On April 12, 1852, De La Tour hired Hochster as a courier for a European tour beginning June 1, 1852. On May 11, before the employment was to begin, De La Tour wrote to Hochster declining his services and repudiating the contract. Hochster immediately sought other employment and on May 22 sued De La Tour for breach of contract. De La Tour argued that no action could lie until June 1, the date when performance was to begin, and that Hochster should have waited until that date to sue.
Can a party sue for breach of contract immediately after the other party repudiates before the time for performance, or must the non-breaching party wait until the performance date to bring an action?
When one party to an executory contract clearly and unequivocally repudiates the contract before the time for performance, the non-breaching party may immediately treat the repudiation as a breach and sue for damages. The non-breaching party is not required to wait until the performance date. This doctrine is known as anticipatory repudiation or anticipatory breach.
The court held that Hochster could sue immediately after De La Tour's repudiation. The clear renunciation of the contract before the performance date entitled Hochster to treat it as an immediate breach and seek damages without waiting until June 1. The anticipatory repudiation gave rise to an immediate cause of action.
Lord Campbell reasoned that it would be unreasonable to require the non-breaching party to wait until the performance date when the other party has clearly stated they will not perform. The injured party should be able to immediately seek to mitigate damages by finding substitute arrangements. Forcing them to wait serves no purpose and could increase damages. The court emphasized that the repudiation must be clear and unequivocal - the repudiating party must have "renounced" the contract so as to prevent himself from performing it. Once such repudiation occurs, the non-breaching party has the option to either: (1) treat the contract as immediately breached and sue, or (2) wait until the performance date and sue then. The doctrine serves efficiency and fairness by not keeping the non-breaching party in suspense.
Hochster established the doctrine of anticipatory repudiation, one of the most important doctrines in contract law. The case is foundational for understanding how contracts can be breached before the time for performance and how non-breaching parties can respond. The doctrine has been adopted in American law and codified in UCC § 2-610. It demonstrates the law's pragmatic approach to breach - recognizing that clear repudiation should trigger immediate rights and remedies rather than forcing parties into an artificial waiting period.
Hochster v. De La Tour established one of contract law's most important doctrines - anticipatory repudiation. The case recognizes the practical reality that when one party clearly repudiates, the other party should be able to respond immediately rather than waiting for an inevitable breach.