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ANTICIPATORY BREACH OF CONTRACT AND THE NECESSITY OF ADEQUATE ASSURANCE UNDER ENGLISH LAW AND THE UNIFORM COMMERCIAL CODE

Lloyd's Maritime and Commercial Law Quarterly

ANTICIPATORY BREACH OF CONTRACT AND THE NECESSITY OF ADEQUATE ASSURANCE UNDER ENGLISH LAW AND THE UNIFORM COMMERCIAL CODE Reza Beheshti * The doctrine of anticipatory breach of contract originated in English law and was adopted into the Uniform Commercial Code. The doctrine remained intact and rigid in English law but certain rules were modified in the UCC regime, which supplemented it by introducing the novel doctrine of adequate assurance, which is absent from English law. This article explores whether English law should undergo a legislative reform to introduce the doctrine of adequate assurance. One hypothesis that will be examined is that adequate assurance is a logical corollary to the doctrine of anticipatory breach of contract, being necessary to secure the full benefit of the latter. The decision in The Pro Victor is investigated: a party made a request for confirmation of performance and the other party’s failure to provide constituted a renunciation—perhaps the first recognition by an English court of the adequate assurance doctrine. Doctrines in English law that may have similar functions to adequate assurance (eg, stoppage in transit, which carries with it a modification of contract and exerts pressure on the insolvent buyer to assure the seller about his performance) are examined in order to assess whether adequate assurance fits well into English commercial law. It is suggested that the doctrine of adequate assurance should formally be introduced as a new section in the Sale of Goods Act 1979. I. INTRODUCTION The doctrine of anticipatory breach of contract, which originated in English law, holds that a breach occurs if a promisor, prior to the time at which he is bound to perform a contract, expresses an intention to break it, or acts in such a way as to lead a reasonable person * Assistant Professor in International Commercial Law, University of Nottingham. I would like to thank Professor Sarah Dromgoole, Professor Mark Gergen and Dr Sean Thomas for their comments on earlier drafts of this article. I would also like to thank the anonymous referee who commented on an early draft and who offered a number of very valuable comments and insights. I am particularly grateful to the Max Planck Institute for Comparative and International Private Law for providing me with the funding and the opportunity to use their rich library in order to complete this article. The usual disclaimer applies. The following abbreviations are used: Benjamin : MG Bridge (ed), Benjamin’s Sale of Goods , 10th edn (Sweet & Maxwell, 2017); Chitty : HG Beale (ed), Chitty on Contracts , 14th edn (Sweet & Maxwell, 2015); Goode : E McKendrick (ed), Goode on Commercial Law , 5th edn (Penguin Books, London, 2010); Liu : Q Liu, Anticipatory Breach (Hart Publishing 2011) Treitel : WE Peel, Treitel : The Law of Contract , 14th edn (Sweet & Maxwell, 2015). Anticipatory breach of contract 277

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