Contracts II - Anticapatory Breach - Hall

Contracts II- - 1 ANTICIPATORY BREACH CHAPTER 8 Spring 2008 T Hall Chad Propst EXAM OUTLINE I Ask WHO BREACHED FIRST A Breach of condition excuses

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ANTICIPATORY BREACH - CHAPTER 8 -- Spring 2008 – T. Hall – Chad Propst – EXAM OUTLINE I. Ask “WHO BREACHED FIRST ?” A. Breach of condition excuses subsequent conditioned performance 1. First breach excuses all other things in the timeline. 2. Need to make damn sure the other party has clearly repudiated the K. 3. Equivocal Repudiation -- Problems arise here – a. UCC 2-609 mechanism that allows you to convert ambiguous conduct/statement into either/or – by asking for assurances when you have a reasonable insecurity. B. Anticipatory Repudiation – a clear, unequivocal, and voluntary repudiation by one of the parties is recognized as the equivalent of a material and total breach, provided that the threatened action or failure would be a material and total breach if it happened at the time due for performance. 1. As the non-breaching party’s promise of performance is dependent on the repudiator’s promised performance—whether express or implied—the advance indication of prospective breach also amounts to an advance failure of the condition . a. Victim is excused of any condition precedent -- A repudiation has the effect of accelerating the due date of the breacher’s promissory condition for the purpose of allowing the victim of the repudiation to withhold any return performance that would otherwise have been due first. II. Purpose of Anticipatory Breach Doctrine A. Old Common Law didn’t recognize the concept – so the promisee had no right to react to an advance indication of breach. 1. If promisee had to perform first, common law required that he do so or be in breach himself 2. Hochester v. De La Tour (Eng. 1853) – landmark case that established the doctrine of anticipatory breach III. Two ways to respond to a repudiation A. Accept the repudiation by treating it as an immediate breach 1. This entitles her to refuse to render her own performance, to terminate the K, and to sue for relief for total breach – expectancy damages/reliance damages B. Delay responding to the repudiation to see of the repudiating party repents 1. She may even take affirmative steps to encourage retraction of the repudiation – give the repudiator a due date after which repudiation will be accepted. 2. Can Change Your Mind – at any time, even if she does give such a notice. IV. Elements of Anticipatory Repudiation – Promisor must clearly, unequivocally, and voluntarily communicate an intention not to render the promised performance when it falls due—either by words or conduct. A. The Prospective action or inaction indicated by the promisor must be serious enough to qualify as a material and total breach of the K . 1. Even if promisor says he’ll be able to render a substantially deficient performance or if he refuses to perform unless promisee pays more money, this will be a material repudiation. B. The Promisor’s statement or conduct
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This note was uploaded on 04/18/2011 for the course LAW 101 taught by Professor Many during the Spring '11 term at University of Louisville.

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Contracts II- - 1 ANTICIPATORY BREACH CHAPTER 8 Spring 2008 T Hall Chad Propst EXAM OUTLINE I Ask WHO BREACHED FIRST A Breach of condition excuses

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