United Kingdom House of Lords Decisions

Parliamentary Archives,
HL/PO/JU/4/3/1094

HOUSE OF LORDS

WHITE AND CARTER (COUNCILS) LIMITED

v.

mcgregor

Lord Reid
Lord Morton of Henryton
Lord Tucker
Lord Keith of Avonholm
Lord Hodson

6th December 1961.

Lord Reid

My lords,

The pursuers supply to local authorities litter bins which are placed in
the streets. They are allowed to attach to these receptacles plates carrying
advertisements and they make their profit from payments made to them
by the advertisers. The defender carried on a garage in Clydebank and
in 1954 he made an agreement with the pursuers under which they displayed
advertisements of his business on a number of these bins. In June, 1957,
his sales manager made a further contract with the pursuers for the display
of these advertisements for a further period of three years. The sales
manager had been given no specific authority to make this contract and
when the defender heard of it later on the same day he at once wrote to
the pursuers to cancel the contract. The pursuers refused to accept this
cancellation. They prepared the necessary plates for attachment to the bins
and exhibited them on the bins from 2nd November, 1957, onwards.

The defender refused to pay any sums due under the contract and the
pursuers raised the present action in the Sheriff Court craving payment of
£196 4s. Od. the full sum due under the contract for the period of three
years. After sundry procedure the Sheriff-Substitute on 15th March, 1960,
dismissed the action. He held that the sales manager's action in renewing
the contract was within his apparent or ostensible authority and that is not
now disputed. The ground on which he dismissed the action was that
in the circumstances an action for implement of the contract was inappro-
priate. He relied on the decision in Longford & Co., Ltd. v. Dutch 1952
S.C. 15, and cannot be criticised for having done so.

The pursuers appealed to the Court of Session and on 2nd November,
1960, the Second Division refused the appeal. The present appeal is taken
against their Interlocutor of that date. That Interlocutor sets out detailed
findings of fact and, as this case began in the Sheriff Court, we cannot look
beyond those findings. The pursuers must show that on those findings they
are entitled to the remedy which they seek.

The case for the defender (now the Respondent) is that, as he repudiated
the contract before anything had been done under it, the Appellants were
not entitled to go on and carry out the contract and sue for the contract
price: he maintains that in the circumstances the Appellants' only remedy
was damages, and that, as they do not sue for damages, this action was
rightly dismissed.

The contract was for the display of advertisements for a period of 156
weeks from the date when the display began. This date was not specified
but admittedly the display began on 2nd November, 1957, which seems
to have been the date when the former contract came to an end. The pay-
ment stipulated was 2s. per week per plate together with 5s. per annum
per plate both payable annually in advance, the first payment being due
seven days after the first display. The reason why the Appellants sued for
the whole sum due for the three years is to be found in Clause 8 of the
Conditions: —

" 8. In the event of an instalment or part thereof being due for pay-
" ment, and remaining unpaid for a period of four weeks or in the event
" of the Advertiser 'being in any way in breach of this contract then
" the whole amount due for the 156 weeks or such part of the said
" 156 weeks as the Advertiser shall not yet have paid shall immediately
" become due and payable."

2

A question was debated whether this clause provides a penalty or liquidated
damages but on the view which I take of the case it need not be pursued.
The clause merely provides for acceleration of payment of the stipulated
price if the advertiser fails to pay an instalment timeously. As the
Respondent maintained that he was not bound by the contract he did not
pay the first instalment within the time allowed. Accordingly, if the
(Appellants were entitled to carry out their part of the contract notwith-
standing the Respondent's repudiation, it was hardly disputed that this clause
entitled them to sue immediately for the whole price and not merely for
the first instalment.

The general rule cannot be in doubt. It was settled in Scotland at least
(as early as 1848 and it has been authoritatively stated time and again in
both Scotland and England. If one party to a contract repudiates it in
the sense of making it clear to the other party that he refuses or will refuse
to carry out his part of the contract, the other party, the innocent party,
has an option. He may accept that repudiation and sue for damages for
breach of contract whether or not the time for performance has come; or
he may if he chooses disregard or refuse to accept it and then the contract
remains in full effect.

In Howie v. Anderson (1848) 10 D. 355. Anderson sold shares to be
delivered on 8th January, 1847: on 31st October, 1846, his agent intimated
to Howie that he refused to go on with the transaction. Howie refused to
accept this repudiation. Anderson pleaded that Howie ought to have gone
into the market and bought other shares on 31st October but it was held
that damages must be awarded on the price ruling on 8th January. Lord
Justice-Clerk Hope said (p. 357): " I do not understand exactly what is meant
" toy the plea that the contract was broken and at an end on the 31st October,
" merely because the defender, in pursuance of his scheme of acting wrong-
" fully, gave notice that he would not fulfil the contract. ... He had no
" power to alter the date of the fulfilment of the contract: He had no power
" to affect the extent of the rights and claims of the pursuer, as on the day
" when the contract was to be fulfilled. That very intimation was a wrong-
" ful act,—'the commencement of the wrong which was consummated by the
" actual failure of delivery on the 8th of January. The bargain continued
" to subsist as a binding contract to be fulfilled at the proper time by the
" defender, after his intimation of the 31st October, exactly as if that intimation
" had not been made." Lord Medwyn said (p. 359): "... the defender cannot
" plead that the buyer was bound to go into the market to make a new
" time-bargain, merely because this might have lessened the damages to him
" if he acted improperly in refusing to implement the bargain. The breach
" of bargain was properly on the 8th January, because that was the day on
" which it was to be fulfilled by delivery of the stock."

I need not refer to the numerous authorities. They are not disputed
by the Respondent but he points out that in all of them the party who
refused to accept the repudiation had no active duties under the contract.
The innocent party's option is generally said to be to wait until the date of
performance and then to claim damages estimated as at that date. There
is no case in which it is said that he may, in face of the repudiation, go on
and incur useless expense in performing the contract and then claim the
contract price. The option, it is argued, is merely as to the date as at which
damages are to be assessed.

Developing this argument, the Respondent points out that in most cases the
innocent party cannot complete the contract himself without the other party
doing, allowing or accepting something, and that it is purely fortuitous that
the Appellants can do so in this case. In most cases by refusing co-opera-
tion the party in breach can compel the innocent party to restrict his claim
to damages. Then it was said that even where the innocent party can
complete the contract without such co-operation it is against the public
interest that he should be allowed to do so. An example was developed
in argument. A company might engage an expert to go abroad and prepare
an elaborate report and then repudiate the contract before anything was
done. To allow such an expert then to waste thousands of pounds in
preparing the report cannot be right if a much smaller sum of damages



3

would give him full compensation for his loss. It would merely enable
the expert to extort a settlement giving him far more than reasonable
compensation.

The Respondent founds on the decision of the First Division in Longford
& Co. v. Dutch 1952 S.C. 15. There an advertising contractor agreed to
exhibit a film for a year. Four days after this agreement was made the
advertiser repudiated it but, as in the present case, the contractor refused
to accept the repudiation and proceeded to exhibit the film and sue for the
contract price. The Sheriff-Substitute dismissed the action as irrelevant
and his decision was affirmed on appeal. In the course of a short opinion
Lord President Cooper said: " It appears to me that, apart from wholly
" exceptional circumstances of which there is no trace in the averments
" on this record, the law of Scotland does not afford to a person in the
" position of the pursuers the remedy which is here sought. The pursuers
" could not force the defender to accept a year's advertisement which she
" did not want, though they could of course claim damages for her breach
" of contract. On the averments the only reasonable and proper course,
" which the pursuers should have adopted, would have been to treat the
" defender as having repudiated the contract and as being on that account
" liable in damages, the measure of which we are, of course, not in a
" position to discuss."

The Lord President cited no authority and I am in doubt as to what
principle he had in mind. In the earlier part of the passage which I
have quoted he speaks of forcing the defender to accept the advertisement.
Of course, if it had been necessary for the defender to do or accept
anything before the contract could be completed by the pursuers, the
pursuers could not and the court would not have compelled the defender
to act, the contract would not have been completed, and the pursuers'
only remedy would have been damages. But the peculiarity in that case,
as in the present case, was that the pursuers could completely fulfil the
contract without any co-operation of the defender. The Lord President
cannot have meant that because of non-acceptance the contract had not
been completely carried out, because that in itself would have been a
complete answer to an action for the contract price. He went on to say
that the only reasonable and proper course which the pursuers should have
adopted would have been to treat the defender as having repudiated the
contract, which must, I think, mean to have accepted the repudiation. It
is this reference to " the only reasonable and proper course" which I
find difficult to explain. It might be, but it never has been, the law
that a person is only entitled to enforce his contractual rights in a reasonable
way and that a court will not support an attempt to enforce them in an
unreasonable way. One reason why that is not the law is no doubt because
it was thought that it would create too much uncertainty to require the
Court to decide whether it is reasonable or equitable to allow a party
to enforce his full rights under a contract. The Lord President cannot
have meant that.

The only principle I can think of which he may have had in mind
is the principle invoked by Lord Watson in a well-known passage at
the beginning of his speech in Grahame v. Magistrates of Kirkcaldy, 9
R.H.L.91: " It appears to me that a superior court, having equitable juris-
" diction, must also have a discretion, in certain exceptional cases, to
" withhold from parties applying for it that remedy to which, in ordinary
" circusmstances, they would be entitled as a matter of course." But Lord
Watson went on to say: " In order to justify the exercise of such a dis-
" cretionary power there must be some very cogent reason for depriving
" litigants of the ordinary means of enforcing their legal rights. There
" are, so far as I know, only three decided cases, i« which the Court of
" Session, there being no facts sufficient to raise a plea in bar of the action,
" have nevertheless denied to the pursuer the remedy to which, in strict
" law, he was entitled. These authorities seem to establish, if that were
" necessary, the proposition that the Court has the power of declining, upon
" equitable grounds, to enforce an admittedly legal right: but they also
" show that the power has been very rarely exercised."




4

Langford & Co. v. Dutch is indistinguishable from the present case.
Quite properly the Second Division followed it in this case as a binding
authority and did not develop Lord Cooper's reasoning: they were not
asked to send this case to a larger court. We must now decide whether
that case was rightly decided. In my judgment it was not. It could only
be supported on one or other of two grounds. It might be said that,
because in most cases the circumstances are such that an innocent party
is unable to complete the contract and earn the contract price without the
assent or co-operation of the other party, therefore in cases where he can
do so he should not be allowed to do so. I can see no justification for that.

The other ground would be that there is some general equitable prin-
ciple or element of public policy which requires this limitation of the
contractual rights of the innocent party. It may well be that, if it can
be shown that a person has no legitimate interest, financial or otherwise,
in performing the contract rather than claiming damages, he ought not to
be allowed to saddle the other party with an additional burden with no
benefit to himself. If a party has no interest to enforce a stipulation
he cannot in general enforce it: so it might be said that if a party has
no interest to insist on a particular remedy he ought not to be allowed
to insist on it. And, just as a party is not allowed to enforce a penalty,
so he ought not to be allowed to penalise the other party by taking one
course when another is equally advantageous to him. If I may revert
to the example which I gave of a company engaging an expert to prepare
an elaborate report and then repudiating before anything was done, it
might be that the company could show that the expert had no substantial
or legitimate interest in carrying out the work rather than accepting damages:
I would think that the de minimis principle would apply in determining
whether his interest was substantial and that he might have a legitimate
interest other than an immediate financial interest. But if the expert had
no such interest then that might be regarded as a proper case for the exercise
of the general equitable jurisdiction of the Court. But that is not this case.
Here the Respondent did not set out to prove that the Appellants had no
legitimate interest in completing the contract and claiming the contract price
rather than claiming damages, there is nothing in the findings of fact to
support such a case, and it seems improbable that any such case could
have been proved. It is, in my judgment, impossible to say that the Appel-
lants should be deprived of their right to claim the contract price merely
because the benefit to them as against claiming damages and reletting their
advertising space might be small in comparison with the loss to the Respon-
dent: that is the most that could be said in favour of the Respondent.
Parliament has on many occasions relieved parties from certain kinds of
improvident or oppressive contracts, but the common law can only do
that in very limited circumstances. Accordingly, I am unable to avoid the
conclusion that this appeal must be allowed and the case remitted so that
decree can be pronounced as craved in the initial writ.

Lord Morton of Henryton,

MY LORDS,

The facts of this case have already been fully stated. It is plain that
the Respondent (defender in the action) repudiated the contract of 26th
June, 1957, immediately after his sales manager had entered into it and some
months before the time for performance of it by the Appellants, and persisted
in his repudiation throughout. Notwithstanding this, the Appellants pro-
ceeded with the preparation of plates advertising the Respondent's garage
business and, as the Sheriff Substitute held, they " made no effort to procure
" another advertiser to take up the advertising space included in said contract
" and thus minimise their loss ". The plates were first exhibited on the litter
bins on 2nd November, 1957, and they remained on display during the whole
of the contract period of 156 weeks. The defender throughout made it
clear that he did not want the advertisements and refused to pay for them.



5

The present action is brought to recover £196 4s. 0d. the full sum payable
under the contract. Alternatively, the Appellants claim the same sum as
liquidated damages. The Respondent contends that in the circumstances
of the present case the only remedy of the Appellants was damages, to be
assessed according to ordinary principles.

My Lords, I think that this is a case of great importance, although the
claim is for a comparatively small sum. If the Appellants are right strange
consequences follow in any case in which, under a repudiated contract,
services are to be performed by the party who has not repudiated it, so long as
he is able to perform these services without the co-operation of the repudiating
party. Many examples of such contracts could be given. One, given in
the course of the argument and already mentioned by my noble and learned
friend Lord Reid, is the engagement of an expert to go abroad and write
a report on some subject for a substantial fee plus his expenses. If the
Appellants succeed in the present case, it must follow that the expert is
entitled to incur the expense of going abroad, to write his unwanted report,
and then to recover the fee and expenses, even if the other party has plainly
repudiated the contract before any expense has been incurred.

It is well established that repudiation by one party does not put an end
to a contract. The other party can say "I hold you to your contract,
" which still remains in force ". What then is his remedy if the repudiating
party persists in his repudiation and refuses to carry out his part of the
contract? The contract has been broken. The innocent party is entitled
to be compensated by damages for any loss which he has suffered by
reason of the breach, and in a limited class of cases the Court will decree
specific implement. The law of Scotland provides no other remedy for a
breach of contract, and there is no reported case which decides that the
innocent party may act as the Appellants have acted. The present case is
one in which specific implement could not be decreed, since the only obliga-
tion of the Respondent under the contract was to pay a sum of money
for services to be rendered by the Appellants. Yet the Appellants are
claiming a kind of inverted specific implement of the contract. They first
insist on performing their part of the contract, against the will of the
other party, and then claim that he must perform his part and pay the
contract price for unwanted services. In my opinion, my Lords, the
Appellants' only remedy was damages, and they were bound to take steps
to minimise their loss, according to a well-established rule of law. Far
from doing this, having incurred no expense at the date of the repudiation,
they made no attempt to procure another advertiser, but deliberately went
on to incur expense and perform unwanted services with the intention of
creating a money debt which did not exist at the date of the repudiation.

The only cases cited in which a claim of the kind now put forward has
been considered are Langford & Co. v. Dutch, 1952 S.C. 15, when it was
rejected by the Court of Session, and White & Carter (Councils) Ltd. (that is,
the present Appellants) v. A. R. Harding, 21st May, 1958 (unreported). The
latter case is I think distinguishable from the present case but if it cannot
be distinguished it was, in my opinion, wrongly decided by the Court of
Appeal. The former case is directly in point, and was, in my opinion,
rightly decided, and rightly followed by the Court of Session in the present
case.

The facts in Longford's case have been stated by my noble and learned
friend Lord Reid. The Court of Session held that the law of Scotland did
not " afford to a person in the position of the pursuer the remedy which
" is here sought". These words are quoted from the short opinion of Lord
President Cooper, and he continued, " The pursuers could not force the
" defender to accept a year's advertisement which she did not want, though
" they could of course claim damages for her breach of contract." These
two sentences embodied, I think, the basis of the learned Lord President's
opinion, but he added " On the averments the only reasonable and proper
" course, which the pursuers should have adopted, would have been to treat
" the defender as having repudiated the contract and as being on that account
" liable in damages the measure of which we are, of course, not in a position



6

"to discuss." My Lords, I think that this last sentence was merely a
comment on the behaviour of the pursuers, which applies with equal force
to the Appellants in the present case. The course of action followed by
the Appellants seems to me unreasonable and oppressive, but it is not on
that ground that I would reject their claim. I would reject it for the reasons
which I have already given.

In my opinion the Appellants' alternative claim for the same sum of
£196 4s. 0d. as liquidated damages should be rejected for the reasons which
will shortly be given by my noble and learned friend, Lord Keith of Avonholm.
I would dismiss the appeal.

Lord Tucker

MY LORDS,

I have had the advantage of reading the Opinion prepared by my noble and
learned friend, Lord Hodson. I am in complete agreement with the reasons
he gives for allowing the appeal.

Lord Keith of Avonholm

MY LORDS,

The issue in this case is of some general importance in contract law. It is
whether, where one party has contracted to perform certain services for
money price to be paid by the other contracting party he can, when his time
of performance arrives, insist on performing these services so as to earn his
price, against the will of the other party who wrongfully insists on repudiating
the contract.

Much argument and citation of authority was advanced on the topic of
anticipatory repudiation. That, in my view, was largely beside the point
There is no doubt that there was here an anticipatory repudiation, for the
contract was repudiated by the defender the very day it was made and some
months before it could come into operation. But the pursuers did not
choose to act on that repudiation and sue the defender for what has
sometimes been called an anticipatory breach. The real question at issue
is what were the rights of parties when the contract fell to be put into
operation, the defender having maintained his repudiation throughout.

I should first state the submission made by Mr. Johnston for the pursuers
(the Appellants) in the words used by him. " Where one party to a
" contract", he said, " intimates that he refuses to implement the obliga-
" tions he has undertaken the innocent party has the option of accepting
" the repudiation and rescinding the contract and availing himself at once
" of the remedies open to him OR he may ignore the repudiation and wait
" until time for performance arrives before setting in train proceedings
" for remedy. The innocent party has truly a choice. He is not compelled
" to accept repudiation. The guilty party cannot rid himself of his con-
" tractual liability or limit his liability under the contract by repudiating it
" and insisting that such repudiation be accepted by the innocent party.
" If the innocent party chooses not to accept he may go on and await
" the date of the performance by the guilty party and if it is not tendered
" his rights as at that date are preserved to him."

There are certain refinements in this submission and certain questions
which it does not answer. A number of cases were cited which were
intended to illustrate the submission. These are all cases where the success-
ful litigant obtained damages, or escaped damages, in actions for breach
of contract. The Appellants, it is to be observed, are suing primarily
for a debt, not for damages for breach of contract. Nor is there any
difficulty in seeing, in the circumstances of the cases what was the date
or lime of performance. In many of the cases it was either the date of
tender and refusal to take delivery of the subject-matter of the contract



7

Wraithwaite v. Foreign Hardwood Co. (1905] 2 KB 543); or the date
of failure to deliver (Mersey Steel & Iron Co. v. Naylor Benzon & Co.
1884, 9 App. Cas. 434; Johnstons v. Milling 1886, 16 Q.B.D. 460; Howie
v. Anderson 1848, 10 D. 355; Avery v. Bowden 1855, 5 El. & Bl. 714).
I take one case in this branch of law for a passage relied on by Mr.
Johnstone for the Appellants in Frost v. Knight 1872, L.R. 7 Ex. 111.
A man had promised to marry a lady in two years. Before that time
elapsed he intimated that he did not intend to abide by his promise. An
action of damages for breach was raised within the two years. Cockburn,
C.J. stated the alternative option in these words: " The promisee, if he
" pleases, may treat the notice of intention [to repudiate] as inoperative,
" and await the time when the contract is to be executed, and then hold
" the other party responsible for all the consequences of non-performance."
There could be no difficulty here about the date of performance. It was
on the expiry of the two years. But there is some ambiguity in the words
" the time when the contract is to be executed ". Do they mean the time
when the contract is to become operative by the action of either of the
parties, as the case may be, or the time when the defaulting party would
have been bound to carry out his obligations under the contract? In the
latter case there may be two times of performance, the time when the
complaining party has to perform his obligations on the one hand and
the time when the defaulting party has to perform his on the other. This
dichotomy does not come to the surface in any of the cases, so far as I
have observed. The position again is stated quite generally in a passage
in Mayne on Damages (11 Edn. p. 141) in a chapter entitled Time to which
Damages are calculated: "If before the time for performance arrives one
" party absolutely and definitely repudiates the contract, the other party is
" entitled either to wait till the time arrives, and then bring his action, or to
" treat the contract as broken, and sue for the breach at once." If I under-
stand aright, counsel for the Appellants would read time of performance as
time of performance by the defender after the Appellants had discharged their
part of performance under the contract. Their claim then becomes a claim not
for damages for breach of contract but for a debt due by the defender under
the contract. In other words, there would be an anticipatory repudiation
by the defender which the Appellants were not bound to accept as a
breach of contract and which did not cease to be anticipatory until the
moment when the defender was due to make payment under the contract.
This, I think, goes beyond anything that has been decided in the cases
where anticipatory repudiation has been considered. It makes an arbitrary
distinction and one differing in its consequences according as performance
is first called for under the contract from the repudiating party, or from
the other party. In the former case there is a plain breach of contract
making the repudiating party liable in damages, unless where a claim for
specific implement is available. In the latter case, according to the sub-
mission made, he is liable contractually for a debt at least where the
consideration for performance by the other party is expressed in money.
The law of Scotland has always stressed the mutuality of contracts and
It should follow, in my opinion, that the consequences of breach of contract
by either party should correspond. I would state the position in the case
of an anticipatory repudiation not accepted by the other party as a breach
of contract thus: If the contract is to take operative effect in the first place
by performance of the repudiating party and he maintains his repudiation
by refusing, or failing to give performance, the other party has a cause
of action for either damages or specific implement. If performance is first
to be given by the other party and the time for his performance has
arrived he must tender performance, in the sense of showing that he is
now ready and able to give performance, and if this tender is still rejected
by the repudiating party his only cause of action again arises to him as at
that date.

I would refer first to contracts for the sale of goods which were touched on
in the course of the debate, for the reason that one of the remedies provided
to the seller by the Sale of Goods Act is an action for the price. This,
however, applies only in two cases. One is where the property in the goods
has passed to the buyer. But property cannot pass without the intention



8

of the buyer as well as that of the seller and, except in some such cases as
fraud or lack of consensus in idem or breach of contract by the seller, no
question of repudiation can arise. The contract is completed and finished
apart from delivery and nothing remains but payment of the price. The
only other case is where parties have contracted for payment on a day certain
irrespective of delivery or the passing of property. This is a clear case
of a contractual debt unconditioned by any question of performance by the
other party. A much closer parallel with the present case is a contract to
sell future, or unascertained goods In this case there can be no appropria-
tion of, and therefore passing of property, in the goods without the assent
of both buyer and seller. If therefore the buyer repudiates the contract
before appropriation, or refuses his assent to appropriation, there can be
no passing of property. The seller is then confined to an action of damages
for breach of contract. This, of course, is a rule of statute. But the Act
is largely declaratory of English law, though not of Scots law. So the rule
can only be treated as an analogy, but it is an analogy which seems to me
to make a hole in the principle contended for by the appellants.

Repudiation of a contract is nothing but a breach of contract. Except
where it is accepted as an anticipatory breach and as a ground for a claim
of damages, a repudiation can never be said to be accepted by the other party
except in the sense that he acquiesces in it and does not propose to take
any action. Otherwise he founds on it as a cause of action.




The late Professor Gloag in his work on Contract (2nd Edn. p.592)
considering the rights arising on breach of contract said: " The primary
" rights of the creditor in a contractual obligation may be said to be to secure
" performance by invoking the assistance of the Court to compel it, or. where
" that remedy is inappropriate, to obtain compensation in damages." It
may be said that the learned author has here in mind an obligation other
than the mere payment of money. But payment of money is often linked
with another obligation as, for instance, to accept delivery and the Courts
will not enforce acceptance of delivery unless in certain cases where they may
order specific implement. They will merely give damages for failure to
take delivery. Nor will they give a decree ad factum praestandum for the
payment of money. Here the Appellants are saying we shall do something
which the Courts will not enforce. We shall force our services on an
unwilling defender and then sue him for the price.

This point receives additional force in the circumstances of this case.
The contract was to come into operation on 2nd November, 1957, when
the previous contract expired. But it involved, in the absence of other
advertising matter supplied by the defender, the display by the Appel-
lants of at least the name, business and address of the advertiser. I
should hesitate to say that any contractor was entitled to display these
particulars of the defender against his wish, even if the withholding of his
assent be in breach of contract.

Some play was made by counsel for the Appellants with an expres-
sion used by Asquith, L. J. (as he then was) in Howard v. Pickford Tool Co.
[1951] 1 K.B. 417 that " an unaccepted repudiation is a thing writ in water ".
A graphic phrase, or expression, has its uses even in a law report and
can give force to a legal principle, but it must be related to the circumstances
in which it is used. Howard was a managing director with a six years
contract of service. He thought that the company with which he was
serving had shown by the conduct of its chairman that it no longer intended
to be bound by its agreement. He brought an action which, as amended,
sought a declaration that the company by so acting had repudiated the
contract and excused the plaintiff from further performance of his obliga-
tions under it. Evershed, M. R. (now Lord Evershed) said: " It is quite
" plain . . . that if the conduct of one party to a contract amounts to a
" repudiation, and the other party does not accept it as such, but goes on per-
" forming his part of the contract and affirms the contract, the alleged act of
" repudiation is wholly nugatory and ineffective in law." Asquith, L.J. (as he
then was) said : " An unaccepted repudiation is a thing writ in water and of no
" value to anybody; it confers no legal rights of any sort or kind." The



9

declaration was held to be academic and the claim struck out. These observa-
tions must be read in the light of the facts to which they relate. They were
directed to an alleged repudiation unaccepted by the man who said there was a
repudiation before any cause of action had arisen. At best the case was
no more than one of an intended repudiation, for performance was going
on. The servant was still serving and the employer was continuing to
employ him. What the Court was saying was that the plaintiff had at that
time no cause of action. But in the case of repudiation of a contract
when performance is tendered, or due to be given by the other party, the
repudiation cannot be said to be writ in water. It gives rise immediately
to a cause of action. This does not involve acceptance of the repudiation.
There has been a breach of contract which the complaining party denies
the other had any right to commit. I know of no authority for saying
that the offended party can go quietly on as if the contract still continued
to be fully operative between both parties. He is put to his remedy at the
date of the breach. It has been said that when an anticipatory repudiation
is not treated as a cause of action the contract remains alive. It does until
the contract would become operative, when the repudiation, if still main-
tained, then becomes a cause of action and all pleas and defences then
existing are available to the respective parties.

The party complaining of the breach also has a duty to minimise the
damage he has suffered, which is a further reason for saying that after
the date of breach he cannot continue to carry on his part of an executory
contract. A breach of a contract of employment will serve to illustrate
the nature of this duty. A person is engaged to serve for a certain period,
say three months, to commence at a future date. When that date arrives
the prospective employer wrongfully refuses to honour the engagement.
The servant is not entitled to see out the three months and then sue the
recalcitrant employer for three months' wages. He must take steps by seek-
ing other employment to minimise his loss. It is true, of course, that a servant
cannot invoke a contract to force himself on an unwilling master, any more
than a master can enforce the service of an unwilling servant. But if
the Appellants' contention is sound, it is difficult to see why, by parity
of reasoning, it should not apply to a person who keeps himself free
to perform the duties of his contract of service during the whole period
of the contract and is prevented from doing so by the refusal of the other
contracting party. Yet in Hochster v. De La Tour. 1858, 2 E. & B. 678,
from which the whole law about anticipatory repudiation stems. Lord
Campbell plainly indicated that if the courier in that case, instead of accept-
ing as he did the repudiation of his engagement as a cause of action, before
it was due to commence, had waited till the lapse of the three months
of the engagement he could not have sued as for a debt. The jury, he
said, would be entitled to look at all that might " increase or mitigate the
" loss of the plaintiff down to the day of trial". There is no difference
in this matter between the law of England and the law of Scotland (Ross v.
Macfarlane, 1894, 25 R. 396).

I now turn to two cases which were relied on by the Appellants'
counsel, which may seem to come nearer the present case, but which, I think,
are clearly distinguishable.

The first is Wright v. Melville, 1828, 3 Car. & P. 542. There a man hired
a phaeton selected by himself for a period of five weeks at five guineas a
week. After he had had it for two or three days he took it back saying he
would take another, which he did not do, and afterwards refused to pay
the stipulated hire. Best, C. J. charged the jury that if the plaintiff had
«old the phaeton within the five weeks (which was alleged) he could not
recover, but as he did not appear to have done so he was entitled to the
stipulated five guineas a week. Verdict was entered accordingly. This
plainly was a contract of hire for a fixed period which had been commenced
and under which rent then became due. There was no question of repudia-
tion or breach at the date of performance. The case was distinguished in
National Cash Register Co. v. Stanley [1921] 3 K.B. 292 for this reason, as
is stated in the case which I next mention.

10

The other case is White & Carter (Councils) Ltd. v. A. R. Harding, 21st
May, 1958 (unreported) in which Morris, L.J. (as he then was) gave the
judgment of the Court with which the Master of the Rolls and Ormerod, L.J.
agreed. Copies were provided during the hearing of this appeal. The form
of contract there was identical with that in the present case. The contractors
were the present Appellants. But the circumstances in which the claim
arose were different. The advertiser, the defendant, entered into the con-
tract on 13th November, 1956. Nothing was done under the contract until
8th May, 1957, when the advertising plates were first displayed by the con-
tractors. The defendant was then asked for payment under the contract
and as he refused to pay he was sued in the Westminster County Court
(for the full 156 weeks under condition 8 of the contract and judgment
issued against him. On two separate occasions, one in November, 1956,
and the other in April, 1957, before the plates had been exhibited he asked
to be released from his contract, but the plaintiff did not agree to do so.
Morris, L.J. held that there had been no termination or repudiation of the
contract by the defendant prior to the exhibition of the plates, only requests
to be released. Some two months after the display of the plates the defendant
wrote to the plaintiffs with a cheque for £81 which he asked to be accepted
in payment for the first year's advertising. He also asked to be allowed
to withdraw from the remainder of the contract. The plaintiffs refused
to accede to this and returned the cheque for £81. The learned Lord Justice
in these circumstances held that the claim was a claim for debt, under the
contract, and upheld the judgment of the County Court Judge. He referred
to the case of National Cash Register Co. Ltd. v. Stanley (cit. sup.) and to
Karsales (Harrow) Ltd. v. Wallis, 1956, W.L.R. 936, in which that case
(was approved. Of the case of the National Cash Register Co. he said:
" That seems to me, if I may say so with respect, to have been an entirely
" correct decision. The payment there was to be for use and hire of the
" register. The defendant refused to take the register. He refused to have
" the use of it and refused to hire it. Therefore the provisions of the con-
" tract were not put into operation ; they were not put into operation because
" of the defendant's own breach, for which the remedy lay in damages."

In my opinion the case relied on is on its facts quite a different case from
the present and is of no assistance to the Appellants.

This brings me to the case of Longford & Co. v. Dutch, 1952, S.C. 15.
I took part in the Judgment in that case, though the only opinion delivered
in the case was given by the Lord President (Lord Cooper), with whom I
and the other Judges of the Division concurred. The Judgment was not a
reserved Judgment and the case was not, I think, so fully argued as the
case now before your Lordships. It is, if rightly decided, determinative
of the present appeal and is, so far as I am aware, the only other case in
which the question raised on this appeal has ever been considered. The
circumstances were practically indistinguishable from those in the present
case and the pursuers were suing as here for recovery of a debt under their
contract. The Lord President said that the only reasonable and practical
course, which the pursuers should have adopted, would have been to treat
the defenders as having repudiated the contract and as being on that account
liable in damages. He made reference to the absence of any specialty
in the case which would justify the pursuers in claiming the remedy which
they sought. What he had in mind, I think, were circumstances like those
in International Correspondence Schools, Ltd. v. Irving, 1915, S.C. 28 which
he referred to as highly special on its facts. I do not need to go further
than to summarise the circumstances of that case in the Lord President's
own words—" the contract there in question was one for the provision of
" tuition by a correspondence course, and the tuition offered was in terms
" of the contract a unum quid, while the circumstances disclosed that part
" delivery of this unum quid had already been effected before the respondent
" first declined to proceed further with the contract." International Corre-
spondence Schools, Limited was thus governed by the same reasoning as pre-
vailed in Wright v. Melville (cit. sup.) and Wilson & Carter (Councils) Ltd. v.
Harding (cit. sup.). It is unnecessary to consider whether the case was
(rightly decided. Even if it were it has no application, in my opinion, to



11

the present case. I have reconsidered the decision in Longford v. Dutch
in the light of the further argument on this appeal. I have come to the
conclusion that it was rightly decided and that the Second Division in the
present case was bound to follow it.

I find the argument advanced for the Appellants a somewhat startling
one. If it is right it would seem that a man who has contracted to go to
Hong Kong at his own expense and make a report, in return for a remunera-
tion of £10,000, and who, before the date fixed for the start of the journey
and perhaps before he has incurred any expense, is informed by the other
contracting party that he has cancelled or repudiates the contract, is entitled
to set off for Hong Kong and produce his report in order to claim in debt
the stipulated sum. Such a result is not, in my opinion, in accordance with
principle or authority and cuts across the rule that where one party is in
breach of contract the other must take steps to minimise the loss sustained
by the breach.

It may be put also in another way, that the pursuers are precluded from
carrying on with their performance by the notice from the defender, albeit
in breach of contract, that he does not intend to pay them if they do. Lord
President Dunedin said very much this in Johannesburg Municipal Council
v. Stewart & Co., 1909, S.C. 860 in the following passage (at p. 877): " When
" two parties are bound together under contract, of course each must per-
" form to the other his mutual stipulations. If one of the parties is in
" breach of a stipulation of the contract, what is the position of the other?
"... If the stipulation which is broken goes to the root and essence of
" the contract, the other party is entitled to say,—now you have so broken
" the contract that I am entitled to say that it is at an end through your
" fault, I shall not perform any more of my stipulations, because you have
" precluded me, and I shall claim damages."

There remains for consideration the alternative case made for the Appel-
lants upon Condition 8 of the contract. Their claim is that in respect of
the defender's repudiation and breach of contract he is liable in damages
and that under the clause the damages are fixed at three years rent which
they say is liquidate damages, and not a penalty. But the clause, in my
opinion, is only intended to take effect after the contract comes into opera-
tion. This is clear in the first event mentioned in the clause, because there
can be no failure of payment until the advertising plates have been displayed
in terms of the agreement. This could not happen on the hypothesis, which
must be accepted on this part of the case, that the pursuers were not entitled
to go on with the contract. The clause is, in my opinion, just a debt clause
ancillary to the conditions for the payment of rent and providing for instant
payment of the whole rent in the event of failure in punctual payment of
the instalments. No very convincing suggestions were given as to what
was meant to be covered by the second event. But, in my opinion, this
also must refer to some breaches in the course of performance of the con-
tract, which will again involve instant payment of the full rent. I fail to see
how the clause can be at one and the same time a contractual clause sound-
ing in payment of debt and a damages clause for repudiation of the contract.
The clause accordingly has, in my opinion, no operation here and I find it
unnecessary to consider whether, if it had, it is a clause for liquidate damages,
or for a penalty.

I would dismiss the appeal.

Lord Hodson

MY LORDS,

The main business of the Appellants is the supply of litter receptacles
to town councils in urban areas throughout Great Britain. They are paid
not by the councils but by advertisers who enter into agreements with
them in accordance with a standard form of contract.




12

In 1954 the same parties entered into a contract whereby the Appellants
agreed to give the Respondent the use of advertising space on certain bins
in Clydebank daring a period of 3 years at a weekly rental. This contract
expired in November, 1957.

On 26th June, 1957, a new contract was signed, in the case of the
Respondent by the hand of Mr. Ward, his sales manager, providing that
the Respondent agreed to take from the Appellants advertising sites in
fixed positions on Clydebank for a period of 156 weeks commencing from
the date when the advertisement was first exhibited and to pay to the
Appellants 2s. 0d. per week per plate, payable anuually in advance,
together with the sum of 5s. 0d. per annum towards the cost of each plate
or replacement plate fixed.

Payments were to be made direct to the Appellants at their office in
London, the first payment to be made seven days after the first display of
advertisements. The contract was headed by a warning notice that it was
not to be cancelled by the advertiser and one of the conditions of the
contract (No. 7) was to the same effect. Control of the advertising matter
vested in the Appellants (see Condition No. 1) and in the last resort the
Appellants could comply with the contract by exhibiting the name business
and address of the advertiser.

Condition 8 reads as follows: —

" In the event of an instalment or part thereof being due for pay-
" merit, and remaining unpaid for a period of four weeks or in the
" event of the Advertiser being in any way in breach of this contract
" then the whole amount due for the 156 weeks or such part of the
" said 156 weeks as the Advertiser shall not yet have paid shall
" immediately become due and payable."

Immediately after the signing of the contract the Respondent sought to
repudiate it by a letter to the Appellants of the same date:

"26th June, 1957.
" Dear Sirs,

" We regret that our Mr. Ward signed an order today continuing
" the lamp post advertisements for a further period of 3 years. He
" was unaware that our proprietor Mr. McGregor does not wish to
" continue this form of advertisement. Please therefore cancel the
" order."

The Appellants did not accept the attempted cancellation and proceeded
with the preparation of plates which they exhibited on 2nd November,
1957, and continued to display during the ensuing 156 weeks.

In due course the Appellants demanded payment in accordance with
the contract. When the Respondent refused to pay on demand the
Appellants sued for £196 4s. 0d. of which £187 4s. Od. represented
the cost of advertising space on 12 sites for 156 weeks at 2s. 0d. a week
and £9 represented 5s. 0d. a year for each plate for the same period.

The Respondent by his answer first denied the contract, saying that
Mr. Ward had no authority to order advertising services. He pleaded
separatim, esto the contract as binding, it was repudiated on the same day
before the Appellants had taken any steps to carry it into effect and the
Respondent thereafter maintained the repudiation. He averred that the
Appellants should have minimised their loss and were not entitled to
proceed as if the contract were in full force and effect.

The claim of the Appellants has always been for a debt due under
contract made for good consideration, they being always ready to perform
the contract and having performed it according to its terms never having
accepted the attempt of the Respondent to cancel or repudiate. They
succeeded before the Sheriff-Substitute in proving the authoring of Mr.
Ward but failed to obtain judgment on the ground that there was an honest
mistake by one of the Respondent's employees and that the contract was
repudiated by him on the day it was entered into and before the Respondent
had time to do anything about it.

13

In the Court of Session it was held that " the Defender not being due and
" resting owing to the Pursuers in the sum sued for decree should not be
" granted and the action dismissed with expenses ".

Both courts held that they were bound by the decision of the First Division
in Longford v. Dutch (1952 Session Cases p. 15) to reject the claim and
leave the Appellants to their remedy if any in damages for breach of contract

I need not refer to the facts in Longford v. Dutch, which is, in my opinion,
indistinguishable from the present case, and accordingly prima facie binding
on both courts. The Lord President (Cooper) in that case said that apart
from wholly exceptional circumstances the law of Scotland did not afford
to a person in the position of the pursuers the remedy sought. They could
not force the defender to accept unwanted advertisements though they
could claim damages for breach of contract On the averments the only
reasonable and proper course, according to the Lord President, would have
been to treat the defender as having repudiated the contract and as being
on that account liable in damages. The other members of the First Division
agreed with the Lord President. This is tantamount to saying that the
pursuers should have accepted the repudiation of the defender which, in
my judgment, the Appellants, who are in the same position as the pursuers
in Longford v. Dutch, cannot be compelled to do. It is settled as a funda-
mental rule of the law of contract that repudiation by one of the parties
to a contract does not itself discharge it. See Viscount Simon's speech in
Heyman v. Darwins [1942] A.C. 356 at page 361. citing with approval the
following sentence from a judgment of Scrutton, L.J., in Golding v. London
& Edinburgh Insurance Company Limited 1932 43 Lloyds Reports 487 at
page 488: " I have never been able to understand what effect the repudia-
" tion of a contract by one party has unless the other party accepts the
" repudiation."

In Howard v. Pickford Tool Co. [1951] 1 K.B. 417 Asquith L.J. said:
" An unaccepted repudiation is a thing writ in water and of no value to
" anybody ; it confers no legal rights of any sort or kind." These are English
cases but that the law of Scotland is the same is, I think, clear from the
authorities, of which I need only refer to one, namely Howie v. Anderson
7 Dunlop 355, where language to the same effect is to be found in the
opinions of the Lord President and Lord Moncrieff.

It follows that, if, as here, there was no acceptance, the contract remains
alive for the benefit of both parties and the party who has repudiated can
change his mind but it does not follow that the party at the receiving end
of the proffered repudiation is bound to accept it before the time for per-
formance and is left to his remedy in damages for breach.

Mr. Bennett for the Respondent did not seek to dispute the general pro-
position of law to which I have referred but sought to argue that if at
the date of performance by the innocent party the guilty party maintains his
refusal to accept performance and the innocent party does not accept the
repudiation, although the contract still survives, it does not survive so
far as the right of the innocent party to perform it is concerned but survives
only for the purpose of enforcing remedies open to him by way of damages
or specific implement.

This produces an impossible result; if the innocent party is deprived of
some of his rights it involves putting an end to the contract except in cases,
unlike this, where, in the exercise of the court's discretion, the remedy of
specific implement is available.

The true position is that the contract survives and does so not only where
specific implement is available. When the assistance of the court is not
required the innocent party can choose whether he will accept repudiation
and sue for damages for anticipatory breach or await the date of performance
by the guilty party. Then, if there is failure in performance, his rights
are preserved.

It may be unfortunate that the Appellants have saddled themselves with
an unwanted contract causing an apparent waste of time and money. No
doubt this aspect impressed the Court of Session but there is no equity



14

which can assist the Respondent. It is trite that equity will not rewrite
an improvident contract where there is no disability oh either side. There
is no duty laid upon a party to a subsisting contract to vary it at the
behest of the other party so as to deprive himself of the benefit given to
him by the contract. To hold otherwise would be to introduce a novel
equitable doctrine that a party was not to be held to his contract unless
the court in a given instance thought it reasonable so to do. In this case
it would make an action for debt a claim for a discretionary remedy. This
would introduce an uncertainty into the field of contract which appears
to be unsupported by authority either in English or Scottish law save for
the one case upon which the Court of Session founded its opinion and which
must, in my judgment, be taken to have been wrongly decided.

The Appellants were given leave to amend their claim by praying in
the alternative for the same sum, namely £196 4s. as liquidated damages for
breach of contract on the footing that the repudiation must be treated as
if accepted. The Respondent resisted the alternative claim on the ground
that the sum sued for being a penalty and not liquidated damages the
Appellants were not entitled to decree therefor.

The only material obligation which the Respondent was bound to fulfil
was to pay the sum of money claimed and it is difficult to see how damages
should be assessed for breach of this obligation. It is, however, unnecessary
in view of the opinion I have expressed to consider the question whether
the sum claimed is recoverable as a genuine pre-estimate of probable or
possible interest in the due performance of the contract or is irrecoverable
as a penalty.

I would allow the appeal.

(31921) Wt. 8118—81 35 1/62 St.S./PA/19