Repudiatory Breach, Prospective Inability, and the Golden Victory

23 Pages Posted: 25 Sep 2015 Last revised: 13 Dec 2019

See all articles by David McLauchlan

David McLauchlan

Victoria University of Wellington - Faculty of Law

Date Written: June 1, 2015

Abstract

When a contract for the supply goods or services is terminated on account of the buyer’s wrongful repudiation, the supplier is usually entitled to recover damages based on the difference between the contract price/rate and the market price/rate. However, what is the position if the evidence establishes that, had the contract remained on foot, the supplier would have been unable to provide the goods or services or that an event had occurred since acceptance of the repudiation that allowed the buyer to cancel the contract pursuant to an express termination clause and that he would have so cancelled? Does B have a valid defence in either of these scenarios? The view of some leading scholars is that the answer is no for the first scenario but yes for the second, but the distinction was rejected by Teare J in The Glory Wealth. This article discusses the competing views and suggests reasons why the latter view should be preferred.

Keywords: Contract, Repudiation, Damages

JEL Classification: K12

Suggested Citation

McLauchlan, David, Repudiatory Breach, Prospective Inability, and the Golden Victory (June 1, 2015). Journal of Business Law, Issue 7, 2015, Victoria University of Wellington Legal Research Paper No. 126/2019, Available at SSRN: https://ssrn.com/abstract=2664862

David McLauchlan (Contact Author)

Victoria University of Wellington - Faculty of Law ( email )

PO Box 600
Wellington, 6140
New Zealand

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