Denny knows nothing of the prior sale to Benny.
The three contracts existing in this case are, first one is between Sammy with the carrier that who carry the 1000 tons of sugar, second is among Sammy and Benny and third contract is between Sammy and Denny. The contract becomes valid only if it fulfills the entire legal requirement. It will come under the Sales of Goods Act 1979.
“A bill of lading is a type of document that is used to acknowledge the receipt of a shipment of goods. A transportation company or carrier issues this document to a shipper.” (What is a bill of landing? 2010).
Bill of trading offers safety to each and every party in the global trade. In these particular case three Bills of lading is offered to Sammy. And also Denny is enabled to ask for all these three Bill of lading from Sammy at the time of receiving 1000 tons of sugar. If Sammy is not giving all these three Bills of lading to the Denny he can neither refuse to carry on with the contract or he can claim financial compensation for the fraudulent contract.
Denny has to admit the two of the three Bills from the Sammy or else, Denny has the right to refuse the bills for the reason that Sammy takes action in bad faith. He should bind with various responsibilities that he must obey. Primarily, he should provide a shipped moveable fresh Bill of Lading to the purchaser. Secondly, Sammy has to offer an agreement of Marine Insurance for the commodities which is constantly concerned by insurer. Thirdly, Sammy must offer a profitable invoice to the purchaser. Denny had to admit the Bills and recompense for the 1000 tone of sugar if Sammy accomplish his responsibilities by tendering fresh Bill of Lading, assurance plan, and profitable invoice. In this case, there is agreement among Sammy and shipping so that the carrier must be followed by certain responsibilities under the Hague