California Civil Jury Instructions (CACI) (2017)

324. Anticipatory Breach

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324.Anticipatory Breach
A party can breach, or break, a contract before performance is required
by clearly and positively indicating, by words or conduct, that he or she
will not or can not meet the requirements of the contract.
If [name of plaintiff] proves that [he/she/it] would have been able to
fulfill the terms of the contract and that [name of defendant] clearly and
positively indicated, by words or conduct, that [he/she/it] would not or
could not meet the contract requirements, then [name of defendant]
breached the contract.
New September 2003
Sources and Authority
• Anticipatory Breach. Civil Code section 1440.
• “Repudiation of a contract, also known as “anticipatory breach,” occurs when a
party announces an intention not to perform prior to the time due for
performance.” (Stephens & Stephens XII, LLC v. Fireman’s Fund Ins. Co.
(2014) 231 Cal.App.4th 1131, 1150 [180 Cal.Rptr.3d 683].)
• Courts have defined anticipatory breach as follows: “An anticipatory breach of
contract occurs on the part of one of the parties to the instrument when he
positively repudiates the contract by acts or statements indicating that he will
not or cannot substantially perform essential terms thereof, or by voluntarily
transferring to a third person the property rights which are essential to a
substantial performance of the previous agreement, or by a voluntary act which
renders substantial performance of the contract impossible or apparently
impossible.” (C. A. Crane v. East Side Canal & Irrigation Co. (1935) 6
Cal.App.2d 361, 367 [44 P.2d 455].)
• Anticipatory breach can be express or implied: “An express repudiation is a
clear, positive, unequivocal refusal to perform; an implied repudiation results
from conduct where the promisor puts it out of his power to perform so as to
make substantial performance of his promise impossible.” (Taylor v. Johnston
(1975) 15 Cal.3d 130, 137 [123 Cal.Rptr. 641, 539 P.2d 425].)
• “In the event the promisor repudiates the contract before the time for his or her
performance has arrived, the plaintiff has an election of remedies—he or she
may ‘treat the repudiation as an anticipatory breach and immediately seek
damages for breach of contract, thereby terminating the contractual relation
between the parties, or he [or she] can treat the repudiation as an empty threat,
wait until the time for performance arrives and exercise his [or her] remedies
for actual breach if a breach does in fact occur at such time.’ ” (Romano v.
Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489 [59 Cal.Rptr.2d 20, 926
P.2d 1114].)
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• Anticipatory breach can be used as an excuse for plaintiff’s failure to
substantially perform. (Gold Mining & Water Co. v. Swinerton (1943) 23 Cal.2d
19, 29 [142 P.2d 22].)
• “Although it is true that an anticipatory breach or repudiation of a contract by
one party permits the other party to sue for damages without performing or
offering to perform its own obligations, this does not mean damages can be
recovered without evidence that, but for the defendant’s breach, the plaintiff
would have had the ability to perform.” (Ersa Grae Corp. v. Fluor Corp. (1991)
1 Cal.App.4th 613, 625 [2 Cal.Rptr.2d 288], internal citations omitted.)
Secondary Sources
1 Witkin, Summary of California Law (10th ed. 2005) Contracts, §§ 861–868
13 California Forms of Pleading and Practice, Ch. 140, Contracts, §§ 140.54,
140.105 (Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, § 50.23 (Matthew Bender)
27 California Legal Forms, Ch. 77, Discharge of Obligations, §§ 77.15, 77.361
(Matthew Bender)
2 Matthew Bender Practice Guide: California Contract Litigation, Ch. 22, Suing or
Defending Action for Breach of Contract, 22.23
CACI No. 324 CONTRACTS
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