| Abstract: | This article reviews the English courts' approach to the controversial decision in White & Carter (Councils) Ltd v McGregor and suggests a systematic reformulation of the principle to be derived from that case. It argues that the notion of ‘legitimate interest’, at the core of that principle, suffers from severe obscurity as it stands. The critical issue in White & Carter is whether the wastefulness of a party's continuing performance outweighs its performance interest in earning the contract price. Three tests currently employed to determine the existence of a ‘legitimate interest’, namely, the adequacy of damages, the duty to mitigate and the concept of wholly unreasonable, are assessed and dismissed as either misdirecting or unsatisfactory in other ways. Finally, it articulates a new test based on a reappraisal of existing case law and summarises the key reasons for the courts to exercise their equitable jurisdiction against wasteful performance. |
