Opinion ID: 1399205
Heading Depth: 1
Heading Rank: 1

Heading: time frame of the covenant

Text: Kasco contends that the trial court erred in holding that the eighteen months began to run in August 1988 rather than when Benson actually resigned on March 1, 1989. The trial judge reasoned: The preliminary injunction will be granted to expire 18 months from August, 1988 because I believe at that time the company was on notice that Mr. Benson did not wish to retain any restrictive covenants in his employment, thereafter, the company would be willing to either  required to terminate him or deal other wise with him. At that point the restrictive covenant would be terminated as to its application to Mr. Benson except for 18 months thereafter. (Emphasis added.) The trial judge made no specific findings of fact or conclusions of law. The covenant not to compete expressly states that the eighteen-month time frame begins to run after termination. The trial court's finding that Kasco was on notice and the noncompetition covenant began to run in August 1988 involves a question of fact and a question of law. Since the finding that Kasco was on notice was a question of fact, we reverse only if we find it clearly erroneous. See Utah R.Civ.P. 52(a); State v. Petersen, 810 P.2d 421, 425 (Utah 1991). However, the effect of that notice, which presumably led the trial court to find an anticipatory repudiation, is a question of law which we review for correctness. State v. Ramirez, 817 P.2d 774, 781-82 n. 3 (Utah 1991); State v. Petersen, 810 P.2d at 425. An anticipatory breach occurs when a party to an executory contract manifests a positive and unequivocal intent not to render performance when the time fixed for performance is due. Hurwitz v. David K. Richards Co., 20 Utah 2d 232, 234-35, 436 P.2d 794, 796 (1968). The other party can immediately treat the anticipatory repudiation as a breach, or it can continue to treat the contract as operable and urge performance without waiving any right to sue for that repudiation. United California Bank v. Prudential Ins. Co. of America, 140 Ariz. 238, 281, 681 P.2d 390, 433 (Ct.App.1983); see also University Club v. Invesco Holding Corp., 29 Utah 2d 1, 3, 504 P.2d 29, 30 (1972). Our court of appeals recently noted, A party that has received a definite repudiation from the breaching party to the contract should not be penalized for its efforts to encourage the breaching party to perform its end of the bargain. Breuer-Harrison, Inc. v. Combe, 799 P.2d 716, 725 (Utah Ct.App.1990) (citing United California Bank, 140 Ariz. at 281, 681 P.2d at 433); see also 4 Arthur L. Corbin, Corbin on Contracts § 981 (1951). The opinion fully explains the modern rule of anticipatory breach and the outmoded common law waiver theory. We need not decide here whether Benson's announcement that he did not intend to abide by the noncompetition covenant was an anticipatory repudiation. It makes no difference in this case. If his remarks were an anticipatory repudiation, Kasco simply had an election. It could treat the remark as a breach, or it could continue to treat the contract as operable and encourage performance without waiving any rights under the contract. If there was no anticipatory repudiation, the non-competition covenant remained in full force. Therefore, anticipatory repudiation or not, it was error for the trial court to rule that the eighteen months began to run when Kasco was put on notice of Benson's intent not to comply with the restrictive covenant. The beginning time should have been the actual date of Benson's resignation.