Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia (The Laconia)
A payment made by bank transfer is made when the funds are unconditionally at the disposal of the payee, and acceptance by the payee's bank as agent can amount to payment.
Facts
Under a charterparty, hire for a ship was payable in advance in cash, and the owners were entitled to withdraw the ship if payment was not made on time. The charterers paid the hire one day late, by transfer to the owners' bank. The owners immediately instructed their bank to return the money, and withdrew the ship. The charterers argued that the owners had waived the late payment because their bank had accepted it.
Legal principle
The House of Lords held that the owners were entitled to withdraw the ship. The court said that the owners' bank had only a limited authority to receive payments, and did not have authority to accept late payment so as to waive the owners' right of withdrawal. The bank's processing of the payment, while the owners were deciding what to do, did not amount to acceptance. The case is important for the law on payment by bank transfer in commercial contracts and on the strict enforcement of withdrawal clauses.
Related cases on payments, mandates and the Quincecare duty
- Agip (Africa) Ltd v Jackson [1991] Ch 547
- Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] QB 677
- Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363
- Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548
- Momm v Barclays Bank International Ltd [1977] QB 790
- Philipp v Barclays Bank UK plc [2023] UKSC 25, [2024] AC 346
- Royal Products Ltd v Midland Bank Ltd [1981] 2 Lloyd's Rep 194
- Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2019] UKSC 50, [2020] AC 1189
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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.
