An anticipatory breach of contract is a failure to live up to a contract term before the actual time for performance has arrived. It is often occurs when one party states an intention not to fulfill or substantially fulfill a contractual obligation before it is due. Such a repudiation of contract terms is generally required to be affirmatively stated. The repudiating party may not later demand performance under the contract from the other party. The result of anticipatory breach is that the other party does not have to perform his/her obligations and cannot be liable for not doing so. This is often a defense to a lawsuit for payment or performance on a contract.
Under the Uniform Commercial Code, which has been adopted in some form by almost every state, a repudiation will justify a demand for an assurance of performance by the nonbreaching party. The repudiating party may withdraw a repudiation without legal consequence before there has been a material change in position.
