An advertising company continued to display unwanted advertisements after the customer repudiated the contract on the same day it was signed. The House of Lords held (3-2) that the innocent party could elect to perform the contract and claim the contract price rather than accept repudiation and sue for damages.
Facts
White & Carter (Councils) Ltd supplied litter bins to local authorities with advertising plates attached. In June 1957, McGregor’s sales manager signed a three-year advertising contract. On the same day, McGregor wrote to cancel the contract. The pursuers refused to accept the cancellation, prepared and displayed the advertising plates from November 1957, and sued for the full contract price of £196 4s 0d.
Background
The contract contained a clause (Condition 8) providing that if any instalment remained unpaid for four weeks or if the advertiser was in breach, the whole amount for 156 weeks would become immediately due and payable. The contract also stated it was not to be cancelled by the advertiser.
Issues
The central issue was whether, upon repudiation of a contract before performance, the innocent party was entitled to continue performing the contract and sue for the contract price, or whether they were confined to claiming damages for breach of contract.
Judgment
The House of Lords allowed the appeal by a majority of 3-2 (Lord Reid, Lord Tucker, and Lord Hodson; Lord Morton of Henryton and Lord Keith of Avonholm dissenting).
Majority Opinion
Lord Reid, delivering the leading majority judgment, affirmed the fundamental principle that repudiation by one party does not discharge a contract. The innocent party has an option: to accept the repudiation and sue for damages, or to disregard it and allow the contract to remain in full effect. Lord Reid stated that the earlier Scottish case of Longford & Co v Dutch was wrongly decided.
Lord Reid acknowledged a possible limitation to this principle:
“It may well be that, if it can be shown that a person has no legitimate interest, financial or otherwise, in performing the contract rather than claiming damages, he ought not to be allowed to saddle the other party with an additional burden with no benefit to himself.”
However, Lord Reid found that no such case had been proved here and that the appellants could not be deprived of their right to claim the contract price merely because the benefit to them might be small compared to the loss to the respondent.
Lord Hodson emphasised the settled rule that an unaccepted repudiation has no legal effect, stating:
“There is no duty laid upon a party to a subsisting contract to vary it at the behest of the other party so as to deprive himself of the benefit given to him by the contract.”
Dissenting Opinion
Lord Morton of Henryton considered the appellants’ only remedy was damages, and they were bound to take steps to minimise their loss. He described the appellants’ course of action as “unreasonable and oppressive.”
Lord Keith of Avonholm agreed with the dissent, emphasising the duty to mitigate damages and arguing that the complaining party is put to their remedy at the date of breach and cannot continue performance of an executory contract thereafter.
Implications
This case established that where one party repudiates a contract, the innocent party may elect either to accept the repudiation and claim damages, or to affirm the contract, continue performance (where possible without the other party’s cooperation), and claim the contract price. The decision introduced the concept that this right might be limited where the innocent party has no legitimate interest in performance. The case remains a leading authority on the innocent party’s election following anticipatory breach and has significant implications for contract law regarding mitigation of loss and the availability of contractual remedies.
Verdict: Appeal allowed. The House of Lords held by a majority (3-2) that the pursuers were entitled to perform the contract and claim the full contract price. The case was remitted for decree to be pronounced as craved in the initial writ.
Source: White & Carter (Councils) Ltd v McGregor [1961] UKHL 5 (06 December 1961)
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To cite this resource, please use the following reference:
National Case Law Archive, 'White & Carter (Councils) Ltd v McGregor [1961] UKHL 5 (06 December 1961)' (LawCases.net, September 2025) <https://www.lawcases.net/cases/white-carter-councils-ltd-v-mcgregor-1961-ukhl-5-06-december-1961/> accessed 5 June 2026
