Tuesday, September 27, 2011

Anticipatory breach

 TA & K Enterprises Inc. v. Suncor Energy Products Inc., 2011 ONCA 613 deals with franchise law.  During a review of that law the Court comments on the timing for a claim for anticipatory breach.  The Court held:

Again I agree with the motion judge that the availability of this cause of action is different from what the exemption is driving at, namely the duration of the rights and obligations under the contract.  Professor John D. McCamus offers this useful insight in his book, The Law of Contracts (Toronto: Irwin Law, 2005), at pp. 651-52:

[I]t is well established that where the innocent party elects to disaffirm the contract on the basis of an anticipatory repudiation, the innocent party may immediately commence an action for breach.  The innocent party need not postpone the commencement of such an action until the date for performance has arrived.  Although this proposition is often referred to as the doctrine of anticipatory breach, it has frequently been observed that it is difficult to see how one could breach an obligation prior to the date for performance.  Accordingly, anticipatory repudiation is perhaps a more felicitous description of the factual phenomenon.

 

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