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English Sale of Goods Law

Lloyd's Maritime and Commercial Law Quarterly

English Sale of Goods Law

Djakhongir Saidov*


92. Aercap Partners 1 Ltd v. Avia Asset Management AB 1

Aircraft sale—buyer’s failure to pay final deposit and inability to make future payments—whether seller able to perform—whether engines specific goods—whether lessee would have redelivered engines to seller—acceptance of buyer’s repudiation—damages—loss of chance—Sale of Goods Act 1979, s 50(3)—reasonable period for mitigation—market price

On 17 October 2008, the seller agreed to sell to the buyer two Boeing 757–200 aircraft. The first two deposit payments were paid into an escrow account, but the buyer failed to make a third deposit payment. The aircraft were not delivered. Discussions followed, in which the seller proposed an alternative whereby the buyer would take aircraft pursuant to a finance lease and which culminated in a meeting in Dublin on 21 January 2009. The seller argued that, at that meeting, the buyer consented to the release of the first two deposits from an escrow account. The buyer contended that the parties had agreed to vary their original agreement in that the buyer would release the first two deposits subject to its being released from an obligation to pay the third deposit prior to the delivery of the aircraft, and therefore the buyer committed no breach by not paying the third deposit prior to delivery. The first two deposits were released, but the third deposit was never paid. The discussions as to a finance lease came to nothing. On 10 February 2009, the seller sent a notice to the buyer stating that the failure to pay the third deposit was a repudiation of the agreement, which the seller accepted, bringing the agreement to an end. On 23 March 2009, the seller sent another notice reiterating the content of the previous notice and demanding damages. On 7 April 2009, the buyer requested a pre-purchase inspection of the aircraft. The seller declined the request, stating that it had already accepted the buyer’s breach, terminating the agreement. On 3 March 2010, the seller resold the aircraft at a price substantially lower than that in the agreement with the buyer. Giving credit for the first two deposit payments, the seller claimed damages for lost rental arising from early redelivery of the aircraft from its lessee, the difference between the contract price and the resale price and storage and insurance costs.
Decision: Claim allowed.
Held: (1) The buyer’s failure to pay the third deposit constituted a repudiation of the agreement. (2) No agreement, whether express or implied, was made in Dublin, with the


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