One berth, two buyers
A berth broker member was engaged by an owner of a berth to sell it on his behalf.
Negotiations commenced with one buyer who continually required changes to the memorandum of agreement (moa) proposed by the owner. The owner tired of this and instructed the broker to find another purchaser. The broker found one and negotiations continued between owner and both potential purchasers.
After some time, the owner tired of negotiating and, via the broker, passed a message to both purchasers requiring completion within 24 hours. The broker passed this message to the purchasers the next day.
The second purchaser returned an unamended and signed moa within the 24 hour period. The first purchaser returned the moa with amendments later that day, after the 24 hour period has expired.
The owner, broker and second purchaser considered that they had a binding contract. The first purchaser was displeased and obtained legal advice stating that, as a matter of law in the country where the berth is located, he had a contract with the owner, despite the amendments he required.
ITIC doubted that the first purchaser’s contention was right and obtained advice from a local lawyer. This advice confirmed that the first purchaser did not have a binding agreement and the buyer and seller were under no obligation to him. ITIC also advised the broker that this was a particularly dangerous practice for the principal to undertake.