Anticipatory repudiation under the common law and under the UCC - Next Generation Bar Exam

1. What distinguishes a repudiation from a statement of doubt about future performance?

   A repudiation is an unequivocal refusal to perform; doubt about ability to perform is not. Doubt may justify a demand for adequate assurance but does not by itself permit cancellation.

2. What conduct constitutes an anticipatory repudiation?

   A definite and unequivocal statement or act showing that a party will not perform when performance is due. Ambiguous statements, doubts, or requests to renegotiate do not qualify.

3. What exception bars an immediate suit when the non-repudiating party has fully performed and only payment of money remains?

   The injured party must wait until each payment falls due. Where the injured party has nothing left to do, the repudiating party's future money obligations are not accelerated.

4. Under UCC 2-611, until when may a repudiating party retract its repudiation?

   Until its next performance is due, unless the other party has cancelled, materially changed position, or treated it as final. The same limits apply to retraction at common law.

5. What effect does an effective retraction have on the repudiating party's rights?

   It reinstates those rights, with due allowance to the other party for any delay caused. Retraction restores the contract, so the aggrieved party may no longer treat the repudiation as a breach.

6. When may a non-repudiating party sue for total breach after an anticipatory repudiation?

   Immediately, without waiting for the date performance was due. The repudiation itself is treated as a breach, so the injured party need not wait for the performance date.

7. Under UCC 2-610, how long may an aggrieved party await performance after a repudiation?

   For a commercially reasonable time. The aggrieved party may also resort to any remedy for breach and may suspend its own performance.

8. A buyer repudiates and the seller sues at once. What duty does the seller owe while the suit is pending?

   To take reasonable steps to mitigate its damages. Losses the seller could have avoided by reasonable effort after the repudiation are not recoverable.

9. Which UCC doctrine has the Restatement (Second) extended to common-law contracts when reasonable insecurity arises?

   The right to demand adequate assurance of performance. Restatement (Second) of Contracts section 251 applies the assurance concept outside the sale of goods.

10. Under UCC 2-609, what may a party do when reasonable grounds for insecurity arise about the other's performance?

    Demand adequate assurance of due performance in writing and suspend its own performance until it is received. Suspension is permitted only if commercially reasonable and only for performance not yet paid for.

11. Under UCC 2-609, how long may a party take to provide adequate assurance before its failure becomes a repudiation?

    A reasonable time not exceeding 30 days after receiving a justified demand. Failure to give adequate assurance within that time is treated as a repudiation of the contract.

12. A seller writes, 'We may be unable to deliver on time because of supplier problems.' What is the buyer's proper response?

    Demand adequate assurance of performance. An expression of possible inability is not an unequivocal refusal, so cancellation would itself be a breach.

Study these flashcards