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How to deal with an anticipatory breach

On Behalf of | Jun 5, 2023 | Business Litigation

Dealing with business disputes in Texas can be a costly and contentious process. To mitigate potential damage, it’s a good idea to include every aspect of a deal in writing. Doing so will help you to anticipate any future trouble that may arise. This is especially true when it comes to making provisions to avoid and resolve disputes.

What constitutes an anticipatory breach?

An anticipatory breach is one of the routine causes of business litigation. This occurs when one of the parties to a contract makes known their intention to renege on the terms previously agreed to. This may be an announcement that they won’t pay their end of the expenses or do any of the work that they agreed to perform.

When this occurs, the other party can consider themselves relieved of their own responsibilities as stated in the contract. Since one party is backing out of the duties they agreed to perform, the other party is free to do so as well. This will be the condition under which you can feel free to prepare yourself to file legal action.

Which actions can signal an anticipatory breach?

There are a number of actions that should take place before you can begin the litigation process. For example, you may receive oral or written confirmation that the other party does not intend to fulfill their end of the deal. However, any failure to perform a contractually stipulated obligation can end in this result.

At this point, you are free to declare that an anticipatory breach has taken place. This will give you the option to begin legal action even before the breach. By maintaining a close eye on conditions, you can give yourself a leg up in the process.