- Which issue is most likely dispositive of whether the contractor's email was an anticipatory repudiation?
Answer: Whether the owner's refusal to pay the framing invoice was a material breach that excused the contractor from continuing work before payment.
Whenever you see an anticipatory repudiation question, start with two ideas: the alleged repudiator must unequivocally refuse to perform, and that refusal must be without legal excuse. Here, the contractor did not simply walk away — he conditioned further work on the owner paying the framed amount. So the dispositive issue is whether the owner's refusal to pay $15,000 was a material breach that excused the contractor from continuing. If the owner was in breach, the contractor could lawfully suspend work; the email was not a repudiation, but a demand that the owner cure a breach. If the owner's refusal was not a material breach, then the contractor's stop-work demand could look like a repudiation.
The statement that the framing met specifications is just a factual dispute about compliance — it does not resolve whether the email repudiated the contract. Similarly, the email was not a "present refusal" to perform the remaining decking; it expressly promised completion after payment, and the decisive question is whether the contractor had a right to make that standstill. The email also was not a proposal to modify the contract: it demanded the existing payment term, not a new term.
Study tip: distinguish a conditional demand based on the other party's breach from unconditional refusal — the former is protected suspension; the latter is repudiation.
- In an action governed by the common law, who prevails?
Answer: Owner, because Builder's January statement was an anticipatory repudiation and Owner's January 20 replacement contract materially changed Owner's position before Builder attempted retraction.
Under the common law, a party's unequivocal statement that he will not perform before performance is due is an anticipatory repudiation. The repudiating party may retract the repudiation before his performance is due unless the nonrepudiating party has materially changed position in reliance on the repudiation, has indicated that she considers the repudiation final, or has brought suit. Owner's January 20 contract with Replacement Contractor was a material change of position made in reliance on Builder's repudiation; it occurred before Builder's February 1 attempted retraction. Therefore Builder's retraction was ineffective, and Owner was entitled to refuse performance. Option A is wrong because material change—not only filing suit—can bar retraction. Option C overstates the effect; the aggrieved party may treat an anticipatory repudiation as a breach, but the repudiator retains a power of retraction until the nonrepudiating party acts in reliance or indicates finality. Option D is wrong because no such notice requirement exists, especially where the owner has already materially changed position.
- Which issue is most likely dispositive in determining whether the bakery breached the contract?
Answer: Whether the grocery chain's email was a clear and unequivocal repudiation of the remaining deliveries, as opposed to a statement of possible inability.
Whenever a contract party expresses uncertainty about future performance, do not automatically treat it as a walk-away right. This question tests anticipatory repudiation under the UCC: a repudiation must be a clear, unequivocal, and voluntary statement that the party will not perform.
Here, the grocery chain's email said it "may not be able to receive the next deliveries" and was "still assessing the damage." That language is conditional and uncertain—more like a request for understanding than a definite refusal. Therefore, the most dispositive issue is whether that email rose to an unequivocal repudiation. If it did, the bakery could cancel; if it only expressed possible inability, the bakery's cancellation was premature and breached the contract.
The fire impracticability choice misses the point: the buyer found space and demanded performance, and the disputed action is the seller's cancellation, not the buyer's excuse. The commercially reasonable resale choice is tempting, but resale is a remedy only after a breach or repudiation; it cannot create a breach that never occurred. The later warehouse-space choice confuses adequate assurance with repudiation—even if security concerns were reasonable, the bakery's proper response was to demand adequate assurance under UCC 2-609, not to cancel immediately.
Study tip: on bar-exam contract questions, distinguish "I may not perform" from "I will not perform." The first triggers assurance rights; only the second justifies cancellation.
- Under the UCC, which is correct?
Answer: Seller did not waive; the UCC allows an aggrieved party to await performance and later resort to any remedy, even after urging the repudiating party to perform.
UCC 2-610 expressly allows the aggrieved party to await performance for a commercially reasonable time and still later resort to any remedy, even after urging retraction. Seller's promise to wait until September 1 did not waive Buyer's earlier repudiation, and Seller could resell before the delivery date after a commercially reasonable wait. B and D assert a false election requirement; C is wrong because a commercially reasonable resale supports the resale measure.
- Under the UCC, what is Seller entitled to recover?
Answer: $500,000, because the conforming yacht was identified to the contract and could not be resold at a reasonable price after Buyer's repudiation.
Under UCC 2-709, a seller may recover the price for conforming goods identified to the contract if the seller is unable after reasonable effort to resell them at a reasonable price. The custom yacht was identified and unsaleable, and Seller's decision to complete it was commercially reasonable under UCC 2-704. B is wrong because completion after repudiation may be reasonable; C gives only market damages even though the price remedy applies; D misstates the mitigation principle.
- Which statement best describes Seller's legal position after Seller's second email and Buyer's telephone response?
Answer: Seller's initial email was an anticipatory repudiation, but Seller effectively retracted it before the next performance was due and before Buyer canceled or materially changed position; Buyer must allow Seller to perform, subject to an allowance for any delay caused by the repudiation.
When you see an anticipatory repudiation question, focus on the timeline: was there a clear refusal to perform a substantial obligation, and did the repudiating party retract before the aggrieved party canceled or materially changed position? Here, Seller's first email was a repudiation even though it was conditional and performance was not yet due. Under § 2-610, a threat to withhold a future installment unless Buyer pays more substantially impairs the contract, and Article 2 expressly covers performance "not yet due." So Buyer had the right to await performance or treat the contract as breached.
Seller's retraction, however, was effective. Under § 2-611, a repudiation can be retracted until the next performance is due unless the aggrieved party has canceled, materially changed position, or clearly indicated the repudiation is final. Buyer's reply — "we have a binding contract and I am holding you to the deal" — was the opposite of treating the repudiation as final; it demanded performance. Seller retracted later that same day, before any cancellation or material change. Buyer's later telephone cancellation came too late. Buyer must allow Seller to perform under the original terms, with an allowance for any delay caused by the repudiation.
The wrong choices miss these points. Saying the email was not a repudiation because it was conditional or because no performance was due ignores that conditional threats can repudiate and anticipatory repudiation exists precisely for future performances. Saying Buyer's holding-Seller-to-the-deal made the repudiation final confuses demanding performance with treating the contract as ended. Saying the email was a privileged request to modify confuses negotiating a change with demanding extra payment under an existing contract.
Study tip: map the sequence. Repudiation? Then retraction? Compare timing and whether the aggrieved party ended the deal or merely demanded performance.
- Under the UCC, what may Chairco recover?
Answer: $15,000, because Chairco was a lost-volume seller and may recover the profit it would have made on Buyer's order even though it resold at the same price.
Under UCC 2-708(2), a lost-volume seller may recover lost profit when the usual contract-price-minus-resale-price formula does not put it in as good a position. Because Chairco could have made both the resale and the Buyer's sale, the resale did not replace Buyer's order; its lost profit is $50 − $35 = $15 per chair. A applies the ordinary resale measure without the lost-volume exception; C would be a double recovery and is not a price case; D imposes a nonexistent precondition.
- Which issue is most likely dispositive of whether the owner can enforce the contract?
Answer: Whether the artist's reliance on the owner's initial email prevented the owner from retracting the repudiation.
Anytime a party repudiates a contract before performance is due, the repudiation can normally be retracted before the other party has either sued, communicated that she treats the repudiation as final, or materially changed position in reliance. That last category is the key here. The artist did not sue or say the contract was over, but the artist immediately declined another commission and bought nonrefundable custom paints and scaffolding. That is material reliance on the owner's repudiation. Once the owner's right to retract was cut off by that reliance, the owner could not revive the contract with the later "please proceed" email. So the artist was not in breach for refusing.
The first wrong answer asks whether the initial email was an invitation to discuss ending the contract rather than a clear refusal — but the language "I do not want the mural" and "I will not be bound" is unequivocal repudiation. The adequate-assurance choice misunderstands the doctrine: adequate assurance is a demand for assurance when performance is reasonably in doubt, not a way for a repudiating party to retract after reliance has barred retraction. The waiver choice is also wrong: a two-week delay in suing is not waiver, which requires an intentional relinquishment of a right, not mere inaction.
Study takeaway: on repudiation questions, check immediately what the non-repudiating party did before the retraction. Reliance, suit, or election to treat the contract as over freezes the repudiation.
- Under the UCC, is Seller entitled to treat Buyer's statement as a total anticipatory repudiation?
Answer: No, because the repudiation concerned only one installment and did not substantially impair the value of the whole contract, so Seller could not treat it as a total breach.
Under the UCC, an anticipatory repudiation justifies treating the whole contract as broken only when the loss of the repudiated performance will substantially impair the value of the remaining contract. Here Buyer repudiated only one of twelve equal installments, worth about 8%, and that installment was readily resellable, so the impairment was not substantial. A is too broad; B confuses insecurity with repudiation; D is wrong because an unequivocal refusal of a future performance can be an anticipatory repudiation even if, as here, it is not total.
- If Marta sues Northstar for breach based on the project manager's February statement, which of the following is Northstar's best argument?
Answer: Northstar's statement was only a prediction of possible inability, not a clear and unequivocal manifestation that it would not perform, because the manager said Northstar "might" be forced to stop and suggested a way to avoid that outcome.
This question tests anticipatory repudiation. The key is whether the statement was a clear, unequivocal, voluntary manifestation that Northstar would not perform when performance was due, or merely doubt and uncertainty. Under Ruiz, a conditional refusal can count if the condition is one the party has no legal right to impose, but the statement must still be a definite refusal to perform.
Here, the project manager's language undercuts repudiation: he said Northstar "might" be forced to stop and asked Marta to advance money "now" to avoid that outcome. That sounds like a prediction of possible inability and a request for modified terms, not a final decision to walk away. Therefore Marta did not yet have the right to treat the contract as breached and hire a replacement contractor at Northstar's expense.
The other choices miss the mark. The argument that a party cannot repudiate before performance is due is simply wrong—anticipatory repudiation exists precisely for pre-performance statements. The argument about Marta's hiring a replacement contractor mischaracterizes the law: if a real repudiation occurred, Marta could terminate and still seek damages; mitigation does not release the repudiating party. And the condition-and-refusal argument misstates the rule: a conditional refusal can be an anticipatory repudiation if the condition is one the party has no right to impose, and Marta did not have to first reject the condition and wait.
Strategy: circle hedging words like "might," "probably," or "unless we get help"—they signal doubt, not repudiation. A true repudiation sounds like a final word, not a plea.
- Which of the following is the strongest argument supporting Seller's right to recover damages for Buyer's repudiation of the fourth shipment?
Answer: Buyer's email was an anticipatory repudiation of the fourth shipment because it clearly and unequivocally stated that Buyer would not accept or pay for further shipments unless Seller accepted a reduced price, and Seller could treat that as a repudiation of the remaining performance.
When you see a UCC sales question about a party refusing performance before the due date, think anticipatory repudiation: a clear, unequivocal statement that substantially impairs the contract lets the aggrieved party suspend performance and seek remedies immediately. Here, Buyer's email did exactly that for the fourth shipment by stating that unless Seller accepted a reduced $60,000 price for the third, Buyer "will not accept or pay for any further shipments." That is not negotiation or mere worry; it is an unambiguous refusal of remaining performance. Under § 2-610, Seller could treat it as a repudiation and sue for damages on the fourth shipment without waiting for the delivery date.
The other choices miss the mark. The choice calling the email an "unconditional refusal to pay for the third shipment" and focusing on adequate assurance confuses repudiation with insecurity; Seller could suspend performance, but the email itself was already a repudiation. The choice requiring a written § 2-609 demand plus a 30-day response period misreads the statute: adequate-assurance procedures apply when there is uncertainty about future performance, not when a party has already clearly refused to perform. Finally, the choice saying Seller had to continue tendering because the fourth shipment was not yet due ignores the very purpose of anticipatory repudiation, which covers performances not yet due.
Study tip: ask whether the statement is an unequivocal refusal or merely ambiguous insecurity. If unequivocal, § 2-610 governs and immediate remedies are available; if merely insecure, § 2-609 may require a demand first.
- Which issue is most likely dispositive of whether the seller's later tender restored the seller's right to enforce the contract?
Answer: Whether the buyer's cancellation occurred before the seller bought the clock back from the collector.
This question tests anticipatory repudiation and retraction under UCC 2-611. When a party repudiates before performance is due, the other party may cancel, await performance, or treat the repudiation as final. The key cutoff is what the non-repudiating party does before the repudiating party tries to retract.
Here, the buyer's email did the decisive act: "I am canceling the contract." Under UCC 2-611, a repudiating party can retract unless the aggrieved party has since canceled, materially changed position, or otherwise indicated the repudiation is final. Because the buyer canceled before the seller bought the clock back, the seller's later tender came too late to restore the right to enforce the contract.
The choice about whether the buyer had already bought a replacement clock is tempting, but a replacement purchase would be a material change of position—a separate cutoff. Since the buyer had not bought one, that fact is not dispositive. The choice about whether the seller restored the exact promised performance is also not enough; retraction must clearly indicate performance and include adequate assurance, but it cannot undo an already-effective cancellation. Finally, the choice about giving the seller a reasonable opportunity to cure confuses cure of defective tender with retraction of anticipatory repudiation; the buyer need not allow cure before canceling after a repudiation.
Study tip: memorize the three UCC 2-611 cutoff events—cancellation, material change of position, or indicating the repudiation is final. Any one of them ends the repudiating party's right to retract.
