Wednesday, December 25, 2013

American Trading & Production Corp. v. Shell International Marine, Ltd. case brief

American Trading & Production Corp. v. Shell International Marine, Ltd. case brief summary
453 F.2d 939 (2d Cir. 1972)

CASE SYNOPSIS
Plaintiff sought review of the decision of the United States District Court for the Southern District of New York dismissing its claim for additional compensation for transporting cargo pursuant to a contract of voyage charter between the parties.

CASE FACTS
The parties contracted for transportation of cargo from Texas to India. Because a canal which was the anticipated passageway was closed due to a state of war which had developed in the Middle East, plaintiff decided, without an opinion by defendant, to make an alternative passage which required it to incur one-third more expenses than it would have incurred had it been able to use the anticipated passageway. Plaintiff sued defendant for the additional compensation.

DISCUSSION

  • The reviewing court affirmed the judgment of the trial court, denying recovery in quantum meruit because the one-third increase in expenses was insufficient to constitute commercial impracticability where the parties did not agree that the canal would be the exclusive method of performance, only the most probable route. 
  • The court also denied recovery under the contract, holding that the liberties clause did not permit additional compensation because the cargo was not deposited at an alternate port due to dangerous conditions.
CONCLUSION
The court affirmed the decision because an increase in expense by one-third was not sufficient to constitute commercial impracticability and the liberties clause of the contract did not provide for extra compensation where the cargo was not deposited due to dangerous conditions at a port other than the designated port.

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