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Error in Carrying Out Instructions and Departure from Instructions
Last updated: 17-Feb-2015

AIC Ltd v ITS Testing Services (UK) Ltd (The Kriti Palm) [2006] EWCA Civ 1601, per Lord Justice Rix:

33.¬†Thus Simon Brown LJ (Veba Oil Supply and Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832, [2002] 1 Lloyd’s Rep 295) pointed out that an error in carrying out instructions is to be distinguished from a departure from instructions. In the former case, the error was only relevant if it was material in the sense of actually affecting the ultimate result, and the question would then be whether the error was "manifest" for the purposes of the clause. In the case of a departure from instructions, however, such as employing the wrong test method, it was irrelevant that the practical effect was immaterial. Only an immaterial departure from instructions, such as one that could not even potentially affect the scientific or commercial process, would be irrelevant. That certainly did not apply to the use of the wrong test method, even where that could not affect the result. As Simon Brown LJ said at para 26(vi) (Veba Oil Supply and Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832, [2002] 1 Lloyd’s Rep 295):

Once a material departure from instructions is established, the Court is not concerned with its effect on the result. The position is accurately stated in par. 98 of Mr. Justice Lloyd’s judgment in Shell U.K. v Enterprise Oil: the determination in those circumstances is simply not binding on the parties. Given that a material departure vitiates the determination whether or not it affects the result, it could hardly be the effect on the result which determines the materiality of the departure in the first place. Rather I would hold any departure to be material unless it can truly be characterized as trivial or de minimis in the sense of being obvious that it could make no possible difference to either party.

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