Remedies for anticipatory breach of contract

Abstract

The thesis discusses the origin and development of anticipatory breach of contract in South African law leading up to the decision in Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA) and the implications of this decision on the law. This decision is generally regarded as the culmination of the development of a 'new approach' to repudiation, as a form of anticipatory breach of contract, in South African law and this 'new approach' and other aspects of the decision will be discussed in detail. Drawing on Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd and the decisions of Lord Diplock in English law the thesis proposes a model for anticipatory breach of contract that defines anticipatory breach of contract as conduct or circumstances that support a conclusion, with reasonable certainty, that a contracting party will fail to perform their primary obligations under the contract correctly and that such failure justifies affording the aggrieved party a right to cancel the contract. Anticipatory breach of contract will therefore always amount to a material breach of contract, where material breach of contract consists of a failure by a contracting party to perform her or his primary obligations correctly, or conduct which indicates with reasonable certainty that she or he will fail to perform their primary obligations correctly, which will substantially deprive the aggrieved party of the benefit of the contract. If, balancing the interests of the parties, it would be fair to afford the aggrieved party a right to cancel the contract this conduct will amount to a material breach of contract. Anticipatory breaches of contract are those material breaches which consist of conduct indicating that a failure will occur rather than consisting of the actual failure to perform a primary obligation. In addition to defining when the remedy of cancellation is available to an aggrieved party the thesis also proposes certain other modifications to the remedies available to an aggrieved party facing an anticipatory breach of contract including introducing into the South African law, as a remedy for an anticipated breach of contract, a 'request for an adequate assurance of performance' modelled on the remedy of the same name originating in the Uniform Commercial Code.