Repudiatory breach of contract

A repudiatory breach of contract is a breach of a condition or a serious breach of an innominate term. There are several tests for determining whether a breach of contract is a repudiatory breach, including:-

  • Whether the breach goes to the root of the contract;
  • Whether the party in breach’s conduct is such that it is substantially inconsistent with his contractual obligations;
  • Whether the breach would substantially deprive the innocent party of the expected benefit of performance; and/or
  • Whether it would be unfair to confine the injured party to a claim in damages.

A repudiatory breach entitles the innocent party to terminate the contract, whereas other breaches only entitle the innocent party to damages (and the innocent party will nonetheless be obliged to carry out his part of the contract). However, wrongful termination of a contract for breach of a warranty or a less serious breach of an innominate term is in itself a repudiatory breach.

Repudiatory breach is most often used with the meaning set out above. However, it may also refer to renunciation, anticipatory breach or impossibility to perform.