Fundamental breach

Fundamental breach of contract, is a controversial concept within the common law of contract. The doctrine was, in particular, nurtured by Lord Denning, Master of the Rolls from 1962 to 1982, but it did not find favour with the House of Lords. Whereas breach of condition is a serious breach that "denies the plaintiff the main benefit of the contract", fundamental breach was supposed to be even worse, with the result that any exclusion clause limiting the defendant's liability would automatically become void and ineffective. Also, whereas breach of condition gives the plaintiff the option to repudiate, fundamental breach automatically discharges the entire contract. Although the concept caused some excitement in the 1950s and 1960s, the concept was regarded as flawed by the Law Lords, whose decision in the Suisse Atlantique substantially curtailed the doctrine, which has now been effectively "laid to rest" in England and Canada. The relevant concept in English Law is repudiatory breach of contract. The origins of the idea of fundamental breach may be traced to early cases on the doctrine of deviation. In Davis v. Garrett Tindal C.J. stated that a carrier's deviation from the agreed voyage route amounted also to a deviation from the terms of the contract, including its exceptions or limitation clauses provided by such a contract. This view was adopted in the leading cases of Leduc v Ward (1888) and Glynn v Margetson (1893). In Leduc v Ward, a vessel bound from Fiume (modern day Rijeka) to Dunkirk headed instead towards Glasgow, sinking in a storm in the Clyde estuary. The court held that even though the shipper may have known of the planned deviation, the parol evidence rule meant that the route described in the bill of lading was conclusive, and that the deviation was actionable, preventing the carrier from invoking the protection of the "perils of the sea" exemption. Similarly, in Glynn v Margetson, a vessel carrying Seville oranges from Malaga to Liverpool deviated from the agreed route, by heading first to Burriana (near Valencia).