R2d § 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.
Professor's notes
Elements: (1) where reasonable grounds arise to believe the obligor will commit a breach by non-performance that would be a total breach, 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 assurance; (2) the obligee may treat as a repudiation the obligor's failure to provide within a reasonable time such assurance as is adequate in the circumstances.
Hornell Brewing v. Spry operationalizes: financially shaky distributor; demand for assurance was reasonable; failure to provide = repudiation.
McCloskey v. Minweld shows the rule's limit: request for help is NOT a clear repudiation.
Common misunderstanding: students think anxious party can repudiate first. § 251 sets up the procedure: reasonable grounds, demand, wait. Acting prematurely converts the anxious party into the breacher.
Cases that operationalize this rule
Text
R2d § 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.