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CMA Foundation · Fundamentals of Business Laws and Business Communication · Breach of Contract and Remedies for Breach of Contract

In the law of contract, which of the following best describes an 'anticipatory breach'?

An anticipatory breach occurs when a party, before the date fixed for performance, declares that he will not perform or disables himself from performing. The breach arises in advance of the due date. Failure on the due date itself is an actual breach, not an anticipatory one.

  1. AA party fails to perform on the due date after the contract has become enforceable
  2. BA party performs the contract partly and the other party accepts the part performance
  3. CA party declares, before the due date of performance, that he will not perform, or disables himself from performingCorrect
  4. DA party performs the contract late but within a reasonable time

Explanation

Anticipatory breach occurs before the time fixed for performance arrives, when a party renounces the contract by words or conduct or makes performance impossible by his own act. Option A describes an actual breach on the due date, not an anticipatory one. Options B and D do not involve a repudiation in advance.

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