The court considered the effect of a breach in a contract for delivery by instalments.
Held: The chief considerations are first, the ratio quantitatively which the breach bears to the contract as a whole, and secondly, the degree of probability or improbability that such a breach will be repeated.
Lord Hewart LCJ said: ‘The language of the Act is substantially based on the language used by Lord Selborne L.C. in Mersey Steel and Iron Co. v Naylor, Benzon and Co. 9 App. Cas. 434, 438, where he said: ‘I am content to take the rule as stated by Lord Coleridge in Freeth v Burr (1874) L.R. 9 C.P.208, which is in substance, as I understand it, that you must look at the actual circumstances of the case in order to see whether one party to the contract is relieved from its future performance by the conduct of the other; you must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other party may accept it as a reason for not performing his part.’ In Freeth v Burr Lord Coleridge C.J. stated the true question to be: ‘Whether the acts and conduct of the party evince an intention no longer to be bound by the contract’. . . the true test will generally be, not the subjective mental state of the defaulting party, but the objective test of the relation in fact of the default to the whole purpose of the contract.’
Lord Hewart LCJ, Lord Wright and Slesser LJ
[1934] 1 KB 148
Sale of Goods Act 1893
England and Wales
Cited by:
Cited – Phones 4U Ltd v EE Ltd ComC 16-Jan-2018
The parties contracted for the marketing of contracts for the marketing of the defendant’s mobile phone contracts. On the claimant entering administration, the defendant exercised a clause in their contract to terminate the contract. The claimant . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 August 2021; Ref: scu.381489