The Lawletter Vol. 51 No. 1
Paul Ferrer, Senior Attorney
The common law is, by definition, judge-made law. See, e.g., Ballentine’s Law Dictionary (3d ed. 2010) (defining “common law” as “[t]hose principles, usages and rules of action . . . which do not rest for their authority upon any express or positive statute or other written declaration, but upon statements of principles found in the decisions of the courts”). The Supreme Court of Virginia has long expressed that “[o]ne of the great virtues of the common law is its dynamic nature that makes it adaptable to the requirements of society at the time of its application in court.” Surratt v. Thompson, 212 Va. 191, 193, 183 S.E.2d 200, 202 (1971) (quotation marks omitted). The court has consistently expressed this understanding of the protean nature of the common law despite a Virginia statute mandating that “[t]he common law of England, insofar as it is not repugnant to the principles of the Bill of Rights and Constitution of this Commonwealth, shall continue in full force within the same, and be the rule of decision, except as altered by the General Assembly.” Va. Code Ann. § 1-200. Thus, the court has indicated that Code § 1-200 “does not mean that common law rules are forever chiseled in stone, never changing. The common law is dynamic, evolves to meet developing societal problems, and is adaptable to society’s requirements at the time of its application by the Court.” Cline v. Dunlora S., LLC, 284 Va. 102, 106-07, 726 S.E.2d 14, 16 (2012) (quotation marks omitted). And yet, in Under Wild Skies, Inc. v. NRA of AmericaUnder Wild Skies, Inc. v. NRA of Am., 304 Va. 310, 319, 915 S.E.2d 514, 519 (2025), the court declined to incorporate the universally well-regarded doctrine of adequate assurance into the Virginia common law, ostensibly because “[t]he decision to adopt a new doctrine applicable to all contractual disputes is a policy decision that is more appropriately left to the legislature.”
The doctrine of adequate assurance was first adopted in Article 2 of the Uniform Commercial Code (“UCC”), which applies only to contracts for the sale of goods. Section 2-609 of the UCC provides that “[w]hen reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.” UCC § 2-609(1). If the promisor does not provide the requested assurance within 30 days, then the promisee making the demand may treat it as “a repudiation of the contract.” UCC § 2-609(4). As the court pointed out in Under Wild Skies, while the doctrine of adequate assurance was first set out in UCC § 2-609, it was adopted to address the “dilemma” posed by, among other things, the common-law doctrine of breach of contract by anticipatory repudiation (i.e., before performance is due) when the promisor’s actions are uncertain or equivocal. Under Wild Skies, 915 S.E.2d at 517-18. In that event, the promisee is caught between suspending its own performance, and thereby risking being itself in breach if the promisor is later determined not to have breached by anticipatory repudiation, and continuing with the contract but potentially foregoing damages that could have been mitigated if it is later determined that the promisor had, in fact, committed an anticipatory breach. See id. at 518 (quoting and discussing Gregory S. Crespi, The Adequate Assurances Doctrine after U.C.C. 2-609: A Test of the Efficiency of the Common Law, 38 Vill. L. Rev. 179 (1993)).
Since its adoption, section 2-609 of the UCC has proven to be a “useful and uncontroversial means” of dealing with the dilemma posed by the doctrine of anticipatory repudiation, as well as for implementing in a commercially reasonable manner “both promisors’ duties of good faith and fair dealing and promisees’ mitigation of damages responsibilities.” Crespi, 38 Vill. L. Rev. at 184. In fact, the doctrine of adequate assurance has been so successful that it was applied to all contracts in section 251 of the Restatement (Second) of Contracts (1981) and from there by courts in numerous jurisdictions. See id. at 191-92 & nn. 45, 49-52 (collecting cases); Under Wild Skies, 915 S.E.2d at 518 (same).
In short, courts and commentators have widely agreed that the doctrine of adequate assurance effectively deals with a problem caused for contracting parties by the intersection of three common-law doctrines—anticipatory repudiation, the implied covenant of good faith and fair dealing, and mitigation of damages—all of which are well established in Virginia. See Under Wild Skies, 915 S.E.2d at 517. That makes it all the more puzzling that the Virginia Supreme Court failed to rely on the “dynamic” nature of the common law to solve this “societal problem,” rather than punting and leaving it up to the legislature to fix the dilemma that was created by judge-made law in the first place. Cline, 284 Va. at 107, 726 S.E.2d at 16.
