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  • What is repudiation of a contract?

Repudiation of a contract, also called “anticipatory breach,” occurs when one party refuses or becomes unable to honor the deal. Three types of repudiation are usually recognized by courts.

One party might tell the other that they do not intend to follow through on their end of the deal. This is called “express repudiation.” The repudiation must be clear and unconditional (as opposed to a vague expression of doubt about whether they can follow through).

One party might take actions that make it impossible to honor the contract. For instance, a business owner may promise to repay a loan, but then take on burdensome additional debts that make it impossible to do so. This situation could be an anticipatory breach.

Finally, the property which the contract concerns might be transferred to a third party, rendering the former owner of the property unable to fulfill the deal.

Most courts require the non-repudiating party to try to minimize the damages that result from the repudiation, not sit around while the situation worsens. If you are involved in a contract dispute, contact the attorneys at the LaGarde Law Firm.

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