In a contract where a local farmer agrees to sell the chef a specified amount of organic tomatoes to be delivered on August 1, the farmer informs on June 15 that part of the crop is infested and he may not deliver on time. Does the chef have valid grounds to cancel the contract?

• A. No, because the farmer did not state unequivocally that he could not deliver on time.
• B. Yes, the farmer's situation constitutes anticipatory repudiation allowing cancellation.
• C. Yes, if performance becomes impossible before delivery.
• D. Yes, because timely delivery was essential to the contract.

Answer: (A)

The key idea here is anticipatory repudiation and when a party may cancel for it. Anticipatory repudiation happens only if a party clearly indicates he will not perform when performance is due. A statement that “part of the crop is infested and I may not deliver on time” is not a definite refusal or impossibility; it’s a warning of possible trouble, not an unequivocal refusal to perform. Because there isn’t a clear, definitive refusal to perform, the chef does not have grounds to cancel on anticipatory repudiation at this point.

Impossibility or impracticability could discharge a contract only if performance becomes objectively impossible before delivery. A farmer’s notice that some of the crop is infested does not by itself prove that delivering the specified amount on the specified date is impossible; there could still be a way to perform or to remedy. So that ground isn’t clearly met here either.

Time being of the essence isn’t established by the facts given, so the mere fact that delivery on the date might be tight isn’t enough to cancel.

If the farmer actually fails to deliver on the due date, that would typically allow the chef to treat the contract as breached and seek damages, but the June 15 notice alone doesn’t give grounds to cancel immediately.