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Repudiation – regarded as waiver of performance of innocent party

 The Facts

London merchants purchased rosewood shipped from Honduras, payment in cash against bills of lading, in two instalments.

 While the first instalment was in transit, buyers expressly repudiated the contract.

 Sellers did not accept the repudiation and tendered the bills of lading to the buyers who refused to take them. 

 Presentation of the bills of lading in respect of the second instalment met the same fate.

 Sellers sold the wood and claimed the shortfall in recovery from the buyers as damages.

 In the meantime, buyers discovered that a portion of the first instalment was defective.

 Hamilton KC argued that, the contract being kept alive for both parties, the sellers were obliged to prove that they were able to perform fully in respect of the first instalment. On failure of such proof, buyers were absolved in respect of the entire instalment.

 There was no dispute that buyers were liable for damages in respect of the second instalment.


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Charter Party Casebook