Anticipatory Breach of Contract
Atlanta Business Litigation Attorneys
A business contract is only as good as the word of the people who agree
to follow it. If one party has promised that they will not perform their
duties as described in a binding contract, or if they have made it clear
through words or actions that they will be unable to complete their duties
despite their want to, other parties may become understandably concerned
for their own businesses’ wellbeing. If that concern is great enough,
the other parties may wish to cite an anticipatory breach of contract,
also called a repudiation of contract.
Is your business possibly facing an anticipatory breach of contract? Even
if you are not sure, it is always wise to consult with a professional
before any more time elapses.
Contact Buckley Beal LLP and talk to our Atlanta business litigation lawyers today.
With our guidance, we may be able to resolve your
breach of contract concerns without causing any further damage to your business or your reputation.
Three Causes of Anticipatory Breaches
An anticipatory breach or repudiation may seem unlikely by its legal definition
but such breaches of contract occur more often than you may realize. Throughout
all the different business models, types, and purposes in the professional
world, innumerable contracts bind them together. If the slightest, crucial
factor changes, an anticipatory breach could be the result.
The three most common reasons an anticipatory breach occurs are:
Unconditional refusal: A business partner explicitly tells you that they will not perform their
duties as described in the agreed upon
business contract. Even if they have not caused the breach
yet, you have been given ample reason to believe they will and can claim they
have already breached it, anticipatorily so.
Example: A third-party vendor that supplies your company with paper sends
you an invoice that states they will not be delivering your next two requested
shipments due to manufacturing constraints. They have stated clearly –
not ambiguously or presumptively – that they intend to breach the
contract, even if it does not benefit themselves to do so.
Impossibility: Specific circumstances can make fulfilling a business contract impossible.
When you know that another party in a contract cannot complete their duties
due to any reason, internal or external, you may claim that they have
used repudiation to break the contract.
Example: You lend someone several thousand dollars to start a small business
under the agreement that they will repay you over time with their profits.
After less than a year, they have mismanaged the new company so poorly,
it is rendered bankrupt and they have incurred additional debts. Due to
their inability to repay you as the contract outlined, and due to the
mishandling of the business, you could cite an anticipatory breach of contract.
Deception: Contracts are often broken through anticipatory means when they have to
do with the sale and purchase of real property. Put simply, repudiation
will occur if one party is allowed to purchase something you have either
already bought or had made a deal to buy.
For example: If you agreed to buy a home from a seller only to later learn
that they sold it to someone else without notifying you, they have deceptively
repudiated on their contract. You could technically still be given the
opportunity to buy the home yourself but it would likely be in your best
interest to cite an anticipatory breach and distance yourself from that seller.
Mitigate Your Damages By Reacting Quickly
In order to protect your business from significant losses due to another
party’s anticipatory breach of contract, you will want to take steps
to mitigate your damages. In many states, you are actually obligated to
do all you can to mitigate, reduce, or eliminate your damages once you
know repudiation will occur. If you do nothing and allow the situation
to worsen, you could be found liable for a portion of the damages due
to inaction or professional neglect. From
partial breaches to
fundamental breaches, our business law legal team can handle all types of disputes involving
You can call
404.913.7415 to connect with Buckley Beal LLP and our
Atlanta business attorneys. Tell us all about your anticipatory breach of contract concerns during an
initial consultation and we can outline what you should do next to ensure your business is
not negatively impacted.