BetterLawNotes-5 (2)

CONTRACT LAW

An actual breach automatically gives rise to a right to damages. Not so, with an anticipatory breach. The effect of an anticipatory breach is to give the innocent party the right to treat the contract as discharged and claim damages. But unless the innocent party elects so to do, the contract remains in being and binding on both parties. In Avery v Bowden, the innocent party chose not to bring performance of the contract to an immediate end. However, subsequently both parties were discharged from their unperformed obligations when the contract was frustrated.

Avery v Bowden (1855) 5 E&B 953

B chartered a boat, Lebanon, from A and agreed to provide a cargo for the boat at Odessa, the cargo to be loaded within 45 days. When the boat reached Odessa, B’s agent failed to supply any cargo and told the ship’s captain to go away. The boat remained at Odessa but before the expiry of the 45-day period the Crimean War broke out, rendering continued performance of the contract illegal. A sued B for breach of contract for the failure to supply a cargo. Held: B had not been in breach before his obligations were discharged by frustration.

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