Daniels v. Newton

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Brief Fact Summary.

A contract specified that one party had to perform within thirty days and if they failed to perform within those thirty days, they would be granted another thirty days to perform.

Synopsis of Rule of Law.

Until the plaintiff has either suffered loss or wrong in respect of that which has already vested in him in right, or has been deprived of or prevented from acquiring that which he is entitled to have or demand, he has no ground on which to seek a remedy by way of reparation.

Facts.

The Defendants agreed to purchase land from the Plaintiff.  The agreement was in writing and under seal.  The agreement read, "said premises are to be conveyed within thirty days from this date" and "in case the said parties of the second part should fail to sell their estate at the expiration of the thirty days, then we agree to extend this agreement for thirty days."  The trial court construed these two provisions to mean that the Defendants had 30 days to perform and in case this requirement was not met, they were to have another 30 days.

Issue.

Does a "[a] renunciation of the agreement, by declarations or inconsistent conduct, before the time of performance, [  ] give cause for treating it as rescinded, and excuse the other party from making ready for performance on his part, or relieve him from the necessity of offering performance in order to enforce his rights?"

Held.

Maybe, but not based on these facts.  A party does not suffer any injury or deprivation "[u]ntil the time arrives when, by the terms of the agreement, he is or might be entitled to its performance."  Here, since there is no loss or violation of rights at this time, an action is not founded.  The court adopted the rule that "in order to charge one in damages for breach of an executory personal contract, the other party must show a refusal or neglect to perform, at a time when and under conditions such that he is or might be entitled to require performance."  The court then observes that a case-by-case determination must be undertaken to determine "what mode and at what time" an action may be brought because it is based on the terms of the contract and the conduct of the other party.

Discussion.

The Uniform Commercial Code's anticipatory repudiation section has greatly changed this rule in the context of goods.