Where not only the promises but also the performances in a bilateral contract are intended as the exchange for one another,48 it may be supposed (1) that the plaintiff's performance was to precede that of the defendant; (2) that the performances were concurrently due, or (3) that the plaintiff's promise was to follow the performance by the defendant. In neither of the first two cases supposed is there any difficulty in effecting by the measure of damages applied a cancellation of the mutual obligations of the parties. In the case first supposed if the plaintiff has already performed, the defendant's obligation became absolute and the measure of damages will be based on the full value of the performance due from the defendant. If the plaintiff has not performed but has been excused from performing, the value of the plaintiff's performance will be deducted from the value of the defendant's performance. In the second case supposed the situation is similar; the plaintiff will ordinarily not have performed but will have merely tendered performance conditionally; therefore the value of his performance must be credited to the defendant. In the third case, however, the problem is more troublesome. It may seem that since a right of action arises as soon as the defendant has broken his promise the plaintiff should at once acquire a right of action for the full value of the defendant's performance, though it may be that the plaintiff himself will not subsequently perform, and in that event the recovery of the plaintiff against the defendant will prove excessive. If the plaintiff is bound to perform the subsequent act and is able to do so; and if the defendant will acquire an effective right of action against him later, the result is proper. The defendant when he made a contract of the kind in question assumed the risk incident to giving credit to the plaintiff. It may be, however, that the plaintiff has been legally excused from his performance because of the failure of the defendant to render prior performance. Obviously the defendant cannot be charged with the full value of his performance while the plaintiff is subjected to no liability because of his non-performance of the subsequent duty. Therefore, if the plaintiff recovers the full value of the defendant's performance, this recovery must operate as an election to go on with the contract; and as a general rule undoubtedly the plaintiff may thus recover full damages, remaining subject to bis own duty to perform subsequently when the obligation on his part matures.49
48 See supra, Sec.Sec.812 el seq.
May the plaintiff have this full damage even though the defendant has totally repudiated the contract or it appears that he will not subsequently get the advantage of the plaintiff's performance? Clearly not if the defendant's prospective failure to get the advantage of the plaintiff's subsequent performance is due to any other cause than his own refusal to take it.50
49 See infra, Sec. 1364.
50 E. g., where the plaintiff because of the defendant's failure to perform, himself has refused or failed to perform. Stix, Baer & Fuller Dry Goods Go. v. Ottawa Realty Go., 273 Mo. 376, 202 S. W. 577. But see Dunlop v. Grote, 2 Gar. & Kir. 153.
The mere fact, however, that the defendant repudiates the contract and asserts that he will not take the performance of the plaintiff when that becomes due seems no reason in itself why the plaintiff should not recover full damages. The defendant will thereupon acquire a right to the plaintiff's performance subsequently. If the defendant does not choose to avail himself of this right it is his own fault. But this statement should be qualified by the rule of avoidable consequences. The power of one who has contracted to buy manufactured goods to preclude by repudiation or countermand the seller from enhancing damages by completing the manufacture51 cannot depend on whether the purchaser had agreed to pay the price in advance. The plaintiff will always be entitled to the profit he would have made on the contract, but he should never be allowed in effect to enforce it specifically if by so doing he will needlessly enhance damages. This is a principle of obvious justice.52.
51 See supra, Sec.1298.
52 This question has arisen in several recent decisions on contracts made by correspondence schools. The following extract from a Massachusetts decision cites the authorities: It is submitted that only on the assumption that there was no saving to the plaintiff, or none shown, by the defendant's failure to take the instruction contracted for, can the decision be supported. That the mutual promises were not wholly independent in any proper sense may be determined by considering what the court would have done if the plaintiff had repudiated or failed wrongfully to keep its promise to instruct. The contract was not aleatory; the defendant did not agree to pay a fixed sum for a chance. In the case in question, International Text-Book Go. v. Martin, 221 Mass. 1, 108 N. E. 469, 470, it was said: "The defendant's contention comes to this: The maker of an independent promise who renounces his right to the thing paid for by him can show that fact in reduction of the sum the promisee is entitled to recover under the independent promise. The case of International Text-Book Go. v. Martin, 82 Neb. 403, 117 N. W. 994, seems in effect to be a decision that there is such a right to reduce the amount to be recovered in such a case. It was there held that the burden was on the defendant to prove the benefit ensuing to the plaintiff by the defendant's renunciation, and in the absence of proof of such a benefit that the sum stipulated for had to be paid.
" If that be so ordinarily, or if ordinarily there is a question as to that, it is disposed of in the case at bar by the terms of the contract between the plaintiff and the son, which was guaranteed by the defendant and by reference made part of the contract of guaranty. It is there expressly provided that:
"'This subscription, when accepted by you [the plaintiff], shall not be seems rather to be that damages which the plaintiff might have avoided, without loss to himself, are not really caused by the defendant's wrong and, therefore, are not to be charged against him. The principle has wide application and frequently involves the establishment of a standard of reasonable conduct. Where a plaintiff has contracted to buy goods or services he cannot ordinarily recover damages for the consequences of going without such goods or services altogether because it is possible to substitute other goods or services obtained elsewhere, and thus in large measure avoid these injurious consequences. Thus a failure to perform a contract to insure, will not justify a recovery of the value of the property when destroyed,55 unless the plaintiff was ignorant of the failure prior to the loss. 56 A breach of contract of service will not justify damages for loss of a crop which the employee was to oversee.57 Similarly where a plaintiff has contracted to sell goods or services, which the defendant has wrongfully refused to take, the breach causes only such damage as will occur if the plaintiff makes the best use of the goods or services left on his hands. Where inferior goods have been furnished under a contract, the buyer cannot recover greater consequential damages caused by using them when he knew of their unfitness, than would have been caused by another possible course, though the seller had sold the goods for that purpose.58 But a plaintiff may charge injurious avoidable consequences to the defendant, if in order to avoid them he would have to forego profits or advantages to which he is entitled by the terms of the contract.59 When by his contract a buyer is entitled to a period of credit, he need The form of the promise should not be controlling. Even though the contract in terms provide that the full amount shall be recovered, the deduction should be allowed. Such a provisubject to cancellation, and that you will not be required to refund any part of the money paid for said scholarship,' and 'We [the plaintiff] do not refund money paid for scholarship.'
"The direct effect of these two provisions is confined to the return of money paid by the scholar. But indirectly they affect the construction of the contract. If money paid for the 'scholarship' is not to be returned under any circumstances, it is plain that as matter of construction the contract between the plaintiff and the son was a contract by which the son bought a 'scholarship/ that is to say a right to be instructed in telephone engineering for a period of five years or until he became qualified to receive a diploma before the expiration of that time. Be was not bound to study at all if he did not wish to. On the other hand although he was at liberty to study when he wished at any time during the five years, he was bound to pay for the 'scholarship ' in instalments the last of which came due in one year and three months after the signing of the contract. What he paid for was the right to the instruction, and the sum to be paid for that right was to be paid whether the son did or did not exercise his right to be instructed.
"The defendant has placed great reliance on International Text-Book Go. v. Schulte, 151 Mich. 149, 151, 114 N. W. 1031; International Textr Book Co. v. Jones, 166 Mich. 86, 88, 131 N. W. 98, 99; International Text-Book Go. v. Marvin, 166 Mich. 660, 968, 132 N. W. 437; International Text-Book Co. v. Roberts, 168 Mich. 501, 506, 134 N. W. 160. The doc-nine established by the first two of these cases and recognised by the other two is stated in these words in the second case: 'It is the rule in this state that a party to an executory contract may always stop performance by the other] party by an explicit direction or renunciation of the contract, and refusal to perform further on his part, and that he is thereafter liable only upon the breach of the contract. The contract price is recoverable only upon the theory of performance, never upon the theory of inability to perform brought on by the refusal of either party to go on.'. It was accordingly held in the first two cases that the only sum which could be recovered was the damage proved by the plaintiff; and there being no affirmative proof of damages suffered by the plaintiff in those cases it was held that the plaintiffs were entitled to nominal damages only. That doubtless is the rule in case of dependent promises. For example, where A agrees to buy of B, a chattel and to pay a specified sum for it. If A refuses to go on with the contract before the title to the chattel passes all that B can recover is damages. See for example Barrie v. Quimby, 206 Mass. 259, 92 N. E. 451. But see in this connection White v. Solomon, 164 Mass. 516, 42 N. £. 104, 30 L. R. A. 537; National Cash Register Co. v. Dehn, 139 Mich. 406, 102 N. W. 965, where it was held that even in case of Bales of chattels the rule does not apply in case it is agreed that payment is to be made before the title passes. The case at bar does not come within the rule stated in the Michigan cases because in the contract here in question the promise to pay was an independent promise." The facts in the Michigan decisions are .not distinguishable from those sion is clearly penal, amounting in effect, as it does, either to a statement that the defendant if in default shall pay the full price for something which he will not get and which the plaintiff obtains a benefit by retaining, or at least to a statement that the plaintiff may needlessly enhance damages.