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Lombard North Central v Butterworth [1987] QB 527

The defendant leased a computer from the claimant. The claimant was to pay £584 by 20 instalments every 3 months. A term of the lease agreement provided that punctual payment was required and breach of this term would entitle the lessor to terminate the agreement. The defendant got into arrears with the instalments and the claimant took possession of the computer and sold it on for £175. The claimant sued the defendant claiming arrears and all future payments amounting to £6,869 in total.

Held: The term relating to prompt payment was a condition. The parties by their agreement had demonstrated that prompt payment was an essential term and the consequence of breach was clearly set out. Nicholls LJ stated that even one late payment would entitle the lessor to terminate irrespective of the effect of the breach.