Tsakiragloe and Co v Noblee and Thorl GmbH, UKHL 1961, [1962] AC 93
Citation:Tsakiragloe and Co v Noblee and Thorl GmbH, UKHL 1961, [1962] AC 93
Rule of thumb:In a contract, is it the dictionary meaning of words taken, or the technical meaning of words? If it a contract with a regulated professional, then the technical definitions and standards will be taken. The Court further affirmed therefore that people are expected to overcome difficulties in contracts and that not every contract will be smooth sailing with unexpected difficulties but they still need to push on through and overcome these so to speak.
Rule of thumb:Do some difficulties in a contract make it unenforceable? No, parties under a contract are expected to overcome difficulties and come up with creative solutions.
Background facts:
The facts of this case were that there was an agreement for Sudanese peanuts to be transported to a port in Hamburg, but due to the ‘Suez canal crisis’, where there was fighting between countries, the canal was nationalised by the Egyptian Government and closed off to all ships. The Egyptian Government unsure which ships were friendly and there also being great danger to the ships, so they just closed the port altogether. As a result of this, the ship never transported the peanuts to Hamburg. Hamburg sued for the damages caused to them.
Parties argued:
Hamburg argued that there was another route which would have taken 4 days longer, but was still viable, and that this meant that the contract could and should still have been completed. The defenders argued that there was a force majeur clause which stated that the contract was over if it had to be delayed excessively. The defenders argued that the additional 4 days they had to spend delivering the nuts invoked this clause leading to it to be over. Authorities were provided by the defenders to argue that a 4 day delay invoked this clause. Hamburg responded that even if this was an excessive delay in some industries, for people in the shipping industry a 4 day delay and diversion was not wholly unusual, meaning that this clause did not apply.
Judgment:
The Court upheld the arguments of Hamburg. They accepted that in the shipping industry a 4 day delay was not wholly unusual and it did not invoke this clause. The Court affirmed that when interpreting the contract using positions and terminology in the shipping industry, a 4 day delay did not invoke this clause.
Ratio-decidendi:
‘... that conclusion is almost completely determined by what is ascertained as to mercantile usage and the understanding of mercantile men’, Lord Radcliffe
'mercantile usage and the understanding of mercantile men', Lord Radcliffe
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.