Repudiation of Contract Lawyers in Melbourne

When the other side walks, the law hands you a loaded choice

A supplier tells you the price has doubled or nothing ships. A buyer goes quiet with half the contract still unperformed. A contractor packs up the site. When conduct like that shows the other party will not perform, or will only perform on terms of their own invention, the law calls it repudiation, and it puts a decision in your hands that you cannot take back later.

MK Law advises Melbourne businesses and individuals on both sides of these disputes: parties deciding whether to terminate, and parties accused of walking away. Repudiation seldom arrives on its own, and by the time someone walks it is usually one front in a broader business dispute with unpaid invoices and a soured working relationship behind it. The wrong move at this point can turn a strong position into a liability, so call 1800 130 120 before you respond. The first call is free.

What repudiation actually is

The test the High Court applies is blunt: repudiation is conduct which conveys to a reasonable person, standing in your shoes, that the other party is unwilling or unable to perform the contract, or will only perform it in a way substantially inconsistent with what they promised. Words can do it, and so can conduct. So can a run of smaller breaches, none of them serious on its own, that together make the position obvious.

The test is objective, so what counts is what their behaviour conveys rather than what they privately meant by it. That cuts both ways. A party can repudiate while loudly insisting they are committed to the deal, and a party can look like they have walked when in law they have done nothing of the sort.

One trap worth knowing about: taking a wrong view of what the contract means is not automatically repudiation. A party who misreads a clause but is still willing to perform once it is properly construed has usually not repudiated anything. Whether the conduct in front of you crosses that line is the judgment we make for clients, and it usually takes one review of the contract and the correspondence.

Your election: terminate or affirm

Once the other side has repudiated, you have to elect between two paths.

You can accept the repudiation and terminate. The contract ends, both parties are released from future performance, and you sue for loss of bargain damages, the money that puts you where full performance would have. Acceptance has to be communicated clearly and the termination notice has to be right, because it will be exhibit one in any proceeding.

Or you can affirm and hold them to the deal. The contract stays on foot, you demand performance, and you keep your own end up. Affirming is often the smarter commercial play where the contract is valuable and the other side may yet come back to the table. It carries a cost, though. Your obligations continue too, and if a later event lawfully excuses their performance, your damages claim can shrink or disappear.

The election is binding once made. You cannot terminate, watch the market move, and then claim you had affirmed, and you cannot affirm and later terminate for the same repudiation. Courts also infer elections from conduct, so continuing to perform as if nothing happened can quietly affirm the contract for you. Say nothing final, in writing or on the phone, until you have chosen deliberately.

Nothing in contract law costs clients more than a termination notice sent with total confidence and no advice. Call the other side’s conduct repudiation, get it wrong, and your own termination becomes the repudiation, which they can accept before suing you for the lost bargain. Delay carries its own risk, because every week you keep performing edges you towards an affirmation you never intended. Get the advice, then make the election, then send the notice.

If you are the one accused of repudiating

Repudiation runs both directions. If you have received a letter claiming your conduct repudiated the contract, or a termination notice relying on it, do not respond in haste. The accusation frequently overstates the position, and a termination based on a bad repudiation claim gives you the damages claim. We act for accused parties to unwind the label, keep the contract alive where that serves you, or negotiate an exit on sensible terms. The wider toolkit for these fights is on our breach of contract and contract disputes pages, and the practice overview is at contract lawyers Melbourne.

Get the election right the first time

Bring us the contract, the correspondence and a timeline of what they have done. We will tell you whether the conduct amounts to repudiation, what each path is worth, and draft the notice that locks in your position. Call 1800 130 120 or use the form on this page. Evenings and weekends included, because parties tend to walk out of contracts on a Friday.