Kingston v. Preston
Defendant, a silk merchant, agreed to hire plaintiff for 15 months for £200 per year. Defendant also agreed to sell his stock to his nephew and plaintiff for a fair price at the end of the 15 months. Defendant also promised to allow the buyers to run the business in his house after they executed 14-year deeds of partnership with defendant. Plaintiff agreed to give defendant sufficient security to guarantee monthly payment of £250 in lieu of defendant receiving a share of the business's income each month after selling it. These payments were to continue "until the value of the stock should be reduced to £4000." After the 15 months plaintiff did not show sufficient security, so defendant did not convey the business to plaintiff. Plaintiff then sued for the business.
Can a breach by the plaintiff be a defense for the defendant's breach?
One breach cannot be a defense for another breach.
The covenants were impliedly dependent on each other, so defendant did not have to convey the business until plaintiff gave him adequate security.
There are three types of promises:
- Mutual and independent promises
- Neither party's performance triggers the other's duty to perform.
- If either party fails to perform, it is a breach.
- The other party still must perform in the event of a breach.
- Dependent condition
- One's performance triggers the other's duty to perform.
- If the first party, the condition, fails to perform, it is not a breach. If the condition occurs, it is a breach if the other party fails to perform.
- If the first party, the condition, fails to perform, it is not a breach if the other party also does not perform.
- Mutual and simultaneous conditions
- Either party's performance triggers the other's duty to perform.
- If neither party performs, it may not be a breach, but if one performs it is a breach if the other does not.
- If one party fails to perform, the other is not obligated to perform.
The parties' covenant was a dependent condition. As the condition precedent did not happen, it would be the greatest injustice to force defendant to give up his business for nothing.
Plaintiff's performance was a condition precedent. Judgment for defendant.