What is Repudiation of a Contract?

Repudiation refers to a situation in a contract whereby the terms of a contract previously agreed upon by both parties is rejected or renounced by a party. In repudiation, a party refuses to honor his part of the deal by disputing the validity of the contract. Repudiation is considered a breach of contract.

What is the effect of a Repudiation?

Two things can occur when a party repudiates the contract, the affected party can decide to end the contract (which means they have accepted the repudiation) or continue with the contract. If the party continues the contract, the other party may be in breach if they fail to perform.