Wakilii

Maclaine Watson and Co. Ltd v Shah (Civil Appeal No. 58 of 1956)

East African Court of Appeal · [1956] EACA 366 · 1950 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from Supreme Court of Kenya judgment dismissing claim for damages for breach of contract
Decision
Appeal allowed; judgment entered for appellant with damages of Sh. 4,801 and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

A C.I.F. contract for delivery of rice at Mombasa did not become void for impossibility of performance when the buyer could not obtain an import licence to bring the goods into Kenya. The buyer's contractual obligation was limited to accepting delivery at Mombasa and paying the contract price. The refusal of an import licence made performance more onerous but did not render it impossible, as the buyer could have disposed of the rice in other ways.

Outcome

Appeal allowed; judgment entered for appellant with damages of Sh. 4,801 and costs

Facts

The appellant agreed to sell and the respondent agreed to buy five long tons of Siam rice at £76 per long ton C.I.F. Mombasa, with shipment guaranteed per s.s. Roggeveen from Singapore. The rice duly arrived at Mombasa and proper shipping documents were tendered to the respondent. The respondent refused to take up the documents or pay the draft because the Kenya Government's Department of Trade and Supplies refused to issue an import licence required under Government Notice No. 802 of 1943 for importing rice into Kenya out of bond. The trial judge held that the contract became void for impossibility of performance under section 56 of the Indian Contract Act and entered judgment for the defendant.

Issues

  1. Whether the contract became void for impossibility of performance under section 56 of the Indian Contract Act when the Kenya Government refused to issue an import licence.
  2. Whether the respondent's contractual obligation extended to importing the rice into Kenya or merely to accepting delivery at Mombasa and paying the contract price.

Orders

  • Appeal allowed with costs.
  • Cross-appeal dismissed with costs.
  • Judgment and decree of the Supreme Court set aside.
  • Judgment entered for the plaintiff-appellant for Sh. 4,801.
  • Plaintiff awarded taxed costs of the Supreme Court proceedings.

Rules and key headnotes

Contract Law — Impossibility of Performance — C.I.F. Contracts — Scope of Buyer's Obligations
Under a C.I.F. contract for delivery at a named port, the buyer's contractual obligation is limited to accepting delivery of the goods at that port and paying the contract price; the buyer is under no obligation to import the goods into the country where the port is located.
Contract Law — Impossibility of Performance — Indian Contract Act Section 56 — Increased Difficulty Distinguished from Impossibility
A contract does not become void for impossibility of performance under section 56 of the Indian Contract Act merely because the promised act becomes more difficult or burdensome than expected; impossibility requires that performance of the actual contractual obligation be prevented, not merely that the buyer's intended use of the goods be frustrated.
Contract Law — Frustration — Government Refusal of Import Licence — Alternative Means of Disposal
Where a buyer cannot obtain an import licence for goods delivered under a C.I.F. contract, the contract is not frustrated if the buyer could dispose of the goods in other ways, such as selling them to a sub-buyer in another country.
Contract Law — Implied Terms — Obligation to Obtain Import Licence
In the absence of an express term, no term will be implied in a C.I.F. contract that the seller is obligated to procure an import licence for the buyer; the nature of a C.I.F. contract and its express terms point to the absence of any such implied obligation.

Legislation cited (1)

  • Indian Contract Act s.56

Cases cited (1)

  • Kunvilal Monohar Das v Durga Prasad (1920) AIR Cal 1021

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Maclaine Watson and Co. Ltd v Shah (Civil Appeal No. 58 of 1956) [1950] EACA 366 (1 January 1950)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.