Chapter 8

ANTICIPATORY REPUDIATION AND OTHER ASPECTS OF BREACH

ChapterScope

This chapter discusses the consequences of: (1) anticipatory repudiations (which are repudiations that occur before the repudiator’s performance is due) and (2) repudiations that occur after the time for performance. Key concepts:

• Anticipatory repudiation: An anticipatory repudiation can occur where the promisor: (1) makes clear statements that he will not perform; (2) uses ambiguous language accompanied by conduct that evinces an unwillingness to perform; or (3) or commits a voluntary act that renders his performance impossible (e.g., a vendor conveys a parcel of land to a party other than the vendee).
  • Immediate suit for breach: When an anticipatory repudiation occurs, the repudiatee may generally sue immediately for breach, even though the repudiator’s time for performance has not yet arrived.
  • Retraction: A repudiation may usually be retracted, if the retraction is communicated to the aggrieved party before he has changed his position materially in reliance on the repudiation.
• Duty to mitigate: A repudiatee may not ignore the repudiation and continue performing under the contract, if doing so would aggravate her damages. Instead, the repudiatee has a “duty to mitigate”—that is, she will barred from recovering for those damages which she could reasonably have avoided.

I. TOTAL AND PARTIAL BREACH

A. Total breach: When a party who owes a present duty under a contract fails to perform that duty, he has, of course, breached the contract. If this breach is relatively severe, it will, as we have seen (supra, p. 211) have the effect of suspending or discharging the other party’s obligation to perform under the contract. Such a breach is sometimes called a “total” breach. A total breach also has the effect of allowing the wronged party to sue immediately for damages based on the entire contract. Usually, these damages will be such as would put the wronged party in the position he would have been in had the contract been completed; see infra, p. 308.

1. Partial breach: If, on the other hand, the breach is not material, it does not relieve the aggrieved party from continuing to perform under the contract. Such a non-material breach is sometimes called a “partial” breach. Although the aggrieved party is not relieved from performing after a partial breach, he nonetheless has an immediate right to sue for damages stemming from the partial breach.