Opinion ID: 714635
Heading Depth: 3
Heading Rank: 2

Heading: Impact of Breach on Right to Terminate

Text: 38 Roye first maintains that Arkla lost whatever contractual rights to terminate it might have had by its failure to perform on other parts of the contract. Specifically, Roye argues that Arkla cannot take advantage of the termination provisions of the contract because it was in breach on its take-or-pay obligations on at least the Epley well. However, Roye advances no authority for its proposition. The authorities cited by Roye establish that if a party is in total breach of a contract or repudiates a contract, it loses its right to terminate that contract, see, e.g., Prudential Ins. Co. of America v. Faulkner, 68 F.2d 676, 679 (10th Cir.1934) (One who repudiates his obligation under a contract cannot thereafter exercise an election contained in its provisions.), but, as explained above, Roye has not established that Arkla repudiated the contract or that any breach by Arkla went to the essence of the agreement. Termination rights survive such partial breaches. As Corbin, whom Roye itself relies upon, states, 39 [a] party who has reserved a power of termination loses that power if he himself commits such a breach as goes to the essence and discharges the other party.... However, one who commits a partial breach that does not discharge the other party from his contractual obligation does not thereby extinguish his power of termination that is expressly reserved. 40 6 Arthur L. Corbin, Corbin on Contracts 1266 at 68-69 (1962). Accordingly, Arkla did not lose its termination power because of its breach of other contractual obligations. 41