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Bunge Corporation v Tradax SA [1981] 1 WLR 711

By Oxbridge Law TeamUpdated 04/01/2024 06:58

Judgement for the case Bunge Corporation v Tradax SA

  • Defendant was shipping Plaintiff’s goods and clause 7 of their contract stated that Defendant had to give notice of 15 days prior to shipping regarding readiness of the ship.

  • Defendant gave late notification that his ship would not be ready, and Plaintiff, stating that clause 7 was a condition, argued that they could terminate the contract.

  • HL held that Plaintiff 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 Plaintiff if termination were not permitted. 

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