SW Legal studies in Business

Statute of Limitations Runs from Date of Anticipatory Breach or of Actual Breach
Description Nevada high court held that the statute of limitations for breach of contract cases begins to toll either on the date one party asserts that anticipatory breach has occurred or on the date that the actual breach occurred because the other party failed to perform. Plaintiff may choose either date.
Topic Court Procedure
Key Words Statute of Limitations; Tolling; Contracts; Anticipatory Breach
C A S E   S U M M A R Y
Facts Schwartz was a partner in an auto-leasing business in Las Vegas. On June 19, 1992 he agreed to sell his partnership interest to Wasserburger. Payment would be made in regular six-month installments. On March 23, 1993, Wasserburger told Schwartz that payments were being suspended because of false information in connection with the sales agreement. On May 13 1993, Schwartz notified Wasserburger that the March 23 letter constituted an anticipatory breach of the purchase agreement and filed suit. Wasserburger made no further payments. Schwartz died in 1996, before the matter was litigated. Ms. Schwartz, his widow, did not learn of the matter until three years after Schwartz's death. On April 13, 1999 Ms. Schwarz filed the complaint in court. The district court determined that the six-year statute of limitations began to toll on March 24, 1993, so it expired before the April 13, 1999, so the matter was time barred. Ms. Schawrtz appealed.
Decision

Reversed. "A cause of action in contract cases involving a wholly anticipatory repudiation accrues either on the date that performance under the contract is due or, if the plaintiff so elects, on the date that the plaintiff sues upon the anticipatory breach. ... Mr. Schwartz filed his complaint in this matter before performance on the contract was due. He therefore elected to sue upon the anticipatory breach and did not wait until [Wasserburger] failed to perform. Consequently, the statute of limitations in the case accelerated and began to run on May 13, 1993. Because Ms. Schwartz filed her survival action on April 13, 1999, the six-year statute of limitation had not expired and did not bar this suit."

Citation Schwartz v. Wasserburger, 30 P.3d 1114 (Sup. Ct., Nev., 2001)

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