246. Whether or not failure of one party to perform the contract in whole or in part operates as a discharge of the other, or merely gives him a right of action for the breach, depends upon the nature of the respective promises, or, in other words, on the question whether they are -

(a) Independent of each other, in which case, as a rule, there is no discharge.

(b) Conditional upon each other, in which case, as a rule, there is a discharge.

In the cases of discharge by breach with which we have thus far dealt, the party at fault so deals with the contract, by word or act, as to intimate to the other party that performance, or further performance, as the case may be, on his part, is needless. In such cases, as we have seen, the courts hold that the party not in default is not bound to tender performance, but may consider the contractual tie broken, and sue at once for the other's breach. These cases are very clear and simple; but where the breach by one party does not make the contract wholly incapable of performance, and is not accompanied by any overt expression of intention to abandon his rights, it is not always easy to determine whether the other party is thereby discharged, or whether he merely acquires a right of action for the breach. It is necessary in these cases to look to the terms of the contract, and ascertain the intention of the parties as to the nature of their respective promises. The difficulties resolve themselves into the question whether the promises of the parties are independent of, or conditional upon, one another.70 This question must be discussed at some length; but it may be well to state at the outset that, as a general rule, failure of a party to perform his promise does not discharge the other from liability to perform his, if the promises are independent of each other; but that it is, as a rule, otherwise, if the promises are conditional upon one another.

69 Planche v. Colbnrn, 8 Bing. 14. So, also, where a person had been employed by a corporation for a number of years, and the company was voluntarily Wound up before the time bad expired, so that further performance by it was rendered impossible, the employe was permitted to sue at once for the breach of contract Ex parte Maclure, L. R. 5 Ch. App. 737. And see Seipel v. Trust Co., 84 Pa. 47; UNITED STATES v. BEHAN, 110 U. S. 338, 4 Sup. Ct. 81, 28 L. Ed. 168, Throckmorton Cas. Contracts, 409; Newhall Engineering Co. v. Daly, 116 Wis. 256, 93 N. W. 12. See "Con-tmcts," Dec. Dig. (Key-No.) § 314; Cent. Dig. § 1446.

Same - Independent Promises

247. Failure of one of the parties to a contract to perform an independent promise does not discharge the other party from liability to perform, but merely gives him a right of action for the breach.

248. A promise may be independent in the following ways:

(a) It may be absolute - that is, wholly unconditional upon performance by the other party; but promises, each of which forms the whole consideration for the other, will not be held independent of one another, unless the intention of the parties to make them independent is clear.

(b) It may be divisible - that is, the promise may be susceptible of more or less complete performance, and the damage sustained by an incomplete performance or partial breach may be apportioned according to the extent of the failure.

(c) It may be subsidiary - that is, the promise broken may be a term of the contract which the parties have not regarded as vital to its existence.