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What is an anticipatory contract breach?

On Behalf of | Mar 5, 2024 | Civil Litigation

Most of the time, you have to wait for a contract to actually be breached before you do anything about it. This is known as an actual breach. For example, perhaps your company signed a contractual agreement to hire a roofing company and they said they would arrive and perform the job on a certain date. But they never arrived and never did the job, so the contract has been broken.

But there are also anticipatory contract breaches, which is when the other party tells you in advance that they are going to break the contract. For example, maybe the owner of the roofing company calls you and says that there’s been a scheduling conflict. They simply do not have a roofing crew to send to your location at the proper time. They are giving you advance warning that they are going to breach that contract in the future.

Is this beneficial for you?

Certainly, this can be frustrating. Any time that there’s a contract in place and the other party doesn’t fulfill their obligations, it’s an issue.

But an anticipatory contract breach can be helpful for you in some ways. As noted above, you usually have to wait for an actual breach, and then you can start legal proceedings if you’re pursuing compensation. But if it’s an anticipatory breach, then you may be able to start those proceedings in advance. You know for certain that the contract is not going to be upheld, so you’re not obligated to wait for the actual breach.

Working your way through a situation like this can be complex. Be sure you know about all of your legal options.