Quick Summary
Hochster (P) was hired by De La Tour (D) to serve as a courier on tour set to begin on June 1st, 1852, but De La Tour informed Hochster 19 days before the tour that he no longer needed his services and refused to pay the promised wages. Hochster filed a lawsuit against De La Tour seeking to recover the unpaid wages.
The issue before the court was whether a breach of contract action could be brought before the date of performance.
The defendant argued that the contract could not be breached before June 1st and, therefore, he did not have to pay the wages. The court ruled against De La Tour and ordered him to pay the wages owed to Hochster.
Rule of Law
If a contract is terminated prior to the agreed-upon date for performance, the party who suffered damages, as a result, may seek compensation immediately.
Facts of the Case
Hochster (plaintiff) was hired by De La Tour (defendant) to serve as a courier during a tour that was scheduled to begin on June 1st, 1852. However, 19 days before the scheduled date, De La Tour informed Hochster that he no longer needed his services and refused to pay the promised wages to Hochster.
In response, Hochster filed a lawsuit against De La Tour, seeking to recover the wages that were owed to him. The defendant argued that the contract could not be breached before June 1st, and therefore he was not required to pay the wages.
However, the court rejected this argument and ruled in favor of Hochster, finding that De La Tour was liable for breach of contract and ordering him to pay the wages owed to Hochster.
Issue
Can we bring a legal action for breach of contract before the agreed upon date for performance?
Holding and Conclusion
Yes.
The court held that Hochster did not need to wait until the performance date was due to commence the action and awarded damages. It is wasteful to make Plaintiff wait and prepare for an event that won’t happen because the defendant denied his agreement with Plaintiff.
Plaintiff was released from his contract obligations after receiving formal notification of renunciation. The harmed party is still free to file a lawsuit immediately or hold off until the scheduled performance date.
The court ruled in favor of Hochster.
Reasoning and Analysis
This case is an introduction to the concept of “anticipatory repudiation” and remedies available to the injured party.
According to the Court, when one party renounces a future conduct agreement, the other party is no longer obligated to uphold the agreement, and there is “no reason to require that the other wait until the day arrives before pursuing his remedy by action.”
For example, if one party to a contract has made it clear that they have no intention of fulfilling their obligations, or if they have taken steps that make it impossible for the other party to perform their obligations, the other party may choose to bring an action for breach of contract to seek damages or other remedies. Similarly, suppose one party has already breached the contract by failing to perform their obligations. In that case, the other party may bring an action for breach of contract to seek damages or other remedies.
Relevant FAQs of this case
Can you cancel a contract before it starts?
A contract binds at least two parties to perform an obligation. Therefore, when one side breaches a contract and refuses to fulfill what is agreed upon, this might lead to complications.
Depending on the type of contract, the procedures for terminating it before the start date can vary. Some contracts contain a termination provision, while others make no mention of it. A professional attorney should review and clarify the contract.
A professional attorney should review and clarify the contract. Typically, suppose you want to terminate a contract. In that case, there are very explicit guidelines regarding how and when to give notice, who pays for what and when, what happens to any data or materials created during the term, etc.
In addition, every contract stipulates what happens to the terms and circumstances of the agreement if the parties violate the regulations or if something modifies the agreement during the performance.
In what situations can you terminate a contract?
There are four different circumstances in which you have the option to end a contract.
- The other party violates the terms of the contract in a manner that can nullify the contract.
- The contract has an exit provision, and it has been fulfilled.
- There is agreement on both sides.
- If a particular statute permits one party to withdraw from the agreement.
Furthermore, two circumstances will result in the immediate termination of a contract.
- One of the parties to the contract commits a breach of the requirements in a manner that renders the agreement “invalid.”
- Some of the things that the parties have decided to conduct together violate the law.
In these circumstances, the contract is null and void even though neither party has expressed a wish to back out of the agreement.
References
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