Paralegal Certification PrepContracts and Business LawMedium
A buyer contracts to purchase a custom-made sculpture from an artist for $10,000. Before the artist begins work, the buyer sends a letter stating, 'I will not be able to purchase the sculpture as planned.' The artist has not incurred any costs yet. The artist sues the buyer for breach of contract. What type of breach has occurred, and what immediate remedy is available to the artist?
- AMinor breach; the artist must wait until the performance date to sue.
- BActual breach; the artist can sue for specific performance.
- CAnticipatory repudiation; the artist can immediately sue for damages.
- DMaterial breach; the contract is automatically rescinded, and no suit is necessary.
Show answer & explanationAnswer & explanation
Correct answer: C. Anticipatory repudiation; the artist can immediately sue for damages.
Anticipatory repudiation occurs when one party unequivocally indicates, before the time for performance, that they will not perform their contractual obligations. This allows the non-breaching party to immediately treat the contract as breached and sue for damages, without waiting for the actual performance date.
Why the other options are wrong
- A. Anticipatory repudiation is a material breach, allowing immediate action. The artist does not have to wait.
- B. Specific performance is typically reserved for unique goods when monetary damages are inadequate, and it's generally not available for anticipatory repudiation before performance has begun.
- D. While it is a material breach, the contract is not automatically rescinded; the non-breaching party has the option to sue or wait, but here, immediate suit is an option.
Anticipatory Repudiation
A clear and unequivocal indication by one party to a contract, made before the time for performance, that they will not perform their contractual obligations. This gives the non-breaching party the option to treat the contract as immediately breached and sue for damages.
- Must be a clear, unequivocal statement or action.
- Occurs before the performance is due.
- Allows the non-breaching party to sue immediately for damages.
- The non-breaching party may also choose to wait for the performance date or urge performance.
Memory trick: Anticipate the 'no,' then sue for the 'show.'