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VI. Breach, Repudiation, and Excuse Obviously, no body of contract law would be complete without rules on breach of contract, excusing breach, and similar topics. To that end, Part 6 of Article 2 sets forth many rules to help determine whether either party has breached the contract and, if so, whether that breach will impose liability or will be excused. A particular form of breach, anticipatory repudiation, deserves special attention, as it is a favorite testing topic for both law professors and bar examiners. Anticipatory Repudiation The rules on anticipatory repudiation are quite similar in both Article 2 and the common law, except that Article 2 boasts a few technical refinements to the topic. Article 2’s rules on anticipatory repudiation apply if: either party repudiates the contract, the repudiation concerns a performance not yet due, and the loss of that performance will substantially impair the contract’s value to the nonrepudiating party.
[U.C.C. § 2-610 (1951).]
1. Repudiation Defined A repudiation is “an overt communication of intention or an action which renders performance impossible or demonstrates a clear determination not to continue with performance.” [U.C.C. § 2-610, cmt. 1 (1951).] Yet this definition should not be read too broadly. A repudiation does not require that performance be rendered literally, totally impossible. Rather, a repudiation arises if the repudiating party reasonably indicates to the other, by word or deed, that the repudiating party is rejecting her unperformed contractual obligation. Perhaps a clear and frequent example of repudiation is refusing to perform without concessions that go beyond what the contract affords—unless, perhaps, the refusal to perform is justified under some other rule. On the other hand, statements that merely raise doubts or concerns about one party’s ability or willingness to perform are no repudiation. Rather, a repudiation requires a clear, positive action or statement manifesting intent not to perform. [U.C.C. § 2-610, cmt. 2 (1951); Ak. Pac. Trading Co. v. Eagon Forest Prods., Inc. , 933 P.2d 417 (Wash. Ct. App. 1997).] Examples : (1) A buyer contracted to purchase 875 metric tons of galvanized steel from a seller for $1,240,000. The buyer accepted and paid for a few shipments, but shortly afterward, the price of steel plummeted. The buyer then refused to accept and pay for any more shipments of steel without a large, downward adjustment in price. The parties discussed modifying the
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