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.
In case of voluntary inability to perform, the adversary party who is not in default may treat such act as discharging him from further liability under the contract.1 A agreed to pay to B seventy-five dollars in goods. A made an assignment for the benefit of creditors. This was held to disable A from performance, so that B, without demand, could set off such amount against a debt due from him to A.2 Some courts hold that he may treat the contract as in force, if a continuing contract, and sue for instalments as they become due thereunder. Under a contract whereby A agrees to pay B royalties, if A makes it impossible for himself to perform, B may treat such act as an entire breach and sue for damages, or he may treat the contract as in force and sue for the instalments as they become duo.3 While the act of a party in making performance on his own part impossible may operate as a discharge if the adversary party elects to treat it as a discharge, such adversary party can not treat it as a discharge if performance has continued and if he has in fact enjoyed the benefits of full performance.4 The party who is not in default may bring action at once, even if the time for performance has not yet arrived.5 If A agrees to pay a certain sum of money to B when A collects a note executed by C, which B has transferred to A, A's act in selling such note is a discharge of such contract, and B may maintain an action thereon at once.6 If A has agreed to give a lease to B when C's lease ends, and A gives a lease to X before C's lease ends, B may maintain an action at once against A for breach of such covenant, although C's lease has not yet ended.7 If A agrees to devise,8 or to sell,9 or to deliver as payment of a debt,10 specific property to B, A's sale of such property is a breach of such contract, and gives to B the right to sue upon such contract before the time fixed for performance. If A has entered into a contract with B, by which B agrees to buy from A for four years and A agrees to distribute certain profits among those who deal with him, A's act in selling his business before the expiration of such period is a breach,11 and B may set off damages for such breach against a claim for goods sold and delivered.12
9 Barker & Stewart Lumber Co. v. Edward Hines Lumber Co., 137 Fed. 300.
This is rather a case of a breach of a severable contract than a breach of an independent covenant. See Sec. 2994 et seq.
1 Hickey v. O'Brien, 123 Mich. 611,
81 Am. St. Rep. 527, 49 L. R. A. 594,
82 N. W. 241; Jackson v. Rogers, - S. Car. -, 90 S. E. 092.
2 Hickey v. O'Brien, 123 Mich. 611,
81 Am. St. Rep. 227, 49 L. R. A. 594,
82 N. W. 241.
3 Wells v. Alexandre, 130 N. Y. 642, 15 L. R. A. 218, 29 N. E. 142.
1 England. Ogdens v. Nelson , A. C. 109 [affirming (1904), 2 K. B.
410, which affirmed (1903), 2 K. B. 2871.
United States E. I. Du Pont de Nemours Powder Co. v. Schlottman, 218 Fed. 353 [affirming, Schlottman v. E. I. Du Pont de Nemours Powder Co., 210 Fed. 3501.
Georgia. Day v. Jeffords, 102 Ga. 714, 29 S. W. 591.
Michigan. McCreery v. Green, 33 Mich. 172.
Nebraska. Apking v. Hoefer, 74 Neb. 325, 104 N. W. 177.
2 Laybourn v. Seymour, 53 Minn. 105, 39 Am. St. Rep. 579, 54 N. W. 941.
3 Keck v. Bieber, 148 Pa. St. 645, 33 Am. St. Rep. 846, 24 Atl. 170.
4 Rosenthal Paper Co. v. National Folding Box ft Paper Co., 220 N. Y. 313, 123 N. E. 766.
5 England. Ford v. Tiley, 6 Barn. & C. 325; Synge v. Synge , 1 Q. B. 466.
United States. Lovell v. St. Louis Mutual Life Ins. Co., Ill U. S. 264, 28 L. ed. 423.
California. Carter v. Rhodes, 135 Cal. 46, 66 Pac. 985.
Colorado. Mulford v. Torrey Exploration Co., 45 Colo. 81, 100 Pac. 506.
Maine. Brackett v. Knowlton, 109 Me. 43, 82 Atl. 436.
New York. Genet v. Delaware & Hudson Canal Co., 136 N. Y. 593, 10 L. R. A. 127, 32 X. E. 1078.
Ohio. McArthur v. Ladd, 5 Ohio 514; Loren v. Hillhouse, 40 O. S. 302.
Oklahoma. Stark v. Duvall, 7 Okla. 213, 54 Pac. 453; Deming Investment Co. v. Christensen, 60 Okla. 148,159 Pac. 663 (obiter).
Oregon. Colgan v. Farmers' & Mechanics' Bank, 50 Or. 460, 106 Pac. 1134, 114 Pac. 460, 117 Pac. 807; Learned v. Holbrook, 87 Or. 576, 170 Pac. 530.
Pennsylvania. Keck v. Bieber, 148 Pa. St. 645, 33 Am. St. Rep. 846, 24 Atl. 170.
Washington. Hunter v. Wenatchee Land Co., 50 Wash. 438, 97 Pac. 494.
6 Loren v. Hillhouse, 40 O. S. 302.
7 Ford v. Tiley, 6 Barn, & C. 325.
8 Synge v. Synge , 1 Q B. 466.
9 Weaver v. Aitcheson, 65 Mich. 285, 32 N. W. 436.
10 Reynolds v. Manhattan Trust Co., 83 Fed. 593, 27 C. C. A. 620.
11 Ogdens v. Nelson , 2K.B 410.
12 Ogdens v. Nelson , 2KB. 410.