Imagine you and a friend agree that you’ll bake a cake for their party next week, and they’ll pay you for it. This agreement is a contract, a promise between two parties. But what if, before the party, your friend tells you they no longer want the cake? Or what if you start baking, and they suddenly back out? That’s where contract law comes into play.
When a Contract Ends Because of a Breach
Not every broken promise (breach) ends a contract. Some are minor hiccups, like delivering the cake a bit late. But others are major, like refusing to bake the cake at all. These serious breaches can allow the other person to end the contract entirely. This is called discharge by breach.
There are two major types of breaches that may justify ending a contract:
- Refusing to do something before it’s time to do it (also called anticipatory breach).
- A fundamental breach that strikes at the heart of the agreement.
In both situations, the innocent person has an important choice to make: either accept the broken promise and end the contract, or keep the contract going and demand that the other person still follow through.
Anticipatory Breach: Breaking the Promise Before It’s Due
An anticipatory breach happens when someone shows they won’t keep their promise before the time comes to fulfill it. This can be:
- Express: They clearly say, “I won’t do it.”
- Implied: Their actions make it obvious they won’t follow through.
Real Case: Collins Appiah v. Eyia Kyei Baffour (2016)
In this Ghanaian case, the seller agreed to sell a house but later changed his mind before the buyer paid in full, citing his wife’s disapproval. The court saw this as a clear sign that he wouldn’t honour the agreement (repudiation). However, the contract didn’t end automatically; the buyer had to decide whether to accept this breach.
Choices for the Innocent Party
When faced with a breach, you have two options:
1. Accept the Breach and Move On
You can treat the contract as over and seek compensation.
