Homer Delivery Tobacco Accept Gary Justified Refusing Leaves

VI. 

Gary is a tobacco trader and also a lending investor. He sold tobacco leaves to Homer for delivery within a month, although the period for delivery was not guaranteed. Despite Gary's efforts to deliver on time, transportation problems and government red tape hindered his efforts and he could only deliver after 30 days. Homer refused to accept the late delivery and to pay on the ground that the agreed term had not been complied with.  As lending investor, Gary granted a P1,OOO,OOO loan to Isaac to be paid within two years from execution of the contract. As security for the loan, Isaac promised to deliver to Gary his Toyota Innova within seven (7) days, but Isaac failed to do so. Gary was thus compelled to demand payment for the loan before the end of the agreed two-year term.

VI.(l)  Was Homer justified in refusing to accept the tobacco leaves? (1%)

(A)  Yes. Homer was justified in refusing to accept the tobacco leaves. The delivery was to be made within a month. Gary's promise of delivery on a "best effort" basis made the delivery uncertain. The term, therefore, was ambiguous.

(B)  No. Homer was not justified in refusing to accept the tobacco leaves. He consented to the terms and conditions of the sale and must abide by it. Obligations arising from contract have the force of law between the contracting parties.

(C)  Yes. Homer was justified in his refusal to accept the delivery. The contract contemplates an obligation with a term. Since the delivery was made after 30 days, contrary to the terms agreed upon, Gary could not insist that Homer accept the tobacco leaves.

(D)  No. Homer was not justified in refusing to accept the tobacco leaves. There was no term in the contract but a mixed condition. The fulfillment of the condition did not depend purely on Gary's will but on other factors, e.g., the shipping company and the government. Homer should comply with his obligation.

SUGGESTED ANSWER:

(D)

It is clear under the facts that the period of delivery of the  tobacco leaves was not guaranteed.  Gary anticipated other factors which may prevent him from making the delivery within a month.  True enough, transportation problems and government red tape did.  Such slight delay was, thus, excusable.

Obligations arising from contract have the force of law between the contracting parties and should be complied with in good faith (Art. 1160 Civil Code).