Thursday, 28 March 2013

What is anticipatory breach?

  • This occurs if one party notifies the other party of intention to breach the contract.
  • For example, Hochester v De La Tour 1853 ( In this case the defendant employed the plaintiff to work starting in a month. Before he started work the defendant terminated the contract, the plaintiff argued there had been a breach. The courts agreed there had been a breach and the plaintiff could claim damages immediately. 
  • The remedy that an anticipatory breach fruits is dependent on on what type of term we are discussing; so the breach of a condition will yield the repudiation of the contract and the breach of a warranty or an innominate term will tend to yield damages.
  • With anticipatory breach the key feature is that the are communicated to the other party either expressly or impliedly.
  • By communicating the innocent party has a chance to seek performance elsewhere and could reduce the liability of the party in breach. It is beneficial for both parties. 
  • Express communication tend to be easier to deal with. Where it is implied it is more complex. The remedies tend to be more fact sensitive.

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