Breach & Anticipatory Repudiation

Question 1

When does breach of contract occur ?

Answer 1

When a duty to perf. exists, nonperformance is a breach of contract unless the duty is discharged by:

• Agreement
• Statute
• inability to perform
• waiver

Question 2

Material Breach of Contract - Common Law

Answer 2

When nonbreaching party doesn’t get the subst. benefit of its bargain

• Nonbreaching party does NOT need to perf. AND
• Can pursue remedies for breach
  
  • including damages

Question 3

Minor Breach of Contract - Common Law

Answer 3

Breaching party has substantially perf.

• Nonbreaching party entitled to pursue remedies for nonmaterial breach
• BUT must still perf. under the K

Question 4

Breach of Contract - UCC

Answer 4

Seller must strictly perf. all obligations under the K or be in breach

Question 5

When is Anticipatory Repudiation Under the Common Law applicable?

Answer 5

When promisor repudiates a promise b/f the time for perf. is due

Question 6

Anticipatory Repudiation - Common Law

What are the nonbreaching party’s options?

Answer 6

1. Treat repudiation as a brach, or
2. Ignore the repudiation & demand performance of promisor
   
   • If ignored, promisee must susepend perf. if cont. perf. would increase damages for the promisor

Question 7

When can repudiation be retracted?

Answer 7

Can be retracted until:

1. promisee acts in reliance on the repudiation
2. Accepts repudiation by signaling acceptance to the breaching party OR
3. commences action for breach of K (damages or spec. perf.)

Question 8

Doctrine of anticipatory repudiation & Unilateral Ks

Answer 8

Doesn’t apply to unilater contracts

Question 9

When does Anticipatory Repudiation occur under the UCC ?

Answer 9

Occurs when there has been:

• an unequivocal refusal of the buyer or seller to perf. or
• when reas. grounds for insecurity arise AND
• the other party fails to provide adequate assurances w/in reas. time
  
  • Can’t exceed 30 days

Question 10

When can a party request an assurance of performance?

Answer 10

When anticipatory repudiation can’t be est. but there are reas. grounds for insecurity

• The insecure party can make a demand for adequate assurance of performance

Question 11

What is the effect of making a demand for assurances under the UCC?

Answer 11

1. a Party w/ reas. grounds for insec. may suspend his own perf. if it is commercially reas. to do so
2. Failure to respond w/in reas. time (can’t exceed 30 days) = a repudiation by the non-responding party
   
   • can still retract repudiation until his next perf. is due
   • unless other party has already materially changed his position or indicates he considers repudiation final

Question 12

What are the rights of the aggrieved party upon the repudiation of a K?

Answer 12

1. Cancel K & terminate all obligations under the K
2. Bring action for damages or spec. perf. AND
3. Ignore the repudiation & cont. under the K

Question 13

When can a contract be anticipatorially repudiated?

Answer 13

1. A party makes a definitive statement indicating it will commit a breach of contract OR
2. A party makes a vol. act that renders the party unable to perf. its contractual oblig.

Question 14

UCC - when is there a Breach of Contract by the seller?

Answer 14

When good tendered fail in any respect to conform to the K

Question 15

UCC - Breach of Contract

What is the effect on the Buyer when there is a breach by seller?

Answer 15

Breach by seller relieves payment obligation of the buyer

Question 16

UCC - Breach of Contract

What is the Doctrine of Material Breach?

Answer 16

Doctrine of Material Breach - only applies to installment Ks or when parties provide in their K

Question 17

How must Anticpatory Repudiation occur under the Common Law?

Answer 17

Repudiation must be clear and unequivocal (not just mere insecurity)

• May be words or acts

Question 18

Anticipatory Repudiation - Common Law

What is the effect if date of perf. has not passed and only perf. left is payment?

Answer 18

Must wait for actual breach b/f filing suit