ANTICIPATORY
BREACH of contract model jury charge 4.10
Definite and Clear Repudiation
If the
defendant clearly indicates through words or conduct before the time for
performance has arrived, that the defendant would not or could not perform the
contract, the plaintiff would be entitled to treat that indication as a breach.[1] To qualify as a breach, the defendant’s
indication of non-performance must have been definite and clear.
A defendant can
take back a previously stated or demonstrated unwillingness or inability to
perform if the repudiation of the contract is withdrawn before the
plaintiff: [Choose option: (1)
substantially changes position; (b) brings an action for damages.][2]
2. Demand for Adequate Assurances[3]
If you find that (1) the plaintiff
had reasonable grounds to support his/her/its belief that the defendant would
breach the contract, (2) the plaintiff demanded assurances from defendant that
he/she/it would perform in accordance with the contract, and (3) the defendant
failed within a reasonable amount of time to provide adequate assurances that
he/she/it would perform in accordance with the contract, then plaintiff may
treat defendant’s failure to provide adequate assurances as a breach of the
contract.
[1] The anticipatory breach must be a “material
breach” to discharge the other party. Ross Systems v. Linden Dari Delite, Inc.,
35 N.J. 329 341 (1961). Whether seller’s refusal to perform a
contract for sale of a retail food business constituted an anticipatory breach
is a fact question for the jury. Semel v. Super, 85 N.J.L. 101 (Sup. Ct. 1913).
[2] See,
Neptune Research & Development v. Teknics Industry System, 235 N.J. Super. 522, 534 (App. Div. 1989)
and Miller and Sons Bakery Co. v.
Selikowitz, 8 N.J. Super. 118,
123 (App. Div. 1950).
Note: Where defendant repudiates the contract after
plaintiff has performed, plaintiff may be entitled to restitution of what
plaintiff gave, as an alternative remedy.
Shea v. Willard, 857 N.J Super. 446, 451 (App. Div.
1984).
Note: Where the contract involves the sale of
goods, the rights of the parties are governed by N.J.S.A. 12A:2-610. As to an
anticipatory breach of installment sales contracts, the court said in Graulich Caterer, Inc. v. Hans Holterbosch,
101 N.J. Super. 61 (App. Div.
1968): “Replacing considerations of
anticipatory repudiation and the material injury with the test of substantial
impairment, N.J.S. 12A:2-612 adopts a
more restrictive seller-oriented approach favoring ‘the continuance of the
contract in the absence of an overt cancellation.’ See Comment
to Sec. 12A:2-612, par. 6; also New Jersey Study Comment, par. 2; Hawkland supra, 3, c. (3), p. 116. To allow an aggrieved party to cancel an
installment contract, N.J.S.
12A:2-612(3) requires (1) the breach be of the whole contract which occurs when
the nonconformity of ‘one or more installments substantially impairs the value
of the whole contract;’ and (2) that seasonable notification of cancellation
has been given if the buyer has accepted a nonconforming installment.” (At p. 75).
Note:
Under N.J.S.A.
12A:2-508, a defective tender of goods subject to the Sales Act (N.J.S.A.
12A:2-101 et seq.) which may have
been an anticipatory breach, as in Parker
v. Pettit, 43 N.J.L. 512 (Sup.
Ct. 1881), may be “cured” by reasonable notice of intent to render proper
performance.
[3] The modern view of anticipatory repudiation
includes cases in which “reasonable grounds support the obligee’s belief that the obligor will breach the
contract.” Spring Creek Holding Company, Inc. v. Shinnihon U.S.A., Ltd., 399 N.J. Super. 158, 179 (App. Div.), certif. denied, 196 N.J. 85 (2008); see also
Magnet Res., Inc. v. Summit MRI, Inc., 318 N.J.Super. 275, 288 (App. Div. 1998). The questions of whether plaintiff’s asserted
grounds for demanding assurance are reasonable,
and whether defendant’s assurance is adequate,
are questions ordinarily determined by the fact-finder. Spring Creek, supra, at
179-84 (discussing certain factors which may be considered by the fact-finder).
