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.
If a contract is entered into whereby A is to sell1 or lease2 property to B, or to do certain work for B,3 the performance whereof is to extend over a considerable space of time, and B is to pay in installments during such space of time, B's failure to pay an installment operates, according to many authorities, as a breach of the entire contract and discharges A from further performance. This holding is placed by some courts upon the ground that such default in payment is an abandonment of the contract.4 If the party in default expressly or impliedly repudiates liability under the contract, as by notifying the adversary party to quit work when he expresses himself as willing to continue if payments were made or assured,5 the theory of abandonment clearly applies. Other courts base their holding on the theory that the party in default has by withholding payment made performance by the adversary party impossible.6 Other authorities, however, hold that a mere default in payment of an installment, if not coupled with facts showing an intent on the part of the party in default to renounce his liability under the contract, does not operate as a discharge of the adversary party.7 If the vendor, instead of treating non-payment of one installment as a discharge, sues to recover such installment, the contract is so far severable that he may recover any installment due without waiting until he delivers all the installments.8 The same principle applies to a contract to do work payable in installments.9
4" The contract in this case is clearly an illustration of a eon-tract of sale which is entire on one Bide and apportionable on the other." Johnson Forge Co. v. Leonard, 3 Penne. (Del.) 342, 347; 94 Am. St. Rep. 86; 57 L. R. A. 225; 51 Atl. 305.
1 Honck v. Muller, 7 Q. B. D. 92; Veerkamp v. Drying Co., 58 Cal. 229; 41 Am. Rep. 265; Johnson Forge Co. v. Leonard, 3 Penne. (Del.) 342; 94 Am. St. Rep. 86; 57 L. R. A. 225; 51 Atl. 305; Savannah Ice-Delivery Co. v. Transit Co., 110 Ga. 142; 35 S. E. 280; Baltimore v. Schaub, 96 Md. 534; 54 Atl. 106; McGrath v. Gegner, 77 Md. 331; 39 Am. St. Rep. 415; 26 Atl. 502; National, etc., Co. v. Machine Co., 181 Mass. 275; 63 N. E. 900; Kokomo Strawboard Co. v. Inman, 134 N. Y. 92; 31 N. E. 248;
Shinn v. Bodine, 60 Pa. St. 182; 100 Am. Dec. 560.
2 Bean v. Fitzpatrick, 67 N. H. 225; 38 Atl. 722.
3 Setting hedge. Eastern Arkansas Hedge-Fence Co. v. Tanner, 67 Ark. 156; 53 S. W. 886. Building levee. San Francisco Bridge Co. v. Improvement Co., 119 Cal. 272; 51 Pac. 335. Building road. Porter v. Reservoir Co., 100 Cal. 500; 35 Pac. 146. Constructing canal. South Fork Canal Co. v. Gordon, 6 Wall. (U. S.) 561. Clearing land. Newton v. Improvement Co., 62 Minn. 436; 64 N. W. 1146. Digging ditch. Dyer v. Irrigation District, 25 Wash. 80; 64 Pac. 1009.
4 Johnson Forge Co. v. Leonard, 3 Penne. (Del.) 342; 94 Am. St. Rep. 86; 57 L. R. A. 225: 51 Atl. 305.
5 Tennessee, etc.. Ry. v. D.inforth, 112 Ala. SO; 20 So. 502.