Anticipatory repudiation

Anticipatory repudiation

Anticipatory repudiation (or anticipatory breach) is a term in the law of contracts that describes a declaration by one party (the promising party) to a contract that they do not intend to live up to their obligations under the contract. Where such an event occurs, the other party (the performing party) to the contract is excused from having to fulfill their obligations. However, the repudiation can be "retracted" by the promising party so long as there has been no material change in the position of the performing party in the interim. A retraction of the repudiation restores the performer's obligation to perform on the contract.

If the promising party's repudiation makes it impossible to fulfill its promise, then retraction is not possible and no act by the promising party can restore the performing party's obligations under the contract. For example, if A promises to give B a unique sculpture in exchange for B painting A's house, but A then sells the sculpture to C before B begins the job, this act by A constitutes an anticipatory repudiation which excuses B from performing. Once the sculpture has left A's possession, there is no way that A can fulfill the promise to give the sculpture to B.

The question arises as to why any party would want to provide notice of anticipatory breach. The reason is that once the performing party is informed of the anticipatory breach, a duty is then created for the performing party to mitigate damages as a result of the breach.

Another situation where anticipatory repudiation can occur is where a party has reason to believe the other party is not going to perform and requests reasonable assurances that the other party will perform. If such reasonable assurances are not given, it will constitute anticipatory repudiation, for which the performing party has various remedies including termination.

However, anticipatory repudiation only applies to an executory bilateral contract with non-performed duties on both sides. Additionally, the repudiation must be unequivocal.

ee also

*Breach of contract

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Look at other dictionaries:

  • anticipatory repudiation — n: a refusal by one party to a contract to perform his or her future obligations under the contract that is expressed either by a clear statement of refusal or by a statement or action that clearly implies refusal Merriam Webster’s Dictionary of… …   Law dictionary

  • anticipatory repudiation — See anticipatory breach of contract …   Black's law dictionary

  • anticipatory repudiation — See anticipatory breach of contract …   Black's law dictionary

  • anticipatory repudiation — A positive statement to the promisee or other person having a right under a contract, indicating that the promisor will not or cannot substantially perform his contractual duties. Restatement, Contracts, § 318; Hawkinson v Johnston (CA8 Mo) 122… …   Ballentine's law dictionary

  • repudiation — re·pu·di·a·tion /ri ˌpyü dē ā shən/ n: the rejection or renunciation of a duty or obligation (as under a contract); esp: anticipatory repudiation ◇ A party aggrieved by a repudiation may consider a repudiated contract to have been breached and… …   Law dictionary

  • repudiation — A rejection, disclaimer, or renunciation of a contract before performance is due that does not operate as an anticipatory breach unless the promisee elects to treat the rejection as a breach and brings a suit for damages. The rejection or refusal …   Black's law dictionary

  • Anticipatory Breach — In contract law, an action that shows a party s intention to fail to perform or fulfill its contractual obligations to another party. An anticipatory breach negates the counterparty s responsibility to perform its requirements under the contract …   Investment dictionary

  • repudiation — A denial of validity or of authority. Refusal to recognize an obligation asserted as binding one. A denial of responsibility or obligation. State Sav. Bank v Black, 91 Iowa 490, 59 NW 282. A certain, definite, unequivocal, and timely denial by… …   Ballentine's law dictionary

  • anticipatory breach — see breach 1b Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. anticipatory breach …   Law dictionary

  • anticipatory breach of contract — n. A breach of contract that occurs when one party announces before the time scheduled for performance that he or she will not perform according to the contract. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy …   Law dictionary

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