anticipatory breach of contract

In contract law, where a party unequivocally evinces an intention that they will not perform executory consideration when performance falls due under a contract, the party will be in anticipatory breach of contract. At this point in time, the innocent party may elect to accept the renunciation of the contract, terminate it and sue for damages for the anticipatory breach. No further performance is required under the contract by the innocent party.

In cases where the renunciation is accepted, it is the renunciation that constitutes the cause of action, and not the future breach.

The party in breach is not entitled to tender performance at a later date and claim under the contract, as it has already been terminated

It is also open to the innocent party to wait for the time of performance and again call on the other party to perform. This may amount to an election, in that the innocent party has selected a particular course and waived its rights in respect to the anticipatory breach.

Usage: The customer terminated the contract for an anticipatory breach of contract when the supplier renunciated the contract by stating that he did not intend to deliver the goods.

Related Words: breach of contract; executory consideration; executed consideration; breach of warranty; contract; past consideration; election; waiver; cause of action.