Safco v BHP

Safco (Ahmed) Farid Partners, an Egyptian partnership, sought to enforce a contract with B.H.P. Australia Coal Limited, which had been made with a deceased member of the partnership, Salah Farid. The central legal issues were whether the death of Salah Farid terminated the contract and, if so, whether an oral agreement made on August 7, 1991, substituted the deceased's son, Ahmed Farid, as the new agent. The court found that the death of Salah Farid did not automatically terminate the contract, as the clause in question only made the contract voidable at the option of the parties. The court also concluded that the oral agreement made on August 7, 1991, did not substitute Ahmed Farid as the new agent under the same terms as the original contract but rather was a temporary arrangement until a new agent was appointed.

Justice Ambrose detailed that the written contract specified its duration and provided for automatic extensions unless terminated by notice. The court held that the death of Salah Farid did not automatically terminate the contract but gave the defendant the option to terminate it if it chose. The court found that the defendant did not exercise this option, implying the contract's continuation. Regarding the oral agreement on August 7, 1991, the court found that it was a temporary arrangement for Ahmed Farid to act as his father's replacement until the end of 1991. The court accepted the defendant's evidence that the arrangement was intended to be temporary, allowing time to find a new agent.

The court determined that the plaintiff was paid all due commission and that the defendant's actions did not constitute a breach of contract. Justice Ambrose ruled in favor of the defendant, ordering the plaintiff to pay the defendant's costs of the action. The judgment concluded that the plaintiff's claims were unfounded, and the contract had not been improperly terminated.