An Anticipatory breach of contract occurs when one party indicates, through behavior, actions, or words, his or her intention to fail to meet his or her contractual duties to the other party. By proving the intent to breach the contract, the other party may have grounds for filing a lawsuit.
Types of Anticipated Breach of Contract
A Party to the Contract Makes a Positive and Absolute Refusal to the Other Party
In this case, a party must precisely tell the other party that he or she won’t go through with the deal. A vague refusal isn’t enough. Instead, the refusal must be clear, direct, and intended for the other party.
An Action that Keeps the Other Party from Performing
An action or actions of a party to the contract can also lead to an anticipatory breach. For instance, assuming a person committed to pay back a loan from proceeds of his or her business. Instead, that person mismanaged the business and incurred many other debts in the process, making it difficult for him or her to repay the original loan. That person’s negligent, voluntary actions may be considered as an anticipatory breach of the original loan agreements.
Transfer of Property Tied to the Deal to a Third Party
If the contract involves property sale, an anticipatory breach happens when one party hands over the property to someone else. For instance, if a person has entered a contract to purchase a house and he or she discovers that the other party has transferred it to a family member, then an anticipatory breach of the sales contract will be considered to have happened. In such a case, a breach of contract attorney will help the plaintiff determine the legal remedies available to him or her.
Dealing with an Anticipatory Breach
If one party commits an anticipatory breach, the other party may cancel the contract prior to the arrival of the time of performance. Alternatively, the other party may opt to wait for the arrival of the time of performance, hoping that the breaching party will meet his or her duties as originally agreed.
Working with a breach of contract attorney is another great way to resolve the matter. The attorney will examine the contract and identify elements to prove a breach of contract case. The attorney will then develop a strong argument that fits the situation and present the case to the court.