## Facts

- A parish owned two lots and agreed to sell them to B. M. Freedman, an experienced real-estate broker, for $18,000 with a $2,000 deposit and the balance to be placed into escrow within 30 days.
- The parties executed escrow instructions requiring conveyance free of encumbrances except recorded covenants, conditions, restrictions, rights-of-way, and easements.
- A recorded utility easement ran over the rear five feet of one lot; Freedman was informed of it when he signed the escrow instructions.
- The escrow set a performance date of November 10, 1947, but also authorized completion after that date unless a party made written demand for return of the deposit and/or instruments.
- Freedman later objected to the easement, claimed he had no duty to proceed until title was “cleared,” and on November 28, 1947 sent letters repudiating the contract and demanding return of his deposit.
- On December 19, 1947 Freedman stated he would perform once the easement was cleared.
- The parish canceled escrow on December 27, 1947 and sold the property to a third party for $20,000.
- The easement was later abandoned, but only after the resale; Freedman then sued for specific performance or, alternatively, damages.

## Issues

1. Whether the buyer’s unconditional written repudiation discharged the seller’s duty to perform and permitted the seller to treat the contract as terminated.
2. Whether, if time was not of the essence, the seller still had to give notice and a reasonable opportunity to perform before canceling escrow and reselling.
3. Whether the recorded easement constituted a title defect that excused the buyer’s performance or justified rescission.
4. Whether the buyer could retract repudiation after the seller canceled escrow and resold, and still obtain specific performance or damages.

## Decision

- The California Supreme Court affirmed judgment for the seller.
- The buyer’s November 28 letters were an unconditional repudiation that entitled the seller to treat the contract as ended.
- The “time not of the essence” argument did not assist a repudiating buyer; the seller was not required to keep the contract open or provide additional notice before acting on the repudiation.
- The buyer’s attempted retraction came too late because the seller had materially changed position by canceling escrow and reselling.
- The recorded easement was within the encumbrances expressly permitted by the escrow instructions; the seller’s failure to remove it was not a breach.

## Legal Principles

- An unequivocal repudiation of a land-sale contract permits the nonrepudiating party to treat the repudiation as a breach and terminate the contract.
- A repudiating party cannot revive contractual rights by retraction after the other party materially relies on the repudiation, including by canceling escrow and entering a subsequent sale.
- Where the parties contract for title subject to specified recorded encumbrances, the buyer cannot treat those encumbrances as defects excusing performance.
- Specific performance is unavailable when the plaintiff’s own unjustified repudiation and the defendant’s reliance make the remedy inequitable or impracticable.

## Conclusion

The court held that the buyer’s unconditional repudiation, coupled with the seller’s reliance through cancellation and resale, barred specific performance and damages, and that a recorded easement expressly permitted by the escrow terms did not excuse the buyer’s refusal to perform.


Freedman v. Rector, Wardens & Vestrymen of St. Matthias Parish, 37 Cal. 2d 16 (Cal. 1951)