Anticipatory Repudiation Flashcards
anticipatory repudiation
When someone clearly says or shows they won’t do what they promised in a contract before they were supposed to do it, it’s like treating them as if they’ve already broken the contract, even though they technically haven’t yet. This can happen
ezzz–> when one party makes a clear and definite statement that they won’t perform their part of the agreement.
effect of repudiation by one party
Excuses the other party from the duty to perform; and
If one person breaks their promise before it is time to deliver, other party can ask for compensation right away
But if person already did what they promised and then the first person backs out, they have to wait until deadline passes before they can demand compensation and sue
retraction
if someone says that they can not keep their promise (repudiation) they can take it back before the other person
- gives notice that they are ending the contract before any performance happens
- takes legal action for breaking the promise
- makes a significant change based on the broken promise (materially changes their position in reliance on the repudiation)
Adequate assurance
MUST BE IN WRITING
If someone’s words or actions make it seem like they might not keep their promise, but it’s not absolutely clear, the other person can ask for proof that they’ll follow through. If it’s reasonable, they can even pause their own part of the deal until they get that proof.
Must receive assurance, if it is not given then the party can treat the contract as repudiated
indirect communication
The direct statement or action that shows someone won’t keep their promise must come from the person involved in the contract. But if someone gets worried about the promise being broken because of something else they heard or saw, like news or rumors, they can still ask for proof that the promise will be kept.
Has to come directly
Can not be indirectly through youtube or anything
Form of the demand
UCC and Common Law
Under the UCC, a demand for adequate assurance of performance must be in writing
Under common law, a demand for adequate assurance may take any form
remedies –> expectation damages (normal remedy)
Expectation interest
Calculating money damages
He painted half and owner told him to stop
If painter had painted - he would profit 500$
He bought supplies and salaries for 4500$
$2500 ←—-painters actual position—————-0$ —————-painters expectation $500—->
He only spent $2500 since he only painted half the house
+$2500 to move from -2500 back to 0$
+500 to get from $0 to $500 as expected
3000$
The expectation money damages are $3000
Will give them +500 which they expected to be at painting the house
Time for giving assurance
If someone asks for proof that a promise will be kept, the person they asked has to respond within a reasonable time, but it can’t take more than 30 days under the UCC
Common law is similar but has no 30 day cap, recipient of a demand for adequate assurance, just have to respond within a REASONABLE TIME
reliance damages –> can not prove damages not certain, or promissory estoppel
Reliance interest
Expenses gotten because of reliance in contract
It is difficult to calculate expectation damages with certainty
Damages need to be certain, can not be speculative, need to be for sure
The painter sues for promissory estoppel because unable to sue for breach of the contract
What expenses did the painter incur in reliance on the contract ?
$2500,
Restitution damages
In simple terms:
When a contract is rescinded due to a defense, the plaintiff can choose to sue for restitution instead of breach of contract (expectation damages).
Restitution focuses on unjust enrichment, meaning how the defendant benefited from the plaintiff’s actions. The plaintiff seeks to recover the value of the benefit they provided to the defendant.
