What is an anticipatory breach in Florida?

On Behalf of | Apr 6, 2022 | Business Law |

If you are negotiating a contract with an individual or business in Florida, the success of your goals is tied to that deal. This means if the other party acts in a way that shows they are about to breach that contract, your business will be significantly affected. If this is happening to you, here’s what you need to know.

What is an anticipatory breach?

An anticipatory breach or repudiation is a situation where a business shows intentions of failing to fulfill its contractual obligations to another company or individual. When a party does this, the other parties may find it very difficult to run their business because it is almost impossible to keep investing or working knowing that someone is about to breach the contract. They might force you to start again from the drawing board by looking for and vetting other businesses to work with.

The consequences of an anticipatory breach?

When a business knows that a contract will be violated but does nothing to stop it, this can lead to customers and clients fleeing in droves if the word gets out. Besides, it could be difficult to keep the business afloat if the other parting isn’t holding up its end.

When you fail to meet your clients’ demands because a party you are doing business is not responding as needed, your brand reputation will likely be damaged. Your customers are not concerned about the inner workings of your business but rather the services or products you provide them.

What can you do in the case of an anticipatory breach?

  • Cancel the contract – If you believe that canceling the contract and working with someone else is the best move, you should do it.
  • File a lawsuit – Business litigation could help you get compensation for the damages the other party has caused you through an anticipatory breach.
  • Do nothing – If you believe it won’t cause substantial harm, you can wait for the promisor to actually breach the contract and then sue them for damages.

An anticipatory breach is like a hole in your boat that can sink it unless you act fast to seal it. Filing a lawsuit immediately you suspect an anticipatory breach might prevent your boat from actually sinking. You can also prevent harm by adding a liquidated damage clause to your contracts.