ANTICIPATORY BREACH OF CONTRACT BUSIENSS LAW

• ANTICIPATORY BREACH OF CONTRACT
  DISCHARGE OF BREACH
  BUSINESS LAW
  DR. SHASHI AGGARWAL
• DISCHARGE BY BREACH

1. PARTIES TO CONTRACT ARE EXPECTED TO PERFORM THEIR RESPECTIVE OBLIGATION
2. IF ANY PARTY FAILS TO PERFORM HIS OBLIGATIONS,THERE TAKES PLACE A BREACH OF THE CONTRACT
3. BREACH OF THE CONTRACT OPERATES AS A DISCHARGE OF THE CONTRACT.

• BREACH OF THE CONTRACT MAY BE :

1. ACTUAL BREACH
2. ANTICIPATORY BREACH OF CONTRACT

• ACTUAL BREACH

1. WHEN PERFORMANCE IS ACTUALLY DUE
2. WHEN ACTUALLY PERFORMING THE CONTRACT

• BREACH OF CONTRACT WHEN PERFORMANCE IS ACTUALLY DUE: WHEN A PERSON DOES NOT PERFORM HIS PART OF THE CONTRACT AT THE TIME WHEN IT IS DUE. HE WILL LIABLE FOR ITS BREACH. WHERE A AGREES TO DELIVER TO B 20 BAGS OF SUGAR ON 1 ST SEP, AND FAILS TO DO SO ON THAT DAY THERE IS  BREACH OF CONTRACT BY A
• BREACH DURING THE PERFORMANCE OF THE CONTRACT
• WHERE A PARTY TO A CONTRACT PERFORMS HIS PART OF THE CONTRACT BUT THE OTHER PARTY ALLEGES THAT IT IS NOT A PEOPER  PERFORMANCE ACCORDING TO THE TERMS OF THE CONTRACT,IN THAT CASE IF THE BREACH IS OF CONDITION ESSENTIAL TO THE MAIN PURPOSE OF THE CONTRACT,THE CONTRACT IS DISCHARGED
• BUT THE BRANCH IS ONLY OF A COLLATERAL TERM, WILL NOT ENTITLE THE OTHER PARTY TO RESCIND THE CONTRACT, BUT HE CAN CLAIM DAMAGES.
• CORT V AMBER GATE RAILWAY COMPANY

1. C AGREED TO SUPPLY A RAILWAY COMPANY WITH 3,900 RAILWAY CHAIRS
2. AFTER 1787 CHAIRS HAD BEEN DELIVERED THE COMPANY TOLD C THAT NO MORE CHAIRS WILL BE REQUIRED
3. BREACH OF THE CONTRACT

• ANTICIPATORY BREACH OF CONTRACT

1. WHEN A PARTY TO CONTRACT HAS REFUSED TO PERFORM HIS PROMISE IN ITS ENTIRETY,THE PROMISEE MAY PUT AN END TO THE CONTRACT
2. A REFUSAL BY THE PROMISOR TO PERFORM HIS PART OF THE CONTRACT BEFORE THE  DUE DATE OF PERFORMANCE IS KNOWN AS ANTICIPATORY BREACH OF CONTRACT.
3. IT IS BREACH OF CONTRACT OCCURRING BEFORE THE TIME FIXED FOR PERFORMANCE HAS ARRIVED EITHER BY THE PROMISOR REFUSING TO PERFORM HIS PROMISE OR BY DISABLING HIMSELF FROM PERFORMING HIS PROMISE
4. ANTICIPATORY BREACH IS PREMATURE DESTRUCTION OF THE CONTRACT RATHER THAN A FAILURE TO PERFORM
5. A REPUDIATION OF THE BETROTHAL IS  AN ANTICIPATORY BREACH OF MARRIAGE

• CASE STUDY

1. A CONTRACTS WITH B ON IST JANUARY TO SELL 500 QUINTA LS OF WHEAT AND TO DELIVER IT ON FIRST MAY
2. ON 15 TH APRIL A WRITES TO B AND SAYS THAT HE IS NOT GOING TO DELIVER THE WHEAT
3. B IMMEDIATELY TREAT THE CONTRACT  AT AN END AND FILE THE SUIT FOR THE DAMAGES WITHOUT WAITING TILL IST MAY,THE SCHEDULED DATE FOR THE PERFORMANCE

• CONSEQUENCES OF ANTICIPATORY BREACH( SECTION 39)

1. TO TREAT THE WHOLE CONTRACT AS BROKEN AND TO CLAIM DAMAGES AGAINST THE OTHER PARTY ALTHOUGH THE TIME FOR THE PERFORMANCE OF THE CONTRACT HAS NOT YET BEEN ARRIVED OR
2. TO TREAT THE CONTRACT STILL OPERATIVE AND WAIT FOR THE TIME OF PERFORMANCE AND THEN HOLD THE OTHER PARTY RESPONSIBLE FOR ALL THE CONSEQUENCES OF NON PERFORMANCE.

• EXAMPLE ( CASE STUDY)
• FROST V KNIGHT

1. D PROMISED TO MARRY P AS SOON AS D’S FATHER SHOULD DIE
2. DURING THE FATHER’S LIFE TIME D ABSOLUTELY REFUSED TO MARRY P
3. ALTHOUGH THE TIME FOR THE PERFORMANCE OF THE CONTRACT HAD NOT YET ARRIVED
4. P WAS ENTITLED TO SUE FOR THE BREACH OF THE PROMISE OF THE MARRIAGE

• EXAMPLE ( CASE STUDY

1. X A SINGER ENTERS INTO A CONTRACT WITH Y,THE MANAGER OF A THEATRE TO SING AT THE THEATRE TWO NIGHTS IN EVERY WEEK DURING THE NEXT TWO MONTHS
2. Y ENGAGES TO PAY HER AT THE RATE OF 100 RUPEES FOR EACH NIGHT
3. ON 6 TH NIGHT X WILFULLY ABSENTS HERSELF
4. WITH THE ASSENT OF Y,HE SINGS ON 7^TH NIGHT
5. HERE B HAS SIGNIFIED HIS CONSENT IN CONTINUANCE OF THE CONTRACT AND CAN NOT PUT TO AN END
6. HE IS ENTITLED TO GET THE COMPENSATION FOR NON PERFORMANCE OF THE X’S FAILURE TO SING ON THE SIXTH NIGHT.

• MEASURES OF DAMAGES
• DAMAGES ARE MEASURED AS UNDER:

1. IF THE REPUDIATION OF THE CONTRACT IS ACCEPTED AND THE CONTRACT IS PUT TO AN END IMMEDIATELY,THE DAMAGES WILL BE MEASURED BY THE DIFFERENCE OR PRICE PERV AILING ON THE DATE OF BREACH AND THE CONTRACT PRICE
2. IF THE CONTRACT IS KEPT OPERATIVE AND SUBSISTING THEN THE DAMAGES WILL BE MEASURED BY DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE PRICE PREVAILING ON THE DATE FIXED FOR THE PERFORMANCE.

• MEASURES OF DAMAGES
• ON THE TERMINATION OF THE CONTRACT,THE AGGRIEVED PARTY MAY BRING AN ACTION FOR DAMAGES FOR BREACH
• BUT HE WILL BE BOUND TO RESTORE TO THE OTHER PARTY BENEFITS HE MAY HAVE RECEIVED UNDER THE CONTRACT.