Termination and the agreed sum

Summers, Andrew ORCID: 0000-0002-4978-7743 (2017) Termination and the agreed sum. In: Virgo, Graham and Worthington, Sarah, (eds.) Commercial Remedies: Resolving Controversies. Cambridge University Press, London, UK. ISBN 9781107171329

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Abstract

Where a party repudiating a contract refuses to cooperate with further performance by the innocent party, is the contract automatically terminated, or is the innocent party merely prevented from earning the agreed sum? The recent decision in Société Générale v Geys has renewed this old controversy.1 In a forceful dissenting judgment, Lord Sumption argued in favour of automatic termination, relying on Lord Reid’s comments in the famous case of White & Carter v McGregor.2 The majority of the Supreme Court instead treated cooperation as a practical limit on recovery of the agreed sum. This essay sides against Lord Sumption’s automatic termination approach, but acknowledges that the majority’s view leaves one difficult problem unresolved. The first section of this essay describes the cooperation limitation in outline, starting with the dictum of Lord Reid in White & Carter and considering its application in Geys. The second section assesses and rejects the arguments for regarding cooperation as a limitation on the innocent party’s right to affirm the contract. The third section puts forward the argument that cooperation instead provides a practical limitation on the capacity of the innocent party to earn the agreed sum, and shows why this means that the limitation is not universally applicable. The final section acknowledges that the approach of the majority in Geys leaves a difficult problem concerning the content of the wage-work bargain in contracts of employment.

Item Type:	Book Section
Official URL:	http://www.cambridge.org/
Additional Information:	© 2016 Cambridge University Press
Divisions:	Law
Subjects:	H Social Sciences > H Social Sciences (General)
Date Deposited:	18 May 2016 13:17
Last Modified:	20 Oct 2024 16:45
URI:	http://eprints.lse.ac.uk/id/eprint/66544

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