In California, anticipatory breach of contract occurs when a party involved in a bilateral contractual agreement decides to repudiate the terms of the contract.
A repudiation in an anticipatory breach of contract can be either express or implied. An express repudiation is a clear, unequivocal refusal to perform the terms of the agreement. In contrast, an implied repudiation stems from conduct where the promisor puts it out of their power to perform so as to make substantial performance of their obligations impossible.
In California, the legal standard for implied repudiation was set forth in Mammoth Lakes Land Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435.) This standard was then codified under California Civil Code Section 1440. This particular section states that “if a party to an obligation gives notice to another, before the latter is in default, that [they] will not perform the same upon [their] part, and does not retract such notice before the time at which performance upon [their] part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon [their] part in favor of the former party.”
When to Take Legal Action
If you entered into an agreement with another party and endured an anticipatory breach, it is in your best interest to take legal action sooner rather than later. Why? Because California law set forth a 4-year statute of limitations for anticipatory breach of contract claims when the breach is related to a written contract. The 4-year statute of limitations is set forth in California Civil Code Section 337(1). If, on the other hand, your anticipatory breach claim is related on an oral agreement, the statute of limitations period is only two years, according to California Civil Code Section 339(1).
Retracting or Waiving the Repudiation
One of the affirmative defenses that can be raised to a claim based on anticipatory breach of contract is retracting or waiving the repudiation. Basically, the repudiation of a contract can be nullified by an affirmative retraction of the repudiation before the non-breaching party materially changes their position in reliance on the repudiation, or brings a civil lawsuit predicated on the breach. In addition, if the non-breaching party decides to treat the contract as if it is still in force, then that decision could be used as a defense to any subsequent anticipatory breach legal claim.
Have Questions Regarding Anticipatory Breach of Contract? Contact an Experienced Business Lawyer in Los Angeles Today
If you have questions or need professional legal advice about anticipatory breach of contract, take action by contacting the highly reputable Hakim Law Group today. Our team of highly experienced business lawyers in Los Angeles stand ready to help your business when a breach of contract occurs or if you need to repudiate the terms of an agreement and want to mitigate your exposure to civil liability. For further information or to schedule an appointment with an expert business attorney in Los Angeles, please contact The Hakim Law Group at 310.993.2203 or visit www.HakimLawGroup.com to learn more.
