SC Holds That Unilateral Declaration Of A Non-determinable Agreement Is Not Valid

The SC, in K.S. Manjunath v. Moorasavirappa¹, held that unilateral termination of an agreement by a party is impermissible in law, except in cases where the agreement is determinable. The SC laid down the following principles, inter alia, in this regard:

i. in cases involving non-determinable contracts it should be the terminating party, which should ideally approach the Court and obtain a declaration as to the validity of the termination; and

ii. if an agreement itself gives no right to unilaterally terminate, or such right has been waived, and a party still unilaterally terminates the agreement, then such termination would amount to a breach by repudiation. In such a case, the non-terminating party can directly seek specific performance, without first seeking a declaration on the validity of termination.