Of such undertakings all that can be predicated is that some breaches will and others will not give rise to an event which will deprive the party not in default of substantially the whole benefit which it was intended that he should obtain from the contract; and the legal consequences of a breach of such an undertaking, unless provided for expressly in the contract, depend upon the nature of the • event to which the breach gives rise and do not follow automatically from a prior classification of the undertaking as a "condition" or a "warranty". Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 is a landmark English contract law case. [14] (2) The question whether an event which is the result of the other party's breach of contract has this consequence cannot be answered by treating all contractual undertakings as falling into one of two separate categories: "conditions" the breach of which gives rise to an event which relieves the party not in default of further performance of his obligations, and "warranties" the breach of which does not give rise to such an event. For instance, to take Baron Bramwell's example in Jackson v. Union Marine Insurance itself (at page 142), breach of an undertaking by a shipowner to sail with all possible dispatch to a named port does not necessarily relieve the charterer of further performance of his obligation under the charter-party, but if the breach is so prolonged that the contemplated voyage is frustrated it does have this effect. Conditions, Warranties and Innominate Terms. Construction of contractual terms as ‘conditions’ and repudiatory breach of contract. 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. The plaintiffs said the repudiation was wrongful, and that the ship was fit to charter. Condition Term that goes to root of the contract 5 minutes know interesting legal matters Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (UK Caselaw) It introduced the concept of innominate terms, a category between "warranties" and "conditions". Consequently the problem in this case is, in my view, neither solved nor soluble by debating whether the shipowner's express or implied undertaking to tender a seaworthy ship is a "condition" or a "warranty". Hong Kong Fir was successful at trial and Kawasaki appealed. This case is cited by: Cited – Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd CA 20-Dec-1961 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. Where the event occurs as a result of the default of one party the party in default cannot rely upon it as relieving himself of the performance of any further undertakings on his part and the innocent party, although entitled to, need not treat the event as relieving him of the performance of his own undertakings. White and Carter (Councils) Ltd v McGregor, "a 25-year-old vessel called the "Antrim", which they renamed the "Hong Kong Fir", of some 5395 tons gross and 3145 tons net register", Law Reform (Frustrated Contracts) Act 1943, Universal Cargo Carriers Corporation v Citati, Maredelanto Compania Naviera SA v Bergbau-Handel GmbH, L Schuler AG v Wickman Machine Tool Sales Ltd, Golden Strait Corporation v Nippon Yusen Kubishka Kaisha, https://en.wikipedia.org/w/index.php?title=Hong_Kong_Fir_Shipping_Co_Ltd_v_Kawasaki_Kisen_Kaisha_Ltd&oldid=983505504, Court of Appeal (England and Wales) cases, Creative Commons Attribution-ShareAlike License, [1962] 2 QB 26, [1961] EWCA Civ 7, [1962] 1 All ER 474, This page was last edited on 14 October 2020, at 16:34. 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. Motivation for entry into contract helps determine what type of term (in this case condition) ... *Hong Kong Fir Shipping Co v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. The enormous costs involved in chartering mean that parties cannot afford to leisurely loiter, whilst pondering the consequences of the breach. Nolan, Donal, Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd, the Hongkong Fir (May 30, 2008). Hongkong Fir Shipping Company Ltd v Kawasaki Kisen Kaisha Ltd “the Hong Kong Fir” [1961] 1 Lloyd’s Rep 159; [1961] 2 Lloyd’s Rep 478 By michael Posted on August 3, 2011 Maritime Baltime charterparty – vessel unseaworthy – charterers not entitled to cancel In this analysis of the Not merely because the contract is broken. In doing so, the Court adopted a policy that favours contractual performance over greater simplicity and certainty. This case document summarizes the facts and decision in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, Court of Appeal. The question which the learned judge had to ask himself was, as he rightly decided, whether or not at the date when the charterers purported to rescind the contract, namely 6th June, 1957, or when the shipowners purported to accept such rescission, namely 8th August, 1957, the delay which had already occurred as a result of the incompetence of the engine room staff, and the delay which was likely to occur in repairing the engines of the vessel and the conduct of the shipowners "by that date in taking steps to remedy these two matters, were, when taken together, such as to deprive the charterers of substantially the whole benefit which it was the intention of the parties they should obtain from further use of the vessel under the charter-party. It was early recognised that contractual undertakings were of two different kinds; those collateral to the main purpose of the parties as expressed in the contract and those that were mutually dependent so that the non-performance of an undertaking of this class was an event that excused the other party from the performance of his corresponding undertakings. And such a stipulation, unless the parties have agreed that breach of it shall not entitle the non-defaulting party to treat the contract as repudiated, is a "condition". Why? Kirby J agreed with the decision but argued strongly for the preservation of the traditional dualistic approach. The contract may itself expressly define some of these events, as in the cancellation clause in a charter-party; but, human prescience being limited, it seldom does so exhaustively and often fails to do so at all. Soon after, in The Mihalis Angelos [1971] 1 QB 164, it was held the impossibility of the shipowner to meet the "expected ready to load" date, ipso facto entitled the charterer to repudiate for anticipatory breach of condition. Upon initial delivery, the vessel’s machinery was described to be in ‘reasonably good condition,’ yet required constant maintenance due to its age. 16th Jul 2019 In McFadden v Blue Star Lines [1905] 1 KB 607 it was stated that, to be seaworthy, a vessel must have the degree of fitness that an ordinarily careful and prudent shipowner would require his vessel to have at the commencement of a voyage, having regard to all possible circumstances. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 is a landmark English contract law case. 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 … Also the innocent party may well be liable for wrongful repudiation if they treat the contract as at an end where it is found that the breach did not deprive them of substantially the whole benefit of the contract. VAT Registration No: 842417633. 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. Take a look at some weird laws from around the world! Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd which was held in 1961 is a landmark case in English contract law area. Court held that breach was serious so K was allowed to rescind contract.) This is the precise note for contract law course. It embraces obligations with respect to every part of the hull and machinery, stores and equipment and the crew itself. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 is a landmark English contract law case. Looking for a flexible role? In the earlier cases before the Common Law Procedure Act 1852, the problem tends to be obscured to modern readers by the rules of pleading peculiar to the relevant forms of action-covenant, debt and assumpsit, and the nomenclature adopted in the judgments, which were mainly on demurrer, reflects this. On arrival at Osaka, a further fifteen weeks of repairs were needed before the ship was seaworthy again. The Defendant, after having problems with the bad state of the ship, notified the Plaintiff that the condition of the ship being in … ... the vessel is delivered and placed at the disposal of the charterers... at Liverpool... she … And so it should though he has such an excuse that no action lies". (1) The test whether the event relied upon has this consequence is the same whether the event is the result of the other party's breach of contract or not, as Mr. Justice Devlin pointed out in Universal Cargo Carriers Corporation v Citati. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962) Kawasaki chartered the Hong Kong Fir from Hong Kong Fir Shipping Co for 24 months. To export a reference to this article please select a referencing stye below: Our academic writing and marking services can help you! has exercised the English Courts for centuries, probably ever since assumpsit emerged as a form of action distinct from covenant and debt and long before even the earliest cases which we have been invited to examine; but until the rigour of the rule in Paradine v Jane[5] was mitigated in the middle of the last century by the classic judgments of Mr Justice Blackburn in Taylor v Caldwell [6] and Baron Bramwell in Jackson v Union Marine Insurance [7] it was, in general, only events resulting from one party's failure to perform his contractual obligations that were regarded as capable of relieving the other party from continuing to perform what he had undertaken. The problem was the delay element; one had to "wait and see" the effect of the breach. 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. This chapter discusses the decision of the Court of Appeal in The Hongkong Fir, one of the most important English contract cases of the 20th century. Background facts. 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. case of Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd. Any information contained in this case summary does not constitute legal advice and should be treated as educational content only. 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. 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. But not arriving in time for the voyage contemplated, but at such a time that it is frustrated is not only a breach of contract, but discharges the charterer. 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. Court held that breach was serious so K was allowed to rescind contract.) By this time, barely seventeen months of the two-year time-charter remained. The problems in what event will a party to a contract be relieved of his undertaking to do that which he has agreed to do but has not yet done? But where they go only to a part, where a breach may be paid for in damages, there the defendant has a remedy on his covenant and shall not plead it as a condition precedent". Hong Kong Fir Shipping Co Ltd vs. Kawasaki Kishen Kaisha Ltd [1962] 2 QB 26 Contract Law “There are, however, many contractual undertakings which cannot be categorized as being conditions or warranties. Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 (Case summary) This approach has been criticised for sacrificing certainty. Hong Kong Fir Shipping Ltd v Kisen Kaisha Ltd (1962) EWCA Civ 7. "The distinction", he said. As my "brethren have already pointed out, the shipowner's undertaking to tender a seaworthy ship has, as a result of numerous decisions as to what can amount to "unseaworthiness", become one of the most complex of contractual undertakings. "which hold that, where the shipowner has not merely broken his contract, but has so broken it that the condition precedent is not performed, the charterer is discharged. Common Law Procedure Act 1852. And the Marine Insurance Act 1906 s 39(4) provides that "a ship is deemed to be seaworthy when she is reasonably fit in all respects to encounter the ordinary perils of the adventure insured.". However, the trial judge found that this breach was not substantial enough to entitle the charterer to repudiate the contract. Once in Osaka, market freight rates fell, and Kawasaki terminated the contract citing Hong Kong's breach. Case: Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 Key terms: Square pegs and round holes Walker Morris LLP | The Commercial Litigation Journal … But it is by no means true of contractual undertakings in general at common law. House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ,... Determined by the judges is crucial a policy that favours contractual performance over greater simplicity and...., where certainty is crucial doing so, the one precedent to the contract, and the. 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