Part II Breach and Termination, 4 The Process of Termination

Subject(s):

Remedies for breach of contract — Termination/unwinding of contract — Validity of contract

This chapter assesses what termination is, how it should be described, and what it involves. The concept of termination is not easy to define, not least because of the inconsistent terminology used by the courts and by commentators, and also because of the overlap existing between termination itself and other concepts that are akin to it. Termination is one way in which a party to a contract is relieved of his undertaking to do that which he has agreed to do but has not yet done. There are three key factors distinguishing termination from other types of discharge, the first being that it requires proof of a serious breach by the party in default, the second being that it normally occurs only at the option of the innocent party, and the third that it leaves the party in default liable in damages. Though termination is traditionally described as involving the termination of the contract as a whole, it is perfectly possible for a contract to be terminated in part. The chapter then looks at the requirement of election in termination for breach. It also considers how the right to terminate may be limited.