RES exam question on Contract & Agency Law: Two months before the agreed completion date, the seller of a condominium writes to…
Two months before the agreed completion date, the seller of a condominium writes to the buyer saying he will not complete the sale under any circumstances. Which is/are correct? (i) This is an anticipatory breach, as he has refused to perform before performance is due (ii) The buyer must wait for the completion date to pass before taking any action (iii) The buyer may accept the repudiation, end the contract and claim damages at once (iv) The buyer may instead affirm the contract, which then stays alive for both parties
- A(i) and (iii) only
- B(i), (ii) and (iii) only
- C(ii), (iii) and (iv) only
- D(i), (iii) and (iv) only
Show answer & explanation
Answer
D. (i), (iii) and (iv) only
Explanation
A party who, before performance falls due, clearly says he will not perform commits an anticipatory breach. This is a repudiation. The innocent party then has a choice, as the Court of Appeal set out in RDC Concrete v Sato Kogyo [2007] SGCA 39. He may accept the repudiation, end the contract and sue for damages straight away, without waiting for the completion date. Or he may affirm the contract, which then continues for both sides, so he must stay ready to complete and may later seek specific performance. So statements (i), (iii) and (iv) are correct. The two-statement combination leaves out affirmation, and the other two combinations include the waiting rule. Trap: believing no breach exists until completion day.
Why the other options are wrong
- The statement that he must wait for the completion date is wrong, because the right to act arises as soon as the repudiation is made.
Study the concept behind this question: Remedies for Breach of a Property Contract
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