Taylor v. Johnston

Supreme Court of California · 1975 · Contracts

ContractsAnticipatory repudiationBreach of contractanticipatory breachanticipatory repudiationexpress repudiationimplied repudiationretraction

Facts

Plaintiff and defendants entered into two written contracts under which defendants' stallion, Fleet Nasrullah, was to breed plaintiff's mares in 1966 for a $3,500 fee per mare. After contracting, defendants sold the stallion, shipped him to Kentucky, and initially told plaintiff he was released from his reservations, but later arranged for the mares to be bred to the stallion in Kentucky. Once the mares arrived and later came into heat, plaintiff's agent repeatedly encountered difficulty obtaining reservations because shareholders had priority, and one confirmed booking for Sandy Fork was cancelled the day before service. Before the 1966 period for performance ended, plaintiff bred both mares to another stallion and sued for breach.

Issue

Did defendants commit an anticipatory breach of the breeding contracts by first releasing plaintiff from his reservations and later delaying or subordinating plaintiff's access to the stallion? More specifically, did defendants' conduct amount to an express or implied repudiation before the time for performance had expired?

Rule

There can be no actual breach until the time specified for performance has arrived. Anticipatory breach requires a repudiation before performance is due, and repudiation must be either an express, clear, positive, unequivocal refusal to perform or an implied repudiation arising when the promisor puts it out of his power to render substantial performance. If the injured party does not elect to treat the repudiation as a breach and the promisor retracts it before performance is due, the repudiation is nullified. Mere delay, difficulty, doubt about eventual performance, or at most a partial breach does not constitute repudiation absent an unequivocal refusal or conduct making performance impossible.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In March, Nora Bennett agreed that Ridgeway Fabrication would deliver a custom steel staircase to Liam Ortega's renovation project in Phoenix by September 30. On August 10, after several scheduling delays, Liam sued for breach even though Ridgeway had not yet stated it would refuse delivery and the September 30 date had not arrived.

Under the majority rule, which is the best analysis of Liam's claim?

Explanation. The governing rule is that there can be no actual breach until the contract time for performance arrives. Before that date, the claimant must show anticipatory repudiation. Mere delay or uncertainty, without a clear refusal or conduct making performance impossible, is not enough. Because September 30 has not yet arrived and Ridgeway has not repudiated, Liam's suit is premature under this doctrine.