Ch.16 The Doctrine of Anticipatory Repudiation

Subject(s):

Breach of contract — Anticipatory breach and damages — UN Sales Convention and damages

This chapter addresses how the United Nations Convention on Contracts for the International Sale of Goods (CISG) governs anticipatory repudiation of a contract. Under the CISG, anticipatory breach does not pose any problems but is different from the common law position. The differences are in the application and in the terminology. A party under the CISG can resolve a potential unease whether the other party will perform in a two-step approach unlike under common law where repudiation is the only approach. Importantly, the CISG governs two situations. First, a party can suspend its own performance once it suspects that the other party will not perform. Secondly, the innocent party can avoid the contract without having to wait until the contract is actually breached, thereby allowing the applicability of the principles of fundamental breach.