If an FOB buyer makes a mickey mouse nomination, i.e. nominates a vessel that obviously cannot reach the load port in time, then is it a breach of condition entitling the seller to end the contract notwithstanding that the buyer had ample time to (and did) make a valid replacement nomination?
This is what happened in The Tai Hunter [2021]. Question really was whether the nomination clause was a condition rather than a warranty. Also, in this case the sale contract obliged the buyer to provide a copy of C/P to sellers upon request. Buyers obviously could not fulfill this and the sellers argued this was also a breach of condition.
The court found that although buyer’s initial nomination was invalid as the ETA was overly ambitious, it was not a breach of condition as the contract could still be fulfilled if a valid nomination is given by the deadline. In this case the buyers had enough time to make a valid nomination which they did in fact do. As for the second issue, a C/P request clause was not a condition. Finally, seller's argument that a series of non-repudiatory breaches by buyers can cumulatively amount to a repudiation of a contract was a non-starter here as buyers factually did not act in bad faith and moreover did make a valid nomination later on.
Comments