Opinion ID: 1426976
Heading Depth: 3
Heading Rank: 2

Heading: Discharge of Duty to Pay Damages

Text: UBA's next allegation of error is based upon the rule of contract law set forth in Restatement (Second) of Contracts § 254(1) at 289 (1981): A party's duty to pay damages for total breach by repudiation is discharged if it appears after the breach that there would have been a total failure by the injured party to perform his return promise. An equivalent statement of this principle of law is contained at 4 A. Corbin, Corbin on Contracts § 978, at 924 (1964). UBA contends that NAR-PC could not have performed its contractual obligations even if UBA had not breached the loan agreement. It, therefore, argues that the trial court erred in failing to find that UBA's duty to pay damages was discharged. As discussed above in section III A, there is ample evidence to support the trial court's findings on NAR-PC's ability to have successfully converted and delivered the S-2's to the United States. This finding alone, however, does not completely resolve this issue. Under the rule of law cited above, UBA's duty to pay damages would be discharged only if it were shown that NAR-PC would have totally failed to perform its obligations under the loan agreement. A reading of the loan agreement reveals that the only act which NAR-PC was contractually obligated to perform was payment of the $200,000 loan according to the loan agreement's payment schedule. [2] A review of the record reveals that there is much conflicting evidence on NAR-PC's financial situation at the time of UBA's breach. The trial court listened to six weeks of trial testimony and viewed all of the evidence prior to rendering its decision. Reading the trial court's February 17, 1981 and April 12, 1982 memorandum decisions in conjunction, we conclude that the trial court did implicitly find that NAR-PC would have successfully paid off its $200,000 loan had UBA honored its letter of commitment. In its original February 17, 1981 decision, the court held that NAR-PC was undercapitalized and that therefore, even had UBA not breached the loan agreement, NAR-PC would not have been able to perform its contractual duty to pay the $200,000 loan. In the April 12, 1982 decision, the court reversed itself after analyzing the expenses facing NAR-PC and the assets which NAR-PC in fact mustered in its attempt to bail itself out. It found that NAR-PC could have succeeded in its S-2 project. Implicit in this finding is the finding that NAR-PC would have been able to make timely payments on its UBA loan. A review of the record does not leave us with a definite and firm conviction ... that a mistake has been made. Mathis v. Meyeres, 574 P.2d 447, 449 (Alaska 1978). We therefore affirm the trial court's decision on this issue.