Thursday, December 26, 2013

Fertico Belgium S.A. v. Phosphate Chemicals Export Association case brief

Fertico Belgium S.A. v. Phosphate Chemicals Export Association case brief summary
510 N.E.2d 334 (1987)

Appellant foreign corporation sought review of an order by stipulation of judgment absolute from the Appellate Division of the Supreme Court in the First Judicial Department (New York), which vacated a damages award against respondent shipper on appellant's action under the Uniform Commercial Code to recover damages related to appellant's breach of a shipping contract.

Appellant foreign corporation and respondent shipper entered into a contract for the shipment of fertilizer. The contract provided that the shipment was to be received by respondent on two different dates. Subsequently, respondent breached the contract by shipping the first installment of the fertilizer well after the date provided for in the contract. Thus, appellant was forced to find another shipper to provide the fertilizer, and to find another customer for the fertilizer shipped by respondent. Appellant filed suit for breach of contract under the Uniform Commercial Code (UCC). The trial court found for appellant, and the lower appellate court vacated the award of damages to appellant.


  • The court reversed the vacating of the damages award, holding that under the UCC appellant was entitled to damages because its cover purchase was made in good faith and without unreasonable delay, and the fertilizer obtained from the second shipper was a reasonable substitute, as appellant had contracted to sell fertilizer. 
  • The action of selling the shipment of respondent's fertilizer to a third party after respondent's breach did not offset appellant's damages for the breach.
The court modified the order of the lower appellate court vacating an award of damages to appellant foreign corporation against respondent shipper for breach of a shipping contract and awarded appellant damages. Appellant's cover of its damages by acquiring fertilizer from another shipper after respondent's breach was reasonable, and thus it was entitled to a damage remedy because its cover was made in good faith.

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