California Civil Jury Instructions (CACI)

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

  • Civil Code section 1440 provides: “If a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party.”
  • 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].)
  • 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.)
  • Section 253 of the Restatement Second of Contracts provides:

    (1) Where an obligor repudiates a duty before he has committed a breach by non-performance and before he has received all of the agreed exchange for it, his repudiation alone gives rise to a claim for damages for total breach.

    (2) Where performances are to be exchanged under an exchange of promises, one party’s repudiation of a duty to render performance discharges the other party’s remaining duties to render performance.

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