This article aims to highlight the purpose and consequence of breach of contract in general and repudiatory breach of contract in specific. This article also takes into account common law principles and cases to better understand the Indian stand on this specific aspect. Contract is a document or an agreement which is legally enforceable and binding on parties to the contract.

Anything done contrary to the said terms of contract or any deviation or omission of any contractual obligations enshrined in the contract leads to a breach of contract. Breach of contract is a huge concept in the field of law. Each day there are millions of cases filed for breach of contract, not just in India but in almost every nation with a civilised legal system.

This article moves to highlight that a breach of contract is not a narrow singular concept, there are different classifications within a breach of contract, out which repudiatory breach of contract which is prevalent in the current trend of modern breach of contract is dealt in detail in this article.

Introduction
An agreement enforceable by law is a contract1. Pursuant to Section 2(e) of the Indian Contract Act, 1872 Every promise and every set of promises, forming the consideration for each other, is an agreement. When a person has failed to perform or abstain from performing something as specified in their promise which forms a legally enforceable agreement, is said to have breached the contract. In other words, according to Cornell Law School's Legal Information Institute Breach of Contract is:
"The violation of a contractual obligation. One may breach a contract by repudiating a promise, failing to perform a promise, or interfering with another party's performance.2 Not all breaches of contract are similar to each other, there are different types of breach with different result of consequences when the contract is breached. In this article I'll be covering in detail the Repudiatory breach of contract.

In India, the consequences of a Breach of Contract are Compensation for the damaged party which includes both liquidated and unliquidated damages, enforcing Specific Performance on the breaching Party, Imposition of injunction against the breaching party and/or making the contract void. Repudiatory breach is one of the underlying principles to terminate a contract validly.

It simply means a contravention of a stipulated situation which goes so much into the root of the contract that it makes further commercial performance of a contract impossible.3Where one party to a contract indicates by words or through conduct that he does not intend to perform his obligations, he is said to have repudiated the contract by his actions4

In the case of White and Carter v. Mcgregor 5 It was held by the House of Lords that 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. The Supreme Court of India has taken the same principle enunciated in the above case[ White and Carter v. Mcgregor ]and reiterated in various cases including the case of State of Kerala v. C.C. Refineries 6, ,and many more7.

If the innocent party elects to keep the contract alive, he is said to have 'affirmed' the contract. The house of lords in the White and Carter case8, held that the contract had remained intact after the breach of contract and that the innocent party even though he chose to continue the contract was entitled to sue for the contract price. But the obiter dicta of the same case by Lord Reid stated the innocent party may not elect to keep the contract alive where he has "no substantial or legitimate interest" in completing the performance and that, in such cases, the innocent party's only remedy is in the form of damages.

The principle of legitimate interest was enunciated in the Madras high court case of Simplex Infrastructure Limited v. Aban Offshore Ltd.,9 which took reference to the White and Carter case10 held "if a person has no legitimate interest in performing the contract rather a sole intention of claiming damages, then he ought not to be allowed to claim the same from the other party".

The innocent party was not entitled to claim compensation for the entire period of contract, the party was only entitled to claim compensation until the date of institution of proceedings. Conversely, Termination of Contract is one of the most common consequences of a repudiatory breach of contract.
 
Does non compliance to the terms of contract by the innocent party after a repudiatory breach performed by the breaching party lead to breach of contractual obligation by the innocent party?
This type of situation arise when the innocent party opts to terminate the contract and decides not to follow or omits the performance of certain contractual obligation enumerated in the contract for its termination due to the repudiatory breach performed by the breaching party , for instance non compliance to the mandatory notice period before termination, or other formalities enumerated in the contract for the termination of contractual obligation between the two parties. Different courts of India have given its interpretation and judgement regarding the said issue. 

For example, In the case of Air India Ltd. V. Gati Ltd.11A single judge bench of the Delhi High Court has held "in case of Repudiatory Breach by one party, termination of contract by another party is justified even if the procedure is not followed". In the above mentioned case, the court has held that the breaching party, i.e the person who committed the repudiatory breach cannot come to court seeking damages for non compliance of the contractual term by the other party after the the commission of the said repudiatory breach which makes the commercial performance of a contract practically impossible to perform.

In an earlier judgement of the Himachal Pradesh High Court, in the case of Deva Builders vs. Nathpa Jhakri Joint Venture12 The court opined that even though the respondent did not comply with the terms of the contract by not giving requisite notice before terminating the contract, it was the plaintiff who in the first instance breached the terms of the contract by not executing the work in accordance with the terms and conditions of the agreement. And therefore it was held, the plaintiff in the above mentioned case cannot claim damages for the breach of contract by the respondent. I.e not giving requisite notice for termination.

Similar judgement was also held by a two judge bench of the Gujarat High Court in the case of D.L.F. Universal Ltd. vs. Atul Limited13 which stated, " In view of the inordinate delay or inaction by the appellant and the fact that the appellant had not performed its part of the contract, the procedure for termination of contract agreed under Clause 10 of the agreement had become superfluous.

The termination of agreement was on account of abandonment of the contract by the appellant. The appellant did not suffer any damage on account of termination of the contract. We do agree that the procedure for termination of contract agreed under the agreement had been, under the circumstances, reduced to a mere formality. The appellant did not suffer any prejudice for non-adherence to the agreed procedure."

What if the other party to a contract is not at fault for the breach of contract?
There can exist a situation where the terms of the contract cannot be complied with, with no fault of either parties to the contract. Frustration of contract and Force Majeure are some circumstances that will be dealt with in this article regarding non performance of contract with no breach by either party to a contract.

1. Force Majeure
   'Force Majeure' clause is a provision in a contract that exempts a party from performing his contractual obligations which have become impossible or impracticable due to an event or effect which the parties could not have foreseen or controlled. This clause is usually articulated in general, inclusive terms to cover unforeseeable incidents such as natural calamities, war, sudden change of government policies etc.
   
   It is pertinent to mention that the age old Indian Contract Act,1872 which was introduced into the Indian legislature by the then British government governing contracts in India does not expressly refer to 'Force Majeure' in any of its clauses. However, the Real Estate (Regulation and Development) Act, 2016 includes a definition of 'Force Majeure' in its explanation to Section 514 as follows:
   
   Explanation For the purpose of this section, the expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.
    
2. Doctrine of Frustration
   The crux of this doctrine can be found in the common law judicial decision of Taylor vs. Caldwell15. Prior to this decision, the law of contracts in England was extremely cast-iron. No matter what the circumstances [Unforeseen or otherwise] which renders the performance of a contract impossible, nevertheless a contract had to be performed . This rigidity was somewhat relaxed by the decision in Taylor vs. Caldwell in which it was held that if some unforeseen event occurs during the performance of a contract which makes it impossible of performance, in the sense that the fundamental basis of the contract goes, it need not be further performed, as insisting upon such performance would be unjust.
    

Unlike in England, the Doctrine of Frustration which was introduced as a consequence of Judicial Decision, in India, there is a clear distinct principle to deal with the doctrine of frustration which is enshrined in the Indian contract Act itself. Section 56 of the Indian Contract Act states "An agreement to do an act impossible in itself is void." Furthermore, Judicial decisions of different courts of India have also thoroughly analysed and interpreted the said doctrine to better understand the concept. For instance, in the case of Satyabrata Ghose v. Mugneeram Bangur & Co.16 A three judge bench of the Hon'ble Supreme Court of India held "A contract which has become impossible to perform is said to be frustrated."

Reference:

1. Indian Contract Act, 1872 Section 2(h)
2. https://www.law.cornell.edu/wex/breach_of_contract
3. VIACOM 18 Media Pvt. Ltd. vs. MSM Discovery Pvt. Ltd. MANU/TD/0199/2011
4. Stephen A. Smith, Atiyah's Introduction to the Law of Contract (6th ed. 1995), p. 201
5. WHITE AND CARTER (COUNCILS) LTD. APPELLANTS; AND MCGREGOR RESPONDENT., [1962] A.C. 413
6. State of Kerala v. Cochin Chemical Refineries Ltd., (1968) 3 SCR 556
7. Motilal Srinivasa Sarda v. Netha Co-operative Spinning Mills Ltd., 1974 SCC OnLine AP 159
8. Ibid 5
9. Simplex Infrastructure Limited v. Aban Offshore Ltd., 2021 SCC OnLine Mad 1676
10. Ibid 5
11. Air India Ltd. v. Gati Ltd., 2015 SCC OnLine Del 10220
12. 2002(3)ShimLC11
13. 2010(Suppl. 1)ArbLR362(Gujarat) / (2010)51GLR762
14. The Real Estate (Regulation and Development) Act, 2016, Section 5
15. (1861-73) All ER Rep 24
16. Satyabrata Ghose v. Mugneeram Bangur & Co., 1954 SCR 310