| The Mihalis Angelos | |
|---|---|
 | |
| Court | Court of Appeal |
| Citation(s) | [1970] EWCA Civ 4, [1971] 1 QB 164 |
| Case opinions | |
| Lord Denning MR, Edmund Davies LJ and Megaw LJ | |
Maredelanto Compania Naviera SA v Bergbau-Handel GmbH or The Mihalis Angelos [1970] EWCA Civ 4 is an English contract law case, concerning breach of contract.
The Mihalis Angelos was fixed to sail to Haiphong and there load a cargo for delivery in Europe. In the charterparty dated 25 May 1965 the shipowners ("the owners") stated that the ship was "expected ready to load under this charter about July 1, 1965". The charterparty also provided, in the first sentence of the cancelling clause,
"Should the vessel not be ready to load (whether in berth or not) on or before July 20, 1965, charterers have the option of cancelling this contract, such option to be declared, if demanded, at least 48 hours before vessel's expected arrival at port of loading".
On 17 July 1965 the ship was at Hong Kong, still discharging cargo from her previous voyage. It was physically impossible for her to finish discharging and reach Haiphong by 20 July. The charterers gave notice cancelling the charter. The owners treated this as a repudiation and claimed damages, which were the subject of arbitration and of an appeal to Mocatta J. On further appeal, there were three issues:
On the first issue, all three members of the court decided in favour of the charterers, Bergbau, and against the owners, Maredelanto, that 'expected ready' was a condition of the contract. On the second issue, Lord Denning held that the charterers had not repudiated the contract by cancelling on 17 July, but Edmund Davies LJ and Megaw LJ held that they had. On the third issue, Lord Denning, in agreement with the arbitrators, who were themselves agreed, held that they had suffered no damage (p 197): "Seeing that the charterers would, beyond doubt, have cancelled, I am clearly of opinion that the shipowners suffered no loss: and would be entitled at most to nominal damages."
Edmund Davies LJ agreed (p 202): "One must look at the contract as a whole, and if it is clear that the innocent party has lost nothing, he should recover no more than nominal damages for the loss of his right to have the whole contract completed."
Megaw LJ (at pp 209–210) stated:
In my view, where there is an anticipatory breach of contract, the breach is the repudiation once it has been accepted, and the other party is entitled to recover by way of damages the true value of the contractual rights which he has thereby lost; subject to his duty to mitigate. If the contractual rights which he has lost were capable by the terms of the contract of being rendered either less valuable or valueless in certain events, and if it can be shown that those events were, at the date of acceptance of the repudiation, predestined to happen, then in my view the damages which he can recover are not more than the true value, if any, of the rights which he has lost, having regard to those predestined events.
All members of the court were viewing the case as from the date of acceptance of the repudiation (although only Megaw LJ said so in terms). They were not taking account of later events. They were recognising, as was obvious on the facts as found, that the value of the contractual right which the owners had lost, as of the date of acceptance of the repudiation, was nil because the charter was bound to be lawfully cancelled three days later.
The 1962 case of Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha had helped to clarify the distinction between breach of "condition" (where both damages and repudiation lie) and breach of "warranty" (whose sole remedy is damages). [1] The court declared that the victim of a breach of contract could lawfully repudiate only if the "breach had denied the plaintiff of the main benefit of the contract". Here, even though the vessel's unseaworthiness (through insufficient and incompetent crew) might seem important, its effect was only minor. The problem with the Hong Kong Fir case, from the viewpoint of the shipping trade, was the "wait and see" principle. That is, one had to "wait and see" whether the breach had indeed "denied the plaintiff of the main benefit". Given the huge daily cost of hiring and running a ship, [2] parties could not afford to wait. The shipping trade welcomed the Mihalis Angelos decision, as it effectively established a new commercial convention that certain breaches such as breach of an "Expected Readiness to Load" clause (a type of NOR) were inherently repudiatory, with no need to "wait and see".
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. Breach occurs when a party to a contract fails to fulfill its obligation(s), whether partially or wholly, as described in the contract, or communicates an intent to fail the obligation or otherwise appears not to be able to perform its obligation under the contract. Where there is breach of contract, the resulting damages have to be paid to the aggrieved party by the party breaching the contract.
Fundamental breach of contract, is a controversial concept within the common law of contract. The doctrine was, in particular, nurtured by Lord Denning, Master of the Rolls from 1962 to 1982, but it did not find favour with the House of Lords.
Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch of marine insurance, though marine insurance also includes onshore and offshore exposed property,, hull, marine casualty, and marine liability. When goods are transported by mail or courier or related post, shipping insurance is used instead.
Consequential damages, otherwise known as special damages, are damages that can be proven to have occurred because of the failure of one party to meet a contractual obligation, a breach of contract. From a legal standpoint, an enforceable contract is present when it is: expressed by a valid offer and acceptance, has adequate consideration, mutual assent, capacity, and legality. Consequential damages go beyond the contract itself and into the actions that arise from the failure to fulfill. The type of claim giving rise to the damages, such as whether it is a breach of contract action or tort claim, can affect the rules or calculations associated with a given type of damages. For example, consequential damages are a potential type of expectation damages that arise in contract law.
A charterparty is a maritime contract between a shipowner and a "charterer" for the hire of either a ship for the carriage of passengers or cargo, or a yacht for leisure.
In commercial shipping, laytime is the amount of time allowed in a voyage charter for the loading and unloading of cargo.
A contractual term is "any provision forming part of a contract". Each term gives rise to a contractual obligation, the breach of which may give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract.
Affreightment is a legal term relating to shipping.
Contractual terms in English law is a topic which deals with four main issues.
The Achilleas or Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48 is an English contract law case, concerning remoteness of damage.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 [1961] EWCA Civ 7 is a landmark English contract law case. It introduced the concept of innominate terms, a category between "warranties" and "conditions".
Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 is a landmark English contract law decision of the House of Lords, concerning the notions of fundamental breach of contract and inequality of bargaining power.
Golden Strait Corporation v Nippon Yusen Kubishika Kaisha[2007] UKHL 12, also known as The Golden Victory, is an English contract law case, concerning the measure of damages for breach of contract.
In English law, a vitiating factor in the common law of contract is a factor that can affect the validity of a contract. The concept has been adopted in other common law jurisdictions, including the USA.
In English contract law, an innominate term is an intermediate term which cannot be defined as either a "condition" or a "warranty".
Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 is an English contract law case, concerning misrepresentation. It explains the test of "reasonable grounds for belief" under the Misrepresentation Act 1967 s 2(1), and raises the issue of the reasonableness test under s 3.
Bunge Corporation v Tradax Export SA[1981] UKHL 11 is an English contract law case, concerning the right to terminate performance of a contract.
Seaworthiness is a concept that runs through maritime law in at least four contractual relationships. In a marine insurance voyage policy, the assured warrants that the vessel is seaworthy. A carrier of goods by sea owes a duty to a shipper of cargo that the vessel is seaworthy at the start of the voyage. A shipowner warrants to a charterer that the vessel under charter is seaworthy; and similarly, a shipbuilder warrants that the vessel under construction will be seaworthy.
Société Générale, London Branch v Geys [2012] UKSC 63 is a UK labour law case, concerning wrongful dismissal. The Supreme Court's decision was a significant ruling in regard to the competing automatic and elective theories of contractual repudiation, affirming the elective theory.
The law of carriage of goods by sea is a body of law that governs the rights and duties of shippers, carriers and consignees of marine cargo.