The Hansa Nord [1976] QB 44
Construction of contractual terms as ‘conditions’ and the right to terminate a contract.
Facts
Pursuant to a contract of sale, a German company agreed to sell a Dutch company 12,000 tons of citrus pulp pellets for use in cattle feed. A clause in the contract stipulated that the shipment is “to be made in good condition.” The buyer sought to reject the goods on the ground that “not all of the goods” were shipped in good condition. However, all of the goods were usable for the same intended purpose.
Issue
The question arose as to whether the buyer was entitled to reject the goods on the grounds that (1) the term “good condition” is construed as a contractual condition’; or, (2) the breach was substantial.
Held
As a general rule, whether a contractual breach entitles the other party to repudiate the contract depends on whether the breached stipulation, on the contract’s construction, constitutes a ‘condition.’ In the case law following the Sales of Good Act 1893, the right to repudiate is the breach of a condition or if it is so substantial as to go to the root of the contract. On the facts, firstly, in assessing the term “shipped in good condition,” the Court viewed that the buyer should not have a right to reject an entire cargo shipment due to ‘some’ goods being in bad condition. Thus, the term must be construed as an intermediate stipulation and not a condition, the breach of which does not give the buyer the right to reject the goods but solely a right to claim for damages. Secondly, as all of the goods are usable for the same intended purposes, there is no substantial breach of the term that goes to the root of the contract. Accordingly, the buyer did not have the right to reject the goods but solely to claim for damages for the breach of an intermediate term.
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Updated 20 March 2026
This case summary remains broadly accurate as a description of Cehave NV v Bremer Handelsgesellschaft mbH (The Hansa Nord) [1976] QB 44 and the legal principles it established. The case is still good law and continues to be cited in English contract law for the doctrine of innominate (intermediate) terms, alongside the foundational authority of Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26.
One factual point to note: the article refers to the Sale of Goods Act 1893. That Act has since been repealed and replaced by the Sale of Goods Act 1979, which is the legislation currently in force and which consolidates the earlier law. The core principles discussed in the case remain unaffected by this legislative change. Students should cite the 1979 Act when discussing current statutory law in this area.
The broader framework for classifying contractual terms as conditions, warranties, or innominate terms remains settled law and has not been materially altered by subsequent legislation or case law.
