What is anticipatory breach of contract?

Hi Kismat. Let me answer what is anticipatory breach of contract. 

1. So by anticipatory, the word means “something ahead of time”. Now, anticipatory breach occurs when a partner refuses to finish their duty or fulfull his promise (as was specified in the Contract) before the actual time arrives. 

2. What happens here is that a person or entity expresses the unwillingness to perform contractual obligations before the date of performance. 

3. An Anticipatory repudiatory Breach happens when a party shows an unwillingness to do a duty by communicating it verbally or through a written notice or by implying through their actions and conduct.

4. When an anticipatory breach of contract happens, the other party can consider that the contract is void. The party can then complain about the guilty party to claim the anticipatory damages. 

5. Complaints can be filed immediately, instead of waiting for the actual date of its performance, based on what was mentioned in the contract.

6. The affected party can then claim the damages from the party. But for this, they will have to preserve the agreement clauses and ensure everyone’s benefit.

7. The guilty party that has breached the contract will have to compensate by either accepting that they were rejected from performing their duty based on the contract or they can continue performing under the contract.

I hope this helps.

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You know I never knew about anticipatory breach of contract up until I started my own business and dealt with businesses and companies. I have had difficulties getting a few commitments fulfilled and contracts being taken for granted. I was fed up so I decided to get my lawyer involved to understand if I could avoid these situations. He suggested that I go for anticipatory breach of contract in such cases. I had no clue and asked him what is anticipatory breach of contract. He was kind enough to explain it to me. I will be simply passing on the information I received. 

In the Indian Contract Act 1872, the Anticipatory Breach of Contract is specified in Section 39. It says, “When a party to a contract has refused to perform or disable himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signifi­ed, but words or conduct, his acquiescence in its continuance.”

Also known as anticipatory repudiation, the anticipatory breach of contract is when a party in contract refuses to perform the obligations mentioned in contract before its due date. But let me mention this, it is not filed based on certain events, there needs to be sufficient refusal to fulfil the obligations in the contract by the promisor.

An example to explain anticipatory repudiation is as follows:

Rajesh contracts to sell goods to Ritu within a due date, however before the due date he gives a written application to Ritu saying, “ I’ll not deliver the goods as promised.”

This shows clear refusal or performing duties as mentioned in the contract, therefore, the anticipatory breach of contract is indicated.