“Repudiation in the context of this case
is taken to describe the circumstances
where “one party so acts or expresses
himself as to show that he does not mean
to accept the obligations of a contract
any further” – see Heyman v
Darwins[1942] AC 356 at 361 per
Lord Simon.
In normal circumstances a breach of
contract by one party does not entitle
the other party to bring the contract to
an end. There are two exceptions to this
rule:
(1) where the contracting parties
have agreed whether by express words or by
implication of law that any (or a
particular) breach of contract shall bring
the contract to an end;
(2)
where the event resulting
from the breach of contract has the
effect of depriving the other
party of substantially the whole
benefit which it was the intention of
the parties that it should obtain from
the contract, i.e. where there is a
fundamental breach – see Lord Diplock in Photo
Products v Securicor [1980] AC 827
at 849.
In the second case the
court must consider the commercial
significance of the breach or
breaches of contract. To amount to a
fundamental breach it must go to the
root of the contract - see Federal
Commerce v Molena Alpha [1997]
AC 757 at 779.
Repudiation
requires acceptance if it is to bring the
contract to an end. Failure tocontinue
to perform may be sufficient notice that
the innocent party has elected to treat
the contract as at an end. See Lord
Steyn in Vitol
SA v Norelf Ltd [1996]
AC 800 at 810/811.
In general, mere negligent
omissions or bad workmanship, where the
work is substantially completed,
does not go to the root of the contract
and is not therefore repudiation - see Hoenig v
Isaacs [1952]
2 All ER 176.
However, an accumulation of
breaches may indicate an inability on the
part of a contractor to deliver the
contract to a reasonable standard. In Sutcliffe v
Chippendale & Edmonson [1971]
18 BLR 157 at 161 the court held
that:
“the contractors’ manifest
inability to comply with the completion
date requirements, the nature and number
of complaints from sub-contractors and
[the architect’s] own admission
that in May and June the quality of work
was deteriorating and the number of
defects was multiplying, many of which
he had tried unsuccessfully to have put
right, all point to the truth of the
complainant’s expressed view that the
contractors had neither the ability,
competence or the will by this time to
complete the work in the manner required
by the contract”.
Where time is not of the essence,
delay on the part of the contractor does
not amount to a repudiation unless it is
shown that he cannot complete the contract
within a reasonable time or that the delay
is such as to deprive the innocent party
of substantially the whole benefit of the
contract.
In Felton v
Wharrie (1906)
HBC, Vol 2, 398, the contractor had not
finished the work by the completion date
and when asked how long it would take he
said he could not say. The contractor
continued to work on site and two weeks
later he was forcibly ejected. The Court
of Appeal held that the employer had no
right to determine the contract.
“If
he were going to act upon the claimant’s
conduct as being evidence of his not
going on, he ought to have told him of
it and to have said, ‘I treat that as a
refusal’, and the man would know of it
but the fact of allowing him to go on
cannot be any evidence of justification
of re-entry.”
“As far as
the employer is concerned, if the employer
wrongfully and by his own act and without
lawful excuse renders completion of the
contract impossible, that amounts to a
repudiation. This must apply to the
situation where the employer ejects the
contractor from site before completion.”
Hayes
& Others –v- Gallant [2008]
