 436; Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009]
QB 27; Stannard and Capper, above n 347, para 8-26.
Private Law Library
Page 381
Table of Cases
John E. Stannard

John Stannard

ISBN: 9780198792321
United Kingdom
29 Equities v Bank Leumi (UK) Ltd [1986] 1 WLR 1490 (CA) 8.15n64
A-G of Belize v Belize Telecom [2009] UKPC 10, [2009] 1 WLR 1988 2.49, 2.49n140,
3.16, 11.07
A-G v Blake [2001] 1 AC 268 (HL) 9.02, 9.103, 9.103n367, 9.104
AB Corp v CD Co [2002] 1 Lloyd’s Rep 805 9.104
Aberfoyle Plantations v Cheng [1960] AC 115 (HL) 1.35n122, 11.31, 11.37
ACG Acquisition LLC v Olympic Airlines SA (in Liquidation) [2012] EWHC 1070
(Comm), [2012] 2 CLC 48 12.74
The Achilleas see Transfield Shipping Inc v Mercator Shipping In
Adams v Midland Rly Co (1862) 31 LJ Ex 35 9.114
Addax Ltd v Arcadia Petroleum Ltd [2000] 1 Lloyd’s Rep 493 9.44, 9.91, 9.100
Adderley v Dixon (1824) 1 Sim & St 607, 57 ER 239 7.26
Addis v Gramophone Company [1909] AC 488 9.72
Admiral Shipping Co v Weidner, Hopkins & Co Ltd [1916] 1 KB 429 6.17, 8.30, 12.08,
12.13, 12.51
Adyard Abu Dhabi LLC v SD Marine Services [2011] EWHC 848 (Comm), (2011) 136
Con LR 190 5.57n244, 5.84
Private Law Library
Page 382
The Aegean Dolphin see Dolphin Hellas Shipping SA v Itemslot Ltd
Aerial Advertising Co Ltd v Batchelor Peas (Manchester) Ltd [1938] 2 All ER 261 6.23,
9.71
Aero Properties Ltd v Citycrest Properties Ltd [2002] 2 P & CR 21 8.15n72
Afford v Till [1990] 35 EG 56 (CA) 8.36
Afovos Shipping Co SA v R Pagnan & Flli (The Afovos) [1982] 1 Lloyd’s Rep 562 (CA)
13.77
Afovos Shipping Co SA v R Pagnan & Flli (The Afovos) [1983] 1 Lloyd’s Rep 335 (HL)
4.03n4
The Afrapearl see Portolana Cia Naviera Ltd v Vitoil SA Inc
African Export-Import Bank v Shebah Exploration and Production Co Ltd [2016]

EWHC 311 (Comm), [2016] 1 CLC 292 5.23
The Agios Giorgios see Steelwood Carriers Inc of Monrovia v Evimeria Compania
Naviera SA of Panama
Agius v Great Western Colliery Co [1899] 1 QB 413 (CA) 9.06, 9.66
The Agrabele see Gebr van Weelde Scheepvaartkantor BV v Compania Naviera Sea
Orient SA
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd (The Strathallan) [1983] 1 WLR
964 (HL(Sc)) 5.04, 5.12
Ajayi v R T Briscoe (Nigeria) Ltd [1964] 1 WLR 1326 (PC) 5.81
Ajit v Sammy [1967] 1 AC 255 (PC) 8.27, 8.29
Aktieselskabet Reidar v Arcos Ltd [1927] 1 KB 352 (CA) 11.38, 13.38, 13.39, 13.44
Aktieselskabet Dampskibsselskabet Svendborg v Mobil North Sea [2001] 2 Lloyd’s

Rep 127 5.67
Aktion Maritime Corp of Liberia v S Kasmas & Bros Ltd [1987] 1 Lloyd’s Rep 283
10.04
The Al Hofuf see Scandinavian Tanker Trading Co AB v Zodiac Petroleum SA
Al Saloom v Shirley James Travel Service Ltd (1981) 42 P & CR 181 (CA) 11.29
Alan (WJ) & Co v El Nasr Export & Import Co [1972] 2 QB 189 (CA) 5.59n250
Alderslade v Hendon Laundry Ltd [1945] KB 189 5.14(p. xxvi)
Alewyn v Pryor (1826) Ry & M 406, 171 ER 1065 2.20–2.21, 2.49, 11.30, 11.46n193
Alexiadi v Robinson (1861) 2 F & F 677, 175 ER 1237 1.03, 1.16, 1.26, 11.22
Alfred McAlpine Capital Projects Ltd v Tilebox Ltd [2005] 1 BLR 271 13.54n283
Private Law Library
Page 383
Alfred McAlpine plc v BAI (Run-off) Ltd [2000] 1 Lloyd’s Rep 437 (CA) 10.14n41
Ali Shipping Corp v Shipyard Trogir [1999] 1 WLR 314 (CA) 11.25
The Aliakmon see Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd
Alison & Co Ltd v Wallsend Slipway & Engineering Co Ltd (1927) 43 TLR 323 (CA)
5.12, 9.64
Allcard v Skinner (1887) LR 36 Ch D 145 (CA) 7.22
Alley v Deschamps (1806) 13 Ves J 225, 33 ER 278 7.21, 7.22
Allied Marine Transport Ltd v Vale do Rio Doce Navegacao SA [1985] 2 Lloyd’s Rep
18 (CA) 5.52
Allseas International Management Ltd v Panroy Bulk Transport Ltd (The Star Gazer)
[1985] 1 Lloyd’s Rep 370 7.27n131
The Almare Seconda see Blackgold Trading Ltd of Monrovia v Almare SpA di
Navigazione of Genoa
The Altus see Total Transport Corp v Amoco Trading Co
Amalgamated Building Contractors Ltd v Waltham Holy Cross UDC [1952] 2 All ER
452 (CA) 13.47
Amalgamated Investment & Property Co Ltd v John Walker & Son Ltd [1977] 1 WLR
164 (CA) 12.13n40
The Amer Energy see ASM Shipping Ltd of India v TTMI Ltd of England
Amherst v James Walker Goldsmith and Silversmith Ltd [1983] Ch 305, (1984) 47 P &
CR 85 (CA) 2.46, 8.50, 11.34, 11.36, 11.38
Amiri Flight Authority v BAE Systems plc [2003] EWCA Civ 1447, [2003] 2 Lloyd’s
Rep 767 5.30
Ampurius Nu Homes Holdings Ltd v Telford Homes (Creekside) Ltd [2013] EWCA Civ
577, [2013] BLR 400 5.67, 6.30n126, 12.27, 12.70, 12.70n172
André Cayman Islands Trading Co v Stolt Nielson B/V (The Sun Sapphire) [2000] CLC
156 9.99
André et Compagnie SA v Marine Transocean Ltd [1981] QB 694 (CA) 5.51, 12.20
Andros Springs (Owners) v World Beauty (Owners) [1970] P 144 (CA) 9.83
The Angelia see Trade and Transport Inc v Iino Kaiun Kaisha Ltd
The Angelic Grace see Miserocchi and C SpA v Agricultores Federados Argentinos
SCL
The Angelic Star see Oresundvarvet Aktiebolag v Marcos Diamantis Lemos
Private Law Library
Page 384
Anglia Commercial Properties Ltd v North East Essex Building Co Ltd (1982) 265 EG
608 8.50n223
Anglia Television Ltd v Reed [1972] 1 QB 60 (CA) 9.94n329
Anglo-African Shipping Co of New York Inc v Mortner & Co [1962] 1 Lloyd’s Rep 610
(CA) 9.78
Anglo-Irish Bank Corporation Ltd v John Patrick Conway [2014] NI Ch 24 4.20
Anglo-Northern Trading Co Ltd v Emlyn Jones [1917] 2 KB 78 12.28, 12.32n83
Antaios Compania Naviera SA v Salen Rederiana AB (The Antaios) [1985] AC 191

(HL) 11.40, 13.76
The Antclizo see Food Corp of India v Antclizo Shipping Corpn
Re Apex Supply Co Ltd [1942] Ch 108 13.57
The Apollonius see Cosmos Bulk Transport Inc v China National Foreign Trade
Transportation Corp
Appleby v Myers (1865) 2 CP 651 10.08, 10.09
The Aquafaith see Isabella Shipowner SA v Shagang Shipping Co Ltd
Arcos Ltd v Ronaasen & Son [1933] AC 470 (HL) 3.04, 10.07, 11.47
The Arctic III see Transocean Drilling UK Ltd v Providence Resources plc
Ardan SS Co v Weir [1905] AC 501 (HL(Sc)) 4.22, 6.12
The Argonaut see MSC Mediterranean Shipping Co SA v Alianca Bay Shipping Co Ltd
Aries Powerplant Ltd v ECE Systems Ltd (1996) 45 Con LR 111 1.09, 11.22(p. xxvii)
Arnold v Britton [2015] UKSC 36, [2015] AC 1619 3.22, 5.12n40, 11.07, 11.40n162
Aron & Co Inc v Comptoir Wegimont [1921] 3 KB 435 11.46n193
The Arpad [1934] P 189 (CA) 9.02, 9.44, 9.109
Arundel Corp v Khokker [2003] EWCA Civ 1784 11.34
Ascon Contracting Ltd v Alfred McAlpine Construction (Isle of Man) Ltd (2001) 16
Con LJ 316 9.66
Ashby v White (1703) 2 Ld Raym 938, 92 ER 126 9.100
Ashton v Corrigan (1871) LR 13 Eq 76 7.05
ASM Shipping Ltd of India v TTMI Ltd of England (The Amer Energy) [2009] 1 Lloyd’s
Rep 93 9.26
Associated Distributors Ltd v Hall [1938] 2 KB 83 (CA) 13.57, 13.58
Private Law Library
Page 385
Associated Portland Cement Manfacturers Co Ltd v Houlder Bros & Co (1917) 22 Com
Cas 279, (1917) 86 LJKB 1495 6.12, 9.12, 11.45, 13.37n208
Astea UK Ltd v Time Group Ltd [2003] EWHC 725, [2003] All ER (D) 212 4.19, 8.49
Astilleros Canarios SA v Cape Hatteras Shipping Co Inc (The Cape Hatteras) [1982] 1
Lloyd’s Rep 518 5.57, 13.47
Astley Industrial Trust v Grimley [1963] 1 WLR 584 (CA) 11.06
The Athos see Telfair Shipping Corp v Athos Shipping Co SA
Atisa SA v Aztec AG [1983] 2 Lloyd’s Rep 579 12.91
Atkin v Rose [1923] 1 Ch 522 11.52
Atkinson v Sir Alfred McAlpine & Sons [1968] 2 QB 229 (CA) 5.51
Attica Sea Carriers Corp v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto
Buitrago) [1976] 1 Lloyd’s Rep 250 (CA) 7.40
Attwood v Emery (1856) 1 CB NS 110, 140 ER 45 11.22
Avery v Bowden (1855) 5 E & B 714, 119 ER 647 5.66, 7.10
Avimex SA v Dewulf & Cie [1979] 2 Lloyd’s Rep 57 5.77, 5.91
Awal Bank BSC (in Administration) v Al-Sanea [2011] EWHC 1354 (Comm) 4.17
AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, [2011] 2
Lloyd’s Rep 1 5.21
The Azur Gaz see SHV Gas Supply & Trading SAS v Naftomar Shipping & Trading Co
Ltd Inc
B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 5.10
Babacomp v Rightside Properties Ltd [1975] 3 All ER 873 (CA) 1.04, 8.33
Bailey v Bullock [1950] 2 All ER 1167 9.72
Bailey v Memorial Enterprises Ltd [1974] 1 WLR 728 (CA) 11.33
Baily v de Crespigny (1869) LR 4 QB 180 12.87
Bain v Fothergill (1874) LR 7 HL 158 7.19, 9.130
Baird Textile Holdings Ltd v Marks & Spencer plc [2001] EWCA Civ 274, [2001] CLC
999 5.73
The Baleares see Geogas SA v Trammo Gas Ltd
Banco de Portugal v Waterlow [1932] AC 452 (HL) 9.79
Bank Line Ltd v Arthur Capel & Co [1919] AC 435 (HL) 12.10, 12.21, 12.26, 12.29,
12.32, 12.44, 12.61, 12.90
Private Law Library
Page 386
Banks v Geddis [2012] NIQB 57 11.28
Banks v Kokkinos [1999] 3 EGLR 133 11.34
Banning v Wright [1972] 1 WLR 972 (HL) 5.61n256
Barclay v Bailey (1810) 2 Camp 527, 170 ER 1240 4.09n24
Barclays Bank plc v Saville Estates Ltd [2002] EWCA Civ 589, [2003] P & CR 28 8.19,
8.28, 11.34
Barclays Bank v Beck [1952] 2 QB 47 (CA) 9.128
Barrow v Chappell & Co Ltd [1976] RPC 355 7.14
Barrow v Isaacs & Son [1891] 1 QB 417 (CA) 11.52(p. xxviii)
Re Barr’s Contract: Moorwell Buildings Ltd v Barr [1956] Ch 551 8.12, 8.17, 8.28,
13.34, 13.35
Barton Thompson & Co Ltd v Stapling Machines Co [1966] Ch 499 11.57n239,

13.69n329
Basingstoke and Deane B C v Host Group Ltd [1988] 1 WLR 348 (CA) 11.06
Bastin v Bidwell (1881) 18 Ch D 238 7.20
Bates v Robert Barrow Ltd [1995] 1 Lloyd’s Rep 680 9.13n42
Re Bayley and Shoesmith’s Contract (1918) 87 LJ Ch 626 8.18
Bayoil SA v Seawind Tankers Corp (The Leonidas) [2001] 1 Lloyd’s Rep 533 5.08, 5.13
BCCI v Ali [2001] UKHL 8, [2001] 2 WLR 735 11.07
Beaumont v Greathead (1846) 2 CB 494, 135 ER 1039 9.100
Bechal v Kitsford Holdings Ltd [1989] 1 WLR 105 8.14
Behn v Burness (1863) 3 B & S 751, 122 ER 241 2.29, 2.31, 2.38, 2.49, 11.16, 11.45,
11.47
Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1 (CA) 1.04n16, 2.12, 2.51, 8.20, 8.36,
13.35n204
Bentsen v Taylor, Sons & Co [1893] 2 QB 274 (CA) 2.49, 5.66, 11.06, 11.16, 11.45
Berg & Sons v Landauer (1925) 42 TLR 142 11.46n193
Bergerco USA v Vegoil Ltd [1984] 1 Lloyd’s Rep 440 11.46
Bernard v Williams (1929) 139 LT 22 (DC) 2.49
Besant v Wood (1879) 12 Ch D 605 7.20
Besseler Waechter Glover & Co v South Derwent Coal Co Ltd [1934] 1 KB 408 5.63
Private Law Library
Page 387
Beswick v Beswick [1968] AC 58 (HL) 7.05
Bettini v Gye (1876) 1 QBD 183 10.10
The Beursgracht see Glencore International AG v Ryan
BHP Petroleum v British Steel plc and Dalmine SpA [1999] 2 Lloyd’s Rep 586 5.21
BICC plc v Burndy Corp [1985] Ch 232 (CA) 11.57, 13.68, 13.69n330
Bickenhall Engineering Co Ltd v Grandmet Restaurants Ltd [1995] 1 EGLR 110 11.34
Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 9.29, 9.36, 9.66
Bird v Hildage [1948] 1 KB 91 (CA) 5.76
Birkett v James [1978] AC 297 (HL) 5.51
Birmingham & District Land Co v London and North Western Rly (1888) 40 Ch D 268
(CA) 5.81
Blackburn Bobbin Co v T W Allen & Sons [1918] 1 KB 540 12.97
Blackett v Bates (1865) LR 1 Ch App 117 7.07
Blackgold Trading Ltd of Monrovia v Almare SpA di Navigazione of Genoa (The

Almare Seconda) [1981] 2 Lloyd’s Rep 433 9.02, 9.08, 9.93n324, 9.107
The Blankenstein see Damon Cia Naviera SA v Hapag-Lloyd International SA
Blindley Heath Investments Ltd v Bass [2014] EWHC 1366 (Ch) 5.52
Bliss v South East Thames Regional Health Authority [1987] ICR 700 (CA) 9.73
Bluewater Energy Services BV v Mercon Steel Structures BV [2014] EWHC 2132

(TCC) 13.19
Blythe & Co v Richards Turpin & Co (1916) 114 LT 753 5.88
BMBF (No 12) Ltd v Harland and Wolff Shipbuilding & Heavy Industries Ltd [2001]
EWCA Civ 862, [2001] 2 Lloyd’s Rep 227 6.20
BNP Paribas v Wockhardt EU Operations (Swiss) AG [2009] EWHC 3116 (Comm)

8.25, 8.49n222
Boehm v Wood (1820) 1 Jac & W 419, 37 ER 435 7.20, 11.27
Bolton v Mahadeva [1972] 1 WLR 1009 (CA) 3.01, 10.08
The Bonde see Richco International Ltd v Alfred C Toepfer International GmbH
Bontex Knitting Works Ltd v St John’s Garage [1943] 2 All ER 690 (Lewis J), [1944] 1
All ER 381 (CA) 5.15
Boone v Eyre (1777) 1 Hy Bl 273n, 126 ER 160, 2 Bl W 1313n, 96 ER 267 2.21n49,

2.23, 2.23–2.26, 2.28, 2.29, 2.31, 2.38, 11.19, 11.40, 11.44(p. xxix)
Private Law Library
Page 388
The Borag see Compania Financiera ‘Soleada’ SA v Hamoor Tanker Corp Inc
The Boral Gas see Rashtriya Chemicals and Fertilizers Ltd v Huddart Parker
Industries Ltd
Bornmann v Tooke (1808) 1 Camp 376, 170 ER 991 11.10
Borries v Hutchinson (1865) 18 CB (NS) 445, 144 ER 518 9.62, 9.65, 9.112
Borrowman, Phillips & Co v Free & Hollis (1878) 4 QBD 500 (CA) 2.29n66, 4.06n13,
10.03n10
Bovis Homes v Oakcliff Investment Corporation HC (Ch D), 30 March 1994 11.23,
11.28
The Bow Cedar see NV Bunge v Compagnie Noga d’Importation et d’Exportation SA
Bowdell v Parsons (1808) 10 East 359, 103 ER 811 1.30
Bower v Hill (1835) 1 Bing NC 549, 131 ER 1229 9.100
Bowes v Shand (1877) 2 App Cas 455 (HL) 3.04, 11.14, 11.30, 11.46, 11.46n192,
13.27n151
BP Exploration Co Ltd (Libya) v Hunt [1979] 1 WLR 783 5.72, 5.73
BP Exploration Co Ltd (Libya) v Hunt (No 2) [1981] 2 All ER 925 4.25
Bracebridge v Buckley (1816) 2 Pri 200, 146 ER 68 11.52
Braithwaite v Crawshay (1850) 16 LTOS 81 1.12, 1.16
Braithwaite v Foreign Hardwood Co [1905] 1 KB 543 (CA) 6.32
Branchett v Beaney, Coster and Swale B C (1992) 24 HLR 348 (CA) 9.73
Bremer Handelsgesellschaft mbH v Deutsche Conti-Handelsgesellschaft mbH [1983]

1 Lloyd’s Rep 689 5.75
Bremer Handelsgesellschaft mbH v Mackprang [1981] 1 Lloyd’s Rep 292 (CA) 11.30
Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1977] 1 Lloyd’s

Rep 133 12.100
Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s

Rep 109 (HL) 3.11, 3.13, 5.74, 11.46n193, 12.84
Bremer Handelsgesellschaft mbH v Westzucker GmbH [1981] 1 Lloyd’s Rep 207 5.74
Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981]
AC 901 (HL) 5.51
Brickles v Snell [1916] 2 AC 599 (PC) 11.19, 11.58, 11.59
Bridge v Campbell Discount Co Ltd [1962] AC 600 (HL) 13.58, 13.60
Brikom Investments v Carr [1979] QB 467 (CA) 5.61n257
Private Law Library
Page 389
The Brimnes [1975] QB 929 (CA) 5.66
Bristol Airport plc v Powdrill [1990] Ch 744 (CA) 11.57n239
British and Beningtons Ltd v NW Cachar Tea Co Ltd [1923] AC 48 (HL) 12.39
British and Commonwealth Holdings plc v Quadrex Holdings Inc [1989] 1 QB 842
(CA) 8.19, 8.21, 11.27, 13.35
British Columbia Saw Mill Co Ltd v Nettleship (1868) LR 3 CP 499 9.37, 9.49, 9.82
British Fermentation Products Ltd v Compair Reavell Ltd (1999) 66 Const LR 1 5.23
British Movietonews v London and District Cinemas [1951] 1 KB 190 (CA) 12.44
British Russian Gazette Ltd v Associated Newspapers Ltd [1933] 2 KB 616 (CA) 5.53
British Sugar plc v Nei Power Products Ltd [1997] CLC 622 9.05
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric

Railways of London Ltd [1912] AC 673 (HL) 9.02, 9.04, 9.85
Britvic Soft Drinks Ltd v Messer UK Ltd [2002] EWCA Civ 548, [2002] 2 Lloyd’s Rep
376 5.27
Brooks v Beirnstein [1909] 1 KB 98 13.72
Brown v KMR Services [1995] 2 Lloyd’s Rep 513 (CA) 9.53
Brown v Turner, Brightman & Co [1912] AC 12 (HL) 12.80
BS & N Ltd (BVI) v Micado Shipping Ltd (Malta) (No 2) [2002] 2 Lloyd’s Rep 37, aff’d
[2001] 1 Lloyd’s Rep 341 (CA) 11.24
Buckland v Farmar and Moody [1979] 1 WLR 221 (CA) 8.36n171
Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd (The Pamphilos) [2002] EWHC
2292 (Comm), [2002] 2 Lloyd’s Rep 681 6.09(p. xxx)
Bunge & Co Ltd v Tradax England Ltd [1972] 2 Lloyd’s Rep 235 6.09, 8.18, 8.42, 8.44,
11.06, 11.12, 11.13, 11.16, 11.20, 11.27, 11.30
Bunge Corporation v Tradax Export SA [1979] 2 Lloyd’s Rep 477 (Comm Ct) 2.34
Bunge Corporation v Tradax Export SA [1980] 1 Lloyd’s Rep 295 (CA) 2.34
Bunge Corporation v Tradax Export SA [1981] 1 WLR 711 (HL) 2.06, 2.12, 2.32, 2.34,
2.48, 2.51, 5.92, 11.46, 11.48, 13.30n178, 13.75
Burnett SS Co v Danube and Black Sea Shipping Agencies [1933] 2 KB 438 1.03
Burrows v Sharp (1991) 23 HLR 82 (CA) 7.33
Burton & Son v W H Bowater Ltd (1921) 9 Ll LR 336 (CA) 12.13n40
Burton v Pinkerton (1867) LR 2 Exch 340 9.72
Private Law Library
Page 390
Bush v Whitehaven Town Trustees (1888) HBC (4th edn) 12.107n260
Busk v Spence (1815) 4 Camp 329, 171 ER 105 2.20–2.21, 10.14, 11.29
C Czarnikow Ltd v Koufos (The Heron II) [1969] 1 AC 350 (HL) 9.02, 9.16, 9.22–9.23,
9.23n66, 9.31, 9.32, 9.33, 9.91, 9.115, 9.115n414, 9.124n445
C & P Haulage v Middleton [1983] 1 WLR 1461 (CA) 9.11, 9.97
Cadby v Martinez (1840) 11 A & E 720, 113 ER 587 4.16
Cadman v Horner (1810) 18 Ves 10, 34 ER 221 7.19
Calabar Properties v Stitcher [1984] 1 WLR 287 (CA) 9.68, 9.82
Caleo Bros Pty Ltd v Lyons Bros (Aust) Pty Ltd (1980) 1 BPR 9496 8.15, 8.32,
13.34n199
Candy v Midland Rly Co (1878) 38 LT 226 9.62
Caney v Leith [1937] 2 All ER 532 3.14, 11.21
The Cap Palos [1921] P 458 5.15
The Cape Hatteras see Astilleros Canarios SA v Cape Hatteras Shipping Co Inc
The Captain George K [1970] 2 Lloyd’s Rep 21 12.65, 12.107
Carapanayoti & Co Ltd v Comptoir Commercial Andre et Cie SA [1972] 1 Lloyd’s Rep
139 (CA) 4.10, 4.13, 12.59
Carboex SA v Louis Dreyfus Commodities Suisse SA [2012] EWCA Civ 838, [2013] QB
789 6.10, 13.14n53
Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (CA) 3.01
Carlton SS Co Ltd v Castle Mail Packets Co Ltd [1898] AC 485 (HL) 1.12, 1.19, 1.28
Carr v London and North Western Rly (1875) LR 10 CP 310 5.78n333
Carradine Properties Ltd v Aslam [1976] 1 WLR 442 (CA) 4.17
Carter v Dean and Chapter of Ely (1835) 7 Sim 211, 58 ER 817 2.42, 11.27
Cartwright v MacCormack [1963] 1 WLR 18 (CA) 4.11
Carver & Co v Sassoon & Co (1911) 17 Com Cas 597 (DC) 4.24
Castle Inns (Stirling) Ltd v Clark Contracts Ltd [2009] CSOH 174 13.18
Castlegate SS Co v Dempsey [1892] 1 QB 854 (CA) 1.12, 4.23, 6.09
Cavendish Square Holding BV v Makdessi [2015] UKSC 67, [2016] AC 1172

13.50n263, 13.51, 13.52, 13.53, 13.54, 13.57
Cawthron v Trickett (1864) 15 CB (NS) 754, 143 ER 981 13.43
Private Law Library
Page 391
CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] 1 QB 16 9.98
Cehave NV v Bremer Handelsgesellschaft (The Hansa Nord) [1976] QB 44 (CA) 2.34
Celestial Aviation Trading 71 Ltd v Paramount Airways Pte Ltd [2010] EWHC 185
(Comm), [2011] 1 Lloyd’s Rep 9 11.57
Cellulose Acetate Silk Co Ltd v Widnes Foundry (1925) Ltd [1933] AC 20 (HL)
13.38n209
Central Estates (Belgravia) Ltd v Woolgar (No 2) [1972] 1 WLR 1048 (CA) 5.67n294
Central Estates Ltd v Secretary of State for the Environment (1992) 72 P & CR 482
(CA) 11.29
Central London Property Trust v High Trees House Ltd [1947] KB 130 5.71, 5.81
Cerealmangimi SpA v Toepfer (The Eurometal) [1981] 1 Lloyd’s Rep 337 11.46n193
Chakki v United Yeast Co [1982] ICR 140 (EAT) 12.29
Chancery Lane Developments Ltd v Wade’s Departmental Stores Ltd (1987) 53 P &
CR 306 (CA) 11.34, 11.38
Chandler Bros v Boswell [1936] 3 All ER 179 (CA) 6.26(p. xxxi)
Chandler v Webster [1904] 1 KB 493 (CA) 12.52n133
Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240 5.06, 13.44
Chandris v Union of India [1956] 1 WLR 147 (CA) 9.06
Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323 (CA) 5.10, 5.89
Chanter v Hopkins (1838) 4 M & W 399, 150 ER 1484 5.15
Chaplin v North Western Rly Co (1862) 5 LT 601 7.33
Chappell v Times Newspapers [1975] 1 WLR 482 7.20, 7.21
Charles Duval & Co Ltd v Gans [1904] 2 KB 685 (CA) 4.07n17, 8.41
Charles Rickards & Co Ltd v Oppenhaim [1950] 1 KB 616 (CA) 2.50, 5.66, 5.67, 5.68,
5.81, 8.08, 8.18, 8.21, 8.31, 8.34n160, 8.36, 12.102
Charlotte Thirty Ltd v Croker Ltd (1990) 24 Const LR 46 5.27
Charnock v Liverpool Corporation [1968] 1 WLR 1498 (CA) 1.12, 1.18, 1.27
Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101 3.22,
11.07, 11.40n162
Chatterton v Maclean [1951] 1 All ER 761 13.72
Chaucer Estates v Fairclough Homes Ltd [1991] EGCS 65 (CA) 12.106
Private Law Library
Page 392
Cheikh Boutros Selim El-Khoury v Ceylon Shipping Lines (The Madeleine) [1967] 2
Lloyd’s Rep 224 (QBD) 13.77
Chelsea Building Society v R & A Millett (Shops) Ltd (1994) 67 P & CR 319 11.21n82,
11.34
Chilean Nitrate Sales Corp v Pansuiza Compania de Navegacion SA (The Hermosa)

[1980] 1 Lloyd’s Rep 638 2.01, 6.18, 6.22n92, 12.01, 12.06–12.07
Lloyd’s Rep 570 (CA) 2.01, 6.18, 6.25, 6.26, 12.06, 12.16, 12.17, 12.24
China National Foreign Trade Transportation Corp v Evlogia Shipping Co SA of

Panama (The Mihailios Xilas) [1979] 1 WLR 1018 (HL) 5.67
China Shipbuilding Corp v Nippon Yusen Kabushiki Kaisha (The Seta Maru) [2000] 1
Chipperfield v Carter (1895) 72 LT 487 3.14
CHS Inc Iberica SL v Far East Marine SA Devon [2012] EWHC 3747 (Comm) 6.09,
9.69, 9.79
City Inn Ltd v Shepherd Construction Ltd [2007] CSOH 190, [2008] BLR 269 5.83
City of London v Nash (1747) 3 Atk 512, 26 ER 1095 7.31n148
Clacy v Sanchez [2015] UKUT 387 3.14
Clarion Ltd v National Provident Association [2000] 1 WLR 1888 3.15
Clark v Gees (1877) 4 LTOS 98 3.01
Clarke Investments Ltd v Pacific Technologies Ltd [2013] EWCA Civ 750, [2013] 2 P &
CR 20 8.36, 8.38
Clarke v Gurnell (1611) 1 Bulst 167, 80 ER 858 3.07, 3.14, 11.21
Classic Maritime v Lion Diversified Holdings [2009] EWHC 1142 (Comm), [2010] 1
Clea Shipping Corp v Bulk Oil International Ltd (No 2) [1983] 2 Lloyd’s Rep 645 7.40
Clegg v Anderson (T/A Nordic Marine) [2003] EWCA Civ 320, [2003] 2 Lloyd’s Rep 32
5.67
Clemens Horst & Co v Biddell Bros [1912] AC 18 (HL) 4.06n10
Cleveland Bridge (UK) Ltd v Severfield-Rowan Structures Ltd [2012] EWHC 3652
(TCC) 1.10
Clipsham v Vertue (1843) 5 QB 265, 114 ER 1249 11.45
Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo y

Castaneda [1905] AC 6 (HL(Sc)) 13.37, 13.51
Private Law Library
Page 393
CN Marine Inc v Stena Line A/B (The Stena Nautica) (No 2) [1982] 2 Lloyd’s Rep 336
7.27, 7.32
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1996] Ch 286 7.17
(p. xxxii)
Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 (HL)
7.05, 7.16, 7.17
Coastal Bermuda Petroleum v VTT Vulcan Petroleum SA (The Marine Star) [1993] 1
Lloyd’s Rep 329 (CA) 5.89
Coastal International Trading Ltd v Maroil AG [1988] 1 Lloyd’s Rep 92 9.54
Cobec Brazilian Trading Co Ltd v Toepfer [1982] 1 Lloyd’s Rep 528 11.46
Cobelfret Bulk Carriers NV v Swissmarine Services SA (The Lowlands Orchid) [2009]

EWHC 2883 (Comm), [2010] 1 Lloyd’s Rep 317 5.08
Cohen v Roche [1927] 1 KB 169 7.05, 7.27
Cohn v Davidson (1877) 2 QBD 455 6.12
Cointat v Myham & Son [1913] 2 KB 220 9.71
Cole v Rose [1978] 3 All ER 1121 8.12, 8.15n72, 13.64
Collard v South Eastern Rly Co (1861) 7 H & N 79, 158 ER 400 9.44, 9.115, 9.116
Collin v Duke of Westminster [1985] QB 581 (CA) 5.53
Combe v Combe [1951] 2 KB 215 (CA) 5.79
Compagnie Commerciale Sucres et Denrées v C Czarnikow Ltd (The Naxos) [1990] 1

WLR 1337 11.12, 11.46n193
Compagnie Française d’Importation et de Distribution SA v Deutsche Continental

Handelsgesellschaft [1985] 2 Lloyd’s Rep 592 5.52
Compania Financiera ‘Soleada’ SA v Hamoor Tanker Corp Inc (The Borag) [1981] 1
WLR 247 (CA) 9.82
Compania Naviera Maropan v Bowaters [1955] 2 QB 68 9.13
Re Comptoir Commercial Anversois and Power, Son & Co [1893] 2 QB 274 (CA) 11.06,
12.109
Comptoir d’Achat et de Vente du Boerenbond Belge SA v Luis de Ridder Ltda (The

Julia) [1949] AC 293 12.47
Compton v Bagley [1892] 1 Ch 313 8.28
Concord Trust v Law Debenture Trust Corpn plc [2004] EWCA Civ 1001, [2005] 1
Lloyd’s Rep 113 8.11n39
Connolly Shaw Ltd v AS Det Nordenfjeldske DS (1934) 49 Ll LR 183 5.13, 5.42
Private Law Library
Page 394
Constable v Cloberie (1627) Palmer 397, 81 ER 1141 2.21, 2.39n102, 3.04, 8.04,
11.10, 11.21
Constantine v Imperial Hotels [1944] KB 693 9.100
Contigroup Companies Ltd v Glencore AG [2004] EWHC 2750 (Comm), [2005] 1

Lloyd’s Rep 241 9.66, 9.91
Cook Industries Inc v Tradax Export SA [1985] 2 Lloyd’s Rep 454 (CA) 5.91
Cooke v Clayworth (1811) 18 Ves 12, 34 ER 222 7.19
Copley v Hepworth (1690) 12 Mod 1, 88 ER 1124 3.07, 3.17
The Coral Seas see Imperator I Maritime Co v Bunge SA
Corkling v Massey (1873) 8 CP 395 11.46
Cornwall v Henson [1900] 2 Ch 298 (CA) 6.27
Cory v Thames Ironworks Co (1868) LR 3 QB 181 9.58
Coslake v Till (1826) 1 Russ 376, 38 ER 146 2.42, 8.21, 11.27n105
Cosmar Compania Naviera SA v Total Transport Corp (The Isabelle) [1982] 2 Lloyd’s
Rep 81 (CA) 6.12
Cosmos Bulk Transport Inc v China National Foreign Trade Transportation Corp (The
Apollonius) [1978] 1 Lloyd’s Rep 53 6.09
Countess of Warwick SS Co v Le Nickel SA [1918] 1 KB 372 (CA) 12.51
Court Line v Dant & Russell (1939) 44 Com Cas 345 12.21, 12.44, 12.85
Coventry City Council v J Hepworth & Son Ltd (1983) 46 P & CR 170 (CA) 11.29
Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s Rep 45 (Mayor’s and City of London
Court) 5.59
Cowles v Gale (1871) LR 7 Ch App 12 8.21, 11.27n105
Cranley v Hillary (1813) 2 M & S 120, 105 ER 327 4.07(p. xxxiii)
Cranston v Marshall (1850) 5 Exch 395, 155 ER 172 9.114
Crawford v Toogood (1879) 13 Ch D 153 8.28
Credit Lyonnais SA v Russell Jones & Walker [2002] EWHC 1310 (Ch), [2002] 33 EG
99 11.31
Cresswell v Board of Inland Revenue [1984] ICR 508 3.19
Cricklewood Property Trust v Leighton’s Investment Trust [1945] AC 221 (HL)

12.13n40, 12.32, 12.87, 12.97
Croudace Construction Co v Cawoods Concrete Products [1978] 2 Lloyd’s Rep 55

9.44, 9.45, 9.91
Private Law Library
Page 395
The Crudesky see Great Elephant Corp v Trafigura Beheer BV
Crux v Aldred (1866) 14 WR 656 13.54n283
CTI Group v Transclear SA (The Mary Nour) [2008] EWCA Civ 856, [2008] 2 CLC 112,
[2008] 2 Lloyd’s Rep 526 6.06, 12.91, 12.99
Cubitt v Smith (1864) 11 LT 198 7.31
Cud v Rutter (1719) 1 P Wms 570, 24 ER 521 7.05, 7.30
Cukurova Finance International Ltd v Alfa Telecom Turkey Ltd [2013] UKPC 2, [2016]
AC 923 11.57
Cullinane v British ‘Rema’ Manufacturing Co Ltd [1954] 1 QB 292 (CA) 9.99
Cumberland Court (Brighton) Ltd v Taylor [1964] Ch 29 8.32, 13.34
Cunningham Ltd v Monro & Co Ltd (1922) 28 Com Cas 42 (HL) 3.19
Cutler v Close (1832) 5 C & P 337, 172 ER 1001 10.10
Cutter v Powell (1795) 6 TR 310, 101 ER 573 2.19–2.20, 2.31, 3.05n17, 10.04, 10.08,
10.08n30, 10.09
D & C Builders v Rees [1966] 2 QB 167 (CA) 5.80
Re Dagenham (Thames) Dock Co ex parte Hulse (1873) LR 8 Ch App 1022 11.58,

11.59, 11.64, 13.68
Dakin & Co Ltd v Lee [1916] 1 KB 566 10.09
Dalkia Utilities Services plc v Celtech International Ltd [2006] EWHC 63 (Comm),
[2006] 1 Lloyd’s Rep 599 8.25, 8.49n222, 8.50n223, 13.79
Damon Cia Naviera SA v Hapag-Lloyd International SA (The Blankenstein) [1985] 1

WLR 435 (CA) 13.62
In re Daniel [1917] 2 Ch 405 1.25
Darbishire v Warran [1963] 1 WLR 1067 (CA) 9.75
Davenport v R (1877) 3 App Cas 115 (PC) 5.66
Davidson v Gwynne (1810) 12 East 381, 104 ER 149 2.21
Davies v Collins [1945] 1 All ER 247 5.14
Davis Contractors Ltd v Fareham UDC [1956] AC 696 (HL) 4.25, 5.92, 6.17, 12.17,
12.29n73, 12.43n112, 12.62, 12.65, 12.66, 12.91, 12.98n238, 12.106–12.107,
12.107n260
Davis v Burrell (1851) 10 CB 821, 138 ER 325 4.07
Davis v Garrett (1830) 6 Bing 716, 130 ER 1456 5.13
Davis v Street (1823) 1 C & P 18, 171 ER 1084 5.50
Private Law Library
Page 396
Day v Luhke (1868) LR 5 Eq 336 8.21, 11.27n105
Day v Singleton [1899] 2 Ch 320 (CA) 9.130
De Beers UK Ltd v ATOS Origin IT Services UK Ltd [2010] EWHC 3276 (TCC), [2011]
BLR 274 9.55
De Francesco v Barnum (1890) 45 Ch D 430 7.33
Dean v Allin & Watts (a firm) [2000] Lloyd’s Rep PN 469 9.79
Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 (CA)

4.06n14, 6.26, 12.70n171, 12.73
Delta Vale Properties v Mills [1990] 1 WLR 445 (CA) 4.16
Denne v Light (1857) De G M & G 230, 44 ER 588 7.23
Denny, Mott & Dickson v James B Fraser & Co Ltd [1944] AC 265 (HL(Sc)) 4.25,
11.01, 12.05, 12.100(p. xxxiv)
Denny v Hancock (1870) 6 Ch App 1 7.19
Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) plc [2017] EWHC 391
(Comm) 3.17
The Derby [1984] 1 Lloyd’s Rep 637 9.56
Dewar v Elliott (1824) 2 LJOS 178 7.19
DGM Commodities Corporation v Sea Metropolitan SA [2012] EWHC 1984 (Comm),

[2012] 2 Lloyd’s Rep 587 12.79
Di Luca v Juraise (Springs) Ltd (2000) 79 P & CR 193 (CA) 1.34, 11.31
Diamond v Campbell-Jones [1961] Ch 22 9.47n163
The Diana Prosperity see Reardon Smith Lines Ltd v Hansen Tangen
Dibbins v Dibbins [1896] 2 Ch 348 1.33
Dickinson v Jones Alexander & Co [1993] 2 FLR 521 9.74
Dickinson v Martini (1874) 1 Rettie 1185 (Ct of Session) 13.42n227
Dies v British and International Mining and Finance Corporation Ltd [1939] 1 KB 724
13.71, 13.72
Diestal v Stevenson [1906] 2 KB 345 13.38
Dimech v Corlett (1858) 12 Moo PC 199, 14 ER 887 3.21, 11.45
AC 481 5.39, 5.40, 5.42
Ditchburn Equipment v Crich (1966) 110 SJ 266 (CA) 6.26
Private Law Library
Page 397
Dodd v Churton [1897] 1 QB 562 (CA) 5.57, 5.57n243, 13.47, 13.48
Dodds v Walker [1981] 1 WLR 1027 (HL) 4.15
Doe d. Wheeldon v Paul (1829) 3 C & P 613, 172 ER 568 4.08
Doloret v Rothschild (1824) 1 Sim & St 590, 57 ER 233 2.42, 2.49, 11.27
Dolphin Hellas Shipping SA v Itemslot Ltd (The Aegean Dolphin) [1992] 2 Lloyd’s Rep
178 1.03
Dominion Corporate Trustees Ltd v Debenhams Properties Ltd [2010] EWHC 1193
(Ch) 11.19n67, 13.76
Donoghue v Stevenson [1932] AC 562 (HL(Sc)) 7.23
Dubai Islamic Bank PJSC v PSI Energy Holding Co BSC [2013] EWHC 3781 (Comm)
5.67
Dudley, Hall & Clarke v Cooper, Ewing & Co (Unreported) 8.07
Duke of Rutland v Batty (1740) 2 Str 777, 93 ER 842 4.08
Duke of Somerset v Cookson (1753) 3 P Wms 390, 24 ER 1114 7.05, 7.27
Dun & Bradstreet Software Services (England) Ltd v Provident Mutual Life Assurance
Association [1998] 2 EGLR 175 (CA) 11.21n82
Dunavant Enterprises Inc v Olympia Spinning and Weaving Mills Ltd [2011] EWHC
2028 (Comm), [2011] 2 Lloyd’s Rep 619 5.11
Dunbar Assets plc v Butler [2015] EWHC 2546 (Ch) 5.81
Duncan Investments Ltd v Underwood [1998] PNLR 754 (CA) 9.36
Duncuft v Albrecht (1841) 12 Sim 189, 59 ER 1104 7.30
Dunlop Pneumatic Tyre Co v New Garage and Motor Co [1915] AC 79 (HL) 13.49,
13.50–13.52, 13.54
Dunlop v Grote (1845) 2 Car & Kir 153, 175 ER 64 7.37n173
Dunn v Bradford MDC [2002] EWCA Civ 1137 1.15
Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839 5.73
The Dynamic see Ocean Marine Navigation Ltd v Koch Carbon Ltd
Eagle Star Life Assurance Co Ltd v Griggs and Miles [1998] 1 Lloyd’s Rep 256 (CA).
1.15
Eagleview Ltd v Worthgate Ltd (Ch D, 14 July 1998) 8.12
Earl’s Terrace Properties v Nilsson Design Ltd [2004] EWHC 136, [2004] BLR 273
9.118
Eastern Telegraph Co Ltd v Dent [1899] 1 QB 835 (CA) 11.52(p. xxxv)
Private Law Library
Page 398
Edgeworth Capital (Luxembourg) Sarl v Ramblas Investments BV [2016] EWCA Civ

412, [2017] 1 All ER (Comm) 577 13.57
Edmund Murray v BSP International Foundations (1994) 33 Const LR 1 (CA) 5.26
Edwards v Child (1716) 2 Vern 727, 23 ER 1077 10.09
Edwin and Stafford v East India Co (1690) 2 Vern 210, 23 ER 738 10.09

Ltd (The Sea Angel) [2007] EWCA Civ 547, [2007] 2 Lloyd’s Rep 517 12.33, 12.74,
12.77, 12.90
Egg Stores (Stamford Hill) Ltd v Leibovici [1977] ICR 260 (EAT) 12.06, 12.20,
12.29n72
Ehrman v Bartholomew [1898] 1 Ch 671 7.33
The Elafi see Karlshamns Olje Fabriker v Eastport Navigation Corp
Elbinger Aktien-Gesellschaft v Armstrong (1874) LR 9 QB 473 9.37, 9.49, 9.65, 9.93,

9.113
The Elena D’Amico see Koch Marine Inc v D’Amica Societa di Navigazione ARL
Ellen v Topp (1851) 6 Ex 424, 155 ER 609 11.44
Elliott v Turner (1843) 13 Sim 477, 60 ER 185 11.52
Ellis v Allen [1914] 1 Ch 904 11.52
Ellis v Hamlen (1810) 3 Taunt 52, 128 ER 21 10.08
Ellis v Thompson (1838) 3 M & W 445, 150 ER 1219 1.12, 1.17, 1.23
Elmcroft Developments Ltd v Tankersley-Sawyer (1984) 15 HLR 63 (CA) 9.72
Elphinstone v Monkland Iron & Coal Co Ltd (1886) 11 App Cas 332 (HL(Sc)) 13.49
Elysian Fields Management Co v Nixon [2016] L & TR 4 3.14
Embiricos v Sydney Reid & Co [1914] 3 KB 45 6.29, 6.36, 7.11, 8.22n106, 12.37–
12.38, 12.39–12.40, 12.42
Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168, [2011] 2 All
ER (Comm) 223 6.25
Engell v Fitch (1869) LR 4 QB 659 1.25
England v Curling (1844) 8 Beav 129, 50 ER 51 7.33
English v Cliff [1914] 2 Ch 376 4.12
Engman v Palgrave (1898) 4 Com Cas 75 11.45
Enrico Furst & Co v W E Fischer [1960] 2 Lloyd’s Rep 340 5.64
Private Law Library
Page 399
Equitable Life Assurance Society v Hyman [2002] 1 AC 408 (HL) 11.25
Eribo v Odinaiya [2010] EWHC 301 (TCC) 12.72
Eridania SpA v Rudolf A Oetker (The Fjord Wind) [2000] 2 Lloyd’s Rep 191 (CA) 9.62,
9.82, 12.79
Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 (HL(Sc)) 7.22
Errington v Errington and Woods [1952] 1 KB 290 (CA) 3.01
Eshun v Moorgate Mercantile Credit Co [1971] 1 WLR 722 (CA) 8.49
Esso Petroleum Co Ltd v Mardon [1976] QB 801 (CA) 9.99
Esteve Trading Corp v Agropec International (The Golden Rio) [1990] 2 Lloyd’s Rep
273 11.46
Établissements Soules et Cie v Intertradex SA [1991] 1 Lloyd’s Rep 378 (CA)

13.42n223
Etzin v Reece [2002] All ER (D) 405 11.03, 11.06, 11.28
The Eugenia see Ocean Tramp Tankers v V/O Sovfracht
The Eurometal see Cerealmangimi SpA v Toepfer
The Europa [1908] P 84 (DC) 10.01
Evening Standard Co v Henderson [1987] IRLR 64 (CA) 7.33
The Evia see Kodros Shipping Corp v Empresa Cubana de Fletes
Ex parte Chalmers (1873) LR 8 Ch 289 12.41n105
Excomm Ltd v Guan Guan Shipping (Pte) Ltd (The Golden Bear) [1987] 1 Lloyd’s Rep
330 5.52
Eximenco Handels AG v Partrederiet Oro Chief (The Oro Chief) [1983] 2 Lloyd’s Rep
509 7.05, 7.27n131(p. xxxvi)
Exmar NV v BP Shipping (The Gas Enterprise) [1993] 2 Lloyd’s Rep 352 1.03
Experience Hendrix LLC v PPX Enterprises Ltd [2003] EWCA Civ 323, [2003] 1 All ER
(Comm) 830 9.103n367
Export Credits Guarantee Department v Universal Oil Products Co [1983] 1 WLR 399
(HL) 13.57
Exportelisa SA v Rocco Giuseppe Figli Soc Coll [1978] 1 Lloyd’s Rep 433 (CA) 5.90
Factory Holdings Group Ltd v Leboff International Ltd [1987] EGLR 135 8.50n223
Fairbridge v Pace (1844) 1 C & K 317, 174 ER 828 3.01
Fairclough, Dodd & Jones v J H Vantol Ltd [1957] 1 WLR 136 (HL) 5.10
Private Law Library
Page 400
Famosa Shipping Co Ltd v Armada Bulk Carriers Ltd [1994] 1 Lloyd’s Rep 633 9.87
Farley v Skinner [2001] 1 UKHL 49, [2002] 2 AC 732 9.74
Farrant v Olver [1922] WN 47 8.18, 8.22
Faruqi v English Real Estates Ltd [1979] 1 WLR 963 13.22
FC Bradley and Sons Ltd v Colonial & Continental Trading Ltd [1964] 2 Lloyd’s Rep
52 (CA) 1.24
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc (The Nanfri) [1979] AC
757 (HL) 2.01, 6.25, 12.16, 12.70
Felton v Wharrie (1906) HBC (4th edn), vol 2 p 398 (CA) 12.97, 13.47
Fercometal SARL v MSC Mediterranean Shipping Co SA (The Simona) [1989] 1 AC

788 (HL) 6.30n126, 6.32, 6.35
Fessard v Mugnier (1865) 18 CB (NS) 286, 144 ER 453 4.07n16
Fibrosa Spolka Akynja v Fairbairn Lawson Combe Barbour [1943] AC 32 (HL)

2.25n56, 12.15n42
Figre Ltd v Mander [1999] Lloyd’s Rep IR 193 1.02
Finagrain SA Geneva v P Kruse Hamburg [1976] 2 Lloyd’s Rep 508 (CA) 5.75,
11.46n193
Financings Ltd v Baldock [1963] 2 QB 104 (CA) 2.48, 8.49n219, 9.127, 13.78
Finch v Underwood (1876) 2 Ch D 310 (CA) 11.31
Finkielkraut v Monahan [1949] 2 All ER 234 8.38
First Property Growth Partnership LP v Royal & Sun Alliance Property Services Ltd
[2002] EWCA Civ 1687, [2003] 2 P & CR 292 11.22, 11.34
Firth v Greenwood (1855) 25 LTOS 51 11.27
Fisher, Reeves & Co Ltd v Armour & Co Ltd [1920] 3 KB 614 (CA) 5.67
Fisher v Eastwoods Ltd [1936] 1 All ER 421 5.50
Fitzpatrick v Sarcon (No 177) Ltd [2012] NICA 58, [2014] NI 35 2.48, 11.11, 11.12,
11.19, 11.23
The Fjord Wind see Eridania SpA v Rudolf A Oetker
Fletcher v Tayleur (1855) 17 CB 21, 139 ER 973 9.112
Flight v Bolland (1828) 4 Russ 298, 38 ER 817 7.07
Flogas v Warrington (t/a Robin Sutton Gases & Calor Gas Ltd) [2007] EWHC 1303
(QB) 7.17
Private Law Library
Page 401
Foaminol Laboratories Ltd v British Artid Plastics Ltd [1941] 2 All ER 393 9.61, 9.71,
9.99
Food Corp of India v Antclizo Shipping Corp (The Antclizo) [1988] 1 WLR 603 (HL)
5.52
Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd [2013] EWCA
Civ 780, [2013] RPC 36 5.67
Ford v Cotesworth (1868) LR 4 QB 127 1.12
Ford v Cotesworth (1870) LR 5 QB 544 (Exchequer Chamber) 1.12, 4.23, 4.25
Fordyce v Ford (1794) 4 Bro CC 497, 29 ER 1107 2.39, 8.04, 8.39
Forrer v Nash (1865) 35 Beav 167, 55 ER 858 7.13
The Forum Craftsman see Islamic Republic of Iran Shipping Lines v Ierax Shipping Co
of Panama
The Fortune Plum see White Rosebay Shipping SA v Hong Kong Chain Glory Shipping
Ltd
Foster v Dawber (1851) 6 Exch 839, 155 ER 785 5.50(p. xxxvii)
Four Seasons Healthcare Ltd v Maughan [2005] IRLR 324 (EAT) 12.06
Fowler v Knoop (1878) 4 QBD 299 (CA) 1.12
Fowler v Midland Electric Corp for Power Distribution Ltd [1917] 1 Ch 656 (CA) 4.07
Fox-Bourne v Vernon (1894) 10 TLR 649 4.03
Frans Maas (UK) Ltd v Samsung Electronics (UK) Ltd [2004] EWHC 1502 (Comm),
[2004] 2 Lloyd’s Rep 251 5.04
Fratelli Moretti SpA v Nidera Handelscompagnie BV [1980] 1 Lloyd’s Rep 534 13.56
Freeman v Reid (1863) 4 B & S 174, 122 ER 425 4.14
Freeman v Taylor (1831) 8 Bing 124, 131 ER 348 6.09, 6.12
Freeth v Burr (1874) LR 9 CP 208 2.29n66, 6.25
French Marine v Compagnie Napolitaine [1921] 2 AC 495 (HL) 12.52
Friends Provident Life & Pensions Ltd v Sirius International Insurance [2005] 2
Lloyd’s Rep 517 (CA) 12.53n134
The Front Commander see Tidebrook Maritime Corp v Vitol SA
Frost v Knight (1872) LR 7 Ex 111 6.35, 8.22
Fyffes Group Ltd v Reefer Express Lines Pty Ltd (The Kriti Rex) [1996] 2 Lloyd’s Rep
171 9.86, 9.125
Gaetano Ltd v Obertor Ltd [2009] EWHC 2653 (Ch) 7.05, 7.30
Private Law Library
Page 402
Galbraith v Mitchenall Estates Ltd [1965] 2 QB 473 11.57n239, 13.69
Galoo Ltd v Bright Grahame Murray [1994] 1 WLR 1360 (CA) 9.13
Gardner v Coutts & Co [1968] 1 WLR 173 11.25, 12.98
Garnac Grain Co Inc v Faure & Fairclough Ltd [1968] AC 1130 (HL) 9.79
Garnham, Harris & Elton Ltd v Alfred W Ellis (Transport) Ltd [1967] 1 WLR 940 5.14
Garston v Scottish Widows Fund and Life Assurance Society [1998] 1 WLR 1583 (CA)
4.17
Gartside v Isherwood (1783) 1 Bro CC 558, 28 ER 1297 7.19
The Gas Enterprise see Exmar NV v BP Shipping
Gatoil International Inc v Tradax Petroleum Ltd (The Rio Sun) [1985] 1 Lloyd’s Rep
350 6.11
Gator Shipping Corp v Trans-Asiatic Oil Co Ltd SA [1978] 2 Lloyd’s Rep 357 7.40
Gebr van Weelde Scheepvaartkantor BV v Compania Naviera Sea Orient SA (The

Agrabele) [1985] 2 Lloyd’s Rep 496 (CA) 5.52
Gebroder Metellmann GmbH & Co v NBR (London) Ltd [1984] 1 Lloyd’s Rep 614 (CA)
9.83
Gedye v Duke of Montrose (1858) 26 Beav 456, 53 ER 813 11.27
Gee v Lancashire and Yorkshire Rly Co (1860) 6 H & N 211, 158 ER 87 9.121, 9.123
Geipel v Smith (1872) LR 7 QB 404 12.43, 12.61
General Feeds Inc Panama v Slobodna Plovidba Yugoslavia (The Krapan J) [1999] 1
Geogas SA v Trammo Gas Ltd (The Baleares) [1993] 1 Lloyd’s Rep 215 1.09, 9.125,
11.46
George Barker Transport Ltd v Eynon [1974] 1 WLR 462 (CA) 7.40
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1983] 2 AC 803 (HL)
5.04, 5.12, 5.26, 5.27
Get Nominees Ltd v Trinity Welsh Homes Ltd [2014] EWHC 4737 (Ch) 11.31
Geys v Societe Generale [2012] UKSC 63, [2013] 1 AC 523 6.34, 11.02n4
GH Renton & Co Ltd v Palmyra Trading Corp of Panama [1957] AC 149 5.05
Gianchetti v Speeding, Marshall & Co (1899) 15 TLR 401 9.120
Gibaud v Great Eastern Rly [1921] 2 KB 426 (CA) 5.14, 5.14n55
Gibson v Patterson (1737) 1 Atk 12, 26 ER 8 2.39, 7.20, 8.04
Private Law Library
Page 403
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 (HL)
3.21, 13.79
Giles (CH) & Co Ltd v Morris [1972] 1 WLR 307 7.16, 7.33n157(p. xxxviii)
Gill & Duffus SA v Société pour L’Exportation des Sucres SA [1985] 1 Lloyd’s Rep 621
(aff’d [1986] 1 Lloyd’s Rep 322 (CA)) 11.22
Gill & Duffus SA v Société pour l’Exportation des Sucres SA [1986] 1 Lloyd’s Rep 322
(CA) 11.29
The Giuseppe di Vittorio [1998] 1 Lloyd’s Rep 136 (CA) 13.07
GKN Centrax Gears Ltd v Matbro Ltd [1976] 2 Lloyd’s Rep 555 (CA) 9.71
Glaholm v Hays (1841) 2 M & G 257, 133 ER 743 2.27–2.28, 2.29, 2.31, 2.49, 6.09,
11.16, 11.45
GLC v Cleveland Bridge and Engineering Ltd (1984) 34 BLR 72 (CA) 1.10
Glencore Grain Ltd v Flacker Shipping Ltd (The Happy Day) [2002] EWCA Civ 1068,
[2002] 2 Lloyd’s Rep 487 5.60, 5.61n257, 5.65
Glencore Grain Ltd v Goldbeam Shipping Inc (The Mass Glory) [2002] EWHC 27,
[2002] 2 Lloyd’s Rep 244 5.85, 6.10
Glencore Grain Rotterdam BV v LORICO [1997] 2 Lloyd’s Rep 386 (CA) 5.67
Glencore International AG v Ryan (The Beursgracht) [2001] 2 Lloyd’s Rep 602 (CA)
11.33
Glenlion Construction Ltd v The Guinness Trust (1987) 39 BLR 94 1.10
Globalia Business Travel SAU of Spain v Fulton Shipping Inc of Panama [2017] UKSC
43 9.88
Glynn v Margetson & Co Ltd [1893] AC 351 5.13, 5.42, 9.69, 9.116
Godard v Gray (1870) LR 6 QB 139 13.53
Gold Group Properties Ltd v Bow Trading Ltd [2010] EWHC 323 (TCC), [2010] BLR
235 12.66
The Golden Bear see Excomm Ltd v Guan Guan Shipping (Pte) Ltd
Golden Bay Realty Pte Ltd v Orchard Twelve Investments Pte Ltd [1991] 1 WLR 981
(PC) 13.54n283
The Golden Rio see Esteve Trading Corp v Agropec International
Goldsmith’s Company v West Metropolitan Railway [1904] 1 KB 1 (CA) 4.11
Gonzalez Corp v Waring (International)(Pty) Ltd [1980] 2 Lloyd’s Rep 160 (CA) 13.56
Grange v Quinn [2013] EWCA Civ 24, [2013] 1 P & CR 18 9.98
Grant & Co v Coverdale, Todd & Co (1884) 9 App Cas 470 (HL) 6.12
Private Law Library
Page 404
Grant v Cigman [1996] 2 BCLC 24, [1996] BCC 410 7.30, 11.27
Granville Oil & Chemicals Ltd v Davis Turner & Co Ltd [2003] EWCA Civ 570, [2003]
2 Lloyd’s Rep 356 5.21, 5.27, 5.30
Graves v Legg (1854) 9 Ex 709, 156 ER 304 10.14, 11.44
Gray v Smith (1889) 43 Ch D 214 (CA) 11.27n105
The Great Creation see Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd
Great Eastern Hotel Co Ltd v John Laing Construction Ltd [2005] EWHC 181, 99 Con
LR 45 9.57, 9.82
Great Elephant Corp v Trafigura Beheer BV (The Crudesky) [2013] EWCA Civ 905,
[2013] 2 All ER (Comm) 992, [2014] 1 Lloyd’s Rep 1 5.89
Great Lakes SS Co v Maple Leaf Milling Co (1924) 41 TLR 21 (PC) 9.07, 9.70
Great Northern Rly v Harrison (1852) 12 CB 576, 138 ER 1032 1.30
Great Northern Rly v Witham (1873) LR 9 CP 16 1.30n103
Great Western Rly Co v Redmayne (1866) LR 1 CP 329 9.44, 9.49, 9.115, 9.124
Grébert-Borgnis v Nugent (1885) 15 QBD 85 (CA) 9.51, 9.65, 9.109
Green v Sevin (1879) 13 Ch D 589 2.12, 2.51, 8.17, 8.28, 8.31, 8.36
Greenwich Marine Inc v Federal Commerce & Navigation Co Ltd (The Mavro
Vetranic) [1985] 1 Lloyd’s Rep 580 1.09, 9.77, 11.13, 11.46
Gregory Projects (Halifax) Ltd v Tenpin (Halifax) Ltd [2009] EWHC 2639 (Ch) 1.10
The Gregos see Torvald Klaveness A/S v Arni Maritime Corp
Gregson v Riddle (1783) (cited at (1802) 7 Ves 268, 32 ER 109) 7.20, 11.17
Grey v Friar (1854) 4 HLC 565, 10 ER 583 3.14, 11.19(p. xxxix)
Griffin v Pillet [1926] 1 KB 17 9.07, 9.68
Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2005] EWHC 2407, [2006]

IRLR 100 7.33, 12.06, 12.30n76
Guest v Homfray (1801) 5 Ves J 818, 31 ER 875 7.20
The Guildford [1956] P 364 9.39
Gulf Shipping Lines Ltd v Jadranska Slobodna Plovidba (The Matija Gubec) [1981] 1
Gullischen v Stewart Bros (1884) 13 QBD 317 (CA) 13.43n228
Gunton v Richmond-on-Thames LBC [1981] Ch 448 (CA) 5.67
Hadji Ali Akbar v Anglo-Arabian SS Co (1906) 11 Com Cas 219 5.13
Private Law Library
Page 405
Hadley v Baxendale (1854) 9 Ex 341, 156 ER 145 9.05, 9.16, 9.17–9.18, 9.19, 9.20,
9.23, 9.29, 9.31, 9.34–9.35, 9.40, 9.41, 9.53, 9.55, 9.67, 9.72, 9.107, 9.109, 9.111,
9.114, 9.123, 12.13n40
Hain SS Co v Minister of Food [1949] 1 KB 492 (CA) 6.09
Hain SS Co v Tate and Lyle (1936) 41 Com Cas 350 (HL) 5.14, 5.14n52
Hakimzay v Swales (Ch D, 25 February 2015) 8.36n176
Hales v London and North Western Rly (1863) 4 B & S 66, 122 ER 384 1.25, 9.55,
9.82, 9.120
Halifax Building Society v Urquhart-Dykes and Lord [1997] RPC 55 9.100
Hall v Cazenove (1804) 4 East 476, 102 ER 913 2.39n102, 8.04, 11.44
Hall v Pim (1928) 33 Com Cas 324 (HL) 9.04, 9.32, 9.51, 9.54, 9.110
Hall v Warren (1804) 9 Ves 605, 32 ER 738 7.26
Hall v Wright (1858) 27 LJ QB 345 1.12, 4.24
Hamlin v Great Northern Rly Co (1856) 1 H & N 408, 156 ER 1261 9.114
Hammond v Bussey (1888) 20 QBD 79 (CA) 9.51
Hammond v Ouden (1700) 12 Mod 421, 88 ER 1424 4.08
Hancock v BSA Tools Ltd [1939] 4 All ER 538 12.49n123
Hanfstaengl v WH Smith [1905] 1 Ch 519 9.100
Hankey v Clavering [1942] 2 KB 326 (CA) 4.16
The Hannah Blumenthal see Paal Wilson & Co A/S v Partenreederei Hannah
Blumenthal
The Hansa Nord see Cehave NV v Bremer Handelsgesellschaft
Hanslip v Padwick (1850) 5 Exch 615, 155 ER 269 7.20
Hanson v South West Electricity Board [2001] EWCA Civ 1377, [2002] 1 P & CR 35
8.14
The Happy Day see Glencore Grain Ltd v Flacker Shipping Ltd
The Happy Ranger see Parsons Corp v CV Scheepvaartonderneming
Harbutt’s ‘Plasticine’ Ltd v Wayne Tank and Pump Co [1970] 1 QB 447 (CA) 5.16
Hare v Gocher [1962] 2 QB 641 (DC) 4.12
Hare v Nicoll [1966] 2 QB 130 (CA) 1.33, 11.31, 11.37
Harold Wood Brick Co v Ferris [1935] 2 KB 198 (CA) 8.36
Private Law Library
Page 406
Harries v Bryant (1827) 4 Russ 89, 38 ER 738 11.52
Harrington v Brown (1917) 23 CLR 297 11.46n193
Harrington v Wheeler (1799) 4 Ves 686, 31 ER 354 7.20n83, 7.22, 8.05
Harris v Dreesman (1854) 23 LJ Ex 210 4.23
Harrison v Wright (1811) 13 East 343, 104 ER 402 13.53
Hart v A R Marshall & Sons (Bulwell) Ltd [1977] ICR 539 (EAT) 12.06, 12.20
Hartley v Hymans [1920] 3 KB 397 2.32, 2.49, 5.64, 5.65, 5.77, 5.81, 8.07–8.08, 11.14,
11.30, 11.46n193
Hartwells of Oxford Ltd v British Motor Trade Association [1951] Ch 50 (CA) 1.25n90
Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207 (HL) 7.30
(p. xl)
Hasham v Zenab [1960] AC 316 (PC) 7.10–7.11
Haugland Tankers AS v RMK Marine [2005] EWHC 321 (Comm), [2005] 1 All ER
(Comm) 679 11.29, 11.31
Havelock v Geddes (1809) 10 East 555, 103 ER 886 2.21, 2.39n102, 8.04, 11.16
Hawes v South Eastern Rly Co (1884) 54 LJQB 174 9.69, 9.116
Hayes v James and Charles Dodd (a firm) [1990] 2 All ER 815 (CA) 9.73
Haywood v Cope (1858) 25 Beav 140, 53 ER 589 7.24
Hazel v Akthar [2002] 2 P & CR 17 (CA) 5.76, 5.79n339
Heaphy v Hill (1824) 2 Sim & St 29, 57 ER 255 8.05n20
Hearne v Tenant (1807) 13 Ves 287, 33 ER 301 2.41, 11.18
Heath v Heath [2009] EWHC 1908, [2010] 1 FLR 610 7.19
Hebden v Forsey & Son [1973] ICR 607 (NIRC) 12.06
Hedworth v Jenwise Ltd [1994] EGCS 133 11.67, 11.67n275
Hemingway Realty Ltd v Clothworkers of the City of London [2005] EWHC 299 (Ch),
[2005] 2 EGLR 36 11.34
Hercy v Birch (1804) 9 Ves 357, 32 ER 640 7.13
The Hermosa see Chilean Nitrate Sales Corp v Marine Transportation Co Ltd
The Heron II see C Czarnikow Ltd v Koufos
Hescorp Italia SpA v Morrison Construction Ltd (2000) 75 Con LR 51 (QBD) 1.15
Private Law Library
Page 407
Heskell v Continental Express Ltd [1950] 1 All ER 1033 9.37, 9.62, 9.65, 9.115, 9.118,
9.120, 9.125
Heyman v Darwins Ltd [1942] AC 356 (HL) 5.67, 6.32, 11.02n4
Heywood v Wellers (a firm) [1976] QB 446 (CA) 9.74
HHR Pascal BV v W2005 Puppet II BV [2009] EWHC 2771 (Comm) 3.13
Hick v Raymond and Reid [1893] AC 22 (HL) 1.12, 4.24, 4.25, 5.86, 8.19
Hick v Rodocanachi and ors [1891] 2 QB 626 (CA) 13.43n228
HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6,
[2003] 1 CLC 358 5.04
Hill v Barclay (1811) 18 Ves J 56, 34 ER 238 11.52
Hill v Parsons & Co Ltd [1972] Ch 305 (CA) 7.33
The Hill Harmony see Whistler International Ltd v Kawasaki Kisen Kaisha Ltd
Hillingdon Estates Co v Stonefield Estates Ltd [1952] Ch 627 7.20n83, 7.26
Hinde v Liddell (1875) LR 20 QB 265 9.109, 9.109n386
Hinton v Sparkes (1868) LR 3 CP 161 13.62
Hipwell v Knight (1835) 1 Y & C Ex 400, 160 ER 163 2.09, 2.42
Hirji Mulji v Cheong Yue SS Co Ltd [1926] AC 497 4.25, 5.92, 6.19, 11.01, 12.05,
12.105
Hoare v Rennie (1859) 5 H & N 19, 157 ER 1083 3.21, 6.26, 8.44n207
Hobbs v London and South Western Rly Co (1875) LR 10 QB 11 9.72
Hochster v de la Tour (1853) 2 E & B 678, 118 ER 922 8.22
Hoenig v Isaacs [1952] 1 TLR 1360 10.01, 10.10
Hogg Bullimore & Co v Co-operative Insurance Society (1985) 50 P & CR 105 4.14
Holme v Guppy (1838) 3 M & W 387, 150 ER 1195 5.57, 5.83, 6.09, 13.47
Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715 5.13
Honck v Muller (1881) 7 QBD 92 (CA) 3.21, 6.26, 8.44n207
Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (The Hongkong Fir)
[1962] 2 QB 26 (CA) 2.33, 2.34, 5.66, 5.92, 6.12, 6.15, 6.16, 6.24, 8.18, 8.42, 8.44,
10.03, 11.06, 11.12, 11.16, 11.68, 12.04, 12.07, 12.32, 12.68, 13.12
Hope v Walter [1900] 1 Ch 257 (CA) 7.23
Horne v Midland Railway Co (1873) LR 8 CP 131 9.38, 9.49, 9.52, 9.114, 9.124
Private Law Library
Page 408
Horsfall and anor v Haywards (a firm) [1999] Lloyd’s Rep PN 332 (CA) 9.79
Horton v Kurzke [1971] 1 WLR 769 8.12
Houlder v Weir [1905] 2 KB 267 6.09(p. xli)
Hounslow LBC v Twickenham Garden Developments Ltd [1971] Ch 233 7.39
Household Machines Ltd v Cosmos Exporters Ltd [1947] 1 KB 217 9.54
Howard-Jones v Tate [2011] EWCA Civ 1330, [2012] 1 P & CR 11 8.36n171
Howard Perry & Co Ltd v British Railways Board [1980] 1 WLR 1375 7.05, 7.29
Howard v Pickford Tool Co Ltd [1951] 1 KB 417 (CA) 6.31n127, 7.38
Howe v Smith (1884) 27 Ch D 89 (CA) 1.04, 13.62
Hubbard v Glover (1812) 3 Camp 313 6.04
Hudson v Hill (1874) 43 LJCP 273 11.22, 12.01, 12.109
Hudson v Temple (1860) 30 LJ Ch 251 2.09, 2.42, 11.27
Hughes v Lord Advocate [1963] AC 837 (HL(Sc)) 9.34
Hughes v Metropolitan Railway (1877) 2 App Cas 439 (HL) 5.65, 5.65n275, 5.71, 5.74,
5.77, 5.79, 5.79n338, 11.52
Hughes v Southwark LBC [1988] IRLR 55 7.33
Huilerie l’Abeille v Société des Huileries du Niger [1978] 2 Lloyd’s Rep 203 5.88
Hunlocke v Blacklowe (1670) 2 Wms Saund 156, 85 ER 893 3.17
Hunt (Charles) Ltd v Palmer [1931] 2 Ch 287 13.64
Hut Group Ltd v Nobahar-Cookson [2016] EWCA Civ 128, [2016] 1 CLC 573 5.12
Huyton SA v Jakil SpA [1999] 2 Lloyd’s Rep 83 (CA) 5.52
Hydraulic Engineering Co Ltd v McHaffie, Goslett & Co (1878) 4 QBD 670 (CA) 1.03,
9.02, 9.51, 9.61, 9.99, 9.109, 11.22
Hyundai Heavy Industries Co Ltd v Papadopoulos [1980] 1 WLR 1129 (HL) 6.20,
7.37n178, 13.72
Hyundai Merchant Marine Co Ltd v Karander Maritime Inc (The Niizuru) [1996] 2
Iceland Foods plc v Dangoor [2002] EWHC 107 (Ch), [2002] 21 EG 146 11.34
Idealview v Bello [2009] EWHC 2808 (QB), [2010] 1 EGLR 39 11.34
Idealview v Bello [2010] EWCA Civ 721 5.51
Private Law Library
Page 409
Imperator I Maritime Co v Bunge SA (The Coral Seas) [2016] EWHC 1506 (Comm),
[2016] 2 Lloyd’s Rep 293 6.09
Inman SS Co v Bischoff (1881) 7 App Cas 670 (HL) 11.38, 11.44
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] QB 433 (CA)
13.56
International Asset Control Ltd (t/a IAC Films) v Films Sans Frontieres SARL [1999]
EMLR 268 (CA) 11.13
International Sea Tankers Inc v Hemisphere Shipping Co Ltd (The Wenjiang) (No 2)
[1983] 1 Lloyd’s Rep 400 12.30n76, 12.34, 12.35, 12.91n224, 12.96, 12.105n257,
12.108
Intertradex SA v Lesieur-Tourteaux SARL [1978] 2 Lloyd’s Rep 509 (CA) 6.06, 12.90,
12.91, 12.99
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR
892 (HL) 1.17, 3.22, 4.17, 5.12, 11.07
The Ion see Nippon Yusen Kaisha Ltd v Pacifica Navegacion SA
Irani v Southampton Health Authority [1985] IRLR 203 (CA) 7.33
The Irbenskiy Proliv see Mitsubishi Corp v Eastwind Transportation Ltd
Isabella Shipowner SA v Shagang Shipping Co Ltd (The Aquafaith) [2012] EWHC

1077 (Comm), [2012] 2 Lloyd’s Rep 61 7.40
The Isabelle see Cosmar Compania Naviera SA v Total Transport Corp
Islamic Republic of Iran Shipping Lines v Ierax Shipping Co of Panama (The Forum
Craftsman) [1991] 1 Lloyd’s Rep 81 9.52n180, 12.74
J F Finnegan Ltd v Sheffield City Council (1988) 43 BLR 130 1.10
J Lauritzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd’s Rep 1 (CA)
12.05
Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468 (CA) 9.74n256
Jackson v Royal Bank of Scotland [2005] UKHL 3, [2005] 1 WLR 377 9.71(p. xlii)
Jackson v Union Marine Insurance Co Ltd (1874) LR 10 CP 125 4.25, 5.93, 6.18,
6.29n122, 12.01, 12.06, 12.70n171, 12.85, 12.109
The Jalagouri see Nippon Yusen Kaisha Ltd v Scindia Steam Navigation Co Ltd
James Finlay & Co Ltd v Kwik Hoo Tong Handel Maatschappij [1929] 1 KB 400 (CA)
9.79
James Macara Ltd v Barclay [1944] 1 All ER 31 13.64
James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC
583 (HL) 1.29, 4.19n70
Private Law Library
Page 410
Jameson v Midland Rly Co (1884) 50 LT 426 9.41, 9.49, 9.124n445
Jamshed Khodaram Irani v Bunjorji Dhunjibai (1915) 32 TLR 156 (PC) (Lord Haldane)
1.04
Japan Line Ltd v Himoff Maritime Enterprises Ltd (The Kehrea) [1983] 1 Lloyd’s Rep
29 12.20
Jarvis v Swan’s Tours Ltd [1973] QB 233 (CA) 9.74n256
Jarvis v Westminster Corp [1969] 1 WLR 1448 (CA) 6.04
Jeancharm (T/A Beaver International) v Barnet Football Club Ltd [2003] EWCA Civ 58,
92 Con LR 26 13.51
Jerram Falkus Construction Ltd v Fenice Investments Inc (No 4) [2011] EWHC 1935
(TCC) 5.83
Jervis v Harris [1996] Ch 195 (CA). 7.35
Jet2.com Ltd v SC Compania Nationala de Transporturi Aeriene Romane Tarom SA

[2012] EWHC 622 (QB) 8.33
Jeune v Queen’s Cross Properties Ltd [1974] Ch 97 7.16
Jewelowski v Propp [1944] KB 510 9.79
Jindal Iron & Steel Co Ltd v Islamic Solidarity Shipping Co Jordan Inc (The Jordan II)
[2005] 1 WLR 1363 5.13
Jobson v Johnson [1989] 1 WLR 1026 (CA) 7.30, 13.49n258
The Johanna Oldendorff see Oldendorff (EL) & Co GmbH v Tradax Export SA
John Barker Construction Ltd v London Portman Hotel Ltd (1996) 50 Con LR 43
5.57n244
John Grimes Partnership Ltd v Gubbins [2013] EWCA Civ 37, [2013] BLR 126 9.26n83
John Lewis Properties plc v Viscount Chelsea [1993] 2 EGLR 77 5.93
John M Henderson & Co Ltd v Montague Meyer Ltd (1941) 46 Com Cas 209 9.62,
9.113
Johns v Deacon [1985] CLY 65 (CA) 8.14
Johnson v Humphrey [1946] 1 All ER 460 1.12
Johnson v Shrewsbury and Birmingham Rly Co (1853) 22 LJ Ch 921, (1853) De G M &

G 914, 43 ER 358 7.15, 7.33
Johnson v Taylor Bros [1920] AC 144 (HL) 13.25, 13.26n143
Johnstone v Milling (1886) 16 QBD 460 (CA) 6.35
Jolley v Sutton L B C [2000] 1 WLR 1082 (HL) 9.52n180
Private Law Library
Page 411
Jonathan Wren & Co Ltd v Microdec plc (1999) 65 Con LR 157 1.15, 1.18, 1.23
Jones v Barkley (1781) 2 Dougl 684, 99 ER 434 2.18, 2.19n42, 3.08, 3.22, 5.82, 7.20,
7.37
Jones v Boyce (1816) 1 Stark 493, 171 ER 340 9.13
Jones v Gallagher (T/A Gallery Kitchens and Bathrooms) [2004] EWCA Civ 10, [2005]
Jones v Gardiner [1902] 1 Ch 191 6.11, 9.129
Jones v Gibbons (1853) 8 Exch 920, 155 ER 1626 1.12, 1.30
Jones v St John’s College, Oxford (1870) LR 5 CP 310 13.47
Jones v Watney, Combe, Reid & Co (1912) 28 TLR 399 9.83
The Jordan II see Jindal Iron & Steel Co Ltd v Islamic Solidarity Shipping Co Jordan
Inc
Joseph Constantine SS Line Ltd v Imperial Smelting Corp Ltd [1942] AC 154 (HL)
12.81
Joseph Thorley v Orchis SS Co [1907] 1 KB 660 (CA) 5.14
Joseph v National Magazine Co Ltd [1959] 1 Ch 14 7.14(p. xliii)
The Jotunheim see More OG Romsdal Fylkesbatar AS v The Demise Charterers of the
Ship ‘Jotunheim’
Joyner v Weeks [1891] 2 QB 31 (CA) 9.86
The Julia see Comptoir d’Achat et de Vente du Boerenbond Belge SA v Luis de Ridder
Ltda
Kammins Ballrooms Co v Zenith Investments (Torquay) Ltd [1971] AC 650 (HL) 5.66
The Kanchenjunga see Motor Oil Hellas (Corinth) Refineries SA v Shipping Corpn of
India
Karlshamns Olje Fabriker v Eastport Navigation Corp (The Elafi) [1981] 2 Lloyd’s Rep
679 7.28n135
Karsales (Harrow) Ltd v Wallis [1956] 1 WLR 936 (CA) 5.15, 5.16
The Kathleen (1874) LR 4 A & E 269 3.19
Kawasaki Kisen Kabushiki Kaisha v Belships Co Ltd (1939) 63 Ll LR 175 1.12
Kawasaki Steel Corpn v Sardoil SpA (The Zuiho Maru) [1977] 2 Lloyd’s Rep 552 6.06
Kaye v Nu Skin UK Ltd [2012] EWHC 958 (QB), [2012] CTLC 69 5.21
The Kehrea see Japan Line Ltd v Himoff Maritime Enterprises Ltd
Kemble v Farren (1829) 6 Bing 141, 130 ER 1234 13.49, 13.53
Private Law Library
Page 412
Kenilworth Industrial Sites Ltd v Little & Co [1975] 1 WLR 143 (CA) 1.35, 11.33
Kennedy v Chaplin (1991) 26 ACWS (3d) 1365 8.08
Kenya Railways v Antares Pte Ltd [1987] 1 Lloyd’s Rep 424 (CA) 5.14
Kidston v Monceau Ironworks (1902) 77 Com Cas 82 11.29n117
Kilmer v British Columbia Orchard Lands Ltd [1913] AC 319 (PC) 11.58, 11.59, 13.68
Kim v Chasewood Park Residents Ltd [2013] EWCA Civ 239, [2013] HLR 4 5.74, 5.75
King v Chamberlain (1871) 40 LJCP 273 11.22
King v Wilson (1843) 6 Beav 124, 49 ER 772 8.18
Kingdom v Cox (1848) 5 CB 522, 136 ER 982 3.17
Kingston v Preston (1773) Lofft 194 2.18–2.20, 2.31, 3.08–3.10, 3.22, 7.20, 7.37
Kirk and Kirk v Croydon Corporation [1956] JPL 585 6.06
Kish v Taylor [1912] AC 604 (HL) 10.01, 10.05
Knott v Bolton (1995) 11 Const LJ 375 (CA) 9.74
Koch Marine Inc v D’Amica Societa di Navigazione ARL (The Elena D’Amico) [1980] 1
Lloyd’s Rep 75 9.14, 9.80, 9.92n322
Kodros Shipping Corpn v Empresa Cubana de Fletes (The Evia) (No 2) [1981] 2
Kodros Shipping Corpn v Empresa Cubana de Fletes (The Evia) (No 2) [1982] 2
Lloyd’s Rep 307 (HL) 12.80
Kpohraror v Woolwich Building Society [1996] 4 All ER 119 (CA) 9.05, 9.06, 9.29,
9.30, 9.35, 9.40
The Krapan J see General Feeds Inc Panama v Slobodna Plovidba Yugoslavia
The Kriti Rex see Fyffes Group Ltd v Reefer Express Lines Pty Ltd
Kronos Worldwide Ltd v Sempra Oil Trading SARL [2004] EWCA Civ 3 3.19
Kudos Catering Ltd v Manchester Central Convention Complex Ltd [2013] EWCA Civ
38, [2013] 2 Lloyd’s Rep. 270 5.16
Kurt A Becher GmbH & Co KG v Roplak Enterprises SA (The World Navigator) [1991]
Kurt A Becher GmbH & Co KG v Voest Alpine Intertrading GmbH (The Rio Apa)
[1992] 2 Lloyd’s Rep 586 13.56
Kuwait Supply Co v Oyster Marine Management Inc [1994] 1 Lloyd’s Rep 637 12.81
Kwei Tek Chao v British Traders & Shippers Ltd [1954] 2 QB 459 9.50, 9.86n308,
9.93, 13.26
Private Law Library
Page 413
The Labrador see Newcastle Protection and Indemnity Association v Assurance

Foreningen Gard Gjendsidig
The Laconia [1977] AC 850 (HL) 11.55(p. xliv)
Lake v Bayliss [1974] 1 WLR 1073 9.102
Lakshmijit v Sherani [1974] AC 605 (PC) 5.67
Lamb v Brownwent (1599) Cro Eliz 716, 78 ER 950 3.17
Lambeth LBC v Vincent and ors [2000] 19 EG 145 8.12
Lamprell v Billericay Union (1849) 3 Ex 283, 154 ER 850 11.10, 11.38
Lancashire v Killingworth (1701) 12 Mod 530, 88 ER 1498 4.08
Lancecrest Ltd v Asiwaju [2005] EWCA Civ 117, [2005] 1 EGLR 40 11.23n93, 11.34
Lang v Gale (1813) 1 M & S 111, 105 ER 42 2.21, 2.42n109, 11.10
Langen & Wind Ltd v Bell [1972] Ch 685 7.30
Larrinaga & Co Ltd v Société Franco-Americaine des Phosphates (1923) 39 TLR 316
(HL) 12.61n150
Laurinda Pty Ltd and others v Capalba Park Shopping Centre Pty Ltd (1989) 166 CLR
623 (High Ct of Australia) 8.27, 8.34n160
Lauritzen AS v Wijsmuller BV (The Super Servant Two) [1990] 1 Lloyd’s Rep 1 (CA)
11.01, 12.79
Law v Local Board of Redditch [1892] 1 QB 127 (CA) 13.53
Le Peintur v South Eastern Rly Co (1860) 2 LT 170 9.07, 9.49, 9.61, 9.69, 9.116, 9.121
Leander Construction Ltd v Mulalley & Co Ltd [2011] EWHC 3449 (TCC), [2012] BLR
152 1.10
Leather-Cloth Co v Hieronimus (1875) LR 10 QB 140 5.63
Leavey & Co Ltd v George H Hirst & Co Ltd [1944] KB 24 (CA) 9.109
Leduc v Ward (1888) 20 QBD 475 (CA) 5.13, 5.42
Leech v Lamb (1855) 11 Ex 437, 156 ER 902 11.22
Leeds and Hanley Theatre of Varieties v Broadbent [1898] 1 Ch 343 (CA) 11.21
Legal and General Assurance (Pension Management) Ltd v Cheshire C C (1983) 46 P

& CR 160 11.29
Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) [1986] AC 785
7.29
The Leonidas D [1985] 2 Lloyd’s Rep 18 (CA) 5.67
Private Law Library
Page 414
Lester v Garland (1808) 15 Ves J 248, 33 ER 748 4.11
Lesters Leather and Skin Co Ltd v Home and Overseas Brokers Ltd (1948) 64 TLR
569 (CA) 9.79
Levey & Co v Goldberg [1922] 1 KB 688 5.61
Levy v Lindo (1817) 3 Mer 84, 36 ER 32 2.41
Levy v Stogdon [1898] 1 Ch 478 11.27n105
Lewis Emanuel and Son Ltd v Sammut [1959] 2 Lloyd’s Rep 629 6.06, 12.99
Lewis v Barnett (1981) 246 EG 1079 11.34
Lewis v Lord Lechmere (1722) 10 Mod 503, 88 ER 828 7.26
The Li Hai see Western Bulk Carriers K/S v Li Hai Maritime Inc
Libau Wood Co v H Smith and Sons (1930) 37 Ll LR 296 4.06n13
Libyan Arab Foreign Bank v Banker’s Trust Co [1988] 1 Lloyd’s Rep 259 12.49
Lidl UK GmbH v RG Carter (Colchester) Ltd [2012] EWHC 3138 (TCC), 146 Con LR
133 13.19
Lilley v Doubleday (1881) 7 QBD 510 5.14
Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 7.22
Liontrust Investment Partners LLP v Eoghan Flanagan [2017] EWCA Civ 985
11.40n162
The Lipa see Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd
Little v Stevenson [1896] AC 108 (HL) 4.22
Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 (HL(Sc)) 9.02
Lloyd Royal Belge Société Anonyme v Stathatos (1916) 33 TLR 390 (aff’d (1917) 34
TLR 70 (CA)) 12.09, 12.10
Lloyd v Collett (1793) 4 Bro CC 469, 29 ER 992 2.42n109, 8.04, 8.05, 8.39
Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657 (CA) 7.13
Lock v Bell [1931] 1 Ch 35 11.27n105
Lock v Wright (1723) 1 Stra 569, 93 ER 706 11.31, 11.37(p. xlv)
Re Lockie and Craggs (1902) 86 LT 388 1.12
Lodza Compania de Navigacione SA v Govt of Ceylon (The Theraios) [1971] 1 Lloyd’s

Rep 209 (CA) 6.09
Lombard North Central plc v Butterworth [1987] QB 527 (CA) 2.35, 2.48, 6.20, 6.35,
9.08, 9.127, 11.19, 11.20, 11.57n239, 13.78
Private Law Library
Page 415
London, Chatham and Dover Railway Co v South Eastern Railway Co [1893] AC 429
(HL) 9.67
London & Manchester Assurance Co Ltd v GA Dunn & Co (1982) 265 EG 39, [1983] 1
EGLR 111 (CA) 11.23n93, 11.34, 11.36
London & North Western Rly v Neilson [1922] 2 AC 263 (HL) 5.14
Re Longlands Farm [1968] 3 All ER 552 1.17
Re Lord de Clifford’s Estate [1900] 2 Ch 707 11.51
Lordsvale Finance plc v Bank of Zambia [1996] QB 752 13.52, 13.53
Lorentzen v White Shipping Co (1943) 74 Ll LR 161 6.09
Losinjska Plovidba Brodarstovo DD v Valfracht Maritime Co Ltd (The Lipa) [2001] 2

Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] EWHC 525, [2004] 2 Lloyd’s
Rep 243 9.36, 9.51n177
The Lowlands Orchid see Cobelfret Bulk Carriers NV v Swissmarine Services SA
Lowther v Lowther (Lord) (1806) 13 Ves 95, 33 ER 230 7.05
Lucas v Comerford (1790) Bro CC 166, 29 ER 469 7.31
Lucas v Godwin (1837) 3 Bing NC 738, 132 ER 595 10.10
The Lucille see Uni-Ocean Lines PTE v C-Trade SA
Luck v White (1973) 26 P & CR 89 (Ch D) 8.38
Lumley v Ravenscroft [1895] 1 QB 683 (CA) 7.07
Lumley v Wagner (1852) 1 De G M & G 604, 42 ER 687 7.33
Lusograin Comercio Internacional de Cereas Ltda v Bunge AG [1986] 2 Lloyd’s Rep

654 13.56
The Lutetian see Tradax Export SA v Dorada Compania Naviera SA
Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 (HL) 11.25
Lyle SS Co v Cardiff Corp [1900] 2 QB 638 (CA) 1.12
Lyon & Co Ltd v Fuchs (1920) 2 Ll L R 333 9.51, 9.86n308, 9.93, 9.109
MacBryde v Weekes (1856) 22 Beav 533, 52 ER 1214 8.17, 8.29
Maccaferri v Zurich Insurance plc [2016] EWCA Civ 1302, [2017] 1 Lloyd’s Rep IR
200 3.17
Mackay v Dick (1881) 6 AC 251 13.19n88
Mackreth v Marlar (1786) 1 Cox 259, 29 ER 1156 2.42n109
Private Law Library
Page 416
Maclaine v Gatty [1921] 1 AC 376 (HL(Sc)) 11.21
The Madeleine see Cheikh Boutros Selim El-Khoury v Ceylon Shipping Lines
Maestro Bulk Ltd v Cosco Bulk Carrier Co Ltd (The Great Creation) [2014] EWHC
3978 (Comm), [2015] Lloyd’s Rep 315 9.26
Maggs v Marsh [2006] EWCA Civ 1058 4.19n70
The Mahakam see Parbulk II A/S v Heritage Maritime SA
Malcolmson v Morton (1847) 11 ILR 230 3.14
Re Mallam, ex parte Wheeler (1817) Buck 25 3.01
Mallett v Great Eastern Rly [1899] 1 QB 309 5.14
Mallone v BPB Industries plc [2002] EWCA Civ 126, [2002] ICR 1045 5.58
Malyon v Lawrence Messer & Co (1968) 112 SJ 623 9.59
Mamidoil-Jetoil Greek Petroleum Co SA v Otka Crude Oil Refinery AD (No 2) [2003]

EWCA Civ 1031, [2003] 2 Lloyd’s Rep 635 5.10, 5.89
Mamidoil-Jetoil Greek Petroleum Co SA v Otka Crude Oil Refinery AD (No 3) [2003]

EWCA Civ 617, [2003] 2 Lloyd’s Rep 645 5.89
Mammoth Greeting Cards Ltd v Agra Ltd [1990] 29 EG 45 11.34
The Mamola Challenger see Omak Maritime Ltd v Mamola Challenger Shipping Co(p.
xlvi)
M’Andrew v Adams (1834) 1 Bing NC 29, 131 ER 1028 6.09
M’Andrew v Chapple (1866) LR 1 CP 643 6.09, 12.01
The Manifest Lipkowy see Marcan Shipping (London) Ltd v Polish Steamship Co
Mannai Ltd v Eagle Star Assurance Co Ltd [1995] 1 WLR 1508 4.16, 11.07
Mannai Ltd v Eagle Star Assurance Co Ltd [1997] AC 749 (HL) 4.16, 4.17n67
Manorlike Ltd v De Vitas Travel Agency &c Ltd [1986] 1 All ER 573 (CA) 4.14
Maple Flock Co Ltd v Universal Furniture Products (Wembley) Ltd [1934] 1 KB 148
(CA) 6.26
The Marathon (1879) 40 LT 163 6.12
Marcan Shipping (London) Ltd v Polish Steamship Co (The Manifest Lipkowy) [1989]
2 Lloyd’s Rep 138 (CA) 2.49n139, 3.16
Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] AC 850 5.74
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH (The Mihalis Angelos)

[1971] 1 QB 164 (CA) 1.09, 2.32, 5.67, 11.16, 11.46, 11.46n193, 13.77
Private Law Library
Page 417
Mareva Navigation Co Ltd v Canaria Armadora SA (The Mareva AS) [1977] 1 Lloyd’s
Rep 368 1.01
Marifortuna Naviera SA v Government of Ceylon [1970] 1 Lloyd’s Rep 247 5.07, 5.13
The Marine Star see Coastal Bermuda Petroleum v VTT Vulcan Petroleum SA
Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524 (HL) 4.25, 12.79
Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015]
UKSC 72, [2016] AC 472 2.49, 3.16, 6.11
Marks v Lilley [1959] 1 WLR 749 7.11
Marquis of Hertford v Boore (1801) 5 Ves J 619, 31 ER 823 7.21
The Mary Nour see CTI Group v Transclear SA
Marren v Dawson Bentley & Co Ltd [1961] 2 QB 135 4.11
Marseille Fret SA v D Oltman Schiffahrts GmbH & Co KG (The Trado) [1982] 2

Marshall v Harland & Wolff Ltd [1972] ICR 101 (NIRC) 12.06, 12.22, 12.55
Martindale v Smith (1841) 1 QB 389, 113 ER 1181 2.31n68, 8.40n190, 11.10,

11.14n43, 11.30, 11.46n194
Maryon v Carter (1830) 4 C & P 295, 172 ER 711 2.20–2.21, 10.14
Marzetti v Williams (1830) 1 B & Ad 415, 109 ER 842 9.100
The Mass Glory see Glencore Grain Ltd v Goldbeam Shipping Inc
The Massalia see Société Franco-Tunisienne D’Armement v Sidermar SpA
Mathew v TM Sutton Ltd [1994] 1 WLR 1455 9.102
The Matija Gubec see Gulf Shipping Lines Ltd v Jadranska Slobodna Plovidba
Mathuen v Andrews (1936) 3 Sol 200 8.18
Matthey v Curling [1922] 2 AC 180 (HL) 12.97
The Mavro Vetranic see Greenwich Marine Inc v Federal Commerce & Navigation Co
Ltd
Mayhaven Healthcare Ltd v Bothma (T/A DAB Builders) [2009] EWHC 2634 (TCC),
[2010] BLR 154 9.26
McAlpine Humberoak v McDermott International Inc (1993) 58 BLR 61 (CA) 12.106,

12.107n260
McDonald v Fernandez [2003] EWCA Civ 1219, [2004] 1 WLR 1027 4.17n67
McDonald v McKenna [2014] NIQB 65 4.20
Private Law Library
Page 418
McDonald’s Property Co Ltd v HSBC Bank plc [2001] 36 EG 181 11.34
McGee Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC), [2017] CILL
393 5.12
McGrath v Shah (1989) 57 P & CR 452 8.12
McMurray v Spicer (1868) LR 5 Eq 527 8.28
Mears v Safecar Security Ltd [1982] ICR 626 (CA) 12.49n123
Measures Bros Ltd v Measures [1910] 2 Ch 248 (CA) 7.20
Mecca Leisure Ltd v Renown Investments (Holdings) Ltd (1984) 49 P & CR 12 (CA)
11.34, 11.41
The Mediana [1900] AC 113 (HL) 9.100(p. xlvii)
Mediolanum Shipping Co v Japan Lines Ltd [1984] 1 Lloyd’s Rep 136 (CA) 6.10
Merchants Trading Co v Banner (1871) LR 12 Eq 18 7.31
Mersey Iron and Steel v Naylor, Benzon & Co (1882) 9 QBD 648 (CA) 12.73
Mertens v Home Freeholds [1921] 2 KB 526 12.79
The Metagama (1927) 29 Ll L R 253 (HL) 9.39
Metrolands Investments Ltd v JH Dewhurst Ltd [1986] 3 All ER 659 (CA) 11.29n118,
11.34, 11.36, 11.38, 11.41
Metropolitan Properties v Cordery (1979) 251 EG 567 (CA) 5.67
Metropolitan Water Board v Dick Kerr & Co [1918] AC 119 (HL) 12.22, 12.61, 12.64,
12.104
The Mexico I see Transgrain Shipping BV v Global Transporte Oceanico SA
Michael Warde v Feedex International Inc [1985] 2 Lloyd’s Rep 289 8.50n223
Midill (97PL) Ltd v Park Lane Estates Ltd [2008] EWCA Civ 1227, [2009] 1 WLR 2460
13.64
The Mihalis Angelos see Maredelanto Compania Naviera SA v Bergbau-Handel GmbH
The Mihailios Xilas see China National Foreign Trade Transportation Corp v Evlogia
Shipping Co SA of Panama
Miles v Wakefield MDC [1987] AC 539 (HL) 3.19
Millar’s Karri and Jarrah Co (1902) v Weddel Turner & Co (1908) 14 Com Cas 25 6.26
Millar’s Machinery Co Ltd v David Way & Son (1935) 40 Com Cas 204 9.99
Millen v Brasch & Co [1940] 1 KB 740 (CA) 9.120
Miller v FA Sadd & Son Ltd [1981] 3 All ER 265 (DC). 1.30n103
Private Law Library
Page 419
Miller v London CC (1934) 50 TLR 479 13.48
Millers Wharf Partnership v Corinthian Column (1990) 61 P & CR 461 1.34, 11.31
Million Pigs Ltd v Parry (1983) 46 P & CR 333 11.34
Milton Furniture Ltd v Brit Insurance Ltd [2015] EWCA Civ 671, [2016] 1 Lloyd’s Rep
IR 192 3.14
Miserocchi and C SpA v Agricultores Federados Argentinos SCL (The Sotir and
Angelic Grace) [1982] 1 Lloyd’s Rep 202 6.12
Mitsubishi Corp v Eastwind Transportation Ltd (The Irbenskiy Proliv) [2005] 1 Lloyd’s
Rep 383 5.13
Mitsui OSK Lines Ltd v Garnac Grain Co Inc (The Myrtos) [1984] 2 Lloyd’s Rep 449
1.09, 6.11
Moel Tryvan Ship Co Ltd v Andrew Weir & Co [1910] 1 KB 844 (CA) 1.12
Mona Oil Equipment & Supply Co Ltd v Rhodesia Railways Ltd [1949] 2 All ER 1014
13.19n88
Monarch Airlines Ltd v London Luton Airport [1998] 1 Lloyd’s Rep 403 5.28, 9.82,
9.120
Monarch SS Co Ltd v Karlshamns Oljefabriker AB [1949] AC 196 (HL(Sc)) 9.05, 9.13,

9.31, 9.62
Monkland v Jack Barclay Ltd [1951] 2 KB 252 (CA) 1.25n90
Montague L Meyer Ltd v Travaru A/B H Cornelius of Gamleby (1930) 46 TLR 553
11.46
Monte Video Gas and Dry Dock Co Ltd v Clan Line Steamers Ltd (1921) 37 TLR 866
(CA) 9.49, 9.123
Moon v Mayor, Aldermen and Councillors of the Borough of Camberwell (1903) 89 LT

595 1.30n103
The Moorcock (1889) 14 PD 64 (CA) 3.16, 11.25
Re Moore & Co v Landauer & Co [1921] 2 KB 519 (CA) 11.47
More OG Romsdal Fylkesbatar AS v The Demise Charterers of the Ship

‘Jotunheim’ [2004] EWHC 671 (Comm), [2005] 1 Lloyd’s Rep 181 5.68, 11.57, 13.07,
13.69n330
Morgan v Davison (1815) 1 Stark 114, 171 ER 418 4.09n24
Morgan v Manser [1948] 1 KB 184 12.102
Morris v Baron & Co [1918] AC 1 (HL) 5.50, 5.54
Morrow v Carty [1957] NI 174 (High Ct of N Ireland). 5.78(p. xlviii)
Private Law Library
Page 420
Mortimer v Capper (1782) 1 Bro CC 567, 28 ER 1051 7.24
Mortlock v Buller (1804) 10 Ves 292, 32 ER 857 7.19
Morton v Lamb (1797) 7 TR 125, 101 ER 890 3.19, 3.21
Moschi v Lep Air Services Ltd [1973] AC 331 (HL) 5.66, 5.92, 6.20, 11.02, 12.05n10,
13.78
Motis Exports Ltd v Dampskibsselskabet AF 1912 Aktieselskab [2000] 1 Lloyd’s Rep

211 (CA) 5.13
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The Kanchenjunga)
[1990] 1 Lloyd’s Rep 391 5.61, 5.66, 5.67, 5.69, 5.70, 5.75, 10.03n10
Mott & Co Ltd v Muller & Co (London) Ltd (1922) 13 Ll L Rep 492 9.51, 9.93, 9.109,
9.110
Mount Charlotte Investments v Leek and Westbourne Building Society [1976] 1 All ER
890 11.33
Mountford v Scott [1975] Ch 258 (CA) 7.24
MSAS Global Logistics Ltd v Power Packaging Ltd [2003] EWHC 1393 (Ch) 5.67,
11.22
MSC Mediterranean Shipping Co SA v Alianca Bay Shipping Co Ltd (The Argonaut)

[1982] 2 Lloyd’s Rep 214 (CA) 12.20
MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] EWCA Civ 789, [2016]
2 Lloyd’s Rep 494 6.18, 7.40, 12.07, 12.09
Muller, Maclean & Co v Leslie and Anderson (1921) 8 Ll L R 328 7.37n173
Multi Veste 226 BV v NI Summer Row Unitholder BV [2011] EWHC 2026 (Ch), 139
Con LR 23 8.23, 8.23n114, 8.25, 8.49n222
Multiplex Constructions Ltd v Honeywell Control Systems Ltd [2007] EWHC 447
(TCC), [2007] BLR 195 5.83, 13.48
The Multitank Holsatia see Tankrederei Ahrenkeil GmbH v Frahuil SA
Munkenbeck & Marshall v Kensington Hotel Ltd (Counterclaim) (2002) 78 Con LR

171 1.12
Munro v Butt (1858) 8 E & B 739, 120 ER 275 10.08
Mur Joint Ventures BV v Compagnie Monagasque de Banque [2016] EWHC 3107

(Comm) 3.17
Murray v Lloyd [1989] 1 WLR 1060 9.92n322
Mussen v Van Diemen’s Land Co [1938] Ch 253 13.67
MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553,
[2017] QB 604 5.59, 5.78
Private Law Library
Page 421
The Myrtos see Mitsui OSK Lines Ltd v Garnac Grain Co Inc
Myton Ltd v Schwab-Morris [1974] 1 WLR 331 11.14n43
The Nanfri see Federal Commerce & Navigation Co Ltd v Molena Alpha Inc
Nash and Staunton v Paragon Finance plc [2001] EWCA Civ 1466, [2002] 1 WLR 685
5.58
National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 (HL) 12.05, 12.17,
12.50, 12.51, 12.63, 12.66, 12.97
The Naxos see Compagnie Commerciale Sucres et Denrées v C Czarnikow Ltd
Neale v Ratcliff (1850) 15 QB 916, 117 ER 704 3.17
Neilsen v Wait, James & Co (1885) 16 QBD 67 (CA) 13.42
Nelson v Patrick (1846) 2 Car & Kir 641, 175 ER 269 1.12, 1.16, 1.18
The Nema see Pioneer Shipping Ltd v BTP Tioxide Ltd
Nereide SpA di Navigazione v Bulk Oil International Ltd [1982] 1 Lloyd’s Rep 1 (HL)
6.10
New Brunswick and Canada Railway and Land Co v Muggeridge (1859) 4 Drew 686,
62 ER 263 7.30
Newcastle Protection and Indemnity Association v Assurance Foreningen Gard

Gjendsidig (The Labrador) [1998] 2 Lloyd’s Rep 387 9.66(p. xlix)
Newland Shipping and Forwarding Ltd v Toba Trading FZC [2014] EWHC 661
(Comm) 13.79
Re Newman (1876) 4 Ch D 724 (CA) 13.54
Newman v Rogers (1793) 4 Bro CC 391, 29 ER 350 2.09, 2.42, 2.42n109, 2.49, 8.21,
11.27n105
Nicholl & Knight v Ashton, Edridge & Co [1901] 2 KB 126 12.59
Nigerian National Shipping Lines Ltd v Mutual Ltd (The Windfall) [1998] 2 Lloyd’s
Rep 664 9.83
The Niizuru see Hyundai Merchant Marine Co Ltd v Karander Maritime Inc
The Nikmary see Triton Navigation Ltd v Vitoil SA
The Nile Co for the Export of Agricultural Crops v H & J M Bennett (Commodities) Ltd
[1986] 1 Lloyd’s Rep 555 12.91
Nippon Yusen Kaisha Ltd v Pacifica Navegacion SA (The Ion) [1980] 2 Lloyd’s Rep 245
5.81
Nippon Yusen Kaisha Ltd v Scindia Steam Navigation Co Ltd (The Jalagouri) [2000] 1
Private Law Library
Page 422
Nissho Iwai Petroleum Co v Cargill International SA [1993] 1 Lloyd’s Rep 80 4.03,

4.08
Noble v Edwardes (1877) 5 Ch D 378 11.10
The Noel Bay see SIB International SRL v Metalsgesellschaft Corp
Re North [1895] 2 QB 264 (CA) 4.11
North Eastern Properties Ltd v Coleman [2010] EWCA Civ 277, [2011] 1 P & CR 3
8.28, 8.31
North Hertfordshire District Council v Hitchin Industrial Estate Ltd [1992] 2 EGLR
121 11.21n82, 11.34
North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1979] QB 705 5.59
North Sea Energy Holdings NV v Petroleum Authority of Thailand [1999] 1 Lloyd’s

Rep 483 (CA) 9.100
Northern and Midland Holdings Ltd v Magnet Ltd [2004] EWHC 120, [2004] All ER
(D) 179 11.34
Northern Regional Health Authority v Derek Crouch Construction Co Ltd [1984] QB

644 (CA) 5.57n244
The Northgate Ocean see Pride Maritime Ltd Partnership v Qingdao Ocean Shipping
Co
Nosotti v Auerbach (1899) 15 TLR 140 (CA) 1.12, 1.16, 1.22, 8.19
NV Bunge v Compagnie Noga d’Importation et d’Exportation SA (The Bow Cedar)

[1980] 2 Lloyd’s Rep 602 5.15
Nwakobi v Nzekwu [1964] 1 WLR 1019 (PC) 7.22
Oakacre Ltd v Claire Cleaners (Holdings) Ltd [1982] Ch 197 7.10
Oakdown Ltd v Bernstein & Co (1985) 49 P & CR 282 4.04n6
Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Siboen and the
Sibotre) [1976] 1 Lloyd’s Rep 293 9.101
Ocean Marine Navigation Ltd v Koch Carbon Ltd (The Dynamic) [2003] EWHC 1936
(Comm), [2003] 2 Lloyd’s Rep 693 5.85, 7.40
Ocean Pride Maritime Ltd Partnership v Qingdao Ocean Shipping Co (The Northgate)
[2007] EWHC 2796 (Comm), [2008] 1 Lloyd’s Rep 511 5.85
Ocean Tramp Tankers v V/O Sovfracht (The Eugenia) [1964] 2 QB 226 (CA) 1.21,
12.80, 12.86n208, 12.88, 12.107n260
Ocular Sciences Ltd v Aspect Vision Care Ltd [1997] RPC 289 2.51, 8.48
Odfjfell Seachem A/S v Continentales des Petroles [2004] EWHC 2929 (Comm), [2005]
Private Law Library
Page 423
Office of Fair Trading v Abbey National plc [2009] UKSC 6, [2010] 1 AC 696 5.42
Ogden v Fossick (1862) D F & J 426, 45 ER 1249 7.07
Ogilvy v Hope-Davies [1976] 1 All ER 683 5.81
Olafsson v Foreign and Commonwealth Office [2009] EWHC (QB) 9.79
Oldendorff (EL) & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1974] AC
479 13.14(p. l)
Oliver v Fielden (1849) 4 Ex 135, 154 ER 1155 2.49, 11.16, 11.45
Ollive v Booker (1847) 1 Ex 416, 154 ER 177 2.49, 11.16, 11.45
Re Olympia & York Canary Wharf Ltd (No 2) [1993] BCC 159 2.12, 2.51, 8.22n106,
8.25, 8.36, 8.49n222
Omak Maritime Ltd v Mamola Challenger Shipping Co (The Mamola Challenger)

[2010] EWHC 2026 (Comm), [2011] BLR 212 9.02, 9.95, 9.97
Omar v El-Wakil [2001] EWCA Civ 1090, [2002] 2 P & CR 3 13.64
One Step (Support) Ltd v Morris-Garner [2016] EWCA Civ 180, [2017] QB 1 9.102
Oresundvarvet Aktiebolag v Marcos Diamantis Lemos (The Angelic Star) [1988] 1

The Orient Prince see P & O Oil Trading Ltd v Scanoil AB
The Oro Chief see Eximenco Handels AG v Partrederiet Oro Chief
The Oropesa [1943] P 32 (CA) 9.39
Ostfriesische Volksbank v Fortis Bank [2010] EWHC 361 (Comm) 4.19
Otuo v Brierley [2015] EWHC 1938 (Ch) 3.17
Overseas Medical Supplies Ltd v Orient Transport Services Ltd [1999] 1 Lloyd’s Rep
273 (CA) 5.26, 5.28
Overstone v Shipway [1962] 1 WLR 117 (CA) 9.127
Overy v Paypal (Europe) Ltd [2012] EWHC 2659 (QB), [2013] Bus LR D1 5.36
Oxus Gold plc v Templeton Insurance Ltd [2007] EWHC 770 (Comm) 9.92n322
P & O Developments v Guy’s and St Thomas’ National Health Service Trust [1999]
BLR 3 9.66
P & O Oil Trading Ltd v Scanoil AB (The Orient Prince) [1985] 1 Lloyd’s Rep 389 6.10
Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (The Hannah Blumenthal)
[1983] 1 AC 854 (HL) 5.51, 12.05, 12.20, 12.87, 12.100, 12.100n245
Page One Records v Britton [1968] 1 WLR 157 7.33
Private Law Library
Page 424
Pagebar Properties Ltd v Derby Investments (Holdings) Ltd. [1972] 1 WLR 1500 8.12,
8.14
Pagnan (R) & Fratelli v Corbisa Industrial Agropacuaria Limitada [1970] 1 WLR 1306
(CA) 9.108
Palm Shipping Inc v Kuwait Petroleum Corp (The Sea Queen) [1988] 1 Lloyd’s Rep
500 6.10
The Pamela see Schelde Delta Shipping BV v Astarte Shipping Ltd
The Pamphilos see Bulfracht (Cyprus) Ltd v Boneset Shipping Co Ltd
187 1.28, 9.49, 9.93, 9.113, 9.115, 9.124n445
Panchaud Frères SA v Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53 (CA)

5.67
Panoutsos v Raymond Hadley Corp of New York [1917] 2 KB 473 (CA) 5.63, 5.65, 5.81
Paradine v Jane (1647) Aleyn 26, 82 ER 897 12.50
The Parana (1877) 2 PD 118 9.22, 9.115n414
Parbulk II A/S v Heritage Maritime SA (The Mahakam) [2011] EWHC 2917 (Comm),
[2012] 1 Lloyd’s Rep 87 5.67, 5.67n294
Parkin v Thorold (1852) 16 Beav 59, 51 ER 698 1.05, 2.15, 2.41, 7.22, 11.10
Parking Eye v Beavis [2015] UKSC 67, [2016] AC 1172 13.55n295
Parsons Corp v CV Scheepvaartonderneming (The Happy Ranger) [2002] EWCA Civ

694; [2002] 2 Lloyd’s Rep 357 5.04
Parsons (Livestock) Ltd v Uttley Ingham & Co [1978] QB 791 (CA) 9.07, 9.31, 9.34,
9.52n180, 9.58n205, 9.70
Patel v Ali [1984] Ch 283 7.23
Paton v Payne (1897) 35 SLR 112 11.30
Patrick v Russo-British Grain Export Co Ltd [1927] 2 KB 535 9.51, 9.93
Payzu v Saunders [1919] 2 KB 581 (CA) 9.77, 9.79, 9.80(p. li)
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 (CA)
5.57, 5.83, 13.47, 13.48
Pearl Mill Co Ltd v Ivy Tannery Ltd [1919] 1 KB 78 1.17, 5.50
Pearson v Sanders Witherspoon [2000] PNLR 110 (CA) 9.59
Peer Freeholds Ltd v Clean Wash International Ltd [2005] EWHC 179 (Ch), [2005] P
& CR DG6 4.17
The Pegase [1981] 1 Lloyd’s Rep 175 9.42, 9.49, 9.93, 9.123
Private Law Library
Page 425
Pegg v Wisden (1852) 16 Beav 239, 51 ER 770 8.18
Pegler v White (1864) 33 Beav 394, 55 ER 423 7.23
Pellew v Inhabitants of Wonford (1829) 9 B & C 134, 109 ER 50 4.11
Pembroke St Georges Ltd v Cromwell Developments Ltd [1991] 2 EGLR 129 11.34
The Penelope [1928] P 180 12.31, 12.32, 12.91n224
Peninsula and Orient Steam Navigation Co v Youell and ors [1997] 2 Lloyd’s Rep 136
(CA) 9.99
Percival Ltd v London County Council Asylums and Mental Deficiency Committee
(1918) 87 LJKB 677 1.30n103
Percy Bilton Ltd v GLC (1982) 20 Build LR 1 (HL) 13.47
Peregrine Systems Ltd v Steria Ltd [2005] EWCA Civ 239, [2005] Info TLR 294 1.10,
4.19, 5.67, 11.14
Peter Dixon & Sons Ltd v Henderson Craig & Co [1919] 2 KB 778 (CA) 5.88
Petrie v MacFisheries Ltd [1940] 1 KB 258 (CA) 12.49n123
The Petrofina [1949] AC 76 (HL) 5.76, 11.55
Peyman v Lanjani [1985] Ch 457 (CA) 5.67
Philco Radio v Spurling [1949] 2 All ER 882 (CA) 9.39
Phillips v Homfray (1871) 6 Ch App 770 7.19
Phillips v Lamdin [1949] 2 KB 33 7.27, 9.129
Phipps v Jackson (1887) 56 LJ Ch 530 7.15
Photo Production Ltd v Securicor Transport Ltd [1980] AC 827 (HL) 5.14, 5.16
Pickering v Bishop of Ely (1843) 2 Y & C CC 249, 63 ER 109 7.33
Pilkington v Wood [1953] Ch 770 9.79
Pincke v Curteis (1793) 4 Bro CC 329, 29 ER 918 2.39, 8.04
Pindell Ltd v AirAsia Bhd [2010] EWHC 2516 (Comm), [2012] 2 CLC 1 9.26
Pinnel’s Case (1602) 5 Co Rep 117a, 77 ER 237 5.59n251
Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 (HL) 12.29, 12.44,
12.66, 12.91n224, 12.96, 12.108n262
Pips (Leisure Productions) Ltd v Walton [1981] 2 EGLR 172 8.12
Planché v Colburn (1831) 8 Bing 14, 131 ER 305 5.85
Private Law Library
Page 426
Plastimoda Societa per Azioni v Davidson’s (Manchester) Ltd [1952] 1 Lloyd’s Rep
527 (CA) 5.64
Platt v Parker (1886) 2 TLR 786 (CA) 11.38
Plevins v Downing (1876) 1 CPD 220 2.49, 11.30, 11.46n193
PM Project Services Ltd v Dairy Crest [2016] EWHC 1235 (TCC), [2016] 4 Costs LR
735 5.59n249
Pole v Tochesser (1374) YB 48 Edw 3 fo 2 p 16 3.07, 3.18
In re Polemis and Furness Withy Co [1921] 3 KB 560 (CA) 9.23n66
Poole v Hill (1840) 6 M & W 835, 151 ER 651 8.15
Pordage v Cole (1669) 1 Wms Saund 319, 85 ER 449 2.19n42, 3.07, 3.18
Portaria Shipping Co Ltd v Gulf Pacific Navigation Co Ltd (The Selene G) [1981] 2
Porter v Jones (1943) 112 LJKB 173 (CA) 9.68
Portman v Middleton (1858) 4 CB (NS) 322, 140 ER 1108 9.64
Portolana Cia Naviera Ltd v Vitoil SA Inc (The Afrapearl) [2004] EWCA Civ 864,
[2004] 2 Lloyd’s Rep 305 13.42
Posner v Scott-Lewis [1987] Ch 25 7.15, 7.16
The Post Chaser [1981] 2 Lloyd’s Rep 695 5.78, 5.81(p. lii)
Postlethwaite v Freeland (1880) LR 5 App Cas 599 (HL) 1.12, 4.23, 4.25
Potter v Deboos (1815) 1 Stark 81, 171 ER 408 1.12
Poussard v Spiers & Pond (1876) 1 QBD 410 4.25, 5.93, 12.21, 12.102n251
Powell Duffryn Steam Coal Co v Taff Vale Railway Co (1874) 9 Ch App 331 7.15
Powell v Brent LBC [1987] IRLR 466 (CA) 7.33
Powell v Marshall, Parkes & Co [1899] 1 QB 710 (CA) 11.27n105
Prehn v Royal Bank of Liverpool (1870) LR 5 Ex 92 9.05, 9.30
President of India v Hariana Overseas Corp (The Tafaka) [1990] 1 Lloyd’s Rep 536
1.03, 6.09, 13.39
President of India v La Pintada Compania Navigacion [1985] AC 104 (HL) 9.67
Price v Dyer (1810) 17 Ves 356, 34 ER 137 5.61n257
Price v Strange [1978] Ch 337 (CA) 7.07, 7.08
Prosper Homes Ltd v Hambro’s Bank Executor & Trustee Co Ltd (1980) 39 P & CR
395 5.65, 8.14
Private Law Library
Page 427
Prow v Argyll and Bute Council [2012] CSOH 77 11.34
Public Works Commissioner v Hills [1906] AC 368 (PC) 13.53
The Puerto Buitrago see Attica Sea Carriers Corp v Ferrostaal Poseidon Bulk Reederei
GmbH
Pugh v Duke of Leeds (1777) Cowp 714, 89 ER 1323 4.12
Pusey v Pusey (1684) 1 Vern 273, 23 ER 465 7.05, 7.27
Quadrangle Development and Construction Co v Jenner [1974] 1 WLR 68 (CA) 8.38
Quadrant Visual Communications v Hutchinson Telephone UK [1993] BCLC 442 (CA)

7.12
R & C Electrical Engineers v Shaylor Construction Ltd [2012] EWHC 1254 (TCC),
[2012] BLR 373 13.19
R (Khatun) v Newham LBC [2004] EWCA Civ 55, [2005] QB 37 13.65n322
R v Berkshire Justices (1878) 4 QBD 469 11.22
R v Inhabitants of Gresham (1786) 1 TR 101, 99 ER 996 5.54
Radcliffe v Bartholomew [1891] 1 QB 161 (DC) 4.11
Radcliffe v Warrington (1806) 12 Ves J 326, 33 ER 124 2.42n109, 8.04, 8.05, 8.39,
11.10
Rae v Hackett (1844) 12 M & W 724, 152 ER 1390 3.17, 10.14
Re Railway Sleepers Supply Co (1885) 29 Ch D 204 4.13
Raineri v Miles [1981] AC 1050 (HL) 1.06–1.08, 1.25, 2.04, 2.12, 6.04, 6.09, 8.20n97,
8.36, 9.129, 13.35
Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900 3.22, 11.07
Rapid Building Housing Group Ltd v Ealing Family Housing Assn Ltd (1984) 29 BLR 5
(CA) 13.47
Rashtriya Chemicals and Fertilizers Ltd v Huddart Parker Industries Ltd (The Boral
Gas) [1988] 1 Lloyd’s Rep 342 6.10
Rayner v Stone (1762) 2 Eden 128, 28 ER 845 7.15
Read v Bonham (1821) 3 Brod & Bing 147, 129 ER 1238 1.26
Reardon Smith Lines Ltd v Hansen Tangen (The Diana Prosperity) [1976] 1 WLR 989
(HL) 2.33, 2.34
Reardon Smith Lines Ltd v Ministry of Agriculture [1962] 1 QB 42 (CA) 5.88, 11.47,
12.91n224
Reardon Smith Lines Ltd v Ministry of Agriculture [1963] AC 691 (HL) 4.03
Private Law Library
Page 428
Red River v UK Ltd v Sheikh [2010] EWHC 961 (Ch) 5.67
Redland Aggregates Ltd v Shepherd Hill Civil Engineering Ltd [1999] BLR 252 (CA)
1.15
Redler Grain Silos Ltd v BICC Ltd [1982] 1 Lloyd’s Rep 435 (CA) 7.29
Reed v Madon [1989] Ch 408 9.74(p. liii)
Rees-Hough v Redland Reinforced Plastics Ltd (1985) 2 Const LR 109 5.27
Regent OhG Aisestadt & Barig v Francesco of Jermyn St Ltd [1981] 3 All ER 327
10.09
Regus (UK) Ltd v Epcot Solutions Ltd [2008] EWCA Civ 361 5.27
Reichman v Beveridge [2006] EWCA Civ 1659, [2017] 1 P & CR 20 7.40
Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 (CA) 11.25
Reimers v Druce (1857) 23 Beav 145, 53 ER 57 7.22
Rein v Stein [1892] 1 QB 753 (CA) 4.07n17
Reuter, Hufeland & Co v Sala Ltd (1879) 4 CPD 239 (CA) 11.14, 11.46
Reynolds v Nelson (1821) 6 Madd 18, 56 ER 995 2.09, 2.42, 8.06, 8.34
Rice (T/A The Garden Guardian) v Great Yarmouth Borough Council [2003] TCLR 1
13.76
Richards & Son Ltd v Karenita Ltd (1971) 221 EG 25 1.35, 11.29
Richco International Ltd v Alfred C Toepfer International GmbH (The Bonde) [1991] 1
Rightside Properties v Gray [1972] Ch 72 4.13
Riley Investments Ltd v Eurostile Holdings Ltd [1985] 1 WLR 1139 (CA) 4.14
The Rio Apa see Kurt A Becher GmbH & Co KG v Voest Alpine Intertrading GmbH
The Rio Sun see Gatoil International Inc v Tradax Petroleum Ltd
Rippinghall v Lloyd (1833) 5 B & Ad 742, 110 ER 964 4.07
Ritchie v Atkinson (1808) 10 East 295, 103 ER 787 10.10
Roberts v Berry (1853) 3 De G M & G 284 11.10
Roberts v Brett (1865) 11 HLC 337, 11 ER 1363 11.22
Roberts v Bury Improvement Commrs (1870) LR 5 CP 310 1.12, 13.47, 13.48
Roberts v Havelock (1832) 3 B & Ad 404, 110 ER 145 10.09
Roberts v Smith (1859) 4 H & N 315, 157 ER 861 3.14, 11.21
Private Law Library
Page 429
Robey and Co v Snaefell Mining Co Ltd (1887) 20 QBD 152 4.07
Robinson v Harman (1848) 1 Ex 850, 154 ER 263 9.02, 9.90
Robinson v Thames Mead Park Estate Ltd [1947] 1 Ch 334 8.14
Robophone Facilities Ltd v Blank [1966] 1 WLR 1428 13.52
Rogers v Challis (1859) 27 Beav 175, 54 ER 68 7.05
Rolfe v Harris (1811) 2 Pri 202n, 146 ER 71n 11.52
Rolt v Cozens (1856) 18 CB 673, 139 ER 1534 10.08
Roper v Johnson (1873) LR 8 CP 167 9.79
Re Ropner Shipping Co Ltd & Cleeves Western Valleys Anthracite Collieries Ltd
[1927] 1 KB 879 (CA) 13.42
Ross T Smyth & Co Ltd v TD Bailey, Son & Co [1940] 3 All ER 60 (HL), (1940) 164 LT
102 (HL) 5.61n257, 13.26n142
Rover International Ltd v Cannon Film Sales Ltd [1989] 1 WLR 912 (CA) 13.71
Rowe v School Board for London (1887) 36 Ch D 619 9.130
Royal Bristol Permanent Building Society v Bomash (1887) 35 Ch D 390 9.129
Royal Brompton Hospital v Hammond & Lerche [1999] BLR 162 9.66
Rubicon Computer Systems v United Paints Ltd (2000) 2 TCLR 453 (CA) 6.23
Russell v Ledsam (1845) 14 M & W 574, 153 ER 604 4.12
Russell v Sa da Bandiera (1862) 13 CB (NS) 149, 143 ER 59 5.56, 13.47
Rutter v Palmer [1922] 2 KB 87 (CA) 5.05
RWE NPower Renewables Ltd v JN Bentley Ltd [2014] EWCA Civ 150, [2014] CILL
3488 13.20
Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116 (CA) 7.15,
7.16, 7.33
Saint Line Ltd v Richardsons, Westgarth & Co Ltd [1940] 2 KB 99 9.02, 9.57, 9.61,
9.94n329
Salvage Association v CAP Financial Services [1995] 22 FSR 654 5.23, 9.99(p. liv)
Samarenko v Dawn Hill House Ltd [2011] EWCA Civ 1445, [2013] Ch 36 1.05, 2.15,
2.39, 8.04, 8.23, 8.25n123, 8.36, 8.39, 11.10, 11.14n43
Samuel Properties (Developments) Ltd v Hayek [1972] 1 WLR 1296 (CA) 1.35, 11.33,
11.38
Sanday v Keighley Maxsted & Co Ltd (1922) 27 Com Cas 296 (CA) 11.46
Private Law Library
Page 430
The Sandgate [1930] P 30 (CA) 6.09
In re Sandwell Park Colliery Co [1929] 1 Ch 277 1.04
Sansom v Rhodes (1840) 6 Bing NC 261, 133 ER 103 1.12, 2.42n109, 8.19, 11.10
Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA [1981] 1 Lloyd’s Rep

175 9.37
Sattar v Sattar [2009] EWHC 289 (Ch) 1.29
The Satya Kailash see Seven Seas Transportation Ltd v Pacifico Union Marina Corp
Savage v Taylor (1736) Cas temp Talb 234; 25 ER 753 7.19
Scally v Southern Health and Social Services Board [1992] 1 AC 294 (HL(NI)) 11.25
Scandinavian Tanker Trading Co AB v Flota Petrolera Ecuatoriana (The Scaptrade)

[1981] 2 Lloyd’s Rep 425 5.74

[1983] 1 Lloyd’s Rep 146 (CA) 5.74

[1983] 2 AC 694 (HL) 2.45, 5.74, 5.76, 5.77, 7.32, 11.55, 11.56, 13.10, 13.69n330
Scandinavian Tanker Trading Co AB v Zodiac Petroleum SA (The Al Hofuf) [1981] 1

Lloyd’s Rep 81 3.17, 10.14, 11.29
The Scaptrade see Scandinavian Tanker Trading Co AB v Flota Petrolera Ecuatoriana
Scarf v Jardine (1882) 7 App Cas 345 (HL) 5.66, 5.67
Schelde Delta Shipping BV v Astarte Shipping Ltd (The Pamela) [1995] 2 Lloyd’s Rep
249, [1995] CLC 1011 4.03n4, 13.77
Schenkers Ltd v Overland Shoes Ltd [1998] 1 Lloyd’s Rep 498 5.27
Schindler v Pigault (1975) 30 P & CR 328 13.64
Schnabel v Allard [1967] 1 QB 627 (CA) 4.14
Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 (HL) 5.09, 5.23
Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 (HL) 11.20, 11.20n72,
11.23, 11.40
Schulze v Great Eastern Rly Co (1887) 19 QBD 30 (CA) 9.115
Scott v Rayment (1868) LR 7 Eq 112 7.13
Scottish Power plc v Britoil (Exploration) Ltd [1998] CLY 848 (CA) 1.17
The Sea Angel see Edwinton Commercial Corp v Tsavliris Russ (Worldwide Salvage
and Towage) Ltd
Sea and Land Securities v William Dickinson (1942) 72 Lloyd’s Rep 159 13.07, 13.10
Private Law Library
Page 431
Sea Cargo Skips AS v State Bank of India [2013] EWHC 177 (Comm), [2013] 2 Lloyd’s
Rep 477 13.20
Seaward v Willock (1804) 5 East 198, 102 ER 1046 11.10
Secretary of State for Communities and Local Government v Standard Securities Ltd
[2007] EWHC 1808 (Ch), [2008] 1 P & CR 23 11.34
Seeger v Duthie (1860) 8 CB(NS) 45, 141 ER 1081 3.21
Segal Securities Ltd v Thoseby [1963] 1 QB 887 5.67n294
Select Commodities Ltd v Valdo SA (The Florida) [2006] EWHC 1137 (Comm), [2007]
The Selene G see Portaria Shipping Co Ltd v Gulf Pacific Navigation Co Ltd
Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34, [2008] 1 AC
561 9.67
The Seta Maru see China Shipbuilding Corp v Nippon Yusen Kabushiki Kaisha
Seton v Slade (1802) 7 Ves J 265, 32 ER 108 2.08, 2.39, 2.41, 2.42n109, 7.20, 8.04,
8.39, 11.17
Seven Seas Properties v Al-Essa (No 2) [1993] 1 WLR 1083 9.64
Seven Seas Transportation Ltd v Pacifico Union Marina Corp (The Satya Kailash)
[1988] 1 Lloyd’s Rep 588 (CA) 5.13(p. lv)
Sharp & Co Ltd v McMillan [1998] IRLR 632 (EAT) 12.06, 12.102
Sharp v Christmas (1892) 8 TLR 687 (CA) 11.14
Shawton Engineering Ltd v DGP International Ltd [2005] EWCA Civ 1359, [2006] BLR
1 5.83, 8.17, 8.34n159, 12.70n171, 13.47
Shell-Mex Ltd v Elton Cop Dyeing Co Ltd (1928) 34 Com Cas 39 7.37n173
Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (CA) 2.49, 3.15, 6.11, 11.25
Shiloh Spinners Ltd v Harding [1973] AC 691 (HL) 7.16, 11.53, 11.55, 11.67
Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 (CA) 3.16, 11.25, 12.98
Shower v Cudmore (1682) T Jo 216, 84 ER 1224 3.07, 3.18, 11.10
Shuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 (HL) 13.76
SHV Gas Supply & Trading SAS v Naftomar Shipping & Trading Co Ltd Inc (The Azur
Gaz) [2005] EWHC 2528 (Comm), [2006] 1 Lloyd’s Rep 206 4.24
SIB International SRL v Metalsgesellschaft Corp (The Noel Bay) [1989] 1 Lloyd’s Rep
361 (CA) 9.86
The Siboen and the Sibotre see Occidental Worldwide Investment Corp v Skibs A/S
Avanti
Private Law Library
Page 432
Sidebotham v Holland [1895] 1 QB 378 (CA) 4.12, 4.16
Siemens Building Technologies FE Ltd v Supershield Ltd [2010] EWCA Civ 7, [2010] 1
Lloyd’s Rep 349 9.26, 9.66
Siemens Hearing Instruments Ltd v Friends Life Ltd [2014] EWCA Civ 382, [2014] 2 P
& CR 5 1.33, 4.17n67
Sieveking v Maas (1856) 6 E & B 670, 119 ER 1013 1.12
Re Sigma Finance Corp [2009] UKSC 2, [2010] BCC 40 3.22
Sim v Rotherham MBC [1987] Ch 216 5.93
Simmons v South Eastern Rly Co (1861) 7 Jur (NS) 849 9.49, 9.124
Re Simoco Digital UK Ltd [2004] EWHC 209 (Ch), [2004] 1 BCLC 541 11.13, 11.30
The Simona see Fercometal SARL v MSC Mediterranean Shipping Co SA
Simpson v Crippin (1872) LR 8 QB 14 3.21, 8.44n207
Simpson v Henderson (1829) Mood & M 300, 173 ER 1363 11.22
Simpson v Hughes (1897) 66 LJ Ch 143 1.12, 8.19
Simpson v London and North Western Railway Co (1876) 1 QBD 274 9.49, 9.121,
9.124n445
Sims v Midland Rly [1913] 1 KB 103 1.12
Sinclair v Bowles (1829) 9 B & C 92, 109 ER 35 10.08
Singer Co (UK) Ltd v Tees and Hartlepool Port Authority [1988] 2 Lloyd’s Rep 164
5.28
The Sivand [1998] 2 Lloyd’s Rep 97 (CA) 9.52n180
SK Shipping (S) Pte Ltd v Petroexport Ltd [2009] EWHC 2974 (Comm), [2010] 2
Skips A/S Nordheim v Syrian Petroleum Co Ltd (The Varenna) [1984] QB 599 (CA)
3.02
Sky Petroleum Ltd v VIP Petroleum Ltd [1974] 1 WLR 576 7.05, 7.29
Smales v Lea [2011] EWCA Civ 1325, [2012] PNLR 8 10.12n39
Small & Sons v Middlesex Real Estates Ltd [1921] WN 245 10.08
Smeed v Foord (1859) 1 E & E 602, 120 ER 1035 9.69, 9.113
Smith v Dart & Son (1884) 14 QBD 105 11.45
Smith v Hamilton [1951] Ch 174 1.04n16, 8.20, 8.34, 13.34, 13.35
Smith v Leech Brain & Co Ltd [1962] 2 QB 405 9.34
Private Law Library
Page 433
SmithKline Beecham plc v Apotex Europe Ltd [2006] EWCA Civ 658, [2007] Ch 71
5.73
Snia Societa di Navigatione Industriale et Commercio v Suzuki & Co (1924) 29 Com

Cas 284 (CA) 8.44
Société Franco-Tunisienne D’Armement v Sidermar SpA (The Massalia) [1960] 3 WLR

701 12.65, 12.107n260
Société Générale de Paris v Milders (1883) 49 LT 55 3.18
Société Italo-Belge pour le Commerce et l’Industrie v Palm and Vegetable Oils

(Malaysia) Sdn Bhd [1981] 2 Lloyd’s Rep 695 5.75(p. lvi)
The Solholt see Sotiros Shipping Inc v Sameiet Solholt
The Sotir see Miserocchi and C SpA v Agricultores Federados Argentinos SCL
Sotiros Shipping Inc v Sameiet Solholt (The Solholt) [1981] 2 Lloyd’s Rep 574
5.67n296
Sotiros Shipping Inc v Sameiet Solholt (The Solholt) [1983] 1 Lloyd’s Rep 605 (CA)
9.14, 9.75, 9.77, 9.78, 9.79, 9.80
South Staffordshire Tramways Co Ltd v Sickness and Accident Assurance Association

Ltd [1891] 1 QB 402 (CA) 4.11
South West Water Services Ltd v International Computers Ltd [1999] BLR 420 6.28
Southcomb v Bishop of Exeter (1847) 16 LJ Ch 378 11.27
Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2015] EWHC 718
(Comm), [2015] 2 Lloyd’s Rep 407 13.78
Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd [2016] EWCA Civ
982, [2016] 2 Lloyd’s Rep 447 2.48, 3.13, 9.127, 11.14n43
The Spiros C see Tradigrain SA v King Diamond Shipping SA
Sport Internationaal Bussum BV v Inter-Footwear Ltd [1984] 1 WLR 776 (CA & HL)
13.69n330
Spurrier v Hancock (1799) 4 Ves J 667, 31 ER 344 8.05n20, 11.27n105
SS Ardennes (Cargo Owners) v SS Ardennes (Owners) [1951] 1 KB 55 9.06, 9.44,

9.62, 9.91, 9.100, 9.120
SS Singleton Abbey v SS Paludina [1927] AC 16 (HL) 9.39
St Albans City & DC v International Computers Ltd [1996] 4 All ER 481 (CA) 5.23
St Enoch Shipping Co Ltd v Phosphate Mining Co Ltd [1916] 2 KB 624 3.19
Stag Line Ltd v Tyne Shiprepair Group Ltd (The Zinnia) [1984] 2 Lloyd’s Rep 211 5.27
Stanley v Robinson (1830) 1 Russ & M 527, 39 ER 203 7.19
Private Law Library
Page 434
Stanton v Austin (1874) LR 7 CP 651 3.01
Stanton v Richardson (1872) LR 7 CP 421 10.03, 12.09
Stanton v Richardson (1874) LR 9 CP 390 (Exchequer Chamber) 11.16
The Star Gazer see Allseas International Management Ltd v Panroy Bulk Transport
Ltd
Stargas SpA v Petredec Ltd (The Sargasso) [1994] 1 Lloyd’s Rep 412 9.65
Starmark Enterprises Ltd v CPL Distribution Ltd [2001] EWCA Civ 1252, [2002] Ch
306 11.34, 11.41n163
Starside Properties Ltd v Mustapha [1974] 1 WLR 816 (CA) 13.68
The Starsin see Homburg Houtimport BV v Agrosin Private Ltd
Startup v Macdonald (1843) 6 M & G 593, 134 ER 1029 4.03, 4.05
State Securities plc v Initial Industry Ltd [2004] All ER (D) 317 11.19
State Trading Corp of India v Golodetz Ltd [1989] 2 Lloyd’s Rep 277 (CA) 5.14, 5.67
Staunton v Wood (1851) 16 QB 639, 117 ER 1025 3.18, 11.22
Stavart v Eastwood (1843) 11 M & W 197, 152 ER 773 1.12, 8.19
Stavers v Curling (1838) 3 Bing NC 355, 132 ER 447 3.21
Steam Herring Fleet Ltd v Richards & Co Ltd (1901) 17 TLR 731 9.02, 9.57
Steedman v Drinkle [1916] 1 AC 275 (PC) 11.19, 11.58, 11.59, 13.68
Steel v State Line SS Co (1877) 3 App Cas 72 (HL(Sc)) 6.12
Steelwood Carriers Inc of Monrovia v Evimeria Compania Naviera SA of Panama (The

Agios Giorgios) [1976] 2 Lloyd’s Rep 192 10.03n13
Stein Forbes & Co Ltd v County Tailoring Co Ltd (1916) 86 LJKB 448 7.37, 7.37n173
The Stena Nautica see CN Marine Inc v Stena Line A/B
Steria Ltd v Sigma Wireless Communications Ltd [2008] BLR 79 (QBD (TCC)) 3.14
Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA) 5.20, 5.25
Stewart v Chapman [1951] 2 KB 792 (DC) 4.11
Stickney v Keeble [1915] AC 338 (HL) 2.10, 2.39n102, 2.43, 2.44, 8.04, 8.05, 8.18,
8.29, 11.27
Stilk v Myrick (1802) Camp 317, 170 ER 1168 5.59(p. lvii)
Re Stirrup’s Contract [1961] 1 WLR 449 8.12
Stocker v Wedderburn (1857) 3 K & J 393, 69 ER 1162 7.07
Private Law Library
Page 435
Stockloser v Johnson [1954] 1 QB 476 (CA) 13.69
Stockport MBC v O’Reilly [1983] 2 Lloyd’s Rep 70 12.20
Stocznia Gdanska SA v Latvian Shipping Co [1996] 2 Lloyd’s Rep 132 7.40n192
Stocznia Gdanska SA v Latvian Shipping Co [1998] 1 WLR 574 (HL) 6.15n61,

7.37n177, 13.72
Stocznia Gdanska SA v Latvian Shipping Co (No 2) [2002] EWCA Civ 889, [2002] 2
Lloyd’s Rep 436 5.67, 6.30n126, 13.80
Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] QB 27
13.80
Stolt Tankers Inc v Landmark Chemicals SA [2002] 1 Lloyd’s Rep 786 13.42
Storer v Great Western Rly Co (1842) 2 Y & C CC 48, 61 ER 21 7.24
Stowell v Robinson (1837) 3 Bing NC 928, 132 ER 668 2.42n109, 11.10
The Strathallan see Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd
Ströms Bruks Aktie Bolag v Hutchinson [1905] AC 515 (HL(Sc)) 9.05, 13.53
The Subro Valour [1995] 1 Lloyd’s Rep 509 9.120
Suisse Atlantique Societe d’Armement Maritime SA v NV Rotterdamsche Kolen

Centrale [1967] 1 AC 361 (HL) 5.04, 5.05n6, 5.06, 5.16, 6.22, 12.04, 13.38n209,
13.44n234
Sumpter v Hedges [1898] 1 QB 673 (CA) 3.01, 10.04, 10.08, 10.09
The Sun Sapphire see André Cayman Islands Trading Co v Stolt Nielson B/V
Sunley v Cunard White Star [1940] 1 KB 740 (CA) 9.46, 9.117
The Super Servant Two see Lauritzen AS v Wijsmuller BV
Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 (CA) 9.101
Sutherland v Allhusen (1866) 14 LT 666 3.19
Sylvia Shipping Co Ltd v Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm),
[2010] 2 Lloyd’s Rep 81 9.26, 9.56
T & L Sugars Ltd v Tate & Lyle Industries Ltd [2015] EWHC 3107 (Comm) 3.17
The Tafaka see President of India v Hariana Overseas Corp
Talley v Wosley-Neech (1978) 38 P & CR 45 (CA) 13.38
Tamplin SS Co v Anglo-Mexican Petroleum Co Ltd [1916] 2 AC 397 (HL) 4.01n1,

12.10, 12.23, 12.23n63, 12.31, 12.59, 12.61, 12.103–12.104
Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm), [2010]
Private Law Library
Page 436
Tankexpress A/S v Compagnie Financière Belge des Petroles SA [1949] AC 76 (HL)

5.64
Tankrederei Ahrenkeil GmbH v Frahuil SA (The Multitank Holsatia) [1988] 2 Lloyd’s

Rep 486 5.52
Tarrabochia v Hickie (1856) 1 H & N 183, 156 ER 1168 11.16
Tatem v Gamboa [1939] 1 KB 132 12.18
Taverner & Co Ltd v Glamorgan CC (1941) 57 TLR 243 5.56
Taylor v Brown (1839) 2 Beav 180, 48 ER 1149, (1839) 9 LJ Ch 14 8.06, 8.18,

8.41n197
Taylor v Caldwell (1863) 3 B & S 826, 122 ER 309 4.01n1, 4.25, 6.19
Taylor v Clay (1846) 9 QB 713, 115 ER 1448 1.26
Taylor v Great Northern Rly (1866) LR 1 CP 385 1.12, 4.24
Taylor v Laird (1856) 1 H & N 266, 156 ER 1203 10.09
Taylor v Webb [1937] 2 KB 283 (CA) 10.06
Telfair Shipping Corpn v Athos Shipping Co SA (The Athos) [1983] 1 Lloyd’s Rep 127
(CA) 13.76
Tennants (Lancashire) Ltd v C S Wilson & Co Ltd [1917] AC 495 (HL) 5.88
Tennaro Ltd v Majorarch Ltd [2003] EWHC 2601, [2003] 47 EGCS 154 11.06, 11.29,
11.42
Tetley v Shand (1871) 25 LT 658 10.03n10(p. lviii)
Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC
1476 (Comm) 9.88
Thames Tideway Properties Ltd v Serfaty Partners [1999] 2 Lloyd’s Rep 110 5.27
Thames Valley Power Ltd v Total Gas & Power Ltd [2005] EWHC 2208, [2006] 1
Lloyd’s Rep 1 5.88, 12.66
Tharsis Sulphur & Copper Co Ltd v McElroy & Sons (1878) 3 App Cas 1040 (HL(Sc))
5.56
Tharsis Sulphur & Copper Co Ltd v Morel Bros & Co [1891] 2 QB 647 6.09
The Theraios see Lodza Compania de Navigacione SA v Govt of Ceylon
Thol v Henderson (1881) 8 QBD 457 9.50, 9.93
Thomas Borthwick (Glasgow) Ltd v Bunge & Co Ltd [1969] 1 Lloyd’s Rep 17 4.25
Thomas v Cadwallader (1744) Willes 496, 125 ER 1286 3.08, 3.17
Thomas v Thomas (1842) 2 QB 851, 114 ER 330 7.24
Private Law Library
Page 437
Thompson v Palmer [1893] 2 QB 80 (CA) 4.07n17
Thorn v Public Works Commrs (1863) 32 Beav 490, 55 ER 192 7.27
Thornhill v Neats (1860) 8 CB (NS) 831, 141 ER 1392 1.12, 5.83, 13.47
Thorpe v Thorpe (1701) 1 Ld Raym 662, 91 ER 1341 3.07, 3.14, 3.18
Tidebrook Maritime Corp v Vitol SA (The Front Commander) [2006] EWCA Civ 944,
[2006] 2 Lloyd’s Rep 251 1.03
Tidey v Mollett (1864) 16 CB(NS) 298, 143 ER 1143 3.14, 11.21
Tilley v Thomas (1867) LR 3 Ch App 61 1.05, 2.49, 8.10, 11.27
Timeload Ltd v British Telecommunications plc [1995] EHLR 459 (CA) 5.24
Tinckler v Prentice (1812) 4 Taunt 549, 128 ER 445 4.06
Tindal v Brown (1786) 1 Term Rep 167, 99 ER 1033 1.16
Tito v Waddell (No 2) [1977] Ch 106 7.05
Toepfer v Lenersan-Poortman BV [1980] 1 Lloyd’s Rep 143 (CA) 6.11, 11.29,

11.46n193
Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 561 (HL)
5.81
Torvald Klaveness A/S v Arni Maritime Corp (The Gregos) [1993] 2 Lloyd’s Rep 335
(CA) 11.14n44
Torvald Klaveness A/S v Arni Maritime Corp (The Gregos) [1994] 1 WLR 1465 (HL)
11.06, 11.14n44
Total Gas Marketing Co Ltd v Arco British Ltd [1998] 2 Lloyd’s Rep 209 (HL) 12.82
Total Transport Corp v Amoco Trading Co (The Altus) [1985] 1 Lloyd’s Rep 423 13.38,
13.44
Tote Bookmakers Ltd v Development Property Holding Co Ltd (1985) 49 P & CR 232
11.19
Touche Ross & Co v Secretary of State for the Environment (1983) 46 P & CR 187
(CA) 11.18, 11.29n118, 11.34, 11.36
Tracomin SA v Anton C Nielsen A/S [1984] 2 Lloyd’s Rep 195 5.52
Tradax Export SA v Dorada Compania Naviera SA (The Lutetian) [1982] 2 Lloyd’s Rep
140 4.03n4
Tradax Export SA v Italgrani di Francesco Ambrosio [1986] 1 Lloyd’s Rep 112 (CA)
3.17
Trade and Transport Inc v Iino Kaiun Kaisha Ltd (The Angelia) [1973] 1 WLR 210
5.89, 6.28, 8.22, 8.45, 12.27n67, 12.91
Private Law Library
Page 438
Tradigrain SA v King Diamond Shipping SA (The Spiros C) [1999] 2 Lloyd’s Rep 91

(CA) 1.12
The Trado see Marseille Fret SA v D Oltman Schiffahrts GmbH & Co KG
Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297 (CA) 3.02
Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2006] EWHC 3030
(Comm), [2007] 1 Lloyd’s Rep 19 9.25
Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2007] EWCA Civ
901, [2007] 2 Lloyd’s Rep 555 9.25(p. lix)
Transfield Shipping Inc v Mercator Shipping Inc (The Achilleas) [2008] UKHL 48,
[2009] 1 AC 61 9.05n15, 9.16, 9.24–9.27, 9.53, 9.56
Transgrain Shipping BV v Global Transporte Oceanico SA (The Mexico I) [1990] 1

Transocean Drilling UK Ltd v Providence Resources plc (The Arctic III) [2016] EWCA
Civ 372 5.09n20, 5.23
Tredegar Iron & Coal Co Ltd v Hawthorn Bros & Co (1902) 18 TLR 716 (CA) 5.66
Trench v Trewin (1696) 1 Ld Raym 124, 91 ER 980 3.07, 3.17
In Re Trent and Humber Co ex parte Cambrian Steam Packet Co (1868) LR 3 Ch App

112 9.57
Triggs v Newnham (1825) 1 C & P 631, 171 ER 1346 4.09n24
Triton Navigation Ltd v Vitoil SA (The Nikmary) [2003] EWCA Civ 1715, [2004] 1
Lloyd’s Rep 55 5.57n244, 5.66, 6.20, 13.42n223
Trollope v Colls Ltd v North Western Regional Hospital Board [1973] 1 WLR 601 (HL)
11.25
Trow v Ind Coope (West Midlands) Ltd [1967] 2 QB 899 (CA) 4.12
Trustees of Henry Smith’s Charity v AWADA Trading and Promotion Services (1983)
47 P & CR 607 (CA) 11.34
Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL) 4.25, 12.59n145, 12.65, 12.109,
12.110
Tully v Howling (1877) 2 QBD 182 (CA) 6.12, 12.31
Turner & Son v Confederation Life Insurance Co (UK) Ltd [2002] EWHC 2949 (Ch),
[2003] 31 EG 192 11.34
Tyers v Rosedale and Ferryhill Iron Co (1875) LR 10 Ex 195 5.63, 5.65, 5.81
UGS Finance Ltd v National Mortgage Bank of Greece [1964] 1 Lloyd’s Rep 446 (CA)
5.67
Uni-Ocean Lines PTE v C-Trade SA (The Lucille) [1984] 1 Lloyd’s Rep 244 (CA) 12.80
Private Law Library
Page 439
Union Assurance Society of Canton Ltd v George Wills & Co [1916] AC 281 (HL) 1.29,
4.19n70
United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd [1968] 1 WLR
74 (CA) 1.02, 1.12, 1.22, 1.36, 2.05, 6.03, 8.50n223, 11.31, 11.37
United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (HL) 1.34,
1.35, 1.36, 2.06, 2.10, 2.12, 2.36n90, 2.44, 2.47, 2.48, 2.51, 6.03, 8.25, 8.40n190,
8.42, 8.46, 8.50, 10.14n41, 11.04, 11.06, 11.11, 11.14, 11.18, 11.27, 11.34, 11.35
Universal Bulk Carriers Ltd v Andre et Cie [2001] 2 Lloyd’s Rep 65 (CA) 11.40
Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 4.03n4, 6.16, 6.28–6.29, 6.36,
8.22, 8.40, 8.45, 11.68, 12.07, 12.27n67, 12.37, 12.39–12.41, 12.42, 12.70n171,
12.79, 12.110, 13.40
Universal Cargo Carriers Corp v Citati (No 2) [1958] 2 QB 254 (CA) 6.28
Universal Corporation v Five Ways Properties Ltd [1979] 1 All ER 552 (CA) 13.64
Upperton v Nickolson (1871) LR 6 Ch App 436 8.38, 11.18
Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 816, [2014] 1 WLR 756 1.12, 8.23, 8.39,
8.49n222, 12.56, 12.70n171
Urban 1 (Blonk St) v Ayres [2013] EWCA Civ 1445, [2013] Ch 36 8.02, 8.10, 8.36
Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971] 1 QB 88 9.34
Valilas v Janujaz [2014] EWCA Civ 436, [2015] 1 All ER (Comm) 1047 11.14n43,
12.56, 12.73(p. lx)
The Varenna see Skips A/S Nordheim v Syrian Petroleum Co Ltd
Verrall v Great Yarmouth BC [1981] QB 202 CA 7.26n121
Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA) 9.07,
9.16, 9.19–9.21, 9.22, 9.23, 9.29, 9.31, 9.33, 9.52, 9.53, 9.57, 9.113, 9.124
Victoria Seats Agency v Paget (1902) 19 TLR 16 12.81
Vigers v Cook [1919] 2 KB 475 (CA) 6.23
Vinmar International v Theresa Navigation SA [2001] 2 Lloyd’s Rep 1 9.83
Virulite LLC v Virulite Distribution Ltd [2014] EWHC 366 (QB) 5.78, 5.81
Visionhire Ltd v Britel Fund Trustees Ltd [1992] 1 EGLR 128 (Ct of Session) 11.06,
11.08, 11.34
Vitoil SA v Norelf Ltd [1996] AC 800 (HL) 5.66, 5.67n296, 6.32
Vitoil SA v Phibro Energy AG [1990] 2 Lloyd’s Rep 84 4.03
Vivienne Westwood Ltd v Conduit Street Development Ltd [2017] EWHC 350 (Ch),
[2017] L & TR 23 13.50
Private Law Library
Page 440
Vlierboom v Chapman (1844) 13 M & W 230, 153 ER 96 3.19
Wadcock v Brent LBC [1990] IRLR 223 7.33
Wade’s Case (1601) 5 Co Rep 114A, 77 ER 232 4.06
Wadsworth v Lydall [1981] 1 WLR 598 (CA) 9.67, 9.129
Re Wait [1927] 1 Ch 606 (CA) 7.28n135, 7.29
Wales v Wales and anor (1967) 111 SJ 946 9.73
Walker v Eastern Counties Rly (1848) 6 Hare 594, 67 ER 1300 7.26
Walker v Jeffreys (1841) 1 Hare 348, 66 ER 1064 11.27n105
Wall v Rederiaktiebolaget Luggude [1915] 3 KB 66 13.49n258
Wallems Rederij A/S v Muller & Co [1927] 2 KB 99 9.75
Wallingford v Mutual Society (1880) 5 App Cas 685 (HL) 13.52
Wallis, Son & Wells v Pratt & Haynes [1910] 2 KB 1003 (CA) 2.31n70, 2.32, 2.38,
5.66n280, 6.21
Wallis v Smith (1882) 21 Ch D 245 13.50
Walter Lilly & Co Ltd v Mackay [2012] EWHC 1773 (TCC), [2012] BLR 503 13.18
Walton v Mascall (1844) 13 M & W 452, 153 ER 188 4.07
Warde v Feedex International Inc [1985] 2 Lloyd’s Rep 290 3.17, 11.22, 11.29
Warinco AG v Fritz Mauthner [1978] 1 Lloyd’s Rep 151 (CA) 5.90
Warmington v Miller [1973] QB 877 (CA) 7.13
Warner Bros Pictures Inc v Nelson [1937] 1 KB 209 7.33, 13.32, 13.32n192
Warner v Armfield Retail & Leisure Ltd [2014] ICR 239 (EAT) 12.06
Waters v Towers (1853) 8 Ex 401, 155 ER 1404 9.02, 9.61, 9.99
Watford Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317, [2001] Build LR
143 5.27
Watson v Gray (1900) 16 TLR 308 9.06, 9.62, 9.113
Watts, Watts & Co Ltd v Mitsui & Co Ltd [1917] AC 227 (HL) 13.49n258
Watts v Morrow (2000) 116 LQR 556 9.72n251, 9.73
Webb v Fairmaner (1838) 3 M & W 473, 150 ER 1231 4.11
Wells v Army & Navy Co-operative Society [1902] 86 LT 764 5.57, 13.47
Wells v Maxwell (1863) 33 LJ Ch 44 8.17, 8.28
Private Law Library
Page 441
The Wenjiang see International Sea Tankers Inc v Hemisphere Shipping Co Ltd
Wertheim v Chicoutimi Pulp Co [1911] AC 301 9.86, 9.112n401
West v Blakeway (1841) 2 M & G 729, 133 ER 940 5.82
West Yorkshire MCC v Trinette (28 January 1986) 12.97
Westbrook Resources v Globe Metallurgical Inc [2009] EWCA Civ 310, [2009] 2
Western Bulk Carriers K/S v Li Hai Maritime Inc (The Li Hai) [2005] EWHC 735
(Comm), [2005] 1 CLC 704, [2005] 2 Lloyd’s Rep 389 5.75, 13.77(p. lxi)
Westland v Robinson (1667) Eq Cas Abr 376, 21 ER 1113 10.09
Westminster Corporation v Jarvis & Sons Ltd [1970] 1 WLR 637 1.01
Weston v Collins (1865) 34 LJ Ch 353 11.31
Westwood and anor v Secretary of State for India (1863) 1 New Rep 262 13.47
Whistler International Ltd v Kawasaki Kisen Kaisha Ltd (The Hill Harmony) [2001] 2
AC 638 (HL) 1.03, 5.15, 13.13
Whitbread and Co Ltd v Watt [1902] 1 Ch 835 (CA) 8.36
Re White and Arthur (1901) 17 TLR 461 13.54n283
White Arrow Express Ltd v Lamey’s Distribution Ltd (1995) 145 NLJ 1504 (CA) 9.02,
9.104
White & Carter (Councils) Ltd v McGregor [1962] AC 413 (HL(Sc)) 6.34, 7.38–7.40,
7.38n181, 9.78
White Rosebay Shipping SA v Hong Kong Chain Glory Shipping Ltd (The Fortune
Plum) [2013] 1355 (Comm), [2013] 2 CLC 884 5.67
White v Blackmore [1972] 2 QB 651 (CA) 5.20
White v Riverside Housing Association Ltd [2007] UKHL 20, [2008] 1 P & CR 13
11.34, 11.43
White v Warner (1817) 2 Mer 459, 35 ER 1016 11.52
Wickman Machine Tool Sales Ltd v Schuler AG [1971] 1 WLR 840 (CA) 2.28n62
Wigan Coal & Iron Co Ltd v Eckersley (1910) 103 LT 468 (HL) 1.03, 11.22
Wiggins v Ingleton (1705) 2 Ld Raym 1211, 92 ER 300 10.09
Wigginton v Dodd (1862) 2 F & F 844, 175 ER 1313 1.12, 1.16, 4.20
Wilde v Fort (1812) 4 Taunt 334 11.10
Wilderbrook Ltd v Oluwu [2005] EWCA Civ 1361 11.34
Private Law Library
Page 442
The Wilhelm (1866) 14 LT 636 9.13
Wilkins v Jadis (1831) 2 B & Ad 188, 109 ER 1113 4.09
Wilkinson v Clements (1872) LR 8 Ch App 96 7.08, 7.31
Williams Bros v ET Agius Ltd [1914] AC 510 (HL) 9.86n308, 9.92n322, 9.108, 9.110
Williams v Brisco (1882) 22 Ch D 441 (CA) 3.17
Williams v Greatrex [1957] 1 WLR 31 (CA) 1.04
Williams v Reynolds (1865) 6 B & S 495, 122 ER 1278 9.93
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (CA) 5.59
Williams v Stern (1879) 5 QBD 409 (CA) 5.80
Williams v Watson’s Luxury Coaches Ltd [1990] 1 IRLR 164 (EAT) 12.06
Wilmott v Barber (1880) 15 Ch D 96 7.13
Wilson v Lancashire and Yorkshire Railway Co (1861) 9 CBNS 632, 142 ER 248 9.44,
9.49, 9.61, 9.115, 9.121
Wilson v Maynard Shipbuilding Consultants AB [1978] QB 665 (CA) 4.19n70
Wilson v Newport Dock Co (1866) LR 1 Ex 177 9.13
Wilson v United Counties Bank [1920] AC 102 (HL) 9.83
Wiluszynski v Tower Hamlets LBC [1989] IRLR 259 (CA) 5.93
Wimshurst v Deeley (1845) 2 CB 253, 135 ER 912 11.46n193
The Windfall see Nigerian National Shipping Lines Ltd v Mutual Ltd
Withers v Reynolds (1831) 2 B & Ad 882, 109 ER 1370 6.26
Withy v Cottle (1823) Turn & R 78, 37 ER 1024 2.09, 2.42, 2.49, 11.27
WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 (CA) 5.78
Wolverhampton Corporation v Emmons [1901] 1 KB 515 (CA) 7.16, 7.31
Wood v Berkeley Homes (Sussex) Ltd (1992) 64 P & CR 311 (CA) 8.14
Wood v Capita Insurance Services Ltd [2017] UKSC 24 11.07, 11.40n162
Wood v Sureterm Direct Ltd [2017] UKSC 24, [2017] 2 WLR 1095 3.22
Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR

277 (HL) 6.25, 6.26n105
Woodfield SS Co v Thompson (1919) 1 Ll L R 126 (CA) 12.64
Woodger v Great Western Railway Co (1867) LR 2 CP 318 9.62, 9.120
Private Law Library
Page 443
Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC

741 (HL) 5.75(p. lxii)
Woolfe v Horne (1877) 2 QBD 355 8.40n190
Worker’s Trust and Merchant Bank Ltd v Dojap Investments Ltd 13.63
Workman, Clark & Co Ltd v Lloyd Brasileno [1908] 1 KB 568 (CA) 7.37, 7.37n173
The World Navigator see Kurt A Becher GmbH & Co KG v Roplak Enterprises SA
Wright v Howard (1823) 1 Sim & St 190, 57 ER 76 11.27
Wroth v Tyler [1974] Ch 30 7.23, 9.52, 9.53
Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798 9.102, 9.102n364
Wuhan Ocean Economic & Technical Co-operation Co Ltd v Schiffahrts-Gesellschaft

‘Hansa Murcia’ mbH & Co KG [2012] EWHC 3104 (Comm), [2013] 1 Lloyd’s Rep 273
12.32
WW Gear Construction Ltd v McGee Group Ltd [2010] EWHC 1460 (TCC), (2010) 131
Con LR 63 3.14, 3.21
WWF World Wide Fund for Nature v World Wrestling Federation Entertainment Inc
[2007] EWCA Civ 286 9.103n369
Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB), [2013] 1
CLC 662 9.98
Re Yeadon Waterworks Co and Binns and Wright (1875) 72 LT 538 13.46
Yeoman v R [1904] 2 KB 429 (CA) 6.09
Young v Higgon (1840) 6 M & W 50, 151 ER 317 4.13
Young v Purdy [1997] 2 PNLR 130 (CA) 9.13
The Zinnia see Stag Line Ltd v Tyne Shiprepair Group Ltd
The Zuiho Maru see Kawasaki Steel Corpn v Sardoil SpA
Other National Cases

Anguilla
Thompson v Corroon [1993] NPC 54 (PC) 6.26n105
Australia
Abraham v Mallon (1975) 1 BPR 9157 (Supreme Ct of New South Wales) 8.28
Adams v Quasar Management Services Pty Ltd [2002] QSC 223 (Supreme Ct of
Queensland) 8.31
Private Law Library
Page 444
Amann Aviation Pty Ltd v Commonwealth of Australia (1990) 92 ALR 601 (Federal Ct
of Australia) 8.20
Andrews v ANZ Banking Group [2012] HCA 30, (2012) 290 CLR 595 13.59
Austral Standard Cables Pty v Walker Nominees Pty [1992] ALMD 5513 (CA of New
South Wales) 6.33
Balog v Crestani (1975) 132 CLR 289 (High Ct of Australia) 8.34, 8.34n159
Baltic Shipping Co v Dillon (1993) 176 CLR 344 (High Ct of Australia) 9.74n256
Bank v Koutoulis (Supreme Court of New South Wales, 1975) 8.15
Barrett v Beckwith (1974) 1 BPR 9731 (Supreme Court of Victoria) 8.28
Bazzana v McNamara (1981) 2 BPR 9396 (Supreme Ct of New South Wales) 8.14,
8.28
Brown v Heffer (1967) 116 CLR 344 (High Ct of Australia) 11.60
Byrnes v Kendle [2011] HCA 26, (2011) 243 CLR 253 3.22
Carr v JA Berriman Pty Ltd (1953) 27 ALJR 273, (1953) 89 CLR 327 (High Ct of
Australia) 5.56, 8.48
Castle Hill Tyres Pty Ltd v Luxspice Pty Ltd (1996) 7 BPR 14959 (Supreme Ct of New
South Wales) 8.20
Charles Investments Pty Ltd v Karakis [2002] NSWSC 1213 8.33
Collingridge v Sontor Pty Ltd (No 2) (1997) 141 FLR 440 (Supreme Ct of New South
Wales) 8.35(p. lxiii)
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 (High Ct of
Australia) 9.98
Commr for Main Roads v Reed & Stuart Pty Ltd (1974) 12 BLR 55 (High Ct of
Australia) 5.56
Craine v Colonial Mutual Fire Insurance Co Ltd (1920) CLR 305 (High Ct of Australia)
5.66
Crnokrak v Avifed Pty Ltd (Supreme Ct of New South Wales, 3 November 1990) 8.14
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 (High Court of
Australia); 5.04
Fekala Pty Ltd v Castle Constructions Pty Ltd [2002] NSWCA 297 8.38
Fileman v Liddle (1974) 2 BPR 9192 (Supreme Ct of New South Wales) 8.27
Fiske v Sterling Investment Co Pty Ltd (1977) 3 ACLR 158 8.29, 8.31
Freeman v Jacobs (1980) 1 BPR 9273 (Supreme Ct of New South Wales) 8.14, 8.31
Private Law Library
Page 445
Gaymark Investments Pty Ltd v Walter Construction Group Ltd (2005) 21 Const LJ 71
(Supreme Ct of Northern Territories) 5.83, 13.47
Gogard Pty Ltd v Satnaq Pty Ltd [1999] NSWSC 1283 8.14
GR Mailman and Associates Pty Ltd v Wormald (Australia) Pty Ltd (1991) 24 NSWLR
80 (New South Wales Ct of Appeal) 12.96n229
Gustin v Taajamba Pty Ltd (1988) 4 BPR 9373 (New South Wales Ct of Appeal) 8.24,
8.30
Halkidis v Bugeia [1974] 1 NSWLR 423 (Supreme Ct of New South Wales) 8.15
Hewitt v Debus [2003] NSWSC 176 1.04n16
Hewitt v Debus [2004] NSWSA 54 13.75n348
Holland v Wiltshire (1954) 90 CLR 409 (High Ct of Australia) 5.67
Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd [2007] NSWCA
235 3.22
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61, (2007)
241 ALR 88, (2007) 233 CLR 115 6.15, 12.68, 12.73
Legione v Hateley (1983) 152 CLR 406 (High Ct of Australia) 2.45, 8.18n85, 8.37,
8.48, 8.48n216, 11.18, 11.60, 11.61, 11.63, 11.63–11.65, 13.75
Lenneberg v McGirr (1919) 19 SR (NSW) 83 (Supreme Ct of New South Wales) 8.34
Louinder v Leis (1982) 149 CLR 509, 41 ALR 187 (High Ct of Australia) 1.05, 8.48
Malouf v Sterling Estates Development Corporation Pty Ltd [2002] NSWSC 920
8.36n176
Maxsujur Pty Ltd v Asimus [1980] 2 NSWLR 96 (Supreme Ct of New South Wales)
8.15
McNally v Waitzer [1981] 1 NSWLR 294 (New South Wales Ct of Appeal) 8.13, 8.15
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 (High Ct of

Australia). 9.96
Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 (New South Wales Ct of Appeal)
8.27, 8.29
Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 (High Ct of Australia) 1.05,
8.12, 8.33, 11.09
O’Brien v Dawson (1941) 41 SR (NSW) 295 8.26
Overseas Tankship UK Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound)
[1961] AC 338 (PC) 9.23n66
Park v Brothers [2001] NSWSC 88 (Supreme Ct of New South Wales) 1.08
Private Law Library
Page 446
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153
ALR 643 (High Ct of Australia) 7.17n69(p. lxiv)
Pavlovic v Commonwealth Bank of Australia (1992) 56 SASR 587 (Supreme Ct of

South Australia) 9.73
Pearce v Kelly (1919) 20 SR (NSW) 88 (Supreme Ct of New South Wales) 8.35
Pianta v National Finance and Trustee Co Ltd (1964) 180 CLR 146 (High Ct of
Australia) 7.26
Port of Geelong Authority v The Ship ‘Bass Reefer’ (1992) 109 ALR 505 (Federal Ct of
Australia) 1.15n49
Rands Developments Pty Ltd v Davis (1975) 133 CLR 26 (High Ct of Australia) 8.15
Romanos v Pentagold Investments Pty Ltd (2003) 201 ALR 399, 217 CLR 367 (High Ct
of Australia) 2.45, 11.64
Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5,
(2002) 240 CLR 45 3.22
SMK Cabinets v Hili Modern Electrics [1984] VR 391 (Supreme Ct of Victoria) 13.47
Spencer v Cali [1986] 2 Qd R 456 (Supreme Ct of Queensland) 8.36n176
Stern v McArthur (1988) 165 CLR 489 (High Ct of Australia) 2.45, 11.60, 11.61
Strada Estates Pty Ltd v Harcla Hotels Pty Ltd (1980) 25 SASR 284 (Supreme Ct of
South Australia). 8.29
Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 (High Ct of Australia) 2.45,
11.64
Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 (Supreme Ct of New
South Wales) 8.35, 8.48
TC Industrial Plant Pty Ltd v Roberts (Queensland) Pty Ltd [1964] ALR 1083 (High Ct
of Australia) 9.99
The Wagon Mound see Overseas Tankship UK Ltd v Morts Dock & Engineering Co Ltd
Thornton v Bassett [1975] VR 407 (Supreme Ct of Victoria) 8.28
Tricontinental Corporation v HDFI Ltd (1990) 21 NSWLR 689 (CA of New South
Wales) 2.22
Tropical Traders Ltd v Goonan (1964) 111 CLR 41 (High Ct of Australia) 8.36n176
Turner v Bladin (1951) 82 CLR 463 (High Ct of Australia) 7.11
Van Reesema v Giameos (No 2) (1978) 17 SASR 353 (Supreme Ct of South Australia).
8.14
Vandyke v Vandyke (1976) 12 ALR 621 (New South Wales Ct of Appeal) 8.35n168
Private Law Library
Page 447
Vines v Djordjevitch (1955) 91 CLR 512 (High Ct of Australia) 11.22
Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (High Ct of Australia)
5.79n340
Wilde v Anstee [1999] NSWSC 612 8.34
Winchcombe Carson Trustee Co Ltd v Ball-Rand Pty Ltd [1974] 1 NSWLR 477
(Supreme Ct of New South Wales) 1.05
Bermuda
Paynter and Paynter v Holder and Holder [1986] Bda R 10 (Bermuda Ct of Appeal)
1.08
Canada
Beckett v Karklins (1975) 50 DLR (3d) 21 (High Ct of Justice, Ontario) 8.14
Bernard v Williams (1928) 139 LT 22; SES, (1930) 8 Can BR 61 11.27
Bowlay Logging v Domtar Ltd [1978] 4 WWR 105 (Supreme Ct of British Columbia)
9.11, 9.97
Canadian Terminal System Ltd v Kingston [1935] 4 DLR 713 (Supreme Ct of Canada)
11.18(p. lxv)
Canwest Pacific Television Inc v 147250 Canada Ltd (1987) 5 ACWS (3d) 431 (British
Columbia Ct of Appeal) 1.10
Carlson, Carlson, and Hettrick v Big Bud Tractor of Canada Ltd (1981) 7 Sask R 337
(CA of Saskatchewan) 1.33, 2.16, 11.31n126
Colliers McClocklin Real Estate Corporation v Lloyd’s Underwriters [2003] SKQB 383
(High Ct of Saskatchewan) 2.22
Colliers McClocklin Real Estate Corporation v Lloyd’s Underwriters [2004] 11 WWR

(CA of Saskatchewan) 2.22
Dacon Construction Ltd v Karkoulis (1964) 44 DLR 2d 403 (High Ct of Ontario) 3.01
Dobell v Cowichan Copper Co (1968) 65 DLR (2d) 440 (Supreme Ct of British

Columbia) 7.30
Eansor v Eansor [1946] 2 DLR 781 (Supreme Ct of Canada) 7.30
Re Empire Shipping Co and Hall Bryan Ltd [1940] 1 DLR 695 (Supreme Ct of British
Columbia) 11.46
First City Trust Co v Triple Five Trust Corporation Ltd (1989) 57 DLR (4th) 554
(Supreme Ct of Canada) 2.22
Foster v Heintzmann [1923] 4 DLR 166 (Supreme Ct of Ontario) 1.27
Frank v Sun Life Assurance Co (1893) 20 Ont App Rep 564 1.02
Private Law Library
Page 448
Hanson v Cameron [1949] 1 DLR 16 (Supreme Ct of Canada) 8.33
Herron v Hunting Chase Inc (2003) 124 ACWS (3d) 487 2.22n51
Hobart Investment Corp v Walker (1976) 68 DLR 3d 348 1.33
Hope and Sons v Canada Foundry Co (1917) 39 DLR 308 (Supreme Ct of Ontario)
4.24
Johnson v Dunn (1905) 11 BCR 372 (Supreme Ct of British Columbia) 8.50n223
King’s Old Country Ltd v Liquid Carbonic Canadian Corporation [1942] 2 WWR 603
(KB, Manitoba) 11.22
Knight Sugar Co v Alberta Rly and Irrigation Co [1938] 1 All ER 266 (PC) 9.128
Owens v Upham (1909) 39 NBR 198 (Supreme Ct of New Brunswick) 11.22
Quadrant Visual Communications Ltd v Hutchinson Telephone UK Ltd [1993] BCLC

442 (CA) 13.32
R v Cuthbertson [1949] 4 DLR 369 (Exchequer Ct of Canada) 11.22
Roberto v Bumb [1943] 2 DLR 613 (CA of Ontario) 7.10
Roy v Kloepfer Wholesale Hardware and Automotive Co Ltd [1951] 3 DLR 122
(Supreme Ct of Canada) 7.10
Sanko SS Co v Eacom Timber Sales Ltd [1987] 1 Lloyd’s Rep 487 (Supreme Ct of
British Columbia) 12.41, 12.44
Steedman v Drinkle [1916] 1 AC 275 (PC) 11.19, 11.58, 11.59, 13.68
Tritav Holdings v National Bank of Canada (1996) 47 CPC (3d) 91 (Ontario General
Division) 13.32
Wingold v William Looser & Co Ltd [1951] 1 DLR 429 (CA of Ontario) 1.30n103
Zhilka v Turney [1959] SCR 578 (Supreme Ct of Canada) 1.33, 2.16, 11.31n126
FIJI
Maharaj v Jai Chand [1986] AC 898 (PC) 5.73
Hong Kong
Arnhold & Co v Attorney-General of Hong Kong (1989) 5 Const LJ 263 (High Ct of
Hong Kong) 13.54n283
Lord Energy Ltd v Chen Paul and another [1997] 3 HKC 270 (High Ct of Hong Kong)
8.07
Man Sun Finance (International) Corp v Lee Ming Ching Stephen [1993] 1 HKC 113
(CA of Hong Kong) 1.08
Pao On v Lau Yiu Long [1980] AC 614 (PC) 5.59
Private Law Library
Page 449
Philips Hong Kong Ltd v Attorney- General of Hong Kong (1993) 61 Build LR 41 (PC)
13.50, 13.52, 13.53(p. lxvi)
Tang Man Sit v Capacious Investments Ltd [1996] AC 514 (PC) 9.102
Tsang Cheung Kit & Ors v Hong Kong Housing Authority [1982] 1 HKC 268 (High Ct
of Hong Kong) 1.08
Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 (PC) 2.45n127, 4.03, 11.62
Wong Lai Ying v Chinachem (1979) 13 BLR 86 (PC) 12.97
India
Burn v HH Thakur Sahib AIR 1924 Calcutta 427 8.50n223
Hind Construction Contractors v State of Maharashtra AIR 1979 SC 721 8.50n223
Ireland
Courtnay v Waterford Railway (1878) 4 LR Ir 11 1.12, 5.83, 13.47
Harnett v Yeilding (1805) 2 Sch & Lef 549 (High Ct of Chancery in Ireland) 7.05
Leeson v North British Oil and Candle Co (1874) IR 8 CL 309 1.30n103
Lennon v Napper (1802) 2 Sch & Lef 682 (High Ct of Chancery in Ireland) 2.08, 2.15,
2.40, 8.04
Ross Bros Ltd v Edward Shaw & Co [1917] 2 IR 367 (KBD (Ireland)) 1.24, 1.30
Re Todd & McFadden’s Contract [1908] 1 IR 213 1.03, 11.22
Israel
Adras Ltd v Harlow & Jones GmbH, noted at (1988) 104 LQR 385 9.104
Malaysia
Electcoms Sdn Bhd v Internet Technology Asia Ventures Sdn Bhd [2002] 481 MLJU 1
8.36n176
New Zealand
Adamson v Barton [1981] 2 NZLR 690 (High Ct of New Zealand) 8.14, 8.15
Barber v Crickett [1958] NZLR 1057 (Supreme Ct of New Zealand) 3.01
Bisley v Thompson [1982] 2 NZLR 696 (New Zealand Ct of Appeal) 9.69
Brown v Langwoods Photo Stores [1991] 1 NZLR 173 (New Zealand Ct of Appeal)
6.20
Cable (William) Ltd v Trainor [1957] NZLR 337 1.01
Dwyer v Hunter [1951] NZLR 177 (New Zealand Ct of Appeal) 1.15n49
Private Law Library
Page 450
Firm PI Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147 3.22
Ingram and Knee & Kip Investments Ltd v Patcroft Properties Ltd [2011] 3 NZLR 433
6.31n127
Jacobs v Bills [1967] NZLR 249 7.19
Kennedy v Jenkins (1909) 28 NZLR 1073 (Supreme Ct of New Zealand) 3.14, 11.21
MacIndoe v Mainzeal Group Ltd [1991] 3 NZLR 273 8.50n223
Melanesian Mission Trust Board v Australian Mutual Provident Society [1997] 2 EGLR
128 (PC) 11.06
Meyer v Gilmer (1899) 18 NZLR 129 (Supreme Ct of New Zealand) 13.48n255
Morris v Robert Jones Investments Ltd [1994] 2 NZLR 275 (New Zealand Ct of
Appeal) 1.08, 8.34, 8.49n219, 8.50n223
Murdoch v Luckie (1897) 15 NZLR 296 (Supreme Ct of New Zealand) 13.48n255
O’Sullivan v Moodie [1977] 1 NZLR 643 (Supreme Ct of NZ) 1.05
P v P [1957] NZLR 854 (Supreme Ct of New Zealand) 5.78
Pym v Campbell (1856) 6 E & B 370, 119 ER 903 3.03
Rutherford v Acton-Adams [1915] AC 866 (PC) 7.20
Scott v Rania [1966] NZLR 656 (New Zealand Ct of Appeal) 3.03
Thomas v Monaghan [1977] 1 NZLR 1 (New Zealand Ct of Appeal) 1.05(p. lxvii)
Valentines Properties Ltd v Huntco Corporation Ltd [2001] UKPC 14, 2001 WL 27291
11.31
Wing Crawford Holdings Ltd v Lion Corporation Ltd [1989] 1 NZLR 563 (High Ct of
NZ) 1.12, 1.25n90
Singapore
Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] SGCA 35, [2014]
3 SLR 857 12.97
Holchim (Singapore) Pte Ltd v Kwon Yong Construction Pte Ltd [2008] SGHC 231,
[2009] SLR (R) 193 12.97
Lie Kie Siang v Han Ngum Juan Marcus [1992] 1 SLR 476 (High Ct of Singapore) 1.08
Lim Hoe Heng v Poh Choon Kia [2013] 1 SLR 152 (Singapore Ct of Appeal) 1.08
Out of the Box Pte Ltd v Wanin Industries Pte [2013] SGCA 15, [2013] 2 SLR 363
9.27n87
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd [2007] SGCA 39, [2007] 4 SLR 413
6.15, 12.68
Private Law Library
Page 451
Sentinel International Ltd v Cordes [2008] UKPC 60 8.48
Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] AC 576 (PC) 5.15
South Africa
Group Five Building Ltd v Minister of Community Development 1993 (3) SA 629(A)
5.57
Public Works Commissioner v Hills [1906] AC 368 (PC) 13.53
Trinidad and Tobago

Mahase and others v Ramlal [2003] UKPC 12 [2004] P & CR 1 1.12, 8.12, 8.17, 8.19
United States
31171 Owners v New York City Dept of Housing 190 AD 2d 441, 599 NYS 2d 19
(1993) (New York) 3.06
Albert & Son v Armstrong Rubber Co 178 F 2d 182 (1949) (USCA) 9.11, 9.97
Bank of Syracuse v Hollister 17 NY 46 (1858) (New York) 4.09
Bank of US v Carneal 2 Pet 543, 27 US 343 (1829) (US Supreme Court) 4.09
Berman Stores Co v Hirsch 240 NY 209, 148 NE 213 (1925) 1.23n85
Berry v Nall and Duxberry 54 Ala 446 (1875) (Alabama) 4.09
Boyd v Gunnison 14 W Va 1 (1878) 1.23n85
Brauer v Freccia 159 Conn 289, 268 A 2d 645 (1970) (Connecticut) 11.21
Cameron Coal Co v Universal Metal Co 26 Okl 615, 110 P 720 (1910) 1.23n85
Centex Homes Corporation v Boag 128 NJ Super 385, 320 A 2d 194 (1974) (New
Jersey) 7.26
Cheyenne Dodge Inc v Reynolds and Reynolds Co 613 P 2d 1234 (1980) (Wyoming)
3.21
Chugach Electrical Association v Northern Corp 562 P 2d 1053 (1977) (Alaska) 12.97
Chung v Pericleous [1981] CLY 2277 8.12
City and County of Honolulu v Kam 48 Haw 349, 402 P 2d 683 (1965) 1.17
Colbath v Stebbins Lumber Co 127 Me 406,144 A 1 (1929) (Maine) 11.21
Colorado Women’s College v Bradford-Robinson Printing Co 114 Colo 237, 157 P 2d

612 (1945) (Colorado) 8.50n223
Consolidated Irrigation District v Crawshaw 130 Cal App 455, 20 P 2d 119 (1933)
(California) 3.18
Private Law Library
Page 452
Criswell v European Crossroads Shopping Center Ltd (Tex, 1990) 792 SW 2d 945
(1990) (Texas) 3.14, 3.21(p. lxviii)
Denison v Ladd 54 Nev 186, 10 P 2d 637 (1932) 1.21
Dennis v Stoughton 55 Vt 371 (1883) 1.17, 1.28n99
DEW Inc v Depco Forms Inc (Tex App, 1992) 827 SW 2d 379 (1992) (Texas) 3.21
Doctorman v Schroeder 92 NJ Eq 376, 114 A 810 (1921) (New Jersey) 11.19
Dunton v Stemme 117 Colo 327, 187 P 2d 593 (1947) (Colorado) 11.19
Elson v Jones 42 Idaho 349, 245 P 95 (1926) (Idaho) 3.17
Franklin Paint Co v Flaherty 139 Me 330, 29 A 2d 651 (1943) 1.17
Fresno Canal and Irrigation Co v Perrin 170 Cal 411, 149 P 805 (1915) (California)
3.18
General State Authority v Loffredo 16 Pa Comm (1974) 328 A 2d 886 (1974)

(Pennsylvania) 3.06
Glen Cove Marina Inc v Vessel Little Jennie 269 F Supp 877 (1967) (USDC) 8.50n223
Goldfarb v Cohen 92 Conn 277, 102 A 649 (1917) (Connecticut) 10.12n40
Green Construction Co v Department of Transportation 164 Pa Comm 566, 643 A 2d

1129 (1994) (Pennsylvania) 3.06
Gurski v Doscher 112 App Div 345, 98 NYS 588 (1906) (New York) 3.06
Harris v Pacific Mutual Life Insurance Co 137 F 2d 272 (1943) (USCC) 10.12n40
Jaslow v Waterbury Co CCA (2nd Circuit), 296 F 363 (1924) 1.22
Jay Clutter Custom Digging v English 181 Ind App 603, 393 NE 2d 230 (1979)
1.23n85
Kennelly v Shapiro 222 AD 488, 226 NYS 692 (1928) (New York) 3.18
Koedding v Slaughter 634 F 2d 1095 (1980) (USCA) 11.21
Kram v Losito 105 NJL 588, 147 A 465 (1929) (New Jersey) 10.12n40
Landscape Design v Harold Thomas Excavating Co Tex Civ App, 604 SW 2d 374
(1980) (Texas) 11.21
Lippincott v Content 123 NJL 277, 8 A 2d 362 (1939) (New Jersey) 10.12n40
Lukens Iron and Steel Co v Hartmann-Greiling Co 169 Wis 350, 172 NW 894 (1919)
1.28
Madera Canal and Irrigation Co v Arakelian Inc 103 Cal App 592, 284 P 271 (1930)
(California) 3.18
The Malcolm Baxter (1928) 31 Ll L R 200 (US Supreme Ct) 9.13n44
Private Law Library
Page 453
Manners v Hirschenhorn 116 NYS 2d 532 (1952) (New York) 4.09
McFarland v Pico 8 Cal 626 (1857) (California) 4.09
Mecham v Nelson 92 Idaho 783, 451 P 2d 529 (1969) (Idaho) 3.17
Miceli v Dierberg Mo App E D 1989, 773 SW 2d 154 (1989) (Missouri) 4.03
Minthorne v Seeburg Corp 397 F 2d 237 (1968) (US CA) 3.21
Mizell v Burnett 49 NC 249, 69 Am Dec 744 (1857) 1.22, 1.24
Morris v Sparrow 225 Ark 1019, 287 SW 2d 583 (1956) (Arkansas) 7.27n130
Morse v Bellows 7 NH 549, 28 Am Dec 372 (1835) 1.18
PDQ Lube Center Inc v Huber (Utah App, 1997) 949 P 2d 792 (1997) (Utah) 3.21
Randolph v Frick 57 Mo App 401 (1894) 1.18
Reed v Wilson (1879) NJLR 29 (New Jersey) 4.09
Richard v Falleti 13 NJ Super 534, 81 A 2d 17 (1951) (New Jersey) 10.12n40
Rochester Distilling Co v Geloso 92 Conn 43, 101 A 500 (1917) 1.24, 1.26
Schwarz-Jordan Inc v Delisle Construction Co (Tex, 1978), 569 SW 2d 878 (1978)

(Texas) 3.14
Stange v Wilson 17 Mich 342 (1868) 1.23n85
Szanto v Pagel Tex Civ App, 47 SW 2d 632 (1932) 1.21
Transbay Construction Co v City and County of San Francisco, 35 F Supp 433 (1940)
(California) 12.107n260
Transbay Construction Co v City and County of San Francisco, 134 F 2d 468 (1943)
(US CCA) 12.107n260
US v 476 Acres of Land (USDC WD Pa) 86 F Supp 632 (1949) 1.20
Yamanishi v Bleily and Collishaw Inc 29 Calif A 3d 457 (1972) (California) 3.21
Zone Co v Service Transport Co 137 NJL 112, 57 A 2d 562 (1948) 1.17, 1.23n85
Private Law Library
Page 454
Table of International Legislation

John E. Stannard

John Stannard

ISBN: 9780198792321
Treaties and Conventions

CMR Convention 1956 (Convention on the Contract for the International Carriage of
Goods by Road) 5.11
Art 17.1 6.12
Art 17.4 5.11
Art 41.1 5.47
COTIF Convention 1980 (Convention Concerning International Carriage by Rail) 5.11

Art 26(2) 5.11
Hague-Visby Rules (International Convention for the Unification of Certain Rules of

Law relating to Bills of Lading) 3.19, 5.07, 5.08, 5.11, 5.32, 5.33
Art III
(1) 5.47
(a) 3.19
(2) 5.47
(3) 3.19
(8) 5.47
Art IV.2 5.11
Brussels Protocol 1968 3.19n75
Private Law Library
Page 455
Montreal (Amendment) Convention 1999

Art 19 6.12
Art 22 5.11
Warsaw Convention 1929 (Convention for the Unification of Certain Rules relating to
International Carriage by Air) 5.11, 6.12
Art 23 5.47
Directives
European Union
EC 93/13 on Unfair Terms in Consumer Contracts [1993] 5.34
Recital 16 5.39, 5.40
Recital 19 5.42
(p. lxx)
Private Law Library
Page 456
Table of Statutes
John E. Stannard

John Stannard

ISBN: 9780198792321
United Kingdom
Apportionment Act 1870
s 2 10.09
Arbitration Act 1950

s 13A 5.52
Arbitration Act 1996

s 41 5.51, 5.52
s 69(2)–(3) 12.108n262
Bills of Exchange Act 1882

s 45(3) 4.09
Caravan Sites and Control of Development Act 1960

s 14 4.12
Carriage by Air Act 1961 5.11
Carriage of Goods by Road Act 1965 5.11
Carriage of Goods by Sea Act 1971 3.19, 5.11
Common Law Procedure Act 1852 11.51

ss 210–212 11.51n213
Private Law Library
Page 457
Consumer Credit Act 1974 2.35

ss 87–88 8.01, 8.37
s 100 13.60
Consumer Rights Act 2015 5.10, 5.17, 5.18, 5.23n91, 5.34–5.46, 11.25, 13.01, 13.24,
13.60, 13.65n322
Pt 2 5.34, 5.37, 13.55, 13.65
s 2(2) 5.36
s 28
(1) 8.51
(3) 1.14, 8.51, 11.49
(4) 8.51, 11.49
(5) 8.51
(6) 8.51
(a)–(c) 11.49
(7) 8.01, 8.51, 11.49
(8) 8.01, 8.51
s 52 1.15, 8.51
s 52(3) 1.16
s 61
(1) 5.36, 13.65, 13.70
(2) 5.46
s 62
(1) 5.35, 5.43, 13.55
(2) 5.35
(4) 5.37
(5) 5.41
s 63(1) 5.45
s 64
(1) 5.42
(2) 5.42
(3) 5.42, 5.42n170
Private Law Library
Page 458
(4) 5.42, 5.42n171
s 67 5.43, 13.55
s 69(1) 5.42n178
s 70
(1) 5.44
(2) 5.44
s 73(1)
(a) 5.46
(b) 5.46
Sch 2 5.41, 5.45, 13.55

paras 1–2 5.45
para 4 13.70
para 11 5.45
paras 13–16 5.41
para 20 5.45
Sch 5
para 3 5.44
para 6 5.44
County Courts Act 1984

s 69 9.67
s 138–140 11.51n213
Courts and Legal Services Act 1990

s 102 5.52
Hire Purchase Act 1965 8.49
Housing Act 1988 4.17n67
Interpretation Act 1889

s 36(2) 4.12
Judicature Act 1873 2.08, 2.10, 2.43, 2.44

Pt II 8.40
s 25(7) 2.10, 2.43, 11.11, 12.96n229
Private Law Library
Page 459
Landlord and Tenant Act 1954

Pt II 5.76
s 25(1) 4.14
s 29(3) 4.14, 4.15
Law of Property Act 1925

s 41 2.43, 2.44, 11.11
s 49(2) 13.64(p. lxxii)
s 146 8.01
s 146(1) 11.51, 11.53n223
Law of Property (Miscellaneous Provisions) Act 1989

s 3 7.19, 9.130
Law Reform (Frustrated Contracts) Act 1943 12.05, 12.52n133
Law Reform (Miscellaneous Provisions) Act 1934

s 3(1) 9.67
Occupiers Liability Act 1984

s 2 5.20n76
Official Secrets Act 1911 9.103
Prevention of Cruelty to Animals Act 1849

s 14 4.11
Sale and Supply of Goods Act 1994

s 4(2) 10.07, 11.46n192
Sale of Goods Act 1893 2.28, 2.30–2.31, 2.32, 2.38, 9.34

s 10(1) 2.31n68
s 11(1)(b) 2.31
Sale of Goods Act 1979 2.05, 2.06, 5.20, 7.29, 9.106–9.113, 11.06
s 2(1) 9.106, 13.24
s 10 11.14, 11.30
s 10(1) 11.46
s 11
(1) 2.35
(3) 6.20
Private Law Library
Page 460
ss 12–15 11.45
s 13 3.04, 10.07
ss 13–14 3.19
s 15A 10.07n26, 11.46n192
s 20A 7.28n135
s 27 6.12
s 28 3.19, 3.21, 7.37, 10.06
s 29(3) 1.12, 1.14
s 29(4) 4.05
s 31(2) 2.29n66, 6.26, 12.49
s 34 4.06
s 37 1.14
s 48(3) 2.05
s 49 7.37
ss 49–53 9.106
s 51
(1) 9.107
(2) 9.107
(3) 9.02, 9.50, 9.92, 9.108
s 52 7.28
s 54 9.107
s 59 1.16
s 61(1) 7.28n134
Sale of Goods (Amendment) Act 1995

s 1(3) 7.28n135
s 2(d) 7.28n134
Senior Courts Act 1981

s 35A 9.67
s 51 9.67
Private Law Library
Page 461
Social Security and Housing Benefits Act 1992

Pt IX 12.49n123
Supply of Goods and Services Act 1982

s 12
(1) 1.15
(2) 1.15
(3) 1.15
(4) 1.15n58
s 14 1.12, 1.23
(1) 1.03, 1.14, 1.15
(2) 1.16
Supreme Court Act 1981

s 38 11.51n213
Trade Union and Labour Relations (Consolidation) Act 1992

s 236 7.33
Unfair Contract Terms Act 1977 (UCTA) 5.09, 5.17, 5.18–5.33, 5.34, 5.42n177, 5.45
s1
(1)(a) 5.22
(2) 5.24
(3) 5.20
(a) 5.20n76, 5.21
(b) 5.20n76, 5.21
s 2 5.19, 5.33
(2) 5.22, 5.25
s 3 5.30, 5.37
(1) 5.23
(2)
(a) 5.24
(b)(i) 5.21, 5.24
(b)(ii) 5.24
(3) 5.23
Private Law Library
Page 462
s 6 9.126
(4) 5.20
s 11
(1) 5.25
(4) 5.28
(5) 5.25
s 13
(1) 5.05n6
(a) 5.21
(b) 5.21
(c) 5.21n82
(2) 5.21
s 26(1)–(4)(c) 5.30(p. lxxiii)
s 27(1)–(2)(a) 5.31
s 29(1)(a)–(b) 5.32
Sch 1
para 1(a)–(e) 5.33
para 2(a)–(c) 5.33
para 2(c) 5.24
para 4 5.33
Sch 2 5.27, 5.39
West Metropolitan Railway Act 1899 4.11
Germany
Bürgerliches Gesetzbuch (BGB)
para 326 8.01
New Zealand
Limitation Act 1950
s 4(7) 1.01
Private Law Library
Page 463
United States
Restatement (Second) of the Law of Contracts 3.09
§ 90 5.79
§ 224 3.06
§ 231 3.20
§ 253(1) 6.35
Uniform Commercial Code 1952

§ 2-503 4.05
(p. lxxiv)
Private Law Library
Page 464
Table of Statutory Instruments

John E. Stannard

John Stannard

ISBN: 9780198792321
United Kingdom
Civil Procedure Rules 1998
r 44 9.100
Railways (Convention on International Carriage by Rail) Regulations 2005 5.11
Rules of the Supreme Court

Ord 6, r 8(1) 4.12
Unfair Terms in Consumer Contracts Regulations 1994 5.34
Unfair Terms in Consumer Contracts Regulations 1999 5.34, 5.42n179, 5.43n182,

13.65n322
Reg 5(1) 13.60
(p. lxxvi)
Private Law Library
Page 465
Table of Standard form Clauses and Rules

John E. Stannard

John Stannard

ISBN: 9780198792321
United Kingdom
FTA Model Conditions of Carriage 2002
cl. 9.4 5.04
cl. 10 5.04
JCT 2005 Intermediate Building Contract 13.20

s 1.1 13.20
s 1.5 13.20
s 1.19 13.20
s 2.20 13.20
ss 2.21–2.23 13.20
s 4.11 13.20
s 8.4.1 13.20
s 8.9.1 13.20
s 8.11.1 13.20
National Conditions of Sale

cl. 21 13.34
cl. 22 13.34
Private Law Library
Page 466
cl. 23(1) 13.34
Standard Conditions of Sale (5th Edition) 13.23

cond 2.1 13.23
cond 2.2 13.23
cond 4.2.2 13.23
cond 4.3.1 13.23
cond 4.3.2 13.23
cond 6.1.1 13.23
cond 6.1.2 13.23
cond 6.8.1 13.23
cond 6.8.2 13.23
cond 7.2 9.128
cond 7.2.1 13.23
cond 7.2.2 13.23
cond 7.4 9.128, 13.23
cond 7.4.2(a)(i) 13.23
cond 7.5 13.23
International Trade Associations

Baltic International Maritime Council (BIMCO BARECON 2001) 13.09, 13.09n18
cl. 3 13.09
cl. 4 13.09
cl. 5 13.09
cl. 11 13.09
(a) 13.09n15
cl. 15 13.09
cl. 28(a)(i) 13.09n16
Grain and Feed Trade Association (GAFTA 64) 13.30

cl. 6 13.30
cl. 8 13.30
Private Law Library
Page 467
cl. 10
(a) 13.30
(d) 13.30
cl. 19 13.30
cl. 23 13.30
Grain and Feed Trade Association (GAFTA 100) 12.84, 13.27

cl. 6 13.27n151
cl. 10 13.27
cl. 11 13.27
cl. 11(b) 13.27
cl. 12
(a) 13.27
(i) 13.27
cl. 19 13.27
cl. 23(a)–(c) 13.27
United States
Americanised Welsh Coal Charterparty (AMWELSH 93) 13.17
cl. 1 13.17
cl. 3 13.17
cl. 5 13.17
cl. 7(a)–(b) 13.17
cl. 8 13.17
cl. 9 13.17
cl. 10 13.17
cl. 20 13.17
New York Produce Exchange (NYPE 92) 13.12

cl. 2 13.12
cl. 10 13.12
cl. 11(a) 13.12n47
cl. 16 13.12
Private Law Library
Page 468
cl. 17 13.12
(p. lxxviii)
Private Law Library
Page 469
List of Abbreviations
John E. Stannard

John Stannard

ISBN: 9780198792321
Abbey and Richards

Abbey, Robert and Richards, Mark, A Practical Approach to Conveyancing (17th edn,
2015)
Anson
Beatson, J, Burrows, A, and Cartwright, J (eds), Anson’s Law of Contract (30th edn,
2016)
Barnsley
Thompson, Mark (ed), Barnsley’s Conveyancing Law and Practice (4th edn, 1996)
Beale
Beale, Hugh, Remedies for Breach of Contract (1980)
Benjamin
Bridge, Michael (ed), Benjamin’s Sale of Goods (9th edn, 2014)
Carter
Carter, J W, Carter’s Breach of Contract (Hart edition, 2010)
Carver
Howard (ed), Carver on Charterparties (2017)
Cheshire, Fifoot and Furmston

2017)
Private Law Library
Page 470
Chitty
Beale, Hugh G, (ed), Chitty on Contracts (32nd edn, 2015)
Coghlin
Coghlin, Terence and others (eds), Time Charters (7th edn, 2014)
Cooke
Cooke, Julian and ors, Voyage Charters (4th edn, 2014)
CRA
Consumer Rights Act 2015
Davis
Davis, Mark, Bareboat Charters (2nd edn, 2005)
Ganado and Kindred

Ganado, Max and Kindred, Hugh M, Marine Cargo Delays (1990)
Glass and Cashmore

Glass, David and Cashmore, Chris, Introduction to the Law of Carriage of Goods
(1989)
Hudson
Dennys, Nicholas and Clay, Robert (eds), Hudson’s Building and Engineering
Contracts (13th edn, 2015)
Jones and Goodhart

Jones, Gareth and Goodhart, William, Specific Performance (2nd edition, 1996)
Keating
Furst, Stephen, and Ramsey, Vivian (eds), Keating on Construction Contracts (10th
edn, 2016)
Lawson
Lawson, Richard, Exclusion Clauses and Unfair Contract Terms (11th edn, 2014)
Lewison
Lewison, Sir Kim, The Interpretation of Contracts (6th edn, 2015)
Lindgren
Lindgren, Kevin, Time in the Performance of Contracts (2nd edn, 1982)
Macdonald
Macdonald, Elizabeth, Exemption Clauses and Unfair Terms (2nd edn, 2006)
(p. lxxx) MacGillivray

Birds, John, Lynch, Ben and Milnes, Simon (eds), MacGillivray on Insurance Law (13th
edn, 2005)
Private Law Library
Page 471
McElroy and Williams

McElroy, G R and Williams, G, Impossibility of Performance (1943)
McGregor
McGregor, Harvey, McGregor on Damages (17th edn, 2003)
Restatement 2d
Restatement (Second) of Contracts
Sassoon
Lorenzon, Filippo and Batz, Yvonne, Sassoon on CIF and FOB Contracts (6th edn,
2017)
Scrutton
Eder, Sir Bernard and ors (eds), Scrutton on Charterparties (23rd edn, 2015)
SOGA
Sale of Goods Act 1979
Treitel (Contract)
Peel, Edwin (ed), Treitel: The Law of Contract (14th edn, 2005)
Treitel (FFM)
Treitel, G H, Frustration and Force Majeure (3rd edn, 2014)
UCTA
Unfair Contract Terms Act 1977
Words and Phrases

Hay, David (ed), Words and Phrases Legally Defined (4th edn, 2007)
Private Law Library
Page 472
Index

John Stannard

ISBN: 9780198792321
(p. 403) Index

action for the price 7.34–7.40
annoyance, damages for 9.72–9.74
anticipatory delay, frustration and 12.36–12.43
arbitration 5.51
ascertained goods, specific performance and 7.28
avoidable loss, mitigation and 9.77–9.80
avoided losses, mitigation and 9.84–9.88
anxiety, damages for 9.72–9.74
breach of condition 5.92, 6.20–6.21
breach of contract 6.02
no lawful excuse for failure to perform 6.05
obligation under the contract 6.03
risk allocation 6.08–6.12
standard of performance 6.06–6.07
time for performance passed 6.04
building contracts 7.31
liquidated damages 13.45–13.46
extensions of time 13.48
prevention by employer 13.47
see also construction contracts
burden of proof, damages and 9.39–9.40
carriage by sea 5.14
frustrating delay 12.93–12.97
see also charterparties
causation 9.10, 9.80
duty to mitigate and 9.14
in fact 9.11
Private Law Library
Page 473
in law 9.12–9.13
charterparties 7.32, 13.06
charterparties by demise 13.07–13.09
time charterparties 13.10–13.12
voyage charterparies 13.13–13.17
commercial common sense, construction and 11.40–11.42
commercial contracts, time of essence in 11.13–11.14
common law
Judicature Acts 2.43, 2.44
reasonable time 1.12
remedies 1.05–1.08
damages see damages
time of the essence see time of the essence
common object, frustration and 12.08–12.14
compensation, damages and 9.01
damages see damages
deposits 13.61–13.65
options 11.31–11.36, 13.56–13.60
part payments, forfeiture of 13.61, 13.66–13.72
compound interest, damages and 9.67
conditions
distinct from warranties 2.31, 2.33–2.34
time stipulations 2.24–2.28, 2.32
conditions precedent 2.05, 2.16–2.22, 3.01–3.11
doctrine of substantial performance 3.23, 10.10–10.12
express 3.12
language used 3.14
timetables or schedules 3.13
implied 3.15
condition obvious from the circumstances 3.17
implication of fact 3.16–3.18
implication of law 3.19
rules of construction 3.18
time set for performance 3.18
presumption against 3.20–3.22
timely performance 10.13–10.14
consequential loss, damages and 9.47, 9.62
construction contracts 13.18–13.20
Consumer Rights Act 2015 5.34–5.46
consumer sales contracts 11.49
part payments 13.70
time of the essence 8.51
contingencies see conditions precedent
contracts for personal services, specific performance and 7.07, 7.33
contracts of carriage, damages for breach of 9.114
interest 9.118
loss of market value 9.115
loss of profit 9.122–9.124
loss of use 9.117
physical deterioration 9.116
recoupment of damages 9.125
recovery of expenses 9.119–9.121
Private Law Library
Page 474
conveyancing 2.11, 2.50, 8.39, 13.21–13.23

damage to property, compensation for 9.69
damages 1.06–1.08, 2.04, 2.06, 9.02
adequacy 7.05
cancellation of contract, relevance of 9.08
(p. 404)
causation 9.10, 9.80
duty to mitigate 9.14, 9.80
in fact 9.11
in law 9.12–9.13
contracts of carriage 9.114
interest 9.118
loss of profit 9.122–9.124
loss of use 9.117
physical deterioration 9.116
delayed performance and total non-performance 9.09
general and special 9.05
hire purchase 9.126–9.127
liquidated see liquidated damages
measure of damages 9.89
expectation loss 9.90–9.93
nominal damages 9.100
recovery of profits 9.101–9.104
reliance loss 9.94–9.99
mitigation 9.75–9.76
and causation 9.80
avoided losses 9.84–9.88
cost of mitigation 9.81–9.83
decision to terminate 9.78
no recovery for avoidable loss 9.77–9.80
reasonableness 9.79
physical and financial loss 9.07, 9.68–9.70
positive and negative losses 9.06, 9.47, 9.60, 9.62
remoteness of damage 9.15, 9.43
Achilleas 9.24–9.27
burden of proof 9.39–9.40
case law 9.17–9.27
degree of likelihood required 9.31–9.34
fact or law 9.41–9.42
Hadley v Baxendale 9.17–9.18
Heron II 9.22–9.23
inconvenience, anxiety and annoyance 9.72–9.74
loss of goodwill 9.71
loss of profits 9.47–9.59
loss of use 9.46
loss of value 9.44–9.45
physical injury and damage 9.68–9.70
recovery of indemnity 9.63–9.66
recovery of interest 9.67
Private Law Library
Page 475
rules 9.16–9.74
subjective or objective 9.35–9.38
Victoria Laundry case 9.19–9.21
repudiation 6.36
sale of goods 9.106–9.113
sale of land 9.128–9.130
type of loss and measure of loss 9.04
damnum emergens, damages for 9.62
delay
as breach of condition 6.20–6.21
as breach of contract 6.02
no lawful excuse for failure to perform 6.05
obligation under the contract 6.03
standard of performance 6.06–6.07
time for performance passed 6.04
as failure of condition 6.13–6.14
as fundamental breach 5.15–5.16, 6.22–6.24
as prospective impossibility 6.28–6.29
as renunciation 6.26–6.27
as repudiation 2.31, 2.35, 6.25–6.36, 6.30
acceptance of repudiation 6.31–6.35
right to terminate and right to claim damages 6.36
categorisation of 6.01
compensation for see compensation
discharge by agreement as excuse 5.49–5.54
equitable estoppel as excuse 5.70–5.72, 5.79
inequitable to enforce rights 5.80
pre-existing legal relationship 5.73
promise or representation 5.74–5.76
reliance 5.77–5.78
resumption of rights by representor 5.81
exclusion clauses as excuse see exclusion clauses
expected, reasonable time where 1.19–1.21
frustrating delay see frustrating delay
limitation clauses 5.04, 5.06
liquidated damages see liquidated damages
prevention by promisee 5.82–5.85
remedies for see remedies
supervening events as excuse 5.86
discharge by breach or frustration 5.92
excused non-performance falling short of frustration 5.93
force majeure clauses 5.87–5.91
variation as excuse 5.55–5.60
waiver as excuse 5.61
by election 5.66–5.69
by forbearance 5.62–5.65
see also reasonable time; time for performance
demurrage 13.39–13.44
dependent promises
time of the essence 11.21
withholding performance 10.06–10.09
see also conditions precedent
Private Law Library
Page 476
deposits 13.61–13.65
deprivation/unexpiration principle, frustration and 12.31–12.35
deterioration, damages for 9.116
discharge by agreement as excuse 5.49–5.54
due diligence, reasonable time and 1.25–1.26
equitable estoppel as excuse 5.70–5.72, 5.79
inequitable to enforce rights 5.80
pre-existing legal relationship 5.73
(p. 405)
promise or representation 5.74–5.76
reliance 5.77–5.78
resumption of rights by representor 5.81
equitable remedies
specific performance see specific performance
time of the essence see time of the essence
estoppel see equitable estoppel
exclusion clauses 5.02–5.03
carriage by sea 5.14
exclusion of liability and exclusion of duty 5.05
force majeure clauses 5.10, 5.87–5.91
incorporation into contract 5.11
inequality of bargaining power 5.09
reasonableness 5.25–5.28
rules of construction 5.12
deviation 5.14
fundamental breach 5.15–5.16
‘main purpose’ rule 5.13
statutory controls 5.17
excluded contracts 5.29–5.33, 5.47
other controls 5.47
‘tailor-made’ and ‘off the peg’ clauses 5.07–5.08
Unfair Contract Terms Act 1977 5.18–5.33
excused non-performance 5.93
executory contracts, time of essence and 11.44–11.49
expectation loss, damages for 9.90–9.93
expected delay, reasonable time and 1.19–1.21
expenses, recovery of 9.60–9.62, 9.82, 9.119–9.121
express contractual provisions 13.01–13.05
charterparties 13.06
charterparties by demise 13.07–13.09
time charterparties 13.10–13.12
voyage charterparties 13.13–13.17
construction contracts 13.18–13.20
conveyancing 13.21–13.23
effect 13.31
deposits and part payments 13.61–13.72
liquidated damages 13.37–13.44
liquidated damages in building contracts 13.45–13.48
notice making time of the essence 13.33–13.35
options 13.56–13.60
penalties 13.49–13.56
Private Law Library
Page 477
specific relief 13.32

termination 13.74–13.80
withholding performance 13.73
sale of goods 13.24
cost, insurance and freight (c.i.f.) contracts 13.25–13.27
free on board (f.o.b.) contracts 13.28–13.30
expressio unius exclusio alterius, time of essence and 11.23–11.24
extensions of time 5.57, 13.48
failure of condition 2.22–2.28, 6.13–6.14, 6.20
failure of consideration 2.24–2.26, 12.15–12.18, 12.37–12.42, 12.46–12.57
failure to perform on time see delay
financial loss 9.07
foreseeability
damages and 9.31–9.34
frustration and 12.87–12.91
forfeiture of payments in advance 11.44, 13.66–13.72
relief against 11.50–11.67
frustrating delay 6.15–6.19, 12.01–12.02, 12.19
actus reus of frustrating breach 12.70
claims for extra remuneration 12.106–12.107
delay unexpectedly short 12.44
delays and interruptions 12.03
discharge by breach and discharge by frustration 12.04–12.07
effect of the delay 12.45
failure of consideration 12.46–12.57
impossibility 12.58–12.66
fact or law 12.108–12.110
failure of consideration and impossibility 12.15–12.18
frustration of the ‘common object’ 12.08–12.14
implied terms 12.98–12.100
legal effect 12.67
delay as a frustrating breach 12.68–12.73
delay under the doctrine of frustration 12.74–12.110
length of the delay 12.20–12.25
anticipatory delay 12.36–12.43
deprivation/unexpiration principle 12.31–12.35
prospective failure of consideration 12.37–12.42
prospective impossibility 12.43
relevant time for decision 12.26–12.30
maritime commerce 12.93–12.97
mens rea of frustrating breach 12.71–12.73
delay dealt with by the contract 12.81–12.86
delay foreseeable 12.90–12.91
delay foreseen 12.87–12.89
self-induced frustration 12.79–12.80
type of contract involved 12.92–12.97
waiver 12.102–12.105
frustration of contract as excuse 5.92
fundamental breach 5.15–5.16, 6.22–6.24
good faith, exclusion clauses and 5.38–5.39
goodwill, damages for loss of 9.71
Private Law Library
Page 478
hire purchase, damages and 9.126–9.127

hour of performance 4.02
performance possible without co-operation of promisee 4.03
(p. 406)
performance requiring co-operation of promisee 4.04–4.09
performance due on demand 4.09
tender of performance at a reasonable hour 4.05–4.06
unavailability of promisee 4.07–4.08
impossibility 6.28–6.29, 12.15–12.18, 12.43, 12.58–12.66
inability to perform as repudiation 6.28–6.29
inconvenience, damages for 9.72–9.74
indemnity, recovery of 9.63–9.66
inequality of bargaining power
exclusion clauses and 5.09
specific performance and 7.19
instalments, forfeiture of see part payments
interest payments, damages and 9.67, 9.118
interruptions, frustration and 12.03
laches, specific performance and 7.22
land transfers
damages 9.128–9.130
relief against forfeiture 11.58–11.67
specific performance and 7.26
lay days 13.14, 13.39, 13.41, 13.42, 13.44
limitation clauses, exclusion clauses and 5.04, 5.06
liquidated damages 5.06, 5.57, 9.131, 13.37–13.38
building contracts 13.45–13.46
extensions of time 13.48
prevention by employer 13.47
clauses struck out as penalties 13.49–13.56
delay in paying a sum of money 13.52
lump sum payable for variety of breaches 13.53
precise pre-estimate of damage impossible 13.54
statutory provisions 13.55
sum extravagant and unconscionable 13.51
losses, damages for
avoidable loss 9.77–9.80
causation see causation
loss of bargain 9.90–9.93
loss of profits 9.47–9.59, 9.122–9.124
loss of use 9.46, 9.117
mitigation see mitigation
physical and financial 9.07, 9.68–9.70
positive and negative 9.06, 9.47, 9.60, 9.62
remoteness of damage see remoteness of damage
Private Law Library
Page 479
type and measure 9.04

lucrum cessans, damages for 9.60
maritime commerce see carriage by sea
market value, recovery of 9.115
measure of damages 9.89
mental distress, damages for 9.72–9.74
mitigation 9.75–9.76
and causation 9.80
cost of 9.81–9.83
decision to terminate 9.78
no recovery for avoidable loss 9.77–9.80
reasonableness 9.79
moveables, specific performance of contract for sale of 7.27–7.29
mutuality of remedy, specific performance and 7.06–7.09
non-commercial contracts, time of essence in 11.43
non-performance of condition precedent, right to terminate and 2.29
notice to quit, time limits in 4.14–4.17
options
penalties and 13.56–13.60
time of essence in 11.31–11.36
part payments 13.61, 13.66–13.72
penalty clauses 13.49
common law 13.50
delay in paying a sum of money 13.52
lump sum payable for variety of breaches 13.53
precise pre-estimate of damage impossible 13.54
sum extravagant and unconscionable 13.51
statutory provisions 13.55
performance, obligation to perform on time and 4.01
delay see delay
due on a contingency see conditions precedent
due on demand 1.30
period specified 4.10
period exclusive 4.13–4.15
period inclusive 4.11–4.12
specifying wrong date 4.16–4.17
place for performance 4.07–4.08
see also hour of performance; time for performance; withholding performance
periodic tenancy, termination of 4.14–4.15
(p. 407) personal injury, damages for 9.68, 9.70
personal services, specific performance of 7.07, 7.33
physical deterioration, damages for 9.116
physical loss, damages for 9.07, 9.68–9.70
place for performance 4.07–4.08
profits
Private Law Library
Page 480
loss of 9.47, 9.59, 9.122–9.124

sale profits 9.48–9.54, 9.124
user profits 9.55–9.58, 9.123
recovery of 9.101–9.104
promissory conditions 2.06–2.07, 3.02, 3.04
promissory estoppel see equitable estoppel
proper time for performance see time for performance
prospective delay, frustration and 12.36–12.43
prospective impossibility, frustration and 6.28–6.29
quantum meruit 10.09
reasonable time, obligation to perform within
circumstances subsequent to the contract 1.29
common law and statute 1.11–1.15
conduct of the parties 4.20
contract silent as to time 1.37
definition 1.16
expected delay 1.19–1.21
factors in existence when the contract was made 1.17–1.28
importance of knowledge 1.27–1.28
normal time for performance 1.18
performance within a reasonable time 4.18–4.19
conduct of parties 4.20
supervening events 4.21–4.25
pre-contractual negotiations 1.23
reasonable diligence 1.25–1.26
subject matter of the contract 1.22
supervening events 4.21–4.25
supply of goods 1.13, 1.14
supply of services 1.13, 1.15
trade custom 1.24
reasonableness
exclusion clauses and 5.25–5.28
mitigation and 9.79
recovery of expenses 9.60–9.62, 9.82, 9.119–9.121
recovery of interest 9.67, 9.118
remedies 1.05–1.08, 2.04, 2.06, 7.01–7.02
compensation see compensation
damages see damages
equitable see equitable remedies
notices making time of the essence 2.11–2.12, 2.50–2.52, 8.01–8.08
content of the notice 8.26–8.35
delay by the promisor 8.17–8.25
effect of notice 8.36–8.38
failure to comply with a notice 8.46–8.50
form of the notice 8.33–8.35
promisee able, ready and willing 8.12–8.16
reasonable time for compliance 8.27–8.32
scope of the procedure 8.39–8.50
Private Law Library
Page 481
terminology 8.10
remoteness of damage 9.15, 9.43
Achilleas 9.24–9.27
burden of proof 9.39–9.40
case law 9.17–9.27
degree of likelihood required 9.31–9.34
fact or law 9.41–9.42
Hadley v Baxendale 9.17–9.18
Heron II 9.22–9.23
inconvenience, anxiety and annoyance 9.72–9.74
loss of profits 9.47–9.59
loss of use 9.46
physical injury and damage 9.68–9.70
recovery of interest 9.67
rules 9.16–9.74
subjective or objective 9.35–9.38
Victoria Laundry case 9.19–9.21
rent in arrear, relief against forfeiture for 11.51
rent review cases, time of essence in 11.32–11.36, 11.39
renunciation 6.26–6.27
repudiation 2.31, 2.35, 6.25–6.36, 6.30
acceptance 6.31–6.35
right to terminate and right to claim damages 6.36
right to terminate 2.29, 2.35, 6.36
risk allocation
breach of contract and 6.08–6.12
frustrating delay 12.77–12.78
delay dealt with by the contract 12.81–12.86
delay foreseeable 12.90–12.91
delay foreseen 12.87–12.89
self-induced frustration 12.79–12.80
sale of goods 7.27–7.29, 7.37, 9.106–9.113, 13.24
cost, insurance and freight (c.i.f.) contracts 13.25–13.27
free on board (f.o.b.) contracts 13.28–13.30
Sale of Goods Act 1893 2.30–2.31
sale of land
damages in 9.128–9.130
specific performance of 7.26
sale of moveables, specific performance and 7.27–7.29
(p. 408) sale of shares, specific performance and 7.30
schedules, order of performance and 3.13
share sales, specific performance and 7.30
ships see carriage by sea; charterparties
significant imbalance, exclusion clauses and 5.38, 5.40
specific performance 2.08–2.10, 7.03–7.04
adequacy of damages 7.05
bars to specific performance 7.12
Private Law Library
Page 482
conduct of promisee 7.18–7.22

decree pointless 7.13
excessive need for supervision 7.15–7.17
formation of the contract 7.19
hardship to promisor 7.23–7.24
laches 7.22
obligation too vague 7.14
building contracts 7.31
charterparties 7.32
contracts for personal services 7.07, 7.33
default by promisor 7.10–7.11
mutuality 7.06–7.09
sale of land 7.26
sale of moveables 7.27–7.29
sale of shares 7.30
statutory provisions
exclusion clauses 5.17
Consumer Rights Act 2015 5.46
excluded contracts 5.29–5.33, 5.47
reasonable time 1.13
time stipulations 2.30–2.31, 2.43, 2.44
substantial performance 3.23, 10.10–10.12
supervening events 4.21–4.25, 5.86
discharge by breach or frustration 5.92
excused non-performance falling short of frustration 5.93
supply of goods, reasonable time and 1.13, 1.14
supply of services, reasonable time and 1.13, 1.15
tenancies
relief against forfeiture 11.51
rent review cases 11.32–11.36, 11.39
termination of 4.14–4.17
termination 2.29, 2.35, 6.36, 9.08, 11.01–11.03, 13.74–13.80
compared to withholding performance 10.03–10.05
construction of termination rights 13.76
effect under express provisions 13.78
express termination rights 13.75, 13.77
multiple termination rights 13.79–13.80
time not of the essence 11.68
time of the essence 11.04–11.05
availability of other remedy 11.37–11.39
by implication 11.25–11.49
commercial common sense 11.40–11.42
commercial contracts 11.13–11.14
common law and equity 11.09–11.10
construction of the parties’ intentions 11.06–11.07
executed and executory contracts 11.44–11.49
made expressly 11.17–11.24
non-commercial contracts 11.43
other stipulations 11.15–11.16
presumptions 11.08–11.16
Private Law Library
Page 483
time charterparties see charterparties

time for performance 1.01–1.03
contract silent as to time see reasonable time
performance due on demand 1.30
set by contract 1.04–1.10
unilateral obligations 1.31–1.37
see also hour of performance
time of the essence 1.04–1.08, 2.47, 8.09
bar to specific performance 2.08–2.10
common law 2.13–2.15, 2.45–2.46, 8.07–8.08, 8.39–8.40, 11.09–11.10
condition as promise 2.27–2.28
condition precedent 2.16–2.22
importance of the stipulation 2.23–2.26
modern law 2.36–2.38
non-performance of condition 2.29
promissory and non-promissory time stipulations 2.36–2.38
right to terminate 2.29
twentieth century developments 2.32–2.35
condition precedent 2.05, 2.16–2.22
Consumer Rights Act 2015 8.51
contractual obligation 2.04
definition 2.01–2.03
equity 2.39–2.46, 8.03–8.06, 8.39–8.40, 11.09–11.10
express stipulation 2.48
implication 2.49
notice procedure 2.11–2.12, 2.50–2.52, 8.01–8.08
content of notice 8.26–8.35
delay by promisor 8.17–8.25
effect of notice 8.36–8.38
failure to comply with a notice 8.46–8.50
form of notice 8.33–8.35
promisee able, ready and willing 8.12–8.16
reasonable time for compliance 8.27–8.32
scope of the procedure 8.39–8.50
terminology 8.10
promissory condition 2.06–2.07
Sale of Goods Act 1893 2.30–2.31
termination 11.04–11.05
availability of other remedy 11.37–11.39
commercial common sense 11.40–11.42
commercial contracts 11.13–11.14
common law and equity 11.09–11.10
construction of the parties’ intentions 11.06–11.07
(p. 409)
executed and executory contracts 11.44–11.49
non-commercial contracts 11.43
other stipulations 11.15–11.16
presumptions 11.08–11.16
time expressly of the essence 11.17–11.24
time of the essence by implication 11.25–11.49
unilateral obligations 1.33–1.36
Private Law Library
Page 484
timetables, order of performance and 3.13

trade custom, reasonable time and 1.24
unfair terms
effect of unfairness 5.43–5.44
unilateral obligations 1.31–1.37, 11.31
unjust enrichment, relief against 11.44, 11.60, 11.64
variation as excuse 5.55–5.60
voyage charterparties see charterparties
waiver as excuse 5.61
by election 5.66–5.69
by forbearance 5.62–5.65
warranties, contrasted with conditions 2.31, 2.33–2.34
withholding performance 10.01–10.02, 13.73
compared to termination 10.03–10.05
dependent obligations 10.06–10.09
doctrine of substantial performance 10.10–10.12
timely performance as a condition precedent 10.13–10.14
Private Law Library

Delay in The Performance of Contractual Obligations 2nd Edition

Uploaded by

Copyright:

Available Formats

Delay in The Performance of Contractual Obligations 2nd Edition

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Delay in The Performance of Contractual Obligations 2nd Edition

Uploaded by

Copyright:

Available Formats

Page 1

Preface to the Second Edition

From: Delay in the Performance of Contractual Obligations (2nd Edition)

Content type: Book content

Preface to the First Edition

From: Delay in the Performance of Contractual Obligations (2nd Edition)

Content type: Book content

From: Delay in the Performance of Contractual Obligations (2nd Edition)

Content type: Book content

Preface to the Second Edition v

Preface to the First Edition vii

Table of Cases xxv

Table of International Legislation lxix

Table of Statutes lxxi

Table of Statutory Instruments lxxv

Table of Standard Form Clauses and Rules lxxvii

List of Abbreviations lxxix

I The Obligation to Perform On Time

1. The Proper Time for Performance 3

II Performance of the Obligation

4. The Obligation and its Performance 65

III Remedies for Delay

7. Specific Relief 151

From: Delay in the Performance of Contractual Obligations (2nd Edition)

Content type: Book content

Table of Cases xxv

Table of International Legislation lxix

Table of Statutes lxxi

Table of Statutory Instruments lxxv

Table of Standard Form Clauses and Rules lxxvii

List of Abbreviations lxxix

I The Obligation to Perform On Time

1. The Proper Time for Performance

A. Where a Time is Set by the Contract 1.04

(ii) Was some delay expected? 1.19

(vi) Reasonable time and reasonable diligence 1.25

C. Performance Due on Demand 1.30

2. The Importance of Timely Performance

A. Time of the Essence and its Meaning 2.03

(2) Time of the essence in equity 2.39

(3) Common law and equity compared 2.46

C. When is Time of the Essence? 2.47

3. Performance Due on a Contingency

A. The Nature of a Condition Precedent 3.02

B. Identifying a Condition Precedent 3.07

(2) Condition precedent by implication 3.15

(b) Condition precedent by implication of law 3.19

(3) A presumption against conditions precedent? 3.20

II Performance of the Obligation

4. The Obligation and its Performance

A. The Hour of Performance 4.02

B. Period Specified for Performance 4.10

(p. xvii) C. Performance within a Reasonable Time 4.18

5. Excuses for Failure to Perform on Time

A. Exclusions and Exceptions 5.02

(e) Exclusion clauses and inequality of bargaining

(2) Incorporation of exclusion clauses into contract 5.11

(4) Statutory controls 5.17

(b) Consumer Rights Act 2015 5.34