The race to acquire scarce personal protective equipment at the start of the COVID-19 pandemic provided the context for a High Court ruling that, in the performance of a contract to purchase five million face masks, time was of the essence.
Shortly before the announcement of the first lockdown, a medical supplies company contracted to purchase the masks from a supplier on the basis that they would be delivered in 10 weekly batches of 500,000. After it paid £900,000 to the supplier, the first batch was delivered. However, the subsequent four batches were delayed after the government of India, where the masks were made, imposed an export ban.
The company contended that the timing of the deliveries was of the essence and that the delays amounted to a repudiatory breach of contract. Asserting that the contract came to an end when it accepted that repudiation, the company launched proceedings to recover £720,000 that had been retained by the supplier.
Ruling on the matter, the Court acknowledged that the contract, which was in the form of an email, did not spell out in terms that the delivery dates were deadlines that had to be met. The consequences of failing to deliver weekly were not specified. The masks were not perishable and the company was aware that the supplier was not in complete control of its supply chain.
Upholding the claim, however, the Court found that, on a true construction of the contract, time was of the essence. It did so in the light of the short and repeated delivery intervals specified in the contract, the developing pandemic, the high demand and the volatile market conditions then prevalent.
From the company’s point of view, the object of the contract was not just to obtain face masks as quickly as possible, but to be able to cancel the deal if they did not arrive on time. The supplier’s arguments that the company had waived its strict rights or affirmed the contract by expressing a willingness to wait were rejected. The company was awarded the £720,000, plus interest.