Suisse Atlantique Societe d'Armament SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 is a landmark English contract law

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 notion of a fundamental breach

Fundamental breach

A fundamental breach of a contract, sometimes known as a repudiatory breach, is a breach so fundamental that it permits the distressed party to terminate performance of the contract, in addition to entitling that party to sue for damages.-History:...

of contract.

Facts

The case involved the charter of a ship for two years’ consecutive voyages between US and Europe. The ship was to be loaded at a specified rate. The owners were to be paid according to the number of voyages made during the two year period. If the time taken for loading and unloading was longer than required, the charterers were to pay $1000 per day by way of demurrage. The charterers were taking many extra days in loading and unloading but were allowed to continue to have the use of the ship for the remainder of the two years. Eight round trips were made. However, the owners alleged that the charterers delay in loading and unloading had made a further six trips impossible and sued for damages. The owners claimed that they were not bound by that clause because the charterers by their extraordinary delays had committed a fundamental breach of the contract.

Judgment

Lord Reid said, notably, “In the ordinary way the customer has no time to read them, and if he did read them he would probably not understand them. And if he did understand and object to any of them, he would generally be told he could take it or leave it. And if he then went to another supplier the result would be the same. Freedom to contract must surely imply some choice or room for bargaining.”