Actual Breach and Anticipatory Breach Compared: When Each Arises, the Injured Party's Election, the Date for Assessing Damages, and the Risk of Waiting

A contract may be broken in two ways. An actual breach occurs when the time for performance arrives and a party fails to perform: the seller does not deliver, the buyer does not accept or pay. An anticipatory breach occurs before that time, when a party makes clear that he will not perform or disables himself from performing. The difference is not merely one of timing. An anticipatory breach gives the injured party an election, and the choice he makes affects when damages are assessed and what risks he carries.

The two kinds of breach on a timeline, and the five points on which they differ

1. Actual Breach

It arises at or after the time for performance. No election is involved; the breach has happened.
On the seller's side: failure to deliver, delivery of the wrong quantity or of goods not answering the contract.
On the buyer's side: refusal to accept, refusal to pay, or failure to take delivery after request under Section 44.
The remedies are those in Sections 55 to 59, and damages are assessed as at the date of the breach.

2. Anticipatory Breach

Section 60, Sale of Goods Act, 1930

Where either party to a contract of sale repudiates the contract before the date of delivery, the other may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach.

📖 Hochster v. De La Tour, (1853) 2 E & B 678

Facts: A courier was engaged to accompany an employer on a tour beginning on 1 June. In May, before the engagement began, the employer wrote saying he no longer required his services. The courier sued at once, before June arrived.

Held: The action was well brought. Where one party renounces the contract before performance is due, the other need not wait for the day of performance; he may treat the renunciation as a breach and sue immediately, and is meanwhile free to take other engagements.

Ratio: A repudiation before the time for performance is itself a breach, on which the injured party may sue at once without waiting for the date fixed. Section 60 states the same rule for sales.

3. The Points of Difference

	Actual breach	Anticipatory breach
When	At or after the time for performance	Before it
How it arises	Failure to deliver, accept or pay	Renunciation, or the party disabling himself
Election	None; the breach has occurred	Sue at once, or keep the contract alive
Suit	After the breach	May be brought at once, before the due date
Damages assessed	At the date of the breach	At the date fixed for performance
Risk	None of the special kind	Waiting keeps the contract alive for both parties

4. The Risk of Waiting

A party who refuses to accept a repudiation keeps the contract alive for both sides. The repudiating party may change his mind and perform, and may take advantage of anything that would discharge the contract in the meantime. In Avery v. Bowden (1855) the shipowner waited at the port rather than accept the charterer's refusal, and when war made performance unlawful the contract was discharged and the claim lost. The injured party must also remain ready and willing to perform his own side throughout.

5. What Is Common to Both

Both give a right to damages, measured on the principles of Section 73 of the Contract Act.
Both require mitigation once the injured party treats the contract as at an end.
Both may be answered by showing that the other party was himself in breach, or not ready and willing.
Section 39 of the Contract Act states the same principle for contracts generally, and continues to apply to sales through Section 3.

6. The Position Stated Shortly

An actual breach occurs at or after the time for performance; an anticipatory breach before it.
Section 60 gives the injured party an election: sue at once, or keep the contract alive.
Hochster v. De La Tour: a party may sue immediately on a repudiation without waiting for the due date.
Damages on an anticipatory breach are assessed at the date fixed for performance.
Avery v. Bowden: a party who waits keeps the contract alive at his own risk.
Both kinds of breach give damages under Section 73 principles and both require mitigation.