## Facts

- A Canadian seller contracted to sell lamb pelts to Philadelphia buyers “all at $3.80 each U.S. funds F.O.B. Toronto,” with shipping directions referencing rail shipment to Philadelphia.
- The contract included (i) an excusing clause for “governmental act or order” and (ii) a provision stating that for “F.O.B. seller’s plant” sales, title and risk of loss pass when the goods are loaded on cars at the seller’s plant.
- The seller delivered part of the pelts by loading them on railroad cars in Toronto for shipment to Philadelphia.
- On or about March 12, 1952, the seller notified the buyers it was ready to deliver the remaining pelts on board railroad cars in Toronto for shipment.
- Around that time, U.S. Bureau of Animal Industry regulations became stricter; the parties stipulated that these regulations prevented the buyers’ importation of the pelts into the United States.
- The buyers refused to accept delivery; the remaining car was not loaded or shipped because of the refusal.
- The seller treated the refusal as a breach, resold the pelts, and sought damages equal to the difference between the contract price and the resale price.
- On stipulated facts, the district court granted summary judgment for the buyers; the seller appealed.

## Issues

1. Under a contract priced “F.O.B. Toronto,” did the seller make a sufficient tender by being ready and willing to load the pelts on rail cars at Toronto when the buyers refused acceptance before loading occurred?
2. Did supervening U.S. import restrictions, together with a “governmental act or order” clause, excuse the buyers’ refusal to accept and pay under the contract?

## Decision

- The court of appeals reversed the summary judgment for the buyers and directed entry of judgment for the seller.
- The seller’s readiness and willingness to deliver the pelts F.O.B. Toronto, coupled with the buyers’ refusal, satisfied the seller’s tender obligations; the seller was not required to incur the expense of loading and shipping after repudiation.
- The import regulations did not excuse the buyers’ performance because the regulations did not prevent delivery in Toronto under the FOB shipment term and the buyers were not contractually required to import the pelts into the United States.
- The seller was entitled to damages measured by the contract-resale price difference.

## Legal Principles

- In an “F.O.B. place of shipment” contract, delivery to the carrier at the shipment point is the seller’s basic performance and is the ordinary point at which risk and title shift to the buyer.
- When a buyer unequivocally refuses to accept under a shipment contract, the seller need not complete a useless final act (such as loading or shipping) to preserve a claim for breach; readiness and willingness to perform can constitute sufficient tender in that posture.
- Contractual shipping directions stated alongside an FOB shipment term are generally treated as buyer-controlled instructions rather than conditions that redefine the seller’s FOB performance.
- A “governmental act or order” clause and later regulatory restrictions do not necessarily discharge the buyer where the governmental action impairs only the buyer’s preferred destination or use, and does not prevent the seller’s contracted performance at the FOB point.

## Conclusion

The court held that the buyers breached an FOB Toronto shipment contract by refusing acceptance after the seller was ready to load for shipment, and that later U.S. import restrictions did not excuse payment because the contract allocated post-shipment destination risk to the buyers; judgment was directed for the seller on stipulated damages.


Swift Canadian Co. v. Banet, 224 F.2d 36 (3d Cir. 1955)