Anticipatory Breach

What does Anticipatory Breach mean?

The Definition

An anticipatory breach is a term used to describe when a person makes a declaration to the opposite party that they do not intent to fulfill the terms of their contract together. This can happen when the person unconditionally refuses to live up to what they signed in the contract, regardless of what the contract says. This is also called a "repudiation" of a contract.

Examples of When an Anticipatory Breach Occurs

There are different forms of an anticipatory breach, as it can present itself differently in certain situations. The most common types of an anticipatory breach include:

  • When one party makes a clear refusal to the other party
    • This is basically when one person says "I'm not going through with this, no matter what:
  • When one party's actions make it impossible to fulfill the contract they are in
    • For example, when a person runs into deep debt and cannot pay off a loan contract made with a bank
  • When a contract on a property between two people is transferred to another party
    • For example, a person agrees to a contract to buy a home from the seller, but the seller decides to breach the contract and sell the home to a relative instead

What Happens after an Anticipatory Breach

Once one party declares via written or verbal communication that they do not intend to fulfill the duties of the contract, the other party can immediately claim a breach of contract. In this case, they can demand financial payment from the breacher, or other means of remedying the situation.

 

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