What describes an anticipatory breach?

Anticipatory breach occurs when one party indicates, either through words or actions, that they will not fulfill their contractual obligations before the performance is due. This early refusal allows the other party to take necessary legal actions to mitigate damages or seek alternative arrangements.

The first choice, which characterizes anticipatory breach as a premature refusal to perform contractual obligations, is accurate. It reflects that one party has made it clear, before the time for performance arrives, that they do not intend to honor the terms of the contract. This obliges the non-breaching party to assess their response and consider remedies, even before the contractual deadline has passed.

Other choices, while addressing aspects of contract performance, do not accurately capture the essence of anticipatory breach. A mere failure to meet a deadline indicates non-performance but does not address the element of early refusal or avoidance of obligations. Similarly, a refusal to perform after the due date has passed defines a regular breach rather than anticipatory breach since it occurs after the contract should have been fulfilled. Lastly, a verbal disagreement on contract terms does not constitute a refusal to perform and thus does not fit within the concept of anticipatory breach; it highlights a dispute rather than an indication of non-performance.