Breach 

A breach is a failure to perform a contractual obligation when performance is due, without lawful excuse. Every breach sounds in damages; only some permit termination. Keeping those two consequences separate is the single most useful discipline in this area.

Establishing breach

1. Identify the obligation precisely, by construing the term.
2. Determine the standard: strict, or one of reasonable care. Many obligations are strict, so best efforts are no answer.
3. Ask whether performance was due — conditions precedent, notice requirements and time stipulations all bear on this.
4. Ask whether there is a lawful excuse: waiver, prevention by the other party, or frustration.

Anticipatory breach

Where a party, before performance falls due, renounces the contract or disables themselves from performing, the innocent party may accept the repudiation and terminate immediately, suing for damages then — or affirm and wait for the time for performance, keeping the contract alive for both parties. Affirming carries risk: the contract remains on foot, and an intervening frustrating event may discharge it.

Time stipulations

Whether time is "of the essence" is a question of construction. Where it is not, a party faced with delay may serve a notice to complete fixing a reasonable time and making time essential, provided they are themselves ready and willing to perform.

Consequences

• Damages are available for every breach, as of right.
• Termination is available only where the breach is of a condition, is a sufficiently serious breach of an intermediate term, amounts to repudiation, or triggers an express clause.
• Debt — a claim for an agreed sum that has fallen due is a claim in debt, not damages, and mitigation and remoteness do not apply to it. Students frequently conflate the two.

Repudiation, carefully

Repudiation is serious and is often pleaded too readily. It requires conduct that would convey to a reasonable person an unwillingness or inability to perform substantially in accordance with the contract — as in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623,¹ where persistent, unexplained delay in executing a lease was itself held to amount to repudiation. An honest but mistaken assertion about the meaning of a contract is not necessarily repudiation — though persisting in a position that would amount to non-performance may become so.

A party who wrongly purports to terminate is often themselves in repudiation — but not automatically, and the difference is examinable. The test is the same one that governs any repudiation: does the conduct convey to a reasonable person an unwillingness or inability to perform substantially? A party who asserts a wrong construction in the honest belief it is right, and who would perform on the correct construction once it is settled, has not necessarily conveyed that. Where the conduct shows it will not perform according to the contract properly construed, it has. This is why election must be approached carefully and, where the position is unclear, why parties reserve their rights.

Applying this in a problem question

1. Establish the obligation, the standard and that performance was due.
2. Identify the breach and any excuse.
3. Classify the term and assess seriousness if termination is claimed.
4. Address election and its timing.
5. Separate the damages claim from any claim in debt.

Where the authority sits

Common law, with a substantial body of Australian authority on repudiation and on the classification of terms.