Biddell Brothers v E Clemens Horst Co
Under a CIF contract, the buyer must pay against tender of the shipping documents, and is not entitled to inspect the goods before paying.
Facts
Clemens Horst agreed to sell hops to Biddell Brothers on CIF terms, with payment to be made against documents. The buyers refused to pay when the documents were tendered, arguing that they were entitled to inspect the goods before paying. The sellers refused to tender the documents unless the buyers paid, and the buyers sued for damages.
Legal principle
The House of Lords held that the buyers were obliged to pay on tender of the documents, without inspecting the goods. Kennedy LJ, whose dissenting judgment in the Court of Appeal was approved, said that the essence of a CIF contract is that the seller performs by shipping the goods and tendering the documents, which represent the goods, and that the buyer is bound to pay on tender of the documents. The buyer retains the right to reject the goods on arrival if they do not conform to the contract.
Related cases on international sales and documentary credits
- Arnhold Karberg & Co v Blythe, Green, Jourdain & Co [1916] 1 KB 495
- Bunge Corp v Tradax Export SA [1981] 1 WLR 711
- Comptoir d'Achat et de Vente du Boerenbond Belge SA v Luis de Ridder Limitada (The Julia) [1949] AC 293
- Discount Records Ltd v Barclays Bank Ltd [1975] 1 WLR 315
- Edward Owen Engineering Ltd v Barclays Bank International Ltd [1978] QB 159
- Equitable Trust Co of New York v Dawson Partners Ltd (1927) 27 Ll L Rep 49
- Gill & Duffus SA v Berger & Co Inc [1984] AC 382
- Hamzeh Malas & Sons v British Imex Industries Ltd [1958] 2 QB 127
Studying commercial law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.
This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
