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Contracts: Anticipatory Repudiation, Nonperformance

Can there be a breach of contract before the actual time for performance? The answer is yes — and the answer is an anticipatory repudiation. In order to constitute a repudiation,  a party’s language must be sufficiently positive to be reasonably interpreted to mean that the party will not or cannot perform. Language that under a fair reading amount to a statement of intention not to perform except on conditions which go beyond the contract constitutes repudiation. The “statement” of a repudiation need not necessarily be in words/writing.   It can also be a voluntary affirmative act which renders the party unable or apparently unable to perform without such a breach. In simplest terms, a repudiation, therefore, is any act by a party which signals with certainty that it will not perform under the contract.

What is the effect of an anticipatory repudiation? Generally, it gives rise to a breach of contract, meaning that the non-breaching contract will be customarily entitled to the benefit of the contract had it been performed (expectancy damages). Furthermore, the non-breaching party is often excuse from performance, particularly if the repudiation is tantamount to a material breach.

Contact us with questions pertaining to contract anticipatory repudiation and nonperformance.

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