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Scope_of_CCLA.pdf-Scope of CCLA Exclusion of Sale
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Scope of CCLA.pdf-Scope of CCLA Exclusion of Sale
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Scope_of_CCLA.pdf-Scope of CCLA Exclusion of Sale
Page 9
ss 41, 42
On its face, CCLA contemplates that a
wrongful repudiation (or breach of an essential term
or a breach having substantial effects)
gives the innocent party an election.
The choice must be evidenced overtly and communicated to the counterparty
s 40:
ss 36-39 to have effect in place of common law and equity governing the circs in
which a party may rescind it, or treat it as discharged, for misrep, repudiation or breach.
the election does not meet the problems posed by the
unaccepted repudiation
as it
requires the innocent party to manifest its choice by electing to cancel.
Decided cases show how difficult it is to marry the merits of a decision with statute
because that obligation was no long dependent on duty to nominate a vessel
Don’t have to just affirm or cancel - can wait and then sue for actual breach without
having to fulfil their own obligations (this is conditional on the repudiation remaining
continued and unretracted)
Accepted by NZSC in
Innocent party must show that they were ready and willing to perform up until the
Rent overdue
One day before landlord is entitled to terminate the contract - he unlawfully enters the
premises and refuses the tenants entry
This was an unlawful repudiation
Tenants did nothing - therefore contract remained on foot
Landlord tried to cancel contract - tenants did not pay rent
The contracting party who has repudiated
cannot enforce the agreement
The unaccepted repudiation may
absolve the innocent party’s duty to perform
Tenants were
ready and willing
to perform and would have performed but for the
They were not in breach by failing to pay the rent as the
obligation had been waived
due to the landlord's unretracted repudiation.
Therefore, since the landlord was repudiating, the landlord cannot claim that the
tenants were in breach by refusing the pay the rent.
s 41: cancellation must be communicated in order to take effect

Page 10
Schmidt v Holland
Sale of land
Purchaser failed to pay and settle
Vendor did nothing - did not make time of the essence, did not communicate
Sold property to another person
Real estate agent who had brokered sale sued vendor for commission and recovered it -
vendor sought counterclaim against purchaser.
Same broad position as Turnbull:
purchaser repudiated, vendor acts but does not settle - does
not show readiness and willingness on settlement date
Repudiation gives rise to an election
Until cancellation - the obligation subsist
An acceptance of repudiation must be communicated before the innocent party can sue
for wrongful repudiation
If innocent party does not communicate an acceptance - the innocent party must be
regarded as not accepting therefore the contract remains on foot
Therefore - both parties obliged to continue performing until cancellation is
On settlement date: vendor needed needs to tender and disable itself by
Innocent party (vendor)
has no claim for damages for loss of bargain
until a
cancellation brings the bargain to and end and discharges both parties
further performance
Mrs Holland fails to recover and Schmidt walks away
Logical but UNJUST
Chatfield v Jones
Vendor has made an agreement to sell shares
Purchaser fails to settle
Vendor seeks specific performance and affirms contract
Vendor resells and
vendor affirmed contract - relied on equivalent of
s 38 CCLA
(no cancellation if
contract is affirmed)
Refinement of cancellation: distinction between act of cancellation and
legal effect
cancellation (when the cancellation becomes effective)
Repudiation wass continuing and unretracted -
this gave rise to more than one right
to elect
Vendor elected to cancel by reselling - the selling itself was a
manifestation of the the

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