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.
By electing to treat the contract as in effect, the party not in default loses his right to maintain an action for such breach before the time fixed by the contract has arrived,1 at least if the party who has renounced the contract does not persist in such renunciation. If the party who is not in default refuses to accept a renunciation as a breach, he can not subsequently alter his position and treat such renunciation as a breach, so as to recover damages therefor as a counterclaim in an action upon a different contract which was brought by the party in default on the contract in question after his renunciation and before the party who was not in default refused to accept it as breach.2 The party who is not in default may, however, at any time before the party who has renounced the contract withdraws his renunciation, elect to treat it as a breach, even if he has at first refused to consider it as a breach, and has demanded performance.3
10 See oh LXXXVII.
11 Louisville Packing Co. v. Crain, 141 Ky. 370, 132 S. W. 575.
12 Ga Nun v. palmer, 202 N. Y. 483, 36 L. R. A. (N.S.) 922, 96 N. E. 99.
13 Ga Nun v. Palmer, 202 N. Y. 483, 36 L. R. A. (N.S.) 022, 06 N. E. 90.
1 Landes v. Klopstock, 252 Fed. 80.
"Upon receipt of the defendant's letter the plaintiffs need have done nothing; they could have waited until June 15th and sued the defendant under any of the remedies open, to a seller, or they might themselves have declared the contract at an end, save for their right to sue at once under the doctrine of anticipatory breach. It is perfectly clear that they did not mean to declare the contract at an end. Three times in their letters they speak of the defendant's duty under the contract to give the notice, and they leave no ground for doubt that they intended to hold the defendant to his performance according to the contract as they understood it.
"We need not consider whether, having taken that attitude towards the contract, the plaintiffs were excused from further performance if the defendant's obligation had been conditional. The English rule is that the promisee, if he means to ignore the repudiation, must still perform, quite as though the promisor had not repudiated. The language of Lord Cock-burn In Frost v. Knight, L. R. 7 Ex. Ill, 112, has been accepted generally, and in Dalrymple v. Scott, 19 Ontario Appeals, 477, it was the basis of the. decision. True, it is difficult to see how these cases can be reconciled with the well-settled rule in this country that, when the promisor repudiates, the promisee not only need not perform, but, if he chooses to perform, does so on his own account. Clark v. Mar-siglia, 1 Denio (N. Y.) 317, 43 Am. Dec. 670; Dillon v. Anderson, 43 N. Y. 231; Danforth v. Walker, 40 Vt. 257; Moline Scale Co. v. Beed, 52 Iowa 307, 3 N. W. 06, 35 Am. Rep. 272; Heaver v. Lanahan, 74 Md. 403, 22 Atl. 263; Gibbons v. Bente, 51 Minn. 499, 53 N.
W. 756, 22 L. R. A. 80; Davis v. Bron-8on, 2 N. D. 300, 50 N. W. 836, 16 L. R. A. 655, 33 Am. St. Rep. 783. In the case at bar we have not that question, because the plaintiffs had no conditions precedent to perform; they were required to do nothing until the day of payment arrived. We may therefore assume that the American rule obtains. "They chose, on the other hand, to take positive action, and in that they erred, for only two courses were open to them, and they attempted an intermediate. They might have declared the contract at an end and sued at once. We pass the question whether any other declaration is necessary beyond the bringing of an action; we do not hold that there must be a prior acceptance of the rescission, so called. They did not accept the repudiation in any way; on the contrary, they refused to recognize it, quite as clearly as though they had said, 'We decline to recognize your right to repudiate. Having so ignored it, as was their right, they added a condition, not authorized by the contract, upon which their own continued performance was to depend. This they had no right to do. Rubber, etc., Go. v. Manhattan, etc., Co., 221 N. Y. 120, 116 N. E 789. It is true that they supposed they were acting under the contract, and the case is a hard one, but no harder than any other in which a party acts upon an interpretation of a contract, with which the court9 do not agree. That is a hazard all must run.
"It is suggested that, as the plaintiffs had the right to declare an immediate breach, they might accord the defendant the right to retract, and that their letters should be taken as equivalent to a declaration that, if the defendant persisted in his repudiation until June 5th, they would accept the repudiation. They might have done this; but they did not. The question is whether we may regard their insistence upon the contract, which they misunderstood, as in effect a declaration that it was at an end. While we have avoided deciding whether such a declaration is necessary in order to suo upon a repudiation, either before or after the stipulated time of performance, we do hold that, if the promiseo insists upon performance, he waives the right so to sue upon the repudiation, certainly if he does not himself retract in season." Landes v. Klop-stock, 252 Fed. 89.
2 Zuck v. McClure, 98 Pa. St. 541.
3 Ault v. Dustin, 100 Tenn. 366, 45 S. W. 981.