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Repudiation of a contract must be positive, absolute, and unconditional. Mere expression of doubt as to a party's willingness or ability to perform is not enough to constitute a repudiation, although such an expression may give an obligee reasonable grounds to believe that the obligor will commit a serious breach and may ultimately result in a repudiation. When the obligee reasonably believes that the obligor will not perform, the obligee may demand assurance of performance, and the failure of the obligor to give adequate assurance may be treated as a repudiation.
Property owner Mike Hawa and contractor Gerald Moore entered into a contract for the installation of a recycled concrete base for a parking lot. In February 2009, Hawa looked at the samples and handed Moore a $5000 check to begin work. When Moore asked about the second $5000 payment, Hawa told him that he needed to see eighty percent of the parking lot done before he would make the second payment. At some point, Hawa told Moore that his bank would not advance him any more money for the second $5000 payment until it could inspect the work. Moore walked off the job. Consequently, Hawa filed a breach of contract claim in small claims court. Moore filed a counterclaim. At trial, Moore submitted a list of total costs Incurred for hawa's project, which totaled $10,495. Hawa vehemently denied that half of the area of the parking lot was done as required by the contract. The small claims court ruled in favor of Moore and awarded him a judgment of $4745. Hawa filed a motion to correct error, which was denied. Hawa appealed, contending that the small claims court clearly erred by ruling in favor of Moore and improperly calculating damages and denied him due process by not giving him an opportunity to defend against Moore’s counterclaim or rebut Moore’s testimony.
Under the circumstances, did the small claims court err by ruling in favor of Moore?
The court held that Hawa clearly repudiated the contract by failing to provide Moore with adequate assurance that he would pay for his services. Thus, the small claims court did not err by ruling in favor of Moore. However, the small claims court erred by awarding Moore the cost of transporting certain materials after the lawsuit was filed, damages that Moore should have used reasonable diligence to mitigate. Finally, because the transcript showed that Hawa rejected the court's offer to reschedule the matter for any further evidence, he was not denied due process.