Johnson v Agnew [1980] AC 367 is a landmark English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

 case on the date for assessing damages. Lord Wilberforce decided that the date appropriate is the date of breach, or when a contracting party could reasonably be aware of a breach.

Five major principles it laid down were,

1. termination for breach of contract is "prospective", not "retrospective"; i.e. repudiatory breach of contract discharges both parties from future performance of their contractual obligations, but leaves their accrued rights intact (and themselves open to damages)
2. a claimant for specific performance does not forfeit his right to terminate the contract by accepting a defendant's repudiatory breach
3. when a specific performance decree is made, a court oversees performance, and it has the sole jurisdiction to determine whether that obligation can be discharged
4. common law damages are assessed at the date of the breach of the contract, though the court may fix another date if justice requires
5. the same principles for awarding common law damages applies to awarding equitable damages under s 50 Supreme Court Act 1981

Facts

The 'commonplace, indeed routine' facts were that Mrs Adeline Agnew twice failed to complete purchase of Michael and Renee Johnson's farm, Scheepcote Grange, Woodburn Common, Buckinghamshire

Buckinghamshire

Buckinghamshire is a ceremonial and non-metropolitan home county in South East England. The county town is Aylesbury, the largest town in the ceremonial county is Milton Keynes and largest town in the non-metropolitan county is High Wycombe....

. She had contracted to buy the farm on 1 November 1973 for £117,000. When everything was ready in December and January 1974, she did nothing. Meanwhile, the Johnsons were in financial trouble. They were in arrears on mortgage repayments. In March 1974 they specific performance

Specific performance

Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...

 of the contract, and won summary judgment in June, but the order was not drawn up till November, and so the Johnsons left it, because in the meantime, the mortgagees had won orders for possession and sale of the property. The Johnsons' lawyer advised there was no point enforcing against Agnew. The mortgagees only realised £48,000, not even enough to discharge the Johnsons' mortgage debts. The Johnsons' creditors filed them into bankruptcy

Bankruptcy

Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....

. This was adjourned, and the Johnsons' brought a claim against Agnew seeking the purchase price (less deposit and the £48,000 realised on sale by the mortgagees), and a declaration that the contract was repudiated and to keep the deposit price.

Judgment

Lord Wilberforce said,
On the prospective nature of a repudiatory breach, he said this.

See also

• Breach of contract
  Breach of contract
  Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
  
  

• Hillel v Christoforides (1991) 63 P&CR 301 (ChD)
• Jaggard v Sawyer [1994] EWCA Civ 1
• Hurst v Bryk [2000] UKHL 19, [2002] 1 AC 185

• Capital and Suburban Properties Ltd v Swycher [1976] 1 Ch 319