Breach of Contract

In one line

A breach is a failure or refusal to perform a contractual obligation without lawful excuse, and it is either actual, occurring at or after the time for performance, or anticipatory, occurring before it, which section 39 governs by giving the promisee an election.

Actual breach

It takes three forms.

Non-performance at the time fixed, where section 55 decides the consequence: the contract is voidable at the promisee's option if time was of the essence, and otherwise the promisee has compensation only.

Defective performance, where what is tendered does not answer the contract.

And performance made impossible by the party's own act, which is not frustration under section 56 because the event was one the promisor could have prevented.

Anticipatory breach: section 39

When a party to a contract has REFUSED TO PERFORM, or DISABLED HIMSELF FROM PERFORMING, his promise IN ITS ENTIRETY, the promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance.

Four elements, and the third and fourth carry the marks.

Two ways of committing it: an express refusal, or disabling himself, which is conduct making performance impossible, such as selling the very thing promised to somebody else.

It must be IN ITS ENTIRETY. A refusal to perform part is not within section 39, and the promisee's remedy for that is damages.

The promisee has an ELECTION: he may put an end to the contract. He is not obliged to.

And the election is lost by acquiescence, signified by words or conduct.

The two illustrations to section 39 are a matched pair and they teach the election.

(a) A singer engaged to sing two nights a week for two months wilfully absents herself on the sixth night. B is at liberty to put an end to the contract.

(b) The same facts, but with B's assent A sings on the seventh night. B has signified his acquiescence in the continuance of the contract and cannot now put an end to it, but is entitled to compensation for the damage sustained through A's failure to sing on the sixth night.

The consequences of the election, which is the examinable part

Take the two branches separately, because the consequences are different and most answers give only one.

If the promisee RESCINDS: he is discharged from his own future obligations; he may sue at once, without waiting for the date of performance; section 75 entitles him to compensation for the damage sustained through the non-fulfilment; and section 65 requires restoration of any advantage received.

If the promisee AFFIRMS and waits, four consequences follow and three of them are against him.