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Restrictions on Termination

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Restrictions on termination

1 Waiver of benefit of condition by enforcing party

Even if a contract provides expressly or implicitly that non-fulfillment may be relied on by either party, if it is primarily for the benefit of the condition before it is relied on by the other party.

Waiving party thereby gives up own right, but also strips other party of theirs.


Purchasers tried this, but failed because the contract had already been terminated.

Sandra Investments v Booth

'In the event that such approval is not obtained then the Purchaser may at their option cancel the contract.'

Held: the clause gives only the purchaser the right to rely on the provision.

After the period passes they elect not to cancel the contract, other party try to but are not able to use it.

Can purchaser waive condition where it is 'primarily' for benefit, or just 'exclusively' for benefit? 'It is not appropriate to pursue a discussion of these matters. I would merely observe that one should not lightly imply a right of waiver in one party to the possible prejudice of the other unless it clearly emerges on the face of the contract.' (Wilson J).

Can you waive the benefit after the period has expired? Yes, it appears so (Wilson J).

2 Failure to cooperate by terminating party (also applies to breach)

An obligation is implied in every contract that each party will do all things necessary to enable the other to have the benefit of the contract.

Breach of this obligation is not only a breach of contract resulting in potential liability for damages; but it also disqualifies the party in breach from reliance on non fulfillment of the condition as a ground for termination.



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