A person to a contract can breach, or break, a contract before performance is required by clearly and positively indicating, by words or conduct, that he will not or cannot meet the requirements of the contract.
If the plaintiff proves that he would have been able to fulﬁll the terms of the contract and that the breaching clearly and positively indicated, by words or conduct, that he would not or could not meet the contract requirements, then the breaching party breached the contract.
What is Anticipatory Breach of Contract?
A non-repudiating party may bring a claim for breach of the entire contract when:
- When the repudiating party repudiates a bilateral contract before committing a breach, or after committing only a partial breach.
- The non-repudiating party may bring a claim of the breach without having performed under the contract. 
1:20 What are the element of a anticipatory breach of contract?
1:21 Bilateral Contract
The general rule is that there can be no anticipatory breach of a unilateral contract or a contract that has become unilateral because one party has completed its performance.
- This is because the party who has performed is not prejudiced by having to wait for the arrival of the other party’s time for performance before suing for breach. 
The repudiating party positively repudiates the contract when he indicates that he will not or cannot substantially perform his contractual duties.
- He may indicate this by an act or a statement.
1:23 Repudiating Party’s Performance Not Yet Due
Repudiation must occur before the repudiating party’s performance is due under the contract.
- If the repudiation occurs after the performance is due, then the proper action is a breach of contract.
1:24 Repudiation Treated as Breach
The non-repudiating party must have treated the repudiation as a breach of the contract. 
1:25 Ability and Willingness to Perform
To recover damages, the non-repudiating party must plead and prove that he would have had the ability to perform the contract if not for the repudiating party’s breach. 
1:31 Bilateral Contract
1:31a Exception to General Rule
When the contract is for the performance of related acts then the courts will make an exception to the general rule requiring a bilateral contract and will allow recovery for total breach of a unilateral contract if:
- rather than merely the payment of installment amounts or,
- if after the repudiation it appears that the performance of the agreement is unlikely and
- that the non-repudiating party may be protected only by the recovery of damages for the value of the promise. 
Repudiation of unilateral contract for the performance of improvements to real estate supported a claim for breach of the entire contract. 
Repudiation of unilateral contract for extraction of minerals from property supported claim for breach of the entire contract.
1:32a Express Repudiation
Express repudiation of the contract occurs when a party unequivocally refuses to perform the contract.
- For example, where a landlord expressly repudiated contract by offering a lease with an option to purchase to a third party after the plaintiff had alreadyaccepted the same offer, it resulted in a breach of contract. 
The repudiation must be of the whole contract and must be a distinct, unequivocal, and absolute refusal to perform. 
Generally, a mere threat not to perform will not constitute a repudiation. 
1:32b Implied Repudiation
Repudiation can be implied when a party to a contract voluntarily renders his performance impossible. 
- Repudiation can also be implied when the promisee demands adequate assurance of due performance from the promisor
- and the promisor fails to provide such assurance within a reasonable time (not more than thirty days). 
1:32c Retraction of Repudiation
A cause of action for anticipatory breach requires that the repudiation was not retracted before the time for performance or before a detrimental change in position by the non-repudiating party in reliance thereon. 
The retraction of the repudiation must be clear and unequivocal.
The one who repudiates and then retracts the repudiation may not impose new conditions, not in accord with the original contract. 
If a party sues for breach after the other party anticipatorily repudiates the contract, the repudiation thereafter cannot be retracted.
- This is because the suing party has materially changed his position by treating the repudiation as a breach. 
1:33 Repudiating Party’s Performance Not Yet Due
In a 1970 case, a development company acting as both a leasing agent and loan agent for the owner of a shopping center. The development company was allowed to recover leasing commissions where the owner terminated the contract.
- The owner terminated the contract after the leasing agency term expired, but before the commissions were due.
- The owner’s obligation to pay commissions was conditioned on his obtaining a loan and on rent commencing under the leases. 
1:34 Repudiation Treated as Breach
If the non-repudiating party materially changes his position in response to the repudiation, he has exercised his election to treat the repudiation as a breach of contract. 
If the non-repudiating party chooses not to treat the anticipatory repudiation as a final breach but instead waits until the time for performance to arrive, he may then exercise remedies for actual breach if a breach does occur at such time. 
If the non-repudiating party acts upon the repudiation, then he need not allege his performance under the contract.
- This is because the repudiation of a contract excuses the other party’s performance. 
1:35 Ability and Willingness to Perform
The non-repudiating party is not obligated to tender performance to be entitled to damages.
- However, the non-repudiating party must present evidence at trial and plead in the complaint that, but for the repudiating party’s breach, he was ready, willing and able to perform as required by the contract.
The repudiating party is then allowed to present evidence that the non-repudiating party would not have performed.
- Therefore, the breach caused the non-repudiating party no damage. 
- Rescission 
- Upon repudiation constituting an anticipatory breach, non-repudiating party may:
- rescind the contract,
- attempt to keep the contract alive,
- or treat the contract as coming to an end and seek to recover damages.
- Compensatory Damages 
- Immediately after an anticipatory breach, the non-repudiating party may recover damages for a total breach of contract before the repudiating party’s performance is due.
- However, the recovery of prospective damages is limited to their value at the time of judgment.
- Mitigation of Damages
- After a party to a contract receives notice of the other party’s repudiation of the contract and elects to not sue immediately under the contract, but rather waits until the repudiating party’s performance is due, he cannot continue to perform under the contract.
- Therefore he cannot increase his damages unless other circumstances exist that make his performance necessary. 
1:50 STATUTE OF LIMITATIONS
The statute of limitations is four years for claims based on a written instrument.
For claims based on an oral agreement, the limitations period is two years. 
- The statute of limitations does not begin to run until performance is due under the contract, or until the plaintiff elects to regard the anticipatory repudiation as a final breach. 
- The statute of limitations under the employment contract begins to run when an employee is terminated, not over two years earlier when an employee is notified of the future termination.
- The statute of limitations runs from the date of actual termination of employment and not from the time the defendant tells the plaintiff that he intends to terminate him. 
- The statute of limitations runs from the date of actual termination of employment, not from time intolerable working conditions amount to constructive discharge occurs. 
- Retraction or Waiver of Repudiation 
- A repudiation of a contract may be nullified by a retraction of the repudiation before the injured party materially changes his position in reliance on it or brings suit.
- A repudiation of a contract may also be nullified by the non-repudiating party’s treating the contract as if it is still in force.
 Gold Mining & Water Co. v. Swinerton, 23 Cal. 2d 19, 29, 142 P.2d 22, 27 (1943); Harris v. Time, Inc., 191 Cal. App. 3d 449, 457, 237 Cal. Rptr. 584, 588 (1987); Machado v. Machado, 188 Cal. App. 2d 141, 147, 10 Cal. Rptr. 347, 351 (1961); Cal. Civ. Code §1440.
 Cobb v. Pacific Mut. Life Ins. Co., 4 Cal. 2d 565, 573, 51 P.2d 84, 88 (1935); Diamond v. University of S. Cal., 11 Cal. App. 3d 49, 53-4, 89 Cal. Rptr. 302, 305 (1970); Garage & Serv. Station Employees Union Local 665 v. Pacific Mut. Life Ins., 2 Cal. App. 3d 706, 712, 82 Cal. Rptr. 821, 824 (1969); but see §XI.6:31a (Exception to General Rule).
 Guerrieri v. Severini, 51 Cal. 2d 12, 18, 330 P.2d 635, 638 (1958).
 Taylor v. Johnston, 15 Cal. 3d 130, 137, 123 Cal. Rptr. 641 (1975); Gold Mining & Water Co. v. Swinerton, 23 Cal. 2d 19, 29, 142 P.2d 22, 27 (1943); Daum v. Superior Court of Sutter County, 228 Cal. App. 2d 283, 288, 39 Cal. Rptr. 443, 446 (1964); see also BAJI 10.87.
 Salot v. Wershow, 157 Cal. App. 2d 352, 357-58, 320 P.2d 926, 930 (1958); Winegar v. Gray, 204 Cal. App. 2d 303, 309, 22 Cal. Rptr. 301, 305 (1962).
 Ersa Grae Corp. v. Fluor Corp., 1 Cal. App. 4th 613, 625, 2 Cal. Rptr. 2d 288, 295 (1991); Barron v. Frink, 30 Cal. 486, 488 (1866).
 Coughlin v. Blair, 41 Cal. 2d 587, 599-600, 262 P.2d 305, 311-12 (1953)
 Gold Mining & Water Co. v. Swinerton, 23 Cal. 2d 19, 29-30, 142 P.2d 22, 28 (1943)
 see also Riess v. Murchison, 329 F.2d 635 (9th Cir. 1964).
 Johnson v. Meyer, 209 Cal. App. 2d 736, 741, 26 Cal. Rptr. 157, 161 (1962)
 Salot v. Wershow, 157 Cal. App. 2d 352, 357, 320 P.2d 926, 930 (1958); Atkinson v. District Bond Co., 5 Cal. App. 2d 738, 743, 43 P.2d 867, 869 (1935); see also Whitney Inv. Co. v. Westview Dev. Co., 273 Cal. App. 2d 594, 602-03, 78 Cal. Rptr. 302, 308 (1969).
 Thornton v. Victor Meat Co., 260 Cal. App. 2d 452, 476, 67 Cal. Rptr. 887, 904 (1968).
 Taylor v. Johnston, 15 Cal. 3d 130, 137-39, 123 Cal. Rptr. 641, 646-47 (1975); Golden West Baseball Co. v. City of Anaheim, 25 Cal. App. 4th 11, 49, 31 Cal. Rptr. 2d 378, 404 (1994); see also Zogarts v. Smith, 86 Cal. App. 2d 165, 172, 194 P.2d 143, 147 (1948).
 Cal. Com. Code §2609.
 Salot v. Wershow, 157 Cal. App. 2d 352, 357-58, 320 P.2d 926, 930 (1958).
 Pichignau v. City Paris, 264 Cal. App. 2d 138, 141-42, 70 Cal. Rptr. 147, 149 (1968).
 Diamond v. University of S. Cal., 11 Cal. App. 3d 49, 53, 89 Cal. Rptr. 302, 304-05 (1970); Crown Prods. Co. v. California Food Prods. Corp., 77 Cal. App. 2d 543, 551, 175 P.2d 861, 865 (1947).
 Daum Dev. Corp. v. Yuba Plaza, Inc., 11 Cal. App. 3d 65, 70-71, 89 Cal. Rptr. 458 (1970), disapproved on other grounds, Ninety Five Ten v. Crain, 231 Cal. App. 3d 36, 282 Cal. Rptr. 141 (1991).
 Guerrieri v. Severini, 51 Cal. 2d 12, 19, 330 P.2d 635, 639 (1958).
 Trypucko v. Clark, 142 Cal. App. 3d Supp. 1, 7, 191 Cal. Rptr. 165, 169 (1983).
 Winegar v. Gray, 204 Cal. App. 2d 303, 309, 22 Cal. Rptr. 301, 305 (1962).
 Ersa Grae Corp. v. Fluor Corp., 1 Cal. App. 4th 613, 626, 2 Cal. Rptr. 2d 288, 295-96 (1991)
 Winegar v. Gray, 204 Cal. App. 2d 303, 309, 22 Cal. Rptr. 301, 304-05 (1962)
 Daum Dev. Corp. v. Yuba Plaza, Inc., 11 Cal. App. 3d 65, 76, 89 Cal. Rptr. 458, 465 (1970)
 Bomberger v. McKelvey, 35 Cal. 2d 607, 613-15, 220 P.2d 729, 733-34 (1950).
 Cal. Civ. Proc. Code §337(1).
 Cal. Civ. Proc. Code §339(1).
 Trypucko v. Clark, 142 Cal. App. 3d Supp. 1, 7, 191 Cal. Rptr. 165, 169 (1983); see also Romano v. Rockwell Int’l, Inc., 14 Cal. 4th 479, 489-91, 59 Cal. Rptr. 2d 20 (1996)
 Mingo v. Delta Air Lines, Inc., No. C 97-1256SI, 1998 WL 227142, at *5 (N.D. Cal. April 28, 1998)
 Mullins v. Rockwell Int’l Corp., 15 Cal. 4th 731, 743, 63 Cal. Rptr. 2d 636, 643 (1997)
 Cal. Com. Code §2611; Guerrieri v. Severini, 51 Cal. 2d 12, 18-19, 330 P.2d 635, 638-39 (1958)
 see also Cook v. Nordstrand, 83 Cal. App. 2d 188, 188 P.2d 282 (1948) (waiver of breach)