Alaska Airlines Inc. v Virgin Aviation TM Limited & Anor

the Defendants’ (“Virgin”’s) application for summary judgment on its counterclaim; and

the Claimant’s (“Alaska”’s) application for permission to amend its Particulars of Claim.

In 2005 and 2007, Virgin America Inc. (“Virgin America”) and Virgin entered into trade mark licensing agreements which set out the terms on which Virgin America was permitted to operate an airline in the US under the Virgin brand, and exclude others from doing so.

The 2005 license agreement had led to regulatory concerns on the part of the US Department of Transport as to Virgin America’s “nationality”, which concerns in turn led to the 2007 revision to the licence introducing clause 3.7.

In 2014, Virgin America decided to launch an IPO. Issues raised by the IPO led Virgin America and Virgin to enter into a re-stated licensing agreement (“the TMLA”) on 19 November 2014. Provision for the payment of a “Minimum Royalty” (“the MR”) was introduced at this time.

On 20 July 2018, Virgin American merged with Alaska and ceased to exist, Alaska succeeding to the TMLA.

In 2019, Alaska ceased to use the Virgin brand, and issues arose as to whether it remained obliged to pay royalties to Virgin under the TMLA.

That issue was resolved in Virgin’s favour by a decision of this court ([2023] EWHC 322 (Comm), a decision of Mr Christopher Hancock KC) which was upheld by the Court of Appeal ([2024] EWCA Civ 622).

While Virgin disputes that there was any breach of the Exclusivity Obligation (renunciatory, repudiatory or otherwise) or that it had the effect of bringing the TMLA to an end, it accepts that these questions give rise to triable issues for summary judgment and permission to amend purposes.

Virgin claims that Alaska has no defence to its claim for the MR under the TMLA in relation to the period up to the date of its alleged termination, relying on a “no set-off” clause in clause 8.9.1 of the TMLA.

For its part, Alaska contends that the MR was payable exclusively for the Exclusivity Obligation, such that the basis for Virgin’s entitlement to the MR has fallen away given the assumed breach of the Exclusivity Obligation. Alaska contends that Virgin cannot obtain summary judgment for the MR because it has an arguable claim to immediately recover any amount paid back in restitution.

Alaska argues that it was a condition precedent to its obligation to pay the MR that Virgin had not granted any “further licences in breach of clause 3.3 in that financial year” (which I understand to mean both the initial grant of any further licence in a financial year and the continuation of any such further licence during that financial year, regardless of when it was granted).

In the alternative, Alaska argues that it was an implied term of the TMLA that “in the event that Virgin had granted a further licence in a given financial year in breach of clause 3.3 then the Minimum Royalty would not be payable in respect of that financial year” (as to which I hold the same understanding).

Was the MR a severable payment due solely in respect of the Exclusivity Obligation (such that the assumed breach of the Exclusivity Obligation would give rise to a total failure of consideration)?

If so, and independently of the condition precedent and implied term arguments, does clause 8.9.1 of the TMLA have the effect that Alaska cannot rely upon its alleged right of recovery in restitution as a defence to the claim?

Is compliance with the Exclusivity Obligation in the relevant financial year a condition precedent to Alaska’s obligation to pay the MR in respect of that financial year?

Is it an implied term of the TMLA that no MR is payable in respect of any financial year in which there is a breach of the Exclusivity Obligation?

“Airline Rights” defined as “the rights granted by [the First Defendant] to [Alaska] pursuant to clause 3 of this agreement”; and

“Airline Royalties” defined as “the royalty payments payable by [Alaska] in consideration for the grant of the Airline Rights, as more particularly described in clause 8.1.”

At [32], he referred to the Exclusivity Obligation, stating:

“Alaska's contention is that it should be entitled to hold (and effectively “sterilise”) valuable intellectual property rights for up to 25 years, and yet pay nothing. If nothing else, it is plainly of value to Alaska that the well-known Virgin Brand should not be used by one of its competitors in the US airline marketplace. It is not appropriate to consider the adequacy or otherwise of that consideration, but it is plain that some payment would be expected and indeed required” (emphasis added).

While that passage points to the Exclusivity Obligation as something of value received in return for the MR even if Alaska does not use the Marks, it does not, in my view, involve a finding that this is the sole benefit for which the MR is paid, as the emphasised wording makes clear: the words “if nothing else” are intended to show that the Court of Appeal was not seeking to identify the sole benefit of the TMLA in the event Alaska chose not to use the Marks. As Phillips LJ made clear earlier in the judgment at [26] and [30], those benefits include the right to use the Marks, regardless of whether and to what extent Alaska chooses to avail itself of that right.

At [34], he noted that on Alaska’s case, “there would be a huge and unjustifiable difference between the use of a single Name or Mark in any part of Alaska's operation (perhaps by mistake), which would trigger the Minimum Royalty payment of nearly US$8m, and a complete de-brand, where nothing would be payable. There is no commercial or rationale justification for such an arbitrary distinction with huge financial consequences, which cannot have been intended by the parties.”

“The doctrine of “severability” in the context of total failure of basis ‘allows courts to split up the total payment made and allocate it to particular parts of the benefit expected in return. Where only part of the expected benefit has been conferred, it can be said that there has been a total failure of basis in respect of that part of the payment relating to the benefit still outstanding’ (Goff & Jones, §12-26).”

“It is not a requirement that ‘the contract must expressly distribute the consideration between different elements of counter-performance: all that is needed is that the court be able to identify distinct elements of payment in respect of which there has been a failure of basis’ (Goff & Jones, §12-27 citing Giedo Van der Garde BV v Force India Formula One Team Ltd [2010] EWHC 2373 (QB) at §§302– 304 and 323).”

“The test in each case as to whether a contract is severable is ‘whether as a matter of practical common sense the court considers that it is able to apportion on objective analysis of the nature of the contract and the consideration’ Dargamo Holdings v Avonwick Holdings [2021] EWCA Civ 1149 [2021] 2 CLC 583 (per Carr LJ at §104, quoting §297 of Giedo).”

Clause 3 grants the compendious “Airline Rights” in consideration for “Airline Royalties.” Clause 8.1 provides for a payment obligation (with a floor) “in consideration of the Airline Rights”. The “Airline Rights” comprise rights to use and sub-license (clause 3.1) (and through clause 9 the right to transfer those rights in specified circumstances) and rights of exclusivity (clauses 3.2 to 3.4).

On the natural reading of the introductory words to both clauses 3.1 and 8.1, and given the definition of “Airline Royalties”, the “Airline Royalties” are granted in consideration of the full package of Airline Rights. The definition of “Airline Royalties” does not distinguish between the MR payment provision in clause 8.6, and the amounts calculated by reference to clause 8.1(a) to (c), to the extent these lead to a figure exceeding the MR. While clause 3.1 provides that the Airline Royalties are paid in consideration of the use rights alone, Mr Toledano KC accepted that, read as a whole, the TMLA provided that the Airline Royalties were paid in return for the full bundle of Airline Rights.

I do not accept the submission that this construction requires the words “each and every” to be read into the words “in consideration of the Airline Rights”. “Airline Rights” is a defined term, and the natural meaning of a provision that a sum is paid “in consideration of the Airline Rights” is that it is paid in respect of all the rights falling within that definition, not some unspecified sub-set of them.

That conclusion is also strongly supported by the history of the TMLA, which, prior to November 2014, contained the same use and exclusivity rights, and a version of clause 8.1, but no MR. At that stage there could be no suggestion that the Exclusivity Obligation was the subject of a separate payment obligation from the use rights. The November 2014 TMLA introduced the MR in the form of the floor to ensure payment was received even if there was no use. However, there is nothing to suggest the amendments were intended to create separate payment obligations where previously there had been one.

It is also consistent with the conclusions of the Court of Appeal, who observed that the TMLA gives Alaska the right to use the Marks to the extent it wishes to do so, whether it chooses to avail itself of that right or not. That right to use forms part of the consideration for which the MR was payable, as the Court of Appeal noted.

On Alaska’s construction, as confirmed in oral submissions, if Alaska used the Marks during a financial year in which there was a breach of the Exclusivity Obligation, Virgin would remain entitled to “Gross Sales”-assessed royalty payments under clause 8.1. If these equalled or exceeded the amount of the MR, the MR would be of no relevance and Alaska could point to no amount referable to the Exclusivity Obligation which ceased to be payable or became recoverable on total failure of consideration grounds.

Where royalties calculated under clauses 8.1(a) to (c) fell below the MR, the severable payment solely referable to the Exclusivity Obligation would be the amount of the shortfall, and thus inherently variable.

The suggestion that the TMLA provides for a severable payment solely referable to the Exclusivity Obligation which would vary in amount, and in some cases involve no payment at all, is a commercially very surprising outcome.

These difficulties arise because what Alaska is trying to treat as a separable and severable payment is not a payment at all, but a floor forming part of the definition of the single payment obligation created by clause 8.1.

Reliance was placed on reference to “Gross Sales” in clause 8.1 and the associated definitions which it was suggested showed that payments under clause 8.1(a) to (c) were solely in consideration of actual use. “Gross Sales” is defined as amounts received “in connection with the carrying on of the Licensed Activities”, which are in turn defined as “the activities … in connection with which [Alaska] and its subsidiaries are permitted to use the Marks”. Clause 8.1 does not, therefore support the conclusion that clause 8.1 is intended to calculate a payment made solely in return for actual use (such that the consideration referable to exclusivity must be found elsewhere). (emphasis added)

The fact that the MR is a fixed amount does not support the conclusion that it is paid solely for the Exclusivity Obligation. The MR is (necessarily) a fixed amount because it represents the floor of the amount payable for the Airline Rights.

The structure of clause 8.6, with Alaska being obliged to pay the higher of the two alternatives in (a) and (b), does not assist Alaska. Indeed the fact that where the clause 8.1 calculation (i.e. the amount Alaska says is payable for actual use) is higher than the MR, nothing additional is paid (and therefore on Alaska’s case nothing solely referable to the Exclusivity) tells against Alaska’s construction.

The mechanism for payment (quarterly accounting and an annual adjustment at the end of Alaska’s financial year by reference to the MR where appropriate) does not assist Alaska. That inevitably follows from the MR being an annual floor for royalty payments.

Finally, Alaska made the point on a number of occasions that Virgin had accepted for the purposes of this hearing that there was an arguable repudiatory breach, i.e. one which deprived Alaska of “substantially the whole benefit of” the TMLA (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 66). However, it is very far from the case that a breach sufficient to satisfy the Hong Kong Fir test and permit prospective discharge of a contract for breach of an innominate term means that there has been a total failure of consideration in respect of any contractual performance by the party in repudiatory breach prior to termination.

That analysis affords no commercial value to Alaska’s right to use the Marks (and the passages in Virgin’s pleadings in the previous action relied upon as adopting Alaska’s submission define the benefits in terms of Alaska being “permitted” to use the Marks rather than simply actual use). One benefit of the continuing right to use is that it remained open to Alaska to change its mind and use the Marks if it wished.

Further, it was also open to Alaska to sell the licence along with a substantial part of its business (clause 9.1.2) to a purchaser who might well attach value to the right to use the Marks and to exclude others from doing so, and to use the licence as security (clauses 9.1.3 and 9.2).

Alaska suggested that Virgin had already conceded that the only commercial benefits which arose from the licence were actual use and exclusivity, relying on submissions made in the prior proceedings. I was not assisted by the references to the submissions made in the prior proceedings, which did not always clearly distinguish between issues of the right to use and exclusivity, and had no reason to do so. However, Virgin’s submissions clearly identified one of the benefits to Alaska as “the right to use the Virgin brand again in future should it wish to do so” (paragraph 47(1) of its appeal skeleton and transcript 6 March 2024 page 118 lines 18-23).

I have addressed Alaska’s reliance on [32] of the Court of Appeal judgment above. Alaska relied on an analogy drawn by Virgin in prior proceedings with a lease of real property, submitting “it is not …typical that a lease will require payment where the property is not used and the landlord is simultaneously entitled to lease it for occupation by a third party”. However the analogy is not apt. A lease of real property is rivalrous, in the sense that leasing the property to one party necessarily precludes leasing the same property to use by another in the same period. However, trademarks can be the subject of more than one (non-exclusive) licence, but the licensee still benefits from a right to use not available to non-licensees.

There have been attempts to argue that where a claimant’s claim has been caused by the “wrong” which forms the basis of the answer, the no set-off clause should not apply: e.g. where the defendant claims it was induced to enter into the contract under which the debt arose by an actionable misrepresentation. The suggestion that a widely-worded no set-off clause did not apply in similar circumstances was rejected by the Court of Appeal in Society of Lloyd’s v Leighs [1997] CLC 1398, 1408, albeit in a case which raised the complication that the party against whom the misrepresentation claim arose was suing as assignee of the debt. The Court of Appeal distinguished the case before them from cases where “breaches of warranty by the seller or provider of services reduce or extinguish the price that would otherwise be due for the goods sold or services provided” (which they referred to as “pure defence” cases), albeit stating “we consider that the words ‘or other deduction on any account whatsoever’ would probably be wide enough to encompass the reduction or extinction of the premium by way of ‘pure’ defence.” Similarly, in Skipskredittforeningen v Emperor Navigation [1997] CLC 1151, the case proceeded on the basis that a no set-off clause in a loan contract was capable of applying to a claim for damages on the basis that the defendant had been induced to enter into the contract by misrepresentation.

The issue of whether a claim to “abate” the price of goods or services by reference to defects in them is caught by a no set-off clause has been considered in a number of cases, the overall effect of which is that it is possible to exclude the operation of abatement through an appropriately worded clause, but there will be forms of clause which exclude legal and equitable set-off but not abatement. In Acsim (Southern) Ltd v Danish Contracting & Development (1990) 47 BLR 55, a construction contract provided that with certain exceptions, “no other rights whatsoever shall be implied as terms of this sub-contract relating to exceptions.” Those words were held not to “affect the right of a contractor to defend a claim … by showing that the sum claimed includes sums to which the sub-contractor is not entitled under the terms of the contract or to defend by showing that, by reason of the sub-contractor’s breaches of contract, the value of the work is less than the sum clamed under the ordinary right of defence established in Mondel v Steel” (p.70). However, the Court acknowledged that a party seeking to achieve that result “can, without difficulty, find words apt for that purpose.” The same outcome was conceded on similar wording (and with the Court’s approval) in Mellowes Archital v Bell Products (1997) 58 Con LR 22. Similarly, in NH International (Caribbean) Ltd v National Insurance Property Development Co. Ltd [2015] UKPC 37, wording regulating a contractor's entitlement “to set-off against or make any deduction from an amount certified” was held not to preclude the employer from raising an abatement argument, namely that the work for which the contractor was seeking payment was so poorly carried out that it did not justify any payment or was so defective that it was worth significantly less than the contractor was claiming, relying on Mellowes.

In Totsa Total Oil Trading SA v Bharat Petroleum [2005] EWHC 1641 (Comm), the relevant clause provided “payment shall be made without discount, deduction, withholding, set-off or counterclaim in United States Dollars … on or before the due date … against presentation to Buyer of hard copy or telex invoice together with original bills of lading or letter of indemnity …”. The buyer claimed that the quantity shipped was short. At [20]-[21], Christopher Clarke J held that while the buyer’s claims could be “put forward as counterclaims, claims to equitable set-off or claims to abate a price”, they were all caught by the provision (the judge observing that “set-off and counterclaim are dealt with expressly, and a claim by way of abatement involves claiming a deduction from the price”.) At [24], he stated:

“It seems to me that when a buyer declines to pay the full amount of the invoice upon the ground that not all of the oil that he contracted for has been shipped, what he is doing is seeking to deduct from his payment to the seller such proportion of the invoice as he declines to pay and to withhold payment of that amount. That is exactly what the buyers have undertaken not to do.”

In the case of Skipskredittforeningen v Emperor Navigation [1997] CLC 1151, a further issue arose as to whether an assumed wrongful failure to realise the value of security for a loan was caught by a no set-off clause in a loan agreement. Mance J noted that cases had treated a mortgagee’s claim for loss arising from such a failure as an “allowance” and he accepted at p.1167 that “it was arguable in law that failure to use reasonable care in realizing assets could entitle a borrower to claim a reduction in his indebtedness corresponding in amount to the amount of any loss caused by the failure.” Nonetheless, the alleged reduction was held to fall within the words “without set-off … whatsoever”.

What of circuity of action (where the defendant contends that the amount for which summary judgment is sought against it will, if recovered, constitute an amount which the defendant is immediately entitled to recover back from the claimant by reference to some separate legal entitlement, very often a claim arising out of an anterior wrong, but perhaps because of a contractual right of recovery, e.g. under an indemnity)? In Workington Harbour and Dock Board v Towerfield (Owners) [1951] AC 112, 148, Lord Normand referred at p.148 to the principle “frustra petis quod mox es restiturus” (helpfully, and necessarily in my case, translated by Geoffrey Lane LJ in Post Office v Hampshire CC [1980] QB 124, 134 as “it is no good trying to get something which immediately afterwards you are going to have to hand back”). Conceptually, this raises a similar issue to that considered in Leighs, and appropriately worded “no set-off clauses” have been held to apply to circuity arguments. In Petroplus Marketing AG v Shell Trading International Ltd [2009] EWHC 1024 (Comm), payment was to be rendered “in full without deduction, offset or counterclaim”. This was held to be sufficient to preclude an argument that the price should be reduced to the extent that it arose from the seller’s assumed wrongful late shipment (the price being tied to the bill of lading debt).

Two cases dealing with an argument which might be regarded as a sub-set of the circuity doctrine – the so-called “prevention principle” – reached different conclusions on the application of the “no set-off” clauses in issue to the argument that the defendant’s liability had arisen because the claimant’s breach of a co-operation agreement had prevented the defendant from performing. In Cargill International Trading Pte Ltd v Uttam Galva Steels Ltd [2018] EWHC 2977 (Comm), clause 6.4 of a contract for the supply of steel provided that “no default by the Buyer of its obligations under this Agreement …. or any other action or inaction by the Buyer, any Alternative Buyer or a third person shall suspend, terminate or otherwise extinguish the Seller's payment obligation.” Teare J held that this clause, which he described as “rather wider in effect than simple no set-off clauses” ([18]) precluded reliance on a defence based on the prevention principle ([19]-[20]).

In TMF Trustee Limited v Fire Navigation Ince [2019] EWHC 2918 (Comm), a clause requiring payment “without any form of set-off, cross-claim or condition” was held to be insufficient to exclude a defence based on the prevention principle, Phillips J stating at [41] that the effect of the no set-off clause was “that the Borrowers cannot resist liability for amounts due by reason of any alleged set-off or cross-claim, but that does not in any way stop the Borrowers from arguing that the amounts claimed are not due in the first place”. At [42], he held that the authorities establish “that the prevention principle ‘excuses’ a breach where performance was prevented by the other party's breach, giving rise to a defence to liability for the breach itself, not merely defence by way of a set-off.” However, I do not understand the case to hold that an appropriately worded no set-off clause could not apply to a defence based on the prevention principle, and I am satisfied that it could.

I remain of the view I expressed in Delivery Hero v Mastercard [2023] EWHC 1827 (Comm), [22]-[23], in reliance on Fibrosa Spolka Akcyna v Fairbairn Lawson Come Barbour Limited [1943] AC 32, 55, that the principle summarised in Chitty and Treitel is best explained by reference to the defence of circuity of action. I note that the deputy judge analysed the principle in these terms in Ministry of Sound (Ireland) Limited v World Online Limited [2003] EWHC 2178 (Ch), [63] as did a different deputy judge in Lomax Leisure Limited v Miller [2007] EWHC 2508, [54]. The latter’s statement that “a liability to honour the cheques never properly arose” is readily understood as meaning never arose in a way which meant that the claim could not be resisted on the circuity basis.

On the basis of the authorities and as a matter of principle, I am satisfied that circuity defences can be made the subject of no set-off clauses when these are appropriately worded. Clause 8.9.1 is a widely worded clause, providing for payment “without any set-off or counterclaim whatsoever and free and clear of all deductions or withholdings whatsoever ….”

The passage relied upon in Hyundai is at 1136, where Viscount Dilhorne states:

“I conclude that save in the case of sales of land and goods and where there has been a total failure of consideration, it was the law prior to the decision in Lep Air Services Ltd. v. Rolloswin Investments Ltd [1973] A.C. 331 that cancellation or rescission of a contract in consequence of repudiation did not affect accrued rights to the payment of instalments of the contract price unless the contract provided that it was to do so.”

That passage is concerned with the (different) question of whether a right to payment which has accrued prior to termination of a contract can be affected by termination, the answer being that it can when the termination has the result that there is a total failure of consideration but not otherwise. It does not follow, however, that the “effect” in question is that no debt ever accrued, as opposing to a defence coming into existence, still less that it is not possible through an appropriately worded no set-off clause to require that defence to be pursued by independent action.

I do not believe Mirimskaya v Evans [2007] EWHC 2073 (TCC), assists. The case involved judgment following a trial, and the principle applied was that in Hyundai, namely “after a repudiation, unpaid instalments which were due prior to the repudiation remain payable by the party repudiating unless there has been a total failure of consideration in respect of those instalments.” At [63], the deputy judge explained the reason why total failure of consideration is language redolent of the circuity analysis, rather than a Pure No Debt analysis:

“The result in law is that, although DZL might technically be entitled to payment of those paid instalments, the Claimant would have a clear restitutionary right to recover them immediately due to a total failure of consideration. In these circumstances the law does not require the instalments to be paid and then recovered.”

There is an obviously closer connection between the basis of the claim and the basis of the answer than found in many other “circuity” contexts.

In this case, the total failure argument is one assumed to be available when the MR first became due (contrast a case in which it might arise after the debt became due, e.g. because goods under a contract of sale were subsequently rejected, and property revested in the buyer).

Virgin is able to plead and prove what it needs to plead and prove for the purposes of establishing its debt claim absent any response, and there is no arguable basis for denying those elements. While that is not sufficient to prevent the answer from being a Pure No Debt argument, it is necessary.

It is not alleged that there has been any change in the status of the debt through a subsequent agreement between the parties, or that it has been satisfied in a manner which, if it had occurred, would constitute an undisputed means of discharging the payment.

Alaska’s answer is one which is capable of being asserted and given effective relief by way of independent action (which is one of the basic premises of a no set-off clause, often reflected in their characterisation as “pay now, sue later” clauses).

Entering judgment for the debt does not create a cause of action estoppel which precludes later reliance on the answer (such that it can be said that the answer must either be taken into account when judgment is sought for the debt, or not at all).

From a commercial perspective, the issue raised (whether there has been a breach of a contractual obligation on disputed facts) is the type of dispute which a no set-off clause is ordinarily intended to prevent being set up as an answer to a payment obligation arising as one of the primary obligations under a contract (see by analogy Popplewell J in FG Wilson at [88]-[89]).

Alaska relied upon the statement in Chitty on Contracts (35t), [25-028] that “[i]n the reported cases the courts have tended to the view that in every lump-sum contract there is an implied term that no part of the price is to be recovered without complete performance.” However, the MR is not a “lump sum” in this sense, but a floor of a payment obligation which can vary in amount.

Alaska relied upon the fact that the MR was payable after the end of the financial year, and therefore after “the period in which Virgin’s obligation is to be performed”. However, the conferral of the right to use the Marks and the Exclusivity Obligations are continuing obligations which are not divided into separate time periods. The MR is invoiced after the end of a financial year because the floor it creates is a floor for a particular financial year. If no MR is ever payable as such (because the clause 8.1(a) to (c) payments exceed the floor), then the payments made by Virgin do not involve any link with a financial year.

The payment provisions are not consistent with Alaska’s construction. On Alaska’s case, where there had been quarterly payments under clauses 8.1(a) to (c) for the first three quarters of a financial year, they would be recoverable in the event that there had been breach of the exclusivity obligation in the fourth quarter. However, clause 8.6 does not provide for recovery of amounts paid on this basis, but only a right of set-off and then only where a Reconciliation Statement reveals an overpayment rather than for any other reason.

I accept Virgin’s submission that clause 8.9.1 also provides a measure of support for its construction. If Alaska’s “condition precedent” argument is correct, it is difficult to see how there could ever be an occasion on which a payment was due to Virgin but there was a counterclaim for breach of Virgin’s obligations.

Alaska (sensibly) does not suggest that the Exclusivity Obligation is a condition, but accepted that it is an innominate term. That also tells against the suggestion that, nonetheless, entire performance is a condition precedent to Virgin’s right to recover any payment under the TMLA. Alaska suggested that “the question of whether or not an obligation is entire turns substantially upon the same analysis as to whether the breach is repudiatory”, citing Muduroglu v Stephenson Harwood [2017] EWHC 29 (Ch), [43]-[53]. However that case is authority for the proposition that the issue of whether a term is a condition “turns upon much the same considerations” as whether one is concerned with a dependent obligation in an entire contract. Far from assisting Alaska, this decision is inconsistent with its case. The question of whether performance of an obligation is a condition precedent to the obligation of a counterparty to perform an obligation must be fixed when a contract is concluded. Where a term is innominate, the question of whether it is a dependent obligation cannot change depending on the consequences of a particular breach in a particular case and whether they are sufficient to amount to a repudiatory breach.