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

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

 

RULE:

Non-occurrence 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 the buyer and that the shipment was to be made in Texas and/or in Louisiana. The seller became concerned about the shipping instructions under the contract because congested conditions prevailed at both rice mills and the docks. Having not heard from the buyer, the seller elected to the deliver the rice to Louisiana. Further, the buyer failed to provide shipping instructions for the rice destined for Texas within the specified time. The seller then rescinded the contract for the Texas shipments. The buyer brought suit for refusal to deliver. The trial court entered judgment in favor of the seller. On the buyer's 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 the seller?

ANSWER:

Yes.

CONCLUSION:

It held that the notice by the buyer was a condition precedent to the seller's duty to ship. Therefore, the non-occurrence of that condition entitled the seller 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 the buyer --  as it conceded: it was a condition precedent to the performance which might be required of the the seller. The non-occurrence of that condition entitled the the seller to rescind or to treat its contractual obligations as discharged.

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