Part I Introduction, 1 The Nature of Termination

Subject(s):

Damages and contract — Frustration and contract — Remedies for breach of contract — Termination/unwinding of contract — Liquidated or agreed damages — Penalty clauses and damages — Price and damages — Specific performance and damages — Termination and damages

This chapter discusses the nature of termination for breach. Termination for breach can be seen both as a process and as a remedy. Traditionally, the topic has been dealt with under the broader umbrella of ‘discharge’, alongside such topics as performance, frustration, and agreement. Problems arise, however, when the notion of discharge is pressed too far; in particular, the idea of the contract ‘coming to an end’ can be a misleading one, and has given rise to various errors and misconceptions. For this and other reasons, more emphasis is now given to termination in the context of remedies. Termination can be one of the most useful weapons in the armoury for the victim of a breach of contract, not least because, unlike many other remedies, it does not require recourse to the courts. However, this notion of termination as a remedy should not obscure the close relationship between termination and the other modes of discharge, most notably frustration. The chapter then looks at the problems in this area of the law, including problems of terminology, the different ways in which common law and equity have approached the question, and the relationship between discharge and damages. It also considers the most important aspects of the right to terminate, including the right to refuse performance.