Does Virginia Recognize the Adequate Assurance Doctrine?

Under Wild Skies Inc. v. National Rifle Association of America (Va. May 29, 2025)

The NRA contracts with a tv production company to pay to be the sole sponsor of a show. One day, the NRA demands the company provide the NRA with information about the show, including its viewership numbers and platforms on which it is aired. The company responds that it doesn’t have to provide that information under the contract. But the company then nevertheless provides the information. The NRA stops paying. The company sues for breach of contract and anticipatory breach, seeking $17.1 million in damages. At trial, in support of the anticipatory breach claim, the company offers a jury instruction on the adequate assurance doctrine. The judge refuses to give the instruction. The jury finds for the company on its breach of contract claim, but not its anticipatory breach claim, and awards the company $550,000.

Question: Does Virginia recognize the adequate assurance doctrine?

Virginia Supreme Court: No.

Virginia recognizes the common law doctrines of anticipatory breach and repudiation. Under these doctrines, when a party to a contract unequivocally indicates that it will not perform its contract duties when due, the other party does not have to wait until that time has come to sue. The party who unequivocally repudiated the contract is liable for anticipatory breach.

The adequate assurance doctrine is not a traditional common law doctrine; rather, it began in the Uniform Commercial Code, which is limited to the sale of goods. The doctrine  provides that “when 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.” If the apparently breaching party does not respond to the written demand for assurance within 30 days, the other party may treat it as a repudiation.

In 1981, in section 251 of the Restatement (Second) of Contracts, the American Law Institute incorporated the adequate assurance doctrine to apply to contracts generally. Some states have adopted the Restatement’s approach as part of their common law.

But in this appeal, the Virginia Supreme Court decides to “decline the invitation to do so.” The court explains “the doctrine of adequate assurance is a modern innovation by the American Law Institute, not a common law doctrine,” and a “decision to adopt a new doctrine applicable to all contractual disputes is a policy decision that is more appropriately left to the legislature.” 

Takeaway: This decision establishes a default rule in Virginia, under which parties have no contract right to adequate assurances, unless the contract is governed by the Uniform Commercial Code. But that’s just the default rule, which parties can contract around. So if you want the contract right to adequate assurances, write it into the contract.