What are your options after an anticipatory breach of contract?

| Apr 27, 2021 | Business Law

Most Texas businesses will have to deal with an anticipatory breach of contract at some point or another. This specific type of contract breach can result in severe losses for any business. By understanding the specific aspects you’ll need to prove that the breach occurred and what your options are, you can help to set your business up for the best outcome from this type of scenario.

What is an anticipatory breach of contract?

An anticipatory breach of contract is when one party of the contract is unable to fulfill its obligations. In order for it to be considered an anticipatory breach, the party that is unable to fulfill their obligations must state to the other party their inability to do so and this must take place before the expiration date of the contract. Any business litigation attorney can advise you that you’ll have to have all of these various aspects for the breach to be considered illegal.

What are your options?

When an anticipatory breach of contract happens, you have three main actions you can take. You can cancel the contract and receive your money back from the other party. The second thing you can do is take legal action against the other party for any damages that you incurred due to their breach. The last thing you can do is simply do nothing. This last reaction is most common for businesses with long-standing relationships.

An anticipatory breach of contract is something that most business managers deal with from time to time. By understanding what your various different responses can be, you can help to make the right choice for the future operations of your business and its revenue. If you need assistance with understanding what your options are or help in choosing the best one, an attorney could help you decipher what’s in your best interest.