What is an anticipatory breach of contract?

An anticipatory breach of contract is when a party to a contract signals that it does not intend to fulfill its obligations under the contract before the time specified for performance. In Washington, an anticipatory breach may be established if the party notifies the other party in writing of an intent to not fulfill the contract, or if the party’s conduct indicates an unwillingness or inability to fulfill its obligations under the contract. An example of an anticipatory breach of contract is when one party sends a written notice to the other party stating that they will not fulfill the terms of the contract. The party that sent the notice has essentially broken the contract before the performance was due. When an anticipatory breach of contract occurs, the non-breaching party may choose to terminate the contract and seek damages. In Washington, the non-breaching party may be entitled to “expectation damages”, which are designed to put the non-breaching party in the position it would have been in had the contract been fully performed. The non-breaching party may also be entitled to “reliance damages”, which are designed to compensate the non-breaching party for any losses that it incurred in reliance on the contract. Anticipatory breaches of contract are a serious matter and can have major consequences for both parties. It is important for parties entering into a contract to ensure that they understand their obligations under the contract, and to consult with an attorney if there is any doubt or questions.

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What is an anticipatory breach of contract?

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