Repudiation of Contract

• If one of the parties to a contract for the sale of land, prior to the time for performance, lets the other know they cannot complete then there may be anticipatory breach.
• Sometimes, where there is repudiatory conduct, it may be important to send a notice to complete depending upon the circumstances. A notice to complete will not always be required such as when one party to the contract for the sale of land makes clear repeatedly that they do not intend to perform as in Galafassi v Kelly.
• Should a contract for the sale of land be validly terminated for repudiation then the purchaser may be entitled to a return of deposit paid to the vendor.

"...repudiation is an ambiguous word and is used in various senses. We are of course concerned only with a case in which it is admitted that there was a valid and binding contract. Such a contract may be repudiated if one party renounces his liabilities under it — if he evinces an intention no longer to be bound by the contract (Freeth v. Burr [3] ) or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way (Ross T. Smyth & Co. Ltd. v. T. D. Bailey, Son & Co. [4] ; Carr v. J. A. Berriman Pty. Ltd. [5] ). In such a case the innocent party is entitled to accept the repudiation, thereby discharging himself from further performance, and sue for damages: Heyman v. Darwins Ltd. [6] . It is convenient to say that the injured party in these circumstances rescinds the contract, although there is, of course, no rescission ab initio: Johnson v. Agnew [7] . The present case was not one of this kind. There is nothing to suggest that the lessee had any intention other than to fulfil the contract, according to its terms, to the best of its ability. However, if one party, although wishing to perform the contract, proves himself unable to do so, his default in performance will give the other party a right to rescind the contract, if the breach goes "so much to the root of the contract that it makes further commercial performance of the contract impossible": Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [8] . There is high authority for treating such cases as a form of repudiation of the contract: Suisse Atlantique Société d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale [9] ; Federal Commerce v. Molena Alpha [10] . In Honner v. Ashton [11] , Mahoney J.A. said that he thought that the right to terminate for fundamental breach should be seen as, in principle, distinct from the right to terminate for repudiation. For present purposes, it is immaterial whether repudiation and fundamental breach are treated as separate categories, for in either case the innocent party can rescind the contract and recover damages to compensate him for the failure to perform the contractual obligations." - Shevill v Builders Licensing Board [1982] HCA 47