Opinion ID: 312332
Heading Depth: 2
Heading Rank: 2

Heading: Repudiation of the Contract

Text: 54 In Question No. 11 the jury found that RCA repudiated the contract by deliberately withholding shipment of the equipment until Fredonia executed the Conditional Sales Agreement [Question 11(a)]; by delivering equipment on a delayed, erratic, and incomplete basis [Question 11(b)]; by delivering equipment not suitable for the use for which it was intended and not suitable as is generally sold on the market [Question No. 11(c)]; by withholding personnel necessary to supervise the installation of the equipment [Question No. 11(d)]; and by failing after notice to repair defective equipment [Question No. 11 (e)]. 55 RCA objected to Question No. 11 at the trial level and renews its objection on appeal. RCA argues that Question No. 11 is improper for two reasons. First, RCA contends that the actions of RCA found by the jury to have been repudiation deal with the quality of RCA's performance and not with actions which render performance impossible or demonstrate a clear determination not to continue with performance. RCA contends that this is the way repudiation is described in Comment 1 to U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2-610. 7 Second, RCA asserts that the jury was not instructed properly as to U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2.610, since there was no instruction that repudiation (as it is defined in U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2.610) required a loss that would substantially impair the value of the contract to the other party. 56 As to repudiation, the District Court instructed the jury as follows: 57 Repudiation . . . is defined as such words or actions by a contracting party as indicate that he is not going to perform his contract in the future. It is conduct which shows a fixed intention to abandon, renounce, and refuse to perform the contract. 58 No Texas Court has as yet interpreted U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2.610, nor has any Court of any state in this Circuit. 59 RCA's contention that the jury's findings concerning RCA's actions only goes to the quality of the acts and do not have the characteristics of acts of repudiation is without merit. All the acts the jury found in Questions Nos. 11(a)-(e) could have demonstrated in the jury's mind a clear determination [by RCA] not to continue with performance or actions [which would] render performance impossible. The jury was properly instructed as to this aspect of repudiation when the Court instructed the jury that repudiation is denied by such words or actions . . . [that] indicate [that the contracting party] is not going to perform his contract in the future. 60 However, the District Court's instruction did not comply with the plain language of U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2.610, which states: 61 When either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may 62 (1) for a commercially reasonable time await performance by the repudiating party; or 63 (2) resort to any remedy for breach (Section 2-703 or Section 2-711), even though he has notified the repudiating party that he would await the latter's performance and has urged retraction; and 64 (3) in either case suspend his own performance or proceed in accordance with the provisions of this Article on the seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (Section 2-704). 65 Clearly, a repudiation is not actionable unless it substantially impairs the value of the contract. Comment 3 to U.C.C. Sec. 2-610, V.T.C.A. Bus. & C. Sec. 2.610, describes the test to determine if the substantial value of the contract has been impaired as whether a material inconvenience or injustice will result. 66 The District Court's instruction was incorrect since it did not tell the jury that for it to find repudiation there must be a substantial impairment of the contract, and it did not define substantial impairment. Therefore, the jury's determination that RCA repudiated the contract cannot stand. 8