Leagl Case Summary
White & Carter (Councils) Ltd v McGregor [1962] UKHL 5
Contract law – Payments – Repudiation
Facts
White & Carter, the appellants, were advertising contractors that agreed with a representative of a garage proprietor to advertise for his garage for the period of three years. The respondent, the garage owner, wrote to the appellant on the same day of the agreement to cancel as the representative was mistaken during the negotiation. The appellants refused this and began advertising for the garage five months after the contract had been agreed between the parties. The respondent refused to pay and the appellant sued for the whole amount of the contract.
Issues
The court was required to understand whether the contract between the parties could be repudiated on the basis of the mistake that had been made by the representative of the garage owner. If this repudiation was not permitted, then it had to be determined whether the appellants could claim for the whole of the contract value or whether the damages would be limited. It was also argued by the respondent that where a party has no legitimate interest in performing the contract, the burden should not be placed on the other party unnecessarily.
Decision/Outcome
The court found that the appellants had the right to carry out the contract and claim for the entire value of the contract. On this basis, this did not require the appellant to accept the withdrawal of the contract by the respondent. The court did not accept the argument that was put forward by the respondent as to the enforcement by the appellant of the contract.
Updated 20 March 2026
This case summary accurately reflects the decision in White & Carter (Councils) Ltd v McGregor [1962] UKHL 5 (also reported at [1962] AC 413). The core principle — that an innocent party may, in certain circumstances, elect to perform a contract following repudiation and sue for the full contract price rather than accept the repudiation and claim damages — remains good law.
However, readers should be aware of important subsequent developments. The ‘legitimate interest’ qualification, mentioned briefly in the article as an argument raised by the respondent, has since become a significant limiting principle in its own right. It was given considerable judicial attention in The Alaskan Trader [1984] 1 All ER 129 and more recently in MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] EWCA Civ 789, where the Court of Appeal emphasised that the right to affirm and perform is not absolute and may be curtailed where a party has no legitimate interest in doing so. The Supreme Court’s judgment in Cavendish Square Holding BV v Makdessi [2015] UKSC 67 also touched on related questions of contractual enforcement and remedy. Students should therefore treat the ‘legitimate interest’ limitation as a substantive and actively developing qualification to the White & Carter principle, not merely a rejected argument, when engaging with this area of contract law.
