Anticipatory Repudiation

• Author: John D. McCamus
• Pages: 689-709

689

CHAP TER 16

ANTICIPATORY

REPUDIATION

A. I NTRODUC TION

An anticipatory repudiation of an agreement occurs when one party

manifests, t hrough words or conduct, an intention not to perform or

not to be bound by provisions of the agreement that require perform-

ance in the future. We have previously considered whether failure to

perform a contractual obligat ion at the time stipulated for performance

constitutes a repudiatory breach of contract ent itling the part y not in

breach to terminate the agreement and pursue such remedies as may

be available with resp ect to losses caused by the breach of contract.1 In

this chapter, we consider whether an anticipatory repudi ation of con-

tractual obligations may similarly give rise to an ent itlement on the

part of the innocent part y to bring the agreement to an end and pur-

sue any available remedies for contractual breach. The basic approach

taken by the common law to thi s question holds that an anticipatory

repudiation of a future obligation has the same ef fect on the rights of

an innocent party as an actual breach of the obligation in question.

Thus, if an actual breach of the provision in question would entitle the

innocent party to tre at the contract as discha rged by breach, an antici-

patory repudiation of that obligation would confer a similar option on

the innocent party. More than this, however, it is well established that

where the innocent party elect s to disaff‌irm the contract on the basis of

1 See Chapter 15.

THE LAW OF CONTR ACTS690

an anticipatory repudiation, the innocent party may immediately com-

mence an action for breach. The innocent party need not postpone the

commencement of such an action until the date for performance has

arrived. Although this proposition is often referred to as the doctrine

of anticipatory breach, i t has f reque ntly b een ob serve d tha t it is d iff‌ic ult

to see how one could breach an obligation prior to the date for perform-

ance. Accordingly, anticipatory repu diat ion is perh aps a more felicitous

description of the factual phenomenon.

The general principle was established in the leadi ng decision in

Hochster v. De La Tour.2 The plaintiff in thi s case had been hi red on 12

April 1852 by the defendant to act as the defendant’s courier on a trip

abroad. The assignment was to begin on 1 June of that yea r. On 11 May

the defendant wrote to the plainti ff and cancelled the as signment. The

plaintiff immediately commenced an action for damages for breach of

contract. Prior to 1 June, the plaintiff secured alternative employment

with a third pa rty to commence on 4 June. The defendant had the tem-

erity to argue that t he plaintiff, being himself in breach of contract

by accepting alternative employment prior to the date for performance

was himself in breach of contract and therefore not entitled to sue. The

jury’s verdict for the plaintiff wa s upheld on appeal. Lord Ca mpbel l C.J.

rejected the argument that the plaintiff was entitled to relief only if he

had maintai ned his availabilit y for work for the defendant on 1 June,

reasoning as follows:

it is surely much more rational, and more for the benef‌it of both par-

ties, that, af ter the renunciation of the agree ment by the defendant,

the plainti ff should be at libert y to consider himsel f absolved from

any future perform ance of it, retaining h is right to sue for any dam-

age he has suffered from the bre ach of it. Thus, in stead of remaining

idle and layi ng out money in prep arations which must be useles s, he

is at liberty to s eek service under another employer, which would go

in mitigation of the da mages to which he would otherwi se be entitled

for a breach of the contract.3

As has often been pointed out, however, this reasoning does not ne-

cessarily lead to the conclusion that the plaintiff should be entitled

to bring an action immediately after the anticipatory repudi ation. It

would be suff‌icient to meet Lord Campbell’s concern that the plain-

tiff be in a posit ion to mitigate to hold that the innocent party, when

2 (1853), 2 El. & Bl. 678, 118 E.R. 922. And see P. Mitchell, “Hochster v. De La Tour

(1853)” in C. Mitche ll & P. Mitchell, e ds., Landmark Cases in the Law of Con-

tracts (Oxford: Hart Publishi ng, 2008) c. 5.

3Ibid. at 926 (E.R.).