Termination for material breach


Some useful help was provided in this decision on when a breach of contract is considered material, whether that breach is capable of remedy and what is required for a notice to terminate a contract to be effective.



The Scottish Court was required to answer three questions:

The Court also considered whether the contract was affirmed. It rejected T's submission that A's delay in ending the agreement meant A had affirmed the contract, saying that for this to have been the case, there must be very clear evidence that the injured party has indeed elected to continue with the agreement. A had conducted prolonged negotiations with T in the interim period (without prejudice to its entitlement to terminate) and this was perfectly legitimate and did not amount to affirmation. The Court emphasised that this was an ongoing, continuing breach by T which could still be used by A as a basis to terminate. The position may well have been different in relation to a once and for all, one-off breach.

Points to Note:

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