Repudiation should have a health warning on the packet. You can accept what you think is a repudiation and stop further performance of a contract but, in cases where there is any doubt, only a judge can say for sure if you made the right call. Getting it wrong can be expensive but what if (just to raise the stress levels) you made the wrong call but, unknown to you at the time, the other party had done something else that was a repudiation that you could have accepted? Happy ending after all?
This was a key issue in Leofelis v Lonsdale, where the court gave three answers to the puzzle. It ruled that the wronged party could rely on the previously unknown repudiatory breach, to defeat any claim by the wrongdoer for damages for the original wrongful termination, and to bring its own claim for damages for the breach. What it could not recover, however, was damages for loss caused by the termination. That had occurred in ignorance of the wrongdoer’s real default, which had therefore not been the cause of the termination, or of any loss flowing from it.