An anticipatory breach of contract, also commonly referred to as a repudiation of contract, is when one of the parties to a contract explicitly expresses their unwillingness to fulfill their obligations under the contract. This can be through a verbal declaration, an act, or a written notice. If a party expresses an intention to breach the contract, then this can ripen into an anticipatory breach before the actual breach has occurred.

Anticipatory breach is an important concept in contract law and can have significant consequences for parties involved in a contract. When one of the parties indicates they will not fulfill their contractual obligations, it may force the other party to take legal action pre-emptively and seek damages to mitigate their own losses.

In order for a repudiation to be considered an anticipatory breach, the statement or action must be an absolute refusal to fulfill the terms of the contract. This means that, no matter the circumstances, the party has decided that they will not fulfill the contract and there is no chance of them changing their mind in the future. If there is any chance that the party could fulfill the contract, then this will be treated as a “normal” breach of contract and not an anticipatory breach.

It should be noted that an anticipatory breach of contract does not necessarily mean that the contractual relationship between the parties is terminated. Rather, it is an indication that a breach will occur in the future if nothing is done. The party that has been anticipatorily breached may choose to terminate the contract and seek damages, or they may continue to pursue their rights under the contract. However, any attempts at renegotiating the contract or seeking alternative solutions must be done in good faith, otherwise the other party may be able to seek damages.

Overall, it is important for parties to be aware of the potential for an anticipatory breach to occur in a contract. While the consequences of an anticipatory breach can be severe, parties should remain mindful of the concept and ensure they act in good faith to prevent damages occurring.