Breach of contract is where one party to a contract fails to
abide by a contractual obligation. This occurs after the obligation
to perform a certain act comes due. I.e., I give you $20 and you
will give me your basketball by Friday. Friday comes and goes, and
you didn't give me your basketball. Breach of contract.
Anticipatory breach is where one party makes a clear,
unequivocal statement to the effect that he will not perform his
contractual obligations. This occurs before the deadline to perform
occurs. To use the stupid basketball example above, if you tell me
on Thursday, "There's no way in hell I'm giving you that basketball
tomorrow. Want your $20 back? Sue me! Ha!" That would be an
anticipatory repudiation of the contractual obligation to give me
the basketball on Friday. Even though you're telling me on
Thursday, before your obligation to give me the ball comes due (on
Friday), I have the right to treat it as an actual breach of
contract and sue.
Of course, with anticipatory breach, if you retract your
repudiation before the deadline to perform rolls around, you are OK
- provided that I have not done anything in reliance on your
anticipatory repudiation. I.e., Thursday you tell me there's no way
you're giving me that basketball, but then Thursday night you say,
"I take it back. You'll get your ball tomorrow." That would make
you no longer in breach - as long as I did not rely on the breach
and go out and buy a new basketball or something.
