Date: Jason Neyers

From: Mon, 11 Sep 2006 12:07:35 -0400

Subject: The MAHKUTAI

Dear Colleagues:

I just read Lord Hobhouse in The Starsin and it still makes no sense. It must just be a pre-contractual negotiation followed by a unilateral contract: "if you unload/or carry my goods I promise to give you certain protections". It cannot be a bilateral contract with consideration coming later since the offer and acceptance must state a valid consideration and the only two possibilities are promise and act. It cannot be a promise since everyone says that the stevedore/ship owner is not bound until they act. It cannot be a conditional promise such as "I will unload/ship if I feel like it" since that would be an illusory promise which cannot be consideration. It cannot be a later consideration somehow saving a prior "inchoate" contract since the promise and consideration "must be at one instance, for else they will be nuda pacta" (Nichols v Raynbred).

So all that is left is the unilateral contract analysis of Lord Wilberforce or some form of actionable reliance / estoppel. In the unilateral contract analysis knowledge of the stevedore should not be a problem since as you mentioned the offer is made to the agent who shares knowledge with the principal.

Cheers,

Robert Stevens wrote:

The traditional explanation for The Eurymedon is difficult to accept for a number of reasons. For example the stevedore when unloading the ship may not know of the offer they are supposed to be accepting.

By far the best explanation was given by Barwick CJ in the HC of A in The New York Star [1979] 1 Lloyd’s Rep 298 at pp. 304-305, which was subsequently adopted by the House of Lords in The Starsin [2003] UKHL 12, [2003] 2 W.L.R. 711 per Lord Hoffmann at para 93, Lord Hobhouse at paras 149-153, Lord Millett at para 196. (Hobhouse is the best, as usual in such cases.)

The contract was unilateral, not bilateral, as at no stage were the stevedores obliged to the owners to unload the goods.

However, unlike the usual unilateral contract, acceptance did not consist of performance. Rather, the contract was agreed between the shipper and the stevedores through the agency of the carrier when the shipper accepted the bill of lading. (As to how the consignee became bound by the contract see Treitel and Reynolds, Carver on Bills of Lading (2001) at para. 7-086) To this extent, the agreement resembled the usual bilateral contract and this must have been what Lord Goff meant. Consideration was subsequently provided by the stevedores’ unloading of the ship, not by any promise to unload at the time of agreement. Only at this stage did a binding contract come into existence. This analysis avoids the artificialities which are normally associated with this case. (Although it must be confessed that the analysis is complex even if no fictions are invoked).

The thing to grasp is that offer/acceptance and consideration do not occur at the same time.

--
Jason Neyers
January Term Director
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

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