CONTRACTUAL TERMINATION, TERMINATION UNDER THE GENERAL LAW AND AFFIRMATION

Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] BLR 196

In Stocznia Gdynia SA v Gearbulk Holdings Ltd [2009] EWCA Civ 75, [2009] BLR 196 the Court of Appeal held that the existence of a contractual right to terminate the contract did not of itself deprive the contracting parties of the right to terminate the contract under the general law. Clear words are required before a court will reach the conclusion that contracting parties have agreed to give up a valuable right which the law confers upon them. Further, the Court of Appeal held that the fact that the claimant had given notice to terminate pursuant to the terms of the contract did not prevent it from treating the contract as having been discharged at common law. There had been no election on the facts of the case because the contractual right to terminate corresponded with the right to terminate under the general law. This being the case, the claimant was held to be entitled to recover damages for the loss of its bargain and was not confined to the recovery of the sums stipulated to be payable in the event that the contract was terminated pursuant to the contractual right to terminate.