Societe Generale, London Branch v Geys [2012]

Court: UK Supreme Court

Facts: Geys’s employment contract with Société Générale was terminated, leading to a dispute over whether the contract's termination was automatic or elective following the employer's repudiation. The issue centered on whether the contract ended upon repudiation or when the innocent party accepted it.

Issue: Does a repudiation automatically terminate a contract, or is it elective, requiring the innocent party to accept the repudiation?

Held: The Supreme Court held that the elective theory applies, meaning a repudiated contract does not automatically terminate and requires the innocent party’s acceptance for termination. Société Générale's wrongful repudiation did not end the contract until Geys elected to terminate it.

Key Judicial Statement: The court emphasized the importance of the elective theory in preserving the rights of the innocent party to choose whether to accept repudiation or keep the contract alive.

💡Leveluplaw: A contract does not automatically terminate upon repudiation. The innocent party has the right to accept or reject the repudiation, which preserves their control over the contract.