Problem
By contract, A agreed to purchase, and B agreed to sell, 90,000 tons of crude oil. The contract provided that the price should include freight and insurance direct or indirect to Sydney from Saudi Arabia and that payment should be by cash in exchange for shipping documents. The ship arrived in Sydney on 20 March 2021 and reported at customs on the following day.
A paid for the oil and took delivery of the bills of lading in respect of the oil on 20 March 2021. The ship commenced to discharge the oil on 21 March, and over that day A resold 70,000 tons of the oil to sub-purchasers which was placed in tankers for delivery. Late in the day of 21 March, A took samples of the oil, when a suspicion was aroused that the oil was not of the contract description.
On 22 March, the ship continued to discharge the oil and A took further samples. A's suspicions were confirmed, and the oil was not of contract quality, and on 23 March A gave B notice that it rejected the whole cargo.
After giving the said notice of rejection, A caused the oil tankers that were on the road in transit to the sub-purchasers to return to the port at Sydney.
Having regard to the SOGA, advise A if it can reject the oil? Would your answer be different if the oil had already been delivered to the sub-purchasers?