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Vol29 No4 December 2015-February 2016

Breach by anticipatory repudiation
Author: Anton Trichardt
 
The doctrine of breach by anticipatory repudiation — elliptically referred to as anticipatory breach or anticipatory repudiation — has recently enjoyed the judicial centre stage in Singapore. In The STX Mumbai, the Singapore Court of Appeal considered the basis for the doctrine and specifically addressed the so-called exception to the anticipatory breach doctrine: that is, whether the doctrine applies to an executed contract.
 
The Singapore Court of Appeal applied a so-called ‘modern’ rationale for the doctrine of anticipatory breach in considering the question, and held that the doctrine applies to both executed and executory contracts, as well as unilateral contracts. In this regard, it is pertinent to notice that the court used the term ‘unilateral contract’ to refer only to situations in which the innocent party has performed all its obligations under the contract; that is, it is no more than what is in effect ‘an executed bilateral contract.’ The Singapore Court of Appeal reached its conclusion because there was no good reason to exclude the doctrine’s applicability in such situations, and because it would be unjust and unfair to make such an exception.
 
The Singapore Court of Appeal also explained how its analysis of the doctrine of anticipatory breach would fit within the framework of the four situations, which entitle an innocent party to elect to treat a contract as discharged as a result of another party’s breach, as identified in its decision in RDC Concrete Pte Ltd v Sato Kagyo (S) Pte Ltd. The decision in The STX Mumbai and its reasoning will no doubt have interesting effects on the commercial world, especially in situations where a party supplies goods — for example, bunkers — and the counterparty evinces a clear intention not to pay for the goods.
 
 
Direct and consequential loss
Author: Jeffrey Goldberger
 
It is common practice to limit the scope of an indemnity to direct loss and to exclude consequential loss or more generally to exclude a liability for consequential loss on breach of contract.
 
Considerable care needs to be exercised in the drafting of such liability clauses. In the case of an indemnity, the draftsperson should have a clear understanding of precisely what losses are to be included and, conversely, what losses are to be excluded. However, the first step is to understand the meaning in law of the expressions ‘direct loss’ and ‘consequential loss’.
 
In a sense all loss flowing from a breach of contract is consequential and, therefore, the use of the term consequential in this context is not particularly helpful. However, it is patently clear that an exclusion of consequential loss is not intended to operate as an exclusion of all loss flowing from a breach otherwise the inclusion of direct loss would be meaningless.
 
 
Best and reasonable endeavours
Author: Jeffrey Goldberger
 
Contractual obligations are frequently cast as best or reasonable endeavours. Such obligations conventionally contemplate the taking of steps by a party to secure a particular result or outcome. Clearly, however, the content of the obligation does not mandate that the objective or result be actually achieved.
 
The fundamental difficulty in introducing these classes of obligations lies in the inherent uncertainty as to what in a particular case is involved in the performance of the obligation. The cases demonstrate the use of a wide variety of terms including:
• best endeavours
• reasonable endeavours
• all reasonable endeavours
• best reasonable endeavours
• best efforts
• reasonable efforts
 
The question is whether these various formulations establish a spectrum of obligations with different levels of stringency or whether, at the end of the day, they all mean essentially the same thing.
  
  • Breach by anticipatory repudiation
    By Anton Trichardt
    page 3
  • Direct and consequential loss
    By Jeffrey Goldberger
    page 17
  • Best and reasonable endeavours
    By Jeffrey Goldberger
    page 24
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