Wimpey agreed to buy land from Woodar for a sum of andpound;850,000 of which andpound;150,000 was to be paid to Transworld. A month later Wimpey sent a letter purporting to rescind the contract and Woodar sued for damages including the andpound;150,000 payable to Transworld. The parties, or at any rate one of them, honestly but mistakenly believed that they were entitled to act in a certain way by virtue of their understanding of the contract.
Held: Wimpey had not repudiated the contract but in view of the Court of Appeal’s decision that Wimpey were liable in damages for the andpound;150,000 certain observations were made. Lord Wilberforce referred to the proposition: ‘that if Woodar made a contract for a sum of money to be paid to Transworld, Woodar can, without showing that it has itself suffered loss or that Woodar was agent or trustee for Transworld, sue for damages for non payment of that sum. That would certainly not be an established rule of law.’ and
‘Whether in a situation such as the present – viz. where it is not shown that Woodar was agent or trustee for Transworld, or that Woodar itself sustained any loss, Woodar can recover any damages at all, or any but nominal damages, against Wimpey, and on what principle, is, in my opinion, a question of great doubt and difficulty – no doubt open in this House – but one on which I prefer to reserve my opinion.’ A party may recover damages for a third party where the contract was in effect held in trust for that third party, or he acted as agent. ‘there are many situations of daily life which do not fit neatly into conceptual analysis, but which require some flexibility in the law of contract.’ Lord Scarman said that it was open to the House to declare that: ‘in the absence of evidence to show that he has suffered no loss, A, who has contracted for a payment to be made to C, may rely on the fact that he required the payment to be made as prima facie evidence that the promise for which he contracted was a benefit to him and that the measure of his loss in the event of non-payment is the benefit which he intended for C but which has not been received.’
Lord Scarman said: ‘they honestly believed the contract did give them the right. When one examines the totality of their conduct and its impact upon Mr. Cornwell it is plain . . that the defendants, though claiming mistakenly to exercise a power given them by the contract to bring it to an end, were not evincing an intention not to be bound by the contract. On the contrary, they believed they were acting pursuant to the contract
It never occurred to Mr. Cornwell that the defendants, if held not to have been entitled to give notice of rescission, would refuse to perform the contract.’
Lord Wilberforce, Lord Salmon, Lord Russell of Killowen, Lord Keith of Kinkel, Lord Scarman
[1980] 1 WLR 277, [1980] UKHL 11, [1980] 1 All ER 571
Bailii
England and Wales
Citing:
Cited – Frost v Knight 1872
The doctrine of repudiatory breach is largely founded upon considerations of convenience and the opportunities which it affords for mitigating loss. It applies even where the obligation to be performed at a future date is a contingent obligation. . .
Cited – James Shaffer Ltd v Findlay Durham and Brodie CA 1953
The defendants were desirous of doing, and were in fact doing, their utmost to perform their contract, but remained in breach.
Held: A mere misconstruction of the obligations in a contract does not amount to repudiation. A party who takes . .
Cited by:
Cited – Alfred Mcalpine Construction Limited v Panatown Limited HL 17-Feb-2000
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
Cited – Bridgen v Lancashire County Council CA 1987
The court considered a claim for constructive dismissal where the parties made a genuine mistake as to the test for anticipatory breach.
Held: Sir John Donaldson MR said: ‘But, for my part, I would not have thought it necessary to give any . .
Cited – Haberdasher’s Monmount School for Girls v Turner EAT 8-Mar-2004
EAT Unfair Dismissal
ET incorrectly applied Sir John Donaldson’s dictum in Bridgen [1987] IRLR 58 (based on Woodar v Wimpey): assertion of wrong interpretation of contract not enough for repudiation, which . .
Cited – Eminence Property Developments Ltd v Heaney CA 21-Oct-2010
The court was asked whether a vendor of land, who served a notice to complete making the time for completion of the essence of the sale contract, and then, mistakenly, treated the contract as at an end prior to the expiry of the notice, was thereby . .
Cited – Force India Formula One Team Ltd v Etihad Airways PJSC and Another QBD 4-Nov-2009
force_india_etihadQBD2009
The parties had entered into a sponsorship agreement, with the claimants undertaking to display the name of the defendants on their car. After the agreement, the claimant company had been taken over by parties with interests competing with those of . .
Cited – Lidl UK Gmbh v Hertford Foods Ltd and Another CA 20-Jun-2001
The respondent had contracted to supply tinned corned beef to the appellant, but had become unable to fulfil the orders because of industrial action in Brazil. The appellant had purchased supplies elsewhere and set off the cost of that against the . .
Lists of cited by and citing cases may be incomplete.
Contract
Leading Case
Updated: 10 November 2021; Ref: scu.218897