The correct test to determine if a breach should lead to repudiation is to look at the events which have occurred as a result of the breach and to decide if these events deprived the party attempting to repudiate of the benefits that it expected to receive from the contract (the breach must lead to the party not being able to obtain all or a substantial proportion of the benefits that they intended to receive by entering into the contract) - if they do, then repudiation is in order, else only damages can be awarded. Clause 1 of the contract obliged the owners to deliver a “seaworthy” vessel and Clause 3 further obliged them to maintain the vessel’s seaworthiness and good condition. 14 Hong Kong Fir Shipping Cov Kawasaki [1962] 2 QB 26; The Amstelslot[1963] 2 Lloyd’s Rep 223. The vessel owner’s chief engineer was inefficient and incompetent, and the vessel suffered numerous breakdowns and delays. What is the test for determining if a breach of a contract leads to a right of repudiation? Disclaimer: This work was produced by one of our expert legal writers, as a learning aid to help you with your studies. 26 4 Hongkong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. [2] Hong Kong Fir Shipping Co Ltd. v Kawasaki Kisen Kaisha [1962] EWCA Civ 7 [3] Great Peace Shipping v Tsavliris Salvage [2002] EWCA Civ 1407 [4] Detailed on p.2 3 Hongkong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. Court of Appeal of England and Wales cases, https://casebrief.fandom.com/wiki/Hong_Kong_Fir_Shipping_Co._Ltd._v_Kawasaki_Kisen_Kaisha_Ltd. In parlance more consistent with the modern classification of terms, a party repudiates a contract whenever he breaches, (i) a condition, or (ii) an innominate term in such a way as to deprive the non-breaching party of substantially the whole benefit of the contract (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (ECA)). Kawasaki repudiated the contract, and Hong Kong Fir sued for wrongful repudiation. Any opinions, findings, conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of LawTeacher.net. Free resources to assist you with your legal studies! 26 (C.A. The plaintiffs said the repudiation was wrongful, and that the ship was fit to charter. Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. The employer’s ability to terminate the contract on breach will therefore depend on the effect of the breach, in accordance with Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha [1962] 2 QB 26, CA. What is the test for determining if a breach of a contract leads to a right of repudiation? He decides that in this case, as the charterers still get to have the boat for 20 more months, the expected benefits can still be received. Facts: In the case a ship was leased. HONGKONG FIR SHIPPING COMPANY, LTD. v. KAWASAKI KISEN KAISHA, LTD. Do you have a 2:1 degree or higher? Hong Kong Fir Shipping v Kawasaki Kishen Kaisha: Hong Kong Fir agreed to rent their ship to Kawasaki for 24 months and stated on the date of delivery that the ship was fitted for use in ordinary cargo service. The ship was delivered on 13 February 1957, sailing …show more content… The vessel was delivered to … Relying on Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, the court said that whether a breach is repudiatory must be judged at the time of acceptance of the breach, so it followed that any cures that the party in breach had carried out before that … United Kingdom On the facts, the delays, albeit serious and repeated, did not amount to a frustration of contract that entitled repudiation of the contract, but merely a breach allowing for damages. 4.C is for example, in Dominion Corporate Trustees Ltd -v- Debenhams Properties Ltd [2010] EWHC 1193 (Ch), the Court interpreted an apparently intermediate condition in which the elimination of dismissal for a minor offence appeared too drastic. Hong Kong Fir Shipping Co. Ltd. VAT Registration No: 842417633. Elderly engines and incompetent staff caused 20 weeks of breakdowns. Background facts. In Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962 2 QB 26) the Court of Appeal of England and Wales first conceived the notion of an "innominate term". Hong Kong Fir Shipping Co Ltd v Kawasaki Ltd The defendants had chartered a ship for 2 years. Hong Kong Fir was successful at trial and Kawasaki appealed. On the facts, the Court held that the seaworthiness and maintenance clause was not viewed as so fundamental so as to amount to a condition of the contract, but rather constitutes a term allowing damages. 16 Kish v Taylor [1912] AC 604; The Friso [1980] 1 Lloyd’s Rep 469. The innominate terms themselves are hard to classify as conditions or warranties, Whether or not a agreement can be set aside when the term be breached depend on the seriousness of the breach. Area of law The term was breached meaning the ship could not be at sea for the full amount of time. Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd: CA 20 Dec 1961. Hong Kong Fir Shipping Co. Ltd -v- Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 70. (Hong Kong Fir Shipping Co Ltd v. Kawasaki Kaisen Kaisha Ltd [1962] 2 QB 26]. As explained at the beginning of this piece, the existence of the innominate term was acknowledged in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 (20 December 1961). Hong Kong Fir agreed to rent their ship to Kawasaki for 24 months and stated on the date of delivery that the ship was fitted or use in ordinary cargo service. Citation Applying the dicta of Diplock LJ in Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26, the Court of Appeal held that previous cases had used as the relevant test whether the breach had deprived the injured party of “substantially the whole benefit” of the contract, which is the same test as that applicable to frustration, so the bar is set high. The agreement included a term that the ship would be seaworthy throughout the period of hire. 6:35. ?oldid=11652. Construction of contractual terms as ‘conditions’ and repudiatory breach of contract. Hong Kong Fir Shipping co . Legal Locomotive Law Videos 1,161 views Country The claimant leased a ship for 2 years to the defendant. Summary of the facts of Hong Kong Fir The charterparty in Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd was a time charter of 24 months (the shipowner manages the vessel but the charterer gives orders for the employment of the vessel). In parlance more consistent with the modern classification of terms, a party repudiates a contract whenever he breaches, (i) a condition, or (ii) an innominate term in such a way as to deprive the non-breaching party of substantially the whole benefit of the contract (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (ECA)). Court Hong Kong Fir Shipping v Kawasaki Kisen Kaisha Ltd [1962] 1 All ER 474 CA. Hong Kong Fir案. Company Registration No: 4964706. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd 2 QB 26 A ship was chartered to the defendants for a 2 year period. The innominate term approach was established in the case of Hong Kong Fir Shipping Company v Kawasaki Kisen Kaisha [1962]. Rule - Breach = can terminate if breach deprives one party of substantially the … Case Summary In this representative case, the ship owner hired out the Hong Kong Fir, ‘being in every way fitted for ordinary cargo service’. The claimants claimed that the breach did not entitle the defendants to terminate, only to claim damages. Firstly, the Court held that in order to construe whether a contractual clause constitutes a condition precedent, the breach of which permits repudiation, or an innominate term, the breach of which permits damages, depends on a holistic assessment of the contract’s surrounding circumstances in determining the intention of the parties in their treatment of the clause. 14 Hong Kong Fir Shipping Cov Kawasaki [1962] 2 QB 26; The Amstelslot[1963] 2 Lloyd’s Rep 223. The charterparty in Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd was a time charter of 24 months (the shipowner manages the vessel but the charterer gives orders for the employment of the vessel). The contract said the ship should be “seaworthy” and “be in every way fitted for ordinary cargo service”. The case laid down the approach of substance over form, and the court must assess the contract holistically to ascertain the status of the Clause. 4.C is for example, in Dominion Corporate Trustees Ltd -v- Debenhams Properties Ltd [2010] EWHC 1193 (Ch), the Court interpreted an apparently intermediate condition in which the elimination of dismissal for a minor offence appeared too drastic. Year HONGKONG FIR SHIPPING COMPANY, LTD. v. KAWASAKI KISEN KAISHA, LTD. (THE "HONGKONG FIR") [1961] 2 Lloyd's Rep. 478 COURT OF APPEAL Before Lord Justice Sellers, Lord … Legal Locomotive Law Videos 3,291 views. Facts. Lord Diplock, in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, created the concept of an innominate term, breach of which may or may not go to the root of the contract depending upon the nature of the breach. Plaintiff [Hongkong] owned a ship and chartered it to the Defendant [Kawasaki] A clause in the agreement guaranteed that the ship would be in good condition etc. They decided to terminate the contract. The questions arose as to (1) whether the seaworthiness obligation constituted a ‘condition’ of contract, the breach of which entitles the party to repudiate; and (2) whether the breach caused delays of a sufficient degree so as to entitle the charterer to treat the contract as repudiated. Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 (Case summary) This approach has been criticised for sacrificing certainty. v. Yngvar Hansen-Tangen (1976) 1 W.L.R. 15 Paterson Steamships Ltd v Robin Hood Mills (1937) 58 LlLR 33. The problems developed with the engine of the ship and the engine crew were incompetent. Hong Kong Fir Shipping Co. Ltd -v- Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 70. The ship was delivered in February 1967 and sailed to the US and then to Japan on the same day. Diplock, Sellers, and Upjohn LJJ Innominate Terms: The Case of Hong Kong Fir Shipping vs Kawasaki Kisen Kaisha - Duration: 6:35. First, the labelling of the Clause is immaterial following Hong Kong Fir Shipping Ltd v. Kawasaki Ltd [1962] 2 Q.B. Hong Kong Fir agreed to rent their ship to Kawasaki for 24 months and stated on the date of delivery that the ship was fitted or use in ordinary cargo service. Appellant Construction of contractual terms as ‘conditions’ and repudiatory breach of contract. In-house law team. Take your favorite fandoms with you and never miss a beat. There was a charter-party between the plaintiff who was the owner of the vessel called Hongkong Fir and the defendant who was the charterer. Diplock, writing for a unanimous court, states that the test does not always depend on whether the thing that was breached was a warranty or a condition, as sometimes the circumstances are more complex than this. [2] Hong Kong Fir Shipping Co Ltd. v Kawasaki Kisen Kaisha [1962] EWCA Civ 7 [3] Great Peace Shipping v Tsavliris Salvage [2002] EWCA Civ 1407 [4] Detailed on p.2 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd LORD JUSTICE SELLERS: Both parties to this action are resident abroad, the plaintiffs in Hong Kong and the defendants in Japan, and, in substitution for the arbitration provisions, they agreed to have the dispute tried in our Commercial Court and it came before Mr. Justice Salmon in the early part of this year. Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 Court of Appeal A ship was chartered to the defendants for a 2 year period. Reference this Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 (Case summary) This approach has been criticised for sacrificing certainty. Ship owners let the vessel, Hongkong fir, to charterers for a period of 24 months. Ratio: The plaintiffs had recently acquired the ship the ‘Hong Kong Fir’ and contracted to charter it to the defendants, but being late in delivering it, the defendants cancelled the charterparty contract. Clause 1 of the contract obliged the owners to deliver a “seaworthy” vessel and Clause 3 further obliged them to maintain the vessel’s seaworthiness and good condition. A ship was chartered to the defendants for a 2 year period. Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd has invented a brand new term in contract law, ‘intermediate term’. Respondent Ravi engaged MIcrohard Company Pte Ltd to perform professional software support service for his customers relationship management software, We will assess whether MicroHard Company Pte Ltd has satisfy the terms of agreement, if not, we will do discussion about the question whether Ravi can get any compensation in incidents (a), (b) an… In this representative case, the ship owner hired out the Hong Kong Fir, ‘being in every way fitted for ordinary cargo service’. Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd., [1962] 2 QB 29, [1962] 1 All ER 474 Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd has invented a brand new term in contract law, ‘intermediate term’. Issue Case Brief Wiki is a FANDOM Lifestyle Community. He states that the correct test is to look at the events which have occurred as a result of the breach at the time when the contract was purported to be repudiated and to decide if these events deprived the party attempting to repudiate of the benefits that it expected to receive from the contract. However, due to the fact )]. The agreement included a term that the ship would be seaworthy throughout the period of hire. Hong Kong Fir Shipping Co. Ltd vs Kawasaki Kisen Kaisha Ltd is the key case which owns the credit for this discovery. Summary of the facts of Hong Kong Fir. Copyright © 2003 - 2020 - LawTeacher is a trading name of All Answers Ltd, a company registered in England and Wales. Registered Data Controller No: Z1821391. Court of Appeal of England and Wales Ship owners let the vessel, Hongkong fir, to charterers for a period of 24 months. Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26. 16th Jul 2019 Classification of terms The ship was delivered on 13 February 1957, sailing from the United States to Osaka. In the case, the ship owner hired out the Hong Kong fir, ‘being in every way fitted for ordinary cargo service’. Looking for a flexible role? Nolan, Donal, Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd., the Hongkong Fir (1961) (May 30, 2008). many observers now detect a trend to bring the law of sales into closer alignment with the general rules governing the consequences of a breach of contract as laid down in the Hong Kong Fir Shipping Co. case [Hong Kong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. (1962) 2 Q.B. To export a reference to this article please select a referencing stye below: Our academic writing and marking services can help you! 15 Paterson Steamships Ltd v Robin Hood Mills (1937) 58 LlLR 33. Kawasaki repudiated the contract, and Hong Kong Fir sued for wrongful repudiation. The charterer’s repudiated the contract, alleging a breach of the obligations to deliver and maintain a seaworthy vessel. Secondly, the Court held that an innocent party cannot treat the contract as repudiated due to delays, however significant, if the breach falls short of a frustration of the contract rendering performance impossible. The ship in fact was not in good condition, and its repairs caused a lot of delays for the Defendant. Upon initial delivery, the vessel’s machinery was described to be in ‘reasonably good condition,’ yet required constant maintenance due to its age. 27 5 McKendrick, E., Contract Law: Text, Cases and Materials 2 nd Edition (UK, Oxford University Press, 2005) at pp. We also have a number of samples, each written to a specific grade, to illustrate the work delivered by our academic services. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. The court also referred to other cases where the question posed by the court was whether the breach deprived the “injured party of a substantial part of the benefi… Relying on Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, the court said that whether a breach is repudiatory must be judged at the time of acceptance of the breach, so it followed that any cures that the party in breach had carried out before that date should be taken into account ([1962] 2 QB 26). He may affirm the contract or he may bring it to an end. 989 (H.L.)] Donal Nolan (Contact Author) University of Oxford - Faculty of Law ( email ) St Cross Building. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. This chapter discusses the decision of the Court of Appeal in Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, The Hong Kong Fir [1962] 2 QB 26, one of the most important English contract cases of the 20th century. Although it was … Kawasaki Kisen Kaisha Ltd. The problems developed with the engine of the ship and the engine crew were incompetent. The innocent party has then an election. ltd v. Kawasaki Kisen Kaisha Ltd (1962) 原告与被告签订合同,被告租用原告的名为Hong Kong Fir的船,租期为24个月。租约中有一个条款规定,该船是适宜航海的。根据以往的有关判例,船上只要稍微有差错,就会违反这个条款。 The vessel was delivered to … 1962 Hong Kong Fir Shipping v Kawasaki Case - developed the concept of innominate terms. However, due to the fact that the engine room staff was inefficient and the engines were very old, the ship was held up for 5 weeks, and then needed 15 more weeks worth of repairs after the deal had been made. Charles Mitchell and Paul Mitchell (eds), Landmark Cases in the Law of Contract (Hart 2008) 269-297, Available at SSRN: https://ssrn.com/abstract=3075903. However, due to the fact that the engine room staff was inefficient and the engines were very old, the ship was held up for 5 weeks, and then needed 15 more weeks worth of repairs after the deal had been made. 16 Kish v Taylor [1912] AC 604; The Friso [1980] 1 Lloyd’s Rep 469. Judges The key issue is turn upon whether MicroHard Company Pte Ltd has breached any term in the Software Support Services Agreement it had signed with Ravi (the Customer). *You can also browse our support articles here >. Hong Kong Fir was successful at trial and Kawasaki appealed. The problems developed with the engine of the ship and the engine crew were incompetent. There was a charter-party between the plaintiff who was the owner of the vessel called Hongkong Fir and the defendant who was the charterer. Bourhill v Young [1943] AC 92 - Duration: 5:50. 26. Hong Kong Fir Shipping Ltd v Kisen Kaisha Ltd (1962) EWCA Civ 7. ... as well as a detailed look at repudiation in the context of recent case law ‘Sabic UK Petrochemicals Ltd v Punj Lloyd Ltd and anor [2013] highlights some of the problems that can arise on the termination of a construction contract. Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd which was held in 1961 is a landmark case in English contract law area. Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd which was held in 1961 is a landmark case in English contract law area. Therefore this breach should not lead to repudiation, but only to damages. Case: Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7. The Defendant, after having problems with the bad state of the ship, notified the Plaintiff that the condition of the ship being in … The agreement included a term that the ship would be seaworthy throughout the period of hire. 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