Anticipatory Breach of Contract

Published on January 11, 2026

Anticipatory breach of contract occurs when one party clearly indicates, before performance is due, that they won’t fulfill their contractual obligations. Instead of waiting until the deadline passes, they announce in advance, through words or actions, that they’re not going to perform their obligations.

This is also called “anticipatory repudiation.” It allows the innocent party to take action immediately rather than waiting for the actual breach date to arrive.

How It Happens

Express Repudiation: The other party directly tells you they won’t perform. For example, a supplier emails two weeks before delivery saying they won’t be shipping the goods you ordered.

Implied Repudiation: Their actions make it clear they can’t or won’t perform. A contractor sells all their equipment needed for your project, making performance impossible. A seller transfers property to someone else before your closing date.

Why It Matters

Anticipatory breach gives you options immediately. You don’t have to wait until the performance date to take action. This allows you to minimize losses, find alternative arrangements, and sue for damages right away without wasting time.

What You Can Do

Accept the Repudiation: You can treat the contract as ended immediately. This releases you from your own obligations and allows you to sue for damages now. You can also find replacement suppliers, contractors, or buyers without waiting.

Reject the Repudiation: You can insist the other party still perform. The contract remains in effect, and you wait until the performance date. If they still don’t perform when the time comes, you can then sue for actual breach.

Your Duty to Mitigate

Even with anticipatory breach, you must take reasonable steps to minimize your losses. If a supplier repudiates, you should promptly find an alternative supplier. If a buyer backs out, you should actively market the property to other buyers.

You can’t simply wait and let damages accumulate when you could have reduced them.

Damages You Can Claim

If you accept the anticipatory breach, you can claim the difference between the contract price and replacement cost, additional expenses incurred finding alternatives, lost profits from the breach, and other foreseeable losses caused by their repudiation.

Contact Pinto Shekib LLP, Your Toronto Contract Litigation Lawyers

If the other party indicates they won’t perform, consult a litigation lawyer before responding. They can assess whether the conduct constitutes anticipatory breach, advise whether to accept or reject the repudiation, help you properly document your position, and calculate potential damages.