[10][11] In Leduc v Ward, a vessel bound from Fiume (modern day Rijeka) to Dunkirk headed instead towards Glasgow, sinking in a storm in the Clyde estuary.
[citation needed] Similarly, in Glynn v Margetson, a vessel carrying Seville oranges from Malaga to Liverpool deviated from the agreed route, by heading first to Burriana (near Valencia).
The carrier relied on a 'liberty clause' in the bill of lading which purported to allow the vessel 'liberty to visit any port in any order'.
When the buyer inspected the car in the morning, it would not work and it was clear it had been involved in an accident, and there were other changes: its tyres had been replaced by old ones, body parts were missing, and the engine's cylinder head was detached, revealing burnt valves.
Following Glynn v Margetson and using its "main purpose" concept, the court held that the dealer was "in breach of a fundamental obligation" and so could not rely on any exclusion clause.
[a] The matter came to a head in 1966 in the House of Lords decision in Suisse Atlantique Societe d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale.
[16] The case involved a two-year time charter to export coal, the shipowners to be paid freight dependent on tonnage of cargo carried.
After the Suisse Atlantique decision, there was a series of cases where the Court of Appeal patently ignored the House of Lords' findings.
These two cases (the Suisse Atlantique and Photo Productions) thus formed the definitive statement of the law up to the Unfair Contract Terms Act 1977.
[c] More recently, this law was successfully applied in two cases related to carriage of goods by sea and application of limitation clauses under the Hague-Visby Rules: Daewoo Heavy Industries Ltd. v. Klipriver Shipping Ltd.[18] and The Happy Ranger.
[6] The doctrine of fundamental breach has been “laid to rest” by the Supreme Court of Canada in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways) in 2010.