Part III The right To Terminate, 6 Fundamental Breach

Subject(s):

Breach of contract

This chapter explores the doctrine of fundamental breach, and considers the leading decision of the Court of Appeal in The Hongkong Fir. It examines the scope of the fundamental breach principle in two contexts, the first being its relationship to the classification of contractual terms, and the second its application to past and future events. The chapter also assesses the types of fundamental breach. There are a number of concepts akin to fundamental breach that overlap with it to a greater or lesser extent, but which need to be distinguished from it. These concepts include breach of condition; the doctrine of frustration; the doctrine of substantial performance; and the doctrine whereby time may be made of the essence by notice. When is a breach fundamental? The chapter studies a number of key factors which can provide useful guidance for the courts in approaching this question.