How to Deal with An Anticipatory Breach of Contract in Texas Law

 Posted on October 29,2024 in Business Formation

An anticipatory breach of contract occurs when it becomes clear that a party to the contract will not be able or willing to fulfill their contractual obligations and perform the contract. Another legal term for this type of anticipatory breach is "anticipatory repudiation." This is a complex issue that can have significant legal and financial ramifications depending on the facts and your response. Knowing what to look for to determine whether there is an anticipatory breach and what you can do about it is vital, and an attorney experienced in breach of contract Texas law can advise you on this matter. 

When Does Anticipatory Breach Occur?

Anticipatory breach usually happens in one of two situations:

• One party of the agreement communicates to you that they will not perform one of the terms of the contract or that they intend to breach the agreement. 

• Before the time to perform the contract occurs, the other party does something that lets you know that they will not fulfill their contractual obligations. 

How to Identify Anticipatory Breach 

Determining whether you are legally entitled to claim that an anticipatory breach of contract has occurred can vary based on the situation, but there are some factors to look out for:

• The other party has told you that they intend to breach.

• The other party is falling behind on deadlines and it is clear that their time and resources are being used for another customer.

• In a contract for goods (rather than services), more than 30 days have passed after you requested confirmation that the goods have been delivered, and no such confirmation was provided

Remedies Against Anticipatory Breach

• Nonperformance: If you believe that the other party will not fulfill the terms of the contract, you may cease performing your obligations under the agreement, such as by not paying for goods or services.

• Adequate Assurances: You may legally ask for "adequate assurances" that the other party will perform their part of the agreement. 

• Lawsuit: If you have been unable to resolve the conflict through communication and mediation, it may be time to file a breach of contract lawsuit. 

Anticipatory Breach as a Defense to a Breach of Contract Lawsuit 

Sometimes, you may use anticipatory breach as a defense in a breach of contract case brought against you. In this scenario, if another party sues you for not performing your obligations under a contract, you would use this defense by arguing in a court that you did not perform because you knew the other party had already intended to breach the agreement.

Contact a Fort Worth, TX Breach of Contract Attorney

When the other party to your business contract has made it clear in words or actions that they will not fulfill their obligations under your contract with them, this is an anticipatory breach that entitles you to certain legal rights. At Gonzalez Law, PLLC, we understand the legal and financial implications of a breach of contract action. To get advice on the legal nuances and ensure that you are not found to be in breach of contract, it is important to discuss the facts of your case with a Fort Worth, TX breach of contract lawyer by calling 817-349-7330 today.