Contract Law: Acceptance vs Affirmation of repudiatory breaches

When a repudiatory breach has been committed, the innocent party has the right of election to decide whether to accept or affirm the breach – Force India Formula One Team Ltd v Aerolab SRL [2013]. If they choose to accept the breach through unequivocal words or conduct, they treat the contract as terminated immediately upon discovering the breach. This action releases both parties from further performance under the contract – Vitol SA v Norelf Ltd [1996]. However, the innocent party could also affirm the repudiatory breach as long as there is evidence of the innocent party making an informed decision to waive the right to treat the contract as discharged – Yukong Line v Rendsberg Investments Corp of Liberia [1996]. If the innocent party affirms the breach and continues with the contract despite the repudiatory breach, they choose to continue with the contract and insist on performance by the guilty party.