Note:
Breach by Anticipatory Repudiation
Anticipatory
repudiation occurs when a party clearly states their intent to breach before
the date of performance has arrived.
When this happens, there are a couple of questions to be asked:
1. Can the
injured party due after the repudiation but before the date set for
performance?
2. By the prices
of what date should you measure damages?
Case:
Hochster v. De La Tour (excerpt)
This
does not mean that the plaintiff must sue upon repudiation. It is a hard and fast rule, however, that
anticipatory repudiation discharges any duties of the aggrieved party even
prior to the date of performance.
Questions
1. § 2-712 adds
more certainty to the damages that a plaintiff will receive if the plaintiff
“covers”. It would appear that Missouri
Furnace would not be punished for making a substitute forward contract. It seems that § 2-712 combined with § 2-713
would placate Prof. Corbin.
2. It is suggested
that Missouri Furnace could collect consequential damages from Cochran so long
as Cochran knew of Missouri Furnace’s needs.
3. The comments
to § 2-713 (buyer’s damages for repudiation) state that this section is an
alternative to § 2-712 (cover) and that it applies only if the buyer doesn’t
cover.
4. If Reliance
sued Treat today, they would collect the difference between the market price
and the contract price on the date of repudiation, rather than on the date of
performance.
Back to Limitations on Expectation
Damages