Norrington v. Wright
1885 U.S. LEXIS 1829, 115 U.S. 188, 6 S. Ct. 12 (1885)
Rule of Law:
In mercantile contracts for the sale of goods by installment, stipulations regarding the time and quantity of shipment are considered conditions precedent, and a seller's failure to strictly comply with these terms for an initial installment justifies the buyer in repudiating the entire contract.
Facts:
- Norrington and Wright entered into a contract for the sale and purchase of 5,000 tons of iron rails.
- The rails were to be shipped from a European port or ports for Philadelphia.
- The contract specified shipment 'at the rate of about 1,000 tons per month, beginning February, 1880, but whole contract to be shipped before August 1, 1880.'
- Norrington shipped only 400 tons in February 1880, instead of approximately 1,000 tons.
- Norrington shipped only 885 tons in March 1880, instead of approximately 1,000 tons.
- Wright accepted the 400 tons shipped in February without notice or knowledge of the deficiency in quantity for that month.
- Upon the arrival of the March shipments, and as soon as they knew of the deficiencies in both February and March shipments, Wright clearly and positively asserted their right to rescind the whole contract.
Procedural Posture:
- Norrington (plaintiff) sued Wright (defendants) in the Circuit Court of the United States for the Eastern District of Pennsylvania for breach of contract.
- The Circuit Court directed a verdict for the defendants.
- Norrington appealed the judgment to the Circuit Court (acting as an intermediate appellate court, given the Supreme Court's review), which affirmed the judgment for the defendants.
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Issue:
Does a seller's failure to ship the stipulated quantity of goods in a timely manner, as specified in a mercantile contract for installment deliveries, justify the buyer in repudiating the entire contract?
Opinions:
Majority - Mr. Justice Gray
Yes, a seller's failure to ship the stipulated quantity of goods in a timely manner, as specified in a mercantile contract for installment deliveries, justifies the buyer in repudiating the entire contract. In contracts between merchants, time is of the essence, and descriptive statements about the subject-matter, such as time or place of shipment, are conditions precedent. Failure to perform such a condition allows the aggrieved party to repudiate the entire agreement. The contract for 5,000 tons of iron rails was a single, entire contract, not several distinct contracts based on monthly shipments. The stipulation for 'about 1,000 tons per month' meant substantial compliance with monthly shipments of that quantity, with only 'slight and unimportant deficiencies' permissible, not significant under-shipments. Norrington's failure to ship approximately 1,000 tons in both February (shipping only 400 tons) and March (shipping only 885 tons) constituted a material breach of these conditions precedent. Wright's prior acceptance of the February shipment did not waive their right to rescind, as they were unaware of the quantitative deficiency at that time. The Court affirmed that this interpretation aligns with controlling English precedents, notably Hoare v. Rennie and Bowes v. Shand, which hold that such specific shipment terms are fundamental to the contract and not mere independent promises giving rise only to a cross-action for damages.
Analysis:
This case firmly established the 'perfect tender' rule in common law for mercantile installment contracts, emphasizing that precise adherence to material terms like shipment quantity and schedule is a condition precedent. It significantly impacts commercial law by reinforcing the principle that merchants rely on the exact terms of their contracts, allowing buyers to repudiate an entire contract for a seller's material deviation in an early installment. This ruling places a high burden on sellers for strict performance, contrasting with a more lenient 'material breach' standard that might only allow for damages rather than full contract repudiation.
