Breach & termination

What "Breach & termination" covers

• A breach is repudiatory where it is a breach of condition, a sufficiently serious breach of an innominate term, or a renunciation of the contract.
• Anticipatory breach arises where a party indicates before performance is due that it will not perform, allowing the innocent party to sue at once.
• Faced with a repudiatory breach the innocent party may either affirm the contract (keeping it alive for both) or accept the repudiation and terminate.
• Termination must be communicated, though in limited cases conduct can suffice (The Santa Clara).
• On affirmation the innocent party loses the right to terminate for that breach and remains bound to perform.
• A party who terminates for a breach that was not in fact repudiatory itself commits a wrongful repudiation.
• In some circumstances the innocent party can perform and claim the price rather than mitigate (White & Carter), subject to a legitimate interest.

Key cases & statutes

The authorities and provisions most likely to matter for this subtopic:

How it's tested in SQE1

SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For breach & termination, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.

Where candidates lose marks

• Purporting to terminate for a breach of warranty, which only gives damages, and thereby repudiating oneself.
• Forgetting that acceptance of a repudiation must generally be communicated to the party in breach.
• Assuming a party can terminate after affirming — affirmation is an irrevocable election.

FAQ

More Contract subtopics