dealing with the time and mode of performance.2 Cases have also been cited to exhibit the nature of a subsidiary promise, the breach of which does not operate to put an end to the contract but merely gives a claim to compensation for the breach.3

In the case of a contract for the delivery of goods during a year, payments monthly for the delivery in the preceding month, and the buyer fails to pay for three months, the seller may rescind; and if after notice of rescission, the seller accepts payment of part of what he is due, he does not waive his right to refuse to make further deliveries.*

Failure to pay for part of the goods delivered and refusal to give notes for another part as agreed upon, justifies a rescission. If a dealer has agreed to buy all his ice from a certain company for one year at a certain price but purchases a part of his supply from others, the seller is justified in rescinding the contract for such breach.

§ 198. Rescission for Breach. When there has been a substantial breach of the contract, the other party has the right to rescind the contract for that reason, or to refuse to perform his part and sue for damages. But he is not required to rescind for a breach not amounting to a repudiation. He

2 Ante, Part vi, chapter 3, § 183.

3 Ante, § 186.

1

4Eastern Forge Co. v. Corbin, 182 Mass 590. See, Purcell Co. v. Sage, 200 I. 342, to the same effect. But in the case of a building contract the mere failure to pay an instalment of the price when due does not authorize the builder to abandon the work. Chamberlin v. Booth, 135 Ga. 719. In other contracts a failure to pay on delivery is not always a breach going to the root of the contract. Nat. Machine Co. v. Standard Co., 181 Mass. 275.

5 Kokomo Co. v. Inman, 134 N. Y. 92. See also Hess Co. v. Dawson, 149 Ill. 138; Sitman v. Lindsay, 123 La. 53; Webster v. Moore, 108 Md. 572; Gibney v. Curtis, 61 Md. 198.

6 Stone v. West Jersey Ice Co., 65 N. J. L. 24.

1 Anvil Mining Co. v. Humble, 153 U. S. 540; Wharton v. Winch. 140 N. Y. 287; Lee . Briggs, 99 Mich. 487. When a buyer refuses to accept the goods at the time specified in the contract for their delivery, the seller is not obliged to ship them, or to make an offer to deliver, but may treat the buyer's refusal as a rescission of the con

may continue to perform his part and merely claim damages for the other party's breach.2

The expression "rescission of a contract" sometimes means the annullment of the agreement for mistake or fraud, or some other defect in an essential requisite. It sometimes means the extinguishment of the contract by mutual agreement. But in this connection, it signifies the right of one party to put an end to a contract on account of a substantial breach of it by the other party. When that right is exercised, he is absolved from performance of his own promise and may sue for such damages as the breach has caused." This right to rescind is not lost merely because the contract has been performed in part on either or both sides.*

Waiver of right to rescind. If a party does not choose to exercise his right of rescission for a substantial breach but continues to accept a subsequent performance from the other party or to accept goods which are not in accordance with the contract, the rule of most cases is that such waiver of the right to rescind the contract is not in itself a waiver of the right to claim damages.5

tract, and the buyer has no right afterwards to demand delivery. Koch v. Wimbrow, 111 Md. 22. As to what is a substantial breach. see generally, Weintz v. Hafner, 78 Ill. 29; Hichborn v. Bradley, 117 [a. 130; Harnden v. Milwaukee, etc., Co., 164 Mass. 382.

If the party who rescinds has performed in part, he is entitled to compensation. Nash v. Towne, 5 Wallace, 689; Cockey v. Muller, 71 N. Y. 367; Parker Coal Co. v. O'Hern, 8 Md. 201.

2 Beatty v. Howe Lumber Co., 77 Minn. 272.

3 Phillips, etc., Co. v. Seymour, 91 U. S. 626;

216; Wolf v. Schlacks, 67 Ill. App. 117.

See ante, p. 389

Hill v. Blake, 97 N. Y.

4 Ankeny v. Clark, 148 U. S. 345; Snow . Alley, 144 Mass. 546. 5 Phillips, etc., Co. v. Seymour, 91 U. S. 646; Rockwell Co. v. Cambridge Co., 191 Pa. 386; Redland, etc., Assn. v. Gorman, 161 Mo. 203; 54 L. R. A. 718; Shupe r. Collender, 56 Conn. 489. But see contra, America Theatre Co. v. Siegel, Cooper & Co., 221 Ill. 145; 4 L. R. A. (N. S.) 1167; Talbot Co. v. Gorman, 103 Mich. 403; 27 L. R. A. 96; Gaylord Mfg. Co. v. Allen, 53 N. Y. 515. In the case of a sale of a chattel, when there is a warranty against defects, etc., most cases hold that the acceptance of the article with knowledge of the defects is not a waiver of the right to recover damages for breach of the warranty. Holloway r. Jacoby, 120 Pa. 583; Central Trust Co. v. Arctic Co., 77 Md. 202; Fitzgerald v. Evans, 49 Minn. 541; Branson v.

When a contract requires the seller to deliver goods as demanded during a certain period of time, and he fails or refuses to make a delivery as requested, thus giving to the buyer the right to rescind the contract, then, if the buyer afterwards demands and receives other goods, he may be held to have waived his right to rescind the contract. But by thus waiving his right to rescind, the buyer does not waive his right to claim damages for the breach by the seller's failure to make the prior delivery as demanded. Thus, where a buyer was entitled to demand 600 tons of ice each week during a certain period, and the seller refused or was unable to deliver more than 300 tons, the buyer, merely by accepting the 300 tons, does not waive his right to the stipulated amount, and is not prevented from afterwards recovering damages for the failure of the seller to deliver that amount."

When the contract provides that goods be delivered within a certain time, this stipulation may be waived by the buyer, and if waived he is not entitled to recoup against the seller's claim for the price any damages sustained by reason of the non-delivery within the time agreed upon. But the mere acceptance of the goods after the expiration of the time fixed for delivery is not of itself a waiver of the breach committed by the failure to deliver according to the terms of the contract, nor does such acceptance preclude the buyer from recovering the damages resulting from such breach or from recouping those damages against the seller's claim for the price.

Turner, 77 Mo. 489; North Alaska Salmon Co. v. Hobbs, 159 Cal. 380; 35 L. R. A. (N. S.) 502. Contra: Northfield Bank v. Arndt, 132 Wis. 383; 12 L. R. A. (N. S.) 82. Some cases make a distinction between an express and an implied warranty. Waeber v. Talbot, 167 N. Y. 48. 6 Sumwalt Ice Co. v. Knickerbocker Co., 112 Md. 437.

7 Bagby . Walker, 78 Md. 239. If a man contracts for a certain quantity of goods and accepts a lesser quantity as a compliance with the contract and pays the full price, not knowing that the full amount had not been delivered, he is entitled to recover for the deficiency. Denton r. Gill & Fisher, 102 Md. 386.

The execution of notes for a part of the purchase price of a harvester machine after its delivery and trial is not waiver of the defects therein when the seller at the time such notes were given, promised to repair it and make it comply with the terms of the warranty.s

After a breach if, instead of a rescission in invitum, the parties agree to terminate the contract, it is not a waiver of the damages for the breach, unless the agreement can be treated as an accord and satisfaction."

$199.

Renunciation of Contract. Anticipatory Breach. If one party to an executory contract, before the time for performance arrives, announces to the other that he will not abide by it, in other words, if he absolutely and unequivocally renounces and repudiates the contract, the other party has a right to do either one of two things. He may (1) accept the renunciation by words or conduct, and treat such announcement as a breach of the contract which absolves him from performance on his part and entitles him to sue for damages, or (2) he may refuse to accept such renunciation in advance as a breach, wait until the time fixed for performance arrives, and then demand fulfilment of the contract and sue if it be refused. If he adopts the second of these alternatives, he can not afterwards change his mind and assert that the contract was terminated at the time it was repudiated.1

In Michael v. Hart, the Master of Rolls said: "Where there has been what has been called an anticipatory breach of contract, going to the whole consideration, it has not of itself the effect of rescinding the contract for there must be

8 Osborn v. Carpenter, 37 Minn. 331.

9 Morehouse . Second Nat. Bank, 98 N. Y. 503.

1 Avery v. Bowden, 5 El. & B. 714; Zuch v. McClure, 98 Pa. 541. If the promisee adopts the second alternative, the promisee can not perform his own part and sue for the price. See section as to countermanding.

2 [1902] 1 K. B. 490. See also Eckenrode v. Chemical Co., 55 Md. 59; Smoot's case, 15 Wallace, 36.

two parties to a rescission. It only has the effect of giving the other party to the contract an option to treat the repudiation of the contract as a definitive breach of it, and thereupon to treat the contract as rescinded, except for the purpose of his bringing an action for breach of it. *** On the other hand, he may refuse to treat the contract as rescinded and hold the party repudiating the contract to his obligation when the time fixed for performance arrives."

Thus when there has been a sale of goods on credit, if the buyer repudiates the contract, the seller may either accept his renunciation as a breach and sue for damages, or he may wait until the expiration of the term of credit and sue for th price.3

In Johnstone v. Milling, it is said: "The other party may adopt such renunciation of the contract by so acting upon it as in effect to declare that he, too, treats the contract as at an end, except for the purpose of bringing an action upon it for the damages sustained by him in consequence of such renunciation. He can not, however, himself proceed with the contract on the footing that it still exists for other purposes, and also treat such renunciation as an immediate breach. If he adopts the renunciation, the contract is at an end except for the purposes of the action for such wrongful renunciation; if he does not wish to do so, he must wait for the arrival of the time when, in the ordinary course, a cause of action on the contract would arise. He must elect which course he will pursue."

The renunciation must be absolute, that is, a distinct refusal to be bound by the contract and not a mere statement that the party would probably not perform or may be unable to do so. The acceptance of the renunciation must also be

8 Tatum v. Ackerman, 148 Cal. 357.

4 L. R. 16 Q. B. 467. See, Shaffner r. Killian, 7 Ill. App. 620. 5 Dingley v. Oler, 117 U. S. 490. If one party repudiates the contract he can not be heard to complain that the other party did not perform. Hinckley v. Pittsburgh, etc., Co., 121 U. S. 264; Textor v. Hutchings, 62 Md. 150; Cort v. Ambergate Ry. Co., 17 Q. B. 127; Carpenter v. Holcomb, 105 Mass. 280; Bascom v. Smith, 164 Mass.