Anticipatory Breach of Contract in California: Repudiation and Your Options

Last updated: November 2026

An anticipatory breach of contract happens when one party clearly states, or shows by its conduct, that it will not perform before its performance is due. California law lets the other party treat that repudiation as a breach immediately, sue for damages, and stop its own performance, or instead wait and see whether the repudiating party changes its mind. Kolmogorov Law, P.C. advises businesses in Orange County, Los Angeles, and across California on both choices.

Call (909) 235-6116 or contact us online if a counterparty has told you it will not perform, or if you need to get out of a deal yourself.

What counts as an anticipatory breach of contract

The Civil Code states the rule in one sentence. If a party gives notice, before the other side is in default, that it will not perform, and does not retract that notice before performance is due, the other side may enforce the obligation without first performing its own conditions. (Civ. Code, § 1440.)

The California Supreme Court fills in the rest. Repudiation may be express or implied. An express repudiation is a clear, positive, unequivocal refusal to perform. An implied repudiation results from conduct that puts performance out of the party's power, so that substantial performance becomes impossible. (Taylor v. Johnston (1975) 15 Cal.3d 130, 137.)

The word that matters is unequivocal. "We may have trouble making the June shipment" is not a repudiation. "We will not be shipping in June or at any other time" is. A party that sells the only asset the contract covers to someone else has repudiated by conduct, even if it never said a word.

CACI No. 324 is the instruction a jury hears on this theory, and it tracks the same elements.

How it comes up for business owners

A buyer signs a purchase agreement for equipment to be delivered in ninety days, then emails the seller that it has found a cheaper source and will not be taking delivery. The seller has a repudiation on the day of that email, not ninety days later.

A commercial tenant with eighteen months left on a lease tells the landlord it is moving out at the end of the quarter and will not pay rent after that. The landlord does not have to wait for the first missed payment.

In each case the injured party has two questions: is this really a repudiation, and what should I do about it?

The election: treat it as a breach, or wait

After a repudiation the injured party faces an election. It can treat the repudiation as an anticipatory breach, immediately seek damages, and end the contractual relationship. Or it can treat the repudiation as an empty threat, wait until the performance date, and pursue remedies for an actual breach if one occurs. (Taylor v. Johnston, supra, 15 Cal.3d at pp. 137-138.)

The second choice carries a risk. If the injured party keeps the contract in force and the repudiating party retracts before performance is due, the repudiation is nullified. The injured party is left with whatever remedies arise at the time of performance. (Ibid.)

So the choice is real. A business that sues immediately locks in the breach but gives up the chance that the other side will come around. A business that waits keeps the deal alive but may watch the repudiation evaporate on the eve of performance.

I usually recommend a written response that does three things: records the repudiation in the other side's own words, states that the client considers it a breach unless retracted by a specific date, and reserves all rights. That letter narrows the retraction window without forcing an immediate lawsuit.

Sales of goods: the Commercial Code adds tools

Where the contract is for the sale of goods, the Commercial Code gives the injured party a more detailed menu. When a party repudiates a performance not yet due and the loss will substantially impair the contract's value, the other party may await performance for a commercially reasonable time, or resort to any remedy for breach even after urging retraction. In either case it may suspend its own performance. (Com. Code, § 2610.)

The repudiating party can retract until its next performance is due, unless the injured party has cancelled, materially changed its position, or otherwise indicated that it considers the repudiation final. (Com. Code, § 2611, subd. (1).)

The most useful tool is the demand for adequate assurance. When reasonable grounds for insecurity arise, a party may demand in writing adequate assurance of due performance and may suspend its own performance until it receives that assurance. (Com. Code, § 2609, subd. (1).) Failure to provide adequate assurance within a reasonable time, not exceeding thirty days, is itself a repudiation. (Com. Code, § 2609, subd. (4).) For a business that hears troubling rumors but has no unequivocal refusal yet, this is the way to force the issue. Our page on sending a demand letter explains how to frame one.

Damages and the duty to mitigate

Damages for anticipatory breach are measured the same way as for any contract breach: the amount that compensates for the detriment proximately caused. (Civ. Code, § 3300.) The injured party cannot sit idle and let losses mount. A seller whose buyer has repudiated should look for another buyer. Reasonable mitigation reduces damages and makes the injured party a far more sympathetic plaintiff. Our page on breach of contract damages covers the details.

If you are the party who wants out

Business owners also call because they want to repudiate. A deal has gone bad and they want to know what happens if they walk.

A clear repudiation is a breach, and the other side can sue immediately. The better path is often to say less. Ask for a modification. Propose a buyout of the remaining term. Raise a genuine dispute about the other side's performance if one exists. A negotiated exit is almost always cheaper than a litigated one. Whether the other side's own breach was serious enough to excuse you is covered on our page on material versus minor breach.

Claims that do not settle are filed in the Superior Court: the Central Justice Center in Santa Ana for Orange County, the Stanley Mosk Courthouse for Los Angeles. Parties from different states may end up in the Central District of California. The claim must still satisfy each of the elements of breach of contract.

What to bring to the first meeting

Bring the contract, the exact communication you believe is a repudiation (the email, the letter, the text), everything sent in response, and a summary of what you have done since to limit your losses. If the other side has retracted or hedged, bring that too.

Frequently asked questions

What is an anticipatory breach of contract?

An anticipatory breach, or anticipatory repudiation, is a clear and unequivocal statement or act by one party, before performance is due, that it will not perform. California treats it as a present breach. The injured party may sue immediately and stop its own performance, or wait for the performance date. (Civ. Code, § 1440.)

Can I sue for anticipatory breach before the contract deadline?

Yes. Once the other party has unequivocally repudiated, you may treat the contract as breached and file suit without waiting for the performance date or performing your own obligations first. The repudiation must be clear. Doubts, delays, or requests to renegotiate are usually not enough.

Can a party take back an anticipatory repudiation?

Yes, within limits. A repudiation can be retracted before performance is due, as long as the injured party has not already treated it as final, materially changed position, or cancelled. For goods contracts the rule is in the Commercial Code. (Com. Code, § 2611, subd. (1).) A prompt written response that treats the repudiation as a breach closes that window.

What is a demand for adequate assurance?

In a sale of goods, a party with reasonable grounds for insecurity may demand in writing that the other side give adequate assurance it will perform. Failure to respond adequately within a reasonable time, and in no event more than thirty days, is a repudiation. (Com. Code, § 2609.) It converts rumors into a legally meaningful answer.

Talk to a California breach of contract attorney

If a counterparty has announced it will not perform, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents businesses in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the contract, the facts, and the court.