S
Sahaj Vidhi
M.P. Civil Judge Question Paper 2019 Phase I

Write Short-notes on / संक्षिप्त टिप्पणी लिखिये : - (C) Anticipatory breach of Contract.

Verified Answer
  1. Core Legal Answer & Context: Anticipatory breach of contract occurs when one party to a contract declares their intention not to perform their obligations under the contract before the performance is actually due. This repudiation can be express (by words, oral or written) or implied (by conduct, making performance impossible). The concept is based on the principle that a party should not have to wait until the actual date of performance to know if the other party intends to fulfill their obligations.

Upon an anticipatory breach, the innocent party has two options: (a) Treat the contract as immediately repudiated: The innocent party can immediately treat the contract as broken, sue for damages, and is discharged from their own obligations under the contract. This is known as 'accepting the repudiation'. (b) Wait until the due date of performance: The innocent party can choose not to accept the repudiation and keep the contract alive until the actual date of performance. If they choose this option, the breaching party may still perform their obligations, or a supervening event might occur that discharges the contract (e.g., frustration), in which case the innocent party would lose their right to sue for breach.

  1. Relevant Statutes and Sections:
  • Indian Contract Act, 1872: Section 39 (Effect of refusal of party to perform promise wholly).
  1. Important Landmark Cases:
  • Hochster v. De La Tour (1853): This English case is the foundational authority for the doctrine of anticipatory breach, establishing the right of the innocent party to sue immediately upon repudiation.
  • Frost v. Knight (1872): Further developed the doctrine, confirming the options available to the innocent party.
  • Union of India v. G.C. Sharma (1976): An Indian case applying the principles of anticipatory breach.
  1. Clear Conclusion: Anticipatory breach allows an innocent party to react to a clear repudiation of a contract before the performance date, offering the choice to either terminate the contract and claim damages immediately or keep it alive, with significant implications for their rights and the contract's future.