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EXPRESS TERMINATION CLAUSES IN CONTRACTS

Published online by Cambridge University Press:  07 March 2014

John Randall
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Abstract

Having set express termination clauses (ETCs) in their legal context, this article's first aim is briefly to explain three significant points concerning their operation which have now been clarified. Other important questions remain unresolved, and the second aim is to explore four of them: the judicial “reading down” of ETCs; whether termination need be immediate; the recoverability of expectation damages; and the avoidance of an unintended repudiation. Respects in which the English law of contract on each of them would benefit from development or change are identified, and it is argued that the Canadian approach to the award of expectation damages following termination pursuant to an ETC is preferable to the established Anglo-Australian position.

Keywords

Contractsexpress termination clausesterminationdamagesrepudiationAustraliaCanada
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Articles
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The Cambridge Law Journal , Volume 73 , Issue 1 , March 2014 , pp. 113 - 141
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Copyright © Cambridge Law Journal and Contributors 2014 

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References

1 The leading practitioners' text, Chitty on Contracts, 31st ed. (London 2012), has only eight paragraphs separately devoted to them (vol. 1, paras. 22-048 to 22–055). There is a short consideration of some of the issues relating to ETCs in chapter 9 of N. Andrews, M. Clarke, A. Tettenborn and G. Virgo, Contractual Duties: Performance, Breach, Termination and Remedies (London 2011).

2 [2009] EWCA Civ 75, [2010] Q.B. 27.

3 [2012] UKSC 63, [2013] 1 A.C. 523.

4 For some discussion of the same see Andrews and ors. op.cit. at paras. 9-018 to 9-028.

5 Of which Staffordshire Area Health Authority v South Staffordshire Waterworks Co. [1978] 1 W.L.R. 1387 (C.A.) is the leading example.

6 G. Treitel, The Law of Contract (E. Peel ed.), 13th ed. (London 2011) at para. 18-026.

7 Op.cit. at para. 18-061.

8 See per Lord Scott of Foscote in Golden Strait Corpn. v Nippon Yusen Kubishka Kaisha (The Golden Victory) [2007] UKHL 12, [2007] 2 A.C. 353 at [38].

9 For examples, see L. Schuler A.G. v Wickman Machine Tool Sales Ltd. [1974] A.C. 235 (see further at note 47 below), Rice v Great Yarmouth Borough Council (2000) 3 L.G.L.R. 4 (p. 41), and Dalkia Utilities Services plc v Celtech International Ltd. [2006] EWHC 63 (Comm), [2006] 1 Lloyd's Rep. 599.

10 Treitel op.cit. at para. 18-062.

11 [2011] EWHC 1120 (Comm). See also Rawson v Hobbs [1961] HCA 72, 107 C.L.R. 466, esp. at [9], 480 per Dixon C.J. and [1], 491 per Windeyer J. (Kitto J. dissented on this issue).

12 Ibid. at [77].

13 There being no equivalent to the common law doctrine of anticipatory breach in the context of an ETC.

14 [1971] 1 Q.B. 164 (C.A.) per Edmund Davies and Megaw L.JJ.

15 [1983] 1 W.L.R. 195 (H.L.). See also Chitty op.cit. at para. 24-032; M. Furmston (ed.), The Law of Contract, 4th ed. (London 2010) at para. 7.7.

16 For helpful consideration of what amounts to remedying a default in the context of a commercial contract, see L. Schuler A.G. v Wickman Machine Tool Sales Ltd. [1974] A.C. 235, esp. at 249G-250B per Lord Reid, more recently considered in Force India Formula One Team Ltd. v Etihad Airways PJSC [2010] EWCA Civ 1051, [2011] E.T.M.R. 10 (p.158) at [100]–[110] per Rix L.J.

17 Furmston, op.cit. at para. 7.29, note 12.

18 Western Bulk Carriers K/S v Li Hai Maritime Inc. (The Li Hai) [2005] EWHC 735 (Comm), [2005] 2 Lloyd's Rep. 389, 406–407 per Jonathan Hirst Q.C. sitting as a deputy High Court Judge.

19 Para. 22-049; contrast at para. 22-051 and note 227 thereto. See to similar effect Carter, J., “Termination Clauses” (1990) 3 Journal of Contract Law 90Google Scholar, 101 and the (Australian) authorities there cited.

20 For which see Ellis Tylin Ltd. v Co-operative Retail Services Ltd. [1999] B.L.R. 205 per H.H.J. Bowsher Q.C. at 217–220, citing inter alia Mannai Investment Co. Ltd. v Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749. For Australian judicial dicta consistent with Chitty's suggestion, see the citation from Kirby J. in the Pan Foods case, text to note 64 below.

21 Anson's Law of Contract, 29th ed. (J. Beatson, A. Burrows & J. Cartwright eds.) (OUP, Oxford, 2010) at 470; Carter, op.cit. at 103; Chitty op.cit. at para. 22-048; Financings Ltd. v Baldock [1963] 2 Q.B. 104 (C.A.), 115 per Upjohn L.J. See also Sotiros Shipping Inc. v Sameiet Solholt (The Solholt) [1983] 1 Lloyd's Rep. 605 (C.A.) at 608, where Sir John Donaldson M.R. referred to a party's “unfettered right” to operate or not operate an ETC. The contrary view has been much discussed in Australia ever since the obiter dicta of Priestley J.A. on the point in Renard Constructions (ME) v Minister for Public Works (1992) 26 N.S.W.L.R. 234 (NSWCA), without (as yet) decisive resolution: see inter alia Burger King Corporation v Hungry Jack's Pty. Ltd [2001] NSWCA 187, (2001) 69 N.S.W.L.R. 558; D. Bennett Q.C. & W. Jocic (both of Melbourne Law School), “Good Faith in the Performance of Australian Contracts” (unpublished); J. Paterson, A. Robertson & A. Duke, Principles of Contract Law, 4th ed. (Sydney 2012) at 488–491.

22 Panchaud Frères S.A. v Établissements General Grain Co. [1970] 1 Lloyd's Rep. 53 (C.A.). There is some support for this approach in Australian judicial dicta: see the short discussion of ‘Unconscionable Terminations’ in Paterson, Robertson & Duke op.cit. at 487–488.

23 [1997] 4 All E.R. 514 (C.A.), 529a–531c. Of course, the doctrine of promissory estoppel remains available if supported by the facts.

24 Furmston op.cit. at para. 7.28. See British & Beningtons Ltd. v North Western Cachar Tea Co. Ltd. [1923] A.C. 48, 71–72 per Lord Sumner (cited with approval by Lord Denning M.R. in The Mihalis Angelos [1971] 1 Q.B. 164 (C.A.) at 193B, and by Dixon J. in Shepherd v. Felt and Textiles of Australia Ltd. [1931] HCA 21, 45 C.L.R. 359 at 377–378); Glencore v Lebanese (note 23 above) at 526f; Stocznia Gdanska S.A. v Latvian Shipping Co. (No. 2) [2002] EWCA Civ 889, [2002] 2 Lloyd's Rep. 436 at [32] (cited with approval in Gearbulk at [44]).

25 Reinwood v L. Brown & Sons [2008] EWCA Civ 1090, [2009] B.L.R. 37 at [51].

26 [2010] EWHC 465 (Comm).

27 [2006] EWHC 63 (Comm), [2006] 1 Lloyd's Rep. 599.

28 Ibid. at [143]–[144].

29 See Gearbulk at [39]–[42].

30 Ibid. at [44]. The position of an innocent party having to elect between two available legal courses (one of which he has obtained by negotiating for its inclusion in the contract) when–and only when – they are inconsistent with one another is, it is suggested, an unobjectionable feature of commercial life, and not in the nature of a difficulty from which the law should protect him (cf. per E. Peel, “The Termination Paradox” [2013] L.M.C.L.Q. 519, speaking of the “obvious dilemma for the innocent party” at 536; C. Langley and R. Loveridge in “Termination as a response to unjust enrichment” [2012] L.M.C.L.Q. 65 at 66, 88 and 92–95).

31 Op.cit. at para. 22-049.

32 (1998) 86 B.L.R. 70.

33 See at 110H-I. In Gearbulk at [26]–[35], dicta apparently to like effect in the earlier case of United Dominions Trust (Commercial) Ltd. v. Ennis [1968] 1 Q.B. 54 (C.A.) were dismissed by Moore-Bick L.J., who said it was “not altogether easy to understand … particularly in the light of more recent expositions of the principles governing the law on repudiation and the doctrine of election … these were ex tempore judgments delivered at a time when the principles of discharge by breach had not received the detailed analysis and exposition provided in the more recent authorities.”

34 Dalkia Utilities at [143] per Christopher Clarke J.

35 See Heyman v Darwins Ltd. [1942] A.C. 356.

36 At [34].

37 At [20].

38 (2009) 125 L.Q.R. 378 at 380–381, building on the judgments of Lord Denning M.R. in UDT v Ennis (note 33 above) and Burton J. at first instance in Gearbulk [2008] EWHC 944 (Comm), [2008] 2 Lloyd's Rep. 202. For Peel's subsequent development of this argument see [2013] L.M.C.L.Q. 519 (note 30 above).

39 At [37].

40 [1985] HCA 14 at [32], 157 C.L.R. 17, 31.

41 Furmston op.cit, at para. 7.7 (and repeated at para. 7.29).

42 [1978] 2 All E.R. 385 (C.A.), 392a-b per Bridge L.J.

43 [1983] 1 W.L.R. 195 (H.L.), 201G-H per Lord Hailsham L.C.

44 Note 40 above per Mason J. at [28], 30 and per Deane J. at [8], 55–56.

45 Chitty op.cit. at para. 22-049.

46 (1996) 77 B.L.R. 38 (C.A.), the example cited in Chitty op.cit., para. 22-049 at note 210.

47 As to which note BSkyB Ltd. v HP Enterprise Services UK Ltd. [2010] EWHC 86 (TCC), per Ramsey J. at [1366], final sentence. L. Schuler A.G. v Wickman Machine Tool Sales Ltd. [1974] A.C. 235 can be viewed as another such case, given the presence of the ETC in clause 11(a) of the contract there under consideration, and the view of its impact taken by Lord Reid at 249C-G and 252A-C (Lord Simon of Glaisdale agreeing at 264A-B), Lord Morris of Borth-y-Gest at 260A-B and Lord Kilbrandon at 271C-H.

48 An equivalent point was made in Schuler v Wickman (note 47 above) by Lord Morris at 259G-H: “I would have expected a specific mention in clause 11 of a right in Schuler to determine the agreement on notice alone for any breach by Wickman of their clause 7(b) obligations had it been the intention of the parties that Schuler would have such a right.”

49 See at 46 and 50 respectively. The same point was made in Amann Aviation Pty. Ltd. v Commonwealth of Australia [1990] FCA 55, (1990) 22 F.C.R. 527 (a case better known for the subsequent appeal to the High Court of Australia on issues relating to damages and remedies, at [1991] HCA 54, 174 C.L.R. 64). Davies and Sheppard JJ., having found that an ETC did provide a comprehensive procedure for terminating the contract in the circumstances specified in the relevant clause (2.24) (see at [11]–[15] and [2]–[15] respectively), both pointed out that the same conclusion would not have applied to an anticipatory breach (aliter “a repudiation … in its strict sense”) by the contractor (at [16] and [15] respectively).

50 [1999] All E.R. (D.) 1487 (C.A.).

51 Per Mance L.J. (as he then was) at [21].

52 Per Langley J. in Amoco (UK) Exploration Co. v British American Offshore Ltd. [2001] All E.R. (D.) 244 (Nov).

53 Per Ramsey J. in BSkyB (note 47 above) at [1366].

54 Dalkia Utilities at [21] per Christopher Clarke J.; South Oxfordshire District Council v SITA UK Ltd. [2006] EWHC 2459 (Comm), [2007] Env. L.R. 13 at [174]–[178] per David Steel J. (insufficient indication that the ETCs in that case contained a complete code for termination in the relevant circumstances).

55 [1996] A.C. 800, 811A per Lord Steyn.

56 Ibid. at 810H-811B.

57 Ibid. at 811F-H.

58 [2012] UKSC 63, [2013] 1 A.C. 523 at [57].

59 Ibid., loc. cit.

60 See ibid. at [9] per Lord Hope D.P.S.C.

61 Ibid. at [58].

62 Ibid. at [10] per Lord Hope.

63 Ibid. at [103]. It may be noted that being “not unreasonable” does not satisfy any recognised test for the implication of terms, even after Attorney General of Belize v Belize Telecom Ltd. [2009] UKPC 10, [2009] 1 W.L.R. 1988.

64 [2000] HCA 20, (2000) 170 A.L.R. 579 at [24].

65 Gumland Property Holdings Pty. Ltd. v Duffy Brothers Fruit Market (Campbelltown) Pty. Ltd. [2008] HCA 10 at [58], 234 C.L.R. 237, 259 (see also [53], 257–258) in the joint judgment of the High Court of Australia, citing inter alia Bettini v Gye (1876) 1 Q.B.D. 183 at 187 per Blackburn J. See also Bunge Corporation, New York v Tradax Export S.A., Panama [1981] 1 W.L.R. 711 (H.L.), 715G-H per Lord Wilberforce.

66 Of which L. Schuler A.G. v Wickman Machine Tool Sales Ltd. [1974] A.C. 235 (Lord Wilberforce dissenting) affords the leading example.

67 [1985] A.C. 191 (see at 200F-G and 205C-D per Lord Diplock and 209D-E per Lord Roskill). As to the contractual significance of a requirement in a charterparty that the payment of hire be “punctual and regular”, at least when combined with an anti-technicality clause, see now Kuwait Rocks Co. v AMN Bulkcarriers Inc. (The Astra) [2013] EWHC 865 (Comm), [2013] 2 Lloyd's Rep. 69 at [109]–[118] per Flaux J.

68 (2001) 3 L.G.L.R. 4 (p. 41) (C.A.) – see at [18] and [28] per Hale L.J. (as she then was). For a further example see Dominion Corporate Trustees Ltd. v Debenhams Properties Ltd. [2010] EWHC 1193 (Ch).

69 “Termination Clauses” in A. Burrows & E. Peel (eds.), Contract Terms (Oxford 2007), 277–283. See also M. Chen-Wishart, Contract Law, 4th ed. (Oxford 2012), 472–473, and E. McKendrick, Contract Law – Text, Cases and Materials, 5th ed. (Oxford 2012), 792–793.

70 Op. cit. at 279, citing Colman J. in National Power plc v United Gas Co. Ltd. [1998] All E.R. (D.) 321. Chen-Wishart makes the same point, loc. cit.

71 [1987] Q.B. 527 (C.A.).

72 For an exception at first instance, see BNP Paribas v Wockhardt EU Operations (Swiss) A.G. [2009] EWHC 3116 (Comm), 132 Con. L.R. 177, Christopher Clarke J.

73 See section 3(2)(b)(i), held to be of “at least arguable” application by Lord Bingham M.R. in Timeload Ltd. v British Telecommunications plc [1995] E.M.L.R. 459 (C.A.) at 468.

74 Anson op.cit. at 471–472, and compare, for an example, the ETC in Walkinshaw v Diniz [2001] 1 Lloyd's Rep. 635, which Mr Diniz sought to exercise (see headnote at 632 for clauses 7.1, 9.2(b) and 9.4, and the judgment of Tomlinson J. at [46] for the exercise of the ETC, and at [106] for his conclusion). This decision was upheld on appeal without these points being challenged ([2002] EWCA Civ 180, [2002] 2 Lloyd's Rep. 165), and is discussed below (text to note 80 ff.).

75 Stocznia Gdanska S.A. v Latvian Shipping Co. (No. 2) [2002] EWCA Civ 889, [2002] 2 Lloyd's Rep. 436 at [87] per Rix L.J. The legal position of the innocent party who has not (yet) accepted a repudiation has recently been discussed by Chetwin, M. in “The Unaccepted Repudiation and Legal Rights”, (2012) 29 Journal of Contract Law 231Google Scholar.

76 See the passage from Treitel op.cit. at para. 18-026 cited early in this article.

77 Consultation Paper No. 188 (October 2008), Consumer Remedies for Faulty Goods, Part 3, “The Right to ‘Reject’ in UK Law”, at para. 3.2.

78 [1985] I.C.R. 668 (C.A.).

79 Ibid., at 683E-F. To similar effect, in one of the leading Australian judgments on the termination of contracts at common law, Jordan C.J. (N.S.W.) said that such a termination when communicated “is at once operative”: Tramways Advertising Pty. Ltd. v Luna Park (NSW) Ltd. (1938) 38 S.R. (N.S.W.) 632, 643.

80 [2001] 1 Lloyd's Rep. 635 (as to which see also note 74 above) at [51].

81 [2006] EWHC 2459 (Comm), [2007] Env. L.R. 13 at [168].

82 Shell Egypt at [27].

83 See text to note 75 above.

84 Another example can be derived from the facts of South Oxon. v SITA (note 81 above) if one postulates (contrary to the Judge's findings of fact in that case) that the waste disposal contractor's breaches were sufficiently serious to amount to a repudiation.

85 [1963] 2 Q.B. 104 (C.A.).

86 [1987] Q.B. 527 (C.A.).

87 See e.g. G. Treitel, “Damages on rescission for breach of contract” [1987] L.M.C.L.Q. 143; Opeskin, B., “Damages for breach of contract terminated under express terms” (1990) 106 L.Q.R. 293Google Scholar.

88 The conferral of the right so to terminate on the innocent party is well-established as one of the common law's responses to such a breach of contract. There is, it is suggested, neither need nor justification for the radical re-theorisation of this as a response to unjust enrichment of the contract breaker, as proposed by Langley and Loveridge op.cit. (note 30 above).

89 For criticism of the availability of loss of bargain damages upon any termination for breach of a strict condition, see Stannard, J., “Delay, Damages and the Doctrine of Constructive Repudiation” (2013) 30 Journal of Contract Law 178, esp. at 194–198Google Scholar.

90 Such as, for example, a claim for the recovery of wasted expenditure.

91 Op.cit. at para. 22-049 (emphasis added).

92 In theory, an ETC may be triggered by an event which does not constitute, and has not been brought about by, a breach of contract at all. However in practice such cases seem to be quite rare, and in any event there cannot be any principled basis on which damages of any sort should be recoverable at common law in circumstances where there has been no relevant breach.

93 Regardless of whether or not the latter was asserted at any stage: see “The ‘Second Thoughts’ Principle” (above). Contrast the position where a carefully drawn clause in the contract has elevated the broken obligation, which would not otherwise have been a strict condition, to that status, as to which see Lombard North Central plc v Butterworth [1987] Q.B. 527 (C.A.).

94 See, for examples from cases cited elsewhere in this article, Esanda Finance Corp. v Plessnig [1989] HCA 7, 166 C.L.R. 131, Dalkia Utilities at [122] and The Astra [2013] EWHC 865 (Comm), [2013] 2 Lloyd's Rep. 69 at [31] & [120] (clauses not penal); contrast Financings Ltd. v Baldock [1963] 2 Q.B. 104 (C.A.), Lombard v Butterworth (note 86 above), AMEV-UDC Finance Ltd. v. Austin [1986] HCA 63, 162 C.L.R. 170, and Dalkia Utilities at [123] (clauses penal).

95 For an earlier discussion of some of the issues this raises see Opeskin op.cit. (note 87 above) at 315–320.

96 [1987] 2 S.C.R. 440, (1987) 43 D.L.R. (4th.) 171, at [25]. This approach was discussed by Opeskin op.cit. at 298–300. For a recent English decision taking a strikingly similar line, see The Astra (note 67 above) at [109] & [118], considered in the text to notes 128–130 below.

97 [1953] 1 Q.B. 86 (a case which itself turned on a penalties point), at 102.

98 (1926) K.B.D.C., C.G. Jones & R. Proudfoot, Notes on Hire-Purchase Law, 2nd ed. (London 1937), Appendix A, 107, 112.

99 [1963] 2 Q.B. 104 (C.A.), 111–112 (see also per Upjohn L.J. at 115).

100 Which the owners accepted (at 106) as being the consequence of the then recent decision of the House of Lords in Bridge v Campbell Discount Co. Ltd. [1962] A.C. 600.

101 [1982] HCA 47 at [8], 149 C.L.R. 620, 627.

102 Progressive Mailing House Pty. Ltd. v Tabali Pty. Ltd. [1985] HCA 14 at [33], 157 C.L.R. 17, 31. In AMEV-UDC (note 103 below) at [4], 175 Gibbs C.J. himself described the reasoning of the High Court in Shevill (in which he had presided) as “very similar” to that in Financings Ltd. v Baldock (note 99 above).

103 [1986] HCA 63, 162 C.L.R. 170 (a chattel lease case).

104 See per Gibbs C.J. at [3]–[5], 175–176; Mason and Wilson JJ. at [26], 185–186; Dawson J. (dissenting as to the result) at [15], 212–213; (and contrast Deane J., also dissenting as to the result, at [10]–[12], 204–207 dubitante).

105 At [26], 186. This passage was cited with approval by Brennan J. in Esanda Finance Corporation Ltd. v Plessnig [1989] HCA 7 at [4], 166 C.L.R. 131, 145.

106 [2008] HCA 10, 234 C.L.R. 237 (a case concerning the provisions of a lease of real property, to which the ordinary principles of contract law, including that of termination for repudiation or fundamental breach, were applicable – Progressive Mailing House v Tabali (note 102 above) per Mason J. at [24]–[28], 27–30).

107 As their Honours pointed out at [52]. For the relevant clauses, see earlier in the same joint judgment at [3].

108 Gearbulk, at [36] per Moore-Bick L.J.

109 Universal Cargo Carriers Corporation v Citati (The Catherine D. Goulandris) [1957] 2 Q.B. 401, 431 per Devlin J.

110 Hongkong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. (The Hongkong Fir) [1962] 2 Q.B. 26 (C.A.), 70–73 per Diplock L.J.; The Afovos [1983] 1 W.L.R. 195 (H.L.), 202H-203G per Lord Diplock.

111 See text to notes 118–119 below; hence a repudiation pending such acceptance has famously been said to be a “thing writ in water” – Howard v Pickford Tool Co. Ltd. [1951] 1 K.B. 417 (C.A.), 421 per Asquith L.J.

112 As they are entitled to do: see note 125 below.

113 See Lombard North Central plc v Butterworth [1987] Q.B. 527 (C.A.).

114 Decro-Wall International S.A. v Practitioners in Marketing Ltd. [1971] 1 W.L.R. 361 (C.A.), 380A-B per Buckley L.J.; Rice v Great Yarmouth Borough Council (2000) 3 L.G.L.R. 4 (p. 41) (C.A.) at [38] per Hale L.J.

115 Such as depriving the innocent party of substantially the whole benefit of the contract (see per Diplock L.J. in The Hongkong Fir (note 110 above) at 72). Notwithstanding the opinion expressed by Lord Wilberforce in Federal Commerce and Navigation Co. Ltd. v Molena Alpha Inc. (The Nanfri) [1979] AC 757 at 779C-D that there is no “divergence of principle” between this formulation and that of Buckley L.J. in Decro-Wall International (text to note 114 above), it is suggested that the older formulation clearly presented a higher threshold for the innocent party to overcome, a view apparently supported by Lewison L.J. in Ampurius Nu Homes Holdings Ltd. v Telford Homes (Creekside) Ltd. [2013] EWCA Civ 577, [2013] 4 All E.R. 377 at [48].

116 Ibid., at [50].

117 See note 21 above.

118 In perhaps the most challenging factual circumstances for this principle, namely where a contract of employment has been repudiated by an employer who wishes to have nothing further to do with the employee.

119 A point emphasised in a variety of well-known cases including Hochster v De la Tour (1852) 2 E. & B. 678, 691 per Lord Campbell C.J.; White and Carter (Councils) Ltd. v McGregor [1962] A.C. 413, 427 per Lord Reid and 444 per Lord Hodson; Clea Shipping Corp. v Bulk Oil International Ltd. (The Alaskan Trader) (No. 2) [1984] 1 All E.R. 129, 137d-e per Lloyd J. (as he then was).

120 As Peel acknowledges op.cit. (note 30 above) at 523.

121 [1963] 2 Q.B. 104, 110 and 113. Compare per Lord Sumption S.C.J. in ENE Kos I Ltd. v Petroleo Brasileiro S.A. (No. 2) [2012] UKSC 17, [2012] 2 A.C. 164 at [7].

122 See text to notes 109–110 above.

123 Per Upjohn L.J. at 117 and 115.

124 Per Diplock L.J. at 123 and 121.

125 See e.g. Bettini v Gye (1876) 1 Q.B.D. 183, 187 per Blackburn J.; Financings Ltd. v Baldock [1963] 2 Q.B. 104, 120 per Diplock L.J.; Lombard North Central plc v Butterworth [1987] Q.B. 527 (C.A.), 535F per Mustill L.J. and 546C-D per Nicholls L.J. (as they then were); Gumland v Duffy Brothers [2008] HCA 10, 234 C.L.R. 237 at [58], 259 (cited in the text to note 65 above).

126 For an argument that the common law measure of damages upon termination for breach of a strict condition should be modified, see Stannard op.cit. (note 89 above).

127 Compare the observations of Nicholls L.J. in Lombard v Butterworth (note 125 above) at 546E-F.

128 [2013] EWHC 865 (Comm), [2013] 2 Lloyd's Rep. 69 at [109].

129 6th ed. (T. Coghlin, A. Baker, J. Kenny & J. Kimball eds.) (Informa, London, 2008) at para. 16.132.

130 Ibid. at [118] (see also [34] & [91]).

131 Or that the term breached constituted a strict condition of the contract.

132 A difficulty which court proceedings, even if they can be brought on quickly enough, cannot be used to resolve in advance, because the courts will regard a declaration of entitlement to terminate a contract which is still on foot as a hypothetical matter and refuse to make one: Galaxy Communications Pty. Ltd. v Paramount Films of Australia Inc. [1998] NSWCA 48, citing inter alia Howard v Pickford Tool Co. Ltd. [1951] 1 K.B. 417, 420–412 per Lord Evershed M.R. and Dormer v Solo Investments Pty. Ltd. (1974) 1 N.S.W.L.R. 428, 434–435 per Holland J. (“… it is one thing to declare present contractual rights of the parties, another to declare them contingently on the plaintiff electing to take some course that he has not yet taken, is not bound to take and may not take”).

133 At [34]. For a short discussion of the issues raised see Peel, op.cit. (note 30 above) at 542–543.

134 [1980] 1 W.L.R. 277 (H.L.), in particular at 283A-B per Lord Wilberforce (citing James Shaffer Ltd. v Findley Durham & Brodie [1953] 1 W.L.R. 106 (C.A.) and Sweet & Maxwell Ltd. v Universal News Services Ltd. [1964] 2 Q.B. 699 (C.A.)) and 295A-H per Lord Keith of Kinkel (also citing Ross T. Smyth and Co. Ltd. v T. D. Bailey and Son & Co. (1940) 164 L.T. 102, 107 per Lord Wright).

135 [1979] A.C. 757.

136 At [148].

137 [2010] EWCA Civ 1168, [2011] 2 All E.R. (Comm.) 223 at [61]–[63]. See also DTR Nominees Pty. Ltd. v Mona Homes Pty. Ltd. [1978] HCA 12, 138 C.L.R. 423; and Vaswani v Italian Motors (Sales and Services) Ltd. [1996] 1 W.L.R. 270 (P.C.). The Court of Appeal approved the application of this principle in the context of denial of title in Eastaugh v Crisp [2007] EWCA Civ 638, at [32]–[39] per Arden L.J.

138 Note 134 above at 283D-E (emphasis added).

139 “Termination Clauses” (1990) 3 Journal of Contract Law 90, 93–94.

140 Under “Only One Type of Termination” (text to note 38 above).

141 Dalkia Utilities at [149]–[151].

142 Galaxy Communications v Paramount Films [1998] NSWCA 48 per Stein J.A. at [36].

143 Cf. Langley and Loveridge op.cit. (note 30 above).