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.
Renunciation of a contract to sell land excuses tender of the purchase price and demand for the deed.1 If A has entered into a contract to make a lease to B, and B has agreed to pay rent and furnish a bond, A's refusal to perform discharges B from B's duty to perform or to make formal tender of performance;2 and B may have specific performance if he is ready and willing to perforin and notifies A thereof.3
Virginia. Barnes v Morrison, 97 Va. 372. 34 S. E. 93; Mutual Reserve Fund Life Association v. Taylor, 99 Va. 208. 37 S. E. 854.
West Virginia. Catlett v Bloyd, - W. Va. - , 99 S. E. 81
Wisconsin. Davidor v. Bradford, 129 Wis. 524, 109 N. W 576, Ambler T. Sinaiko, 168 Wis. 286, 170 N. W 270.
To the same effect, nee the obiter in Stanford v Magill, 6 N D 536, 38 L. R. A. 760, 72 N . 938
It has, however, been said to be error to charge the jury that if one of the parties to a contract "decides to re-flcirtl it" and notifies the other of that fact, that Mich other party is not then bound to continue performance is erroneous since rescission imports an agreement of both parties Adams v. Guiraud, - Colo. - , 169 Pac 580.
On renunciation by one party, the other party is no longer bound by the original contract if he elects to treat such renunciation as a discharge. National Contracting Co v. Hudson River Water Power Co, 192 N. Y. 209, 84
N E. 905; Moore v. Jenkins, - Tex. -, 211 S. W. 975.
Renunciation was apparently held not to excuse tender in Mowry v. Kirk, 19 O. S. 375.
2 Kansas. Bauman v. McManus, 75 Kan. 106, 10 L R. A. (N.S.) 1138, 89 Pac. 15
Kentucky. Hobbs v. Ray (Ky.), 96 S. W 589, 29 Ky. L. Rep. 999.
New York. Shaw v. Republic Ins. Co, 69 N Y. 280.
Ohio. George Wiedemann Brewing Co. v Maxwell, 78 O. S. 54, 84 N. E. 595.
Oregon. Longfellow v. Huffman, 49 Or 486, 90 Pac. 907.
West Virginia. Catlett v. Bloyd, - W Va. - , 99 S. E. 81.
Contra, Mowry v. Kirk, 19 O. S. 375.
1 Watson v. White, 152 111. 364, 38 N E 902; Durham v. Wick, 210 Pa. St 128, 105 Am. St. Rep. 789, 69 AtL 824.
2 George Wiedemann Brewing Co. v. Maxwell, 78 O. 8. 54, 84 N. E. 596
3 George Wiedemann Brewing Co. v. Maxwell, 78 O. S. 64, 84 N. E. 595.
On renunciation of a building contract by one of the parties the adversary party may treat such contract as discharged.4 If a contract has been made to construct a dam and before performance the party for whom the dam is to be constructed demands that the dam be constructed according to plans substantially different from those upon which the parties had originally agreed, the contractor may treat such conduct as a breach which discharges him from further performance.5
A contract to sell certain goods is so far discharged by renunciation by the vendee that it is not necessary for the vendor to tender the thing sold, in order to enable him to recover damages for broach.6 If A has entered into a contract to accept certain property and to pay therefor, and if he subsequently denies having made such offer and declares that he will not take such property, such conduct excuses tender.7 If A and B have entered into a contract by which they are to buy stock from C and by which they adjust their liabilities for the payment of the purchase price thereof, A's refusal in advance to comply with the terms of the contract is such a breach that B may treat the contract as discharged and may enter into a bona fide compromise with C.8 Under an instalment contract by the terms of which each instalment is to be paid for within a certain time after delivery, the refusal of the purchaser to pay for any instalments until all are delivered operates as a discharge of such contract.9
If the seller refuses performance such renunciation discharges the buyer from further performance or tender thereof.10 If A has agreed to sell an automobile to B, and to give B a certain credit upon B's old automobile, A's refusal to deliver the new automobile unless B consents to a reduction in the agreed credit on the old automobile, discharges B from the duty of tendering the balance of the purchase price.11
4 National Contracting Co. v. Hudson River Water Power Co., 192 N, Y. 209, 84 N. E. 965.
5 National Contracting Co. v. Hudson River Water Power Co., 192 N. Y. 209, 84 N. E. 966.
6 United States. Roehm v. Horst, 178 U. S. 1 [affirming, 91 Fed. 345, 33 C. C. A. 560].
Kansas. Bauman v. McManus, 75 Kan. 106, 10 L. R. A. (N.S.) 1138, 89 Pac. 15.
Montana. McCaull-Dinsmore Co. v• Jackson, - Mont. - , 189 Pac 771.
North Dakota. Hart-Parr Co. v. Finley, 31 N D. 130, L. R. A. 1915E, 851, 153 N. W. 137.
Vermont. Ellis' Admr. v. Durkee, 79 Vt. 341, 65 Atl. 94.
Wisconsin. Walsh v. Myers, 92 Wis. 397, 6G N. W. 250; Davidor v. Bradford, 129 Wis. 524, 109 N. W. 576; Ambler v. Sinaiko, 168 Wis. 286, 170 N. W. 270.
7 Ellis' Admr. v. Durkee, 79 Vt. 341, 65 Atl. 94.
8 Davidor v. Bradford, 129 Wis. 524, 109 N. W. 576.
9 Ambler v. Sinaiko, 168 Wis. 286, 170 N. W. 270. (Decided under section 45 of the Uniform Sales Act.)
10 Trowbridge v. Jefferson Auto Co., 92 Conn. 569, 103 AtL 843.
A contract to make and deliver certain goods is so far discharged by renunciation in advance by the adversary party that it is not necessary to make and tender the thing to be made in order to recover damages.12 If A has agreed to make steel rails for B, to be drilled as B directs, B's refusal to give directions, and subsequent refusal to take any rails, excuses A from making, drilling and tendering them.13 Under a contract to make wagons,14 or to print books,15 refusal to accept excuses tender. Renunciation by a creditor of a contract to accept a three months' note if indorsed by a responsible indorser, excuses the debtor from his obligation of preparing and tendering such note.16 If A has agreed to make a loan to B on condition that B shows a good title to property which he offers as security for such loan, A's renunciation of such contract in advance discharges B from his duty to show such title as a condition precedent to his maintaining an action upon such contract.17
If an insurance company renounces liability on a valid policy before loss, the insured is excused from tendering premiums which fall due "thereafter, even if he elects to treat the policy as in force; and when loss occurs, the insurance company can be compelled to pay the amount of the policy less the amount of the premiums which are due and unpaid;18 or the face of the policy discounted to the date of renunciation less the amount of premiums which in fact fall due thereafter, discounted to the same date.19 The same principles apply to a policy which was surrendered by a holder who was insane at the time, and which was accepted by the insurance company.20
1 1 Trowbridge v. Jefferson Auto Co., 92 Conn. 569, 103 Atl. 843.
12 Hinckley v. Pittsburgh Bessemer Steel Co., 121 U. S. 264, 30 L. ed. 967; Kingman v. Hanna Wagon Co., 176 111. 545, 52 N. E 328; Farwell v. Solomon, 170 Mass. 457, 49 N. E. 738.
In such a case, it is the duty of the party not in default to cease performance if this will mitigate damages.
See Sec. 2898 and ch. LXXXVII.
13 Hinckley v. Pittsburgh Bessemer Steel Co., 121 U. S. 264, 30 L. ed. 967.
14 Kingman v. Hanna Wagon Co., 176 111. 545, 52 N. E. 328.
15 Farwell v. Solomon, 170 Mass. 457, 49 N. E. 738.
16 Lovell v. Hammond Co., 66 Conn. 500, 34 Atl. 511. (The creditor had agreed to prepare such note, but prepared a note payable on demand, and refused to prepare a three months' note.)
17 Holt v. United Security Life Ins. & Trust Co., 76 N. J. L. 585, 21 L. R. A. (N.S.) 691, 72 Atl. 301.
18 Wayland v. Western Life Indemnity Co., 166 Mo. App. 221, 148 S. W. 62G; Shaw v. Republic Life Ins. Go., 69 N. Y. 286.
The difficulties which attend the attempt to keep the policy alive after repudiation by the insurance company, even if premiums are tendered, are pointed out in Day v. Connecticut General Life Ins. Co., 45 Conn. 480, 99 Am. Rep. 693.