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.
The party who elects to take advantage of breach on the part of the adversary party as a discharge of the contract is bound to give proper notice of his election to treat the contract as discharged, unless the circumstances are such that the party in default must be assumed to have known of such election.1 The duty to give notice is especially clear where the party in default is proceeding to perform and will be put to additional and unnecessary expense if such notice is not given.2
If, on the other hand, the breach is one which amounts to a total failure of consideration and there are no executory covenants in the performance of which the party who is in default can incur additional expense, notice of an election to treat the contract as discharged is not necessary.3 If A has lent money to B in reliance upon B's promise to execute a note therefor and to deliver certain security for the payment of such obligation, B's failure to execute such note and to deliver such security is a breach of such a character that it is not necessary for A to give notice to B of his election to treat the contract as discharged, before bringing an action to recover the amount thus lent.4
Notice, where necessary, must be unequivocal.5 Notice of dissatisfaction with the performance which has been tendered is not equivalent to notice of an election to treat the contract as discharged by reason of such default.6