Bunge Corporation v Tradax SA
Encyclopedia
Bunge Corporation v Tradax Export SA [1981] UKHL 11 is an English contract law
case, concerning the right to terminate performance of a contract.
sued Tradax SA for wrongful termination of its agreement to supply Bunge with 15,000 tons of soya bean meal on the basis that giving notice four days late for loading the ship was not so bad. The soya bean meal was going on three shipments from a port in the Gulf of Mexico
nominated by Tradax and on a ship nominated by Bunge. One of the shipments was to be during June 1975. Clause 7 said Bunge was to ‘give at least 15 days consecutive notice’ of the readiness of the ship for loading (ie which at the time mean 13 June). Bunge gave notice on 17 June. Tradax argued this was a breach and purported to terminate and recover damages for the difference between the contract price and the market price (which had just fallen).
Lord Scarman and Lord Roskill concurred.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning the right to terminate performance of a contract.
Facts
Bunge CorpBunge Limited
Bunge Limited is a Bermudan food conglomerate with its headquarters in White Plains, New York. As well as being a leading global soybean exporter it is also involved in food processing, grain trading, and fertilizer...
sued Tradax SA for wrongful termination of its agreement to supply Bunge with 15,000 tons of soya bean meal on the basis that giving notice four days late for loading the ship was not so bad. The soya bean meal was going on three shipments from a port in the Gulf of Mexico
Gulf of Mexico
The Gulf of Mexico is a partially landlocked ocean basin largely surrounded by the North American continent and the island of Cuba. It is bounded on the northeast, north and northwest by the Gulf Coast of the United States, on the southwest and south by Mexico, and on the southeast by Cuba. In...
nominated by Tradax and on a ship nominated by Bunge. One of the shipments was to be during June 1975. Clause 7 said Bunge was to ‘give at least 15 days consecutive notice’ of the readiness of the ship for loading (ie which at the time mean 13 June). Bunge gave notice on 17 June. Tradax argued this was a breach and purported to terminate and recover damages for the difference between the contract price and the market price (which had just fallen).
Judgment
The House of Lords held that proper construction of the contract meant clause 7 was a condition, so Tradax had been entitled to terminate. The contract had to be construed to give effect to the parties' intentions, and although because it allows the right to terminate one would not quickly hold that in mercantile contracts agreements contained conditions, this one did. Lord Wilberforce said the following.Lord Scarman and Lord Roskill concurred.