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Breach clause requiring notice not affecting right to terminate due to repudiatory breach.

The Facts

Purchasers, an Indian company, entered into a contract, with sellers a UAE company, for the supply of bitumen for an extendable period of 10 years.

Clause 17.1.1 read:

“Failure of the other party to observe any of the terms herein and to remedy the same where it is capable of being remedied within in the period specified in the notice given by the aggrieved party to the party in default, calling for remedy, being a period not less than 20 days”.

Clause 18.2 read:

“Termination of this agreement, including but not limited to termination in accordance with clause 17, will not prejudice the rights of action or remedy of the parties in respect of any antecedent breach by the other party of any of such party’s obligations under this agreement”.

Sellers terminated after 4 years without giving notice pursuant to clause 17.1.1, claiming substantial damages.

The breaches upon which sellers relied were:

Buyers secretly contracting with a third party in breach of the exclusivity provision; failure to pay particular invoice for almost 1 year; and, failure to pay demurrage.


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