Attorney Gil Nadel, Gilad Paz
The Magistrate's Court of Herzliya has recently received a lawsuit submitted by an importer against an international forwarder. The court ordered the international forwarder to recompense the importer, who was represented by the Gil Nadel Law Office, with sums that were illegally charged and contrary to the agreement signed between the parties.
The Case:
Comasco, an importer of agricultural equipment, had hired the services of Mentfield, an international forwarding company, for transporting a cargo of three grain harvesters and three units for harvesting machinery from the US to Israel.
Mentfield sent Comasco an initial price quote of $36,000, and then later an altered price quote of $35,000.
In practice, after the cargo reached Israel, Mentfield charged Comasco a sum of $46,000, claiming that these were the actual expenses of the shipping companies, due to differences in the volume of the cargo as opposed to the data given by Comasco.
When this disagreement arose between the two parties as to the size of the cargo, Mentfield suggested that Comasco appoint an appraiser, who will measure the cargo again to determine its proper size. After the appraiser measured the goods, it was discovered that the cargo was not 199 cubic meters, as Comasco had informed Mentfield, but instead was 207 cubic meters. It should be noted here that according to a previous measurement of the cargo taken by the shipping company, the size of the harvesters was determined at 230 cubic meters, and the shipment fee was calculated accordingly.
Mentfield refused to release the cargo and to give the order for release thereby forcing Comasco to pay Mentfield the shipment fee as demanded, at a sum of approximately $46,000, and to sue them at court for the difference between the price that was given in the price quote and the sum that was actually paid.
The court's ruling:
The court determined that the small difference that had been discovered in the size of the cargo, which eventually stood at only 8 cubic meters, does not justify an increase of 33% to the shipment fee, as demanded by Mentfield.
The court determined that since Mentfield had sent Comasco two written price quotes, their claim of having sent erroneous price quotes and that their actual intent was for approximately $45,000 must be deferred.
The court ruled that suppliers will often give their clients "tempting offers" at low prices in order to lure them into a business deal, and if the court will provide a precedent for a supplier to withdraw a low price quote after signing a contract, this would seriously hinder the legal certainty of signing contracts, and will be bad for the clients.
Mentfield claimed a mistake in entering the contract, regarding the price that was quoted, but the court ruled that this claim was not proven and therefore rejected it, and in effect accepted the lawsuit in full.
Thus, the court ordered Mentfield to recompense Comasco with $50,000, which is the difference between the price in the quote and the price that was paid in practice, with an additional NIS 18,000 for legal expenses and attorney fee.
[Civil suit (Magistrates Herzliya) 6694-01-10 Comasco Ltd. vs. Mentfield (1983) Ltd., Judge Dr. Shaul Avinor. Verdict of September 3, 2012. Party representatives: on behalf of Comasco- Gil Nadel Law Office. On behalf of Mentfield- Attorney A. Netz.]
Notes:
Our office represented Comasco (the winning party) in this case.
It should be further mentioned that the court had stressed the issue of a "tempting offer", and determined that customarily, suppliers tend to give very low quotes the first time around, so as to tempt them into a business deal. On the other hand, contract law allows for the parties bound by the contract to cancel it or amend it, should a mistake in the contract be discovered.
In this case, the court ruled that when a supplier claims to have made an error in the price quote given to a client, claiming that it was cheaper than customary, the supplier will be charged with the additional obligation to prove the mistake. This measure should be taken to protect the client and to prevent the price from being raised after the contract has already been signed.
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