Anticipatory Repudiation or Material Breach: Did the Failure Happen Before or During Performance?
Anticipatory repudiation happens before performance is due. Material breach happens when performance is due or underway.
Anticipatory repudiation
One party clearly indicates before performance is due that it will not perform a material contractual obligation.
Material breach
A material breach is substantial enough to excuse the other party's remaining performance and support damages or other remedies.
Retraction
A repudiating party can sometimes retract before the other side materially changes position or treats the repudiation as final, subject to applicable law.
Remedies
The nonbreaching party can generally suspend performance and pursue appropriate contract remedies when the legal requirements are met.
The takeaway
Repudiation is a clear advance refusal to perform. Material breach is a serious failure of actual performance.
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FAQ
Does anticipatory repudiation occur before performance is due?
Yes.
Can a minor breach automatically discharge the other party?
No.
Can repudiation sometimes be retracted?
Yes under applicable conditions.