J.M.T.C.L. v. Williams [1984-86] 1GLR 634.

JAPAN MOTORS TRADING CO. LTD. v. WILLIAMS [1984-86] 1 GLR 634

COURT OF APPEAL, ACCRA

ABBAN, OSEI-HWERE AND AMUA-SEKYI JJ.A.

STATUTORY REF.
Page 635

Amua-Sekyi J.A. On the admitted facts, the plaintiff bought the motor vehicle in question, a Nissan diesel bus, from the Trans Africa Engineering & Motor Co. Ltd. For reasons that have not been disclosed, when the vehicle broke down, the plaintiff did not go to the dealers for spares, but rather to the defendants through one of whose directors, Jalal Kalmoni, he placed an order for the spares from Japan. It is agreed that at that time the vehicle was standing idle and the defendants, through their director, were aware of this.

Page  636

The order was placed with the Toyoshima Special Steel Co. Ltd. which by telex gave a quotation which reads:

“We quote for Japan as follows:

Line Part No                Unit Price

   . .                                 . .

   . .                                 . .

Delivery: three months after receipt of your L/C

Terms: I.R. confirmed L/C at sight

Packing: Wooden cases

Validity: 50 days.”

The suppliers evidently thought that the defendants required a large number of the spares. When they realised that they were required for the repair of one vehicle only they sent another message, “Actually we do not want this business. This customer is important for you?” The defendants replied, “Yes customer very important.” By then, of course, the plaintiff had got his bankers to transfer to a Canadian account the cost of the spares and the defendants had in turn paid the amount to the suppliers. When the spares were not forthcoming the plaintiff sued the defendants in the High Court, Accra for the return of his money, interest and damages. Before the hearing was concluded the plaintiff received the spares and abandoned the claims for the purchase price and interest. However, the claim for damages was upheld on the ground that the defendants had failed to deliver the spares to the plaintiff within three months and the trial judge awarded him substantial damages.

It seems that the import of the words “for Japan” appearing at the head of the telex message was lost on the plaintiff and the court below. Those two words showed as clearly as may be that the time for delivery was the time for delivery in Japan. The contract was of the type known in commercial circles as a FOB contract, meaning free on board. It is a type of contract which our Sale of Goods Act, 1962 (Act 137) recognises and enforces and is to be distinguished from a CF or CIF contract, meaning cost insurance freight, under which the seller assumes the responsibility for shipping the goods to the buyer. The rules governing FOB contracts will be found set out in section 62 of the Act and provide, among other things, that unless a contrary intention appears the buyer is to nominate a ship to carry the goods and the duty of the seller is to have the goods loaded on the ship at his own expense. The seller assumes no responsibility for the insurance or freight nor does he give any guarantees as to the time of arrival of the ship at its destination. After all, why should he when the ship was nominated by the buyer? The only representation therefore, which the suppliers made was that they were ready, willing and able to deliver the goods within

Page 637

three months at any port in Japan nominated by the defendants and load them at their own expense on the ship designated by them.

There is another ground on which, I think, this appeal ought to be allowed. It is that as between the plaintiff and the defendants the agreement was one of agency and not of sale of goods. The distinction and its implications have been explained in Benjamin’s Sale of Goods (2nd ed.), para. 47 at p 34-35:

“When a supplier agrees to procure goods for another, he may do so as the latter’s agent or as a principal party standing towards him in the relationship of a seller . . . A supplier who is a seller ordinarily contracts to supply the goods at an agreed price whatever may be the cost to himself, and he undertakes absolutely to do so; a supplier who is an agent merely binds himself to use due diligence to fulfil the order, . . .”

It is to be observed that the defendants never delivered to the plaintiff a pro forma invoice of their own stating the price at which they would sell the goods to him, or the time within which they would deliver them. All they did was to give him a copy of the telex from the suppliers and ask him to pay the cost of the goods calculated from the unit prices given therein. The obligation which the defendants assumed towards the plaintiff was that of using their best endeavours to procure the goods for him on the most favourable terms available. The evidence shows that they were not responsible for the delay which did occur. I would allow the appeal.

Abban J.A. I agree.

Osei-Hwere J.A. I also agree.

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