What Is Meant by Anticipatory Breach of Contract

Anticipatory breach of contract is a legal concept that occurs when one party to a contract indicates to the other party that they will not perform their obligations under the contract. The breach is “anticipatory” because it occurs before the actual due date of the obligation.

Anticipatory breach of contract can occur in several ways. One common way is when one party notifies the other party that they will not fulfill their obligations under the contract. This notification can be verbal or in writing, and it must be clear enough to indicate an intention not to perform. For example, if a contractor tells a client that they will not complete a project, this could be considered an anticipatory breach of contract.

Anticipatory breach of contract can also occur if one party takes actions that make it impossible for them to fulfill their obligations under the contract. For example, if a supplier disposes of the goods that they were supposed to deliver to a buyer, this could be considered an anticipatory breach of contract.

When an anticipatory breach of contract occurs, the other party has several options. They can choose to wait until the actual due date of the obligation and then take legal action for breach of contract. Alternatively, they can choose to terminate the contract immediately and seek damages for the anticipatory breach.

It`s important to note that not every indication of non-performance will constitute an anticipatory breach of contract. The indication must be clear and unequivocal, indicating a definite intention not to perform. Additionally, the other party must not have waived their right to insist on performance, either explicitly or by their conduct.

In conclusion, anticipatory breach of contract occurs when one party to a contract indicates to the other party that they will not perform their obligations under the contract. This breach of contract occurs before the actual due date of the obligation. The other party has several options, including waiting until the actual due date and then taking legal action or terminating the contract immediately. However, the indication must be clear and unequivocal, and the other party must not have waived their right to insist on performance.