TRACTORS SINGAPORE LTD V PACIFIC OCEAN ENGINEERING & TRADING PTE LTD

[2020] SGHC 60, High Court, Singapore, Vincent Hoong J, 26 March 2020

Contract – Contractual terms – Implied terms – Implied term to nominate a port of destination within a reasonable time before agreed delivery date – Implied term to advise on a delivery date within a reasonable time from date of contract – Discharge – Repudiatory breach – Express termination clause – Renunciation – Breach of condition – Requirements for waiver by election – Communication of choice to affirm contract in clear and unequivocal terms

The defendant had ordered shipbuilding equipment from the plaintiff under several contracts. The contracts were evidenced by purchase orders and their terms permitted the defendant to advise the plaintiff on a delivery date or a port of destination for the equipment ordered. The equipment was never delivered. The plaintiff alleged that its failure to deliver was caused by the defendant’s repudiatory breaches of implied terms of the contracts. The alleged implied terms included: (a) a term requiring the defendant to advise the plaintiff on a delivery date within a reasonable time; and (b) a term requiring the defendant to nominate a port of destination within a reasonable time, that was sufficiently early to allow the plaintiff to effect delivery by the agreed delivery date. The defendant counterclaimed that the plaintiff had wrongly terminated the contracts in question. Questions arose as to whether the alleged implied terms existed, whether the defendant was in breach of these terms and whether the defendant’s breach of these implied terms entitled the plaintiff to terminate the contracts.