## Facts

- A horse owner contracted with a ranch operating a stud farm for breeding services by a specific stallion, Fleet Nasrullah, for two mares in the 1966 season, with a live-foal guarantee providing a return breeding without additional fee.
- The ranch sold Fleet Nasrullah in October 1965 and sent the owner a letter stating he was “released” from his breeding reservations.
- The owner’s attorney promptly demanded performance and threatened suit; the ranch later replied that arrangements had been made for the mares to be bred to Fleet Nasrullah in Kentucky, where the stallion was standing at stud.
- The stallion was syndicated; shareholders had priority in the booking schedule, and nonshareholders could book only on unreserved days.
- The owner’s Kentucky agent attempted multiple times to obtain breeding dates; the scheduler stated the stallion was booked on requested dates but indicated breeding could still occur and that reservations were possible on days not reserved by shareholders.
- After unsuccessful attempts to secure firm dates, the owner stopped trying and bred both mares to a different stallion in June 1966.
- The owner sued for breach and obtained a substantial damages judgment after a bench trial; the ranch appealed, arguing it had not anticipatorily breached and that the owner’s use of another stallion was the breach.

## Issues

1. Whether selling the stallion and issuing a “release” letter constituted an anticipatory repudiation of the breeding contracts.
2. Whether the ranch effectively retracted any repudiation by later offering performance in Kentucky before the owner materially changed position.
3. Whether later scheduling difficulties and inability to secure firm dates amounted to an implied, unequivocal refusal to perform.
4. Whether the owner breached by breeding the mares to another stallion while the ranch had not unequivocally refused to perform.

## Decision

- The California Supreme Court reversed the judgment for the owner.
- The court held there was no operative anticipatory breach by the ranch when the owner elected to use another stallion.
- The initial “release” letter amounted to a repudiation, but it was retracted when the ranch arranged performance in Kentucky and the owner did not materially change position in reliance on the repudiation.
- The booking conflicts and delays did not constitute an unequivocal refusal to perform.
- Because the ranch had not clearly refused to perform, the owner’s decision to breed to another stallion was not justified as a response to anticipatory breach.

## Legal Principles

- Anticipatory breach occurs only when a party expressly or impliedly repudiates the contract or unequivocally refuses to perform.
- A repudiation may be withdrawn if retraction occurs before the injured party materially changes position in reliance on the repudiation or indicates the repudiation is treated as final.
- Difficulty, delay, uncertainty, or inconvenience in arranging performance does not constitute anticipatory repudiation absent a clear, positive, and unequivocal refusal to perform.
- After a valid retraction, both parties remain bound; the nonrepudiating party must continue to seek performance unless and until the other party’s conduct amounts to an unequivocal refusal.

## Conclusion

The court rejected liability based on anticipatory repudiation where an initial repudiation was timely retracted and later performance problems reflected scheduling conflicts rather than a clear refusal to perform; the owner’s substitution of a different stallion was not justified by anticipatory breach.


Taylor v. Johnston, 539 P.2d 425 (Cal. 1975)