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David B. Saxe and Danielle C. Lesser

The ancient and often complex common law doctrine of anticipatory repudiation in the law of contracts has recently bedeviled a series of courts in New York, including our Court of Appeals. In Princes Point v. Muss Dev., No. 92, 2017 N.Y. LEXIS 3139 (N.Y. Oct. 19, 2017), the Court of Appeals addressed a claim of anticipatory repudiation, finding that a prospective purchaser’s commencement of an action seeking to rescind an amendment to a purchase agreement one month prior to the last day to close on the purchase did not constitute an unequivocal communication to the seller of the purchaser’s intention not to perform. In doing so, it reversed the Appellate Division, First Department, which upheld the trial court’s finding that the filing of the rescission claim was an unequivocal and definite act of anticipatory repudiation. Princes Point v. Muss Dev., 138 A.D.3d 112 (1st Dep’t 2016). Both the Court of Appeals and the Appellate Division grappled with whether the asserted rescission claim was analogous to a declaratory judgment filing, which, under New York law, does not constitute an anticipatory repudiation. Nevertheless, the Court of Appeals did not consider issues that might have produced a different result—one in accord with the determination of the Appellate Division and the trial court. The result the Court of Appeals reached—it is respectfully submitted—is a detour into an area of murky jurisprudence that may prove unsettling to the commercial bar that relies on the certainty of precedent and its application in a way that conforms to the realities of commercial practice.

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