Florida businesses enter into various contracts each and every day. While most people enter into a contract believing that they’ll be able to deliver on their responsibilities, sometimes things happen that can stop them from doing so. When this happens, it may be considered an anticipatory breach of contract.
What is an anticipatory breach of contract?
Anyone who handles business litigation can define an anticipatory breach of contract as one party stating that they’ll be unable to fulfill their responsibilities of the contract before its expiration. For example, if a company ordered 10,000 yards of fabric and the supplier tells them that they’re unable to deliver by the contract expiration date because they had a problem with one of their machines, they’ve just committed an anticipatory breach of contract.
What are the options when this happens?
An anticipatory breach of contract can happen for a number of different reasons. The other party in the contract has three main options. The first is to modify the agreement so that the other party is able to deliver on the responsibilities. The second option is to take up a legal suit against the breaching party. If a business decides to sue the breaching party, it’s important that the business try to mitigate its own losses as part of its legal responsibilities.
The last option that a business has is to simply forgo the contract. This is more likely to happen in cases where a business has a long-standing relationship with the other party in the contract. They simply agreed to dismiss the contract to ensure that the relationship stays on good terms for future transactions.
Every business is likely to deal with an anticipatory breach of contract at some point throughout its career. By understanding the components that are involved in this type of contract breach and what remedies are available for it, one can come up with a quick response to the problem and move on. If you have any questions regarding an anticipatory breach of contract, it’s always advisable to speak to an attorney to ensure that your best interest is looked after.