FRANCONIA ASSOCIATES et al. v. UNITED STATES

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129 OCTOBER TERM, 2001
Syllabus
FRANCONIA ASSOCIATES et al. v. UNITED STATES
certiorari to the united states court of appeals for
the federal circuit
No. 01–455. Argued April 15, 2002—Decided June 10, 2002*
Under §§ 515 and 521 of the Housing Act of 1949, the Farmers Home Ad-
ministration (FmHA) makes direct loans to private, nonprofit entities
to develop and/or construct rural housing for the elderly and low- or
middle-income individuals and families. Petitioners are property own-
ers who entered into such loans before December 21, 1979. The promis-
sory notes petitioners executed authorized “[p]repaymen[t] of scheduled
installments, or any portion thereof, . . . at any time at the option of
Borrower.” On February 5, 1988, concerned about the dwindling sup-
ply of low- and middle-income rural housing in the face of increasing
prepayments of mortgages by § 515 borrowers, Congress enacted the
Emergency Low Income Housing Preservation Act of 1987 (ELIHPA),
which amended the Housing Act of 1949 to impose permanent restric-
tions upon prepayment of § 515 mortgages entered into before December
21, 1979. On May 30, 1997, the Franconia petitioners filed suit under
the Tucker Act, 28 U. S. C. § 1491, charging that ELIHPA abridged the
absolute prepayment right set forth in their promissory notes and
thereby effected, inter alia, a repudiation of their contracts. In dis-
missing petitioners’ contract claims as untimely under § 2501—which
provides that a claim “shall be barred unless the petition thereon is filed
within six years after such claim first accrues”—the Court of Federal
Claims concluded that the claims first accrued on the ELIHPA regula-
tions’ effective date. In affirming on statute of limitations grounds, the
Federal Circuit ruled that, if the Government’s continuing duty to allow
petitioners to prepay their loans was breached, the breach occurred im-
mediately upon ELIHPA’s enactment date, over nine years before peti-
tioners filed their suit. The court rejected petitioners’ argument that
ELIHPA’s passage qualified as a repudiation, so that their suit would
be timely if filed within six years of either the date performance fell due
(the date they tendered prepayment) or the date on which they elected
to treat the repudiation as a present breach. On September 16, 1998,
the Grass Valley petitioners filed an action that was virtually identical
to the Franconia suit. The Court of Federal Claims dismissed for the
*Together with Grass Valley Terrace et al. v. United States (see this
Court’s Rule 12.4), also on certiorari to the same court.

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130 FRANCONIA ASSOCIATES v. UNITED STATES
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reasons it had dismissed the Franconia claims, and the Federal Circuit
affirmed without opinion.
Held: Because ELIHPA’s enactment qualified as a repudiation of the par-
ties’ bargain, not a present breach of the loan agreements, breach would
occur, and the six-year limitations period would commence to run, when
a borrower tenders prepayment and the Government then dishonors its
obligation to accept the tender and release its control over use of the
property securing the loan. Pp. 141–149.
(a) Resolution of two threshold matters narrows the scope of the con-
troversy. First, the requirement that the Government unequivocally
waive its sovereign immunity is satisfied here because, once the United
States waives immunity and does business with its citizens, it does so
much as a party never cloaked with immunity. Cf. Clearfield Trust
Co. v. United States, 318 U. S. 363, 369. Second, the Court, like the
Government, accepts for purposes of this decision that the loan contracts
guaranteed the absolute prepayment right petitioners allege. P. 141.
(b) Under applicable general contract law principles, whether peti-
tioners’ claims were filed “within six years after [they] first accrue[d],”
§ 2501, depends upon when the Government breached the prepayment
undertaking stated in the promissory notes. In declaring ELIHPA a
present breach of petitioners’ loan contracts, the Federal Circuit rea-
soned that the Government had but one obligation under those agree-
ments: to continue to allow borrowers the unfettered right to prepay
their loans at any time. If that continuing duty was breached, the court
maintained, the breach occurred immediately, totally, and definitively,
when ELIHPA took away the borrowers’ unfettered right to prepay.
In so ruling, the court incorrectly characterized the performance alleg-
edly due from the Government under the promissory notes. The Gov-
ernment’s pledged performance is properly comprehended as an obliga-
tion to accept prepayment. Once the Government’s obligation is thus
correctly characterized, the decisions below lose force. A promisor’s
failure to perform at the time indicated for performance in the contract
establishes an immediate breach. But the promisor’s renunciation of a
contractual duty before the time fixed in the contract for performance
is a repudiation, which ripens into a breach prior to the time for per-
formance only if the promisee elects to treat it as such, see Roehm v.
Horst, 178 U. S. 1, 13. Viewed in this light, ELIHPA effected a repudi-
ation of the FmHA loan contracts, not an immediate breach. ELIHPA
conveyed the Government’s announcement that it would not perform as
represented in the promissory notes if and when, at some point in the
future, petitioners attempted to prepay their mortgages. Unless peti-
tioners treated ELIHPA as a present breach by filing suit prior to the

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date indicated for performance, breach would occur when a borrower
attempted to prepay, for only then would the Government’s responsive
performance become due. Pp. 141–144.
(c) The first of the Government’s arguments to the contrary is unper-
suasive. The Government contends that § 2501’s “first accrues” qualifi-
cation is meant to ensure that suits against the United States are filed
on the earliest possible date, thereby providing the Government with
reasonably prompt notice of the fiscal implications of past enactments.
However, § 2501’s text is unexceptional: A number of contemporaneous
state statutes of limitations applicable to suits between private parties
also tie the commencement of the limitations period to the date a claim
“first accrues.” Equally telling, in its many years of applying and inter-
preting § 2501, the Court of Federal Claims has never attributed to the
words “first accrues” the meaning the Government now proposes. In-
stead, in other settings, that court has adopted the repudiation doctrine
in its traditional form when evaluating the timeliness of suits governed
by § 2501. Two practical considerations reinforce the Court’s conclu-
sion. First, reading § 2501 as the Government proposes would seriously
distort the repudiation doctrine in Tucker Act suits because a party
aggrieved by the Government’s renunciation of a contractual obliga-
tion anticipating future performance would be compelled by the looming
limitations bar to forgo the usual option of awaiting the time perform-
ance is due before filing suit for breach. Second, putting prospective
plaintiffs to the choice of either bringing suit soon after the Govern-
ment’s repudiation or forever relinquishing their claims would surely
proliferate litigation, forcing the Government to defend against highly
speculative damages claims in a profusion of suits, most of which would
never have been brought under a less novel interpretation of § 2501.
Pp. 144–147.
(d) The Court also rejects the premise, and therefore the conclusion,
of the Government’s second argument against application of the repudia-
tion doctrine. The Government contends that a congressional enact-
ment like ELIHPA that precludes the Government from honoring a con-
tractual obligation anticipating future performance always constitutes a
present breach because the agency or official responsible for administer-
ing the contract is not free to change its mind and render the requisite
performance without violating binding federal law. However, just as
Congress may announce the Government’s intent to dishonor an obliga-
tion to perform in the future through a duly enacted law, so may it
retract that renouncement prior to the time for performance, thereby
enabling the agency or contracting official to perform as promised. In-
deed, Congress changed its mind in just this manner before it enacted
ELIHPA. In 1979 amendments to the National Housing Act, Congress

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132 FRANCONIA ASSOCIATES v. UNITED STATES
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repudiated the promissory notes at issue here by conditioning prepay-
ment of all § 515 loans on the borrower’s agreement to maintain the
low-income use of its property for a specified period. One year later,
Congress removed those conditions on pre-1979 loans, thereby retract-
ing the repudiation. Hence, the fact that the Government’s repudia-
tion here rested upon the enactment of a new statute makes no signifi-
cant difference. Mobil Oil Exploration & Producing Southeast, Inc.
v. United States, 530 U. S. 604, 619, 620. Pp. 147–148.
240 F. 3d 1358; 7 Fed. Appx. 928, reversed and remanded.
Ginsburg, J., delivered the opinion for a unanimous Court.
Jeff H. Eckland argued the cause for petitioners. With
him on the briefs were William L. Roberts and Mark J.
Blando.
Matthew D. Roberts argued the cause for the United
States. With him on the brief were Acting Solicitor
General Clement, Assistant Attorney General McCallum,
James A. Feldman, David M. Cohen, and Mark L. Josephs.†
Justice Ginsburg delivered the opinion of the Court.
The two cases consolidated for our review concern the
timeliness of claims filed against the United States under
the Tucker Act, 28 U. S. C. § 1491. Petitioners are property
owners who participated in a federal program to promote
development of affordable rental housing in areas not tradi-
tionally served by conventional lenders. In exchange for
low-interest mortgage loans issued by the Farmers Home
Administration (FmHA), petitioners agreed to devote their
†Briefs of amici curiae urging reversal were filed for Bank of America,
FSB, et al. by Steven S. Rosenthal, Alan K. Palmer, Leo G. Rydzewski,
John C. Millian, Melvin C. Garbow, Howard N. Cayne, David B. Berg-
man, Michael A. Johnson, Daniel J. Goldberg, William T. Reilly, and
Stephen M. Forte; for the Council for Affordable and Rural Housing by
Carl A. S. Coan III; and for the National Association of Home Builders
by Thomas Jon Ward.
John C. Millian, Mark A. Perry, and Paul Blankenstein filed a brief
for John K. Castle et al. as amici curiae.

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properties to low- and middle-income housing and to abide
by related restrictions during the life of the loans.
Petitioners allege that the promissory notes governing
their loans guaranteed the borrower the right to prepay at
any time and thereby gain release from the federal program
and the restrictions it places on the use of a participating
owner’s property. In the suits that yielded the judgments
before us, petitioners charged that Congress abridged that
release right in the Emergency Low Income Housing Pres-
ervation Act of 1987 (ELIHPA or Act), 101 Stat. 1877,
as amended, 42 U. S. C. § 1472(c) (1994 ed. and Supp. V).
That Act placed permanent restraints upon prepayment of
FmHA loans. Petitioners asserted in their complaints
that ELIHPA effected both a repudiation of their contracts
and a taking of their property in violation of the Fifth
Amendment.
The Federal Circuit held petitioners’ claims time barred
under 28 U. S. C. § 2501, which prescribes that all Tucker
Act claims must be filed within six years of the date they
“first accrue[d].” In the Federal Circuit’s view, passage of
ELIHPA constituted an immediate breach of the FmHA loan
agreements and therefore triggered the running of the limi-
tations period. Petitioners filed suit not “within six years
of,” but over nine years after, ELIHPA’s enactment. On
that account, the Federal Circuit held their claims untimely,
and their suits properly dismissed.
Accepting for purposes of this decision that the loan
contracts guaranteed the absolute prepayment right peti-
tioners allege, we reverse the Federal Circuit’s judgment.
ELIHPA’s enactment, we conclude, qualified as a repudiation
of the parties’ bargain, not a present breach of the loan
agreements. Accordingly, breach would occur, and the six-
year limitations period would commence to run, when a
borrower tenders prepayment and the Government then dis-
honors its obligation to accept the tender and release its con-
trol over use of the property that secured the loan.

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134 FRANCONIA ASSOCIATES v. UNITED STATES
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I
A
Under §§ 515 and 521 of the Housing Act of 1949, 76 Stat.
671, 82 Stat. 551, as amended, 42 U. S. C. §§ 1485, 1490a, the
FmHA makes direct loans to private, nonprofit entities to
develop or construct rural housing designed to serve the el-
derly and low- or middle-income individuals and families.1
Section 515 loans require the borrower, inter alia, to execute
various loan documents, including a loan agreement, a prom-
issory note, and a real estate mortgage.
Before December 21, 1979, each petitioner entered into
a loan agreement with the FmHA under §§ 515 and 521
“to provide rental housing and related facilities for eligible
occupants . . . in rural areas.” App. to Pet. for Cert. A165.
In the loan agreements, each petitioner certified that it was
unable to obtain a comparable loan in the commercial market.
See id., at A177. The loan agreements contained various
provisions designed to ensure that the projects were afford-
able for people with low incomes. Those provisions included
restrictions as to eligible tenants, the rents petitioners could
charge, and the rate of return petitioners could realize, as
well as requirements regarding the maintenance and finan-
cial operations of each project. See id., at A170–A174.
Each loan agreement also specified the length of the loan,
ordinarily 40 or 50 years.
The promissory notes executed by petitioners required
payment of the principal on each mortgage in scheduled
installments, plus interest. See id., at A176–A177. The
1 Since 1994, the program has been entrusted to the Rural Housing
Service, known between 1994 and 1996 as Rural Housing and Community
Development Services. That agency was created by the Secretary of
Agriculture under authority provided by the Department of Agriculture
Reorganization Act of 1994, 108 Stat. 3219, as amended, 110 Stat. 1128,
1131. See also 7 CFR § 2003.18 (2002) (functional organization of Rural
Housing Service). Our references to the FmHA should be understood to
include these successor agencies.

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notes also contained the prepayment provision curtailed by
the legislation involved in the litigation now before us. That
provision read: “Prepayments of scheduled installments, or
any portion thereof, may be made at any time at the option
of Borrower.” Id., at A176. No other provision of the loan
documents addressed prepayment.
In 1979, Congress found that many § 515 participants had
prepaid their mortgages, thus threatening the continued
availability of affordable rural housing. Concerned that
“these projects [remain] available to low and moderate in-
come families for the entire original term of the loan,” H. R.
Rep. No. 96–154, p. 43 (1979), Congress amended the Na-
tional Housing Act to stem the loss of low-cost rural housing
due to prepayments, see Housing and Community Develop-
ment Amendments of 1979, 93 Stat. 1101. In these 1979
amendments, Congress prohibited the FmHA from accepting
prepayment of any loan made before or after the date of
enactment unless the owner agreed to maintain the low-
income use of the rental housing for a 15-year or 20-year
period from the date of the loan. 93 Stat. 1134–1135. That
requirement could be avoided if the FmHA determined that
there was no longer a need for the low-cost housing. Id.,
at 1135.
The 1979 amendments applied to all program loans, past,
present, and future. In 1980, however, Congress further
amended the National Housing Act to eliminate retroactive
application of the § 515 prepayment limitations imposed by
the 1979 legislation. The Housing and Community Develop-
ment Act of 1980, 94 Stat. 1614, provided that the prepay-
ment restrictions would apply only to loans entered into
after December 21, 1979, the date that amendment was
enacted. § 514, 94 Stat. 1671–1672. The 1980 Act also
required the Secretary of Agriculture to inform Congress
of the repeal’s adverse effects, if any, on the availability of
low-income housing. Id., at 1672.

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By 1987, Congress had again become concerned about the
dwindling supply of low- and moderate-income rural housing
in the face of increasing prepayments of mortgages under
§ 515.2 A House of Representatives Committee found that
owners were “prepay[ing] or . . . refinanc[ing] their FmHA
loans, without regard to the low income and elderly tenants
in these projects.” H. R. Rep. No. 100–122, p. 53.
Responsive to that concern, Congress passed ELIHPA,
which amended the Housing Act of 1949 to impose perma-
nent restrictions upon prepayment of § 515 mortgages en-
tered into before December 21, 1979. This legislation,
enacted on February 5, 1988, provides that before FmHA
can accept an offer to prepay such a mortgage,
“the [FmHA] shall make reasonable efforts to enter into
an agreement with the borrower under which the bor-
rower will make a binding commitment to extend the
low income use of the assisted housing and related facili-
ties involved for not less than the 20-year period begin-
ning on the date on which the agreement is executed.”
42 U. S. C. § 1472(c)(4)(A) (1994 ed.).
The legislation further provides that the FmHA may include
incentives in such an agreement, including an increase in
the rate of return on investment, reduction of the interest
rate on the loan, and an additional loan to the borrower.
§ 1472(c)(4)(B) (1994 ed. and Supp. V).
Under ELIHPA, if the FmHA determines after a “reason-
able period” that an agreement cannot be reached, the owner
who sought to prepay must offer to sell the housing to
“any qualified nonprofit organization or public agency at a
fair market value determined by 2 independent apprais-
ers.” § 1472(c)(5)(A)(i) (1994 ed.). If an offer to buy is not
2 In 1986, Congress had passed a temporary moratorium that precluded
§ 515 prepayments in most cases. The moratorium originally was to ex-
pire in 1987, but it was extended into 1988 by another temporary measure.
See note following 42 U. S. C. § 1472, p. 163 (1994 ed.).

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made by a nonprofit organization or agency within 180
days, the FmHA may accept the owner’s offer to prepay.
§ 1472(c)(5)(A)(ii). The offer-for-sale requirement may be
avoided if the FmHA determines that prepayment will not
“materially affec[t]” housing opportunities for minorities and
one of two other conditions is met: Prepayment will not dis-
place the tenants of the affected housing, or there is “an ade-
quate supply of safe, decent, and affordable rental housing
within the market area” and “sufficient actions have been
taken to ensure” that such housing “will be made available”
to displaced tenants. § 1472(c)(5)(G)(ii).
ELIHPA’s implementing regulations establish a process
by which the FmHA addresses prepayment requests.
Under those procedures, the FmHA first “develo[ps] an in-
centive offer,” making a “reasonable effort . . . to enter into
an agreement with the borrower to maintain the housing for
low-income use that takes into consideration the economic
loss the borrower may suffer by foregoing [sic] prepay-
ment.” 7 CFR § 1965.210 (2002). Only if the borrower
rejects that offer will the FmHA attempt to make the deter-
minations—regarding the effect on minority housing op-
portunities, the displacement of tenants, and the supply of
affordable housing in the market—required by 42 U. S. C.
§ 1472(c)(5)(G) before prepayment can be accepted. 7 CFR
§ 1965.215(a) (2002). 3
B
Petitioners in Franconia filed this action in the United
States Court of Federal Claims on May 30, 1997. Plaintiffs
included petitioners—all of whom had entered into loan
agreements before December 21, 1979, and were therefore
3 In 1992, Congress passed the Housing and Community Development
Act of 1992, 106 Stat. 3672, codified in relevant part at 42 U. S. C. § 1472(c)
(1992 legislation). That provision, which had no effect on petitioners’
loans, extended ELIHPA’s restrictions to loans made after those of peti-
tioners, i. e., loans made from December 21, 1979, through 1989. See 106
Stat. 3841.

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subject to ELIHPA—and others, who had entered into loan
agreements after December 21, 1979, and were therefore un-
affected by the Act. See App. to Pet. for Cert. A3, n. 2.4
Petitioners alleged that ELIHPA repudiated their loan con-
tracts, which, they asserted, gave them the right “to termi-
nate their participation in the Government’s housing pro-
gram by exercising their option to prepay at any time.” Id.,
at A112. Their complaint sought relief on two theories:
breach of contract and a violation of the Fifth Amendment’s
proscription against taking property without just compensa-
tion. See id., at A132–A133.
The Court of Federal Claims granted the Government’s
motion to dismiss petitioners’ contract claims as barred by
the six-year statute of limitations in 28 U. S. C. § 2501. 43
Fed. Cl. 702 (1999). That provision states: “Every claim of
which the United States Court of Federal Claims has juris-
diction shall be barred unless the petition thereon is filed
within six years after such claim first accrues.” The court
concluded that petitioners’ contract claims first accrued on
May 23, 1988, the effective date of regulations implementing
ELIHPA. Id., at 709. That was so, the court said, because
those regulations breached the only performance required of
the Government under the promissory notes: “to keep its
promise to allow borrowers an unfettered prepayment
right.” Id., at 710. The court also dismissed petitioners’
takings claims sua sponte; because “the [Government]
conduct . . . alleged to have constituted a taking” was “Con-
gress’s change of the prepayment option,” the court rea-
soned, any claim based on that conduct “accrued at the time
of the 1988 legislation.” Id., at 711.
The Federal Circuit affirmed the dismissal of petitioners’
claims on timeliness grounds. 240 F. 3d 1358 (2001). The
4 The claims of the latter group of Franconia plaintiffs remain pend-
ing before the Court of Federal Claims. See App. to Pet. for Cert. A3,
n. 2.

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Court of Appeals agreed with the Court of Federal Claims
on the respective benefits and burdens generated by the
promissory notes: Petitioners enjoyed “an unfettered right
to prepay their loans at any time,” id., at 1363, while the
Government had an obligation “to continue to allow borrow-
ers” that option, ibid. If the Government’s “continuing duty
was breached,” the court concluded, “the breach occurred
immediately upon enactment of ELIHPA because, by its
terms, ELIHPA took away the borrowers’ unfettered right
of prepayment.” Ibid. Thus, the court ruled, the statute
of limitations began to run on February 5, 1988, the date of
ELIHPA’s passage, see id., at 1364; 5 given that limitations-
triggering date, the court held, petitioners’ claims, filed over
nine years post-ELIHPA, were time barred.
In holding petitioners’ claims untimely, the Federal Circuit
rejected the argument pressed by petitioners that the pas-
sage of ELIHPA qualified as a repudiation. Were ELIHPA
so regarded, petitioners’ suit would be timely if filed within
six years of either the date performance fell due (the date
petitioners tendered prepayment) or the date on which peti-
tioners elected to treat the repudiation as a present breach.
“An anticipatory repudiation occurs,” the Court of Appeals
recognized, “when an obligor communicates to an obligee
that he will commit a breach in the future.” Id., at 1363
(internal quotation marks omitted). “The doctrine of antici-
patory repudiation does not apply in this case,” the court
reasoned, because after ELIHPA revoked the promise to
allow unrestricted prepayment, the Government owed no
future performance under the contracts. Id., at 1364.
5 The Federal Circuit thus disagreed with the Court of Federal Claims
in one respect: The former concluded that petitioners’ claims had accrued
on the date of ELIHPA’s enactment, while the latter held that those claims
had accrued on the effective date of regulations implementing the Act.
240 F. 3d, at 1365, n. 3. This disagreement is irrelevant to, and rendered
academic by, our resolution of the petitions.

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Petitioners’ takings claims were time barred for essen-
tially the same reason, the Federal Circuit held. The “prop-
erty” allegedly taken without just compensation was peti-
tioners’ contractual “right to prepay their FmHA loans at
any time,” id., at 1365; the takings claim thus arose when,
upon passage of ELIHPA, the Government “took away and
conclusively abolished” the unrestricted prepayment option,
id., at 1366.6
On September 16, 1998, the Grass Valley petitioners, all
of whom had entered into § 515 loan agreements before De-
cember 21, 1979, joined by other plaintiffs with post-1979
loans, filed an action in the Court of Federal Claims virtually
identical to the Franconia action. On April 12, 2000, that
court granted the Government’s motion to dismiss the Grass
Valley petitioners’ contract claims for the reasons it had dis-
missed the claims of the Franconia petitioners. 46 Fed. Cl.
629, 633–635 (2000). The Federal Circuit affirmed without
opinion. Judgt. order reported at 7 Fed. Appx. 928 (2001).7
We granted certiorari, 534 U. S. 1073 (2002), and now re-
verse the two judgments of the Federal Circuit before us
for review.
6 Like the Court of Federal Claims, see 43 Fed. Cl. 702, 708–709 (1999),
the Federal Circuit rejected petitioners’ “alternative argument” that even
if the limitations period commenced to run upon enactment of legislation
installing prepayment restrictions, the 1992 legislation, rather than
ELIHPA, served as the operative provision. 240 F. 3d, at 1365, and n. 4.
Petitioners contended that ELIHPA represented an emergency measure
that curtailed prepayment rights only temporarily; the definitive legis-
lative action, they maintained, occurred later, when the 1992 leg-
islation made curtailment of their prepayment rights permanent. Id.,
at 1365. The Federal Circuit concluded that although Congress had des-
ignated certain provisions in ELIHPA “interim measures,” ibid. (inter-
nal quotation marks omitted), “no similar language . . . indicate[s] that
[ELIHPA’s] restrictions on FmHA loan prepayments were anything but
permanent as to” borrowers in petitioners’ situation, ibid.
7 The Court of Federal Claims dismissed the Grass Valley petitioners’
takings claims as untimely in a separate decision. 51 Fed. Cl. 436, 439
(2002).

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Opinion of the Court
II
A
A waiver of the sovereign immunity of the United States
“cannot be implied but must be unequivocally expressed.”
United States v. King, 395 U. S. 1, 4 (1969). That require-
ment is satisfied here. Once the United States waives its
immunity and does business with its citizens, it does so much
as a party never cloaked with immunity. Cf. Clearfield
Trust Co. v. United States, 318 U. S. 363, 369 (1943) (“The
United States does business on business terms.” (internal
quotation marks omitted)).
Another threshold matter confines this controversy. For
purposes of our disposition, the United States agrees, it may
be assumed that petitioners obtained precisely the promise
they allege—a promise that permits them an unfettered right
to prepay their mortgages any time over the life of the loans,
thereby gaining release from federal restrictions on the use
of their property. See Brief for United States 18–19; Tr. of
Oral Arg. 29–30. The sole issue before us is thus cleanly
presented: were petitioners’ complaints initiated within the
six-year limitations period prescribed in 28 U. S. C. § 2501?
“When the United States enters into contract relations, its
rights and duties therein are governed generally by the law
applicable to contracts between private individuals.” Mobil
Oil Exploration & Producing Southeast, Inc. v. United
States, 530 U. S. 604, 607 (2000) (internal quotation marks
omitted). Under applicable “principles of general contract
law,” Priebe & Sons, Inc. v. United States, 332 U. S. 407, 411
(1947), whether petitioners’ claims were filed “within six
years after [they] first accrue[d],” 28 U. S. C. § 2501, depends
upon when the Government breached the prepayment under-
taking stated in the promissory notes. See 1 C. Corman,
Limitations of Actions § 7.2.1, p. 482 (1991) (“The cause of
action for breach of contract accrues, and the statute of limi-
tations begins to run, at the time of the breach.” (footnote

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142 FRANCONIA ASSOCIATES v. UNITED STATES
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omitted)); see also 18 W. Jaeger, Williston on Contracts
§ 2021A, p. 697 (3d ed. 1978) (same).
In declaring ELIHPA a present breach of petitioners’ loan
contracts, the Federal Circuit reasoned that the Government
had but one obligation under those agreements: “to continue
to allow borrowers the unfettered right to prepay their loans
at any time.” 240 F. 3d, at 1363; see also 43 Fed. Cl., at 710
(Government’s contractual duty was “to keep its promise to
allow borrowers an unfettered prepayment right”). If that
continuing duty was breached, the court maintained, the
breach occurred immediately, totally, and definitively when
ELIHPA took away the borrowers’ unfettered right to pre-
pay. See 240 F. 3d, at 1363. The Court of Appeals so ruled
despite petitioners’ insistence that “the government’s per-
formance obligation under the contracts was to accept pre-
payment” whenever tendered during the long life of the
loans, even decades into the future. Id., at 1362 (emphasis
added); see also 43 Fed. Cl., at 710.
The Federal Circuit, we are persuaded, incorrectly charac-
terized the performance allegedly due from the Government
under the promissory notes. If petitioners enjoyed a “right
to prepay their loans at any time,” 240 F. 3d, at 1363, then
necessarily the Government had a corresponding obligation
to accept prepayment and execute the appropriate releases.
See Brief for Petitioners 5–6. Absent an obligation on the
lender to accept prepayment, the obligation “to allow” bor-
rowers to prepay would be meaningless. A loan contract of
such incomplete design would be illusory. See J. Murray,
Contracts § 2, p. 5 (2d rev. ed. 1974) (promise required
to create a binding contract must be an “undertaking or
commitment to do or refrain from doing [some]thing in the
future”).
Once the Government’s pledged performance is properly
comprehended as an obligation to accept prepayment, the
error in the Federal Circuit’s reasoning becomes apparent.
Failure by the promisor to perform at the time indicated
for performance in the contract establishes an immediate

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143 Cite as: 536 U. S. 129 (2002)
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breach. See Restatement (Second) of Contracts § 235(2)
(1979) (hereinafter Restatement) (“When performance of a
duty under a contract is due[,] any non-performance is a
breach.”); Murray, supra, § 206, at 417. But the promisor’s
renunciation of a “contractual duty before the time fixed in
the contract for . . . performance” is a repudiation. 4 A.
Corbin, Contracts § 959, p. 855 (1951) (emphasis added); Re-
statement § 250 (repudiation entails a statement or “volun-
tary affirmative act” indicating that the promisor “will com-
mit a breach” when performance becomes due). Such a
repudiation ripens into a breach prior to the time for per-
formance only if the promisee “elects to treat it as such.”
See Roehm v. Horst, 178 U. S. 1, 13 (1900) (repudiation
“give[s] the promisee the right of electing either to . . . wait
till the time for [the promisor’s] performance has arrived, or
to act upon [the renunciation] and treat it as a final assertion
by the promisor that he is no longer bound by the contract”).
Viewed in this light, ELIHPA effected a repudiation of the
FmHA loan contracts, not an immediate breach. The Act
conveyed an announcement by the Government that it would
not perform as represented in the promissory notes if and
when, at some point in the future, petitioners attempted to
prepay their mortgages. See Restatement § 250, Comment
b (“[A] statement of intention not to perform except on condi-
tions which go beyond the contract constitutes a repudia-
tion.” (internal quotation marks omitted)); Murray, supra,
§ 208, at 421. Unless petitioners treated ELIHPA as a pres-
ent breach by filing suit prior to the date indicated for per-
formance, breach would occur when a borrower attempted to
prepay, for only at that time would the Government’s respon-
sive performance become due.8
8 The record indicates that at least one petitioner has attempted to pre-
pay, see App. to Pet. for Cert. A157–A158, but contains no information
about how many others have done so or when any such attempts took
place, see 43 Fed. Cl., at 707. Application of our holding to each petitioner
in light of such determinations is a task for the lower courts on remand.

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In sum, once it is understood that ELIHPA is most sensi-
bly characterized as a repudiation, the decisions below lose
force. To recapitulate, “[t]he time of accrual . . . depends on
whether the injured party chooses to treat the . . . repudia-
tion as a present breach.” 1 C. Corman, Limitation of Ac-
tions § 7.2.1, p. 488 (1991). If that party “[e]lects to place
the repudiator in breach before the performance date, the
accrual date of the cause of action is accelerated from [the]
time of performance to the date of such election.” Id., at
488–489. But if the injured party instead opts to await per-
formance, “the cause of action accrues, and the statute of
limitations commences to run, from the time fixed for per-
formance rather than from the earlier date of repudiation.”
Id., at 488.
The Government draws no distinction “between a duty to
allow petitioners to prepay and a duty to accept tendered
prepayments”; “any such distinction,” the Government ac-
knowledges, “would be without significance.” Brief for
United States 33. Indeed, the Government recognizes, if
petitioners had an “unfettered right to prepay,” then, “of
course,” that right would be complemented by an “obligation
to accept any prepayment tendered.” Ibid. In defense of
the judgment below, the Government relies on two other
grounds.
First, the Government draws upon the text of § 2501,
which bars any claims not “filed within six years after [the]
claim first accrues.” The words “first accrues,” the Govern-
ment contends, are key. See id., at 11. Those words, ac-
cording to the Government, convey Congress’ intent to guard
the sovereign against claims that might be deemed timely
under statutes of limitations applicable to private parties.
Id., at 28. As the Government reads § 2501, the “first ac-
crues” qualification ensures that suits against the United
States are filed on “the earliest possible date,” id., at 17,
thereby providing the Government with “reasonably prompt
notice of the fiscal implications of past enactments,” id.,

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at 16. See ibid. (“[S]trict construction of [§ 2501] . . . serves
the salutary purpose of ensuring that a Congress close to the
one that enacted the statute [alleged to have caused a breach
of contract]—rather than a Congress serving perhaps many
decades later—may and must address the consequences.”);
see Tr. of Oral Arg. 45–46.
We do not agree that § 2501 creates a special accrual rule
for suits against the United States. Contrary to the Gov-
ernment’s contention, the text of § 2501 is unexceptional: A
number of contemporaneous state statutes of limitations ap-
plicable to suits between private parties also tie the com-
mencement of the limitations period to the date a claim “first
accrues.” See J. Angell, Limitations of Actions 536–588 (6th
ed. 1876) (quoting state statutes of limitations). Equally
telling, in its many years of applying and interpreting § 2501,
the Court of Federal Claims has never attributed to the
words “first accrues” the meaning the Government now pro-
poses. Instead, in other settings, that court has adopted the
repudiation doctrine in its traditional form when evaluating
the timeliness of suits governed by § 2501. See Plaintiffs
in Winstar-Related Cases v. United States, 37 Fed. Cl. 174,
183–184 (1997), aff ’d sub nom. Ariadne Financial Services
Pty. Ltd. v. United States, 133 F. 3d 874 (CA Fed. 1998). In
line with our recognition that limitations principles should
generally apply to the Government “in the same way that”
they apply to private parties, Irwin v. Department of Veter-
ans Affairs, 498 U. S. 89, 95 (1990), we reject the Govern-
ment’s proposed construction of § 2501. That position, we
conclude, presents an “unduly restrictiv[e]” reading of the
congressional waiver of sovereign immunity, Bowen v. City
of New York, 476 U. S. 467, 479 (1986), rather than “a realistic
assessment of legislative intent,” Irwin, 498 U. S., at 95.9
9 As petitioners observe, see Reply Brief 6, n. 6, the “first accrues” quali-
fication might serve a meaningful purpose in the context of tolling of disa-
bilities for successive claimants. In that context, the qualification would
ensure that suit could be delayed only during the disability of the claim-

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146 FRANCONIA ASSOCIATES v. UNITED STATES
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Two practical considerations reinforce this conclusion.
Cf. Crown Coat Front Co. v. United States, 386 U. S. 503, 517
(1967) (the words “first accrues” must be interpreted “with
due regard to those practical ends which are to be served
by any limitation of the time within which an action must
be brought” (internal quotation marks omitted)). Reading
§ 2501 as the Government proposes would seriously distort
the repudiation doctrine in suits brought under the Tucker
Act. Assuming a claim could “first accrue” for limitations
purposes on the date of repudiation, but see supra, at 144, a
party aggrieved by the Government’s renunciation of a con-
tractual obligation anticipating future performance would be
compelled by the looming limitations bar to forgo the usual
option of awaiting the time performance is due before filing
an action for breach. The Government’s construction of
§ 2501 would thus convert the repudiation doctrine from a
shield for the promisee into a sword by which the Govern-
ment could invoke its own wrongdoing to defeat otherwise
timely suits. As Professor Corbin explained, “[t]he plaintiff
should not be penalized for leaving to the defendant an op-
portunity to retract his wrongful repudiation; and he would
be so penalized if the statutory period of limitation is held
to begin to run against him immediately.” Corbin, Con-
tracts § 989, at 967; see Roehm v. Horst, 178 U. S., at 10 (“[I]t
seems reasonable to allow an option to the injured party,
either to sue immediately, or to wait till the time when the
act was to be done, . . . which may be advantageous to the
innocent party.”).
There is also reason to doubt that the Government’s read-
ing of § 2501 would inure to the benefit of the United States.
Putting prospective plaintiffs to the choice of either bringing
suit soon after the Government’s repudiation or forever re-
linquishing their claims would surely proliferate litigation.
ant to whom a right of action first accrued; successive claimants labor-
ing under a disability would be unprotected by any tolling proviso. See
J. Angell, Limitations of Actions 488, and n. 2 (6th ed. 1876).

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Every borrower of FmHA loans, for example, would be
forced to sue the Government within six years of ELIHPA’s
enactment in order to preserve a claim stemming from that
Act. Faced with the prospect of forever forgoing such a
claim, even a borrower that had not previously wished to
prepay might well conclude that early exit from the FmHA
program is the only safe course. The Government would
thus find itself defending against highly speculative damages
claims in a profusion of lawsuits, most of which would never
have been brought under a less novel interpretation of
§ 2501. See Tr. of Oral Arg. 33–34.10
The Government also seeks to avoid the repudiation doc-
trine by attacking as “futile” petitioners’ “search for an exact
parallel in contracts solely between private parties.” Brief
for United States 13. The law of repudiation does not gov-
ern here, the Government ultimately contends, because the
“statement of intent not to perform” on which petitioners
base their claim is an Act of Congress. Id., at 24. Accord-
ing to the Government, a congressional enactment like
ELIHPA that precludes the Government from honoring a
contractual obligation anticipating future performance al-
ways constitutes a present breach. This is so, the Govern-
ment maintains, because “the promisor”—the agency or of-
ficial responsible for administering the contract—does not
10 The Government’s reliance on McMahon v. United States, 342 U. S. 25
(1951), is misplaced. Brief for United States 29–30. The Court there
rejected an interpretation of the Suits in Admiralty Act that would have
given tort plaintiffs “an option as to when they will choose to start the
period of limitation of an action against the United States.” 342 U. S.,
at 27. The reasoning in that case does not apply to petitioners’ claims,
which arise out of contracts in which the Government allegedly granted
borrowers an option to demand performance, and thereby precipitate
breach, at any time. See supra, at 141. And unlike the position rejected
in McMahon, our ruling today ensures that suit must be brought within
a fixed period after the date of injury—in this case, no later than six years
after the Government’s refusal to accept prepayment in accord with the
terms of the promissory notes.

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148 FRANCONIA ASSOCIATES v. UNITED STATES
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“remai[n] free to change its mind and render the requisite
performance” without violating binding federal law. Id.,
at 27. Accordingly, the Government concludes, the essential
purpose of the repudiation doctrine—to avoid an unneces-
sary lawsuit by allowing the promisor an opportunity to ad-
here to its undertaking—is inapplicable.
We reject the Government’s premise, and therefore its
conclusion. Just as Congress may announce the Govern-
ment’s intent to dishonor an obligation to perform in the
future through a duly enacted law, so may it retract that
renouncement prior to the time for performance, thereby
enabling the agency or contracting official to perform as
promised. Indeed, Congress “change[d] its mind” in just
this manner before it enacted ELIHPA. Ibid. In the 1979
amendments to the National Housing Act, Congress repudi-
ated the promissory notes at issue here by conditioning pre-
payment of all § 515 loans on the borrower’s agreement to
maintain the low-income use of its property for a specified
period. See Housing and Community Development Amend-
ments of 1979, 93 Stat. 1134–1135. One year later, Congress
removed those conditions on pre-1979 loans, thereby retract-
ing the repudiation. See Housing and Community Develop-
ment Act of 1980, 94 Stat. 1671–1672; supra, at 135.
We comprehend no reason why an Act of Congress may
not constitute a repudiation of a contract to which the United
States is a party. Congress may renounce the Government’s
contractual duties without triggering an immediate breach
because Congress may withdraw that repudiation if given
the opportunity to do so. “Hence, . . . the fact that [the Gov-
ernment’s] repudiation rested upon the enactment of a new
statute makes no significant difference.” Mobil Oil, 530
U. S., at 620; see id., at 619 (“[I]f legislation passed by Con-
gress and signed by the President is not a ‘statement by the
obligor’ ” capable of triggering a repudiation, “it is difficult to
imagine what would constitute such a statement.” (quoting
Restatement § 250)).

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B
To answer the question presented—when does the statute
of limitations on petitioners’ claims begin to run, see Pet. for
Cert. i—we need not separately address petitioners’ alter-
native theory of recovery based on the Takings Clause of
the Fifth Amendment. The Federal Circuit’s holding that
takings relief was time barred hinged entirely on its conclu-
sion that petitioners’ contract claims accrued upon passage
of ELIHPA. See 240 F. 3d, at 1365–1366. Because that
conclusion was incorrect, we hold, the Federal Circuit erred
in dismissing petitioners’ takings theory on grounds of
untimeliness.
* * *
Concluding that each petitioner’s claim is timely if filed
within six years of a wrongly rejected tender of prepayment,
we reverse the judgments of the Federal Circuit and remand
the Franconia and Grass Valley cases reviewed herein for
further proceedings consistent with this opinion.
It is so ordered.