Anticipatory breach of contract:
- When a party refuses to perform their part of a promise before the due date of performance, it is known as an anticipatory breach of contract.
- This occurs when one party clearly communicates that they will not fulfill their contractual obligations.
- It is also referred to as an anticipatory repudiation.
- The party who anticipates the breach can choose to treat the contract as terminated and seek damages.
- The non-breaching party can also wait until the due date of performance and then file a lawsuit for breach of contract.
- In both cases, the non-breaching party is entitled to recover damages caused by the breach.
- The anticipatory breach of contract allows the non-breaching party to mitigate their losses by seeking alternative arrangements or contracts.
- It is important for the non-breaching party to document the communication of the anticipatory breach to provide evidence in case of legal action.

Anticipatory breach of contract

An anticipatory breach of contract occurs when one party to a contract informs the other party, before the due date of performance, that they will not be able to fulfill their obligations under the contract. This refusal to perform can be explicit, such as through a written or verbal statement, or implied through actions that clearly indicate an intention not to fulfill the contract.

Key points:
- Refusal to perform before the due date: The crucial aspect of an anticipatory breach of contract is that the party refusing to perform does so before the agreed-upon date of performance. This gives the other party a chance to take appropriate legal action or seek remedies.
- Communicated refusal: The party breaching the contract must communicate their refusal to perform to the other party. This can be done through explicit statements or implied through actions that indicate an intention not to fulfill the contract.
- Legal consequences: An anticipatory breach of contract allows the non-breaching party to consider the contract terminated and seek remedies for the breach. They may choose to sue for damages, seek specific performance, or pursue other available legal remedies.
- Duty to mitigate damages: The non-breaching party also has a duty to mitigate their damages by taking reasonable steps to minimize the harm caused by the breach. This can include finding alternative sources of performance or attempting to mitigate financial losses.

Example:
Suppose Company A enters into a contract with Company B to deliver a shipment of goods on a specific date. However, before the due date, Company B informs Company A that they will not be able to deliver the goods as agreed due to unforeseen circumstances. This communication from Company B constitutes an anticipatory breach of contract.

Conclusion:
An anticipatory breach of contract occurs when a party refuses to perform their obligations under a contract before the due date of performance. This breach allows the non-breaching party to consider the contract terminated and pursue legal remedies for the breach. It is important for parties to understand their rights and obligations in the event of a breach and seek legal advice if necessary.