Gestel said that there may be circumstances - acts or failures to act – that have
the effect of affirming the existence of a contract despite there having been one
or more repudiations.
74.
The expert’s answers in relation to issues 7 and 8 and the subsequent part 35
questions appear to be somewhat confusing and require careful analysis. Issue 7 asked
him to give his opinion whether the party not in repudiatory breach could treat the
contract as automatically terminated and whether he could elect to treat the contract as
continuing by affirmation. Automatic termination does not occur, the injured party
must do something before the contract terminates. It is in this context that Judge van
Gestel referred to Clauses 10 and 11.
75.
Clause 11 provides that the contract may not be waived, amended, or the obligations
thereunder terminated in whole or in part except by writing executed by all the
parties. It is difficult to follow how, as a matter of any common law system, it would
be necessary for a party wishing to treat a contract as at an end for repudiatory breach,
to be required to obtain the agreement of the repudiating party that this was the case.
If, as appears to be the case, there is a concept of repudiatory breach in Massachusetts
law, which enables the other party to take steps to treat further performance at an end
by some act or notice – or application to the court – then Clause 11 would prevent this
is Judge van Gestel’s opinion is taken literally. He does not explain how Clauses 10
and 11 would operate in these circumstances.
76.
The Claimant asked a part 35 question about this, pointing out that there might have
been a misunderstanding about what was meant by affirmation in the context of this
case. He was also referred to a decision of his own (Tomer v Hollister Associates Inc,
20 Mass. L. Rptr. 487). In his response, he says that there can be acts or failures to act
that can amount to affirmation of the contract, but does not develop or explain his
point on Clauses 10 and 11. If the contract continues following a repudiatory breach
until the injured party takes some step treating it at an end, then there doesn’t appear
to be much difference between English and Massachusetts law. A repudiatory breach
does not relieve the other party of further performance unless and until there is an
acceptance of the breach and he can’t do this if he has affirmed the contract in the
knowledge of the breach in the meantime.
77.
In Tomer, there was also an integration clause in similar terms to the contract in this
case. The case wasn’t directly about affirmation of an agreement after a repudiatory
breach, but the decision by Judge van Gestel to order summary judgment for the
defendant was made on the basis that an integration clause did not always require a
written document signed by both parties. In that case, the parties’ emails affirming
that the parties were continuing to perform the contract notwithstanding that the
defendant had unilaterally reduced the defendant’s wages, at least amounted to a
variation of the original agreement by email exchange notwithstanding the integration
clause.
78.
I therefore conclude that the integration clause does not prevent a party who has not
accepted a repudiatory breach as freeing him from further performance, from
continuing to be bound by the contract if he acts on the footing that the contract is
continuing or gives the other party notice that he considers it to be continuing.
Alternatively, an agreement to treat the contract as continuing does not fall foul of the
integration clause if it is in emails between the parties following the breach.