Internatio-Rotterdam, Inc. v. River Brand Rice Mills, Inc.

259 F.2d 137 (2d Cir. 1958)

 

RULE:

Nonoccurrence of a condition precedent entitles a party in a contract to rescind or to treat its contractual obligations as discharged.

FACTS:

Appellant buyer agreed to purchase rice from appellee seller. The agreement provided that shipment was to be in December 1952, with two weeks call for plaintiff and that the shipment was to be made in Texas and/or in Louisiana. Appellee became concerned about the shipping instructions under the contract, since congested conditions prevailed at both rice mills and the docks. Having not heard from appellant, appellee elected to the deliver the rice to Louisiana. Appellee delivered the rice to Louisiana, however appellant failed to provide shipping instructions for the rice destined for Texas within the specified time. Appellee then rescinded the contract for the Texas shipments. Appellant brought suit for refusal to deliver. The trial court entered judgment in favor of appellee. On appeal, the court affirmed the trial court's decision. 

ISSUE:

Was a notice of shipping instructions a condition precedent to the performance which might be required of the appellee?

ANSWER:

Yes.

CONCLUSION:

It held that the notice by appellant was a condition precedent to appellee's duty to ship. Therefore, the nonoccurrence of that condition entitled appellee to rescind or to treat its contractual obligations as discharged. Notice of shipping instructions on or before December 17 was not merely a 'duty' of the appellant --  as it concedes: it was a condition precedent to the performance which might be required of the appellee. The nonoccurrence of that condition entitled the appellee to rescind or to treat its contractual obligations as discharged.

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