Stromo Bruks Aktie Bolag v. J. & P. Hutchison [1904] ScotLR 41_274 (26 January 1904)

Stromo Bruks Aktie Bolag v. J. & P. Hutchison [1904] ScotLR 41_274 (26 January 1904)

The penalty clause did not limit the pursuers to estimated freight; common law damages apply. However, as the breach of the charter-party was not the true cause of the pursuers' inability to fulfil their contract with Owen & Co. (due to non-correspondence of delivery times), damages are not measured by the loss on that contract. The pursuers are entitled only to moderate damages for inconvenience, storage, and interest resulting from the breach.

Citation
[1904] ScotLR 41_274
Parties
Pursuer: Stromo Bruks Aktie Bolag; Defender: J. & P. Hutchison
Jurisdiction
Scotland
Judgment Date
26 January 1904
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division
Outcome
Appeal allowed in part; damages reduced
Legal Topics
Charter Party, Penalty Clause, Measure of Damages, Breach of Contract, Affreightment, C.i.f. Contracts
Contract Law Shipping Law Charter Party Penalty Clause Measure of Damages Breach of Contract Affreightment C.i.f. Contracts

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Parties

Stromo Bruks Aktie Bolag

Pursuer

J. & P. Hutchison

Defender

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House, First Division

Legal Issues

  1. 1 Does the penalty clause in the charter-party limit damages to estimated freight or can common law damages be awarded?
  2. 2 Is the shipowner liable for consequential losses arising from the charterer's separate contract with a third party, absent notice?
  3. 3 What is the proper measure of damages for breach of a contract of affreightment when the charterer cannot fulfil a downstream contract?

Ratio Decidendi

The penalty clause did not limit the pursuers to estimated freight; common law damages apply. However, as the breach of the charter-party was not the true cause of the pursuers' inability to fulfil their contract with Owen & Co. (due to non-correspondence of delivery times), damages are not measured by the loss on that contract. The pursuers are entitled only to moderate damages for inconvenience, storage, and interest resulting from the breach.

Court Disposition

Appeal allowed in part; damages reduced

Orders

  • Damages assessed at £50 awarded to pursuers against defenders