Breach

Article 94
Article 94
The parties may dissolve the contract under any of the following circumstances: 1. the aim of the contract cannot be attained because of force majeure;
2. before the period of performance expires, either party clearly indicates by word or by act that it will not discharge the principal debts;
3. either party delays the discharge of the principal debts and still fails to discharge them within a reasonable period of time after being urged;
4. either party delays the discharge of debts or is engaged in other illegal activities and thus makes realization of the aim of the contract impossible; or
5. any other circumstances as provided for by law.
Article 8.105 (ex art. 3.105) - Assurance of Performance 427
(1) A party who reasonably believes that there will be a fundamental non- performance by the other party may demand adequate assurance of due performance and meanwhile may withhold performance of its own obligations so long as such reasonable belief continues. 428
(2) Where this assurance is not provided within a reasonable time, the party demanding it may terminate the contract if it still reasonably believes that there will be a fundamental non-performance by the other party and gives notice of termination without delay. 429
Article 8.106 (ex art. 3.106) - Notice Fixing Additional Period for Performance 430
Article 8.106 (ex art. 3.106) - Notice Fixing Additional Period for Performance 430
(1) In any case of non-performance the aggrieved party may by notice to the other party allow an additional period of time for performance. 431
(2) During the additional period the aggrieved party may withhold performance of its own reciprocal obligations and may claim damages, but it may not resort to any other remedy. If it receives notice from the other party that the latter will not perform within that period, or if upon expiry of that period due performance has not been made, the aggrieved party may resort to any of the remedies that may be available under Chapter 9. 432
(3) If in a case of delay in performance which is not fundamental the aggrieved party has given a notice fixing an additional period of time of reasonable length, it may terminate the contract at the end of the period of notice. The aggrieved party may in its notice provide that if the other party does not perform within the period fixed by the notice the contract shall terminate automatically. If the period stated is too short, the aggrieved party may terminate, or, as the case may be, the contract shall terminate automatically, only after a reasonable period from the time of the notice. 433
Article 8.108 (ex art 3.108) - Excuse Due to an Impediment 436
Article 8.108 (ex art 3.108) - Excuse Due to an Impediment 436
Article 8.108 (ex art 3.108) - Excuse Due to an Impediment 436
(1) A party's non-performance is excused if it proves that it is due to an impediment beyond its control and that it could not reasonably have been expected to take the impediment into account at the time of the conclusion of the contract, or to have avoided or overcome the impediment or its consequences. 437
(2) Where the impediment is only temporary the excuse provided by this article has effect for the period during which the impediment exists. However, if the delay amounts to a fundamental non-performance, the obligee may treat it as such. 438
(3) The non-performing party must ensure that notice of the impediment and of its effect on its ability to perform is received by the other party within a reasonable time after the non-performing party knew or ought to have known of these circumstances. The other party is entitled to damages for any loss resulting from the non-receipt of such notice. 439

Section 2 - Right To Withhold Performance 459
Article 9.201 (ex art 4.201) – Right to Withhold Performance 460
Article 9.201 (ex art 4.201) – Right to Withhold Performance 460
(1) A party who is to perform simultaneously with or after the other party may withhold performance until the other has tendered performance or has performed. The first party may withhold the whole of its performance or a part of it as may be reasonable in the circumstances. 461
(2) A party may similarly withhold performance for as long as it is clear that there will be a non-performance by the other party when the other party's performance becomes due. 462
Section 3 - Termination Of The Contract 463
Article 9.301 (ex art. 4.301) - Right to Terminate the Contract 464
(1) A party may terminate the contract if the other party's non-performance is fundamental. 465
(2) In the case of delay the aggrieved party may also terminate the contract under Article 8.106 (3). 466
Article 9.302 (ex art 4.302) - Contract to be Performed in Parts 467
If the contract is to be performed in separate parts and in relation to a part to which a counter-performance can be apportioned, there is a fundamental non-performance, the aggrieved party may exercise its right to terminate under this Section in relation to the part concerned. It may terminate the contract as a whole only if the non-performance is fundamental to the contract as a whole. 468
Article 9.303 (ex art. 4.303) - Notice of Termination 469
(1) A party's right to terminate the contract is to be exercised by notice to the other party. 470
(2) The aggrieved party loses its right to terminate the contract unless it gives notice within a reasonable time after it has or ought to have become aware of the non- performance. 471
(3)
(a) When performance has not been tendered by the time it was due, the aggrieved party need not give notice of termination before a tender has been made. If a tender is later made it loses its right to terminate if it does not give such notice within a reasonable time after it has or ought to have become aware of the tender. 472
(b) If, however, the aggrieved party knows or has reason to know that the other party still intends to tender within a reasonable time, and the aggrieved party unreasonably fails to notify the other party that it will not accept performance, it loses its right to terminate if the other party in fact tenders within a reasonable time. 473
(4) If a party is excused under Article 8.108 through an impediment which is total and permanent, the contract is terminated automatically and without notice at the time the impediment arises. 474
Article 9.304 (ex art. 4.304) - Anticipatory Non-Performance 475
Where prior to the time for performance by a party it is clear that there will be a fundamental non-performance by it the other party may terminate the contract. 476
Article 9.305 (ex art. 4.305) - Effects of Termination in General 477
(1) Termination of the contract releases both parties from their obligation to effect and to receive future performance, but, subject to Articles 9.306 to 9.308, does not affect the rights and liabilities that have accrued up to the time of termination. 478
(2) Termination does not affect any provision of the contract for the settlement of disputes or any other provision which is to operate even after termination. 479
Article 9.306 (ex art. 4.306) - Property Reduced in Value 480 A party who terminates the contract may reject property previously received from the other party if its value to the first party has been fundamentally reduced as a result of the other party's non-performance. 481
§ 237 Effect on Other Party's Duties of a Failure to Render Performance
§ 237 Effect on Other Party's Duties of a Failure to Render Performance
Except as stated in § 240, it is a condition of each party's remaining duties to render performances to be exchanged under an exchange of promises that there be no uncured material failure by the other party to render any such performance due at an earlier time.
§ 238 Effect on Other Party's Duties of a Failure to Offer Performance
§ 238 Effect on Other Party's Duties of a Failure to Offer Performance
Where all or part of the performances to be exchanged under an exchange of promises are due simultaneously, it is a condition of each party's duties to render such performance that the other party either render or, with manifested present ability to do so, offer performance of his part of the simultaneous exchange.
§ 239 Effect on Other Party's Duties of a Failure Justified by Non-Occurrence Of a Condition
§ 239 Effect on Other Party's Duties of a Failure Justified by Non-Occurrence Of a Condition
(1) A party's failure to render or to offer performance may, except as stated in Subsection (2), affect the other party's duties under the rules stated in §§ 237 and 238 even though failure is justified by the non-occurrence of a condition.
(2) The rule stated in Subsection (1) does not apply if the other party assumed the risk that he would have to perform in spite of such a failure.
§ 240 Part Performances as Agreed Equivalents
§ 240 Part Performances as Agreed Equivalents
If the performances to be exchanged under an exchange of promises can be apportioned into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents, a party's performance of his part of such a pair has the same effect on the other's duties to render performance of the agreed equivalent as it would have if only that pair of performances had been promised.
§ 241 Circumstances Significant in Determining Whether a Failure Is Material
In determining whether a failure to render or to offer performance is material, the following circumstances are significant:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.
§ 242 Circumstances Significant in Determining When Remaining Duties Are Discharged In determining the time after which a party's uncured material failure to render or to offer performance discharges the other party's remaining duties to render performance under the rules stated in §§ 237 and 238, the following circumstances are significant:
(a) those stated in § 241;
(b) the extent to which it reasonably appears to the injured party that delay may prevent or hinder him in making reasonable substitute arrangements;
(c) the extent to which the agreement provides for performance without delay, but a material failure to perform or to offer to perform on a stated day does not of itself discharge the other party's remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is important.
§ 245 Effect of a Breach by Non-Performance As Excusing the Non-Occurrence Of a Condition
§ 245 Effect of a Breach by Non-Performance As Excusing the Non-Occurrence Of a Condition Where a party's breach by non-performance contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.
Topic 3 - Effect of Prospective Non-Performance
§ 250 When a Statement or an Act Is a Repudiation
A repudiation is
(a) a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach under § 243, or
(b) a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach.
§ 251 When a Failure to Give Assurance May Be Treated as a Repudiation
(1) Where reasonable grounds arise to believe that the obligor will commit a breach by non- performance that would of itself give the obligee a claim for damages for total breach under § 243, the obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he receives such assurance.
(2) The obligee may treat as a repudiation the obligor's failure to provide within a reasonable time such assurance of due performance as is adequate in the circumstances of the particular case.
§ 252 Effect of Insolvency 
(1) Where the obligor's insolvency gives the obligee reasonable grounds to believe that the obligor will commit a breach under the rule stated in § 251, the obligee may suspend any performance for which he has not already received the agreed exchange until he receives assurance in the form of performance itself, an offer of performance, or adequate security.
(2) A person is insolvent who either has ceased to pay his debts in the ordinary course of business or cannot pay his debts as they become due or is insolvent within the meaning of the federal bankruptcy law.
§ 253 Effect of a Repudiation as a Breach and on Other Party's Duties
§ 253 Effect of a Repudiation as a Breach and on Other Party's Duties
(1) Where an obligor repudiates a duty before he has committed a breach by non- performance and before he has received all of the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach.
(2) Where performances are to be exchanged under an exchange of promises, one party's repudiation of a duty to render performance discharges the other party's remaining duties to render performance.
§ 254 Effect of Subsequent Events on Duty to Pay Damages
§ 254 Effect of Subsequent Events on Duty to Pay Damages
(1) A party's duty to pay damages for total breach by repudiation is discharged if it appears after the breach that there would have been a total failure by the injured party to perform his return promise.
(2) A party's duty to pay damages for total breach by repudiation is discharged if it appears after the breach that the duty that he repudiated would have been discharged by impracticability or frustration before any breach by non-performance.
§ 255 Effect of a Repudiation as Excusing the Non-Occurrence Of a Condition
§ 255 Effect of a Repudiation as Excusing the Non-Occurrence Of a Condition
Where a party's repudiation contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.
§379 Election to Treat Duties of Performance Under Aleatory Contract as Discharged
If a right or duty of the injured party is conditional on an event that is fortuitous or is supposed by the parties to be fortuitous, he cannot treat his remaining duties to render performance as discharged on the ground of the other party's breach by non-performance if he does not manifest to the other party his intention to do so before any adverse change in the situation of the injured party resulting from the occurrence of that event or a material change in the probability of its occurrence.
Article 310.
Inadmissibly of the Unilateral Refusal to Discharge the Obligation
The unilateral refusal to discharge the obligation and the unilateral amendment of its terms shall not be admitted, with the exception of the law-stipulated cases. The unilateral refusal to discharge the obligation, connected with its parties' performing the business activity, and the unilateral amendment of the terms of such an obligation shall also be admissible in the cases, stipulated by the contract, unless otherwise following from the law or from the substance of the obligation.
Article 328. The Recourse Discharge of Obligations
1. The recourse discharge shall be recognized as the discharge of the obligation by one of the parties, which in conformity with the agreement has been stipulated by the discharge of its obligations by the other party.
2. In case of the obliged party's failure to discharge the obligations, stipulated by the agreement, or of the existence of the circumstances, obviously testifying to the fact that such discharge will not be effected within the fixed term, the party, onto which the recourse discharge has been imposed, shall have the right to suspend the discharge of its obligation or to refuse to discharge this obligation, and to claim the compensation of the losses. If the obligation, stipulated by the agreement, has not been discharged in the full volume, the party, onto which the recourse discharge has been imposed, shall have the right to suspend the discharge of its obligation or to refuse to discharge it in the part, corresponding to the above-said under-discharge.
3. If the recourse discharge of the obligation has been effected, despite the fact that the other party has not discharged its obligation, stipulated by the agreement, this party shall be obliged to effect such discharge.
4. The rules, stipulated by Items 2 and 3 of the present Article, shall be applied, unless otherwise stipulated by the law.
Article 404. The Creditor's Guilt
Article 404. The Creditor's Guilt
1. If the non-discharge or an improper discharge of the obligation has occurred through the fault of both parties, the court shall correspondingly reduce the scope of the debtor's responsibility. The court shall also have the right to reduce the scope of the debtor's responsibility, if the creditor has intentionally or through carelessness contributed to the increase of the losses, caused by the non-discharge or by an improper discharge, or if he has not taken reasonable measures to reduce them.
2. The rules of Item 1 of the present Article shall also be correspondingly applied in the cases, when the debtor, by force of the law or of the contract, bears responsibility for the non-discharge or for an improper discharge of the obligation regardless of whether he is, or is not, at fault.
Article 450. The Grounds for the Amendment and the Cancellation of the Contract
1. The amendment and the cancellation of the contract shall be possible only by an agreement between the parties, unless otherwise stipulated by the present Code, by the other legal acts or by the contract.
2. Upon the demand of one of the parties, the contract may be amended or cancelled by the court decision only:
1) in case of an essential violation of the contract by the other party;
2) in the other cases, stipulated by the present Code, by the other legal acts or by the contract. As an essential violation shall be recognized such violation of the contract by one of the parties, which entails for the other party the losses, to a considerable extent depriving it of what it could have counted upon when concluding the contract. 
3. In case of the unilateral refusal to discharge the contract in full or in part, when such refusal is admitted by the law or by the agreement between the parties, the contract shall be correspondingly regarded as cancelled or as amended.