How long should you wait before terminating?


A contracting party faced with serious breaches by the other side faces a difficult choice. Act prematurely and you risk purporting to terminate when you do not have the right to do so. You then lay yourself open to a claim for breach of contract and damages, not to mention ruining any possibility of a negotiated settlement and potentially allowing the party initially in breach to escape from its ongoing contractual commitments. Act too slowly and you risk having waived your rights even if the contract has the traditional 'no waiver' clause (whereby neither party waives the right to exercise its rights under the contract due to delay). This case looked at what a party must do in such circumstances.


Faced with a serious ‘repudiatory’ breach of contract, a party must either decide to:

Neither option affects the right to claim damages. A party cannot, however, unduly delay in choosing between these options. The case of Tele2 International v The Post Office [2008], showed how a 11 month delay resulted in a party losing the right to terminate despite the usual waiver clause which purports to avoid just that happening.



points to note:

back to archive