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anticipatory breach
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what is an anticipatory breach, what is the role of the judge, what is a constitutive decision.
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21. Lesson 21Thursday, 10 March 2022 16:11
[It is possible that a contract breach doesn’t cause any damage]
ANTICIPATORY BREACH
= when, before the time fixed for performance under the contract one party informs
the other that
• He will not or cannot be able to perform the obligation
• He cannot perform the obligation in way consistent with the terms of the
contract
—> due to the circumstances it’s clear that the counter party won’t be able to fulfil
the obligations
—> I can terminate the contract before the breach actually happens
Eu Law —> ! It’s not present in the Italian civil code
Art. 9:304 Anticipatory non-performance - where prior to the time for the
performance it is clear that there will be a fundamental non-performance by it the
other party may terminate the contract
So… the innocent party sues the court for the termination of the contract when:
• The mutual non-performance is serious
• The interest in the bargain is lost
• There is no trust in the counter party anymore
Once the court has ascertained the existence of the right conditions, it terminates
the contract (constitutive decision)
What is the court?
Court = judge —> must be in the best third-position to be impartial
Why do I need the court to terminate a contract?
Because law is something higher than us: we have to respect it, since it
regulates our lives a —> even if created by privates the contract is
recognised as true legal instrument —> we, as normal people can’t
discharge a legal instrument
! EXCEPTION when both parties are willing to discharge the power of the
contract
Constitutive decision —> the contract keeps to be valid until the court
decisions (we enter into the court with the effects of the contract still taking
place - even if the breach has already occurred, at least in a formal way)
[… already seen in lesson 16 - voidable contracts]
Once terminated:
• The contract is not binding on the parties anymore - as if the parties have
never been bounded —> as if it has never produced effect from the
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