Anticipatory Repudiation

Things that, by themselves, won't constitute Anticipatory Repudiation

1) Insolvency & Other Financial Difficulties 2) Modifications

3 Types of Anticipatory Repudiation

1) Partial 2) Material 3) Total

Issues with Anticipatory Repudiation

1) The NRP must decide what kind of breach it would be and if they get it wrong, the NRP could put themselves into breach instead 2) A party can repudiate the contract, but may not mean repudiation of the whole contract - If it's not a repudiation of the whole contract, then the other party could constitute a breach instead

RECAP (must ask yourself 2 things)

1) Was it unequivocal and unambiguous? 2) If yes, was it partial, material, or total?

Modifications

A modification alone will not be sufficient to be an AR A repudiation will happen when language, under a fair reading, amounts to a statement of intention not to perform except on conditions which go beyond the contract (modification)

Retractions of Anticipatory Repudiation

A repudiating party has an unencumbered right to retract the repudiation at any point prior to: 1) Reliance by the NRP on the repudiation 2) NRP has indicated to the repudiating party that repudiation is considered final 3) NRP has commenced action for breach (brings lawsuit) 4) Time for performance has come

Anticipatory Repudiation (definition)

An unequivocal, unambiguous manifestation of intent not to perform when performance is due

Reliance by the NRP on the repudiation

Do not need to seek or receive the repudiating party's consent to rely on the repudiation No notice of reliance is required by the NRP to the repudiating party

NRP has indicated to the repudiating party that repudiation is considered final (Final)

Final = the moment the repudiating party receives the notification NRP does not need the repudiating party's consent

When must Anticipatory Repudiation happen?

Must be after formation but before performance is due

Total Anticipatory Repudiation

NRP can discharge performance and immediately seek remedies

Material Anticipatory Repudiation

NRP can suspend performance and await a cure

Partial Anticipatory Repudiation

NRP still has to perform in conformity with the contract and then sue is necessary at a later date

Why isn't an AR considered a breach?

Not a breach because the time for performance hasn't yet come

NRP has indicated to the repudiating party that repudiation is considered final (Notice)

Notice may be given by: (1) bringing a lawsuit; (2) verbal notice; or (3) other conduct indicating finality

NRP has commenced action for breach (brings lawsuit)

Once the NRP files a lawsuit, the ability to retract the repudiation is gone

Insolvency & Other Financial Difficulties

The mere fact that a party is insolvent does not mean that they can't come up with other means of performance At most, insolvency is the high likelihood that a party won't perform

Manifestations

could be written, oral, or through conduct

If the manifestation arises through conduct

the conduct must present functional impossibility as conduct otherwise is ambiguous

If the manifestation is ambiguous

the way that reads the party does intend to perform is the one that prevails