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Part II Performance of the Obligation, 4 The Obligation and its Performance

John E. Stannard

From: Delay in the Performance of Contractual Obligations (2nd Edition)

John Stannard

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

(p. 65) The Obligation and its Performance

4.01  Though the distinction between the content of an obligation and its performance is one that is often notoriously difficult to draw in the contractual context,1 there are some factors which clearly relate more naturally to the performance of an obligation rather than to its content. In particular, performance may be affected by factors which arise after the contract is made. The present section of the book is divided into three chapters. In this chapter we shall be considering the computation of time, the hour of performance, and performance in the context of an obligation to perform within a reasonable time. In Chapter 5 we shall consider excuses for failure to perform in time. Then in Chapter 6 we shall summarise the legal consequences of untimely performance, before turning in the next section to the question of remedies for delay.

A.  The Hour of Performance

4.02  In some cases it is necessary to consider not only the day on which performance is due but the hour when it is due. The rules here differ depending on whether or (p. 66) not the promisor can perform without the co-operation of the promisee. Where performance is entirely under the control of the promisor, the general rule is that he or she has up to midnight to perform, but where the promisee has to be involved the legal position is rather more complicated.

(1)  Performance possible without co-operation of promisee

4.03  Where performance is possible without the co-operation of the other party, the basic rule is that in the absence of any stipulation to the contrary2 the promisor has up to midnight to perform. As Patteson J put it in Startup v Macdonald:3

I apprehend the general rule of law to be, that when a thing is to be done on a certain day, it may be done at any time before twelve o’clock at night, unless there be any particular usage …

This rule is well illustrated by a series of three cases concerning a term in a charterparty allowing a shipowner to issue notice of withdrawal where hire was ‘due and not received’. In all three cases it was held that a notice issued before midnight on the last day for payment of hire was premature. It did not matter that the notice was issued after the close of business hours, or at a time when it was clear that the hire would not be forthcoming. The notice could only be issued when hire was both (a) due and (b) not received, and this did not become the case until after midnight had passed.4 Similarly, in The Mathraki5 it was held that, in the absence of any trade custom or practice to the contrary, a seller was entitled to nominate a cargo at any time up to midnight on the last day specified in the contract.

(2)  Performance requiring co-operation of promisee

4.04  It is different where performance requires the co-operation of the promisee. Where the promisor can perform independently, there is no reason for the law to prevent this being done at any hour of the day or night, as the promisor is the only person affected. But in the majority of cases both parties are involved in performance. The delivery of goods, for instance, requires one to deliver and (p. 67) another to accept, and even the payment of money may require the presence of the recipient, at least where cash is involved.6 In cases of this sort the promisor cannot simply perform at his or her own convenience, and the rules concerning the hour of performance are accordingly more strict.

(a)  Tender of performance at a reasonable hour

4.05  Where a tender of performance is required, this must be at a reasonable hour, and the promisee must have a fair opportunity to decide whether or not to accept the promisor’s tender. So in a contract for the sale of goods it is provided by statute that tender and demand of delivery must both be made at a reasonable hour.7 Once more we must turn to Startup v Macdonald,8 where the following observations were made by Rolfe B:9

Now, it may be observed, that in every contract by which a party binds himself to deliver goods, or pay money, to another, he in fact engages to do an act which he cannot completely perform without the concurrence of the party to whom the delivery or the payment is to be made. Without acceptance on the part of him who is to receive, the act of him who is to deliver or to pay, can amount only to a tender. But the law considers a party who has entered into a contract to deliver goods or pay money to another, as having, substantially, performed it, if he has tendered the goods or money to the party to whom the delivery or the payment was to be made, provided that the tender has been made under such circumstances that the party to whom it has been made, has had a reasonable opportunity of examining the goods, or the money, tendered in order to ascertain that the thing tendered really was what it purported to be. Indeed, without such an opportunity an offer to deliver or to pay does not amount to a tender.

4.06  In the same way, a tender of performance must be at an hour which will give the promisee sufficient time to assess whether the tender is satisfactory. Thus section 34 of the Sale of Goods Act 1979 provides that in the absence of agreement to the contrary10 a buyer should be given the chance to inspect the goods on delivery so as to decide whether or not to accept them.11 In the same way, where the obligation is to pay cash the money has to be tendered at such a time as to allow the payee to count it out.12 Where the tender is too late for the promisee to be able to decide (p. 68) whether or not to accept it before the deadline specified for performance by the promisor, the promisor will have broken the contract. However, a tender can be at an unreasonable hour even though there is still plenty of time for performance. Take, for instance, a case where a seller of goods is bound to make delivery within two weeks after the contract is made. If the goods are tendered at an unreasonable hour on the last day for performance, the tender is bad, but it is equally bad if made at such an hour on the very day the contract is signed. The only difference is that in the latter case there is no breach of contract, since it is still open to the promisor to make a good tender at a later stage.13 Indeed, it can be said that as a general rule in cases such as this it is not the bad tender that amounts to the breach, but the failure to make a good one within the stipulated time.14

(b)  Unavailability of promisee

4.07  A tender of performance may also fail because the promisee is not available to receive it. The crucial question here is whether or not the contract specifies a place for performance. Where no place of performance is specified, it is the duty of the promisor to seek out the promisee wherever he or she may be,15 and the absence of the latter can be no excuse.16 However, in most cases the contract will specify a place for performance,17 and the question then arises as to the time of day when the promisee is expected to be there.

4.08  Where the contract specifies a place of performance, and the promisor has not been able to contact the promisee, it is sufficient to show that performance was tendered at the last convenient hour of the day at the place specified. Thus it has been held that (p. 69) a demand for rent will put a tenant in default if made at the last convenient hour of the day upon which it is due,18 and that a tender of stock must be at the last part of the day that it can be accepted.19 A similar problem may arise where one party to the contract has to exercise an option by a certain deadline. In Nissho Iwai Petroleum Co v Cargill International SA20 the seller under an f.o.b. contract had until 5 p.m. on a certain day to declare the cargo to the buyer’s office, and the buyer was obliged to use all reasonable efforts to ensure that personnel were available at the office to deal with such declarations. The seller tried to make a declaration in the last thirty seconds prior to the deadline, but was unable to contact anyone as the office had shut down for the day. The buyers were found to be in breach; given that declarations in such cases might pass through a chain of up to fifty parties right up to the last moment of the last day, it was not unreasonable to expect that someone would be on hand to receive the declaration when it was made. The upshot was that by closing the office half a minute early the buyers had rendered themselves liable for over $1 million in damages.

(c)  Performance due on demand

4.09  Sometimes performance is due on demand, and then the question arises as to what time of the day such demand can be made. Clearly performance cannot be demanded at any hour of the day or night, save in exceptional cases.21 Normally performance must be demanded at a reasonable hour. Most of the cases on this point relate to bills of exchange, which have to be presented at a reasonable hour on a business day.22 Thus a bill payable at a bank has to be presented within banking hours;23 a bill payable at some other place of business, or at a private house, has to be presented at a time when it would be reasonable to expect someone to be available on the premises to transact business.24 The same principles apply outside the law of negotiable instruments, as is seen by two American cases. The (p. 70) first is Berry v Nall and Duxberry,25 where the plaintiff agreed to take and the defendant to deliver a quantity of cotton when ready for market. The cotton was promised for a certain day, the plaintiff to come and ask for the cotton. He did so on the due day, but half an hour after sunset. The defendant was unable to deliver the consignment, and argued that the demand had been made at an unreasonable hour. The court held that the plaintiff was entitled to come and ask for the cotton at that hour, provided that he gave the defendant time to complete the delivery before midnight. In the circumstances it was found as a fact that it was quite customary to use lamps in gin-houses, and that if he had had the cotton available it would have been perfectly possible for him to weigh it out in the time. In contrast we have Manners v Hirschenhorn,26 where a contract for the sale of hog bristles provided for payment within ten days on presentation of shipping documents. The sellers tendered the documents after the close of banking hours on the tenth day and demanded cash, and when this was not forthcoming they refused to accept an offer of payment in cash the next banking day.27 It was held that the sellers could not maintain an action for breach of contract. The demand for payment, it was said, had to be made at a reasonable hour, what was reasonable being a question for the jury.

B.  Period Specified for Performance

4.10  The contract may provide for something to be done within a certain period, or alternatively that a certain period must elapse before something may be done. The question then arises as to how that period is to be computed; in particular, when does it begin and when does it end? In Carapanayoti & Co Ltd v Comptoir Commercial Andre et Cie SA28 Lord Denning MR drew a distinction in this context depending on whether the period was intended to be inclusive or exclusive, the difference being that in the former case the last day of the period was to be included in the computation, whereas in the latter it was not. We shall now look more closely at this distinction.

(1)  Period inclusive

4.11  The first situation is where, in the words of Lord Denning, ‘the instrument prescribes a period within which a person must act or take the consequences … [as] … for (p. 71) instance, where a man must give notice or do some other thing within a certain number of days from or after some date or event.’29 Here the general rule is that the date on which the event occurs is not counted. This rule has a long pedigree, going back to the case of Lester v Garland in 1808.30 There a will provided a bequest to the children of A on condition that she gave security not to marry B within six calendar months of the testator’s death. The testator died on the evening of 12 January 1805, and A gave the required security on the evening of 12 July of the same year. It was held that this was within the time specified in the will, it being said that A should be allowed six full months to make up her mind on the matter. The same rule applies in the contractual context. In Webb v Fairmaner,31 for instance, goods were sold on 5 October 1837, ‘to be paid for in two months’. It was held that the seller was not entitled to sue for the price on 5 December, since the contract allowed two whole months for payment. Again, in Goldsmith’s Company v West Metropolitan Railway32 the defendant company was given a statutory power of compulsory purchase which was set to cease ‘after the expiration of three years’ from the passing of the relevant Act.33 Royal Assent having been given on 9 August 1899, it was held that the company was entitled to exercise the power on 9 August 1902, the day on which the Act came into force having been excluded. In the words of Mathew LJ, ‘the rule is now well established, that where a particular time is given, from a certain date, within which an act has to be done, the day of the date is to be excluded’.34 The rule is often justified by postulating a situation in which something has to be done within one day of a given event;35 if the day of the event itself is not excluded from the computation, there might be only a very short time available for the act to be done. This can be illustrated by Radcliffe v Bartholomew,36 where section 14 of the Prevention of Cruelty to Animals Act 1849 provided that a complaint had to be lodged ‘within one calendar month after the cause of such complaint shall arise’. On 30 June 1891 a complaint was lodged against the applicant alleging that he had ill-treated certain sheep on 30 May of that year. It was held that the complaint was in time. Say the period specified had been one day rather than one month, and that the acts complained of had occurred late in the evening. If the first day were included, the complaint would have had to be lodged before midnight on that very day, which would have been absurd.37

(p. 72) 4.12  However, this principle may give way when a contrary construction is indicated. Thus where a lease or licence is stated to commence on a certain day, that day is included in the term,38 and under the Interpretation Act 188939 a statute comes into force, unless there is express provision to the contrary, at midnight on the day preceding that on which it receives the Royal Assent. In Hare v Gocher40 the court had to consider the interpretation of section 14 of the Caravan Sites and Control of Development Act 1960, whereby a licence had to be applied for ‘within the period of two months beginning with the commencement of this Act’. The Act received Royal Assent on 29 July 1960 and came into force on 28 August. It was held that an application for a licence made on 29 October was out of time, the court having held that the wording used was clearly intended to exclude the general rule whereby the first day was excluded. A similar result was reached in Trow v Ind Coope (West Midlands) Ltd,41 concerning the construction of the rule of court requiring a writ to be served within a period of 12 months ‘beginning with’ the date of its issue.42 The writ having been issued on 10 September 1965, it was held that it could not be validly served on 10 September 1966; the wording of the rule, it was said, clearly indicated that time should begin to run on the first day. Though neither of these two cases concern the construction of a contract, they do indicate that the general rule excluding the first day from computation can be excluded by the use of an appropriate form of words.

(2)  Period exclusive

4.13  In other situations the prescribed period may be exclusive. These are cases where, in the words of Lord Denning, ‘the instrument prescribes that a certain time must elapse between some event and another, such as between the doing of a thing and some other date or event’.43 Here the general rule is that the day on which the act is to be done and the day of the date or event in question are both excluded, so as to give the other party the benefit of so many clear days. In Young v Higgon44 it was provided by statute that no writ could be served on a justice of the peace for anything done in the execution of his office ‘until notice in writing shall have been delivered to him … at least one calendar month before the suing out or serving the same’. Notice was served on 26 March 1838 and the writ was sued out on 26 April. It was held that insufficient notice had been given, (p. 73) since the days of service and of suing out were both to be excluded; the intention of the statute was to ensure that the defendant had a full month’s warning of the action. The same line of reasoning was applied in Rightside Properties v Gray,45 where a contract for the sale of land allowed in the event of default for the service of a notice of ‘at least 21 days’ requiring the default to be remedied. The purchaser having failed to complete, the vendor put a notice in the post requiring completion ‘within 21 days of the date hereof’. The notice was held to be improper; even if it had arrived the very next day, it only gave the purchaser 20 days to act, whereas the contract said that he should have had 21. In Carapanayoti & Co Ltd v Comptoir Commercial Andre & Cie itself,46 a contract for the sale of goods provided for shipment in ‘February/March 1968’, the buyer being obliged to nominate a port ‘not less than 21 days before the commencement of the shipment period’. It was held that a nomination made on 11 January was out of time, since this was within 21 days of the first shipping day. As Lord Denning MR pointed out, this was a clause inserted for the benefit of the seller, who was to have the benefit of the full 21 days in order to make the necessary arrangements for having the cargo ready.47

4.14  Once again, this rule is subject to exception. Thus Lord Denning MR himself refers to cases where a periodic tenancy is determinable by notice; here it is always sufficient to give a notice to quit expiring on the periodic day.48 Similarly, where a notice to quit is required to be of a certain number of months’ duration, it is generally sufficient to give the tenant until the corresponding date of the month in question. In Hogg Bullimore & Co v Co-operative Insurance Society49 a tenancy was subject to section 25(1) of the Landlord and Tenant Act 1954, under which notice to quit was ineffective if given ‘less than six months before the date of termination specified therein’. The landlord served a notice on 2 April 1984 specifying the date of termination as 2 October 1984, and this was held to be valid on the basis of the ‘corresponding date’ principle. In Riley Investments Ltd v Eurostile Holdings Ltd50 the court had to consider the effect of section 29(3) of the same Act, which specified that applications for a new tenancy under the Act had to be made ‘not less than two nor more than four months’ after the service of a notice to quit. Notice having been given on 23 March 1983, the question arose whether the tenant was entitled to apply for a new tenancy on 23 May. It was held that the application was within the limits specified by the section. The landlords had argued that since 23 May was not more than two months after 23 March it (p. 74) had to be less, but as Fox LJ pointed out this argument was misconceived. Some dates were less than two months after 23 March and some were more, but 23 May was neither less nor more; it was exactly two months after.51 A similar course of reasoning was employed in Freeman v Reid,52 where Cockburn CJ set out the following principle:53

In a case like the present where the months are broken, the day on which the notice was given being excluded, the calendar month or other period of time is complete when, starting from a given day in the first month, you come to the corresponding day in the succeeding month whatever be the length of either.

4.15  This principle is well illustrated by Dodds v Walker,54 another case involving section 29(3). Here the notice to quit was served on 30 September 1978, and the tenant sought to apply for a new tenancy on 31 January 1979, arguing that he was entitled to four full months under the section – that is to say, October, November, December and January. But this argument was dismissed by the court as a fallacy, depending as it did on the irrelevant fact that 30 September happened to be the last day of the month. If the notice had been served on 30 August, it would have been quite clear that the last day for the application would have been 30 December. In the same way, the last day on which the application could have been made in the present case was the date corresponding to that on which the notice was served, that is to say, 30 January 1979.

(3)  Specifying the wrong date

4.16  A related but distinct problem appears from the decision of the House of Lords in Mannai Ltd v Eagle Star Assurance Co Ltd.55 In this case leases commencing on 13 January 1992 contained a break clause providing the tenants with an option to determine by serving not less than six months’ notice in writing on the landlord or his solicitors, such notice to expire ‘on the third anniversary of the term commencement date’. On 24 June 1994 the tenant served a notice in the following terms: ‘Pursuant to … the lease we as tenant hereby give notice to you to determine the lease on 12 January 1995.’ This was of course a mistake: the date should have been 13 January. The courts now had to decide whether the notice was valid to determine the lease. At first instance the notice was held to be valid by Judge Rich QC, on the grounds that since 12 and 13 January were contiguous dates there was a moment of time at which they coincided.56 However, this reasoning was rejected by the Court of Appeal on the basis that where the contract imposed a requirement that a notice take effect on one day, (p. 75) that requirement could not be satisfied by a notice expressed to take effect on a different day.57 The tenants then appealed to the House of Lords, where Lords Goff and Jauncey accepted the reasoning of the Court of Appeal;58 though it was clear what the tenants were trying to achieve, they had failed to use the right key which alone was capable of turning the lock.59 However, Lords Steyn, Hoffmann and Clyde voted to allow the appeal,60 saying that notices of this sort were to be approached objectively, and that the question was how a reasonable recipient would have understood them.61 In the present case a reasonable recipient with knowledge of the lease and of its terms would have been left in no doubt, despite the mistake as to the date, that the tenants were purporting to exercise the break option according to its terms.

4.17  How does this case affect the principles we have just been discussing? To some extent, it does not affect them at all, since the issue in the case was one of form rather than of substance. The notice had clearly been served within the stipulated time; the only problem was that it referred to the wrong date. The principle here is basically one of interpretation, as set out by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society,62 the principle being that in some cases it is ‘open to the court to conclude that the parties must, for whatever reason, have used the wrong words or syntax’.63 Thus in Carradine Properties Ltd v Aslam,64 where a lease could be determined by 12 months’ notice, the court upheld the validity of a notice served by a lessor in September 1974 purporting to determine the lease in ‘September 1973’, it being obvious that what was meant was ‘September 1975’. A similar approach can be seen in Garston v Scottish Widows Fund and Life Assurance Society,65 where the lease provided for determination by notice at the expiry of the tenth year of the term. The court upheld the validity of a notice served by the tenants despite the fact that it specified determination on 9 July 1995, the anniversary of the lease, when it should have been 23 June 1995, the anniversary of its commencement. However, the point in these cases is that the intended meaning of the notice would have been clear to any reasonable recipient. It is different where the notice is ambiguous on its face,66 (p. 76) or where it is clearly not in accordance with the contract.67 It has also been said that the approach in Mannai has no application to unilateral contracts or options, where strict compliance is of the essence.68

C.  Performance within a Reasonable Time

4.18  We have already seen how, where the contract is silent as to time, performance must take place within a reasonable time, and we have considered the factors that go to make up a reasonable time in any given case.69 However, the law also provides a related but distinct set of principles to be applied in deciding whether such performance has taken place. In particular, the court may excuse the promisor for delays in performance caused by events outside his or her control.

4.19  As a general rule events occurring after the contract was made cannot be taken into account in calculating a reasonable time for performance, and no doubt this is so if we restrict our inquiry to the content of the obligation to perform within a reasonable time.70 However, such factors may be of great relevance in deciding whether such an obligation has been performed, and this is generally the issue before the court in any given case. In Peregrine Systems Ltd v Steria Ltd71 the Court of Appeal rejected the proposition that the exercise was merely one of looking forward from the date of the contract to a completion date contemplated by the parties at the relevant time, and said that the consideration of whether there had been a breach of the relevant obligation was not limited to what the parties contemplated or ought to have foreseen at the time of the contract.72 At the same time, the court approved a dictum of His Honour Judge Seymour QC, which deserves to be cited at length in the present context. According to Judge Seymour,73 the question whether a reasonable time had been exceeded in any given case was

(p. 77)

… a broad consideration, with the benefit of hindsight, and viewed from the time at which one party contends that a reasonable time for performance had been exceeded, of what would, in all the circumstances which are by then known to have happened, have been a reasonable time for performance. That broad consideration is likely to include any estimate given by the performing party of how long it would take him to perform; whether that estimate has been exceeded, and if so, in what circumstances; whether the party for whose benefit the relevant obligation was to be performed needed to participate in the performance, actively, in the sense of collaborating in what was needed to be done, or passively, in the sense of being in a position to receive performance, or not at all; whether it was necessary for third parties to collaborate with the performing party in order to enable it to perform; and what exactly was the cause, or were the causes, of the delay to performance. The list is not intended to be exhaustive.

Two matters are of particular significance in this context, one being the conduct of the parties subsequent to the contract, and the other the effect of unforeseen supervening events.

(1)  Conduct of the parties

4.20  The conduct of the parties, and in particular their attitude to the contract, may be of great importance in deciding whether performance has taken place within a reasonable time. Both the attitude of the promisor and that of the promisee can be relevant here. Thus a promisee who has constantly been pressing for performance is more likely to be able to convince the court that the promisor has not performed within a reasonable time than one who has not shown any concern about the matter. In Wigginton v Dodd74 a sum of £200 was delivered to the defendant to be applied for the purchase of a public house. Three months later the plaintiff sued for the return of the money on the ground that the defendant had not taken any steps to carry out the proposed transaction. The question of whether a reasonable time had elapsed for the return of the money was left to the jury, who were instructed to bear especially in mind that there had been no request by the plaintiff prior to the action. On the other hand, in McDonald v McKenna75 the claimant seller sought specific performance of a contract for the sale of a house to the defendant, the understanding being that the defendant would then resell it himself on the market. No date for completion was specified, but it was held that the defendant had failed to complete within a reasonable time, one reason being that the claimant had been pressing for completion while he himself had been dilatory, having rejected several reasonable offers from potential sub-purchasers.76 A similar result was reached in Anglo-Irish Bank Corporation Ltd v John Patrick Conway,77 which involved an agreement made in June 2009 between the (p. 78) guarantor of a debt and one of the creditors for waiver of the guarantee, provided that the guarantor could obtain similar waivers from the other creditors. No such waivers having been obtained by November 2011, it was held that the creditor in question was entitled to sue the guarantor on the basis of the debt. No deadline having been set for the obtaining of the necessary waivers, a reasonable time would be implied, and this had clearly lapsed by the relevant time. It would have been different if the guarantor had kept in touch with the creditor and given some explanation of the delay.78

(2)  Supervening events

4.21  One matter of particular significance in this context is the effect of unforeseen supervening events which hinder the promisor from performing. When the obligation is to perform on a certain day, such events do not provide any defence, as we shall see, unless they are severe enough to frustrate the contract, but where the obligation is merely to perform within a reasonable time, a wider latitude is allowed.

4.22  It is clear that while an obligation to perform within a reasonable time is more than just an obligation to do one’s best, the promisor will sometimes be excused where performance has been hindered by matters for which he or she is not responsible. Thus in Ardan SS Co v Weir79 a charterer was held liable in damages for failure to load the cargo within a reasonable time despite the fact that he had loaded as fast as he could. It was decided that since the delay resulted from his failure to provide a cargo, an obligation which was absolute, he was to be held responsible. However, it was added that a charterer in performing this obligation was not bound to be prepared for contingencies or fortuitous circumstances not contemplated by the parties.80

4.23  The crucial question, therefore, as with the doctrine of frustration,81 is whether the supervening event is something for which the promisor should shoulder the risk. If not, no liability arises. Thus it has been held that where the cargo was to be provided from a particular place, and the charter had been made in view of circumstances by which, as both parties knew, the procuring of a cargo from that place might be delayed, the charterer was excused from liability.82 Again, a charterer is not liable for delay in unloading the ship if the charterparty incorporates a reference to the custom of a particular port, and unloading according to that custom is rendered temporarily impossible. In Ford v Cotesworth83 an obligation (p. 79) to unload at Lima ‘in the usual and customary manner’ was held not to have been broken when the port authorities refused to allow cargo to be landed because of the threat of bombardment from the Spanish Navy; in Postlethwaite v Freeland84 an obligation to unload ‘with all dispatch according to the custom of the port’ was held to have been fulfilled despite a delay of six weeks caused by a shortage of lighters; and in Castlegate SS Co Ltd v Dempsey,85 where the obligation was to unload ‘with all dispatch as customary’ at Garston, the charterer was not liable for delay caused by a strike of the dockers, who normally by the custom of the port did all the unloading.

4.24  The cases just mentioned could be said to turn on the custom of the port, but a wider principle was set out in Hick v Raymond and Reid.86 This case involved a bill of lading under which the consignees were obliged to unload the goods from the ship. Nothing was said about time. The unloading was interrupted for several weeks by a dock strike, and the question arose whether the consignees were answerable in damages for the delay. It was held by the House of Lords that they were not. Since the contract was silent as to time, a reasonable time had to be implied, and this was to be assessed according to all the circumstances, including supervening events. The only proviso was that a promisor could not rely on these as an excuse in so far as he or she had caused them or contributed to them. This rule was not a special one confined to charterparties or bills of lading, but a general principle of contract. As Lord Watson said:87

The rule is not confined to contracts for the carriage of goods by sea. In the case of other contracts the condition of reasonable time has been frequently interpreted; and has invariably been held to mean that the party on whom it is incumbent duly fulfils his obligation, notwithstanding protracted delay, so long as such delay is attributable to causes beyond his control, and he has neither acted negligently nor unreasonably.

Thus in Taylor v Great Northern Railway88 the defendants were held not to be liable for delays in delivery caused by an accident involving the train of another company which had running powers over their line. Their duty was to deliver the goods in a reasonable time, and this was to be assessed by looking at all the circumstances, including those which existed at the time of performance. In Hall v Wright89 it was said that a man who promised to marry would be excused by a supervening deadly disease just as he would by a dangerous wound; assuming (p. 80) that his obligation had to be performed within a reasonable time, all the relevant circumstances had to be considered. In the words of Erle J:90

The test lies, not in number of days, but in the reasons that produced the delay originally, and the alteration in the situation of the parties when the time is supposed to have arrived.

Similarly, in Carver & Co v Sassoon & Co,91 where a cargo of cottonseed was held up because the ship had gone aground, it was said that the sellers would have been liable for the delay if the grounding had been shown to be due to negligent navigation, as this risk was assumed by them on the proper construction of the contract; in the absence of proof of negligence, no liability arose.

4.25  How does the principle just discussed relate to the doctrine of frustration? On the surface the two look remarkably similar. Both involve the question of when an unexpected turn of events can excuse a failure of performance. Both of them have been justified by reference to what the parties must have contemplated. In both cases the promisor is saying in effect that to ask for performance in the circumstances which have arisen would be to demand something which he or she did not promise to do.92 Again, both the doctrine of frustration and the principle in Hick v Raymond and Reid contain the qualification that the circumstances which excuse performance must not have been brought about by the promisor. So it is a well-known rule that the law does not allow self-induced frustration.93 And in Hick v Raymond and Reid itself, Lord Watson said, as we have seen, that the promisor was relieved of liability for the delay only so long as such delay was ‘attributable to causes beyond his control’, and ‘he has acted neither negligently nor unreasonably’.94 However, though the two doctrines clearly have much in common, there are a number of important differences between them. In particular:

  • •  The Hick v Raymond and Reid doctrine does no more than provide the promisor with an excuse for delay in performance. The doctrine of frustration is said to discharge the contract altogether.95

  • •  The Hick v Raymond and Reid doctrine only applies where no time of performance is specified.96 The doctrine of frustration is not so limited.

  • (p. 81) •  The Hick v Raymond and Reid doctrine only applies to impossibility of performance, that is to say where prompt performance is hindered by a supervening event. The doctrine of frustration can also be used in cases of failure of consideration – that is to say, where performance is perfectly possible, but where the promisor has been deprived by subsequent events of the agreed exchange for his or her performance.97

  • •  The Hick v Raymond and Reid doctrine is satisfied in any case where a promisor who is bound to perform in a reasonable time is delayed by events beyond his or her control. The doctrine of frustration only applies where the supervening event renders performance something ‘radically different’ from what was contemplated by the contract.98

  • •  The Hick v Raymond and Reid doctrine only affects one party. The doctrine of frustration affects both.99

  • •  The Hick v Raymond and Reid doctrine acts by way of a defence available to the promisor at his or her option. The doctrine of frustration is said to be automatic and to operate whether the promisor wishes to rely on it or not.100

We shall be discussing the doctrine of frustration in the context of delay more fully in a later chapter.101 Suffice it to say at the present juncture that the Hick v Raymond and Reid doctrine, though similar to the doctrine of frustration, operates independently of it. This is not an unreasonable conclusion to draw; as we shall see, there are other examples in the law of contract of excused non-performance falling short of frustration.102(p. 82)


1  The doctrine of frustration, for instance, was once thought to rest on the basis of an implied term in the contract itself: Taylor v Caldwell (1863) 3 B & S 826 at 833, 122 ER 309 at 312 (Blackburn J); Tamplin SS Co v Anglo-Mexican Petroleum Products Co Ltd [1916] 2 AC 397 (HL) at 404 (Lord Loreburn); below, paras 12.98–12.100.

2  As in Miceli v Dierberg Mo App E D 1989, 773 SW 2d 154 (1989) (Missouri) (10 a.m.); Nissho Iwai Petroleum Co v Cargill International SA [1993] 1 Lloyd’s Rep 80 (5 p.m.); Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514 (PC) (5 p.m.).

3  (1843) 6 M & G 593, 134 ER 1029 at 1040.

4  Tradax Export SA v Dorada Compania Naviera SA (The Lutetian) [1982] 2 Lloyd’s Rep 140; Afovos Shipping Co SA v R Pagnan and Fratelli (The Afovos) [1983] 1 Lloyd’s Rep 335 (HL); Schelde Delta Shipping BV v Astarte Shipping Ltd (The Pamela) [1995] 2 Lloyd’s Rep 249. In cases where the promisor is ‘totally and finally disabled’ from performing, the promisee may be able to terminate the contract on the grounds of anticipatory breach, but such breach is anticipatory, not actual: Universal Cargo Carriers Corp v Citati [1957] 2 QB 621.

5  Vitoil SA v Phibro Energy AG [1990] 2 Lloyd’s Rep 84; Fox-Bourne v Vernon (1894) 10 TLR 649; Reardon-Smith Line Ltd v Ministry of Agriculture [1963] AC 691 (HL).

6  Thus in Oakdown Ltd v Bernstein & Co (1985) 49 P & CR 282 the court dismissed as ‘ridiculous’ the argument that a purchaser of land might pay the price on Good Friday by posting cash through the letterbox of the vendor’s solicitor.

7  Sale of Goods Act 1979, s 29(4); Uniform Commercial Code para 2-503; Uniform Sales Act para 43(4).

8  (1843) 6 M & G 593, 134 ER 1029: above, para 4.03.

9  Ibid at 1036.

10  As in the case of c.i.f. contracts, where payment is made against the shipping documents: Clemens Horst & Co v Biddell Bros [1912] AC 18 (HL); see further below, paras 13.25–13.27.

11  Bridge M (ed), Benjamin’s Sale of Goods (9th edn, 2014) (‘Benjamin’), para 12.041; ‘Delivery of goods’ (2005) 27(3) The Buyer, pp 4–5.

12  Wade’s Case (1601) 5 Co Rep 114A, 77 ER 232; Tinckler v Prentice (1812) 4 Taunt 549, 128 ER 445.

13  In the same way that a seller whose goods are rejected may still be able to make a proper tender in accordance with the contract at a later stage: Borrowman Phillips and Co v Free and Hollis (1878) 4 QBD 500 (CA); Libau Wood Co v H Smith and Sons (1930) 37 Ll LR 296; Apps, A, ‘The right to cure defective performance’ [1994] LMCLQ 525.

14  A bad tender made within the time allowed for performance will only break the contract if it is so bad as to evince an intention not to be bound by the contract, in which case the promisee can terminate performance on the basis that the contract has been repudiated: Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 (CA).

15  Cranley v Hillary (1813) 2 M & S 120, 105 ER 327; Walton v Mascall (1844) 13 M & W 452, 153 ER 188; Davis v Burrell (1851) 10 CB 821, 138 ER 325; Robey and Co v Snaefell Mining Co Ltd (1887) 20 QBD 152; Fowler v Midland Electric Corp for Power Distribution Ltd [1917] 1 Ch 656 (CA); Beale, Hugh G (ed), Chitty on Contracts (32nd edn, 2015) (‘Chitty’), para 21-005. Though this rule generally relates to the payment of money, it also applies to other obligations where no place for performance is specified, as in Rippinghall v Lloyd (1833) 5 B & Ad 742, 110 ER 964 (covenant to deduce good title).

16  The debtor’s duty in these cases is sometimes said to be to seek out the creditor wherever he may be within the four seas (inter quatuor maria), but where the contract was made outside the jurisdiction the debtor may be under a duty to go outside the jurisdiction to pay the creditor, as in Fessard v Mugnier (1865) 18 CB (NS) 286, 144 ER 453. But where the creditor has left the jurisdiction after the contract was made, the debtor is not bound to go after him.

17  Even where a particular place is not expressly named for performance, the court may very well construe the obligation as being one to perform at the promisee’s place of residence or business: Rein v Stein [1892] 1 QB 753 (CA); Thompson v Palmer [1893] 2 QB 80 (CA); Charles Duval & Co Ltd v Gans [1904] 2 KB 685 (CA).

18  Doe d. Wheeldon v Paul (1829) 3 C & P 613, 172 ER 568; Lancashire v Killingworth (1701) 12 Mod 530, 88 ER 1498.

19  Duke of Rutland v Batty (1740) 2 Str 777, 93 ER 842; Hammond v Ouden (1700) 12 Mod 421, 88 ER 1424.

20  [1993] 1 Lloyd’s Rep 80.

21  The holder of a railway or bus ticket can no doubt use it (subject to limitations on the ticket) at any time when services are running, and an ATM card can be used at a cash dispenser at any hour of the day or night.

22  Bills of Exchange Act 1882, s 45(3).

23  Wilkins v Jadis (1831) 2 B & Ad 188, 109 ER 1113; Bank of US v Carneal 2 Pet 543, 27 US 343 (1829) (US Supreme Court); McFarland v Pico 8 Cal 626 (1857) (California). But presentment outside banking hours is good if there is an officer of the bank present to answer to the demand: Reed v Wilson (1879) NJLR 29 (New Jersey); Bank of Syracuse v Hollister 17 NY 46 (1858) (New York).

24  Thus it was held in Wilkins v Jadis (above n 23) that presentment at a merchant’s address at 8 p.m. was not unreasonable, though presentment at midnight would have been. In Morgan v Davison (1815) 1 Stark 114, 171 ER 418 a presentment at 6 p.m. was held good, despite there only being a young girl in charge of the premises. See also Barclay v Bailey (1810) 2 Camp 527, 170 ER 1240; Triggs v Newnham (1825) 1 C & P 631, 171 ER 1346.

25  54 Ala 446 (1875) (Alabama).

26  116 NYS 2d 532 (1952) (New York).

27  According to a note in (1953) 39 Virginia LR 230 the sellers were trying to put the buyers in default here by deliberately demanding cash payment at a time after the banks were closed, and when it would not have been reasonable to expect them to keep sufficient cash in hand to meet the sellers’ demand.

28  [1972] 1 Lloyd’s Rep 139 (CA).

29  Ibid at 142–143.

30  (1808) 15 Ves J 248, 33 ER 748.

31  (1838) 3 M & W 473, 150 ER 1231.

32  [1904] 1 KB 1 (CA).

33  West Metropolitan Railway Act 1899.

34  [1904] 1 KB 1 at 7; South Staffordshire Tramways Co Ltd v Sickness and Accident Assurance Association Ltd [1891] 1 QB 402 (CA); Re North [1895] 2 QB 264 (CA); Marren v Dawson Bentley & Co Ltd [1961] 2 QB 135; Cartwright v MacCormack [1963] 1 WLR 18 (CA).

35  Pellew v Inhabitants of Wonford (1829) 9 B & C 134 at 144, 109 ER 50 at 54 (Lord Tenterden).

36  [1891] 1 QB 161 (DC).

37  Ibid at 163–164 (Wills J); Stewart v Chapman [1951] 2 KB 792 (DC).

38  Pugh v Duke of Leeds (1777) Cowp 714, 89 ER 1323; Russell v Ledsam (1845) 14 M & W 574, 153 ER 604; Sidebotham v Holland [1895] 1 QB 378 (CA); English v Cliff [1914] 2 Ch 376.

39  S 36(2).

40  [1962] 2 QB 641 (DC).

41  [1967] 2 QB 899 (CA).

42  RSC Ord 6 r 8(1).

43  Carapanayoti & Co Ltd v Comptoir Commercial Andre & Cie (above, n 28) at 143.

44  (1840) 6 M & W 50, 151 ER 317; Re Railway Sleepers Supply Co (1885) 29 Ch D 204.

45  [1972] Ch 72.

46  Above, para 4.10.

47  [1972] 1 Lloyds’ Rep 139 (CA) at 143.

48  Schnabel v Allard [1967] 1 QB 627 (CA).

49  (1985) 50 P & CR 105; Manorlike Ltd v De Vitas Travel Agency and Consultancy Services Ltd [1986] 1 All ER 573 (CA).

50  [1985] 1 WLR 1139 (CA).

51  Ibid at 1141.

52  (1863) 4 B & S 174, 122 ER 425.

53  Ibid at 429.

54  [1981] 1 WLR 1027 (HL).

55  [1997] AC 749 (HL).

56  Ibid at 752–753; Sidebotham v Holland [1895] 1 QB 378 (CA).

57  [1995] 1 WLR 1508; Cadby v Martinez (1840) 11 A & E 720, 113 ER 587; Hankey v Clavering [1942] 2 KB 326 (CA); Transgrain Shipping BV v Global Transporte Oceanico SA (The Mexico I) [1990] 1 Lloyd’s Rep 507 (CA).

58  [1997] AC 749 at 761 (Lord Goff) and 766 (Lord Jauncey).

59  Ibid at 754 (Lord Goff).

60  Ibid at 773 (Lord Steyn); 780 (Lord Hoffmann); 783 (Lord Clyde); Delta Vale Properties v Mills [1990] 1 WLR 445 (CA) at 454 (Slade LJ).

61  [1997] AC 749 at 767–768 (Lord Steyn); 774–775 (Lord Hoffmann); 782 (Lord Clyde).

62  [1998] 1 WLR 892 (HL).

63  Ibid at 912.

64  [1976] 1 WLR 442 (CA).

65  [1998] 1 WLR 1583 (CA); Peer Freeholds Ltd v Clean Wash International Ltd [2005] EWHC 179 (Ch), [2005] P & CR DG6.

66  Awal Bank BSC (in Administration) v Al-Sanea [2011] EWHC 1354 (Comm).

67  Lord Hoffmann gives the example here of a notice served on pink paper when it should have been served on blue paper: Mannai v Eagle Star (above, n 58) at 776. See also McDonald v Fernandez [2003] EWCA Civ 1219, [2004] 1 WLR 1027 (strict compliance necessary for statutory notice under Housing Act 1988).

68  Siemens Hearing Instruments v Friends Life Ltd [2014] EWCA Civ 382, [2014] P & CR 5.

69  Above, paras 1.11–1.26.

70  Normally events occurring after a written contract has been drawn up, such as the subsequent conduct of the parties, cannot be taken into account in assessing its meaning: see Union Assurance Society of Canton Ltd v George Wills & Co [1916] AC 281 (HL) at 288 (Lord Parmoor); James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 (HL) at 603 (Lord Reid). However, such evidence may be taken into account where the contract is partly written and partly oral: Wilson v Maynard Shipbuilding Consultants AB [1978] QB 665 (CA); Maggs v Marsh [2006] EWCA Civ 1058.

71  [2005] EWCA Civ 239, [2005] Info TLR 294; Ostfriesische Volksbank v Fortis Bank [2010] EWHC 361 (Comm).

72  [2005] EWCA Civ 239, [2005] Info TLR 294 at [15].

73  Astea UK Ltd v Time Group Ltd [2003] EWHC 725, [2003] All ER (D) 212.

74  (1862) 2 F & F 844, 175 ER 1313.

75  [2014] NIQB 65.

76  Ibid at para [41] (Coghlin LJ).

77  [2014] NI Ch 24.

78  Ibid at para [21] (Weatherup J).

79  [1905] AC 501 (HL).

80  Ibid at 512 (Lord Davey); Little v Stevenson [1896] AC 108 (HL).

81  As we shall see, the doctrine under discussion is closely related to the doctrine of frustration, but differs from that doctrine in several key respects: below, para 4.25.

82  Harris v Dreesman (1854) 23 LJ Ex 210.

83  (1870) LR 5 QB 544.

84  (1880) 5 App Cas 599 (HL).

85  [1892] 1 QB 854 (CA).

86  [1893] AC 22 (HL); Hope and Sons v Canada Foundry Co (1917) 39 DLR 308 (Supreme Ct of Ontario).

87  [1893] AC 22 (HL) at 32.

88  (1866) LR 1 CP 385.

89  (1858) 27 LJQB 345.

90  Ibid at 352.

91  (1911) 17 Com Cas 597 (DC); SHV Gas Supply & Trading SAS v Naftomar Shipping & Trading Co Ltd Inc (The Azur Gaz) [2005] EWHC 2528 (Comm), [2006] 1 Lloyd’s Rep 206.

92  Compare the comments of Lord Selborne in Postlethwaite v Freeland (1880) 5 App Cas 599 (HL) at 608 with those of Lord Radcliffe in Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL) at 729.

93  Maritime National Fish Ltd v Ocean Trawlers Ltd [1935] AC 524 (HL).

94  Above at para 4.24.

95  Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (HL); Thomas Borthwick (Glasgow) Ltd v Bunge & Co Ltd [1969] 1 Lloyd’s Rep 17; BP Exploration Co (Libya) v Hunt (No 2) [1981] 2 All ER 925 at 945 (Robert Goff J).

96  Ford v Cotesworth (1870) LR 5 QB 544.

97  Thus an obligation to pay money can be frustrated, as in Jackson v Union Marine Insurance Co Ltd (1874) 10 CP 125 and the Coronation cases.

98  Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 (HL) at 729 (Lord Radcliffe).

99  Taylor v Caldwell (1863) 3 B & S 826, 122 ER 309; Tsakiroglou v Noblee Thorl GmbH [1962] AC 93 (HL) at 118 (Lord Reid).

100  Hirji Mulji v Cheong Yue SS Co [1926] AC 497 (HL); Denny, Mott and Dickson v James B Fraser [1944] AC 265 (HL).

101  See below, chapter 12.

102  Below, para 5.93; Poussard v Spiers & Pond (1876) 1 QBD 410.