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Repudiation: Difference between revisions
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To repudiate a [[contract]] is to indicate an 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. | {{g}}To repudiate a [[contract]] is to indicate an 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 “repudiatory” [[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}}. | A “repudiatory” [[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}}. | ||
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*'''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 failure to pay may be a specific [[event of default]] prescribing exactly what should happen — so this question is moot — but it may apply where you have a lender of a revolving credit facility, or a prime broker. | |||
If your contract stipulates that [[time is of the essence]], then yes. If not, then it will depend on the circumstances. If the failure 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. | |||
{{sa}} | |||
*[[Time is of the essence]] | |||
*[[Event of default]] | |||
*[[Force majeure]] | |||