Urquhart Lindsay and Company, Limited v. Eastern Bank, Limited
King’s Bench Division
1 KB 318 (1922)
- Written by Ryan McCarthy, JD
Facts
In December 1919, Urquhart Lindsay and Company, Ltd. (Urquhart) (plaintiff) contracted to manufacture and sell machinery to Benjamin Jute Mill Co., Ltd. (Benjamin). The contract required Benjamin to establish a letter of credit in Urquhart’s favor. In February 1920, Eastern Bank, Ltd. (Eastern) (defendant) sent a letter of credit to Urquhart stating that payment would be made upon presentment of an invoice and shipping documents. Eastern subsequently made payment on two requests from Urquhart to cover two shipments of machinery. The third invoice Urquhart presented to Eastern included an extra charge to cover increased labor costs. In February 1921, Eastern sent a letter to Urquhart stating that the invoice that included extra costs would not be paid unless agreed to by Benjamin. Urquhart sued Eastern, alleging that the February 1921 refusal to make payment under the letter of credit was a breach of the February 1920 letter of credit. Eastern defended that the December 1919 sales contract did not allow Urquhart to collect under the letter of credit for increased labor costs.
Rule of Law
Issue
Holding and Reasoning (Rowlatt, J.)
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