Beruflich Dokumente
Kultur Dokumente
Group C
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Was the seller in Anticipatory Breach ?
• The contract price of the wheat was $160 per metric tonne
• Buyer gets a quote of $282.5 on August 11 and claims damages to
the extent of $3,062,500 before GAFTA tier 1 arbitration tribunal
• Seller contends that buyer did not suffer any loss since the embargo
did not get lifted. The contract would have been cancelled anyway
• Arbitrator agrees with this view and does not award substantive
damages
• GAFTA Board of Appeal notes that clause 20(c) has to be followed
and awards $ 3,062,500 in damages
• Now, supreme court has to decide the damages to be awarded
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Award of Damages : Supreme Court
• The court observes that the damages clauses exist so that disputes
about the “quantum of damages” can be avoided
• It could be by capping the maximum loss, or by means of arbitrary
formula to remove the uncertainty
• This could result in damages being under or over estimated
compared to application of common law principles
• The court also goes on to observe that such contractual clauses
cannot be regarded as complete codes