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Repudiation: Difference between revisions
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To repudiate a [[contract]] is to indicate | {{a|g| | ||
[[File:Givingthefinger.jpg|450px|thumb|center|This is what I think of your stupid contract]] | |||
}}To [[repudiate]] a [[contract]] is to [[fundamental breach|fundamentally breach]] it: to indicate one’s inability or unwillingness to perform it in such a way as to deprive the aggrieved party of substantially the whole benefit of the bargain represented by the contract. | |||
A | A “[[Repudiatory breach|repudiatory]]” or “[[Fundamental breach|fundamental]]” [[breach of contract]] is a one which is sufficiently serious to indicate a party has repudiated the {{tag|contract}}, thereby entitling the innocent party to [[terminate]] the {{tag|contract}}. | ||
In this case the innocent party has two options: It can | In this case the innocent party has two options: It can | ||
*'''accept''' the repudiation and treat the contract as at an end; or | *'''accept''' the repudiation and treat the contract as at an end; or | ||
*'''affirm''' the contract and insist on performance by the repudiating party. | *'''affirm''' the contract and insist on performance by the repudiating party. | ||
=== | ===How serious is “serious”?=== | ||
The $64,000 question: What counts as “sufficiently serious”? | The $64,000 question: What counts as “sufficiently serious”? | ||
Does “failure to pay an amount due by the time specified in a contract” constitute a [[repudiatory breach]]? Usually, in [[financing contract]]s, [[failure to pay]] will be a designated “[[event of default]]” prescribing exactly what should happen — so this question is moot — but it may apply where there is no such term: if your counterparty is a bank, offering you a loan, a [[revolving credit facility]], or some such thing. | |||
If your contract stipulates that “[[time is of the essence]]”, then yes. If not, then it will depend on the circumstances. If the [[failure to pay]] was due to a [[force majeure]]-style external event, probably not. If the failure to pay was accompanied by an [[extended middle finger]], more likely. | |||
{{Event of default vs fundamental breach}} | |||
===Compare=== | |||
*[[Rescission]] of contract | |||
{{sa}} | |||
*[[Time is of the essence]] | |||
*[[Event of default]] | |||
*[[Force majeure]] | |||
{{ref}} | |||