OPINION

Before CHAMBERS and SNEED, Circuit Judges, and KING, * District Judge.

This case is no stranger to this Court. It has been here twice before. Riess v. Murchison, 329 F.2d 635 (9th Cir., 1964); Riess v. Murchison, 384 F.2d 727 (9th Cir., 1969). The initial complaint was filed approximately sixteen years ago, viz. on October 8, 1959. It is time to terminate this litigation. To the full extent of our ability and power, *1001 the disposition embodied in this opinion is directed to that end.

I.

The History of This Litigation.

The issues before us in this third appeal can best be understood by tracing the history which has given rise to them.

In our opinion dealing with the present controversy, this Court, speaking through Judge MacBride, outlined the underlying facts, and the legal theories of the parties, in the following manner:

329 F.2d at 637-639 .

These motions were denied by the district court. In addition, the court ruled that the contract was not susceptible of total breach, and that “at the times here relevant” only a partial breach had occurred. This partial breach consisted of: (1) the buyers paying only $30,000, instead of $48,000, during the two years immediately following the consummation date; (2) the buyers’ failure to build the reservoir and pipelines on the water-lands by June 12, 1958; and, (3) the buyers’ failure to pay the sellers at the contract rate for water produced, saved, and sold by them from the water lands. Finally, the district court held that the $28,000 paid prior to the consummation date should be credited “against monies to become due under the contract after trial, not against the $48,000 due during such first two years.” 329 F.2d at 639 .

On appeal by both Riess and Murchison, this Court framed the issues then before it in the form of three questions. These were:

As to the first question, we overruled the district court on the ground that under California law the contract was not a unilateral contract “for future payments of money only” or “for performances of acts not connected with one another.” Nonetheless, we expressly refrained at that time from determining whether the buyers had committed a total breach.

Our response to the second question sustained the district court — i. e., we held that the pre-consummation payment of $28,000 should not be credited against the $48,000 due during the first two years of the post-consummation period. We did not decide the manner in which the $28,000 should be credited against “monies to become due under the contract after trial,” viz. whether against the monies next due under the contract after trial, against the last such monies due, or in some other fashion.

Finally, we held that the district court erred in treating as' unconditional the buyers’ duty to build or install the reservoir and pipelines by June 12, 1958. California law, as we perceived it, dictated otherwise. The duty so to build or install had been conditioned upon “the sufficiency of the water on the water lands to adequately service the Montgomery lands.” 329 F.2d at 643 . From this we reasoned that the district court’s denial of the buyers’ motions for arbitration, on the ground that the sufficiency of the water was immaterial, had been erroneous. We concluded this first appeal by observing that if the case was one which, under California law, was otherwise proper for arbitration “the buyers are entitled to have the question of sufficiency settled by arbitration.” 329 F.2d at 644 .

In keeping with the above holdings, we reversed and remanded for further proceedings.

B. The Second Appeal: Riess v. Murchison, 384 F.2d 727 (9th Cir., 1969).

On remand, the buyers moved over objection to refer the question of sufficiency to arbitration. After hearings, the district court ruled that the case was “otherwise proper for arbitration,” and ordered the parties so to proceed. We permitted an appeal from this ruling pursuant to 28 U.S.C. § 1292 (b) and sustained the district court. In so doing, we held that under California law arbitration pursuant to the contractual provision before us was proper even if the buyers had breached the contract in several respects and had refused to render any future performance solely for the purpose of giving the sellers “a belly full of litigation.” We carefully distinguished such alleged conduct from that which occurs when a party denies all contractual liability, which denial under the applicable California law would thereby foreclose that party from later asserting any rights pursuant to an arbitration clause which is contained in the contract.

It is important in describing this second appeal to enumerate the issues which we explicitly stated had been left undecided. We expressly refused to pass upon whether the buyers had repudiated the contract. Nor did we pass upon the contention “that a duty of diligent development of the water lands by appellee should be read as an implied provision of the contract.” 384 F.2d at 735, 736 . The issue of total breach was left “untried and undecided.” Id. at 736 . We did recognize, however, that the district court’s determination in the initial proceedings that the buyers had breached the contract by failing to pay for water produced, saved and sold had not been specifically appealed and thus constituted a portion of the law of the case. Id. at 733, fn. 2 .

*1004 C. The Arbitration Proceedings.

Following our affirmance of the order to proceed with arbitration, a “Stipulation Re Arbitration and Order,” dated July 1, 1968, was issued by the district court. This order provided, among other things, that the arbitrators were to take testimony and consider all evidence submitted by the parties only on the following two issues:

Pursuant to a second order of the district court, also dated July 1, 1968, the buyers were assigned the burden of proof with respect to both of these issues. The arbitrators convened on August 20, 1969 and hearings commenced on December 8, 1969. On May 14, 1970, the arbitrators filed their report, and gave the following response to the question posed in issue (a), set out above:

Issue (b), also set out above, was answered by the simple word “No.”

In an addendum to the report, the arbitrators were careful to set forth their interpretation of certain of the terms which had been employed by the court in framing the issues which they were to consider. “On a continuous basis,” for example, was interpreted to require a substantially non-diminishing supply of water for a period of at least 20 years. “To adequately service” meant “normal pressure, normal- home use on a year-round basis, shrubbery, fire protection, compliance with County requirements, etc.”

The phrase “contemplating that such lands would be developed for residential and industrial usages” was explained by setting forth certain assumptions which the arbitrators had made. For example, a certain density of development was assumed. Of the 1,500 acres potentially available for development, fifteen percent was considered not worth developing. A density of 3.5 houses to the acre generally was assumed, although it was recognized that some of the acreage would be developed less heavily. In addition, it was felt that such development would require 10 years to complete, and only at the expiration of that period would the full 1,750,000 gallons per twenty-four hours be required. However, the arbitrators believed that the water would be inadequate at the end of five years.

In reaching their conclusion that the water would be inadequate at the end of five years, and that a negative response to Issue (b) was warranted, the arbitrators explicitly rejected as not proven the contention of the sellers that the reservoir from which the Riess wells drew water was subject to recharge from a distant source through underground structures. Moreover, even if such recharging took place, the arbitrators felt that any such recharge “would be subject to interception prior to reaching the water lands.” The arbitrators then stated:

II.

The Judgment From Which This Third Appeal Is Taken.

The arbitration award was confirmed by the district court on September 23, 1970. Thereafter the sellers filed a Fourth Amended Complaint over the objection of the buyers who, in due course, filed an Answer and a Cross-Claim. Trial without a jury commenced on September 20, 1971. The district court regarded this trial as a continuation of initial court proceedings that led to the first and second appeals outlined above rather than a new trial. At the conclusion of this proceeding the district court made, inter alia, the following findings of fact which, according to the district court, were to be treated as conclusions of law to the extent they could be denominated as such.

In its Memorandum of Decision accompanying these findings, the district *1007 court stated that it had based its analysis on the premise that under the law of the case the buyers had breached the contract in two particulars:

It further held that the effect of its June 15, 1962 judgment, as modified by the first appeal, was to establish that the above breaches constituted only a partial breach. It stated:

The district court’s ultimate finding of total breach was then based on the additional failures to perform set forth in the above findings.

Judgment against the buyers in the amount of $892,000, together with interest at seven percent (7%) per annum from October 8, 1958, was entered on May 25, 1972. Their appeal therefrom is the matter currently before us. We affirm in all respects except as to the proper measure of damages which are recoverable. As to that feature, we reverse the district court’s holding and direct that the district court compute the allowable damages in the manner hereinafter described.

The buyers attack the district court’s findings and holding on the grounds that they could not have totally breached the contract because any non-performance by them was excused; that the record does not support the conclusion that the contract was totally breached; and that damages were improperly computed. We shall consider each of these contentions.

III.

Were Buyers Excused From Performance ?

The essence of the buyers’ contentions is that the bringing of the suit for total breach of the contract in October 1958 terminated any obligation on their part to perform the contract. They purport to reach this position (1) by asserting that the sellers, by bringing suit in 1958, elected to treat the contract at an end and “thereafter seek redress through the medium of litigation;” and (2) by insisting that they justifiably relied on this election to their detriment.

Their argument can best be understood by casting it in hypothetical form. Assume S conveyed Blackacre to B in exchange for B’s promise to farm Black-acre and to pay S an annual sum, equal to one half the gross value of the crops derived therefrom for a period of ten years, or until the sum of $50,000 had been paid, whichever occurs first. Following his conveyance, S became dissatisfied with B’s methods of farming and the amounts he was receiving. S brought suit against B alleging a total breach of the contract by B and seeking to recover damages in an amount equal to the present value of B’s entire future performance. B responded by denying that a total breach had occurred and that the breach, if any, was only partial. In the course of the litigation, it was determined that B was correct as of the date suit was initiated — i.e., only a partial breach had occurred. During the pendency of the litigation, B did not repudiate the contract but ceased all performance and retained Blackacre. It is the contention of the buyers in this case that B is entitled to cease such performance, retain the land, and be liable thereafter in damages only for the partial breach.

This should not be the law; nor do we think that it is the law. The line between a partial and a total breach is not so plain as to visit such a severe forfeiture upon a plaintiff who exaggerates his injury. Under the cireum- *1008 stances of our hypothetical, it was the duty of B to continue his performance or to offer to restore S substantially to his antecedent position. Failure to do either amounts to a total breach by B which entitles S either to amend his complaint to include a prayer for relief with respect to such breach or, if the case has proceeded to final judgment in which only damages for partial breach have been recovered, to bring a new suit seeking damages for the total breach. In this latter case, the initial proceeding is not res judicata,; the second suit is upon a different and distinct injury.

It must be acknowledged that we have been able to find no precise precedent in the law of California, or elsewhere, for either the position we believe is correct or for that insisted upon by the buyers. We cannot believe that a doctrine as novel and as harsh as that advocated by the buyers would have escaped the attention of the courts of California or that of commentators. This silence reassures us.

The buyers press upon us authorities which assert that a party aggrieved by a breach of contract may not simultaneously pursue inconsistent remedies for relief. Alder v. Drudis, 30 Cal.2d 372 , 182 P.2d 195 (1947), for example, so holds. Authorities such as Alder recognize that, following a total breach unaccompanied by a repudiation of the contract by the wrongdoer, the aggrieved party has a choice of three courses of action. He may treat the total breach as a partial breach and insist upon further performance by the wrongdoer; he may assert a total breach and seek damages measured by the value of what he would have received had the contract been performed; or he may seek restitution in which both he and the wrongdoer will be restored to the position they occupied at the time the contract was formed. He cannot recover both damages for a total breach and, obtain restitution, the vice which led the Supreme Court of California to reverse the trial court’s judgment in Alder . The choice between damages and restitution is forced to avoid placing the aggrieved party in a better position than he would have been in had the contract been performed. See 5A Corbin on Contracts, § 1223 (1964). It serves the same purpose as does the rule that the injured party cannot at the same time receive a decree for specific performance and a judgment for damages based on a total breach. See 5A Corbin on Contracts, § 1222 (1964).

Usually the necessity of a choice of remedies, which inescapably arises only immediately prior to judgment, is described as an “election” in which the injured party either treats the contract as “in existence” and seeks damages for its breach or “rescinds” the contract and seeks to be restored to the status quo ante. Any necessity to elect at an even earlier date must rest upon facts which estop the injured party from altering his choice of remedies because the breaching party has made a substantial change of position in reliance upon the injured party’s initial choice. This is well settled California law. Roullard v. Rosenberg Bros. & Co., 193 Cal. 360 , 224 P. 449 (1924). See Corbin on Contracts § 1220 (1964).

These principles provide no support for the buyers’ assertion that the sellers’ initiation of this suit in 1958 for total breach of the contract amounted to an “election” to treat the contract at an end, and that this “election” thereby relieved the buyers of any obligation thereunder. The buyers were not misled in a way that makes consideration of their failure to perform subsequent to 1958 inequitable or unjust. Our rather lengthy recital of the history of this litigation amply makes clear that they not only used water from the Riess wells but also insisted for purposes of arbitration that the contract was not extinguished by commencement of this suit. Moreover, we find nothing in the record that could lead the buyers to believe that the sellers did not expect them to continue performance under the contract. It is true, of course, that the buyers were entitled to insist upon arbitration and to *1009 defer the construction of the reservoir and pipelines until that had occurred; but in other respects the contract remained binding upon them. Full performance by the sellers already having occurred, the filing of this suit could not foreshadow a failure by the buyers to receive the consideration for which they had bargained.

The buyers also insist that they were justified in relying on the sellers’ refusal to accept various proposals, which had been put forward by the buyers prior to the commencement of this suit, as evidence of an intention to treat the contract at an end. As we read the applicable testimony, these proposals, designed to facilitate a settlement of the dispute on terms generally favorable to the buyers, were rejected by the sellers who insisted upon either full performance or complete restitution. Rejection of an offered accord provides no basis for assuming that the offeree no longer asserts his rights under the contract. That he does so assert his rights is the overwhelming inference.

Nor are we impressed by the buyers’ insistence that the sellers’ reluctance to accept settlement terms offered by the buyers, and their resistance to efforts by the buyers to obtain arbitration, constituted a breach of the contract which would excuse the buyers from further performance. The sellers, as this Court recognized on the first appeal of this case, “have performed all the material covenants and conditions on their side of the contract.” In 1958 the contract was executory only with respect to the buyers. Putting aside any residual implied covenants of cooperation to which the sellers might remain obligated, only the buyers could fail to perform in accordance with the terms of the contract. Moreover, any such implied covenants were not breached by the sellers’ insistence upon their interpretation of the contract, including their views with respect to arbitration which, it must be remembered, were resolved against them only after the second appeal to this Court. Cf. 4 Corbin on Contracts, § 973. Cooperation, not surrender, is the outer limit of any possible executory duty to which the sellers remained liable at the commencement of this suit. We cannot find that this duty has been breached or repudiated.

The strongest argument made by the buyers to support their contention that their duties under the contract were terminated when this suit was filed in 1958 rests upon their interpretation of Coughlin v. Blair, 41 Cal.2d 587 , 262 P.2d 305 (1953). They point to certain language in one portion of the opinion which dealt with the issue of whether a wrongdoer who has totally breached a contract could reduce his damages by receiving a credit for that portion of his performance which was rendered subsequent to the filing of the injured party’s suit but pri- or to trial thereof. In treating this issue, the court stated as follows;

41 Cal.2d at 602-603 , 262 P.2d at 314 .

The buyers appear to suggest that under the above language they were justified in believing that with the filing of the suit in 1958 the sellers had indicated that they would accept nothing but damages for a total breach, and that this belief led the buyers to eschew further performance under the contract. In this manner they relied, reasonably they assert, on the sellers “election” of remedies and prudently failed to render further performance for which they could receive no credit in the final assessment of damages. By this process of reasoning, buyers attempt to establish the “es-toppel” basis of the election of remedies referred to earlier.

While we are not at liberty to reject the holding of Coughlin when confronted with a substantially similar situation in a diversity case governed by California law, neither are we required to extend this case beyond its facts. As we see it, such an extension is what the buyers are urging. There are two principal distinctions between the facts of this case and those of Coughlin . The first is that in Coughlin neither party seriously questioned the existence of a total breach by the wrongdoer prior to commencement of the suit. Nor did subsequent litigation px-ove this assumption erroneous. Thus, without regard to whether credit for post-suit performance is allowed, the plaintiff in Coughlin was assured the recovery of damages for a total breach. To apply Coughlin here in the manner sought by the buyers would limit the recovery by the sellers to damages for a partial breach even though the sellers fully performed and the buyers substantially failed to do so. No case from California, or elsewhere, which applies Coughlin in such a context has been called to our attention.

The second distinction is that, notwithstanding the total breach in Coughlin , the injured party treated the breach as partial for approximately one year during which time he urged the wrongdoer to perform. Despite this opportunity to expunge the total breach, the wrongdoer failed to fulfill his contractual duties. Coughlin merely terminated this extended opportunity to perform fully. In the instant case thex-e was no total breach in 1958 which could be expunged; there was only a partial breach coupled with a dispute about the sufficiency of the water and the applicability of the ax’bitration clause. While Coughlin permits an injux-ed party who has fully performed to terminate the period of grace that he has extended, it does not require that one whose defective performance is incorrectly described as a total breach should thereafter be excused from all further performance.

These distinctions make clear that we are not required under California law to disregard buyers’ total breach of the contract subsequent to the commencement of this suit because of the sellers’ institution of an action for total breach in 1958. We have examined carefully all the authorities relied upon by the buyers to support their interpretation of Coughlin and find none of them persuasive.

It should be obvious that in our analysis of the buyers’ claim that they wex’e excused from performance we have proceeded on the assumption that at the time this suit was commenced the contx-act had only been partially breached. The district court so held and we agree. However, the final result which we reach in this case would be no different even if we had considered the buyers to have been in total breach in 1958. This follows because damages for total breach must be fixed by reference to what the aggrieved party would have received had the contract in its entirety been performed. Where, as in this case, the performance of the defaulting party is to extend over a long period of time, such damages may be far different from what might *1011 be due and owing the injured party, under the terms of the contract, as of the date the total breach occurred. In computing such damages, the true issue of Coughlin — i. e., the availability of a credit for any performance rendered subsequent to the filing of a suit seeking damages for total breach — might arise; but in all events the injured party is entitled to the economic equivalent of full performance. Anything less is inadequate reparation.

IV.

Did Buyers Totally Breach?

The buyers insist that, even if not excused from performance on the grounds just discussed, their contract with the sellers was never totally breached. To support this contention they assert that they did not repudiate the contract, that no evidence of any such repudiation exists, and that at no time has either the district court or this Court so held. We are inclined to agree. However, the absence of repudiation is not dispositive given that, in our view, the contract before us was totally breached by nonperformance.

The buyers argue that there could be no total breach by nonperformance because the arbitration proceedings established that the Riess wells were not physically able to produce water, on a continuous basis, to adequately service the Montgomery lands. They contend that this determination relieved them of any duty to construct a reservoir and pipelines, to produce, save, and sell water, and to perform any other duty imposed upon them by the contract. This overstates the effect of the arbitrators’ findings.

Our approach to this issue requires that the situation which existed prior to the filing of this suit be examined. At that time the buyers had developed doubts about the capacity of the Riess wells to produce the quantities of water they originally had anticipated. Notwithstanding these doubts, they did not avail themselves of paragraph 8 of the September 13, 1955 letter agreement which provided:

Nor did the buyers respond to the sellers’ initiation of this action in 1958 by offering to rescind the contract. Instead, water was produced, saved, and sold from the Riess wells from the time of their acquisition by the buyers until January 28, 1964.

It is our view that the district court was correct in holding that the buyers “were obligated diligently and in good faith to endeavor to produce as much water as the Water Lands were capable of producing so that such water could be saved and sold.” This implied obligation of “good faith” may well have been constructively conditioned upon the physical capacity of the Riess wells to service the Montgomery lands initially; but the buyers continuing performance of the contract, albeit defective in substantial respects, by producing, saving and selling water and constructing certain reservoirs, and pipelines effectively waived this constructive condition. 1 As *1012 a result, while the duty to erect the reservoir and pipelines contemplated by the contract was excused as a result of the arbitration, the implied covenant to endeavor in good faith to produce was not. The buyers’ failure to perform a substantial part of their duties under this covenant is the heart of their total breach.

This implied covenant to endeavor in good faith to produce, save, and sell water is firmly rooted in California law and in the decisions of this Court. While it is true that under California law implied covenants are limited to those terms “which are necessary to make a contract reasonable, or conformable to usage,” California Civil Code, § 1655, and not inconsistent with other provisions of the contract, the decisions of California courts, even when refusing to find an implied covenant insisted upon by one of the parties to a contract, acknowledge that there exists an implied covenant to perform in good faith on the part of both parties to a contract. See e. g., William S. Gray & Co. v. Western Borax Co., Ltd., 99 F.2d 239, 242 (9th Cir., 1938) (applying California law); Langenberg v. Guy, 77 Cal.App. 664, 669 , 247 P. 621, 623 (1926). See generally 1 Witkin, Summary of California Law, Contracts, § 242 (7th ed.). The obligation to endeavor to perform in good faith in the context of the contract before us requires that the buyers endeavor in good faith not only to produce, save and sell water but also to account properly therefor.

Although the authorities which imply covenants to develop and to market in mineral leases are not directly applicable to this case, the readiness with which such covenants are implied suggests to us that implying the covenant to endeavor in good faith to produce, save, sell, and account does not run counter to the intent of contracts, such as this, pertaining to the extraction of natural resources from the earth. See generally 5 Williams & Myers, Oil & Gas Law, (Implied Covenants) (1972).

Y.

Were Damages Computed Improperly?

As already indicated, we believe the district court erred in computing damages. It treated the contract between the sellers and buyer as a contract for the sale of land for the price of $1,000,000. See Finding of Fact No. 34, supra at 12. This is an erroneous construction of the contract. Paragraph 2(b) of the contract, set forth in the margin 2 and heretofore described in the *1013 first appeal, obligates the buyers to pay at “$0.10 per one thousand (1,000) gallons of water produced, saved and sold from the Water Lands” and not otherwise. It is true, of course, that both the sellers and buyers had certain options in the event the payments subsequent to the first two years of the contract did not amount to $24,000; but the fact remains that payments were to be measured by the water produced, saved, and sold.

It is likely that the district court’s erroneous interpretation of the contract was influenced by the fact that the buyers have steadfastly refused to account for the water they did produce, save, and sell in any satisfactory manner and have made no effort to justify their termination of the use of any water from the Riess wells on January 28, 1964 other than to admit that other water became available at that time. This is not enough to relieve them of their “good faith” obligation. Faced with such contumacy the district court’s reaching for some simple basis upon which to rest damages is understandable.

In our judgment, the district court should have turned to the finding of the arbitrators. These findings demonstrate clearly to us that sufficient water never existed to yield to the sellers the balance of the one million dollars provided by the contract. Damages should have been computed on the basis of what the sellers would have received had the buyers in good faith produced, saved, and sold that amount of water of which the Riess wells were capable of producing.

While it is a close question whether the findings of the arbitrators alone furnish sufficient data upon which to so measure damages, we believe that the interests of justice will be best served by treating this data as sufficient. See, e. g., Steelduct Co. v. Henger-Seltzer Co., 26 Cal.2d 634 , 160 P.2d 804, 813 (1945); Bertero v. National General Corp., 254 Cal.App.2d 126 , 62 Cal.Rptr. 714, 729 (C.A.1967); Pacific Scientific Co. v. Glassey, 245 Cal.App.2d 831 , 54 Cal.Rptr. 235, 243 (C.A.1966). See generally Baver, “The Degree of Moral Fault as Affecting Defendant’s Liability,” 81 U.Pa.L.Rev. 586, 592 (1933). Proceeding in this manner, we direct that damages be computed on the assumption that the Riess wells could produce water for 20 years commencing June 12, 1958. We further direct that it be assumed that during the period 1958 thru 1963 the production could and *1014 should have been at 300 gallons per minute twenty four hours a day, and that for the balance of the twenty year term production could and should have been at 150 gallons per minute twenty four hours a day.

Against this amount so computed should be applied as a credit the voluntary payment of $28,000, which we hold under the circumstances of this case should be applied at the end of the payments for water. For this reason the credit of $28,000 should not be augmented by the accrual of interest. The unpaid $18,000, representing payments not made during the two years following the consummation date, should also be recovered, but with allowance for proper interest. The assumptions upon which we base these directions are largely derived from the addendum to the report of the arbitrators, which we regard as evidence properly before us, and represent our fairly conservative application of their estimates of the capacity of the Riess wells.

With respect to the computation of damages, we reverse the judgment of the district court and remand for the sole purpose of computing damages in accordance with the above assumptions. Such computation should utilize an interest and discount rate of 7 percent per annum. Interest or sums determined to be due and owing with respect to water which could and should have been produced, saved, and sold should be computed from the first day of each year next succeeding that in which the water should have been produced, saved, and sold. Thus, the interest due on sums owing because of water which could and should have been produced, saved, and sold during 1958 shall be computed from January 1, 1959, that during 1959 from January 1, 1960, etc. Interest on the payments not made during the two years following the consummation date, viz. $18,000, shall be computed from the dates such payments were due.

Affirmed in part and Reversed in part.

Honorable Samuel P. King, United States District Judge, District of Hawaii, sitting by designation.

. If it were true, as the buyers strenuously argue, that the sufficiency of the water to service the Montgomery lands was an absolute condition precedent to any duty to produce, *1012 save and sell, then they would have been required to assert their freedom from liability at the time the inadequacy became apparent and offer to make payment in accordance with the contract to the extent that they had received benefits thereunder. However, even accepting, arguendo, the buyers’ contention that there existed no implied good faith obligation to produce, save and sell, buyers’ construction of a limited reservoir and pipeline coupled with their continuing use of the wells would operate as a waiver of the express condition. See, e. g., Sitlington v. Fulton, 281 F.2d 552 (10th Cir., 1960); Foster v. L.M.S. Development Co., 346 S.W.2d 387 (Tex.Civ. App.1961); John B. Robeson Associates, Inc. v. Cardens of Faith, Inc., 226 Md. 215 , 172 A.2d 529 (1961).

If, on the other hand, buyers were to argue that no waiver occurred by their continuing to produce, save and sell because such action was contemplated by the contract whether or not the express condition arose, see 3A Corbin on Contracts § 755, then, even absent an implied obligation to produce in good faith, tire failure to account and pay for the water so taken would constitute material breach of the contract.

. Paragraph 2(b), as amended, reads in full as follows: