ANTICIPATORY BREACH OF CONTRACT Meaning and
Definition
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Anticipatory breach of contract refers to a situation where one party to a contract clearly and unequivocally communicates their intention to not fulfill their contractual obligations before the designated time for performance has arrived. It is an action that demonstrates the party's unwillingness or inability to perform their contractual duties as agreed upon.
This type of breach typically occurs when one party explicitly informs the other party, through words or actions, that they will not be able to fulfill their part of the contract. Examples of such actions include a clear declaration of intent not to perform, selling or disposing of the subject matter of the contract to someone else, or taking significant steps that suggest an inability to complete the contract.
An anticipatory breach allows the non-breaching party to treat the contract as terminated, freeing them from any future obligations and enabling them to seek legal remedies for damages resulting from the breach. The non-breaching party is not required to wait until the designated time for performance has passed before taking action.
The concept of anticipatory breach is significant as it provides a degree of certainty and protection to parties in a contract. It allows them to take proactive measures, such as seeking alternative arrangements or pursuing legal recourse, rather than being left in a state of uncertainty and potential loss.
