Anticipatory Breach of a Contractor Agreement

Typically, a breach of contract lawsuit is filed after the full performance of the contract is completed. There are times, however when some contractors are unwilling to perform parts of a construction contract depending on certain circumstances. This could lead to the homeowner to sue the contractor for the violation of the contract. This anticipatory breach generally happens before the end of the deadline period and may happen near the beginning.

Anticipatory breach is the result of the intentional and unconditional refusal of one party in a contract agreement to work. This could occur with the contractor or the owner of the project. Some owners must pay early or commission materials for the contractor. If the owner refuses to work with the contractor, this could cause further problems. However, the anticipatory breach generally refers to the contractor that will not perform the job for one reason or another. He or she refuses to continue or start working at the beginning. This is also a repudiation of the contract agreement.

The Breach of Contract

The repudiation of the contract could lead to a breach of the contract. An anticipatory breach is the actions of the contractor or other party that will not continue with the necessary activity in the project. Many contracts have clauses about the failure to perform the work. Remedies for this action with the contractor or other party are often available either in payment or some other item awarded to the aggrieved party. The agreement broken between parties usually ends the contract period, and the owner must find a new contractor to complete the work. It is important to consult a lawyer in the event of an anticipatory breach.

 

The Instance of Repudiation

There are normally three different types of repudiation that the judge will consider in a contract situation. These are an unconditional refusal of working in any way, something that causes an impossibility of continuing forward and when the property is no longer with the original owner. The refusal of work is generally the type that most may understand. The contractor refuses to work with the owner or will not continue working. He or she must state the specific words, or the matter becomes confusing or ambiguous. This could prolong the period that the owner may bring forth the anticipatory breach.

Some repudiation of the contract occurs with the owner. If the person that owns the building is unable to pay off debts and the financial institution attached forecloses, the contractor is unable to continue working with the owner. In this instance, it is the property owner that repudiates the contract through his or her actions. The last is when a situation similar to the debts owed occurs where the property is no longer in the hands of the original owner. The repudiation occurs so that the contractor cannot continue forward, and the anticipatory breach happens through the transfer or sale of the building to another person or entity.

Pursuing the Case of Anticipatory Breach

The owner must ensure that the matter is a repudiation or anticipatory breach of the contract and not an issue on his or her side that causes the termination of the project. For this to remain a valid claim to pursue, the owner must not transfer the property to another owner, refuse to pay a higher price for materials or necessary resources or cause the building to enter foreclosure. Invalidating the contract through his or her own actions does not provide an outlet to seek a repudiation of the contract due to the contractor. 

However, if the contractor does not progress the work, refuses to continue or specifies in spoken or written words, he or she may initiate a repudiation of the contract. This provides the owner with a claim through common law or a default clause in the agreement that gives him or her the option to litigate or seek another remedy. The owner has the right to adequate performance assurance from the contractor. Some situations provide the contractor with up to 30 days to continue work or provide assurances for the request the owner makes. Failure to comply leads to the possible anticipatory breach.

Anticipatory Breach Legal Support

In light of a refusal from the contractor to perform the necessary tasks, the owner may need to hire a lawyer to pursue the case. He or she may have a remedy available, or the lawyer could explain the options possible for these situations. The legal professional will work to protect the owner’s rights and seek the best outcome.