Foran v Wight

From Uni Study Guides
Jump to: navigation, search

Citation: Foran v Wight (1989) 168 CLR 385

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 579-86 [25.15]

Contents

Background facts

  • The parties entered into a contract for sale of land.
  • A date was specified for completion, and time was of the essence.
  • The Vendor notified the Purchaser that it would not be able to complete on time.
  • Neither of the parties took any action on the day set for completion.
  • Two days after, the Purchaser's notified the Vendor that they are terminating the contract because of the breach of the time clause. They moved to get their deposit back.
  • The Vendor alleged wrong termination

Argument

  • The Vendor argues that the Purchaser was not in a financial position to complete any way on the set date, and therefore they were not 'ready and willing'.

Legal issues

Judgement

  • The notification before the set time amounted to an anticipatory breach (and thus repudiation) by the Vendor.
  • An Aggrieved party who suffers an anticipatory breach does not have to terminate - it can continue with the contract and let the anticipatory breach become an actual breach.
    • "Repudiation by way of anticipatory breach by a party to a contract does not put an end to the contract unless the other party accepts the repudiation and rescinds the contract...He may continue to treat the contract as on foot and hold the guilty party to the performance of his obligations. If those obligations fail to be performed the anticipatory breach will become an actual breach[1]."
  • "If the other party keeps the contract alive, he does so not only for his own benefit but also for the benefit of the party guilty of repudiation. The latter may, upon giving reasonable notice, withdraw his repudiation and complete the contract and...the other party remains bound by the contract, enabling the repudiating party to take advantage of any breach by the other party or any supervening event which would discharge him from liability."[2]."

Readiness and willingness

  • An Aggrieved party can only terminate on grounds of a breach if it was ready and willing to perform the contract.
  • This is presumed these days, but a defendant can still require the plaintiff to prove readiness and willingness.
    • "Under the old rules a plaintiff was required to plead that he was ready and willing but under the present rules that fact is implied with the effect that he is not required to prove it unless the defendant puts it in issue. In that event, the burden of proving readiness and willingness rests upon the plaintiff."[3]
  • To show that it was ready and willing, a party simply has to show that it is not 'substantially incapable' of performing at the time of repudiation (broad application).
  • However, in the case of an anticipatory breach, the repudiating party's words or conduct may mean that there is no point for the Aggrieved party to perform his obligation on the set date because it will be futile considering the non-performance of the repudiating party.
  • This means the conduct of the repudiating party effectively induces the Aggrieved party to adopt the assumption that its performance is futile and therefore it does not need to show readiness and willingness. An estoppel will arise in favour of the Aggrieved party to estop the repudiating party from demanding that the Aggrieved party needed to be ready and willing.
  • This is what happened here, the Purchaser wins.

References

  1. (1989) 168 CLR 385, 441
  2. (1989) 168 CLR 385, 441-2
  3. (1989) 168 CLR 385, 451-2
Personal tools
Namespaces

Variants
Actions
Navigation
Toolbox