D was shipping P’s goods and clause 7 of their contract stated that D had to give notice of 15 days prior to shipping regarding readiness of the ship. D gave late notification that his ship would not be ready, and P, stating that clause 7 was a condition, argued that they could terminate the contract. HL held that P was right.
Lord Wilberforce: this case is distinct from Hong Kong Fir since there the CA’s reasoning was that a term which would almost certainly, and could very easily, be breached was unlikely to be considered as a condition. However giving late notice can only be committed in one way and is easily avoided. Therefore Hong Kong Fir reasoning does not prevent clause 7 here from being regarded as a condition. On the facts it was “clearly essential” that the notice be given in time.
Lord Roskill: The use of the “innominate term” should not be used to allow escapes from bad bargains. Where it is right to do so, terms will be construed as conditions for the sake of commercial certainty: This is especially so where the contract is part of a chain or string of contracts, or where it would be difficult for the court to quantify the amount lost by P if termination were not permitted.