Repudiatory Breach - an Introduction
Published on 16th March, 2017 by Benjamin Li Yong Le
Repudiatory breaches grant innocent party right to choose whether to terminate or continue in which both parties must continue their obligations
Repudiatory breaches fall into three categories:-
(2) impossibility by owns fault
(3) fails to perform K in accordance with its terms or not performing at all
The Singapore Court of Appeal in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd held that there is no automatic right to terminate a contract in the event of a breach.
Repudiatory breaches grant the innocent party a right to choose whether to terminate or continue in which both parties must continue their obligations
The Singapore Court of Appeal in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd continued to say that the right to cancel the contract arises in three categories – Situation 1, Situation 2, Situation 3a and 3b.
Situation 1 – contract clearly states that innocent party can cancel the contract upon occurrence of a specified event.
Situation 2 – renunciation – where the defaulting party by words or conduct or by silence tells the other party he will not perform his obligations and innocent party is then entitled to terminate. This right to terminate arises not by non-performance but is manifested by an intention not to perform.
Situation 3a and 3b – repudiatory breach arising from failure to perform – completely not performed, delayed or late, not up to scratch eg defective quantity or quality.
Unlike situation 1 and 2 where can be anticipatory, situation 3a and 3b always involve actual breach because the time has come for performance of a party's obligations and he fails to do so.