Contract Law

Hochster v. De La Tour

(1853) 2 E & B 678

Facts

De La Tour employed Hochster to act as a courier on a European tour.
The employment was to begin on a future date.
Before that date arrived, De La Tour informed Hochster that his services would no longer be required.
Hochster treated the communication as repudiation and filed an action immediately.
De La Tour argued that the suit was premature because:
the date for performance had not yet arrived;
no actual breach could occur until then.
Hochster contended that the clear refusal destroyed the future contractual relationship and entitled him to sue at once.

Whether an innocent party may sue immediately where the other party repudiates the contract before the date fixed for performance.

A clear and unconditional refusal to perform before the due date constitutes anticipatory breach.
The innocent party may elect to:
accept the repudiation, terminate the contract and sue immediately; or
affirm the contract and wait for the performance date.
If the innocent party accepts the repudiation:
it is released from further performance;
damages are assessed for the loss caused by non-performance.
The innocent party must take reasonable steps to mitigate loss.

De La Tour’s communication was not uncertain or provisional.
He clearly stated that Hochster would not be employed.
Requiring Hochster to wait until the commencement date would serve no useful purpose.
He would be expected to remain available for employment that the other party had definitively rejected.
The law instead allows the innocent party to accept the repudiation and seek alternative arrangements.
Immediate action also promotes mitigation because Hochster could seek other employment rather than remain idle.
The contract contained present obligations of mutual commitment even though active performance was to begin later.
De La Tour’s advance refusal therefore violated the continuing contractual relationship.

The Court held that Hochster was entitled to sue immediately.
A clear repudiation before the performance date constituted anticipatory breach.
Use this case for: the innocent party may accept an anticipatory repudiation and sue before the date fixed for performance.