Tuesday, December 31, 2013

Star SS Soc v Beogradska Plovidba (The Junior K) case brief

Star SS Soc v Beogradska Plovidba (The Junior K) case brief summary
Queen’s Bench Division

Facts
  • Plaintiff - Star Steamship Society, a Lebanese concern which was the owner of the vessel Junior K.
  • Defendants - Beogradska Plovidba, a Yugoslav corporation, and they were the proposed charterers.
  • The critical events took place on October 4, 1975, on that day there were various telex exchanges and telephonic discussions, between the brokers who acted on behalf of the parties.
  • The last telex was from the plaintiff’s brokers to the defendant’s brokers - the “recap” telex. See page 384.
  • There were no phone conversations.
  • It is common ground that the contract is concluded by the dispatch and receipt of the recap telex.
  • On October 5, the defendants indicated that they didn’t wan to proceed with negotiations. It was viewed as a repudiation of a concluded contract by the plaintiffs.
  • On October 7, they accepted that alleged repudiation, subject to damages.
  • On august, 1986 leave was granted to the plaintiffs to issue and serve proceedings against defendants.
  • The defendants now apply to set aside that order and service pursuant to it.
  • The owners sought damages for the charterers’ repudiation of the charter, the proposed charterers denied that a charter was fixed.

Issue
Whether the contract was concluded.
What is the meaning of “subject to details”

Holding
There was no binding contract.

Rationale
  • The “recap” telex had all the essential terms of the charter-party.
  • The plaintiffs argue that “subject to the details of Gencon charterparty” had been specifically raised in the negotiations which remained unresolved.
  • If there has been a complete and unqualified acceptance of an offer, a contract comes into existence even if the parties intend to reduce the agreement to writing.
  • However, in negotiations parties are free to stipulate that no binding contract shall come into existence, despite agreement on all essentials, until agreement is reached on yet unmentioned and unconsidered detailed provisions.
  • The Gencon charter-party is a detailed and well-known standard form.
  • The parties had in mind a contract on the Gencon form but they had not yet considered the details of it.
  • subject to details on the Gencon charterparty”, the owners made clear that they did not wish to commit themselves contractually until negotiations had taken place about eh details of the charterparty.
  • It is a common occurrence that some of the detailed provision of the Gencon form to be amended during the process of negotiation.
  • It was stipulated that there was to be no contract until agreement had been reached on the details of the Gencon charter-party.
  • Great Circle v Matheson (The Cluden): the suggestion made in this case is that details are unimportant and that one can simply go back to the printed form, doesn’t always work.
  • There is no unanimity in the US.
  • Arbitration award in the US: until all terms have been agreed no fixture has been concluded.
  • The expression “subject to detailsenables owners and charterers to know where they are in negotiations and to regulate their business accordingly. It is a device which tends to avoid disputes, and the assumption of those in the shipping trade that it is effective to make clear that there is no binding agreement at that stage ought to be respected.
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