Options for a business facing an anticipatory contract breach

| May 3, 2021 | Business Law |

One of the most aggravating and potentially costly situations for a Wisconsin business is one in which it confronts a party to a contract that indicates it has no intention of satisfying its obligations under the agreement. These are a number of essential elements to an anticipatory breach of contract that a business needs to understand.

Definition of anticipatory contract breach

Pursuant to Wisconsin business law, anticipatory breach is defined as a situation in which a party to a contract realistically recognizes that the other party to an agreement is not likely to perform its contractual obligations. There are a number of actions a party that is in this can take.

Take no immediate action and sue for breach of contract

One course of action a business can take in a situation involving an anticipatory breach of contract is to do nothing at the moment. Once the other party breaches the contract, the aggrieved party can pursue a lawsuit.

Pursue an anticipatory breach of contract lawsuit

In the alternative, a business can attempt to mitigate its overall losses that might stem from a full breach of contract by initiating an anticipatory breach of contract lawsuit against the other party. A business must be reasonably certain that the other party intends to breach the contract.

There are a number of ways in which a party to a contract demonstrates a desire not to perform its duties pursuant to the agreement. These include the failure of a party to a contract to take certain steps necessary to prepare to satisfy the terms and conditions of a contract.

Pursuing an anticipatory breach of contract case can prove challenging. Consequently, a business facing the prospect typically best protects important its legal interests by retaining the services of a skilled lawyer.