Affirmation of contract CASES
In English law, affirmation of contract refers to a party’s decision to continue with a contract, despite being entitled to terminate it following a breach or misrepresentation.
Definition and Principles
When a contract is breached or affected by misrepresentation, the innocent party typically has a choice: terminate (rescind) or affirm (continue). Affirmation occurs through clear action or inaction indicating an intention to uphold the contract.
Common Examples
- Continuing to accept goods or payments after becoming aware of a breach.
- Expressly confirming intention to continue a contract after discovering a misrepresentation.
- Delay or failure to promptly terminate, suggesting acceptance of the breach.
Legal Implications
- Affirmation waives the right to terminate for the known breach.
- The affirming party retains the right to claim damages but not to rescind.
Practical Importance
Understanding affirmation helps parties manage breaches effectively, ensuring decisions on continuing or terminating contracts are deliberate, clear, and legally effective.
Home » Affirmation of contract
A party repudiated a three-year advertising contract on the day it was made. The advertisers refused the repudiation, performed the contract, and sued for the full price. The House of Lords held they were entitled to affirm the contract and claim the price. Facts The appellants (pursuers), White & Carter, were advertising contractors who supplied local authorities with litter bins, on which they displayed advertisements. The respondent (defender), Mr McGregor, owned a garage in Clydebank. On 26th June 1957, the respondent’s sales manager, acting within his apparent authority, entered into a contract with the appellants to display advertisements for the
Shipbuilders threatened to breach a contract unless the price was increased by 10% after a currency devaluation. The buyers reluctantly agreed to ensure their ship was delivered. The court held this was economic duress, but the buyers lost their right to repudiate through delay. Facts The plaintiffs, North Ocean Shipping Co Ltd (‘the owners’), contracted with the defendants, Hyundai Construction Co Ltd (‘the shipbuilders’), for the construction of a tanker, ‘The Atlantic Baron’. The price was fixed in US dollars, payable in five instalments. After the first instalment was paid, the US dollar was devalued by 10 per cent. The
A lorry buyer discovered major defects after purchase. The seller offered to split repair costs, which the buyer accepted. The lorry broke down again. The court held that by accepting the offer and using the lorry, the buyer affirmed the contract. Facts The plaintiff, a haulage contractor, saw an advertisement for an Albion lorry which described it as being in ‘exceptional condition’. The defendant seller made further oral representations, including that the lorry was capable of 11 miles to the gallon. The plaintiff purchased the lorry for £850, paying a deposit. On the first journey, numerous serious defects became apparent:
