Anticipatory Repudiation

Anticipatory repudiation is a doctrine that allows a party to treat a contract as breached before the time for performance has arrived, when the other party unequivocally communicates an intention not to perform. The doctrine originated in Hochster v. De La Tour (1853) and is codified in UCC Section 2-610.

For anticipatory repudiation to occur, the repudiation must be clear and unequivocal. Mere expressions of doubt about one's ability to perform, or requests for modification, are generally insufficient. The repudiating party must make it unmistakably clear that performance will not be forthcoming. Courts look at both words and conduct — making it impossible to perform (such as selling the subject matter to someone else) constitutes repudiation by conduct.

Upon receiving an anticipatory repudiation, the non-repudiating party has several options. They may treat the repudiation as a breach and immediately sue for damages. They may wait a commercially reasonable time for the repudiating party to retract (under the UCC) while urging performance. Or they may simply treat the contract as terminated and make alternative arrangements. The non-repudiating party has a duty to mitigate damages regardless of which option they choose.

An anticipatory repudiation may be retracted before the non-repudiating party has materially changed position in reliance on the repudiation, accepted the repudiation, or indicated that they consider the repudiation final. Upon retraction, the contract is restored, though the non-repudiating party may demand adequate assurance of performance.

The doctrine serves efficiency goals by allowing parties to minimize waste. Without it, the non-repudiating party would be required to wait until the performance date to confirm the breach, potentially incurring unnecessary costs and missing opportunities to mitigate.

On exams, anticipatory repudiation appears when a party communicates that they will not perform before the performance date. The key issues are whether the repudiation was sufficiently clear and what remedies are available.