The decision of the House of Lords in Gill & Duffus S.A. v. Berger & Co. Inc.1 considers some fundamental problems relating to rejection of documents in documentary sales. The case involved a c.i.f. sale of Argentine Bolita Beans to be accompanied by a certificate of quality indicating conformity on discharge with samples taken earlier. The goods arrived at Le Havre, the port of discharge, before the documents were tendered, but not all were discharged: a small portion was carried on to Rotterdam and brought back a few days later. The sellers tendered documents, which were rejected because they did not include the certificate of quality. This was of itself without more a repudiatory breach, as the certificate did not relate to quality on shipment and therefore could not be a shipping document under such a contract. The buyers, however, did not treat the contract as discharged, but set about obtaining such a certificate. Subsequently they tendered the documents again, accompanied this time by a certificate. This could not relate to all the goods, since not all had at the time of its issue arrived, and therefore covered only the first and larger portion discharged.

The buyers, who presumably believed that the goods did not conform to sample whatever the certificate said, again rejected the documents. This was of itself a further repudiatory breach, which the sellers this time accepted. They sued the buyers, who in the House of Lords were held liable for wrongful repudiation by rejecting the second presentation of documents.

The case was decided in three different ways at first instance,2 in the Court of Appeal3 and in the House of Lords, and a proper analysis of the many points raised would require a full article or more. It is the purpose of this note to direct attention only to certain points of general principle arising out of the case.

First, the documents were correct on their face and no indication is given that they were false in any material particular; thus the buyers’ claim was in the end treated as one to reject documents because the contract goods were defective. Put in one way such a claim is clearly inadmissible. The notion that a buyer is entitled to reject confirming documents if it should subsequently turn out 4 that the actual goods shipped under them did not in fact conform to the contract is inconsistent with the presuppositions behind a c.i.f. contract—though it may of course go to damages if the buyer is sued.

On the other hand, if the buyer can establish that the seller had already committed a breach of contract and was at the time of tender of documents wholly and finally disabled from performing the contract, for example because the contract concerns specific goods which were when shipped not in conformity with sample, or because the seller has made an irrevocable contractual appropriation of such non-conforming