Commercial Law
Arthur, a trader in London, entered into three contracts on the 15th January 2014. Each of them was expressed to be subject
to English law.
(1) First, he agreed to sell to Bernadette in Amsterdam 7,000 tonnes of Peninsula long-grained rice c.i.f. Rotterdam,
February 2014 shipment from Singapore. Payment was to be in full against tender of shipping documents. The rice was loaded
aboard Claudes vessel Jeanne dArc in Singapore on 1st February 2014. The vessels captain issued Arthurs agent in
Singapore with a bill of lading for the rice.
(2) Second, he agreed to sell to David in Paris 5,000 tonnes of Jamaican unrefined brown sugar c.i.f. Le Havre,
February 2014 shipment from Kingston, Jamaica. Payment was to be in full against tender of shipping documents. The sugar
was loaded aboard Edwards vessel Stars and Stripes on 1st March 2014. The vessels captain issued Heinzs agent in
Kingston, Jamaica with a bill of lading that stated, amongst other things:
(a) 5,000 tonnes of Jamaican unrefined brown sugar loaded aboard the Stars and Stripes on 28th February 2014 in
apparent good order and condition;
(b) Freight at the rate of $100 per 1,000 tonnes payable on discharge;
(c) The carrier has liberty to tranship the goods for any reason and if the other vessel is neither owned nor chartered
by the carrier he is thereafter under no liability whatsoever in relation to the goods.
In the margin of the bill of lading the captain had written: After shipment some of the sugar was damaged by water when
the crew had to put out a fire using water hoses.
(3) Third, he agreed to sell to Frank in London 4,000 barrels of Gulf crude oil c.i.f. Fawley Refinery, Hampshire,
February 2014 shipment from New Orleans. Payment was to be by letter of credit subject to the U.C.P. 600, 2007 revision, to
be confirmed by a bank in London. The oil was duly loaded aboard Waynes tanker the Stars and Stripes on 15th February
2014. The vessels captain issued Arthurs agent with a set of three bills of lading each of which stated, amongst other
things:
(a) 4,000 barrels of crude oil loaded aboard the Stars and Stripes in New Orleans on the 15th February 2014 in apparent
goods order and condition;
(b) All terms and conditions (including named discharge port/s) of the Wayne-Homer charter party dated 4th June 2013
are hereby incorporated;
(c) One of a set of three original bills.
On the 25th February 2014 Frank instructed Barkers Bank in London to open a credit in favour of Arthur. The bank wrote to
Arthur on the 26th February 2014 notifying him that they were opening an irrevocable credit in his favour and that they
would pay him the contract price for 4,000 barrels of Gulf crude oil if he tendered a bill of lading, insurance
certificate and invoice within 15 days of the bill of lading date. They also informed him that the credit was subject to
the U.C.P. 600, 2007 revision.
When the Jeanne dArc arrives in Rotterdam it is discovered that all the rice has been damaged by sea water which leaked
into the vessel through a rusted joint in the vessels hull. Advise Bernadette.
On the 10th March 2014 Arthurs agent in Paris tenders to David:
(1) The bill of lading for the sugar;
(2) A certificate of marine insurance; and
(3) An invoice for the full sale price of the sugar.
The market price for brown sugar has fallen by a half since mid-January. Advise David.
on 3rd March 2014 Arthur delivered to Barkers Bank the following documents:
(1) One bill of lading for the oil;
(2) A copy of the Wayne-Homer charter party dated 4th June 2013;
(3) A certificate of insurance;
(4) An invoice for 4,000 barrels of crude oil.
Advise Barkers Bank.