Breach of Contract Law

Breach of Contract Law To establish its contract claim against the defendant, plaintiff must prove that: 1. The parties entered into a contract containing certain terms. 2. The plaintiff did what the contract required the plaintiff to do. 3. The defendant did not do what the contract required the defendant to do. This failure is called a breach of the contract. 4. The defendant’s breach, or failure to do what the contract required, caused a loss to the plaintiff. 1Weichert Co. Realtors v. Tyan, 128 N.J. 427, 435 (1992) (a contract arises from proper acceptance, and “must be sufficiently definite that the performance to be rendered by each party can be ascertained with reasonable certainty.”); West Caldwell v. Caldwell, 26 N.J. 9, 24-25 (1958); Friedman v. Tappan Development Corp., 22 N.J. 523, 531 (1956); Leitner v. Braen, 51 N.J. Super. 31, 38-39 (App. Div. 1958). When a party materially breaches the contract but does not indicate any intention to renounce or repudiate the remainder of the contract, the plaintiff can elect to either continue to perform or cease to perform. If the plaintiff elects to perform, plaintiff is deprived of an excuse for ceasing performance. But even if the plaintiff elects to perform, plaintiff can still sue for any injury or damages suffered because of the material breach. Frank Stamato & Co., v. Borough of Lodi, 4 N.J. 21 (1950). ANTICIPATORY BREACH If the defendant clearly indicates through words or conduct before the time for performance arrived, the defendant would not or could not perform the contract; the plaintiff would be entitled to treat that indication as a breach. 1The anticipatory breach must be a “material breach” to discharge the other party. Ross Systems v. Linden Dari Delite, Inc., 35 N.J. 329 341 (1961). Whether seller’s refusal to perform a contract for sale of retail food business constituted, an anticipatory breach is a fact question for the jury. Semel v. Super, 85 N.J.L. 101 (Sup. Ct. 1913). To qualify as a breach, the defendant’s indication of non-performance must have been definite and clear. A total breach of contract has occurred when a person who has promised to render performance under a contract thereafter has stated or indicated to the person to whom he/she has promised the performance either that he/she will not or cannot perform that which he/she has promised. This charge follows the rule set out in Restatement, Contracts (1932) Sec. 318(a). The Restatement language is similar to that in Samel v. Super, 85 N.J.L. 101 (Sup. Ct. 1913) in which the court held that whether seller’s refusal to perform a contract for the sale of a retail food business constituted an anticipatory breach was a fact question for the jury. In the course of its opinion the court quoted fromO’Neill v. Supreme Council, 70 N.J.L. 410 (Sup. Ct. 1904): Where a contract embodies mutual and interdependent conditions and obligations, and one party either disables himself from performing, or repudiates in advance his obligations under the contract and refuses to be longer bound thereby, communicating such repudiation to the other party, the latter party is not only excused from further performance on his part, but may, at his option, treat the contract as terminated for all purposes of performance, and maintain an action at once for the damages occasioned by such repudiation, without awaiting the time fixed by the contract for performance by the defendant. (at p. 103). See Parker v. Pettit, 43 N.J.L. 512 (Sup. Ct. 1881); Stopford v. Boonton Molding Company, Inc., 56 N.J. 169 (1970); Scoredisc Service Corp. v. Feldman, 10 N.J.Misc. 228 (Sup. Ct. 1932). Conduct indicating repudiation of a contract has the same effect as language. Ross Systems v. Linden Dari-Delite, Inc., 35 N.J. 329, 340 (1961); Ferber v. Cona, 89 N.J.L. 135 (Sup. Ct. 1916), aff’d 91 N.J.L. 688 (E. & A. 1918); Stein v. Francis, 91 N.J.E. 205 (Ch. 1919); Storms v. Corwin, 7 N.J.Misc. 931 (Sup. Ct. 1929). The anticipatory breach must be a “material breach” to discharge the other party. Ross Systems, supra, at p. 341; Restatement, Contracts (1932), Sec. 397. As to the remedy for anticipatory breach, see Stopford, supra, (1970) where the anticipatory breach was discontinuance of a pension plan in which plaintiff-employee had vested rights. Discussing the question of damages, Justice Francis said: “Here, the plaintiff was presented with a clear choice of alternative remedies, i.e., specific performance which would produce periodic payments or a lump sum recovery which he chose to pursue.” (at p. 195) Where defendant repudiates the contract, after plaintiff has performed, plaintiff may be entitled to restitution of what he gave, as an alternative remedy. Shea v. Willard, 85 N.J. Super. 446, at 451 (App. Div. 1964) more at http://KennethVercammen.com/Breach-of-Contract-Law.html