Contract Law - Week 19b Lectures Discharge of Contracts (Breach) Issues • Breach · Nature of Repudiatory Breach . The Sale of Goods Act 1979 . Categorisation of Terms by the Court · Special Types of Breach · Anticipatory Breach · Effect of Breach: Right of Election Breach • May lead to o Damages; or o Repudiation; or o Both . No automatic termination of contract - Photo Production v Securicor (1980) Nature of Repudiatory Breach · What types of breach of contract will give rise to the right to repudiate? • Should this be determined by parties? . Should it be dependent on the actual consequences of the breach? . Should the law specify categories in relation to contractual obligations the breach of which will result in the right to repudiate? The Sales of Goods Act . Implied terms under the SGA 1979 are labelled as either 'conditions' or 'warranties'. · Sec 11(3)- a condition is a stipulation the breach of which may give rise to a right to treat the contract as repudiated, whereas a breach of warranty may give rise to a claim for damages but not to a right to treat the contract as repudiated. Condition in the Sale of Goods Act . Arcos Ltd v EA Ronaasen & Sons [1933] . Reardon Smith Line Ltd v Hansen-Tangen[1976] Categorisation of Terms - The Courts' Approach · 'major' terms - any breach gives the right to repudiate (terminate) contract + damages. · 'minor' terms - damages, but no right to repudiate, whatever the actual consequences of the breach. Conditions and Warranties · Condition = major term · Warranty = minor term o Importance of term to contract - Poussard v Spiers (1876)
Bettini v Gye (1876) o Labelling by parties - · Schuler AG v Wickman (1974) Innominate Terms · Hong Kong Fir Shipping v Kawasaki Kisen Kaisha (1962) o Seaworthiness o Right to repudiate depends on seriousness of consequences of breach, not the breach itself · Advantage - flexibility · Disadvantage - uncertainty Express terminate clauses Rice v Great Yarmouth Borough Council (2001) o Financing Ltd v Baldock [1963] o Lombard North central Plc v Butterworth [1987] Anticipatory Breach • Executory contract o One party indicates that it does not intend to perform on the due date o Other party can " 'accept' the breach and sue for damages immediately " wait for the due date to arrive before taking action • Hochster v De La Tour (1853) Effect of Breach and Right of Election . Geys v Societe Generale London [2012] . Force India Formula One Team v Etihad Airways [2010 · Avery v Bowden (1855) . Vitol SA v Norelf Ltd [1996] . White & Carter (Councils) Ltd v McGregor [1962] Mistaken repudiation . Federal Commerce and Navigation Co Ltd v Molena Alpha Inc, The Nanfri (1979) . Woodar Investment Development Ltd v Wimpey Construction UK Ltd (1980)
Contract Law - Revision Notes Discharge by Breach · Photo Production Ltd - distinguished between primary