In sale of goods contracts where the goods are to be transported by sea, time stipulations relating to the shipment process will often be regarded as conditions. In Bunge Corpn New York v Tradax Export SA, the parties entered into a contract for the sale of 15,000 tons of soya bean meal, 5% more or less, to be shipped from the US. The contract also required the buyers to give 15 consecutive days’ notice of probable readiness of the vessels being used to transport the cargo and of the approximate quantity to be carried. Once this was done, it was for the seller to nominate a port of loading. The buyer gave less than 15 days’ notice and the seller repudiated the contract at a time when the market price for soya bean meal was falling. The seller’s actions were upheld in the Court of Appeal and the House of Lords on the ground that the requirement of 15 days’ notice, being a time stipulation, was a condition of the contract rather than an innominate term: Bunge Corpn New York v Tradax Export SA [1981] 1 WLR 711, HL, p 714

doi:10.4324/9781843141518-217

Chapter

No Image Available

Chapter

In sale of goods contracts where the goods are to be transported by sea, time stipulations relating to the shipment process will often be regarded as conditions. In Bunge Corpn New York v Tradax Export SA, the parties entered into a contract for the sale of 15,000 tons of soya bean meal, 5% more or less, to be shipped from the US. The contract also required the buyers to give 15 consecutive days’ notice of probable readiness of the vessels being used to transport the cargo and of the approximate quantity to be carried. Once this was done, it was for the seller to nominate a port of loading. The buyer gave less than 15 days’ notice and the seller repudiated the contract at a time when the market price for soya bean meal was falling. The seller’s actions were upheld in the Court of Appeal and the House of Lords on the ground that the requirement of 15 days’ notice, being a time stipulation, was a condition of the contract rather than an innominate term: Bunge Corpn New York v Tradax Export SA [1981] 1 WLR 711, HL, p 714

ABSTRACT

In sale of goods contracts where the goods are to be transported by sea, time stipulations relating to the shipment process will often be regarded as conditions.

In Bunge Corpn New York v Tradax Export SA,36 the parties entered into a contract for the sale of 15,000 tons of soya bean meal, 5% more or less, to be shipped from the US. The contract also required the buyers to give 15 consecutive days’ notice of probable readiness of the vessels being used to transport the cargo and of the approximate quantity to be carried. Once this was done, it was for the seller to nominate a port of loading. The buyer gave less than 15 days’ notice and the seller repudiated the contract at a time when the market price for soya bean meal was falling. The seller’s actions were upheld in the Court of Appeal and the House of Lords on the ground that the requirement of 15 days’ notice, being a time stipulation, was a condition of the contract rather than an innominate term:

Bunge Corpn New York v Tradax Export SA [1981] 1 WLR 711, HL, p 714 Lord Wilberforce: The main contention of Mr Buckley for the appellant was based on the decision of the Court of Appeal in Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, as it might be applied to cl 7. Diplock LJ, in his seminal judgment, illuminated the existence in contracts of terms which were neither, necessarily, conditions nor warranties, but, in terminology which has since been applied to them, intermediate or innominate terms capable of operating, according to the gravity of the breach, as either conditions or warranties. Relying on this, Mr Buckley’s submission was that the buyer’s obligation under the clause, to ‘give at least [15] consecutive days’ notice of probable readiness of vessel(s) and of the approximate quantity required to be loaded’ is of this character. A breach of it, both generally and in relation to this particular case, might be, to use Mr Buckley’s expression, ‘inconsequential’, that is, not such as to make performance of the seller’s obligation impossible. If this were so, it would be wrong to treat it as a breach of condition: Hong Kong Fir would require it to be treated as a warranty.