Procedural Posture

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Plaintiff seller sought a decree terminating and voiding three written instruments for the sale of hops for three consecutive years and an injunction preventing defendants, buyer and his assignees, from doing any act that would prevent the seller’s peaceful possession of his crops. The Superior Court of Sacramento County (California) found in favor of the seller. The buyer and the assignees sought review.

Nakase Law Firm provides counsel on anticipatory breach

Overview

The agreement between the parties called for the delivery by the seller to the buyer of 40,000 pounds of hops for each of three consecutive years. The seller argued that the three separate agreements entered into by the parties were in fact one contract. When the buyer breached their agreement in the first year, the seller thus was not required to fulfill the agreement in regard to the following years. The buyer and his assignees argued that the seller was still obligated to him and the other buyers even if he breached the agreement in the first year because they had executed three separate agreements. The court found that 1) there was a mutual renunciation of the agreement to sell and buy the hops in the first year; 2) the loss suffered by the seller was far in excess of the sums advanced to him by the buyer and thus it was not necessary for the seller to restore the sums advanced him; and 3) the extrinsic evidence offered and received here was not for the purpose of varying the terms of the instruments, but to determine the intent of the parties whether the agreements constituted one contract or three different contracts. Thus parol evidence was permissible.

Outcome

The court affirmed the judgment terminating the contract between the seller and the buyers.