The Court was asked to decide (i) which, if either, of the two parties to a 15 year agreement lawfully terminated it; (ii) whether, if one of them did so, it was by giving notice under a contractual termination clause or by way of acceptance of the repudiation of the contract by the other party, or both; and (iii) whether a notice of termination pursuant to a particular clause of the contract may, also, serve as an acceptance of a repudiation by the other party or may, if the notice was invalid and there was no such repudiation, itself, be a repudiation.
Held: Christopher Clarke J observed: ‘a) Equity, before the Judicature Acts, insisted that prima facie time for payment was not essential. But Equity’s patience was exhaustible. It would allow the contract to be treated as repudiated if the party in default had been given the opportunity to mend his ways by the giving of a notice to comply within a reasonable time. Whilst this is described as making time of the essence in reality the notice is the means of bringing to an end equity’s interference with the contract: Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1
b) Such a notice, which may be given in respect of any species of term, may not be served until the time for performance has expired; but it may be served as soon as that time arrives;
c) Such a notice must state clearly what the other party is required to do and the consequence if he fails i.e. that the contract may be terminated; Afovos Shipping Co SA v Pagnan[1982] 1 Lloyd’s Rep562, 565 col 2; [1982] 1 WLR 848, 854C;
d) If the defaulting party fails to perform after service of such a notice, the failure is not automatically a repudiation of the contract, giving rise to a right to terminate. The breach must go to the root of the contract;
e) The notice operates as evidence of the date by which the promisee considers it reasonable to require the contract to be performed, failure to perform by which is evidence of an intention not to perform: see Lord Simon of Glaisdale in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, 946E-947A; Astea (UK) Ltd v Time Group Ltd [2003] EWHC 725 (TCC) para 147.’
Judges:
Christopher Clarke J
Citations:
[2006] EWHC 63 (Comm), [2006] 1 Lloyd’s Rep 599, [2006] 1 LLR 599, [2006] 2 P and CR 9
Links:
Citing:
Cited – Hobson v Gorringe CA 1897
The intention of the parties in affixing an object to land is only relevant to the extent that it can be derived from the degree and object of the annexation: ‘the intention of the parties as to the ownership of the chattel fixed to the land is only . .
See Also – Celtech International Limited v Dalkia Utilities Services Plc ChD 12-Feb-2004
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Cited – Behzadi v Shaftsbury Hotels CA 1992
The court must distinguish between an open contract such as Green v Sevin where no date for completion is fixed by the contract and the more normal case where a completion date is fixed but time is not of the essence of the date specified. In the . .
Cited by:
Judgement – Dalkia Utilities Services Plc v Celtech International Ltd (No. 2) ComC 2-Feb-2006
. .
Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
Cited – Imageview Management Ltd v Jack CA 13-Feb-2009
The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The . .
Cited – Warren and Another v Burns QBD 13-Nov-2014
The boxing manager and boxer each said that the other owed him money.
Held: The contract entitled the claimant to take some share of the boxers earnings but as part of the overall management fee, but as a part of the overall sum and at a share . .
Lists of cited by and citing cases may be incomplete.
Contract, Land, Equity
Updated: 05 July 2022; Ref: scu.238351
