10.Sackett v. Spindler
248 Cal. App. 2d 22D
FACTS
Spindler was the owner of S&S Newspapers and entered into the agreement with Sackett where he agreed to sell 6,316 shares of stock of S&S Newspapers. The contract provided for a total price of $85,000 and it was to paid off on or before specific date. And Spindler was to deliver of the full amount of stock to Sackett when he made his final payment under the contract. Sackett made 2 times payment on time, then gave Spindler a check for $59,200 balance due under the contract. However it was rejected due to insufficient funds and never paid. Thus Spinlder reclaimed the certificate of the stocks that he had given to Sackett’s attorney. Sackett expressed his willingness to pay the balance and complete the transaction but instead of paying the balance and interest, he extended time for several times and never finished his duty to pay. Later, October 5, Spindler wrote a letter that there will be no sale and purchase of the stock due to Sackett’s delay in performing the contract and his unwillingness to consummate the agreement. The trial court awarded damages to Spindler, Sackett appealed.
ISSUE
Whether the Sackett’s delaying the payment was a material breach of the contract, thus Spindler’s repudiation was justifiable.
RULE
Rest., Contracts, § 275, pp.402-403
In determining the materiality of a failure to fully perform a promise the following factors are to be considered:
(1) The extent to which the injured party will obtain the substantial benefit which he could have reasonably anticipated;
(2) the extent to which the injured party may be adequately compensated in damages for lack of complete performance;
(3) the extent to which the party failing to perform has already partly performed or made preparations for performance;
(4) the greater or less hardship on the party failing to perform in terminating the contract;
(5) the willful, negligent, or innocent behavior of the party failing to perform; and
(6) the greater or less uncertainty that the party failing to perform will perform the remainder of the contract.
Coughlin v. Blair, 41 Cal. 2d 587
Although defendants had not expressly repudiated the contract, their conduct clearly justified plaintiffs' belief that performance was either unlikely or would be forthcoming only when it suited defendants' convenience.
APPLICATION
Spinlder was uncertain whether Sackett intended to complete the contract because of Sackett’s many delays which were not reasonable. After numerous attempts to complete the transaction on Spindler’s part, he wrote the letter to repudiate the contract. But the letter by Spindler stating that there will be no sale and purchase of the stock can be justifiable only if Sackett’s breach is classified as a total breach of the contract.
According to Rest., Contracts, § 275 his failure to perform is not innocent, it could be gross negligence or willful conduct on his part. Thus it is constituted as a material breach.
Additionally, similar to the case Coughlin v. Blair, 41 Cal. 2d 587, Spinlder was not required to endure the uncertainty or to await Sackett’s convenience. Thus the letter did not constitute an unlawful repudiation of the contract on Spindler’s part, therefore it was not a breach of the contract by Spindler. Thus it did not discharge Sackett’s duty to perform the contract or, alternatively, to respond to Spindler in damages.
CONCLUSION
Yes, it was total breach of contract, the judgment affirmed.
LIVE 수업 NOTE
어떤 경우에 material breach 로 인정되는지 배웠습니다. 상대방의 Material breach 로 인한 반대측의 계약 파기 행위는 정당하다고 인정되었고 이번 케이스에서 material breach 를 했던 Sackett 에게 이자를 제외한 손해를 배상하라고도 판결되었습니다.
Cause of action: Breach of contract- not performing the duty
Remedy for a breaching part
(1)Maintain the contract and with damages
(2)Repudiation of the contract and damages
*Minor breach cannot make contract repudiate, Only material breach can make contract repudiate
Ex)Divorce -> material wrongful act can make marriage terminated
*Minor or material?
Restatement Second of Contracts Section 241
Circumstances Significant in Determining Whether a Failure is Material
In determining whether a failure to render or to offer performance is material, the following circumstances are significant;
The extent to which the injured party will be deprived of the benefit which he reasonably expected;
The extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
The extent to which the party failing to perform or to offer to perform will suffer forfeiture;
The likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
The extent to which the behavior of the party failing to perform or to offer to perform comports with standards of god faith and fair dealing.