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.
Whether renunciation of a contract by one party before performance is due by the terms thereof can be treated by the adversary party as a breach so as to enable the adversary party to bring an action to recover damages for such breach before the time which was fixed by the contract for performance has arrived, is a question upon which there has been in the past a considerable conflict of authority and upon which some conflict still persists.
At one time the English courts seemed inclined to hold that the renunciation of the contract before performance was due did not give a right of action to the party who was not in default, for the purpose of enabling him to recover damages, until the time which was fixed by the contract for performance.1 This result, which was not required for the actual decision in these cases, was reached in part on the theory that breach could not occur until the time fixed for performance,2 and in part, apparently, on the theory that such renunciation would not even operate as a discharge of the party who was not in default from further performance, even though such further performanoe would aggravate the damages.3 .The real decision in one of these cases4 was that such renunciation of a contract of sale could not change the time as of which damages were to he estimated, from that which was fixed by the terms of the contract. In the other case the real decision was that if such renunciation were not withdrawn until the time fixed for performance, the contract could be regarded as broken.5
8 Hcinlein v. Imperial Life Ins. Co., 101 Mich. 250, 45 Am. St. Rep. 100, 25 L. F A. 627. 50 N. W. 615; Shaw v. Republic Life Ins. Co.. 69 N Y. 286.
9 Heinlein v. Imperial Life Ins. Co., 101 Mich. 250. 45 Am. St. Rep. 400, 25 L R. A. 627. 59 N. W. 615; Shaw v. Republic Life Ins. Co., 69 N. Y. 286.
10 Shaw v. Republic Life Ins. Co., 69 N. Y. 286.
11 Shaw v. Republic Life Ins. Co.. 69 N. Y. 286.
1 Phillpotts v. Evans. 5 Mees. & W. 475; Ripley v. M'Clure. 4 Exch. 345.
2 Ripley v. M'Clure, 4 Exch. 345.
3 Phillpotts v. Evans, 5 Mees. & W. 475.
For the modern rule on this point, see ch. LXXXVII.
The question was finally submitted squarely for decision in a case in which A had employed B to render personal services for a certain time, performing at a certain time in the future, and before the time for the commencement of performance had arrived A notified B that he would not accept B's services or pay compensation therefor, B thereupon brought an action before the time for performance had arrived, and it was held that such action could be maintained.6 The decision was placed on the ground that it was for the benefit of both parties to permit B to bring an action at once to recover damages for breach of the contract, and to seek other employment as the means'of mitigating damages, rather than to require B to remain idle until the termination of the period of employment fixed by the contract, and then to maintain an action to recover the contract price.7 Without discussion it seems to have been assumed that the right to bring an action before the time fixed by the contract for performance followed necessarily from the duty of the employe to mitigate damages.8 The question was presented later in a case in which A had agreed to marry B on the death of A's father; and while A's father was still alive A had declared that he would not marry B when his father died. B thereupon brought an action to recover damages during the life of A's father. The doctrine of the earlier case9 was followed, although in that case the contract was to be performed at a certain time, while in the case at bar it was not to be performed until the happening of an event which was bound to happen, it is true, but the time at which it would happen could not be foreseen. This distinction, however, was held to be immaterial, and B was allowed to recover, although the action was brought before the event which was fixed by the contract as that on the happening of which performance would be due.10
4 Phillpotta v. Evans, 5 Mees. & W. 475.
5 Ripley v. M'Clure, 4 Exch. 345.
6 Hochster v. De la Tour, 2 El. & Bl. 678.
7 Hochster v. De la Tour, 2 EL & Bl. 678.
8 Hochster v. De la Tour, 2 El. & Bl. 678.
9 Hochster v. De la Tour, 2 EL & Bl 678.
10 Frost v. Knight, L. R. 7 Exch. 111.
The principle which is involved in these cases has been recognized and followed in the courts of the United States; and it is now held by the great weight of authority that renunciation of a contract by one party before the time fixed for performance gives an immediate right of action to the adversary party.11
11 England. Frost v. Knight, L. R. 7 Exch. Ill; Hochster v. De la Tour, 2 El. & Bl 678; The Danube & Black Sea Railway & Kustendjie Harbor Co. v. Xenoa, 11 C B. (NS.) 152.
United States. Watts v. Camors, 115. U. S. 353, 29 L. ed. 406; Roehm v. Horst, 178 U S. 1, 44 L ed 953 [affirming. 91 Fed 345, 33 C. C A. 550]; Central Trust Co. v. Chicago Auditorium Association, 240 U S. 581, L. R. A. 1917B, 580, 60 L. ed 811; Foss-Schnelder Brewing Co v Bullock, 59 Fed. 83, 8 C C. A 11; Edward Hines Lumber Co v. Alley, 73 Fed. 603, 19 C. C A. 599; Marks v. Van Eeghen, 85 Fed 853, 30 C. C. A. 208; Colorado Tale Marble Co v Collins, 230 Fed. 78; In re Mullings Clothing Co., 238 Fed 58. L. R. A 1913A, 545; Dixon v• Anderson. 252 Fed. 694.
Arkansas. Wendt v. Ismert-Hincke Milling Co, 107 Ark. 106, 154 S. W. 194
California. Alderson v. Houston, 154 Cal. 1, 96 Pac 884; Walker v. Harbor Business Blocks Co., - CaL - , 186 Pac. 356.
Connecticut. Jordan v. Patterson, 67 Conn. 473, 35 AtL 521; Bridgeport v. Aetna Indemnity Co., 91 Conn. 197, 99 Atl. 566.
Florida. Hall v. Northern & Southern Co., 55 Fla. 235, 46 So. 178 (obiter).
Illinois. Roebling's Sons Co. v. Lockstitch Fence Co., 130 III. 660, 22 N. E. 518; Lake Shore Ry. v. Richards, 152 III. 59, 30 L. R. A. 33, 38 N. E. 773.
Indiana. Kurtz v. Frank, 76 Ind. 594, 40 Am. Rep. 275.
Iowa. McCormick v. Basal, 46 la.
235; McCormick Harvesting Machine Co v. Markert, 107 Ia 340, 78 N. W. 33; Sprague v. Iowa Mercantile Co., - Ia. -, 172 X. XV. 637 [citing. Quartan v. Law Book Co., 143 Ia. 517, 32 L. R A. (N.S) 1, 121 N. W. 1009. and Pardoe v. Jones, 161 Ia 426, 143 N. W. 405].
Kansas. Kansas Flour Mills Co. v. Brandt, 98 Kan. 537, L. R A. 1917A, 1000, 153 Pac. 1120. Kentucky. . Globe Fertilizer Co. v. Tennessee Phosphate Co (Ky ) 83 S W. 1177.
Maryland. Dugan v. Anderson, 36 Md. 567, 11 Am. Rep 509.
Michigan Hosmer v. Wilson, 7 Mich 294, 74 Am Dec 716; Platt v. Brand, 26 Mich 173
Minnesota. Alger-Fowler Co v. Tracy, 93 Minn. 432. 107 N W. 1124
New Jersey. O'Neil v. Supreme Council, 70 N. J. L 410. 57 Atl 463; Holt v United Security Life Ins & Trust Co. 76 N. J. L 535, 21 L R. A. (N.S ) 691, 72 Atl. 301.
New York. Howard v. Daly, 61 N. T. 362, 19 Am. Rep 285; Windmuller T. Pope, 107 N. Y. 674, 14 N. E 436; Tanenbaum v. Federal Match Co., 189 N. Y. 75, 81 N. E. 565.
North Dakota. Hart-Parr Co. v. Finley, 31 N. D. 130, L. R. A. 1915E, 851, 153 N. W. 137 [overruling on this point, Stanford v. McGill, 6 N. D. 536; 38 L. R. A. 760, 72 N. W. 9381.
Pennsylvania. Hocking ▼. Hamilton, 158 Pa. St. 107, 27 Atl. 836.
Tennessee. Brady v. Oliver, 125 Tenn. 695, 41 L. R. A. (N.S.) 60, 147 S. W. 1135 (obiter).
The supreme court of the United States seemed at one time to be opposed to the recognition of this doctrine, although it avoided direct refusal to recognize it.12 In subsequent cases, however, the question could not be avoided, and the supreme court of the United States has recognized the existence of the doctrine.13 In most jurisdictions it is now regarded as a rule which is so thoroughly settled that discussion is unnecessary.14
This result is generally explained on the theory that while this can not be a case of actual breach by reason of non-performance, since the time for performance has not arrived, repudiation is a breach of the right of the adversary party to have the contract kept open as a subsisting and effective contract.15 It has been explained, on the other hand, as a case in which there is not a breach, but an entire repudiation of the contract.16 The distinction in the last case between breach and entire repudiation is not clear. Probably the two ideas are substantially the same, although in some cases renunciation in advance is called a breach while in other cases that term seems to be reserved for breach by non-perfonnance.17 In any event the party not in default may bring an action to recover damages for breach, and he is not confined to an action in quasi-contract on the theory that the contract is a nullity from the beginning.18
Vermont. Cobb v. Hall, 33 Vt. 233.
Virginia. James v. Kibler, 04 Va. 165, 20 S. E. 417; Lee v. Mutual Reserve Fund Life Association, 97 Va. 160, 33 S. E. 056 (obiter).
Washington. Hunter v. Wenatehee Land Co., 50 Wash. 438, 97 Pac. 494.
West Virginia. James v. Adams, 16 W. Va. 245; Davis v. Grand Rapids School Furniture Co, 41 W. Va. 717, 24 S. E. 630; Pancake v. Campbell, 44 W. Va. 82, 28 S. E. 719; Miller ▼. Jones, 68 W. Va. 526, 36 L. R. A. (N.S.),408, 71 S. E. 248; Catlett v. Bloyd, - W. Va. - , 99 S. E. 81.
Wisconsin. Merrick v. Northwestern National Life Ins. Co., 124 Wis. 221, 102 N. W. 593.
See, Repudiation of Contracts, I, IT, by Samuel Willston, 14 Harvard Law Review, 317, 421
12 Smoot's Case, 82 U. S. (15 Wall) 36, 21 L. ed. 107; Dingley v. Oler, 117 U. S. 490, 29 L ed 984.
13 Roehm v. Horst, 178 U. S. 1, 44 L. ed. 953 [affirming, 91 Fed 345, 33 C. C. A. 550]; Central Trust Co. v. Chicago Auditorium Association, 240
U. S. 581, L. R. A. 1917B, 580, 60 L. ed. 811.
14 "The rule is well settled that, if before time of performance one party to a contract absolutely repudiates it and unequivocally refuses to perforin the same, the other party may treat such repudiation as a breach thereof and sue for damages." Sprague v. Iowa Mercantile Co., - la. - , 172 N. W. 637.
15 Frost v. Knight, L. R. 7 Exch. Ill; Nichols v. Scranton Steel Co., 137 N. Y. 471, 33 N. E. 561.
1 6 "The present action is not brought for a mere breach of the agreement. In strictness there can be no breach until the time for performance arrives. The action for a repudiation in toto, in advance of the time for performance, and is sustained upon grounds outlined in Hochster v. De la Tour, 2 El. & Bl. 078, 22 L. J. Q. B. (N.S.) 455, 17 Jur. 972, 6 English Ruling Cases, 576, the doctrine of which case was approved by our supreme court in O'Neill v. Supreme Council, A. L. H. 70 N. J. L. 410, 57 Atl. 463, 1 A. & E. Ann. Cas. 422, and adopted by this
In case of renunciation in advance by the principal, action may be brought at once not merely against the principal but also against his surety or one who is liable upon a bond to secure the performance of such contract 19