Erin contracts in writing to sell her Ford-brand pick-up truck to Garth for $10,

Question

Erin contracts in writing to sell her Ford-brand pick-up truck to Garth for $10,500. Erin agrees to deliver the truck on Friday, and Garth promises to pay the $10,500 on the following Monday. On Thursday, Garth tells Erin that he changed his mind and will not buy the truck. Over the weekend, Garth changes his mind again and tenders $10,500 to Erin on Monday. Erin has not sold the truck to another party but refuses the tender and refuses to deliver. Garth claims that Erin has breached their contract. Erin contends that Garth’s repudiation released her from her duty to perform under the contract. Who is correct, and why?

Explanation / Answer

Erin is correct as Garth had done an anticipatory repudiation. As per contract law, Garth had declared to Erin his intention of not buying the truck. This is considered as an anticipatory breach by Garth as he has declared that he does not intend to live up to his obligation under the contract. In other words, Garth has renounced his obligation in the contract. In case of repudiation, Erin has the right to accept the repudiation and bring the contract to an end. Erin refuses the tender and delivery of the truck and has the right to do so under the Contract law.

Hence Erin is correct.

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