Frustrated Contracts



The question arises whether the owner of the Enterprise, due to the ship’s sinking in the Atlantic Ocean (no reason was offered as to exact cause), whether the ship’s owner is liable and if so, what is the extent of his liability? Does Dixie Wholesalers have the right to sue? And what are the rights of the c.i.f., who did not receive the future goods which they were promised by Dixie Wholesalers? What is the predominant principle of law which underlie this case? In addressing these issues we will first view the Carriage of Goods by Sea Act 1971, Article 6 – Supplement S(4) which in part states: “It is hereby determined that for the purpose of Article VIII of the rules, section 502 of the Merchant Shipping Act 1894, (which as amended by the Merchant Shipping (liability of ship owner and others) Act 1958, entirely exempts ship owner and others in certain circumstances from liability for loss, or damage to goods) is a provision relating to limitation of liability”(CGSA). Further, the Hague-Visby Rules as Amended by the Brussels Protocol 1968, Articles 4 sections ( c ) and (d) in part states: “Neither the carrier nor the ship shall be liable for loss or damage arising from unseaworthiness unless caused by want of due diligence on the part of the carrier to make ship seaworthy, and to secure that the ship is properly manned, equipped etc., whenever loss or damage has resulted from unseaworthiness the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption from this article.