A breach of contract occurs when a party fails or refuses to perform their obligations under the contract without lawful excuse.
A breach does not automatically terminate a contract; the remedy depends on the type of term breached.
Types of Contractual Terms
Conditions: Fundamental terms whose breach allows the innocent party to terminate the contract.
Warranties: Less critical terms that do not allow for termination but may warrant damages.
Innominate Terms: Terms that could be treated as a condition or a warranty depending on the seriousness of the consequences.
Rights of the Innocent Party
Terminate: End the contract and discharge future obligations, must communicate termination clearly (Vitol SA v Norelf Ltd - The Santa Clara).
Affirm: Continue the contract and fulfill obligations, but must act promptly to avoid implied affirmation (Stocznia Gdanska SA v Latvian Shipping).
Anticipatory Breach
Occurs when a party indicates they will not fulfill their contractual obligations before the performance is due.
Allows the innocent party to take action before the actual breach occurs (Hochster v De la Tour).
Can be express or implied through actions that make performance impossible (Omnium DEnterprises v Sutherland).
Methods of Anticipatory Breach
Via words or conduct indicating an intention not to perform obligations (Chitty on Contracts).
Conduct allowing inference of likely breach (Johnstone v Milling).
Risk of premature termination (Gulf Agri Trade FZCO v Aston Agro Industrial).
Legal Considerations
Objective vs. subjective interpretation of anticipatory breach (Universal Cargo Carriers Corporation v Citati).
Criticism of the doctrine under English law, with contrasts to the American Uniform Commercial Code (Reza Beheshti).
Additional Information
This resource provides educational material and should not be used as legal advice.
Published by Hannah Palmer.
Note:
References to case law and scholarly critique provide depth to understanding the practical application of breach of contract law in various jurisdictions.