Edgar Joseph Jr J:

This was a plaintiff purchases' claim for damages for non-delivery of goods alleging loss of profits on resale.

At all material times to this suit, the plaintiffs were and are an incorporated company having their registered office and place of business at 6255 rue Hutchinson Street, Montreal, Quebec, Canada, while the defendants were and are an incorporated company having their registered office at Lot 1242, Sungei Kluang Estate, Bayan Free Trade Zone, Penang.

The plaintiffs were and are also traders importing garments from suppliers in various countries including Malaysia, Singapore, Hong Kong, China and Taiwan, for resale to retail outlets being, they claim, approximately 500 departmental chain and speciality stores in Canada. The defendants were the Malaysian suppliers of the plaintiffs since 1963 until sometime in 1979, when disputes between the parties arose ending in the present litigation.

It was alleged in the statement of claim that by 26 contracts in writing - all in a printed common form and prepared by the plaintiffs - made between the months of March and June 1979, the plaintiffs ordered and the defendants agreed to deliver certain goods, namely ladies' and girls' blouses and men's shirts, such goods to be delivered between the months of January and June 1980. It was further alleged in the statement of claim that at all material times the defendants well knew that the plaintiffs bought the said goods in the ordinary course of their business for resale at a profit to its customers, and that in breach of the said contracts, the defendants wrongfully failed to deliver the said goods as agreed or at all. It was also alleged that the plaintiffs were unable to purchase similar goods on the market and therefore unable to supply their customers and so lost the profits they would have made on the resale thereof.

The damages claimed in the statement of claim were particularised as the loss of profits which were alleged to amount to 32% on the landed value of the goods being US$2,708,214.82 or in other words, US$708,708.74.

The breakdown of the sum claimed was as follows:

Particulars

7.1 Cost price of MA Form

Blouses US$394,533.88

25% Duty $ 98,633.47

15% Freight & Insurance $ 59,180.09

Value Landed $552,347.44

7.2 Cost Price of MB Form

Blouses US$424,990.08

18% Duty $ 76,498.21

15% Freight & Insurance $ 63,748.51

$565,236.80

7.3 Cost Price of MA Form

Shirts US$325,034.28

25% Duty $ 81,258.57

17% Freight & Insurance $ 52,255.83

Value Landed US$458,548.68

7.4 Cost Price of MB Form

Shirts US$473,023.62

18% Duty $ 85,144.26

17% Freight and Insurance $ 80,414.02

US$638,581.90

7.5 Total Landed Value = US$2,214,714.82

Average profit on selling 32% = US$708,708.74

By their defence, the defendants took two points, namely that (1) there was no concluded contract as alleged or at all. In particular, it was alleged that each of the alleged contracts were merely order forms, the acceptance thereof being subject to a condition precedent that the plaintiffs had to open irrevocable letters of credit in favour of the defendants, at least 60 days before shipment and the plaintiffs having failed to do so in respect of all of the contracts, there never was any concluded contracts. In the alternative, (2) it was contended that even if there were concluded contracts, the defendants were discharged from performing their part of the contracts by reason of the failure of the plaintiffs to provide any letter of credit.

Before I construe the words of the contracts, I would make some general observations. In ordinary contracts for the sale of goods, delivery and payment are concurrent obligations, but in contracts in which the price is to be paid by means of a commercial credit "the seller is entitled, before he ships the goods, to be assured that on shipment, he will get paid". (Per Denning LJ in Pavia & Co. SPA v. Thurmann-Nielson [1952] 2 QB 84, 88). Accordingly, in the absence of agreement to the contrary, the credit