Opinion ID: 1402413
Heading Depth: 3
Heading Rank: 3

Heading: Effect of AS 45.01.107

Text: Philbin argues that to read the release as the borough does would require a conclusion that he released all contract claims, even as to what he calls Phases II and III of the contract, without receiving any additional consideration. [25] The borough claims that AS 45.01.107, Alaska's codification of Uniform Commercial Code (UCC) § 1-107, applies, and that because Philbin executed the release after the borough allegedly breached the contract, no consideration was required. Alaska Statute 45.01.107 provides: Waiver or renunciation of claim or right after breach. A claim or right arising out of an alleged breach can be discharged in whole or in part without consideration by a written waiver or renunciation signed and delivered by the aggrieved party. The UCC applies to a contract for the sale of gravel. [26] The section headings are part of the code. [27] Philbin consequently argues that section 107 would not excuse the lack of consideration for a broad release, because he signed the release before the borough allegedly breached the contract by refusing in spring 1996 to purchase the remaining Contract material. The borough claims that Philbin executed the release after the borough terminated the contract and canceled the purchase order. Whether, for purposes of applying section 107, Philbin signed the release after a breach occurred is a fact question which remains to be determined. The superior court did not decide this issue, and we cannot say as a matter of law whether a breach occurred on November 6, or whether the borough breached the contract, as Philbin's complaint alleges, in spring 1996 when it refused to purchase the remaining material. Consequently, we cannot say as a matter of law whether section 107 applies here and whether the release was valid despite the want of consideration. This question will be before the superior court on remand, subject to being mooted if that court concludes that the parties intended the release to apply only to the Beverly Lakes Road portion of the contract. Philbin also argues that even if section 107 does apply, the borough did not act in good faith because it indicated to him that the contract was only shut down for the winter and would resume in the spring. He asserts that not until spring 1996 did he know that the borough had breached its contract. The official comment to the UCC provides that section 107 must be read in conjunction with the section imposing an obligation of good faith. (Section 1-203). [28] Good faith is defined as honesty in fact in the conduct or transaction concerned. [29] But we cannot say as a matter of law that the borough failed to act in good faith such that the release must be invalidated, and Philbin has not asked us to do so.