Lloyd's Maritime and Commercial Law Quarterly

Professor Francis D Rose

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Anticipatory breach of contract—the PRC system and English comparisons

Jay Jie Ze *

The English doctrine of anticipatory breach provides that, if, before the agreed time for performance has arrived, a party renounces the contract or disables himself from performing it, the other party is entitled to treat the contract as at an end and claim damages at once. The doctrine has established itself for reasons of certainty and convenience at the expense of coherent legal reasoning. In recognition of at least its practical values, the recently promulgated PRC Contract Law introduces to the PRC legal system this doctrine in the form of express and implied anticipatory breach. In addition, the PRC Contract Law retains the civil law concept of the defence of insecurity. The aim is to provide comprehensive and sound solutions to the problem of renunciation or disablement of performance of a contract before the performance falls due. This paper evaluates the conceptual and practical difficulties surrounding the doctrine, compares the solutions given by both systems to the question of ‘‘anticipatory breach’’, examines their effectiveness, and proposes possible reforms to both systems.

I. INTRODUCTION

Assume A enters into a contract with B. Before the performance is due from B, B refuses to perform the contract either expressly or by conduct, or is unable to perform the contract due to his own act or default. A problem then arises: does A have any immediate right or cause of action before any actual breach by B occurs?

* Student on the Legal Practice Course at the Oxford Institute of Legal Practice, sponsored by Herbert Smith. This paper was a dissertation submitted to the University of Bristol in accordance with the requirements of the degree of MA in Legal Studies in the Faculty of Law and Social Science. I am grateful to Professor Gerard McMeel for his supervision of this work. All errors remain my own.

The following abbreviations are used:

Anson : J. Beatson, Anson’s Law of Contract , 28th edn (Oxford University Press; Oxford, 2002). Mustill : M. Mustill, ‘‘Anticipatory Breach’’, Butterworth Lectures 1989–1990 (1990), Part I.

Sui : P.S. Sui, The Law of Contract (China University of Politics and Law Press; Beijing; 2003).

Treitel , Remedies : G.H. Treitel, Remedies for Breach of Contract: A Comparative Account (Clarendon Press; Oxford; 1988).

Treitel , Contract : G.H. Treitel, The Law of Contract , 11th edn (Sweet & Maxwell; 2003).

Wang , Cai & Lee : S.M. Wang, R.W. Cai and M. Lee, ‘‘Formation, Enforceability and Liability Issues Under the Contract Law’’, An Insider’s Guide to the PRC Contract Law (Asia Law & Practice Ltd, 1999).

Wang & Cui : L.M. Wang and J.Y. Cui, New Account of The Contract Law (General Provisions) (China University of Politics and Law Press; Beijing; 2000).

Zweigert & Kötz : K. Zweigert & H. Kötz, translated by Tony Weir, An Introduction to Comparative Law (Clarendon Press; Oxford; 3rd edn, 1998).

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