Also known as: retraction defence · retractions defense · retraction defenses · retraction · retract
Written by attorneys · grounded in primary & secondary sources — see below
A contractual principle that nullifies the effect of a repudiation when the repudiating party notifies the injured party of the retraction before the injured party has materially changed position in reliance on the repudiation or indicated that the repudiation is final.
Raymond Ramos contracted with Redline Automotive to supply custom parts by a set date. Ramos later told Redline he could not deliver on time. Before Redline hired a replacement supplier or altered its production schedule, Ramos notified Redline that he would meet the original deadline after all. Redline could not treat the earlier statement as a final repudiation.
Roland Rhodes agreed to buy equipment from Rising Sun Electronics for a new facility. Rising Sun stated it would not ship the equipment. Rhodes told Rising Sun he would await performance and urged retraction while also contacting backup vendors. Rhodes retained the right to pursue remedies even though he had invited retraction.
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Ralph Richardson promised to sell inventory to Ridgeway Partners by a future date. Richardson repudiated the sale. Before Ridgeway cancelled or changed position, Richardson sent a clear message that he intended to perform and included the assurance Ridgeway had demanded. The retraction reinstated Richardson's rights under the contract with allowance for any delay.
A retraction loses effect once the injured party has materially changed position in reliance on the repudiation or has indicated that the repudiation is final. Notification of the retraction must reach the injured party before either of those events occurs.
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No. The injured party may still resort to any remedy for breach even after notifying the repudiating party that performance will be awaited and urging retraction.
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Retraction may be made by any method that clearly indicates to the aggrieved party that the repudiating party intends to perform. It must also include any assurance justifiably demanded under the circumstances.
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No. Retraction is unavailable once the aggrieved party has cancelled the contract or otherwise indicated that the repudiation is final.
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