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Three ways to deal with an anticipatory contract breach

On Behalf of | Jan 27, 2023 | Business Law, Civil Litigation

Whether you buy a home or enter a business agreement in Florida, most transactions involve contracts. Unfortunately, there’s no guarantee that every party follows a contract’s terms. If another party demonstrates they will break the terms, they’re committing an anticipatory breach. Victims of anticipatory breaches have three options.

Doing nothing

Your first option when an anticipatory breach takes place is to do nothing. Understandably whether or not a company does nothing after a breach depends on its relationship with the other party or parties. An example would be a business owner hiring their friend’s company to complete renovation work. The business owner is unlikely to take his friend’s business to court.

Canceling the contract

Another option is for the promisee to cancel a contract when an anticipatory breach occurs. One reason this option is popular is that it can save a promisee from further contract-related issues with a party who can’t follow through. Depending on the circumstances, both parties might agree to cancel a contract and draft a new one with more achievable terms.

Pursuing legal action

Sometimes, you have no choice but to pursue civil litigation against someone who committed a breach of contract. Considering the value of some business contracts, one party breaching it could cost another party lots of money. Typically, a party who pursues legal action for an anticipatory breach of contract seeks compensation.

A contract breach is an unfortunate but often unavoidable part of doing business with other people or companies. If you suspect an unplanned breach is about to occur, it’s smart to gather as much information as possible about this incident. It could prove useful if you pursue legal action.