Define: Repudiation Of Contract

Repudiation of contract occurs when one party to a contract explicitly or implicitly indicates that they do not intend to fulfil their contractual obligations. This can happen through words, actions, or behaviour that indicates a clear refusal to perform under the terms of the contract. Repudiation may occur before the performance of the contract is due or during the performance. When one party repudiates the contract, the other party may treat the contract as terminated and sue for damages for breach of contract. Alternatively, they may choose to continue to perform under the contract while reserving the right to claim damages for the breach. Repudiation of contract is a serious matter and can have significant legal consequences for the parties involved.

A form of breach of contract where a party announces his intention not to perform his obligations under it (rather than simply not performing it in the expected time and manner). This is also known as ‘anticipatory breach of contract’. A person may have the right to repudiate if the other party is in breach of a condition of the contract, and he may then treat the contract as discharged. However, repudiation is a breach of contract, and if done without good cause will leave the repudiator liable for damages.

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This glossary post was last updated: 29th March 2024.