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“READY AND WILLING TO PERFORM”: DISCHARGE FOR BREACH AND DAMAGES

Lloyd's Maritime and Commercial Law Quarterly

“READY AND WILLING TO PERFORM”: DISCHARGE FOR BREACH AND DAMAGES

JW Carter* and Wayne Courtney

The concept of a party being “ready and willing to perform” is long established in the law of contract. We seek to resolve two debates, which have appeared in recent decisions, over how the concept affects the promisee’s common law rights. The first debate is: does the promisee’s exercise of a common law right to terminate for breach or repudiation depend upon its proving its readiness and willingness to perform at the time of the election? The other debate concerns loss of bargain damages. Must the promisee prove that it was ready and willing to perform in the post-termination period?

I. INTRODUCTION

“Ready and willing to perform” is a familiar concept for contract lawyers. As an abbreviation of “ready, willing and able to perform”, it refers to preparedness, disposition and capacity. Accordingly, a party is not ready and willing to perform a contract unless able to do so.1 This article explores how each party’s readiness and willingness to perform determines rights. “Rights” is used in a broad sense to include powers and claim-rights, but our principal concerns are common law rights to terminate the contract, and the promisee’s claim for loss of bargain damages following exercise of the right. The basis for termination may be actual breach or repudiation (whether by refusal to perform, prospective breach or factual inability).
The relationship between each party’s readiness and willingness, and the promisee’s rights, is complex. Two perspectives are investigated. One is what the promisee must prove in relation to itself. In general, a promisee who calls for performance from the promisor must prove readiness and willingness to perform. In particular, if a contract requires a concurrent exchange of performances, a promisee is entitled to call for performance only if ready and willing to make the exchange at the agreed time. Since on one rationalisation a claim for damages is a call for performance in a substitutionary form,2 this perspective may also be relevant to recovery of substantial damages.

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