“Repudiation in the context of this case is taken to describe the circumstances where “one party so acts or expresses himself as to show that he does not mean to accept the obligations of a contract any further” – see Heyman v Darwins [1942] AC 356 at 361 per Lord Simon.
In normal circumstances a breach of contract by one party does not entitle the other
party to bring the contract to an end. There are two exceptions to this rule:
(1) where the contracting parties have agreed whether by express words or by implication of law that any (or a particular) breach of contract shall bring the
contract to an end;
(2) where the event resulting from the breach of contract has the effect of depriving the other party of substantially the whole benefit which it was the intention of the
parties that it should obtain from the contract, i.e. where there is a fundamental
breach – see Lord Diplock in Photo Products v Securicor [1980] AC 827 at 849.
In the second case the court must consider the commercial significance of the breach or breaches of contract. To amount to a fundamental breach it must go to the root of the contract – see Federal Commerce v Molena Alpha [1997] AC 757 at 779.
Repudiation requires acceptance if it is to bring the contract to an end. Failure to
continue to perform may be sufficient notice that the innocent party has elected to treat the contract as at an end. See Lord Steyn in Vitol SA v Norelf Ltd [1996] AC 800 at 810/811.
In general, mere negligent omissions or bad workmanship, where the work is
substantially completed, does not go to the root of the contract and is not therefore
repudiation – see Hoenig v Isaacs [1952] 2 AllER 176.
However, an accumulation of breaches may indicate an inability on the part of a
contractor to deliver the contract to a reasonable standard. In Sutcliffe v Chippendale & Edmondson [1971] 18 BLR 157 at 161 the court held that:
“the contractors’ manifest inability to comply with the completion date requirements, the nature and number of complaints from sub-contractors and [the architect’s] own
admission that in May and June the quality of work was deteriorating and the number of defects was multiplying, many of which he had tried unsuccessfully to have put right, all point to the truth of the complainant’s expressed view that the contractors had neither the ability, competence or the will by this time to complete the work in the manner required by the contract”.
Where time is not of the essence, delay on the part of the contractor does not amount to a repudiation unless it is shown that he cannot complete the contract within a reasonable time or that the delay is such as to deprive the innocent party of substantially the whole benefit of the contract.
In Felton v Wharrie (1906) HBC, Vol 2, 398, the contractor had not finished the work by the completion date and when asked how long it would take he said he could not say. The contractor continued to work on site and two weeks later he was forcibly
ejected. The Court of Appeal held that the employer had no right to determine the
contract.
“If he were going to act upon the claimant’s conduct as being evidence of his not going on, he ought to have told him of it and to have said, ‘I treat that as a refusal’, and the man would know of it but the fact of allowing him to go on cannot be any
evidence of justification of re-entry.”
As far as the employer is concerned, if the employer wrongfully and by his own act and without lawful excuse renders completion of the contract impossible, that amounts to a repudiation. This must apply to the situation where the employer ejects the contractor from site before completion. “
Hayes & Others –v- Gallant [2008]
