Contract seminar 5- Week 5
Breach and Termination- (it’s the 25th Feb Class)
Notes from the seminar:
Terminology:
Repudiation- the party who has indicated that they are breaching the contract via their
conduct or orally. The repudiation should be accepted by the other party? There are
different views as to the acceptance of the repudiation.
Rescind- in response to a material breach of contract one party to the contract ceases to
carry out their obligations- the non- breaching party that ceases to perform their obligations
in relation to future obligations (remember mutuality)- the previous obligations before the
breach of the contract are still effective or survive the rescission. The basic idea is that you
are terminating the contract- the non- breaching party does not need to rescind the
contract, but can exercise either of the self-help remedies or seek any other remedy either
by litigating or arbitration. There is also the option of the non- breaching party to do nothing
about the material breach if that is the best possible situation after considering all the
commercial realities surrounding the issue. E.g. if it is a small electrician who is the non-
breaching party and the breaching party is the shopping mall, it would not be wise for him
to exercise retention or any other remedy or even rescind the contract as it could possibly
lead to loss of future business. In theory in France you have to get the courts permission to
rescind- this is not practical for the client as it could be time consuming and expensive. It
also departs from the idea of rescission being a self- help remedy. Also litigating to be
awarded the remedy could lead to uncertainty over some of the issues like material breach.
Resiling- lawfully withdrawing from a contract and may not be in response to a breach. The
right exists in the contract. E.g. buying a pub but the licence is not granted. This is an agreed
ability to say the whole contract is at an end.
Restitution- upon the breach of one party, we restore the parties to their position as it was
before the contract was entered into. Some situations could arise where the parties cannot
be restored to their original positions, thus in such a case there could be the return of goods
for example that could constitute restitution. Restituto in intergrum is different from this
which applies mainly to misrepresentation.
Material breach:
Something that goes to the root of the contract- but this is too vague- this could give rise to
all sorts of problems like latent breaches etc. but does this vagueness give the judges
discretion as material breach could vary from contract to contract
So what do we mean by going to the root of the contract- could this relate to fundamental
terms of the contract or the purpose of the contract and not all the other ancillary terms.
Wade v Waldon- the bill matter the actor was supposed to provide, did not hand it in and
the theatre manager terminated the contract.
In England however, the test for material breach is defined by the use of warranties and
conditions, whereby the breach of a condition can lead to the rescission of the contract and
a breach of a warranty can lead to the award of damages. English law developed a third term
Breach and Termination- (it’s the 25th Feb Class)
Notes from the seminar:
Terminology:
Repudiation- the party who has indicated that they are breaching the contract via their
conduct or orally. The repudiation should be accepted by the other party? There are
different views as to the acceptance of the repudiation.
Rescind- in response to a material breach of contract one party to the contract ceases to
carry out their obligations- the non- breaching party that ceases to perform their obligations
in relation to future obligations (remember mutuality)- the previous obligations before the
breach of the contract are still effective or survive the rescission. The basic idea is that you
are terminating the contract- the non- breaching party does not need to rescind the
contract, but can exercise either of the self-help remedies or seek any other remedy either
by litigating or arbitration. There is also the option of the non- breaching party to do nothing
about the material breach if that is the best possible situation after considering all the
commercial realities surrounding the issue. E.g. if it is a small electrician who is the non-
breaching party and the breaching party is the shopping mall, it would not be wise for him
to exercise retention or any other remedy or even rescind the contract as it could possibly
lead to loss of future business. In theory in France you have to get the courts permission to
rescind- this is not practical for the client as it could be time consuming and expensive. It
also departs from the idea of rescission being a self- help remedy. Also litigating to be
awarded the remedy could lead to uncertainty over some of the issues like material breach.
Resiling- lawfully withdrawing from a contract and may not be in response to a breach. The
right exists in the contract. E.g. buying a pub but the licence is not granted. This is an agreed
ability to say the whole contract is at an end.
Restitution- upon the breach of one party, we restore the parties to their position as it was
before the contract was entered into. Some situations could arise where the parties cannot
be restored to their original positions, thus in such a case there could be the return of goods
for example that could constitute restitution. Restituto in intergrum is different from this
which applies mainly to misrepresentation.
Material breach:
Something that goes to the root of the contract- but this is too vague- this could give rise to
all sorts of problems like latent breaches etc. but does this vagueness give the judges
discretion as material breach could vary from contract to contract
So what do we mean by going to the root of the contract- could this relate to fundamental
terms of the contract or the purpose of the contract and not all the other ancillary terms.
Wade v Waldon- the bill matter the actor was supposed to provide, did not hand it in and
the theatre manager terminated the contract.
In England however, the test for material breach is defined by the use of warranties and
conditions, whereby the breach of a condition can lead to the rescission of the contract and
a breach of a warranty can lead to the award of damages. English law developed a third term
