The Supreme Court of Appeal held that where one party to a contract repudiates the contract by expressing an intention not to be bound by their obligations, extinctive prescription to defeat a claim for damages or performance runs from the date that the other party accepts the repudiation and cancels the contract. A contract between brothers-in-law, who subsequently fell out, for the improvements to a holiday home required the defendant to pay for the improvements of the house of which he took ownership to get a mortgage bond. Their agreement was that the house would be re-transferred when the plaintiff qualified for a bond of his own. Instead the defendant sold the property without telling the plaintiff.
The defendant alleged that prescription ran from the date he repudiated the contract on 8 April 2008. Repudiation of a contract occurs when one party to a contract, without lawful grounds, indicates to the other party, whether by words or conduct, a deliberate and unequivocal intention to no longer be bound by the contract. The innocent party is then entitled either to reject the repudiation and claim performance or accept the repudiation, cancel the contract and claim damages.
The plaintiff only accepted the repudiation and cancelled the contract within the three year period before issuing summons and the claim had not prescribed.