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Case: Vitol SA v Norelf Ltd [1996]
The parties agreed a contract for the sale of a cargo of propane. While the cargo was
being loaded, the buyers sent a telex to the sellers repudiating the contract on the
grounds that the loading would not be completed on time. The sellers did not reply
to the telex. The loading was completed and the vessel sailed with its cargo on
board.
The sellers brought a claim (in arbitration) for the difference between the contract
price for the propane that had been agreed with the buyers and the price at which
they had been obliged to sell the propane in the market.
In this case, the arbitration court found that the anticipatory breach of the contract
by the buyers gave the sellers the right to repudiate the contract. Their decision to
sell the propane for what they could get in the market was sufficient notification to
the buyers of their intention to elect to treat the contract as being at an end.From the information you have posted I’m not sure that that is anticipatory breach! If the buyer BEFORE the due date for loading had said “I’m cancelling / breaching” that would have been a clear indication of anticipatory breach. If not, it could be argued that the notification was not in anticipation. Rather it was notification AFTER the seller had unconditionally appropriated the goods to the contract ie after the contract start date. However, the Arbitration Court apparently agreed that it was anticipatory
Your question does not indicate whether the goods were in fact loaded in time according to the time limit imposed by the contract
Given that it was held to be anticipatory, the seller has the right to sue the breaching buyer for the damage which they have suffered on the deal. In this case above, the seller sold on the market (presumably for the best price the seller could achieve) and sued the buyer for the difference between agreed price in the contract less the value received on the market sale.
I’m not sure what I else I can say to explain it – it seems to me to be quite straight-forward, but maybe I’m missing something
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