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Dan and Tom are Merchants in the ordinary course of business. Dan has agreed to sell, and Tom had agreed to buy ½ of the cargo of widgets on board the MV Annie Staley. The MV Annie Staley is a merchant vessel that departed Hong Kong and is due to make port at the Port of Long Beach the week of June 3rd. The only problem is that there are in fact two vessels named Annie Staley, one belonging to Republic shipping lines, and one belonging to Allied Merchant Fleet. Both have sailed from Hong Kong. Both are carrying a cargo or widgets. Both will dock in the Port of Long Beach, the first on June 3rd, the second on June 5th. The contract only calls for the purchase of ½ of the cargo of widgets on board the MV Annie Staley. Neither Dan nor Tom is sure which of the two vessels Annie Staley the other was referring to. What is the fate of the contract?
This is a typical example of ambiguous contract. An ambiguous contract is the contract that has more than one interpretation. The terms of the contracts or the language of the contract may be unclear or confusing to the parties. As in the given case, there is confusion in both the parties about the exact merchant vessel the parties are referring.
If the contract has some sort of confusion or is seen as ambiguous, then the contract will be termed as void or voidable contract. So the given contract will be termed either as a void or voidable contract
Dan and Tom are Merchants in the ordinary course of business. Dan has agreed to sell,...