Practitioners drafting f.o.b. contracts must ensure the port of shipment is expressly specified in the written agreement, as prior course of dealing cannot be relied upon to supply this essential term without offending the Statute of Frauds.
Later decisions that cite Cumming & Co Ltd v Hasell
Cumming & Company Limited Plaintiff, Appellant; and Hasell Defendant. Respondent.
H C of A
On appeal from the High Court in Original Jurisdiction.
28 October 1920
Knox C.J., Isaacs and Rich JJ.
Latham (with him Ham), for the appellant.
Stanley Lewis (with him Owen Dixon), for the respondent.
Ham, in reply.
The Court delivered the following judgment:—
Knox C.J.,
Isaacs and Rich JJ.
The plaintiff Company bases its claim on an agreement alleged to be contained in three telegrams which are in the following words:—14th November 1918, plaintiff to defendant, "Informed you booked one hundred thousand sassy logs each Alderson Blackwell fourteen six presume you have covered us for similar quantity at same price. Reply." 15th November 1918, defendant to plaintiff, "Sassafras. Yes book hundred thousand January February March shipment fourteen sixpence f.o.b. less five wire confirmation can possibly fix buyer further hundred thousand could you supply." 16th November 1918, plaintiff to defendant, "Confirm sassy logs sell up to half million also half million celery logs four feet girth up million hardwood logs six feet girth up at list price wire prospect of selling." And it alleges that the following additional terms were implied in that agreement: "that girths should be 36 inches and upwards, that payment should be by 30 days sight draft, documents to be surrendered on acceptance, that insurance should be buyer's care, and that the logs should be consigned to order of buyer Sydney."
It is apparent that the agreement alleged was concluded (if at all) on 16th November 1918 at the latest. We think it is clear from the telegrams that at that date the parties had not arrived at any express agreement as to the place of shipment of the sassafras logs the subject matter of the negotiations, and there is no allegation that a term relating to the place of shipment ought to be implied. The only reference to shipment or delivery contained in the telegrams consists of the expression "f.o.b.," meaning free on board, but no port is named at which the logs are to be placed on board ship. In the absence of any stipulation express or implied as to the port of shipment, there is, in our opinion, no obligation sufficiently certain to be enforced in a Court of law even assuming the agreement to be one for sale by the plaintiff Company to the defendant. There is nothing in the evidence to show with reasonable certainty whether the agreement was for delivery f.o.b. Burnie or f.o.b. Tasmanian ports. There is no written reference to Burnie in the writings forming the alleged agreement. Prior course of conduct is relied on to supply the word Burnie after the letters f.o.b.; but that goes beyond interpretation, and adds a word which limits the effect of the letters f.o.b. The statute was therefore not complied with. It follows that there was not on 16th November any complete enforceable agreement for the sale of the logs by the plaintiff Company to the defendant.
In our opinion the appeal should be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant, Moule, Hamilton & Kiddle, for F. B. Edwards, Burnie.
Solicitors for the respondent, Blake & Riggall.