Discharge by Breach Effect of Breach May lead to Damages; or Repudiation; or Both No automatic termination of contract - Photo Production v Securicor (1980) Repudiatory breach A breach entitling the other party to treat the contract as an at end. Election: Vitol SA v Norelf Ltd, The Santa Clara (1996) Federal Commerce and Navigation Co Ltd v Molena Alpha Inc, The Nanfri (1979) Woodar Investment Development Ltd v Wimpey Construction UK Ltd (1980) Categorisation of Terms - and the consequences of breach "major" terms - any breach gives 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 Status determined by Statute (eg Sale of Goods Act 1979 implied terms) Importance of term to contract - Poussard v Spiers (1876) Bettini v Gye (1876) Labelling by parties - Schuler v Wickman (1974) Rice v Great Yarmouth Borough Council (2001) Awilco A/S v Fulvia SpA di Navigazione, The Chikuma (1981) 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 Cehave v Bremer (1976) Advantage - flexibility Disadvantage - uncertainty Instalment contracts Maple Flock Co Ltd v Universal Furniture Products (Wembley) Ltd (1934) RA Munro & Co Ltd v Meyer (1930) Mersey Steel and Iron Co v Naylor Benzon & Co (1884) 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) Next week: • Illegality b) Agreements contrary to public policy