REPUDATION. Repudiation is where 1 party takes some action that leads to conclusion that they’re not going to perform on the contract, whether done by color of right or not. (so vendor defaulting is repudiation.) There tends to be 2 kinds of repudiation: direct/express repudiation: i.e. phone call, letter indirect/implied repudiation: by conduct of parties Where one of parties indirectly repudiating, other party should go through motions of tender to preserve their rights. Xxx is whether that party wants contract to continue or not, and then act accordingly. (For vendor this means having clear title and instrument to convey title, for P this means being prepared to pay purchase price. Vendor has to have that transfer ready to go). 3 options for innocent party: can accept repudiation and terminate the K can accept repudiation, terminate K and sue for damages can reject repudiation, affirm K, and claim specific performance and/or damages Equity requires refusal to accept repudiation to be clearly communicated. Cannot do anything that would not be inconsistent with K staying alive. Equity further requires acting quickly in refusing repudiation (i.e. can’t wait 6 months then sue for specific performance). Rescission – return parties to their original position as though they had not entered into an agreement. Rarely will a court grant rescission of a complete deal. Happens under the following: Fraud Error in substantialibus (total failure of consideration; error of subject matter of the K). Breach of condition or term of agreement can give rise to rescission in certain circumstances (equitable remedy at the discretion of the court). Salama Enterprises (1988) Inc. x. Xxxxxx (1992, BCCA) FACTS: Vendor refused to complete the transfer of title (bc purchaser defaulted—recall: 1 day late) Purchaser sues for specific performance (so must keep K alive, reject vendor’s repudiation) [Note: purchaser was strictly speaking in default, even still this can be a tactic to delay, to find a way to negotiate. In the end, recall that court found it would be inequitable to insist on strict ‘time of essence’ and hold P in breach for being 1 day late] ISSUE: did purchaser’s actions on closing day amount to acceptance of vendor’s repudiation? HELD: no—P’s actions were consistent with his obligations under the K (sub-divided; had purchase $ ready) If you’re going to seek specific performance, it’s crucial that the party act in every way as though the contract is still in force (must be ready, wi...
