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IAI Actuarial Core Principles · Business Management · Implied terms, exclusion of liability, contractual remedies and damages

On 1 March, Bharat Life Ltd contracted with a data vendor, Kalyan Analytics, for monthly data feeds from 1 May to 31 December. On 10 April Kalyan wrote that it would not supply any data at all, whatever Bharat said. Bharat has not yet responded. Which description is most accurate?

Kalyan's clear refusal before the performance date is an anticipatory breach. Bharat Life may accept the repudiation, end the contract and sue immediately for damages, or affirm the contract and wait for performance, keeping it alive. The contract does not end automatically.

  1. AThere is anticipatory breach, and Bharat may either accept it and sue at once or affirm and await performanceCorrect
  2. BThere is no breach until 1 May, so Bharat can do nothing before then
  3. CThe contract is automatically void on 10 April without any choice by Bharat
  4. DBharat can only claim a refund of money paid, not damages
  5. The breach is only a warranty breach, so Bharat must continue to perform and cannot sue

Explanation

A clear refusal to perform before the due date is an anticipatory breach (repudiation). The innocent party may accept it, treat the contract as discharged and sue immediately, or affirm and wait for the performance date. The contract is not void automatically, and waiting for May is not compulsory.

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