Sales and Leases | 19
V. Breach, Repudiation, and Excuse
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.
Anticipatory Repudiation
A breach by anticipatory repudiation occurs 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. 1. Repudiation Defined A repudiation is an overt, clear communication that a party will not or cannot perform or an action that makes performance impossible. For instance, a party may refuse to perform without concessions going beyond the contract. By contrast, statements that merely raise doubts or concerns about one party’s ability or willingness to perform are no repudiation. 2. Whether Lack of Repudiated Performance Will Substantially Impair the Contract’s Value to the Nonrepudiating Party Substantial impairment means that the nonrepudiating party will suffer material injustice or inconvenience if she must wait to receive performance, minus the part repudiated. 3. Nonrepudiating Party’s Remedies for Anticipatory Repudiation Upon an anticipatory repudiation, the nonrepudiating party may: await the repudiating party’s performance for a commercially reasonable time; invoke any remedy for breach; or in either case, suspend performance, proceed under § 2-704 (dealing with the seller’s right to identify goods to the contract despite a breach or to salvage unfinished goods), or cancel the contract.
Retracting an Anticipatory Repudiation
A repudiating party may cut off the nonrepudiating party’s remedies, and reinstate the repudiating party’s contractual rights, by effectively retracting the repudiation. Retraction means that the repudiating party clearly and unequivocally indicates to the nonrepudiating party, by
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