Repudiation of the Contract Before the Due Date under Section 60 of the Sale of Goods Act, 1930: The Injured Party's Election, the Risk of Waiting, and Section 60 Compared with Section 39 of the Contract Act

A party may make clear before the delivery date that he will not perform. Section 60 gives the other party a choice. He may treat the contract as rescinded and sue at once for damages, without waiting for a breach that has not yet technically occurred. Or he may treat the contract as subsisting and wait for the date of delivery, hoping the other will think better of it. The choice is real, but it is not free: a party who waits keeps the contract alive for both sides, and if a supervening event then discharges it, he may lose his claim altogether.

The election, what follows from each branch, and the risk of waiting

1. The Section

Section 60, Sale of Goods Act, 1930

Where either party to a contract of sale repudiates the contract before the date of delivery, the other may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach.

It applies to either party: a buyer who says he will not accept, or a seller who says he will not deliver.
The repudiation must be clear. Words or conduct must show an intention no longer to be bound, or an inability to perform. A request to vary the contract, or an expression of difficulty, is not repudiation.
The right to sue at once was established in English law by Hochster v. De La Tour (1853), which allowed an action before the time for performance had arrived.
The election is final. Once the injured party has chosen, he cannot change his mind, though the other party's continued refusal at the due date gives a fresh right of action.

2. Accepting the Repudiation

The contract is at an end for the future, and the injured party sues for damages.
Damages are assessed on ordinary principles under Section 73 of the Contract Act, ordinarily by reference to the market at the date fixed for performance.
The duty to mitigate begins when he accepts the repudiation. A buyer who accepts a seller's repudiation should look for substitute goods rather than wait.
He need not wait for the due date to bring his suit, which is the practical advantage of this branch.

3. Keeping the Contract Alive

A party who refuses to accept the repudiation keeps the contract on foot for both parties. The repudiating party may still perform, and may take advantage of anything that would discharge the contract in the meantime. The injured party must also remain ready and willing to perform his own side. The risk is that an intervening event, such as supervening illegality or impossibility, will bring the contract to an end and leave him without a claim.

📖 Avery v. Bowden, (1855) 5 E & B 714

Facts: A ship was chartered to load cargo at a foreign port within a fixed number of days. At the port the charterer's agent told the master repeatedly that no cargo would be supplied. The master did not accept this as a repudiation; he waited at the port in the hope that cargo would arrive. Before the loading period expired, war broke out between the two countries, making performance unlawful.

Held: The shipowner's claim failed. By declining to accept the repudiation, he had kept the contract alive for both parties. When war intervened, the contract was discharged by supervening illegality, and with it went the claim for breach.

Ratio: A party who refuses to accept a repudiation keeps the contract alive at his own risk, and loses his claim if the contract is afterwards discharged by a supervening event.

📖 White and Carter (Councils) Ltd. v. McGregor, [1962] AC 413 (HL)

Facts: An advertising contractor agreed to display advertisements for a garage over three years. The garage repudiated the contract the same day. The contractor refused to accept the repudiation, went ahead and displayed the advertisements for the full period, and sued for the whole contract price.

Held: The House of Lords held, by a majority, that the contractor was entitled to do so. The innocent party is not bound to accept a repudiation; he may hold the contract open, perform his side and claim the agreed sum, at least where he can perform without the other party's co-operation.

Ratio: An innocent party may refuse to accept a repudiation and perform, claiming the price, though the decision has been criticised and is qualified where he has no legitimate interest in performing rather than claiming damages.

4. Section 60 and Section 39 of the Contract Act

	Section 39, Contract Act	Section 60, Sale of Goods Act
Scope	Any contract	Contracts of sale of goods
Trigger	A promisor refuses to perform, or disables himself, in its entirety	Either party repudiates before the date of delivery
The election	End the contract, or acquiesce in its continuance	Treat it as rescinded and sue, or treat it as subsisting and wait
Effect	The same principle, stated generally	The same principle, stated by reference to the delivery date

The two provisions say the same thing for the same reason, and Section 3 keeps Section 39 available for sales as well. The difference is one of expression: Section 39 speaks of refusal or disablement, while Section 60 fixes on the moment before the delivery date, which is the situation in which the question arises in a sale.

5. The Position Stated Shortly

Section 60: where a party repudiates before the delivery date, the other may treat the contract as rescinded and sue, or keep it alive and wait.
Accepting the repudiation allows an immediate suit, and starts the duty to mitigate.
Keeping the contract alive keeps it alive for both parties, and the injured party must remain ready and willing.
Avery v. Bowden: a supervening event destroyed the claim of a party who had waited.
White and Carter v. McGregor: an innocent party may refuse to accept a repudiation and perform, subject to criticism and later qualification.
Section 39 of the Contract Act states the same principle for contracts generally.