That's a material breach, they didn't do what they were supposed to do,
so your duty to pay is discharged.
So it would be ridiculous to make you pay for
something when the other party didn't uphold their end of the contract.
So a material breach will discharge the other party,
the non-breaching party will be discharged.
Now, sometimes a material breach might not even have occurred yet and
you can be discharged, and this is what's called anticipatory repudiation.
This is one of my favorite legal terms, I just like saying it,
anticipatory repudiation, try saying it, it's fun, anticipatory repudiation.
>> Very flattering, Mr Peterson.
>> Now, anticipatory,
sometimes I can't even say it.
Anticipatory repudiation is when one party clearly tells the other
party that they're not going to perform their obligations under the contract.
And in that case as long as it's clear and unequivocal,
then the non-breaching party will be discharged from their obligations.
Now, it has to be clear and unequivocal.
One party can't say, it's going to be really hard for me to perform, or gosh,
I'm not sure if I'm going to be able to make the deadline.
That's not anticipatory repudiation.
It is anticipatory repudiation if one party says we are not able to do this,
or we will not be performing, or something along those lines.
In that case, the other party is relieved from their duties,
even though the actual breach may not have occurred yet.
Maybe their time for performance isn't due yet but if they tell you in advance,
they're not going to do it, you can be discharged at the time of the repudiation.
Okay, moving on to discharge by operation of law.
Now, there are several instances in which the law just says, if this happens,
then parties to a contract are released from their obligations.
Now, the first one of those instances is what's called impossibility.
If you have a contract and for some reason it becomes impossible for
you to fulfill your obligations under the contract, you are discharged.
Now, when we say impossible, it really means impossible.
Not just really, really, really, really hard or extremely impractical,
impossible means not physically possible.
So say you have a contract to build a building on some land,
and the land gets swallowed up by a sinkhole.