To decide whether a party has repudiated a contract through their behaviour, you apply an objective test: 


‘So far as concerns repudiatory conduct, the legal test is simply whether, looking at all the circumstances objectively, that is from the perspective of a reasonable person in the position of the innocent party, the contract breaker has clearly shown an intention to abandon or altogether to refuse to perform the contract.’ 


This test was laid down by the CA in a recent case where the buyer had failed to complete on time. The seller served a notice to complete, which was said to expire on 15 December. In fact, the solicitors had calculated the time incorrectly – and the notice to complete would expire on 19 December. Because of their mistake, they then sent notices of rescission to the buyer’s solicitors on 17 December (in the wrong belief that notice to complete had already expired). In response, the seller said that the rescission of the contract by the buyer amounted to a repudiatory breach, which therefore entitled the buyer to rescind. Accordingly, he claimed his deposit back. 


The CA emphasised that every case of this sort is highly fact-sensitive. All the circumstances must be taken into account, and you then apply an objective test. In this case, there had been an obvious mistake in the wording of the notice to complete, and the clear inference from the facts was that the buyer knew the seller wanted to enforce the contracts (as opposed to rescind them). In short, what needed to be done in a situation of this sort was to look beyond the mistaken notice of rescission served by the seller, and take into account all the surrounding circumstances. 


The important point is that you look to see whether the conduct amounts to a repudiatory breach by applying an objective examination of the facts, rather than look to the subjective intention of the parties. See commentary on Eminence Property v Heaney [2010] EWCA Civ 1168 (access free at www.practicalconveyancing.co.uk) in [2010] NLJ 1520.