Wednesday, July 20, 2011

Lawyer Lingo: Anticipatory breach [of existing contract] as defense to BoC claim


When can it be invoked as a defense?  

With regard to anticipatory breaches of a contract, it has long been the law in Texas that before there can be an anticipatory breach, there must be an unconditional declaration of an intention not to perform the contract. Pollack v. Pollack, 39 S.W.2d 853, 857 (Tex. Comm’n App. 1931, holdings approved), reh’g denied, 46 S.W.2d 292 (1932); Moore v. Jenkins, 109 Tex. 461, 211 S.W. 975, 976 (1919); Kilgore v. Nw. Tex. Baptist Educational Society, 90 Tex. 139, 37 S.W. 598, 600 (1896); McKenzie v. Farr, 541 S.W.2d 879, 882 (Tex. Civ. App.—Beaumont 1976, writ ref’d n.r.e.).

Elements of anticipatory repudiation

The repudiation must be a distinct, positive, unequivocal, and absolute refusal to perform the contract in the future. El Paso Prod. Co. v. Valence Operating Co., 112 S.W.3d 616, 621 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (citing Van Polen v. Wisch, 23 S.W.3d 510, 516 (Tex. App.—Houston [1st Dist.] 2000, pet. denied)); Jenkins v. Jenkins, 991 S.W.2d 440, 447 (Tex. App.—Fort Worth 1999, pet. denied). The party who is alleged to have committed an anticipatory breach must show a fixed intention to abandon, renounce, and refuse to perform the contract. Jenkins, 991 S.W.2d at 447.

As stated in 1896 by the supreme court in Kilgore:

But a mere assertion that the party will be unable or will refuse to perform his contract is not sufficient. It must be a distinct and unequivocal absolute refusal to perform the promise[.]

37 S.W. at 600.

SOURCE: San Antonio Court of Appeals - 04-10-00725-CV - 7/13/11

RELATED LEGAL TERMS: contract and contract defenses, breach and anticipatory breach, repudiation of contract, contractual duty to perform, prior breach by the other party to the contract as defense to BoC

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