Section 18 Breach of Contract and Default in Performance

• Library: Remedies 2006

Generally, the complainant has the option to elect between rescission and breach of contract. Jones v. Peterson, 72 S.W.2d 76, 78 (Mo. 1934). But courts have limited this option in several ways. First, historically, courts have not awarded rescission when damages would adequately protect the injured party. See Haydon v. St. Louis & S. F. R. Co., 121 S.W. 15, 19 (Mo. 1909). And the plaintiff must not be in default of the contract. Reece v. Van Gilder, 281 S.W.2d 27, 32 (Mo. App. W.D. 1955). Moreover, the plaintiff must not have been the first to breach the contract. Landau v. St. Louis Pub. Serv. Co., 273 S.W.2d 255, 257 (Mo. banc 1954). Second, courts have limited the remedy to cases in which one party to the contract has yet to begin to perform their obligations (either by choice or otherwise). Jones, 72 S.W.2d at 78. Courts have required such radical nonperformance of a vital provision going to the very root and life of the contract as amounts to an abandonment of the contract. Reece, 281 S.W.2d at 32. See Lincoln Trust Co. v. Nathan, 74 S.W. 1007 (Mo. 1903), in which the Court allowed rescission of the remainder of a lease when the building burned down and the landlord had delayed five years in rebuilding.

There is evidence that these restrictions may not be so strictly construed by modern courts. In 1996, the Western District Court
of Appeals held that rescission was appropriate even though the contract was no longer executory. Harris v. Desisto, 932 S.W.2d 435, 444 (Mo. App. W.D. 1996). The court recited the rule that rescission is allowed if there was a material breach of contract that “relate[s]
to a vital provision going to the very substance or root of
the agreement.” Id. at 444. In Harris, the court judged the performance to be less than “substantial” performance of the contract and also found that the part performance by the breaching party did not constitute a waiver of a rescission claim by the nonbreaching party. Id. Apparently, as long as the party has not substantially performed the contract, rescission may...