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Law School Case Brief

Guerrieri v. Severini - 51 Cal. 2d 12, 330 P.2d 635 (1958)

Rule:

The doctrine of breach of a contract by anticipatory repudiation is recognized in California. An anticipatory breach of contract occurs on the part of one of the parties to the instrument when he positively repudiates the contract by acts or statements indicating that he will not or cannot substantially perform essential terms thereof. Anticipatory breach must appear only with the clearest terms of repudiation of the obligation of the contract. 

Facts:

Plaintiff buyer appealed a decision by the Superior Court of Fresno County (California), which entered judgment in favor of the buyer on the issue of liability in its breach of contract action against defendant seller regarding a sale of wine, but ordered that the buyer suffered no damages as a result of the seller's breach. The buyer, who owned a wine business, made an offer to the seller, who owned a winery, to purchase 200,000 gallons of the seller's wine, which was accepted and memorialized in a written document. One hour after signing the contract, the seller advised the buyer that he would be unable to deliver the wine. The buyer filed an action for damages for breach of contract. The trial court entered judgment in favor of the buyer as to liability, but found that the buyer suffered no damage. 

Issue:

Did plaintiff buyer suffer damages by reason of defendant seller’s anticipatory repudiation of the sales contract?

Answer:

Yes

Conclusion:

The court held that the buyer had been damaged by the breach. Upon learning of the seller's anticipatory repudiation, the buyer was entitled to act upon the repudiation, which he did by purchasing wine at a higher price to obtain the quantity and quality of wine desired. This purchase was a material change in position caused by the breach. The court rejected the seller's contention that the buyer could have purchased other available wine at the contract price and not been damaged, finding that the available wine was a different wine, and was not available in the quantity desired. The buyer was not required to buy inferior wine to mitigate the damages caused by the seller's breach.

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