Breach of contract for the sale of real property; Anticipatory repudiation; Hanesworth v Hendrickson

In this breach of contract action as to the purchase of real property, the court held that the trial court erred in granting defendants summary disposition because there were questions of material fact as to whether they “repudiated the contract terms, whether this alleged repudiation continued through the remainder of the parties’ dealings, and whether [it] constituted a breach of the implied covenant of good faith and fair dealing or an otherwise substantial breach.” In sum, the court held that “in determining defendants’ breach was not substantial, the trial court’s focus on what it saw as a lack of prejudice was erroneous for two reasons. First, the trial court ignored the anticipatory repudiation doctrine principle that manifestation of one party’s continued intention not to perform excuses the other party from having to perform to maintain its rights under the contract—that repudiation, in and of itself, is an event which alters the state of the dealings so as to change the nature of the parties’ obligations. Second, the contextual consideration of the timeline and communications reflected by the renegotiation request supports plaintiff’s allegation of an intention not to proceed unless there was, in one way or another, a change in the price term; this being the first substantial breach.” Reversed and remanded.