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I felt bad for the seller for a while. Then I realized they probably just sold the cotton to someone else, and that fungibility and liquid markets make a lot o

I felt bad for the seller for a while. Then I realized they probably just sold the cotton to someone else, and that fungibility and liquid markets make a lot of this stuff less risky on both sides.

rebuilder 4y ago
But the price was probably settled well in advance, so the seller was left taking on market risk, which depending on the way things went, could have been anything between a bad loss or a nice windfall. Less likely the latter, I would expect, since they were forced to sell the cotton in Bombay or cover the cost of transport elsewhere.
- ghaff 4y ago
  >But the price was probably settled well in advance, so the seller was left taking on market risk, No. That was the whole problem. It was for market price when the cargo arrived and the price of cotton jumped between October and December. So the buyer didn't want it any longer and basically claimed they thought it was going to be on the October boat.
retcon 4y ago
I think that all the analysis I've found with a quick search isn't very helpful. The seller had to sue to either obtain payment or void the contract or else spend energies and time pursuing payment by persuasion whilst the entire time granting the ostensible buyers a free call option on FOB Liverpool cotton. My cynical guess is that regardless of evidence of foreknowledge about the duplicate ship names, Lloyds Register [0] most certainly did exist and importantly was considerably more accessible from Liverpool than India. Seller's imperative wasn't recompense but prior to marketing the cargo and taking profit, obtaining title and clean hands. Why go to so much effort? Letters of credit access and costs issues that could have been affected by a impossible distance impedance to necessary restorative PR. [0] https://hec.lrfoundation.org.uk/archive-library/lloyds-register-of-ships-online https://hec.lrfoundation.org.uk/archive-library/lloyds-regis... Edit:.. evidence of foreknowledge..
ghaff 4y ago
I wonder how this has played out in the doubtless many other contract law cases. If this was really a case of (apparent) confusion on both sides, really not much hard/foul to either, so just void the contract. I assume you might see a different result if there was significant hard that fell disproportionately on one party.

I felt bad for the seller for a while. Then I realized they probably just sold the cotton to someone else, and that fungibility and liquid markets make a lot of this stuff less risky on both sides.

rebuilder 4y ago

But the price was probably settled well in advance, so the seller was left taking on market risk, which depending on the way things went, could have been anything between a bad loss or a nice windfall. Less likely the latter, I would expect, since they were forced to sell the cotton in Bombay or cover the cost of transport elsewhere.

ghaff 4y ago
>But the price was probably settled well in advance, so the seller was left taking on market risk, No. That was the whole problem. It was for market price when the cargo arrived and the price of cotton jumped between October and December. So the buyer didn't want it any longer and basically claimed they thought it was going to be on the October boat.

retcon 4y ago

I think that all the analysis I've found with a quick search isn't very helpful. The seller had to sue to either obtain payment or void the contract or else spend energies and time pursuing payment by persuasion whilst the entire time granting the ostensible buyers a free call option on FOB Liverpool cotton. My cynical guess is that regardless of evidence of foreknowledge about the duplicate ship names, Lloyds Register [0] most certainly did exist and importantly was considerably more accessible from Liverpool than India. Seller's imperative wasn't recompense but prior to marketing the cargo and taking profit, obtaining title and clean hands. Why go to so much effort? Letters of credit access and costs issues that could have been affected by a impossible distance impedance to necessary restorative PR. [0] https://hec.lrfoundation.org.uk/archive-library/lloyds-register-of-ships-online https://hec.lrfoundation.org.uk/archive-library/lloyds-regis... Edit:.. evidence of foreknowledge..

ghaff 4y ago

I wonder how this has played out in the doubtless many other contract law cases. If this was really a case of (apparent) confusion on both sides, really not much hard/foul to either, so just void the contract. I assume you might see a different result if there was significant hard that fell disproportionately on one party.