Anticipatory Repudiation

• Author: John D. Mccamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 651-671

CHAP TER 16

ANTICIPATORY

R EPU DIA TION

A. INTRODUCTION

An anticipatory repudiation of an agreement occurs when one party

manifests, through words or conduct, an intention not to perform or

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

ance in the future. We have previously considered whether fa ilure to

perform a contractual obligat ion at the time stipulated for performance

constitutes a repudiatory bre ach of contract entitling the party not in

breach to terminate t he agreement and pursue such remedies as may

be avail able with respect t o losses caused b y the breach of contract .1 In

this chapter, we consider whether an anticipatory repudiation of con-

tractual obligations may similarly give rise to an entitlement on the

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

sue any available remedies for contractu al breach. The basic approach

taken by the common law to this question holds that an anticipatory

repudiation of a future obligation has the same effect on the rights of

an innocent party a s an actual breach of the obligation in quest ion.

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

innocent party to treat the contract as disch arged 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

1 See Chapter 15.

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THE LAW OF CONTR ACTS652

where the innocent party elects to d isaff‌i r m the contract on the basis of

an anticipatory repudiation, the innocent party may im mediately 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 anticip atory breach, it has freque ntly been obser ved that it is di ff‌i cult

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

ance. Accordingly, anticipatory repu diat ion i s perhaps a more felicitous

description of the factual phenomenon.

The general principle was established in the leading decision in

Hochster v. De La Tour.2 The plainti ff in this case had been hired on

April 12, 1852, by the defendant to act as the defendant’s courier on a

trip abroad. The assign ment was to begin on June 1st of that year. On

May 11th the defendant wrote to the plaintiff a nd cancelled the assig n-

ment. The plaintiff immed iately commenced an action for damages for

breach of contract. Prior to June 1st, the plaintiff secured altern ative

employment with a third pa rty to commence on June 4th. The defend-

ant had the temerity to argue that the plaintif f, being himself in breach

of contract by accepting alternative employment prior to the date for

performance was hi mself in breach of contract and therefore not en-

titled to sue. The jury’s verdict for the plaintiff was upheld on appeal.

Lord Campbell C.J. rejected the argument that the plaintiff was entitled

to relief only if he had maintained his availability for work for the de-

fendant on June 1st, reasoning as follows:

it is surely much more rational, and more for the bene f‌i t of both pa r-

ties, that, a fter the renunciation of the ag reement by the defendant,

the plainti ff should be at libert y to consider hims elf absolved from

any future perform ance of it, retaini ng his right to sue for any da m-

age he has suffered from t he breach of it. Thus, instead of rem aining

idle and layi ng out money in preparations wh ich must be useless, he

is at libert y to seek serv ice under another employer, which would go

in mitigation of the d amages to which he would otherwi se be entitled

for a breach of the contract.3

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

cessarily lead to the conclusion that the plaintiff should be entitled to

bring an action immed iately after the anticipatory repudiation. It would

be suff‌i cient to meet Lord Campbell’s concern that the plaintiff be in a

position to mitigate to hold that the innocent party, when confronted

2 (1853), 2 El. & Bl. 678, 118 E.R. 922.

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