RES exam question on Contract & Agency Law: On 1 August the seller of a condominium unit writes to the buyer, Mr Das, that he will…
On 1 August the seller of a condominium unit writes to the buyer, Mr Das, that he will not complete on 30 September "under any circumstances". Mr Das replies that he still expects completion, and he keeps his bank loan in place. (i) The seller's letter is an anticipatory breach, as it refuses performance before performance is due. (ii) Since Mr Das has affirmed the contract, he can no longer claim any remedy for the seller's breach. (iii) By affirming, Mr Das keeps the contract alive for both sides, so he must remain ready to complete. (iv) Had he accepted the repudiation instead, he could have sued at once without waiting for 30 September. Which of the following statements are correct?
- A(i) and (iv) only
- B(i), (ii) and (iii) only
- CAll of the above
- D(i), (iii) and (iv) only
Show answer & explanation
Answer
D. (i), (iii) and (iv) only
Explanation
Answer: (i), (iii) and (iv) only. Affirming keeps the contract alive for both sides and costs the buyer only the right to terminate on that repudiation.(i) True. A clear refusal to perform, made before performance is due, is an anticipatory breach.(iii) True. Once affirmed, the contract stays alive for both sides, so he must remain ready to complete.(iv) True. Accepting the repudiation would have let him end the contract and sue for damages at once.Rule: After an anticipatory breach, the innocent party may accept it, end the contract and sue at once, or affirm and keep the contract alive for both sides.Source: RDC Concrete v Sato Kogyo [2007] SGCA 39; /learn/remedies-for-breach-of-property-contract
Why the other options are wrong
- (ii) False. He has affirmed, but affirmation does not strip him of remedies. If the seller then fails to complete, that is a fresh breach, and he may terminate and claim damages or seek specific performance.
Study the concept behind this question: Remedies for Breach of a Property Contract
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