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Unformatted text preview: t the whole contract, the breach here is quite minor.
Harry can deduct the cost of having those two window frames painted, but he will have
to pay Peter the rest of the $3,000. Timeliness
Suppose William contracts to sell Victoria 1,000 pillows for her new hotel, to
be delivered by June 1, but the pillows
don’t arrive until June 3. Is Victoria discharged, or must she still accept and
pay for the pillows? The general rule is
that if the late performance is still commercially reasonable, Victoria is not discharged. Absent special circumstances,
the two-day delay is probably not very
significant, and Victoria must accept and
pay for the pillows.
But if the contract also includes the
phrase, “time is of the essence,” the
law generally finds that any lateness is a
material breach. Thus Victoria would be
excused from the pillow contract if the
contract had this phrase. Businesses must ensure that shipments are made as
contractually specified so as not to breach contract.
© Getty Images/Comstock/Thinkstock Anticipatory Breach
Suppose William, in the above situation, instead called Victoria on May 15 and informed
her that he could not deliver the pillows on time. This is called an anticipatory breach or
repudiation of the contract. The law treats an anticipatory breach the same as an actual,
present breach, so Victoria now has three options: (1) she can tell William she is holding
him to the deal, see if he delivers on time, and if not, sue him then; (2) sue him now, on
May 15; or (3) simply buy the pillows from another supplier. Victoria should, however,
inform William of her choice so as to avoid confusion.
Note that this doctrine does not apply to debts. If you tell the bank you’re terribly sorry,
but you don’t think you’ll have the money for that student loan payment next month, the
bank cannot charge you a late fee now. The bank must wait until you are actually delinquent with the payment. rog80328_06_c06_111-133.indd 120 10/26/12 5:37 PM Section 6.2 Performance and Discharge of Contracts CHAPTER 6 Impossibility of...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.
- Spring '10
- Business Law