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.
Election to treat breach as a discharge of the contract consists in words or conduct which show unequivocally that the party who has such right of election intends to treat the contract as discharged.1 The election of the party who is not in default to treat the breach by the adversary party as discharging the party not in default from the performance of subsequent covenants, does not of itself amount to an election on his part to treat the contract as discharged so as to prevent him from maintaining an action on the contract for the breach thereof.2 If a life insurance company has repudiated liability upon its contract, the fact that subsequent premiums were neither paid nor tendered does not prevent the beneficiary from bringing an action upon the policy to recover the amount thereof less the unpaid premiums, on the death of the insured.3
5 United States. Harriman National Bank v. Seldomndge, 249 U. S. 1, -L. ed. -; Shubert v. Rosenberger, 204 Fed. 934, 45 L. R A. (N.S.) 1062.
Arkansas. Fletcher v. Verser, 79 Ark 271, 116 Am. St. Rep. 75, 96 S. W. 384.
Illinois. Ptacek v. Pisa, 231 111. 522, 14 L R. A. (N.S.) 537, 83 N. E. 221.
Kentucky. Seventh St. Planing Mill Co. v. Schaefer (Ky.), 99 S. W. 341, 30 Ky L Rep 623.
Maryland. Ady v. Jenkins, - Md -, 104 Atl 178.
Nevada. Bradley v. Nevada-Califor-nia-Oregon Ry., - Nev. -, 178 Pac. 006.
New York. Elterman v. Hyman, 192 N. Y. 113, 84 N. E. 937.
Washington. Garey v. Pasco, 89 Wash. 382, 154 Pac. 433; Bishop v. T. Ryan Const. Co., 106 Wash. 254, 18O Pac. 126.
See, on this subject, Codification of the Doctrine of Rescission, by Francis M. Burdick, 4 Columbia Law Review, 264, and Rescission of Executory Con-tracts, by C. B. M orison, 28 Law Quarterly Review, 398.
6 In re Hellams, 223 Fed 460; Feick v. Stephens, 250 Fed 185; Chamberlin v. Booth, 135 Ga. 719, 35 L. R. A. (N. S.) 1223, 70 S. E. 569; Mail & Times Publishing Co. v. Marks, 125 la. 622, 101 N. W. 458; Shaw v. Republic Life Ins Co, 69 N. Y 286; Rosenthal Paper Co. v. National Folding Box & Paper Co., 226 N. Y. 313, 123 N. E. 766.
7 See Sec. 3037.
1 Shaw v Republic Life Insurance Co., 69 N, Y. 286.
2 Shaw v Republic Life Insurance Co., 69 N. Y. 286.
See Sec. 3063 et seq.
If the declarations of the party who is not in default indicate an election to treat the contract as discharged, but his conduct in continuing to accept benefits thereunder indicates that he elects to treat it as in effect and that he waives his right to treat such breach as a discharge,4 the inference drawn from his conduct prevails over the inference from his declarations.5 Under a contract by which B agrees to advance certain funds to A, A's conduct in accepting advances waives B's default in not advancing as large amounts as he had agreed to advance; and even if A has notified B that he will terminate the contract because of B's default, his conduct in continuing to accept advances operates as a waiver of such notice.6
Many of the questions involved in the nature of election are considered in connection with the election of the party in default to treat the contract as still in effect; and in accordance with general usage, they are discussed under waiver.7
3 Shaw v. Republic Life Insurance Co., 69 N. Y. 286.
'There is no doubt that the defendant repudiated all obligation to the plaintiff, and so declared to her. It would have been a useless act for her after that to have sought the defendant and made offer to pay the annual premium. Nor need she, though the defendant had refused future performance, act with effect until the death of her husband, the event which was contemplated by the contract as giving immediate right of action. It was then she sustained the injury which was the cause of damage to her, by the non-performance by the defendant of their contract. (See, in this particular, the remarks and illustration per Grover, J. [Burtis v. Thompson], in 42 N. Y. [2461.) We do not perceive that it altera the rule we have stated, that this contract is one of life Insurance, and that there might occur several or many occasions when by its stipulations the plaintiff might have precedent conditions to fulfill. It is no more incumbent upon a party to such a contract to offer performance of the conditions precedent, because they are many and of periodical recurrence, than upon the promisee who has but one act to perform The declaration of the promissor that he will not perform is an excuse for not offering to perform many and successive conditions, as well as one. For the same reason exists at the occurrence of each period for performance that it would be useless and unavailing to make tender while the declaration was not withdrawn (see Crist v. Armour, 34 Barb., 378)." Shaw v. Republic Life Insurance Co., 69 N Y. 286. 4 See Sec. 3037 et seq.
5 St. Regis Paper Co. v. Santa Clara Lumber Co., 186 N. Y. 89, 78 N. E. 701.
For cases in which acceptance of benefits precedes the attempt to treat the breach as a discharge, see Perry v. Ayres, 159 Cal. 414, 114 Pac. 46; Pacific Timber Co. v. Iowa Windmill & Pump Co., 135 la. 308, 112 N. W. 771.
6 St. Regis Paper Co. v. Santa Clara Lumber Co., 186 N. Y. 89, 78 N. E. 701.
 
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