Law Notes

Topics: Contract, Breach of contract, Contract law Pages: 3 (2144 words) Published: October 31, 2014

*44  Cehave N. v. v Bremer Handelsgesellschaft M.B.H.
The Hansa Nord
Court of Appeal
16 July 1975
[1975] 3 W.L.R. 447
[1976] Q.B. 44
Lord Denning M.R. , Roskill and Ormrod L.JJ.
1975 June 10, 11, 12, 13, 16; July 16
Contract—Condition or warranty—Intermediate stipulation—Whether breach goes to root of contract—Carriage by sea—Stipulation for "shipment... in good condition" Sale of Goods—Description—Merchantable quality—Citrus pulp pellets for use in cattle food—Substantial part damaged—Rejection by buyers—Goods used in cattle food—Whether of "merchantable quality"—Whether buyers entitled to reject— Sale of Goods Act 1893 (56 & 57 Vict. c. 71), ss. 11 (1) (b), 14 (1) (2) Ships' Names—Hansa Nord

1 By contracts of sale in September 1970 German sellers agreed to sell to Dutch buyers 12,000 tons of U.S. citrus pulp pellets c.i.f. Rotterdam for use as animal feed. The contracts incorporated the trade association term "shipment to be made in good condition." Following the buyers' payment of the price of some £100,000 and receipt of the shipping documents, a shipment on the Hansa Nord, with 1,260 tons of pellets in no. 1 hold and 2,053 tons in no. 2 hold, arrived in Rotterdam on May 21, 1970, by which time the market price of citrus pulp pellets had fallen. On May 22 discharge of the pellets into lighters commenced. Much of the cargo in no. 1 hold was found to be damaged while the goods in no. 2 hold were in substantially good condition. On May 24 the buyers rejected the whole cargo from both holds and claimed repayment of the price on the ground that the shipment was not made in good condition. The sellers rejected the claim. By an order made by the Rotterdam county court on the ex parte application of the lighter owners the whole cargo of pellets from both holds was sold for £30,000 net on June 2 to an importer of such pellets who on the same day resold the whole cargo to the buyers for the same sum of £30,000. The buyers then used "the entire cargo...
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