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 renounces a contract can not compel the party who is not in default to treat such renunciation as a discharge of the contract if the latter does not wish so to do.1 In case of breach of an executory contract of sale of personalty by renunciation on the part of the buyer, the seller is not bound to attempt to resell such property in order to mitigate damages, before the time fixed for performance.2 This result is due to the operation of two different principles; one, that the contract by its terms fixes the time for performance, and the law fixes this as the time for measuring damages; and one of the parties to the contract can not modify the measure of damages by his own act;3 the other, that even if the seller is bound to mitigate damages, it is impossible to tell whether a resale of the property before the time fixed by the contract for performance will mitigate damages, or will aggravate them.4 If the purchaser renounces a contract which provides for the delivery of goods in instalments, it is held that the seller need not treat this renunciation as a breach, but that he may treat the contract as in effect, tendering each instalment as it comes due, and recover damages in case of the failure of the purchaser to accept and to pay for such instalment; and it is said that a judgment upon one instalment will not operate as a merger of the executory covenants of such contract.5
5 "The rule is well settled that in executory contracts, where specific performance can not be enforced, either party has the power to stop the performance on the other side by an explicit order to that effect, by subjecting himself to such damages as will compensate the other party for being stopped in the performance on his part at that point or stage in the execution of the contract. In such cases it is held that an action can not be maintained to recover the contract price, but may be maintained to recover damages for the breach of the contract." Badger State Lumber Co. v. G. W. Jones Lumber Co., 140 Wis. 73, 121 N. W. 933.
As to the effect of the right to specific performance, see Sec. 3033.
6 District of Columbia. King v. Rhodes, 47 D. C. App. 316.
Massachusetts. Barrie v. Quinby, 206 Mass 259, 92 N. £. 451.
Minnesota. Gibbons v. Bente, 51 Minn. 499, 22 L. R. A. 80, 53 N. W. 756.
North Dakota. Davis v. Bronson, 2 N. D 300, 33 Am. St. Rep. 783, 16 L. R. A. 655, 50 N. W. 836; Hart-Parr Co. v. Finley, 31 N. D. 130, L. R. A. 1915E, 851, 153 N. W. 137.
Wisconsin. Richards v. Manitowoc & Northern Traction Co, 140 Wis. 85, 121 N. W. 937.
See Sec. 2881 et seq.
1 Main Street & Agricultural Park Ry. v. Los Angeles Traction Co., 129 Cal. 301, 61 Pac. 937; Radish v. Young, 108 111. 170, 48 Am. Rep. 548; Krebs Hop Co. v. Livesley, 59 Or. 574, 114 Pac 944, 118 Pac. 165.
2 Radish v. Young. 108 111. 170, 48 Am. Rep. 548.
3 Radish v. Young, 108 III. 170, 48 Am. Rep. 548.
In some jurisdictions, accordingly, a party to an executory contract who is not in default is permitted to ignore the attempted breach on the part of the adversary party, and to continue performance even though such performance increases damages.6 It has been held that a contractor may continue performance of a building contract in spite of the breach thereof by the owner, and that he may then recover the full contract price.7 If a railway company renounces a contract with a traction company to pay for the cost of altering a crossing, it has been held that the traction company may continue to perform and may recover the price to which it was entitled in accordance with the terms of the contract.8
In some cases relief is given at common law on this theory only in cases in which specific performance might have been had.9 It has been held that where A agrees to furnish support to B's father, X, in consideration of a certain amount per week to be paid semiannually, A may continue performance in spite of B's notice to A to quit furnishing such support and to look instead to his action at law for damages.10 This result was justified, however, on the theory that since specific performance of such a contract could have been had in equity,11 law would grant a similar remedy by permitting the party who was not in default to perform and to recover compensation at the contract rate.12 While no logical objection could be made to granting specific performance at law in proper cases and under proper safeguards, the courts have usually proceeded on the theory that law and equity have not yet been so fused together that specific performance can be had at law. In some jurisdictions it is held that under an executory contract for the sale of realty the vendor can recover the purchase price in spite of the renunciation of such contract by the purchaser,13 on the theory that equity would give specific performance of such a contract and that accordingly such relief can be had at law.14
4 Kadish v. Young, 108 111. 170, 48 Am. Rep. 648.
5 Krebs Hop Co. v. Livesley, 60 Or. 674, 114 Pac. 944, 118 Pac. 165
See Sec. 2562.
6 Bond v. Bourk, 64 Colo. 51, 43 L. R. A. (N.S.) 97, 129 Pac. 223; Marsh v. Blackman, 60 Barb. (N. Y.) 329; Warren v. Shealy, 83 S. Car. 113, 65 S. E. 1.
7 Warren v. Shealy, 83 S. Car. 113, C5 S E. 1.
8 Main Street & Agricultural Park Ry. v Los Angeles Traction Co., 129 Cal. 301, 61 Pac. 937.
9 Marsh v. Blackman, 60 Barb (N. Y.) 329.
10 Marsh v. Blackman, 50 Barb. (N. Y.) 329.
11 See ch. LXXXIX et seq. on the question of the right of the parties to specific performance in equity in cases of this sort.
While it is undoubtedly very desirable to fuse law and equity into one consistent and harmonious body of law, and while the historical reasons for the existence of two separate systems have long since ceased to exist, the device of adopting a kind of equitable relief without any of the checks or restrictions which equity has always imposed on granting such relief, seems to be an attempt to solve a complicated problem in a simple manner by ignoring the inherent difficulties instead of trying to avoid them.