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repudiation

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Repudiation

When does a party repudiate a contract giving rise to another party the right to terminate the contract for such repudiation?

The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.

Cases

2008

  • Exhibition Marketing Pty Limited ACN 010 519 329 v Richmond Valley Council 1)

2007

  • Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited 2)
    • The term repudiation is used in different senses.
    • First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract.
    • This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations.
    • It may be termed renunciation.
    • The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.
    • In this case, we are not concerned with the issues that arise where the alleged repudiation takes the form of asserting an erroneous interpretation of the contract.
    • Nor are we concerned with questions of inability as distinct from unwillingness.
    • Secondly, it may refer to any breach of contract which justifies termination by the other party.
    • It will be necessary to return to the matter of classifying such breaches.
    • Campbell J said this was the sense in which he would use the word “repudiation” in his reasons.
    • There may be cases where a failure to perform,
    • even if not a breach of an essential term (as to which more will be said),
    • manifests unwillingness or inability to perform
    • in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements.
    • This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives.
    • In contractual renunciation, actions may speak louder than words.

1980

  • The Millstream Pty Limited v Shultz 3), McLelland J

1953

  • Carr v J A Berriman 4)
1) [2008] NSWSC 1253
2) [2007] 233 CLR 115
3) [1980] 1 NSWLR 547
4) (1953) 89 CLR 327

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