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Traenkle v. La

A-6758-03T3 (N.J. Super. App. Div. 2006) (Unpublished)

CONTRACTS; ANTICIPATORY BREACH—When disputants meet to resolve their respective contract breach allegations and agree to move forward, it indicates that they intend to work through their disputes and that they do not intend to disavow their agreement.

A retailer of sport fishing boats entered into a contract with another company that would manufacture fiberglass boat sets and other components for it and provide technical support. The retailer would use those components to build the fishing boats. The contract provided that the retailer would purchase twelve boat sets over a one-year period and pay for each boat set in installments. An installment was to be due upon receipt of the hull and a final installment was to be due upon receipt of the balance of the component parts.

After untimely delivery and quality issues arose, each party claimed that the other had breached the contract. The retailer claimed that the manufacturer did not deliver on time and had provided substandard component parts requiring additional touch up work. The manufacturer claimed that the retailer did not abide by the required payment terms. After a meeting to discuss open issues, neither party performed their contractual agreements and each sued the other for breach of contract. At the trial that followed, a jury found that each party had breached the contract. It found that the manufacturer breached the contract by not delivering on time. It also found that the retailer breached the contract by buying only four boat sets as opposed to the required twelve. The retailer asked the lower court to mold the trial verdict. It claimed that because the manufacturer breached the contract by failing to provide quality boat sets on time, its failure to buy more boats was a proper response to the manufacturer’s anticipatory breach that excused its obligation to buy the remaining boat sets. The lower court disagreed.

On appeal, the Appellate Division affirmed. The Court noted that during the sale of the first boat sets, the retailer and manufacturer continued to perform even though the retailer was not satisfied with the quality of the boat sets or the timeliness of delivery, and even though the retailer altered the payment terms under the contract. The Court also found that the parties continued to work through their dispute, which indicated to each other that they did not intend to disavow their deal. Therefore, the lower court’s rejection of the retailer’s claim of anticipatory breach was reasonable. The Court found that the parties’ conduct before their meeting indicated their willingness to continue performing, but that their conduct after the meeting supported the jury’s determination that each had breached the contract. The Court noted that, after the meeting, the retailer breached the contract by not ordered a fifth boat set after the manufacturer began working on the hull. The manufacturer breached the contract when the fourth boat set was delivered late and was defective.


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