TWW Yachts Sarl v The Yacht “Loretta” (No 1)

The case of TWW Yachts Sarl v The Yacht "Loretta" (No 1) involved a dispute between the seller, TWW Yachts Sarl, and the buyer, Sterling Yacht Management, regarding the sale and purchase of a yacht, Loretta. The primary issue was whether the written contract for the sale and purchase of the yacht was varied by a subsequent oral meeting, and if so, whether the buyer performed the conditions of the variation. The buyer sought an order for specific performance of the contract as varied.

The court was required to decide whether the oral agreement to vary the written contract was binding if the buyer delivered a signed version of the agreed amendments, with evidence of a new contract to ship the yacht to the Mediterranean and pay the seller's direction AUD50,000 on account of anticipated costs. The court also needed to determine if the buyer's tender of a signed but not agreed version of the amendments was defective performance or a counter offer, and if it was necessary for the seller to sign the agreed amendments after the buyer performed the conditions of variation.

The court found that there was a binding contract entered into on the terms of version 3 that varied the original contract. The buyer provided the further consideration of entering into the cargo contract and making the payment of AUD50,000. The court held that the buyer was entitled to an order for specific performance of the contract as varied. The court emphasised the importance of the objective approach in determining the rights and liabilities of the parties to a contract, and what a reasonable person would have understood by the language in which the parties had expressed their agreement.

The court ordered that the matter be adjourned to 26 February 2021, and the parties provide draft orders providing for specific performance of the contract as varied, along with any consequential orders, including as to costs. If the parties could not agree on the orders, they were to provide a version in mark-up identifying any differences.