In business and commercial litigation, there are ways to protect yourself if worse comes to worst. An anticipatory breach can be enacted when you expect a person or party to breach or break the rules of their contract, either through their words or their actions. By seeking an anticipatory breach of contract, you’re looking to end the contract with that person or party before the contract can be broken.
Why would you look to end a contract early?
Employers might look to end a contract with a person early through anticipatory breach of contract to prevent monetary losses. For example, a company might notice halfway through an employee’s contract that they’re going to miss a critical deadline.
Missing that deadline would be a breach of the employee’s contract, but by waiting for the employee to miss the deadline, the company might lose money. Seeking an anticipatory breach of contract would allow the company to let go of their current employee and hire someone who can get the project done by the deadline.
What counts as an anticipatory breach of contract?
In business and commercial litigation, an anticipatory breach of contract often happens when a vendor demonstrates that they will not meet the terms of their contract. This can happen through verbal communication, written confirmation or actions.
The company seeking the anticipatory breach must be able to prove that the person or party has demonstrated or otherwise confirmed that they will not meet the terms of their contract. In the case of the employee, an employer can state how they’ve missed certain goals or deadlines.
Being able to prove anticipatory breach of contract varies depending on the contract. It’s wise to talk to an attorney about anticipatory breaches before making any decisions.
