This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Breach even of the sort that may discharge the adversary party does not necessarily have that effect. Breach by one party gives the adversary party an election in so far as his exercise of the right of election does not increase the damages resulting from the breach.1 The adversary party not being in default may (1) treat the breach as a discharge, or (2) treat the breach as not affecting the contract, and the contract as still being in force. The choice of the former alternative by the party not in default operates as a final discharge of the contract in the absence of a subsequent waiver thereof acquiesced in by both parties. If a breach by the promisor is accepted as discharge by the promisee, the subsequent offer of the promisor to perform does not prevent the contract from operating as a discharge,2 nor does it give the promisor the right to recover on the contract;3 nor does it prevent him from being liable for breach of such contract.4 Choice of the latter alternative by the party not in default has certain definite consequences, (a) If the party in default wishes to perform after such default he may do so5 and recover under the contract,6 less the amount of dam ages, if any, caused by delay. In such case the contract is not discharged, but remains in full force, (b) If before the party not in default has accepted the breach as discharging the contract, such contract becomes impossible of performance, it will be discharged.7 To operate as such discharge, however, the impossibility must be of the sort that would operate as a discharge if it existed before breach, (c) If the party originally in default performs, before the adversary party elects to treat it as a breach, his rights under the contract stand as if the contract had never been broken,8 except as concerns his liability for damages. Subsequent breach by the party not in default may prevent the latter from recovery, and in such case he cannot revert to the original breach as a discharge. Thus A was to manufacture certain cars for a railroad, using in part material furnished by the railroad. This material was not furnished when due, and A was delayed in commencing work. Instead of treating this as a discharge A performed when the material arrived. Before A had delivered the cars they were destroyed by fire. It was held that A could not recover from the railroad, since the fire was in no way caused by the delay in furnishing material, and such breach was waived as a ground of discharge by A's continuing performance.9
2 Montgomery v. Hunt, 99 Ga. 499; 27 S. E. 701; Pungs v. Brake Beam Co., 200 111. 306; 65 N. E. 645.
3 See Ch. LXXIII.
4 See Ch. LXXV. For negative specific performance by injunction, see Ch. LXXVI.
5 See post, this chapter.
6 See Ch. LXX1V.
1"The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed and then hold the other party responsible for all the consequences of non-performance; but in that case he keeps the contract alive for the benefit of the other party as well as his own; he remains subject to all his own obligations and liabilities under it, and enables the other party not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to complete it. On the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as a wrongful putting an end to the contract, and may at once bring his action as on a breach of it; and in such action he will be entitled to such damages as would have arisen from the non-performance of the contract at the appointed time, subject, however, to abatement in respect of any circumstance which may have afforded him the means of mitigating his loss." Frost v. Knight, L. R. 7 Ex. Ill, 112; quoted in Roehm v. Horst, 178 U. S. 1, 11.
2 Contract to convey realty. Clover v. Gottlieb, 50 La. Ann. 568; 23 So. 459. Contract for constructing waterworks. Grand Haven v. Waterworks, 99 Mich. 106; 57 X. W. 1075. Breach by employee of contract of employment. Tennessee Mfg. Co. v. James, 91 Tenn. 154; 30 Am. St. Rep. 865; 15 L. R. A. 211; 18 S. W. 262.
3 The Akaba, 54 Fed. 197.
4Emack v. Hughes, 74 Vt. 382; 52 Atl. 1061.