Strathlorne Steamship Co v Baird and Sons, [1916] UKHL 3
Citation:Strathlorne Steamship Co v Baird and Sons, [1916] UKHL 3.
Rule of thumb:What trade customs have to be implemented legally? Basic ones or gold standard? Any quality standards carried out by many high-level businesses in a sector consistently though not done by all businesses in the sector, and not rights under common law or statute, are not implied terms of the contract.
Background facts:
The basic facts of this case were that Baird and Sons contracted with Steamship and Co to carry barley cargo for them to be collected at port. Baird and Sons argued that the barley cargo was not correctly packaged for them to be able to transport it to its destination from the port. They therefore did not transport it. This created a dispute that ended up in Court.
Parties argued:
Baird and Sons argued that this was a custom in the trade for barley to be packaged in a certain way and this fell short. They further argued that Strathlorne packaged it this way for other transporters. Strathlorne argued that this was a special package they provided only for some esteemed clients, and they argued that lots of other barley producers never packaged it in the way Strathlorne expected.
Judgment:
The Court upheld the arguments of Strathlorne. This was a pratice that was sufficiently established as part of their business model or in the sector as a whole, meaning that it fell short of being considered a custom that was an implied term of the contract.
Ratio-decidendi:
‘I desire respectfully to offer these observations, because in view of the grounds of judgment of the Court below I think that the distinction should be made plain between a settled and established practice in the general sense of the mere occurrence of instances (many of which may have sprung from express contract) and a settled and established practice which amounts to the acceptance of a binding obligation of a custom apart from particular bargain’, Lord Shaw, 'the distinction should be made plain between a settled and established practice in the general sense ... from particular bargain', Lord Shaw
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.