A breach of contract occurs when one party fails to perform his or her obligations in a contract, or engages in activity that prevents the other party from fulfilling his or her obligations. The violated party has the right to recover for damages resulting from a breach of contract.
Anticipatory repudiation occurs if one party brings legal action against the other party if it is obvious that the other party cannot fulfill his or her contractual obligations.
An anticipatory breach is the act that, in essence, makes it impossible for someone to do an act. This may include the violating party indicating that he or she will not fulfill his or her obligations.
There are certain requirements that must be met in order for a contract to be valid.
For the contract to be binding, the essential elements below must be present in the agreement.
A party that does not meet its promises and obligations are in default and will be liable to the other party. This is a breach of contract.
Case Law As It Relates to Breach
Case Review: In re Estate of De Harte (1961)
In the case, In re Estate of De Harte (1961) 196 Cal.2nd 452., an estate administrator filed suit against a broker for a breach of good faith duties.
An estate administrator hired a broker to sell an estate. Shortly after the estate was listed, the broker introduced the estate administrator to a buyer. The estate administrator approved the buyer’s offer and sold the estate for $9,600. However, only 17 days after the close of the sale, the estate buyer listed the property for sale at $11,900. The estate administrator discovered that the buyer was the broker’s mother. He filed suit against the broker for failing to act in good faith.
The Superior Court ruled in favor of the estate administrator. Ultimately, the sale was rescinded and the broker was required to return his commission.
Case Review: R.J. Kuhl Corp. v. Sullivan (1993)
In the case, R.J. Kuhl Corp. v. Sullivan (1993) 13 Cal.4th 1589., a broker sued a buyer over a breach of contract dispute.
A broker (R.J. Kuhl Corp.) found a property for a buyer (Sullivan). He set up a deal, but ultimately, the property was sold to a third party. That third party later approached Sullivan and gave him the option to purchase half of the property’s interest. Sullivan agreed and entered into an agreement with the third party. When R.J. Kuhl Corp. was made aware of this, he sued Sullivan and the third party for breach of contract, interference with a contract, and conspiracy to alter an existing contract.
R.J. Kuhl Corp. claimed that he was entitled to his broker’s commissions for the sale of the property. Sullivan opposed this, saying that his original agreement with R.J. Kuhl Corp. did not lead to the direct purchase of the property. The Superior Court ruled in favor of the broker. It held that as a result of going around R.J. Kuhl Corp. and not paying the commission, Sullivan had gained an unfair profit from the broker’s services. Sullivan appealed, but the appellate court affirmed the lower court’s ruling. Sullivan was held liable for R.J. Kuhl Corp.’s fees.
Case Review: BD Inns v. Pooley (1990)
The case, BD Inns v. Pooley (1990) 218 Cal.3d 289., involved a buyer who cancelled a purchase agreement after the terms had been accepted.
A seller of a motel (BD Inns) entered into an agreement to sell the motel to a buyer (Pooley). BD Inns sued Pooley for specific performance and breach of contract on the grounds that Pooley cancelled the sale after a contract had been agreed upon.
The Superior Court sides with BD Inns and ordered Pooley to perform the contract as previously agreed. However, as Pooley was no longer willing to purchase the property, he was ordered to pay the difference between the the purchase price that had been agreed to in the contract and the property’s future sales price.