Explain with illustration ‘Anticipatory breach of contract.’ What is the measure in cases of such breach?

Question: Explain with illustration ‘Anticipatory breach of contract.’ What is the measure in cases of such breach? [UPJS 2003]

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Write Short-notes on: Anticipatory breach of Contract [MPJS 2019]

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Answer

When a party has refused to perform, or disabled himself from performing his promise in its entirety, the other party may put an end to the contract unless he has, by words or conduct, signified his acquiescence to its continuance. This is generally referred to as anticipatory breach.

Section 39 of the Indian Contract Act defines it as – The repudiation of the contract by one party before its due date of performance has arrived. The breach could be made by the promisor; either by refusing to perform the contract, or disabling himself from performing his promise. While to act of the promisor the promise may put an end to the contract either signifying by words or conduct; or its acceptance in its confirmation.

“An anticipatory repudiation occurs when, prior to the promised date of performance, the promisor absolutely repudiates the contract.” It is an announcement by the contracting party of his intention not to fulfill the contract and that he will no longer be bound by it. This kind of anticipatory renunciation has certain effects upon the rights of the parties.

If there is a refusal to perform, the other party can rescind the contract. The right to rescind arises when there is a refusal under the terms of the contract. A refusal that entitles the promisee to end the contract must be clear and unambiguous, and a refusal to perform the obligation of the party in its entirety. It must be communicated to the promisee, enabling him to exercise his right to elect.

In case of a contract by a singer to perform for seven nights, if the singer absents himself on the sixth night, the other party can put an end to the contact; if however, he is permitted by the other party to sing on the seventh night, that other party cannot put an end to the contract because he has acquiesced in the continuance of the contract but can claim damages for the failure to perform on the sixth night.

Mere failure to perform a contract without more cannot be said to be a repudiation of it unless it evinces an intention not to go on with the contract. Such refusal may be express, or may be implied from conduct and circumstances; but it being a serious matter, will not be lightly inferred.

Illustrations

(1) ‘A’ agrees to employ ‘B’ from 1st of March and on 25th February, he writes to ‘B’ that he need not join the service. The contract has been expressly repudiated by ‘A’, before the date of its performance. This is the anticipatory breach of contract.

(2) ‘A’ contracts to marry ‘B’. Before the agreed date of marriage, he marries ‘C’. In this case, A has committed anticipatory breach of contract.

Under this breach, there are 2 remedies available to the sufferer party-

1. He can file a suit for compensation immediately after the breach of contract; or
2. He may wait till the date of performance in anticipatory that the promisor will perform his promise at the time of performance.

But waiting for the performance of the contract till the date of performance might cause loss to the sufferer party as it might be possible that during the period of waiting for certainly unavoidable impossibility event may occur which may frustrate the contract under Section 56 of the Indian Contract Act.

The two leading case laws on anticipatory breach are

Hochster v. De La Tour [(1853) 2E and B. 678] Under this case, it was held that a party to an executory contract may make a breach of contract before the actual date of performance, and the plaintiff in such a case is entitled to put an end to the contract and can bring an action even before the actual date of performance has arrived.

Frost v. Knight [(1872) L.R. 7 Ex. 111] In this case, the defendant promised to marry the plaintiff on the father’s death. While the defendant father was still alive he broke off

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X