Hochster v. De La Tour

Queen’s Bench 1853

Parties:

Plaintiff = courier hired by defendant

Defendant = hired plaintiff to accompany him on a trip

Facts:

• The P was hired in April 1852 to accompany the D on a tour beginning June 1^st.
• May 11^th—D wrote to the P stating that he had changed his mind and no longer wanted P’s services; there was no compensation for the cancellation
• May 22^nd—P brought suit
• Sometimes between May 22^nd and June 1^st, Lord Ashburton hired P under equally good terms (as the contract with the D), with the trip beginning on July 4^th.

Procedural History:

• Judge reserved leave to enter a nonsuit (no decision on the merits) on issue whether the breach can occur on June 1^st
• The jury found for the P on the other questions

Terms:

• Repudiation of a contract = unequivocal declaration before performance is due that performance will not be made
• Anticipatory = after contract formation, but before performance is due

Issue:

If A (employee) and B (employer) enter into an agreement & B breaks the agreement before the start of performance, whether A can immediately sue for damages for breach if ready & willing to perform?

Holding:

YES—P does not have to wait until performance is due if the D has unequivocally renounced the contract; P can sue anytime after the renouncement

Discussion:

This case:

• D claims that the P must stay ready & willing to perform even after the May 11^th letter; D claims that there can be no breach until June 1^st

• D’s claims are based on an implied condition to keep the contract open

• P detrimentally relied on the renunciation by the D (detrimental reliance/ estoppel)

Generally:

• Universal rule: A party can usually bring suit before the performance is due in cases of unilateral renunciation with reliance

Examples: breaches before performance is due that hold instant liability:

a. Promises to marry (engagements)

b. Leases of same land to 2 different parties

c. Sale of same items to 2 different parties

-Reasoning for rule:

a. EITHER: D rendered it impossible for him to perform the contract on the performance date (words or actions); OR:

b. The relationship established between formation and performance of the contract has been prejudiced by D’s actions

• P must prove either that D renounced the contract OR D did some act to render the contract impossible

Court’s Decision:

• Rational to assume that after renunciation, P is at liberty to consider himself free from performance
• P keeps his rights to sue for damages for breach
• P can seek other employment which acts to mitigate the damages
• D has no right to change his mind after he unilaterally renounces when P relied on the renunciation
• To make P wait until the date of performance to seek other employment is unfair since P knows the contract has been renounced

Plaintiff Options:

• Can either sue immediately; OR
• Wait until June 1^st

Rule:

When there has been anticipatory repudiation of a contract, it is not necessary to wait for the date of performance to sue. The renunciation is binding when the other party detrimentally relies on the renunciation.