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Recognizing an anticipatory breach of contract

On Behalf of | Nov 24, 2021 | Business Litigation |

Breaches of contract happen in Florida for all different reasons. When one party makes it clear that they plan to breach a contract, this is referred to as an anticipatory breach. An anticipatory breach means that a breach of contract is expected to happen, but it hasn’t actually happened yet.

Explicit statements

Sometimes one party in a contract communicates with clear statements that they are no longer willing to fulfill their end of the deal. The breaching party may communicate their intentions to breach the contract verbally or in an email. Either way, explicit statements make it obvious that there is an anticipatory breach happening.

Failure to perform

In other cases, a breaching party might communicate their intention to breach a contract passively through their actions or inactions. Even if a contract has months left before certain tasks need to be fulfilled, one party’s failure to perform the work in the contract could indicate that they are breaching the contract.

Sometimes, working at such a slow pace that a job could never be fulfilled in time is evidence of an anticipatory breach. Performing just a little work could be an effort by the breaching party to avoid commercial litigation. However, the injured party in the contract may still file a lawsuit.

When to react and not react

If you are a business owner, there are some situations where it is in your best interest to react to a breach of contract by filing a lawsuit against the breaching party. There are also times when maintaining a positive long-term relationship with the breaching party is more valuable than recovering compensation for short-term damages. What’s best for your company will depend on the circumstances involved and how much damage the breach has caused.