Tanker broker’s disappearing principal
A tanker broker, who had moved from a large firm to a smaller one, was pleasantly surprised when a charterer client of his former employer approached him asking the broker to take over his account. The charterer told the broker that since he had left he had never been satisfied with the service from the large brokerage house. The broker fixed several ships for the charterer without incident, until a fixture went badly wrong, and the tanker owner decided to take the charterer to arbitration. The first thing the owner's lawyers discovered was that the charterer had been declared bankrupt twelve months before the fixture was made, although this had not stopped him from continuing to fix ships. At common law, a person who professes to contract on behalf of a principal who does not exist, may have contracted personally. Obviously the tanker broker would not have telephoned his old employer to find out why the charterer was leaving him, but if he had used ITIC's Credit Management Information Centre, the Club would have been able to let him know the status of the charterer.