A party in breach of a non-essential term of a contract is not precluded from terminating for the other party's breach of an essential term, provided there is no causal relationship between the breaches. The knowledge element of the tort of inducing breach of contract requires the defendant to have sufficient knowledge of the terms of the contract to appreciate that what it is inducing will constitute a breach. Upon exercise of an option to purchase land, obligations under the option agreement (such as payment of interest and provision of a bank guarantee) arise immediately, not upon exchange of formal contracts of sale.
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