Printable Format84-2-610. Anticipatory repudiation. When 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) for a commercially reasonable time await performance by the repudiating party; or
(b) resort to any remedy for breach (section 84-2-703 or section 84-2-711), even though he has notified the repudiating party that he would await the latter's performance and has urged retraction; and
(c) in either case suspend his own performance or proceed in accordance with the provisions of this article on the seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (section 84-2-704).
History: L. 1965, ch. 564, § 90; January 1, 1966.
KANSAS COMMENT, 1996
1. This section extends the doctrine of anticipatory repudiation to sales contracts under the Code. Official Comment 1 defines a repudiation as "an overt communication of intention or an action which renders performance impossible or demonstrates a clear determination not to continue with performance." Although there is authority from other states to the contrary, in Kansas it appears that a repudiation does not require a clear and unequivocal refusal to perform. Instead, any action that "reasonably indicates a rejection of the continuing obligation" is sufficient. See Aero Consulting Corp. v. Cessna Aircraft Co., 867 F. Supp. 1480 (D. Kan. 1994) (quoting Kansas Comment 1983 to this section). Refusal to perform a contract, except upon terms that go beyond the contract provisions, is a repudiation. Id. For the related problem of insecurity, see 84-2-609. For breach of installment contracts, see section 84-2-612.
2. Subsection (1) requires that a repudiation must "substantially impair the value of the contract to the other." Repudiation of a nonmaterial portion of the contract will not permit a party to resort to the remedies for breach. The materiality standard is the same as that for breach of an installment contract. Official Comment 3 states that "(t)he most useful test of substantial value is to determine whether material inconvenience will result if the aggrieved party is forced to wait and receive an ultimate tender minus the part or aspect repudiated." See also Official Comments 4, 6, & 7 to 84-2-612.
3. Paragraphs (1)(a), (b), and (c) spell out the options available to the aggrieved party in response to an anticipatory repudiation. The party may always suspend its own performance. In addition, it may either await performance by the repudiating party—but only for a commercially reasonable time—or resort to any remedy for breach. Another option, not stated in this section, is that the aggrieved party may demand assurances under section 84-2-609.
Law Review and Bar Journal References:
Anticipatory breach and bankruptcy, Richard F. Broude, 17 K.L.R. 1, 12, 13, 14, 15 (1968).
CASE ANNOTATIONS
1. When subcontractor failed to supply affidavits, considered repudiation with UCC remedies available. In Re John Gruss Co., Inc., 22 B.R. 236, 237, 242 (1982).
2. Whether buyer's agent's conduct constituted anticipatory repudiation examined. Aere Consulting Corp. v. Cessna Aircraft Co., 867 F. Supp. 1480, 1491 (1994).