Anticipatory Breach
A clear indication by one party that they will not perform a contractual obligation, allowing the other party to act before the actual breach occurs.
An anticipatory breach happens when one party signals, through words or conduct, that they will not perform a contract before the performance is due. The signal must be clear and unequivocal: vague concern or financial worry typically is not enough.
This comes up when a vendor declares they cannot deliver before the delivery date, a buyer announces they are walking away from a closing, or a licensee says they will stop paying royalties. Recognizing the signal early lets the non-breaching party mitigate damages and lock in remedies before the harm grows.
Under California Commercial Code §2610 (for goods) and common-law principles, the non-breaching party can suspend performance, treat the contract as breached and sue immediately, or demand written assurance of performance under §2609. Acting too aggressively on weak signals can flip you into the breaching party, the analysis is fact-specific.
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