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In a mercantile contract, a statement descriptive of the subject matter, or of some material incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty, or condition precedent, upon the failure or nonperformance of which the part aggrieved may repudiate the whole contract.
Plaintiffs and defendant entered into a mercantile contract, whereby plaintiffs sold to the defendant 500 tons of number one Shott's (Scotch) pig iron, at the price of $26 per ton, to be paid in cash by the defendant upon the delivery to him of the iron in bond at New Orleans. The contract stipulated that the iron was to be shipped from Glasgow, Scotland, as soon as possible. The defendant refused to accept the iron on the ground that the plaintiffs failed to ship the iron from Glasgow. Subsequently, plaintiffs filed the present action against the defendant. The district court instructed the jury that the provision requiring shipment from Glasgow was not material. Consequently, judgment was entered in favor of the plaintiffs. On appeal, defendant urged that it was not liable under the contract because the contract specified that the iron was to be shipped from Glasgow, which the plaintiffs failed to do.
Was the defendant liable under the contract, notwithstanding the non-performance of the provision requiring shipment from Glasgow?
the Court reversed the judgment of the lower court, holding that in a mercantile contract, a statement descriptive of the subject matter or of some material incident, such as the time or place of shipment, was ordinarily to be regarded as a warranty, or condition precedent. The Court held that the trial court had neither the means nor the right to determine why the parties specified the city of shipment, but was bound to give effect to the terms that the parties chose. According to the Court, that the shipment was to come from Glasgow was a condition precedent to any liability of defendant.