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Anticipatory Breach of Contract (Repudiation)

Contracts are a vital part of any reputable business. In addition to outlining the terms and conditions of a business transaction, contracts clearly outline the obligations of all parties to each other. However, as with any promise—even one made by a company or business—there is a possibility of agreed-upon measures being broken, unfulfilled, or inadequately executed. When one party does not perform the tasks they were contractually obligated to perform, the other party can claim an anticipatory breach of contract, meaning the party claiming a contract breach can seek remedies and payments. The recognition that one party will not fulfill the terms of their part of a contract is called repudiation.

In matters concerning a breach of contract or contract dispute, consulting with a Texas contract law attorney is invaluable to ensuring your business is getting the legal protection it deserves. The legal team at Slater Pugh, Ltd. LLP is well-versed in all areas of business law and can provide extensive support and guidance in issues related to breaches of contract.

Types of Repudiation

When one party expresses through words or actions that they will not fulfill their contractual obligations, it is grounds for repudiation. In a court of law, an anticipatory breach of contract can describe any of the following:

  • A positive and unconditional refusal to the other party, such as, “I will not go through with the deal.” This “express repudiation” has to be clear and unambiguous, not hinging on outside factors.
  • An action makes it impossible for one party to fulfill their obligations. Something has to happen that would prevent this party from performing their side of the bargain.
  • The property relating to the deal is transferred to someone else. This breach generally happens when a third party outside of the contract deal buys the good.

In some cases, legal standards by the Uniform Commercial Code allow you to withhold performing your part of a contract until you receive “adequate assurance of performance” from the other party. Adequate assurance occurs when one party has reason to believe the other will not fulfill their side of a contract, whether they express their intent through words or actions. This demand will give the other party 30 days to provide some type of assurance that they will perform it or else the contract ends.

Contact a Contract Law Attorney in Austin

At Slater Pugh, Ltd. LLP, we provide legal services for businesses so entrepreneurs and business owners can spend more time focusing on their ventures while we navigate the legal field. If you are in need of a proficient contract law attorney, contact our Austin offices at (512) 472-2431 for effective representation.

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