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Breach of contract statute of limitations

Re: Breach of contract statute of limitations

Postby atticus » Mon May 22, 2017 8:08 pm

Sooner or later anticipatory breach becomes actual breach (or, if there is a change of heart, performance).
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Re: Breach of contract statute of limitations

Postby Scienke » Mon May 22, 2017 8:43 pm

X signs a contract with Z that has a clause in it stating that if X doesn't meet a regular sales target he will pay Z an extra sum.

One day X decides that he no longer wants to have this clause hanging over him and tells Z that if he misses his target he will refuse to pay the previously agreed penalty.

The breach has not occurred and it may never occur.
But by not voiding the contract within a reasonable amount of time on being told of the anticipatory breach has he reafirmed the contract under the new terms?

After all, even if X doesn't always hit his targets, he may still be a very good salesman. It may be in Z's interests not to object and by default simply accept the new terms.
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Re: Breach of contract statute of limitations

Postby atticus » Mon May 22, 2017 8:53 pm

Is that an anticipatory breach? Your article suggests perhaps not.
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Re: Breach of contract statute of limitations

Postby Scienke » Mon May 22, 2017 9:10 pm

Are you referring to number 2?

I'd be interested to know why it cannot be conditional on some event occuring. I don't see why it should matter.

Since renunciation is widely accepted as being the primary basis for anticipatory breach, the courts have refined the test for when it can be said to have occurred. Donaldson LJ in The Hermosa[1982] sets out four key considerations in determining whether there has been a renunciation amounting to an anticipatory breach:

1)Whether there has been a clear case of a refusal to perform contractual obligations such that it goes to the root of the contract.

2)The refusal must be absolute. The renunciation cannot be conditional on some circumstance occurring or remaining.

3)Whether there has been a sufficient refusal to perform must be judged in light of whether a reasonable person in the position of the innocent party would regard the refusal as being clear and absolute.

4)The words and/or conduct relied on for the renunciation must be considered as at the time when it is treated as terminating the contract. This will therefore involve looking at the history of the transaction (later events being irrelevant).
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Re: Breach of contract statute of limitations

Postby atticus » Mon May 22, 2017 9:35 pm

Flaux J comes higher up the pecking order of legal authority than I do. I expect that you will find the full judgment on BAILII. The full judgment may amplify and clarify the reasoning.
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Re: Breach of contract statute of limitations

Postby Scienke » Mon May 22, 2017 9:45 pm

Thanks I think I might check it out.
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