The vessel was delivered to … Not merely because the contract is broken. Where the event occurs as a result of the default of neither party each is relieved of the further performance of his own undertakings and their rights in respect of undertakings previously performed are now regulated by the Law Reform (Frustrated Contracts) Act 1943. A term in the charterparty agreement required the ship to be seaworthy and to be "in every way fitted for ordinary cargo service." City University of Hong Kong Hong Kong Fir Shipping v Kawasaki Kisen Kaisha [1962] 2 QB 26 (Case summary) This approach has been criticised for sacrificing certainty. In Jackson v Union Marine Insurance there was no breach of the express warranty; but if there had been, to engraft the implied condition upon the express warranty would have been merely a more complicated way of saying that a breach of a shipowner's undertaking to sail with all possible dispatch may, but will not necessarily, give rise to an event which will deprive the charterer of substantially the whole benefit which it was intended that he should obtain from the charter. Common Law Procedure Act 1852. Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd which was held in 1961 is a landmark case in English contract law area. Clause 13, the "due diligence" clause, which exempts the shipowners from responsibility for delay or loss or damage to goods on board due to unseaworthiness unless such delay or loss or damage has been caused by want of due diligence of the owners in making the vessel seaworthy and fitted for the voyage, is in itself sufficient to show that the mere occurrence of the events that the vessel was in some respect unseaworthy when tendered or that such unseaworthiness had caused some delay in performance of the charter-party would not deprive the charterer of the whole benefit which it was the intention of the parties he should obtain from the performance of his obligations under the contract - for he undertakes to continue to perform his obligations notwithstanding the occurrence of such events if they fall short of frustration of the contract and even deprives himself of any remedy in damages unless such events are the consequence of want of due diligence on the part of the shipowner. 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 … Ship owners let the vessel, Hongkong fir, to charterers for a period of 24 months. VAT Registration No: 842417633. 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. 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. The charter provided '1. The cases referred to by Lord Justice Sellers illustrate this and I would only add that in the dictum which he cites from Kish v. Taylor (1912 Appeal Cases page 604, at page 617) it seems to me from the sentence which immediately follows it as from the actual decision in the case and the whole tenor of Lord Atkinson's speech itself that the word "will" was intended to be "may". Conditions, Warranties and Innominate Terms. The starting point for any consideration of the contractual status of any particular term of a contract has to be the judgment of Diplock LJ in Hongkong Fir Shipping v Kawasaki Kishen Kaisha [1962] 2 QB 26. 16th Jul 2019 Any opinions, findings, conclusions, or recommendations expressed in this material are those of the authors and do not reflect the views of LawTeacher.net. 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. Disclaimer: This work was produced by one of our expert legal writers, as a learning aid to help law students with their studies. 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. On the facts, given that the charterer had had the "substantial benefit" of the contract for some 80% of the time period, the court held that the breach was adequately remedied by damages. The test whether an event has this effect or not has been stated in a number of metaphors all of which I think amount to the same things Does the occurrence of the event deprive the party who has further undertakings still to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings? 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. 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 … The existence of innominate terms was acknowledged in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 (20 December 1961). 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. 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". CASE: Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd (1962) 2 QB 26 p 341 (Shipping, delayed, intermediate terms, terms were breached. The agreement included a term that the ship would be seaworthy throughout the period of hire. 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. It embraces obligations with respect to every part of the hull and machinery, stores and equipment and the crew itself. Registered Data Controller No: Z1821391. The agreement included a term that the ship would be seaworthy throughout the period of hire. 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. In 1874 when the doctrine of frustration was being foaled by "impossibility of performance" out of "condition precedent" it is not surprising that the explanation given by Baron Bramwell should give full credit to the dam by suggesting that in addition to the express warranty to sail with all possible dispatch there was an implied condition precedent that the ship should arrive at the named port in time for the voyage contemplated. Accordingly, it is impossible to determine ahead of time what type of term it is. The document also includes supporting commentary from author Nicola Jackson. Background facts. In this analysis of the Under the English sale of goods principles, a condition is a term whose breach entitles the injured party to repudiate the contract,[1] but a breach of warranty shall give rise only to damages. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 is a landmark English contract law case. Where mutual covenants go to the whole of the consideration on both sides they are mutual conditions, the one precedent to the other. The Hong Kong Fir confirmed that the term "seaworthiness" has a very broad meaning ranging from trivial defects like a missing life preserver or a major flaw that would sink the ship. 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? 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. Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This is only a specific application of the fundamental legal and moral rule that a man should not be allowed to take advantage of his own wrong. In-house law team. 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, 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 document also includes supporting commentary from author Nicola Jackson. It is, with all deference to Mr. Ashton Roskill's skilful argument, by no means surprising that among the many hundreds of previous cases about the shipowner's undertaking to deliver a seaworthy ship there is none where it was found profitable to discuss in the judgments the question whether that undertaking is a "condition" or a "warranty"; for the true answer, as I have already indicated, is that it is neither, but one of that large class of contractual undertakings one breach of which may have the same effect as that ascribed to a breach of "condition" under the Sale of Goods Act and a different breach of which may have only the same effect as that ascribed to a breach of "warranty" under that Act. 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. Now that the doctrine of frustration has matured and flourished for nearly a century and the old technicalities of pleading "conditions precedent" are more than a century out of date, it does not clarify, but on the contrary obscures, the modern principle of law where such an event has occurred as a result of a breach of an express stipulation in a contract, to continue to add the now unnecessary colophon "therefore it was an implied condition of the contract that a particular kind of breach of an express warranty should not occur." It introduced the concept of innominate terms, a category between "warranties" and "conditions". The fact that the emphasis in the earlier cases was upon the breach by one party to the contract of his contractual undertakings, for this was the commonest circumstance in which the question arose, tended to obscure the fact that it was really the event resulting from the breach which relieved the other party of further performance of his obligations; but the principle was applied early in the nineteenth century and without analysis to cases where the event relied upon was one brought about by a party to a contract before the time for performance of his undertakings arose but which would make it impossible to perform those obligations when the time to do so did arrive: for example, Short v Stone;[11] Ford v Tiley;[12] Bowdell v Parsons. Kawasaki repudiated the contract, and Hong Kong Fir sued for wrongful repudiation. 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. 5 minutes know interesting legal matters Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 (UK Caselaw) The common law evolves not merely by breeding new principles but also, when they are fully grown, by burying their ancestors. If it is not a condition precedent, what matters it whether it is unperformed with or without excuse? Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 (20 December 1961) Post Author: editor Post published: February 24, 2020 Post Category: INTERNATIONAL / U.K. Court of Appeal(CIVIL DIVISION) Cases - Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd Record details Name Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd Date [1962] Citation 2 QB 26 CA Legislation. 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