White and Carter (Councils) Ltd v McGregor

An innocent party can usually affirm a contract after repudiation and perform it, unless it has no legitimate interest in doing so.

Citation
[1962] AC 413
Court
House of Lords
Year
1962
Subject
Contract Law
Topic
Discharge and breach

Facts

White and Carter supplied litter bins to local councils and sold advertising space on them. Mr McGregor's sales manager agreed that White and Carter would display advertisements for his garage on litter bins for three years, at a fixed weekly charge. On the same day, Mr McGregor wrote cancelling the contract. White and Carter refused to accept the cancellation, prepared the advertising plates and displayed the advertisements for the full three years. It then claimed the full contract price of about £196. Mr McGregor argued that White and Carter should have accepted his repudiation and claimed damages, which would have been much smaller.

Legal principle

The House of Lords held, by a majority of three to two, that White and Carter could recover the full price. When one party repudiates a contract, the innocent party has a choice: it may accept the repudiation and claim damages, or it may affirm the contract and continue to perform. If it can perform without the cooperation of the other party, it may do so and claim the price. Lord Reid suggested two limits: the innocent party may not be able to do this where it needs the other party's cooperation, or where it has no legitimate interest, financial or otherwise, in performing the contract rather than claiming damages.

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