CA-2024-002472 - [2025] EWCA Civ 1407

This appeal is concerned with the principle of waiver by election. Specifically, does the decision in Peyman v Lanjani [1985] Ch 457, that a party entitled to rescind or avoid a contract will not be held to have elected to affirm it unless it knows that it has such a right, apply when the right in question is contained in an express term of the contract? Put another way, is a party with an express contractual right to terminate the contract in certain events, who continues to perform for a period of months after such an event has occurred, entitled to say that its conduct does not amount to an election to affirm the contract because it did not know that the contract entitled it to terminate?

The judge, Mrs Justice Dias, held that the right to terminate the contract was not lost as a result of an election to affirm in such circumstances and, although for my part the result seems counter-intuitive, and indeed unmeritorious on the particular facts of this case, I have concluded that she was right to do so.