Unlawful recission / repudiation

Forgive me - this is part of my learning curve.

Please could somebody set out for me in very simple terms what unlawful recission and unlawful repudiation are, and if not obvious, what the difference is between them and when they are likely to be used?

Thank you!

An ignorant Caspar!!!!!!

[paulb2905]

Re: Unlawful recission / repudiation

Not sure there is an easy answer
legal dictionary;
REPUDIATION
1. The act of repudiating or the state of being repudiated.
2. The refusal, especially by public authorities, to acknowledge a contract or debt

Term: repudiatory breach
1.
A repudiatory breach of contract is a breach of contract that goes to the very root of the contract, evidences intention on the part of the party in breach that they no longer intend to be bound by an essential term of the contract.
Breach of a fundamental term in this way entitles the innocent party to accept the breach of contract (that is the repudiation of the contract) and bring the contract to end, or alternately affirm the contract.
If the innocent party wishes to accept the breach and terminate the contract, they must do so unequivocally and without undue delay. Delay in its own right is not fatal, provided the innocent party does not do anything to affirm the contract in the interim, and it is prudent to put it on the record that the innocent party objects to the conduct.
Repudiatory breach: Repudiation of contracts - London lawyers & solicitors, UK

Contract Law | Express and implied repudiation | Law of Contract
Repudiation may be an express renunciation of contractual obligations by one party (A)1. This will be so whether A absolutely refuses to perform his side of the bargain2 or unambiguously asserts that he will be unable to do so3. However, it's more commonly implied from failure to render due performance4 or, in cases of anticipatory repudiation5, by the party in default putting himself in such a position that he will apparently be unable to perform when the time comes. A party (B) seeking to rely on repudiation implied from conduct must show that the party in default has so conducted himself regarding lead a reasonable person to believe that he won't perform6 or will be unable to perform at the specified time7; as where A refuses to perform unless B complies with requirements not contained in the contract8. The fact that a breach is deliberate won't necessarily amount to a repudiation9; nor will words and conduct which do not amount to a renunciation of the contract10.
Where the parties genuinely differ regarding the meaning of the contract a party won't necessarily be treated as having repudiated if he refuses to perform except according to his own bona fide interpretation of the contract11, although that interpretation turns out to be erroneous12. Where one party to a contract conceives that he is no longer bound by it, or has a right to rescind it or have it declared null and void, and issues a writ for the purpose of obtaining that which he believes to be his right, he doesn't thereby repudiate the contract in any event13. The issue of a writ by an employee in respect of a claim for accrued wages doesn't represent a repudiation by him of his contract of service14.
A party isn't bound before the time for performance to give a definite answer whether he intends to fulfil the contract or not15.

Case Law

Repudiation of contract
Date 18 November 1998 Judgment Bedfordshire County Council -v- Fitzpatrick Contractors Limited, TCC 16 October 1998 The Issue Repudiation of contract. Implication A repudiation occurs when a party intimates by words or conduct that it does not intend to honour its obligations under the contract.

Most professionals in the construction industry understand the concepts of termination and repudiation. It is appreciated that these matters need to be approached with sensitivity and caution, proper legal advice being crucial.

Nevertheless it is commonplace to find situations where the termination of a construction contract has been poorly handled with a flurry of letters, faxes and E-mails blinding commercial judgement.

The case of Bedfordshire County Council -v- Fitzpatrick Contractors demonstrates how such actions may appear entirely unreasonable when under the cold examination of a court of law. The proceedings arose out of the termination of a highway maintenance contract awarded by Bedfordshire County Council to Fitzpatrick.

The contract was for a period of four years, with work to be carried out pursuant to works orders for the construction, maintenance and clearance of all directly maintained highways in Bedfordshire.

The contract envisaged the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981, to the effect that there would an automatic transfer of the employment of the Council's highways maintenance employees.

This meant that Fitzpatrick was concerned to ensure that the value of work executed under the term contract would be sufficient to keep the transferred workforce gainfully employed, otherwise it could face substantial redundancy costs.

During the tender Fitzpatrick had requested the Council to confirm the minimum contract value per annum and had been told that it would be of the order of £6M, although this figure could not be guaranteed.

In February 1996 Fitzpatrick's tender was accepted and it was agreed that the commencement date would be 1 June 1996.

As June approached however, it became obvious to Fitzpatrick that the anticipated volume of work orders would not be available to it by 1 June. On 24 May it wrote to the Council stating that it was only in receipt of work orders for the first month of the contract with a value of approximately £15,000. It noted that a spend level in the order of £400,000 per month would be a minimum requirement to maintain gainful employment for the transferring employees.

A snow storm of correspondence commenced. The Council responded to the effect that it considered there was no obligation upon it to provide sufficient work to guarantee gainful employment for the transferred workforce at the start of the contract.

The first of June passed without Fitzpatrick commencing work, and the Council immediately made provision for the continuation of highway maintenance by employing the direct workforce that was to have been transferred to Fitzpatrick.

Relations between the parties deteriorated further. On 11 June Fitzpatrick wrote to the Council stating that it considered that 1 July would be a more appropriate date for the contract to commence.

The following day the Council replied to the effect that unless Fitzpatrick confirmed its intention to take up all its obligations under the contract by 15 June, the Council would treat this as a repudiation and terminate the contract.

On 13 June, not having received an acceptable response from the contractor, the Council gave notice terminating the contract forthwith.

The Honourable Mr Justice Dyson QC was first asked to consider the issues of liability.

Firstly Mr Dyson had to consider whether there was an implied term of trust and confidence in a long term contract of this type, in similar terms to that which would exist between an employer and employee. This, it was argued, would apply to the effect that the contractor would not conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the parties.

Mr Dyson was satisfied that no such term should be implied and that the contract stood perfectly well on its own terms.

Turning to the actions of Fitzpatrick, it was clear that it was in breach of contract by failing to accept the transfer of the workforce and start work on 1 June. It was not a term of the contract that there should be sufficient work available on 1 June and even if there had been such a term, this would have given rise to an entitlement to damages payable to Fitzpatrick. It would not entitle Fitzpatrick to refuse to perform the contract.

Such a breach of contract by Fitzpatrick did not however amount to repudiation. The Council was in no doubt that Fitzpatrick had the will and the ability to perform this four year contract. Furthermore the Council had failed to make 'time of the essence' of the contract by its letter of 12 June, since it had failed to give Fitzpatrick reasonable notice.

In Mr Dyson's view the failure to commence work was not a breach which would deprive the Council of substantially the whole of the benefit which it was intended that the Council should obtain from the further performance of the contract.

It followed from this that the Council was in repudiation in terminating the contract on 13 June.

Vitol SA v Norelf Ltd; House of Lords (Lord Mackay of Clashfern, Lord Chancellor, Lord Griffiths, Lord Nolan, Lord Steyn, Lord Hoffmann) 20 June 1996
An aggrieved party could as a matter of law accept a repudiation of a contract merely by himself failing to perform the contract. Whether in any particular case he had done so must depend on the circumstances.
The House of Lords allowed an appeal by the sellers, Norelf Ltd, reversed the decision of the Court of Appeal ([1996] QB 108) and restored the decision of Mr Justice Phillips ([1994] 1 WLR 1390) affirming an arbitration ruling against the buyers, Vitol SA.
The dispute arose out of a contract of 11 February 1991, by which Norelf sold to Vitol a cargo of propane c.i.f. north-west Europe to be shipped from the United States. Delivery of the cargo to the ship was to take place from 1 to 7 March. The sellers were to tender the bill of lading to the buyers promptly after loading. On 8 March the buyers telexed the sellers as follows:
It was a condition of the contract that
delivery would be effected 1-7
March 1991 . . . We are advised that the vessel is not likely to complete loading now until some time on 9 March, well outside the agreed contractual period. In view of the breach of this condition we must reject the cargo and repudiate the contract.
The buyers never retracted nor attempted to retract their repudiation of the contract. The sellers did nothing to affirm or perform the contract. Instead they resold the cargo at a loss. They then claimed against the buyers US$950,000 in damages, being the difference between the original contract price and the resale price. The premise of the claim was that they had accepted the buyers' repudiation.
The arbitrator held that the tenor of the rejection telex was such that the failure of the sellers to take any further step to perform the contract which was apparent to the buyers constituted sufficient communication of acceptance of the buyers' repudiation.
Jeremy Cooke QC and Andrew Wales (Clyde & Co) for the buyers; Andrew Popplewell and Miss N. Davis (Holman Fenwick & Willan) for the sellers.
Lord Steyn said it was established law that where a party had repudiated a contract the aggrieved party had an election to accept the repudiation or to reaffirm the contract. Acceptance of a repudiation required no particular form; it was sufficient that the communication or conduct clearly and unequivocally conveyed to the repudiating party that the aggrieved party was treating the contract as at an end. The aggrieved party need not notify the repudiating party of his election to treat the contract as at an end; it was sufficient that the fact of the election came to the repudiating party's attention.
The issue here was whether non-performance of an obligation was ever as a matter of law capable of constituting an act of acceptance. One could not generalise on the point. It all depended on the particular contractual relationship and the particular circumstances of the case. Like Phillips J, his Lordship was satisfied that a failure to perform might sometimes signify to a repudiating party an election by the aggrieved party to treat the contract as at an end.
The Court of Appeal had been strongly influenced by an obiter dictum of Kerr LJ in State Trading Corp of India Ltd v Golodetz Ltd [1989] 2 Lloyd's Rep 277 at 286, that saying and doing nothing at all, other than a continuing failure to perform, cannot constitute an acceptance of a repudiation even if the grounds for such an acceptance then exist.
In his Lordship's opinion that passage, if intended to enunciate a general rule, went too far. A continuing failure to perform would necessarily be equivocal; but his Lordship disagreed with the view of Nourse LJ in the Court of Appeal ([1996] QB 106 at 116-117) that failure to perform a contractual obligation was necessarily and always equivocal.
Sometimes in the practical world of businessmen an omission to act might be as pregnant with meaning as a positive declaration.
Paul Magrath, Barrister
http://www.independent.co.uk/news/pe...n-1339172.html

There are several more repudiation case laws
Rescission

Nonperformance or Breach

One party to a contract can rescind it because of substantial nonperformance or breach by the other party. The party who knowingly and willfully fails to perform cannot complain that the other party to the contract has injured him or her by terminating the contract. The right to rescind does not arise from every breach but is permitted only when the breach is so substantial and fundamental that it defeats the objective of the parties in making the agreement. The breach must pertain to the essence of the contract. The act must be an unqualified refusal by the other party to perform and should amount to a decision not to be bound by the contract in the future. A party to a contract who is in default cannot, however, rescind because of a breach by the other party.
When time is of the essence in a contract, failure to perform within the time stipulated is a ground for rescission. Otherwise a delay in the time of performance is not considered a material breach justifying rescission. When performance is intended within a reasonable time, one party cannot suddenly and without reasonable notice terminate the contract while the other party is attempting in good faith to perform it.
An unconditional notice by one party that he does not intend to perform a contract is a ground for rescission by the other party. In order to justify rescission, the refusal must be absolute and unconditional.
When one party to a contract abandons it and refuses further performance or her conduct shows that she is repudiating the contract, the other party is entitled to rescission. A disagreement over the terms of the contract and a subsequent refusal to perform in a particular manner by one of the parties do not constitute an Abandonment of the contract justifying rescission.

Probably the clearest explanation with regard to CCA

Although a breach of contract by one party is not an offer to rescind, the other party can treat the repudiation as an offer to rescind that he or she can accept, leading to rescission of the contract by mutual assent. Rescission must be clearly expressed, however, and the conduct of the parties must be inconsistent with the existence of the contract. The fact that some of the materials that form part of the subject matter of the contract have been returned is not conclusive as to whether rescission has occurred.

Also look here for pretty good explanation of both Rescission and Repudiation Legal Definition of Contract Rescission | eHow.com

[Caspar]

Re: Unlawful recission / repudiation

I don't feel so guilty about being ignorant of this now! Thank you.

[Guest]

Re: Unlawful recission / repudiation

Hi
Excellent not sure how it relares to a regulated agreement though, and there is this

"A party to a contract who is in default cannot, however, rescind because of a breach by the other party."

Peter

[paulb2905]

Re: Unlawful recission / repudiation

Haha i did see that.

I think however that the act of repudiation (termination in this case) is more than just a breach - it forms a statement of intent and in the OC's case has followed on from what they beleive they are entitled to do, albeit negligently.

This then, perhaps, forms a Negligent Breach of Contract - another possibly useful argument.

But just my 10cents worth of "wisdom"

[Guest]

Re: Unlawful recission / repudiation

Haha i did see that.

I think however that the act of repudiation (termination in this case) is more than just a breach - it forms a statement of intent and in the OC's case has followed on from what they beleive they are entitled to do, albeit negligently.

This then, perhaps, forms a Negligent Breach of Contract - another possibly useful argument.

But just my 10cents worth of "wisdom"

HI Paul
Bit tenuous that Pau
l think in order to be a repudiation there has to be a breach although admittedly a major one.
I think the judge in the woodchester case referred to the breach of the hirer as repudiatory.

Regards
Peter