Question 1

Can I always end the contract if the other party breaches it?

Accepted Answer

No. The right to terminate (repudiate) the contract only arises from a breach of a condition or a sufficiently serious breach of an innominate term (a 'repudiatory breach'). For a breach of warranty, your only remedy is to claim damages; you must still perform your own obligations.

Question 2

If the other party tells me they are going to breach the contract next month, do I have to wait until then to sue them?

Accepted Answer

No, you do not have to wait. This is an anticipatory breach. Following the principle in *Hochester v De La Tour*, you have the option to accept the repudiation immediately, treat the contract as terminated, and start a claim for damages straight away.

Question 3

Is it always better to accept an anticipatory breach rather than affirm the contract?

Accepted Answer

Not necessarily, but it is often the safer option. Affirming the contract keeps it alive, which means you are also still bound by it. If an unforeseen event then frustrates the contract, as in *Avery v Bowden*, you could lose your right to claim damages. Furthermore, the right to affirm is limited by the 'legitimate interest' principle from *White & Carter v McGregor*, so you cannot affirm simply to penalise the other party.

Question 4

What happens if I terminate a contract for what I think is a serious breach, but a court later decides it was only a minor breach?

Accepted Answer

This is a dangerous situation. If you terminate without the legal right to do so, you have committed a 'wrongful termination'. This is itself a repudiatory breach, which gives the other party (the one who committed the original minor breach) the right to terminate the contract and sue you for damages.

Breach

What you need to know

Breach