Castaneda v. Clydebank Engineering and Shipbuilding Co., Ltd [1903] ScotLR 40_713 (17 June 1903)

Castaneda v. Clydebank Engineering and Shipbuilding Co., Ltd [1903] ScotLR 40_713 (17 June 1903)

The stipulated sum of £500 per week for late delivery was liquidated damages, not a penalty, as it applied only to a specific term (time of delivery), was proportionate to the breach, and was not shown to be exorbitant or unconscionable. Payment of the contract price without express reservation did not constitute waiver of the right to claim damages, as the pursuers' need for delivery and ongoing assertion of their claim precluded such inference.

Citation
[1903] ScotLR 40_713
Parties
Pursuer: Spanish Minister of Marine and others (Royal Naval Commission in London); Defender: Clydebank Engineering and Shipbuilding Company, Limited (formerly J. & G. Thomson, Limited) and its liquidators
Jurisdiction
Scotland
Judgment Date
17 June 1903
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor
Outcome
appeal dismissed; judgment for pursuers affirmed
Legal Topics
Liquidated Damages, Penalty Clauses, Breach of Contract, Waiver of Rights, Damages for Late Delivery
Contract Law Liquidated Damages Penalty Clauses Breach of Contract Waiver of Rights Damages for Late Delivery

Case Brief

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Parties

Spanish Minister of Marine and others (Royal Naval Commission in London)

Pursuer

Clydebank Engineering and Shipbuilding Company, Limited (formerly J. & G. Thomson, Limited) and its liquidators

Defender

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary's Interlocutor

Legal Issues

  1. 1 Whether the sum stipulated in the contract for late delivery was a penalty or liquidated damages and thus subject to modification
  2. 2 Whether the pursuers waived their right to claim damages for late delivery by paying the contract price without express reservation

Ratio Decidendi

The stipulated sum of £500 per week for late delivery was liquidated damages, not a penalty, as it applied only to a specific term (time of delivery), was proportionate to the breach, and was not shown to be exorbitant or unconscionable. Payment of the contract price without express reservation did not constitute waiver of the right to claim damages, as the pursuers' need for delivery and ongoing assertion of their claim precluded such inference.

Court Disposition

appeal dismissed; judgment for pursuers affirmed

Orders

  • Defenders to pay pursuers £67,500 as liquidated damages for late delivery, with interest at 5% per annum from date of citation until payment in full