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Breach of contract before its completion date

| Aug 21, 2019 | Firm News

Running a small business seems to become more challenging every day. Not only must you comply with an increasingly complex set of laws and regulations, but you also must likely work with contractors. If one of your contractors fails to deliver, you may be unable to meet customer expectations. You may also have financial losses or missed business opportunities. 

Sometimes, it becomes clear that a contractor either cannot or will not complete the contract. You probably do not need to wait until the completion date arrives to protect your business interests. With anticipatory repudiation, you may be able to free your small business from the terms of the contract. 

Express repudiation 

Whether the contract’s completion date has arrived, you may be able to breach the contract. That is, if the contractor tells you that fulfillment of the contract is not going to happen, you may have an express breach. For this type of repudiation, though, you must have a clear expression of unwillingness or an inability to comply with the terms of the contract. 

Impossibility 

Sometimes, fulfilling a contract becomes impossible. For example, the contractor you hired to remodel your showroom may have had a fire that destroyed every tool. If it simply is not possible for the contractor to satisfy contractual obligations, you may be able to breach the agreement and find a different contractor. 

Contracts for goods 

While anticipatory repudiation may occur with different types of contracts, agreements for the purchase of goods have their own rules. If you plan to buy goods from a supplier and think the supplier may not be able to provide you with them, you typically must seek assurance before breaching the contract. 

Time often matters in business. If you must wait until a contractor actually breaches an agreement, you may lose a significant amount of time and money. Fortunately, if the contractor signals that he or she cannot abide by the contract, you may be able to explore other options.

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