MONA OIL EQUIPMENT AND SUPPLY COMPANY, LTD. v. RHODESIA RAILWAYS, LTD.
(1949) 83 Ll.L.Rep. 178
KING'S BENCH DIVISION.
Before Mr. Justice Devlin.
Contract - Breach - Prevention of performance - Implied condition to co-operate - Instructions given by defendants to their agents-Alleged obstruction by agents - Mutual misunderstanding - Sale of oil tanks by plaintiffs to defendants -Immediate payment required as sellers were not in actual possession of tanks but were in position to buy for re-sale-Term of contract that "Immediately the goods have passed inspection and are ready for shipment, invoices are to be sent direct to the [defendants]" - "Payment against invoice"-Contract varied by mutual consent, the following further clause being added to contract:
As an alternative against bill of lading payment may be made against signed confirmation [by defendants' shipping agents] that the tanks are now at the disposal of the [defendants].
Interview between plaintiffs' representatives and defendants' shipping agents Evidence that such agents had been informed of position in general terms by defendants, but that they had not been supplied with full instructions- Resultant misunderstanding - Complaint made by plaintiffs to defendants that agents were unwilling to co-operate - Plaintiffs not informed by defendants that instructions had (as was the fact) in meantime been sent to agents-No further communication between plaintiffs and defendants' agents, defendants being notified by plaintiffs that
in those circumstances we must ask for payment in accordance with the contract [as originally drawn up]. The tanks have already been invoiced to you, and we shall be glad to have your cheque in due course.
Tanks, which were to be delivered in parts, inspected by defendants' engineers, who reported that materials
were generally in serviceable condition but that certain parts would have to be selected, as some were corroded- Defendants informed by plaintiffs that only good parts would be dispatched, and offered, by arrangement with plaintiffs' suppliers, a written assurance that the tanks were being held at their (defendants') disposal-Refusal by defendants to pay until parts to be appropriated to contract had been segregated, inspected again and held to their order-Delay-Contract cancelled by plaintiffs' suppliers - Action brought by plaintiffs against defendants for breach of contract-Plea by plaintiffs that contract impliedly cast upon defendants the duty of procuring their agents to ascertain whether the tanks were at defendants' disposal; also, of doing nothing to prevent or obstruct the payment - Duty of defendant buyers.