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 - Damages; or - Repudiation; or – Both . No automatic termination of contract - Photo Production v Securicor (1980) Sale 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. Conditions of sales of goods act · Arcos Ltd v EA Ronaasen & Sons [1933] . Reardon Smith Line Ltd v Hansen-Tangen[1976] '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 - Importance of term to contract - · Poussard v Spiers (1876) · Bettini v Gye (1876)
– Labelling by parties - Schuler AG v Wickman (1974 Innominate Terms · Hong Kong Fir Shipping v Kawasaki Kisen Kaisha (1962) - Seaworthiness - Right to repudiate depends on seriousness of consequences of breach, not the breach itself · Advantage - flexibility · Disadvantage - uncertainty Express termination clauses Rice v Great Yarmouth Borough Council (2001) Financing Ltd v Baldock [1963] Lombard North central Plc v Butterworth [1987] Anticipatory Breach • Executory contract - One party indicates that it does not intend to perform on the due date - 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)