Case name- Facts Decision/Speeches Lecture/
Breach Topic
Vitol v Is it enough if innocent party simply Lord Steyn gave 2 examples: Acceptance
Norelf, The does not perform their own obligations 1) If employer told contractor not to of
Santa Clara under the contract? Yes, in some return to site and contractor does not termination
(HL) circumstances. But, generally, silence return; Lord Steyn: may ‘convey a
will not be enough. decision to treat the contract as at an
end’
2) Contract to ship good overseas on
specified vessel and date. S under
contractual duty to obtain the export
licence. If B breaches contract before
any loading of shipment and B knows
that S did not apply for the export
licence, would it be enough for B to
conclude that S was accepting B’s
repudiation?
Poussard v Obligation of lead singer to perform at Condition
Spiers first performance went to the root of
the contract and its breach amounted
to a breach of condition.
Hong Kong Breach of a 24-month contract as the CA held: the term broken wasn’t a Innominate
Fir Shipping ship was not seaworthy. It broke down condition but an innominate term and term
Co. Ltd v and needed repairs. The charterers since the effects of the breach
Kawasaki (hirer) terminated but the ship was weren’t sufficiently serious to justify
Kisen Kaisha returned and was in seaworthy termination, the charterers had no
Ltd condition even when there were still 17 right to terminate when they did. The
months of the original 24-month term effect of the breach depends on how
remaining. seriously the innocent party was
deprived of receiving the whole
benefit.
Aerial P were to advertise D’s peas by flying Breach was repudiatory (pre-dates Innominate
Advertising v over towns trailing a banner reading: Hong Kong Fir but would be term
Batchelors ‘Eat Batchelors’ peas!’ In breach of innominate). It was repudiatory
Peas contract the pilot flew over the main because the court looked at how
square of Salford during the 2 minutes’ serious the effect of the breach was. D
silence on Armistice Day. This caused would struggle to pick up their
great upset and D’s product was business again.
boycotted, leading to a fall in sales.
Bettini v Gye Obligation to attend rehearsals for 6 Didn’t go to root of contract, was a Warranty
days but only came for 3. warranty giving rise to a claim in
damages but not to the ability to
terminate the contract.
Bannerman v D wanted to buy hops and said that he Held: the statement was so important Term
White didn’t want to purchase from P if the to D that it amounted to a contractual
hops has been treated with sulphur. P promise (term) by the seller.
(seller) said they hadn’t been treated
, with sulphur.
Lombard Hire of computer and prompt payment CA held: Parties
North of each instalment of the hire was (1) Parties are free to classify relative classified
Central plc v stated to be “of the essence” of the importance of their terms term as
Butterworth agreement. This means prompt (2) “Of the essence” made prompt condition
payment is important. payment a condition – so if any
payment was made late, would be
repudiatory breach and entitle
finance provider to terminate. (Harsh
consequences for consumer)
Schuler AG v It was a ‘condition’ of an exclusive This term wasn’t a condition in the Parties
Wickman distribution contract (over a period of sense that a single breach, however classified
Machine 4.5 years) that the distributor ‘shall small, would entitle the innocent term as
Tools Sales send its representatives to visit the 6 party to terminate the whole condition
largest UK motor manufacturers at contract. It followed that the not
least once in every week’ to solicit distribution contract had been conclusive
orders. The distributor failed to make a wrongfully terminated. The fact that a
number of these visits and the term is called a ‘condition’ isn’t
agreement was terminated. conclusive (definite).
Arnold v The Supreme Court was required to This decision is clear in emphasising Parties
Britton interpret service charge provisions in the starting point for interpretation as classified
leases of chalets at a caravan park being the language the parties have term as
which had been granted at a time of chosen. If this language is clear the condition is
high inflation in the late 1970’s/80’s. courts won’t interfere. It follows that not
Each lease contained a clause requiring the clause should be interpreted in conclusive
the lessee to pay a fixed service charge accordance with ‘commercial
and provided for it to increase at a common sense’ only in instances of
compound rate (increase every year). clear drafting problems.
The Mihalis The owners of the ship, The Mihalis Megaw LJ referred to need for Time
Angelos Angelos (M), hired the ship to D to use certainty and if a term is classified as stipulations
for the carriage of some cargo. A clause a condition you will know in advance in
in the agreement stated the ship was what the position will be if it is mercantile
expected ready to load on 1st July. It broken. The ‘expected ready to load’ contract-
couldn’t be ready for that date and was clause was a condition despite the condition
ready even later. D cancelled the fact it had caused no loss to the
contract on 17th of July. M brought an defendant. The classification as a
action against D for anticipatory condition was said to be because of
breach. D argued the claimant was in the need for commercial certainty in
breach of condition of the contract shipping contracts.
because it wasn’t ready to load on the
specified date.
Bunge A contract for the sale 5,000 tons of B appealed to the High court who Time
Corporation soya beans required the buyers (B) to reversed this decision applying the stipulations
v Tradax SA give the sellers (S) 15 days notice of innominate term approach from Hong in
readiness of loading. This term was Kong Fir. The Court of Appeal mercantile
stated as a condition. B gave a shorter reversed the decision and B appealed contract-
notice period and S treated this as to the House of Lords. The term was condition
Breach Topic
Vitol v Is it enough if innocent party simply Lord Steyn gave 2 examples: Acceptance
Norelf, The does not perform their own obligations 1) If employer told contractor not to of
Santa Clara under the contract? Yes, in some return to site and contractor does not termination
(HL) circumstances. But, generally, silence return; Lord Steyn: may ‘convey a
will not be enough. decision to treat the contract as at an
end’
2) Contract to ship good overseas on
specified vessel and date. S under
contractual duty to obtain the export
licence. If B breaches contract before
any loading of shipment and B knows
that S did not apply for the export
licence, would it be enough for B to
conclude that S was accepting B’s
repudiation?
Poussard v Obligation of lead singer to perform at Condition
Spiers first performance went to the root of
the contract and its breach amounted
to a breach of condition.
Hong Kong Breach of a 24-month contract as the CA held: the term broken wasn’t a Innominate
Fir Shipping ship was not seaworthy. It broke down condition but an innominate term and term
Co. Ltd v and needed repairs. The charterers since the effects of the breach
Kawasaki (hirer) terminated but the ship was weren’t sufficiently serious to justify
Kisen Kaisha returned and was in seaworthy termination, the charterers had no
Ltd condition even when there were still 17 right to terminate when they did. The
months of the original 24-month term effect of the breach depends on how
remaining. seriously the innocent party was
deprived of receiving the whole
benefit.
Aerial P were to advertise D’s peas by flying Breach was repudiatory (pre-dates Innominate
Advertising v over towns trailing a banner reading: Hong Kong Fir but would be term
Batchelors ‘Eat Batchelors’ peas!’ In breach of innominate). It was repudiatory
Peas contract the pilot flew over the main because the court looked at how
square of Salford during the 2 minutes’ serious the effect of the breach was. D
silence on Armistice Day. This caused would struggle to pick up their
great upset and D’s product was business again.
boycotted, leading to a fall in sales.
Bettini v Gye Obligation to attend rehearsals for 6 Didn’t go to root of contract, was a Warranty
days but only came for 3. warranty giving rise to a claim in
damages but not to the ability to
terminate the contract.
Bannerman v D wanted to buy hops and said that he Held: the statement was so important Term
White didn’t want to purchase from P if the to D that it amounted to a contractual
hops has been treated with sulphur. P promise (term) by the seller.
(seller) said they hadn’t been treated
, with sulphur.
Lombard Hire of computer and prompt payment CA held: Parties
North of each instalment of the hire was (1) Parties are free to classify relative classified
Central plc v stated to be “of the essence” of the importance of their terms term as
Butterworth agreement. This means prompt (2) “Of the essence” made prompt condition
payment is important. payment a condition – so if any
payment was made late, would be
repudiatory breach and entitle
finance provider to terminate. (Harsh
consequences for consumer)
Schuler AG v It was a ‘condition’ of an exclusive This term wasn’t a condition in the Parties
Wickman distribution contract (over a period of sense that a single breach, however classified
Machine 4.5 years) that the distributor ‘shall small, would entitle the innocent term as
Tools Sales send its representatives to visit the 6 party to terminate the whole condition
largest UK motor manufacturers at contract. It followed that the not
least once in every week’ to solicit distribution contract had been conclusive
orders. The distributor failed to make a wrongfully terminated. The fact that a
number of these visits and the term is called a ‘condition’ isn’t
agreement was terminated. conclusive (definite).
Arnold v The Supreme Court was required to This decision is clear in emphasising Parties
Britton interpret service charge provisions in the starting point for interpretation as classified
leases of chalets at a caravan park being the language the parties have term as
which had been granted at a time of chosen. If this language is clear the condition is
high inflation in the late 1970’s/80’s. courts won’t interfere. It follows that not
Each lease contained a clause requiring the clause should be interpreted in conclusive
the lessee to pay a fixed service charge accordance with ‘commercial
and provided for it to increase at a common sense’ only in instances of
compound rate (increase every year). clear drafting problems.
The Mihalis The owners of the ship, The Mihalis Megaw LJ referred to need for Time
Angelos Angelos (M), hired the ship to D to use certainty and if a term is classified as stipulations
for the carriage of some cargo. A clause a condition you will know in advance in
in the agreement stated the ship was what the position will be if it is mercantile
expected ready to load on 1st July. It broken. The ‘expected ready to load’ contract-
couldn’t be ready for that date and was clause was a condition despite the condition
ready even later. D cancelled the fact it had caused no loss to the
contract on 17th of July. M brought an defendant. The classification as a
action against D for anticipatory condition was said to be because of
breach. D argued the claimant was in the need for commercial certainty in
breach of condition of the contract shipping contracts.
because it wasn’t ready to load on the
specified date.
Bunge A contract for the sale 5,000 tons of B appealed to the High court who Time
Corporation soya beans required the buyers (B) to reversed this decision applying the stipulations
v Tradax SA give the sellers (S) 15 days notice of innominate term approach from Hong in
readiness of loading. This term was Kong Fir. The Court of Appeal mercantile
stated as a condition. B gave a shorter reversed the decision and B appealed contract-
notice period and S treated this as to the House of Lords. The term was condition
