Friday, December 27, 2013

Transatlantic Financing Corp. v. United States case brief

Transatlantic Financing Corp. v. United States case brief summary
363 F.2d 312 (1966)

CASE SYNOPSIS
Plaintiff, a shipping corporation, appealed from an order of the United States District Court, dismissing plaintiff's action to recover from defendant government the costs attributable to diverting plaintiff's ship from the normal sea route caused by the closing of the Suez Canal.

CASE FACTS
Plaintiff contracted with defendant to deliver a cargo of wheat from Texas to Iran via the Suez Canal. When the Suez was closed, the contract became impossible to perform. Plaintiff argued that when it delivered the cargo by going around the Cape of Good Hope, it conferred a benefit upon defendant for which it should have been paid in quantum meruit.

DISCUSSION

  • The court held that plaintiff was entitled to only the contract price for transporting the cargo because performance of the contract was not rendered legally impossible by the canal's closure. 
  • Instead, plaintiff attempted to take its profit on the contract and then force defendant to absorb the cost of the additional voyage. 
  • When impracticability without fault occurs, the law seeks an equitable solution. 
  • There was no interest in casting the entire burden of commercial disaster on defendant in order to preserve plaintiff's profit.

CONCLUSION
The court affirmed the judgment for defendant because plaintiff was entitled to only the contract price for transporting cargo of wheat from Texas to Iran via the customary route, the Suez Canal, because performance of the contract was not rendered legally impossible by the canal's closure.


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