Contract; breach of contract; late performance; remedies; termination of performance.
Facts: Wiltshire sold some land to Holland for £3,750. The written agreement provided for payment to be made 'on the day fixed for settlement namely January 14th 1952'. At Holland's request Wiltshire agreed to an extended deadline, but Holland failed to meet the extension. Holland then informed Wiltshire that he did not intend to proceed with the sale at all. Wiltshire did not immediately terminate performance of the contract but said that, if Holland did not settle by March 28, he (Wiltshire) would commence legal action for breach of contract.
Issue 1: The right to terminate performance and claim damages: Was Wiltshire entitled, failing payment by March 28, to terminate further performance of the sale, resell the land to a third party, and claim any loss from Holland?
Decision: Wiltshire was entitled to these remedies.
Reason: There were two breaches of contract by Holland. The first occurred when Holland failed to perform at the agreed (extended) time. On the facts of this case, the court held that the time of performance was agreed to be of essential importance. This meant that Holland's failure to perform on time amounted to a breach of condition and entitled Wiltshire to terminate the contract immediately. Wiltshire chose not to end performance of the contract immediately. It was only after a second breach occurred, when Holland said he would not proceed with the sale at all, that Wiltshire gave him a deadline for performance and then terminated the contract when that deadline passed. Wiltshire then resold the property to a third party, but at a lower price. He was entitled to claim as damages the difference between the lower price on resale and the original contract price.
Issue 2: Giving notice of a decision to terminate performance: Had Wiltshire done what was required to terminate further performance of the contract?
Decision: The contract had been effectively terminated.
Reason: When faced with a breach that justifies termination, the non-defaulting party has a choice: to continue with the contract, or to terminate further performance. The decision does not have to be made immediately, but once made and communicated to the other party, the choice is binding. In this case, Wiltshire had kept the contract alive for a short time after Holland's repudiation, but made it clear that any further failure would result in an action for breach. The eventual decision to treat the contract as terminated was communicated sufficiently by re-advertising and reselling the land.