Standard of review on appeal · Next Generation Bar Exam

Next Generation Bar Exam Quiz

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Delta Manufacturing sued Beacon Supply in federal court for breach of a requirements contract. After a two-day bench trial, the district court found that Beacon had repudiated the contract by telling Delta's plant manager, "I don't think we're going to be able to keep supplying you at these volumes, but let's talk next quarter." The district court concluded that this statement was an unequivocal expression of intent not to perform and thus constituted repudiation. Beacon appeals, contending that the statement was merely an expression of uncertainty about future performance, which cannot constitute repudiation. In Cobalt Holdings, L.L.C. v. Marlin Distribution, Inc., the court of appeals explained its standard for reviewing repudiation determinations: "In a breach of contract action tried to the bench, we review findings of fact for clear error and conclusions of law de novo. When the issue is whether a party's words or conduct constituted anticipatory repudiation, the question is a mixed question of law and fact. We first determine whether the district court applied the correct legal definition of repudiation. If it did, we review its application of that definition to the factual circumstances only for clear error. If it applied an incorrect legal definition, we review the repudiation determination de novo."

Which standard of review should the court of appeals apply to the district court's repudiation determination?

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