Wakilii

Twentsche Overseas Trading Co., Ltd v Patel and Co., Ltd (Civil Appeal No. 11 of 1941)

East African Court of Appeal · [1941] EACA 5 · 1941 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of H.M. High Court of Uganda
Decision
Appeal allowed; judgment entered for appellants for the full amount claimed; respondents' counterclaim for damages dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that clause 7 of the indent contract gave the sellers the power to refuse shipment without liability for damages for non-shipment. The appellants validly exercised this power by notifying the respondents in November 1939 that goods could not be supplied under the original indent. The nails shipped and sold in 1940 at Sh. 45 per case were not supplied under the original October 1939 indent requiring shipment at Sh. 17 per case. The respondents had no right to claim damages for non-shipment under the original contract due to the exclusion clause. Appeal allowed.

Outcome

Appeal allowed; judgment entered for appellants for the full amount claimed; respondents' counterclaim for damages dismissed

Facts

By an indent contract dated 28 July 1939, the appellants agreed to sell 200 cases of nails to the respondents at Sh. 17 per case for shipment in October 1939. Clause 7 of the indent provided that the buyer would not be entitled to compensation for non-shipment or late shipment under any circumstances. On 24 October 1939, the appellants' head office notified their Kampala branch that the nails could not be supplied due to dissolution of the supplier syndicate. On 8 November 1939, the Kampala branch informed the respondents that the nails could not be supplied owing to prevailing conditions. In March or April 1940, the appellants sold and delivered 120 cases of similar nails to the respondents at Sh. 45 per case. In May 1940, the respondents discovered that these nails appeared to have been procured from Italy for the original contract and claimed Sh. 5,600 in damages, representing the difference between the contract price and the market price in November 1939. The trial judge found for the respondents on the counterclaim. The appellants appealed.

Issues

  1. Whether clause 7 of the indent contract protected the appellants from liability in damages for non-shipment of goods.
  2. Whether goods shipped in 1940 at an increased price were supplied under the original 1939 indent contract.
  3. Whether the buyer's acceptance of goods at a higher price in 1940 entitled them to claim damages based on the original contract price.

Orders

  • Appeal allowed with costs.
  • Judgment entered for the appellants for the sum claimed with Sh. 750 costs as agreed in the High Court.
  • Counterclaim dismissed with costs.
  • Appellants to have the agreed costs in the High Court and the taxed costs on the counterclaim which is dismissed.

Rules and key headnotes

Contract Law — Exclusion Clauses — Liability for Non-Shipment — Interpretation of Contractual Terms Limiting Damages
Where a contract contains a clause stating that in no circumstances shall the buyer be entitled to compensation for non-shipment or late shipment, the seller may refuse to ship goods without incurring liability for damages, provided notice of non-shipment is given to the buyer.
Contract Law — Interpretation of Contracts — Meaning of Non-Shipment
The term 'non-shipment' in an exclusion clause means exactly what it purports to mean and covers the situation where goods are not shipped at all under a particular contract, not merely late shipment within a specified time.
Contract Law — Appropriation of Goods — Subsequent Shipment Under Different Terms
Where a seller has validly notified a buyer of non-shipment under an original contract and subsequently supplies similar goods at a higher price under a new arrangement, the later shipment is not a shipment under the original contract merely because the goods may have been originally ordered for that purpose or bear markings connecting them to the original order.
Contract Law — Exclusion Clauses — Buyer's Rights on Non-Shipment
A contractual clause may validly limit a buyer's remedy for non-shipment to the right to reject goods if later offered, while excluding any right to claim damages or compensation, provided the parties have agreed to such terms.

Cases cited (2)

  • Blackburn Bobbin Co. v Allen (1918) 1 KB 540
  • Wills v Cunningham (1924) 2 KB 220

Full judgment

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

Twentsche Overseas Trading Co., Ltd v Patel and Co., Ltd (Civil Appeal No. 11 of 1941) [1941] EACA 5 (1 January 1941)
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.