AMI 2427 Breach

Use the first bracketed paragraph when there is an issue as to whether the breach was material. Use the parenthetical sentences in that paragraph when appropriate.

Use the second bracketed paragraph when there is an issue as to whether there was an anticipatory breach of the contract. Do not use the second bracketed paragraph if the contract involves a sale of goods and is governed by Ark. Code Ann. § 4-2-610 or 4-2-611.

This instruction was cited with approval as to the definition of material breach in Roberts Contracting Co. v. Valentine-Wooten Road Public Facility Board, 2009 Ark. App. 437, 320 S.W.3d 1 (2009).

“When performance of a duty under a contract is contemplated, any non-performance of that duty is a breach.” Zufari v. Architecture Plus, 323 Ark. 411, 914 S.W.2d 756 (1996), citing Restatement (Second) of Contracts § 235 (2) (1981).

In TXO Production Corp. v. Page Farms, Inc., 287 Ark. 304, 698 S.W.2d 791 (1985), the court discussed material breach in terms of a prior breach by a plaintiff and whether performance by the defendant is thereby excused: “If the plaintiff's breach is material and sufficiently serious, the defendant's obligation to perform may be discharged. Restatement of Contracts, § 397 (1932). Not so, however, if the plaintiff's breach is comparatively minor. Corbin states the basic rule: ‘If one party to a bilateral contract commits a partial breach of his duty, one that is not so material as to discharge the other party's duty of performance, the latter's only remedy is damages for the partial breach.’ Corbin, Contracts, § 1253 (1962).”

“Where there is a material breach of contract, substantial nonperformance and entire or substantial failure of consideration, the injured party is entitled to rescission of the contract and restitution and recovery back of money paid.” Economy Swimming Pool Co. v. Freeling, 236 Ark. 888, 370 S.W.2d 438 (1963).

In Cox v. McLaughlin, 315 Ark. 338, 867 S.W.2d 460 (1993), the court cited Stocker v. Hall, 269 Ark. 468, 602 S.W.2d 662 (1980) for the propositions that “the failure of one party to perform can excuse the other from his obligation” and that “when a party to a contract has, either by words or conduct, definitely manifested an intention not to perform, the other party may treat the contract as ended.”; See also Jim Orr & Assoc., Inc. v. Waters, 299 Ark. 526, 530–531, 773 S.W.2d 99, 102 (1989) (applying the doctrine of anticipatory breach); De Lukie v. American Petroleum Co., 170 Ark. 453, 461, 280 S.W. 669, 673 (1926) (“Positive notice of intended breach of contract to be performed in the future may be treated by the adverse party as an actual breach.”); Bank of Cabot v. Bledsoe, 9 Ark. App. 145, 148–149, 653 S.W.2d 144, 145–146 (1983) (“[T]he doctrine of anticipatory breach does not apply to contracts which have as their unperformed part merely the duty to pay money at specified times.”).

“[A] client's exercise of the right to discharge an attorney with or without cause does not constitute a breach of contract because it is a basic term of the contract, implied by law into it by reason of the nature of the attorney-client relationship, that the client may terminate that contract at any time.” Crockett & Brown, P.A. v. Courson, 312 Ark. 363, 849 S.W.2d 938 (1993) (providing that a discharged attorney can nonetheless recover the reasonable value of her services to the date of discharge) (emphasis in original).

Arkansas does not recognize a cause of action for tortious breach of contract. Quinn Companies, Inc. v. Herring-Marathon Group, Inc., 299 Ark. 431, 773 S.W.2d 94 (1989) (“The breach itself simply is not a tort.”).