Bar Exam (Next Generation) Quiz: Anticipatory Repudiation Under The Common Law And Under The Ucc

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Anticipatory Repudiation Under The Common Law And Under The UccQuestion 1 of 12

On May 1, Seller agreed to sell 1,000 lamps to Buyer, delivery on September 1. On August 1, Buyer emailed: 'We will not accept or pay for the lamps. Deal is off.' Seller replied: 'I will give you until September 1 to change your mind.' On August 20, after lamp prices fell, Seller sold the lamps to another buyer at the lower market price and sued Buyer for the difference. Buyer argues Seller waived the repudiation by choosing to await performance.

Under the UCC, which is correct?

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.

Seller waived; by promising to wait until September 1, Seller elected to keep the contract alive and could not later treat the August 1 repudiation as a breach.

Seller did not waive, but its damages are based on the September 1 market price, not the resale price, because Seller chose to await performance.

Seller waived; the UCC requires an aggrieved party to choose immediately between awaiting performance and suing for breach.

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Bar Exam (Next Generation) Quiz: Anticipatory Repudiation Under The Common Law And Under The Ucc

Practice Anticipatory Repudiation Under The Common Law And Under The Ucc in Bar Exam (Next Generation) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Anticipatory Repudiation Under The Common Law And Under The Ucc, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Under the UCC, which is correct?

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. (correct answer)
Seller waived; by promising to wait until September 1, Seller elected to keep the contract alive and could not later treat the August 1 repudiation as a breach.
Seller did not waive, but its damages are based on the September 1 market price, not the resale price, because Seller chose to await performance.
Seller waived; the UCC requires an aggrieved party to choose immediately between awaiting performance and suing for breach.

Explanation: 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.

Question 2

Chairco agreed to sell 1,000 chairs to Buyer at $50 each, delivery June 1. Before production, Buyer repudiated. Chairco's factory had excess capacity and could have filled Buyer's order without displacing any other sale. Chairco resold the same 1,000 chairs to another customer for $50 each. Chairco's incremental cost per chair was $35. Chairco sued Buyer.

Under the UCC, what may Chairco recover?

$0, because the resale to another customer at the same price fully mitigated Chairco's loss.
$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. (correct answer)
$50,000, because Buyer owed the contract price for conforming goods identified to the contract.
$15,000, only if Chairco first offered the resold chairs to Buyer at the contract price after the repudiation.

Explanation: 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.

Question 3

Buyer ordered a custom yacht from Seller for $500,000, with delivery and payment due July 1. On June 1, Buyer emailed: 'We will not take the yacht; cancel the order.' Seller nonetheless completed the yacht, a reasonable step because it had been built to Buyer's specifications. On July 1, Buyer refused to pay. After reasonable efforts, Seller could not resell the yacht at a reasonable price. Seller sued for $500,000.

Under the UCC, what is Seller entitled to recover?

$500,000, because the conforming yacht was identified to the contract and could not be resold at a reasonable price after Buyer's repudiation. (correct answer)
$500,000 only if Seller had completed the yacht before Buyer's repudiation, because completion after repudiation is not permitted.
The difference between $500,000 and the yacht's fair market value on June 1, the date Seller learned of Buyer's repudiation, plus incidental damages.
Nothing, because completing the yacht after Buyer's repudiation was an unreasonable failure to mitigate damages.

Explanation: 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.

Question 4

Builder, a general contractor, entered into a written contract with Owner to renovate Owner's restaurant for $150,000, with work to be completed by March 1. On January 15, Builder told Owner, “I am not going to do this job; find someone else.” Owner immediately began negotiating with Replacement Contractor and, on January 20, signed a contract with Replacement Contractor for $170,000 to perform the same renovation. On February 1, Builder telephoned Owner, "I have changed my mind; I can start on time after all." Owner refused to let Builder perform. Builder sued Owner for breach of contract.

In an action governed by the common law, who prevails?

Builder, because an anticipatory repudiation may be retracted at any time before the scheduled performance date unless the nonrepudiating party has already filed suit.
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. (correct answer)
Owner, because an anticipatory repudiation constitutes an immediate total breach and Owner therefore had no duty to consider Builder's later retraction.
Builder, because Owner was required to give Builder timely notice that it treated the repudiation as final before retraction could be barred.

Explanation: 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.

Question 5

Marta contracted with Northstar Construction to build a custom commercial greenhouse for $400,000. The contract required Northstar to complete the structure by June 1. In February, Northstar's project manager told Marta: "We are having serious financial trouble. Unless you advance us $100,000 now, we cannot promise to finish by June. We might be forced to stop work entirely." Marta did not advance the money. Instead, she immediately hired another contractor, who completed the greenhouse at a cost of $450,000. Northstar then resumed work and tendered performance, but Marta refused to allow it to continue.

In a common-law jurisdiction, the trial court applies the following rule from an earlier appellate decision, Ruiz v. Kendall:

"A statement is an anticipatory repudiation only if it is a clear, unequivocal, voluntary manifestation that the party will not perform when performance is due. A mere expression of doubt, uncertainty, or inability is not enough. However, a conditional refusal to perform is an anticipatory repudiation if the condition is one that the party has no legal right to impose and if the refusal is made in circumstances indicating that the party will not perform unless the condition is met. After such a repudiation, the nonrepudiating party may treat the contract as breached and immediately seek damages, provided the repudiation concerns the whole of the performance to which the contract entitles him."

If Marta sues Northstar for breach based on the project manager's February statement, which of the following is Northstar's best argument?

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. (correct answer)
Northstar's statement was not a repudiation because it was made before any performance was due, and a party cannot repudiate a contract before the time for performance has arrived.
Northstar's statement was not a repudiation because Marta's immediate hiring of a replacement contractor was an election to treat the contract as terminated, thereby releasing Northstar from any duty to perform or pay damages.
Northstar's statement was conditioned on Marta's failure to advance funds, so it could not be a repudiation unless Marta first refused the condition and gave Northstar a reasonable opportunity to perform.

Explanation: 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.

Question 6

An artist agreed to paint a mural for a hotel owner for $80,000, with the artist to begin work in four months. The owner paid half on signing and was to pay the balance on completion. One month after signing, the owner emailed the artist: 'I have decided I do not want the mural. Do not start work. I will not be bound by the contract.' The artist immediately declined a firm, more lucrative commission for those same dates and bought nonrefundable custom paints and rented scaffolding. Two weeks later, before the artist had sued or said the contract was over, the owner emailed: 'I have changed my mind. Please proceed with the mural exactly as agreed.' The artist refused, and the owner sued the artist for breach.

Which issue is most likely dispositive of whether the owner can enforce the contract?

Whether the owner's initial email was an invitation to discuss ending the contract rather than a clear statement that the owner would not perform.
Whether the artist's reliance on the owner's initial email prevented the owner from retracting the repudiation. (correct answer)
Whether the owner's second email was an adequate assurance of performance that required the artist to resume work.
Whether the artist's failure to sue during the two weeks after the initial email waived the repudiation.

Explanation: 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.

Question 7

A bakery contracted with a grocery chain to supply 5,000 jars of honey in four monthly deliveries, with payment for each delivery due 30 days after delivery. After the first delivery, the grocery chain's purchasing manager emailed the bakery: 'Our warehouse had a fire, and we may not be able to receive the next deliveries as scheduled. We are still assessing the damage and will update you.' The bakery immediately canceled the remaining deliveries and began selling the honey to other stores. The grocery chain later obtained temporary warehouse space, demanded that the bakery continue, and sued when the bakery refused.

Which issue is most likely dispositive in determining whether the bakery breached the contract?

Whether the grocery chain's email was a clear and unequivocal repudiation of the remaining deliveries, as opposed to a statement of possible inability. (correct answer)
Whether the fire made the grocery chain's duty to accept the remaining deliveries impracticable and therefore discharged.
Whether the bakery's decision to sell the honey to other stores was a commercially reasonable response to the grocery chain's email.
Whether the grocery chain's later obtaining warehouse space was an adequate assurance sufficient to require the bakery to resume performance.

Explanation: 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.

Question 8

A seller contracted to sell a buyer a one-of-a-kind antique clock for $40,000, with delivery in four months. One month before delivery, the seller sold the clock to a collector for $50,000. The seller later conceded that this sale was an anticipatory repudiation. The buyer immediately emailed the seller: 'You have repudiated. I am canceling the contract.' The next day, before the buyer had bought a replacement clock, the seller bought the clock back from the collector and told the buyer that he would deliver it on the contract date. The buyer refused to take delivery and sued the seller for breach.

Which issue is most likely dispositive of whether the seller's later tender restored the seller's right to enforce the contract?

Whether the buyer had already bought a replacement clock when the seller bought the clock back.
Whether the seller's repurchase of the clock restored the exact performance promised under the contract.
Whether the buyer's cancellation occurred before the seller bought the clock back from the collector. (correct answer)
Whether the buyer's email gave the seller a reasonable opportunity to cure before canceling.

Explanation: 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.

Question 9

Seller and Buyer entered a contract for Sale of Goods governed by the UCC. Seller was to deliver 1,000 industrial printers in four equal quarterly shipments; Buyer was to pay $100,000 for each shipment within 30 days after receipt. Buyer paid the first two shipments on time. Before the third shipment was due, Buyer emailed Seller: "We have had unexpected cash-flow problems. We will pay you only $60,000 for the third shipment. If you do not accept that, we will not accept or pay for any further shipments." Seller did not accept the reduced amount. Instead, Seller immediately stopped preparing the third and fourth shipments, then sued Buyer for the contract price of the third shipment and for damages for repudiation of the fourth.

Relevant UCC provisions:

§ 2-610. Anticipatory Repudiation. If either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may (a) await performance by the repudiating party for a commercially reasonable time or resort to any remedy for breach, and (b) in either case suspend his own performance.

§ 2-609. Right to Adequate Assurance of Performance. (1) ... When reasonable grounds for insecurity arise with respect to the performance of either party, the other party may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return. (4) After receipt of a justified demand, failure by the party against whom the demand is made to provide within a reasonable time not exceeding 30 days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract.

Which of the following is the strongest argument supporting Seller's right to recover damages for Buyer's repudiation of the fourth shipment?

Buyer's email was an anticipatory repudiation because it was an unconditional refusal to pay for the third shipment and to accept later shipments, and Seller was privileged to suspend performance of the third shipment until Buyer provided adequate assurance.
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. (correct answer)
Buyer's email was an anticipatory repudiation of the fourth shipment only if Seller first made a written demand for adequate assurance under § 2-609 and gave Buyer 30 days to respond, because the email was a statement of insecurity rather than a refusal to perform.
Buyer's email was not an anticipatory repudiation of the fourth shipment because the fourth shipment was not yet due; Seller was therefore required to continue preparing and tendering the third and fourth shipments until Buyer actually refused to accept delivery.

Explanation: 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.

Question 10

Seller agreed to sell Buyer 12,000 identical widgets, delivered in 12 equal monthly installments, with payment due on each delivery. Before the third installment was due, Buyer told Seller: 'Our customer for the third installment canceled. We will not accept that installment, but we will accept all later installments.' Each installment was worth about 8% of the contract price. The third installment could be sold without difficulty on the open market. Seller canceled the entire contract and sued for total breach.

Under the UCC, is Seller entitled to treat Buyer's statement as a total anticipatory repudiation?

Yes, because any unequivocal refusal to accept a scheduled installment is an anticipatory repudiation of the entire installment contract.
Yes, because Buyer's stated reason shows reasonable grounds for insecurity, and that insecurity permits Seller to cancel the whole contract.
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. (correct answer)
No, because refusal of a future installment is never an anticipatory repudiation; Seller must wait until that installment is due and claim breach only for that installment.

Explanation: 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.

Question 11

Seller agreed to sell Buyer 10,000 custom-made electronic components, with delivery in three equal monthly installments and payment due 30 days after each delivery. Seller delivered and was paid for the first installment. Two weeks before the second installment was due, Seller emailed Buyer: "Unless you agree to pay an additional $5,000 per lot, I will not ship the remaining components." Buyer immediately replied: "No. We have a binding contract and we expect you to perform. I am holding you to the deal." Later that same day, before any further action by Buyer, Seller emailed Buyer: "Fine, I will ship as originally agreed." Buyer then telephoned Seller and said: "Too late. Your repudiation is accepted, and I am canceling the contract."

The following provisions are from Article 2 of the Uniform Commercial Code:

§ 2-611. Retraction of Anticipatory Repudiation. (1) Until the repudiating party's next performance is due, he can retract his repudiation unless the aggrieved party has since the repudiation cancelled or materially changed his position or otherwise indicated that he considers the repudiation final. (2) Retraction may be by any method which clearly indicates to the aggrieved party that the repudiating party intends to perform, but must include any assurance justifiably demanded under the circumstances. (3) Retraction restores the repudiating party's rights under the contract, with due excuse and allowance to the aggrieved party for any delay caused by the repudiation.

Which statement best describes Seller's legal position after Seller's second email and Buyer's telephone response?

Seller's initial email was not an anticipatory repudiation because it was conditional and no performance was yet due, so Seller had no repudiation to retract and is entitled to enforce the contract without any liability for delay.
Seller's initial email was an anticipatory repudiation, and Buyer's reply that he was holding Seller to the deal made the repudiation final, so Seller's retraction was ineffective and Buyer may cancel without liability.
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. (correct answer)
Seller's initial email was a privileged request to modify the contract, not a repudiation, because Seller expressly conditioned nonperformance on Buyer's refusal; Buyer's rejection of that request terminated the contract, leaving both parties free to cancel.

Explanation: 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.

Question 12

An owner hired a contractor to build a custom deck for $30,000. The contract required the owner to pay $15,000 when the framing was complete and the remaining $15,000 on final inspection. The contractor finished the framing and submitted an invoice. The owner inspected the work, said the framing did not meet specifications, and refused to pay. The contractor emailed the owner: 'The framing meets specifications. Because you have not paid, I will not proceed with the decking until the framing payment is made. Once it is paid, I will complete the deck according to the contract.' The owner treated the email as an anticipatory repudiation, terminated the contractor, and hired another builder. The contractor sued.

Which issue is most likely dispositive of whether the contractor's email was an anticipatory repudiation?

Whether the owner's refusal to pay the framing invoice was a material breach that excused the contractor from continuing work before payment. (correct answer)
Whether the contractor's statement that the framing met specifications was made in good faith.
Whether the contractor's email was a present refusal to perform the remaining work, rather than a suspension of a single phase.
Whether the contractor's promise to finish after payment made the email a proposal to modify the contract rather than a repudiation.

Explanation: 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.