Civil Model Jury Charge 4.10 M. ANTICIPATORY BREACH IN NJ

Civil Model Jury Charge4.10 M.ANTICIPATORY BREACHBILATERAL CONTRACTS

1.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 defendants 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back a previously stated or demonstrated unwillingness or inability to perform if the repudiation of the contract is withdrawn before the plaintiff:[Choose option:(1) substantially changes position; (b) brings an action for damages.][2]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 defendants failure to provide adequate assurances as a breach of the contract.

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[1]The anticipatory breach must be a material breach to discharge the other party.Ross Systems v. Linden Dari Delite, Inc.,35N.J.329 341 (1961).Whether sellers 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,85N.J.L.101 (Sup. Ct. 1913).

[2]See, Neptune Research & Development v. Teknics Industry System,235N.J. Super.522, 534 (App. Div. 1989) andMiller and Sons Bakery Co. v. Selikowitz, 8N.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,857N.J Super.446, 451 (App. Div. 1984).

Note:Where the contract involves the sale of goods, the rights of the parties are governed byN.J.S.A.12A:2-610.As to an anticipatory breach of installment sales contracts, the court said inGraulich Caterer, Inc. v. Hans Holterbosch,101N.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.SeeComment to Sec. 12A:2-612, par. 6; also New Jersey Study Comment, par. 2; Hawklandsupra,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:UnderN.J.S.A.12A:2-508, a defective tender of goods subject to theSales Act(N.J.S.A.12A:2-101et seq.) which may have been an anticipatory breach, as inParker v. Pettit,43N.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 obligeesbeliefthat the obligor will breach the contract.Spring Creek Holding Company, Inc. v. Shinnihon U.S.A., Ltd., 399N.J. Super.158, 179 (App. Div.),certif. denied, 196N.J. 85 (2008);see also Magnet Res., Inc. v. Summit MRI, Inc.,318N.J.Super.275, 288 (App. Div. 1998).The questions of whether plaintiffs asserted grounds for demanding assurance arereasonable, and whether defendants assurance isadequate, 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).