SOME PROBLEMS OF BREACH OF CONTRACT

Publication Date01 Mar 1967
DOIhttp://doi.org/10.1111/j.1468-2230.1967.tb01143.x
AuthorG. H. Treitel
SOME
PROBLEMS
OF
BREACH
OF
CONTRACT
ONE
of the most perplexing problems in the English law of contract
concerns the remedies which one contracting party has in the event
of the other’s failure to perform in accordance with the contract.
One reason for the difficulty is that discussions of
this
problem are
often widely scattered in the books, with the result that very
different solutions are proposed for problems which appear to be
basically similar. At the same time precisely the opposite fault is
to be found,
in
the search
for
uniform concepts to solve problems
containing elements which are significantly dissimilar. The
con-
ceptual apparatus which has been built up for these purposes is
formidable and confusing. Thus
it
is said that the effects of a
breach depend (at least sometimes)
on
whether
it
is
fundamental
or
‘‘
goes
to
the root of the contract
”;
on
whether
it
substan-
tially
deprives a party of what he contracted for;
on
whether
promises are
‘‘
independent
or
concurrent
”;
on
whether the
performance of one party’s promise is a
‘‘
condition precedent
to
the liability of the other;
or
on
whether the breach is one of
‘‘
con-
dition
or
only one of
‘‘
warranty.”
No
doubt this kind of
analysis corresponds with, and is therefore necessitated by, the
language of the relevant cases and statutes. These materials have
been subjected to much acute and illuminating discussion’; and
there would be
no
point in adding to this. The object of this
article
is
rather to consider, in the context
of
the proposal to codify
the law of contract, whether a new approach can be made to these
problems, free from the vague and obscure conceptualism of the
present law, and based more directly
on
practical considerations.
This will involve in the first place an emphasis
on
the distinct
nature
of
the problems which may arise from defective perform-
ance
;
secondly, a discussion of the practical effects of possible
remedies; and finally a discussion
of
the respective interests of the
parties in using
(or
in resisting the use of) one particular remedy
as
opposed to another.
It
cannot
of
course be pretended that such an
approach will remove the difficulties of deciding individual cases in
a
field which is
characterised by indefinite gradations.”
la
But
this article will have amply served its purpose
if
it
diverts discussion
of this subject from its present conceptual plane to a more practical
level.
1
Culminating in Lord Devlin’s recent article in [1966] C.L.J. 192.
I*
Fuller
and
Braucher,
Basic
Contract
Law,
p.
617.
189
140
TEE
MODERN
LAW
REVIEW
VOL.
30
1.
DIFFERENT
RESCISSION
SITUATIONS
The question whether a party can
(‘
rescind
a contract arises in
at least three different situations
:
where tender of defective per-
formance is rejected; where defective performance is actually
rendered: the party complaining of the defect may wish to return
it and to recover back his
own
performance,
or
he may simply
refuse to pay for
it
or
to perform some other counter-promise; and
where defective performance is made in the course of a contract
involving continuing reciprocal obligations.
In the first case, where
A
tenders defective performance to B,
the question
is
whether
B
is justified
in
refusing to accept and pay
for
it.
If
the contract is one for the sale of goods, the stock answer
varies according to whether the defect is qualitative
or
quantitative.
A
qualitative breach is said to justify rejection
if
it
amounts to a
breach of condition, but not merely
if
it
amounts to a breach of
warranty
2;
and this distinction is thought, at least generally, to
reflect the seriousness of the defect in performance. But
if
the
defect is quantitative, rejection is justified in any event
*
(subject
to the
de
minimis
principle): such a breach need not
(‘
go to the
root
of
the contract
or
be
(‘
substantial
or
seriously prejudice
the other party at all. Can this distinction be justified
?
“radition-
ally
it
is said that
it
would
cc
force a new contract
on
the buyer
to make him take more,
or
less, than he contracted for (subject to
damages); but this may be as much the case where the defect is a
qualitative one which does not, under the present law, justify rejec-
tion.
If
there are practical commercial reasons for the distinction
they have not,
so
far as the present writer is aware, been stated in
any of the authorities
on
the subject.
In the second situation, where
A’s
defective performance has
actually been received by By the question whether B can repudiate
is again said to depend
on
the seriousness of the defect. This
criterion is applied where
a
contract to build is defectively per-
formed
5;
and in contracts for the sale of
goods
B’s liability is
again said, at least prima facie,0 to depend
on
whether
A’s
breach
is
one of condition
or
one of warranty. But
it
seems odd
to
use
even the same verbal formula in this situation as in the first, for
actual performance by one party is liable
to
give rise to problems
(such as unjust enrichment) which are much less likely to occur
where performance has not yet been received.
It
is arguable that
there should be a sliding scale: the further performance has gone,
the more serious the defect has
to
be to justify rejection. The
English law of sale may accept
one
end of
this
scale.
Very
serious
defects
(((
fundamental
breaches) may justify rejection where
2
Sale
of
Goods
Act
1893,
8.
62
(1);
cf.
8.
53 (1).
4
Cunliffe
v.
Harrison
(1851) 6
Ex.
903, 906.
5
Hoenig
v.
Zsaaos
[1953]
2
All
E.R.
176.
6
i.e.,
subject to
the limitations
on
the
right
to
reject
to
be
mentioned below.
Ibid.
8.
30.

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