Q&As

Can a party rely on the terms of contract ie limitation on liability, where that party has breached them terms of the contract which the other party has treated as a repudiation?

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Published on LexisPSL on 18/05/2018

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Can a party rely on the terms of contract ie limitation on liability, where that party has breached them terms of the contract which the other party has treated as a repudiation?

Can a party rely on the terms of contract ie limitation on liability, where that party has breached them terms of the contract which the other party has treated as a repudiation?

Acceptance of a repudiatory breach discharges the contract.

Termination occurs prospectively, meaning the parties are discharged from further performance under the contract with respect to their primary obligations and their secondary obligations come to the fore. The implied secondary obligation on the defaulting party is to pay monetary compensation to the other party for the loss sustained as a consequence of the breach.

Generally, whether or not a contractual term operates after termination is a question of construction (Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Australia) Pty Ltd). If the parties expressly provide that a particular term is, or is not, to be enforceable when a contract terminates, the parties’ agreement will be enforceable.

When there is no express agreement, the courts will be left to decide what the parties must have intended. For a summary of the principles used by the courts when

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