Bunge Corporation v Tradax Export SA [1981]

Court: House of Lords

Facts: Bunge Corp was sued by Tradax for failing to provide timely notice of ship readiness for loading as required by Clause 7 of their contract, leading to contract termination and a claim for damages. The contract stipulated precise timelines for notices regarding the shipment of 5,000 tons of soya bean meal. Bunge's notice was given four days late, and Tradax terminated the contract, claiming breach of the time-related clause.

Issue: Does the failure to give timely notice of readiness for loading justify contract termination?

Held: The House of Lords ruled that Clause 7 was a condition, and Tradax was entitled to terminate the contract due to Bunge's late notice. Precise compliance with time clauses is crucial in mercantile contracts.

Key Judicial Statement: Lord Wilberforce stated that the court must not hesitate to regard a term as a condition, particularly in mercantile contracts where time is of the essence. This ensures certainty in commercial dealings.

💡Leveluplaw: When a contractual term is labeled as a "condition," especially time-related terms in commercial agreements, a breach may entitle the non-breaching party to terminate the contract.